Vol. 85 Thursday, No. 157 August 13, 2020

Pages 49229–49588

OFFICE OF THE FEDERAL REGISTER

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Contents Federal Register Vol. 85, No. 157

Thursday, August 13, 2020

Agricultural Marketing Service PROPOSED RULES PROPOSED RULES Energy Conservation Program: Softwood Lumber Research, Promotion, Consumer Energy Conservation Standards for Clothes Washers and Education and Industry Information Order: Clothes Dryers, 49297–49312 Assessment Rate Increase, 49281–49284 Test Procedure for Showerheads, 49284–49297 Environmental Protection Agency Agriculture Department RULES See Agricultural Marketing Service National Emission Standards for Hazardous Air Pollutants: Plywood and Composite Wood Products Residual Risk Centers for Disease Control and Prevention and Technology Review, 49434–49469 NOTICES Pesticide Tolerances: Agency Information Collection Activities; Proposals, Novaluron, 49261–49264 Submissions, and Approvals, 49373–49375 NOTICES Agency Information Collection Activities; Proposals, Centers for Medicare & Medicaid Services Submissions, and Approvals, 49366–49368 RULES Application for Emergency Exemption: Basic Health Program: Lambda-cyhalothrin, 49365–49366 Federal Funding Methodology for Program Year 2021, Ecological Risk Assessment for Federally Listed Species: 49264–49280 Cuprous Iodide; Draft, 49368–49369 NOTICES Agency Information Collection Activities; Proposals, Farm Credit Administration Submissions, and Approvals, 49375–49376 NOTICES Privacy Act; Systems of Records, 49369–49371 Children and Families Administration Federal Aviation Administration NOTICES RULES Agency Information Collection Activities; Proposals, Airworthiness Directives: Submissions, and Approvals: Airbus Helicopters Deutschland GmbH Helicopters, Youth Empowerment Information, Data Collection, and 49233–49234 Exploration on Avoidance of Sex, 49376–49377 Blanik Aircraft CZ s.r.o., 49235–49238 Pacific Aerospace Limited Airplanes, 49238–49240 Commerce Department PROPOSED RULES See Foreign-Trade Zones Board Airworthiness Directives: See International Trade Administration General Electric Company Turbofan Engines, 49322– See National Oceanic and Atmospheric Administration 49324 Proposed Amendment and Revocation of Air Traffic Service Comptroller of the Currency (ATS) Routes: RULES Vicinity of Lebanon, NH, 49327–49328 Collective Investment Funds: Proposed Amendment of V–6, V–30, V–58, V–119, and V– Prior Notice Period for Withdrawals, 49229–49233 226: NOTICES Vicinity of Clarion, PA, 49324–49327 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Energy Regulatory Commission Licensing Manual, 49417–49418 NOTICES Meetings: Combined Filings, 49363–49365 Minority Depository Institutions Advisory Committee, Initial Market-Based Rate Filings Including Requests for 49418 Blanket Section 204 Authorizations: Thordin ApS, 49363, 49365 Education Department Federal Financial Institutions Examination Council NOTICES NOTICES Agency Information Collection Activities; Proposals, Appraisal Subcommittee: Submissions, and Approvals: Order Extending Commercial Real Estate Transaction Department of Education Green Ribbon Schools Nominee Temporary Waiver Relief, 49371–49372 Presentation Form, 49361–49362 Report of the Randolph-Sheppard Vending Facility Federal Highway Administration Program, 49362–49363 PROPOSED RULES Service Contract Inventory for Fiscal Years 2017 and 2018, Broadband Infrastructure Deployment, 49328–49332 49362 Federal Housing Finance Agency Energy Department PROPOSED RULES See Federal Energy Regulatory Commission 2021 Enterprise Housing Goals, 49312–49322

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Federal Motor Carrier Safety Administration Health Resources and Services Administration NOTICES NOTICES Exemption Application: Agency Information Collection Activities; Proposals, J. J. Keller and Associates, Inc.; Parts and Accessories Submissions, and Approvals: Necessary for Safe Operation, 49416–49417 Teaching Health Center Graduate Medical Education Program Cost Evaluation, 49385–49386 Financial Crimes Enforcement Network NOTICES Homeland Security Department Agency Information Collection Activities; Proposals, See U.S. Customs and Border Protection Submissions, and Approvals: Anti-Money Laundering Programs for Certain Financial Housing and Urban Development Department Institutions, 49418–49425 NOTICES Customer Identification Program Regulatory Agency Information Collection Activities; Proposals, Requirements for Certain Financial Institutions, Submissions, and Approvals: 49425–49431 Monthly Report of Excess Income and Annual Report of Uses of Excess Income, 49391 Fish and Wildlife Service NOTICES Indian Health Service Incidental Take Permit Application and Proposed Habitat NOTICES Conservation Plan: Awards: Karner Blue Butterfly and Frosted Elfin in the Albany Unsolicited Proposal for the Health Communication Pine Bush Preserve, Albany, Colonie and Initiative Program, 49386–49387 Guilderland, NY; Categorical Exclusion, 49391–49392 Interior Department Food and Drug Administration See Fish and Wildlife Service NOTICES RULES Food Labeling: Meetings: Gluten-Free Labeling of Fermented or Hydrolyzed Foods, Draft Invasive Species Strategic Plan; Tribal and Alaska 49240–49261 Native Corporation Consultations, Public Listening NOTICES Sessions, 49393–49394 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Internal Revenue Service Electronic Records; Electronic Signatures, 49381–49383 NOTICES Medical Devices; Humanitarian Use Devices, 49379– Meetings: 49381 Taxpayer Advocacy Panel Joint Committee, 49432 Guidance: Taxpayer Advocacy Panel Taxpayer Communications Acute Myeloid Leukemia: Developing Drugs and Project Committee, 49431 Biological Products for Treatment, 49383–49385 Taxpayer Advocacy Panel’s Notices and Correspondence Meetings: Project Committee, 49431 New Drugs Regulatory Program Modernization: Taxpayer Advocacy Panel’s Special Projects Committee, Implementation of the Integrated Assessment of 49432 Marketing Applications and Integrated Review Taxpayer Advocacy Panel’s Tax Forms and Publications Documentation; Public Workshop, 49377–49379 Project Committee, 49431–49432 Taxpayer Advocacy Panel’s Toll–Free Phone Lines Project Committee, 49432 Foreign-Trade Zones Board NOTICES Application for Production Authority: International Trade Administration Teijin Carbon Fibers, Inc. (Polyacrylonitrile-based Carbon PROPOSED RULES Fiber) Greenwood, SC; Foreign-Trade Zone 38, Improving Administration and Enforcement of Spartanburg County, SC, 49359 Antidumping and Countervailing Duty Laws, 49472– Approval of Subzone Status: 49504 Ipswich Shellfish Co., Inc., Ipswich, MA, 49359 International Trade Commission Health and Human Services Department NOTICES See Centers for Disease Control and Prevention Antidumping or Countervailing Duty Investigations, Orders, See Centers for Medicare & Medicaid Services or Reviews: See Children and Families Administration Ferrovanadium from China and South Africa, 49394 See Food and Drug Administration Investigations; Determinations, Modifications, and Rulings, See Health Resources and Services Administration etc.: See Indian Health Service Phosphate Fertilizers from Morocco and Russia, 49394 See National Institutes of Health See Substance Abuse and Mental Health Services Justice Department Administration PROPOSED RULES NOTICES Registration Requirements under the Sex Offender Delegation of Authority, 49386 Registration and Notification Act, 49332–49355

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NOTICES Securities and Exchange Commission Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals: Self-Regulatory Organizations; Proposed Rule Changes: Annual Parole Survey, Annual Probation Survey, 49395– Cboe BZX Exchange, Inc., 49405–49407 49396 Cboe Exchange, Inc., 49403–49405 National Survey of Prosecutors, 49395 MEMX, LLC, 49407–49411

Management and Budget Office Small Business Administration RULES NOTICES Guidance: Disaster Declaration: Grants and Agreements, 49506–49582 Commonwealth of Pennsylvania, 49411 State of Tennessee, 49411 National Institutes of Health NOTICES Substance Abuse and Mental Health Services Meetings: Administration National Institute of Biomedical Imaging and NOTICES Bioengineering, 49387 Meetings: National Institute of Diabetes and Digestive Kidney National Advisory Council, 49389 Diseases, 49388 National Institute of Nursing Research, 49388 Surface Transportation Board Prospective Grant of an Exclusive Start-Up Patent License NOTICES for Evaluation: Temporary Trackage Rights Exemption: Immunotherapy for Relapsed/Refractory Diffuse Large B Union Pacific Railroad Co.; BNSF Railway Co., 49411– Cell Lymphoma, 49387–49388 49412 Trade Representative, Office of United States National Oceanic and Atmospheric Administration NOTICES PROPOSED RULES Hearing: Fisheries of the Caribbean, Gulf of Mexico, and South Concerning Russia’s Implementation of its World Trade Atlantic: Organization Commitments, 49412–49414 Shrimp Fishery off the South Atlantic States; Product Exclusion Amendment: Amendment 11, 49355–49358 NOTICES China’s Acts, Policies, and Practices Related to Environmental Assessments; Availability, etc.: Technology Transfer, Intellectual Property, and Portland Harbor Draft Supplemental Restoration Plan, Innovation, 49414–49416 49359–49361 Transportation Department See Federal Aviation Administration Nuclear Regulatory Commission See Federal Highway Administration NOTICES See Federal Motor Carrier Safety Administration Environmental Impact Statements; Availability, etc.: Holtec International HI–STORE Consolidated Interim Treasury Department Storage Facility Project, 49396–49398 See Comptroller of the Currency See Financial Crimes Enforcement Network Personnel Management Office See Internal Revenue Service NOTICES Agency Information Collection Activities; Proposals, U.S. Customs and Border Protection Submissions, and Approvals: NOTICES Civil Service Retirement System/Federal Employees Agency Information Collection Activities; Proposals, Retirement System Designation of Beneficiary, Submissions, and Approvals: 49401–49402 Crew Member’s Declaration, 49389–49390 Report of Medical Examination of Person Electing Documents Required Aboard Private Aircraft, 49390 Survivor Benefits, 49398 Excepted Service, 49398–49401 Separate Parts In This Issue Postal Regulatory Commission NOTICES Part II New Postal Products, 49402–49403 Environmental Protection Agency, 49434–49469

Presidential Documents Part III ADMINISTRATIVE ORDERS Commerce Department, International Trade Administration, Education: 49472–49504 Federal Student Loans; Continuation of Payment Relief During COVID–19 Pandemic (Memorandum of Part IV August 8, 2020), 49583–49586 Management and Budget Office, 49506–49582 Taxation: Payroll Tax Obligations; Deferment Due to COVID–19 Part V Pandemic (Memorandum of August 8, 2020), 49587– Presidential Documents, 49583–49588 49588

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Reader Aids To subscribe to the Federal Register Table of Contents Consult the Reader Aids section at the end of this issue for electronic mailing list, go to https://public.govdelivery.com/ phone numbers, online resources, finding aids, and notice accounts/USGPOOFR/subscriber/new, enter your e-mail of recently enacted public laws. address, then follow the instructions to join, leave, or manage your subscription.

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CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

2 CFR 25...... 49506 170...... 49506 183...... 49506 200...... 49506 3 CFR Administrative Orders: Memorandums: Memorandum of August 8, 2020...... 49585 Memorandum of August 8, 2020...... 49587 7 CFR Proposed Rules: 1217...... 49281 10 CFR Proposed Rules: 430 (2 documents) ...... 49284, 49297 12 CFR 9...... 49229 Proposed Rules: 1282...... 49312 14 CFR 39 (3 documents) ...... 49233, 49235, 49238 Proposed Rules: 39...... 49322 71 (2 documents) ...... 49324, 49327 19 CFR Proposed Rules: 351...... 49472 21 CFR 101...... 49240 23 CFR Proposed Rules: 645...... 49328 28 CFR Proposed Rules: 72...... 49332 40 CFR 63...... 49434 180...... 49261 42 CFR 600...... 49264 50 CFR Proposed Rules: 622...... 49355

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Rules and Regulations Federal Register Vol. 85, No. 157

Thursday, August 13, 2020

This section of the FEDERAL REGISTER interim final rule must be received no Comments received, including contains regulatory documents having general later than September 14, 2020. attachments and other supporting applicability and legal effect, most of which ADDRESSES: Commenters are encouraged materials, are part of the public record are keyed to and codified in the Code of to submit comments through the Federal and subject to public disclosure. Do not Federal Regulations, which is published under include any information in your 50 titles pursuant to 44 U.S.C. 1510. eRulemaking Portal or email, if possible. Please use the title ‘‘Collective comment or supporting materials that The Code of Federal Regulations is sold by Investment Funds: Prior Notice Period you consider confidential or the Superintendent of Documents. for Withdrawals’’ to facilitate the inappropriate for public disclosure. organization and distribution of the You may review comments and other comments. You may submit comments related materials that pertain to this DEPARTMENT OF THE TREASURY by any of the following methods: rulemaking action by any of the Federal eRulemaking Portal— following methods: Office of the Comptroller of the • Viewing Comments Electronically— Currency ‘‘Regulations.gov Classic or Regulations.gov Beta’’: Regulations.gov Classic or Regulations.gov Beta: 12 CFR Part 9 Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID Regulations.gov Classic: Go to https:// [Docket ID OCC–2020–0031] OCC–2020–0031’’ in the Search Box and www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0031’’ in the Search box and RIN 1557–AE99 click ‘‘Search.’’ Click on ‘‘Comment Now’’ to submit public comments. For click ‘‘Search.’’ Click on ‘‘Open Docket Collective Investment Funds: Prior help with submitting effective Folder’’ on the right side of the screen. Notice Period for Withdrawals comments please click on ‘‘View Comments and supporting materials can Commenter’s Checklist.’’ Click on the be viewed and filtered by clicking on AGENCY: Office of the Comptroller of the ‘‘Help’’ tab on the Regulations.gov home ‘‘View all documents and comments in Currency, Treasury. page to get information on using this docket’’ and then using the filtering ACTION: Interim final rule; request for Regulations.gov, including instructions tools on the left side of the screen. Click comment. for submitting public comments. on the ‘‘Help’’ tab on the Regulations.gov Beta: Go to https:// Regulations.gov home page to get SUMMARY: OCC regulations permit a beta.regulations.gov/ or click ‘‘Visit information on using Regulations.gov. national bank or Federal Savings New Regulations.gov Site’’ from the The docket may be viewed after the association (collectively, a bank) Regulations.gov Classic homepage. close of the comment period in the same administering a collective investment Enter ‘‘Docket ID OCC–2020–0031’’ in manner as during the comment period. fund (CIF) that is invested primarily in the Search Box and click ‘‘Search.’’ Regulations.gov Beta: Go to https:// real estate or other assets that are not Public comments can be submitted via beta.regulations.gov/ or click ‘‘Visit readily marketable to require a prior the ‘‘Comment’’ box below the New Regulations.gov Site’’ from the notice period, not to exceed one year, displayed document information or by Regulations.gov Classic homepage. for withdrawals from the fund. The OCC clicking on the document title and then Enter ‘‘Docket ID OCC–2020–0031’’ in interprets this notice provision as clicking the ‘‘Comment’’ box on the top- the Search Box and click ‘‘Search.’’ requiring the bank to withdraw an left side of the screen. For help with Click on the ‘‘Comments’’ tab. account within the prior notice period submitting effective comments please Comments can be viewed and filtered or, if permissible under the CIF’s click on ‘‘Commenter’s Checklist.’’ For by clicking on the ‘‘Sort By’’ drop-down written plan, within one year after prior assistance with the Regulations.gov Beta on the right side of the screen or the notice was required (standard site, please call (877) 378–5457 (toll ‘‘Refine Results’’ options on the left side withdrawal period). The OCC is issuing free) or (703) 454–9859 Monday–Friday, of the screen. Supporting materials can an interim final rule to codify the 9 a.m.–5 p.m. ET or email regulations@ be viewed by clicking on the standard withdrawal period and create erulemakinghelpdesk.com. ‘‘Documents’’ tab and filtered by a limited exception that allows a bank, • Email: regs.comments@ clicking on the ‘‘Sort By’’ drop-down on with OCC approval, to withdraw an occ.treas.gov. the right side of the screen or the account from the CIF up to one year • Mail: Chief Counsel’s Office, Office ‘‘Refine Results’’ options on the left side beyond the standard withdrawal period, of the Comptroller of the Currency, 400 of the screen. For assistance with the with opportunities for further 7th Street SW, Suite 3E–218, Regulations.gov Beta site, please call extensions, provided that certain Washington, DC 20219. (877) 378–5457 (toll free) or (703) 454– conditions are satisfied. The exception Instructions: You must include 9859 Monday–Friday, 9 a.m.–5 p.m. ET is intended to enable a bank to preserve ‘‘OCC’’ as the agency name and ‘‘Docket or email regulations@ the value of the CIF’s assets for the ID OCC–2020–0031’’ in your comment. erulemakinghelpdesk.com. benefit of fund participants during In general, the OCC will enter all The docket may be viewed after the unanticipated and severe market comments received into the docket and close of the comment period in the same conditions, such as those resulting from publish the comments on the manner as during the comment period. the current national health emergency Regulations.gov website without FOR FURTHER INFORMATION CONTACT: concerning the coronavirus disease change, including any business or Patricia Dalton, Director for Asset (COVID–19) outbreak. personal information that you provide Management Policy, David Stankiewicz, DATES: The interim final rule is effective such as name and address information, Technical Expert for Asset Management August 13, 2020. Comments on the email addresses, or phone numbers. Policy, Market Risk Policy Division,

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Bank Supervision Policy, 202–649– those assets. This could compel ‘‘fire (including its notice and withdrawal 6360; Beth Kirby, Assistant Director, sales’’ of CIF assets and lead to policy) must authorize an extended Asa Chamberlayne, Counsel, or Daniel avoidable economic harm for CIF withdrawal period and be fully Perez, Senior Attorney, Chief Counsel’s participants, which would be contrary disclosed to fund participants. In Office, (202) 649–5490, for persons who to general fiduciary principles that addition, the bank’s board of directors, are deaf or hearing impaired, TTY, (202) require a CIF trustee to act in the or a committee authorized by the board 649–5597, Office of the Comptroller of interests of CIF participants. Similarly, of directors, must make certain the Currency, 400 7th Street SW, an in-kind distribution 6 of CIF assets to determinations and commitments. The Washington, DC 20219. CIF participants would be generally bank’s board of directors, or a SUPPLEMENTARY INFORMATION: impractical and involve considerable committee authorized by the board of difficulties and transaction costs for the directors, must determine that (1) due to I. Background participants, who may be ill-equipped unanticipated and severe market A collective investment fund (CIF) is to receive, manage, and liquidate such conditions for specific assets held by the a bank-managed fiduciary fund that assets. fund, an extended withdrawal period is holds pooled assets. A national bank or Extending the time period for acting necessary in order to preserve the value Federal savings association upon withdrawal requests beyond the of the fund’s assets for the benefit of (collectively, a bank) that establishes standard withdrawal period would fund participants; and (2) the extended and operates a CIF must do so in allow a bank administering a CIF to take withdrawal period is consistent with 12 accordance with the criteria established appropriate steps to satisfy the requests CFR part 9 and applicable law. The under the OCC fiduciary activities within the context of current market bank’s board of directors, or a regulation at 12 CFR 9.18.1 A CIF is conditions, including allowing for an committee authorized by the board of funded through contributions by the orderly liquidation of sufficient assets to directors, must also commit that the CIF’s participants, which are the raise cash through prudent and bank will act upon any withdrawal beneficial owners of the fund’s assets. A appropriate sales, as the return of more request as soon as practicable. Finally, bank admitting a CIF participant or normal market conditions permit. the rule provides discretion for the OCC withdrawing all or part of its II. Interim Final Rule to impose additional conditions if the participating interest (that is, allowing OCC determines that the conditions are the participant to, in effect, redeem a The OCC is issuing an interim final necessary or appropriate to protect the proportionate interest in the assets of rule that clarifies the standard interests of fund participants. the CIF) must do so on the basis of a withdrawal period and establishes a The conditions established by this valuation of the CIF’s assets.2 limited exception to that withdrawal interim final rule are intended to ensure A bank administering a CIF invested period. that the exception is only granted if it primarily in real estate or other assets Under 12 CFR 9.18(b)(5)(iii), a bank is consistent with fiduciary principles, that are not readily marketable may administering a CIF invested primarily applicable law, and the CIF’s written require a prior notice period of up to in real estate or other assets that are not plan.7 To ensure that the exception is one year for withdrawals.3 The OCC has readily marketable may require a prior consistent with these principles and interpreted this notice as requiring the notice period of up to one year for requirements, and as described above, bank to withdraw an account within the withdrawals. As described above, the the OCC may impose additional prior notice period or, if permissible OCC has interpreted this notice conditions, such as requiring periodic under the CIF’s written plan, within one provision as requiring payment of the progress reports from the bank. year after prior notice was required withdrawal requests within the standard If, due to ongoing severe market (standard withdrawal period).4 The OCC withdrawal period. The IFR adds new conditions, a bank has been unable to has also recognized, however, that there paragraph (b)(5)(iii)(B) to § 9.18, which satisfy withdrawal requests during the may be circumstances when a longer codifies the standard withdrawal period one-year extension period without withdrawal period is appropriate. For as a distinct provision of the rule and causing harm to participants, the bank example, during the 2009 financial provides that a bank that requires a may request OCC approval under new crisis, the OCC permitted a bank to prior notice period for withdrawals paragraph (b)(5)(iii)(D) for up to two extend the time period for withdrawals, generally must withdraw an account additional one-year extensions. The subject to certain conditions.5 within the prior notice period or, if OCC may only approve each additional During normal market conditions, a permissible under the CIF’s written one-year extension if the OCC bank can typically satisfy withdrawal plan, within one year after prior notice determines that the bank has made a requests within the standard withdrawal was required. good faith effort to satisfy withdrawal period. However, in the event of The IFR also adds new paragraph requests during the original extension unanticipated and severe market (b)(5)(iii)(C) to § 9.18 to create an period and the bank has been unable to conditions, a bank may be faced with an exception to the standard withdrawal satisfy such requests without causing increased number of withdrawal period that may be invoked under harm to participants due to ongoing requests and reduced market liquidity. exceptional circumstances. Specifically, severe market conditions. The bank If the bank is required to sell assets held under the exception, a bank may must also continue to satisfy the by a CIF to satisfy withdrawals within withdraw an account from a CIF up to conditions described in new paragraph the standard withdrawal period, it may one year beyond the standard (b)(5)(iii)(C). In the OCC’s experience, have difficulty realizing a fair value for withdrawal period described in new the initial one-year extension should be paragraph (b)(5)(iii)(B), if the OCC sufficient in most cases to avoid a ‘‘fire 1 Pursuant to 12 CFR 150.260, the terms ‘‘bank’’ approves and certain conditions are sale’’ of CIF assets during stressed and ‘‘national bank’’ as used in 12 CFR 9.18 are met. Namely, the fund’s written plan deemed to include a Federal savings association. market conditions. Additional 2 extensions are available in one-year 12 CFR 9.18(b)(5)(i). 6 See 12 CFR 9.18(b)(5)(iv) (a bank may withdraw 3 12 CFR 9.18(b)(5)(iii). an account from a fund in cash, ratably in kind, a increments to allow the OCC to review 4 See, e.g., OCC Interpretive Letter No. 1121 (Aug. combination of cash and ratably in kind, or in any 2009) (Interpretive Letter 1121). other manner permitted under state law where the 7 See 12 CFR 9.18(b)(1) (written plan 5 Id. bank national maintains the fund). requirements).

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the bank’s ongoing efforts to satisfy bank to withdraw an account within the based enterprises in domestic and withdrawal requests. The additional standard withdrawal period, may export markets.14 requests are capped at two years based undermine the ability of a bank to For the same reasons set forth above, on the OCC’s experience with stressed realize an appropriate value for CIF the OCC is adopting the interim final market events and the need to balance assets and be harmful in preserving the rule without the delayed effective date the bank’s and participants’ interest in value of the CIF’s assets for the benefit generally prescribed under the satisfying withdrawal requests at fair of fund participants. Accordingly, the Congressional Review Act. The delayed value with the participants’ interest in OCC finds that the public interest is best effective date required by the timely withdrawals. served by implementing the interim Congressional Review Act does not For example, under normal final rule immediately upon publication apply to any rule for which an agency circumstances and pursuant to the in the Federal Register. for good cause finds (and incorporates standard withdrawal period in new The APA also requires a 30-day the finding and a brief statement of paragraph (b)(5)(iii)(B), a bank that delayed effective date, except for (1) reasons therefor in the rule issued) that requires notice of withdrawal by substantive rules, which grant or notice and public procedure thereon are December 31, 2020, is required to recognize an exemption or relieve a impracticable, unnecessary, or contrary withdraw an account no later than restriction; (2) interpretative rules and to the public interest.15 In light of the December 31, 2021. However, if, due to statements of policy; or (3) as otherwise potential economic harm described exceptional circumstances, the bank provided by the agency for good above, the OCC finds that delaying the receives a one-year extension of the cause.10 Because the rule relieves a effective date of the interim final rule standard withdrawal period pursuant to restriction on banks, the interim final would be contrary to the public interest. new paragraph (b)(5)(iii)(C), the bank is rule is exempt from the APA’s delayed As required by the Congressional required to withdraw the account no effective date requirement.11 In Review Act, the OCC will submit the later than December 31, 2022. If the addition, for the same reasons set forth interim final rule and other appropriate bank later receives an additional one- above under the discussion of section reports to Congress and the Government year extension pursuant to new 553(b)(B) of the APA, the OCC finds Accountability Office for review. paragraph (b)(5)(iii)(D), the bank is good cause to publish the interim final required to withdraw the account no C. Paperwork Reduction Act rule with an immediate effective date. later than December 31, 2023. The Paperwork Reduction Act of 1995 While the OCC believes that there is (44 U.S.C. 3501–3521) (PRA) states that III. Request for Comment good cause to issue the interim final no agency may conduct or sponsor, nor rule without advance notice and The OCC invites comment on all is the respondent required to respond comment and with an immediate aspects of this rulemaking. In particular, to, an information collection unless it effective date as of the date of Federal the OCC invites comment on whether displays a currently valid OMB control Register publication, the OCC is the OCC approval requirement and number. The interim final rule contains interested in the views of the public and associated conditions for an extended reporting requirements under the requests comment on all aspects of the withdrawal period are (1) sufficient to Paperwork Reduction Act. With the interim final rule. ensure that any extension of the OCC’s approval, and if certain withdrawal period would be consistent B. Congressional Review Act conditions are satisfied, a bank may with fiduciary principles and applicable withdraw an account from a collective For purposes of Congressional Review law; and (2) consistent with general investment fund up to one year after the Act, the Office of Management and business practices. end of the standard withdrawal Budget (OMB) makes a determination as period.16 In addition, a bank may IV. Administrative Law Matters to whether a final rule constitutes a request that the OCC approve an A. Administrative Procedure Act ‘‘major’’ rule.12 If a rule is deemed a extension beyond the one-year ‘‘major rule’’ by OMB, the Congressional The OCC is issuing the interim final extension period, if certain conditions Review Act generally provides that the rule without prior notice and the are satisfied.17 Extensions past the rule may not take effect until at least 60 opportunity for public comment and the initial one-year extension must be days following its publication.13 30-day delayed effective date ordinarily requested and approved annually, for a prescribed by the Administrative The Congressional Review Act defines maximum of two years after the initial Procedure Act (APA).8 Pursuant to a ‘‘major rule’’ as any rule that the one-year extension period.18 section 553(b) of the APA, general Administrator of the Office of Title of Information Collection: notice and the opportunity for public Information and Regulatory Affairs of Fiduciary Activities. comment are not required with respect the OMB finds has resulted in or is OMB Control No.: 1557–0140. to a rulemaking when an ‘‘agency for likely to result in (A) an annual effect Frequency: On occasion. good cause finds (and incorporates the on the economy of $100,000,000 or Affected Public: Businesses or other finding and a brief statement of reasons more; (B) a major increase in costs or for-profit. therefor in the rules issued) that notice prices for consumers, individual Estimated number of respondents: 4. and public procedure thereon are industries, Federal, State, or local Total estimated annual burden: 220 impracticable, unnecessary, or contrary government agencies or geographic burden hours. to the public interest.’’ 9 regions, or (C) significant adverse effects Comments are invited on: The OCC is concerned that the on competition, employment, a. Whether the collections of disruption and stress in the real estate investment, productivity, innovation, or information are necessary for the proper markets and other markets for not on the ability of United States-based performance of the OCC’s functions, readily marketable assets resulting from enterprises to compete with foreign- the outbreak of the COVID–19 14 5 U.S.C. 804(2). emergency, coupled with requiring a 10 5 U.S.C. 553(d). 15 5 U.S.C. 808. 11 5 U.S.C. 553(d)(1). 16 12 CFR 9.18(b)(5)(iii)(C) introductory text. 8 5 U.S.C. 553. 12 5 U.S.C. 801 et seq. 17 12 CFR 9.18(b)(5)(iii)(D). 9 5 U.S.C. 553(b)(B). 13 5 U.S.C. 801(a)(3). 18 Id.

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including whether the information has institutions, including small depository Therefore, because the OCC has found practical utility; institutions, and customers of good cause to dispense with notice and b. The accuracy or the estimate of the depository institutions, as well as the comment for this interim final rule, the burden of the information collections, benefits of such regulations. In addition, OCC concludes that the requirements of including the validity of the section 302(b) of RCDRIA requires new UMRA do not apply to this interim final methodology and assumptions used; regulations and amendments to rule. c. Ways to enhance the quality, regulations that impose additional List of Subjects utility, and clarity of the information to reporting, disclosures, or other new be collected; requirements on IDIs generally to take 12 CFR Part 9 d. Ways to minimize the burden of the effect on the first day of a calendar Estates, Investments, National banks, information collections on respondents, quarter that begins on or after the date including through the use of automated Reporting and recordkeeping on which the regulations are published requirements, Trusts and trustees. collection techniques or other forms of in final form, with certain exceptions, information technology; and including for good cause.22 For the Office of the Comptroller of the e. Estimates of capital or startup costs reasons described above, the OCC finds Currency and costs of operation, maintenance, good cause exists under section 302 of 12 CFR CHAPTER I and purchase of services to provide RCDRIA to publish the interim final rule information. with an immediate effective date. Authority and Issuance D. Regulatory Flexibility Act F. Use of Plain Language For the reasons set forth in the The Regulatory Flexibility Act preamble, the OCC amends chapter I of Section 722 of the Gramm-Leach- Title 12 of the Code of Federal (RFA) 19 requires an agency to consider 23 Bliley Act requires the Federal Regulations as follows: whether the rules it proposes will have banking agencies to use ‘‘plain a significant economic impact on a language’’ in all proposed and final PART 9—FIDUCIARY ACTIVITIES OF 20 substantial number of small entities. rules published after January 1, 2000. In NATIONAL BANKS The RFA applies only to rules for which light of this requirement, the OCC has an agency publishes a general notice of sought to present the interim final rule ■ 1. The authority citation for part 9 proposed rulemaking pursuant to 5 in a simple and straightforward manner. continues to read as follows: U.S.C. 553(b). As discussed previously, The OCC invites comments on whether Authority: 12 U.S.C. 24 (Seventh), 92a, and consistent with section 553(b)(B) of the there are additional steps the OCC can 93a; 15 U.S.C. 78q, 78q-1, and 78w. APA, the OCC has determined for good take to make the rule easier to ■ cause that general notice and understand. For example: 2. Section 9.18 is amended by revising opportunity for public comment is • Have we organized the material to paragraph (b)(5)(iii): impracticable and contrary to the suit your needs? If not, how could this § 9.18 Collective investment funds. public’s interest, and therefore the OCC material be better organized? * * * * * is not issuing a notice of proposed • Are the requirements in the (b) * * * rulemaking. Accordingly, the OCC regulation clearly stated? If not, how (5) * * * concludes that the RFA’s requirements could the regulation be more clearly (iii) Prior notice period for relating to initial and final regulatory stated? flexibility analysis do not apply. • Does the regulation contain withdrawals from funds with assets not Nevertheless, the OCC is interested in language or jargon that is not clear? If readily marketable—(A) A bank receiving feedback on ways that the so, which language requires administering a collective investment OCC can reduce any potential burden of clarification? fund described in paragraph (a)(2) of the interim final rule on small entities. • Would a different format (grouping this section that is invested primarily in and order of sections, use of headings, real estate or other assets that are not E. Riegle Community Development and paragraphing) make the regulation readily marketable may require a prior Regulatory Improvement Act of 1994 easier to understand? If so, what notice period, not to exceed one year, Pursuant to section 302(a) of the changes to the format would make the for withdrawals. Riegle Community Development and regulation easier to understand? (B) A bank that requires a prior notice Regulatory Improvement Act • What else could we do to make the period for withdrawals must withdraw (RCDRIA),21 in determining the effective regulation easier to understand? an account from the fund within the date and administrative compliance prior notice period or, if permissible requirements for new regulations that G. Unfunded Mandates Act under the fund’s written plan, within impose additional reporting, disclosure, As a general matter, the Unfunded one year after the date on which notice or other requirements on insured Mandates Act of 1995 (UMRA), 2 U.S.C. was required, except as described in depository institutions (IDIs), each 1531 et seq., requires the preparation of paragraph (b)(5)(iii)(C) of this section. Federal banking agency must consider, a budgetary impact statement before (C) A bank may withdraw an account consistent with the principle of safety promulgating a rule that includes a from the fund up to one year after the and soundness and the public interest, Federal mandate that may result in the withdrawal period described in any administrative burdens that such expenditure by State, local, and tribal paragraph (b)(5)(iii)(B) of this section, regulations would place on depository governments, in the aggregate, or by the with the OCC’s approval, provided that private sector, of $100 million or more the following conditions are met: 19 5 U.S.C. 601 et seq. in any one year. However, the UMRA (1) The fund’s written plan, including 20 Under regulations issued by the Small Business does not apply to final rules for which its notice and withdrawal policy, Administration, a small entity includes a depository a general notice of proposed rulemaking authorizes an extended withdrawal institution, bank holding company, or savings and period and is fully disclosed to fund loan holding company with total assets of $600 was not published. See 2 U.S.C. 1532(a). million or less and trust companies with total assets participants; of $41.5 million or less. See 13 CFR 121.201. 22 12 U.S.C. 4802. (2) The bank’s board of directors, or 21 12 U.S.C. 4802(a). 23 12 U.S.C. 4809. a committee authorized by the board of

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directors, determines that, due to Airbus Helicopters Deutschland GmbH installation on MBB–BK 117 D–2 unanticipated and severe market Model MBB–BK 117 D–2 helicopters. helicopters. The NPRM proposed to conditions for specific assets held by the This AD was prompted by the discovery require removing the affected parts from fund, an extended withdrawal period is that certain longitudinal trim actuators, service and prohibit installing the necessary in order to preserve the value lateral trim actuators, and yaw trim affected parts on MBB–BK 117 D–2 of the fund’s assets for the benefit of actuators, which are certified for helicopters. The FAA is issuing this AD fund participants; installation on MBB–BK 117 C–2 to address erroneously installed (3) The bank’s board of directors, or helicopters, were erroneously listed as longitudinal trim actuators, lateral trim a committee authorized by the board of eligible for installation on MBB–BK 117 actuators, and yaw trim actuators, directors, determines that the extended D–2 helicopters. This AD requires which could lead to reduced control of withdrawal period is consistent with 12 removing the affected parts from service the helicopter. CFR part 9 and applicable law; and prohibits installing the affected The European Aviation Safety Agency (4) The bank’s board of directors, or parts on MBB–BK 117 D–2 helicopters. (now European Union Aviation Safety a committee authorized by the board of The FAA is issuing this AD to address Agency) (EASA), which is the Technical directors, commits that the bank will act the unsafe condition on these products. Agent for the Member States of the upon any withdrawal request as soon as DATES: This AD is effective September European Union, has issued EASA AD practicable; and 17, 2020. 2017–0094, dated May 29, 2017 (EASA (5) Any other condition imposed by ADDRESSES: For service information AD 2017–0094) (referred to after this as the OCC, if the OCC determines that the identified in this final rule, contact the Mandatory Continuing condition is necessary or appropriate to Airbus Helicopters, 2701 N Forum Airworthiness Information, or ‘‘the protect the interests of fund Drive, Grand Prairie, TX 75052; phone: MCAI’’), to correct an unsafe condition participants. 972–641–0000 or 800–232–0323; fax: for Airbus Helicopters Deutschland (D) Upon request by a bank, the OCC GmbH Model MBB–BK 117 D–2 may approve an extension beyond the 972–641–3775; or at https:// www.airbus.com/helicopters/services/ helicopters with a serial number (S/N) one-year extension period described in up to 20126 inclusive, excluding S/N paragraph (b)(5)(iii)(C) of this section if support.html. You may view this service information at the FAA, Office of the 20109, 20119, and 20124. You may the OCC determines that the bank has examine the MCAI in the AD docket on made a good faith effort to satisfy Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N–321, the internet at https:// withdrawal requests and the bank has www.regulations.gov by searching for been unable to satisfy such requests Fort Worth, TX 76177. For information on the availability of this material at the and locating Docket No. FAA–2020– without causing harm to participants 0418. due to ongoing severe market FAA, call 817–222–5110. conditions. The bank must also Examining the AD Docket Comments continue to satisfy the conditions You may examine the AD docket on The FAA gave the public the described in paragraph (b)(5)(iii)(C) of the internet at https:// opportunity to participate in developing this section. Extensions under this www.regulations.gov by searching for this final rule. The FAA received no paragraph must be requested and and locating Docket No. FAA–2020– comments on the NPRM or on the approved annually, for a maximum of 0418; or in person at Docket Operations determination of the cost to the public. two years after the initial one-year between 9 a.m. and 5 p.m., Monday Conclusion extension period. through Friday, except Federal holidays. The FAA reviewed the relevant data * * * * * The AD docket contains this final rule, and determined that air safety and the any comments received, and other Brian P. Brooks, public interest require adopting this information. The street address for Acting Comptroller of the Currency. final rule as proposed, except for minor Docket Operations is listed above. [FR Doc. 2020–17322 Filed 8–12–20; 8:45 am] editorial changes. The FAA has FOR FURTHER INFORMATION CONTACT: BILLING CODE 4810–33–P determined that these minor changes: David Hatfield, Aviation Safety • Are consistent with the intent that Engineer, Safety Management Section, was proposed in the NPRM for DEPARTMENT OF TRANSPORTATION Rotorcraft Standards Branch, FAA, addressing the unsafe condition; and 10101 Hillwood Pkwy., Fort Worth, TX • Do not add any additional burden Federal Aviation Administration 76177; phone: 817–222–5110; email: upon the public than was already [email protected]. proposed in the NPRM. 14 CFR Part 39 SUPPLEMENTARY INFORMATION: Related Service Information [Docket No. FAA–2020–0418; Product Discussion Airbus Helicopters has issued Alert Identifier 2017–SW–053–AD; Amendment The FAA issued a notice of proposed 39–21210; AD 2020–17–05] Service Bulletin MBB–BK117 D–2–67A– rulemaking (NPRM) to amend 14 CFR 005, Revision 0, dated April 3, 2017. RIN 2120–AA64 part 39 by adding an AD that would This service information contains apply to certain Airbus Helicopters procedures for replacing the affected Airworthiness Directives; Airbus Deutschland GmbH Model MBB–BK 117 parts. Helicopters Deutschland GmbH D–2 helicopters. The NPRM published Helicopters in the Federal Register on April 23, Differences Between This AD and the EASA AD AGENCY: Federal Aviation 2020 (85 FR 22684). The NPRM was Administration (FAA), Department of prompted by the discovery that certain The EASA AD has a compliance time Transportation (DOT). longitudinal trim actuators, lateral trim of ‘‘Within 400 flight hours, or within ACTION: Final rule. actuators, and yaw trim actuators, 12 months, whichever occurs first’’ for which are certified for installation on the replacement. However, this AD SUMMARY: The FAA is adopting a new MBB–BK 117 C–2 helicopters, were requires replacing affected parts within airworthiness directive (AD) for certain erroneously listed as eligible for 300 hours time-in-service instead. The

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EASA AD prohibits the installation of List of Subjects in 14 CFR Part 39 418–00878–001, lateral trim actuator P/N an affected actuator on any helicopter, Air transportation, Aircraft, Aviation 418–00878–051, or yaw trim actuator P/N whereas this AD prohibits the safety, Incorporation by reference, 418–00879–001 on any Model MBB–BK 117 D–2 helicopter. installation of an affected actuator on Safety. any Model MBB–BK 117 D–2 helicopter (h) Special Flight Permits instead. Adoption of the Amendment Special flight permits are prohibited. Accordingly, under the authority Costs of Compliance delegated to me by the Administrator, (i) Alternative Methods of Compliance The FAA estimates that this AD the FAA amends 14 CFR part 39 as (AMOCs) would affect 29 helicopters of U.S. follows: (1) The Manager, Rotorcraft Standards registry. Labor costs are estimated at $85 Branch, FAA, may approve AMOCs for this PART 39—AIRWORTHINESS per work-hour. Based on these numbers, AD. Send your proposal to: David Hatfield, DIRECTIVES the FAA estimates the following costs to Aviation Safety Engineer, Safety Management comply with this AD. ■ 1. The authority citation for part 39 Section, Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX If required, replacing an actuator continues to read as follows: 76177; phone: 817–222–5110; email: 9-ASW- would take about 1.5 work-hours and Authority: 49 U.S.C. 106(g), 40113, 44701. [email protected]. parts would cost about $20,000 for an § 39.13 [Amended] (2) For operations conducted under a 14 estimated cost of $20,128. CFR part 119 operating certificate or under ■ 2. The FAA amends § 39.13 by adding Authority for This Rulemaking 14 CFR part 91, subpart K, notify your the following new airworthiness principal inspector or lacking a principal Title 49 of the United States Code directive (AD): inspector, the manager of the local flight specifies the FAA’s authority to issue 2020–17–05 Airbus Helicopters standards district office or certificate holding rules on aviation safety. Subtitle I, Deutschland GmbH: Amendment 39– district office, before operating any aircraft section 106, describes the authority of 21210; Docket No. FAA–2020–0418; complying with this AD through an AMOC. Product Identifier 2017–SW–053–AD. the FAA Administrator. Subtitle VII: (j) Related Information Aviation Programs, describes in more (a) Effective Date (1) The subject of this AD is addressed in detail the scope of the Agency’s This AD is effective September 17, 2020. authority. European Aviation Safety Agency (now (b) Affected ADs European Union Aviation Safety Agency) The FAA is issuing this rulemaking None. (EASA) AD 2017–0094, dated May 29, 2017. under the authority described in This EASA AD may be found in the AD Subtitle VII, Part A, Subpart III, Section (c) Applicability docket on the internet at https:// 44701: General requirements. Under This AD applies to Airbus Helicopters www.regulations.gov by searching for and that section, Congress charges the FAA Deutschland GmbH Model MBB–BK 117 D– locating Docket No. FAA–2020–0418. with promoting safe flight of civil 2 helicopters, certificated in any category, (2) For more information about this AD, aircraft in air commerce by prescribing with a serial number up to 20126 inclusive, contact David Hatfield, Aviation Safety excluding serial numbers 20109, 20119, and regulations for practices, methods, and Engineer, Safety Management Section, 20124, and with any of the following procedures the Administrator finds installed: Rotorcraft Standards Branch, FAA, 10101 necessary for safety in air commerce. (1) Longitudinal trim actuator part number Hillwood Pkwy., Fort Worth, TX 76177; This regulation is within the scope of (P/N) 418–00878–001, phone: 817–222–5110; email: david.hatfield@ that authority because it addresses an (2) Lateral trim actuator P/N 418–00878– faa.gov. unsafe condition that is likely to exist or 051, or (3) Airbus Helicopters Alert Service develop on products identified in this (3) Yaw trim actuator P/N 418–00879–001. Bulletin MBB–BK117 D–2–67A–005, rulemaking action. (d) Subject Revision 0, dated April 3, 2017, which is not incorporated by reference, contains Regulatory Findings Joint Aircraft Service Component (JASC) additional information about the subject of Code 6700, Rotors flight control. this AD. For service information identified in This AD will not have federalism (e) Unsafe Condition this AD, contact Airbus Helicopters, 2701 N implications under Executive Order Forum Drive, Grand Prairie, TX 75052; 13132. This AD will not have a This AD was prompted by the discovery that certain longitudinal trim actuators, phone: 972–641–0000 or 800–232–0323; fax: substantial direct effect on the States, on lateral trim actuators, and yaw trim actuators 972–641–3775; or at https://www.airbus.com/ the relationship between the national were erroneously listed as eligible for helicopters/services/technical-support.html. government and the States, or on the installation on Model MBB–BK 117 D–2 You may view this service information at the distribution of power and helicopters. The FAA is issuing this AD to FAA, Office of the Regional Counsel, responsibilities among the various address this condition, which could lead to Southwest Region, 10101 Hillwood Pkwy., levels of government. reduced control of the helicopter. Room 6N–321, Fort Worth, TX 76177. For the reasons discussed above, I (f) Compliance Issued on August 7, 2020. certify that this AD: Comply with this AD within the Lance T. Gant, (1) Is not a ‘‘significant regulatory compliance times specified, unless already done. Director, Compliance & Airworthiness action’’ under Executive Order 12866, Division, Aircraft Certification Service. (2) Will not affect intrastate aviation (g) Required Actions [FR Doc. 2020–17682 Filed 8–12–20; 8:45 am] in Alaska, and (1) Within 300 hours time-in-service, BILLING CODE 4910–13–P remove from service any longitudinal trim (3) Will not have a significant actuator P/N 418–00878–001, lateral trim economic impact, positive or negative, actuator P/N 418–00878–051, and yaw trim on a substantial number of small entities actuator P/N 418–00879–001. under the criteria of the Regulatory (2) After the effective date of this AD, do Flexibility Act. not install longitudinal trim actuator P/N

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DEPARTMENT OF TRANSPORTATION the FAA, Airworthiness Products at https://www.regulations.gov by Section, Operational Safety Branch, 901 searching for and locating Docket No. Federal Aviation Administration Locust, Kansas City, Missouri 64106. FAA–2020–0714. For information on the availability of 14 CFR Part 39 this material at the FAA, call (816) 329– Related Service Information Under 1 CFR Part 51 [Docket No. FAA–2020–0714; Project 4148. It is also available on the internet Identifier MCAI–2020–00589–G; Amendment at https://www.regulations.gov by The FAA reviewed Blanik Mandatory 39–21189; AD 2020–16–05] searching for and locating Docket No. Bulletin Document No. L23/060a, FAA–2020–0714. RIN 2120–AA64 Revision 2, dated March 17, 2020, Examining the AD Docket which contains procedures for Airworthiness Directives; Blanik You may examine the AD docket on inspecting the affected parts. The FAA Aircraft CZ s.r.o. the internet at https:// also reviewed Blanik Information Bulletin Document No. L23/061b, AGENCY: Federal Aviation www.regulations.gov by searching for Revision 1, dated March 17, 2020, Administration (FAA), DOT. and locating Docket No. FAA–2020– 0714; or in person at Docket Operations which contains procedures for replacing ACTION: Final rule; request for the affected parts. This service comments. between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. information is reasonably available SUMMARY: The FAA is adopting a new The AD docket contains this final rule, because the interested parties have airworthiness directive (AD) for all the mandatory continuing airworthiness access to it through their normal course Blanik Aircraft CZ s.r.o. Model L 23 information (MCAI), any comments of business or by the means identified Super-Blanik gliders. This AD requires received, and other information. The in the ADDRESSES section. a one-time inspection of the rudder street address for Docket Operations is FAA’s Determination control cable attachment screws and listed above. Comments will be hinge bolts, replacement of the cable available in the AD docket shortly after This product has been approved by attachment screws and hinge bolts if a receipt. EASA, and is approved for operation in crack is found, and reporting the FOR FURTHER INFORMATION CONTACT: Jim the United States. Pursuant to our inspection results to the manufacturer. Rutherford, Aerospace Engineer, FAA, bilateral agreement with the European This AD was prompted by reports of General Aviation & Rotorcraft Section, Union, EASA has notified us of the cracked rudder cable attachment screws. International Validation Branch, 901 unsafe condition described in the MCAI The FAA is issuing this AD to address Locust, Room 301, Kansas City, and service information referenced the unsafe condition on these products. Missouri 64106; phone: (816) 329–4165; above. The FAA is issuing this AD DATES: This AD is effective August 28, fax: (816) 329–4090; email: because it evaluated all the relevant 2020. [email protected]. information provided by EASA and The Director of the Federal Register SUPPLEMENTARY INFORMATION: determined the unsafe condition is approved the incorporation by reference likely to exist or develop in other of certain publications listed in this AD Discussion products of the same type design. as of August 28, 2020. The European Union Aviation Safety The FAA must receive comments on Agency (EASA), which is the Technical AD Requirements this AD by September 28, 2020. Agent for the Member States of the This AD requires a one-time ADDRESSES: You may send comments, European Community, has issued EASA inspection of the rudder control cable using the procedures found in 14 CFR AD No. 2020–0068–E, dated March 23, attachment screws and hinge bolts and, 11.43 and 11.45, by any of the following 2020 (referred to after this as ‘‘the if a crack is found, replacement of the methods: MCAI’’), to address an unsafe condition affected parts as specified in the service • for Blanik Aircraft CZ s.r.o. Model L 23 Federal eRulemaking Portal: Go to information described previously. This Super-Blanik gliders. The MCAI states: https://www.regulations.gov. Follow the AD also requires reporting certain instructions for submitting comments. During a standard maintenance procedure information to the manufacturer. • Fax: 202–493–2251. on an L 23 Super-Blanı´k sailplane, a crack • Mail: U.S. Department of was detected on a rudder control cable FAA’s Justification and Determination Transportation, Docket Operations, M– attachment screw. of the Effective Date 30, West Building Ground Floor, Room This condition, if not detected and W12–140, 1200 New Jersey Avenue SE, corrected, could lead to rudder control An unsafe condition exists that Washington, DC 20590. failure, possibly resulting in loss of requires the immediate adoption of this directional control of the sailplane. • Hand Delivery: U.S. Department of AD without providing an opportunity To address this unsafe condition, BACZ for public comments prior to adoption. Transportation, Docket Operations, M– [Blanik Aircraft CZ s.r.o.] issued the MB 30, West Building Ground Floor, Room [mandatory bulletin] and the IB [information The FAA has found that the risk to the W12–140, 1200 New Jersey Avenue SE, bulletin] to provide inspection and flying public justifies waiving notice Washington, DC 20590, between 9 a.m. replacement instructions. and comment prior to adoption of this and 5 p.m., Monday through Friday, For the reasons described above, this rule because the required corrective except Federal holidays. [EASA] AD requires a one-time inspection actions must be accomplished before For service information identified in and, depending on findings, replacement of further flight. Therefore, the FAA finds this final rule, contact Blanik Aircraft affected parts. good cause that notice and opportunity CZ s.r.o., Beranovych 65, Letnany, Blanik Aircraft CZ s.r.o. advises that for prior public comment are Praha, 199 00, Czech Republic; phone: reporting by operators and maintenance impracticable. In addition, for the +420 731 425 699; internet: https:// facilities indicates that this issue is not reason stated above, the FAA finds that www.blanik.aero/customer-support; an isolated event. You may obtain good cause exists for making this email: [email protected]. You may view further information by examining the amendment effective in less than 30 this referenced service information at MCAI in the AD docket on the internet days.

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Comments Invited substantive verbal contact it receives Aviation & Rotorcraft Section, This AD is a final rule that involves about this AD. International Validation Branch, 901 Locust, Room 301, Kansas City, requirements affecting flight safety and Confidential Business Information was not preceded by notice and an Missouri 64106. Any commentary that opportunity for public comment. CBI is commercial or financial the FAA receives which is not However, we invite you to send any information that is both customarily and specifically designated as CBI will be written data, views, or arguments about actually treated as private by its owner. placed in the public docket for this this final rule. Send your comments to Under the Freedom of Information Act rulemaking. an address listed under the ADDRESSES (FOIA) (5 U.S.C. 552), CBI is exempt Regulatory Flexibility Act section. Include ‘‘Docket No. FAA– from public disclosure. If your 2020–0714; Product Identifier MCAI– comments responsive to this AD contain The requirements of the Regulatory 2020–00589–G’’ at the beginning of your commercial or financial information Flexibility Act (RFA) do not apply when comments. The FAA will consider all that is customarily treated as private, an agency finds good cause pursuant to comments received by the closing date that you actually treat as private, and 5 U.S.C. 553 to adopt a rule without and may amend this AD because of that is relevant or responsive to this AD, prior notice and comment. Because the those comments. it is important that you clearly designate FAA has determined that it has good Except for Confidential Business the submitted comments as CBI. Please cause to adopt this rule without notice Information as described in the mark each page of your submission and comment, RFA analysis is not following paragraph, and other containing CBI as ‘‘PROPIN.’’ The FAA required. information as described in 14 CFR will treat such marked submissions as Costs of Compliance 11.35, the FAA will post all comments confidential under the FOIA, and they we receive, without change, to https:// will not be placed in the public docket The FAA estimates that this AD regulations.gov, including any personal of this AD. Submissions containing CBI affects 91 gliders of U.S. registry. The information you provide. The FAA will should be sent to Jim Rutherford, FAA estimates the following costs to also post a report summarizing each Aerospace Engineer, FAA, General comply with this AD:

ESTIMATED COSTS

Cost per Cost on U.S. Action Labor cost Parts cost product operators

Inspect rudder cable attach fasteners ...... 2.5 work-hours × $85.00 per hour = $212.50 $0.00 $212.50 $19,337.50 Reporting results to the manufacturer ...... 1 hour × $85.00 per hour = $85.00 ...... 0.00 85.00 7,735.00

The FAA estimates the following results of the inspection. The FAA has parts that might need these costs to do any necessary replacements no way of determining the number of replacements. that would be required based on the

ON-CONDITION COSTS

Cost per Action Labor cost Parts cost product

Replace fasteners ...... 3.5 work-hours × $85.00 per hour = $297.50 ...... $213.00 $510.50

Paperwork Reduction Act comments regarding this burden that section, Congress charges the FAA A federal agency may not conduct or estimate or any other aspect of this with promoting safe flight of civil sponsor, and a person is not required to collection of information, including aircraft in air commerce by prescribing respond to, nor shall a person be subject suggestions for reducing this burden to: regulations for practices, methods, and to a penalty for failure to comply with Information Collection Clearance procedures the Administrator finds a collection of information subject to the Officer, Federal Aviation necessary for safety in air commerce. requirements of the Paperwork Administration, 10101 Hillwood This regulation is within the scope of Reduction Act unless that collection of Parkway, Fort Worth, TX 76177–1524. that authority because it addresses an unsafe condition that is likely to exist or information displays a currently valid Authority for This Rulemaking OMB Control Number. The OMB develop on products identified in this Control Number for this information Title 49 of the United States Code rulemaking action. collection is 2120–0056. Public specifies the FAA’s authority to issue Regulatory Findings reporting for this collection of rules on aviation safety. Subtitle I, information is estimated to be section 106, describes the authority of This AD will not have federalism approximately 1 hour per response, the FAA Administrator. Subtitle VII: implications under Executive Order including the time for reviewing Aviation Programs describes in more 13132. This AD will not have a instructions, searching existing data detail the scope of the Agency’s substantial direct effect on the States, on sources, gathering and maintaining the authority. the relationship between the national data needed, completing and reviewing The FAA is issuing this rulemaking government and the States, or on the the collection of information. All under the authority described in distribution of power and responses to this collection of Subtitle VII, Part A, Subpart III, Section responsibilities among the various information are mandatory. Send 44701: General requirements. Under levels of government.

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For the reasons discussed above, I Authority: 49 U.S.C. 106(g), 40113, 44701. (e) Unsafe Condition certify this AD: § 39.13 [Amended] This AD was prompted by reports of (1) Is not a ‘‘significant regulatory cracking on the rudder control cable ■ action’’ under Executive Order 12866, 2. The FAA amends § 39.13 by adding attachment screw. The FAA is issuing this and the following new airworthiness AD to detect and prevent a crack in a rudder (2) Will not affect intrastate aviation directive (AD): control cable attachment screw, which could in Alaska. 2020–16–05 Blanik Aircraft CZ s.r.o.: result in in-flight collapse of the screw. The List of Subjects in 14 CFR Part 39 Amendment 39–21189; Docket No. unsafe condition, if not addressed, could FAA–2020–0714; Project Identifier result in rudder control failure and loss of Air transportation, Aircraft, Aviation MCAI–2020–00589–G. control of the glider. safety, Incorporation by reference, Safety. (a) Effective Date (f) Compliance This AD is effective August 28, 2020. Adoption of the Amendment Comply with this AD within the (b) Affected ADs compliance times specified, unless already Accordingly, under the authority done. delegated to me by the Administrator, None. the FAA amends 14 CFR part 39 as (c) Applicability (g) Inspection and Replacement follows: This AD applies to Blanik Aircraft CZ s.r.o. (1) For purposes of this AD, an affected Model L 23 Super-Blanik gliders, all serial part means a part identified in table 1 to PART 39—AIRWORTHINESS numbers, certificated in any category. paragraph (g)(1) of this AD. The series refers DIRECTIVES (d) Subject to the second pair of digits in the glider serial number. ■ 1. The authority citation for part 39 Joint Aircraft System Component (JASC) continues to read as follows: Code 2720, RUDDER CONTROL SYSTEM.

(2) Before further flight after August 28, report the following information to Blanik displays a currently valid OMB Control 2020 (the effective date of this AD), inspect Aircraft CZ s.r.o. at the address provided in Number. The OMB Control Number for this each affected part in accordance with the paragraph (m)(3) of this AD. information collection is 2120–0056. Public Working Procedure, paragraphs A.1(1) (1) Glider registration number (N number). reporting for this collection of information is through A.1(4) or paragraphs A.2(1) through (2) Glider serial number. estimated to be approximately 1 hour per A.2(4), as applicable for each part, of Blanik (3) Glider total hours time-in-service. response, including the time for reviewing Mandatory Bulletin Document No. L23/060a, (4) Number of starts by winch and tow (if instructions, searching existing data sources, Revision 2, dated March 17, 2020. known). gathering and maintaining the data needed, (3) If there are no cracks in the inspection (5) Inspection results (including no completing and reviewing the collection of area of a part during the inspection required findings). information. All responses to this collection by paragraph (g)(2) of this AD, before further of information are mandatory. Send flight, install the rudder in accordance with (i) Credit for Previous Actions comments regarding this burden estimate or the Working Procedure, paragraph A.1(8) or You may take credit for the actions any other aspect of this collection of A.2(8), as applicable for each part, of Blanik required by paragraphs (g)(2) and (g)(3) of Mandatory Bulletin Document No. L23/060a, this AD if you accomplish those actions information, including suggestions for Revision 2, dated March 17, 2020. before the effective date of this AD using reducing this burden to: Information (4) If there are any cracks in the inspection Blanik Mandatory Bulletin Document No. Collection Clearance Officer, Federal area of a part during the inspection required L23/060a, Revision 1, dated March 4, 2020, Aviation Administration, 10101 Hillwood by paragraph (g)(2) of this AD, before further and, Blanik Information Bulletin Document Parkway, Fort Worth, TX 76177–1524. flight, replace the part in accordance with the No. L23/061b, original issue, dated March 4, (k) Alternative Methods of Compliance Working Procedure, paragraphs A.1, A.2, 2020. If you take this credit, you do not have (AMOCs) either A.3.1. or A.3.2 (as applicable), and A.4, to comply with the reporting requirement in of Blanik Information Bulletin Document No. paragraph (h) of this AD. (1) The Manager, Small Airplane Standards L23/061b, Revision 1, dated March 17, 2020, Branch, FAA, has the authority to approve (j) Paperwork Reduction Act Burden and install the rudder in accordance with the AMOCs for this AD, if requested using the Working Procedure, paragraph A.1(8) or Statement procedures found in 14 CFR 39.19. In A.2(8), as applicable for each part, of Blanik A federal agency may not conduct or accordance with 14 CFR 39.19, send your Mandatory Bulletin Document No. L23/060a, sponsor, and a person is not required to request to your principal inspector or local Revision 2, dated March 17, 2020. respond to, nor shall a person be subject to Flight Standards District Office, as a penalty for failure to comply with a appropriate. If sending information directly (h) Reporting Requirement collection of information subject to the to the manager of the certification office, Within 10 days after each inspection requirements of the Paperwork Reduction send it to the attention of the person required by paragraph (g)(1) of this AD, Act unless that collection of information identified in paragraph (l) of this AD.

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(2) Before using any approved AMOC, DEPARTMENT OF TRANSPORTATION this referenced service information at notify your appropriate principal inspector, the FAA, Airworthiness Products or lacking a principal inspector, the manager Federal Aviation Administration Section, Operational Safety Branch, 901 of the local flight standards district office/ Locust, Kansas City, Missouri 64106. certificate holding district office. 14 CFR Part 39 For information on the availability of (l) Related Information [Docket No. FAA–2020–0711; Project this material at the FAA, call (816) 329– 4148. It is also available on the internet (1) For more information about this AD, Identifier MCAI–2020–00719–A; Amendment 39–21188; AD 2020–16–04] at https://www.regulations.gov by contact Jim Rutherford, Aerospace Engineer, searching for locating Docket No. FAA– FAA, General Aviation & Rotorcraft Section, RIN 2120–AA64 2020–0711. International Validation Branch, 901 Locust, Room 301, Kansas City, Missouri 64106; Airworthiness Directives; Pacific Examining the AD Docket Aerospace Limited Airplanes phone: (816) 329–4165; fax: (816) 329–4090; You may examine the AD docket on email: [email protected]. AGENCY: Federal Aviation the internet at https:// (2) Refer to European Union Aviation Administration (FAA), DOT. www.regulations.gov by searching for Safety Agency (EASA) AD No. 2020–0068–E, and locating Docket No. FAA–2020– dated March 23, 2020, for more information. ACTION: Final rule; request for comments. 0711; or in person at Docket Operations You may examine the EASA AD in the AD between 9 a.m. and 5 p.m., Monday docket on the internet at https:// SUMMARY: The FAA is adopting a new through Friday, except Federal holidays. www.regulations.gov by searching for and airworthiness directive (AD) for certain The AD docket contains this AD, the locating it in Docket No. FAA–2020–0714. Pacific Aerospace Limited Model 750XL regulatory evaluation, any comments (m) Material Incorporated by Reference airplanes. This AD results from received, and other information. The (1) The Director of the Federal Register mandatory continuing airworthiness street address for Docket Operations is approved the incorporation by reference of information (MCAI) issued by the listed above. Comments will be the service information listed in this aviation authority of another country to available in the AD docket shortly after paragraph under 5 U.S.C. 552(a) and 1 CFR identify and correct an unsafe condition receipt. part 51. on an aviation product. The MCAI FOR FURTHER INFORMATION CONTACT: (2) You must use this service information describes the unsafe condition as an Mike Kiesov, Aerospace Engineer, FAA, as applicable to do the actions required by incorrect illustration of the screw jack General Aviation & Rotorcraft Section, this AD, unless the AD specifies otherwise. assembly in the airplane maintenance International Validation Branch, 901 (i) Blanik Mandatory Bulletin Document manual, which may cause potential Locust, Room 301, Kansas City, No. L23/060a, Revision 2, dated March 17, errors with installation. The FAA is Missouri 64106; telephone: (816) 329– 2020. issuing this AD to address the unsafe 4144; fax: (816) 329–4090; email: (ii) Blanik Information Bulletin Document condition on these products. [email protected]. No. L23/061b, Revision 1, dated March 17, DATES: This AD is effective September 2, SUPPLEMENTARY INFORMATION: 2020. 2020. Discussion (3) For Blanik service information The Director of the Federal Register identified in this AD, contact Blanik Aircraft approved the incorporation by reference The Civil Aviation Authority (CAA), CZ s.r.o., Beranovych 65, Letnany, Praha, 199 of a certain publication listed in the AD which is the aviation authority for New 00, Czech Republic; phone: +420 731 425 as of September 2, 2020. Zealand, has issued AD DCA/750XL/ 699; internet: https://www.blanik.aero/ The FAA must receive comments on 38A, dated September 5, 2019 (referred customer-support; email: [email protected]. this AD by September 28, 2020. to after this as ‘‘the MCAI’’), to correct (4) You may view this service information ADDRESSES: an unsafe condition for Pacific at the FAA, Airworthiness Products Section, You may send comments by any of the following methods: Aerospace Limited Model 750XL Operational Safety Branch, 901 Locust, • airplanes. The MCAI states: Kansas City, Missouri 64106. For information Federal eRulemaking Portal: Go to DCA/750XL/38A with effective date 5 on the availability of this material at the https://www.regulations.gov. Follow the instructions for submitting comments. September 2019 and a 5 hour TIS compliance FAA, call (816) 329–4148. It is also available • is prompted by two reports of finding on the internet at https:// Fax: (202) 493–2251. • Mail: U.S. Department of incorrectly assembled flap screw jacks on www.regulations.gov by searching for affected aircraft. This AD is revised to locating Docket No. FAA–2020–0714. Transportation, Docket Operations, M– introduce Pacific Aerospace Mandatory (5) You may view this service information 30, West Building Ground Floor, Room Service Bulletin (MSB) PACSB/XL/117 issue that is incorporated by reference at the W12–140, 1200 New Jersey Avenue SE, 2, dated 21 August 2019 and expand the AD National Archives and Records Washington, DC 20590. applicability to include additional aircraft S/ • N and parts held as spares. Administration (NARA). For information on Hand Delivery: U.S. Department of There are no additional AD requirements the availability of this material at NARA, Transportation, Docket Operations, M– 30, West Building Ground Floor, Room for aircraft and affected parts in compliance email: [email protected], or go to: with DCA/750XL/38. https://www.archives.gov/federal-register/cfr/ W12–140, 1200 New Jersey Avenue SE, A Pacific Aerospace Ltd (PAL) review of ibr-locations.html. Washington, DC 20590, between 9 a.m. the 750XL Maintenance Manual (MM) and and 5 p.m., Monday through Friday, the 750XL Illustrated Parts Manual (IPM) has Issued on July 28, 2020. except Federal holidays. determined that the orientation shown in Lance T. Gant, For service information identified in these two manuals for the flap screw jack Director, Compliance & Airworthiness this AD, contact Pacific Aerospace bearing stop is incorrect. PAL has Division, Aircraft Certification Service. Limited, Airport Road, Hamilton, subsequently issued temporary revisions dated 5 June 2019, for both the 750XL MM [FR Doc. 2020–17650 Filed 8–12–20; 8:45 am] Private Bag 3027, Hamilton 3240, New and the 750XL IPM to correct the orientation BILLING CODE 4910–13–P Zealand; phone: +64 7843 6144; fax: +64 shown for the flap screw jack bearing stop. 843 6134; email: pacific@ These temporary revisions can be obtained aerospace.co.nz; internet: https:// from Pacific Aerospace Ltd, Hamilton, New www.aerospace.co.nz/. You may view Zealand.

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Due to the possibility that there may be assemblies in service, which could Aerospace Engineer, FAA, General incorrectly assembled flap screw jack cause failure of the flap screw jack and Aviation & Rotorcraft Section, assemblies in service, this [CAA] AD is result in a failure of the flap actuator to International Validation Branch, 901 issued to introduce the corrective actions in fully extend the flaps during the Pacific Aerospace Mandatory Service Locust, Room 301, Kansas City, Bulletin (MSB) PACSB/XL/117 issue 2, dated completion of a final approach. This Missouri 64106. Any commentary that 21 August 2019. The aircraft may be condition, if not detected and corrected, the FAA receives which is not recovered back to a maintenance base for the could result in a longer landing distance specifically designated as CBI will be inspection, provided the flight is a non-hire and a possible runway overrun placed in the public docket for this or reward flight with no passengers carried. condition. The risk assessment received rulemaking. by the FAA, and reconfirmed in July of You may examine the MCAI on the Costs of Compliance internet at https://www.regulations.gov 2020, indicates that urgent action is by searching for and locating Docket No. required. Therefore, the FAA finds good The FAA estimates that this AD will FAA–2020–0711. cause that notice and opportunity for affect 22 products of U.S. registry. The prior public comment are impracticable. FAA also estimates that it will take 1 Related Service Information Under 1 In addition, for the reason stated above, work-hour per product to comply with CFR Part 51 the FAA finds that good cause exists for the inspection requirement of this AD. The FAA reviewed Pacific Aerospace making this amendment effective in less The average labor rate is $85 per work- Mandatory Service Bulletin PACSB/XL/ than 30 days. hour. Based on these figures, the FAA 117, Issue 2, dated August 21, 2019. The Comments Invited service information contains procedures estimates the cost of the inspection for for inspecting the flap screw jack This AD is a final rule that involves U.S. operators to be $1,870, or $85 per assembly to verify proper configuration requirements affecting flight safety and product. of the assembly. This service was not preceded by notice and an In addition, the FAA estimates that information is reasonably available opportunity for public comment. any necessary follow-on actions will because the interested parties have However, we invite you to send any take 4 work-hours and require parts access to it through their normal course written data, views, or arguments about costing $50, for a cost of $390 per of business or by the means identified this final rule. Send your comments to product. The FAA has no way of in the ADDRESSES section. an address listed under the ADDRESSES determining the number of products section. Include the Docket Number that may need these actions. Other Related Service Information FAA–2020–0711 and Product Identifier According to the manufacturer, some Pacific Aerospace Limited has also MCAI–2020–00719–A at the beginning of the costs of this AD may be covered issued temporary revisions for the P– of your comments. We will post all under warranty, thereby reducing the 750 XSTOL Maintenance Manual for the comments we receive, without change, cost impact on affected individuals. The 750XL Aircraft, Revision 16, dated to https://www.regulations.gov, FAA does not control warranty coverage October 2018; and the P–750 XSTOL III including any personal information you for affected individuals. As a result, the Maintenance Manual P/N 11–08002–1 provide. FAA has included all costs in our cost for the 750XL (EFIS) Aircraft, Revision Except for Confidential Business estimate. 2, dated August 2018. These temporary Information (CBI) as described in the Authority for This Rulemaking revisions contain corrections for the following paragraph, and other orientation of the flap screw jack information as described in 14 CFR Title 49 of the United States Code bearing stop. 11.35, the FAA will post all comments specifies the FAA’s authority to issue we receive, without change, to https:// rules on aviation safety. Subtitle I, FAA’s Determination and Requirements www.regulations.gov, including any section 106, describes the authority of of the AD personal information you provide. The the FAA Administrator. Subtitle VII: This product has been approved by FAA will also post a report Aviation Programs, describes in more the aviation authority of another summarizing each substantive verbal detail the scope of the Agency’s country, and is approved for operation contact we receive about this final rule. authority. in the United States. Pursuant to our The FAA is issuing this rulemaking Confidential Business Information bilateral agreement with this State of under the authority described in Design Authority, it has notified us of CBI is commercial or financial Subtitle VII, Part A, Subpart III, section the unsafe condition described in the information that is both customarily and 44701: General requirements. Under MCAI and service information actually treated as private by its owner. that section, Congress charges the FAA referenced above. The FAA is issuing Under the Freedom of Information Act with promoting safe flight of civil this AD because it evaluated all (FOIA) (5 U.S.C. 552), CBI is exempt aircraft in air commerce by prescribing information provided by the State of from public disclosure. If your regulations for practices, methods, and Design Authority and determined the comments responsive to this AD contain procedures the Administrator finds unsafe condition exists and is likely to commercial or financial information necessary for safety in air commerce. exist or develop on other products of the that is customarily treated as private, This regulation is within the scope of same type design. that you actually treat as private, and that authority because it addresses an that is relevant or responsive to this AD, unsafe condition that is likely to exist or FAA’s Determination of the Effective it is important that you clearly designate develop on products identified in this Date the submitted comments as CBI. Please rulemaking action. An unsafe condition exists that mark each page of your submission requires the immediate adoption of this containing CBI as ‘‘PROPIN.’’ The FAA Regulatory Flexibility Act AD. The FAA has found that the risk to will treat such marked submissions as The requirements of the Regulatory the flying public justifies waiving notice confidential under the FOIA, and they Flexibility Act (RFA) do not apply when and comment prior to adoption of this will not be placed in the public docket an agency finds good cause pursuant to rule because of the possibility there may of this AD. Submissions containing CBI 5 U.S.C. 553 to adopt a rule without be incorrectly assembled flap screw jack should be sent to Mike Kiesov, prior notice and comment. Because FAA

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has determined that it has good cause to the flap screw jack assembly to verify proper DCA/750XL/38A, dated September 5, 2019, adopt this rule without notice and configuration of the assembly and make the for related information. You may examine the comment, RFA analysis is not required. correction if found improperly installed. This MCAI on the internet at https:// unsafe condition, if not addressed, could www.regulations.gov by searching for and Regulatory Findings cause fatigue failure of a flap screw jack, locating Docket No. FAA–2020–0711. which could result in a failure of the flap The FAA has determined that this AD actuator to fully extend the flaps during the (k) Material Incorporated by Reference will not have federalism implications completion of a final approach, a longer (1) The Director of the Federal Register under Executive Order 13132. This AD landing distance, and consequent runway approved the incorporation by reference of will not have a substantial direct effect overrun condition. the service information listed in this on the States, on the relationship paragraph under 5 U.S.C. 552(a) and 1 CFR (f) Actions and Compliance between the national government and part 51. the States, or on the distribution of Unless already done, do the following (2) You must use this service information power and responsibilities among the actions in paragraphs (f)(1) and (2) of this as applicable to do the actions required by AD. various levels of government. this AD, unless the AD specifies otherwise. (1) Within 20 hours time-in-service after (i) Pacific Aerospace Mandatory Service For the reasons discussed above, I September 2, 2020 (the effective date of this Bulletin PACSB/XL/117, Issue 2, dated certify that this AD: AD), inspect the left hand (LH) and right August 21, 2019. (1) Is not a ‘‘significant regulatory hand (RH) flap screw jack assemblies for (ii) [Reserved] action’’ under Executive Order 12866, proper installation by following the (3) For Pacific Aerospace Limited service and Accomplishment Instructions, paragraphs information identified in this AD, contact (2) Will not affect intrastate aviation A.1) through A.3), of Pacific Aerospace Pacific Aerospace Limited, Airport Road, in Alaska. Mandatory Service Bulletin (MSB) PACSB/ Hamilton, Private Bag 3027, Hamilton 3240, XL/117, Issue 2, dated August 21, 2019 New Zealand; phone: +64 7843 6144; fax: List of Subjects in 14 CFR Part 39 (PACSB/XL/117, Issue 2). If a flap screw jack +64 7843 6134; email: pacific@ Air transportation, Aircraft, Aviation assembly is not properly installed as shown aerospace.co.nz; internet: https:// in figures 1 and 2 of PACSB/XL/117, Issue 2, www.aerospace.co.nz/. safety, Incorporation by reference, before further flight, comply with the Safety. (4) You may view this referenced service Accomplishment Instructions, Part B, of information at the FAA, Airworthiness Adoption of the Amendment PACSB/XL/117, Issue 2. Products Section, Operational Safety Branch, (2) As of September 2, 2020 (the effective 901 Locust, Kansas City, Missouri 64106. For Accordingly, under the authority date of this AD), do not install a LH flap information on the availability of this delegated to me by the Administrator, screw jack assembly P/N 11–45621–1 or RH material at the FAA, call (816) 329–4148. It the FAA amends 14 CFR part 39 as flap screw jack assembly P/N 11–45622–1 on is also available on the internet at https:// follows: any airplane, unless it is installed in www.regulations.gov by searching for Docket accordance with the Accomplishment No. FAA–2020–0711. PART 39—AIRWORTHINESS Instructions, Part B, of PACSB/XL/117, (5) You may view this service information DIRECTIVES Issue 2. that is incorporated by reference at the (g) Credit for Previous Actions National Archives and Records ■ 1. The authority citation for part 39 Administration (NARA). For information on You may take credit for the actions the availability of this material at NARA, continues to read as follows: required by paragraph (f)(1) of this AD if you email [email protected], or go to: https:// Authority: 49 U.S.C. 106(g), 40113, 44701. performed those actions before the effective date of this AD using Pacific Aerospace MSB www.archives.gov/federal-register/cfr/ibr- § 39.13 [Amended] PACSB/XL/117, Issue 1, dated June 7, 2019. locations.html. Issued on July 29, 2020. ■ 2. The FAA amends § 39.13 by adding (h) Special Flight Permit Gaetano A. Sciortino, the following new airworthiness Special flight permits may be issued may directive: be issued for the purpose of operating the Deputy Director for Strategic Initiatives, airplane to a location where the requirements Compliance & Airworthiness Division, 2020–16–04 Pacific Aerospace Limited: Aircraft Certification Service. Amendment 39–21188; Docket No. of this AD can be performed with the FAA–2020–0711; Project Identifier following limitations: Flights must not carry [FR Doc. 2020–17607 Filed 8–12–20; 8:45 am] MCAI–2020–00719–A. passengers. BILLING CODE 4910–13–P (a) Effective Date (i) Alternative Methods of Compliance (AMOCs) This airworthiness directive (AD) becomes DEPARTMENT OF HEALTH AND effective September 2, 2020. The Manager, Small Airplane Standards Branch, FAA, has the authority to approve HUMAN SERVICES (b) Affected ADs AMOCs for this AD, if requested using the None. procedures found in 14 CFR 39.19. Send Food and Drug Administration information to ATTN: Mike Kiesov, (c) Applicability Aerospace Engineer, FAA, General Aviation 21 CFR Part 101 This AD applies to Pacific Aerospace & Rotorcraft Section, International Validation Limited Model 750XL airplanes, serial Branch, 901 Locust, Room 301, Kansas City, [Docket No. FDA–2014–N–1021] numbers 101 through to 215, 220, 8001, and Missouri 64106; telephone: (816) 329–4144; RIN 0910–AH00 8002, certificated in any category. fax: (816) 329–4090; email: mike.kiesov@ faa.gov. Before using any approved AMOC on (d) Subject Food Labeling; Gluten-Free Labeling of any airplane to which the AMOC applies, Fermented or Hydrolyzed Foods Air Transport Association of America notify your appropriate principal inspector (ATA) Code 27: Flight Controls. (PI) in the FAA Flight Standards District AGENCY: Food and Drug Administration, Office (FSDO), or lacking a PI, your local HHS. (e) Reason FSDO. This AD was prompted by an incorrect ACTION: Final rule. illustration of the screw jack assembly in the (j) Related Information airplane maintenance manual, thus causing Refer to mandatory continuing SUMMARY: The Food and Drug potential errors with installation. The FAA is airworthiness information (MCAI) New Administration (FDA or we) is issuing a issuing this AD to require an inspection of Zealand Civil Aviation Authority AD No. final rule to establish requirements

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concerning ‘‘gluten-free’’ labeling for Compliance date: The compliance published a final rule that defines the foods that are fermented or hydrolyzed date of this final rule is August 13, 2021. term ‘‘gluten-free’’ and establishes or that contain fermented or hydrolyzed ADDRESSES: For access to the docket to requirements for the voluntary use of ingredients. These requirements f are read background documents or that term in food labeling (the 2013 needed to help ensure that individuals comments received, go to https:// gluten-free food labeling final rule). The with celiac disease are not misled and www.regulations.gov and insert the 2013 gluten-free food labeling final rule receive truthful and accurate docket number found in brackets in the (now codified at § 101.91 (21 CFR information with respect to fermented heading of this final rule into the 101.91)) is intended to ensure that or hydrolyzed foods labeled as ‘‘gluten- ‘‘Search’’ box and follow the prompts, individuals with celiac disease are not free.’’ Currently, FDA knows of no and/or go to the Dockets Management misled and are provided with truthful scientifically valid analytical method Staff, 5630 Fishers Lane, Rm. 1061, and accurate information with respect to effective in detecting and quantifying Rockville, MD 20852. foods so labeled. The regulation with precision the gluten protein FOR FURTHER INFORMATION CONTACT: provides that when compliance with the content in fermented or hydrolyzed With regard to the final rule: Carol rule is based on an analysis of the food, foods in terms of equivalent amounts of D’Lima, Center for Food Safety and we will use a scientifically valid method that is suitable for the reliable detection intact gluten proteins. Thus, we plan to Applied Nutrition (HFS–820), Food and of 20 parts per million (ppm) gluten in evaluate compliance of such fermented Drug Administration, 5001 Campus Dr., the food and has been validated or hydrolyzed foods that bear a ‘‘gluten- Rm. 4D–022, College Park, MD 20740, extensively for the detection of gluten in free’’ claim based on records that are 240–402–2371, Carol.Dlima@ both raw and cooked or baked products made and kept by the manufacturer of fda.hhs.gov. With regard to the (§ 101.91(c)). In the context of this rule the food bearing the ‘‘gluten-free’’ claim information collection: FDA PRA Staff, for the Gluten-Free Labeling of and made available to us for inspection Office of Operations, Food and Drug Fermented or Hydrolyzed Foods, the and copying. The records need to Administration, 8455 Colesville Rd., limit for gluten refers to intact gluten. provide adequate assurance that the COLE–14526, Silver Spring, MD 20993– We established this 20 ppm limit for food or ingredients used in the food are 0002, [email protected]. ‘‘gluten-free’’ before fermentation or gluten considering multiple factors, SUPPLEMENTARY INFORMATION: hydrolysis. Once we identify that a including currently available analytical scientifically valid method has been Table of Contents methods and the needs of individuals with celiac disease, as well as factors developed that can accurately detect I. Executive Summary and quantify gluten in fermented or such as ease of compliance and A. Purpose and Coverage of the Final Rule enforcement, stakeholder concerns, hydrolyzed foods or ingredients, it B. Summary of the Major Provisions of the would no longer be necessary for the Final Rule economics, trade issues, and legal manufacturer of foods bearing the C. Legal Authority authorities. Although test methods for ‘‘gluten-free’’ claim to make and keep D. Costs and Benefits the detection of gluten fragments in these records. In addition, because II. Table of Abbreviations and Acronyms fermented or hydrolyzed foods have currently there is no scientifically valid Commonly Used in This Document advanced, currently, we know of no analytical method effective in detecting III. Background scientifically valid analytical method A. Need for the Regulation/History of This and quantifying the gluten protein effective in detecting and quantifying Rulemaking with precision the gluten protein content in fermented or hydrolyzed B. Provisions of the Proposed Rule foods the final rule requires the content in fermented or hydrolyzed IV. Legal Authority foods in terms of equivalent amounts of manufacturer of these kinds of foods V. Comments on the Proposed Rule and FDA bearing the ‘‘gluten-free’’ claim to Responses intact gluten. Thus, alternative means document that it has adequately A. Introduction are necessary to verify compliance with evaluated the potential for gluten cross- B. Comments and FDA Responses the provisions of the 2013 gluten-free contact and, if identified, that the VI. Effective and Compliance Dates food labeling final rule for fermented or manufacturer has implemented VII. Economic Analysis of Impacts hydrolyzed foods, such as cheese, VIII. Analysis of Environmental Impact yogurt, vinegar, sauerkraut, pickles, measures to prevent the introduction of IX. Paperwork Reduction Act of 1995 green olives, beers, and wine, or gluten into the food during the Recordkeeping Requirements for Gluten- hydrolyzed plant proteins used to manufacturing process. Likewise, the Free Labeling of Fermented or improve flavor or texture in processed final rule requires manufacturers of Hydrolyzed Foods foods such as soups, sauces, and foods that contain fermented or X. Federalism seasonings. hydrolyzed ingredients and bear the XI. References ‘‘gluten-free’’ claim to make and keep I. Executive Summary B. Summary of the Major Provisions of records that demonstrate with adequate the Final Rule assurance that the fermented or A. Purpose and Coverage of the Final Section 101.91 (21 CFR 101.91) hydrolyzed ingredients are ‘‘gluten-free’’ Rule defines the term ‘‘gluten-free’’ to mean in compliance with the 2013 gluten-free Celiac disease, a hereditary, chronic that the food bearing the claim does not food labeling final rule. Finally, this inflammatory disorder of the small contain: (1) An ingredient that is a final rule states that we will evaluate intestine, has no cure, but individuals gluten-containing grain; (2) an compliance of distilled foods by who have this disease are advised to ingredient that is derived from a gluten- verifying the absence of protein using avoid all sources of gluten in their diet containing grain and that has not been scientifically valid analytical methods to protect against adverse health effects processed to remove gluten; or (3) an that can reliably detect the presence of associated with the disease. Relevant ingredient that is derived from a gluten- protein or protein fragments in the educational materials are available on containing grain and that has been distilled food. FDA’s website at https://www.fda.gov/ processed to remove gluten if the use of DATES: food/food-labeling-nutrition/gluten-free- that ingredient results in the presence of Effective date: This rule is effective labeling-foods. In the Federal Register 20 parts per million (ppm) or more October 13, 2020. of August 5, 2013 (78 FR 47154), we gluten in the food; or inherently does

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not contain gluten, and that any commerce. The final rule allows these III. Background unavoidable presence of gluten in the records to be kept as original records, as A. Need for the Regulation/History of food is below 20 ppm gluten. A food true copies, or as electronic records, and This Rulemaking that bears the claim ‘‘no gluten,’’ ‘‘free manufacturers would have to make the of gluten,’’ or ‘‘without gluten’’ in its records available to us for inspection Celiac disease is a hereditary, chronic labeling and fails to meet the and copying, upon request, during an inflammatory disorder of the small requirements for the ‘‘gluten-free’’ claim inspection. The records need to be intestine triggered by the ingestion of will be deemed to be misbranded. This reasonably accessible to FDA during an certain proteins referred to as gluten, final rule amends § 101.91(c) to provide inspection at each manufacturing which occur in wheat, rye, barley, and alternative means for FDA to verify facility (even if not stored on site) to crossbreeds of these grains. The main compliance based on records that are determine whether the food has been protein of wheat gluten is gliadin; the maintained by the manufacturer of the manufactured and labeled in similar proteins of rye and barley are fermented or hydrolyzed food bearing compliance with § 101.91. Records that termed secalin and hordein, the ‘‘gluten-free’’ claim and made can be immediately retrieved from respectively. Both major protein available to us for inspection and another location by electronic means are fractions of gluten, gliadins and copying. considered reasonably accessible. The glutenins, are active in celiac disease. This final rule requires that, for foods final rule also provides that we will All the gliadins and glutenins subunits that are fermented or hydrolyzed and evaluate compliance of distilled foods, are reported to be harmful for bear the ‘‘gluten-free’’ claim, the such as distilled vinegar, by verifying individuals with celiac disease (Ref. 1). manufacturer must have records that the absence of protein using Celiac disease has no cure, and demonstrate with adequate assurance scientifically valid analytical methods individuals who have this disease are that the food is ‘‘gluten-free’’ in that can reliably detect the presence of advised to avoid all sources of gluten in compliance with § 101.91(a)(3) before protein or protein fragments in the food. their diet to protect against adverse fermentation or hydrolysis. Such health effects associated with the adequate assurance can include test C. Legal Authority disease. results, certificates of analysis (CoAs), or Consistent with section 206 of the In the Federal Register of August 5, other appropriate verification Food Allergen Labeling and Consumer 2013 (78 FR 47154), we published a documentation for each of the Protection Act (FALCPA) and sections final rule that defines the term ‘‘gluten- ingredients used in the food. (A CoA is 403(a)(1), 201(n), and 701(a) of the free’’ and establishes requirements for a document indicating specified test Federal Food, Drug, and Cosmetic Act the voluntary use of that term in food results performed on product(s) by a (FD&C Act) (21 U.S.C. 343(a)(1), 321(n), labeling. The 2013 gluten-free food qualified laboratory that has certified and 371(a)), we are issuing requirements labeling final rule, which is codified at the test results.) Alternatively, adequate to permit the voluntary use of the term § 101.91, is intended to help ensure that assurance can include results of tests on ‘‘gluten-free’’ in the labeling of foods individuals with celiac disease are not the food itself, rather than the that are fermented, hydrolyzed, or misled and receive truthful and accurate ingredients, before fermentation or distilled, or that contain fermented, information with respect to foods hydrolysis of the food. In addition, the hydrolyzed, or distilled ingredients. labeled as ‘‘gluten-free.’’ The 2013 final rule requires documentation by the gluten-free food labeling final rule does manufacturer that any potential for D. Costs and Benefits not require manufacturers who label gluten cross-contact has been Full compliance with this final rule their foods as ‘‘gluten-free’’ to test those adequately assessed, and where such a would have annualized costs of about foods for the presence of gluten. potential has been identified, the $7 million to $11 million per year at 3% However, they may choose to do so to manufacturer has implemented discount rate and annualized costs of $7 ensure that the food does not contain 20 measures to prevent the introduction of million to $11 million at 7% discount ppm or more gluten. The regulation gluten into the food during the rate. For the rule to break-even with provides that, when compliance with manufacturing process. Also, for foods costs, the annualized benefits would [the rule] is based on an analysis of the containing one or more fermented or need to be at least $8.8 million at a 3% food, we will use a scientifically valid hydrolyzed ingredients and bearing the discount rate and a $9.1 million at a 7% method that can reliably detect the ‘‘gluten-free’’ claim, manufacturers must discount rate. Based on our simulation presence of 20 ppm gluten in a variety make and keep records demonstrating analysis, the rule would break-even of food matrices, including both raw with adequate assurance that the with primary cost estimates discounted and cooked or baked products fermented or hydrolyzed ingredients are at 7% if at least 0.07% of estimated (§ 101.91(c)). We may conduct such ‘‘gluten-free’’ under § 101.91(a)(3) individuals with celiac disease testing to verify that foods labeled before fermentation or hydrolysis and following a gluten-free diet benefit from ‘‘gluten-free’’ meet the criteria for the potential for gluten cross-contact has the rule each year. ‘‘gluten-free’’ labeling, including the been adequately assessed, and where part of the ‘‘gluten-free’’ definition that such potential has been identified, II. Table of Abbreviations and states that any unavoidable presence of measures have been implemented to Acronyms Commonly Used in This gluten in the food bearing the claim in prevent introduction of gluten during Document its labeling is below 20 ppm gluten (i.e., below 20 mg gluten per kg of food) the ingredient manufacturing process). Abbreviation What it means This includes, but is not limited to, (§ 101.91(a)(3)(ii)). CoAs or other appropriate verification ANPRM ...... Advance Notice of Proposed Rule- Through comments we received in documentation from the ingredient making. response to the proposed rule for gluten- CPG ...... Compliance Policy Guide. free labeling of foods that appeared in suppliers and/or results of testing E.O...... Executive Order. conducted by the ingredient suppliers. FALCPA ...... Food Allergen Labeling and Con- the Federal Register of January 23, 2007 The final rule also requires that the sumer Protection Act. (72 FR 2795) and to a related notice manufacturer retain records for at least FD&C Act ...... Federal Food, Drug, and Cosmetic reopening of the comment period that 2 years after introduction or delivery for Act. we published in the Federal Register of GMP ...... Good Manufacturing Practice. introduction of the food into interstate August 3, 2011 (76 FR 46671), we

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became aware that fermented or difficult. This uncertainty creates hydrolysis; (2) the manufacturer has hydrolyzed foods, some of which are problems in equating these test results adequately evaluated their processing labeled as ‘‘gluten-free,’’ cannot be to an equivalent amount of intact gluten for any potential for gluten cross- tested for a quantitative measure of in the fermented or hydrolyzed product. contact; and (3) where the potential for intact gluten using currently available Without reference standards to gauge gluten cross-contact has been identified, analytical methods. In the notice that the response for detection and the manufacturer has implemented we published in the Federal Register of quantification of gluten to produce measures to prevent the introduction of August 3, 2011 (76 FR 46671 at 46673), fermented or hydrolyzed products, such gluten into the food during the we stated that we recognized that, for quantification is uncertain and manufacturing process. For foods for some food matrices (e.g., fermented or potentially inaccurate (Ref. 2). Thus, we which a scientifically valid method to hydrolyzed foods), there were no need other means to verify compliance detect and quantify gluten is not currently available validated methods for these foods. available because the food is distilled, that could be used to accurately compliance would be evaluated by B. What did we propose to do? determine if those foods contained <20 verifying the absence of protein (and ppm gluten. We also stated that we were In the Federal Register of November thus gluten) in the distilled component considering whether to require 18, 2015 (80 FR 71990), we published a using scientifically valid analytical manufacturers of such foods to have a proposed rule to establish requirements methods that can reliably detect the scientifically valid method that would concerning ‘‘gluten-free’’ labeling for presence or absence of protein or reliably and consistently detect gluten at foods that are fermented, hydrolyzed, or protein fragments in the food. 20 ppm or less before including a distilled, or that contain fermented, IV. Legal Authority ‘‘gluten-free’’ claim in the labeling of hydrolyzed, or distilled ingredients. In their foods. We requested comments on brief, we proposed to evaluate We are issuing this final rule under this proposed approach as well as on compliance with the 2013 gluten-free section 206 of FALCPA which directs whether we also should require these food labeling final rule of such the ‘‘Secretary of Health and Human manufacturers to maintain records on fermented or hydrolyzed foods that bear Services, in consultation with test methods, protocols, and results and a ‘‘gluten-free’’ claim based on records appropriate experts and stakeholders,’’ to make these records available to us that are made and kept by the to ‘‘issue a rule to define, and permit upon inspection. manufacturer of the food bearing the use of, the term ‘‘gluten-free’’ on the The notice explained that we interpret ‘‘gluten-free’’ claim and made available labeling of foods.’’ Section 403(a)(1) of the term ‘‘scientifically valid method’’ to us for inspection and copying. The the FD&C Act states that a food shall be to mean a method that is ‘‘accurate, records would need to provide adequate deemed to be misbranded if its labeling precise, and specific for its intended assurance that food is ‘‘gluten-free’’ in is false or misleading in any particular. purpose and where the results of the compliance with the 2013 gluten-free In determining whether food labeling is method evaluation are published in the food labeling final rule before misleading, section 201(n) of the FD&C peer-reviewed scientific literature. In fermentation or hydrolysis. In addition, Act explicitly provides for consideration other words, a scientifically valid test is we proposed to require the of the extent to which the labeling fails one that consistently and reliably does manufacturer of fermented or to reveal facts that are material with what it is intended to do’’ (78 FR 47154 hydrolyzed foods bearing the ‘‘gluten- respect to the consequences which may at 47165). free’’ claim to document that it has result from the use of the food to which Although test methods for the adequately evaluated the potential for the labeling relates under conditions of detection of gluten fragments in gluten cross-contact and, if identified, use as are customary or usual. Section fermented or hydrolyzed foods have that the manufacturer has implemented 701(a) of the FD&C Act vests the advanced, as of August 13, 2020, we measures to prevent the introduction of Secretary (and by delegation, FDA) with know of no scientifically valid gluten into the food during the authority to issue regulations for the analytical method effective in detecting manufacturing process. Likewise, we efficient enforcement of the FD&C Act. and quantifying with precision the proposed to require manufacturers of Consistent with section 206 of FALCPA gluten protein content in fermented or foods that contain fermented or and sections 403(a)(1), 201(n), and hydrolyzed foods in terms of equivalent hydrolyzed ingredients and bear the 701(a) of the FD&C Act, we are amounts of intact gluten proteins. ‘‘gluten-free’’ claim to make and keep establishing requirements for the use of Sandwich Enzyme-Linked records that demonstrate with adequate the term ‘‘gluten-free’’ for fermented and Immunosorbent Assay (ELISA)-based assurance that the fermented or hydrolyzed foods. methods are not effective in detecting hydrolyzed ingredients are ‘‘gluten-free’’ Because there is no scientifically valid and quantifying gluten proteins that are in compliance with § 101.91. Finally, analytical method available that can no longer intact as a result of we proposed to evaluate compliance of both reliably detect and accurately fermentation or hydrolysis since the distilled foods by verifying the absence quantify the equivalent of 20 ppm intact method requires at least two epitopes to of protein using scientifically valid gluten in foods that are fermented or work. Competitive ELISA-based analytical methods that can reliably hydrolyzed, or that contain fermented or methods that recognize a single epitope detect the presence of protein or protein hydrolyzed ingredients, we are have been developed and may fragments in the distilled food. We establishing requirements for eventually overcome the detection proposed to revise § 101.91(b)(1), (b)(2), manufacturers to make and keep records problems encountered using current and (c) to state that when a scientifically containing information that provide sandwich ELISA-based assays with valid method is not available because adequate assurance that their food fermented or hydrolyzed food. While the food or ingredient is fermented or complies with the definition of ‘‘gluten- some studies have validated the hydrolyzed, the manufacturer of such free,’’ including information that they reproducibility of competitive ELISA- foods bearing the claim must make and gather or produce about their based test methods, the lack of keep records regarding the fermented or ingredients and the details of their appropriate calibration standards or hydrolyzed food that demonstrate: (1) manufacturing practices. These record suitable reference materials make Adequate assurance that the food is requirements would help ensure that accurate quantification of gluten content ‘‘gluten-free’’ before fermentation or the use of the term ‘‘gluten-free’’ is

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accurate, truthful, and not misleading comments for purposes of our whether documentation providing based on information known to the responses. The number assigned to each general information on the commodity manufacturer that FDA would not comment topic is for organizational and regional growing practices in otherwise be able to access, and to purposes only and does not signify the countries of origin would be sufficient facilitate efficient and effective action to comment’s value, importance, or the to meet the ‘‘gluten-free’’ claim enforce the requirements when order in which it was received. requirements. necessary. Our authority to establish (Response 1) It is our experience that B. Comments and FDA Responses records requirements has been upheld all foods may, at some point during under other provisions of the FD&C Act 1. Request for Exemption for Inherently manufacture, have a risk of cross- where we have found such records to be Gluten-Free Ingredients and Enzymes contact with a gluten-containing grain depending on manufacturer operations, necessary (National Confectioners (Comment 1) Several comments stated sources of ingredients, movements Assoc. v. Califano, 569 F.2d 690, 693– that the rule would have the unintended through the supply chain and 694 (D.C. Cir. 1978)). consequence of prohibiting certain distribution, etc. There may be The final rule requires records only inherently gluten-free foods and inherently gluten-free foods or for foods for which an adequate ingredients from bearing a ‘‘gluten-free’’ ingredients that still do not meet the analytical method is not available. The claim. The comments said that the definition of ‘‘gluten-free’’ due to cross- records will allow us to verify that the added recordkeeping requirements were contact with gluten that leads to gluten ‘‘gluten-free’’ claim on foods that are an unnecessary burden on content in the food that is at or above fermented or hydrolyzed, or contain manufacturers and that, in other cases, 20 ppm. Conversely, there also may be fermented or hydrolyzed ingredients, is it might be impossible to request records truthful and complies with the inherently gluten-free foods that have from remote geographic regions for some cross-contact with gluten- requirements of the definition. The commodity items that are fermented authority granted to us under sections containing products but are still able to immediately after harvest (e.g., cocoa bear the ‘‘gluten-free’’ claim because the 701(a), 403(a)(1), and 201(n) of the beans). The comments pointed out that FD&C Act not only includes authority to presence of gluten in the food due to some ingredients are at low risk of cross-contact is less than 20 ppm. Just establish records requirements, but also contact with gluten-containing grains at includes authority to access to such as we concluded in the preamble to the harvest as well as across the supply 2013 gluten-free food labeling final rule records. Without such authority, we chain. The comments stated that FDA would not know whether the use of the (78 FR 47154 at 47168), all food bearing should make clear in the preamble to a ‘‘gluten-free’’ claim, regardless if they term ‘‘gluten-free’’ on the label or in the the final rule that inherently gluten-free labeling of these foods is truthful and are inherently gluten-free or not, must foods, such as milk and dairy meet the definition of ‘‘gluten-free.’’ In not misleading under sections 403(a)(1) ingredients, vanilla beans, enzymes and 201(n) of the FD&C Act. The 2015, we stated in the preamble to the (grown on media containing gluten), proposed rule for gluten-free labeling of introduction or delivery for introduction flavor extracts, and cocoa beans, that into interstate commerce of a fermented or hydrolyzed foods that the have a low risk of gluten cross-contact specific types of records that would misbranded food is a prohibited act are exempt from the final rule. The under section 301(a) of the FD&C Act provide adequate assurance that comments requested that proposed fermented or hydrolyzed ingredients (21 U.S.C. 331(a)). Thus, to determine § 101.91(c)(3) not apply to foods whether the food is misbranded, and the with a high likelihood of gluten cross- containing fermented or hydrolyzed contact, such as grains and legumes, manufacturer has committed a ingredients derived from foods that are prohibited act, we must have access to may differ from the records that would inherently ‘‘gluten-free’’ and do not provide adequate assurance for the manufacturer’s records that we are have a known or reasonable probability requiring be made and kept under ingredients with a lower likelihood of of gluten cross-contact. Alternatively, gluten cross-contact, such as dairy (80 sections 403(a)(1), 201(n), and 701(a) of some comments suggested that we the FD&C Act. Failure to make and keep FR 71990 at 71996 through 71998). For revise the rule to apply only to example, a manufacturer of fermented records, and provide the records to fermented foods produced from gluten- or hydrolyzed foods from non-gluten- FDA, as described in § 101.91(c)(4), containing grains or having a known or containing grains, legumes, or seeds that would result in the food being reasonably foreseeable risk of cross- are susceptible to cross-contact with misbranded under sections 403(a)(1) contact with a gluten-containing grain gluten-containing grains bearing the and 201(n) of the FD&C Act. (e.g., gluten-free beers). The comments ‘‘gluten-free’’ claim may choose to V. Comments on the Proposed Rule and suggested that we define ‘‘fermented obtain a CoA from the ingredient FDA Responses food’’ for the purposes of this section as suppliers or test the ingredients before ‘‘a food or ingredient derived from a fermentation and maintain records of A. Introduction gluten-containing grain by the test results. A manufacturer of We received over 500 comments on fermentation.’’ products bearing the ‘‘gluten-free’’ claim the proposed rule. We received The comments also stated that, if we made from inherently gluten-free comments from consumers; consumer could not create an exemption, we ingredients, such as milk, or fruit, that groups; trade organizations; industry; should clarify that testing is not have low probability of cross-contact public health organizations; public required for inherently gluten-free with gluten-containing grains may be advocacy groups; and other ingredients when there is no cross- more likely to use other appropriate organizations. We have numbered each contact with gluten-containing verification documentation. Thus, we comment to help distinguish among ingredients. Also, if testing is done, it decline to modify § 101.91(c)(3) to different topics. We have grouped should only be at the frequency exclude any group of foods or similar comments together under the necessary to prove the ‘‘gluten-free’’ ingredients because doing so does not same number, and, in some cases, we claim and records regarding cross- consider the possibility of cross-contact. have separated different issues contact should be flexible based on We also decline to define the term discussed in the same comment letter ingredients and facility. Further, the ‘‘fermented food’’ as a food or ingredient and designated them as distinct comments stated that we should clarify derived only from a gluten-containing

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grain by fermentation. The final rule is ‘‘gluten-free’’ claim make and keep information on growing practices and intended to cover all foods that are records that provide adequate assurance product segregation as records to meet fermented or contain fermented that they have carefully evaluated their the requirements of this final rule. ingredients and bear the term ‘‘gluten- processing for any potential for gluten (Comment 2) Several comments free,’’ not just those from gluten- cross-contact, and where the potential expressed concerns regarding some containing grains. Regardless of whether exists, manufacturers have implemented aspects of the proposed rule as it could the food that is subjected to measures to prevent the introduction of relate to enzymes. For example, some fermentation contains gluten, we cannot gluten into the food. Through this comments stated that commercial exclude the possibility that the food process, a manufacturer can assure that enzymes are often produced by could be exposed to gluten due to cross- the food or its ingredients comply with microbes grown on media containing contact. It is important that all § 101.91(a)(3) before fermentation or wheat and that these enzymes are manufacturers who choose to use the hydrolysis. As specified in the preamble considered to be processing aids when ‘‘gluten-free’’ claim on their foods that to the 2015 proposed rule (80 FR 71990 used in other foods produced by are fermented or contain fermented at 71996 through 71998), the records fermentation. The comments said that ingredients evaluate their process for providing adequate assurance that the very little gluten protein (if transferred potential gluten cross-contact. food is ‘‘gluten-free’’ before to the food by the enzyme) may survive As requested by a comment, we are fermentation or hydrolysis could the fermentation process. Therefore, the clarifying that the final rule does not include records of test results conducted comments said these enzymes should require testing of ingredients. The final by the manufacturer or an ingredient not be covered under the rule. The rule requires manufacturers to supplier, CoA, or other appropriate comments stated that the production of adequately evaluate their processing for verification documentation for the food enzymes includes a bacterial any potential for gluten cross-contact. itself or each of the ingredients used in fermentation step, but the enzymes Such assessment involves evaluation of the food. We would expect themselves are not fermented or each individual manufacturing process manufacturers of fermented or hydrolyzed. The comments noted that to find out if there is a known or hydrolyzed foods that bear the ‘‘gluten- the final product is purified to remove reasonably foreseeable risk of cross- free’’ claim, as part of their routine extraneous materials and claimed that contact with gluten-containing grains operations, to test their food or very small amounts of their enzyme and maintenance of records to indicate ingredients with the sufficient products are used in food processing that measures have been implemented frequency to ensure that the gluten level and, therefore, would not present a to prevent the introduction of gluten in the food or in each ingredient is health risk to patients with celiac into the food during the manufacturing below 20 ppm before fermentation or disease. Finally, the comments process. As noted in the preamble to the hydrolysis. Alternatively, as we noted in explained that wheat is not used by the 2015 proposed rule, we are aware that the preamble to the 2013 gluten-free enzymes that form the final product and some foods and ingredients are more at food labeling final rule (78 FR 47154 at the enzymes do not contain gluten; thus, risk than others (80 FR 71990 at 71996 47167), manufacturers, as part of routine according to the comments, the enzymes through 71998). The manufacturer is operations, may rely on records, such as should not be classified as fermented or best suited to decide how to adequately CoAs, from their suppliers to determine hydrolyzed, and we should exempt the evaluate any potential for gluten cross- that each ingredient is below 20 ppm enzymes from the rule and allow foods contact during its manufacturing gluten. Similarly, for ingredients produced with the use of such enzymes process as well as the measures that received from outside suppliers, to bear a ‘‘gluten-free’’ claim if the foods should be taken to prevent the manufacturers may document a visit to meet the ‘‘gluten-free’’ definition under introduction of gluten into the food a supplier’s facility, a review of § 101.91(a)(3). during that manufacturing process. The supplier’s records, or a review of written (Response 2) The issue of purity and final rule requires that manufacturers of documentation from a supplier to verify potential carry-over of growth media food products covered by the rule make the compliance with § 101.91(a)(3) for containing gluten is a valid concern for and keep records providing adequate these ingredients. We find it is both the manufacturers and consumers assurance that: (1) The food is ‘‘gluten- appropriate to allow a manufacturer to with celiac disease. Wheat may be free’’ before fermentation or hydrolysis; use any means of verification they present in any carried-over nutrient (2) the manufacturer has adequately develop, if the manufacturer can media used to grow the microbes, and evaluated the potential for cross-contact document that such verification the gluten in the media may be with gluten during the manufacturing provides adequate assurance that the subjected to proteolytic digestion process; and (3) if necessary, measures ingredients comply with § 101.91(a)(3). (hydrolysis) making its quantity and are in place to prevent the introduction We do not specify the types of records biological activity hard to confirm using of gluten into the food during the to be kept, so the manufacturer could, currently available technology. Further, manufacturing process. In some cases, for example, create records regarding it is likely that these properties will vary adequate assurance may be provided the ingredients used or maintain records with the specific production process through testing the ingredients when or CoAs obtained from a supplier. (e.g., type of microbe grown, there is a scientifically valid method As we discussed in the preamble to temperature, incubation period, etc.). that can reliably detect the presence of the 2013 gluten-free food labeling final We agree that the enzymes produced in 20 ppm gluten. Testing should indicate rule (78 FR 47154 at 47173), we expect this manner are not themselves that foods or ingredients contain less foods bearing the ‘‘gluten-free’’ claim to fermented; however, the gluten that may than 20 ppm gluten before fermentation be manufactured using the controls possibly be present in the enzyme may or hydrolysis. To help address potential necessary to minimize cross-contact be hydrolyzed due to fermentation. An gluten cross-contact during the with all gluten sources to ensure that important consideration is the amount manufacturing process, the final rule, at any amount of gluten in the food from of potential carryover and how much of § 101.91(c)(2) and (3), requires that gluten cross-contact is as low as the enzyme ingredient is used in the manufacturers of a fermented or possible and that the food has less than production of the final food product. hydrolyzed product who wish to use a 20 ppm gluten. Also, we would accept Because these factors may vary

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considerably, we decline to exempt longer harmful for individuals with proceed for a specified amount of time enzymes from the rule. celiac disease. at a specific temperature. If the hydrolytic conditions (time, Finally, we disagree with the 2. Innovation in Developing Methods for temperature, or composition under comments’ assertions that, because Fermented, Hydrolyzed, or Distilled which the hydrolysis is occurring) wheat is not used by the enzymes that Foods form the final product, the enzymes do associated with the production of the not contain gluten. Section 101.91(a)(3) (Comment 4) A few comments stated sample being analyzed were different requires some means of demonstrating that a valid method exists to quantify from those used to make the calibration that the final product has been gluten in a product that has been standards, the peptide profile is likely to processed to remove gluten to a level fermented or hydrolyzed, like beer, and be different, and the assay is unlikely to below 20 ppm. During the enzyme pointed to the R5 Competitive ELISA generate accurate results. The production process, the microbes make test with inactivated protease enzyme. Association of Official Analytic use of wheat in the nutrient medium, (Response 4) When compliance with Chemists Official Methods of Analysis and any gluten present, because of the § 101.91(b) is based on an analysis of the (AOAC OMA) First Action award to the food, FDA will use a scientifically valid carry-over described in the preceding R5 Competitive ELISA stated that the method that can reliably detect the paragraph, may have undergone hydrolyzed gluten being used as a presence of 20 ppm gluten in a variety alterations, such as protein calibration standard may not be of food matrices, including both raw, fragmentation and deamidation, during suitable, and users should establish cooked, or baked products the bacterial fermentation step. We do their own standards before relying on (§ 101.191(c)). As stated in the 2011 not know how these changes affect the the calibration standard (Ref. 3). notice and the 2013 gluten-free food immunopathogenicity and other Specifically, minor fluctuations in labeling final rule, a scientifically valid properties of gluten, and it is not clear temperature and time, as well as the method for purposes of substantiating a whether the means of measuring specifics of the proteolysis, could result ‘‘gluten-free’’ claim for food matrices in a different range of peptides, making compliance with the 2013 gluten-free where formally validated methods (e.g., food labeling final rule for intact gluten the calibration standards not suitable. that underwent a multi-laboratory Further, it is not known how to would be sufficient to safeguard performance evaluation) do not exist is consumers with celiac disease. Thus, interpret the immunopathogenicity one that is accurate, precise, and based on the amount and profile of until this is known, the final rule is specific for its intended purpose and needed to help ensure that individuals gluten peptides detected. The threshold where the results of the method of 20 ppm gluten was based on studies with celiac disease are not misled and evaluation are published in the peer- receive truthful and accurate examining the immunopathogenicity of reviewed scientific literature. In other intact gluten. Whether the biological information with respect to fermented words, a scientifically valid test is one activity on a per mg basis is the same or hydrolyzed foods labeled as ‘‘gluten- that consistently and reliably does what for gluten peptides, as was measured free.’’ it is intended to do (76 FR 46671 at with intact proteins, is unknown; the (Comment 3) One comment regarding 46673; 78 FR 47154 at 47165). The R5 answer may depend on the peptide the effects of various processing and Competitive ELISA test has potential as profile. treatment technologies noted that it was a quantitative method, and we Thus, we have concerns regarding the important to distinguish between those acknowledge that, under the appropriate use of the R5 Competitive ELISA in the that actually remove gluten and those test conditions, the R5 Competitive detection of gluten in fermented or that modify or cleave the protein ELISA can generate reproducible hydrolyzed foods or ingredients because molecules without actually removing results. The commercial R5 Competitive of the challenge in demonstrating that it anything from the food or ingredient. ELISA marketed for the detection of is suitable for the intended purpose of The comment provided an example of hydrolyzed (or fermented) gluten has, interpreting the immunopathogenicity production of wheat starch that involves by design, an advantage over sandwich based on the amount and profile of a step in which a protein (gluten)- ELISA-based methods by not requiring gluten peptides detected and whether enriched fraction is physically separated the presence of two antigenic epitopes the method performs reliably (i.e., is a from a protein depleted (potentially (antibody binding sites) to detect the scientifically valid method). While the gluten-free) starch fraction. In this case, presence of gluten peptides. Further, method may perform reproducibly as gluten has been removed. When a food because the immunopathogenesis indicated by the American Association or ingredient is treated by fermentation associated with celiac disease only of Cereal Chemist International (AACCI) or hydrolysis, it is only possible to state requires a single immunopathogenic validation (Ref. 4), it does not mean that that the gluten has been modified, not element, the R5 Competitive ELISA is the method is suitable for the intended removed. theoretically more appropriate as an purpose of detecting and quantifying, (Response 3) We agree that there is a assay. with sufficient accuracy, the gluten difference between physical removal However, as currently designed, the protein content in fermented and and modification (processing) of gluten R5 Competitive ELISA method is not hydrolyzed foods, or assessing the to generate a product that does not suitable for the detection and immunopahogenicity or equivalent contain any immunopathogenic quantification of gluten in any amount of intact gluten proteins. elements of concern to consumers with fermented or hydrolyzed food (e.g., beer, Finally, the procedure of adding a celiac disease. When physically yogurt). The lack of appropriate controlled amount of an artificially removing the gluten, the question is reference standards for the detection prepared hydrolysate to food as required whether all of the gluten has been and quantification of gluten subjected to by the testing protocol (a process called removed so that there is no trace left fermentation or proteolysis (hydrolysis) ‘‘spiking’’) may give an inaccurate that might cause an adverse health makes the results generated by the R5 reading because it does not reflect the event. Modification of the gluten is not Competitive ELISA difficult, if not assay’s ability to detect gluten that has definitive unless it is possible to impossible, to interpret. As currently been added to the food before demonstrate that all of the modified supplied, the calibration standard in the processing and hydrolyzed during gluten or its protein components are no R5 Competitive ELISA is allowed to production. For this reason, it is

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important that, whenever possible, often a good indicator of reliability (not methods would unnecessarily limit methods be validated using gluten that necessarily ‘suitability for purpose’ flexibility and possibly deter the is added to the food before processing. beyond the specifics described in the development of new and better The inability to detect any gluten using validation report), there are other analytical methods as well as methods the R5 Competitive ELISA (below the organizations, such as the American for gluten removal. In the preamble to limit of detection) is not an indication Society for Testing and Materials the 2013 gluten-free food labeling final of complete elimination or even a (ASTM), that may develop methods that rule (78 FR 47154 at 47169), we stated reduction of gluten. Another complexity perform reliably and may be appropriate that we were not specifying analytical is that not all the immunopathogenic for testing gluten in fermented or methods in the final rule even though sequences of gluten have been hydrolyzed foods. we had included a description of two identified. Further, the R5 antibody Other governmental agencies and analytical methods that met our needs does not recognize all industry may adopt their own for the analysis of intact gluten in the immunopathogenic sequences (e.g., procedures for testing gluten in 2011 notice that reopened the comment glutenin-derived) and, therefore, gluten hydrolyzed and fermented foods as period for the proposed rule for gluten- could be present in a form that is not well. The focus should be on using the free food labeling of foods (76 FR 46671 detectable (Ref. 5). most appropriate, scientifically valid at 46672). In the 2011 notice, we (Comment 5) One comment stated method that meets the manufacturer’s described the methods along with that the proposed rule would require needs. Realizing insufficiencies of references explaining how the two gluten to be measured using existing validation methods, we methods were suitable-for-purpose and scientifically valid methods. The established our own validation were validated. The information in the comment would have us revise the rule protocols. Our validation protocols preamble to the 2013 gluten-free food to address the fact that there are many focus on the detection and labeling final rule provided extensive different test methods and that they vary quantification of analytes under realistic discussion about why we were not in their ability to provide accurate and conditions (such as using a standard specifying analytical methods in order precise data. The comment suggested that has been spiked before any food to support the development of new and that, instead of requiring that testing processing instead of simply spiking the better technologies and also labs merely use ‘‘scientifically valid’’ standard into the final food product). demonstrate flexibility for foods that are test methods, we require that the Once a method has been validated, the not fermented or hydrolyzed by methods are fully validated, thereby method can only be used for a novel allowing stakeholders to use the establishing performance reliability (the food following evaluation and methods most appropriate to fit their consistency or reproducibility of the validation of the method performance needs (78 FR 47154 at 47169). test). with the specific food matrix. (Response 5) The ideal test method for (Comment 6) Several comments stated More importantly, we have written detecting and quantifying the gluten that the proposed rule does not offer the final rule in a manner that, once we content of feremented or hydrolyzed flexibility for scientific innovation and, identify that a scientifically valid foods is a scientifically valid method therefore, unintentionally prevents method, pursuant to § 101.91(c)(1), has that is suitable for the intended purpose fermented and hydrolyzed foods from been developed that can accurately and has been extensively, preferably benefiting from scientific advancements detect and quantify gluten in some or all multi-laboratory validated. However, that are very likely to be achieved. One fermented or hydrolyzed foods or multi-laboratory validation is sometimes comment stated that the proposed rule ingredients, § 101.91(c)(2)–(c)(4) would conducted for conditions that are not is overly restrictive, shows disregard to no longer be applicable for those foods, suitable for the intended purpose (not competition and innovation, and and it would no longer be necessary for scientifically valid). For example, in the threatens to stifle the marketplace the manufacturer of foods bearing the R5 Competitive ELISA, which has because it fails to account for new and ‘‘gluten-free’’ claim to make and keep undergone multi-laboratory validation emerging technologies and scientific the records required under for use in the quantitative analysis of developments in this area. Other § 101.91(c)(2)–(c)(4) demonstrating fermented or hydrolyzed gluten, the comments asserted that the rule will adequate assurance that the food meets calibration standard often does not limit options for those suffering from the ‘‘gluten-free’’ definition before represent the peptide repertoire being gluten-related disorders. fermentation or hydrolysis. Should any measured and, thereby, is not suitable (Response 6) As with all detection new scientifically valid methods be for fermented or hydrolyzed foods or methodology, we support efforts to developed that can accurately detect ingredients. Further, validation should resolve the uncertainty issues associated and quantify gluten in fermented and focus on realistic samples. Instead, the with quantifying gluten fragments and hydrolyzed foods, FDA would R5 Competitive ELISA validation interpreting results in terms of intact determine compliance in accordance employed a calibration standard to gluten. The preamble to the 2013 gluten- with § 101.91(c)(1). (On our own which a controlled amount of substance, free food labeling final rule (78 FR initiative, we have revised § 101.91(c)(1) as required by protocol, was added into 47154 at 47169) and this final rule to state that the scientifically valid several samples; as such, the recoveries reflect our support in encouraging method is one that can ‘‘reliably detect and performance of the assay were not innovation in how gluten-free products and quantify’’ the presence of 20 ppm reflective of the analysis of realistic are produced and the development of gluten. We added the words ‘‘and samples. The R5 Competitive ELISA is new analytical methods for detecting quantify’’ to clarify that the not the only example of a method that the gluten content of foods. Other than scientifically valid method needs to do has been promoted for use in an our discussion of distillation, where more than detect the presence of analysis of gluten in fermented or testing for the absence of protein gluten.) In addition, should any new hydrolyzed foods, but it is mentioned indicates compliance with the use of the scientifically valid methods be here because it has been promoted for term ‘‘gluten-free,’’ we deliberately did developed for fermented or hydrolyzed use in the quantitative analysis of not specify analytical methods that foods, we expect that we would identify fermented or hydrolyzed gluten. should be used. We did this because we the existence of such methods through Although an AOAC Official Method is believe that specifying analytical guidance or other appropriate means.

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Therefore, we disagree with the expected to occur under poor We also disagree that the regulations assertion that the final rule is overly manufacturing practices in which the for distilled foods or ingredients is in restrictive, adversely affects competition initial material is splashing into the direct conflict with our regulations or innovation, or fails to account for distillate due to poor design of the still. defining ‘‘gluten-free.’’ Our regulations emerging technologies. Protein testing can be done to confirm permit ingredients derived from a (Comment 7) One comment asked us that protein (and thus gluten) is absent gluten-containing grain that has been to give insight regarding which in the distilled product. We note that processed to remove gluten if the use of analytical methods might be of greater testing of each batch is not required that ingredient does not result in the utility for verifying absence of protein in under existing regulations, and this rule presence of 20 ppm or more gluten in distilled foods and ingredients. specifies the methods we will use to the food (§ 101.91(a)(3)(i)(A)(3)). (Response 7) We decline to discuss in verify compliance for distilled foods in We are aware that the process of detail the pros and cons of the various § 101.91(c)(5). In addition, we note that distillation is capable of separating analytical methods available for any ingredients (such as flavors) added gluten and other proteins from the verifying the absence of protein in to the distilled product would need to remaining compounds and, therefore, distilled food and ingredients because comply with our regulations defining we make this distinction for foods or the best method may depend on factors ‘‘gluten-free’’ in § 101.91(a) for the ingredients that are distilled. such as food matrix, the experience of finished product labeling to bear the Scientifically valid methods for protein the analyst, the business decision of the gluten-free claim. testing can determine if a product is free company, etc. Additionally, a list of (Comment 9) A few comments of protein and, therefore, also free of methods may be misinterpreted as opposed different requirements for gluten. Thus, we will evaluate indicating that we consider other distilled foods because, according to the compliance by verifying the absence of approaches that are not included on the comments, distilled foods have caused protein in the distilled component using list to be unacceptable or of reactions in some people and, therefore, scientifically valid analytical methods comparatively less value or usefulness. are not safe. The comments stated that that can reliably detect the presence or 3. Distilled Food the exception for distilled foods is in absence of protein or protein fragments direct conflict with the gluten-free food in the food. Furthermore, we note that (Comment 8) One comment stated labeling rule and creates an uneven malt beverages, as defined under the that FDA claimed that there is no proof playing field within the overall Federal Alcohol Administration Act that gluten does not volatilize during alcoholic beverages category. The (FAA Act) (27 U.S.C. 211(a)(7)), do not the distillation process because the comments pointed out that malt undergo distillation and, therefore, temperatures are not high enough to beverages or other products that have would not be subject to § 101.91(c)(5). allow gluten to pass through a still. The undergone a process to remove or As for the comment regarding a tiered comment went on to state that, rather reduce gluten content are not treated the labeling system, to be consistent with than banning a ‘‘gluten-free’’ claim on same as distilled spirits. § 101.91, which defines the term any product that had not been tested for One comment suggested a tiered ‘‘gluten-free,’’ we decline to introduce a gluten, FDA should rely on existing labeling system for distilled foods with tiered labeling system along with a science that proves that gluten does not varying labels (‘‘Gluten-free,’’ ‘‘gluten- disclaimer because § 101.91(b)(2) pass through a distillation still and, free’’ with a disclaimer, ‘‘gluten- provides for the use of the label claims therefore, would not end up in a reduced,’’ no gluten claim allowed) that ‘‘gluten-free,’’ ‘‘no gluten,’’ ‘‘free of distilled product. The comment said allows ‘‘gluten-free’’ labeling when gluten,’’ or ‘‘without gluten’’ if the that testing every batch is a hardship on testing is possible with the caveat that product meets the definition under small craft and farm distillers and if the starting material was a gluten- § 101.91(a)(3). Use of any of these terms prevents marketing of these kind of containing grain, a disclaimer is used to on products that were made from products to those with gluten disclose this fact. The comment claimed gluten-containing grains would not meet intolerance. The comment also said that that this tiered labeling standard would the definition of ‘‘gluten-free’’ in we should commission a scientific provide full disclosure to the consumer, § 101.91(a)(3) and would, therefore, study to confirm that gluten may be place the burden on industry to provide misbrand the products unless the present in distilled spirits or that gluten accurate labeling, and be transparent. ingredients used to formulate the food does not pass through a still and, (Response 9) As we explained in the have been processed to remove gluten therefore, all distilled spirits do not preamble to the proposed rule (80 FR and the final food product contains less contain gluten. 71990 at 71995, 71999), while creating than 20 ppm of gluten. We note that this (Response 8) The comment may have distilled vinegar does involve rule does not prohibit other truthful and misunderstood our position. We did not fermentation, the process of distillation not misleading labeling statements claim that there is no proof that gluten heats a liquid, which vaporizes about the presence or absence of gluten does not volatilize during the components with lower boiling points in food products that do not meet a distillation process because the and separates them from components ‘‘gluten-free’’ definition, provided the temperatures are not high enough to with higher boiling points. The statements do not expressly or allow gluten to pass through a still. If remaining compounds, whose boiling implicitly suggest that the food meets good manufacturing practices are points are too high to undergo FDA’s ‘‘gluten-free’’ definition. followed, the process of distillation vaporization, are left behind. If (Comment 10) One comment stated must remove all protein (and thus distillation is done properly, the process that we should revise the rule to gluten), regardless if the product has removes gluten because gluten does not distinguish between distilled vinegar been distilled from gluten-containing vaporize. Therefore, there should not be made from raw material naturally free grains. As discussed further in Response any gluten remaining in the final from gluten and vinegar made from raw 9, distillation is considered a process to distilled product. For this reason, a material containing gluten. The remove gluten and it is unlikely that distilled product labeling may bear a comment recommended that if the residual gluten may be present in the ‘‘gluten-free’’ claim and should be safe original feedstock is ‘‘gluten-free,’’ then final distilled products. Transfer of for people with celiac disease to no further testing is needed. The gluten into the distillate would only be consume. comment pointed out that distilled

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vinegar is made from distilled ethanol protein fragments (and thus gluten) in wording of proposed § 101.91(c)(2) which is further fermented into vinegar distilled foods. Therefore, as indicated through (c)(5). This would mean that the by bacteria. Distilled ethanol is in § 101.91(c)(5) of this final rule, we labeling requirements would apply generally produced from non-gluten- will evaluate compliance with equally to all food categories for which containing raw material such as corn, § 101.91(b) by verifying the absence of a scientifically valid method is not beet or sugar cane but in some cases, protein in the distilled component using available to confirm compliance with also gluten-containing cereals. Vinegar scientifically valid analytical methods the 20 ppm gluten threshold. The itself is not distilled; only the main raw that can reliably detect the presence or comments said this would provide FDA material to make the vinegar is distilled. absence of protein or protein fragments with the necessary compliance authority Therefore, according to the comment, in the food. to impose a higher standard on certain proteins and/or protein fragments may foods where we determine that a valid 4. Different Compliance Standard be present due to the use of yeast or scientific method does not currently yeast extract in the fermentation of (Comment 11) Some comments stated exist. Later, when a scientifically valid distilled vinegar. that the rule concludes that fermented analytical method is established, no Other comments asked us how we or hydrolyzed foods should be subject to regulatory amendment process would be plan to distinguish proteins or protein a different labeling compliance standard required. The comments further fragments that may originate from the than other foods bearing a ‘‘gluten-free’’ explained that the proposed language ethanol feedstock from those proteins claim based upon the assumption that does not offer any flexibility for and protein fragments that may no scientifically valid method will be scientific innovation in this area and originate from the ethanol fermentation developed to accurately detect the unintentionally prevents this group of process. The comments stated that such presence of gluten in these food foods from ever benefiting from a distinction for any protein detected is products. scientific advancements that are likely important. (Response 11) There is research to be achieved. (Response 10) As we explained underway within FDA and elsewhere to (Response 12) When we developed previously in the preamble to the develop methods to accurately detect the proposed rule, there were no proposed rule (80 FR 71990 at 71995, and quantify the presence of gluten in scientifically valid methods for the 71999), distillation is a process capable fermented or hydrolyzed foods. purposes of analyzing fermented or of separating gluten and other proteins However, as we noted in the proposed hydrolyzed foods to determine from the remaining compounds and, rule (80 FR 71990 at 71991), although compliance with § 101.91. Because, therefore, we make this distinction for test methods for the detection of gluten currently, there are no analytical foods or ingredients that are distilled. fragments in fermented or hydrolyzed methods to reliably detect and quantify Due to the distillation process, no foods have advanced, there is still gluten in fermented or hydrolyzed food protein fragments should be in the uncertainty in interpreting the results. nor methods to equate test results in ethanol feedstock. Scientifically valid The currently available test methods are terms of intact gluten, we will evaluate methods for protein testing can not capable of producing results on a compliance of these foods that bear a determine if a product is free of protein quantitative basis that equate to an ‘‘gluten-free’’ labeling claim with the and, therefore, also free of gluten. Only equivalent amount of intact gluten, and 2013 gluten-free food labeling final rule those vinegars made from distilled thus, we are making available alternate based on records that provide adequate ethanol that are further processed in a means by which these kinds of foods assurance that the foods are ‘‘gluten- manner to avoid the introduction of can comply with § 101.91. Once we free’’ before fermentation or hydrolysis. gluten can be considered ‘‘gluten-free.’’ have identified a scientifically valid Fermented or hydrolyzed foods are As for the possible introduction of method, it would no longer be necessary subject to the same labeling compliance gluten from those proteins and protein for the manufacturer of foods bearing standards as any other food that would fragments that may originate from the the ‘‘gluten-free’’ claim to make and bear a ‘‘gluten-free’’ claim. This final ethanol fermentation process, as with keep the records required under rule describes how manufacturers of any product, it is the manufacturer’s § 101.91(c)(2)–(c)(4), and FDA would fermented or hydrolyzed foods or responsibility to implement measures determine compliance in accordance distilled foods would be able to preventing the introduction of gluten with § 101.91(c)(1). If or when a demonstrate compliance and how FDA into the food elsewhere in the scientifically valid method to detect and will evaluate compliance. For this manufacturing process for an ingredient quantify the presence of gluten in reason, we decline to remove reference made ‘‘gluten-free’’ by distillation. fermented or hydrolyzed foods become to distilled foods and fermented or Further, the manufacturer could request available, we will identify this change hydrolyzed foods from § 101.91(c)(2) from their supplier that the raw through a guidance document or other through (c)(5). Further, as we noted in materials, such as bacteria or yeast used appropriate means. In addition, FDA Response 6, if or when a scientifically in the fermentation of distilled vinegar, may consider changing our regulations valid method for fermented or be ‘‘gluten-free.’’ One way this can be if warranted. hydrolyzed foods becomes available, accomplished is by avoiding the use of (Comment 12) Several comments FDA will identify such a method bacteria grown on any gluten-containing questioned whether fermented or through a guidance document or other source material or by using appropriate hydrolyzed foods should be subject to a appropriate means. Once FDA identifies testing to confirm that the material different compliance standard than such a method, it would no longer be (bacteria) are ‘‘gluten-free.’’ Thus, the other foods bearing a ‘‘gluten-free’’ necessary for the manufacturer of foods vinegar manufacturer would have claim when there is a high probability bearing the ‘‘gluten-free’’ claim to make assurance that the distilled ethanol was that a scientifically valid method will be and keep the records required under used in a manner that prevented the developed in the very near future to § 101.91(c)(2) though (c)(4), and FDA introduction of gluten into the food accurately detect the presence of gluten would determine compliance with the during the manufacturing process. in such foods. The comments suggested ‘‘gluten free’’ labeling requirements Scientifically valid analytical that we remove the reference to any under § 101.91(c)(1). methods are readily available to detect particular food that is distilled, (Comment 13) One comment stated the presence or absence of protein and fermented, or hydrolyzed in the that the proposed rule appears to

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impose a stricter requirement on preamble to the proposed rule stated provide accurate quantitive results electronic records related to the gluten- that ‘‘the types of records that would sufficient to be suitable for use with free voluntary labeling standard than provide adequate assurance for fermented or hydrolyzed foods. Thus, to the requirements for other food safety ingredients with a high likelihood of evaluate compliance of such fermented records under other regualtions. For gluten cross-contact, such as grains and and hydrolyzed foods that bear a example, the comment states that legumes, may vary from those expected ‘‘gluten-free’’ claim, we need to rely on section II.C. of the proposed rule (80 FR for ingredients with a lower likelihood records made and kept by the 71990 at 71998 through 71999) indicates of gluten cross-contact, such as dairy.’’ manufacturer providing adequate that electronic records, including The comment suggested that this can be assurance that the food is ‘‘gluten-free’’ electronic signatures, established or interpreted as imposing a greater in compliance with § 101.91(a)(3) before maintained to meet the requirements of recordkeeping requirement on the ‘‘low fermentation or hydrolysis. In addition, this rule would be subject to the likelihood’’ foods than is required in this rule requires the manufacturer of electronic records and electronic part 117, ‘‘Current Good Manufacturing fermented or hydrolyzed foods bearing signatures requirements in part 11 (21 Practice, Hazard Analysis, and Risk- the ‘‘gluten-free’’ claim to document CFR part 11). However, the comment Based Preventive Controls for Human that it has adequately evaluated the states that § 117.305(g), FDA’s Food’’ (21 CFR part 117) for food safety potential for gluten cross-contact and, if regulation concerning Current Good hazard analysis. In particular, the identified, implemented measures to Manufacturing Practice, Hazard comment said that, in § 117.130(b)(1), prevent the introduction of gluten into Analysis, and Risk-Based Preventive manufacturers only must address the food during the manufacturing Controls for Human Food, establishes hazards that are ‘‘known or reasonably process. that electronic records established or likely.’’ The comment said that it would It is, therefore, appropriate and maintained to meet the requirements of be appropriate to only require records in reasonable to impose the recordkeeping part 117 and that meet the definition of cases where the potential presence of requirement established under electronic records in § 11.3(b)(6), are gluten or gluten-containing grains is § 101.91(c)(4) in this final rule for exempt from the requirements of part ‘‘known or reasonably likely.’’ The fermented or hydrolyzed foods bearing 11. comment stated that manufacturers a ‘‘gluten-free’’ claim to substantiate a (Response 13) Although the proposed should be required to document the firm’s compliance with § 101.91(a). rule indicated that electronic records information and process used to reach Therefore, we decline to change the rule would need to comply with part 11, we this conclusion but should not be as suggested by the comment and have also note that the use of electronic subject to further recordkeeping finalized § 101.91(c)(4) without change. records is voluntary and thus, a paper requirements. 5. ‘‘Gluten-Free’’ Labeling of Beer record system could be used to comply with the proposed recordkeeping (Response 14) The comment asked The Treasury Department’s Alcohol requirements. This would give that we only require records in cases and Tobacco Tax and Trade Bureau manufacturers the maximum flexibility where the potential presence of gluten (TTB) is responsible for the issuance to use whatever recordkeeping system or gluten-containing grains is ‘‘known or and enforcement of regulations with they find most appropriate (80 FR reasonably likely.’’ While the ‘‘known or respect to the labeling of beers that are 71999). reasonably likely’’ standard is malt beverages under the FAA Act. The final rule would allow these established in part 117 for food safety Certain other beers that do not meet the records to be kept as original records, as hazard analysis, this final rule was definition of a malt beverage under the true copies or as electronic records, and specifically developed to establish the FAA Act (27 U.S.C. 211(a)(7)) are manufacturers would have to make the requirements for the voluntary use of subject to FDA’s labeling requirements. records available to us for inspection the ‘‘gluten-free’’ claim that allows Beer manufacturers whose beers are and copying, upon request, during an consumers to practice dietary avoidance subject to FDA’s labeling requirements inspection. Records that can be and benefits individuals suffering from and do not meet the ‘‘gluten-free’’ immediately retrieved from another celiac disease. Although we definition are not precluded from using location by electronic means are acknowledge that there is a difference in other statements on the label, such as a considered reasonably accessible. the likelihood of gluten cross-contact in gluten statement consistent with the Compliance with FDA’s regulation some fermented or hydrolyzed foods, TTB Revised Interim Policy on Gluten concerning Current Good Manufacturing because there is no scientifically valid Content Statements in the Labeling and Practice, Hazard Analysis, and Risk- method to quantify the gluten protein Advertising of Wine, Distilled Spirits, Based Preventive Controls for Human content in fermented or hydrolyzed and Malt Beverages, about processing of Food in 21 CFR part 117 has no bearing foods, manufacturers who wish to beers to reduce gluten (Ref. 6). However, on this rule. produce and label such foods as such statements must be truthful and (Comment 14) One comment said ‘‘gluten-free’’ still need to make and not misleading in accordance with our that, in the preamble to the proposed keep records, as described in the new general labeling provisions in sections rule, but not in the proposed codified requirements of § 101.91(c), to provide 403(a)(1) and 201(n) of the FD&C Act. language, FDA recognizes that there is a adequate assurance of the type of In the preamble to the 2013 gluten- significant difference between ingredient used is ‘‘gluten-free’’ before free food labeling final rule (78 FR fermented or hydrolyzed foods fermentation or hydrolysis and to 47154 at 47166), we said that, under produced from gluten-containing grains address the potential for cross-contact limited circumstances, we would and those that are not. According to the with gluten-containing grains or exercise enforcement discretion with comment, proposed § 101.91(c)(2) ingredients. The records for different respect to the requirements for ‘‘gluten- would require the manufacturer of such foods can have different levels of detail free’’ labeling for FDA-regulated beers foods bearing the claim to make and needed to demonstrate compliance. As that already made a ‘‘gluten-free’’ claim keep records demonstrating adequate we have noted in section III.A. and before the rule was published and that assurance that the fermented or elsewhere in this document, the results were: (1) Made from a non-gluten- hydrolyzed ingredients are ‘‘gluten- of current gluten test methods for containing grain; or (2) made from a free.’’ The comment said that the fermented and hydrolyzed foods do not gluten-containing grain, where the beer

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had been subject to processing that the or absence of gluten broken down in that ‘‘gluten-free’’ was not the same as manufacturer had determined would this way cannot be reliably detected ‘‘gluten-reduced,’’ and that products remove gluten. We said that the with sandwich ELISA-based methods. treated to remove gluten should be enforcement discretion pertained only In the preamble to the proposed rule clearly differentiated from those that are to those beers subject to FDA’s labeling (80 FR 71990 at 71994), we requested inherently gluten-free. requirements that made a ‘‘gluten-free’’ comments to learn more about the (Response 15) Our regulations at claim as of August 5, 2013, pending efficacy of competitive ELISA-based § 101.91 seek to eliminate confusing and completion of the rulemaking process methods, given the beer industry’s potentially misleading language that with respect to fermented or hydrolyzed practice of adding enzymes to the beer might hinder people with celiac disease products. We also said that any beer to prevent the problem of cloudiness or from properly identifying food safe for manufacturer that wanted to make a ‘‘haze.’’ The enzyme hydrolyzes or consumption. In the preamble to the new ‘‘gluten-free’’ claims should contact breaks down gluten proteins at proline 2013 gluten-free food labeling final rule FDA regarding the possible expansion of residues. Thus, using these haze control (78 FR 47154 at 47164), we explained our consideration for the exercise of enzymes may generate peptides that are that, under § 101.91(b)(2), a food that enforcement discretion related to such not detectable using the commercially bears the claim ‘‘no gluten,’’ ‘‘free of labeling. With the publication of this available competitive ELISA-based gluten,’’ or ‘‘without gluten’’ in its final rule, we complete the gluten-free methods that rely on the presence of labeling and fails to meet the labeling rulemaking and the proline in the epitopes. As we noted in requirements for a ‘‘gluten-free’’ claim enforcement discretion described in the the preamble to the proposed rule (80 will be deemed to be misbranded. preamble to the 2013 gluten-free food FR 71990 at 71995), it is uncertain that Based upon comments that we labeling final rule (78 FR 47154 at cleavage at proline residues eliminates received during a public meeting on 47166) is no longer valid. the concern for people with celiac August 19, 2005, to discuss the topic of On February 11, 2014, TTB issued a disease because there may be gluten-free food labeling and comments revised interim policy on gluten content immunopathogenic protein fragments that were submitted in writing to the statements in the labeling and still present. In other words, we do not related FDA Docket No. FDA–2005–N– advertising of beverages or beers it know whether the protein fragments can 0404 (formerly 2005N–0279), we believe regulates. The ‘‘Revised Interim Policy trigger a reaction in people with celiac that a uniform definition of the term on Gluten Content Statements in the disease. ‘‘gluten-free’’ prevents confusion and Labeling and Advertising of Wines, In the preamble to the proposed rule, uncertainty among both consumers and Distilled Spirits, and Malt Beverages’’ we requested comment, including food manufacturers about what this food allows the use of the following scientific research, regarding whether labeling claim means. Therefore, we qualifying statement to inform beer derived from gluten-containing have not defined the terms ‘‘gluten- consumers: ‘‘Product fermented from grains that may still contain protein reduced,’’ ‘‘crafted to remove gluten,’’ or grains containing gluten and [processed fragments from gluten can be shown by ‘‘made to remove gluten,’’ and we do or treated or crafted] to remove gluten. scientifically valid analytic methods to not consider those terms to be The gluten content of this product equate to intact gluten on a quantitative equivalent to ‘‘gluten-free.’’ Although cannot be verified, and this product may basis (80 FR 71990 at 71995). We also some products may be labeled with contain gluten,’’ or ‘‘This product was were interested in scientific research these terms as long as the label is distilled from grains containing gluten, regarding how we can use such test truthful and not misleading (e.g., so as which removed some or all of the methods to determine whether beer to not imply that they are gluten-free), gluten. The gluten content of this derived from gluten-containing grains we reiterate that consumers with celiac product cannot be verified, and this contains the equivalent of less than 20 disease should rely only on the terms product may contain gluten.’’ (Ref. 6). ppm intact gluten proteins, including specified in § 101.91(b)(2) to indicate We stated in the preamble to the any data and information regarding that a food is ‘‘gluten-free’’ or safe for proposed rule (80 FR 71990 at 71994) quantification of gluten fragments and them to consume. that, as with other foods, beers made determining appropriate calibration or This final rule does not change the using a gluten-containing grain do not reference standards. We also invited definition of ‘‘gluten-free,’’ but only meet the ‘‘gluten-free’’ definition. Thus, comment, including data and any adds compliance requirements for beers made from gluten-containing information on scientific research and hydrolyzed, fermented, or distilled grains cannot bear a ‘‘gluten-free’’ claim. methods, to determine if a specific foods. However, as with other foods, if the enzymatic treatment of beer derived (Comment 16) Several comments gluten-containing grain has been from gluten-containing grains can stated that it would be appropriate for processed to remove gluten (e.g., wheat modify proteins or protein fragments beers made with gluten-containing starch) in accordance with the such that they are present at levels grains to be labeled as ‘‘crafted to provisions in the ‘‘gluten-free’’ equivalent to less than 20 ppm intact remove gluten,’’ along with a statement definition before making beer, the beer gluten proteins (80 FR 71990 at 71995). that ‘‘the beer is fermented from grains may be eligible to make the claim. We received several comments related containing gluten and crafted to remove As far as the claims that beer made to these specific questions as well as gluten.’’ The comments stated that the from gluten-containing grains can be some other beer-related topics. gluten content of the beer cannot be processed to remove gluten, we are not (Comment 15) Many comments verified and that a statement that the aware of any scientifically valid way to opposed the use of the terms ‘‘made to beer may contain gluten is truthful, evaluate such a claim, and there is remove gluten,’’ ‘‘crafted to remove accurate, and not misleading and inadequate evidence concerning the gluten,’’ and other similar such terms on provides the consumer with adequate effectiveness of gluten removal beer labels. The comments stated that information to make a purchase processes. We acknowledge that gluten such terms are not the same as ‘‘gluten- decision. The comments said that our can be at least partially broken down by free’’ and that consumers may think proposed rule is too narrow in focus and several processes, including they are the same, especially because that TTB’s Policy authorizing qualified fermentation. However, as we explain in these products are often marketed as ‘‘crafted to remove gluten’’ claims for section III.A. of this rule, the presence ‘‘gluten-free.’’ Other comments stated fermented alcohol beverages made with

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gluten-containing grain ingredients is statements may not expressly or comments, the TTB Policy allows appropriate. The comments said that implicitly suggest to the consumer that products made from gluten-containing our proposal fails to incorporate TTB’s the product is ‘‘gluten-free’’ when it grains to be labeled as being Policy requirements or distinguish does not meet the requirements of ‘‘processed,’’ ‘‘treated,’’ or ‘‘crafted’’ to between the claims that are subject to § 101.91. remove gluten, along with a qualifying FDA’s gluten-free requirements from (Comment 17) A few comments statement indicating that the product’s TTB’s qualified ‘‘crafted to remove pointed out that fermented beverages gluten content cannot be determined, gluten’’ claim. The comments strongly are different from other foods. One and that the product may contain urged FDA to adopt the TTB Policy comment further stated that prohibiting gluten. The comments stated that authorizing qualified ‘‘crafted to remove ‘‘gluten-free’’ claims for fermented certain companies are displaying gluten’’ claims. products that are made with gluten- meaningless gluten test results to their (Response 16) As we have noted containing grains, without regard for consumers. In addition, the comments previously, the statutory directive for whether gluten is present in the finished expressed concern that, if TTB adopted this rule was to define the term ‘‘gluten- product, would conflict with the policy the same approach as our rule, free,’’ and this rulemaking, like the 2013 of the Codex Alimentarius 1 (Codex) on manufacturers will sell low gluten beers gluten-free food labeling final rule, is gluten claims. The comment stated that as ‘‘gluten-free,’’ and consumers will not intended to implement that statutory the rule does not provide clarity that be able to differentiate between ‘‘gluten- directive. The intent in this rulemaking fermented alcoholic beverages currently free’’ and ‘‘low-gluten’’ products. is to provide an alternative for showing labeled as processed/treated to remove (Response 18) Although TTB consults compliance with the ‘‘gluten free’’ gluten in accordance with the TTB with FDA about the issuance of definition in § 101.91(a)(3) because Policy will be permitted to continue regulations regarding the labeling of current analytical methods are not being so labeled. Without clear guidance ingredients and substances contained in suitable for the quantification of gluten from FDA with respect to the alcohol beverages, as we noted in the in fermented or hydrolyzed foods (like permissibility and standards of such preamble to the 2013 gluten-free food beer). Thus, beers under our jurisdiction labeling, the comment said that the labeling final rule (78 FR 47154 at that are made from gluten-containing conditions may exist for potential 47165), TTB, and not FDA, is grains cannot bear a ‘‘gluten-free’’ claim. disparate ‘‘crafted to remove gluten’’ responsible for the issuance and However, as with other foods, if the standards to arise. enforcement of regulations with respect gluten-containing grain has been (Response 17) The Codex Standards to the labeling of beers that are malt processed to remove gluten in for ‘‘gluten-free’’ labeling (see Codex beverages under the FAA Act. TTB’s accordance with the provisions in the Standard 118–1979, section 2.1.1b) Policy states that, ‘‘the term ‘gluten-free’ ‘‘gluten-free’’ definition before the require that foods labeled as ‘‘gluten- may be used on labels and in fermentation process to make beer, the free’’ not contain gluten-containing advertisements if the product would be beer may be eligible to make the claim grains unless they have been processed entitled to make a gluten-free label under the final rule. to remove gluten and the end product claim under the standards set forth in We do not agree with the comments has less than 20 ppm gluten. Thus, the new FDA regulations at 21 CFR stating we should adopt TTB’s Policy. In contrary to the comment’s assertion, our 101.91’’ (Ref. 6). the preamble to the proposed rule, we requirements are aligned with the policy We will continue to work with TTB noted that the labeling of beer is subject of Codex on gluten claims. on the issues associated with ‘‘gluten- to oversight by two separate federal As for fermented or hydrolyzed free’’ labeling of beer to promote agencies (80 FR 71990 at 71995). In products, the final rule applies to FDA- consistency in terminology to avoid addition, we stated that we are working regulated foods, including certain beers, label statements that are either not with TTB on the issues associated with and, as we stated in the preamble to the truthful or are misleading. ‘‘gluten-free’’ labeling of beer to promote proposed rule, we will work with TTB (Comment 19) One comment pointed consistency in our approach, while on the issues associated with the out that proline endopeptidase (PEP) (a taking into consideration the differences ‘‘gluten-free’’ labeling of beer to promote yeast derived enzyme used by some in the statutes administered by FDA and consistency in our approach, while manufacturers to selectively degrade the TTB, respectively (80 FR 71990 at taking into consideration the differences haze-forming peptides and proteins 71995). in the statutes administered by FDA and present in beer) provides a suitable and We appreciate the efforts of TTB to TTB, respectively (80 FR 71990 at convenient processing aid for preparing provide terminology for products they 71995). The final rule does not redefine ‘‘gluten-free’’ barley-based beverages. regulate that do not meet the definition the term ‘‘gluten-free’’ or provide for the The comment mentioned research done of ‘‘gluten-free,’’ and as the proposed use of other statements, but rather the by Osman et al. 2003 (Ref. 7), which rule for gluten-free labeling of fermented rule provides how manufacturers of described the gradual degradation of or hydrolyzed foods clearly states, and foods that are fermented or hydrolyzed barley proteins during the malting stage we are reiterating here, FDA-regulated can comply with § 101.91. where barley glutens were likely to be beers are not precluded from using other (Comment 18) Some comments stated digested to peptides. The comment also statements on the label, such as a gluten that the TTB Policy does not protect stated that, according to Akeroyd et al. statement consistent with the TTB those with celiac disease and creates a and Panda et al. (Refs. 7 and 8), adding Policy (80 FR 71990 at 71995). Such competitive disadvantage for beers that the enzyme during the beer statements must be truthful and not are truly free of gluten (as opposed to fermentation phase helps to further misleading. Beers that do not meet the having been processed in some manner reduce the modest gluten concentrations definition of malt beverage are not to reduce gluten). According to the present in conventionally brewed beers. subject to the labeling provisions of the More specifically, the enzyme helps in FAA Act, but can be subject to the food 1 The Codex Alimentarius is a collection of destroying the minimal core sequence labeling provisions of the FD&C Act and internationally recognized standards, codes of required for T-cell recognition. The practice, guidelines, and other recommendations implementing regulations. This includes relating to foods, food production, and food safety. comment also stated that if a beer shows the provisions concerning the use of http://siweb.dss.go.th/standard/Fulltext/codex/ an ELISA response below the detection ‘‘gluten-free’’ claims, and such CXS_118E.pdf. level, then the absence of peptides with

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T-cell recognition sites is almost products even if the concentration of that have not been processed to remove guaranteed. The comment said that, gluten in the final product was less than gluten and, therefore, cannot be used in after using the PEP in the brewing of 20 ppm. foods that bear ‘‘gluten-free’’ labeling. beer, no known immunopathogenic 6. Issues Outside the Scope of This Rule One comment said that some wheat sequence is detected by mass starch contains small levels of both spectrometry and the R5 Competitive Some comments pertained to matters intact and hydrolyzed gluten and asked ELISA analysis fails to detect any that were outside the scope of this rule. us to clarify which methods should be gluten. The comment did, however, However, we address several of these used to test such products because we acknowledge that a final verification on comments here. consider wheat starch to be ‘‘processed the absolute quantities of gluten present Several comments stated that the term to remove gluten.’’ ‘‘gluten-free’’ should be reserved only in the end product remains necessary. We note that wheat starch, when for foods that are inherently ‘‘gluten- (Response 19) It has been well properly manufactured, does not free.’’ established that barley glutens are not involve hydrolysis of the gluten and can completely digested to amino acids We addressed this issue in the 2013 gluten-free food labeling final rule (78 be protein-free. However, as we explain during the malting and fermentation in the preamble to the 2007 proposed stage and that the gluten fragments are FR 47154). There may be inherently gluten-free foods or ingredients that still rule for gluten-free food labeling, we present in the final beer product (Ref. 8, recognize that there may be different Ref. 10, Ref. 11). Using mass do not meet the definition of ‘‘gluten- free’’ due to cross-contact with gluten methods of deriving wheat starch, and spectrometry, multiple research groups that some methods may remove less have detected gluten peptides in that leads to gluten content in the food that is at or above 20 ppm. The rule gluten than others (72 FR 2795 at 2802). conventionally brewed beer and beer Therefore, § 101.91(a)(3)(i)(A)(3) brewed in the presence of PEP that has defines ‘‘gluten-free’’ to mean the product does not contain a gluten- prohibits a food that contains an tested negative for an ELISA response ingredient that is derived from a gluten- because the level of gluten was below containing grain or an ingredient derived from a gluten-containing grain containing grain and that has been the limit of detection of ELISA test kits processed to remove gluten (e.g., wheat (Ref. 8, Ref. 9, Ref. 10, Ref. 11). The unless that ingredient has been starch) if the use of that ingredient inability to detect certain known protein processed to remove gluten and the use results in the presence of 20 ppm or fragments in gluten that elicit a response of that ingredient does not result in the more gluten in the food. Manufacturers in people with celiac disease does not presence of 20 ppm or more gluten in who label their food as ‘‘gluten-free’’ mean that all possible fragments related the food. Also, any unavoidable should make certain that the food does to celiac disease are absent because the presence of gluten in a product labeled not contain 20 ppm or more gluten, identities of all possible T-cell epitopes as ‘‘gluten-free’’ must be less than 20 regardless of whether or not those foods have not been established (Ref. 12). ppm. We concluded in the preamble to contain an ingredient that is derived Additionally, Fiedler et al., were able to the 2013 gluten-free food labeling final from a gluten containing grain that has demonstrate that gluten peptides that rule (78 FR 47154 at 47168), that all contained immunogenic sequences foods bearing a ‘‘gluten-free’’ claim, been processed to remove gluten. We knowns to be associated with celiac regardless if they are inherently gluten- would expect manufacturers of products disease were detected in PEP-containing free or not, must meet the definition of that they wish to label as ‘‘gluten-free’’ beer (Ref. 13). Though it is likely that ‘‘gluten-free.’’ We chose not to limit the to use good manufacturing practices and PEP breaks down gluten, that is not the use of the term to only foods that were be aware of the practices used in goal for the use of PEP. Also, the inherently gluten-free because such an production of the ingredients they use comments acknowledge, there is no approach could have the unintended in their products. Also, if the processing scientifically valid analytical method effect of reducing the food choices does involve hydrolysis resulting in able to quantify the gluten content in available for individuals who have hydrolyzed gluten, then the product terms of equivalent amounts of intact celiac disease, thereby reducing the would be subject to the requirements of gluten proteins. variety of foods needed to meet their this rule. We established the use of a 20 ppm nutrient needs. Finally, one comment asked us to limit as one criterion in the definition Other comments asked us to clarify clarify what government entities of ‘‘gluten-free’’ because 20 ppm is our position on the use of barley malt regulate ‘‘gluten-free’’ claim for gluten- currently the lowest level at which and barley malt extract in foods bearing reduced beer on restaurant menus and analytical methods have been a ‘‘gluten-free’’ claim. store shelves. We note that TTB is scientifically validated to reliably and We note that malt syrup and malt responsible for the labeling consistently detect gluten across a range extract are interchangeable terms for a requirements for beers, including of food matrices, providing a limit for viscous concentrate of a water extract of gluten-reduced beers, that meet the any inadvertent cross-contact with germinated barley, with or without a definition of malt beverage in the FAA gluten during the manufacturing preservative. The terms barley malt or Act (27 U.S.C. 211(a)(7)). Beers that do process. Allowing the ‘‘gluten-free’’ barley malt extract are used also. Malt not meet the definition of malt beverage label claim on food whose ingredients syrup is usually a brown and viscous are not subject to the labeling provisions are derived from a gluten-containing liquid containing varying amounts of of the FAA Act, but are subject to the grain and have been processed to amylolytic enzymes with plant food labeling provisions of the FD&C remove gluten, but not on food constituents. Malt extract and malt Act and implementing regulations, containing such ingredients that have syrup are ingredients derived from a including the provisions concerning the not been processed to remove gluten, gluten-containing grain, barley, that use of ‘‘gluten-free’’ or other type of helps to ensure that the finished have not been processed to remove gluten claims. Regarding restaurant product meets the requirement that the gluten. Food and ingredient menus that bear a ‘‘gluten-free’’ claim, food contain less than 20 ppm. Further, manufacturers should be aware that we recommend that, for beers subject to under § 101.91, gluten-containing grains malt extract and other similar malt- the food labeling provisions of the FD&C (e.g., wheat, rye, barley) are not to be derived ingredients are ingredients Act and implementing regulations, used in the production of ‘‘gluten-free’’ derived from gluten-containing grains restaurants use the defined food labeling

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claim ‘‘gluten-free’’ to be consistent persons with celiac disease who may be that may result in the expenditure by with our ‘‘gluten-free’’ definition. consuming those foods. State, local, and tribal governments, in Therefore, we are establishing the the aggregate, or by the private sector, of VI. Effective and Compliance Dates compliance date to enforce the $100,000,000 or more (adjusted This rule is effective September 14, provisions of this final rule at August annually for inflation) in any one year.’’ 2020. We recognize that manufacturers 13, 2021. The current threshold after adjustment of fermented or hydrolyzed foods, or for inflation is $156 million, using the VII. Economic Analysis of Impacts foods containing fermented or most current (2019) Implicit Price hydrolyzed ingredients, currently We have examined the impacts of the Deflator for the Gross Domestic Product. bearing a ‘‘gluten-free’’ claim may need final rule under Executive Order 12866, This final rule would not result in an time to review their products to ensure Executive Order 13563, Executive Order expenditure that meets or exceeds this that these foods comply with this final 13771, the Regulatory Flexibility Act (5 amount in any year. rule, or to remove ‘‘gluten- free’’ or U.S.C. 601–612), and the Unfunded The costs of this rule are the costs to similar claims from the label if their Mandates Reform Act of 1995 (Pub. L. manufacturers of covered foods of foods do not comply. 104–4). Executive Orders 12866 and testing ingredients for gluten, evaluating Compliance date: Consequently, the 13563 direct us to assess all costs and potential for cross-contact, if necessary compliance date of this final rule is benefits of available regulatory developing and carrying out written August 13, 2021. alternatives and, when regulation is standard operating procedures (SOPs) Although we are issuing the final rule necessary, to select regulatory for preventing gluten cross-contact, after January 1, 2019, there is sufficient approaches that maximize net benefits relabeling products that cannot be justification for establishing the (including potential economic, brought into compliance, and compliance date of August 13, 2021, to environmental, public health and safety, maintaining records of these activities enforce the provisions of this final rule, and other advantages; distributive for FDA inspection. We estimate total rather than January 1, 2022, which FDA impacts; and equity). Executive Order annualized costs of $7 million to $11 established as the next uniform 13771 requires that the costs associated million for the 3% discount rate and compliance date for other food labeling with significant new regulations ‘‘shall, annualized costs ranging from $7 changes for food labeling regulations to the extent permitted by law, be offset million to $11 million at 7% discount issued between January 1, 2019, and by the elimination of existing costs rate. All costs are computed in 2018- December 31, 2020 (83 FR 65294; associated with at least two prior dollar values. December 20, 2018). regulations.’’ This final rule is not an The benefits of this rule are health We believe that 12 months from the economically significant regulatory gains for people with celiac disease date of publication is sufficient time for action as defined by Executive Order using ‘‘gluten-free’’ labeled foods while manufacturers to review their products 12866. maintaining a gluten-free diet. To to ensure that these foods comply with The Regulatory Flexibility Act examine the potential scope of these this final rule, or to remove ‘‘gluten- requires us to analyze regulatory options benefits, we simulate the harm done by free’’ or similar claims from the label if that would minimize any significant dietary gluten intake from a gluten-free their foods do not comply. This period impact of a rule on small entities. diet before and after the rule. Due to of 12 months is consistent with what Because small firms may have uncertainty in this simulation analysis, FDA has used in the past for compliance annualized costs that do not exceed one we describe benefits qualitatively. For with the requirements of voluntary food percent of their annual revenue, we the rule to break-even with costs, the labeling claims. We believe that waiting certify that the proposed rule will not annualized benefits would need to be at until FDA’s next uniform compliance have a significant economic impact on least $8.8 million at a 3% discount rate date of January 1, 2022, would create an a substantial number of small entities. and a $9.1 million at a 7% discount rate. unnecessary delay in the enforcement of The Unfunded Mandates Reform Act Based on our simulation analysis, the this final rule, as foods bearing the of 1995 (section 202(a)) requires us to rule would break-even with primary voluntary labeling ‘‘gluten-free’’ that do prepare a written statement, which cost estimates discounted at 7% if at not comply with FDA’s regulatory includes an assessment of anticipated least 0.07% of estimated individuals definition of ‘‘gluten-free’’ could have costs and benefits, before issuing ‘‘any with celiac disease following a gluten- an adverse public health impact on rule that includes any Federal mandate free diet benefit from the rule each year.

TABLE 1—SUMMARY OF BENEFITS, COSTS, AND DISTRIBUTIONAL EFFECTS OF FINAL RULE [Millions]

Units Category Primary Low High Discount Notes estimate estimate estimate Year rate Period dollars (%) covered

Benefits: Annualized Monetized $ millions/ ...... 2018 7 10 year. 2018 3 10 Annualized Quantified ...... 7 3

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TABLE 1—SUMMARY OF BENEFITS, COSTS, AND DISTRIBUTIONAL EFFECTS OF FINAL RULE—Continued [Millions]

Units Category Primary Low High Discount Notes estimate estimate estimate Year rate Period dollars (%) covered

Qualitative ...... The benefits of this rule are health gains for people with celiac disease using ‘‘gluten-free’’ labeled foods while maintaining a gluten-free diet. For the rule to break-even with costs, the annualized benefits would need to be at least $8.8 million at a 3% discount rate and a $9.1 million at a 7% discount rate. Based on our simulation analysis, the rule would break-even with primary cost estimates discounted at 7% if at least 0.07% of estimated individuals with celiac disease following a gluten-free diet benefit from the rule each year.

Costs: Annualized Monetized $millions/year $9.09 $7.34 $11.46 2018 7 10 8.76 7.14 10.94 2018 3 10 Annualized Quantified Qualitative ...... 7 3

Transfers: Federal Annualized Monetized $ ...... 7 millions/year. 3

From/To ...... From: To:

Other Annualized Monetized $ mil- ...... 7 lions/year. 3

From/To ...... From: To:

Effects: State, Local or Tribal Government: Small Business: Wages: Growth:

In line with Executive Order 13771, in savings over an infinite time horizon considered a regulatory action under Table 2 we estimate present and based on 2016-dollar values. Based on E.O. 13771. annualized values of costs and cost these costs, this final rule would be

TABLE 2—E.O. 13771 SUMMARY TABLE [In $ millions 2016 dollars, over an infinite time horizon]

Primary Lower Upper Item estimate estimate estimate (7%) (7%) (7%)

Present Value of Costs ...... $107.12 $89.37 $130.02 Present Value of Cost Savings ...... 0 0 0 Present Value of Net Costs ...... $107.12 $89.37 $130.02 Annualized Costs ...... $7.50 $6.26 $9.10 Annualized Cost Savings ...... 0 0 0 Annualized Net Costs ...... $7.50 $6.26 $9.10

The full analysis of economic impacts have a significant effect on the human 3521). A description of these provisions is available in the docket for this final environment. Therefore, neither an is given in this section of the document rule (Ref. 14) and at https:// environmental assessment nor an with an estimate of the annual www.fda.gov/AboutFDA/ environmental impact statement is recordkeeping burden. Included in the ReportsManualsForms/Reports/ required. burden estimate is the time for EconomicAnalyses/default.htm. IX. Paperwork Reduction Act of 1995 reviewing instructions, searching VIII. Analysis of Environmental Impact existing data sources, gathering and This final rule contains information maintaining the data needed, and We have determined under 21 CFR collection provisions that are subject to completing and reviewing each 25.30(k) that this action is of a type that review by OMB under the Paperwork collection of information. does not individually or cumulatively Reduction Act of 1995 (44 U.S.C. 3501–

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Recordkeeping Requirements for Gluten- presented here are averages. We development and ingredient testing Free Labeling of Fermented or anticipate that the records kept would burdens, and all 5,000 facilities would Hydrolyzed Foods vary based on the type of ingredients incur certain new recordkeeping used. Some manufacturers, such as burdens. 1. Description of Respondents those producing fermented dairy 3. Recordkeeping Burden Related to Manufacturers of foods that are products, would likely maintain fewer Standard Operating Procedures fermented, hydrolyzed, or contain records overall. Other manufacturers, fermented or hydrolyzed ingredients such as those producing foods with We estimate that 1,250 facilities do and bear the claim ‘‘gluten-free,’’ ‘‘no fermented or hydrolyzed grains, not have a written SOP for preventing gluten,’’ ‘‘free of gluten,’’ or ‘‘without legumes, or seeds, would likely the introduction of gluten into the food gluten.’’ maintain more extensive records. product. For these facilities, developing an SOP is a first year burden of the rule. 2. Description Our estimates of the numbers of manufacturers/recordkeepers reported We estimate that it takes a facility an In this final rule, we require in column 2 of tables 3 and 4 are based average of seven hours to develop an manufacturers of certain food products on the number of food products that are SOP for gluten control. Thus, we covered by the rule to make and keep covered by the rule. Our search of estimate that in the first year of records providing adequate assurance FoodEssentials database was completed compliance with this final rule, 1,250 that: (1) The food is ‘‘gluten-free’’ before in November of 2017 (Ref. 15) for foods facilities would develop an SOP for a fermentation or hydrolysis; (2) the that are hydrolyzed, fermented, or burden of 8,750 hours (1,250 facilities × manufacturer has evaluated the contain fermented or hydrolyzed 7 hours per facility = 8,750 hours), as potential for cross-contact with gluten ingredients and bear the labeling claim reported in Table 3, row 1. during the manufacturing process; and ‘‘gluten-free,’’ ‘‘no gluten,’’ ‘‘free of Updating the facility’s SOP for gluten (3) if necessary, measures are in place to gluten,’’ or ‘‘without gluten,’’ and found control would be a recurring burden of prevent the introduction of gluten into about 2,500 products that are affected by the rule for the 1,250 facilities that do the food during the manufacturing the rule. Based on our understanding of not currently have an SOP. We estimate process. the market and experience with the that it takes a facility about 0.7 hours Manufacturers using an ingredient percentage of the food market covered (42 minutes) annually to update its SOP that is a fermented or hydrolyzed food by this database, we estimate that this for gluten control, for a burden of 875 are only required to make and keep database has at least half of all products hours (1,250 facilities × 0.7 hours per these records for the fermented or that are covered by the rule, so that facility = 875 hours), as reported in table hydrolyzed ingredient. We estimate that there are likely, at most, 5,000 products 4, row 1. the manufacturers can satisfy the affected by the rule. We estimate that maintaining records recordkeeping requirements of this rule We do not have any data about how of their updated SOPs would be a by maintaining records of their tests or many products are produced in each recurring burden of this rule for all other appropriate verification facility, so we assume that each product 5,000 facilities. We estimate that it takes procedures, their evaluation of the and its production line would be tested each facility one hour annually to potential for gluten cross-contact, and separately and would require a separate maintain records of its updated SOPs for their standard operating procedures evaluation and SOP. Thus, we estimate gluten control, for a burden of 5,000 (SOPs) for preventing gluten cross- the number of food production facilities hours (5,000 facilities × 1 hour per contact. It is also possible that and, accordingly, the number of facility = 5,000 hours), as reported in manufacturers can instead comply with manufacturers/recordkeepers to be table 4, row 2. this rule by obtaining and maintaining 5,000. If multiple products are produced 4. Recordkeeping Burden Related to records of Certificates of Analysis (CoA), in the same facility and can share Testing test results, or other appropriate testing, evaluation, and SOPs, then the verification procedures from their recordkeeping burden would be less To demonstrate that a food is ‘‘gluten- suppliers. than these estimates. free’’ before fermentation or hydrolysis, Written SOPs and records of testing We do not know how many products we expect that most manufacturers and other activities are essential for are already being manufactured using would test their incoming ingredients or FDA to be able to determine compliance gluten-free ingredients and/or with a obtain Certificates of Analysis from their with § 101.91 for these products. process designed to prevent gluten ingredient suppliers. A manufacturer Records need to be reasonably introduction. A survey of food industry may test ingredients for gluten by accessible at each manufacturing facility practices (Ref. 16) shows that about 45 sending ingredient samples to a testing and could be examined periodically by percent of all food production facilities company or by using test kits to test FDA inspectors during an inspection to have a written allergen control plan, and ingredient samples on site at their determine whether the food has been about 39 percent require certificates of facility. Test kits would first undergo manufactured and labeled in analysis for ingredients. Given that method validation for the testing compliance with § 101.91. Records that manufacturers of foods labeled ‘‘gluten- situation in which they are to be used can be immediately retrieved from free’’ are marketing to customers who (Ref. 17). We assume that a another location by electronic means are care more about gluten cross-contact, we manufacturer that begins a program of considered reasonably accessible. estimate that about 75 percent of the testing the gluten content of an We estimate the burden of this 5,000 foods with a ‘‘gluten-free’’ ingredient will start by sending several collection of information as follows: We labeling claim already have a written samples to a lab and obtaining method base our estimates of the average burden plan for preventing the introduction of extension for a test kit for the per recordkeeping on our experience gluten into the food product that ingredient. Obtaining a validation for a with good manufacturing practices used includes the testing of ingredients and test kit is a first-year burden only for to control the identity and composition procedures for evaluating and existing products. of food and to limit contaminants and preventing gluten cross-contact. After the first year of testing, we prevent adulteration. The hour Therefore, we estimate that 1,250 assume the manufacturers would then estimates for the recordkeeping burdens facilities would incur new SOP use test kits to test the ingredient on a

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regular basis, and may also send one or Table 3, row 2. We estimate that this $11, which means that the estimated two samples a year to an outside lab for rule results in manufacturers capital costs related to this recurring testing. These are recurring testing conducting 17,500 laboratory tests in paperwork burden is about $0.6 million burdens. Based on the variety of the first year (1,250 manufacturers × 14 (52,500 test kits × $11 per kit = products under FDA’s jurisdiction that samples to be tested per manufacturer = $577,500), as reported in Table 4, row are fermented or hydrolyzed, we 17,500 samples to be tested). These tests 3. We estimate the burden to process estimate that an average of two have an average cost of $84.33, which and maintain records of the test results ingredients per product would be tested means that the estimated capital costs would be 105,000 hours (5,000 in this manner. Most foods affected by related to this first year paperwork manufacturers × 42 test kits per this rule are those that contain a single burden is about $1.5 million (17,500 manufacturer × 0.5 hours per test kit = fermented or hydrolyzed ingredient. As tests × $84.33 per test = $1,475,833) as 105,000 hours), as reported in table 4, explained earlier, adequate assurance reported in table 3, row 2. row 4. that these fermented or hydrolyzed We estimate that, as a first year We estimate that a recurring burden of ingredient(s) were gluten-free before burden of this rule, all 5,000 this rule, for all 5,000 manufacturers, is that supplier performed hydrolysis or manufacturers would begin retaining to send one or two samples a year to an fermentation can include test results, records of the method extension tests. outside lab for testing. We estimate that CoAs, or other appropriate verification We estimate that it takes a manufacturer 5,000 manufacturers will conduct one documentation for each of the 30 minutes per record, for a total of outside test annually on average per ingredients. Other products contain 35,000 hours (5,000 manufacturers × 14 ingredient, for a total of 2 tests, and that multiple ingredients that would be sample records per manufacturer × 0.5 each test will require 5 minutes to tested before fermentation or hydrolysis. hours per sample record = 35,000 collect a sample and 30 minutes to As described above, we estimate that hours), as reported in table 3, row 3. process and file the test results. We most manufacturers (75 percent) already We estimate that testing ingredients estimate that the burden of collecting have a gluten control SOP that includes on a regular basis would be a recurring samples for these tests is 208 hours testing, so they will not undertake any burden of the rule, for the 1,250 (1,250 manufacturers × 2 tests per additional testing as a result of this rule. manufacturers not currently testing their manufacturer × (5 minutes ÷ 60 minutes In the first year of compliance, we ingredients and production facilities for per hour) = 208 hours), as reported in estimate that the 1,250 manufacturers gluten. We estimate that 1,250 table 4, row 5. We estimate that this rule not currently testing their ingredients manufacturers will use 21 test kits results in manufacturers conducting and production facilities for gluten annually on average per ingredient, for 2,500 laboratory tests in the first year would incur additional testing burdens a total of 42 kits, and that each test will (1,250 manufacturers × 2 tests per as a result of this rule. For these require 5 minutes to collect a sample manufacturer = 2,500 tests). These tests manufacturers, obtaining a method and 30 minutes to process and file the have an average cost of $84.33, which extension for a test kit would be a first test results. We estimate that the burden means that the estimated capital costs year burden of this rule. We estimate of collecting samples for these tests is related to this recurring paperwork that 1,250 manufacturers would conduct 4,375 hours (1,250 manufacturers × 42 burden is about $0.2 million (2,500 tests seven tests for method extension, for test kits per manufacturer × (5 minutes × $84.33 per test = $210,833), as each of two ingredients, for a total of 14 per test kit ÷ 60 minutes per hour) = reported in table 4, row 5. We estimate samples. We estimate that it would take 4,375 hours), as reported in table 4, row the burden to process and maintain a manufacturer 5 minutes to collect each 3. We estimate that this rule, results in records of the test results is 5,000 hours sample, for a total of 1,458 hours (1,250 manufacturers using 52,500 test kits (5,000 manufacturers × 2 tests per manufacturers × 14 samples per each year (1,250 manufacturers × 42 test manufacturer × 0.5 hours per test = manufacturer × (5 minutes ÷ 60 minutes kits per manufacturer = 52,500 test kits). 5,000 hours), as reported in table 4, per hour) = 1,458 hours) as reported in These test kits have an average cost of row 6.

TABLE 3—ESTIMATED FIRST YEAR RECORDKEEPING BURDEN 1

Number of Total Average Activity/proposed Number of records per annual burden per Total Capital costs 21 CFR section recordkeepers recordkeeper records recordkeeping hours (USD millions)

Developing an SOP for gluten 1,250 1 1,250 7...... 8,750 0 control; 101.91(c)(2) and (3). Collecting samples for testing; 1,250 14 17,500 0.083 (5 minutes) ...... 1,458 $1.5 101.91(c)(2) and (3). Maintaining records of method 5,000 14 70,000 0.5 (30 minutes) ...... 35,000 0 extension tests; 101.91(c)(2) and (3).

Total ...... 45,203 $1.5 1 There are no operating or maintenance costs associated with this collection of information.

TABLE 4—ESTIMATED RECURRING RECORDKEEPING BURDEN 1

Number of Total Average Activity/proposed Number of records per annual burden per Total Capital costs 21 CFR section recordkeepers recordkeeper records recordkeeping hours (USD millions)

Updating SOP for gluten con- 1,250 1 1,250 0.7 (42 minutes) ...... 875 0 trol; 101.91(c)(2) and (3).

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TABLE 4—ESTIMATED RECURRING RECORDKEEPING BURDEN 1—Continued

Number of Total Average Activity/proposed Number of records per annual burden per Total Capital costs 21 CFR section recordkeepers recordkeeper records recordkeeping hours (USD millions)

Maintaining records of the up- 5,000 1 5,000 1...... 5,000 0 dated SOP for gluten con- trol; 101.91(c)(2) and (3). Collecting samples for test kit 1,250 42 52,500 0.083 (5 minutes) ...... 4,375 $0.6 testing; 101.91(c)(2) and (3). Maintaining records of test kit 5,000 42 210,000 0.5 (30 minutes) ...... 105,000 0 test results; 101.91(c)(2) and (3). Collecting samples for testing 1,250 2 2,500 0.083 (5 minutes) ...... 208 $0.2 by an outside lab; 101.91(c)(2) and (3). Maintaining records of testing 5,000 2 10,000 0.5 (30 minutes) ...... 5,000 0 by an outside lab; 101.91(c)(2) and (3).

Total ...... 120,458 $0.8 1 There are no operating or maintenance costs associated with this collection of information.

The information collection provisions proposed rule for the use of such term manufacturers of fermented or in this final rule have been submitted to in labeling. In the preamble to the 2007 hydrolyzed foods would need to OMB for review as required by section gluten-free food labeling proposed rule demonstrate in order to use the term 3507(d) of the Paperwork Reduction Act (72 FR 2795 at 2813 through 2814), we ‘‘gluten-free,’’ then individuals with of 1995. indicated that we had consulted with celiac disease would not be able to rely Before the effective date of this final numerous experts and stakeholders in on a consistent meaning for that term rule, FDA will publish a notice in the proposed rule’s development and and thereby use the term to identify Federal Register announcing OMB’s determined that certain narrow appropriate dietary selections. As a decision to approve, modify, or exercises of State authority would result, individuals with celiac disease disapprove the information collection conflict with the exercise of Federal may unnecessarily limit their food provisions in this final rule. An Agency authority under the FD&C Act. Different choices, or conversely, select foods with may not conduct or sponsor, and a and inconsistent amounts of gluten in levels of gluten that are not tolerated person is not required to respond to, a foods with ‘‘gluten-free’’ labeling result and that may cause adverse health collection of information unless it in the inability of those individuals with effects. Food manufacturers, if displays a currently valid OMB control celiac disease who adhere to a gluten- confronted by a State or various State number. free diet to avoid exposure to gluten at requirements that adopted different levels that may result in adverse health requirements for fermented or X. Federalism effects. ‘‘Gluten-free’’ labeling, for hydrolyzed foods than this rule, might We have analyzed this final rule in purposes of this discussion, also decide to remove the ‘‘gluten-free’’ accordance with the principles set forth includes the use of the terms ‘‘no label, and such a result would make it in Executive Order 13132. Section 4(a) gluten,’’ ‘‘free of gluten,’’ and without more difficult for individuals with of Executive Order 13132 requires gluten,’’ as indicated in § 101.91(b)(2). celiac disease to identify foods that they Agencies to ‘‘construe . . . a Federal There is a need for national uniformity can tolerate and achieve a dietary intake statute to preempt State law only where in the meaning of the term ‘‘gluten- from a variety of foods to meet an the statute contains an express free,’’ which includes the manner in individual’s nutrient needs. Moreover, preemption provision or there is some which the definition is enforced, so that consistent requirements regarding the other clear evidence that the Congress most individuals with celiac disease can way compliance with the final rule is intended preemption of State law, or make informed purchasing decisions determined, including the records that where the exercise of State authority that will enable them to adhere to a diet would need to be maintained in order conflicts with the exercise of Federal they can tolerate without causing for a fermented or hydrolyzed food authority under the Federal statute.’’ adverse health effects and can select manufacturer to use the ‘‘gluten-free’’ Here, as in the 2013 gluten-free food from a variety of available gluten-free claim and the use of a scientifically labeling final rule published in the foods. valid method to detect the absence of August 5, 2013, issue of the Federal This final rule establishes additional protein to determine compliance for Register (78 FR 47154 at 47175), we requirements for manufacturers of distilled products, enables us to more have determined that certain narrow fermented and hydrolyzed foods or efficiently enforce the use of the exercises of State authority would foods that contain fermented and ‘‘gluten-free’’ claim across all fermented conflict with the exercise of Federal hydrolyzed ingredients wishing to use and hydrolyzed foods to ensure labels authority under the FD&C Act. the terms ‘‘gluten-free,’’ ‘‘no gluten,’’ bearing a ‘‘gluten-free’’ claim are In section 206 of FALCPA, Congress ‘‘free of gluten,’’ or ‘‘without gluten’’ on truthful and not misleading. directed us to issue a proposed rule to their products, thus these requirements Therefore, the final rule’s objective is define and permit use of the term are a component of how we permit the standardizing use of the term ‘‘gluten- ‘‘gluten-free’’ on the labeling of foods, in use of the ‘‘gluten-free’’ labeling claim. free’’ in the labeling of fermented and consultation with appropriate experts If States were able to establish different hydrolyzed foods so that foods with this and stakeholders, to be followed by a requirements regarding what claim in labeling, and foods with a

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claim of ‘‘no,’’ ‘‘free of,’’ and ‘‘without’’ circumstances and describe how the Supreme Court stated that FDA gluten, which connote a similar final rule’s codified provision regarding possessed the authority to issue meaning to that of ‘‘gluten-free,’’ are preemption, which is now § 101.91(d), regulations preempting local laws that used in a consistent way and will would apply to fermented or hydrolyzed compromise the supply of plasma and prevent consumer confusion and help foods. could do so (Hillsborough County, Fla. individuals with celiac disease make Under the Supremacy Clause of the v. Automated Medical Laboratories, purchasing decisions. Constitution (U.S. Constitution; Art. VI, Inc., 471 U.S. 707, 721 (1985)). We Section 4(c) of Executive Order 13132 clause 2), State laws that interfere with believe we have similar authority to instructs us to restrict any Federal or are contrary to Federal law are preempt State and local laws and preemption of State law to the invalid. (See Gibbons v. Ogden, 22 U.S. regulations to the limited extent that ‘‘minimum level necessary to achieve (9 Wheat.) 1, 211 (1824)). Federal they permit use of ‘‘gluten-free,’’ ‘‘no the objectives of the statute pursuant to preemption can be express (stated by gluten,’’ ‘‘free of gluten,’’ or ‘‘without which the regulations are promulgated.’’ Congress in the statute) or implied. gluten’’ for fermented or hydrolyzed The final rule meets the preceding Implied preemption can occur in several foods differently from our rule because requirement because it would preempt ways. For example, Federal preemption different State or local labeling State law narrowly, only to the extent may be found where Federal law requirements would be contrary to the required to achieve uniform national conflicts with State law. Such conflict Congressional directive for us to define labeling with respect to the may be demonstrated either when and permit use of the term ‘‘gluten- requirements related to the use of the ‘‘compliance with both federal and state free.’’ term ‘‘gluten-free,’’ as well as the terms [law] is a physical impossibility’’ State or local laws or regulations that ‘‘no gluten,’’ ‘‘free of gluten,’’ or (Florida Lime and Avocado Growers, permit use of ‘‘gluten-free,’’ ‘‘no gluten,’’ ‘‘without gluten,’’ on fermented and Inc. v. Paul, 373 U.S. 132, 142–143 ‘‘free of gluten,’’ or ‘‘without gluten’’ hydrolyzed foods. We intend to preempt (1963)), or when State law ‘‘stands as an differently from our rule could frustrate State or local requirements only to the obstacle to the accomplishment and the ability of most consumers to identify extent that the State or local execution of the full purposes and gluten-free foods and avoid adverse requirements are different from the objectives of Congress’’ (Crosby v. Nat’l health effects and deter manufacturers labeling requirements in this section Foreign Trade Council, 530 U.S. 363, from applying a ‘‘gluten-free’’ label to related to the use of the terms ‘‘gluten- 372–74 (2000) (citing Hines v. their foods. With this final rule, free,’’ ‘‘no gluten,’’ ‘‘free of gluten,’’ or Davidowitz, 312 U.S. 52, 67 (1941))). consumers throughout the United States ‘‘without gluten’’ for fermented and State law is also preempted if it can understand what is required to use hydrolyzed foods. In addition, we interferes with the methods by which a the term ‘‘gluten-free’’ on the labeling of cannot foresee every potential State Federal law is designed to reach its a fermented or hydrolyzed packaged requirement and preemption that may goals. (See Int’l Paper Co. v. Ouellette, food. This final rule will also allow us arise if a State requirement is found to 479 U.S. 481, 494 (1987); Michigan to enforce more efficiently the definition obstruct the federal purpose articulated Canners & Freezers Ass’n v. Agricultural on product labels of fermented or in this rule. This rule, like the rule Marketing & Bargaining Bd., 467 U.S. hydrolyzed foods, and manufacturers codified at § 101.91, is not intended to 461, 477–478 (1984)). will be able to comply with a single set preempt other State or local labeling Additionally, ‘‘ ‘a federal agency of requirements, which may lead to requirements with respect to other acting within the scope of its greater use of this voluntary labeling. statements or warnings about gluten. congressionally delegated authority may Therefore, we intend to preempt State For example, a State is not preempted preempt state regulation’ and hence or local requirements only to the extent from requiring a labeling statement render unenforceable state or local laws that they are different from these final about the health effects of gluten that are otherwise not inconsistent with requirements related to the use of the consumption from fermented or federal law’’ (City of New York v. FCC, terms ‘‘gluten-free,’’ ‘‘no gluten,’’ ‘‘free hydrolyzed foods on persons with celiac 486 U.S. 57, 63–64 (1988) (quoting of gluten,’’ or ‘‘without gluten’’ on the disease or information about how the Louisiana Public Service Comm’n v. labeling of fermented or hydrolyzed food was processed. FCC, 476 U.S. 355, 369 (1986)). ‘‘Federal foods, including the requirement to In 2009, the President issued a regulations have no less preemptive make and keep certain records and the memorandum entitled ‘‘Preemption’’ effect than federal statutes’’ (Fidelity use of a scientifically valid method to (74 FR 24693, May 22, 2009). The Federal Savings and Loan Ass’n v. de la detect the absence of protein for memorandum, among other things, Cuesta, 458 U.S. 141, 153 (1982)). distilled foods. There is no change to instructs Agencies to ‘‘not include in When an Agency’s intent to preempt § 101.91(d) regarding preemption, but regulatory preambles statements that the is clearly and unambiguously stated, a the new requirements in § 101.91(c) are department or agency intends to court’s inquiry will be whether the part of the requirements covered by preempt State law through the preemptive action is within the scope of § 101.91(d). regulation except where preemption that Agency’s delegated authority provisions are also included in the (Capital Cities Cable, Inc. v. Crisp, 467 XI. References codified regulation’’ and ‘‘not include U.S. 691, 700 (1984); Fidelity Federal The following references marked with preemption provisions in codified Savings, 458 U.S. at 154). If the an asterisk (*) are on display at the regulations except where such Agency’s choice to preempt ‘‘represents Dockets Management Staff (see provisions would be justified under a reasonable accommodation of ADDRESSES) and are available for legal principles governing preemption, conflicting policies that were committed viewing by interested persons between including the principles outlined in to the agency’s care by the statute [the 9 a.m. and 4 p.m., Monday through Executive Order 13132.’’ Because of the regulation will stand] unless it appears Friday; they also are available May 22, 2009, memorandum we explain from the statute or its legislative history electronically at https:// in detail the principles underlying our that the accommodation is not one that www.regulations.gov. References conclusion that this final rule may Congress would have sanctioned’’ without asterisks are not on public result in preemption of State and local (United States v. Shimer, 367 U.S. 374, display at https://www.regulations.gov laws under a narrow set of 383 (1961)). In Hillsborough County, the because they have copyright restriction.

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Some may be available at the website Degrades all Known Immuno Authority: 15 U.S.C. 1453, 1454, 1455; 21 address, if listed. References without Stimulatory Gluten Peptides in Beer U.S.C. 321, 331, 342, 343, 348, 371; 42 U.S.C. asterisks are available for viewing only Made from Barley Malt.’’ Journal of the 243, 264, 271. American Society of Brewing Chemists ■ at the Dockets Management Staff. FDA 74(2), 2016. 2. In § 101.91, revise paragraphs (b)(1), has verified the website addresses, as of 9. Panda, R., Fiedler, K.L., Cho, C.Y., Cheng, (b)(2), and (c) to read as follows: the date this document publishes in the R., et al. (2015). ‘‘Effects of a Proline § 101.91 Gluten-free labeling of food. Federal Register, but websites are Endopeptidase on the Detection and subject to change over time. Quantitation of Gluten by * * * * * Antibody-Based Methods during the (b) Requirements. (1) A food that 1. Ciclitira, P.J., D. Evans, and N. Fagg, Fermentation of a Model Sorghum Beer.’’ bears the claim ‘‘gluten-free’’ in its ‘‘Clinical Testing of Gliadin Fractions in Journal of Agricultural and Food labeling and fails to meet the Coeliac Patients,’’ Clinical Science, 66: Chemistry 63: 10525–10535.2015 pg. 35 357–364, 1984. Available at: https:// requirements of paragraph (a)(3) of this line 806. section and, if applicable, paragraphs www.ncbi.nlm.nih.gov/pubmed/ 10. Colgrave, M.L., Goswami, H., Blundell., 6692666. M., Howeitt, C. A., Tanner, G.J., (2014). (c)(2) through (4) of this section will be 2. * Garber, E.A.E., FDA Memorandum to ‘‘Using Mass Spectrometry to Detect deemed misbranded. Administrative Record, ‘‘Standards Used Hydrolysed Gluten in Beer that is (2) A food that bears the claim ‘‘no to Detect and Quantify Fermented and Responsible for False Negatives by gluten,’’ ‘‘free of gluten,’’ or ‘‘without Hydrolyzed Gluten in Foods,’’ August ELISA.’’ Journal of Chromatography A. gluten’’ in its labeling and fails to meet 25, 2015. 1370: 105–14. the requirements of paragraph (a)(3) of 3. Lacorn, M. and Weiss, T. (2015). ‘‘Partially 11. Knorr, V., Wieser, H., and Koehler, P. Hydrolyzed Gluten in Fermented Cereal- this section and, if applicable, (2016). ‘‘Production of Gluten-Free Beer paragraphs (c)(2) through (4) of this Based Products by R5 Competitive by Peptidase Treatment.’’ European Food ELISA: Collaborative Study, First Action Research and Technology 242: 1129– section will be deemed misbranded. 2015.05.’’ Journal of AOAC International 1140. * * * * * 98: 1346–1354. Available at: https:// 12. Shewry, P. and Tatham, A. (2016). (c) Compliance. (1) When compliance www.ingentaconnect.com/content/aoac/ ‘‘Improving Wheat to Remove Coeliac with paragraph (b) of this section is jaoac/2015/00000098/00000005/ Epitopes but Retain Functionality.’’ based on an analysis of the food, FDA art00023?crawler Journal of Cereal Science. 67:12–21. =true&mimetype=application/pdf. will use a scientifically valid method 13. Fiedler, K., Panda, R., and Croley, T. that can reliably detect and quantify the 4. Koehler, P., Schwalb, T., Immer, U., (2018). ‘‘Analysis of Gluten in a Wheat- Lacorn, M., et al. (2013). ‘‘AACCI Gluten-Incurred Sorghum Beer Brewed presence of 20 ppm gluten in a variety Approved Methods Technical Committee in the Presence of Proline Endopeptidase of food matrices, including both raw Report: Collaborative Study on the by LC/MS/MS.’’ Analytical Chemistry and cooked or baked products. Immunochemical Determination of 90: 2111–2118. (2) When a scientifically valid method Partially Hydrolyzed Gluten Using an R5 14. * FDA, Economic Impact Analysis for pursuant to paragraph (c)(1) of this Competitive ELISA.’’ Available at: ‘‘Food Labeling; Gluten-Free Labeling of section is not available because the food https://www.researchgate.net/ Fermented or Hydrolyzed Foods, 2019. is fermented or hydrolyzed, the publication/251972244_AACCI_ Available at: https://www.fda.gov/ manufacturer of such foods bearing the Approved_Methods_Technical_ AboutFDA/ReportsManualsForms/ Committee_Report_Collaborative_Study_ Reports/EconomicAnalyses/default.htm. claim must make and keep records on_the_Immunochemical_ 15. FoodEssentials. Product Label Database. regarding the fermented or hydrolyzed Determination_of_Partially_Hydrolyzed_ November 2017 [cited 2017 October 11,]; food demonstrating adequate assurance Gluten_Using_an_R5_Competitive_ Original website retired in mid-2018 and that: ELISA. new database was launched in late (i) The food is ‘‘gluten-free’’ in 5. Sollid, L.M., Qiao, S.W., Anderson, R.P., 2018]. Available from: https:// compliance with paragraph (a)(3) of this Gianfrani, C., and Koning, F. (2012). www.labelinsight.com/about. Access is section before fermentation or ‘‘Nomenclature and Listing of Celiac provided under a contract. hydrolysis; Disease Relevant Gluten T-Cell Epitopes 16. * Eastern Research Group (ERG), (ii) The manufacturer has adequately Restricted by HLA–DQ Molecules.’’ Nationwide Survey of Food Industry Immunogenetics, 64(6), 455–60. Safety Practices, Final report, Contract evaluated their processing for any Available at: https:// No 223–01–2461, task order 7. 2011, potential for gluten cross-contact; and www.ncbi.nlm.nih.gov/pmc/articles/ ERG. (iii) Where a potential for gluten PMC3349865/pdf/251_2012_Article_ 17. * Thompson, Tricia, ‘‘Should cross-contact has been identified, the 599.pdf. Manufacturers Consumers Use Lateral manufacturer has implemented 6. * Revised Interim Policy on Gluten Content Flow Devices (EZ Gluten) to Test Food measures to prevent the introduction of Statements in the Labeling and for Gluten?’’ Online version available at gluten into the food during the Advertising of Wines, Distilled Spirits, http://www.glutenfreedietitian.com/ manufacturing process. and Malt Beverages (TTB Ruling No. should-manufacturers-consumers-use- (3) When a scientifically valid method 2014–2, February 11, 2014, available at: lateral-flow-devices-ez-gluten-to-test- pursuant to paragraph (c)(1) of this https://www.ttb.gov/images/pdfs/rulings/ food-for-gluten/. 2014-2.pdf). section is not available because the food 7. Osman, A.M., S.M. Coverdale, K. Onley- List of Subjects in 21 CFR Part 101 contains one or more ingredients that Watson, D. Bell, and P. Healy. ‘‘The Gel Food labeling, Nutrition, Reporting are fermented or hydrolyzed, the Filtration Chromatographic-Profiles of and recordkeeping requirements. manufacturer of such foods bearing the Proteins and Peptides of Wort and Beer: Therefore, under the Federal Food, claim must make and keep records Effects of Processing—Malting, Mashing, demonstrating adequate assurance that Kettle Boiling, Fermentation and Drug, and Cosmetic Act and under authority delegated to the Commissioner the fermented or hydrolyzed ingredients Filtering.’’ Journal of the Institute of are ‘‘gluten-free’’ as described in Brewing. 109(1), 41–50, 2003. Available of Food and Drugs, 21 CFR part 101 is at: https://onlinelibrary.wiley.com/doi/ amended as follows: paragraph (c)(2) of this section. epdf/10.1002/j.2050- (4) Records necessary to verify 0416.2003.tb00592.x. PART 101—FOOD LABELING compliance with paragraphs (c)(2) and 8. Akeroyd, M., S. Van Zandycke, J. den (3) of this section must be retained for Hartog, J. Mutsaers, et al. ‘‘AN–PEP ■ 1. The authority citation for 21 CFR at least 2 years after introduction or Proline Specific Endo-Peptidase part 101 continues to read as follows: delivery for introduction of the food

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into interstate commerce and may be holidays. The telephone number for the identify docket ID number EPA–HQ– kept as original records, as true copies, Public Reading Room is (202) 566–1744, OPP–2019–0249 in the subject line on or as electronic records. Manufacturers and the telephone number for the OPP the first page of your submission. All must provide those records to us for Docket is (703) 305–5805. objections and requests for a hearing examination and copying during an Please note that due to the public must be in writing and must be received inspection upon request. health emergency, the EPA Docket by the Hearing Clerk on or before (5) When a scientifically valid method Center (EPA/DC) and Reading Room October 13, 2020. Addresses for mail pursuant to paragraph (c)(1) of this was closed to public visitors on March and hand delivery of objections and section is not available because the food 31, 2020. Our EPA/DC staff will hearing requests are provided in 40 CFR is distilled, FDA will evaluate continue to provide customer service 178.25(b). compliance with paragraph (b) of this via email, phone, and webform. For In addition to filing an objection or section by verifying the absence of further information on EPA/DC services, hearing request with the Hearing Clerk protein in the distilled component using docket contact information and the as described in 40 CFR part 178, please scientifically valid analytical methods current status of the EPA/DC and submit a copy of the filing (excluding that can reliably detect the presence or Reading Room, please visit https:// any Confidential Business Information absence of protein or protein fragments www.epa.gov/dockets. (CBI)) for inclusion in the public docket. in the food. FOR FURTHER INFORMATION CONTACT: Information not marked confidential * * * * * Michael Goodis, Registration Division pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior Dated: July 29, 2020. (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 notice. Submit the non-CBI copy of your Stephen M. Hahn, Pennsylvania Ave. NW, Washington, DC objection or hearing request, identified Commissioner of Food and Drugs. 20460–0001; main telephone number: by docket ID number EPA–HQ–OPP– [FR Doc. 2020–17088 Filed 8–12–20; 8:45 am] (703) 305–7090; email address: 2019–0249, by one of the following BILLING CODE 4164–01–P [email protected]. methods: • Federal eRulemaking Portal: http:// SUPPLEMENTARY INFORMATION: www.regulations.gov. Follow the online instructions for submitting comments. ENVIRONMENTAL PROTECTION I. General Information Do not submit electronically any AGENCY A. Does this action apply to me? information you consider to be CBI or 40 CFR Part 180 You may be potentially affected by other information whose disclosure is this action if you are an agricultural restricted by statute. [EPA–HQ–OPP–2019–0249; FRL–10011–78] producer, food manufacturer, or • Mail: OPP Docket, Environmental pesticide manufacturer. The following Protection Agency Docket Center (EPA/ Novaluron; Pesticide Tolerances list of North American Industrial DC), (28221T), 1200 Pennsylvania Ave. AGENCY: Environmental Protection Classification System (NAICS) codes is NW, Washington, DC 20460–0001. • Hand Delivery: To make special Agency (EPA). not intended to be exhaustive, but rather provides a guide to help readers arrangements for hand delivery or ACTION: Final rule. determine whether this document delivery of boxed information, please SUMMARY: This regulation establishes applies to them. Potentially affected follow the instructions at http:// and modifies tolerances for residues of entities may include: www.epa.gov/dockets/contacts.html. novaluron in or on multiple • Crop production (NAICS code 111). Additional instructions on commenting • commodities which are identified and Animal production (NAICS code or visiting the docket, along with more discussed later in this document. 112). information about dockets generally, is • Interregional Research Project Number 4 Food manufacturing (NAICS code available at http://www.epa.gov/ (IR–4) requested these tolerances and 311). dockets. • modifications under the Federal Food, Pesticide manufacturing (NAICS II. Summary of Petitioned-For Drug, and Cosmetic Act (FFDCA). code 32532). Tolerance DATES: This regulation is effective B. How can I get electronic access to In the Federal Register of August 30, August 13, 2020. Objections and other related information? 2019 (84 FR 45702) (FRL–9998–15), requests for hearings must be received You may access a frequently updated EPA issued a document pursuant to on or before October 13, 2020 and must electronic version of EPA’s tolerance FFDCA section 408(d)(3), 21 U.S.C. be filed in accordance with the regulations at 40 CFR part 180 through 346a(d)(3), announcing the filing of a instructions provided in 40 CFR part the Government Printing Office’s e-CFR pesticide petition (PP 9E8746) by IR–4, 178 (see also Unit I.C. of the site at http://www.ecfr.gov/cgi-bin/text- IR–4 Project Headquarters, Rutgers, The SUPPLEMENTARY INFORMATION). idx?&c=ecfr&tpl=/ecfrbrowse/Title40/ State University of New Jersey, 500 ADDRESSES: The docket for this action, 40tab_02.tpl. College Road East, Suite 201 W, identified by docket identification (ID) Princeton, NJ 08540. The petition number EPA–HQ–OPP–2019–0249, is C. How can I file an objection or hearing requested to amend 40 CFR 180.598 by available at http://www.regulations.gov request? establishing tolerances for residues of or at the Office of Pesticide Programs Under FFDCA section 408(g), 21 the insecticide novaluron, including its Regulatory Public Docket (OPP Docket) U.S.C. 346a(g), any person may file an metabolites and degradates, in or on the in the Environmental Protection Agency objection to any aspect of this regulation following commodities: Brassica, leafy Docket Center (EPA/DC), West William and may also request a hearing on those greens, subgroup 4–16B at 25 parts per Jefferson Clinton Bldg., Rm. 3334, 1301 objections. You must file your objection million (ppm); cottonseed subgroup 20C Constitution Ave. NW, Washington, DC or request a hearing on this regulation at 0.6 ppm; kohlrabi at 0.7 ppm; 20460–0001. The Public Reading Room in accordance with the instructions sunflower subgroup 20B at 0.07 ppm; is open from 8:30 a.m. to 4:30 p.m., provided in 40 CFR part 178. To ensure tropical and subtropical, small fruit, Monday through Friday, excluding legal proper receipt by EPA, you must inedible peel, subgroup 24A at 9 ppm;

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and vegetable, brassica, head and stem, this action. EPA’s assessment of residential uses are being added by this group 5–16 at 0.7 ppm; and by exposures and risks associated with action. modifying the existing tolerance on novaluron follows. Chronic dietary risks are below the vegetable, fruiting, group 8–10 from 1.0 On July 22, 2015, EPA published in Agency’s level of concern of 100% of ppm to 1.5 ppm due to the proposed use the Federal Register a final rule the chronic population adjusted dose on greenhouse grown peppers. The establishing tolerances for residues of (cPAD); they are estimated to be 50% of document also requested to remove the novaluron in or on multiple agricultural the cPAD for children 1 to 2 years old, established tolerances in or on the commodities based on the Agency’s the population subgroup with the following commodities: Brassica, head conclusion that aggregate exposure to highest exposure estimate. Short- and and stem, subgroup 5A at 0.50 ppm; novaluron is safe for the general intermediate-term aggregate (dietary and brassica, leafy greens, subgroup 5B at 25 population, including infants and residential) margins of exposure (MOEs) ppm; cotton, undelinted seed at 0.60 children. See 80 FR 43329 (FRL–9929– are 3,400 for adults and 420 for children ppm; and turnip, greens at 25 ppm 57). EPA is incorporating the following 1–2 years old, which are not of concern because these commodities would be portions of that document by reference because they are greater than EPA’s covered by the new tolerances here, as they have not changed in the levels of concern (MOEs less than or established for the crop group Agency’s current assessment of equal to 100). There are no anticipated expansions and conversions above. exposures and risks associated with long-term exposures because the pet That document referenced a summary novaluron: The toxicological profile and spot-on use of novaluron was of the petition prepared by Makhteshim points of departure, certain assumptions voluntarily cancelled in 2017, so the (d/b/a ADAMA), the registrant, which is for exposure assessment, cumulative long-term aggregate assessment is available in the docket, http:// effects from substances with a common equivalent to the chronic dietary. www.regulations.gov. A comment was mechanism of toxicity, and the Agency’s Therefore, based on the risk received in response to the notice of determination regarding the children’s assessments and information described filing. EPA’s response to this comment safety factor. above, EPA concludes there is a is discussed in Unit IV.C. EPA’s dietary exposure assessments reasonable certainty that no harm will Based upon review of the data have been updated to include the result to the general population, or to supporting the petition, EPA is additional exposure from the new uses infants and children, from aggregate establishing and modifying tolerances of novaluron on the tropical and exposure to novaluron residues. Further that vary from what was requested. The subtropical, small fruit, inedible peel, information about EPA’s risk assessment reason for these changes is explained in subgroup 24A, the sunflower subgroup and determination of safety supporting Unit IV.D. 20B, and greenhouse-grown peppers; the tolerances established and modified the crop group expansion for the III. Aggregate Risk Assessment and in this regulation can be found at http:// cottonseed subgroup 20C; and the crop Determination of Safety www.regulations.gov in the document group conversions for Brassica, leafy titled, ‘‘Novaluron. Human Health Risk Section 408(b)(2)(A)(i) of the FFDCA greens, subgroup 4–16B, the vegetable, allows EPA to establish a tolerance (the Assessment for Proposed New Uses on Brassica, head and stem, group 5–16, Tropical and Subtropical, Small Fruit, legal limit for a pesticide chemical and kohlrabi. An acute dietary exposure Inedible Peel, Subgroup 24A; Sunflower residue in or on a food) only if EPA assessment was not performed as there Subgroup 20B; and Greenhouse-Grown determines that the tolerance is ‘‘safe.’’ are no appropriate toxicological effects Peppers; and Crop Group Expansion for Section 408(b)(2)(A)(ii) of the FFDCA attributable to a single exposure (dose). Cottonseed Subgroup 20C, and Crop defines ‘‘safe’’ to mean that ‘‘there is a A partially refined chronic dietary (food Group Conversions for Brassica, Leafy reasonable certainty that no harm will and drinking water) exposure and risk Greens, Subgroup 4–16B, Vegetable, result from aggregate exposure to the assessment was conducted that Brassica, Head and Stem, Group 5–16, pesticide chemical residue, including incorporated tolerance-level residues for and Kohlrabi’’ dated June 30, 2020 in all anticipated dietary exposures and all the proposed new uses, crop group docket ID number EPA–HQ–OPP–2019– other exposures for which there is expansions, and crop group reliable information.’’ This includes conversions. The chronic analysis also 0249. exposure through drinking water and in incorporated average percent crop IV. Other Considerations residential settings but does not include treated (PCT) data for several registered occupational exposure. Section commodities. For the remaining A. Analytical Enforcement Methodology 408(b)(2)(C) of the FFDCA requires EPA commodities, 100 PCT was assumed. Adequate enforcement methodology to give special consideration to Anticipated residues for meat, milk, (gas chromatography/electron-capture exposure of infants and children to the hog, and poultry commodities were detection (GC/ECD) and high- pesticide chemical residue in incorporated as well. A cancer dietary performance liquid chromatography/ establishing a tolerance and to ‘‘ensure assessment was not conducted because ultraviolet (HPLC/UV)) is available to that there is a reasonable certainty that novaluron is classified as ‘‘not likely to enforce the tolerance expression. no harm will result to infants and be carcinogenic to humans.’’ In The method may be requested from: children from aggregate exposure to the addition, the chronic dietary exposure Chief, Analytical Chemistry Branch, pesticide chemical residue. . . .’’ and risk assessment incorporated the Environmental Science Center, 701 Consistent with FFDCA section highest total estimated drinking water Mapes Rd., Ft. Meade, MD 20755–5350; 408(b)(2)(D) and the factors specified concentration of 8.4 parts per billion telephone number: (410) 305–2905; therein, EPA has reviewed the available into this dietary assessment. EPA’s email address: residuemethods@ scientific data and other relevant aggregate exposure assessment epa.gov. information in support of this action. incorporated this additional assumed EPA has sufficient data to assess the dietary exposure in food and drinking B. International Residue Limits hazards of and to make a determination water and residential exposure for In making its tolerance decisions, EPA on aggregate exposure for novaluron, existing uses; the residential exposure seeks to harmonize U.S. tolerances with including exposure resulting from the assessment has not changed since the international standards whenever tolerances established or modified by 2015 final rule because no new possible, consistent with U.S. food

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safety standards and agricultural modified by this action are safe. The VI. Statutory and Executive Order practices. EPA considers the commenter has provided no information Reviews international maximum residue limits supporting a contrary conclusion. This action establishes and modifies (MRLs) established by the Codex tolerances under FFDCA section 408(d) Alimentarius Commission (Codex), as D. Revisions to Petitioned-For Tolerances in response to a petition submitted to required by FFDCA section 408(b)(4). the Agency. The Office of Management The Codex is a joint United Nations The Agency is modifying the and Budget (OMB) has exempted these Food and Agriculture Organization/ tolerance for vegetable, fruiting, group types of actions from review under World Health Organization food 8–10 to 2 ppm, rather than 1.5 ppm as Executive Order 12866, entitled standards program, and it is recognized proposed by the petitioner. The ‘‘Regulatory Planning and Review’’ (58 as an international food safety petitioner did not use the Organization FR 51735, October 4, 1993). Because standards-setting organization in trade for Economic Cooperation and this action has been exempted from agreements to which the United States Development (OECD) tolerance review under Executive Order 12866, is a party. EPA may establish a tolerance calculator and instead estimated the this action is not subject to Executive that is different from a Codex MRL; Order 13211, entitled ‘‘Actions however, FFDCA section 408(b)(4) proposed tolerance level. To be Concerning Regulations That requires that EPA explain the reasons conservative, EPA utilized all of the Significantly Affect Energy Supply, for departing from the Codex level. submitted field trial data for greenhouse Codex MRLs are established for pepper (which is a representative Distribution, or Use’’ (66 FR 28355, May residues of novaluron in mustard greens commodity in the vegetable, fruiting, 22, 2001) or Executive Order 13045, (part of the Brassica, leafy greens, group 8–10) at the pre-harvest interval entitled ‘‘Protection of Children from subgroup 4–16B), the group of Brassica (PHI) which gave the highest residue Environmental Health Risks and Safety vegetables (which includes the levels, because data showed that Risks’’ (62 FR 19885, April 23, 1997), commodities in the vegetable, Brassica, residues increased with increasing PHI. nor is it considered a regulatory action head and stem, group 5–16 and These values were input into the OECD under Executive Order 13771, entitled kohlrabi), and cotton seed (part of the calculator. ‘‘Reducing Regulations and Controlling Regulatory Costs’’ (82 FR 9339, February cottonseed subgroup 20C) at the same Also, although the petitioner 3, 2017). This action does not contain levels as the U.S. tolerances and are proposed a 0.6 ppm tolerance for the any information collections subject to thus harmonized. There are no Codex cottonseed subgroup 20C, the Agency is OMB approval under the Paperwork MRLs for any of the commodities in the establishing the tolerance at 0.5 ppm for Reduction Act (PRA) (44 U.S.C. 3501 et tropical and subtropical, small fruit, harmonization with Codex. While the inedible peel, subgroup 24A or seq.), nor does it require any special OECD calculator determined a rounded considerations under Executive Order sunflower subgroup 20B and therefore tolerance of 0.6 ppm based on harmonization is not an issue. There are 12898, entitled ‘‘Federal Actions to previously submitted cotton field trial Address Environmental Justice in Canadian MRLs at 1 ppm and Codex data, EPA concludes that a 0.5 ppm MRLs at 0.7 ppm for pepper, bell; Minority Populations and Low-Income tolerance is appropriate because it is Populations’’ (59 FR 7629, February 16, pepper, non-bell; and tomato, which are based on the following conservative the representative commodities in the 1994). tolerance-setting assumptions: Since tolerances and exemptions that vegetable, fruiting, group 8–10. Based Cottonseed is a blended commodity on the data submitted with this petition, are established on the basis of a petition (therefore, residues are likely to be under FFDCA section 408(d), such as EPA is revising the existing tolerance lower), and field trials are based on in/on the vegetable, fruiting, group 8–10 the tolerances and modifications in this maximum application rates (which final rule, do not require the issuance of to be 2 ppm. Harmonization with the provides a ‘‘worst-case’’ residue level). Canada or Codex MRLs is not possible a proposed rule, the requirements of the Furthermore, the OECD calculator Regulatory Flexibility Act (RFA) (5 because lowering the tolerance could provided an unrounded maximum cause U.S. growers to have violative U.S.C. 601 et seq.), do not apply. residue limit (MRL) of 0.52 ppm, which This action directly regulates growers, residues despite using the pesticide is close to 0.5 ppm. according to the label. food processors, food handlers, and food V. Conclusion retailers, not States or tribes, nor does C. Response to Comments this action alter the relationships or One comment was received in Therefore, tolerances are established distribution of power and response to the notice of filing that for residues of novaluron in or on responsibilities established by Congress stated in part that ‘‘increasing the Brassica, leafy greens, subgroup 4–16B in the preemption provisions of FFDCA tolerance so that more pesticide junk at 25 ppm; cottonseed subgroup 20C at section 408(n)(4). As such, the Agency can be on brassica and turnips—that is 0.5 ppm; kohlrabi at 0.7 ppm; sunflower has determined that this action will not a very bad idea.’’ subgroup 20B at 0.07 ppm; tropical and have a substantial direct effect on States Although the Agency recognizes that subtropical, small fruit, inedible peel, or tribal governments, on the some individuals believe that pesticides subgroup 24A at 9 ppm; and vegetable, relationship between the national should be banned on agricultural crops, Brassica, head and stem, Group 5–16 at government and the States or tribal the existing legal framework provided 0.7 ppm. Furthermore, the existing governments, or on the distribution of by section 408 of the FFDCA authorizes tolerance for vegetable, fruiting, group power and responsibilities among the EPA to establish tolerances when it 8–10 is modified from 1.0 ppm to 2 various levels of government or between determines that the tolerance is safe. ppm. Lastly, the following tolerances the Federal Government and Indian Upon consideration of the validity, are removed as unnecessary due to the tribes. Thus, the Agency has determined completeness, and reliability of the establishment of the above tolerances: that Executive Order 13132, entitled available data as well as other factors Brassica, head and stem, subgroup 5A; ‘‘Federalism’’ (64 FR 43255, August 10, the FFDCA requires EPA to consider, Brassica, leafy greens, subgroup 5B; 1999) and Executive Order 13175, EPA has determined that the novaluron cotton, undelinted seed; and turnip entitled ‘‘Consultation and Coordination residue tolerances established and greens. with Indian Tribal Governments’’ (65 FR

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67249, November 9, 2000) do not apply List of Subjects in 40 CFR Part 180 ■ b. Adding in alphabetical order an to this action. In addition, this action Environmental protection, entry for ‘‘Brassica, leafy greens, does not impose any enforceable duty or Administrative practice and procedure, subgroup 4–16B’’; contain any unfunded mandate as Agricultural commodities, Pesticides ■ c. Removing the entries for ‘‘Brassica, described under Title II of the Unfunded and pests, Reporting and recordkeeping leafy greens, subgroup 5B’’ and ‘‘Cotton, Mandates Reform Act (UMRA) (2 U.S.C. requirements. undelinted seed’’; 1501 et seq.). This action does not involve any Dated: July 16, 2020. ■ d. Adding in alphabetical order technical standards that would require Michael Goodis, entries for ‘‘Cottonseed subgroup 20C,’’ Agency consideration of voluntary Director, Registration Division, Office of ‘‘Kohlrabi,’’ ‘‘Sunflower subgroup 20B,’’ consensus standards pursuant to section Pesticide Programs. ‘‘Tropical and subtropical, small fruit, 12(d) of the National Technology Therefore, for the reasons states in the inedible peel, subgroup 24A’’; Transfer and Advancement Act preamble, the EPA amend 40 CFR ■ e. Removing the entry for ‘‘Turnip (NTTAA) (15 U.S.C. 272 note). chapter I as follows: greens’’; VII. Congressional Review Act PART 180—TOLERANCES AND ■ f. Adding in alphabetical order an entry for ‘‘Vegetable, Brassica, head and Pursuant to the Congressional Review EXEMPTIONS FOR PESTICIDE stem, Group 5–16’’; and Act (5 U.S.C. 801 et seq.), EPA will CHEMICAL RESIDUES IN FOOD submit a report containing this rule and ■ g. Revising the entry for ‘‘Vegetable, ■ 1. The authority citation for part 180 other required information to the U.S. fruiting, group 8–10’’. continues to read as follows: Senate, the U.S. House of The additions and revision read as Representatives, and the Comptroller Authority: 21 U.S.C. 321(q), 346a and 371. follows: General of the United States prior to ■ 2. In § 180.598, amend the table in publication of the rule in the Federal § 180.598 Novaluron; tolerances for paragraph (a) by: residues. Register. This action is not a ‘‘major ■ a. Removing the entry for ‘‘Brassica, rule’’ as defined by 5 U.S.C. 804(2). head and stem, subgroup 5A’’; (a) * * *

Parts per Commodity million

******* Brassica, leafy greens, subgroup 4–16B ...... 25

******* Cottonseed subgroup 20C ...... 0.5

******* Kohlrabi ...... 0.7

******* Sunflower subgroup 20B ...... 0.07

******* Tropical and subtropical, small fruit, inedible peel, subgroup 24A ...... 9 Vegetable, Brassica, head and stem, Group 5–16 ...... 0.7

******* Vegetable, fruiting, group 8–10 ...... 2

*******

* * * * * DEPARTMENT OF HEALTH AND SUMMARY: This document finalizes the [FR Doc. 2020–16457 Filed 8–12–20; 8:45 am] HUMAN SERVICES methodology and data sources necessary BILLING CODE 6560–50–P to determine federal payment amounts Centers for Medicare & Medicaid to be made for program year 2021 to Services states that elect to establish a Basic Health Program under the Patient 42 CFR Part 600 Protection and Affordable Care Act to [CMS–2432–FN] offer health benefits coverage to low- income individuals otherwise eligible to RIN 0938–ZB56 purchase coverage through Affordable Insurance Exchanges. Basic Health Program; Federal Funding Methodology for Program DATES: The methodology and data Year 2021 sources announced in this notice are effective on January 1, 2021. AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. FOR FURTHER INFORMATION CONTACT: Christopher Truffer, (410) 786–1264; or ACTION: Final methodology. Cassandra Lagorio, (410) 786–4554.

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SUPPLEMENTARY INFORMATION: In the March 12, 2014 Federal II.D. of this notice, and as referenced in Register (79 FR 14112), we published a 42 CFR 600.610(b)(2), state data needed I. Background final rule entitled the ‘‘Basic Health to calculate the federal BHP payment A. Overview of the Basic Health Program: State Administration of Basic rates for the final BHP Payment Notice Program Health Programs; Eligibility and must be submitted to CMS. Section 1331 of the Patient Protection Enrollment in Standard Health Plans; As described in the BHP final rule, and Affordable Care Act (Pub. L. 111– Essential Health Benefits in Standard once the final methodology for the 148, enacted on March 23, 2010), as Health Plans; Performance Standards for applicable program year has been amended by the Health Care and Basic Health Programs; Premium and published, we will generally make Education Reconciliation Act of 2010 Cost Sharing for Basic Health Programs; modifications to the BHP funding (Pub. L. 111–152, enacted on March 30, Federal Funding Process; Trust Fund methodology on a prospective basis, but 2010) (collectively referred to as the and Financial Integrity’’ (hereinafter with limited exceptions. The BHP final referred to as the BHP final rule) Patient Protection and Affordable Care rule provided that retrospective implementing section 1331 of the Act) provides states with an option to adjustments to the state’s BHP payment Patient Protection and Affordable Care establish a Basic Health Program (BHP). amount may occur to the extent that the Act), which governs the establishment In the states that elect to operate a BHP, prevailing BHP funding methodology of BHPs. The BHP final rule established the BHP will make affordable health for a given program year permits the standards for state and federal benefits coverage available for adjustments to a state’s federal BHP administration of BHPs, including individuals under age 65 with payment amount due to insufficient provisions regarding eligibility and household incomes between 133 data for prospective determination of enrollment, benefits, cost-sharing percent and 200 percent of the federal the relevant factors specified in the requirements and oversight activities. applicable final BHP Payment Notice. poverty level (FPL) who are not While the BHP final rule codified the otherwise eligible for Medicaid, the For example, the population health overall statutory requirements and basic factor adjustment described in section Children’s Health Insurance Program procedural framework for the funding (CHIP), or affordable employer- III.D.3. of this final notice allows for a methodology, it does not contain the retrospective adjustment (at the state’s sponsored coverage, or for individuals specific information necessary to whose income is below these levels but option) to account for the impact that determine federal payments. We BHP may have had on the risk pool and are lawfully present non-citizens anticipated that the methodology would QHP premiums in the Exchange. ineligible for Medicaid. For those states be based on data and assumptions that Additional adjustments could be made that have expanded Medicaid coverage would reflect ongoing operations and to the payment rates to correct errors in under section 1902(a)(10)(A)(i)(VIII) of experience of BHPs, as well as the applying the methodology (such as the Social Security Act (the Act), the operation of the Exchanges. For this mathematical errors). lower income threshold for BHP reason, the BHP final rule indicated that eligibility is effectively 138 percent due the development and publication of the Under section 1331(d)(3)(ii) of the to the application of a required 5 funding methodology, including any Patient Protection and Affordable Care percent income disregard in data sources, would be addressed in a Act, the funding methodology and determining the upper limits of separate annual BHP Payment Notice. payment rates are expressed as an Medicaid income eligibility (section In the BHP final rule, we specified amount per eligible individual enrolled 1902(e)(14)(I) of the Act). that the BHP Payment Notice process in a BHP standard health plan (BHP A BHP provides another option for would include the annual publication of enrollee) for each month of enrollment. states in providing affordable health both a proposed and final BHP Payment These payment rates may vary based on benefits to individuals with incomes in Notice. The proposed BHP Payment categories or classes of enrollees. Actual the ranges described above. States may Notice would be published in the payment to a state would depend on the find a BHP a useful option for several Federal Register each October, 2 years actual enrollment of individuals found reasons, including the ability to prior to the applicable program year, eligible in accordance with a state’s potentially coordinate standard health and would describe the proposed certified BHP Blueprint eligibility and plans in the BHP with their Medicaid funding methodology for the relevant verification methodologies in coverage managed care plans, or to potentially BHP year,1 including how the Secretary through the state BHP. A state that is reduce the costs to individuals by considered the factors specified in approved to implement a BHP must lowering premiums or cost-sharing section 1331(d)(3) of the Patient provide data showing quarterly requirements. Protection and Affordable Care Act, enrollment of eligible individuals in the Federal funding for a BHP under along with the proposed data sources various federal BHP payment rate cells. section 1331(d)(3)(A) of the Patient used to determine the federal BHP Such data must include the following: Protection and Affordable Care Act is payment rates for the applicable • Personal identifier; based on the amount of premium tax program year. The final BHP Payment • Date of birth; credit (PTC) and cost-sharing reductions Notice would be published in the • (CSRs) that would have been provided County of residence; Federal Register in February, and • for the fiscal year to eligible individuals would include the final BHP funding Indian status; • enrolled in BHP standard health plans methodology, as well as the federal BHP Family size; in the state if such eligible individuals payment rates for the applicable BHP • Household income; were allowed to enroll in a qualified program year. For example, payment • Number of persons in household health plan (QHP) through Affordable rates in the final BHP Payment Notice enrolled in BHP; Insurance Exchanges (‘‘Exchanges’’). published in February 2015 applied to • Family identifier; These funds are paid to trusts BHP program year 2016, beginning in • Months of coverage; established by the states and dedicated January 2016. As discussed in section to the BHP, and the states then • Plan information; and • administer the payments to standard 1 BHP program years span from January 1 through Any other data required by CMS to health plans within the BHP. December 31. properly calculate the payment.

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B. The 2018 Final Administrative Order, methodology as the 2019 payment B. Overview of the Funding 2019 Payment Methodology, and 2020 methodology with one additional Methodology and Calculation of the Payment Methodology adjustment to account for the impact of Payment Amount individuals selecting different metal tier On October 11, 2017, the Attorney We proposed in the overview of the level plans in the Exchange, referred to General of the United States provided funding methodology to calculate the as the Metal Tier Selection Factor the Department of Health and Human PTC and CSR as consistently as possible (MTSF).2 Services and the Department of the and in general alignment with the Treasury with a legal opinion indicating II. Summary of the Proposed Provisions methodology used by Exchanges to that the permanent appropriation at 31 and Analysis of and Responses to the calculate the advance payments of the U.S.C. 1324, from which the Public Comments PTC (APTC) and CSR, and by the Departments had historically drawn The following sections, arranged by Internal Revenue Service (IRS) to funds to make CSR payments, cannot be subject area, include a summary of the calculate the allowable PTC. We used to fund CSR payments to insurers. public comments that we received, and proposed four equations (1, 2a, 2b, and In light of this opinion—and in the our responses. We received 10 public 3) that would, if finalized, compose the absence of any other appropriation that comments from individuals and overall BHP payment methodology. could be used to fund CSR payments— organizations, including, but not limited We received the following comments the Department of Health and Human to, state Medicaid agencies, other on the overview of the funding Services directed us to discontinue CSR government entities, and advocacy methodology included in the 2021 payments to issuers until Congress groups. In this section, we outline the proposed BHP Payment Notice: provides for an appropriation. In the proposed provisions and provide a Comment: One commenter stated that absence of a Congressional summary of the public comments CMS did not have the authority to appropriation for federal funding for received and our responses. For a exclude payment for the CSR portion of CSRs, we cannot provide states with a complete and full description of the the BHP payment rate. federal payment attributable to CSRs BHP proposed funding methodology for Response: As we explained in the that BHP enrollees would have received program year 2021, see the ‘‘Basic November 2019 final BHP Payment had they been enrolled in a QHP Health Program; Federal Funding Notice for 2019 and 2020 (84 FR 59530, through an Exchange. Methodology for Program Year 2021’’ 59534) and in the 2021 proposed BHP Starting with the payment for the first proposed notice published in the Payment Notice (85 FR 7502), in light of quarter (Q1) of 2018 (which began on February 10, 2020 Federal Register (85 the Attorney General’s opinion January 1, 2018), we stopped paying the FR 7500) (hereinafter referred to as the regarding the unavailability of the CSR component of the quarterly BHP 2021 proposed BHP Payment Notice). permanent appropriation at 31 U.S.C. payments to New York and Minnesota 1324 to make CSR payments—and in (the states), the only states operating a A. Background the absence of any other appropriation BHP in 2018. The states then sued the In the 2021 proposed BHP Payment that could be used to fund CSR Secretary for declaratory and injunctive Notice, we proposed the methodology payments—HHS directed CMS to relief in the United States District Court for how the federal BHP payments discontinue CSR payments to issuers for the Southern District of New York. would be calculated for program year until the Congress provides for an See State of New York, et al, v. U.S. 2021. appropriation. In the absence of a Department of Health and Human We received the following comments Congressional appropriation for federal Services, 18–cv–00683 (S.D.N.Y. filed on the background information included funding for CSRs, we cannot provide Jan. 26, 2018). On May 2, 2018, the in the 2021 proposed BHP Payment states with a federal payment parties filed a stipulation requesting a Notice: attributable to CSRs that BHP enrollees stay of the litigation so that HHS could Comment: Several commenters were would have received had they been issue an administrative order revising generally supportive of the BHP. Several enrolled in a QHP through an Exchange. the 2018 BHP payment methodology. As commenters were generally supportive a result of the stipulation, the court of the 2021 BHP payment methodology C. Federal BHP Payment Rate Cells dismissed the BHP litigation. On July 6, described in the 2021 proposed BHP In this section of 2021 proposed BHP 2018, we issued a Draft Administrative Payment Notice. Payment Notice, we proposed that a Order on which New York and Response: We appreciate the support state implementing BHP provide us Minnesota had an opportunity to from these commenters. As described with an estimate of the number of BHP comment. Each state submitted further in this final notice, we have enrollees it will enroll in the upcoming comments. We considered the states’ largely adopted the methodology as BHP program quarter, by applicable rate comments and issued a Final described in the 2021 proposed BHP cell, to determine the federal BHP Administrative Order on August 24, Payment Notice.3 payment amounts. For each state, we 2018 (Final Administrative Order) proposed using rate cells that separate setting forth the payment methodology 2 ‘‘Metal tiers’’ refer to the different actuarial the BHP population into separate cells that would apply to the 2018 BHP value plan levels offered on the Exchanges. Bronze- level plans generally must provide 60 percent based on the following factors: Age; program year. actuarial value; silver-level 70 percent actuarial geographic rating area; coverage status; In the November 5, 2019 Federal value; gold-level 80 percent actuarial value; and household size; and income. For Register (84 FR 59529 through 59548) platinum-level 90 percent actuarial value. See 45 specific discussions of these proposals, (hereinafter referred to as the November CFR 156.140. 3 As explained in section II.F. of this final notice, please refer to the 2021 proposed BHP 2019 final BHP Payment Notice), we we are finalizing that a state may notify CMS of its Payment Notice. finalized the payment methodologies for election for the 2021 program year to base federal We received no comments on this BHP program years 2019 and 2020. The BHP payment rates on actual 2021 premiums or the aspect of the proposed methodology. 2019 payment methodology is the same 2020 premiums trended forward within 60 days of publication of this final notice rather than by the payment methodology described in the proposed May 15, 2020 deadline. Additionally, as risk adjustment protocol to CMS within 30 days of Final Administrative Order. The 2020 explained in section II.G. of this final notice, we are publication of this final notice rather than by the payment methodology is the same finalizing that a state may submit its optional health proposed August 1, 2020 deadline.

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Therefore, we are finalizing these level QHPs in 2015. Further, one enrollees with incomes below 200 policies as proposed. commenter noted that the amount of percent of FPL more than doubled PTC reduction for these enrollees in between 2017 and 2018. Consistent with D. Sources and State Data New York in 2015 was about $12 per section 1331(d)(3) of the Patient Considerations enrollee per month. Protection and Affordable Care Act, We proposed in this section of the Response: As detailed in the 2021 which requires that payments to states 2021 proposed BHP Payment Notice to proposed BHP Payment Notice and in be based on what would have been use, to the extent possible, data section III.D.6. of this final notice, we provided if BHP eligible individuals submitted to the federal government by continue to believe that it is appropriate were allowed to enroll in QHPs, we QHP issuers seeking to offer coverage to take the MTSF into account due to believe it is appropriate to consider how through an Exchange that uses several changes that occurred following individuals would have chosen different HealthCare.gov to determine the federal the discontinuance of the CSR payments plans—including across metal tiers—as BHP payment cell rates. However, for that increased the impact of enrollees’ part of the BHP payment methodology. states operating a State-based Exchange plan choices on the amount of PTC paid As such, we are finalizing the (SBE) that do not use HealthCare.gov, by the federal government. First, silver- application of the MTSF for program we proposed that such states submit level QHP premiums increased at a year 2021 as proposed. required data for CMS to calculate the higher percentage in comparison to the Regarding comments that New York’s federal BHP payment rates in those increase in premiums of other metal-tier experience has differed from the states. For specific discussions, please plans in many states starting in 2018 (on national averages, as we discussed in refer to the 2021 proposed BHP Payment average, the national average benchmark the November 2019 final BHP Payment Notice. silver-level QHP premium increased Notice for 2019 and 2020 (84 FR 59533), We received no comments on this about 17 percentage points faster than we recognize there are certain unique aspect of the proposed methodology. the national average lowest-cost bronze- state characteristics in the New York Therefore, we are finalizing these level QHP premium). Second, there was markets (for example, pure community policies as proposed. an increase in the percentage of rating); however, the BHP statute directs E. Discussion of Specific Variables Used enrollees with incomes below 200 the Secretary to take into consideration percent of FPL choosing bronze-level the experience of other states when in Payment Equations QHPs. Third, the likelihood that a developing the payment methodology 4 In this section of the 2021 proposed person choosing a bronze-level QHP and doing so is a reasonable basis for BHP Payment Notice, we proposed eight would pay $0 premium also increased, calculating the MTSF. specific variables to use in the payment as the difference between the bronze- We also continue to believe that using equations that compose the overall BHP level QHP premium and the full value 2015 data as the basis for the MTSF is funding methodology. (seven variables of PTC widened. Finally, the average not appropriate. Premiums and are described in section III.D. of this estimated reduction in PTC for enrollees enrollment patterns have changed over final notice, and the premium trend with incomes below 200 percent of FPL time, including the above described factor is described in section III.E. of that chose bronze-level QHPs increased changes in bronze-level and silver-level this final notice). For each proposed substantially from 2017 to 2018. Our QHP premiums, changes in the ratio of variable, we included a discussion on analysis of 2017 and 2018 data the silver-level to bronze-level QHP the assumptions and data sources used documents these effects. premiums, and changes to the amount in developing the variables. For specific In 2017, prior to the discontinuance of of PTC paid by the federal government. discussions, please refer to 2021 CSR payments, 11 percent of QHP In addition, while the cited 2015 data proposed BHP Payment Notice. enrollees with incomes below 200 provides some evidence of consumer Below is a summary of the public percent of FPL elected to enroll in plan selections prior to the full comments we received regarding bronze-level QHPs, and on average the implementation of New York’s BHP, we specific factors and our responses. PTC paid on behalf of those enrollees do not believe that the 2015 data should Comment: Two commenters was 11 percent less than the full value be relied upon for the development of recommended that CMS not apply the of PTC. In 2018, after the the MTSF for the following reasons. MTSF in the 2021 BHP payment discontinuance of the CSR payments, 13 First, New York did not begin methodology and offered rationales for percent of QHP enrollees with incomes implementing its BHP until April 2015 CMS to not include the MTSF. One below 200 percent of FPL chose bronze- (and did not fully implement BHP until commenter stated that applying the level QHPs, and on average, the PTC 2016). Second, the 2015 data predates MTSF would be inappropriate because paid on behalf of those enrollees was 23 the discontinuance of the CSR payments the Essential Plan in New York provides percent less than the full value of the in 2017 and the subsequent adjustments coverage with actuarial value that is PTC. In addition, the national average to premiums beginning in 2018 equivalent to a platinum plan, not a silver-level QHP premium was 17 (particularly to silver-level QHP bronze plan. percent higher than the national average premiums). Therefore, relying on data One commenter stated that applying bronze-level plan premium in 2017. In from 2015 does not capture the more the MTSF is inappropriate because the 2018, this ratio increased such that the recent experience of New York and/or experience in New York in 2015—before national average silver-level QHP other states subsequent to the BHP was fully implemented—showed premium was 33 percent higher than the discontinuation of CSRs, which the that a smaller percentage of enrollees national average bronze-level plan MTSF is intended to reflect. with incomes below 200 percent of FPL premium. While the increase in the In response to comments about New chose bronze-level QHPs than the percentage of QHP enrollees with York’s enrollment assistance efforts, we percentage of such enrollees nationwide incomes below 200 percent of FPL who note that the statute does not require the who chose bronze-level QHPs elected to enroll in bronze-level QHPs Secretary to address every difference in nationwide in 2017. Two commenters between 2017 and 2018 is about 2 Exchange operations among the states cited New York’s enrollment assistance percentage points, the accompanying efforts as the reason for a smaller percentage reduction of the PTC paid by 4 See section 1331(d)(3)(A)(ii) of the Patient percentage of enrollees choosing bronze- the federal government for QHP Protection and Affordable Care Act.

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(including, but not limited to, Comment: Several commenters data is more reliable than partial data enrollment assistance efforts by opposed or disagreed with our and that the preliminary 2019 data does individual Exchanges). We also believe alternative options for calculating the not suggest that there would be a it is not practicable to address every MTSF, which included using partial substantial change in the MTSF value. potential difference in Exchange 2019 data instead of 2018 data, and We are therefore finalizing the MTSF as operations, and that not every potential making a retrospective adjustment proposed using 2018 data, as we discuss difference in Exchange operations under § 600.610(c)(2)(ii) to update the in section III.D.6. of this final notice. would be a relevant factor necessary to MTSF using 2021 data once it becomes Comment: Several commenters take into account. In response to the available. One commenter noted that opposed or disagreed with our comment that the New York Essential calculating the MTSF retrospectively alternative options for calculating the Plan provides coverage with actuarial would introduce uncertainty into the Premium Adjustment Factor (PAF), value that is equivalent to (or greater program that would make planning which included using other data sources than) a platinum plan, not a bronze difficult. to calculate the PAF, estimating the PAF rather than relying on the information plan, we recognize that BHPs are Response: After consideration of comments, we are finalizing the MTSF from the QHP issuers, and making a prohibited from providing bronze-level as proposed using 2018 data.5 As retrospective adjustment under coverage to enrollees. As we discussed detailed in the 2021 proposed BHP § 600.610(c)(2)(ii) to the PAF for 2021 to in the November 2019 final BHP Payment Notice, we believe it is reflect actual 2021 experience once the Payment Notice for 2019 and 2020 (84 reasonable to use the same value for the necessary data for 2021 becomes FR 59533), regarding comments that MTSF as was used in the 2020 final available. In addition, one commenter BHPs are prohibited from providing payment methodology. Most notably, noted that calculating the PAF bronze-level coverage to enrollees, and the MTSF reflects the percentage of retrospectively would introduce thus the BHP payment methodology enrollees choosing bronze-level QHPs uncertainty into the program that would should not assume enrollees would and the accompanying reduction in the make planning difficult. have chosen bronze-level QHPs in the PTCs paid and we do not expect Response: After consideration of Exchange, section 1331(d)(3)(A)(ii) of significant year-to-year differences in comments received, we are finalizing the Patient Protection and Affordable these data points absent other the PAF value at 1.188 for program year Care Act directs the Secretary to ‘‘take significant changes to the operations of 2021 using 2018 data, as proposed. As into account all relevant factors the Exchanges (for example, the detailed in the 2021 proposed BHP necessary to determine the value of the’’ discontinuance of CSR payments). Payment Notice, we believe this value PTCs and CSRs that would have been Further, we believe that states and QHP for the PAF continues to reasonably provided to eligible individuals if they issuers have not significantly changed account for the increase in silver-level would have enrolled in QHPs through their approaches to account for the premiums and the reduction in PTCs an Exchange. We further note the statute discontinuation of CSR payments, and paid that took effect after the does not set forth an exhaustive list of that most states and QHP issuers are discontinuance of the CSR payments. As what those necessary relevant factors using similar approaches as were used explained above, we believe that the are, providing the Secretary with in 2018.6 We also believe that impact of the increase in silver-level discretion and authority to identify and consumers will continue to react to premiums in 2021 can reasonably be take into consideration factors that are these adjustments and increases in expected to be similar in 2018. In not specifically enumerated in the silver-level QHP premiums in the same addition, we recognize that making a statute. In addition, section manner; meaning that consumers will retrospective adjustment to update the 1331(d)(3)(A)(ii) of the Patient continue to select bronze-level QHPs PAF to reflect actual 2021 experience Protection and Affordable Care Act and the impact on PTCs paid by the would create some additional requires the Secretary to ‘‘take into government will generally remain the uncertainty into the BHP payments consideration the experience of other same. because the necessary data would not be available until after the end of the 2021 States with respect to participation on We appreciate the comments on program year, and that this could create Exchanges and such credit and potential other sources of data beyond planning challenges for states operating reductions provided to residents of the 2018 that could be used to calculate the BHPs. We are not pursuing use of the other States, with a special focus on MTSF for 2021. We recognize that making a retrospective adjustment to other data sources for determining the enrollees with income below 200 value of the PAF, as we believe that percent of poverty.’’ We recognize that update the MTSF using 2021 data would introduce some uncertainty into QHP issuers may not be readily able to applying the MTSF would reduce BHP provide specific data. In addition, this funding, but we nonetheless believe that the BHP payments because the necessary data would not be available information is not typically collected incorporating the MTSF into the BHP with the issuers’ rate filings. We believe payment methodology for program year until after the end of the 2021 program year and this could create planning this may be burdensome on the QHP 2021 accurately reflects the changes in issuers to provide this information at challenges for states operating BHPs. We PTCs after the federal government this time (for example, through a survey also remain concerned about using stopped making CSR payments and is specifically to request this information). partial 2019 data to calculate the MTSF, consistent with section 1331(d)(3)(A)(ii) We also are not calculating an estimate and we believe that the final end-of-year of the Patient Protection and Affordable of the QHP premium adjustment. While Care Act. Regarding the comments about we believe this could be a reasonable 5 See section III.D.6. of this final notice for further the potential impact of reduced BHP details on the MTSF finalized as part of the 2021 approach, we believe that the 2018 funding on benefits available under final payment methodology. experience still provides an accurate BHPs, we note that the benefits 6 In fact, HHS may not take any action or prohibit reflection of the QHP premium requirements at § 600.405 are still or otherwise restrict silver loading practices with adjustment and using 2018 data avoids applicable and therefore benefits respect to plan year 2021. See Further Consolidated Appropriations Act, 2020, Division N, title I, the previously described concerns available under BHPs should not be subtitle F, section 609 (Pub. L. 116–94: December associated with the identified potential impacted. 20, 2019, enacting H.R. 1865). alternative data sources. We are

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finalizing the PAF as proposed, as that a state electing this option must so enrolled. Under the payment discussed in section III.D.2. of this final submit their protocol to CMS within 30 methodologies for 2015 (79 FR 13887) notice. days of publication of this final notice. (published in March 2014), for 2016 (80 Comment: Regarding the income FR 9636) (published in February 2015), III. Provisions of the 2021 BHP Final reconciliation factor (IRF), several for 2017 and 2018 (81 FR 10091) Methodology commenters supported our proposal to (published in February 2016), and for calculate the IRF using only the value A. Overview of the Funding 2019 and 2020 (84 FR 59529) (published for states that have expanded Medicaid Methodology and Calculation of the in November 2019), the total federal eligibility to 138 percent of FPL. In past Payment Amount BHP payment amount has been years, we calculated the IRF as the Section 1331(d)(3) of the Patient calculated using multiple rate cells in average of the values for states that have Protection and Affordable Care Act each state. Each rate cell represents a expanded Medicaid eligibility and for directs the Secretary to consider several unique combination of age range (if states that have not. factors when determining the federal applicable), geographic area, coverage Response: We appreciate these BHP payment amount, which, as category (for example, self-only or two- comments and are finalizing the IRF as specified in the statute, must equal 95 adult coverage through the BHP), proposed. percent of the value of the PTC and household size, and income range as a percentage of FPL, and there is a F. State Option To Use Prior Program CSRs that BHP enrollees would have distinct rate cell for individuals in each Year QHP Premiums for BHP Payments been provided had they enrolled in a coverage category within a particular QHP through an Exchange. Thus, the In this section of the 2021 proposed age range who reside in a specific BHP funding methodology is designed payment notice, we proposed to provide geographic area and are in households to calculate the PTC and CSRs as states operating a BHP with the option of the same size and income range. The consistently as possible and in general to use the 2020 QHP premiums BHP payment rates developed also are alignment with the methodology used multiplied by a premium trend factor to consistent with the state’s rules on age by Exchanges to calculate the APTC and calculate the federal BHP payment rates rating. Thus, in the case of a state that CSRs, and by the IRS to calculate final instead of using the 2021 QHP does not use age as a rating factor on an PTCs. In general, we have relied on premiums. We proposed to require Exchange, the BHP payment rates would states to make their election for the 2021 values for factors in the payment not vary by age. program year by May 15, 2020. For methodology specified in statute or The rate for each rate cell is specific discussions, please refer to the other regulations as available, and have calculated in two parts. The first part is 2021 proposed BHP Payment Notice. developed values for other factors not equal to 95 percent of the estimated PTC We received no comments on this otherwise specified in statute, or that would have been paid if a BHP aspect of the proposed methodology. We previously calculated in other enrollee in that rate cell had instead are finalizing these policies as proposed, regulations, to simulate the values of the enrolled in a QHP in an Exchange. The with one exception. PTC and CSRs that BHP enrollees would second part is equal to 95 percent of the Because we are finalizing the 2021 have received if they had enrolled in estimated CSR payment that would have payment methodology after the QHPs offered through an Exchange. In been made if a BHP enrollee in that rate proposed May 15, 2020 deadline for accordance with section cell had instead enrolled in a QHP in an notifying us of the decision to base 1331(d)(3)(A)(iii) of the Patient Exchange. These two parts are added federal BHP payment rates on actual Protection and Affordable Care Act, the together and the total rate for that rate 2021 premiums or the 2020 premiums final funding methodology must be cell would be equal to the sum of the trended forward, we are finalizing that certified by the Chief Actuary of CMS, PTC and CSR rates. We will assign a a state may notify CMS of its election in consultation with the Office of Tax value of zero to the CSR portion of the within 60 days of publication of this Analysis (OTA) of the Department of the BHP payment rate calculation, because final notice. Treasury, as having met the there is presently no available requirements of section 1331(d)(3)(A)(ii) appropriation from which we can make G. State Option To Include of the Patient Protection and Affordable the CSR portion of any BHP Payment. Retrospective State-Specific Health Risk Care Act. Equation (1) will be used to calculate Adjustment in Certified Methodology Section 1331(d)(3)(A)(ii) of the Patient the estimated PTC for eligible In this section of the 2021 proposed Protection and Affordable Care Act individuals enrolled in the BHP in each BHP Payment Notice, we proposed to specifies that the payment rate cell. We note that throughout this provide states implementing BHP the determination shall take into account all final notice that when we refer to option to develop a methodology to relevant factors necessary to determine enrollees and enrollment data, we mean account for the impact that including the value of the PTCs and CSRs that data regarding individuals who were the BHP population in the Exchange would have been provided to eligible enrolled in the BHP who had been would have had on QHP premiums individuals, including but not limited found eligible for the BHP using the based on any differences in health status to, the age and income of the enrollee, eligibility and verification requirements between the BHP population and whether the enrollment is for self-only that are applicable in the state’s most persons enrolled through the Exchange. or family coverage, geographic recent certified Blueprint. By applying For specific discussions, please refer to differences in average spending for the equations separately to rate cells the 2021 proposed BHP Payment Notice. health care across rating areas, the based on age (if applicable), income and We received no comments on this health status of the enrollee for other factors, we effectively take those aspect of the methodology. Therefore, purposes of determining risk adjustment factors into account in the calculation. we are finalizing this policy as payments and reinsurance payments In addition, the equations reflect the proposed, with one change. Because we that would have been made if the estimated experience of individuals in are finalizing the 2021 payment enrollee had enrolled in a QHP through each rate cell if enrolled in coverage methodology after the proposed August an Exchange, and whether any through an Exchange, taking into 1, 2020 deadline for states to submit reconciliation of PTC and CSR would account additional relevant variables. their protocols to CMS, we are finalizing have occurred if the enrollee had been Each of the variables in the equations is

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defined in this section, and further would receive, rather than being account for the impact on the PTC that detail is provided later in this section of calculated for each individual enrollee. would have occurred had such the final notice. In addition, we Second, the reference premium (RP) reconciliation been performed. Fourth, described how we will calculate the (described in section III.D.1. of this final the PTC will be adjusted to account for adjusted reference premium (ARP) that notice) used to calculate the PTC will be the estimated impacts of plan selection; was used in Equation (1) and defined in adjusted for the BHP population health this adjustment, the MTSF, would Equation (2a) and Equation (2b). status, and in the case of a state that reflect the effect of individuals choosing Equation 1: Estimated PTC by Rate Cell elects to use 2020 premiums for the different metal tier levels of QHPs on basis of the BHP federal payment, for the average PTC. Finally, the rate is The estimated PTC, on a per enrollee multiplied by 95 percent, consistent basis, will be calculated for each rate the projected change in the premium with section 1331(d)(3)(A)(i) of the cell for each state based on age range (if from 2020 to 2021, to which the rates in Patient Protection and Affordable Care applicable), geographic area, coverage this final payment methodology will Act. We note that in the situation where category, household size, and income apply. These adjustments are described range. The PTC portion of the rate will in Equation (2a) and Equation (2b). the average income contribution of an be calculated in a manner consistent Third, the PTC will be adjusted enrollee would exceed the ARP, we will with the methodology used to calculate prospectively to reflect the mean, or calculate the PTC to be equal to 0 and the PTC for persons enrolled in a QHP, average, net expected impact of income would not allow the value of the PTC with 5 adjustments. First, the PTC reconciliation on the combination of all to be negative. portion of the rate for each rate cell will persons enrolled in the BHP; this We will use Equation (1) to calculate represent the mean, or average, expected adjustment, the IRF, as described in the PTC rate, consistent with the PTC that all persons in the rate cell section III.D.7. of this final notice, will methodology described above:

PTCa,g,c,h,i = Premium tax credit portion of Equation (2a) and Equation (2b): program year), we will calculate the BHP payment rate Adjusted Reference Premium (ARP) value of the ARP as specified in a = Age range Variable (Used in Equation 1) Equation (2a). The ARP will be equal to g = Geographic area As part of the calculations for the PTC the RP, which will be based on the c = Coverage status (self-only or applicable component, we will calculate the value second lowest cost silver plan premium category of family coverage) obtained of the ARP as described below. in the applicable program year, through BHP Consistent with the existing approach, multiplied by the BHP population h = Household size we will allow states to choose between health factor (PHF) (described in section i = Income range (as percentage of FPL) using the actual current year premiums III.D.3. of this final notice), which will ARPa,g,c = Adjusted reference premium or the prior year’s premiums multiplied reflect the projected impact that Ih,i,j = Income (in dollars per month) at each by the premium trend factor (PTF) (as enrolling BHP-eligible individuals in 1 percentage-point increment of FPL described in section III.E. of this final QHPs through an Exchange would have j = jth percentage-point increment FPL notice). Below we describe how we will had on the average QHP premium, and n = Number of income increments used to multiplied by the premium adjustment calculate the mean PTC continue to calculate the ARP under each option. factor (PAF) (described in section PTCFh,i,j = Premium tax credit formula In the case of a state that elected to III.D.2. of this final notice), which will percentage use the reference premium (RP) based account for the change in silver-level IRF = Income reconciliation factor on the current program year (for premiums due to the discontinuance of MTSF = Metal-tier selection factor example, 2021 premiums for the 2021 CSR payments.

ARPa,g,c = Adjusted reference premium the 2021 program year, as described in on the average QHP premium, a = Age range more detail in section III.E. of this final multiplied by the PAF (described in g = Geographic area notice), we will calculate the value of section III.D.2. of this final notice), c = Coverage status (self-only or applicable the ARP as specified in Equation (2b). which will account for the change in category of family coverage) obtained The ARP will be equal to the RP, which through BHP silver-level premiums due to the will be based on the second lowest cost RPa,g,c = Reference premium discontinuance of CSR payments, and PHF = Population health factor silver plan premium in 2020, multiplied multiplied by the premium trend factor PAF = Premium adjustment factor by the BHP PHF (described in section (PTF) (described in section III.E. of this III.D.3. of this final notice), which will final notice), which will reflect the In the case of a state that elected to reflect the projected impact that projected change in the premium level use the RP based on the prior program enrolling BHP-eligible individuals in between 2020 and 2021. year (for example, 2020 premiums for QHPs on an Exchange would have had

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ARPa,g,c = Adjusted reference premium PAF = Premium adjustment factor BHP enrollees in that cell (that is, the a = Age range PTF = Premium trend factor number of enrollees that meet the g = Geographic area Equation 3: Determination of Total criteria for each rate cell) to calculate c = Coverage status (self-only or applicable Monthly Payment for BHP Enrollees in the total monthly BHP payment. This category of family coverage) obtained calculation is shown in Equation (3). through BHP Each Rate Cell RPa,g,c = Reference premium In general, the rate for each rate cell PHF = Population health factor will be multiplied by the number of

In general, the rate for each rate cell Blueprint for the quarter that enrollment • Ages 55–64. will be multiplied by the number of data is submitted. Procedures will This provision is unchanged from the BHP enrollees in that cell (that is, the ensure that federal payments to a state current methodology. number of enrollees that meet the reflect actual BHP enrollment during a Factor 2—Geographic area: For each criteria for each rate cell) to calculate year, within each applicable category, state, we will separate enrollees into the total monthly BHP payment. This and prospectively determined federal rate cells by geographic areas within calculation is shown in Equation (3). payment rates for each category of BHP which a single RP is charged by QHPs offered through the state’s Exchange. PMT = Total monthly BHP payment enrollment, with such categories Multiple, non-contiguous geographic PTCa,g,c,h,i = Premium tax credit portion of defined in terms of age range (if BHP payment rate applicable), geographic area, coverage areas would be incorporated within a CSRa,g,c,h,i = Cost-sharing reduction portion of status, household size, and income single cell, so long as those areas share BHP payment rate range, as explained above. a common RP.8 This provision is also Ea,g,c,h,i = Number of BHP enrollees We will require the use of certain rate unchanged from the current a = Age range methodology. g = Geographic area cells as part of the proposed methodology. For each state, we will Factor 3—Coverage status: We will c = Coverage status (self-only or applicable separate enrollees into rate cells by category of family coverage) obtained use rate cells that separate the BHP through BHP population into separate cells based on coverage status, reflecting whether an h = Household size the five factors described as follows: individual is enrolled in self-only i = Income range (as percentage of FPL) Factor 1—Age: We will separate coverage or persons are enrolled in family coverage through the BHP, as B. Federal BHP Payment Rate Cells enrollees into rate cells by age (if applicable), using the following age provided in section 1331(d)(3)(A)(ii) of Consistent with the previous payment ranges that capture the widest variations the Patient Protection and Affordable methodologies, a state implementing a in premiums under HHS’ Default Age Care Act. Among recipients of family BHP will provide us an estimate of the Curve: 7 coverage through the BHP, separate rate number of BHP enrollees it projects will • Ages 0–20. cells, as explained below, will apply enroll in the upcoming BHP program • Ages 21–34. based on whether such coverage quarter, by applicable rate cell, prior to • Ages 35–44. involves two adults alone or whether it the first quarter and each subsequent • Ages 45–54. involves children. This provision is quarter of program operations until unchanged from the current actual enrollment data is available. 7 This curve is used to implement the Patient methodology. Upon our approval of such estimates as Protection and Affordable Care Act’s 3:1 limit on Factor 4—Household size: We will reasonable, they will be used to age-rating in states that do not create an alternative continue the current methods for calculate the prospective payment for rate structure to comply with that limit. The curve separating enrollees into rate cells by applies to all individual market plans, both within the first and subsequent quarters of and outside the Exchange. The age bands capture household size that states use to program operation until the state has the principal allowed age-based variations in determine BHP enrollees’ household provided us actual enrollment data. premiums as permitted by this curve. The default income as a percentage of the FPL under These data are required to calculate the age curve was updated for 2018 to include different § 600.320 (Determination of eligibility age rating factors between children 0–14 and for final BHP payment amount, and make persons at each age between 15 and 20. More for and enrollment in a standard health any necessary reconciliation information is available at https://www.cms.gov/ plan). We will require separate rate cells adjustments to the prior quarters’ CCIIO/Programs-and-Initiatives/Health-Insurance- for several specific household sizes. For prospective payment amounts due to Market-Reforms/Downloads/ each additional member above the StateSpecAgeCrv053117.pdf. Both children and differences between projected and adults under age 21 are charged the same premium. largest specified size, we will publish actual enrollment. Subsequent quarterly For adults age 21–64, the age bands in this notice deposits to the state’s trust fund will be divide the total age-based premium variation into 8 For example, a cell within a particular state based on the most recent actual the three most equally-sized ranges (defining size might refer to ‘‘County Group 1,’’ ‘‘County Group by the ratio between the highest and lowest 2,’’ etc., and a table for the state would list all the enrollment data submitted to us. Actual premiums within the band) that are consistent with counties included in each such group. These enrollment data must be based on the age-bands used for risk-adjustment purposes in geographic areas are consistent with the geographic individuals enrolled for the quarter who the HHS-Developed Risk Adjustment Model. For areas established under the 2014 Market Reform the state found eligible and whose such age bands, see Table 5, ‘‘Age-Sex Variables,’’ Rules. They also reflect the service area in HHS-Developed Risk Adjustment Model requirements applicable to QHPs, as described in 45 eligibility was verified using eligibility Algorithm Software, June 2, 2014, http:// CFR 155.1055, except that service areas smaller and verification requirements as agreed www.cms.gov/CCIIO/Resources/Regulations-and- than counties are addressed as explained in this to by the state in its applicable BHP Guidance/Downloads/ra-tables-03-27-2014.xlsx. notice.

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instructions for how we will develop In future years, and in the interest of Marketplace requirements.10 The state additional rate cells and calculate an administrative simplification, we will must submit this methodology to us at appropriate payment rate based on data consider whether to combine or the time of their Blueprint submission. for the rate cell with the closest eliminate certain rate cells, once we are We reserve the right to approve or specified household size. We will certain that the effect on payment would disapprove the state’s methodology to publish separate rate cells for household be insignificant. determine household income and sizes of 1 through 10. This provision is C. Sources and State Data household size for non-filers if the unchanged from the current Considerations household composition and/or methodology. household income resulting from Factor 5—Household Income: For To the extent possible, unless application of the methodology are households of each applicable size, we otherwise provided, we will continue to different than what typically would be will continue the current methods for use data submitted to the federal expected to result if the individual or creating separate rate cells by income government by QHP issuers seeking to head of household in the family were to range, as a percentage of FPL. The PTC offer coverage through the Exchange in file a tax return. States currently that a person would receive if enrolled the relevant BHP state to perform the operating a BHP that wish to change the in a QHP through an Exchange varies by calculations that determine federal BHP methodology for non-filers must submit household income, both in level and as payment cell rates. a revised Blueprint outlining the a ratio to the FPL. Thus, separate rate States operating a SBE in the revisions to its methodology, consistent cells will be used to calculate federal individual market, however, must with § 600.125. BHP payment rates to reflect different provide certain data, including In addition, as the federal payments bands of income measured as a premiums for second lowest cost silver are determined quarterly and the percentage of FPL. We will use the plans, by geographic area, for CMS to enrollment data is required to be following income ranges, measured as a calculate the federal BHP payment rates submitted by the states to us quarterly, in those states. States operating a SBE percentage of the FPL: the quarterly payment will be based on • 0 to 50 percent of the FPL. interested in obtaining the applicable the characteristics of the enrollee at the • 51 to 100 percent of the FPL. 2021 program year federal BHP payment beginning of the quarter (or their first rates for its state must submit such data • 101 to 138 percent of the FPL.9 month of enrollment in the BHP in each accurately, completely, and as specified • 139 to 150 percent of the FPL. quarter). Thus, if an enrollee were to by CMS, by no later than October 15, • 151 to 175 percent of the FPL. experience a change in county of 2020. If additional state data (that is, in • 176 to 200 percent of the FPL. residence, household income, addition to the second lowest cost silver This provision is unchanged from the household size, or other factors related plan premium data) are needed to current methodology. to the BHP payment determination determine the federal BHP payment These rate cells will only be used to during the quarter, the payment for the rate, such data must be submitted in a calculate the federal BHP payment quarter would be based on the data as timely manner, and in a format amount. A state implementing a BHP of the beginning of the quarter (or their specified by us to support the will not be required to use these rate development and timely release of first month of enrollment in the BHP in cells or any of the factors in these rate annual BHP payment notices. The the applicable quarter). Payments will cells as part of the state payment to the specifications for data collection to still be made only for months that the standard health plans participating in support the development of BHP person is enrolled in and eligible for the the BHP or to help define BHP payment rates are published in CMS BHP. We do not anticipate that this enrollees’ covered benefits, premium guidance and are available in the would have a significant effect on the costs, or out-of-pocket cost-sharing Federal Policy Guidance section at federal BHP payment. The states must levels. https://www.medicaid.gov/federal- maintain data that are consistent with We will use averages to define federal policy-Guidance/index.html. CMS’ verification requirements, payment rates, both for income ranges States operating a BHP must submit including auditable records for each and age ranges (if applicable), rather enrollment data to us on a quarterly individual enrolled, indicating an than varying such rates to correspond to basis and should be technologically eligibility determination and a each individual BHP enrollee’s age and prepared to begin submitting data at the determination of income and other income level. This approach will start of their BHP, starting with the criteria relevant to the payment increase the administrative feasibility of beginning of the first program year. This methodology as of the beginning of each making federal BHP payments and differs from the enrollment estimates quarter. reduce the likelihood of inadvertently used to calculate the initial BHP Consistent with § 600.610 (Secretarial erroneous payments resulting from payment, which states would generally determination of BHP payment amount), highly complex methodologies. This submit to CMS 60 days before the start the state is required to submit certain approach should not significantly of the first quarter of the program start data in accordance with this notice. We change federal payment amounts, since date. This requirement is necessary for require that this data be collected and within applicable ranges, the BHP- us to implement the payment validated by states operating a BHP, and eligible population is distributed methodology that is tied to a quarterly that this data be submitted to CMS. relatively evenly. reconciliation based on actual D. Discussion of Specific Variables Used The number of factors contributing to enrollment data. in Payment Equations rate cells, when combined, can result in We will continue the policy first over 350,000 rate cells which can adopted in the February 2016 payment 1. Reference Premium (RP) increase the complexity when notice that in states that have BHP To calculate the estimated PTC that generating quarterly payment amounts. enrollees who do not file federal tax would be paid if BHP-eligible returns (non-filers), the state must individuals enrolled in QHPs through 9 The three lowest income ranges would be limited to lawfully present immigrants who are develop a methodology to determine the an Exchange, we must calculate a RP ineligible for Medicaid because of immigration enrollees’ household income and status. household size consistently with 10 See 81 FR at 10097.

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because the PTC is based, in part, on the family’s geographic area might not offer plans are allowed to serve geographic premiums for the applicable second family coverage that includes the niece. areas smaller than counties after lowest cost silver plan as explained in We believe that it is not possible to obtaining our approval, no geographic section III.D.5. of this final notice, replicate such variations for calculating areas, for purposes of defining BHP regarding the premium tax credit the BHP payment and believe that in the payment rate cells, will be smaller than formula (PTCF). Accordingly, for the aggregate, they will not result in a a county. We do not believe that this purposes of calculating the BHP significant difference in the payment. assumption will have a significant payment rates, the RP, in accordance Thus, we will use the second lowest impact on federal payment levels and it with 26 U.S.C. 36B(b)(3)(C), is defined cost silver plan available to any enrollee would simplify both the calculation of as the adjusted monthly premium for an for a given age, geographic area, and BHP payment rates and the operation of applicable second lowest cost silver coverage category. the BHP. plan. The applicable second lowest cost This choice of RP relies on an Finally, in terms of the coverage silver plan is defined in 26 U.S.C. assumption about enrollment in the category, federal payment rates will 36B(b)(3)(B) as the second lowest cost Exchanges. In previous methodologies only recognize self-only and two-adult silver plan of the individual market in for program years 2015 through 2019, coverage, with exceptions that account the rating area in which the taxpayer we had assumed that all persons for children who are potentially eligible resides that is offered through the same enrolled in the BHP would have elected for the BHP. First, in states that set the Exchange. We will use the adjusted to enroll in a silver level plan if they upper income threshold for children’s monthly premium for an applicable had instead enrolled in a QHP through Medicaid and CHIP eligibility below second lowest cost silver plan in the an Exchange (and that the QHP 200 percent of FPL (based on modified applicable program year (2021) as the premium would not be lower than the adjusted gross income (MAGI)), children RP (except in the case of a state that value of the PTC). In the November 2019 in households with incomes between elects to use the prior plan year’s final BHP Payment Notice, we that threshold and 200 percent of FPL premium as the basis for the federal continued to use the second-lowest cost would be potentially eligible for the BHP payment for 2021, as described in silver plan premium as the RP, but for BHP. Currently, the only states in this section III.E. of this final notice). the 2020 payments we changed the category are Idaho and North Dakota.11 The RP would be the premium assumption about which metal-tier Second, the BHP will include lawfully applicable to non-tobacco users. This is plans enrollees would choose (see present immigrant children with consistent with the provision in 26 section III.D.6. on the MTSF in this final household incomes at or below 200 U.S.C. 36B(b)(3)(C) that bases the PTC notice). Therefore, for the 2021 payment percent of FPL in states that have not on premiums that are adjusted for age methodology, we will continue to use exercised the option under sections alone, without regard to tobacco use, the second-lowest cost silver plan 1903(v)(4)(A)(ii) and 2107(e)(1)(E) of the even for states that allow insurers to premium as the RP, but account for how Act to qualify all otherwise eligible, vary premiums based on tobacco use in enrollees may choose other metal tier lawfully present immigrant children for accordance with 42 U.S.C. plans by applying the MTSF. Medicaid and CHIP. States that fall 300gg(a)(1)(A)(iv). We do not believe it is appropriate to within these exceptions would be Consistent with the policy set forth in adjust the payment for an assumption identified based on their Medicaid and 26 CFR 1.36B–3(f)(6), to calculate the that some BHP enrollees would not have CHIP State Plans, and the rate cells PTC for those enrolled in a QHP through enrolled in QHPs for purposes of would include appropriate categories of an Exchange, we will not update the calculating the BHP payment rates, BHP family coverage for children. For payment methodology, and since section 1331(d)(3)(A)(ii) of the example, Idaho’s Medicaid and CHIP subsequently the federal BHP payment Patient Protection and Affordable Care eligibility is limited to families with rates, in the event that the second Act requires the calculation of such MAGI at or below 185 percent FPL. If lowest cost silver plan used as the RP, rates as if the enrollee had enrolled in Idaho implemented a BHP, Idaho or the lowest cost silver plan, changes a QHP through an Exchange. children with household incomes (that is, terminates or closes enrollment The applicable age bracket (if any) between 185 and 200 percent could during the year). will be one dimension of each rate cell. qualify. In other states, BHP eligibility The applicable second lowest cost We will assume a uniform distribution will generally be restricted to adults, silver plan premium will be included in of ages and estimate the average since children who are citizens or the BHP payment methodology by age premium amount within each rate cell. lawfully present immigrants and live in range (if applicable), geographic area, We believe that assuming a uniform households with incomes at or below and self-only or applicable category of distribution of ages within these ranges 200 percent of FPL will qualify for family coverage obtained through the is a reasonable approach and would Medicaid or CHIP, and thus be BHP. produce a reliable determination of the ineligible for a BHP under section We note that the choice of the second total monthly payment for BHP 1331(e)(1)(C) of the Patient Protection lowest cost silver plan for calculating enrollees. We also believe this approach and Affordable Care Act, which limits a BHP payments relies on several would avoid potential inaccuracies that BHP to individuals who are ineligible simplifying assumptions in its selection. could otherwise occur in relatively for minimum essential coverage (as For the purposes of determining the small payment cells if age distribution defined in 26 U.S.C. 5000A(f)). second lowest cost silver plan for were measured by the number of calculating PTC for a person enrolled in persons eligible or enrolled. 2. Premium Adjustment Factor (PAF) a QHP through an Exchange, the We will use geographic areas based on The PAF considers the premium applicable plan may differ for various the rating areas used in the Exchanges. increases in other states that took effect reasons. For example, a different second We will define each geographic area so after we discontinued payments to lowest cost silver plan may apply to a that the RP is the same throughout the issuers for CSRs provided to enrollees in family consisting of two adults, their geographic area. When the RP varies QHPs offered through Exchanges. child, and their niece than to a family within a rating area, we will define with two adults and their children, geographic areas as aggregations of 11 CMCS. ‘‘State Medicaid, CHIP and BHP Income because one or more QHPs in the counties with the same RP. Although Eligibility Standards Effective April 1, 2019.’’

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Despite the discontinuance of federal the state median adjustment for the BHP because the discontinuation of CSR payments for CSRs, QHP issuers are state. In other words, payments has not changed. required to provide CSRs to eligible PAF = (1 + Nationwide Median 3. Population Health Factor (PHF) enrollees. As a result, many QHP issuers Adjustment) ÷ (1 + State Median increased the silver-level plan Adjustment). The PHF will be included in the methodology to account for the premiums to account for those To determine the PAF described additional costs; adjustments and how potential differences in the average above, we collected QHP information health status between BHP enrollees those were applied (for example, to only from QHP issuers in each state and the silver-level plans or to all metal tier and persons enrolled through the District of Columbia to determine the Exchanges. To the extent that BHP plans) varied across states. For the states premium adjustment those issuers made operating BHPs in 2018, the increases in enrollees would have been enrolled to each silver level plan offered through through an Exchange in the absence of premiums were relatively minor, the Exchange in 2018 to account for the because the majority of enrollees a BHP in a state, the exclusion of those end of CSR payments. Specifically, we BHP enrollees in the Exchange may eligible for CSRs (and all who were requested information showing the eligible for the largest CSRs) were affect the average health status of the percentage change that QHP issuers overall population and the expected enrolled in the BHP and not in QHPs on made to the premium for each of their the Exchanges, and therefore issuers in QHP premiums. silver level plans to cover benefit We currently do not believe that there BHP states did not significantly raise expenditures associated with the CSRs, premiums to cover unpaid CSR costs. is evidence that the BHP population given the lack of CSR payments in 2018. would have better or poorer health In the Final Administrative Order and This percentage change was a portion of status than the Exchange population. At the November 2019 final BHP Payment the overall premium increase from 2017 this time, there continues to be a lack Notice, we incorporated the PAF into to 2018. of data on the experience in the the BHP payment. Similarly, we will According to our records, there were Exchanges, which limits the ability to include the PAF in the 2021 payment 1,233 silver-level QHPs that submitted analyze the potential health differences methodology and to calculate it in the premiums to operate on Exchanges in between these groups of enrollees. More same manner as in the Final 2018. Of these 1,233 QHPs, 318 QHPs specifically, Exchanges have been in Administrative Order. (25.8 percent) responded to our request operation since 2014, and two states Under the Final Administrative for the percentage adjustment applied to have operated BHPs since 2015, but data Order, we calculated the PAF by using silver-level QHP premiums in 2018 to is not available to do the analysis information requested from QHP issuers account for the discontinuance of the necessary to determine if there are in each state and the District of CSRs. These 318 QHPs operated in 26 differences in the average health status Columbia, and determined the premium different states, with 10 of those states between BHP and Exchange enrollees. adjustment that the responding QHP running SBEs (while we requested In addition, differences in population issuers made to each silver level plan in information only from QHP issuers in health may vary across states. We also 2018 to account for the discontinuation states serviced by an FFE, many of those do not believe that sufficient data would of CSR payments to QHP issuers. Based issuers also had QHPs in states be available to permit us to make a on the data collected, we estimated the operating SBEs and submitted prospective adjustment to the PHF median adjustment for silver level QHPs information for those states as well). under § 600.610(c)(2) for the 2021 nationwide (excluding those in the two Thirteen of these 318 QHPs were in program year. BHP states). To the extent that QHP New York (and none were in Given these analytic challenges and issuers made no adjustment (or the Minnesota). Excluding these 13 QHPs the limited data about Exchange adjustment was 0), this would be from the analysis, the nationwide coverage and the characteristics of BHP- counted as 0 in determining the median median adjustment was 20.0 percent. Of eligible consumers, the PHF will adjustment made to all silver level the 13 QHPs in New York that continue to be 1.00 for program year QHPs nationwide. If the amount of the responded, the state median adjustment 2021. adjustment was unknown—or we was 1.0 percent. We believe that this is In the previous BHP payment determined that it should be excluded an appropriate adjustment for QHPs in methodologies, we included an option for methodological reasons (for Minnesota as well, based on the for states to include a retrospective example, the adjustment was negative, observed changes in New York’s QHP population health status adjustment. We an outlier, or unreasonable)—then we premiums in response to the will provide states with the same option did not count the adjustment towards discontinuance of CSR payments (and for 2021 to include a retrospective determining the median adjustment.12 the operation of the BHP in that state) population health status adjustment in The median adjustment for silver level and our analysis of expected QHP the certified methodology, which is QHPs is the nationwide median premium adjustments for states with subject to our review and approval. This adjustment. BHPs. We calculated the proposed PAF option is described further in section For each of the two BHP states, we as (1 + 20%) ÷ (1 + 1%) (or 1.20/1.01), III.F. of this final notice. Regardless of determined the median premium which results in a value of 1.188. whether a state elects to include a adjustment for all silver level QHPs in We will continue to set the PAF equal retrospective population health status that state, which we refer to as the state to 1.188 for program year 2021. We adjustment, we anticipate that, in future median adjustment. The PAF for each believe that this value for the PAF years, when additional data becomes BHP state equaled 1 plus the nationwide continues to reasonably account for the available about Exchange coverage and median adjustment divided by 1 plus increase in silver-level premiums the characteristics of BHP enrollees, we experienced in non-BHP states that took may estimate the PHF differently. 12 Some examples of outliers or unreasonable effect after the discontinuance of the While the statute requires adjustments include (but are not limited to) values CSR payments. We believe that the consideration of risk adjustment over 100 percent (implying the premiums doubled payments and reinsurance payments or more as a result of the adjustment), values more impact of the increase in silver-level than double the otherwise highest adjustment, or premiums in 2021 can reasonably be insofar as they would have affected the non-numerical entries. expected to be similar to that in 2018, PTC that would have been provided to

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BHP-eligible individuals had they • 151–175 percent. contribution amount (the amount of enrolled in QHPs, we will not require • 176–200 percent. premium that an individual or that a BHP’s standard health plans We will assume a uniform income household theoretically would be receive such payments. As explained in distribution for each federal BHP required to pay for coverage in a QHP the BHP final rule, BHP standard health payment cell. We believe that assuming on an Exchange), which is based on (A) plans are not included in the federally- a uniform income distribution for the the household income; (B) the operated risk adjustment program.13 income ranges proposed would be household income as a percentage of Further, standard health plans do not reasonably accurate for the purposes of FPL for the family size; and (C) the qualify for payments under the calculating the BHP payment and would schedule specified in 26 U.S.C. transitional reinsurance program avoid potential errors that could result 36B(b)(3)(A) and shown below. established under section 1341 of the if other sources of data were used to The difference between the Patient Protection and Affordable Care estimate the specific income contribution amount and the adjusted Act for the years the program was distribution of persons who are eligible monthly premium (that is, the monthly operational (2014 through 2016).14 To for or enrolled in the BHP within rate premium adjusted for the age of the the extent that a state operating a BHP cells that may be relatively small. enrollee) for the applicable second determines that, because of the Thus, when calculating the mean, or lowest cost silver plan is the estimated distinctive risk profile of BHP-eligible average, PTC for a rate cell, we will amount of the PTC that would be consumers, BHP standard health plans calculate the value of the PTC at each provided for the enrollee. should be included in mechanisms that 1 percentage point interval of the income range for each federal BHP The PTC amount provided for a share risk with other plans in the state’s person enrolled in a QHP through an individual market, the state would need payment cell and then calculate the average of the PTC across all intervals. Exchange is calculated in accordance to use other methods for achieving this with the methodology described in 26 goal. This calculation will rely on the PTC formula described in section III.D.5. of U.S.C. 36B(b)(2). The amount is equal to 4. Household Income (I) this final notice. the lesser of the premium for the plan Household income is a significant As the APTC for persons enrolled in in which the person or household determinant of the amount of the PTC QHPs would be calculated based on enrolls, or the adjusted premium for the that is provided for persons enrolled in their household income during the open applicable second lowest cost silver a QHP through an Exchange. enrollment period, and that income plan minus the contribution amount. Accordingly, the BHP payment would be measured against the FPL at The applicable percentage is defined methodology will incorporate that time, we will adjust the FPL by in 26 U.S.C. 36B (b)(3)(A) and 26 CFR household income into the calculations multiplying the FPL by a projected 1.36B–3(g) as the percentage that of the payment rates through the use of increase in the CPI–U between the time applies to a taxpayer’s household income-based rate cells. We will define that the BHP payment rates are income that is within an income tier household income in accordance with calculated and the QHP open specified in Table 1 of the proposed the definition of MAGI in 26 U.S.C. enrollment period, if the FPL is notice, increasing on a sliding scale in 36B(d)(2)(B) and consistent with the expected to be updated during that time. a linear manner from an initial premium definition in 45 CFR 155.300. Income The projected increase in the CPI–U will percentage to a final premium would be measured relative to the FPL, be based on the intermediate inflation percentage specified in Table 1. We will which is updated periodically in the forecasts from the most recent OASDI continue to use applicable percentages Federal Register by the Secretary under and Medicare Trustees Reports.16 to calculate the estimated PTC that would be paid on behalf of a person the authority of 42 U.S.C. 9902(2). 5. Premium Tax Credit Formula (PTCF) Household size and income as a enrolled in a QHP on an Exchange as percentage of FPL will be used as factors In Equation 1 described in section part of the BHP payment methodology in developing the rate cells. We will use III.A.1. of this final notice to use the as part of Equation 1. The applicable the following income ranges measured formula described in 26 U.S.C. 36B(b) to percentages in Table 1 for calendar year as a percentage of FPL: 15 calculate the estimated PTC that would (CY) 2020 will be effective for BHP • 0–50 percent. be paid on behalf of a person enrolled program year 2021. The applicable • 51–100 percent. in a QHP on an Exchange as part of the percentages will be updated in future • 101–138 percent. BHP payment methodology. This years in accordance with 26 U.S.C. • 139–150 percent. formula is used to determine the 36B(b)(3)(A)(ii).

TABLE 1—APPLICABLE PERCENTAGE TABLE FOR CY 2020 a

In the case of household income (expressed as a percent of poverty line) within the following The initial premium The final premium income tier: percentage is— percentage is—

Up to 133% ...... 2.06 2.06 133% but less than 150% ...... 3.09 4.12 150% but less than 200% ...... 4.12 6.49 200% but less than 250% ...... 6.49 8.29 250% but less than 300% ...... 8.29 9.78

13 See 79 FR at 14131. under the national reinsurance parameters are Insurance and Federal Supplementary Medical 14 See 45 CFR 153.400(a)(2)(iv) (BHP standard available only for ‘‘Reinsurance-eligible plans’’). Insurance Trust Funds, available at https:// health plans are not required to submit reinsurance 15 These income ranges and this analysis of www.cms.gov/Research-Statistics-Data-and- contributions), 153.20 (definition of ‘‘Reinsurance- income apply to the calculation of the PTC. Systems/Statistics-Trends-and-Reports/ eligible plan’’ as not including ‘‘health insurance 16 ReportsTrustFunds/Downloads/TR2019.pdf. coverage not required to submit reinsurance See Table IV A1 from the 2019 Annual Report contributions’’), 153.230(a) (reinsurance payments of the Boards of Trustees of the Federal Hospital

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TABLE 1—APPLICABLE PERCENTAGE TABLE FOR CY 2020 a—Continued

In the case of household income (expressed as a percent of poverty line) within the following The initial premium The final premium income tier: percentage is— percentage is—

300% but not more than 400% ...... 9.78 9.78 a IRS Revenue Procedure 2019–29. https://www.irs.gov/pub/irs-drop/rp-19-29.pdf.

6. Metal Tier Selection Factor (MTSF) incomes choosing bronze-level QHPs, effects of these choices. Section On the Exchange, if an enrollee despite being eligible for CSRs in silver- 1331(d)(3) of the Patient Protection and level QHPs, because many were able to chooses a QHP and the value of the Affordable Care Act requires that the purchase bronze-level QHPs and pay $0 APTC to which the enrollee is entitled BHP payments to states be based on in premium; according to CMS data, the is greater than the premium of the plan what would have been provided if such percentage of persons with incomes selected, then the APTC is reduced to be eligible individuals were allowed to between 0 percent and 200 percent of equal to the premium. This usually enroll in QHPs, and we believe that it FPL eligible for CSRs (those who would occurs when enrollees eligible for larger is appropriate to consider how be eligible for the BHP if the state APTCs choose bronze-level QHPs, individuals would have chosen different operated a BHP) selecting bronze level which typically have lower premiums plans—including across different metal QHPs increased from about 11 percent on the Exchange than silver-level QHPs. tiers—as part of the BHP payment in 2017 to about 13 percent in 2018. In Prior to 2018, we believed that the methodology. addition, the likelihood that a person We finalized the application of the impact of these choices and plan choosing a bronze-level QHP would pay selections on the amount of PTCs that MTSF for the first time in the 2020 $0 premium increased, and the payment methodology, and we will the federal government paid was difference between the bronze-level relatively small. During this time, most calculate the MTSF using the same QHP premium and the available PTC approach as finalized there (84 FR enrollees in income ranges up to 200 widened. Between 2017 and 2018, the percent FPL chose silver-level QHPs, 59543). First, we will calculate the ratio of the average silver-level QHP percentage of enrollees with incomes and in most cases where enrollees chose premium to the average bronze-level bronze-level QHPs, the premium was below 200 percent of the FPL (those QHP premium increased: the average who would be potentially eligible for still more than the PTC. Based on our silver level QHP premium was 17 analysis of the percentage of persons the BHP) in non-BHP states who percent higher than the average bronze- enrolled in bronze-level QHPs in 2018. with incomes below 200 percent FPL level QHP premium in 2017, whereas choosing bronze-level QHPs and the Second, we will calculate the ratio of the average silver-level QHP premium the average PTC paid for enrollees in average reduction in the PTCs paid for was 33 percent higher than the average those enrollees, we believe that the total this income range who selected bronze- bronze-level QHP premium in 2018. level QHPs compared to the average PTCs paid for persons with incomes Similarly, the average estimated below 200 percent FPL were reduced by PTC paid for enrollees in the same reduction in APTC for enrollees with income range who selected silver-level about 1 percent in 2017. Therefore, we incomes between 0 percent and 200 made no adjustment based on the effect QHPs. Both of these calculations will be percent FPL that chose bronze level done using CMS data on Exchange for enrollees choosing non-silver-level QHPs increased from about 11 percent QHPs in developing the BHP payment enrollment and payments. in 2017 to about 23 percent in 2018 The MTSF will be set to the value of methodology applicable to program (after adjusting for the average age of years prior to 2018. However, after the 1 minus the product of the percentage bronze-level QHP and silver-level QHP of enrollees who chose bronze-level discontinuance of the CSR payments in enrollees); that is, in 2017, enrollees October 2017, several changes occurred QHPs and 1 minus the ratio of the with incomes in this range who chose average PTC paid for enrollees in that increased the expected impact of bronze-level QHPs received 11 percent enrollees’ plan selection choices on the bronze-level QHPs to the average PTC less than the full value of the APTC, and paid for enrollees in silver-level QHPs: amount of PTC the government paid. in 2018, those enrollees who chose These changes led to a larger percentage MTSF = 1¥(percentage of enrollees in bronze-level QHPs received 23 percent × ¥ of individuals choosing bronze-level less than the full value of the APTC. The bronze-level QHPs (1 average QHPs, and for those individuals who discontinuance of the CSR payments led PTC paid for bronze-level QHP chose bronze-level QHPs, these changes to increases in silver-level QHP enrollees/average PTC paid for also generally led to larger reductions in premiums (and thus in the total silver-level QHP enrollees)) PTCs paid by the federal government potential PTCs), but did not generally We have calculated that 12.68 percent per individual. The combination of increase the bronze-level QHP of enrollees in households with incomes more individuals with incomes below premiums in most states; we believe this below 200 percent of the FPL selected 200 percent of FPL choosing bronze- is the primary reason for the increase in bronze-level QHPs in 2018. We also level QHPs and the reduction in PTCs the percentage reduction in PTCs paid calculated that the ratio of the average had an impact on PTCs paid by the by the government for those who PTC paid for those enrollees in bronze- federal government for enrollees with enrolled in bronze-level QHPs between level QHPs to the average PTCs paid for incomes below 200 percent FPL. 2017 and 2018. enrollees in silver-level QHPs was 76.66 Silver-level QHP premiums for the Therefore, we believe that the impacts percent after adjusting for the average 2018 benefit year increased on the amount of PTC the government age of bronze level and silver-level QHP substantially relative to other metal tier would pay due to enrollees’ plan enrollees. The MTSF is equal to 1 minus plans in many states (on average, by selection choices are larger and thus the product of the percentage of about 20 percent). We believe this more significant, and we will include an enrollees in bronze-level QHPs (12.68 contributed to an increase in the adjustment (the MTSF) in the BHP percent) and 1 minus the ratio of the percentage of enrollees with lower payment methodology to account for the average PTC paid for bronze-level QHP

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enrollees to the average PTC paid for enrollees during the year. Even if the a BHP are states that implemented the silver-level QHP enrollees (76.66 BHP adjusts household income Medicaid eligibility expansion. percent). Thus, the MTSF would be determinations and corresponding Therefore, for 2021, we are using the calculated as: claims of federal payment amounts value only for states that have MTSF = 1¥(12.68% × (1¥76.66%)) based on household reports during the implemented the Medicaid eligibility Therefore, the value of the MTSF for year or data from third-party sources, expansion. For 2021, OTA has estimated 2021 will be 97.04 percent. such adjustments may not fully capture that the IRF for states that have the effects of tax reconciliation that BHP implemented the Medicaid eligibility 7. Income Reconciliation Factor (IRF) enrollees would have experienced had expansion to cover adults up to 133 For persons enrolled in a QHP they been enrolled in a QHP through an percent of the FPL will be 99.23 percent. through an Exchange who receive Exchange and received APTC. Therefore, in accordance with current E. State Option To Use Prior Program APTC, there will be an annual Year QHP Premiums for BHP Payments reconciliation following the end of the practice, we will include in Equation 1 year to compare the APTC to the correct an adjustment, the IRF, that will In the interest of allowing states amount of PTC based on household account for the difference between greater certainty in the total BHP federal calculating estimated PTC using: (a) circumstances shown on the federal payments for a given plan year, we have Household income relative to FPL as income tax return. Any difference given states the option to have their determined at initial application and between the latter amounts and the final federal BHP payment rates potentially revised mid-year under APTC paid during the year would either calculated using a projected ARP (that § 600.320, for purposes of determining be paid to the taxpayer (if too little is, using premium data from the prior BHP eligibility and claiming federal APTC was paid) or charged to the program year multiplied by the BHP payments; and (b) actual taxpayer as additional tax (if too much premium trend factor (PTF), as household income relative to FPL APTC was paid, subject to any described in Equation (2b). For program received during the plan year, as it limitations in statute or regulation), as years 2015 through 2018, we required would be reflected on individual federal provided in 26 U.S.C. 36B(f). income tax returns. This adjustment states to make their election to have Section 1331(e)(2) of the Patient will seek prospectively to capture the their final federal BHP payment rates Protection and Affordable Care Act average effect of income reconciliation calculated using a projected ARP by specifies that an individual eligible for aggregated across the BHP population May 15 of the year preceding the the BHP may not be treated as a had those BHP enrollees been subject to applicable program year. Because this ‘‘qualified individual’’ under section tax reconciliation after receiving APTC final notice is published after May 15, 1312 of the Patient Protection and for coverage provided through QHPs 2020, we are requiring states to inform Affordable Care Act who is eligible for offered on an Exchange. Consistent with CMS in writing of their election for the enrollment in a QHP offered through an the methodology used in past years, we 2021 program year 60 days following Exchange. We are defining ‘‘eligible’’ to estimated reconciliation effects based on the publication of this final notice. mean anyone for whom the state agency tax data for 2 years, reflecting income For Equation (2b), we will define the or the Exchange assesses or determines, and tax unit composition changes over PTF as follows: based on the single streamlined time among BHP-eligible individuals. PTF: In the case of a state that would application or renewal form, as eligible The OTA maintains a model that for enrollment in the BHP. Because elect to use the 2020 premiums as the combines detailed tax and other data, basis for determining the 2021 BHP enrollment in a QHP is a requirement including Exchange enrollment and PTC for individuals to receive APTC, payment, it would be appropriate to claimed, to project Exchange premiums, apply a factor that would account for individuals determined or assessed as enrollment, and tax credits. For each eligible for a BHP are not eligible to the change in health care costs between enrollee, this model compares the APTC the year of the premium data and the receive APTC for coverage in the based on household income and family BHP program year. This factor would Exchange. Because they do not receive size estimated at the point of enrollment approximate the change in health care APTC, BHP enrollees, on whom the with the PTC based on household costs per enrollee, which would BHP payment methodology is generally income and family size reported at the include, but not be limited to, changes based, are not subject to the same end of the tax year. The former reflects in the price of health care services and income reconciliation as Exchange the determination using enrollee changes in the utilization of health care consumers. Nonetheless, there may still information furnished by the applicant services. This would provide an be differences between a BHP enrollee’s and tax data furnished by the IRS. The estimate of the adjusted monthly household income reported at the latter would reflect the PTC eligibility premium for the applicable second beginning of the year and the actual based on information on the tax return, household income over the year. These which would have been determined if lowest cost silver plan that would be may include small changes (reflecting the individual had not enrolled in the more accurate and reflective of health changes in hourly wage rates, hours BHP. Consistent with prior years, we care costs in the BHP program year. worked per week, and other fluctuations proposed to use the ratio of the For the PTF, we will use the annual in income during the year) and large reconciled PTC to the initial estimation growth rate in private health insurance changes (reflecting significant changes of PTC as the IRF in Equations (1a) and expenditures per enrollee from the in employment status, hourly wage (1b) for estimating the PTC portion of National Health Expenditure (NHE) rates, or substantial fluctuations in the BHP payment rate. projections, developed by the Office of income). There may also be changes in OTA estimates the IRF separately for the Actuary in CMS (https:// household composition. Thus, we states that have implemented the www.cms.gov/Research-Statistics-Data- believe that using unadjusted income as Medicaid eligibility expansion and and-Systems/Statistics-Trends-and- reported prior to the BHP program year those that have not. In previous program Reports/NationalHealthExpendData/ may result in calculations of estimated years, we used the average of these two NationalHealthAccountsProjected.html). PTC that are inconsistent with the values to set the value for the IRF. To For BHP program year 2021, the PTF actual household incomes of BHP date, the only states that have operated will be 4.8 percent.

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F. State Option To Include Retrospective Program/Downloads/Risk-Adjustment- a BHP at this time). Since we continue State-Specific Health Risk Adjustment and-BHP-White-Paper.pdf). We to estimate fewer than ten respondents, in Certified Methodology proposed to require a state to submit its the final 2021 methodology is not To determine whether the potential proposed protocol by August 1, 2020. subject to the requirements of the PRA. difference in health status between BHP Given the publication date of this final We sought comment on whether or enrollees and consumers in an Exchange notice, we will require a state to submit not to solicit information from QHP would affect the PTC and risk its proposed protocol for the 2021 issuers on the amount of the adjustment adjustment payments that would have program year within 30 days after the to premiums to account for the otherwise been made had BHP enrollees publication of this final notice. This discontinuance of CSR payments. We been enrolled in coverage through an submission will need to include noted that we believe that soliciting Exchange, we will provide states descriptions of how the state would such information would likely impose implementing the BHP the option to collect the necessary data to determine some additional reporting requirements the adjustment, including any propose and to implement, as part of the on QHP issuers and sought comments contracting contingences that may be in certified methodology, a retrospective on the amount of burden this would place with participating standard health adjustment to the federal BHP payments create. plan issuers. We will provide technical to reflect the actual value that would be We received no comments on the assistance to states as they develop their assigned to the population health factor Collection of Information Requirements protocols, as requested. To implement (or risk adjustment) based on data section of the 2021 proposed BHP the population health status adjustment, accumulated during that program year Payment Notice, including whether or we must approve the state’s protocol by for each rate cell. not to solicit information from QHP December 31, 2020 for the 2021 program We acknowledge that there is issuers on the amount of the adjustment year. Finally, the state will be required uncertainty with respect to this factor to premiums to account for the to complete the population health status due to the lack of available data to discontinuance of CSR payments. adjustment at the end of the program analyze potential health differences year based on the approved protocol. V. Regulatory Impact Analysis between the BHP and QHP populations, After the end of the program year, and which is why, absent a state election, A. Statement of Need once data is made available, we will we will use a value for the PHF (see review the state’s findings, consistent Section 1331 of the Patient Protection section III.D.3. of this final notice) to with the approved protocol, and make and Affordable Care Act (42 U.S.C. determine a prospective payment rate any necessary adjustments to the state’s 18051) requires the Secretary to which assumes no difference in the federal BHP payment amounts. If we establish a BHP, and section 1331(d)(1) health status of BHP enrollees and QHP determine that the federal BHP specifically provides that if the enrollees. There is considerable payments were less than they would Secretary finds that a state meets the uncertainty regarding whether the BHP have been using the final adjustment requirements of the program established enrollees will pose a greater risk or a factor, we would apply the difference to under section 1331(a) of the Patient lesser risk compared to the QHP the state’s next quarterly BHP trust fund Protection and Affordable Care Act, the enrollees, how to best measure such deposit. If we determine that the federal Secretary shall transfer to the state risk, the potential effect such risk would BHP payments were more than they federal BHP payments described in have had on PTC, and risk adjustment would have been using the final section 1331(d)(3). This methodology that would have otherwise been made reconciled factor, we would subtract the provides for the funding methodology to had BHP enrollees been enrolled in difference from the next quarterly BHP determine the federal BHP payment coverage through an Exchange. To the payment to the state. amounts required to implement these extent, however, that a state would provisions for program year 2021. develop an approved protocol to collect IV. Collection of Information data and effectively measure the relative Requirements B. Overall Impact risk and the effect on federal payments This final methodology for program We have examined the impacts of this of PTCs and CSRs, we will permit a year 2021 is similar to the methodology rule as required by Executive Order retrospective adjustment that would finalized for program year 2020 in the 12866 on Regulatory Planning and measure the actual difference in risk November 2019 final BHP Payment Review (September 30, 1993), Executive between the two populations to be Notice. While we are finalizing one Order 13563 on Improving Regulation incorporated into the certified BHP change related to the calculation of the and Regulatory Review (January 18, payment methodology and used to Income Reconciliation Factor, the 2011), the Regulatory Flexibility Act adjust payments in the previous year. change will not revise or impose any (RFA) (September 19, 1980, Pub. L. 96– For a state electing the option to new reporting, recordkeeping, or third- 354), section 1102(b) of the Act, section implement a retrospective population party disclosure requirements or burden 202 of the Unfunded Mandates Reform health status adjustment as part of the on states operating a BHP, as it pertains Act of 1995 (March 22, 1995; Pub. L. BHP payment methodology applicable to any of our active collections of 104–4), Executive Order 13132 on to the state, we will require the state to information Although the Federalism (August 4, 1999), the submit a proposed protocol to CMS, methodology’s information collection Congressional Review Act (5 U.S.C. which would be subject to approval by requirements and burden had at one 804(2) and Executive Order 13771 on us and would be required to be certified time been approved by OMB under Reducing Regulation and Controlling by the Chief Actuary of CMS, in control number 0938–1218 (CMS– Regulatory Costs (January 30, 2017). consultation with the OTA. We applied 10510), the approval was discontinued Executive Orders 12866 and 13563 the same protocol for the population on August 31, 2017, since we adjusted direct agencies to assess all costs and health status adjustment as what is set our estimated number of respondents benefits of available regulatory forth in guidance in Considerations for below the Paperwork Reduction Act of alternatives and, if regulation is Health Risk Adjustment in the Basic 1995 (PRA) (44 U.S.C. 3501 et seq.) necessary, to select regulatory Health Program in Program Year 2015 threshold of ten or more respondents approaches that maximize net benefits (http://www.medicaid.gov/Basic-Health- (only New York and Minnesota operate (including potential economic,

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environmental, public health and safety payment amounts are based on actual rule whose mandates require spending effects, distributive impacts, and enrollment. Alternatively, total federal in any 1 year of $100 million in 1995 equity). Section 3(f) of Executive Order BHP payment amounts may be lower in dollars, updated annually for inflation, 12866 defines a ‘‘significant regulatory states with a younger BHP-eligible by state, local, or tribal governments, in action’’ as an action that is likely to population as the RP used to calculate the aggregate, or by the private sector. In result in a rule: (1) (Having an annual the federal BHP payment will be lower 2020, that threshold is approximately effect on the economy of $100 million relative to older BHP enrollees. While $156 million. States have the option, but or more in any 1 year, or adversely and state composition will cause total are not required, to establish a BHP. materially affecting a sector of the federal BHP payment amounts to vary Further, the methodology would economy, productivity, competition, from state to state, we believe that the establish federal payment rates without jobs, the environment, public health or methodology, like the methodology requiring states to provide the Secretary safety, or state, local or tribal used in 2020, accounts for these with any data not already required by governments or communities (also variations to ensure accurate BHP other provisions of the Patient referred to as ‘‘economically payment transfers are made to each Protection and Affordable Care Act or significant’’); (2) creating a serious state. its implementing regulations. Thus, the inconsistency or otherwise interfering The Regulatory Flexibility Act (5 final payment methodology does not with an action taken or planned by U.S.C. 601 et seq.) (RFA) requires mandate expenditures by state another agency; (3) materially altering agencies to prepare an initial regulatory governments, local governments, or the budgetary impacts of entitlement flexibility analysis to describe the tribal governments. grants, user fees, or loan programs or the impact of the rule on small entities, Executive Order 13132 establishes rights and obligations of recipients unless the head of the agency can certify certain requirements that an agency thereof; or (4) raising novel legal or that the rule will not have a significant must meet when it issues a final rule policy issues arising out of legal economic impact on a substantial that imposes substantial direct effects mandates, the President’s priorities, or number of small entities. The RFA on states, preempts state law, or the principles set forth in the Executive generally defines a ‘‘small entity’’ as (1) otherwise has federalism implications. Order. a proprietary firm meeting the size The BHP is entirely optional for states, A regulatory impact analysis (RIA) standards of the Small Business and if implemented in a state, provides must be prepared for major rules with Administration (SBA); (2) a not-for- access to a pool of funding that would economically significant effects ($100 profit organization that is not dominant not otherwise be available to the state. million or more in any 1 year). As noted in its field; or (3) a small government Accordingly, the requirements of in the BHP final rule, the BHP provides jurisdiction with a population of less Executive Order 13132 do not apply to states the flexibility to establish an than 50,000. Individuals and states are this final notice. alternative coverage program for low- not included in the definition of a small D. Alternative Approaches income individuals who would entity. Few of the entities that meet the otherwise be eligible to purchase definition of a small entity as that term We considered several alternatives in coverage on an Exchange. Because we is used in the RFA would be impacted developing the proposed BHP payment make no changes in methodology that directly by this methodology. methodology for 2021, and we discuss would have a consequential effect on Because this final methodology is some of these alternatives below. state participation incentives, or on the focused solely on federal BHP payment We considered alternatives as to how size of either the BHP program or rates to states, it does not contain to calculate the PAF in the proposed offsetting PTC and CSR expenditures, provisions that would have a direct methodology for 2021. The proposed the effects of the changes made in this impact on hospitals, physicians, and value for the PAF is 1.188, which is the payment notice would not approach the other health care providers that are same as was used for 2018, 2019, and $100 million threshold, and hence it is designated as small entities under the 2020. We believe it would be difficult to neither an economically significant rule RFA. Accordingly, we have determined get the updated information from QHP under E.O. 12866 nor a major rule under that the methodology, like the previous issuers comparable to what was used to the Congressional Review Act. methodology and the final rule that develop the 2018 factor, because QHP Moreover, the regulation is not established the BHP program, will not issuers may not distinctly consider the economically significant within the have a significant economic impact on impact of the discontinuance of CSR meaning of section 3(f)(1) of the a substantial number of small entities. payments on the QHP premiums any Executive Order. Section 1102(b) of the Act requires us longer. We do not have reason to believe to prepare a regulatory impact analysis that the value of the PAF would change C. Anticipated Effects if a methodology may have a significant significantly between program years The provisions of this final notice are economic impact on the operations of a 2018 and 2021. We continued to designed to determine the amount of substantial number of small rural consider whether or not there are other funds that will be transferred to states hospitals. For purposes of section methodologies or data sources we may offering coverage through a BHP rather 1102(b) of the Act, we define a small be able to use to develop the PAF. We than to individuals eligible for federal rural hospital as a hospital that is also considered whether or not to financial assistance for coverage located outside of a metropolitan update the value of the PAF for 2021 purchased on the Exchange. We are statistical area and has fewer than 100 after the end of the 2021 BHP program uncertain what the total federal BHP beds. For the preceding reasons, we year. payment amounts to states will be as have determined that this methodology We also considered alternatives as these amounts will vary from state to will not have a significant impact on a how to calculate the MTSF in the state due to the state-specific factors and substantial number of small rural proposed methodology for 2021. The conditions. For example, total federal hospitals. proposed value for the MTSF is 97.04 BHP payment amounts may be greater Section 202 of the Unfunded percent, which is the same as was in more populous states simply by Mandates Reform Act (UMRA) of 2005 finalized for 2020. We believe that we virtue of the fact that they have a larger requires that agencies assess anticipated would use the latest data available each BHP-eligible population and total costs and benefits before issuing any year; for example, we anticipate data

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from 2019 being available next year in premiums and the prior year premiums E. Regulatory Reform Analysis Under developing the subsequent BHP trended forward. We believe that the E.O. 13771 payment methodology. We considered payment rates can still be developed whether or not there are other accurately using either the prior year Executive Order 13771, titled methodologies or data sources we may QHP premiums or the current program Reducing Regulation and Controlling be able to use to develop the MTSF. We year premiums and that it is appropriate Regulatory Costs, was issued on January also considered whether or not to to continue to provide the states the 30, 2017 and requires that the costs update the value of the MTSF for 2021 option. associated with significant new after the end of the 2021 BHP program Many of the factors in this final notice regulations ‘‘shall, to the extent year. are specified in statute; therefore, for permitted by law, be offset by the We considered alternatives as how to these factors we are limited in the elimination of existing costs associated calculate the IRF in the proposed alternative approaches we could with at least two prior regulations.’’ methodology for 2021. We proposed to consider. One area in which we This final rule, if finalized as proposed, calculate the value of this factor based previously had and still have a choice is expected to be neither an E.O. 13771 on modeling by OTA, as we have done is in selecting the data sources used to regulatory action nor an E.O. 13771 for prior years. For the 2021 BHP determine the factors included in the deregulatory action. payment methodology, we considered methodology. Except for state-specific calculating the IRF from the latest RPs and enrollment data, we are using F. Conclusion available year of Exchange data. We do national rather than state-specific data. not anticipate this will lead to a This is due to the lack of currently We believe that this final BHP significant change in the value of the available state-specific data needed to payment methodology is effectively the IRF. In addition, we also considered develop the majority of the factors same methodology as finalized for 2020. whether to set the IRF as the average of included in the methodology. We BHP payment rates may change as the the expected values for states that have believe the national data will produce values of the factors change, most expanded Medicaid eligibility and for sufficiently accurate determinations of notably the QHP premiums for 2020 or states that have not, or to set the IRF as payment rates. In addition, we believe 2021. We do not anticipate this final the value for only states that have that this approach will be less methodology to have any significant expanded Medicaid eligibility, because burdensome on states. In many cases, effect on BHP enrollment in 2021. only states that have expanded using state-specific data would In accordance with the provisions of eligibility have operated a BHP to date. necessitate additional requirements on Executive Order 12866, this regulation We also considered whether or not to the states to collect, validate, and report was reviewed by the Office of continue to provide states the option to data to CMS. By using national data, we Management and Budget. develop a protocol for a retrospective are able to collect data from other adjustment to the population health sources and limit the burden placed on Dated: August 6, 2020. factor (PHF) as we did in previous the states. For RPs and enrollment data, Seema Verma, payment methodologies. We believe that we are using state-specific data rather Administrator, Centers for Medicare & continuing to provide this option is than national data as we believe state- Medicaid Services. appropriate and likely to improve the specific data will produce more accurate Dated: August 6, 2020. accuracy of the final payments. determinations than national averages. We also considered whether or not to We requested public comment on Alex M. Azar II, require the use of the program year these alternative approaches. Secretary, Department of Health and Human premiums to develop the federal BHP Our responses to public comments on Services. payment rates, rather than allow the these alternative approaches are in [FR Doc. 2020–17553 Filed 8–10–20; 4:15 pm] choice between the program year section II.E. of this final notice. BILLING CODE 4120–01–P

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Proposed Rules Federal Register Vol. 85, No. 157

Thursday, August 13, 2020

This section of the FEDERAL REGISTER FOR FURTHER INFORMATION CONTACT: that it shall not affect or preempt any contains notices to the public of the proposed Andrea Ricci, Marketing Specialist, other Federal or State law authorizing issuance of rules and regulations. The Promotion and Economics Division, promotion or research relating to an purpose of these notices is to give interested Specialty Crops Program, AMS, USDA, agricultural commodity. persons an opportunity to participate in the 1400 Independence Avenue SW, Room rule making prior to the adoption of the final Under section 519 of the 1996 Act (7 rules. 1406–S, Stop 0244, Washington, DC U.S.C. 7418), a person subject to an 20250–0244; telephone: (202) 572–1442; order may file a written petition with facsimile: (202) 205–2800; or electronic USDA stating that an order, any DEPARTMENT OF AGRICULTURE mail: [email protected]. provision of an order, or any obligation SUPPLEMENTARY INFORMATION: This imposed in connection with an order, is Agricultural Marketing Service proposal affecting 7 CFR part 1217 not established in accordance with the (herein the ‘‘Order’’) is authorized under law, and request a modification of an 7 CFR Part 1217 the Commodity Promotion, Research, order or an exemption from an order. and Information Act of 1996 (1996 Act) Any petition filed challenging an order, [Document Number AMS–SC–20–0014] (7 U.S.C. 7411–7425). any provision of an order, or any Executive Orders 12866, 13563, and obligation imposed in connection with Softwood Lumber Research, 13771 an order, must be filed within two years Promotion, Consumer Education and after the effective date of an order, Industry Information Order; Executive Orders 12866 and 13563 provision, or obligation subject to Assessment Rate Increase direct agencies to assess all costs and challenge in the petition. The petitioner benefits of available regulatory will have the opportunity for a hearing AGENCY: Agricultural Marketing Service. alternatives and, if regulation is on the petition. Thereafter, USDA will ACTION: Proposed rule. necessary, to select regulatory issue a ruling on the petition. The 1996 approaches that maximize net benefits Act provides that the district court of SUMMARY: This proposal invites (including potential economic, the United States for any district in comments on amending the Softwood environmental, public health and safety which the petitioner resides or conducts Lumber Research, Promotion, Consumer effects, distributive impacts and equity). business shall have the jurisdiction to Education and Industry Information Executive Order 13563 emphasizes the review a final ruling on the petition, if Order (Order) to increase the assessment importance of quantifying both costs the petitioner files a complaint for that rate from $0.35 to $0.41 per thousand and benefits, reducing costs, purpose not later than 20 days after the board feet (mbf). The Order is harmonizing rules and promoting date of the entry of USDA’s final ruling. administered by the Softwood Lumber flexibility. This action falls within a Board (Board) with oversight by the U.S. category of regulatory actions that the Background Department of Agriculture (USDA). Office of Management and Budget This proposal invites comments on a Under the program, assessments are (OMB) exempted from Executive Order proposal to amend the Order by collected from domestic manufacturers 12866 review. Additionally, because increasing the assessment rate from and importers and used for research and this rule does not meet the definition of $0.35 to $0.41 per mbf of softwood promotion projects designed to a significant regulatory action, it does lumber shipped within or imported into strengthen the position of softwood not trigger the requirements contained the United States. The Order is lumber in the marketplace. This in Executive Order 13771. See OMB’s administered by the Board with proposal would also add the conversion Memorandum titled ‘‘Interim Guidance oversight by the USDA. Under the factor for square meters to board feet Implementing Section 2 of the Executive program, assessments are collected from and make one conforming change. Order of January 30, 2017, titled domestic manufacturers and importers DATES: Comments must be received by ‘Reducing Regulation and Controlling and used for research and promotion October 13, 2020. Regulatory Costs’ ’’ (February 2, 2017). projects designed to strengthen the ADDRESSES: Interested persons are Executive Order 13175 position of softwood lumber in the invited to submit written comments This action has been reviewed in marketplace. The additional funds concerning this proposed rule. All accordance with the requirements of would enable the Board to maintain its comments must be submitted through Executive Order 13175, Consultation existing programs, while supporting the Federal e-rulemaking portal at and Coordination with Indian Tribal new programs that would help maintain http://www.regulations.gov and should Governments. The review reveals that and expand markets for softwood reference the document number and the this regulation would not have lumber. This proposal would also add date and page number of this issue of substantial and direct effects on Tribal the conversion factor for square meters the Federal Register. All comments governments and would not have to board feet and make one conforming submitted in response to this proposed significant Tribal implications. change. rule will be included in the rulemaking The Order specifies that the funds to record and will be made available to the Executive Order 12988 cover the Board’s expenses shall be paid public. Please be advised that the This proposal has been reviewed by assessments on manufacturers for the identity of the individuals or entities under Executive Order 12988, Civil U.S. market, other income of the Board, submitting comments will be made Justice Reform. It is not intended to and other funds available to the Board. public on the internet at http:// have retroactive effect. Section 524 of Domestic manufacturers pay www.regulations.gov. the 1996 Act (7 U.S.C. 7423) provides assessments based on the volume of

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softwood lumber shipped within the were $14.23 million. Program harmonizing the language in the two United States and importers pay expenditures averaged $12.96 million sections related to assessment assessments based on the volume of during those five years, with annual recommendations. softwood lumber imported to the United expenditures averaging $3.29 million Board Recommendation States. Assessments are collected per (24 percent) for research conducted on mbf of softwood lumber, except that no wood standards; $4.06 million (29 The Board met on November 20, 2019 entity shall pay an assessment on the percent) on a communications program, and recommended increasing its first 15 million board feet (mmbf) of which includes continuing education assessment rate from $0.35 to $0.41 per softwood lumber otherwise subject to courses for architects and engineers; and mbf. The additional funds would enable assessments in a fiscal year. Domestic $3.94 million (28 percent) on a the Board to maintain its existing manufacturers are required to remit to construction and design program that programs, while supporting new the Board assessments owed no later provides technical support to architects programs that would help maintain and than 30 calendar days of the month and structural engineers about using expand markets for softwood lumber. following the end of the quarter in wood. Pursuant to § 1217.50(h), For the 2016–2018 fiscal years, the which the softwood lumber was administrative expenditures have been Board has used reserve funds to bridge shipped. Importers are responsible for under 8 percent of the assessments the deficit between income and paying assessments to the Board on collected and other income received by expenses. In 2019, the Board kept softwood lumber imported into the and available to the Board for the fiscal expenditures in line with income and United States through the U.S. Customs year. had to make cuts to its programs, and Border Protection (CBP). If CBP Board assessment income has ranged primarily its communications program. does not collect an assessment from the from $12.55 million in 2014 to $13.74 The Board discussed the deficit importer, the importer is responsible for million in 2018. About 70 percent of the spending that occurred from 2016–2018 paying the assessment to the Board no assessment income is from domestic and the funding cuts in 2019, along with later than 30 calendar days of the month manufacturers and 30 percent is from the impacts of inflation, and determined following the end of the quarter in importers. Additionally, pursuant to that without the increase it would not which the softwood lumber was § 1217.50(i), the Board maintains a be able to maintain its current programs imported. Domestic manufactures and monetary reserve with funds that do not nor be able to address gaps that limit the importers must also remit to the Board exceed one fiscal period’s budget. This Board’s ability to expand the market for required reports. The Order also proposal would also amend § 1217.52(h) softwood lumber. Continuing at the provides for exemptions from to add the conversion factor for square current funding level would limit its assessments. Section 1217.53 specifies meters to board feet. Currently, the ability to capitalize on new that U.S. manufacturers and importers Order provides a factor used to convert opportunities or address challenges and that domestically ship and/or import cubic meters of imported softwood maintain the impact the Board has less than 15 mmbf annually, exports of lumber into the equivalent volume of achieved for the softwood lumber softwood lumber from the United States, thousands of board feet, thus enabling industry in prior years. Additionally, and shipments and imports of organic the Board to calculate appropriate the current funding level restricts the softwood lumber are exempt from the assessments. Softwood lumber is also ability to accelerate softwood lumber’s Order’s assessment requirements. being imported in square meters. increase in market share and lumber Pursuant to § 1217.52, and subject to Adding a conversion factor for square usage in the non-residential sector. the exemptions specified in § 1217.53, meters would better reflect current each domestic manufacturer and industry practices and facilitate the The Board’s funding of research on importer shall pay an assessment rate of administration of the program. wood standards has facilitated interest $0.35 per mbf of softwood lumber, Finally, this proposed rule would in using wood-based building systems except that no entity shall pay an make a conforming change to in non-traditional markets, such as tall assessment on the first 15 mmbf of § 1217.52(c) to reflect previously revised wood building. The 2021 International softwood lumber otherwise subject to voting requirements in § 1217.44. In a Code Council building standards will assessment in a fiscal year. The Board final rule published in the Federal recognize the construction of mass may recommend to the Secretary a Register on September 25, 2019 (84 FR timber buildings up to 18 stories in change in the assessment rate as it 50294), voting requirements prescribed height. These new opportunities require deems appropriate by at least a majority in § 1217.44 were revised to specify that a more comprehensive approach, of Board members plus two (exclusive recommendations to change the particularly in outreach and education of vacant seats). The assessment rate assessment rate require affirmation by at initiatives. The Board recognized that its may not be less than $0.35 per mbf nor least a majority of Board members plus funded programs must go beyond more than $0.50 per mbf. two (exclusive of vacant seats). inspiring professionals to think about The $0.35 per mbf assessment rate has Currently, corresponding language in building with wood. These individuals been in effect since the program’s § 1217.52(c) specifies that an affirmative need resources and technical assistance. inception in 2011. The Board’s fiscal vote of at least two-thirds of Board The Board estimated the proposed year runs from January 1 through members is required for assessment rate increased assessment rate of $0.41 per December 31. Board expenditures for recommendations. A conforming change mbf would generate additional revenues the five-year period from 2014–2018 in this proposed rule would revise as shown in Table 1. The consumption have ranged from a low of $12.35 § 1217.52(c) to require affirmation of forecast and assessable board feet million in 2014 to a high of $15.32 assessment rate recommendations by a figures are shown in billion board feet million in 2016; expenditures in 2018 Board majority plus two, thus (bbf).

TABLE 1—ADDITIONAL ASSESSMENT REVENUE AT THE PROPOSED $0.41 PER MBF ASSESSMENT RATE

2021 2022 2023 2024 2025

Consumption Forecast (bbf) 1 ...... 49.69 49.39 52.72 55.64 57.52

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TABLE 1—ADDITIONAL ASSESSMENT REVENUE AT THE PROPOSED $0.41 PER MBF ASSESSMENT RATE—Continued

2021 2022 2023 2024 2025

Assessable Board Feet (bbf) 2 ...... 40.30 40.05 42.76 45.13 46.65 Estimated Assessment Revenue ($0.35/mbf)...... $14,104,640 $14,018,162 $14,965,761 $15,794,788 $16,326,618 Estimated Assessment Revenue ($0.41/mbf)...... $16,522,578 $16,421,276 $17,531,320 $18,502,466 $19,125,466 Additional Assessment Revenue at $0.41/mbf) 3 ...... $2,417,938 $2,403,114 $2,565,559 $2,707,678 $2,798,849 1 Source: Forest Economic Advisors (https://www.getfea.com/data-center); data frequently revised; pulled 2/21/2020. 2 Assumes 18.9 percent exemption rate. 3 Difference of estimated assessment revenue at $0.41/mbf and estimated assessment revenue at $0.35/mbf.

The additional funds would support Initial Regulatory Flexibility Act and importers) as those having annual programs targeting contractors and Analysis receipts of no more than $8 million.1 developers to address installer training In accordance with the Regulatory The Random Lengths Publications, and skills development; establish an Flexibility Act (RFA) (5 U.S.C. 601– Inc.’s yearly average framing lumber education program that would target 612), the Agricultural Marketing Service composite price was $356 per mbf in architecture and engineering students, (AMS) is required to examine the 2019. Dividing the $8 million threshold as well as professionals; and restore the impact of the proposed rule on small that defines an agricultural service firm Board’s communications program entities. Accordingly, AMS has as small by this price results in a budget so that by 2025 it would be considered the economic impact of this maximum threshold of 22.5 million equivalent to 2018 expenditures. action on such entities. board feet (mmbf) of softwood lumber Therefore, the Board recommended The purpose of the RFA is to fit per year that a domestic manufacturer or increasing the assessment rate in the regulatory actions to the scale of importer may ship to be considered a Order from $0.35 to $0.41 per mbf. businesses subject to the actions so that small entity for purposes of the RFA. USDA accepts and agrees with the small businesses will not be Table 2 shows the number of entities Board’s reasoning for increasing the disproportionately burdened. The Small and the amount of volume they assessment rate. Accordingly, USDA Business Administration (SBA) defines, represent that may be categorized as proposes to amend § 1217.52(b) to in 13 CFR part 121, small agricultural small or large based on the SBA specify a $0.41 per mbf assessment rate. service firms (domestic manufacturers definition.

TABLE 2—DOMESTIC MANUFACTURERS AND IMPORTERS BY SBA SIZE STANDARDS, 2019

Domestic manufacturers Importers Totals Volume Volume Volume Entities (MMBF) Entities (MMBF) Entities (MMBF)

Small ...... 226 1,991 774 1,257 1,000 3,248 Large ...... 290 32,229 106 32,582 396 64,811

Total ...... 516 34,220 880 33,839 1,396 68,059 Sources: Forest Economic Advisors; Customs and Border Protection.

As shown in Table 2, there are a total framing lumber composite price of $356 five-year evaluation, conducted by of 1,396 domestic manufacturers and per mbf. The proposed assessment rate Prime Consulting, found that softwood importers of softwood lumber based on of $0.41 per mbf is 0.12 percent of this lumber use per square foot increased 2019 data. Of these, 1,000 entities, or 72 price. The increase in assessment rate nearly 23 percent among architects and percent, shipped or imported less than represents an increase in cost to structural engineers from the program’s 22.5 mmbf and would be considered domestic manufacturers and importers inception in 2011 to 2015. The small under the SBA definition. These of two-thousandth of one percentage evaluation also found a cumulative 1,000 entities domestically point relative to their average received return on investment (ROI) of more than manufactured or imported 3.25 billion price. This cost, though minimal, would $15 in increased sales of softwood board feet (bbf) in 2019, less than 5 also be offset by the benefits derived lumber per $1 spent on promotion by percent of total volume. from the program. the program between 2012 and 2015. While this action would increase the The 1996 Farm Bill requires that The cumulative ROI was updated in assessment obligation on domestic Research and Promotion programs be 2019 to reflect the time period of 2012 manufacturers and importers from $0.35 evaluated every five years with the to 2018. The result was a return of more per mbf to $0.41 per mbf, the impact on specific goal of measuring the economic than $23 in increased sales per $1 spent these entities would be minimal and impact of commodity promotion on on promotion. uniform. The current assessment rate of demand for the commodity. The Board This proposal invites comments on $0.35 per mbf represents 0.1 percent of completed its first five-year evaluation amending § 1217.52(b) to increase the the Random Lengths 2019 average of program effectiveness in 2016. The assessment rate from $0.35 to $0.41 per

1 SBA does have a small business size standard Based on USDA’s understanding of the lumber reality, a large business. Therefore, USDA used for ‘‘Sawmills’’ of 500 employees (see https:// industry, using this criterion would be impractical agricultural service firm as a more appropriate www.sba.gov/sites/default/files/2019-08/SBA%20 as sawmills often use contractors rather than criterion for this analysis. Table%20of%20Size%20Standards_ employees to operate and, therefore, many mills Effective%20Aug%2019%2C%202019_Rev.pdf). would fall under this criterion while being, in

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mbf. The Order is administered by the AMS has performed this initial RFA thousand board feet. A change in the Board with oversight by the USDA. analysis regarding the impact of this assessment rate is subject to rulemaking Under the program, assessments are proposed action on small entities and by the Secretary. collected from domestic manufacturers invites comments concerning potential * * * * * and importers and used for research and effects of this action. (h) The HTSUS categories and promotion projects designed to USDA has determined that this assessment rates on imported softwood strengthen the position of softwood proposed rule is consistent with and lumber are listed in the following table. lumber in the marketplace. The would effectuate the purposes of the The assessment rates are computed additional funds collected at the 1996 Act. using the following conversion factors: proposed rate would enable the Board to A 60-day comment period is provided one cubic meter (m3) equals maintain its existing programs, while to allow interested persons to respond 0.423776001 thousand board feet, and supporting new programs that would to this proposal. All written comments one square meter (m2) equals help maintain and expand markets for received in response to this proposed 0.010763104 thousand board feet. softwood lumber. This proposal would rule by the date specified will be Accordingly, the assessment rate per also amend § 1217.52(h) to add the considered prior to finalizing this cubic meter and square meter is as conversion factor for square meters to action. follows. board feet and make one conforming List of Subjects in 7 CFR Part 1217 change to section 1217.52(c) regarding TABLE 1 TO PARAGRAPH (H) voting requirements. Administrative practice and In accordance with the Paperwork procedure, Advertising, Consumer Softwood Assessment Reduction Act of 1995 (44 U.S.C. Assessment information, Marketing agreements, lumber (by $/cubic meter $/square Chapter 35), the information collection Softwood Lumber promotion, Reporting HTUS No.) meter and recordkeeping requirements that are and recordkeeping requirements. 4407.11.00 0.1737 0.004412 imposed by the Order have been For the reasons set forth in the approved previously under OMB 4407.12.00 0.1737 0.004412 preamble, 7 CFR part 1217, is proposed 4407.19.05 0.1737 0.004412 control number 0581–0093. This to be amended as follows: 4407.19.06 0.1737 0.004412 proposed rule would not result in a 4407.19.10 0.1737 0.004412 change to the information collection and PART 1217—SOFTWOOD LUMBER 4409.10.05 0.1737 0.004412 recordkeeping requirements previously RESEARCH, PROMOTION, 4409.10.10 0.1737 0.004412 approved and would impose no CONSUMER EDUCATION AND 4409.10.20 0.1737 0.004412 additional reporting and recordkeeping INDUSTRY INFORMATION ORDER 4409.10.90 0.1737 0.004412 burden on domestic manufacturers and 4418.99.10 0.1737 0.004412 importers of softwood lumber. ■ 1. The authority citation for 7 CFR As with all Federal promotion part 1217 continues to read as follows: * * * * * programs, reports and forms are Authority: 7 U.S.C. 7411–7425; 7 U.S.C. Bruce Summers, periodically reviewed to reduce 7401. Administrator. information requirements and duplication by industry and public § 1217.52 [Amended] [FR Doc. 2020–16554 Filed 8–12–20; 8:45 am] sector agencies. USDA has not ■ 2. In § 1217.52, paragraphs (b), (c), BILLING CODE 3410–02–P identified any relevant Federal rules and (h) are revised to read as follows: that duplicate, overlap, or conflict with this proposed rule. § 1217.52 Assessments. DEPARTMENT OF ENERGY Regarding alternatives, the Board * * * * * considered maintaining the current (b) Subject to the exemptions 10 CFR Part 430 assessment rate. However, a majority of specified in § 1217.53, each [EERE–2020–BT–TP–0002] Board members determined that an manufacturer for the U.S. market shall increase was needed to adequately pay an assessment to the Board at the RIN 1904–AE85 rate of $0.41 per thousand board feet of support existing programs and fund new Energy Conservation Program: Test softwood lumber, except that no person initiatives. The Board discussed Procedure for Showerheads increasing the assessment at its meeting shall pay an assessment on the first 15 in November 2018, but after much million board feet of softwood lumber AGENCY: Office of Energy Efficiency and consideration it determined it was not otherwise subject to assessment in a Renewable Energy, Department of the right time for the industry to make fiscal year. Domestic manufacturers Energy. such a recommendation. In 2019, with shall pay assessments based on the ACTION: Notice of proposed rulemaking the reduction of assessment revenue and volume of softwood lumber shipped and announcement of public meeting. the program cuts that were made, the within the United States and importers Board again considered the merits of shall pay assessments based on the SUMMARY: The U.S. Department of increasing the assessment rate. This was volume of softwood lumber imported to Energy (‘‘DOE’’) proposes to amend the discussed at several Board committee the United States. existing test procedure for showerheads meetings, including meetings of the (c) At least 24 months after the Order to revise the definition of a showerhead Executive Committee on September 17, becomes effective and periodically consistent with the most recent standard 2019 and November 19, 2019, and the thereafter, the Board shall review and developed by the American Society of Finance Committee on November 19, may recommend to the Secretary, upon Mechanical Engineers (‘‘ASME’’) in 2019. The Board also considered rates of an affirmative vote by at least a majority 2018. DOE’s current definition $0.39 and $0.50 per mbf. After much of Board members plus two (exclusive considers all of the individual discussion at committee meetings and of vacant seats), a change in the showerheads (which DOE has termed with the full Board, the Board assessment rate. In no event may the variously as sprays, openings, or recommended increasing the rate from rate be less than $0.35 per thousand nozzles) in a product containing $0.35 to $0.41 per mbf. board feet nor more than $0.50 per multiple showerheads together for

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purposes of compliance with the water which case it is not necessary to include www.asme.org/codes-standards/find- conservation standard established in the printed copies. codes-standards/a112-18-1-csa-b125-1- Energy Policy and Conservation Act No telefacsimilies (‘‘faxes’’) will be plumbing-supply-fittings. (‘‘EPCA’’). DOE proposes instead to accepted. For detailed instructions on See section III.N of this document for define showerhead as that term is submitting comments and additional a more detailed discussion of this defined in the 2018 ASME standard, information on the rulemaking process, industry standard. such that each showerhead in a product see section IV of this document. containing multiple showerheads would Docket: The docket, which includes Table of Contents be considered separately for purposes of Federal Register notices, public meeting I. Authority and Background determining standards compliance, and attendee lists and transcripts, A. Authority only one of them would need to be comments, and other supporting B. Background turned on for testing. DOE has documents/materials, is available for II. Synopsis of the Notice of Proposed determined that the proposed definition review at http://www.regulations.gov. Rulemaking is consistent with EPCA and, unlike the All documents in the docket are listed A. The Term ‘‘Showerhead’’ in EPCA Is current definition, compliant with in the http:// Ambiguous and Does Not Mandate DOE’s Prior Interpretation Office of Management and Budget www.regulations.gov_index. However, some documents listed in the index, B. DOE’s Current Definition of Showerhead (‘‘OMB’’) Circular A–119. In addition, With Regard to EPCA and the ASME the proposed definition is consistent such as those containing information Standard with DOE’s treatment of other products, that is exempt from public disclosure, C. DOE’s Proposed Definition With Regard such as body sprays. DOE also proposes may not be publicly available. to EPCA and the ASME Standard to define the terms ‘‘body spray’’ and The docket web page can be found at: D. Discussion of the Proposed Rule With ‘‘safety shower showerhead’’ to clarify http://www.regulations.gov/ Regard to Consistency in Treatment of which products are not subject to the docket?D=EERE-2020-BT-TP-0002. The Related Products current energy conservation standard. docket web page will contain simple E. Current Proposal and the Definition of ‘‘Safety Shower Showerhead’’ DOE invites comment on all aspects of instructions on how to access all documents, including public comments, F. Testing Requirements this proposal, and announces a public III. Procedural Issues and Regulatory Review webinar to collect comments and data in the docket. See section IV of this A. Review Under Executive Order 12866 on its proposal. document for information on how to B. Review Under Executive Orders 13771 DATES: Written comments and submit comments through http:// and 13777 information are requested on all aspects www.regulations.gov. C. Review Under the Regulatory Flexibility of this proposal and will be accepted FOR FURTHER INFORMATION CONTACT: Mr. Act before and after the public meeting, but John Cymbalsky, U.S. Department of D. Review Under the Paperwork Reduction Act of 1995 no later than September 14, 2020. See Energy, Office of Energy Efficiency and E. Review Under the National section IV, ‘‘Public Participation,’’ for Renewable Energy, Building Environmental Policy Act of 1969 details. Technologies Office, EE–2J, 1000 F. Review Under Executive Order 13132 ADDRESSES: Interested persons are Independence Avenue SW, Washington, G. Review Under Executive Order 12988 encouraged to submit comments using DC 20585–0121. Telephone: (202) 287– H. Review Under the Unfunded Mandates the Federal eRulemaking Portal at 1692. Email: Reform Act of 1995 ApplianceStandardsQuestions@ I. Review Under the Treasury and General http://www.regulations.gov. Follow the Government Appropriations Act, 1999 instructions for submitting comments. ee.doe.gov. Ms. Elizabeth Kohl, U.S. Department J. Review Under Executive Order 12630 Alternatively, interested persons may K. Review Under Treasury and General submit comments, identified by docket of Energy, Office of the General Counsel, Government Appropriations Act, 2001 number EERE–2020–BT–TP–0002, by GC–33, 1000 Independence Avenue SW, L. Review Under Executive Order 13211 any of the following methods: Washington, DC 20585–0121. M. Review Under Section 32 of the Federal (1) Federal eRulemaking Portal: Telephone: (202) 586–7796. Email: Energy Administration Act of 1974 http://www.regulations.gov. Follow the [email protected]. N. Description of Materials Incorporated by instructions for submitting comments. For further information on how to Reference (2) Email: Showerheads2020TP0002@ submit a comment, review other public IV. Public Participation V. Approval of the Office of the Secretary ee.doe.gov. Include the docket number comments and the docket, or participate and/or RIN in the subject line of the in the webinar, contact the Appliance I. Authority and Background message. and Equipment Standards Program staff A. Authority (3) Postal Mail: Appliance and at (202) 287–1445 or by email: ApplianceStandardsQuestions@ Equipment Standards Program, U.S. Title III of EPCA (42 U.S.C. 6291, et ee.doe.gov. Department of Energy, Building seq.) sets forth a variety of provisions Technologies Office, Mailstop EE–5B, SUPPLEMENTARY INFORMATION: DOE designed to improve energy efficiency 1000 Independence Avenue SW, proposes to incorporate by reference the and, for certain products, water Washington, DC 20585–0121. following additional industry standards efficiency.1 Part B of Title III, which for Telephone: (202) 287–1445. If possible, into 10 CFR part 430: editorial reasons was redesignated as please submit all items on a compact ASME A112.18.1–2012, ‘‘Plumbing Part A upon incorporation into the U.S. disc (‘‘CD’’), in which case it is not supply fittings,’’ approved December Code (42 U.S.C. 6291–6309, as codified), necessary to include printed copies. 2012. establishes the ‘‘Energy Conservation (4) Hand Delivery/Courier: Appliance ASME A112.18.1–2018, ‘‘Plumbing Program for Consumer Products Other and Equipment Standards Program, U.S. supply fittings,’’ approved July 2018. Than Automobiles,’’ which includes Department of Energy, Building Copies of A112.18.1–2018 can be showerheads, the subject of this Technologies Office, 950 L’Enfant Plaza, obtained from the American Society of SW, Suite 600, Washington, DC 20024. Mechanical Engineers, 1828 L St., NW, 1 All references to EPCA refer to the statute as Telephone: (202) 287–1445. If possible, Suite 510, Washington, DC 20036–5104; amended through America’s Water Infrastructure please submit all items on a CD, in (800) 843–2763, or go to https:// Act of 2018, Public Law 115–270 (Oct. 23, 2018).

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proposed rulemaking. (42 U.S.C. EPCA definition of showerhead and the measure compliance with the 2.5 gpm 6292(a)(15)) 2.5 gpm water conservation standard standard, however, DOE provided an Under EPCA, the energy conservation apply to such products. The proposed enforcement grace period of 2 years program consists essentially of four interpretive rule sought comment on from issuance of the guidance for parts: (1) Testing, (2) labeling, (3) DOE’s proposed interpretation of the manufacturers to sell any remaining Federal energy conservation standards, term ‘‘showerhead’’ to mean ‘‘any non-compliant multi-nozzle products and (4) certification and enforcement plumbing fitting designed to direct and adjust product designs to ensure procedures. The testing requirements water onto a bather,’’ including a fitting compliance with the standard. Id. consist of test procedures that that comprises a set of showerheads, as DOE subsequently proposed to change manufacturers of covered products must conventionally understood (i.e., a set of its regulatory definition of showerhead use as the basis for (1) certifying to DOE accessories that each spray water onto a as part of a proposed rule to revise the that their products comply with the bather). Under this interpretation, the test procedures for showerheads and applicable energy and water Department would find a ‘‘showerhead’’ other products. (77 FR 31742, 31747– conservation standards adopted under (i.e., a fitting comprising multiple 31748; 31755; May 30, 2012) In that EPCA (42 U.S.C. 6295(s)), and (2) showerheads) to be noncompliant with proposed rule, DOE proposed to adopt making representations about the EPCA’s maximum water use standard if definitions for the terms ‘‘fitting’’ and efficiency of those products (42 U.S.C. the showerhead’s standard spraying ‘‘accessory’’, as well as a definition of 6293(c)). Similarly, DOE must use these ‘‘components,’’ operating in their ‘‘showerhead’’ that used those terms. test procedures to determine whether maximum design flow configuration Under DOE’s proposed definition, all the products comply with any relevant and when taken together, use a total in components defined as an ‘‘accessory,’’ standards promulgated under EPCA. (42 excess of 2.5 gpm, even if each spraying or a combined set of accessories, to a U.S.C. 6295(s)) component individually does not use an supply fitting represented a single EPCA states that the procedures for amount that exceeds 2.5 gpm. Id. covered product that would be required testing and measuring the water use of DOE did not finalize the proposed to meet the 2.5 gpm standard showerheads shall be ASME/ANSI 2 interpretive rule. Instead, DOE established in EPCA. standard A112.18.1M–1989, ‘‘Plumbing withdrew the draft interpretive rule Specifically, DOE proposed to define Fixture Fittings.’’ EPCA further specifies from review by OMB and in 2011 issued an ‘‘accessory’’, with respect to that if ASME/ANSI revises these enforcement guidance that achieved plumbing fittings, as a component that requirements, the Secretary shall adopt essentially the same result. (See https:// can, at the discretion of the user, be such revisions if they conform to the www.energy.gov/sites/prod/files/gcprod/ readily added, removed or replaced. basic statutory requirements for test documents/Showerhead_ Removal of the accessory will not prevent the fitting from fulfilling its procedures. (42 U.S.C. 6293(b)(7)) The Guidancel.pdf).3 The Department stated primary function. (77 FR 31742, 31755) most recent version of the ASME/ANSI in the enforcement guidance that DOE proposed to define a ‘‘fitting’’ as a standard, A112.18.1M–2018, was multiple spraying components, when device that controls and guides the flow adopted in 2018. sold together as a single unit designed of water. Id. These definitions were to spray water onto a single bather, B. Background consistent with the ASME definition constitute a single showerhead for EPCA defines a showerhead simply as current at that time, ASME A112–18.1– purposes of compliance with the 2.5 ‘‘any showerhead (including a handheld 2011. DOE also proposed to define a gpm standard. The guidance did not showerhead), except a safety shower ‘‘showerhead’’; however, it defined that apply to tub spouts, locker room showerhead.’’ In addition to defining term in a manner different from the showers, or emergency showers, or to ‘‘showerhead,’’ EPCA established a ASME definition. Specifically, the handheld showers where the sprayer maximum water use threshold of 2.5 ASME standard defined ‘‘showerhead’’ cannot run at the same time as the main gallons per minute (‘‘gpm’’) applicable as ‘‘an accessory to a supply fitting for nozzle. To determine whether a to ‘‘any showerhead.’’ Both the spraying water onto a bather, typically showerhead complied with the definition of showerhead and the 2.5 from an overhead position.’’ DOE standard, DOE would measure a gpm standard were added to EPCA by proposed to define a showerhead as ‘‘an showerhead’s water use by turning on the Energy Policy Act of 1992 (Public accessory, or set of accessories, to a all of the unit’s sprays and nozzles to Law 102–486; Oct. 24, 2991, ‘‘EPAct supply fitting distributed in commerce their maximum flow settings. Id. In 1992’’). From 1992 to 2013, DOE for attachment to a single supply fitting, issuing the guidance, DOE stated its regulations did not contain a separate for spraying water onto a bather, view that the term ‘‘any showerhead’’ definition of ‘‘showerhead.’’ typically from an overhead position.’’ DOE issued a notice of availability of was sufficiently clear that no Id. DOE stated that the definition a proposed interpretive rule relating to interpretive rule was needed. The included body sprays and hand-held the definition of showerhead in May Department also stated its view that this showerheads but did not include safety 2010. (75 FR 27926; May 19, 2010) In interpretation was consistent with both showerheads.4 the proposed interpretive rule, available the industry standard incorporated into In response to comments on the at https://www.regulations.gov/ EPCA and the plain language and intent proposed rule, DOE issued a document?D=EERE-2010-BT-NOA-0016- of Congress in establishing a maximum supplemental notice of proposed 0002, DOE noted that the design of water use requirement for showerheads. rulemaking (‘‘SNOPR’’) to revise the showerheads had diversified into a Because manufacturers had developed definitions of showerhead and hand- myriad of products marketed under the ‘‘myriad of products’’ referenced in held showerhead and to remove body names such as waterfalls, shower the draft interpretive rule based on their sprays from the definition of towers, rainheads and shower systems. ‘‘apparent misunderstanding’’ of how to DOE intended the proposed interpretive 4 DOE proposed to define ‘‘body spray’’ as a 3 The 2011 guidance was superseded by the shower device for spraying water onto a bather from rule to address ‘‘uncertainty’’ in how the October 2013 final rule described below. This other than the overhead position. DOE proposed to proposed rule would supersede the 2013 final rule define a ‘‘hand-held showerhead’’ as a showerhead 2 ‘‘ANSI’’ refers to the American National by providing for a different interpretation of the that can be fixed in place or used as a movable Standards Institute. See also 42 U.S.C. 6291(31)(C). term ‘‘showerhead’’ as defined in EPCA. accessory for directing water onto a bather.

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showerhead. (78 FR 20832, 20834– stated that these criteria could help DOE believes that interpreting the 28835, 20841; Apr. 8, 2013; ‘‘April 2013 develop a definition of safety shower term ‘‘showerhead’’ consistent with the SNOPR’’) Specifically, Kohler Company showerhead. Id. ASME definition is more appropriate (‘‘Kohler’’) and Sloan Valve Company Industry commenters on the April than DOE’s previous interpretation of (‘‘Sloan Valve’’) responded to the 2013 SNOPR, including Kohler, PMI, ‘‘showerhead.’’ As described in section proposal by recommending that DOE NSF International (‘‘NSF’’), the II.A of this NOPR, DOE recognizes that use the definition of showerhead in International Association of Plumbing the statutory definition of the term ASME A112.18.1–2011. The Natural and Mechanical Officials, Chicago ‘‘showerhead’’ is ambiguous in key Resources Defense Council (‘‘NRDC’’) Faucets, and Moen, stated that DOE respects. Accordingly, to provide clarity commented that a showerhead should should adopt the definition of to regulated entities and the public not be defined as an accessory, and both showerhead in ASME A112.18.1. The concerning what is meant by the term, NRDC and the International Code majority of these commenters also DOE proposes to interpret the statutory Council supported including body supported DOE’s proposal not to term ‘‘showerhead’’ using the definition sprays in the DOE definition. These include body sprays within the of ‘‘showerhead’’ in ASME A112.18.1– comments were contrary to comments definition of showerhead. NRDC, the 2018. The most current ASME standard from the Plumbing Manufacturers Appliance Standards Awareness Project, continues to define a showerhead as it International (‘‘PMI’’), Moen and the California Energy Commission did in 2011—‘‘an accessory to a supply Incorporated (‘‘Moen’’) and Kohler, who did not support removal of body sprays fitting for spraying water onto a bather, stated that body sprays should not be from the definition. These comments are typically from the overhead position.’’ included or considered an accessory described in DOE’s final rule, published Under DOE’s proposed definition, because they cannot be readily added or in October 2013. (78 FR 62970, 62973; each showerhead included in a product removed by the user. Id. at 78 FR Oct. 23, 2013, ‘‘October 2013 final rule’’) with multiple showerheads would 20834–28835. After considering these comments, separately be required to meet the 2.5 In the April 2013 SNOPR, DOE again DOE issued a final rule in October 2013 gpm standard established in EPCA. As declined to propose the ASME adopting a slightly modified version of explained in the discussion that follows, definition of showerhead. DOE reasoned the definition set forth in the April 2013 DOE concludes that its proposed that the ASME definition did not SNOPR. Specifically, DOE defined interpretation of the term ‘‘showerhead’’ sufficiently address DOE’s regulatory showerhead in the October 2013 final is consistent with Congressional intent coverage, because it did not specifically rule as ‘‘a component or set of in establishing the EPCA definition of include hand-held showerheads or components distributed in commerce ‘‘showerhead’’ and the associated exclude safety showerheads. DOE also for attachment to a single supply fitting, energy conservation standard. DOE’s revised its proposed definition of for spraying water onto a bather, proposal is also consistent with the showerhead (and hand-held typically from an overhead position, requirements of the National showerhead) so that the term excluding safety shower showerheads.’’ Technology Transfer and Advancement ‘‘accessory’’ would not be included in (78 FR 62970, 62973, 62986; Oct. 23, Act of 1995, Public Law 104–113, 2013) DOE continued to include hand- the proposed definition. DOE instead section 12(d), Mar. 7, 1996, 110 Stat. proposed to use the undefined term held showerheads within the definition 783, as amended by Public Law 107– ‘‘component’’. Specifically, DOE of showerhead. DOE excluded body 107, Div. A, Title XI, section 1115, Dec. proposed to define showerhead as ‘‘a sprays from the definition but did not 28, 2001, 115 Stat. 1241 (‘‘NTTAA’’), 15 component of a supply fitting, or set of finalize the definition of ‘‘body spray’’ U.S.C. 272 note, and the associated components distributed in commerce set forth in the NOPR. DOE also OMB Circular A–119, which directs for attachment to a single supply fitting, declined to adopt a definition of ‘‘safety Federal agencies to use voluntary for spraying water onto a bather, shower showerhead’’ to clarify those consensus standards unless inconsistent typically from an overhead position, showerheads that EPCA had exempted with applicable law or otherwise including hand-held showerheads but from coverage. impracticable.5 In addition, DOE’s excluding safety shower showerheads.’’ II. Synopsis of the Notice of Proposed proposal treats products with multiple (78 FR 20832, 20841; Apr. 8, 2013) DOE Rulemaking showerheads in a manner that is proposed that body sprays not be covered by the DOE definition of In this proposed rule, DOE proposes 5 to revisit its prior interpretation of the Section 12(d) of the NTTAA provides that with showerhead, stating that further study of one exception, all Federal agencies and the issue was needed before it could EPCA definition of showerhead and to departments shall use technical standards determine whether to include body interpret the term showerhead using the developed or adopted by voluntary consensus sprays in the definition. (78 FR 20832, definition of the term in ASME standards bodies (‘‘voluntary consensus A112.18.1–2018. DOE proposes to standards’’), using such standards as a means to 20834–20835; Apr. 8, 2013) DOE also carry out policy objectives or activities determined considered defining the term ‘‘safety define showerhead as follows: by the agencies and departments. The statutory shower showerhead’’ to address the ‘‘Showerhead means any showerhead exception is that a Federal agency or department question of which products qualify for (including a handheld showerhead) may elect to use other technical standards if using other than a safety shower voluntary consensus standards is inconsistent with exclusion from coverage under EPCA applicable law or otherwise impractical, and if the and DOE regulations. DOE noted that showerhead.’’ This definition restates agency head submits to OMB an explanation of the the Occupational Safety and Health the statutory definition of reasons for using the alternative standards. See 15 Administration (‘‘OSHA’’) did not ‘‘showerhead,’’ at 42 U.S.C. 6291(31)(D). U.S.C. 272 note. Section 6 of OMB Circular A–119, DOE then proposes to include in its available at https://www.whitehouse.gov/sites/ define the term, but that certain state whitehouse.gov/files/omb/circulars/A119/revised_ regulatory requirements referenced regulations its interpretation of the term circular_a-119_as_of_1_22.pdf, reiterates the ANSI standard Z358.1, Emergency ‘‘showerhead’’ to mean ‘‘an accessory to requirement for Federal agencies to use voluntary Eyewash and Shower Equipment, which a supply fitting for spraying water onto consensus standards unless inconsistent with a bather, typically from an overhead applicable law or otherwise impracticable, and to contains specific design and issue guidance for agency reporting to OMB when performance criteria that must be met, position.’’ This interpretation standards other than voluntary consensus standards such as flow rate and accessibility. DOE incorporates the ASME definition. are used.

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consistent with DOE’s treatment of standing existence of waterfalls, shower amount of force needed to remove the similar products, such as body sprays. towers and similar products on the flow restrictor from the showerhead. (42 DOE also proposes to define the terms market; and (3) the two-year grace U.S.C. 6295(j)(1)) Even the marking and ‘‘body spray’’ and ‘‘safety shower period DOE provided in the labeling requirements are required to be showerhead’’ so that it is clear that these enforcement guidance in recognition of consistent with those of ASME products are not considered these products. In short, the unadorned A112.18.1M–1989, or a subsequently showerheads subject to DOE’s test statutory definition does not require that revised version as appropriate. 42 U.S.C. procedures and energy conservation the term be construed as DOE had 6294(a)(2)(E). standards. interpreted the term in the 2011 Despite Congressional reliance on the ASME standard in developing the A. The Term ‘‘Showerhead’’ in EPCA Is guidance and the October 2013 final provisions of EPAct 1992 with regard to Ambiguous and Does Not Mandate rule. Moreover, the text of the statutory showerheads and direction for DOE to DOE’s Prior Interpretation definition itself, in one respect, seems adopt updates to the ASME standard, EPCA defines the term ‘‘showerhead’’ difficult to square with the when DOE established the current generically, and somewhat circularly, to interpretation set forth in the 2011 definition of ‘‘showerhead,’’ it deviated ‘‘mean[] any showerhead (including a guidance and the 2013 final rule. The significantly from the ASME definition handheld showerhead), except a safety statute defines the term to ‘‘mean[] any by determining that products with shower showerhead.’’ 42 U.S.C. showerhead (including a handheld multiple showerheads constitute only 6291(31)(D). In a May 2010 draft showerhead), except a safety shower one showerhead for purposes of EPCA. interpretive rule, DOE stated that showerhead.’’ (Emphasis added.) As a The current DOE regulatory definition uncertainty existed in application of the general matter, handheld showerheads of ‘‘showerhead’’ went beyond the EPCA definition of showerhead and the are not multiple spraying accessories (or ASME concept of what a showerhead is 2.5 gpm standard to the ‘‘myriad of ‘‘components,’’ to use the language of without any explanation as to why DOE products’’ marketed under names such the 2011 guidance and the 2013 rule) was not following the statutory as waterfalls, shower towers, rainheads but are individual spraying accessories construct based on ASME. While water and shower systems. These products (or ‘‘components’’). This is an important conservation is obviously a purpose of had been designed, manufactured, and consideration weighing in favor of EPCA, DOE did not take into account marketed with knowledge of, and in the DOE’s proposed interpretation, and a congressional reliance on the ASME 19 years since, the 1992 law that reason why DOE believes that this standard when DOE determined in its established a definition of showerhead interpretation is more appropriate than 2011 enforcement guidance what was and the applicable 2.5 gpm standard. the alternative set forth in the 2011 meant by the term showerhead. While it Less than a year later, in March 2011, guidance and the 2013 final rule. is true that the ASME standard did not DOE published enforcement guidance Indeed, assuming arguendo that the specifically define the term defining the term showerhead in a term ‘‘showerhead’’ is not ambiguous, ‘‘showerhead’’ when EPCA was manner that deviated significantly from DOE proposes to conclude in the amended in 1992, commenters on DOE’s the ASME definition by determining alternative that the proposed draft interpretive rule and its proposed that products with multiple interpretation set forth herein is the and supplemental rulemakings made showerheads constitute only one appropriate and correct interpretation of abundantly clear that DOE was going showerhead for purposes of EPCA. In the term. At all events, DOE has beyond ASME’s concept of that term. the enforcement guidance, DOE further authority under the statute to adopt the Moreover, products available on the stated that the term ‘‘any showerhead’’ proposed interpretation. market between 1992 and issuance of in EPCA was ‘‘sufficiently clear such DOE’s 2011 enforcement guidance B. DOE’s Current Definition of that no interpretive rule was needed’’. included those with multiple water Showerhead With Regard to EPCA and DOE reached this conclusion despite outlets manufactured to comply with the ASME Standard DOE’s statements in its 2010 draft statutory water efficiency standards interpretive rule about a lack of clarity The Energy Policy Act of 1992 construed as applying to individual and the development of the market illustrated Congress’ intent that DOE spraying accessories (not to sets of such since enactment of the 1992 definition adhere to ASME standards. When EPCA accessories), suggesting substantial of showerhead. Also despite the was amended in 1992 to define industry reliance on the understanding supposed clarity in the definition, DOE showerhead and to establish a test that this was the appropriate provided a two year grace period for method and water conservation construction of the statutory definition. manufacturers to sell products that the standard for showerheads, Congress Given EPCA’s reliance on the ASME enforcement guidance in effect rendered specified that the test method applicable standard in amending EPCA to prescribe noncompliant with the standard. DOE’s to showerheads is the procedure a definition, test procedure, energy October 2013 final rule then codified in specified in ASME A112.18.1M–1989. conservation standard, and labeling its regulations the showerhead (42 U.S.C. 6293(b)(7)(A)) If that ASME provisions for showerheads, DOE definition set forth in the 2011 standard is revised and approved by concludes that if Congress had intended enforcement guidance, rendering the ANSI, DOE is required to amend its test to significantly deviate from the ASME guidance unnecessary. Following these procedures to conform to those definition of what constitutes a developments, the number of multi- revisions unless doing so would be showerhead, it would have done so headed showerheads in the market inconsistent with other provisions of explicitly. It did not. DOE is therefore decreased significantly from the EPCA. (42 U.S.C. 6293(b)(7)(B)) In the entitled to give significant weight to the ‘‘myriad of products’’ cited by DOE in definition section, immediately ASME definition in construing and 2010. preceding the definition of showerhead, applying the statutory standard, even if A number of considerations support Congress also included definitions of DOE is not required to adhere to the the conclusion that the term ASME and ANSI. 42 U.S.C. ASME definition. ‘‘showerhead’’ in EPCA is ambiguous: 6291(31)(B)–(C). The 2.5 gpm standard In its prior rulemaking to establish a (1) DOE’s own statements in the May required compliance with ASME/ANSI definition of ‘‘showerhead’’, DOE 2010 draft interpretive rule; (2) the long- A112.18.1M–1989 with regard to the proposed to adopt a new definition for

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the term that it stated was based on the some future time should not lead DOE with applicable law or otherwise definition included in ASME/ANSI to depart from the term ‘‘accessory’’ that impracticable.6 A112.18.1–2011. 77 FR 31747 (May 30, had been, and continues to be, used While Congress did not specifically 2012, ‘‘May 2012 NOPR’’). DOE consistently in the ASME definition. direct DOE to define showerhead proposed definitions of ‘‘accessory’’ and Similarly, DOE now recognizes that according to the ASME standard, ‘‘fitting’’ that were the same as the defining products with multiple Congress relied on the ASME standard ASME definitions. In proposing the showerheads to constitute a single in all of the provisions by which it definition of ‘‘showerhead’’, however, ‘‘showerhead’’ inappropriately expands included showerheads within the scope DOE went beyond the ASME definition the definition of ‘‘showerhead’’ beyond of DOE’s authority—definitions, where of ‘‘showerhead.’’ The ASME standard the ASME definition. Congress specifically defined both defined, and continues to define, a In the October 2013 final rule, DOE ASME and ANSI directly preceding and ‘‘showerhead’’ as ‘‘an accessory to a did not adopt the ASME definition and in the same paragraph as the definition supply fitting for spraying water onto a instead adopted a definition of of showerhead, test procedures, labeling bather, typically from an overhead showerhead with minor changes from requirements and the applicable energy position.’’ DOE’s proposal included the that proposed in the April 2013 SNOPR. conservation standard. That reliance terms ‘‘or set of accessories’’ and The definition continued to use the further suggests that DOE should have ‘‘distributed in commerce for terms ‘‘component’’, ‘‘set of considered the directives of the NTTAA attachment to a single’’ supply fitting. components’’, and ‘‘distributed in and OMB Circular A–119 with regard to DOE expanded the ASME definition not commerce for attachment to a single’’ the use of voluntary consensus only, as required by EPCA, to include supply fitting to ensure that products standards in developing its definition. handheld showerheads and exclude with multiple showerheads would be EPCA certainly does not preclude DOE safety shower showerheads (which it considered a single showerhead for from using such standards; the statutory did not propose to define), but also to purposes of compliance with the 2.5 text of EPCA does not make compliance ‘‘more clearly define the extent of DOE’s gpm standard. DOE did not, however, with the NTTAA, and compliance with coverage for these products’’—in other adopt a definition of body spray and did OMB Circular A–119, either words, to ensure that products with not specifically include body sprays inconsistent with applicable law or multiple showerheads would be within the definition of ‘‘showerhead’’. otherwise impracticable. considered a single showerhead for Presumably, this meant that body sprays The Department did not provide purposes of compliance with the DOE were not included as showerheads, discussion of the NTTAA and OMB standard, as well as to include body though the Department’s discussion of Circular A–119 in any of its rulemaking sprays as showerheads. (77 FR 31742, this point stated only that DOE was not documents in support of its decision not 31747–13748; May 30, 2012) adopting a definition of the term. (78 FR to adopt the voluntary consensus 62970, 62972–62973; Oct. 23, 2013) standard developed by ASME. This In response to comments urging DOE omission may have been a result of DOE also did not adopt a definition of to adopt the definition in the industry DOE’s prior conclusion that the term ‘‘safety shower showerhead’’, so the standard, DOE noted in the April 2013 ‘‘showerhead’’ should be read to products specifically exempted by SNOPR only that the ASME definition encompass products that constituted Congress remained undefined and did not sufficiently address DOE’s sets of individual showerheads (which subject to DOE’s discretion as to what it regulatory coverage of showerheads to it termed variously as sprays, openings determined was a safety shower include hand-held showerheads and or nozzles). However, DOE has showerhead. Id. exclude safety showerheads. (78 FR reconsidered this issue and proposes to The definition of showerhead adopted 20832, 20834; Apr. 8, 2013). DOE did reach a different conclusion, as by the Department in the October 2013 not reference the fact that the ASME explained in this proposed rule. final rule did not reference the purpose definition did not include ‘‘set of As to practicability, DOE stated in the of water conservation, and it was also accessories’’ or ‘‘distributed in May 2012 NOPR only that the ASME inconsistent with the ASME standard commerce for attachment to a single’’ standard did not clearly exclude safety upon which Congress relied heavily in supply fitting, terms that DOE used to shower showerheads (which DOE did establishing the definition, test classify products with multiple not propose to define) or include body procedures, energy conservation showerheads as a single showerhead for sprays, and that DOE modified the standard, and labeling requirements for purposes of compliance with the 2.5 ASME definition to ‘‘more clearly define showerheads. The current DOE gpm standard. In the April 2013 the extent of DOE’s coverage’’. (77 FR definition—which uses the additional SNOPR, DOE also proposed not to 31742, 31747; May 30, 2012). DOE’s and undefined terms ‘‘component,’’ ‘‘set include body sprays as showerheads failure to adopt the ASME definition of components’’ and ‘‘distributed in pending further investigation of the does not appear to have been based on commerce for attachment to a single’’ issue. DOE further proposed to an appropriate analysis of practicability supply fitting to include as one eliminate use of the standard term per the NTTAA and OMB Circular A– showerhead a product with multiple ‘‘accessory’’ in favor of the undefined 119. term ‘‘component’’. DOE did not offer showerheads—is also inconsistent with an explanation for this change, other the requirements of the NTTAA (section C. DOE’s Proposed Definition With than that it was in response to 12(d)) and the associated OMB Circular Regard to EPCA and the ASME comments. Id. Comments suggesting A–119 (available at https:// Standard that DOE not define a showerhead as an www.whitehouse.gov/sites/ DOE proposes in this rulemaking to accessory indicated that to do so would whitehouse.gov/files/omb/circulars/ set forth in its regulatory text the ______distinguish body sprays from A119/revised circular a-119 as of 1 definition of showerhead established in showerheads and would lead DOE to 22.pdf). As explained previously at the EPCA. In particular, DOE proposes to exclude body sprays from coverage. But beginning of Section II, the NTTAA and interpret the term using the definition in an interest in retaining the ability to OMB’s Circular A–119 direct that ASME A112.18.1–2018 (Section 3.1)— include body sprays within the Federal agencies use voluntary regulatory definition of showerhead at consensus standards unless inconsistent 6 See fn 5, supra.

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‘‘an accessory to a supply fitting for showerhead’ it actually meant ‘any the term ‘‘showerhead’’. In addition, spraying water onto a bather, typically showerhead’—and that a showerhead what the guidance had characterized as from an overhead position.’’ with multiple nozzles constitutes a ‘‘a showerhead with multiple nozzles’’ DOE’s proposed definition is single showerhead for purposes of could just as rationally, if not more so, consistent with EPCA. DOE stated in its EPCA’s water conservation standard.’’ be considered multiple showerheads. 2011 enforcement guidance that it could See Showerhead Enforcement Guidance Looking at the depictions in Figure 1 not ‘‘reconcile the view that a at 1 (Mar. 4, 2011). https:// (taken from page 1 of the 2011 showerhead with multiple nozzles is www.energy.gov/sites/prod/files/gcprod/ _ enforcement guidance), a rational actually multiple showerheads with documents/Showerhead Guidancel.pdf. person might well have counted three, EPCA’s language or intent’’ and that (in The Department had, however, prior to eight, and three showerheads, a somewhat circular fashion) ‘‘it has the draft interpretive rule that preceded respectively, rather than simply one always been the Department’s view that the enforcement guidance, never showerhead for each configuration. when Congress used the term ‘any provided its view on what was meant by

And, while one of the purposes of with ASME’s definition in ASME provision impliedly repeal the 1987 EPCA is to ‘‘conserve water by A112.18.1–2018, which was adopted by amendment. See, e.g., Morton v. improving the water efficiency of ASME subsequent to, and presumably Mancari, 417 U.S. 535, 551 (1974) certain plumbing products and with knowledge of, DOE’s 2013 (repeals by implication are disfavored; appliances’’ (42 U.S.C. 6201(8)), as rulemaking. This proposal by DOE to ‘‘when two statutes are capable of co- noted in section II.B. of this NOPR, harmonize its definition of existence, it is the duty of the courts, EPCA relied on the ASME standard for ‘‘showerhead’’ with that of ASME is absent a clearly expressed congressional measuring the water use of showerheads meant to ensure that DOE’s regulations intention to the contrary, to regard each at 42 U.S.C. 6293(b)(7) and included comport with congressional intent to as effective’’), cited in Epic Sys. Corp. v. references to ASME and the ASME rely on ASME’s standards for specific Lewis, 138 S. Ct. 1612, 1624 (2018). standard in the definitions related to water-using products, including It is clear that DOE cannot regulate or showerhead at 42 U.S.C. 6291(31), the showerheads. otherwise act to remove products with energy conservation standard at 42 In addition, EPCA was amended in certain performance characteristics and U.S.C. 6295(j), and the labeling 1987 to insert a provision into 42 U.S.C. features from the market given the requirements at 42 U.S.C. 6294(a)(2)(E). 6295 prohibiting DOE from establishing prohibition in 42 U.S.C. 6295(o)(4). Presumably, if Congress intended to a new or amended standard under this While DOE did not undertake a establish a definition of the term section if DOE finds that the standard is standards rulemaking to eliminate ‘‘showerhead’’ significantly more likely to result in the unavailability of products with multiple showerheads, expansive than that contemplated by performance characteristics, features, which can easily be viewed as a ASME (which would have eliminated sizes, capacities and volumes ‘‘feature’’ for purposes of the EPCA many products then manufactured by substantially the same as those generally provision (for example, other aspects of the industry), it would have done so available in the U.S. at the time of the products that DOE has identified as explicitly. finding. See Public Law 1001–2 (Mar. features include the window in an oven DOE also concludes that by 17. 1987); 42 U.S.C. 6295(o)(4). While door and the top loading clothes washer referencing the ASME standard in the DOE is prohibited from taking such an configuration), such an elimination is statute as described in the preceding action, Congress can pass subsequent exactly the outcome of DOE’s 2011 paragraph, and requiring DOE to update legislation that removes products with enforcement guidance and 2013 its test procedures in response to action certain performance characteristics and regulatory interpretation of the term by ASME, Congress was expressing an features from the market, such as ‘‘showerhead’’ in EPCA. As discussed intent that DOE’s actions with regard to products with multiple showerheads. If earlier in this document, the number of showerheads be consistent with those of Congress had intended to establish a multi-headed showerheads in the ASME. As described in section II.B of provision in EPCA in 1992 that market decreased significantly from the this NOPR, DOE’s definition of eliminated these products from the ‘‘myriad of products’’ cited by DOE in showerhead adopted in 2013 was not market, it would have done so explicitly 2010. consistent with ASME’s definition in given the 1987 amendment. Again, it Specifically, in its 2011 enforcement place at that time. Nor is it consistent did not. Nor did the 1992 EPCA guidance, DOE stated that it interpreted

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the term ‘‘showerhead’’ in EPCA such characteristics and features that were D. Discussion of the Proposed Rule With that each individual showerhead available on the market at the time the Regard to Consistency in Treatment of (alternatively called nozzles, sprays, or Department originally acted to eliminate Related Products openings) in a product with multiple them. DOE seeks data and information In this proposal, DOE’s regulations showerheads would need to be turned on any basic models or shipments of would specifically define the term on for testing to determine compliance showerheads with multiple heads ‘‘body spray’’ separately from the as measured by aggregating the water manufactured prior to issuance of DOE’s definition of showerhead, defining use of all showerheads in the product. 2011 enforcement guidance, or data and ‘‘body spray’’ as a ‘‘shower device for As a result, DOE was authorized to take information on basic models or spraying water onto a bather other than enforcement action against shipments of such showerheads from the overhead position.’’ Thus, manufacturers of such products that currently on the market, or basic models DOE’s regulations would make clear exceed the 2.5 gpm maximum, as that manufacturers may be planning to that body sprays are not covered by measured by aggregating the water use introduce. DOE’s test procedure or the energy of all showerheads in a product, rather DOE has also considered the conservation standard applicable to than by applying the 2.5 gpm showerheads. Doing so would be requirement to each individual requirements of the NTTAA and OMB Circular A–119 in developing its consistent with DOE’s proposed showerhead (See https:// interpretation of the term proposed definition. The NTTAA and www.energy.gov/sites/prod/files/gcprod/ ‘‘showerhead.’’ _ documents/Showerhead OMB Circular A–119 require DOE (and This definition would be consistent Guidancel.pdf). DOE acknowledged the all other Federal agencies) to use with the current ASME standard, ASME existence on the market of these multi- voluntary consensus standards in lieu of A112.18.1–2018, which defines a body showerhead products, reasoning, government-unique standards in their spray as a ‘‘shower device for spraying however, that it may have been the regulatory activities, except where water onto a bather other than from the Department’s failure to enforce the law inconsistent with law or otherwise overhead position.’’ In DOE’s May 2012 for 19 years that led manufacturers to impractical. (See Pub. L. 104–113, NOPR, DOE proposed to use this misunderstand the law. As a result, DOE section 12(d), Mar. 7, 1996, 110 Stat. definition for the term ‘‘body spray,’’ gave manufacturers two years to sell any 783, as amended by Pub. L. 107–107, and also proposed to include body products that the Department deemed Div. A, Title XI, section 1115, Dec. 28, sprays in the definition of showerhead. noncompliant. In issuing the 2011 2001, 115 Stat. 1241 (‘‘NTTAA’’), 15 Industry commenters stated that body enforcement guidance, it appears that U.S.C. 272 note https:// sprays were not accessories because DOE effectively banned the vast www.whitehouse.gov/sites/ they cannot be readily added or majority of products with multiple whitehouse.gov/files/omb/circulars/ removed by the user. (78 FR 20832, showerheads from the market. This A119/revised_circular_a-119_as_of_1_ 20834; Apr. 8, 2013). Some commenters action runs contrary to the current 22.pdf). As described earlier in this expressed the view that showerheads directives established for DOE by section, DOE has initially concluded should not be defined as ‘‘accessories’’ Executive Order 13891, ‘‘Promoting the that its proposed definition, which is and that body sprays should be Rule of Law Through Improved Agency the same as the ASME definition, is included in the definition of Guidance Documents’’, issued on Oct. 9, compliant with EPCA. DOE has also showerhead. Id. As a result of these 2019. (84 FR 55235; Oct. 15, 2019). initially determined that it is practicable comments, DOE proposed in a Following issuance of the 2011 to adopt the ASME definition. The supplemental proposal and ultimately enforcement guidance, DOE engaged in ASME definition is well understood by finalized a definition of showerhead a rulemaking to define ‘‘showerhead’’ in showerhead manufacturers. In addition, that used the term ‘‘component’’ rather a manner that would codify in DOE contrary to DOE’s reasoning in the prior than ‘‘accessory’’. While DOE did not regulations its effective ban on products rulemaking, it is not necessary that the define ‘‘body spray’’ in the final test with multiple showerheads from the procedure rule, the definition of market. (78 FR 62970; Oct. 23, 2013) As ASME definition specifically exclude safety showerheads, because EPCA ‘‘showerhead’’—unlike the May 2012 an alternative argument for its proposal NOPR—did not specifically include (or to change its interpretation of the term already does so. In this rulemaking, DOE also proposes to define safety exclude) body sprays. This omission ‘‘showerhead’’ in this rulemaking, DOE may have introduced uncertainty for shower showerhead, so that it is clear proposes to conclude that EPCA’s regulated parties. what products are subject to the EPCA prohibition on the removal of product DOE believes that it is appropriate to characteristics or features from the standard. It is also not necessary to clarify explicitly that body sprays are market through a standards rulemaking explicitly include or exclude body not showerheads. As illustrated in also rendered impermissible DOE’s sprays in the definition of showerhead. Figure II (where the product at the far actions to effectively ban these products In the ASME standard, body spray is right represents a body spray), products through a definition in a test procedure defined separately from showerhead, with multiple showerheads are more rulemaking. indicating that the two terms are akin to body sprays because of the For all of these reasons, considered different and that a body spray is not multiple nozzles that each product has, singly and together, DOE proposes to considered a showerhead. In this regardless of the overhead conclude that its proposed proposal, DOE similarly defines ‘‘body configuration. DOE has determined that interpretation of the term showerhead is spray’’ separately from ‘‘showerhead,’’ its proposed definition, which considers more consistent with congressional to clarify that a body spray is not each showerhead in a product with intent in establishing the definition of included within the definition of a multiple showerheads as a showerhead the term ‘‘showerhead’’ and the showerhead. Thus, DOE concludes that for purposes of standards compliance, is associated energy conservation it is practicable to define showerhead as more consistent with its previous (and standard. DOE’s proposed definition it is defined in the voluntary consensus current) treatment of body sprays, also complies with the congressional standard developed by ASME in ASME/ which are not included in its regulatory directive to preserve performance ANSI A112.18–1–2018. definition of showerhead.

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DOE notes that the October 2013 final In DOE’s October 2013 final rule specifications of the ANSI standard to rule establishing the definition for establishing the current definition of avoid compliance with DOE standards. showerhead did not define body spray, ‘‘showerhead’’, DOE declined to define DOE seeks comment on its proposal to leaving it to the Department’s discretion the term ‘‘safety shower showerhead,’’ adopt the ANSI standard as the to determine whether a given product which meant that the class of definition of ‘‘safety shower was required to comply with the showerheads that EPCA excluded from showerhead’’, whether there is currently standard. In this proposed rule, DOE standards was undefined and subject to uncertainty regarding which products requests comment on its proposal to DOE’s discretion as to what was are ‘‘safety shower showerheads’’, and include in its regulations the definition considered a safety shower showerhead. whether that definition would provide of body spray originally presented in the DOE noted in the October 2013 final clarity as to those showerheads that are May 2012 NOPR and contained within rule that ANSI standard Z358.1, not subject to the DOE standard. ‘‘Emergency Eyewash and Shower the current ASME definition—‘‘a F. Testing Requirements shower device for spraying water onto a Equipment’’, defines an emergency DOE proposes amendments to the bather other than from the overhead shower as ‘‘a device specifically testing provisions at 10 CFR part 430, position.’’ The ASME standard gives an designed and intended to deliver a subpart B, appendix S to address the example of a device mounted on a wall flushing fluid in sufficient volume to testing of a single showerhead in a below the bather’s head that sprays cause that fluid to cascade over the product with multiple showerheads. A water in an approximately horizontal entire body.’’ 78 FR 62970, 62974; Oct. measurement would be required for direction and can be fixed or allowed to 23, 2013. Commenters, including NSF only one showerhead when all swivel on a ball joint. (ASME and PMI, supported inclusion of the showerheads in the product are A112.18.1–2018, Section 3.1). Under definition of safety shower showerhead identical. If the showerheads in such a this proposal, DOE’s regulations would consistent with the requirements of product are not identical, only the specifically define body sprays ANSI standard Z358.1. At the time, DOE declined to adopt this definition, stating showerhead with the maximum water separately from the definition of that DOE could not identify a definition flow would need to be tested to showerhead, so as to explicitly provide that would clearly distinguish these determine compliance with the 2.5 gpm that body sprays are not covered by products from showerheads covered standard. Additionally, DOE proposes to DOE’s test procedure or the energy under EPCA and that adopting an specify that where it is not possible to conservation standard applicable to unclear definition would cause turn on only the showerhead being showerheads. additional confusion. Id. Upon further tested, testing would be performed with E. Current Proposal and the Definition reflection, DOE is of the view that all showerheads flowing at the of ‘‘Safety Shower Showerhead’’ leaving the scope of products not maximum rate. Measurement would be subject to EPCA’s energy conservation taken of only the showerhead under In this rulemaking, DOE proposes to standards undefined, and potentially test. adopt the following ANSI standard as subjecting manufacturers of safety DOE emphasizes that if an existing the definition of ‘‘safety shower shower showerheads to DOE standards, product manufactured pursuant to showerhead’’: ‘‘a device specifically causes more confusion than establishing DOE’s current definition of designed and intended to deliver a a regulatory definition consistent with showerheads is compliant with the 2.5 flushing fluid in sufficient volume to the existing ANSI standard. What is gpm standard, that product would cause that fluid to cascade over the meant by a ‘‘safety shower showerhead’’ remain compliant under the definition entire body.’’ Defining this term is or emergency shower is understood in of showerhead in this proposed rule, if important, because the statute provides the regulated industry, and DOE finalized. Specifically, if a product with that ‘‘[t]he term ‘‘showerhead’’ means believes that it is unlikely that multiple showerheads currently any showerhead (including a handheld manufacturers of showerheads intended available is compliant with the 2.5 gpm showerhead), except a safety shower for use by residential consumers would standard when considering all showerhead.’’ 42 U.S.C. 6291(31)(D). design a showerhead to meet the showerheads together, it must be the

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case that each individual showerhead is the expenditure of funds, from both (Aug. 16, 2002), DOE published compliant separately with the standard. public and private sources. E.O. 13771 procedures and policies on February 19, Because DOE’s focus is standards stated it is essential to manage the costs 2003, to ensure that the potential compliance, should DOE finalize this associated with the governmental impacts of its rules on small entities are proposal, manufacturers would not be imposition of private expenditures properly considered during the DOE required to retest and recertify that required to comply with Federal rulemaking process. 68 FR 7990. DOE product, and could continue to report regulations. has made its procedures and policies the same flow rate to DOE that they Additionally, on February 24, 2017, available on the Office of the General report currently for purposes of the President issued E.O. 13777, Counsel’s website: http://energy.gov/gc/ demonstrating compliance with the ‘‘Enforcing the Regulatory Reform office-general-counsel. standard. DOE may consider whether Agenda.’’ E.O. 13777 required the head DOE reviewed this proposed rule updates to its certification regulations at of each agency designate an agency under the provisions of the Regulatory part 429 are appropriate if it were to official as its Regulatory Reform Officer Flexibility Act and the procedures and finalize the definitional change in this (RRO). Each RRO oversees the policies published on February 19, proposed rule. implementation of regulatory reform 2003. The proposed rule would amend According to data in DOE’s initiatives and policies to ensure that the definition of showerhead such that certification database (CCMS database, agencies effectively carry out regulatory each showerhead in a product with as of March 2020, there are 7,221 basic reforms, consistent with applicable law. multiple showerheads would constitute models of showerheads. Of those, DOE Further, E.O. 13777 requires the a single showerhead for purposes of estimates that only 3% are multi-head establishment of a regulatory task force compliance with the 2.5 gpm standard. showerheads. For 97 percent of at each agency. The regulatory task force The proposal would also specifically showerheads currently on the market, is required to make recommendations to define and exclude body sprays and testing requirements would not change. the agency head regarding the repeal, safety shower showerheads from the For the very small percentage of replacement, or modification of existing regulatory definition of showerhead. As remaining products that do have more regulations, consistent with applicable explained in section II of this proposed than one showerhead, and any new law. At a minimum, each regulatory rule, DOE does not expect a change in products manufactured with more than reform task force must attempt to the test burden as a result of this one showerhead, the testing identify regulations that: proposed rule, if adopted. Specifically, requirement would still be to test the (i) Eliminate jobs, or inhibit job the same test would be performed, but flow rate pursuant to section 5.4 of the creation; the water from only one showerhead ASME standard, but instead of (ii) Are outdated, unnecessary, or would be measured to determine measuring the flow from all of the ineffective; compliance with the DOE water showerheads or outlets, the flow rate of (iii) Impose costs that exceed benefits; conservation standard. The updates to only one of these would be measured. (iv) Create a serious inconsistency or the testing procedures maintain the In other words, the same test would be otherwise interfere with regulatory current testing requirement that only performed, but the water from only one reform initiatives and policies; one showerhead per product would showerhead would be measured to (v) Are inconsistent with the need to be tested, and current products determine compliance with the DOE requirements of Information Quality with multiple showerheads that meet water conservation standard. Act, or the guidance issued pursuant to the energy conservation standard would that Act, in particular those regulations not need to be retested. Based on the III. Procedural Issues and Regulatory that rely in whole or in part on data, foregoing, DOE certifies that this Review information, or methods that are not proposed rule would not have a significant economic impact on a A. Review Under Executive Order 12866 publicly available or that are insufficiently transparent to meet the substantial number of small entities. The Administrator of the Office of standard for reproducibility; or D. Review Under the Paperwork Information and Regulatory Affairs (vi) Derive from or implement Reduction Act of 1995 (OIRA) in the Office of Management and Executive Orders or other Presidential Budget (OMB) has determined that the directives that have been subsequently Manufacturers of showerheads must proposed regulatory action is a rescinded or substantially modified. certify to DOE that their products significant regulatory action under For the reasons stated in the comply with any applicable energy section (3)(f) of Executive Order 12866. preamble, DOE has preliminarily conservation standards. To certify Accordingly, this action was reviewed determined that this action is a compliance, manufacturers must first by OIRA in the Office of Management deregulatory action for purposes of E.O. obtain test data for their products and Budget (OMB). The definitional 13771. according to the DOE test procedures, change in this rule is not expected to including any amendments adopted for C. Review Under the Regulatory have a material impact on costs. those test procedures. DOE has Flexibility Act Similarly, the proposed rule is expected established regulations for the to result in minimal increase in benefits, The Regulatory Flexibility Act (5 certification and recordkeeping primarily through clarifying the U.S.C. 601 et seq.) requires preparation requirements for all covered consumer showerhead definition. of an initial regulatory flexibility products and commercial equipment, analysis (IFRA) for any rule that by law including showerheads. (See generally B. Review Under Executive Orders must be proposed for public comment, 10 CFR part 429.) The collection-of- 13771 and 13777 unless the agency certifies that the rule, information requirement for the On January 30, 2017, the President if promulgated, will not have a certification and recordkeeping is issued Executive Order (E.O.) 13771, significant economic impact on a subject to review and approval by OMB ‘‘Reducing Regulation and Controlling substantial number of small entities. As under the Paperwork Reduction Act Regulatory Costs.’’ E.O. 13771 stated the required by Executive Order 13272, (‘‘PRA’’). This requirement has been policy of the executive branch is to be ‘‘Proper Consideration of Small Entities approved by OMB under OMB control prudent and financially responsible in in Agency Rulemaking,’’ 67 FR 53461 number 1910–1400. Public reporting

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burden for the certification is estimated responsibilities among the various inflation), section 202 of UMRA requires to average 30 hours per response, levels of government. EPCA governs and a Federal agency to publish a written including the time for reviewing prescribes Federal preemption of State statement that estimates the resulting instructions, searching existing data regulations as to energy conservation for costs, benefits, and other effects on the sources, gathering and maintaining the the products that are the subject of this national economy. (2 U.S.C. 1532(a), (b)) data needed, and completing and proposed rule. States can petition DOE The UMRA also requires a Federal reviewing the collection of information. for exemption from such preemption to agency to develop an effective process Notwithstanding any other provision the extent, and based on criteria, set to permit timely input by elected of the law, no person is required to forth in EPCA. (42 U.S.C. 6297(d)) No officers of State, local, and Tribal respond to, nor shall any person be further action is required by Executive governments on a proposed ‘‘significant subject to a penalty for failure to comply Order 13132. intergovernmental mandate,’’ and with, a collection of information subject requires an agency plan for giving notice G. Review Under Executive Order 12988 to the requirements of the PRA, unless and opportunity for timely input to that collection of information displays a Regarding the review of existing potentially affected small governments currently valid OMB Control Number. regulations and the promulgation of before establishing any requirements new regulations, section 3(a) of that might significantly or uniquely E. Review Under the National Executive Order 12988, ‘‘Civil Justice Environmental Policy Act of 1969 affect small governments. On March 18, Reform,’’ 61 FR 4729 (Feb. 7, 1996), 1997, DOE published a statement of DOE is analyzing this proposed imposes on Federal agencies the general policy on its process for regulation in accordance with the duty to adhere to the following intergovernmental consultation under National Environmental Policy Act of requirements: (1) Eliminate drafting UMRA. 62 FR 12820; also available at 1969 (NEPA) and DOE’s NEPA errors and ambiguity, (2) write http://energy.gov/gc/office-general- implementing regulations (10 CFR part regulations to minimize litigation, (3) counsel. DOE examined this proposed 1021). DOE’s regulations include a provide a clear legal standard for rule according to UMRA and its categorical exclusion for rulemakings affected conduct rather than a general statement of policy and determined that interpreting or amending an existing standard, and (4) promote simplification the rule contains neither an rule or regulation that does not change and burden reduction. Section 3(b) of intergovernmental mandate, nor a the environmental effect of the rule or Executive Order 12988 specifically mandate that may result in the regulation being amended. 10 CFR part requires that Executive agencies make expenditure of $100 million or more in 1021, subpart D, Appendix A5. DOE every reasonable effort to ensure that the any year, so these requirements do not anticipates that this rulemaking regulation (1) clearly specifies the apply. qualifies for categorical exclusion A5 preemptive effect, if any, (2) clearly because it is an interpretive rulemaking specifies any effect on existing Federal I. Review Under the Treasury and that does not change the environmental law or regulation, (3) provides a clear General Government Appropriations effect of the rule and otherwise meets legal standard for affected conduct Act, 1999 the requirements for application of a while promoting simplification and Section 654 of the Treasury and categorical exclusion. See 10 CFR burden reduction, (4) specifies the General Government Appropriations 1021.410. DOE will complete its NEPA retroactive effect, if any, (5) adequately Act, 1999 (Pub. L. 105–277) requires review before issuing the final rule. defines key terms, and (6) addresses Federal agencies to issue a Family F. Review Under Executive Order 13132 other important issues affecting clarity Policymaking Assessment for any rule and general draftsmanship under any that may affect family well-being. This Executive Order 13132, ‘‘Federalism,’’ guidelines issued by the Attorney proposed rule would not have any 64 FR 43255 (Aug. 4, 1999) imposes General. Section 3(c) of Executive Order impact on the autonomy or integrity of certain requirements on agencies 12988 requires Executive agencies to the family as an institution. formulating and implementing policies review regulations in light of applicable Accordingly, DOE has concluded that it or regulations that preempt State law or standards in sections 3(a) and 3(b) to is not necessary to prepare a Family that have federalism implications. The determine whether they are met or it is Policymaking Assessment. Executive Order requires agencies to unreasonable to meet one or more of examine the constitutional and statutory them. DOE has completed the required J. Review Under Executive Order 12630 authority supporting any action that review and determined that, to the DOE has determined, under Executive would limit the policymaking discretion extent permitted by law, the proposed Order 12630, ‘‘Governmental Actions of the States and to carefully assess the rule meets the relevant standards of and Interference with Constitutionally necessity for such actions. The Executive Order 12988. Protected Property Rights’’ 53 FR 8859 Executive Order also requires agencies (March 18, 1988), that this regulation H. Review Under the Unfunded to have an accountable process to would not result in any takings that Mandates Reform Act of 1995 ensure meaningful and timely input by might require compensation under the State and local officials in the Title II of the Unfunded Mandates Fifth Amendment to the U.S. development of regulatory policies that Reform Act of 1995 (UMRA) requires Constitution. have federalism implications. On March each Federal agency to assess the effects 14, 2000, DOE published a statement of of Federal regulatory actions on State, K. Review Under Treasury and General policy describing the intergovernmental local, and Tribal governments and the Government Appropriations Act, 2001 consultation process it will follow in the private sector. Public Law 104–4, sec. Section 515 of the Treasury and development of such regulations. 65 FR 201 (codified at 2 U.S.C. 1531). For a General Government Appropriations 13735. DOE has examined this proposed proposed regulatory action likely to Act, 2001 (44 U.S.C. 3516 note) provides rule and has determined that it would result in a rule that may cause the for agencies to review most not have a substantial direct effect on expenditure by State, local, and Tribal disseminations of information to the the States, on the relationship between governments, in the aggregate, or by the public under guidelines established by the national government and the States, private sector of $100 million or more each agency pursuant to general or on the distribution of power and in any one year (adjusted annually for guidelines issued by OMB. OMB’s

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guidelines were published at 67 FR such standards. In addition, section 5.4, ‘‘Flow rate’’ of ASME A112.18.1– 8452 (Feb. 22, 2002), and DOE’s 32(c) requires DOE to consult with the 2018. guidelines were published at 67 FR Attorney General and the Chairman of Copies of both ASME A112.18.1–2012 62446 (Oct. 7, 2002). DOE has reviewed the FTC concerning the impact of the and ASME A112.18.1–2018 may be this proposed rule under the OMB and commercial or industry standards on purchased from the American Society of DOE guidelines and has concluded that competition. Mechanical Engineers, 1828 L St. NW, it is consistent with applicable policies The proposed modifications to the Suite 510, Washington, DC 20036–5104; in those guidelines. test procedure for showerheads in this (800) 843–2763, or by going to https:// www.asme.org/codes-standards/find- L. Review Under Executive Order 13211 proposed rule incorporate definitions and testing methods contained in codes-standards/a112-18-1-csa-b125-1- Executive Order 13211, ‘‘Actions certain sections of the following plumbing-supply-fittings and selecting Concerning Regulations That commercial standards: ASME the appropriate Edition (2012 or 2018). Significantly Affect Energy Supply, A112.18.1–2018, ‘‘Plumbing supply IV. Public Participation Distribution, or Use,’’ 66 FR 28355 (May fittings.’’ DOE has evaluated this DOE invites comment on all aspects 22, 2001), requires Federal agencies to standard and is unable to conclude of this proposal. DOE will accept prepare and submit to OMB, a whether it fully complies with the comments, data, and information Statement of Energy Effects for any requirements of section 32(b) of the regarding this proposed rule before or proposed significant energy action. A FEAA (i.e., whether it was developed in after the public meeting, but no later ‘‘significant energy action’’ is defined as a manner that fully provides for public than the date provided in the DATES any action by an agency that participation, comment, and review.) section at the beginning of this proposed promulgated or is expected to lead to DOE will consult with both the Attorney promulgation of a final rule, and that (1) rule. Interested parties may submit General and the Chairman of the FTC is a significant regulatory action under comments using any of the methods concerning the impact of these test Executive Order 12866, or any successor described in the ADDRESSES section at procedures on competition, prior to order; and (2) is likely to have a the beginning of this proposed rule. prescribing a final rule. significant adverse effect on the supply, Submitting comments via http:// distribution, or use of energy; or (3) is N. Description of Materials Incorporated www.regulations.gov. The http:// designated by the Administrator of by Reference www.regulations.gov web page will OIRA as a significant energy action. For require you to provide your name and In this NOPR, DOE proposes to any proposed significant energy action, contact information. Your contact incorporate by reference the test the agency must give a detailed information will be viewable to DOE standards published by ASME, ASME statement of any adverse effects on Building Technologies staff only. Your A112.18.1–2012, Plumbing supply energy supply, distribution, or use contact information will not be publicly should the proposal be implemented, fittings (approved December 2012), and viewable except for your first and last and of reasonable alternatives to the ASME A112.18.1–2018, Plumbing names, organization name (if any), and action and their expected benefits on supply fittings (approved July 2018). submitter representative name (if any). energy supply, distribution, and use. The proposed amendments in this If your comment is not processed The proposed regulatory action to proposed rulemaking include updating properly because of technical reinterpret the definition of the reference to ASME A112.18.1–2012 difficulties, DOE will use this ‘‘showerhead’’ and revise the test to incorporate by reference the standard information to contact you. If DOE procedure for measuring the energy in its entirety. Currently, only section cannot read your comment due to efficiency of showerheads is a 5.4 of ASME A112.18.1–2012 is technical difficulties and cannot contact significant regulatory action under incorporated by reference at 10 CFR you for clarification, DOE may not be Executive Order 12866. Moreover, it 430.3. ASME A112.18.1–2012 is an able to consider your comment. would not have a significant adverse industry standard that contains However, your contact information effect on the supply, distribution, or use performance guidelines and test will be publicly viewable if you include of energy, nor has it been designated as procedures, and is intended to cover it in the comment or in any documents a significant energy action by the plumbing supply fittings and attached to your comment. Any Administrator of OIRA. Therefore, it is accessories between the supply stop and information that you do not want to be not a significant energy action, and, terminal fitting, including showerheads. publicly viewable should not be accordingly, DOE has not prepared a This proposed rule would continue to included in your comment, nor in any Statement of Energy Effects. reference Section 5.4, ‘‘Flow rate’’ of document attached to your comment. ASME A112.18.1–2012 in the test Persons viewing comments will see only M. Review Under Section 32 of the procedure for faucets. first and last names, organization Federal Energy Administration Act of The proposed amendments in this names, correspondence containing 1974 proposed rule include updating comments, and any documents Under section 301 of the Department references to the definition of submitted with the comments. of Energy Organization Act (Pub. L. 95– showerhead in ASME A112.18.1–2018. Do not submit to http:// 91; 42 U.S.C. 7101), DOE must comply ASME A112.18.1–2018 is a more www.regulations.gov information for with section 32 of the Federal Energy current version of A112.18.1–2012 and which disclosure is restricted by statute, Administration Act of 1974, as amended remains an industry standard that such as trade secrets and commercial or by the Federal Energy Administration contains performance guidelines and financial information (hereafter referred Authorization Act of 1977. (15 U.S.C. test procedures, and is intended to cover to as Confidential Business Information 788; ‘‘FEAA’’) Section 32 essentially plumbing supply fittings and (CBI)). Comments submitted through provides in relevant part that, where a accessories between the supply stop and http://www.regulations.gov cannot be proposed rule authorizes or requires use terminal fitting, including showerheads. claimed as CBI. Comments received of commercial standards, the notice of Specifically, the test procedures for through the website will waive any CBI proposed rulemaking must inform the showerheads as defined in this claims for the information submitted. public of the use and background of proposed rule would reference Section For information on submitting CBI, see

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the Confidential Business Information non-confidential with the information Authority: 42 U.S.C. 6291–6309; 28 U.S.C. section. believed to be confidential deleted. 2461 note. DOE processes submissions made Submit these documents via email to ■ 2. Section 430.2 is amended by through http://www.regulations.gov [email protected] or adding, in alphabetical order, before posting. Normally, comments on a CD, if feasible. DOE will make its definitions for ‘‘Body spray’’ and will be posted within a few days of own determination about the ‘‘Safety shower showerhead,’’ and by being submitted. However, if large confidential status of the information revising the definition of ‘‘Showerhead’’ volumes of comments are being and treat it according to its to read as follows: processed simultaneously, your determination. comment may not be viewable for up to It is DOE’s policy that all comments § 430.2 Definitions. several weeks. Please keep the comment may be included in the public docket, * * * * * tracking number that http:// without change and as received, Body spray means a shower device for www.regulations.gov provides after you including any personal information spraying water onto a bather from other have successfully uploaded your provided in the comments (except than the overhead position. A body comment. information deemed to be exempt from spray is not a showerhead. Submitting comments via email, hand public disclosure). * * * * * delivery, or mail. Comments and Safety shower showerhead means a documents submitted via email, hand V. Approval of the Office of the Secretary device specifically designed and delivery, or mail also will be posted intended to deliver a flushing fluid in http://www.regulations.gov. If you do The Secretary of Energy has approved sufficient volume to cause that fluid to not want your personal contact publication of this proposed rule. cascade over the entire body. information to be publicly viewable, do List of Subjects in 10 CFR Part 430 * * * * * not include it in your comment or any Administrative practice and Showerhead means any showerhead accompanying documents. Instead, (including a handheld showerhead) provide your contact information on a procedure, Confidential business other than a safety shower showerhead. cover letter. Include your first and last information, Energy conservation, DOE interprets the term ‘‘showerhead’’ names, email address, telephone Household appliances, Imports, to mean an accessory to a supply fitting number, and optional mailing address. Incorporation by reference, for spraying water onto a bather, The cover letter will not be publicly Intergovernmental relations, Small typically from an overhead position. viewable as long as it does not include businesses. * * * * * any comments. Signing Authority Include contact information each time ■ 3. Section 430.3 is amended by: This document of the Department of ■ a. Revising paragraph (h)(1); you submit comments, data, documents, ■ and other information to DOE. If you Energy was signed on July 16, 2020, by a. Redesignating paragraph (h)(2) as submit via mail or hand delivery, please Daniel R Simmons, Assistant Secretary paragraph (h)(3); and ■ b. Adding new paragraph (h)(2). provide all items on a CD, if feasible. It for Energy Efficiency, Energy Efficiency and Renewable Energy, pursuant to The revision and addition read as is not necessary to submit printed follows: copies. No faxes will be accepted. delegated authority from the Secretary Comments, data, and other of Energy. That document with the § 430.3 Materials incorporated by information submitted to DOE original signature and date is reference. electronically should be provided in maintained by DOE. For administrative * * * * * PDF (preferred), Microsoft Word or purposes only, and in compliance with (h) * * * Excel, WordPerfect, or text (ASCII) file requirements of the Office of the Federal (1) ASME A112.18.1–2012, (‘‘ASME format. Provide documents that are not Register, the undersigned DOE Federal A112.18.1–2012’’), ‘‘Plumbing supply secured, written in English and free of Register Liaison Officer has been fittings,’’ approved December, 2012, IBR any defects or viruses. Documents authorized to sign and submit the approved for appendix S to subpart B. should not contain special characters or document in electronic format for (2) ASME A112.18.1–2018, (‘‘ASME any form of encryption and, if possible, publication, as an official document of A112.18.1–2018’’), ‘‘Plumbing supply they should carry the electronic the Department of Energy. This fittings,’’ approved July 2018, IBR signature of the author. administrative process in no way alters approved for appendix S to subpart B. Campaign form letters. Please submit the legal effect of this document upon * * * * * campaign form letters by the originating publication in the Federal Register. ■ 4. Appendix S to subpart B of part 430 organization in batches of between 50 to Signed in Washington, DC, on July 16, is amended by: 500 form letters per PDF or as one form 2020. ■ a. Removing the note after the letter with a list of supporters’ names Treena V. Garrett, appendix heading; compiled into one or more PDFs. This Federal Register Liaison Officer, U.S. ■ b. Adding section 0, ‘‘Incorporation by reduces comment processing and Department of Energy. Reference’’; and ■ posting time. For the reasons stated in the c. Revising section 2.b, ‘‘Flow Confidential Business Information. preamble, DOE is proposing to amend Capacity Requirements’’. According to 10 CFR 1004.11, any The addition and revision read as part 430 of Chapter II of Title 10, Code person submitting information that he follows: of Federal Regulations as set forth or she believes to be confidential and below: Appendix S to Subpart B of Part 430— exempt by law from public disclosure Uniform Test Method for Measuring the should submit via email, postal mail, or PART 430—ENERGY CONSERVATION Water Consumption of Faucets and hand delivery two well-marked copies: PROGRAM FOR CONSUMER Showerheads One copy of the document marked PRODUCTS confidential including all the Section 0. Incorporation by Reference information believed to be confidential, ■ 1. The authority citation for part 430 DOE incorporated by reference ASME and one copy of the document marked continues to read as follows: A112.18.1–2012 and ASME A112.18.1–2018

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in their entirety in § 430.3; however, only (‘‘NOPR’’), the Department of Energy information that is exempt from public enumerated provisions of these documents (DOE) proposes to establish separate disclosure. are applicable to this appendix, as follows: product classes for top-loading The docket web page can be found at (a) ASME A112.18.1–2012, Plumbing residential clothes washers and http://www.regulations.gov/#!docket supply fittings, section 5.4, Flow rate,’’ as Detail;D=EERE-2020-BT-STD-0001. The specified in section 2.a. of this appendix. consumer clothes dryers that offer cycle (b) ASME A112.18.1–2018, Plumbing times for a normal cycle of less than 30 docket web page contains instructions supply fittings, section 5.4, Flow rate,’’ as minutes, and for front-loading on how to access all documents, specified in section 2.b. of this appendix. residential clothes washers that offer including public comments, in the * * * * * cycle times for a normal cycle of less docket. See section V for information on how to submit comments through 2. * * * than 45 minutes. DOE would consider appropriate energy and water efficiency http://www.regulations.gov. * * * * * standards for such product classes, if FOR FURTHER INFORMATION CONTACT: Mr. b. Showerheads—(1) The test procedures to measure the water flow rate for showerheads, adopted, in separate rulemakings. Bryan Berringer, U.S. Department of expressed in gallons per minute (gpm) and DATES: Written comments, data, and Energy, Office of Energy Efficiency and liters per minute (L/min), shall be conducted information regarding this NOPR will be Renewable Energy, Building in accordance with the test requirements accepted on or before September 14, Technologies Office, EE–5B, 1000 specified in section 5.4, Flow Rate, of ASME 2020. Independence Avenue SW, Washington, A112.18.1–2018 (incorporated by reference, DC 20585–0121. Email: Appliance see § 430.3). Measurements shall be recorded ADDRESSES: Interested persons are [email protected]. at the resolution of the test instrumentation. encouraged to submit comments using Ms. Jennifer Tiedeman, U.S. Calculations shall be rounded off to the same the Federal eRulemaking Portal at Department of Energy, Office of the number of significant digits as the previous http://www.regulations.gov. Follow the General Counsel, GC–33, 1000 step. The final water consumption value instructions for submitting comments. shall be rounded to one decimal place. If the Independence Avenue SW, Washington, time/volume method of section 5.4.2.2(d) is Alternatively, interested persons may DC 20585–0121. Telephone: (202) 287– used, the container must be positioned as to submit comments, identified by docket 6111. Email: Jennifer.Tiedeman@ collect all water flowing from the number EERE–2020–BT–STD–0001, by hq.doe.gov. showerhead, including any leakage from the any of the following methods: For further information on how to ball joint. (1) Federal eRulemaking Portal: submit a comment, review other public (2) For products with multiple http://www.regulations.gov. Follow the comments and the docket, or participate showerheads, test one showerhead if each instructions for submitting comments. in the public meeting, contact the showerhead has an identical flow control mechanism attached to or installed within (2) Email: ConsumerWashersDryers Appliance and Equipment Standards the supply fitting and identical water-passage [email protected]. Include the Program staff at (202) 287–1445 or by design features that use the same path of docket number EERE–2017–BT–STD– email: ApplianceStandardsQuestions@ water in the highest flow mode. If all 0001 in the subject line of the message. ee.doe.gov. showerheads are not identical, test the (3) Postal Mail: Appliance and SUPPLEMENTARY INFORMATION: showerhead with the maximum water flow Equipment Standards Program, U.S. rate. Where it is not possible to isolate the Department of Energy, Building Table of Contents showerhead under test, test with all Technologies Office, Mailstop EE–5B, I. Background showerheads flowing at the maximum rate A. Consumer (Residential) Clothes Washers and measure the flow rate of only the 1000 Independence Avenue SW, and Clothes Dryers showerhead under test. Washington, DC 20585–0121. Telephone: (202) 287–1445. If possible, B. Cycle Time Considerations for [FR Doc. 2020–15749 Filed 8–12–20; 8:45 am] please submit all items on a compact Appliance Standards BILLING CODE 6450–01–P II. General Discussion disc (‘‘CD’’), in which case it is not A. Legal Authority necessary to include printed copies. B. Cycle Time Data DEPARTMENT OF ENERGY (4) Hand Delivery/Courier: Appliance 1. Residential Clothes Washers and Equipment Standards Program, U.S. 2. Consumer Clothes Dryers 10 CFR Part 430 Department of Energy, Building C. Separate Short-Cycle Product Classes Technologies Office, 950 L’Enfant Plaza 1. Residential Clothes Washers [EERE–2020–BT–STD–0001] SW, 6th Floor, Washington, DC 20024. 2. Consumer Clothes Dryers D. EPCA’s Anti-Backsliding Provision RIN 1904–AE86 Telephone: (202) 287–1445. If possible, III. Conclusion please submit all items on a CD, in IV. Request for Comments, Data, and Energy Conservation Program: Energy which case it is not necessary to include Information Conservation Standards for Clothes printed copies. V. Submission of Comments Washers and Clothes Dryers No telefacsimilies (‘‘faxes’’) will be VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 AGENCY: Office of Energy Efficiency and accepted. For detailed instructions on submitting comments and additional ‘‘Regulatory Planning and Review’’ Renewable Energy, Department of B. Review Under Executive Orders 13771 Energy. information on the rulemaking process, and 13777 see section V of this document. ACTION: Notice of proposed rulemaking. C. Review Under the Regulatory Flexibility Docket: The docket for this activity, Act SUMMARY: The Energy Policy and which includes Federal Register D. Review Under the Paperwork Reduction Conservation Act, as amended notices, comments, and other Act (‘‘EPCA’’), prescribes energy supporting documents/materials, is E. Review Under the National conservation standards for various available for review at http:// Environmental Policy Act of 1969 consumer products and certain www.regulations.gov. All documents in F. Review Under Executive Order 13132 G. Review Under Executive Order 12988 commercial and industrial equipment, the docket are listed in the http:// H. Review Under the Unfunded Mandates including residential clothes washers www.regulations.gov index. However, Reform Act of 1995 and consumer clothes dryers. In this not all documents listed in the index I. Review Under the Treasury and General notice of proposed rulemaking may be publicly available, such as Government Appropriations Act, 1999

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J. Review Under Executive Order 12630 justifies the establishment of a higher or proposed rule DOE reiterated its prior K. Review Under the Treasury and General lower standard, DOE must consider conclusion with respect to commercial Government Appropriations Act, 2001 such factors as the utility to the clothes washers that ‘‘the longer average L. Review Under Executive Order 13211 consumer of such a feature, and such cycle time of front-loading machines VII. Approval of the Office of the Secretary other factors as DOE deems appropriate. warrants consideration of separate I. Background (42 U.S.C. 6295(q)(1)) [product] classes.’’ 79 FR 74492, 74498 The current energy conservation (Sept. 15, 2014). Further, DOE stated its A. Consumer (Residential) Clothes standards establish four product classes position that, similar to commercial Washers and Clothes Dryers for residential clothes washers by clothes washers, cycle time for The Energy Policy and Conservation distinguishing between products on the dishwashers is a performance-related Act, as amended (‘‘EPCA’’),1 authorizes basis of both clothing container capacity feature for purposes of 6295(q) that DOE to regulate the energy efficiency of and axis of loading. 10 CFR 430.32(g)(4). justifies a higher or lower standard than a number of consumer products and A standard clothes washer has a that applicable to other dishwasher certain industrial equipment. (42 U.S.C. clothing container capacity greater than product classes. 6291–6317) Title III, Part B of EPCA or equal to 1.6 cubic feet (ft3), while a Consumer use of residential clothes established the Energy Conservation compact clothes washer has a clothing washers and consumer clothes dryers is Program for Consumer Products Other container capacity less than 1.6 ft3. Axis similar to that of residential Than Automobiles. These products of loading is differentiated by top- dishwashers (i.e., the products provide include consumer (residential) clothes loading or front-loading. Id. consumer utility over discrete cycles washers and clothes dryers, the subject For consumer clothes dryers, the with programmed cycle times, and of this document. (42 U.S.C. 6292(a)(7) current energy conservation standards consumers run these cycles multiple and (8)) EPCA prescribed energy define six product classes, differentiated times per week on average). In Section conservation standards for these by the following characteristics: fuel II of this NOPR, DOE presents cycle products, and directed DOE to conduct source (electric or gas), venting time data that DOE has gathered in a series of rulemakings to determine configuration (vented or ventless), drum support of its proposal to establish whether to amend these standards. (42 capacity (standard (greater than or equal separate product classes for residential U.S.C. 6295(g)(2), (3), and (4)(A) and to 4.4 ft3) or compact (less than 4.4 ft3)), clothes washers and consumer clothes (B)) integration with a clothes washer dryers to preserve a performance-related DOE completed the additional (combination washer-dryer), and for feature of both residential clothes rulemakings for residential clothes electric compact clothes dryers, voltage washers and consumer clothes dryers washers with the publication of a direct (120 V or 240 V). 10 CFR 430.32(h)(3). (i.e., the consumer utility of a short final rule on May 31, 2012 (‘‘May 2012 cycle time). final rule’’). 77 FR 32308. DOE B. Cycle Time Considerations for II. General Discussion completed the additional rulemakings Appliance Standards for consumer clothes dryers by On March 21, 2018, the Competitive A. Legal Authority publishing a direct final rule on April Enterprise Institute (‘‘CEI’’) petitioned Consistent with the analysis 21, 2011, which amended the energy DOE to initiate a rulemaking to define presented in the proposed rulemaking to conservation standards for consumer a new product class under 42 U.S.C. establish a new dishwasher product 2 clothes dryers. 76 FR 22454; 76 FR 6295(q) for residential dishwashers. class (84 FR 33869, 33871–33873; July 52852 (Aug. 24, 2011). The new product class would cover 16, 2019), DOE has concluded it has EPCA directs that when prescribing dishwashers with a cycle time for a legal authority pursuant to 42 U.S.C. an energy conservation standard for a normal cycle of less than one hour from 6295(q) to establish separate product type (or class) of a covered product, washing through drying. CEI stated that classes for residential clothes washers DOE must specify— dishwasher cycle times have become and consumer clothes dryers. [A] Level of energy use or efficiency dramatically longer under existing DOE As explained in the dishwasher higher or lower than that which applies energy conservation standards, and that NOPR, DOE has taken the view in (or would apply) for such type (or class) consumer satisfaction/utility has numerous prior rulemakings (cited and for any group of covered products dropped as a result of these longer cycle discussed in this paragraph and the next which have the same function or times. CEI also provided data regarding few paragraphs) that consumer utility is intended use, if DOE determines that the increase in dishwasher cycle time, an aspect of the product that is covered products within such a group— including data that correlated increased accessible to the layperson and based on (A) Consume a different kind of cycle time with DOE’s adoption of user operation, rather than performing a energy from that consumed by other amended efficiency standards for theoretical function. This interpretation covered products within such type (or dishwashers. has been implemented in DOE’s class); or Based upon its evaluation of the CEI previous determinations of utility (B) Have a capacity or other such petition and consideration of the public through the value the particular feature performance-related feature which other comments received in response to the brings to the consumer, rather than products within such type (or class) do notice of petition published in the through analyzing more complicated not have and such feature justifies a Federal Register on April 24, 2018 (83 design features or costs that anyone, higher or lower standard from that FR 17768), DOE granted the petition for including the consumer, manufacturer, which applies (or will apply) to other rulemaking and proposed a dishwasher installer, or utility companies may bear. products within such type. product class with a cycle time for the DOE has determined that this approach In making a determination concerning normal cycle of less than one hour. 84 is consistent with EPCA’s requirement whether a performance-related feature FR 33869 (July 16, 2019). In that for a separate and extensive analysis of economic justification for the adoption 1 All references to EPCA in this document refer 2 The petition for rulemaking, attachments, and to the statute in its current form, as amended data submitted by CEI are available in docket of any new or amended energy through America’s Water Infrastructure Act of 2018, number EERE–2018–BT–STD–0005 at http:// conservation standard. See, e.g., Public Law 115–270 (Oct. 23, 2018). www.regulations.gov. discussion in DOE’s proposed rule and

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supplemental proposed rule to establish panel features, and price points as front- dryness, fabric gentleness, wrinkle amended energy conservation standards loading residential clothes washers, and removal, and cycle time. for furnaces at 80 FR 13120, 13137 (Mar. that given these equivalencies, purchase Recognizing the interdependence of 12, 2015); 81 FR 65720, 65752–65755 of top-loaders indicates a preference these multiple aspects of performance in (Sept. 23, 2016). Under this approach, among certain consumers for the top- clothes washers and clothes dryers, DOE determined that the window in an loading configuration, i.e., the top- manufacturers are currently offering oven door was a ‘‘feature’’ justifying a loading configuration provides utility to models implementing a range of clothes different standard.3 Similarly, DOE also those customers preferring one washer and clothes dryer performance determined that consumers may value configuration over another, with all characteristics. DOE presumes that the other features such as the ability to self- other product attributes being equal. Id. shortest possible cycle times currently clean,4 size,5 and configuration.6 In DOE acknowledged that its available on the market represent the contrast, DOE determined that water determination of what constitutes a models for which manufacturers have heaters using electric resistance performance-related feature justifying a prioritized cycle time while maintaining technology did not merit a product class different standard could change adequate performance across the other separate from water heaters using heat depending on the technology and the performance aspects. These models pump technology.7 In both heat-pump consumer, and that as a result, certain must also meet the applicable energy and electric storage water heaters, the products may entirely disappear from and water conservation standard. Based same utility to the consumer (i.e., hot the market due to shifting consumer on this presumption, the current energy water) was provided by units using demand. DOE determines such value on conservation standards may be different technology. a case-by-case basis through its own precluding manufacturers from bringing In a rulemaking to amend standards research as well as public comments models to the market with substantially applicable to commercial clothes received, the same approach that DOE shorter cycle times. Offering products washers, DOE determined that the ‘‘axis employs in all other parts of its energy with shorter cycle times (which would of loading’’ constituted a feature that conservation standards rulemaking. See provide greater consumer utility for that justified separate product classes for proposed rule to amend standards for aspect of performance) would require top-loading and front-loading clothes residential furnaces at 80 FR 13120, more per-cycle energy and/or water use washers. DOE also determined that ‘‘the 13138 (Mar. 12, 2015). than would be permitted under the DOE applied this same approach to longer average cycle time of front- current standards in order to maintain cycle time for dishwashers in the loading machines warrants the same level of performance in other product class NOPR. 84 FR 33869, consideration of separate [product] areas (e.g., cleaning, noise, etc.). 33872 (July 16, 2019). Consumer use of classes.’’ See final rule to amend Accordingly, DOE proposes to standards at 79 FR 74492, 74498 (Sept. residential clothes washers and consumer clothes dryers is similar to establish separate product classes for 15, 2014). DOE stated that a split in residential clothes washers and preference between top-loaders and that of residential dishwashers, in that the products provide consumer utility consumer clothes dryers based on the front-loaders would not indicate cycle time required for a normal cycle consumer indifference to the axis of over discrete cycles with programmed cycle times, and consumers run these to wash and dry, respectively, clothing loading, but rather that a certain loads. DOE concludes that cycle time for percentage of the market expresses a cycles multiple times per week on average. As such, the impact of cycle residential clothes washers and clothes preference for (i.e., derives utility from) dryers is a performance-related feature the top-loading configuration. DOE time on consumer utility identified by CEI in its petition regarding for purposes of 42 U.S.C. 6295(q) that further noted that separation of clothes justifies a higher or lower standard than washer product classes by location of dishwashers is also relevant to residential clothes washers and that applicable to other product classes access is similar in nature to the product of residential clothes washers and classes for residential refrigerator- consumer clothes dryers. More importantly, DOE previously clothes dryers. freezers, which include separate Based on the data presented in section product classes based on the access of determined in the context of residential clothes washers that cycle time warrants II.B, DOE proposes to establish separate location of the freezer compartment consideration of separate classes. See product classes for top-loading (e.g., top-mounted, side-mounted, and final standards rule at 77 FR 32308, residential clothes washers with an bottom-mounted). The location of the 32319 (May 31, 2012). average cycle time of less than 30 freezer compartment on these products DOE understands that a consumer’s minutes when conducting the DOE provides no additional performance- perception of the utility provided by a clothes washer test procedure at 10 CFR related utility other than consumer clothes washer encompasses multiple part 430, subpart B, appendix J2 preference. In other words, the location aspects of performance such as: stain (‘‘Appendix J2’’). DOE also proposes to of access itself provides distinct removal (i.e., ‘‘cleaning performance’’), establish separate product classes for consumer utility. Id. at 79 FR 74499. solid particle removal, rinsing front-loading residential clothes DOE also reasoned that top-loading effectiveness, fabric gentleness, cycle washers with an average cycle time of residential clothes washers are available time, noise, vibration, and others. A less than 45 minutes when conducting with the same efficiency levels, control clothes washer’s overall performance is the same DOE test procedure. For a balance among all of these consumer clothes dryers, DOE proposes 3 63 FR 48038, 48041 (Sept. 8, 1998). interdependent attributes, and each separate product classes for clothes 4 73 FR 62034, 62048 (Oct. 17, 2008) (separating standard and self-cleaning ovens into different manufacturer chooses how to balance dryers with a cycle time of less than 30 product classes). these aspects of performance. minutes when conducting the DOE 5 77 FR 32037, 32319 (May 31, 2012) (creating a Furthermore, achieving better clothes dryer test procedure at 10 CFR separate product class for compact front-loading performance in one attribute may part 430, subpart B, appendix D2 residential clothes washers). require a tradeoff with one or more (‘‘Appendix D2’’). DOE seeks comment 6 75 FR 59469 (Sept. 27, 2010) (creating a separate product class for refrigerators with bottom-mounted other attributes. Similar tradeoffs may on other appropriate time frames that it freezers). exist among the performance attributes could consider in developing the final 7 74 FR 65852, 65871 (Dec. 11, 2009). of clothes dryers as well, such as rule.

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DOE makes clear that if it were to basic models in each product class 5 models have a manual water fill finalize this proposal and thereby (including the corresponding percentage control system, 14 models have an establish separate product classes for of the total 501 models) are as follows: automatic water fill control system, and residential clothes washers and • Top-Loading, Standard-Size: 293 (58.5 4 models have both manual and consumer clothes dryers, no energy percent) automatic water fill systems. All 20 efficiency standards yet apply to such • Front-Loading, Standard-Size: 187 front-loading standard-size units that products. DOE would need to undertake (37.3 percent) DOE evaluated have an automatic water rulemaking pursuant to the procedures • Top-Loading, Compact: 20 (4.0 fill control system. DOE is not aware of established in EPCA and the percent) any front-loading models on the market methodology required by its procedures • Front-Loading, Compact: 1 (0.2 with a manual water fill control system. codified at appendix A to subpart C of percent) The DOE test procedure specifies usage 10 CFR part 430. Accordingly, DOE factors for the various tested proposes to establish product classes DOE evaluated the cycle times of a temperature selections and load sizes, to based on cycle time as follows: representative sample of units within combine the results of all the required (1) Top-loading, standard-size clothes the top-loading standard-size and front- wash cycles when calculating the washers with an average cycle time of loading standard-size product classes. integrated modified energy factor less than 30 minutes and front-loading, For the top-loading standard-size (‘‘IMEF’’) rating and integrated water standard-size clothes washers with an product class, DOE tested 23 units factor (‘‘IWF’’) rating.12 average cycle time of less than 45 representing 10 brands across 7 Clothes washers offer a variety of minutes; and manufacturers. For the front-loading wash temperature selections (e.g., Cold, (2) Vented, electric standard-size standard-size product class, DOE tested Cool, Warm, Hot, Extra Hot/Sanitize, clothes dryers and vented gas clothes 20 units representing 14 brands across etc.). Typically, clothes washer models dryers with a test cycle time of less than 12 manufacturers. The technical offer between three and five wash 30 minutes. appendix provides additional details of temperatures that are available for the Such products would not be subject to the technical attributes of each of the consumer to choose when selecting the the applicable DOE test procedure or units evaluated. ‘‘normal’’ cycle. As described, each energy conservation standards, unless To evaluate the cycle time of each temperature selection required for and until DOE were to complete unit, DOE analyzed test data from testing is tested using the two or three appropriate rulemaking to establish performing the Appendix J2 test different load sizes, depending on the applicable test procedures and energy procedure once in its entirety for each type of water fill control, as part of the conservation standards. unit. Appendix J2 is the DOE test Appendix J2 test procedure. procedure required to demonstrate As an example, consider a B. Cycle Time Data compliance with the current energy representative load-sensing clothes DOE gathered data on cycle times for conservation standards. The Appendix washer with four available wash a range of residential clothes washers J2 procedure requires testing a complete temperatures in the normal cycle (e.g., and consumer clothes dryers, with test set of wash/rinse temperature selections Cold, Cool, Warm, Hot). On such a units representing the most popular and load sizes; the specific temperatures model, conducting Appendix J2 once in product classes for each product. This and load sizes required for testing are its entirety would require performing 12 document provides a high-level defined in the test procedure and are individual test cycles (i.e., running test summary of this data. DOE is also based on the user-selectable options and cycles on all four temperature settings including a separate technical appendix features available on the model.10 In with each of the three load sizes), the in the docket of this rulemaking that general, testing is performed using the results of which would be combined in includes a more detailed presentation of ‘‘normal’’ cycle (i.e., wash program), a weighted average to produce the IMEF the data.8 which is defined as the wash program and IWF values. 1. Residential Clothes Washers recommended for normal, regular, or For each unit in its test sample, DOE typical use for washing up to a full load evaluated cycle time using the complete For residential clothes washers, the of normally-soiled cotton clothing. For set of wash cycle configurations top-loading standard-size and front- clothes washers with manual water fill (combinations of wash/rinse loading standard-size product classes control systems (in which the user temperature settings and load sizes) combined represent over 95 percent of physically selects the water fill level), required by the DOE test procedure. The models currently available on the Appendix J2 requires testing each technical appendix provides additional market. DOE does not have data available temperature selection using details of the wash cycle configurations regarding the current distribution of two load sizes: minimum and for each unit. The number of wash cycle shipments by product class; however, in maximum. For clothes washers with configurations ranged from 9 (for a DOE’s experience, model-based automatic water fill control systems manual water fill unit with three distributions provide a close (i.e., ‘‘load-sensing’’), Appendix J2 temperature selections, each tested with approximation of shipments-based requires testing each available two load sizes) to 21 (for a load-sensing distributions for residential laundry temperature selection using three load unit with seven temperature selections, products. DOE’s Compliance sizes: minimum, average, and each tested with three load sizes). 9 Certification Database contains 501 maximum.11 Among the top-loading Appendix J2 does not include unique basic models of residential standard-size units that DOE evaluated, provisions for determining a single clothes washers. The number of unique 10 Sections 2.12 and 2.8 of Appendix J2 specify 12 Table 4.1.1 of Appendix J2 defines the 8 The technical appendix is available in the the wash/rinse temperatures and load sizes required ‘‘temperature use factors,’’ which are the consumer docket for this rulemaking at https:// for testing, respectively. usage factors applied to the temperature selections; www.regulations.gov. 11 Section 2.8 of Appendix J2 specifies the and Table 4.1.3 of Appendix J2 defines the ‘‘load 9 DOE’s Compliance Certification Database is number of load sizes to use based on the model’s usage factors’’, which are the consumer usage available at https://www.regulations.doe.gov/ water fill control system. Table 5.1 of Appendix J2 factors applied to the load sizes. These usage factors compliance-certification-database. Last accessed specifies the weight of each load size to be used for are based on based on surveys and other data March 12, 2020. testing, based on the measured capacity of the unit. reflecting consumer usage patterns.

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cycle time metric for residential clothes this evaluation, DOE considered typically result in a longer cycle time washers. To evaluate overall cycle times individual cycle time as the time than a small load size. DOE testing for model-to-model comparisons, DOE required to complete the entire active suggests, however, that the difference in considered three distinct methods for washing mode (washing, soaking, cycle times as a result of these different representing the cycle time of each tumbling, agitating, rinsing, and/or selections for a given model (other than individual unit: removing water from the load), not for an Extra Hot/Sanitize temperature 1. The arithmetic average of the including any continuous status selection) is typically less than the range individual cycle times for each wash display, intermittent tumbling, or air in cycle times among different models cycle configuration conducted as part of circulation following operation in active on the market. the Appendix J2 test procedure. washing mode. DOE recognizes that the Table II.1 and Table II.2 of this 2. The weighted average of the cycle times associated with specific document provide the cycle time individual cycle times for each wash wash/rinse temperature combinations, (determined using each of the three cycle configuration conducted as part of load sizes, or other cycle configurations methods described above) for the top- the Appendix J2 test procedure, using could also provide useful comparisons loading standard-size and front-loading the temperature use factors and load across models. standard-size residential clothes washer usage factors as defined by Appendix J2 DOE testing indicates that for a given test units, respectively. The data include for the weighting. model, the cycle time of any individual each unit’s IMEF and IWF rating, as 3. The median cycle time of the wash cycle may be dependent upon the measured under Appendix J2. Figure complete set of wash cycle options that are selected for the wash II.1 and Figure II.2 present the same configurations conducted as part of the cycle and the size of the load being data graphically, showing cycle time Appendix J2 test procedure. washed. For example, an Extra Hot/ with respect to each unit’s IMEF rating The data presented below show the Sanitize temperature selection typically for each of the three methods described results using each of these three has a longer cycle time than other above. For the IMEF rating, a higher methods. The technical appendix lower-temperature selections because of value indicates more efficient energy includes tables that provide, for each the need to heat the water internally to performance. For the IWF rating, a unit evaluated, the individual cycle high temperatures, and for the clothes to lower value indicates more efficient times for each wash cycle configuration remain heated for a sufficient amount of water performance. (See the technical conducted as part of the Appendix J2 time to achieve sanitization. As another appendix for additional details of the test procedure that were used as the example, for load-sensing clothes technical attributes of each of the units basis of this analysis. For the purpose of washers, cleaning a large load size will evaluated.)

TABLE II.1—CALCULATED CYCLE TIME FOR TOP-LOADING, STANDARD-SIZE RESIDENTIAL CLOTHES WASHERS

Cycle time Rated IMEF Rated IWF (min) Test unit (cu.ft./kWh/ (gal/cycle/ Method 1: Method 2: cycle) cu.ft.) arithmetic weighted Method 3: average average median

1 ...... 1.57 6.5 41 43 42 2 ...... 1.57 6.5 45 50 45 3 ...... 1.57 6.5 50 58 51 4 ...... 1.57 6.5 64 74 65 5 ...... 1.57 6.5 59 61 55 6 ...... 1.57 6.5 45 45 44 7 ...... 1.57 6.5 40 41 41 8 ...... 1.57 6.5 38 38 38 9 ...... 1.57 6.5 47 46 46 10 ...... 1.71 4.7 40 45 35 11 ...... 1.57 6.5 29 29 29 12 ...... 1.57 6.5 56 57 57 13 ...... 1.57 6.5 55 56 56 14 ...... 1.57 6.5 47 54 47 15 ...... 2.06 3.8 66 66 66 16 ...... 2.38 3.7 66 67 60 17 ...... 1.57 6.5 27 28 28 18 ...... 1.57 6.5 27 27 27 19 ...... 1.57 6.5 42 43 43 20 ...... 1.57 6.5 42 43 42 21 ...... 1.57 6.5 51 52 52 22 ...... 1.57 6.5 50 51 50 23 ...... 1.57 6.5 50 51 49

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TABLE II.2—CALCULATED CYCLE TIME FOR FRONT-LOADING, STANDARD-SIZE RESIDENTIAL CLOTHES WASHERS

Cycle time Rated IMEF Rated IWF (min) Test unit (cu.ft./kWh/ (gal/cycle/ Method 1: Method 2: cycle) cu.ft.) arithmetic weighted Method 3: average average median

1 ...... 2.49 3.5 58 55 56 2 ...... 2.22 3.7 69 66 66 3 ...... 2.76 3.2 47 47 47 4 ...... 2.09 2.8 75 71 70 5 ...... 1.86 3.4 68 68 68 6 ...... 2.07 4.2 67 59 57 7 ...... 2.40 3.7 50 39 35 8 ...... 1.85 4.7 78 79 79 9 ...... 1.84 4.7 52 54 55 10 ...... 1.85 4.6 54 53 53 11 ...... 1.85 4.7 77 77 78 12 ...... 1.87 4.5 48 48 48 13 ...... 2.80 3.0 57 49 49 14 ...... 3.00 2.9 68 69 65 15 ...... 2.38 3.7 45 45 45 16 ...... 1.84 4.6 48 49 46 17 ...... 1.85 4.6 77 77 78 18 ...... 1.84 4.7 90 78 79 19 ...... 1.84 4.7 47 46 43 20 ...... 2.38 3.7 59 58 50

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2. Consumer Clothes Dryers with the current DOE energy Under Appendix D2, the combined For consumer clothes dryers, the conservation standards, but is used for energy factor (‘‘CEF’’) rating is based on vented electric standard-size and vented demonstrating compliance with the energy consumption of a single test 15 gas product classes combined represent ENERGY STAR criteria. Appendix D2 cycle. The cycle time evaluated by over 89 percent of models currently specifies that clothes dryers with DOE represents the total cycle time as available on the market. DOE does not automatic cycle termination be operated tested under Appendix D2, excluding have data regarding the current using the ‘‘normal’’ program (or the any wrinkle prevention mode that distribution of shipments by product cycle recommended by the continuously or intermittently tumbles class; however, in DOE’s experience, manufacturer for drying cotton or linen the clothes dryer drum after the clothes model-based distributions provide a clothes in the absence of a normal dryer indicates to the user that the cycle close approximation of shipments-based program) until the completion of the has finished. Table II.3 and Table II.4 distributions for residential laundry cycle, as indicated to the consumer. provide the Appendix D2 cycle time products. DOE’s Compliance Where it is possible for the drying data for the vented electric standard-size temperature and dryness level to be and vented gas clothes dryers tested by Certification Database contains 686 16 unique basic models of residential selected independently of the program, DOE, respectively. The technical clothes dryers. The number of unique the maximum drying temperature appendix includes the additional cycle basic models in each product class setting is used with the ‘‘normal’’ or time data evaluated for the models (including the corresponding percentage ‘‘medium’’ dryness level (or the mid- certified in the ENERGY STAR database. of the total 686 models) are as follows: point between the minimum and Figure II.3 and Figure II.4 present the maximum settings). Section 3.3.2 of same data graphically, including the • Vented Electric, Standard-Size: 353 Appendix D2. additional cycle time data from the (51.5 percent) ENERGY STAR product database.17 • Vented Gas: 261 (38.0 percent) In contrast, Appendix D1 does not • Vented Electric, Compact (120V): 22 provide data that can be used to TABLE II.3—MEASURED CYCLE TIME (3.2 percent) determine a ‘‘cycle time’’ as experienced • Vented Electric, Compact (240V): 20 by the consumer. Performing the FOR VENTED ELECTRIC STANDARD- (2.9 percent) Appendix D1 test procedure requires SIZE CLOTHES DRYERS USING AP- • Ventless Electric, Compact (240V): 12 operating the dryer on a timed dry cycle PENDIX D2 (1.7 percent) set to the maximum time available, • Ventless Electric, Combination artificially stopping the drying cycle Rated CEF Cycle time Test unit (lbs/kWh) (min) Washer-Dryer: 18 (2.6 percent) when the moisture content of the load DOE evaluated the cycle times of a is between 2.0 and 5.5 percent of the 1 ...... 3.73 40 representative sample of units within bone-dry weight of the cloth, 2 ...... 3.73 62 the vented electric standard-size and normalizing the measured energy to 3 ...... 3.73 67 vented gas product classes. For the represent a standardized moisture 4 ...... 3.74 39 vented electric standard-size product content removal of 53.5 percent, and 5 ...... 3.74 36 6 ...... 3.73 45 class, DOE tested 6 units representing 4 applying a field use factor to calculate brands across 4 manufacturers. In the representative per-cycle energy use. addition, DOE evaluated cycle time data Because Appendix D1 requires TABLE II.4—MEASURED CYCLE TIME from the ENERGY STAR product manually stopping operation at a FOR VENTED GAS CLOTHES DRYERS database 13 for an additional 245 vented specified moisture content, normalizing, USING APPENDIX D2 electric standard-size units representing and applying a field use factor, the 14 brands across 7 manufacturers. For length of time that a clothes dryer is Test unit Rated CEF Cycle time the vented gas product class, DOE tested operated during an Appendix D1 test (lbs/kWh) (min) 8 units representing 4 brands across 4 does not necessarily correspond to the manufacturers. In addition, DOE length of time that a consumer would 1 ...... 3.30 89 2 ...... 3.30 78 evaluated cycle time data from the operate the clothes dryers (in contrast to the calculated energy use, which is ENERGY STAR product database for an 15 representative of the energy use For automatic termination control dryers, additional 110 vented gas units Appendix D2 requires that if the clothes dryer is 14 representing 9 brands across 5 experienced by the consumer). equipped with a mode that continuously or manufacturers. In total, DOE evaluated The sample of models tested by DOE intermittently tumbles the load after the indicating the cycle times of units representing the cycle has finished (i.e., wrinkle prevention were certified to DOE using Appendix mode) that is activated by default in the as-shipped over 50 percent of residential clothes D1, but tested by DOE using Appendix position or if the manufacturer’s instructions dryer basic models. The technical D2 for the purpose of determining cycle specify that the mode be activated for normal use, appendix provides additional details of time in this analysis. All of the models the cycle is considered complete after the end of the technical attributes of each of the wrinkle prevention mode. If at the end of the test analyzed from the ENERGY STAR cycle, the final moisture content is greater than 2 units evaluated. database were certified to ENERGY percent, then the results for that test cycle are To evaluate the cycle time of each STAR using Appendix D2. All of the discarded and the test is rerun with the highest tested unit, DOE analyzed data from models in DOE’s test sample provide dryness level setting. 16 performing the Appendix D2 test automatic cycle termination capability. For both vented electric standard and vented procedure. Appendix D2 is currently gas clothes dryers, baseline units with CEF values near the current energy conservation standard level optional for demonstrating compliance 14 Appendix D1 does not provide data that can be are typically certified to DOE using Appendix D1. used to determine a ‘‘cycle time’’ because the The presented cycle times, however, are those 13 Manufacturers must report cycle time as tested drying cycle is artificially terminated. The measured by DOE when the units were tested to under Appendix D2 when seeking ENERGY STAR artificially terminated cycle has a field use factor Appendix D2. qualification for a consumer clothes dryer basic applied to calculate representative energy 17 The technical appendix tables, available at model. ENERGY STAR product database for clothes consumption. Appendix D2 provides representative http://www.regulations.gov include the ENERGY dryers is available at https://www.energystar.gov/ energy use and a corresponding cycle time, because STAR data. This data is not included in this productfinder/product/certified-clothes-dryers/ the cycle is run from start to completion without document due to the very large number of models results. Last accessed January 22, 2020. being artificially terminated. included.

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TABLE II.4—MEASURED CYCLE TIME TABLE II.4—MEASURED CYCLE TIME TABLE II.4—MEASURED CYCLE TIME FOR VENTED GAS CLOTHES DRYERS FOR VENTED GAS CLOTHES DRYERS FOR VENTED GAS CLOTHES DRYERS USING APPENDIX D2—Continued USING APPENDIX D2—Continued USING APPENDIX D2—Continued

Rated CEF Cycle time Rated CEF Cycle time Test unit Rated CEF Cycle time Test unit (lbs/kWh) (min) Test unit (lbs/kWh) (min) (lbs/kWh) (min)

3 ...... 3.31 36 5 ...... 3.30 63 7 ...... 3.30 33 4 ...... 3.31 35 6 ...... 3.30 54 8 ...... 3.30 51

The data presented in this NOPR and ending the drying cycle when the Appendix J2 (the currently applicable demonstrate a wide range of cycle times specified final moisture content is test procedure) is approximately 30 among the clothes dryer models within reached, without significant over- minutes. The data also indicate that for each product class. Because these cycle drying; or other factors. standard-size front-loading units on the times correspond to the ‘‘normal’’ market, the shortest available cycle time program on each model, the differences C. Separate Short-Cycle Product Classes when tested under Appendix J2 is among them may be due to the 1. Residential Clothes Washers approximately 45 minutes. This characteristics of the heating element/ distinction demonstrates that front- burner control scheme used by the For residential clothes washers, DOE’s loading clothes washers, which are normal cycle; the effectiveness of the data indicate that for standard-size top- generally more efficient than top- automatic termination control system in loading units on the market, the shortest loading clothes washers, inherently sensing the moisture content of the load available cycle time when tested under require additional time to wash a load

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of clothes. Front-loading clothes section II.B.1 of this document) or the cycle times less than 30 minutes, washers typically use less water, and median method (Method 3); or any other including whether the 30-minute thus less water heating energy, than method that would be appropriate. threshold average cycle time is comparably-sized top-loading clothes DOE is aware that some clothes appropriate or whether DOE should washers due to the tumbling action in washers provide, in addition to the consider a different average cycle time front-loading units, but the lower normal cycle,18 a setting that provides a for the final rule. mechanical cleaning action of this shorter cycle time. While clothes Issue 4: DOE also seeks comment on tumbling as compared to the agitation in washers may offer reduced-time cycle its proposal to establish separate top-loading units can result in relatively options, such cycles are not product classes for front-loading longer cycle times to achieve similar recommended by the manufacturer for standard-size residential clothes cleaning performance. DOE seeks to normal, regular, or typical use for washers with average cycle times less preserve the utility of a short cycle time washing up to a full load of normally- than 45 minutes, including whether the for both top-loading and front-loading soiled cotton clothing (as DOE currently 45-minute threshold average cycle time clothes washers in this NOPR. defines the normal cycle). Such cycles is appropriate or whether DOE should Appendix J2 specifies multiple test are not the product’s ‘‘normal cycle’’ consider a different average cycle time cycles with varying temperature and would not be measured as part of for the final rule. selections and load sizes to be run as the Appendix J2 test because Appendix DOE is not proposing to establish part of the energy test cycle. Because J2 specifies performing testing on the cycle-time based product classes for top- different residential clothes washers normal cycle. loading compact and front-loading may have a differing number of wash DOE presumes that certain compact residential clothes washers and rinse temperature selections manufacturers are currently because compact-size units are niche required to be tested as part of the implementing the shortest possible products that represent less than 4 energy test cycle in Appendix J2, and cycle times that enable a clothes washer percent of residential clothes washer because cycles conducted on the same to achieve satisfactory cleaning models on the market.19 DOE could machine at different wash/rinse performance (and other aspects of consider, however, whether the 30- temperature selections may have clothes washer performance) while minute, 45-minute or some other differing cycle times, DOE proposes in meeting the applicable energy and water product class distinction related to cycle this NOPR that the cycle time for a conservation standards. Based on this time should also apply the compact particular residential clothes washer presumption, the current energy product classes. model would be considered to be the conservation standards may be Issue 5: DOE seeks comment on average of the individual cycle times for precluding manufacturers from bringing whether the 30-minute product class each test cycle conducted as part of the models to the market with substantially distinction should apply to both energy test cycle specified in Appendix shorter cycle times. DOE’s data suggest standard and compact residential J2. This corresponds to ‘‘Method 1’’ that standard-size residential clothes clothes washers, and whether that described in section II.B.1 of this washers may not be able to comply with would include both top-loading and document. DOE is also proposing that current energy and water conservation front-loading configurations. each individual cycle time would be standards for residential top-loading based on the time required to complete clothes washers with cycle times 2. Consumer Clothes Dryers the entire active washing mode (which substantively less than 30 minutes and For consumer clothes dryers, DOE’s includes washing, soaking, tumbling, front-loading clothes washers with cycle data indicate that for both vented agitating, rinsing, and/or removing times substantively less than 45 electric standard-size and vented gas water from the load), not including any minutes. To allow manufacturers the units, the shortest available cycle time continuous status display, intermittent opportunity to innovate and develop when tested under Appendix D2 is tumbling, or air circulation following products that would provide consumers approximately 30 minutes. operation in active washing mode. This the utility of such shorter cycle times, As described, during Appendix D2 approach would also provide DOE proposes in this NOPR to establish testing, consumer clothes dryers information to the consumer about an separate product classes for top-loading equipped with automatic cycle average cycle time across all of the standard-size residential clothes termination are operated using cycles that are representative of washers with average cycle times less representative cycle settings consumer usage, consistent with the than 30 minutes and front-loading (specifically, the ‘‘normal’’ program, or energy and water consumption standard-size residential clothes the cycle recommended by the information provided in the Integrated washers with average cycle times less manufacturer for drying cotton or linen Modified Energy Factor (‘‘IMEF’’) and than 45 minutes. clothes; with the maximum drying Integrated Water Factor (‘‘IWF’’) Issue 3: DOE seeks comment on its temperature and ‘‘normal’’ or ‘‘medium’’ metrics, respectively, that are the bases proposal to establish separate product dryness level, if either setting can be of the current energy conservation classes for top-loading standard-size selected independent of the ‘‘normal’’ standards for residential clothes residential clothes washers with average program) to completion of the cycle, washers. Issue 1: DOE requests comment on the with the cycle deemed valid if the final 18 Section 1.25 of Appendix J2 defines Normal moisture content of the load is no analysis used to determine cycle time cycle as the cycle recommended by the for residential clothes washers, manufacturer (considering manufacturer greater than 2 percent. including whether calculating an instructions, control panel labeling, and other markings on the clothes washer) for normal, regular, 19 Based on DOE’s Compliance Certification average value across all test cycles or typical use for washing up to a full load of Database for residential clothes washers, top- (Method 1) is appropriate. normally-soiled cotton clothing. For machines loading compact and front-loading compact product Issue 2: DOE also seeks comment on where multiple cycle settings are recommended by classes combined represent 32 models out of a total whether, alternatively, a different the manufacturer for normal, regular, or typical use of 816 certified basic models. https:// for washing up to a full load of normally-soiled www.regulations.doe.gov/certification-data/CCMS- method for calculating cycle time cotton clothing, then the Normal cycle is the cycle 4-Clothes_Washers.html#q=Product_Group_ should be used, such as the weighted- selection that results in the lowest IMEF or MEF s%3A%22Clothes%20Washers%22. Last accessed average method (Method 2 described in value. January 6, 2020.

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As stated, manufacturers are not establish short-cycle product classes for than that applicable to other product required to use Appendix D2 at this vented electric compact (120 V or 240 classes for that covered product. time to demonstrate compliance with V), ventless electric compact (240 V), Specifically, by using the present current energy conservation standards. and ventless electric combination tense, ‘‘a higher or lower standard than However, manufacturers must use washer-dryer products. DOE seeks that which applies,’’ EPCA authorizes Appendix D2 in order to qualify a comment on whether to establish DOE to reduce the stringency of the consumer clothes dryer for ENERGY separate product classes for ventless or standard currently applicable to the STAR labeling, and manufacturers must compact electric units that offer a short products covered under the newly use a single test procedure (Appendix cycle, and if so, an appropriate length established separate product class. The D1 or Appendix D2) for all for such a product class. applicability of this provision to current representations of energy use, including Issue 8: DOE seeks comment on standards is further evidenced by the certification of compliance with whether the 30-minute product class additional reference to standards that applicable energy conservation distinction should apply only to vented are not yet applicable (i.e., standards standards. Therefore, all ENERGY electric standard-size and vented gas that ‘‘would apply’’ or ‘‘will apply’’). If STAR-qualified consumer clothes dryers product classes, or whether shorter 42 U.S.C. 6295(q)(1) were to operate are already being tested according to cycle times should be considered for all only in instances in which standards Appendix D2. consumer clothes dryer product classes. have not yet been established, there Issue 6: DOE seeks comment on its Issue 9: DOE further seeks comment would be no need to separately indicate use of Appendix D2 to determine the on appropriate cycle times for any short- the applicability to future standards. cycle time of a clothes dryer. cycle vented electric, ventless electric, Nor would there be any purpose to DOE’s data indicate that vented and ventless combination washer-dryer calling out the potential for higher or electric standard-size and vented gas product classes. lower standards, because there would clothes dryers that comply with the not be any standards against which to current energy conservation standards D. EPCA’s Anti-Backsliding Provision measure that potential. In this manner, exhibit cycle times of approximately 30 In any rulemaking to establish 42 U.S.C. 6295(q) authorizes DOE to minutes or longer. Thus, assuming standards for a separate product class, reduce the stringency of a currently certain manufacturers are currently DOE must consider EPCA’s general applicable standard upon making the implementing the shortest possible prohibition against prescribing amended determinations required by 42 U.S.C. cycle times that enable a clothes dryer standards that increases the maximum 6295(q). to achieve satisfactory drying allowable energy use, or, in the case of This reading of the statutory text performance (and other aspects of showerheads, faucets, water closets, or recognizes that section 6295(q) of EPCA clothes dryer performance) while urinals, water use, or decreases the cannot be read to prohibit DOE from meeting the applicable energy minimum required energy efficiency, of establishing standards that allow for conservation standards, the standards a covered product. (42 U.S.C. 6295(o)(1); technological advances or product may preclude manufacturers from the ‘‘anti-backsliding provision’’) As features that could yield significant offering consumers clothes dryers that explained in the proposed rule that consumer benefits while providing provide the utility of cycle times shorter would grant a petition for rulemaking to additional functionality (i.e., consumer than 30 minutes. For these reasons, DOE establish a new dishwasher product utility) to the consumer. DOE relied on proposes in this NOPR to establish class, the anti-backsliding provision this concept when, in 2011, DOE separate product classes for vented must be read in conjunction with the established separate energy electric standard-size and vented gas product class authority in 42 U.S.C. conservation standards for ventless clothes dryers, reasoning that the clothes dryers with cycle times less than 6295(q), and does not prohibit the ‘‘unique utility’’ presented by the ability 30 minutes. establishment of product classes as to have a clothes dryer in a living area Issue 7: DOE seeks comment on its proposed in this document. (84 FR where vents are impossible to install proposal to establish separate product 33869, 33871–33873; July 16, 2019) (i.e., a high-rise apartment) merited the classes for vented electric standard-size DOE presents the substance of that establishment of a separate product vented gas clothes dryers with cycle explanation in the paragraphs that class. 76 FR 22454, 22485 (Apr. 21, times less than 30 minutes, including follow. 2011). Another example of this that DOE whether the 30-minute threshold cycle Section 6295(q) directs DOE to specify is beginning to explore is network time is appropriate or whether DOE ‘‘a level of energy use or efficiency should consider a different value for the connectivity of covered products. See higher or lower than that which applies DOE’s Smart Products RFI at 83 FR final rule. (or would apply) for such type or class Because compact consumer clothes 46886 (Sept. 18, 2018). Network . . .’’ if the Secretary determines that connectivity is a technology that has dryers and combination washer-dryers covered products within such group are niche products that represent a only recently begun to appear on the consume a different type of energy or market. Moreover, it clearly has a relatively low percentage of models on have a capacity or other performance- the market,20 DOE is not proposing to desirable consumer utility and is a fast- related feature that justifies ‘‘a higher or growing feature of new models of lower standard from that which applies covered products. However, network 20 Based on DOE’s Compliance Certification (or will apply) to other products within Database for consumer clothes dryers, vented connectivity comes with attendant electric compact (120 V or 240 V), ventless electric such type (or class).’’ (42 U.S.C. 6295(q)) energy use. EPCA’s anti-backsliding compact (240 V), and ventless electric combination EPCA explicitly acknowledges, provision cannot be read to prohibit washer-dryer product classes collectively represent therefore, that product features may DOE from establishing standards that 95 models out of a total of 1,086 certified basic arise that require designation of a models. https://www.regulations.doe.gov/ allow for covered products to be certification-data/CCMS-4-Clothes_Dryers_-_ product class with a standard lower connected to a network simply because Appendix_D1.html#q=Product_Group_ standards for those products were s%3A%22Clothes%20Dryers%20- D2.html#q=Product_Group_ %20Appendix%20D1%22 (Appendix D1 models) s%3A%22Clothes%20Dryers%20- established prior to the time that and https://www.regulations.doe.gov/certification- %20Appendix%20D2%22 (Appendix D2 models). network connectivity was even data/CCMS-4-Clothes_Dryers_-_Appendix_ Last accessed January 6, 2020. contemplated, and thereby eliminating

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the ability to implement this consumer- consistent with DOE’s statements that comment on any proposed energy desired option. Similarly, for residential DOE determines this value on a case-by- conservation standards for short-cycle clothes washers and consumer clothes case basis through its own research as residential clothes washers and dryers, 42 U.S.C. 6295(q) authorizes well as public comments received. (80 consumer clothes dryers. DOE to establish standards for product FR 13120, 13138, Mar. 12, 2015). In IV. Request for Comments, Data, and features that provide consumer utility, addition, once DOE makes a such as shorter cycle times. determination that a certain product Information This interpretation is consistent with attribute is a feature, DOE cannot later In this rulemaking, DOE proposes to DOE’s previous recognition of the set a standard that would eliminate that establish separate product classes for importance of technological advances feature. top-loading standard-size and front- that could yield significant consumer loading standard-size residential clothes benefits in the form of lower energy III. Conclusion washers with cycle times of less than 30 costs while providing the same DOE has concluded that it has legal and 45 minutes, respectively, and functionality to the consumer. 80 FR authority to establish separate short- vented electric standard-size and vented 13120, 13138 (Mar. 12, 2015); 81 FR cycle product classes for residential gas consumer clothes dryers with a 65720, 65752 (Sept. 23, 2016). In the clothes washers and consumer clothes cycle time of less than 30 minutes. To proposed and supplemental proposed dryers pursuant to 42 U.S.C. 6295(q). inform its consideration of the proposal rule to establish standards for DOE proposes to establish separate and any future energy conservation residential furnaces, DOE stated that product classes for top-loading standards for such residential clothes tying the concept of feature to a specific standard-size and front-loading washers and consumer clothes dryers, technology would effectively ‘‘lock-in’’ standard-size residential clothes DOE requests additional data on the the currently existing technology as the washers with cycle times of less than 30 following: and 45 minutes, respectively, and for ceiling for product efficiency and Issue 10: DOE requests data on the eliminate DOE’s ability to address such vented electric standard-size and vented cycle times of cycles with various wash technological advances. Id. gas clothes dryers with a cycle time of and rinse temperature selections and Further, EPCA’s anti-backsliding less than 30 minutes. DOE will consider provision is limited in its applicability test procedures and energy conservation load sizes for residential clothes with regard to water use to four standards in separate rulemakings, washers (both standard size and specified products, i.e., showerheads, should such product classes be compact). Issue 11: DOE requests data on the faucets, water closets, or urinals. DOE’s established. cycle time of consumer clothes dryers existing energy conservation standards DOE also proposes to update the (standard size and compact, vented and for residential clothes washers include requirements for the residential clothes both energy and water use components. washer and consumer clothes dryer ventless, 120 V and 240 V, and As residential clothes washers are not standards at 10 CFR 430.32(g)(4) and combination washer-dryer one of the products listed in the anti- (h)(3), respectively. The current configurations) currently on the market. Issue 12: DOE requests comment on backsliding provision with respect to requirements for both products include whether any current technologies are water use, EPCA does not prohibit DOE tables that specify the applicable energy available that could provide a wash from specifying a maximum amount of conservation standards. DOE proposes water use for residential clothes washers to add new paragraphs following each cycle (for residential clothes washers) or that is greater than the existing standard table showing the current requirements a dry cycle (for consumer clothes without regard to whether DOE were to to specify that top-loading standard-size dryers) in less than 30 minutes, and that establish separate product classes for and front-loading standard-size would allow the product to comply with residential clothes washers as proposed residential clothes washers with an the applicable current energy in this proposed rule. average cycle time of less than 30 and conservation standards. Finally, DOE recognizes that 42 U.S.C. 45 minutes, respectively, are not As noted, in addition to the normal 6295(o)(4) prohibits DOE from currently subject to energy or water cycle, some clothes washers provide a establishing standards that would result conservation standards, and that vented cycle that provides a shorter cycle time. in the unavailability in any covered electric standard-size and vented gas To better understand the extent of the product type (or class) of performance clothes dryers with a cycle time of less utility that a short cycle would characteristics (including reliability), than 30 minutes are not currently potentially provide consumers, DOE features, sizes, capacities and volumes subject to energy conservation requests comment and data on the that are substantially the same as those standards. following: generally available at the time of the As noted, DOE seeks comment on Issue 13: For each current residential Secretary’s finding. Section 6295(q) of other potential time limits or utilities to clothes washer product class, DOE seeks EPCA authorizes DOE to set standards delineate the separate product classes, data and information on consumer use that recognize new technologies and as well as whether short-cycle product of reduced-time cycles as a percentage product features, or in this case, features classes should be established for other of individual residential clothes washer that are no longer available in the product classes of residential clothes use; the cycle time of the reduced-time market. This reading of the statute is washers and consumer clothes dryers. cycles selected; and the cycle time of consistent with DOE’s previous Should DOE finalize separate product the ‘‘normal’’ cycle of that clothes acknowledgment that its determination classes, DOE would then evaluate washer. of what constitutes a performance- energy and water consumption limits to Issue 14: DOE seeks data and related feature justifying a different determine standards for each product information on how residential clothes standard could change depending on class that provide for the maximum washers with ‘‘express’’ or ‘‘quick the technology and the consumer utility, energy efficiency that is technologically wash’’ cycles operate and how those and that as a result, certain products feasible and economically justified, and cycles compare to a ‘‘normal cycle’’ may disappear from (or reappear in) the will result in a significant conservation with regard to cleaning clothing. market entirely due to shifting of energy. (42 U.S.C. 6295(o)(2)(A)) DOE Issue 15: DOE requests information on consumer demand. This reading is also will provide additional opportunity for the operating demands on consumers

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that may favor shorter cycle times for rulemakings, recordkeeping and and last names, organization names, both residential clothes washers and reporting requirements, and compliance correspondence containing comments, consumer clothes dryers. and certification requirements and any documents submitted with the In analyzing the feasibility of applicable to residential clothes washers comments. potential energy conservation standards, and clothes dryers, while remaining Do not submit to http:// DOE uses information about existing consistent with the requirements of www.regulations.gov information for and past technology options and EPCA. which disclosure is restricted by statute, prototype designs to help identify such as trade secrets and commercial or technologies that manufacturers could V. Submission of Comments financial information (hereinafter use to meet and/or exceed a given set of DOE invites all interested parties to referred to as Confidential Business energy conservation standards under submit in writing by October 13, 2020, Information (‘‘CBI’’)). Comments consideration. comments and information on matters submitted through http:// Issue 16: DOE seeks information on addressed in this document and on www.regulations.gov cannot be claimed technologies currently used or that other matters relevant to DOE’s as CBI. Comments received through the could be used to achieve cycles with consideration of a separate product website will waive any CBI claims for reduced time. Specifically, DOE is classes for top-loading, standard-size the information submitted. For interested in information regarding residential clothes washers with an information on submitting CBI, see the expected market adoption and any average cycle time of less than 30 Confidential Business Information concerns with incorporating such minutes when conducting the test section. technologies into products (e.g., impacts procedure at Appendix J2; for front- DOE processes submissions made on consumer utility; potential safety loading, standard-size residential through http://www.regulations.gov concerns; manufacturing, production, clothes washers with an average cycle before posting. Normally, comments implementation issues, etc.). time of less than 45 minutes when will be posted within a few days of Issue 17: DOE seeks input on the costs conducting the test procedure at being submitted. However, if large associated with incorporating particular Appendix J2; and vented electric volumes of comments are being technologies and/or design options to standard-size clothes dryers and vented processed simultaneously, your achieve cycles with reduced time. gas clothes dryers with a cycle time of comment may not be viewable for up to Issue 18: DOE seeks information on less than 30 minutes when conducting several weeks. Please keep the comment the range of efficiencies or performance the test procedure in Appendix D2. DOE tracking number that http:// characteristics associated with each also seeks comment on potential energy www.regulations.gov provides after you technology option that could be used to conservations standards for such classes have successfully uploaded your achieve cycles with reduced time. of residential clothes washers and comment. Issue 19: DOE requests information on consumer clothes dryers, should they be Submitting comments via email, hand the investments necessary to established. After the close of the delivery/courier, or postal mail. incorporate specific technologies and comment period, DOE will review the Comments and documents submitted design options that could be used to public comments received and begin via email, hand delivery/courier, or achieve cycles with reduced time, collecting data and conducting the postal mail also will be posted to http:// including, but not limited to, costs analyses necessary to consider www.regulations.gov. If you do not want related to new or modified tooling (if appropriate energy conservation your personal contact information to be any), materials, engineering and standard levels. publicly viewable, do not include it in development efforts to implement each Submitting comments via http:// your comment or any accompanying design option, and manufacturing or www.regulations.gov. The http:// documents. Instead, provide your production impacts. www.regulations.gov web page will contact information on a cover letter. Issue 20: DOE requests comment on require you to provide your name and Include your first and last names, email any impacts to small businesses that contact information. Your contact address, telephone number, and may occur as a result of this proposal. information will be viewable to DOE optional mailing address. The cover DOE has identified a variety of issues Building Technologies staff only. Your letter will not be publicly viewable as on which it seeks input in this contact information will not be publicly long as it does not include any rulemaking to establish separate product viewable except for your first and last comments. classes and the appropriate energy names, organization name (if any), and Include contact information each time conservation standards for such product submitter representative name (if any). you submit comments, data, documents, classes, should they be established. If your comment is not processed and other information to DOE. If you Additionally, DOE welcomes comments properly because of technical submit via postal mail or hand delivery/ on other issues relevant to the conduct difficulties, DOE will use this courier, please provide all items on a of this rulemaking that may not information to contact you. If DOE CD, if feasible, in which case it is not specifically be identified in this cannot read your comment due to necessary to submit printed copies. No document. In particular, DOE notes that technical difficulties and cannot contact faxes will be accepted. under Executive Order 13771, you for clarification, DOE may not be Comments, data, and other ‘‘Reducing Regulation and Controlling able to consider your comment. information submitted to DOE Regulatory Costs,’’ Executive Branch However, your contact information electronically should be provided in agencies such as DOE are directed to will be publicly viewable if you include PDF (preferred), Microsoft Word or manage the costs associated with the it in the comment or in any documents Excel, WordPerfect, or text (ASCII) file imposition of expenditures required to attached to your comment. Any format. Provide documents that are not comply with Federal regulations. See 82 information that you do not want to be secured, written in English and free of FR 9339 (Feb. 3, 2017). Consistent with publicly viewable should not be any defects or viruses. Documents that Executive Order, DOE encourages included in your comment, nor in any should not contain special characters or the public to provide input on measures document attached to your comment. any form of encryption and, if possible, that DOE could take to lower the cost of Following this instruction, persons they should carry the electronic its energy conservation standards viewing comments will see only first signature of the author.

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Campaign form letters. Please submit B. Review Under Executive Order 13771 specified in 13 CFR part 121. The campaign form letters by the originating On January 30, 2017, the President threshold values set forth in these organization in batches of between 50 to issued Executive Order (‘‘E.O.’’) 13771, regulations use size standards and codes 500 form letters per PDF or as one form ‘‘Reducing Regulation and Controlling established by the North American letter with a list of supporters’ names Regulatory Costs.’’ E.O. 13771 stated the Industry Classification System compiled into one or more PDFs. This policy of the executive branch is to be (‘‘NAICS’’) that are available at: https:// reduces comment processing and prudent and financially responsible in www.sba.gov/document/support- tablesize-standards. The threshold posting time. the expenditure of funds, from both number for NAICS classification code Confidential Business Information. public and private sources. E.O. 13771 335220, major household appliance According to 10 CFR 1004.11, any stated it is essential to manage the costs manufacturing, which includes clothes person submitting information that he associated with the governmental dryer and clothes washer or she believes to be confidential and imposition of private expenditures manufacturers, is 1,500 employees. exempt by law from public disclosure required to comply with Federal Manufacturers must certify compliance should submit via email, postal mail, or regulations. of their products to DOE prior to hand delivery/courier two well-marked DOE has determined that this distributing them in commerce. Because copies: One copy of the document proposed rule is a deregulatory action. no small manufacturers have certified to marked confidential including all the This proposed rule, if adopted, would DOE in 2019 or 2020, DOE does not information believed to be confidential, establish separate product classes for and one copy of the document marked believe that there are any small short-cycle residential clothes washers manufacturers of these products. In ‘‘non-confidential’’ with the information and consumer clothes dryers. believed to be confidential deleted. addition, this rulemaking proposes to Manufacturers could design and establish product classes for residential Submit these documents via email or on manufacture new products in this a CD, if feasible. DOE will make its own clothes washers and consumer clothes product class to meet consumer dryers with cycle times less than 30 determination about the confidential demand. DOE also seeks data to assist status of the information and treat it minutes. Appropriate standard levels its determination of the appropriate would be established in subsequent according to its determination. standard levels for such product classes It is DOE’s policy that all comments rulemakings. As a result, DOE certifies in subsequent rulemakings. may be included in the public docket, that the proposed rule would not have without change and as received, C. Review Under the Regulatory a significant impact on a substantial including any personal information Flexibility Act number of small entities. DOE will transmit the certification and supporting provided in the comments (except The Regulatory Flexibility Act (5 information deemed to be exempt from statement of factual basis to the Chief U.S.C. 601 et seq.) requires preparation Counsel for Advocacy of the Small public disclosure). of an initial regulatory flexibility DOE considers public participation to Business Administration for review analysis (‘‘IRFA’’) for any rule that by under 5 U.S.C. 605(b). be a very important part of the process law must be proposed for public for developing test procedures and comment, unless the agency certifies D. Review Under the Paperwork energy conservation standards. DOE that the rule, if promulgated, will not Reduction Act actively encourages the participation have a significant economic impact on and interaction of the public during the This rulemaking, which proposes to a substantial number of small entities. establish product classes for residential comment period in each stage of this As required by Executive Order 13272, process. Interactions with and between clothes washers and consumer clothes ‘‘Proper Consideration of Small Entities dryers with cycle times less than 30 members of the public provide a in Agency Rulemaking,’’ 67 FR 53461 balanced discussion of the issues and minutes, but does not establish (Aug. 16, 2002), DOE published standards or new testing requirements assist DOE in the process. Anyone who procedures and policies on February 19, that would be required for testing such wishes to be added to the DOE mailing 2003, to ensure that the potential products, imposes no new information list to receive future notices and impacts of its rules on small entities are or record keeping requirements. information about this process should properly considered during the Accordingly, Office of Management and contact Appliance and Equipment rulemaking process. 68 FR 7990. DOE Budget clearance is not required under Standards Program staff at (202) 287– has made these procedures and policies the Paperwork Reduction Act. (44 1445 or via email at available on the Office of the General U.S.C. 3501 et seq.) ApplianceStandardsQuestions@ Counsel’s website (http://energy.gov/gc/ Manufacturers of covered products ee.doe.gov. office-general-counsel). generally must certify to DOE that their VI. Procedural Issues and Regulatory DOE reviewed this proposed rule products comply with any applicable Review under the provisions of the Regulatory energy conservation standards. To Flexibility Act and the procedures and certify compliance, manufacturers must A. Review Under Executive Orders policies published on February 19, first obtain test data for their products 12866 ‘‘Regulatory Planning and 2003. DOE has tentatively concluded according to the DOE test procedures, Review’’ that this proposed rule will not have a including any amendments adopted for This proposed rule is a ‘‘significant significant impact on a substantial those test procedures. DOE has regulatory action’’ under the criteria set number of small entities. The factual established regulations for the out in section 3(f) of Executive Order basis for this determination is as certification and recordkeeping 12866, ‘‘Regulatory Planning and follows: requirements for all covered consumer Review.’’ 58 FR 51735 (October 4, 1993). The Small Business Administration products and commercial equipment, Accordingly, this action was subject to (‘‘SBA’’) considers a business entity to including residential clothes washers review by the Office of Information and be a small business, if, together with its and consumer clothes dryers. (See Regulatory Affairs (‘‘OIRA’’) in the affiliates, it employs less than a generally 10 CFR part 429). The Office of Management and Budget threshold number of workers or earns collection-of-information requirement (‘‘OMB’’). less than the average annual receipts for the certification and recordkeeping

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is subject to review and approval by have federalism implications. On March expenditure by State, local, and Tribal OMB under the Paperwork Reduction 14, 2000, DOE published a statement of governments, in the aggregate, or by the Act (‘‘PRA’’). This requirement has been policy describing the intergovernmental private sector of $100 million or more approved by OMB under OMB control consultation process it will follow in the in any one year (adjusted annually for number 1910–1400. Public reporting development of such regulations. 65 FR inflation), section 202 of UMRA requires burden for the certification is estimated 13735. EPCA governs and prescribes a Federal agency to publish a written to average 35 hours per response, Federal preemption of State regulations statement that estimates the resulting including the time for reviewing as to energy conservation for the costs, benefits, and other effects on the instructions, searching existing data products that are the subject of this national economy. (2 U.S.C. 1532(a), (b)) sources, gathering and maintaining the proposed rule. States can petition DOE The UMRA also requires a Federal data needed, and completing and for exemption from such preemption to agency to develop an effective process reviewing the collection of information. the extent, and based on criteria, set to permit timely input by elected Notwithstanding any other provision forth in EPCA. (42 U.S.C. 6297) No officers of State, local, and Tribal of the law, no person is required to further action is required by Executive governments on a proposed ‘‘significant respond to, nor shall any person be Order 13132. intergovernmental mandate,’’ and subject to a penalty for failure to comply requires an agency plan for giving notice G. Review Under Executive Order 12988 with, a collection of information subject and opportunity for timely input to to the requirements of the PRA, unless With respect to the review of existing potentially affected small governments that collection of information displays a regulations and the promulgation of before establishing any requirements currently valid OMB Control Number. new regulations, section 3(a) of that might significantly or uniquely Executive Order 12988, ‘‘Civil Justice affect them. On March 18, 1997, DOE E. Review Under the National Reform,’’ imposes on Federal agencies Environmental Policy Act of 1969 published a statement of policy on its the general duty to adhere to the process for intergovernmental In this proposed rule, DOE proposes following requirements: (1) Eliminate consultation under UMRA (62 FR to establish product classes for drafting errors and ambiguity, (2) write 12820) (also available at http:// residential clothes washers and regulations to minimize litigation, and www.gc.doe.gov). This proposed rule consumer clothes dryers with cycle (3) provide a clear legal standard for contains neither an intergovernmental times less than 30 minutes. DOE has affected conduct rather than a general mandate nor a mandate that may result determined that this rule falls into a standard and promote simplification in the expenditure of $100 million or class of actions that are categorically and burden reduction. 61 FR 4729 (Feb. more in any year, so these requirements excluded from review under the 7, 1996). Section 3(b) of Executive Order under the Unfunded Mandates Reform National Environmental Policy Act of 12988 specifically requires that Act do not apply. 1969 (42 U.S.C. 4321 et seq.) and DOE’s Executive agencies make every implementing regulations at 10 CFR part reasonable effort to ensure that the I. Review Under the Treasury and 1021. Specifically, this proposed rule regulation: (1) Clearly specifies the General Government Appropriations would only establish new product preemptive effect, if any, (2) clearly Act, 1999 classes for residential clothes washers specifies any effect on existing Federal Section 654 of the Treasury and and consumer clothes dryers and, law or regulation, (3) provides a clear General Government Appropriations therefore, would not result in any legal standard for affected conduct Act, 1999 (Pub. L. 105–277) requires environmental impacts. Thus, this while promoting simplification and Federal agencies to issue a Family rulemaking is covered by Categorical burden reduction, (4) specifies the Policymaking Assessment for any rule Exclusion A5 under 10 CFR part 1021, retroactive effect, if any, (5) adequately that may affect family well-being. This subpart D, which applies to any defines key terms, and (6) addresses proposed rule would not have any rulemaking that interprets or amends an other important issues affecting clarity impact on the autonomy or integrity of existing rule without changing the and general draftsmanship under any the family as an institution. environmental effect of that rule. guidelines issued by the Attorney Accordingly, DOE has concluded that it Accordingly, neither an environmental General. Section 3(c) of Executive Order is not necessary to prepare a Family assessment nor an environmental 12988 requires Executive agencies to Policymaking Assessment. impact statement is required. review regulations in light of applicable standards in section 3(a) and section J. Review Under Executive Order 12630 F. Review Under Executive Order 13132 3(b) to determine whether they are met The Department has determined, Executive Order 13132, ‘‘Federalism,’’ or it is unreasonable to meet one or under Executive Order 12630, 64 FR 43255 (Aug. 10, 1999), imposes more of them. DOE has completed the ‘‘Governmental Actions and Interference certain requirements on Federal required review and determined that, to with Constitutionally Protected Property agencies formulating and implementing the extent permitted by law, this Rights,’’ 53 FR 8859 (March 15, 1988), policies or regulations that preempt proposed rule meets the relevant that this proposed rule would not result State law or that have federalism standards of Executive Order 12988. in any takings that might require implications. The Executive Order compensation under the Fifth H. Review Under the Unfunded requires agencies to examine the Amendment to the U.S. Constitution. constitutional and statutory authority Mandates Reform Act of 1995 supporting any action that would limit Title II of the Unfunded Mandates K. Review Under the Treasury and the policymaking discretion of the Reform Act of 1995 (‘‘UMRA’’) requires General Government Appropriations States and to carefully assess the each Federal agency to assess the effects Act, 2001 necessity for such actions. The of Federal regulatory actions on State, Section 515 of the Treasury and Executive Order also requires agencies local, and Tribal governments and the General Government Appropriations to have an accountable process to private sector. Public Law 104–4, sec. Act, 2001 (44 U.S.C. 3516, note) ensure meaningful and timely input by 201 (codified at 2 U.S.C. 1531). For a provides for Federal agencies to review State and local officials in the proposed regulatory action likely to most disseminations of information to development of regulatory policies that result in a rule that may cause the the public under information quality

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guidelines established by each agency establish product classes for residential document in electronic format for pursuant to general guidelines issued by clothes washers and consumer clothes publication, as an official document of OMB. OMB’s guidelines were published dryers with cycle times less than 30 the Department of Energy. This at 67 FR 8452 (Feb. 22, 2002), and minutes, would not have a significant administrative process in no way alters DOE’s guidelines were published at 67 adverse effect on the supply, the legal effect of this document upon FR 62446 (Oct. 7, 2002). DOE has distribution, or use of energy and, publication in the Federal Register. reviewed this proposed rule under the therefore, is not a significant energy Signed in Washington, DC, on July 16, OMB and DOE guidelines and has action. Accordingly, DOE has not 2020. concluded that it is consistent with prepared a Statement of Energy Effects Treena V. Garrett, on this proposed rule. applicable policies in those guidelines. Federal Register Liaison Officer, U.S. L. Review Under Executive Order 13211 VII. Approval of the Office of the Department of Energy. Secretary For the reasons set forth in the Executive Order 13211, ‘‘Actions preamble, DOE proposes to amend part Concerning Regulations That The Secretary of Energy has approved 430 of chapter II, subchapter D, of title Significantly Affect Energy Supply, publication of this notice of proposed 10 of the Code of Federal Regulations, Distribution, or Use,’’ 66 FR 28355 (May rulemaking. as set forth below: 22, 2001), requires Federal agencies to List of Subjects in 10 CFR Part 430 prepare and submit to OIRA at OMB, a Administrative practice and PART 430—ENERGY CONSERVATION Statement of Energy Effects for any procedure, Confidential business PROGRAM FOR CONSUMER proposed significant energy action. A information, Energy conservation, PRODUCTS ‘‘significant energy action’’ is defined as Household appliances, Imports, any action by an agency that Incorporation by reference, ■ 1. The authority citation for part 430 promulgates or is expected to lead to Intergovernmental relations, Small continues to read as follows: promulgation of a final rule, and that (1) businesses. Authority: 42 U.S.C. 6291–6309; 28 U.S.C. is a significant regulatory action under 2461 note. Executive Order 12866, or any successor Signing Authority order; and (2) is likely to have a This document of the Department of ■ 2. Section 430.32 is amended by significant adverse effect on the supply, Energy was signed on July 16, 2020, by revising paragraphs (g)(4) and (h)(3) to distribution, or use of energy, or (3) is Daniel R. Simmons, Assistant Secretary read as follows: designated by the Administrator of for Energy Efficiency, Energy Efficiency OIRA as a significant energy action. For § 430.32 Energy and water conservation and Renewable Energy, pursuant to standards and their compliance dates. any proposed significant energy action, delegated authority from the Secretary the agency must give a detailed of Energy. That document with the * * * * * statement of any adverse effects on original signature and date is (g) * * * energy supply, distribution, or use maintained by DOE. For administrative (4)(i) Except as provided in paragraph should the proposal be implemented, purposes only, and in compliance with (g)(4)(ii) of this section, clothes washers and of reasonable alternatives to the requirements of the Office of the Federal manufactured on or after January 1, action and their expected benefits for Register, the undersigned DOE Federal 2018, shall have an Integrated Modified energy supply, distribution, and use. Register Liaison Officer has been Energy Factor no less than, and an This proposed rule, which would authorized to sign and submit the Integrated Water Factor no greater than:

Integrated Integrated modified water Product class energy factor factor (cu.ft./kWh/ (gal/cycle/ cycle) cu.ft.)

i. Top-loading, Compact (less than 1.6 ft3 capacity) ...... 1.15 12.0 ii. Top-loading, Standard (1.6 ft3 or greater capacity) ...... 1.57 6.5 iii. Front-loading, Compact (less than 1.6 ft3 capacity) ...... 1.13 8.3 iv. Front-loading, Standard (1.6 ft3 or greater capacity) ...... 1.84 4.7

(ii) Top-loading, standard clothes Combined Combined washers with an average cycle time of Product class energy factor Product class energy factor less than 30 minutes and front-loading, (lbs/kWh) (lbs/kWh) standard clothes washers with an i. Vented Electric, Standard vi. Ventless Electric, Com- average cycle time of less than 45 (4.4 ft3 or greater capac- bination Washer-Dryer ...... 2.08 minutes are not currently subject to ity) ...... 3.73 energy or water conservation standards. ii. Vented Electric, Compact (ii) Vented, electric standard clothes (h) * * * (120V) (less than 4.4 ft3 capacity) ...... 3.61 dryers and vented gas clothes dryers (3)(i) Except as provided in paragraph iii. Vented Electric, Compact with a cycle time of less than 30 (h)(3)(ii) of this section, clothes dryers (240V) (less than 4.4 ft3 minutes, when tested according to manufactured on or after January 1, capacity) ...... 3.27 appendix D2 in subpart B of this part, 2015, shall have a combined energy iv. Vented Gas ...... 3.30 factor no less than: v. Ventless Electric, Compact (240V) (less than 4.4 ft3 capacity) ...... 2.55

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are not currently subject to energy Alfred M. Pollard, General Counsel, A. Statutory and Regulatory Background conservation standards. Attention: Comments/RIN 2590–AB04, for the Existing Housing Goals * * * * * Federal Housing Finance Agency, The Federal Housing Enterprises [FR Doc. 2020–15750 Filed 8–12–20; 8:45 am] Eighth Floor, 400 Seventh Street SW, Financial Safety and Soundness Act of BILLING CODE 6450–01–P Washington, DC 20219. Please note that 1992 (Safety and Soundness Act) all mail sent to FHFA via U.S. Mail is requires FHFA to establish several routed through a national irradiation annual housing goals for both single- FEDERAL HOUSING FINANCE facility, a process that may delay family and multifamily mortgages AGENCY delivery by approximately two weeks. purchased by Fannie Mae and Freddie Mac.1 The annual housing goals are one 12 CFR Part 1282 FOR FURTHER INFORMATION CONTACT: Ted Wartell, Associate Director, Housing & measure of the extent to which the RIN 2590–AB04 Community Investment, Division of Enterprises are meeting their public purposes, which include ‘‘an affirmative 2021 Enterprise Housing Goals Housing Mission and Goals, at (202) 649–3157, [email protected]; obligation to facilitate the financing of affordable housing for low- and AGENCY: Federal Housing Finance Padmasini Raman at (202) 649–3633, moderate-income families in a manner Agency. [email protected]; or Kevin consistent with their overall public Sheehan, Associate General Counsel, ACTION: Proposed rule. purposes, while maintaining a strong Office of General Counsel, (202) 649– SUMMARY: The Federal Housing Finance financial condition and a reasonable 3086, [email protected]. These 2 Agency (FHFA) is proposing a rule and economic return.’’ are not toll-free numbers. The mailing FHFA has established annual housing seeking comments on proposed address is: Federal Housing Finance benchmark levels for the 2021 housing goals for Enterprise purchases of single- Agency, 400 Seventh Street SW, family and multifamily goals consistent goals for Fannie Mae and Freddie Mac Washington, DC 20219. The telephone (the Enterprises). The housing goals with the requirements of the Safety and number for the Telecommunications Soundness Act. The structure of the apply to mortgages purchased by the Device for the Deaf is (800) 877–8339. Enterprises and include separate housing goals and the rules for categories for single-family and SUPPLEMENTARY INFORMATION: determining how mortgage purchases multifamily housing that is affordable to are counted or not counted are defined I. Comments 3 low-income and very low-income in the housing goals regulation. The most recent rule established benchmark families, among other categories. This FHFA invites comments on all aspects proposed rule would establish levels for the housing goals for 2018– of the proposed rule and will take all 2020.4 This proposed rule would benchmark levels for each of the comments into consideration before housing goals for 2021. establish benchmark levels for 2021, but issuing a final rule. Copies of all it would not make any other changes to DATES: Comments must be received on comments on the proposed rule will be the housing goals regulation. or before October 13, 2020. posted without change, including any Single-family goals. The single-family ADDRESSES: You may submit your personal information you provide such goals defined under the Safety and comments on the proposed rule, as your name, address, email address, Soundness Act include separate identified by regulatory information and telephone number, on the FHFA categories for home purchase mortgages number (RIN) 2590–AB04, by any one of website at https://www.fhfa.gov. In for low-income families, very low- the following methods: addition, copies of all comments income families, and families that reside • Agency Website: https:// received will be available for in low-income areas.5 FHFA has also www.fhfa.gov/open-for-comment-or- examination by the public through the established a subgoal within the low- input. electronic rulemaking docket for this income areas goal that is limited to • Federal eRulemaking Portal: proposed rule also located on the FHFA families in low-income census tracts https://www.regulations.gov. Follow the website. and moderate-income families in instructions for submitting comments. If minority census tracts. Performance on you submit your comment to the II. Background the single-family home purchase goals is Federal eRulemaking Portal, please also Uncertainty over public health and measured as the percentage of the total send it by email to FHFA at home purchase mortgages purchased by [email protected] to ensure the economic impacts of the COVID–19 pandemic has caused significant an Enterprise each year that qualify for timely receipt by FHFA. Include the each goal or subgoal. There is also a following information in the subject line disruption in both the single-family and multifamily housing markets since separate goal for refinancing mortgages of your submission: Comments/RIN for low-income families, and 2590–AB04. March. For reasons explained in more • detail later in the proposed rule, due to Hand Delivered/Courier: The hand 1 the unexpectedly severe nature of the See 12 U.S.C. 4561(a). delivery address is: Alfred M. Pollard, 2 See 12 U.S.C. 4501(7). General Counsel, Attention: Comments/ COVID–19 pandemic and associated 3 See 12 CFR part 1282. RIN 2590–AB04, Federal Housing economic uncertainty, FHFA is 4 See 83 FR 5878 (Feb. 12, 2018). Finance Agency, Eighth Floor, 400 proposing benchmark levels for the 5 The low-income areas housing goal includes (1) Seventh Street SW, Washington, DC single-family and multifamily goals for families in ‘‘low-income census tracts,’’ defined as calendar year 2021 only. The proposed census tracts with median income less than or equal 20219. Deliver the package at the to 80 percent of AMI; (2) families with incomes less Seventh Street entrance Guard Desk, benchmark levels are set forth below than or equal to area median income who reside in First Floor, on business days between 9 and would be the same as those for minority census tracts (defined as census tracts a.m. and 5 p.m. 2018–2020. FHFA will subsequently with a minority population of at least 30 percent • conduct a new round of notice and and a tract median income of less than 100 percent U.S. Mail, United Parcel Service, of AMI); and (3) families with incomes less than or Federal Express, or Other Mail Service: comment rulemaking to establish equal to 100 percent of area median income who The mailing address for comments is: benchmark levels for 2022 and beyond. reside in designated disaster areas.

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performance on the refinancing goal is mortgages on multifamily properties Safety and Soundness Act and the determined in a similar way. (properties with five or more units) with Enterprise housing goals regulation Under the Safety and Soundness Act, rental units affordable to low-income based on new information or the single-family housing goals are families and mortgages on multifamily developments that occur after limited to mortgages on owner-occupied properties with rental units affordable to publication of a final rule. housing with one to four units total. The very low-income families. FHFA has For example, under the Safety and single-family goals cover conventional, also established a small multifamily Soundness Act and the Enterprise conforming mortgages, defined as low-income subgoal for properties with housing goals regulation, FHFA may mortgages that are not insured or 5–50 units. The multifamily housing reduce the benchmark levels in guaranteed by the Federal Housing goals include all Enterprise multifamily response to an Enterprise petition for Administration or another government mortgage purchases, regardless of the reduction for any of the single-family or agency and with principal balances that purpose of the loan. The multifamily multifamily housing goals in a do not exceed the conforming loan goals evaluate the performance of the particular year based on a determination limits for Enterprise mortgages. Enterprises based on numeric targets, by FHFA that: (1) Market and economic Two-part evaluation approach. The not percentages, for the number of conditions or the financial condition of performance of the Enterprises on the affordable units in properties backed by the Enterprise require a reduction; or (2) housing goals is evaluated using a two- mortgages purchased by an Enterprise. efforts to meet the goal or subgoal would part approach, comparing the goal- FHFA has not established a result in the constraint of liquidity, qualifying share of the Enterprise’s retrospective market level measure for over-investment in certain market mortgage purchases to two separate the multifamily goals, due in part to a segments, or other consequences measures: A benchmark level; and a lack of comprehensive data about the contrary to the intent of the Safety and market level. In order to meet a single- multifamily market. As a result, FHFA Soundness Act or the purposes of the family housing goal, the percentage of currently measures Enterprise Enterprises’ charter acts.8 mortgage purchases by an Enterprise multifamily goals performance against The Safety and Soundness Act and that meet each goal must equal or the benchmark levels only. the Enterprise housing goals regulation exceed either the benchmark level or the The Safety and Soundness Act also take into account the possibility market level for that year. The requires that affordability for rental that achievement of a particular housing benchmark level is set prospectively by units under the multifamily goals be goal may or may not have been feasible rulemaking based on various factors set determined based on rents that ‘‘[do] not for an Enterprise. If FHFA determines forth in the Safety and Soundness Act.6 exceed 30 percent of the maximum that a housing goal was not feasible for The market level is determined income level of such income category, an Enterprise to achieve, then the retrospectively for each year, based on with appropriate adjustments for unit statute and regulation provide for no the actual goal-qualifying share of the size as measured by the number of further enforcement of that housing goal overall market as measured by the Home bedrooms.’’ 7 The housing goals for that year.9 Mortgage Disclosure Act (HMDA) data regulation considers the net rent paid by If FHFA determines that an Enterprise for that year. The overall market that the renter and, therefore, nets out any failed to meet a housing goal and that FHFA uses for setting both the subsidy payments that the renter may achievement of the housing goal was prospective benchmark level and the receive, including housing assistance feasible, then the statute and regulation retrospective market level consists of all payments. provide FHFA with discretion to require single-family owner-occupied the Enterprise to submit a housing plan B. Adjusting the Housing Goals conventional conforming mortgages that describing the specific actions the would be eligible for purchase by either If, after publication of a final rule Enterprise will take to improve its Enterprise. It includes loans purchased establishing the housing goals for 2021, performance. FHFA is requesting by the Enterprises as well as comparable FHFA determines that any of the single- comments on factors that FHFA should loans held in a lender’s portfolio. It also family or multifamily housing goals consider in determining whether to includes any loans that are part of a should be adjusted in light of market require an Enterprise to submit a private label security (PLS), though very conditions, to ensure the safety and housing plan. For example, are there few such securities have been issued for soundness of the Enterprises, or for any other Enterprise activities such as conventional conforming mortgages other reason, FHFA will take any steps forbearance actions, loss mitigation since 2008. that are necessary and appropriate to efforts, loan modifications, and other While both the benchmark level and adjust that goal such as reducing the market support activities that FHFA the retrospective market level are benchmark levels through the processes should take into account while designed to measure the current year’s in the existing regulation. FHFA reviewing Enterprise goals performance mortgage originations, the performance recognizes that 2021 is likely to be a for 2021 on both the single-family and of the Enterprises on the housing goals year of disrupted economic activity. multifamily side? While FHFA is not includes all Enterprise purchases in that While FHFA is taking this uncertainty proposing any change to the regulation year, regardless of the year in which the into consideration in proposing the regarding housing plans, FHFA loan was originated. This includes benchmark levels for 2021, FHFA may welcomes input from the public on housing goals credit when the take other actions consistent with the factors that FHFA should consider in Enterprises acquire qualified seasoned making discretionary determinations on loans. (Seasoned loans are loans that 7 See 12 U.S.C. 4563(c). This affordability whether to require a housing plan. were originated in prior years and definition is sometimes referred to as the ‘‘Brooke Amendment,’’ which states that to be affordable at C. Housing Goals Under acquired by the Enterprise in the current the 80 percent of area median income level, the year.) rents must not exceed 30 percent of the renter’s Conservatorship Multifamily goals. The multifamily income which must not exceed 80 percent of the On September 6, 2008, FHFA placed goals defined under the Safety and area median income. See https://www.huduser.gov/ each Enterprise into conservatorship. portal/pdredge/pdr_edge_featd_article_092214.html Soundness Act include categories for for a description of the Brooke Amendment and background on the notion of affordability embedded 8 12 CFR 1282.14(d). 6 See 12 U.S.C. 4562(e). in the housing goals. 9 12 CFR 1282.21(a); 12 U.S.C. 4566(b).

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Although the Enterprises remain in III. Summary of Proposed Rule beyond. The proposed benchmark levels conservatorship at this time, they Due to the unexpectedly severe nature are set forth below and would be the continue to have the mission of of the COVID–19 pandemic and same as those for 2018–2020. supporting a stable and liquid national associated economic uncertainty, FHFA A. Proposed Benchmark Levels for the market for residential mortgage is proposing benchmark levels for the Single-Family Housing Goals for 2021 financing. FHFA has continued to single-family and multifamily goals for establish annual housing goals for the calendar year 2021 only. FHFA will This proposed rule would establish Enterprises and to assess their subsequently conduct a new round of the benchmark levels for the single- performance under the housing goals notice and comment rulemaking to family housing goals and subgoal for each year during conservatorship. establish benchmark levels for 2022 and 2021 as follows:

Current Proposed benchmark benchmark Goal Criteria level for level for 2018–2020 2021 (percent) (percent)

Low-Income Home Purchase Goal Home purchase mortgages on single-family, owner-occupied properties 24 24 with borrowers with incomes no greater than 80 percent of area me- dian income. Very Low-Income Home Purchase Home purchase mortgages on single-family, owner-occupied properties 6 6 Goal. with borrowers with incomes no greater than 50 percent of area me- dian income. Low-Income Areas Home Purchase Home purchase mortgages on single-family, owner-occupied properties 14 14 Subgoal. with: • Borrowers in census tracts with tract median income of no greater than 80 percent of area median income; or • Borrowers with income no greater than 100 percent of area median income in census tracts where (i) tract income is less than 100 per- cent of area median income, and (ii) minorities comprise at least 30 percent of the tract population. Low-Income Refinancing Goal ...... Refinancing mortgages on single-family, owner-occupied properties with 21 21 borrowers with incomes no greater than 80 percent of area median income.

The single-family housing goals also each year based on Federal Emergency B. Proposed Benchmark Levels for the include a Low-Income Areas Home Management Agency declarations of Multifamily Housing Goals for 2021 Purchase Goal that the regulation disasters that are applicable to that year. defines as the benchmark level for the The proposed rule would not make any The proposed rule would also Low-Income Areas Home Purchase change to the criteria or process for establish the benchmark levels for the Subgoal plus an additional ‘‘disaster setting the additional ‘‘disaster areas’’ multifamily goal and subgoals for 2021 areas’’ increment that FHFA determines increment for 2021. as follows:

Current Proposed benchmark benchmark Goal Criteria level for level for 2018–2020 2021 (units) (units)

Low-Income Goal ...... Units affordable to families with incomes no greater than 80 percent of 315,000 315,000 area median income in multifamily rental properties with mortgages purchased by an Enterprise. Very Low-Income Subgoal ...... Units affordable to families with incomes no greater than 50 percent of 60,000 60,000 area median income in multifamily rental properties with mortgages purchased by an Enterprise. Low-Income Small Multifamily Units affordable to families with incomes no greater than 80 percent of 10,000 10,000 Subgoal. area median income in small multifamily rental properties (5 to 50 units) with mortgages purchased by an Enterprise.

IV. Single-Family Housing Goals 3. The performance and effort of the market, as applicable, serving each of Enterprises toward achieving the the types of families described, relative The Safety and Soundness Act housing goals in previous years; to the size of the overall purchase requires FHFA to consider the following 4. The ability of the Enterprises to money mortgage market or the overall seven factors in setting the single-family lead the industry in making mortgage refinance mortgage market, respectively; housing goals: credit available; and 1. National housing needs; 5. Such other reliable mortgage data 7. The need to maintain the sound as may be available; financial condition of the Enterprises.10 2. Economic, housing, and 6. The size of the purchase money FHFA has considered each of these demographic conditions, including conventional mortgage market, or expected market developments; refinance conventional mortgage 10 12 U.S.C. 4562(e)(2)(B).

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seven statutory factors in setting the longest economic expansions in National Housing Needs 12 proposed benchmark levels for each of history. At the start of 2020, the American the single-family housing goals and The depth and duration of this housing market overall was in a strong subgoal. recession and the path to economic position. After falling for 12 consecutive In setting the benchmark levels for the recovery remain highly uncertain. years, the U.S. homeownership rate single-family housing goals, FHFA According to the most recent estimate reached 65.1 percent in 2019, with first- typically relies on statistical market published by the Congressional Budget time homebuyers becoming an models to evaluate these statutory Office (CBO),13 the COVID–19 increasingly larger share of the factors and generate a point forecast for pandemic and associated social homebuying market, helping to drive its each goal as well as a confidence distancing triggered a sharp contraction overall expansion.14 Affordability interval for the point forecast. FHFA in output in the second quarter of 2020 challenges for low-income households then considers other statutory factors, as but the CBO projects that real Gross remained, however. While interest rates well as other relevant policy issues, to Domestic Product (GDP) will grow have remained low since the recession, select a specific point forecast within rapidly in the second half of 2020 and home prices have climbed steadily, with the confidence interval as the proposed the first half of 2021. Strong GDP growth real prices back within 2 percent of their benchmark level. However, due to the is projected to continue thereafter but at 2006 peak at the end of 2018, according unexpectedly severe nature of the a slower pace. The unemployment rate to the FHFA House Price Index. The COVID–19 pandemic and the current is projected to peak at over 14 percent ratio of median home price to median associated uncertainty going forward, in the third quarter of this year and then household income is a common FHFA has determined that the data used to fall quickly as output increases in the yardstick for measuring affordability, to create the statistical market models is second half of 2020 and throughout indicating how difficult it is for would- not sufficient to reflect economic 2021. Nonetheless, real GDP growth is be buyers to qualify for a mortgage and conditions for 2021. As a result, FHFA projected to be negative 5.8 percent for save for a down payment. Nationwide, is proposing to keep the benchmark 2020 while the unemployment rate will this ratio declined from a peak of 4.7 in levels for 2021 at the same level as for be 10.6 percent for 2020. However, the 2005 to a low of 3.3 in 2011 and then 2020. CBO notes that there is an ‘‘unusually rose to 4.1 in 2018.15 However, during In proposing the benchmark levels for high degree of uncertainty’’ surrounding 2019, house price growth was starting to the single-family housing goals for 2021, its projections due to the nature of the align with the growth in median FHFA considered the statutory factors, pandemic and the behavioral and policy household incomes. including the current economic responses aimed at containing its Recent Market Developments conditions, national housing needs, spread, and the difficulties of recording recent market developments, and the and compiling economic data during the In response to the COVID–19 past performance of the Enterprises on unusually strong economic disruption pandemic, financial markets endured a the housing goals. in the second quarter of 2020. severe dislocation in March, and Current Economic Conditions The implications for the primary and housing markets were no exception. secondary mortgage markets are still What is known to date is preliminary, Uncertainty over public health and unfolding as policy makers consider as key housing market indicators—on the economic impacts of the COVID–19 responses to the economic disruption housing construction, sales, prices, pandemic have dealt a severe blow to caused by COVID–19. Congress passed inventory, and more—indicate that the the U.S. economy. The sudden drop in the CARES Act to address some of the extent of disruption is extensive. At the economic activity has created most pressing impacts of the economic same time housing supply remains tight, widespread disruptions and resulted in disruption, including by extending providing support to house prices. At an unprecedented level of job losses. unemployment benefits. Nevertheless, least initially, the combination of social The unemployment rate jumped from the availability of credit has contracted distancing measures and heightened 3.5 percent in February to 14.7 percent in the mortgage market due to a variety economic concerns caused home sales in April.11 Inflation-adjusted consumer of factors, including additional down to drop significantly and homebuilders expenditures, which account for about payment and loan-to-value restrictions to pull back on new housing starts. two-thirds of gross domestic product and generally tightened underwriting Single-family housing starts declined (GDP), declined 7.3 percent in March. requirements. 17.5 percent in March and another 25.4 On June 8, the Business Cycle Dating FHFA is monitoring how these percent in April. Housing starts rose 4.3 Committee of the National Bureau of unfolding changes may impact various percent in May, but this still leaves the Economic Research officially declared segments of the market, including those rate down 23.2 percent compared to that the U.S. economy fell into a 16 targeted by the housing goals. For May 2019. recession in February, ending one of the instance, while the economic disruption The full impact of the COVID–19 has resulted in tightening of credit, job pandemic on the low-income home 11 The Bureau of Labor Statistics (BLS), which purchase market is unknown. However, losses and uncertainty may also lead publishes the unemployment rate and other labor the levels of output and employment statistics each month, noted that the April many low-income households to exit unemployment rate probably understated the share the market of potential homebuyers. of unemployed workers in the labor force because 14 U.S. Census Bureau, ‘‘Quarterly Residential many workers who should have been classified as However, the size of the impact on the Vacancies and Homeownership,’’ Fourth Quarter ‘‘unemployed on temporary layoff’’ were most share of low-income households among 2019, Release Number: CB20–05, available at likely misclassified as ‘‘employed absent from all home purchase mortgages is https://www.census.gov/housing/hvs/files/qtr419/ work’’ in the Current Population Survey. A BLS uncertain. Q419press.pdf. analysis of the underlying data suggests that, had 15 Joint Center for Housing Studies of Harvard that misclassification not occurred, the April University, ‘‘The State of the Nation’s Housing unemployment rate would have been nearly 5 12 See https://www.nber.org/cycles/ 2019,’’ available at https://www.jchs.harvard.edu/ percentage points higher. See Bureau of Labor june2020.html. state-nations-housing-2019. Statistics, ‘‘Frequently Asked Questions: The 13 Congressional Budget Office, ‘‘An Update to the 16 U.S. Census Bureau, ‘‘Monthly New Residential Impact of the Coronavirus (COVID–19) Pandemic Economic Outlook: 2020–2030,’’ published on July Construction,’’ May 2020, Release Number: CB20– on the Employment Situation for April 2020’’ (May 2, 2020, accessed on 7/8/2020 at https:// 90, available at https://www.census.gov/ 8, 2020), https://go.usa.gov/xvM73. www.cbo.gov/publication/56442. construction/nrc/pdf/newresconst.pdf.

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remain far below their pre-pandemic Thus, while recent Enterprise years (2018 and 2019) shows that both levels, and significant uncertainty performance on the housing goals has Enterprises exceeded the benchmark remains about the timing and strength of tended to exceed the benchmark levels levels set by FHFA for each of the the recovery. It is likely that the full set by FHFA, the economic disruption single-family housing goals. picture of the COVID–19 pandemic’s and uncertainty seen so far in 2020 While the final determinations of impact on housing markets will not be support keeping the levels unchanged Enterprise goal compliance for 2019 are known until well after the virus is from 2018–2020. pending FHFA’s determination of the contained. While the Enterprises market level based on HMDA data, both Past Performance of the Enterprises showed strong goals performance in Enterprises report that their 2020 before the onset of the COVID–19 Table 1 provides the annual performance exceeded the benchmark pandemic, it is unclear whether this performance of both Enterprises on the levels, continuing the recent trend of will continue in the light of evolving single-family housing goals between Enterprise performance above the market conditions and continued 2010 and 2019.17 The performance of benchmark levels for the single-family tightening of underwriting by lenders. the Enterprises in the two most recent housing goals for 2018–2020.

TABLE 1—ENTERPRISE SINGLE-FAMILY HOUSING GOALS PERFORMANCE (2010-2019)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Low-Income Home Purchase Goal

Actual Market...... 27.2 26.5 26.6 24 22.8 23.6 22.9 24.3 25.5 TBD Benchmark ...... 27 27 23 23 23 24 24 24 24 24 Fannie Mae Performance ...... * 25.1 * 25.8 25.6 23.8 23.5 * 23.5 22.9 25.5 28.2 27.8 Freddie Mac Performance ...... 27.8 * 23.3 24.4 * 21.8 * 21 * 22.3 23.8 * 23.2 25.8 27.4

Very Low-Income Home Purchase Goal

Actual Market...... 8.1 8 7.7 6.3 5.7 5.8 5.4 5.9 6.5 TBD Benchmark ...... 8 8 7 7 7 6 6 6 6 6 Fannie Mae Performance ...... * 7.2 * 7.6 7.3 * 6 5.7 * 5.6 * 5.2 5.9 6.7 6.5 Freddie Mac Performance...... 8.4 * 6.6 7.1 * 5.5 * 4.9 * 5.4 5.7 * 5.7 6.3 6.8

Low-Income Areas Home Purchase Goal

Actual Market...... 24 22 23.2 22.1 22.1 19.8 19.7 21.5 22.6 TBD Benchmark ...... 24 24 20 21 18 19 17 18 18 19 Fannie Mae Performance...... 24.1 22.4 22.3 21.6 22.7 20.4 20.2 22.9 25.1 24.5 Freddie Mac Performance ...... * 23.8 * 19.2 20.6 * 20 20.1 19 19.9 20.9 22.6 22.9

Low-Income Areas Home Purchase Subgoal

Actual Market...... 12.1 11.4 13.6 14.2 15 15.2 15.9 17.1 18 TBD Benchmark ...... 13 13 11 11 11 14 14 14 14 14 Fannie Mae Performance...... 12.4 11.6 13.1 14 15.5 15.6 16.2 18.3 20.1 19.5 Freddie Mac Performance...... * 10.8 * 9.2 11.4 12.3 13.6 14.5 15.6 16.4 17.3 18.0

Low-Income Refinance Goal

Actual Market...... 20.2 21.5 22.3 24.3 25 22.5 19.8 25.4 30.7 TBD Benchmark ...... 21 21 20 20 20 21 21 21 21 21 Fannie Mae Performance...... 20.9 23.1 21.8 24.3 26.5 22.1 *19.5 24.8 31.2 23.8 Freddie Mac Performance...... 22 23.4 22.4 24.1 26.4 22.8 21 24.8 27.3 22.4 * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Tables 2 through 5 provide additional well as the share of goal-qualifying goals-qualifying loans they acquired at detail on the recent performance of the loans that the Enterprises acquired from the same time that their overall single- Enterprises for each of the goals and the 2013–2019. In 2018 and 2019, the family mortgage purchase volume subgoal. The tables show the number as Enterprises increased the number of increased.

TABLE 2—LOW-INCOME HOME PURCHASE GOAL

Performance Year 2013 2014 2015 2016 2017 2018 2019

Actual Market...... 24.0% 22.8% 23.6% 22.9% 24.3% 25.5% TBD Benchmark ...... 23% 23% 24% 24% 24% 24% 24% Fannie Mae Performance:

17 The 2019 data is preliminary data reported by determinations on Enterprise performance under the Enterprises. FHFA will make the official the 2019 housing goals later in 2020.

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TABLE 2—LOW-INCOME HOME PURCHASE GOAL—Continued

Performance Year 2013 2014 2015 2016 2017 2018 2019

Low-Income Home Pur- chase Mortgages...... 193,660 177,846 188,891 221,628 263,296 294,559 *298,702 Total Home Purchase Mort- gages ...... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 *1,075,032 Low-Income % of Home Purchase Mortgages...... 23.8% 23.5% 23.5% 22.9% 25.5% 28.21/o *27.8% Freddie Mac Performance: Low-Income Home Pur- chase Mortgages...... 93,425 108,948 129,455 153,434 165,555 199,429 *235,811 Total Home Purchase Mort- gages ...... 429,086 519,731 579,340 644,988 713,901 774,394 *860,669 Low-Income % of Home Purchase Mortgages...... 21.8% 21.0% 22.3% 23.8% 23.2% 25.8% *27.4% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

TABLE 3—VERY LOW-INCOME HOME PURCHASE GOAL

Performance Year 2013 2014 2015 2016 2017 2018 2019

Actual Market...... 6.30% 5.70% 5.80% 5.40% 5.90% 6.50% TBD Benchmark ...... 7% 7% 6% 6% 6% 6% 6% Fannie Mae Performance: Very Low-Income Home Purchase Mortgages...... 48,810 42,872 45,022 49,932 60,561 69,952 *70,214 Total Home Purchase Mort- gages ...... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 *1,075,032 Very Low-Income % of Home Purchase Mort- gages ...... 6.0% 5.7% 5.6% 5.2% 5.9% 6.7% *6.5% Freddie Mac Performance: Very Low-Income Home Purchase Mortgages...... 23,705 25,232 31,146 36,837 40,848 48,823 *58,136 Total Home Purchase Mort- gages ...... 429,086 519,731 579,340 644,988 713,901 774,394 *860,669 Very Low-Income % of Home Purchase Mort- gages ...... 5.5% 4.9% 5.4% 5.7% 5.7% 6.3% *6.8% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

TABLE 4—LOW-INCOME AREAS HOME PURCHASE SUBGOAL

Performance Year 2013 2014 2015 2016 2017 2018 2019

Actual Market...... 14.2% 15.2% 15.2% 15.9% 17.1% 18.0% TBD Benchmark ...... 11% 11% 14% 14% 14% 14% 14% Fannie Mae Performance: Low-Income Area Home Purchase Mortgages...... 86,430 91,691 99,723 125,956 152,102 167,265 *166,709 High-Minority Area Home Purchase Mortgages...... 27,425 25,650 25,349 30,535 36,942 42,099 *42,732 Subgoal-Qualifying Total Home Purchase Mort- gages ...... 113,855 117,341 125,072 156,491 189,044 209,364 *209,441 Total Home Purchase Mort- gages ...... 814,066 757,870 802,432 966,800 1,032,567 1,044,098 *1,075,032 Low-Income Area % of Home Purchase Mort- gages ...... 14.0% 15.5% 15.6% 16.2% 18.3% 20.1% *19.5% Freddie Mac Performance: Low-Income Area Home Purchase Mortgages...... 40,444 55,987 67,172 80,805 94,961 106,815 *123,953 High-Minority Area Home Purchase Mortgages...... 12,177 14,808 16,601 19,788 22,190 27,310 *30,770

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TABLE 4—LOW-INCOME AREAS HOME PURCHASE SUBGOAL—Continued

Performance Year 2013 2014 2015 2016 2017 2018 2019

Subgoal-Qualifying Total Home Purchase Mort- gages ...... 52,621 70,795 83,773 100,593 117,151 134,125 *154,723 Total Home Purchase Mort- gages ...... 429,086 519,731 579,340 644,988 713,901 774,394 *860,669 Low-Income Area % of Home Purchase Mort- gages ...... 12.3% 13.6% 14.5% 15.6% 16.4% 17.3% *18.0% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

TABLE 5—LOW-INCOME REFINANCE GOAL

Performance Year 2013 2014 2015 2016 2017 2018 2019

Actual Market...... 24.3% 25.0% 22.5% 19.8% 25.4% 30.7% TBD Benchmark ...... 20% 20% 21% 21% 21% 21% 21% Fannie Mae Performance: Low-lncome Refinance Mortgages ...... 531,611 222,329 231,380 248,698 223,768 196,230 *234,249 Total Refinance Mortgages 2,186,541 840,506 1,045,258 1,274,342 902,123 629,816 * 985,932 Low-lncome % of Refinance Mortgages ...... 24.3% 26.5% 22.1% 19.5% 24.8% 31.2% *23.8% Freddie Mac Performance: Low-Income Refinance Mortgages ...... 320,962 131,921 182,594 174,708 143,475 104,843 *159,322 Total Refinance Mortgages 1,331,034 514,936 800,369 830,888 578,548 384,593 * 712,376 Low-lncome % of Refinance Mortgages ...... 24.1% 25.6% 22.8% 21.0% 24.8% 27.3% *22.4% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Proposed Benchmark Levels for the six factors in setting the multifamily The multifamily housing goals are Single-Family Housing Goals for 2021 housing goals: measured based on the total volume of FHFA is proposing to establish the 1. National multifamily mortgage affordable multifamily mortgage benchmark levels for each of the single- credit needs and the ability of the purchases rather than on a percentage of family housing goals and the subgoal for Enterprises to provide additional multifamily mortgage purchases. Unlike 2021 at the same levels that applied for liquidity and stability for the the single-family housing goals, 2018–2020. While recent Enterprise multifamily mortgage market; performance on the multifamily housing performance and market data have 2. The performance and effort of the goals is measured solely against a tended to exceed the established Enterprises in making mortgage credit benchmark level, without any benchmark levels, FHFA expects that available for multifamily housing in retrospective market measure. The both the market levels and Enterprise previous years; absence of a retrospective market performance could decline in 2021 due 3. The size of the multifamily measure for the multifamily housing to impacts related to economic mortgage market for housing affordable goals results, in part, from the lack of disruption caused by the COVID–19 to low-income and very low-income comprehensive data about the pandemic. Information on Enterprise families, including the size of the multifamily mortgage market. Unlike goals performance remains confidential multifamily markets for housing of a the single-family market, for which until it is reported after the end of the smaller or limited size; HMDA provides a reasonably year. However, FHFA monitors this 4. The ability of the Enterprises to comprehensive dataset about single- confidential information on a regular lead the market in making multifamily family mortgage originations each year, basis. FHFA recognizes that the mortgage credit available, especially for the multifamily market (including the performance trends in the first half of multifamily housing affordable to low- affordable multifamily market segment) 2020 reflect disruption due to COVID– income and very low-income families; has no comparable source. 19, and FHFA expects this to continue 5. The availability of public subsidies; Consequently, it can be difficult to into 2021. Based on the above factors, and correlate different datasets that usually FHFA believes that extending the 6. The need to maintain the sound rely on different reporting formats. benchmark levels from 2020 to 2021 financial condition of the Enterprises.18 Another difference between the will provide achievable yet challenging FHFA has considered each of these single-family and multifamily goals is targets for the Enterprises. statutory factors in setting the proposed that there are separate single-family benchmark levels for each of the housing goals for home purchase and V. Multifamily Housing Goals multifamily goals. refinancing mortgages, while the The Safety and Soundness Act multifamily goals include all Enterprise requires FHFA to consider the following 18 12 U.S.C. 4563(a)(4). multifamily mortgage purchases,

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regardless of the purpose of the loan. In Urban Development 22 notes, it is financially stable through the addition, unlike the single-family increasingly difficult for housing pandemic.25 housing goals, the multifamily housing developers and landlords to provide Conservatorship Scorecard Caps goals are measured based on the total decent rental housing at rates that are volume of affordable multifamily affordable to American working families Enterprise performance on the mortgage purchases rather than on a and more vulnerable households. In multifamily housing goals is heavily percentage of multifamily mortgage 2017, the most recent year for which influenced by the caps on total purchases. The use of total volumes, such data are available, only 59 multifamily business that FHFA has which FHFA measures by the number of affordable units were available per 100 established as conservator of the eligible units, rather than percentages of very low-income renter households, and Enterprises. The multifamily volume each Enterprises’ overall multifamily only 40 units were available per 100 caps are intended to further FHFA’s purchases, requires that FHFA take into extremely low-income renter conservatorship goal: Maintaining the account the expected size of the overall households. presence of the Enterprises as a multifamily mortgage market and the backstop for the multifamily finance affordable share of the market, as well The full impact on the stock of low- market, while not impeding the as the expected volume of the cost rental units in the wake of the participation of private capital. The Enterprises’ overall multifamily COVID–19 pandemic and broader multifamily volume caps reflect an purchases and the affordable share of economic downturn is not yet known. Enterprise share of the multifamily those purchases. The lack of In the short-term, the pandemic might origination market that FHFA has comprehensive data for the multifamily exacerbate the already-constrained determined to be an appropriate market mortgage market is even more acute supply as lower housing mobility rates share for the Enterprises during normal with respect to the segments of the limit the number of low-cost options for market conditions. The multifamily market that are targeted to low-income renters and current residents stay in volume caps are intended to prevent the families, defined as families with place. As one study using the 2018 Enterprises from crowding out other incomes at or below 80 percent of AMI, American Community Survey data capital sources and restrain the rapid and very low-income families, defined shows, demand for low-cost units was growth of the Enterprises’ multifamily as families with incomes at or below 50 already high while their availability was businesses that started in 2011. percent of AMI. As required by the extremely low.23 Additional tightening In September 2019, FHFA established Safety and Soundness Act, FHFA at the low end of the market could pose multifamily loan purchase caps at $100 determines affordability of multifamily significant affordability challenges to billion for each Enterprise during the units based on a unit’s rent and utility low- and middle-income renters. five quarters beginning on October 1, 2019, and ending on December 31, 2020. expenses not exceeding 30 percent of Further, renters living in single-family The new cap framework requires that the area median income standard for homes and smaller multifamily 19 each Enterprise meet a target of 37.5 low- and very low-income families. buildings, along with the owners of percent of its multifamily business as those properties, are more likely to be Current Economic Conditions, National mission-driven, affordable housing. negatively affected by the COVID–19 Housing Needs, and Recent Market There is significant overlap between the economic downturn. According to one Developments types of multifamily mortgages that study, over half of renters with at-risk Even as late as February 2020, the count toward the conservatorship wages 24 due to the pandemic live in multifamily originations market scorecard target of 37.5 percent and the single-family rental housing with 1–4 appeared as strong as it had been in multifamily mortgages that contribute to units. The same study estimates that 2019. At that time, FHFA noted a the performance of the Enterprises nearly 20 percent of renters in small number of trends that have continued under the affordable housing goals. multifamily (5 to 50 units) dwellings for multiple years, including the While the conservatorship scorecard may have difficulty paying full rent if continued market focus on the caps and target level for mission-driven at-risk wages are lost, compared to 12 construction of high-end, luxury loans play a significant role in percent of renters living in larger apartments and the steady decline in the determining the multifamily purchase dwellings. This could, in turn, make it number of low-cost rentals. While volume and affordable share for the difficult for the owners of those completed rentals nearly reached a 30- Enterprise multifamily businesses, the year high in 2018 with an addition of properties, who are more likely to be multifamily housing goals target specific 360,000 units, supply dropped by small, individual investors, to remain segments of the multifamily business 340,000 units between 2016 and 2017.20 and ensure appropriate Enterprise focus Nationwide, there has been a loss of 22 U.S. Department of Housing and Urban on those segments as required by the Development, ‘‘Worst Case Housing Needs: 2019 Safety and Soundness Act. In proposing four million low-cost rental units (rents Report to Congress’’, June 19, 2020 accessed on 7/ less than $800 per month) since 2011.21 10/2020 at https://www.huduser.gov/PORTAL/sites/ benchmark levels for the Enterprise There is a particularly acute shortfall of default/files/pdf/worst-case-housing-needs- housing goals, FHFA has considered the affordable units for extremely low- 2020.pdf. required statutory factors and is income renters (earning up to 30 percent 23 Joint Center for Housing Studies of Harvard proposing benchmark levels that would University, ‘‘The Continuing Decline of Low-Cost of area median income) that was Rentals,’’ May 11, 2020 accessed on 6/30/2020 at be achievable if the conservatorship acknowledged as a persistent problem https://www.jchs.harvard.edu/blog/the-continuing- scorecard caps and target levels for 2021 even before the COVID–19 pandemic decline-of-low-cost-rentals/. are similar to the conservatorship began. For instance, as a recent report 24 ‘‘At risk wages’’ are wages associated with ‘‘At scorecard limits in effect for 2020. If the Risk Jobs’’ which are defined as those in services, conservatorship scorecard has from the Department of Housing and retail, recreation, transportation and travel, and oil extraction. Joint Center for Housing Studies of established the multifamily purchase 19 12 U.S.C. 4563(c). Harvard University, ‘‘Pandemic Will Worsen 20 Joint Center for Housing Studies of Harvard Housing Affordability for Service, Retail, and 25 Joint Center for Housing Studies of Harvard University, ‘‘The State of the Nation’s Housing Transportation Workers’’ March 30, 2020 accessed University, ‘‘COVID–19 Rent Shortfalls in Small 2019,’’ available at www.jchs.harvard.edu/research/ on 6/30/2020 at https://www.jchs.harvard.edu/blog/ Buildings,’’ May 26, 2020 accessed on 6/30/2020 at state_nations_housing. pandemic-will-worsen-housing-affordability-for- https://www.jchs.harvard.edu/blog/covid-19-rent- 21 Id. service-retail-and-transportation-workers/. shortfalls-in-small-buildings/.

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volume caps applicable for 2021 at the Past Performance on the Multifamily income families, defined as families time FHFA publishes a final rule setting Low-Income Housing Goal with incomes less than or equal to 80 benchmark levels for the multifamily The multifamily low-income housing percent of the area median income. housing goals, FHFA may adjust the goal is based on the total number of Since 2016, each Enterprise has benchmark levels based on those rental units in multifamily properties performed significantly above the purchase volume caps. financed by mortgages purchased by the benchmark level for the multifamily Enterprises that are affordable to low- low-income housing goal each year.

TABLE 6—LOW-INCOME MULTIFAMILY GOAL

Performance Year 2012 2013 2014 2015 2016 2017 2018 2019

Fannie Mae Benchmark... 285,000 265,000 250,000 300,000 300,000 300,000 315,000 315,000 Freddie Mac Benchmark.. 225,000 215,000 200,000 300,000 300,000 300,000 315,000 315,000 Fannie Mae Performance: Low-Income Multi- family Units...... 375,924 326,597 262,050 307,510 352,368 401,145 421,813 *384,572 Total Multifamily Units 501,256 430,751 372,072 468,798 552,785 630,868 628,230 *596,137 Low-Income % Total 75.0% 75.8% 70.4% 65.6% 63.7% 63.6% 67.1% *64.5% Freddie Mac Perform- ance: Low-Income Multi- family Units...... 298,529 254,628 273,434 379,042 406,958 408,096 474,062 *455,451 Total Multifamily Units 377,522 341,490 366,377 514,275 597,399 630,037 695,587 *661,417 Low-Income % of Total Units...... 79.1% 74.6% 74.6% 73.7% 68.1% 64.8% 68.2% *68.9% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Past Performance on the Multifamily affordable to very low-income families, surpassed the benchmark level for the Very Low-Income Housing Subgoal defined as families with incomes no multifamily very low-income housing The multifamily very low-income greater than 50 percent of area median subgoal by a significant margin in recent housing subgoal includes units income. Both Enterprises have years.

TABLE 7—VERY LOW-INCOME MULTIFAMILY GOAL

Performance Year 2012 2013 2014 2015 2016 2017 2018 2019

Fannie Mae Benchmark... 80,000 70,000 60,000 60,000 60,000 60,000 60,000 60,000 Freddie Mac Benchmark.. 59,000 50,000 40,000 60,000 60,000 60,000 60,000 60,000 Fannie Mae Performance: Very Low-Income Multifamily Units.... 100,878 78,071 60,542 69,078 65,910 82,674 80,891 *78,835 Total Multifamily Units 501,256 430,751 372,072 468,798 552,785 630,868 628,230 *596,137 Very Low-Income % of Total Units...... 21.7% 18.1% 16.3% 14.7% 11.9% 13.1% 12.9% *13.2% Freddie Mac Perform- ance: Very Low-Income Multifamily Units.... 60,084 56,742 48,689 76,935 73,030 92,274 105,612 *112,785 Total Home Purchase Mortgages ...... 377,522 341,490 366,377 514,275 597,399 630,037 695,587 *661,417 Very Low-Income % of Total Units...... 15.9% 16.6% 13.3% 15.0% 12.2% 14.6% 15.2% *17.1% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Past Performance on the Small number of units in small multifamily median income. A small multifamily Multifamily Low-Income Housing properties financed by mortgages property is defined as a property with Subgoal purchased by the Enterprises that are 5 to 50 units. Both Enterprises have met affordable to low-income families, the small multifamily low-income The small multifamily low-income defined as families with incomes less housing subgoal each year in recent housing subgoal is based on the total than or equal to 80 percent of the area years.

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TABLE 8—SMALL (5–50) LOW-INCOME MULTIFAMILY GOAL

Performance Year 2012 2013 2014 2015 2016 2017 2018 2019

Small Low-Income Multi- family Benchmark ...... 6,000 8,000 10,000 10,000 10,000 Fannie Mae Performance: Small Low-Income Multifamily Units .... 16,801 13,827 6,732 6,731 9,312 12,043 11,890 * 17,782 Total Small Multi- family Units...... 26,479 21,764 11,880 11,198 15,211 20,375 17,894 *25,565 Low-Income % of Total Small Multi- family Units...... 63.5% 63.5% 56.7% 60.1% 61.2% 59.1% 66.4% *69.6% Freddie Mac Perform- ance: Small Low-Income Multifamily Units .... 829 1,128 2,076 12,801 22,101 39,473 39,353 * 34,847 Total Small Multi- family Units ...... 2,194 2,375 4,659 21,246 33,984 55,116 53,893 * 46,862 Low-Income % of Total Small Multi- family Units...... 37.8% 47.5% 44.6% 60.3% 65.0% 71.6% 73.0% *74.4% * Numbers marked with asterisks are preliminary numbers reported by the Enterprises.

Proposed Benchmark Levels for the factors, FHFA believes that extending analysis need not be undertaken if the Multifamily Housing Goals for 2021 the benchmark levels from 2020 to agency has certified that the regulation 26 FHFA is proposing to establish the 2021 will provide achievable yet will not have a significant economic benchmark levels for each of the challenging targets for the Enterprises. impact on a substantial number of small multifamily housing goal and subgoals VI. Paperwork Reduction Act entities. 5 U.S.C. 605(b). FHFA has for 2021 at the same levels that applied considered the impact of the proposed The Paperwork Reduction Act (44 rule under the Regulatory Flexibility for 2018–2020. In proposing the U.S.C. 3501 et seq.) requires that benchmark levels for the multifamily Act. The General Counsel of FHFA regulations involving the collection of certifies that the proposed rule, if low-income housing goal and the information receive clearance from the multifamily very low-income housing adopted as a final rule, will not have a Office of Management and Budget significant economic impact on a goal, FHFA considered the statutory (OMB). The proposed rule does not substantial number of small entities factors including current economic contain any information collection because the regulation applies only to conditions, national housing needs, requirement that would require OMB Fannie Mae and Freddie Mac, which are recent market developments, the most approval under the Paperwork recent conservatorship scorecard cap Reduction Act. Therefore, FHFA has not not small entities for purposes of the levels, and the past performance of the submitted the rule to OMB for review. Regulatory Flexibility Act. Enterprises in meeting each goal. Due to the relatively low volume of VII. Regulatory Flexibility Act List of Subjects in 12 CFR Part 1282 small multifamily loans purchased by The Regulatory Flexibility Act (5 Mortgages, Reporting and each Enterprise, the conservatorship U.S.C. 601 et seq.) requires that a recordkeeping requirements. scorecard cap has less impact on the regulation that has a significant ability of the Enterprises to meet the economic impact on a substantial Authority and Issuance small multifamily low-income housing number of small entities, small For the reasons stated in the goal. Based on the recent performance of businesses, or small organizations must the Enterprises on the goal, FHFA SUPPLEMENTARY INFORMATION, under the include an initial regulatory flexibility authority of 12 U.S.C. 4511, 4513, and believes the benchmark levels for 2018– analysis describing the regulation’s 4526, FHFA proposes to amend part 2020 continue to be appropriate for impact on small entities. Such an 2021 to ensure that the Enterprises 1282 of Title 12 of the Code of Federal Regulations as follows: maintain a meaningful presence in the 26 The benchmark level for the Low-Income Areas market for small multifamily loans. Purchase goal will be set by FHFA notice in 2021 CHAPTER XII—FEDERAL HOUSING While the recent performance of the pursuant to 12 CFR 1282.12(e). The Low-Income FINANCE AGENCY Areas Purchase goal has a disaster component that Enterprises on the multifamily housing is dependent on the Federal disaster declarations in goals suggests that each Enterprise may SUBCHAPTER E—HOUSING GOALS AND place at the beginning of each calendar year. The MISSION be able to meet a higher benchmark regulation defines ‘‘designated disaster area’’ as ‘‘any census tract that is located in a county level, FHFA has also considered a PART 1282—ENTERPRISE HOUSING variety of factors including recent designated by the federal government as adversely affected by a declared major disaster administered GOALS AND MISSION market trends and especially the by FEMA, where individual assistance payments economic disruption due to the COVID– were authorized by FEMA.’’ 12 CFR 1282.1 ■ 19 emergency that support keeping the (emphasis added). While most of the country has 1. The authority citation for part 1282 been declared a disaster area by reason of COVID– continues to read as follows: benchmark levels for the multifamily 19, those declarations have not been accompanied housing goals at the same level as the by FEMA authorizations of individual assistance Authority: 12 U.S.C. 4501, 4502, 4511, 2018–2020 goals. Based on the above payments. 4513, 4526, 4561–4566.

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■ 2. Section 1282.12 is amended by units affordable to low-income families OH 45215; phone: (513) 552–3272; revising paragraphs (c)(2), (d)(2), (f)(2), in small multifamily properties financed email: [email protected]; and (g)(2) to read as follows: by mortgages purchased by the website: www.ge.com. You may view Enterprise for 2021. this service information at the FAA, § 1282.12 Single-family housing goals. Airworthiness Products Section, Mark A. Calabria * * * * * Operational Safety Branch, 1200 District (c) * * * Director, Federal Housing Finance Agency. Avenue, Burlington, MA 01803. For (2) The benchmark level, which for [FR Doc. 2020–15959 Filed 8–12–20; 8:45 am] information on the availability of this 2021 shall be 24 percent of the total BILLING CODE 8070–01–P material at the FAA, call 781–238–7759. number of purchase money mortgages purchased by that Enterprise in each Examining the AD Docket year that finance owner-occupied DEPARTMENT OF TRANSPORTATION You may examine the AD docket on single-family properties. the internet at https:// (d) * * * Federal Aviation Administration www.regulations.gov by searching for (2) The benchmark level, which for and locating Docket No. FAA–2020– 2021 shall be 6 percent of the total 14 CFR Part 39 0733; or in person at Docket Operations number of purchase money mortgages between 9 a.m. and 5 p.m., Monday purchased by that Enterprise in each [Docket No. FAA–2020–0733; Project Identifier AD–2020–00990–E] through Friday, except Federal holidays. year that finance owner-occupied The AD docket contains this NPRM, any single-family properties. RIN 2120–AA64 comments received, and other * * * * * Airworthiness Directives; General information. The street address for (f) * * * Docket Operations is listed above. (2) The benchmark level, which for Electric Company Turbofan Engines FOR FURTHER INFORMATION CONTACT: 2021 shall be 14 percent of the total AGENCY: Federal Aviation Mehdi Lamnyi, Aerospace Engineer, number of purchase money mortgages Administration (FAA), DOT. ECO Branch, FAA, 1200 District purchased by that Enterprise in each ACTION: Notice of proposed rulemaking Avenue, Burlington, MA 01803; phone: year that finance owner-occupied (NPRM). (781) 238–7743; fax: (781) 238–7999; single-family properties. email: [email protected]. (g) * * * SUMMARY: The FAA proposes to adopt a SUPPLEMENTARY INFORMATION: (2) The benchmark level, which for new airworthiness directive (AD) for 2021 shall be 21 percent of the total certain General Electric Company (GE) Comments Invited number of refinancing mortgages GE90–110B1 and GE90–115B model The FAA invites you to send any purchased by that Enterprise in each turbofan engines. This proposed AD was written relevant data, views, or year that finance owner-occupied prompted by the detection of melt- arguments about this proposal. Send single-family properties. related freckles in the billet, which may your comments to an address listed * * * * * reduce the life limits of certain high- under the ADDRESSES section. Include ■ 3. Section 1282.13 is amended by pressure turbine (HPT) rotor stage 2 ‘‘Docket No. FAA–2020–0733; Project revising paragraphs (b) through (d) to disks and certain rotating compressor Identifier AD–2020–00990–E’’ at the read as follows: discharge pressure (CDP) HPT seals. beginning of your comments. The most This proposed AD would require § 1282.13 Multifamily special affordable helpful comments reference a specific replacement of the affected HPT rotor housing goal and subgoals. portion of the proposal, explain the stage 2 disks and rotating CDP HPT reason for any recommended change, * * * * * seals. The FAA is proposing this AD to and include supporting data. The FAA (b) Multifamily low-income housing address the unsafe condition on these will consider all comments received by goal. The benchmark level for each products. Enterprise’s purchases of mortgages on the closing date and may amend this multifamily residential housing DATES: The FAA must receive comments NPRM because of those comments. affordable to low-income families shall on this proposed AD by September 14, The FAA has been informed that GE be at least 315,000 dwelling units 2020. has communicated with affected affordable to low-income families in ADDRESSES: You may send comments, operators regarding the proposed multifamily residential housing using the procedures found in 14 CFR corrective action for this unsafe financed by mortgages purchased by the 11.43 and 11.45, by any of the following condition. As a result, affected operators Enterprise for 2021. methods: are already aware of the proposed (c) Multifamily very low-income • Federal eRulemaking Portal: Go to corrective action and, in some cases, housing subgoal. The benchmark level https://www.regulations.gov. Follow the have already performed the actions for each Enterprise’s purchases of instructions for submitting comments. proposed in this AD. Therefore, the mortgages on multifamily residential • Fax: 202–493–2251. FAA has determined that a 30-day housing affordable to very low-income • Mail: U.S. Department of comment period is appropriate given families shall be at least 60,000 dwelling Transportation, Docket Operations, M– the proposed short cyclic compliance units affordable to very low-income 30, West Building Ground Floor, Room period to correct the unsafe condition families in multifamily residential W12–140, 1200 New Jersey Avenue SE, on the affected GE90 model turbofan housing financed by mortgages Washington, DC 20590. engines. purchased by the Enterprise for 2021. • Hand Delivery: Deliver to Mail Except for Confidential Business (d) Small multifamily low-income address above between 9 a.m. and 5 Information as described in the housing subgoal. The benchmark level p.m., Monday through Friday, except following paragraph, and other for each Enterprise’s purchases of Federal holidays. information as described in 14 CFR mortgages on small multifamily For service information identified in 11.35, the FAA will post all comments properties affordable to low-income this NPRM, contact General Electric received, without change, to https:// families shall be at least 10,000 dwelling Company, 1 Neumann Way, Cincinnati, www.regulations.gov, including any

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personal information you provide. The designated as CBI will be placed in the Revision 01, dated July 17, 2020. The SB FAA will also post a report public docket for this rulemaking. describes procedures for removal of the summarizing each substantive verbal Background HPT rotor stage 2 disk and the rotating contact received about this proposal. CDP HPT seal from service. This service The FAA was notified of the detection information is reasonably available Confidential Business Information of melt-related freckles in the billet because the interested parties have during the forging inspection of HPT access to it through their normal course Confidential Business Information disks, which may reduce the life limits of business or by the means identified (CBI) is commercial or financial of certain HPT rotor stage 2 disks and information that is both customarily and certain rotating CDP HPT seals. The in the ADDRESSES section. actually treated as private by its owner. inspection process in place at the time Proposed AD Requirements Under the Freedom of Information Act of production did not identify these (FOIA) (5 U.S.C. 552), CBI is exempt freckles. The manufacturer determined This proposed AD would require from public disclosure. If your the need to reduce the life limits of the replacement of certain HPT rotor stage comments responsive to this NPRM affected HPT rotor stage 2 disks and 2 disks and certain rotating CDP HPT contain commercial or financial rotating CDP HPT seals. This AD seals. information that is customarily treated requires removal of these affected parts as private, that you actually treat as before reaching their new life limits. Interim Action private, and that is relevant or This condition, if not addressed, could The FAA considers this proposed AD responsive to this NPRM, it is important result in uncontained release of both the an interim action. This issue is still HPT rotor stage 2 disk and the rotating that you clearly designate the submitted under investigation by the manufacturer comments as CBI. Please mark each CDP HPT seal, damage to the engine, and damage to the aircraft. and, depending on the results of that page of your submission containing CBI investigation, the FAA may consider as ‘‘PROPIN.’’ The FAA will treat such FAA’s Determination further rulemaking action. marked submissions as confidential The FAA is proposing this AD Costs of Compliance under the FOIA, and they will not be because the agency has determined the placed in the public docket of this unsafe condition described previously is The FAA estimates that this AD, as NPRM. Submissions containing CBI likely to exist or develop in other proposed, would affect 1 engine should be sent to Mehdi Lamnyi, products of the same type design. installed on an airplane of U.S. registry. Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA Related Service Information The FAA estimates the following 01803. Any commentary that the FAA The FAA reviewed GE Service costs to comply with this proposed AD: receives which is not specifically Bulletin (SB) GE90–100 S/B 72–0845,

ESTIMATED COSTS

Cost per Cost on U.S. Action Labor cost Parts cost product operators

Remove and replace the HPT rotor stage 2 1,500 work-hours × $85 per hour = $127,500 $565,600 $693,100 $693,100 disk. Remove and replace the rotating CDP HPT 600 work-hours × $85 per hour = $51,000 .... 209,900 260,900 0 seal.

Authority for This Rulemaking develop on products identified in this under the criteria of the Regulatory rulemaking action. Flexibility Act. Title 49 of the United States Code specifies the FAA’s authority to issue Regulatory Findings List of Subjects in 14 CFR Part 39 rules on aviation safety. Subtitle I, The FAA determined that this Air transportation, Aircraft, Aviation section 106, describes the authority of proposed AD would not have federalism safety, Incorporation by reference, the FAA Administrator. Subtitle VII: implications under Executive Order Safety. Aviation Programs, describes in more 13132. This proposed AD would not detail the scope of the Agency’s have a substantial direct effect on the The Proposed Amendment authority. States, on the relationship between the national government and the States, or Accordingly, under the authority The FAA is issuing this rulemaking delegated to me by the Administrator, under the authority described in on the distribution of power and responsibilities among the various the FAA proposes to amend 14 CFR part Subtitle VII, Part A, Subpart III, Section 39 as follows: 44701: ‘‘General requirements.’’ Under levels of government. that section, Congress charges the FAA For the reasons discussed above, I PART 39—AIRWORTHINESS certify this proposed regulation: with promoting safe flight of civil DIRECTIVES aircraft in air commerce by prescribing (1) Is not a ‘‘significant regulatory regulations for practices, methods, and action’’ under Executive Order 12866, ■ 1. The authority citation for part 39 procedures the Administrator finds (2) Will not affect intrastate aviation continues to read as follows: necessary for safety in air commerce. in Alaska, and Authority: 49 U.S.C. 106(g), 40113, 44701. This regulation is within the scope of (3) Will not have a significant that authority because it addresses an economic impact, positive or negative, unsafe condition that is likely to exist or on a substantial number of small entities

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§ 39.13 [Amended] and serial number (S/N) TMT1BA38 or (f) Compliance ■ 2. The FAA amends § 39.13 by adding TMT1BA41, installed; or Comply with this AD within the the following new airworthiness (2) a rotating compressor discharge compliance times specified, unless already directive (AD): pressure (CDP) HPT seal, P/N 2479M03P01, done. and S/N GEE1H7GH or GEE1H7JJ, installed. General Electric Company: Docket No. FAA– (g) Required Actions (d) Subject 2020–0733; Project Identifier AD–2020– (1) Before the affected HPT rotor stage 2 00990–E. Joint Aircraft System Component (JASC) disk or the rotating CDP HPT seal listed in Code 7250, Turbine Section. (a) Comments Due Date Table 1 to paragraph (g) of this AD (‘‘Table The FAA must receive comments by (e) Unsafe Condition 1’’) accumulates the cycles since new (CSN) September 14, 2020. This AD was prompted by the detection of threshold in Table 1, or at the next engine shop visit, whichever occurs first after the (b) Affected ADs melt-related freckles in the billet, which may reduce the life limits of certain HPT rotor effective date of this AD, remove the affected None. stage 2 disks and certain rotating CDP HPT part from service and replace it with a part (c) Applicability seals. The FAA is issuing this AD to prevent eligible for installation. This AD applies to General Electric uncontained release of both the HPT rotor (2) If the affected HPT rotor stage 2 disk or Company GE90–110B1 and GE90–115B stage 2 disk and the rotating CDP HPT seal. rotating CDP HPT seal has already exceeded model turbofan engines with: The unsafe condition, if not addressed, could the CSN threshold in Table 1, remove the (1) A high-pressure turbine (HPT) rotor result in damage to the engine and damage affected part before further flight and replace stage 2 disk, part number (P/N) 2505M73P03, to the aircraft. with a part eligible for installation.

(h) Definition or lacking a principal inspector, the manager DEPARTMENT OF TRANSPORTATION (1) For the purpose of this AD, a part of the local flight standards district office/ eligible for installation is any HPT stage 2 certificate holding district office. Federal Aviation Administration disk or rotating CDP HPT seal with an S/N (j) Related Information that is not listed in Table 1 to paragraph (g). 14 CFR Part 71 (2) For the purpose of this AD, an engine (1) For more information about this AD, shop visit is the induction of an engine into contact Mehdi Lamnyi, Aerospace Engineer, [Docket No. FAA–2020–0709; Airspace the shop for maintenance involving the ECO Branch, FAA, 1200 District Avenue, Docket No. 20–AEA–2] Burlington, MA 01803; phone: (781) 238– separation of pairs of major mating engine RIN 2120–AA66 flanges, except that the separation of engine 7743; fax: (781) 238–7999; email: flanges solely for the purposes of [email protected]. Proposed Amendment of V–6, V–30, V– transportation of the engine without (2) For service information identified in 58, V–119, and V–226 in the Vicinity of subsequent engine maintenance does not this AD, contact General Electric Company, constitute an engine shop visit. 1 Neumann Way, Cincinnati, OH 45215; Clarion, PA (i) Alternative Methods of Compliance phone: (513) 552–3272; email: AGENCY: Federal Aviation (AMOCs) [email protected]; website: Administration (FAA), DOT. www.ge.com. You may view this referenced (1) The Manager, ECO Branch, FAA, has service information at the FAA, ACTION: Notice of proposed rulemaking the authority to approve AMOCs for this AD, Airworthiness Products Section, Operational (NPRM). if requested using the procedures found in 14 Safety Branch, 1200 District Avenue, SUMMARY: This action proposes to CFR 39.19. In accordance with 14 CFR 39.19, Burlington, MA 01803. For information on send your request to your principal inspector the availability of this material at the FAA, amend VHF Omnidirectional Range or local Flight Standards District Office, as call 781–238–7759. (VOR) Federal airways V–6, V–30, V–58, appropriate. If sending information directly V–119, and V–226 in the vicinity of to the manager of the certification office, Issued on August 6, 2020. Clarion, PA. The VOR Federal airway send it to the attention of the person Lance T. Gant, modifications are necessary due to the identified in paragraph (j)(1) of this AD. You Director, Compliance & Airworthiness may email your request to: ANE-AD-AMOC@ planned decommissioning of the VOR Division, Aircraft Certification Service. faa.gov. portion of the Clarion, PA, VOR/ (2) Before using any approved AMOC, [FR Doc. 2020–17594 Filed 8–12–20; 8:45 am] Distance Measuring Equipment (VOR/ notify your appropriate principal inspector, BILLING CODE 4910–13–P DME) navigation aid (NAVAID) which

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provides navigation guidance for Comments Invited Service Center, Federal Aviation portions of the affected ATS routes. The Interested parties are invited to Administration, 10101 Hillwood Blvd., Clarion VOR is being decommissioned participate in this proposed rulemaking Fort Worth, TX 76177. as part of the FAA’s VOR Minimum by submitting such written data, views, Availability and Summary of Operational Network (MON) program. or arguments as they may desire. Documents for Incorporation by DATES: Comments must be received on Comments that provide the factual basis Reference or before September 28, 2020. supporting the views and suggestions This document proposes to amend ADDRESSES: Send comments on this presented are particularly helpful in FAA Order 7400.11D, Airspace proposal to the U.S. Department of developing reasoned regulatory Designations and Reporting Points, Transportation, Docket Operations, 1200 decisions on the proposal. Comments dated August 8, 2019, and effective New Jersey Avenue SE, West Building are specifically invited on the overall September 15, 2019. FAA Order Ground Floor, Room W12–140, regulatory, aeronautical, economic, 7400.11D is publicly available as listed Washington, DC 20590; telephone: (800) environmental, and energy-related in the ADDRESSES section of this 647–5527, or (202) 366–9826. You must aspects of the proposal. document. FAA Order 7400.11D lists identify FAA Docket No. FAA–2020– Communications should identify both Class A, B, C, D, and E airspace areas, 0709; Airspace Docket No. 20–AEA–2 at docket numbers (FAA Docket No. FAA– air traffic service routes, and reporting the beginning of your comments. You 2020–0709; Airspace Docket No. 20– points. may also submit comments through the AEA–2) and be submitted in triplicate to internet at https://www.regulations.gov. the Docket Management Facility (see Background FAA Order 7400.11D, Airspace ADDRESSES section for address and The FAA is planning Designations and Reporting Points, and phone number). You may also submit decommissioning activities for the VOR subsequent amendments can be viewed comments through the internet at portion of the Clarion, PA, VOR/DME in online at https://www.faa.gov/air_ https://www.regulations.gov. February, 2021. The Clarion VOR is a traffic/publications/. For further Commenters wishing the FAA to candidate VOR identified for information, you can contact the Rules acknowledge receipt of their comments discontinuance by the FAA’s VOR MON and Regulations Group, Federal on this action must submit with those program and listed in the final policy Aviation Administration, 800 comments a self-addressed, stamped statement notice, ‘‘Provision of Independence Avenue SW, Washington, postcard on which the following Navigation Services for the Next DC 20591; telephone: (202) 267–8783. statement is made: ‘‘Comments to FAA Generation Air Transportation System The Order is also available for Docket No. FAA–2020–0709; Airspace (NextGen) Transition to Performance- inspection at the National Archives and Docket No. 20–AEA–2.’’ The postcard Based Navigation (PBN) (Plan for Records Administration (NARA). For will be date/time stamped and returned Establishing a VOR Minimum information on the availability of FAA to the commenter. Operational Network),’’ published in the Order 7400.11D at NARA, email: All communications received on or Federal Register of July 26, 2016 (81 FR [email protected] or go to https:// before the specified comment closing 48694), Docket No. FAA–2011–1082. www.archives.gov/federal-register/cfr/ date will be considered before taking Although the VOR portion of the ibr-locations.html. action on the proposed rule. The Clarion, PA, VOR/DME is planned for proposal contained in this action may decommissioning, the co-located DME FOR FURTHER INFORMATION CONTACT: be changed in light of comments portion of the NAVAID is being retained Colby Abbott, Rules and Regulations received. All comments submitted will to support Next Generation Air Group, Office of Policy, Federal be available for examination in the Transportation System (NextGen) PBN Aviation Administration, 800 public docket both before and after the flight procedure requirements. Independence Avenue SW, Washington, comment closing date. A report The ATS route dependencies to the DC 20591; telephone: (202) 267–8783. summarizing each substantive public Clarion VOR/DME are VOR Federal SUPPLEMENTARY INFORMATION: contact with FAA personnel concerned airways V–6, V–30, V–58, V–119, and Authority for This Rulemaking with this rulemaking will be filed in the V–226. With the planned docket. decommissioning of the VOR portion of The FAA’s authority to issue rules the Clarion VOR/DME, the remaining Availability of NPRMs regarding aviation safety is found in ground-based NAVAID coverage in the Title 49 of the United States Code. An electronic copy of this document areas is insufficient to enable the Subtitle I, Section 106 describes the may be downloaded through the continuity of the affected VOR Federal authority of the FAA Administrator. internet at https://www.regulations.gov. airways. As such, proposed Subtitle VII, Aviation Programs, Recently published rulemaking modifications to the affected VOR describes in more detail the scope of the documents can also be accessed through Federal airways would result in the agency’s authority. This rulemaking is the FAA’s web page at https:// existing gaps in V–6 and V–30 being promulgated under the authority www.faa.gov/air_traffic/publications/ extended and V–58, V–119, and V–226 described in Subtitle VII, Part A, airspace_amendments/. being shortened. Subpart I, Section 40103. Under that You may review the public docket To overcome the airway gaps and loss section, the FAA is charged with containing the proposal, any comments of airway segments, instrument flight prescribing regulations to assign the use received and any final disposition in rules (IFR) traffic could use adjacent of the airspace necessary to ensure the person in the Dockets Office (see ATS routes, including V–10, V–12, V– safety of aircraft and the efficient use of ADDRESSES section for address and 37, V–41, V–43, V–106, and V–115, or airspace. This regulation is within the phone number) between 9:00 a.m. and receive air traffic control (ATC) radar scope of that authority as it would 5:00 p.m., Monday through Friday, vectors to fly through or circumnavigate modify the route structure as necessary except federal holidays. An informal the affected area. IFR pilots equipped to preserve the safe and efficient flow of docket may also be examined during with area navigation (RNAV) PBN air traffic within the National Airspace normal business hours at the office of capabilities could also navigate point to System (NAS). the Operations Support Group, Central point using the existing fixes that will

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remain in place to support continued V–58: V–58 currently extends rule’’ under Department of operations though the affected area. between the intersection of the Franklin, Transportation (DOT) Regulatory Visual flight rules (VFR) pilots who PA, VOR 176° and Clarion, PA, VOR/ Policies and Procedures (44 FR 11034; elect to navigate via the airways through DME 222° radials (GRACE fix) and the February 26, 1979); and (3) does not the affected area could also take Williamsport, PA, VOR/DME; and warrant preparation of a regulatory advantage of the air traffic services between the intersection of the Sparta, evaluation as the anticipated impact is previously listed. NJ, VORTAC 018° and Kingston, NY, so minimal. Since this is a routine Additionally, the V–58 description VOR/DME 270° radials (HELON fix) and matter that will only affect air traffic includes the exclusionary language, the Nantucket, MA, VOR/DME. The procedures and air navigation, it is ‘‘The airspace within R–4105 is airspace within R–4105 is excluded certified that this proposed rule, when excluded during times of use.’’ That during times of use. The FAA proposes promulgated, will not have a significant exclusion language was added to the to remove the airway segment between economic impact on a substantial airway description, effective March 10, the Franklin, PA, VOR 176° and Clarion, number of small entities under the 1988, and has been unchanged since (53 PA, VOR/DME 222° radials (GRACE fix) criteria of the Regulatory Flexibility Act. FR 2007; January 26, 1988). However, and the Philipsburg, PA, VORTAC. later that same year, the FAA published Additionally, the restricted area Environmental Review a rule in the Federal Register (53 FR exclusion language is proposed to be This proposal will be subject to an 37544; September 27, 1988), effective removed also. The unaffected portions environmental analysis in accordance October 20, 1988, that subdivided of the existing airway would remain as with FAA Order 1050.1F, restricted area R–4105 into R–4105A charted. ‘‘Environmental Impacts: Policies and and R–4105B. Then, in 2014, the FAA V–119: V–119 currently extends Procedures’’ prior to any FAA final published a rule in the Federal Register between the Henderson, WV, VORTAC regulatory action. (79 FR 61989; October 16, 2014), and the Clarion, PA, VOR/DME. The effective November 17, 2014, that FAA proposes to remove the airway List of Subjects in 14 CFR Part 71 removed R–4105A and R–4105B. segment overlying the Clarion, PA, Airspace, Incorporation by reference, Therefore, the restricted area exclusion VOR/DME between the Indian Head, Navigation (air). language in the V–58 description is no PA, VORTAC and the Clarion, PA, VOR/ The Proposed Amendment longer required. DME. The unaffected portions of the In consideration of the foregoing, the The Proposal existing airway would remain as charted. Federal Aviation Administration The FAA is proposing an amendment V–226: V–226 currently extends proposes to amend 14 CFR part 71 as to Title 14 Code of Federal Regulations between the intersection of the Franklin, follows: (14 CFR) part 71 by modifying VOR PA, VOR 175° and Clarion, PA, VOR/ PART 71—DESIGNATION OF CLASS A, Federal airways V–6, V–30, V–58, V– DME 222° radials (GRACE fix) and the B, C, D, AND E AIRSPACE AREAS; AIR 119, and V–226. The planned Stillwater, NJ, VOR/DME. The FAA TRAFFIC SERVICE ROUTES; AND decommissioning of the VOR portion of proposes to remove the airway segment REPORTING POINTS the Clarion, PA, VOR/DME NAVAID has overlying the Clarion, PA, VOR/DME made this action necessary. The between the intersection of the Franklin, ■ 1. The authority citation for part 71 proposed VOR Federal airway changes ° PA, VOR 175 and Clarion, PA, VOR/ continues to read as follows: are outlined below. DME 222° radials (GRACE fix) and the V–6: V–6 currently extends between Keating, PA, VORTAC. The unaffected Authority: 49 U.S.C. 106(f), 106(g); 40103, the Oakland, CA, VOR/DME and the 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, portions of the existing airway would 1959–1963 Comp., p. 389. DuPage, IL, VOR/DME; between the remain as charted. intersection of the Chicago Heights, IL, The NAVAID radials in the VOR § 71.1 [Amended] VOR/Tactical Air Navigation (VORTAC) Federal airway descriptions below are ■ ° ° 2. The incorporation by reference in 358 and Gipper, MI, VORTAC 271 unchanged and stated in True degrees. 14 CFR 71.1 of FAA Order 7400.11D, radials (NILES fix) and the intersection VOR Federal airways are published in Airspace Designations and Reporting of the Gipper, MI, VORTAC 092° and paragraph 6010(a) of FAA Order ° Points, dated August 8, 2019, and Litchfield, MI, VOR/DME 196 radials 7400.11D, dated August 8, 2019, and effective September 15, 2019, is (MODEM fix); and between the Clarion, effective September 15, 2019, which is amended as follows: PA, VOR/DME and the La Guardia, NY, incorporated by reference in 14 CFR VOR/DME. The FAA proposes to 71.1. The ATS routes listed in this Paragraph 6010(a) Domestic VOR Federal Airways. remove the airway segment overlying document would be subsequently the Clarion, PA, VOR/DME between the published in the Order. * * * * * Clarion, PA, VOR/DME and the FAA Order 7400.11, Airspace V–6 [Amended] Philipsburg, PA, VORTAC. The Designations and Reporting Points, is From Oakland, CA; INT Oakland 039° and unaffected portions of the existing published yearly and effective on Sacramento, CA, 212° radials; Sacramento; airway would remain as charted. September 15. Squaw Valley, CA; Mustang, NV; Lovelock, V–30: V–30 currently extends Regulatory Notices and Analyses NV; Battle Mountain, NV; INT Battle between the Badger, WI, VOR/DME and Mountain 062° and Wells, NV, 256° radials; the Litchfield, MI, VOR/DME; and The FAA has determined that this Wells; 5 miles, 40 miles, 98 MSL, 85 MSL, between the Clarion, PA, VOR/DME and proposed regulation only involves an Lucin, UT; 43 miles, 85 MSL, Ogden, UT; 11 the Solberg, NJ, VOR/DME. The FAA established body of technical miles, 50 miles, 105 MSL, Fort Bridger, WY; proposes to remove the airway segment regulations for which frequent and Rock Springs, WY; 20 miles, 39 miles, 95 overlying the Clarion, PA, VOR/DME routine amendments are necessary to MSL, Cherokee, WY; 39 miles, 27 miles, 95 MSL, Medicine Bow, WY; INT Medicine Bow between the Clarion, PA, VOR/DME and keep them operationally current. It, 106° and Sidney, NE, 291° radials; Sidney; the Philipsburg, PA, VORTAC. The therefore: (1) Is not a ‘‘significant North Platte, NE; Grand Island, NE; Omaha, unaffected portions of the existing regulatory action’’ under Executive IA; Des Moines, IA; Iowa City, IA; Davenport, airway would remain as charted. Order 12866; (2) is not a ‘‘significant IA; INT Davenport 087° and DuPage, IL, 255°

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radials; to DuPage. From INT Chicago decommissioning of the Lebanon, NH, structure in the northeastern United Heights, IL, 358° and Gipper, MI, 271° VOR/DME navigation aid which States to maintain the efficient flow of radials; Gipper; to INT Gipper 092° and ° provides navigation guidance for air traffic. Litchfield, MI, 196 radials. From segments of the routes. The Lebanon Philipsburg, PA; Selinsgrove, PA; Allentown, Comments Invited PA; Solberg, NJ; INT Solberg 107° and VOR/DME is planned for ° ° decommissioned as part of the FAA’s Interested parties are invited to Yardley, PA, 068 radials; INT Yardley 068 participate in this proposed rulemaking and La Guardia, NY, 213° radials; to La VOR Minimum Operational Network Guardia. (MON) program. by submitting such written data, views, or arguments as they may desire. * * * * * DATES: Comments must be received on or before September 28, 2020. Comments that provide the factual basis V–30 [Amended] supporting the views and suggestions ADDRESSES: Send comments on this ° presented are particularly helpful in From Badger, WI; INT Badger 102 and proposal to the U.S. Department of ° developing reasoned regulatory Pullman, MI, 303 radials; Pullman; to Transportation, Docket Operations, 1200 Litchfield, MI. From Philipsburg, PA; decisions on the proposal. Comments New Jersey Avenue SE, West Building Selinsgrove, PA; East Texas, PA; INT East are specifically invited on the overall Ground Floor, Room W12–140, Texas 095° and Solberg, NJ, 264° radials; to regulatory, aeronautical, economic, Washington, DC 20590; telephone: 1 Solberg. environmental, and energy-related (800) 647–5527 or (202) 366–9826. You * * * * * aspects of the proposal. must identify FAA Docket No. FAA– V–58 [Amended] Communications should identify both 2020–0735; Airspace Docket No. 19– docket numbers (FAA Docket No. FAA– From Philipsburg, PA; to Williamsport, PA. ANE–8 at the beginning of your 2020–0735; Airspace Docket No. 19– From INT Sparta, NJ, 018° and Kingston, NY, comments. You may also submit ANE–8 and be submitted in triplicate to 270° radials; Kingston; INT Kingston 095° comments through the internet at and Hartford, CT, 269° radials; Hartford; the Docket Management Facility (see https://www.regulations.gov. ADDRESSES section for address and Groton, CT; Sandy Point, RI; to Nantucket, FAA Order 7400.11D, Airspace phone number). You may also submit MA. Designations and Reporting Points, and comments through the internet at * * * * * subsequent amendments can be viewed _ https://www.regulations.gov. V–119 [Amended] online at https://www.faa.gov/air Commenters wishing the FAA to From Henderson, WV; Parkersburg, WV; traffic/publications/. For further acknowledge receipt of their comments INT Parkersburg 067° and Indian Head, PA, information, you can contact the Rules on this action must submit with those 254° radials; to Indian Head. and Regulations Group, Federal comments a self-addressed, stamped * * * * * Aviation Administration, 800 postcard on which the following Independence Avenue SW, Washington, V–226 statement is made: ‘‘Comments to FAA DC 20591; telephone: (202) 267–8783. Docket No. FAA–2020–0735; Airspace From Keating, PA; Williamsport, PA; The Order is also available for Docket No. 19–ANE–8’’. The postcard Wilkes-Barre, PA; to Stillwater, NJ. inspection at the National Archives and will be date/time stamped and returned * * * * * Records Administration (NARA). For to the commenter. Issued in Washington, DC, on August 7, information on the availability of FAA All communications received on or 2020. Order 7400.11D at NARA, email before the specified comment closing Scott M. Rosenbloom, [email protected], or go to https:// date will be considered before taking www.archives.gov/federal-register/cfr/ Acting Manager, Rules and Regulations action on the proposed rule. The Group. ibr-locations.html. proposal contained in this action may [FR Doc. 2020–17598 Filed 8–12–20; 8:45 am] FOR FURTHER INFORMATION CONTACT: Paul be changed in light of comments Gallant, Rules and Regulations Group, BILLING CODE 4910–13–P received. A report summarizing each Office of Policy, Federal Aviation substantive public contact with FAA Administration, 800 Independence personnel concerned with this DEPARTMENT OF TRANSPORTATION Avenue SW, Washington, DC 20591; rulemaking will be filed in the docket. telephone: (202) 267–8783. Availability of NPRM’s Federal Aviation Administration SUPPLEMENTARY INFORMATION: An electronic copy of this document 14 CFR Part 71 Authority for This Rulemaking may be downloaded through the The FAA’s authority to issue rules internet at https://www.regulations.gov. [Docket No. FAA–2020–0735; Airspace regarding aviation safety is found in Docket No. 19–ANE–8] Recently published rulemaking Title 49 of the United States Code. documents can also be accessed through RIN 2120–AA66 Subtitle I, Section 106 describes the the FAA’s web page at https:// authority of the FAA Administrator. www.faa.gov/air_traffic/publications/ Proposed Amendment and Revocation Subtitle VII, Aviation Programs, airspace_amendments/. of Air Traffic Service (ATS) Routes in describes in more detail the scope of the You may review the public docket the Vicinity of Lebanon, NH agency’s authority. This rulemaking is containing the proposal, any comments AGENCY: Federal Aviation promulgated under the authority received and any final disposition in Administration (FAA), DOT. described in Subtitle VII, Part A, person in the Dockets Office (see ACTION: Notice of proposed rulemaking Subpart I, Section 40103. Under that ADDRESSES section for address and (NPRM). section, the FAA is charged with phone number) between 9:00 a.m. and prescribing regulations to assign the use 5:00 p.m., Monday through Friday, SUMMARY: This action proposes to of the airspace necessary to ensure the except federal holidays. An informal amend VHF Omnidirectional Range safety of aircraft and the efficient use of docket may also be examined during (VOR) Federal airways V–141, and V– airspace. This regulation is within the normal business hours at the office of 542, and revoke airways V–151 and V– scope of that authority as it would the Eastern Service Center, Federal 496, due to the planned modify the VOR Federal airway route Aviation Administration, Room 210,

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1701 Columbia Ave., College Park, GA 71.1. The VOR Federal airways listed in 30337. this document would be subsequently Paragraph 6010(a) Domestic VOR Federal published in, or removed from, the Availability and Summary of Airways. Order. * * * * * Documents for Incorporation by FAA Order 7400.11, Airspace Reference Designations and Reporting Points, is V–141 [Amended] This document proposes to amend published yearly and effective on From Nantucket, MA; INT Nantucket 334° FAA Order 7400.11D, Airspace September 15. and Boston, MA, 138° radials; to Boston. Designations and Reporting Points, Regulatory Notices and Analyses * * * * * dated August 8, 2019, and effective September 15, 2019. FAA Order The FAA has determined that this V–151 [Remove] 7400.11D is publicly available as listed proposed regulation only involves an * * * * * established body of technical in the ADDRESSES section of this V–496 [Remove] proposed rule. FAA Order 7400.11D regulations for which frequent and * * * * * lists Class A, B, C, D, and E airspace routine amendments are necessary to areas, air traffic service routes, and keep them operationally current. It, V–542 [Amended] reporting points. therefore: (1) Is not a ‘‘significant From Elmira, NY; Binghamton, NY; to regulatory action’’ under Executive Rockdale, NY. The Proposal Order 12866; (2) is not a ‘‘significant * * * * * The FAA is proposing an amendment rule’’ under Department of to Title 14 Code of Federal Regulations Transportation (DOT) Regulatory Issued in Washington, DC, on August 7, (14 CFR) part 71 to amend VOR Federal Policies and Procedures (44 FR 11034; 2020. airways V–141 and V–542, and to February 26, 1979); and (3) does not Scott M. Rosenbloom, revoke airways V–151 and V–496, due warrant preparation of a regulatory Acting Manager, Rules and Regulations to the planned decommissioning of the evaluation as the anticipated impact is Group. Lebanon, NH VOR/DME. An Area so minimal. Since this is a routine [FR Doc. 2020–17689 Filed 8–12–20; 8:45 am] Navigation (RNAV) waypoint (WP) is matter that will only affect air traffic BILLING CODE 4910–13–P being developed to be charted in the procedures and air navigation, it is vicinity of the Lebanon VOR/DME certified that this proposed rule, when location. The proposed changes are promulgated, will not have a significant DEPARTMENT OF TRANSPORTATION described below. economic impact on a substantial Federal Highway Administration V–141: V–141 currently consists of number of small entities under the two parts: first, extending between the criteria of the Regulatory Flexibility Act. Nantucket, MA, VOR/DME and the 23 CFR Part 645 Environmental Review Boston, MA, VOR/DME; and second, [Docket No. FHWA–2019–0037] extending between the Manchester, NH, This proposal will be subject to an VOR/DME and the Massena, NY, environmental analysis in accordance RIN 2125–AF92 VORTAC. This proposal would remove with FAA Order 1050.1F, the part between Manchester, NH, and ‘‘Environmental Impacts: Policies and Broadband Infrastructure Deployment Procedures’’ prior to any FAA final Massena, NY. As amended, V–141 AGENCY: Federal Highway regulatory action. would extend between Nantucket, MA, Administration (FHWA), U.S. and Boston, MA. List of Subjects in 14 CFR Part 71 Department of Transportation (DOT). V–542: V–542 currently extends between the Elmira, NY, VOR/DME, and Airspace, Incorporation by reference, ACTION: Notice of proposed rulemaking the Lebanon, NH, VOR/DME. The FAA Navigation (air). (NPRM); request for comments. proposes to remove the route segments The Proposed Amendment SUMMARY: FHWA proposes to amend its of V–542 that extend between the In consideration of the foregoing, the regulations governing the Rockdale, NY, VOR/DME, and the Federal Aviation Administration accommodation of utilities on the right- Lebanon, NH, VOR/DME. As amended, proposes to amend 14 CFR part 71 as of-way (ROW) of Federal-aid or direct V–542 would extend between Elmira, follows: Federal highway projects to implement NY, and Rockdale, NY. requirements of the Consolidated V–151: V–151 currently extends PART 71—DESIGNATION OF CLASS A, Appropriations Act, 2018, for between the intersection of the B, C, D, AND E AIRSPACE AREAS; AIR broadband infrastructure deployment. Nantucket, MA, VOR/DME 334° and the ° TRAFFIC SERVICE ROUTES; AND The requirements, which will apply to Providence, RI VOR/DME 079 radials, REPORTING POINTS each State that receives Federal funds and the Burlington, VT, VOR/DME. The under Chapter 1 of Title 23, United ■ FAA proposes to remove this entire 1. The authority citation for part 71 States Code (U.S.C.), aim to facilitate the route. A low altitude RNAV route is continues to read as follows: installation of broadband infrastructure. being developed to replace V–151. Authority: 49 U.S.C. 106(f), 106(g); 40103, V–496: V–496 currently extends DATES: Comments must be received on 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, or before September 14, 2020. between the Utica, NY, VORTAC, and 1959–1963 Comp., p. 389. the Kennebunk, ME, VOR/DME. This ADDRESSES: To ensure that you do not action proposes to remove the entire § 71.1 [Amended] duplicate your docket submissions, route. ■ 2. The incorporation by reference in please submit them by only one of the Domestic VOR Federal airways are 14 CFR 71.1 of FAA Order 7400.11D, following means: published in paragraph 6010(a) of FAA Airspace Designations and Reporting • Federal eRulemaking Portal: Go to Order 7400.11D, dated August 8, 2019, Points, dated August 8, 2019, and http://www.regulations.gov and follow and effective September 15, 2019, which effective September 15, 2019, is the online instructions for submitting is incorporated by reference in 14 CFR amended as follows: comments.

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• Mail: Docket Management Facility, Background Columbia, and the Commonwealth of U.S. Department of Transportation, 1200 FHWA recognizes that it is in the Puerto Rico. 49 U.S.C. 1504(a)(4). The New Jersey Avenue SE, Washington, DC public interest for utility facilities to use MOBILE NOW Act defines ‘‘appropriate 20590–0001. State agency,’’ as ‘‘a State governmental • jointly the ROW of public roads and Hand Delivery: U.S. Department of streets when such use and occupancy agency that is recognized by the executive branch of the State as having Transportation, Docket Operations, do not adversely affect highway or the experience necessary to evaluate West Building Ground Floor, Room traffic safety, or otherwise impair the and carry out projects relating to the W12–140, 1200 New Jersey Avenue SE., highway or its aesthetic quality, and proper and effective installation and Washington, DC 20590, between 9 a.m. does not conflict with Federal, State, or operation of broadband infrastructure.’’ and 5 p.m., Monday through Friday, local laws and regulations. The 47 U.S.C. 1504(a)(1). In addition, the except Federal holidays. The telephone opportunity for such joint use avoids MOBILE NOW Act defines ‘‘broadband number is (202) 366–9329. the additional cost of acquiring separate infrastructure’’ as ‘‘any buried, All submissions should include the ROW for the exclusive accommodation underground, or aerial facility, and any agency name and the docket number of utilities. As a result, the ROW of that appears in the heading of this wireless or wireline connection, that highways is often used to provide enables users to send and receive voice, document or the Regulatory public services to abutting residents as Identification Number (RIN) for the video, data, graphics, or any well as to serve conventional highway combination thereof,’’ 47 USCC rulemaking. All comments received will needs. be posted without change to http:// 1504(a)(2), and ‘‘broadband Utility facilities, unlike most other infrastructure entity’’ as ‘‘any entity that www.regulations.gov, including any fixed objects that may be present within personal information provided. installs, owns, or operates broadband the highway environment, are not infrastructure and provides broadband FOR FURTHER INFORMATION CONTACT: Ms. owned nor are their operations directly Julie Johnston, Office of services in a manner consistent with the controlled by State or local public public interest, convenience, and Preconstruction, Construction and agencies. Federal laws and FHWA Pavements (HICP–10), (202) 591–5858, necessity, as determined by the State.’’ regulations contained in 23 U.S.C. 109, 47 U.S.C. 1504(a)(3). or via email at [email protected], 111, 116, and 123 and 23 CFR parts 1, or Mr. Lev Gabrilovich, Office of the 635, 645, and 710 regulate the Discussion of General Requirements Chief Counsel (HCC–30), (202) 366– accommodation, relocation, and and Limitations 3813, or via email at Lev.Gabrilovich@ reimbursement of utilities located In proposed § 645.307(a), FHWA sets dot.gov. Office hours are from 8:00 a.m. within the highway ROW. State out four new requirements of the to 4:30 p.m., E.T., Monday through departments of transportation (State MOBILE NOW Act. Proposed Friday, except Federal holidays. DOT) are required to develop Utility § 645.307(a)(1) requires that the State SUPPLEMENTARY INFORMATION: Accommodation policies that meet DOT, in consultation with appropriate Electronic Access and Filing these regulations. 23 CFR 645.211. State agencies, identify a broadband utility coordinator who is responsible This document and all comments Legal Authority and Statement of the Problem for facilitating the infrastructure ROW received may be viewed online through efforts within the State. Under the the Federal eRulemaking portal at The Consolidated Appropriations Act, proposal, the coordinator may reside in http://www.regulations.gov. It is 2018 (Pub. L. 115–141), Division P, Title the State DOT or in another State agency available 24 hours each day, 365 days VII (‘‘MOBILE NOW Act’’), Section 607, and may have additional each year. Please follow the instructions Broadband Infrastructure Deployment responsibilities.1 The primary burden of online for more information and help. (47 U.S.C. 1504), directs the Secretary of this provision is imposed on States, An electronic copy of this document Transportation to promulgate though States will likely vary may also be downloaded by accessing regulations to ensure that States meet considerably in their implementation of the Office of the Federal Register’s home specific registration, notification, and it. Some States, for example, may add page at: http://www.archives.gov/ coordination requirements to facilitate this responsibility onto the role of an federal-register and the Government broadband infrastructure deployment in existing employee, while other States Publishing Office’s web page at: http:// the ROW of applicable Federal-aid may hire a new person to assume this www.govinfo.gov/app/frtoc/today. highway projects. Accordingly, FHWA role. The FHWA assumes that another All comments received before the proposes to revise its regulations cost to States would be the cost to close of business on the comment governing the accommodation of update their websites to provide closing date indicated above will be utilities to implement the Section 607 information about the coordinator and considered and will be available for requirements. This rulemaking is their work. The FHWA expects that the examination in the docket at the above required by statute. It addresses the duties of a broadband utility coordinator address. Comments received after the need to update FHWA regulations to would be less than a full-time comment closing date will be filed in implement the Section 607 commitment, assuming roughly 30 the docket and will be considered to the requirements. percent of an employee’s time. This extent practicable. In addition to late provision would also result in time comments, FHWA will also continue to MOBILE NOW Act Direction for Broadband Deployment burdens for FHWA employees, file relevant information in the docket including time to disseminate as it becomes available after the Once the regulations take effect, the information and to prepare and present comment period closing date, and Section 607 requirements will apply to interested persons should continue to each State that receives funds under 1 The proposed requirements are to be examine the docket for new material. A Chapter 1 of Title 23, U.S.C., including implemented by State DOTs in consultation with final rule may be published at any time the District of Columbia and the appropriate State agencies. While FHWA expects employees of other State agencies to be involved, after close of the comment period and Commonwealth of Puerto Rico. The FHWA assumes that the majority of the time after DOT has had the opportunity to MOBILE NOW Act defines the term burdens imposed by this rule would accrue to State review the comments submitted. ‘‘State’’ to mean a State, the District of DOTs.

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one external and one internal Webinar vary considerably due to differing Rulemaking Analyses and Notices to explain the proposed requirements to processes across States. The FHWA Executive Order 12866 (Regulatory State DOTs, and to conduct any follow- assumed that the duties associated with Planning and Review), Executive Order up activities related to the Webinars. this provision would require 25 percent 13563 (Improving Regulation and Consistent with Section 607 of the of the time of a management-level MOBILE NOW Act, FHWA is proposing Regulatory Review), and DOT employee on an annual basis. The Regulatory Policies and Procedures in § 645.307(a)(2) to require the State FHWA does not anticipate any costs to DOT, in consultation with appropriate accrue to the Agency as a result of this The FHWA has determined that the State agencies, to establish a registration proposed provision, as FHWA would proposed rule will not be a significant process for broadband infrastructure not be directly involved in these regulatory action within the meaning of entities that seek to be included. The coordination efforts. Executive Order (E.O.) 12866 or DOT FHWA believes that States may vary regulatory policies and procedures.2 Proposed § 645.307(b) contains the considerably in their approach for This action complies with E.O. 12866, MOBILE NOW Act provision that, if a implementing this provision, and that 13563, and 13771 to improve regulation. States will likely choose an approach State chooses to provide for the The FHWA anticipates that the that fits with their existing processes. installation of broadband infrastructure proposed rule would not adversely The FHWA assumes that States will in the ROW of an applicable Federal-aid affect, in a material way, any sector of spend time implementing this provision highway project, the State DOT must the economy. In addition, these changes to establish the process, update their ensure that any existing broadband would not interfere with any action utility accommodation policy, notify infrastructure entities are not taken or planned by another agency and broadband companies, and put the disadvantaged, as compared to other would not materially alter the budgetary relevant information up on the States’ broadband infrastructure entities, with impact of any entitlements, grants, user websites. The FHWA assumes that these respect to the Section 607 program. The fees, or loan programs. The proposed duties would require the most State FHWA assumes that this provision will rule also does not raise any novel legal employee time in the first year, and not result in any time burdens or costs or policy issues. substantially less time in subsequent years. While FHWA does not have a to FHWA, State DOTs, or broadband The following paragraphs summarize formal role in the registration process, infrastructure entities. the economic analysis for this proposed FHWA would likely incur costs Consistent with the MOBILE NOW rule. A supporting statement and a associated with monitoring States’ Act, proposed § 645.309 provides that spreadsheet in the rulemaking docket compliance with the requirements. nothing in Part 645, Subpart C, requires (FHWA–2019–0037) contain additional Consistent with Section 607 of the that a State install or allow the details. The FHWA requests data and MOBILE NOW Act, FHWA is proposing installation of broadband infrastructure information that could inform the in § 645.307(a)(3) to require the State in a highway ROW, and that nothing in economic analysis for this rule, DOT, in consultation with appropriate part 645, subpart C, authorizes the including any estimates of resulting State agencies, to establish a process for Secretary to withhold or reserve funds benefits, at the final rule stage. electronically notifying broadband or approval of a Title 23 project. The The FHWA estimated the costs of the infrastructure entities identified under FHWA again assumes that this proposed rule at $24.5 million for the proposed § 645.307(a)(2), on an annual provision will not result in any time 10-year period from 2020 through 2029, basis, of the State transportation or $3.5 million on an annual basis, improvement program and providing burdens or costs to FHWA, State DOTs, measured in 2018 dollars and using a 7 other notifications as necessary. To or broadband infrastructure entities. percent discount rate. If a 3 percent comply with this provision, FHWA The FHWA requests comments on the discount rate is used, these costs are assumes that States will create an proposed rule. The FHWA also requests estimated at $29.6 million for the same electronic notification process, update comments and information regarding 10-year period, or $3.5 million on an their utility accommodation policies to the assumptions used and other aspects annual basis, again measured in 2018 include this new process, and also of the economic analysis of the dollars. notify broadband companies of these proposed rule to inform the economic changes. The costs to States would analysis at the final rule stage. The Table 1 summarizes the economic primarily be upfront, and there would FHWA presents the economic analysis impacts of the proposed rule that were able to be quantified at this stage of the be smaller annual costs to send the in a supporting statement and a regulatory process. The quantifiable notifications in subsequent years. spreadsheet found in the rulemaking Finally, FHWA proposes in impacts are the costs that the proposed docket (FHWA–2019–0037) and § 645.307(a)(4) to require that the State rule would impose on States and also on summarizes the analysis under the DOT, in consultation with appropriate FHWA. The costs of the proposed rule ‘‘Executive Order 12866 (Regulatory State agencies, coordinate initiatives are primarily borne by States, with less under Section 607 of the MOBILE NOW Planning and Review), Executive Order than 1 percent of the total costs accruing Act with other statewide 13563 (Improving Regulation and to FHWA and the remaining more than telecommunication and broadband Regulatory Review), Executive Order 99 percent of costs accruing to States. plans and State and local transportation 13771 (Reducing Regulation and Based on the estimated economic and land use plans, including strategies Controlling Regulatory Costs), and DOT impacts and the other criteria for a to minimize repeated excavations that Regulatory Policies and Procedures’’ significant regulatory action under involve broadband infrastructure heading of this preamble. Section 3(f) of E.O. 12866 and as installation in a ROW. The FHWA supplemented by E.O. 13563, this assumes this proposed provision will be proposed rule is not a significant handled by a statewide coordinator. The regulatory action. cost that States would incur to implement this proposed provision may 2 See 49 CFR part 5.

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TABLE 1—ESTIMATED COSTS OF THE BROADBAND INFRASTRUCTURE DEPLOYMENT PROPOSED RULE (2018$)

Analysis Calendar year period year Costs

2020 ...... 1 $4,185,039 2021 ...... 2 3,380,660 2022 ...... 3 3,380,660 2023 ...... 4 3,380,660 2024 ...... 5 3,380,660 2025 ...... 6 3,380,660 2026 ...... 7 3,380,660 2027 ...... 8 3,380,660 2028 ...... 9 3,380,660 2029 ...... 10 3,380,660

Total Undiscounted Costs to FHWA ...... 75,502 Total Undiscounted Costs to State DOTs ...... 34,535,477 Undiscounted Total Costs ...... 34,610,980

Total Costs with 3% Discounting ...... 29,618,666 Total Costs with 7% Discounting ...... 24,496,098

Average Annual Costs (Undiscounted) ...... 3,461,098 Annualized Costs, 3% Discount Rate, 10 Years ...... 3,472,211 Annualized Costs, 7% Discount Rate, 10 Years ...... 3,487,693

The FHWA anticipates that the Regulatory Flexibility Act Unfunded Mandates Reform Act proposed rule would result in benefits excludes financial assistance of the type In compliance with the Regulatory that would accrue primarily to in which State, local, or Tribal Flexibility Act (Pub. L. 96–354, 5 U.S.C. governments have authority to adjust broadband companies and to residents 601–612), FHWA has evaluated the in areas adjacent to project sites. Several their participation in the program in effects of this proposed rule on small accordance with changes made in the of the proposed provisions will result in entities and has determined that the increased coordination and cooperation program by the Federal Government. action is not anticipated to have a Finally, this proposed rule only between broadband companies and significant economic impact on a State DOTs. This increased coordination implements requirements specifically substantial number of small entities. set forth in statute. would have the effect of increasing the The proposed rule affects States, and ability of broadband companies to States are not included in the definition Executive Order 13132 (Federalism conduct project work at times when of small entity set forth in 5 U.S.C. 601. Assessment) roads are already closed or under The proposed rule would also affect This proposed action has been construction for other purposes. broadband entities, but the impact on analyzed in accordance with the Coordination of construction activities these entities is expected to be principles and criteria contained in E.O. between State DOTs and broadband beneficial and also to involve potential 13132, and FHWA has determined that companies is likely to increase the cost savings. The proposed rule is thus this proposed action would not have efficiency of projects, and also result in not expected to result in increased costs sufficient federalism implications to fewer disruptions for area residents if for broadband entities. Therefore, warrant the preparation of a federalism road closures are coordinated rather FHWA certifies that the action will not assessment. The FHWA has also than occurring at separate times for the have a significant economic impact on determined that this proposed action purposes of State DOTs and broadband a substantial number of small entities. would not preempt any State law or infrastructure. The FHWA, however, Unfunded Mandates Reform Act of State regulation or affect the States’ lacks the data and information 1995 ability to discharge traditional State necessary to quantify these potential governmental functions. benefits at this stage in the regulatory This proposed rule would not impose unfunded mandates as defined by the Executive Order 13175 (Tribal process. The FHWA requests data and Consultation) information from commenters that Unfunded Mandates Reform Act of 1995 could inform the economic analysis for (Pub. L. 104–4, 109 Stat. 48). This The FHWA has analyzed this proposed rule would not result in the proposed rule in accordance with the this rule, including any estimates of expenditure by State, local, and Tribal principles and criteria contained in E.O. resulting benefits or cost savings, or that governments, in the aggregate, or by the 13175, ‘‘Consultation and Coordination could facilitate a quantification of costs, private sector, of $155 million or more with Indian Tribal Governments.’’ The benefits, or cost savings at the final rule in any one year (2 U.S.C. 1532). Further, proposed rule implements statutory stage. in compliance with the Unfunded requirements that apply to States that Executive Order 13771 (Reducing Mandates Reform Act of 1995, FHWA receive Title 23 Federal-aid highway Regulation and Controlling Regulatory will evaluate any regulatory action that funds, and it would not have substantial Costs) might be proposed in subsequent stages direct effects on one or more Indian of the proceeding to assess the effects on Tribes, would not impose substantial This proposed rule is not an E.O. State, local, and Tribal governments and direct compliance costs on Indian Tribal 13771 regulatory action because it is not the private sector. In addition, the governments, and would not preempt significant under E.O. 12866. definition of ‘‘Federal Mandate’’ in the Tribal laws. Accordingly, the funding

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and consultation requirements of E.O. Issued under authority delegated in 49 CFR program on an annual basis and provide 13175 do not apply and a Tribal 1.81 and 1.85. additional notifications as necessary to summary impact statement is not Nicole R. Nason, achieve the goals of this subpart; and required. Administrator, Federal Highway (4) Coordinate initiatives carried out Administration. under this subpart with other statewide Paperwork Reduction Act In consideration of the foregoing, telecommunication and broadband Under the Paperwork Reduction Act FHWA proposes to amend Part 645 of plans and State and local transportation and land use plans, including strategies of 1995 (PRA) (44 U.S.C. 3501 et seq.), Title 23 of the CFR as set forth below: to minimize repeated excavations that Federal agencies must obtain approval ■ 1. Revise the authority citation for part involve the installation of broadband from the Office of Management and 645 to read as follows: infrastructure in a right-of-way. Budget for each collection of Authority: 23 U.S.C. 101, 109, 111, 116, (b) If a State chooses to provide for the information they conduct, sponsor, or 123, and 315; 47 U.S.C. 1504; 23 CFR 1.23 installation of broadband infrastructure require through regulations. The FHWA and 1.27; 49 CFR 1.48(b); and E.O. 11990, 42 FR 26961 (May 24, 1977). in the right-of-way of an applicable has determined that this proposed rule Federal-aid highway project under this ■ does not contain collection of 2. Add subpart C to read as follows: section, the State department of information requirements for the transportation shall carry out any purposes of the PRA. Subpart C—BROADBAND INFRASTRUCTURE DEPLOYMENT appropriate measures to ensure that any National Environmental Policy Act existing broadband infrastructure Sec. entities are not disadvantaged, as The Agency has analyzed this 645.301 Purpose. compared to other broadband proposed rulemaking action pursuant to 645.303 Applicability. infrastructure entities, with respect to the National Environmental Policy Act 645.305 Definitions. the program under this section. 645.307 General requirements. of 1969 (42 U.S.C. 4321 et seq.) and has 645.309 Limitations. § 645.309 Limitations. determined that it is categorically Nothing in this subpart establishes a excluded under 23 CFR 771.117(c)(1), § 645.301 Purpose. mandate or requirement that a State To prescribe additional requirements which applies to activities that do not install or allow the installation of to facilitate the installation of involve or lead directly to construction. broadband infrastructure in a highway broadband infrastructure pursuant to 47 Categorically excluded actions meet the right-of-way. Nothing in this subpart U.S.C. 1504. criteria for categorical exclusions under authorizes the Secretary to withhold or the Council on Environmental Quality § 645.303 Applicability. reserve funds or approval of a project regulations (40 CFR 1508.4) and under This subpart applies to each State that under Title 23 of the U.S.C. 23 CFR 771.117(a) and normally do not receives funds under Chapter 1 of Title [FR Doc. 2020–17525 Filed 8–12–20; 8:45 am] require any further NEPA approvals by 23 of the U.S.C. and only to activities for BILLING CODE 4910–22–P FHWA. This rulemaking proposes to which Federal obligations or include in FHWA regulations the expenditures are initially approved on coordination, registration, and or after the effective date of this subpart. DEPARTMENT OF JUSTICE notification requirements of 47 U.S.C. 1504 that are applicable to States that § 645.305 Definitions. Office of the Attorney General receive Title 23 Federal-aid highway For purposes of this subpart, the funds. This rulemaking does not involve terms defined in 47 U.S.C. 1504(a) shall 28 CFR Part 72 and will not lead directly to have the same meaning where used in these regulations, notwithstanding other [Docket No. OAG 157; AG Order No. 4759– construction. The FHWA does not 2020] anticipate any environmental impacts, provisions of this part or Title 23 of the and there are no unusual circumstances U.S.C. RIN 1105–AB52 present under 23 CFR 771.117(b). § 645.307 General requirements. Registration Requirements Under the Regulation Identification Number (a) A State department of Sex Offender Registration and transportation, in consultation with Notification Act A RIN is assigned to each regulatory appropriate State agencies, shall: action listed in the Unified Agenda of (1) Identify a broadband utility AGENCY: Department of Justice. Federal Regulations. The Regulatory coordinator, whether in the State ACTION: Proposed rule. Information Service Center publishes department of transportation or in the Unified Agenda in April and another State agency, that is responsible SUMMARY: The Department of Justice is October of each year. The RIN contained for facilitating the broadband proposing a rule that specifies the registration requirements under the Sex in the heading of this document can be infrastructure right-of-way efforts within Offender Registration and Notification used to cross reference this action with the State. The broadband utility Act (‘‘SORNA’’). The rule in part reflects the Unified Agenda. coordinator may have additional responsibilities. express requirements of SORNA and in List of Subjects in 23 CFR Part 645 (2) Establish a process for the part reflects the exercise of authorities registration of broadband infrastructure SORNA grants to the Attorney General Grant Programs-transportation, entities that seek to be included in those to interpret and implement SORNA’s Highways and roads, Reporting and broadband infrastructure right-of-way requirements. SORNA’s requirements recordkeeping requirements, Utilities. facilitation efforts within the State. have previously been delineated in (3) Establish a process to notify guidelines issued by the Attorney electronically broadband infrastructure General for implementation of SORNA’s entities identified under subsection (2) requirements by registration of the State transportation improvement jurisdictions.

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DATES: Written and electronic comments identified and located as set forth above authorizes the Attorney General to take must be sent or submitted on or before will be placed in the agency’s public more specific actions in certain October 13, 2020. Comments received docket file, but not posted online. If you contexts. by mail will be considered timely if they wish to inspect the agency’s public One such provision is 34 U.S.C. are postmarked on or before the last day docket file in person by appointment, 20913. That section states in subsection of the comment period. The electronic please see the FOR FURTHER INFORMATION (b) that sex offenders are generally to Federal Docket Management System CONTACT paragraph. register initially before release from will accept electronic comments until Overview imprisonment, or within three business midnight Eastern Time at the end of that days of sentencing if not sentenced to day. The Sex Offender Registration and imprisonment, but it provides further in ADDRESSES: Comments may be mailed to Notification Act (‘‘SORNA’’), which is subsection (d) that the Attorney General Regulations Docket Clerk, Office of title I of the Adam Walsh Child has ‘‘the authority to specify the Legal Policy, U.S. Department of Justice, Protection and Safety Act of 2006, applicability of the requirements of 950 Pennsylvania Avenue NW, Room Public Law 109–248, 34 U.S.C. 20901 et [SORNA] to sex offenders convicted 4234, Washington, DC 20530. To ensure seq., establishes national standards for before the enactment of [SORNA] or its proper handling, please reference sex offender registration and implementation in a particular notification in the United States. Docket No. OAG 157 on your jurisdiction, and to prescribe rules for SORNA has a dual character, imposing correspondence. You may submit the registration of any such sex registration obligations on sex offenders comments electronically or view an offenders and for other categories of sex as a matter of Federal law that are electronic version of this proposed rule offenders who are unable to comply federally enforceable under at http://www.regulations.gov. with subsection (b).’’ As discussed circumstances supporting Federal below in connection with 28 CFR 72.3, FOR FURTHER INFORMATION CONTACT: jurisdiction, see 18 U.S.C. 2250, and section 20913(d) is not a David J. Karp, Senior Counsel, Office of providing minimum national standards constitutionally impermissible Legal Policy, U.S. Department of Justice, that non-Federal jurisdictions are delegation of legislative authority. Washington, DC, 202–514–3273. expected to incorporate in their sex Rather, it enables the Attorney General SUPPLEMENTARY INFORMATION: Posting of offender registration and notification to effectuate the legislative intent that Public Comments. Please note that all programs, subject to a reduction of SORNA apply to all sex offenders, comments received are considered part Federal funding for those that fail to do regardless of when they were convicted. of the public record and made available so, see 34 U.S.C. 20912(a), 20926–27. for public inspection online at http:// The Justice Department’s Office of Sex Another relevant provision lists www.regulations.gov. Such information Offender Sentencing, Monitoring, several types of information that sex includes personal identifying Apprehending, Registering, and offenders must provide for inclusion in information (such as your name, Tracking (‘‘SMART Office’’) administers sex offender registries, and states that address, etc.) voluntarily submitted by the national standards for sex offender sex offenders must also provide ‘‘[a]ny the commenter. registration and notification under other information required by the You are not required to submit SORNA and assists all jurisdictions in Attorney General.’’ Id. 20914(a)(8). This personal identifying information in implementing the SORNA standards in provision as well is not an order to comment on this rule. their programs. See id. 20945. As impermissible delegation of legislative Nevertheless, if you still want to submit provided by SORNA, the Department of authority, but rather is instrumental to personal identifying information (such Justice also (i) prosecutes SORNA the Attorney General’s effectuating the as your name, address, etc.) as part of violations by sex offenders committed legislative objective to ‘‘protect the your comment, but do not want it to be under circumstances supporting Federal public from sex offenders and offenders posted online, you must include the jurisdiction, see 18 U.S.C. 2250; (ii) against children’’ by ‘‘establish[ing] a phrase ‘‘PERSONAL IDENTIFYING assists in the enforcement of sex comprehensive national system for the INFORMATION’’ in the first paragraph offender registration requirements registration of those offenders.’’ Id. of your comment. You also must locate through the activities of the U.S. 20901; see 73 FR at 38054–57; 76 FR at all the personal identifying information Marshals Service, see 34 U.S.C. 20941; 1637. The Attorney General’s exercise of you do not want posted online in the (iii) operates, through the Federal the authority under section 20914(a)(8) first paragraph of your comment and Bureau of Investigation, the National is limited to requiring additional identify what information you want Sex Offender Registry, which compiles information that furthers the legislative redacted. the information obtained through the public safety objective or the If you want to submit confidential sex offender registration programs of the implementation or enforcement of business information as part of your states and other registration SORNA’s provisions. How that has been comment, but do not want it to be jurisdictions and makes it available on done is explained below in connection posted online, you must include the a nationwide basis for law enforcement with proposed 28 CFR 72.6 and 72.7. phrase ‘‘CONFIDENTIAL BUSINESS purposes, see id. 20921; and (iv) The Attorney General has exercised INFORMATION’’ in the first paragraph operates the Dru Sjodin National Sex these authorities in previous of your comment. You also must Offender Public website, rulemakings and issuances of guidelines prominently identify confidential www.nsopw.gov, which provides public under SORNA, as detailed in the business information to be redacted access through a single national site to rulemaking history and section-by- within the comment. If a comment has the information about sex offenders section analysis below, and the so much confidential business posted on the public sex offender interpretations and policy decisions in information that it cannot be effectively websites of the various registration this proposed rule follow those already redacted, all or part of that comment jurisdictions, see id. 20922. adopted in existing SORNA-related may not be posted on http:// SORNA generally directs the Attorney documents. The present rule provides a www.regulations.gov. General to ‘‘issue guidelines and concise and comprehensive statement of Personal identifying information and regulations to interpret and implement what sex offenders must do to comply confidential business information [SORNA].’’ Id. 20912(b). SORNA also with SORNA’s requirements.

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In addition to SORNA’s original that will continue to be governed by the Rulemaking History provisions, described above, this previously issued guidelines for SORNA This proposed rule is the ninth rulemaking draws on and implements implementation. While this rule does document the Attorney General has provisions of the International Megan’s not make new policy, as discussed published pursuant to the statutory Law to Prevent Child Exploitation and above, it is expected to have a number directive to the Attorney General to Other Sexual Crimes Through Advanced of benefits. The rule will facilitate issue guidelines and regulations to Notification of Traveling Sex Offenders enforcement of SORNA’s registration interpret and implement SORNA. See (‘‘International Megan’s Law’’), Public requirements through prosecution of 34 U.S.C. 20912(b). The previous Law 114–119. Section 6 of International non-compliant sex offenders under 18 SORNA-related documents are as Megan’s Law amended SORNA by (i) U.S.C. 2250. By providing a follows: redesignating, in 34 U.S.C. 20914(a), comprehensive articulation of SORNA’s (1) Interim rule entitled, former paragraph (7) as paragraph (8) registration requirements in regulations ‘‘Applicability of the Sex Offender and adding a new paragraph (7) that addressed to sex offenders, it will Registration and Notification Act,’’ requires a sex offender to provide for provide a more secure basis for published at 72 FR 8894 (Feb. 28, 2007). inclusion in the sex offender registry prosecution of sex offenders who engage The interim rule solicited public information relating to intended travel in knowing violations of any of comments, and the comment period outside the United States, including SORNA’s requirements. It will also ended on April 30, 2007. The interim several specified types of information resolve a number of specific concerns rule added a new part 72 to title 28 of ‘‘and any other itinerary or other travel- that have arisen in past litigation or the Code of Federal Regulations, related information required by the entitled ‘‘Sex Offender Registration and Attorney General’’; (ii) adding a new could be expected to arise in future Notification.’’ The interim rule provided subsection (c) to 34 U.S.C. 20914 that litigation, if not clarified and resolved that ‘‘[t]he requirements of the Sex requires sex offenders to provide and by this rule. For example, as discussed Offender Registration and Notification update registration information required below, the amendment of § 72.3 in the by SORNA ‘‘in conformity with any rule will ensure that its application of Act apply to all sex offenders, including time and manner requirements SORNA’s requirements to sex offenders sex offenders convicted of the offense prescribed by the Attorney General’’; with pre-SORNA convictions is given for which registration is required prior and (iii) adding a new subsection (b) to effect consistently, resolving an issue to the enactment of that Act.’’ 28 CFR SORNA’s criminal provision, 18 U.S.C. resulting from the decision in United 72.3. 2250, that specifically reaches States v. DeJarnette, 741 F.3d 971 (9th (2) Proposed guidelines, published at international travel reporting violations. Cir. 2013). 72 FR 30210 (May 30, 2007), whose general purpose was to provide This rulemaking is not innovative in Beyond the benefits to effective terms of policy. Many of the guidance and assistance to registration enforcement of SORNA’s requirements, jurisdictions in implementing the requirements it articulates reflect the rule will benefit sex offenders by express SORNA requirements. These SORNA standards in their sex offender providing a clear and comprehensive registration and notification programs. include, inter alia, statutory statement of their registration specifications about (i) where and when The proposed guidelines solicited obligations under SORNA. This public comment, and the comment sex offenders must register; (ii) several statement will make it easier for sex categories of required registration period ended on August 1, 2007. offenders to determine what they are information; (iii) how long sex offenders (3) Final guidelines for registration required to do and thus facilitate must continue to register, including jurisdictions regarding SORNA compliance. different registration periods for sex implementation entitled, ‘‘The National offenders in different tiers and lifetime By facilitating the enforcement of, and Guidelines for Sex Offender Registration registration for those in the highest tier; compliance with, SORNA’s registration and Notification’’ (the ‘‘SORNA and (iv) a requirement to appear requirements, the rule will further Guidelines’’), published at 73 FR 38030 periodically to verify the registration SORNA’s public safety objectives. See (July 2, 2008). information. See 34 U.S.C. 20911(2)–(4), 34 U.S.C. 20901. More consistent (4) Proposed supplemental guidelines 20913, 20914(a)(1)–(7), 20915, 20918. adherence to these requirements will for SORNA implementation, published Other features of the rule reflect enable registration and law enforcement at 75 FR 27362 (May 14, 2010), whose exercises of the Attorney General’s authorities to better track and monitor general purpose was to address certain powers to implement SORNA’s released sex offenders in the community issues arising in SORNA requirements. These include additional and enhance the basis for public implementation that required that some specifications regarding information sex notification regarding registered sex aspects of the SORNA Guidelines be offenders must provide, how and when offenders that SORNA requires. See id. augmented or modified. The proposed they must report certain changes in 20920, 20923. supplemental guidelines solicited registration information, and the time public comment, and the comment and manner for complying with Effective September 1, 2017, the period closed on July 13, 2010. SORNA’s registration requirements by provisions of SORNA, formerly (5) Final rule entitled, ‘‘Applicability sex offenders who cannot comply with appearing at 42 U.S.C. 16901 et seq., of the Sex Offender Registration and SORNA’s normal registration were recodified in a new title 34 of the Notification Act,’’ published at 75 FR procedures. On these matters, however, United States Code, and now appear at 81849 (Dec. 29, 2010). This rule the proposed rule embodies the same 34 U.S.C. 20901 et seq. See http:// finalized the February 28, 2007, interim policies as those appearing in the uscode.house.gov/ rule providing for SORNA’s previously issued SORNA guidelines editorialreclassification/t34/index.html. applicability to all sex offenders, and prior rulemakings under SORNA. United States Code citations of SORNA including those with pre-SORNA The rule also makes no change in provisions in this proposed rule convictions. what registration jurisdictions need to accordingly differ from the (6) Final supplemental guidelines for do to substantially implement SORNA corresponding citations in earlier SORNA implementation entitled, in their registration programs, a matter sources and documents. ‘‘Supplemental Guidelines for Sex

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Offender Registration and Notification’’ stringent than those prescribed by before release from imprisonment; (the ‘‘SORNA Supplemental SORNA. This reflects the fact that provision of name, address, Guidelines’’), published at 76 FR 1630 SORNA provides minimum national employment, vehicle, and other (Jan. 11, 2011). standards for sex offender registration. It registration information; continued (7) Proposed supplemental guidelines, is intended to establish a floor rather registration and periodic verification of published at 81 FR 21397 (Apr. 11, than a ceiling for the registration registration information for at least 15 2016), whose general purpose was to programs of states and other years; lifetime registration and quarterly afford registration jurisdictions greater jurisdictions, which can prescribe verification for certain registrants flexibility in their efforts to substantially registration requirements binding on sex convicted of aggravated or multiple sex implement SORNA’s juvenile offenders under their own laws offenses; and public internet posting of registration requirement. These independent of SORNA. Jurisdictions information about registrants. See id. at proposed supplemental guidelines accordingly are free to adopt more 90–91. The Federal courts have solicited public comment, and the stringent or extensive registration consistently rejected ex post facto comment period closed on June 10, requirements for sex offenders than challenges to SORNA itself. See, e.g., 2016. those set forth in this part, including United States v. Felts, 674 F.3d 599, (8) Final supplemental guidelines more stringent or extensive 605–06 (6th Cir. 2012). regarding substantial implementation of requirements regarding where, when, Section 72.3 also is not premised on SORNA’s juvenile registration and how long sex offenders must any constitutionally impermissible requirement entitled, ‘‘Supplemental register, what information they must delegation of legislative authority to the Guidelines for Juvenile Registration provide, and what they must do to keep executive branch of government. Under the Sex Offender Registration and their registrations current. See 73 FR at Congress intended that SORNA apply to Notification Act,’’ published at 81 FR 38032–35, 38046. all sex offenders, regardless of when 50552 (Aug. 1, 2016). they were convicted. See Reynolds v. Section 72.2—Definitions United States, 565 U.S. 432, 442–45 Section-by-Section Analysis Section 72.2 states that terms used in (2012); id. at 448–49 & n. (Scalia, J., The present proposed rule expands part 72 have the same meaning as in dissenting) (agreeing that Congress part 72 of title 28 of the Code of Federal SORNA. Hence, for example, references intended for SORNA to apply to all sex Regulations to provide a full statement in the part to registration ‘‘jurisdictions’’ offenders). Congress authorized the of the registration requirements for sex mean the 50 states, the District of Attorney General to specify the offenders under SORNA. It revises the Columbia, the five principal U.S. applicability of SORNA’s requirements statement of purpose and definitional territories, and Indian tribes qualifying to sex offenders with pre-SORNA and sections in 28 CFR 72.1 and 72.2. It under 34 U.S.C. 20929. See id. pre-SORNA-implementation maintains the existing provision in 28 20911(10); 73 FR at 38045, 38048. convictions, see 34 U.S.C. 20913(d), in CFR 72.3 stating that SORNA’s Likewise, where the part uses such order to effectuate that intent while requirements apply to all sex offenders, terms as sex offender (and tiers thereof), enabling the Attorney General to regardless of when they were convicted, sex offense, convicted or conviction, sex address transitional issues presented in and incorporates additional language in offender registry, student, employee or integrating the existing sex offender § 72.3 to reinforce that point. It also employment, and reside or residence, population into SORNA’s adds to part 72 provisions—§§ 72.4 the meaning is the same as in SORNA. comprehensive nationwide registration through 72.8—articulating where sex See 34 U.S.C. 20911(1)–(9), (11)–(13); 73 system. See Reynolds, 565 U.S. at 440– offenders must register, how long they FR at 38050–57, 38061–62. 42; 72 FR at 8895–97; 73 FR at 38035– must register, what information they Section 72.3—Applicability of the Sex 36, 38046, 38063–64; 75 FR at 81850– must provide, how they must register 52. In adopting § 72.3, the Attorney Offender Registration and Notification and keep their registrations current to General implemented the relevant Act satisfy SORNA’s requirements, and the legislative policy—that SORNA’s liability they face for violations, Section 72.3 carries forward in requirements should apply to all sex following SORNA’s express substance current 28 CFR 72.3, which offenders—to the maximum, having requirements and the prior articulation states that SORNA’s requirements apply found no reason to delay or qualify its of standards for these matters in the to all sex offenders, including those implementation. Consequently, as an SORNA Guidelines and the SORNA whose sex offense convictions predate articulation of a legislative policy Supplemental Guidelines. SORNA’s enactment. This section was embodied in SORNA, the issuance of initially adopted on February 28, 2007, § 72.3 pursuant to 34 U.S.C. 20913(d) Section 72.1—Purpose and amended on December 29, 2010. involved no exercise of legislative Section 72.1(a) states part 72’s The section and its rationale are authority and did not contravene the purpose to specify SORNA’s registration explained further in the interim and non-delegation doctrine. See Gundy v. requirements and their scope of final rulemakings that adopted it. See 72 United States, 139 S. Ct. 2116, 2123–30 application. It further notes that the FR 8894; 75 FR 81849. (2019) (plurality opinion); id. at 2130– Attorney General has the authority Section 72.3, and its modification by 31 (Alito, J., concurring in the pursuant to provisions of SORNA to this rulemaking, are constitutionally judgment); id., Brief for the United specify these requirements and their sound. In Smith v. Doe, 538 U.S. 84 States at 22–38. applicability as provided in part 72. (2003), the Supreme Court upheld the Moreover, regardless of any question Section 72.1(b) states that part 72 does retroactive application of sex offender concerning the validity of 34 U.S.C. not preempt or limit any obligations of registration requirements against an ex 20913(d), § 72.3 is adequately supported or requirements relating to sex offenders post facto challenge, in reviewing a state on the basis of the Attorney General’s under other laws, rules, or policies. It registration system whose major features authority to issue guidelines and further notes that states and other paralleled SORNA’s in many ways. The regulations to interpret and implement governmental entities may prescribe commonalities between SORNA and the SORNA, appearing in 34 U.S.C. requirements, with which sex offenders state registration program upheld in 20912(b). In § 72.3, the Attorney General must comply, that are more extensive or Smith include required registration interpreted SORNA as intended by

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Congress to apply to all sex offenders the state in which he resides does not. offenders of their registration duties, (ii) regardless of when they were This may occur, for example, because obtaining from sex offenders signed convicted—an interpretation endorsed state law does not require registration acknowledgments confirming receipt of by the Supreme Court, see Reynolds, based on the particular sex offense for that information, and (iii) having sex 565 U.S. at 440–45; see also Gundy, 139 which the offender was convicted, or offenders provide the required S. Ct. at 2123–31—and he implemented because state law requires registration registration information. See 34 U.S.C. that legislative policy by embodying it by sex offenders for shorter periods of 20919(a); 73 FR at 38062–63. in a clearly stated rule. time than SORNA, or because state law Registration procedures of this nature The same considerations apply to the does not apply its registration inform sex offenders of what they must amended version of § 72.3 proposed requirements ‘‘retroactively’’ as broadly do, and the acknowledgments obtained here, which effectuates more reliably as § 72.3 applies SORNA’s requirements from them provide evidence that they the legislative policy judgment that to sex offenders with pre-SORNA were so informed. See 76 FR at 1638. If SORNA’s requirements should apply to convictions. Notwithstanding the a jurisdiction that registers a sex all sex offenders by restating the current absence of a parallel state law, the offender has not fully revised its rule with additional specificity, but registration authorities in the state may processes for conformity to SORNA, which involves no change in substance. be willing to register the sex offender then it may not tell the sex offender In comparison with the current because Federal law (i.e., SORNA) about some of the registration formulation of § 72.3, this proposed rule requires him to register. Cf. Doe v. requirements imposed by SORNA, such adds a second sentence stating that (i) Keathley, 290 SW3d 719 (Mo. 2009) as those that the jurisdiction has not all sex offenders must comply with all (state constitutional prohibition of incorporated in its own laws. If the requirements of SORNA, regardless of retrospective laws does not preclude jurisdiction fails to inform a sex when they were convicted; (ii) this is so registration based on SORNA). If the offender about some of SORNA’s regardless of whether a registration state registration authorities are willing registration requirements, the sex jurisdiction has substantially to register the sex offender, he is not offender then does not know about some implemented SORNA or any particular relieved of the duty to register merely of his registration obligations under SORNA requirement; and (iii) this is so because state law does not track the SORNA based on the information regardless of whether a particular Federal law registration requirement. received from the jurisdiction, and may requirement or class of sex offenders is Hence, sex offenders can be held not learn of them from other sources. In mentioned in examples in the rules or liable for violating any requirement such cases, the possibility of liability guidelines issued by the Attorney stated in this rule, regardless of when under 18 U.S.C. 2250 continues to be General. they were convicted, and regardless of limited to cases in which a sex offender The first part of the added sentence whether the jurisdiction in which the ‘‘knowingly fails to register or update a reiterates § 72.3’s specification of violation occurs has adopted the registration as required by [SORNA].’’ SORNA’s applicability to all sex requirement in its own law. This does The limitation to ‘‘knowing[ ]’’ offenders in the form of an affirmative not mean, however, that SORNA violations provides a safeguard against direction to sex offenders, and it states unfairly holds sex offenders liable for liability based on unwitting violations explicitly that all of SORNA’s failing to comply with its requirements, of SORNA requirements of which a sex requirements so apply. where the requirement is unknown to offender was not aware. Section The added sentence further states that the sex offender or impossible for him 72.8(a)(1)(iii) of this rule, and the the registration duties SORNA to carry out. Cf. Felts, 674 F.3d at 605 accompanying discussion below, prescribes for sex offenders are not (noting concern). Federal enforcement provide further explanation about the conditional on registration jurisdictions’ of SORNA’s requirements occurs limitation of liability under 18 U.S.C. having adopted SORNA’s requirements primarily through SORNA’s criminal 2250 to cases involving violation of in their own registration laws or provision, 18 U.S.C. 2250. That known registration obligations. policies. For example, SORNA requires provision makes it a Federal crime for The second concern about fairness sex offenders to register in the states a person required to register by SORNA involves situations in which a sex (and other registration jurisdictions) in to knowingly fail to register or update a offender has failed to do something which they reside, work, or attend registration as required by SORNA SORNA requires because it is school. See 34 U.S.C. 20913(a). All of under circumstances supporting Federal impossible for him to do so. For the states have sex offender registration jurisdiction, such as conviction of a example, as noted above, a jurisdiction programs, which were initially Federal sex offense or interstate or with laws that do not require established long before the enactment of foreign travel. As discussed below, registration based on the particular SORNA. Hence, sex offenders are able to section 2250 holds sex offenders liable offense for which a sex offender was register in these existing state programs. only for violations of known registration convicted may nevertheless be willing The fact that a particular state has not obligations, and it excuses failures to to register him in light of his Federal modified its registration program at this comply with SORNA under certain law (SORNA) registration obligation. time to incorporate the full range of conditions if the non-compliance results But alternatively, the jurisdiction’s law SORNA requirements does not prevent from circumstances beyond the sex or practice may constrain its registration a sex offender required to register by offenders’ control. personnel to register only sex offenders SORNA from registering in the state or Consider first the concern that sex whom its own laws require to register. excuse a failure to do so. See, e.g., Felts, offenders may lack notice regarding In such a case, it is impossible for the 674 F.3d at 603–05. registration obligations. Under the sex offender to register in that The same principle applies in procedures prescribed by SORNA, and jurisdiction, though subject to a situations in which a jurisdiction’s law under standard procedures that have registration duty under SORNA. This is does not track or incorporate a generally been adopted by registration so because registration is by its nature particular SORNA requirement affecting jurisdictions whether or not they have a two-party transaction, involving a sex a sex offender. Consider a situation of implemented SORNA’s requirements, offender’s providing information about this nature in which SORNA requires a the registration of sex offenders where he resides and other matters as sex offender to register but the law of normally involves (i) informing sex required, and acceptance of that

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information by the jurisdiction for Section 72.3, as currently formulated, 28 CFR 72.3 on February 28, 2007. inclusion in the sex offender registry. If states that SORNA’s ‘‘requirements . . . Example 1 in § 72.3 might be the jurisdiction is unwilling to carry out apply to all sex offenders,’’ exercising misunderstood as suggesting the its side of the transaction, then the sex the Attorney General’s ‘‘authority to contrary, i.e., that a sex offender with a offender cannot register. specify the applicability of the pre-SORNA conviction released from Concerns of this nature are also requirements of [SORNA] to sex imprisonment at any time in 2007 was addressed in SORNA’s criminal offenders convicted before the immediately subject to SORNA’s provision, 18 U.S.C. 2250. Subsection enactment of [SORNA] or its requirements. Hence, to avoid any (c) of section 2250 provides an implementation in a particular possible inconsistency or apparent affirmative defense to liability for jurisdiction.’’ 34 U.S.C. 20913(d); see inconsistency with the Supreme Court’s SORNA violations if ‘‘(1) uncontrollable Reynolds, 565 U.S. at 441–45 decision in Reynolds, the rule proposes circumstances prevented the individual (explaining Congress’s decision to give to change the example by substituting a from complying; (2) the individual did the Attorney General authority to apply later year for 2007. not contribute to the creation of such SORNA’s requirements to sex offenders Section 72.4—Where sex offenders must circumstances in reckless disregard of with pre-SORNA convictions). register the requirement to comply; and (3) the Nevertheless, in United States v. individual complied as soon as such DeJarnette, 741 F.3d 971 (9th Cir. 2013), Section 72.4 tracks SORNA’s express circumstances ceased to exist.’’ A the court believed that the Attorney requirement that a sex offender must registration jurisdiction’s law or practice General had not made all of SORNA’s register and keep the registration current that precludes registration of a sex requirements applicable to all sex in each jurisdiction in which the sex offender, as described above, is a offenders. The case concerned the offender resides, is an employee, or is a circumstance that the sex offender applicability of SORNA’s requirement student, and must also initially register cannot control and to which he did not that a sex offender register initially in in the jurisdiction in which the offender contribute, so he cannot be held liable the jurisdiction in which he is was convicted if that jurisdiction differs for failure to register with that convicted, if it differs from his residence from the jurisdiction of residence. See jurisdiction as SORNA requires. jurisdiction, see 34 U.S.C. 20913(a) 34 U.S.C. 20913(a); 73 FR at 38061–62. The defense in section 2250(c) comes (second sentence), where the sex Section 72.5—How long sex offenders with the proviso that the defendant offender’s conviction predated SORNA’s must register must comply with SORNA ‘‘as soon as enactment. Notwithstanding 28 CFR [the preventing] circumstances cease[ ] 72.3, the court concluded that the Section 72.5 sets out SORNA’s to exist.’’ For example, consider the case Attorney General had not made this requirements regarding the duration of posed above of a jurisdiction that SORNA requirement applicable to sex registration. SORNA classifies sex refuses to register sex offenders based offenders with pre-SORNA convictions, offenders into three ‘‘tiers,’’ based on on a particular offense for which if they were already subject to state law the nature and seriousness of their sex SORNA requires registration, so that a registration requirements. DeJarnette, offenses and their histories of sex offender residing in the jurisdiction 741 F.3d at 982. The decision was recidivism. See 34 U.S.C. 20911(2)–(4); who was convicted of that offense largely premised on the fact that the 73 FR at 38052–54. The tier in which a cannot register there. Suppose that the particular SORNA requirement at issue sex offender falls affects how long the jurisdiction later progresses in its was not mentioned in relation to that offender must continue to register under implementation of SORNA and becomes particular class of sex offenders in the SORNA. The required registration willing to register offenders who have examples of sex offenders subject to periods are generally 15 years for a tier been convicted for that sex offense. In SORNA’s requirements in 28 CFR 72.3 I sex offender, 25 years for a tier II sex light of the proviso, the sex offender’s and the SORNA Guidelines. DeJarnette, offender, and life for a tier III sex obligation to register revives once the 741 F.3d at 976–80. offender. See 34 U.S.C. 20915(a); 73 FR jurisdiction becomes willing to register The sentence added to § 72.3 by this at 38068. Paragraph (a) in § 72.5 him. That is fair, because the rulemaking will foreclose future reproduces these requirements. circumstance preventing his compliance decisions of this nature and ensure that Paragraph (a) of § 72.5 provides an with the SORNA registration § 72.3’s application of SORNA’s exception ‘‘when the sex offender is in requirement no longer exists. requirements to all sex offenders is custody or civilly committed,’’ Section 72.8(a)(2) of this rule, and the given effect consistently. incorporating in substance an express accompanying discussion below, The proposed rule includes one proviso appearing in SORNA, 34 U.S.C. provide further explanation about the further change in § 72.3, affecting the 20915(a). The exception and proviso contours of the impossibility defense first example in the provision. The mean that SORNA does not require a under 18 U.S.C. 2250(c). example as currently formulated sex offender to carry out its processes Returning to the text of proposed describes a sex offender convicted in for registering or updating registrations § 72.3, the added sentence states at the 1990 and released following during subsequent periods of end that sex offenders must comply imprisonment in 2007, and says that the confinement, e.g., when imprisoned with SORNA’s requirements ‘‘regardless sex offender is subject to SORNA’s because of conviction for some other of whether any particular requirement requirements. In Reynolds, the Supreme offense following his release from or class of sex offenders is mentioned in Court held that SORNA’s requirements imprisonment for the sex offense. This examples in this regulation or in other did not apply to sex offenders with pre- reflects that ‘‘the SORNA procedures for regulations or guidelines issued by the SORNA convictions prior to the keeping up the registration . . . Attorney General.’’ In conjunction with Attorney General’s exercise of the generally presuppose the case of a sex the earlier statement in the provision authority under 34 U.S.C. 20913(d) to offender who is free in the community’’ that all sex offenders must comply with specify SORNA’s applicability to those and that ‘‘[w]here a sex offender is all SORNA requirements, the added offenders. 565 U.S. at 434–35. It follows confined, the public is protected against language responds to a judicial decision that SORNA’s requirements did not the risk of his reoffending in a more that did not give full effect to the apply to such sex offenders before the direct way, and more certain means are current regulation. Attorney General’s original issuance of available for tracking his whereabouts.’’

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73 FR at 38068. However, registration for a sex offense where imprisonment imprisonment for the offense giving rise jurisdictions may see incremental value does not ensue. See 73 FR at 38068. The to the registration requirement.’’ The in requiring sex offenders to carry out sex offender’s release from broader ‘‘with respect to’’ language is their processes for registering and imprisonment, which marks the start of best understood to mean that the updating registrations during the registration period for an relevant prison term under section subsequent confinement and are free to incarcerated sex offender, may occur 20913(b)(1) is not the specific sentence do so, though SORNA does not require later than the end of the sentence imposed for the predicate sex offense it. imposed for the sex offense itself. For alone, but rather is the full related The proviso relating to custody or example, suppose that a sex offender is sentence of imprisonment, including civil commitment does not pertain to or convicted for a fatal sexual assault upon any prison time imposed for other limit SORNA’s requirement that initial a victim, resulting in a sentence of three crimes. The corresponding language in registration is to occur while the sex years of imprisonment for the sexual section 20919(a) supports this offender is still imprisoned following assault and a concurrent or consecutive understanding, requiring initial conviction for the predicate sex offense. sentence of 25 years of imprisonment registration of the sex offender ‘‘shortly See 34 U.S.C. 20913(b)(1), 20919(a). for murder. Or consider a case in which before release of the sex offender from Rather, as indicated above, it affects a a sex offender is sentenced to three custody.’’ This language does not signify sex offender’s registration obligations years of imprisonment for a sexual that initial registration is to occur when under SORNA if he is later assault and at a later time he is the sex offender is about to complete the reincarcerated after his release. The sentenced to 25 years of imprisonment portion of an aggregate sentence proviso relating to custody or civil for an unrelated murder, while still attributable specifically to the sex commitment also does not mean that the imprisoned for the sex offense. Or offense, though the sex offender will running of the SORNA registration suppose that a sex offender is already remain in custody because he is serving period is suspended during such serving a 25-year prison term for an additional time for another offense or subsequent confinement, and does not unrelated murder, when he is sentenced offenses. Rather, by its terms, section otherwise affect the commencement or to three years of imprisonment for a 20919(a) contemplates that initial duration of a sex offender’s registration sexual assault. In all such cases, the registration will occur shortly before the period under SORNA. registration period under SORNA starts sex offender is actually released, and For example, consider a sex offender, to run when the sex offender actually section 20913(b)(1) must be understood released in 2010 from imprisonment for completes his imprisonment and is in the same way, because section a sex offense conviction, whom SORNA released. It does not start to run while 20913(b)(1) and section 20919(a) requires to register for 25 years as a tier the sex offender is still imprisoned but describe the same transaction (initial II sex offender, and suppose the sex has completed the portion of the registration) from different perspectives. offender is subsequently convicted sentence attributable to the sex offense. For example, consider the case of a during the registration period for This conclusion follows from the sex offender convicted and sentenced committing a robbery and imprisoned general design and specific for a fatal sexual assault, resulting in a for three years for the latter offense. requirements of SORNA’s registration three-year prison term for the sexual SORNA’s registration requirement for procedures. SORNA provides that assault and a concurrent or consecutive that sex offender terminates in 2035, incarcerated sex offenders must initially 25-year sentence for murder. Suppose although he was incarcerated for three register ‘‘before completing a sentence that the sexual assault involved was a years of the 25-year SORNA registration of imprisonment with respect to the sexual contact offense against an adult period. Sex offenders should keep in [registration] offense.’’ 34 U.S.C. victim, resulting in the classification of mind, however, that their registration 20913(b)(1). SORNA further states that the sex offender as a tier I sex offender jurisdictions are free to impose more the correlative responsibilities of and a registration period of 15 years. See extensive requirements than SORNA, registration officials in effecting the 34 U.S.C. 20911(2)–(4), 20915(a)(1). If including longer registration periods. initial registration are to be carried out the registration period started to run at Hence, the basic registration period ‘‘shortly before release of the sex the end of the first three years of the sex under the law of a jurisdiction in which offender from custody.’’ Id. 20919(a); offender’s incarceration, then the 15- such a sex offender is registered may be see 73 FR at 38063 (explaining year registration period would expire longer than 25 years. And even if the requirement to register shortly before long before the sex offender’s release, basic registration period under the release from custody). Thereafter, sex because of the extension of his jurisdiction’s law is the same as the 25 offenders must ‘‘keep the registration[s] imprisonment by the murder sentence. years required by SORNA, the current’’ for specified periods of time, This result would be at odds with jurisdiction may choose not to credit the depending on their ‘‘tier[s].’’ 34 U.S.C. section 20919(a)’s direction that sex three years the sex offender spent in 20915(a). In light of these provisions, offenders are to be initially registered prison for the robbery towards the the registration period is logically ‘‘shortly before release . . . from running of the registration period under understood as being framed at the start custody,’’ because the sex offender’s state law. See 73 FR at 38032–35, 38046, by the release from custody and at the registration obligation under SORNA 38068. Expiration of the SORNA end by the termination of the specified would be a thing of the past by that registration period accordingly does not time period. time, and also with the requirements obviate the need for sex offenders to Considering specifically cases in under sections 20913 and 20915(a)(1) check with registration jurisdictions which a sex offender is serving an that the sex offender register and keep whether they remain subject to aggregate prison term for multiple the registration current for 15 years, registration requirements under the crimes, 34 U.S.C. 20913(b)(1) requires because his registration period would be jurisdictions’ laws. registration ‘‘before completing a over before he registered in the first As provided in paragraph (b) of § 72.5, sentence of imprisonment with respect place. the registration period under SORNA to the offense giving rise to the In addition to the inconsistency with begins to run upon release from registration requirement.’’ (Emphasis the statutory provisions discussed imprisonment following a sex offense added). It does not require registration above, starting the running of the conviction, or at the time of sentencing ‘‘before completing a sentence of registration period upon the conclusion

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of the portion of a sentence attributable designed for tracking and monitoring program because of prison crowding; to the registration offense would result sex offenders following their release. and whether the sex offender gets in arbitrary differences in registration The principle that the registration additional prison time because of requirements, depending on fortuities in period under SORNA commences on sentencing for other offenses, related or the structuring of criminal sentences or release also applies to cases in which unrelated to the sex offense. their descriptions in judgments. For the sex offender is not imprisoned for Whatever the reasons may be, it is example, considering again the case of the sex offense per se but is imprisoned logical to start a post-release tracking a fatal sexual assault, suppose that the because of conviction for another regime—i.e., registration—when the sex resulting sentence involves a three-year offense. For example, suppose that a sex offender is actually released. Initial prison term for the sexual assault, offender is convicted of sexually registration is to occur ‘‘shortly before’’ followed by a consecutive 25-year assaulting and robbing a victim, that, as 34 U.S.C. 20919(a) requires, ‘‘in prison term for murder. As discussed resulting in a sentence of probation for light of the underlying objectives of above, the assumed 15-year registration the sexual assault and a sentence of five ensuring that sex offenders have their years of imprisonment for the robbery. registration obligations in mind when period for the sexual assault would then Considering the relevant statutory they are released, and avoiding run out long before the sex offender’s provisions, section 20913(b)(2) makes situations in which registration release, and he would never have to applicable an alternative time for initial information changes significantly register at all. But suppose the sentence registration—three business days after between the time the initial registration is cast instead as a 25-year prison term sentencing—only ‘‘if the sex offender is procedures are carried out and the time for murder, followed by a consecutive not sentenced to a term of the offender is released.’’ 73 FR at three-year prison term for the sexual imprisonment.’’ Correspondingly, 38063. assault. The completion of the prison section 20919(a) provides for initial Hence, the registration period under term for the sexual assault would then registration immediately after SORNA starts to run when a sex coincide with the sex offender’s release sentencing, rather than shortly before offender is released from imprisonment, from prison, and he would have to release from custody, only ‘‘if the sex and not at an earlier time when the register and keep the registration current offender is not in custody.’’ These specific sentence for the registration for 15 years. Because the ordering of the provisions, by their terms, do not apply offense has been served, if the two times sexual assault and murder sentences has to a sex offender who remains in differ. This follows from the features of no relevance to the public safety custody, though on the basis of an the statutory provisions discussed purposes served by sex offender offense other than the predicate sex above, from the absurdities entailed by registration, the discrepancy between offense. Hence, cases of this nature must a different interpretation, and from the the two cases as to resulting registration fall under the requirement of sections basic character of registration as a post- requirements would be irrational. For 20913(b)(1) and 20919(a) to effect initial release tracking measure. To the extent this reason as well, the registration registration shortly before the sex that there might be any uncertainty or period under SORNA starts to run when offender’s release, and the consequences argument to the contrary, the Attorney the sex offender is actually released, and are the same as in the cases discussed General in this rule exercises his not at an earlier time upon completion above involving aggregate prison terms authority under 34 U.S.C. 20912(b) to of the portion of an aggregate sentence for the registration offense and other interpret and implement SORNA’s specifically attributable to the predicate crimes. Where the sex offender receives provisions affecting the duration of sex offense. a non-incarcerative sentence for the registration in the manner stated. Paragraph (c) in § 72.5 sets out By way of comparison, an offender’s registration offense and a prison term SORNA’s reduction of its registration term of post-imprisonment supervised for another offense, the registration period for certain sex offenders who release for a sex offense does not start period starts upon the sex offender’s release, so that once registered and out maintain a ‘‘clean record’’ in accordance to run until he is released from prison, in the community he must keep the with statutory standards. The specific including in cases in which the registration current for the full ‘‘clean record’’ conditions are that the offender’s release is delayed by his registration period specified in 34 sex offender not be convicted of any serving additional prison time for U.S.C. 20915, and not just for a felony or any sex offense, successfully another offense or offenses. This is not truncated period reduced by his complete any period of supervision, and unfair or illogical; it rationally reflects incarceration for another offense. successfully complete an appropriate the nature of supervision as a measure In terms of underlying policy, sex offender treatment program designed for overseeing and managing registration is by definition concerned (certified by a registration jurisdiction or offenders following their release. While with tracking sex offenders in the the Attorney General). The SORNA sex offender registration differs from community following their release. See registration period is reduced by five supervision in being a non-punitive, 73 FR at 38044–45. The tiers and the years for a tier I sex offender who civil regulatory measure, see, e.g., associated registration periods under maintains a clean record for 10 years, Smith, 538 U.S. at 92–106; Felts, 674 SORNA reflect categorical legislative and reduced to the period for which the F.3d at 605–06, it is likewise concerned judgments as to how long sex offenders clean record is maintained for a tier III with the post-release treatment of sex should be tracked following release for sex offender required to register on the offenders in the community. Hence, as public safety purposes. These judgments basis of a juvenile delinquency with periods of supervision, it is do not come into play until the sex adjudication who maintains a clean rational for an offender’s registration offender is released. When that happens record for 25 years. See 34 U.S.C. period for a sex offense to begin to run may be affected by many factors—such 20915(a), (b); 73 FR at 38068–69. when he is released from prison, as the length of the prison term the sex including in cases in which the offender receives for the sex offense; Section 72.6—Information Sex offender’s release is delayed by his whether the sex offender makes parole Offenders Must Provide serving additional prison time for other (in a state system having parole) or gets Section 72.6 sets out the registration criminal conduct. This reflects the good-conduct credit; whether the information sex offenders must provide. nature of registration as a measure jurisdiction adopts an early release Much of the specified information is

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expressly required by SORNA, see 34 email addresses and telephone numbers. committing crimes in such U.S.C. 20914(a)(1)–(7), and the A provision of the Keeping the internet circumstances. See 73 FR at 38056. remainder reflects SORNA’s direction Devoid of Sexual Predators Act of 2008 Paragraph (c)(3) of § 72.6 requires a that sex offenders must provide ‘‘[a]ny (KIDS Act), Public Law 110–400, sex offender to provide employer name other information required by the directed the Attorney General to use the and address information, or other Attorney General,’’ id. 20914(a)(8). authority under paragraph (7) of 34 employment location information if the In general terms, the required U.S.C. 20914(a) [now designated sex offender lacks a fixed place of information comprises (i) name, birth paragraph (8)] to require sex offenders to employment. Providing employer name date, and Social Security number; (ii) provide internet identifiers. The and address information is an express remote communication identifiers Attorney General has previously SORNA requirement. See 34 U.S.C. (including email addresses and exercised that authority to require the 20914(a)(4). The Attorney General has telephone numbers); (iii) information specified information in the SORNA adopted, in the SORNA Guidelines and about places of residence, non- Guidelines. See 34 U.S.C. 20916(a); 73 this rule, the requirement to provide residential lodging, employment, and FR at 38055; 76 FR at 1637. The other employment location information school attendance; (iv) international Attorney General has exercised the same for sex offenders who work but do not travel; (v) passports and immigration authority to require telephone have fixed places of employment—e.g., documents; (vi) vehicle information; numbers—a requirement also already a long-haul trucker whose ‘‘workplace’’ and (vii) professional licenses. By appearing in the SORNA Guidelines— is roads and highways throughout the providing basic information about who for a number of reasons, including country, a self-employed handyman a sex offender is, where he is, how he facilitating communication between who works out of his home and does gets around, and what he is authorized registration personnel and sex offenders, repair or home improvement work at to do, these requirements implement and addressing the potential use of other people’s homes, or a person who SORNA and further its public safety telephonic communication by sex frequents sites that contractors visit to objectives. offenders in efforts to contact or lure obtain day labor and works for any Paragraph (a)(1) of § 72.6 requires that potential victims. See 73 FR at 38055. contractor who hires him on a given a sex offender provide his name, Paragraph (c)(1) of § 72.6 requires a day. The Attorney General has adopted including any alias, which is an express sex offender to provide residence this requirement because knowing SORNA requirement. See 34 U.S.C. address information or other residence where such sex offenders are in the 20914(a)(1); 73 FR at 38055. course of employment serves the same location information if the sex offender Paragraph (a)(2) of § 72.6 requires a public safety purposes as knowing the lacks a residence address. Providing sex offender to provide date of birth whereabouts of sex offenders who work residence address information is an information, a requirement the Attorney at fixed locations. See 73 FR at 38056, express SORNA requirement. See 34 General has adopted in the SORNA 38062. Guidelines and this rule because date of U.S.C. 20914(a)(3). In the SORNA Paragraph (c)(4) of § 72.6 requires a birth information is regularly utilized as Guidelines, and now in this rule, the sex offender to provide the name and part of an individual’s basic Attorney General has adopted the address of any place where the sex identification information and hence is requirement to provide other residence offender is or will be a student, an of value in helping to identify, track, location information for sex offenders express SORNA requirement. See 34 and locate registered sex offenders. The who do not have residence addresses, U.S.C. 20914(a)(5); 73 FR at 38056–57, paragraph requires that any date that the such as homeless sex offenders or sex 38062. sex offender uses as his or her purported offenders living in rural areas that lack Paragraph (d) of § 72.6 requires a sex date of birth must be provided, in street addresses, because having this offender to provide information about addition to the actual date of birth, type of location information serves the intended travel outside of the United because sex offenders may, for example, same public safety purposes as knowing States. This is an express SORNA provide false date of birth information the whereabouts of sex offenders with requirement, added by International in seeking employment that would definite residence addresses. See 73 FR Megan’s Law. See 34 U.S.C. 20914(a)(7); provide access to children or other at 38055–56, 38061–62. Public Law 114–119, sec. 6(a)(1). A potential victims. See 73 FR at 38057. Paragraph (c)(2) of § 72.6 requires a related provision in § 72.7(f) of this rule Paragraph (a)(3) of § 72.6 requires that sex offender to provide information requires sex offenders to report a sex offender provide his Social about temporary lodging while away international travel information at least Security number, which is an express from his residence for seven or more 21 days in advance. Exercising the SORNA requirement. See 34 U.S.C. days. In the SORNA Guidelines, and general authority under paragraph (8) of 20914(a)(2). The paragraph further now in this rule, the Attorney General 34 U.S.C. 20914(a) [then designated requires provision of any number that a has adopted this requirement because paragraph (7)] to expand the required sex offender uses as his purported sex offenders may reoffend at locations range of registration information, the Social Security number. The Attorney away from the places in which they Attorney General initially adopted these General has adopted the latter have a permanent or long-term requirements in the SORNA requirement—already appearing in the presence, and indeed could be Supplemental Guidelines, see 76 FR at SORNA Guidelines in 2008—because encouraged to do so to the extent that 1637–38, even before the enactment of sex offenders may, for example, attempt information about their places of International Megan’s Law, for a number to use false Social Security numbers in residence is available to the authorities of reasons: seeking employment that would provide but information is lacking concerning (i) Realizing SORNA’s public safety access to children or other potential their temporary lodgings elsewhere. The objectives requires that registered sex victims. See 73 FR at 38055. benefits of having this information offenders be effectively tracked as they Paragraph (b) of § 72.6 requires a sex include facilitating the successful leave and return to the United States, offender to provide all remote investigation of crimes committed by and that other sex offenders who enter communication identifiers that he uses sex offenders while away from their the United States be identified, so that in internet or telephonic normal places of residence and domestic registration and law communications or postings, including discouraging sex offenders from enforcement authorities know about the

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sex offenders’ presence in the United United States to inform their registration purposes of enforcing registration States and can ensure that they register jurisdictions about international travel requirements. Requiring the specified while here as SORNA requires. To that provides a basis for notifying foreign information concerning international end, SORNA directs the Attorney authorities in the destination countries, travel is justified by its value in General to establish and maintain a which helps to reduce the resulting furthering these objectives. See 73 FR at system for informing relevant risks. If these sex offenders do reoffend 38066–67; 76 FR at 1634, 1637–38. registration jurisdictions about persons in other countries, the resulting human Congress endorsed these objectives entering the United States whom harm to victims is no less because it and the stated conclusion in SORNA requires to register. See 34 occurs in a foreign country, and the International Megan’s Law, whose U.S.C. 20930. Sections 72.6(d) and United States’ image and foreign purposes include ‘‘[t]o protect children 72.7(f) of this rule are part of that relations interests may be adversely and others from sexual abuse and system, requiring registered sex affected as well. Sex offenders from the exploitation, including sex trafficking offenders to inform their registration United States who commit sex offenses and sex tourism, by providing advance jurisdictions about travel abroad, in other countries may be subject to notice of intended travel by registered including information that encompasses prosecution under various Federal laws, sex offenders outside the United States both their departure from and return to which reflect the United States’ policy to the government of the country of the United States. Beyond this direct of, and commitment to, combating the destination [and] requesting foreign benefit, learning about sex offenders’ commission of crimes of sexual abuse governments to notify the United States entry into the United States may depend and exploitation internationally as well when a known sex offender is seeking on notice from the authorities of the as domestically. See, e.g., 18 U.S.C. to enter the United States.’’ Public Law countries they come from—authorities 1591, 2251(c), 2260, 2423. Consistent 114–119; see 162 Cong. Rec. H390–94 who may expect reciprocal notice about tracking of international travel by sex (Feb. 1, 2016) (explanation in House sex offenders traveling to their countries offenders helps to deter and prevent floor debate on passage). As noted from the United States. Having U.S. sex such crimes, and to facilitate their above, the measures adopted by offenders inform their registration investigation if they occur. International Megan’s Law in support of its international notification system jurisdictions of travel abroad provides Beyond creating a general information that is used by U.S. include an express requirement that sex requirement to report travel outside of authorities, including the U.S. Marshals offenders report intended international the United States at least 21 days in Service and INTERPOL Washington- travel, making this requirement a advance, the SORNA Supplemental U.S. National Central Bureau, to notify permanent feature of SORNA that exists Guidelines authorized the requirement the authorities in the destination independently of regulatory action. See of more definite information about countries about sex offenders traveling 34 U.S.C. 20914(a)(7); Public Law 114– international travel plans. 76 FR at 1638 to their areas. These foreign authorities 119, sec. 6(a)(1). (additional directions may be issued by may in return advise U.S. authorities Section 72.6(d) in this rule follows the the SMART Office ‘‘concerning the about sex offenders traveling to the new SORNA travel information information to be required in sex United States from their countries, provision added by International facilitating the notification of domestic offenders’ reports of intended Megan’s Law, which states that sex registration jurisdictions about the sex international travel, such as information offenders must provide ‘‘[i]nformation offenders’ presence that section 20930 concerning expected itinerary, relating to intended travel of the sex contemplates. See 73 FR at 38066; 76 FR departure and return dates, and means offender outside the United States, at 1637. and purpose of travel’’); see Information including any anticipated dates and (ii) Sex offenders traveling abroad Required for Notice of International places of departure, arrival, or return, may remain subject in some respects to Travel, http://ojp.gov/smart/ carrier and flight numbers for air travel, _ U.S. jurisdiction, e.g., because a sex international travel.htm (providing destination country and address or other offender intends to go to an overseas such directions). Section 72.6(d) in this contact information therein, means and U.S. military base or to work as or for rule specifically directs sex offenders purpose of travel, and any other a U.S. military contractor in another traveling abroad to report information itinerary or other travel-related country. In such cases, the intended regarding any anticipated itinerary, information required by the Attorney travel of the sex offender may implicate dates and places of departure, arrival, or General.’’ 34 U.S.C. 20914(a)(7). A sex the same public safety concerns in return, carrier and flight numbers for air offender must report all anticipated relation to communities abroad for travel, destination countries and address information in these categories in which the United States has or contact information therein, and relation to both the United States and responsibility as it does in relation to means and purpose of travel. More destination countries as the language of communities within the United States. detailed information of this type is § 72.6(d) makes clear. For example, a See 73 FR at 38067; 76 FR at 1637–38. needed because notice only that a sex sex offender who is leaving the United (iii) More broadly, for a sex offender offender intends to travel somewhere States must report any anticipated date disposed to reoffend, it may be outside of the United States at some and place of departure from the United attractive to travel to foreign countries time three weeks or more in the future States, and also any anticipated date where law enforcement is weaker (or would be inadequate to realize the and place of return to the United States perceived to be weaker), where sexually objectives of international tracking of if the sex offender expects to return. trafficked children or other vulnerable sex offenders—objectives that include, Likewise, with respect to each foreign victims may be more readily available, as discussed above, notification as country to be visited, the sex offender and where the registration and appropriate of U.S. and foreign must report any anticipated date and notification measures to which the sex authorities in destination countries for place of arrival in that country and any offender is subject in the United States public safety purposes, preventing and anticipated date and place of departure are inoperative. The United States does detecting the offenders’ commission of from that country. not wish to export the public safety sex offenses in other countries, and Paragraph (e) of § 72.6 requires a sex threat posed by its sex offenders to other reliably tracking sex offenders as they offender to provide information countries. Requiring sex offenders in the leave and enter the United States for concerning any passport or passports he

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has, and concerning documents that authorizes him to engage in an ‘‘register . . . and keep the registration establishing his immigration status if he occupation or carry out a trade or current.’’ 34 U.S.C. 20912(b), 20913(a). is an alien. The passports referenced in business. The Attorney General has Previously in the SORNA Guidelines, the paragraph include passports of all adopted this requirement, initially in see 73 FR at 38062–67, and now in this types and nationalities, not just U.S. the SORNA Guidelines and now in this rule, the Attorney General interprets his passports. Where the sex offender has rule, because information of this type (i) authority to ‘‘interpret and implement’’ multiple passports, as may occur, for may be helpful in locating a registered SORNA as including the authority to example, in cases involving dual sex offender if he absconds, (ii) may articulate a comprehensive, gap-free set citizenship, the paragraph’s reference to provide a basis for notifying the of procedural requirements for ‘‘each passport’’ the sex offender has responsible licensing authority if the registering and updating registrations. means that the sex offender must report offender’s conviction of a sex offense Authority of this nature is needed to all of his passports. The Attorney may affect his eligibility for the license, implement SORNA in conformity with General has included information about and (iii) may be useful in crosschecking the legislative objective of protecting the passports and immigration documents the accuracy and completeness of other public from sex offenders by as required registration information in information the offender is required to establishing a comprehensive national the SORNA Guidelines and in this rule provide—e.g., if the sex offender is system for their registration. 34 U.S.C. because having this type of information licensed to engage in a certain 20901. Beyond the public safety need, in the registries serves various purposes. occupation but does not provide name this understanding of section 20912(b) These include locating and or place of employment information as ‘‘takes Congress to have filled potential apprehending registrants who may required by 34 U.S.C. 20914(a)(4) for lacunae’’ in SORNA in a manner attempt to leave the United States after such an occupation. See 73 FR at 38056. consistent with fair notice concerns, committing new sex offenses or empowering the Attorney General to Section 72.7—How Sex Offenders Must registration violations, facilitating the eliminate any ‘‘vagueness and Register and Keep the Registration tracking and identification of registrants uncertainty’’ regarding how sex Current who leave the United States but later offenders are to comply with SORNA’s reenter while still required to register, SORNA requires sex offenders to registration requirements. Reynolds, 565 see 34 U.S.C. 20930, and crosschecking register and keep the registrations U.S. at 441–42. the accuracy and completeness of other current in jurisdictions in which they The Attorney General’s authority to types of information that registrants are reside, work, or attend school. Section interpret and implement SORNA required to provide—e.g., if immigration 72.7 sets out the procedures for doing includes in particular the authority to documents show that an alien registrant so, addressing the timing requirements adopt additional specifications is in the United States on a student visa for registering and updating regarding the time and manner in which but the registrant fails to provide school registrations, the jurisdictions to which its requirements must be carried out. attendance information as required by changes in registration information must For example, SORNA expressly requires 34 U.S.C. 20914(a)(5). See 73 FR at be reported, and the means for reporting that sex offenders must appear in person 38056. such changes. In general terms, the to report changes of name, residence, Paragraph (f) of § 72.6 requires a sex section requires (i) initial registration employment, and student status within offender to provide information before release from imprisonment, or three business days of such changes. 34 concerning any vehicle owned or within three business days after U.S.C. 20913(c). But SORNA does not operated by the sex offender, sentencing if the sex offender is not expressly require the reporting within a information concerning the license plate imprisoned; (ii) periodic in-person particular timeframe of changes relating number or other registration number or appearances to verify and update the to other types of registration information identifier for the vehicle, and registration information; (iii) reporting that also bear directly and importantly information as to where the vehicle is of changes in name, residence, on the identification, tracking, and habitually kept. In part, the paragraph employment, or school attendance; (iv) location of sex offenders. These include reflects the express SORNA requirement reporting of intended departure or remote communication identifiers (such in 34 U.S.C. 20914(a)(6) that a sex termination of residence, employment, as email addresses), temporary lodging offender provide ‘‘[t]he license plate or school attendance in a jurisdiction; information, international travel number and a description of any vehicle (v) reporting of changes relating to information, and vehicle information, as owned or operated by the sex offender.’’ remote communication identifiers, described in § 72.6(b), (c)(2), (d), and (f) This includes, in addition to vehicles temporary lodging information, and of this rule. Absent a requirement that registered to the sex offender, any vehicle information; (vi) reporting of changes in these types of information be vehicle that the sex offender regularly international travel; and (vii) reported promptly, the information in drives, either for personal use or in the compliance with a jurisdiction’s rules if the registries about these matters could course of employment. See 73 FR at a sex offender has not complied with become seriously out of date, which 38057. The remainder of the paragraph the normal time and manner would in turn impair SORNA’s basic reflects the Attorney General’s specifications for carrying out a SORNA objective of effectively tracking and requirement (previously adopted in the requirement. locating sex offenders in the community SORNA Guidelines) of additional The requirements articulated in this following their release. See 73 FR at vehicle-related information that serves section in part appear expressly in 38044–45, 38066–67. The Attorney similar purposes or may be useful to SORNA and in part reflect exercises of General accordingly has adopted help prevent flight, facilitate the powers SORNA confers on the definite timing requirements for investigation, or effect an apprehension Attorney General to further specify its reporting changes in these types of if the sex offender commits new requirements. The authorities relied on information, previously in the offenses or violates registration include the following: SORNA directs guidelines for SORNA implementation, requirements. See id. the Attorney General to issue rules and and now in § 72.7(e)–(f) in this rule. Paragraph (g) of § 72.6 requires a sex guidelines to ‘‘interpret and implement’’ Adopting such rules reflects an offender to provide information its provisions, which include the basic exercise of the Attorney General’s concerning all licensing of the offender requirement that each sex offender must authority to ‘‘interpret and implement’’

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SORNA, 34 U.S.C. 20912(b), and more provided under this section.’’ 34 U.S.C. General’s authority under 34 U.S.C. specifically to interpret and implement 20916(a)–(b). 20914(a)(8) to require sex offenders to SORNA’s requirement that sex offenders Notably, Congress did not find it provide ‘‘[a]ny other information’’—and must ‘‘keep the registration current,’’ id. necessary to make new grants of following the adoption of section 20913(a). While the heading of authority to the Attorney General for 20914(a)(7) by International Megan’s subsection (c) of section 20913 is these purposes and instead directed the Law, within the Attorney General’s ‘‘[k]eeping the registration current,’’ the Attorney General to utilize the pre- more specific authority under the latter heading only signifies that the existing authorities under SORNA to provision to require ‘‘any other . . . subsection sets out an updating rule for require internet identifier information travel-related information.’’ Essentially the most basic types of registration and specify the time and manner for the same point applies to the rule’s information. It does not signify that keeping it current. This confirms that specification that sex offenders must nothing more can be required to keep the section 20912(b) authority includes report within three business days the registration current. The contrary is the authority to adopt additional time changes relating to certain types of evident from section 20915(a), which and manner requirements in the rules registration information the Attorney specifies the duration of required and guidelines the Attorney General General has required. Section 72.7(e) registration under SORNA. Section issues. directs reporting of changes in 20915(a) uses the same terminology, SORNA directs sex offenders to information within that timeframe stating that a sex offender ‘‘shall keep provide for inclusion in the sex offender relating to remote communication the registration current’’ for the relevant registry several expressly described identifiers, temporary lodging, and period of time. Obviously, in providing types of registration information and, in vehicles. Viewed as requirements to that a sex offender must ‘‘keep the addition, ‘‘[a]ny other information report the information that certain registration current’’ for a specified required by the Attorney General.’’ Id. actions or occurrences have taken place period, section 20915(a) defines the 20914(a)(8). The section 20914(a)(8) within the preceding three business period of time during which a sex authority underlies the specification of days, these requirements are within the offender must continue to comply with required types of registration Attorney General’s authority under 34 all of SORNA’s requirements, given the information in § 72.6 in this rule beyond U.S.C. 20914(a)(8). absence of any other provision in those expressly set forth in section Turning to another SORNA provision SORNA specifying how long sex 20914(a)(1)–(7). The section 20914(a)(8) supporting time and manner offenders must comply with its various authority also provides an additional, requirements, 34 U.S.C. 20913(d) requirements. Among other independent legal basis for various authorizes the Attorney General to consequences, this means that sex requirements in § 72.7, including a specify the applicability of SORNA’s number of timing rules it incorporates. offenders must appear in person requirements to sex offenders convicted In relation to some types of required periodically to verify and update their before the enactment of SORNA or its registration information under this rule, registration information, as required by implementation in a particular which may be based wholly or in part jurisdiction ‘‘and to prescribe rules for section 20918, for the specified period on the exercise of the Attorney General’s of time—not just that they must report the registration of any such sex authority under section 20914(a)(8), a offenders and for other categories of sex changes in name, residence, timing requirement is inherent in the employment, and school attendance, as offenders who are unable to comply nature of the information that must be with subsection (b).’’ The cross- provided in section 20913(c), for the reported. This is true of the requirement referenced ‘‘subsection (b)’’ is the specified period of time. That under § 72.7(d) to report if a sex SORNA provision that requires sex consideration alone demonstrates that offender will be commencing residence, offenders to register initially before section 20913(c) does not exhaust employment, or school attendance release from imprisonment, or within SORNA’s requirements for ‘‘keep[ing] elsewhere or will be terminating three business days of sentencing if the the registration current.’’ residence, employment, or school sex offender is not imprisoned. As Regarding other matters, such as attendance in a jurisdiction. It is discussed below in connection with changes in registration information likewise true of the requirement under § 72.7(a)(2) of this rule, sex offenders relating to remote communication § 72.7(f) to report intended international released from Federal or military identifiers, temporary lodging, vehicles, travel. Because these provisions custody and sex offenders convicted in and international travel, the Attorney constitute requirements to report foreign countries generally are unable to General has understood the authority to present intentions regarding expected register prior to release. The section interpret and implement SORNA’s future actions, the information they 20913(d) authority to prescribe requirement to keep the registration require necessarily must be reported in registration rules for sex offenders current as including the authority to advance of the expected actions. ‘‘unable to comply with subsection (b)’’ adopt specific time and manner Section 20914(a)(8) also provides an accordingly provides one of the legal requirements for the reporting of such additional, independent legal basis for bases for the alternative timing rules in changes. Congress ratified this more specific timeframe requirements § 72.7(a)(2), which direct registration by understanding in the KIDS Act. In that appearing in § 72.7 of this rule. One of sex offenders in the affected classes Act, Congress provided that (i) ‘‘[t]he these requirements is that intended within three business days of entering a Attorney General, using the authority international travel is to be reported at jurisdiction following release. provided in [34 U.S.C. 20914(a)(8)], least 21 days in advance of the travel, The authorities described above— shall require that each sex offender as provided in § 72.7(f). In substance, under 34 U.S.C. 20912(b), 20913(d), and provide to the sex offender registry this is a requirement that a sex offender 20914(a)(8)—provided the basis for the those internet identifiers the sex report to the residence jurisdiction an Attorney General’s adoption of time and offender uses or will use’’ and (ii) ‘‘[t]he intention to travel outside of the United manner specifications for complying Attorney General, using the authority States at some time 21 days or more in with SORNA’s registration requirements provided in [34 U.S.C. 20912(b)], shall the future. Viewing the expected timing in previously issued guidelines under specify the time and manner for keeping of the travel as an aspect of the required SORNA. More recently, International current information required to be information, it is within the Attorney Megan’s Law added an express, general

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grant of authority to the Attorney custody or near the time of sentencing. 20913(b)’s timing rule for initial General to make such specifications. This is in contrast to the authorities of registration; and the Attorney General’s The relevant provision is 34 U.S.C. the SORNA registration jurisdictions— authority under section 20914(c) to 20914(c), which reads as follows: ‘‘(c) the states, the District of Columbia, the adopt time and manner specifications TIME AND MANNER.—A sex offender five principal U.S. territories, and for providing and updating registration shall provide and update information qualifying Indian tribes—who may information, which includes the required under subsection (a), including register their sex offenders prior to authority to adopt time and manner information relating to intended travel release or near sentencing as provided specifications for registration as outside the United States required in 34 U.S.C. 20913(b), 20919(a). SORNA discussed above. Viewing a sex under paragraph (7) of that subsection, instead enacted special provisions offender’s being released from Federal in conformity with any time and under which Federal correctional and or military custody and taking up manner requirements prescribed by the supervision authorities (i) are required residence in a jurisdiction as a change Attorney General.’’ to inform Federal (including military) of residence, this requirement is also The cross-referenced ‘‘subsection (a)’’ offenders with sex offense convictions supportable as a direct application of is SORNA’s list of all the registration that they must register as required by section 20913(c). information that sex offenders must SORNA and (ii) must notify the (non- Paragraph (a)(2)(ii) of § 72.7 addresses provide. Hence, the new section Federal) jurisdictions in which the sex the situation of persons required to 20914(c) requires sex offenders to offenders will reside following release register on the basis of foreign sex comply with the Attorney General’s or sentencing so that these jurisdictions offense convictions. Registration by the directions regarding the time and can integrate the sex offenders into their convicting state is not an available manner for providing and updating all registration programs. See 18 U.S.C. option under SORNA in such cases registration information required by 4042(c); Public Law 105–119, sec. because foreign states are not SORNA. In addition to empowering the 115(a)(8)(C), as amended by Public Law. registration jurisdictions under SORNA. Attorney General to specify the time and 109–248, sec. 141(i) (10 U.S.C. 951 See 34 U.S.C. 20911(10). Also, there manner for reporting particular types of note); 73 FR at 38064; see also 18 U.S.C. may be no domestic jurisdiction in registration information, this provision 3563(a)(8); id. 3583(d) (third sentence); which SORNA requires such offenders enables the Attorney General to specify id. 4209(a) (second sentence) to register—if they are not residing, the time and manner for registration. (mandatory Federal supervision working, or attending school in the This is so because registration on the condition to comply with SORNA); 34 United States at the time they are part of a sex offender consists of U.S.C 20931 (requiring the Secretary of released from custody or sentenced in providing required registration Defense to provide to the Attorney the foreign country—but SORNA’s information to the registration General military sex offender requirements will apply if they travel or jurisdiction for inclusion in the sex information for inclusion in the return to the United States. The rule offender registry. Given that the National Sex Offender Registry and adopted for foreign conviction Attorney General has the authority National Sex Offender Public website). situations is that the sex offender must under section 20914(c) to specify the The timing rule adopted for such register within three business days of time and manner for a sex offender’s situations is that sex offenders released entering a domestic jurisdiction to provision of each required type of from Federal or military custody or reside, work, or attend school, see 73 FR registration information, it follows that convicted of Federal or military sex the Attorney General has the authority offenses but not sentenced to at 38050–51, 38064–65, which parallels under section 20914(c) to specify the imprisonment must register within three SORNA’s normal timeframe for time and manner for a sex offender’s business days of entering or remaining registering or updating a registration provision of the required types of in a jurisdiction to reside, see 73 FR at following changes of residence, information collectively, which 38064, which parallels SORNA’s normal employment, or student status, see 34 constitutes registration under SORNA. timeframe for registering or updating a U.S.C. 20913(c). registration following changes of In terms of legal authority, this Paragraph (a)—Initial Registration residence, see 34 U.S.C. 20913(c). requirement is supported by the Paragraph (a)(1) of § 72.7 tracks Section 72.7(a)(2)(i) refers to a sex Attorney General’s authority to interpret SORNA’s general rule that a sex offender entering ‘‘or remaining’’ in a and implement SORNA’s requirement to offender must initially register—that is, jurisdiction to reside because, for register in jurisdictions of residence, register for the first time based on a sex example, a Federal sex offender released employment, and school attendance, 34 offense conviction—before release from from a Federal prison located in a state U.S.C. 20912(b), 20913(a); the Attorney imprisonment, or within three business may remain in that state to reside, rather General’s authority under section days of sentencing in case of a non- than relocating to some other state. In 20913(d) to prescribe rules for the incarcerative sentence. See 34 U.S.C. such a case, the three-business-day registration of sex offenders who are 20913(b) (initial registration by sex period for registering with the state runs unable to comply with section offenders); id. 20919(a) (complementary from the time of the sex offender’s 20913(b)’s timing rule for initial duties of registration officials); 73 FR at release. registration; and the Attorney General’s 38062–65 (related explanation in In terms of legal authority, the authority under section 20914(c) to guidelines). requirement of § 72.7(a)(2)(i) is adopt time and manner specifications Paragraph (a)(2)(i) of § 72.7 addresses supported by the Attorney General’s for providing and updating registration the situation of sex offenders who are authority to interpret and implement information, which includes the released from Federal or military SORNA’s requirement to register in the authority to adopt time and manner custody or sentenced for a Federal or jurisdiction of residence, 34 U.S.C. specifications for registration as military sex offense. There is no 20912(b), 20913(a); the Attorney discussed above. Insofar as a sex separate Federal registration program for General’s authority under section offender’s travel or return to the United such offenders. Hence, Federal 20913(d) to prescribe rules for the States following a foreign conviction authorities cannot register these registration of sex offenders who are involves a change of residence, offenders prior to their release from unable to comply with section employment, or student status, this

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requirement is also supportable as a (within three business days), specifies a person appearance requirements, which direct application of section 20913(c). means of reporting (through in-person aim to provide opportunities for face to appearance), and requires reporting of a face encounters between sex offenders Paragraph (b)—Periodic In-Person change in ‘‘at least 1 jurisdiction,’’ it and persons responsible for their Verification does not specify the particular registrations in the local areas in which Paragraph (b) of § 72.7 sets out the jurisdiction in which each kind of they will be present. Such encounters express requirement of 34 U.S.C. 20918 change—i.e., change in name, residence, may help law enforcement personnel to that sex offenders periodically appear in employment, or school attendance—is familiarize themselves with the sex person in the jurisdictions in which to be reported. As discussed earlier, the offenders in their areas, thereby they are required to register, allow the Attorney General’s authority under 34 facilitating the effective discharge of jurisdictions to take current U.S.C. 20912(b) to interpret and their protective and investigative photographs, and verify their implement SORNA includes the functions in relation to those sex registration information, with the authority to further specify the manner offenders, and helping to ensure that frequency of the required appearances in which changes in registration their responsibilities to track those determined by their tiering. See 73 FR information are to be reported where offenders are taken seriously and carried at 38067–68. there are such gaps or ambiguities in out consistently. Likewise, from the The second sentence of paragraph (b), SORNA’s statutory provisions. In perspective of sex offenders, face to face exercising the Attorney General’s addition, the Attorney General now has encounters with officers responsible for authority under 34 U.S.C. 20912(b), express authority under 34 U.S.C. their monitoring in the local areas interprets and implements section 20914(c) to prescribe the manner in where they are present may help to 20918’s requirement of verifying the which all required registration impress on them that their identities, information in each registry to include information is to be provided and locations, and past criminal conduct are correcting any information that is out of updated. Exercising those authorities in known to the authorities in those areas. date or inaccurate and reporting any paragraph (c) in § 72.7, the Attorney Hence, there is a reduced likelihood of new registration information. With General interprets and implements the their avoiding detection and respect to most types of registration requirement of section 20913(c), and apprehension if they reoffend, and this information, other provisions of § 72.7 prescribes the manner in which sex may help them to resist the temptation require reporting of changes within offenders must provide and update to reoffend. See 73 FR at 38065, 38067. shorter timeframes than the intervals information about name, residence, These policies are furthered by sex between periodic in-person appearances employment, or student status, by offenders appearing in person to report for verification. Hence, a sex offender specifying the particular jurisdiction in changes in residence, employment, and who has complied with SORNA’s which a sex offender must appear to school attendance in the jurisdictions in requirements is likely to have reported report the changes section 20913(c) which the changes occur, rather than in changes in most types of registration describes—in the residence jurisdiction other jurisdictions where they may be information prior to his next verification to report a change of name or residence, required to register, but within whose appearance. But § 72.7 does not in the employment jurisdiction to report borders there has been no change in the specially address the time and manner a change of employment, and in the location of the sex offender. Section for reporting changes in some types of jurisdiction of school attendance to 72.7(c) in the rule accordingly provides registration information. See report a change in school attendance. that changes in the most basic types of § 72.6(a)(2)–(3), (e), (g) (requiring as well See 73 FR at 38065. location information—residence, information concerning actual and For example, suppose that a sex employment, school attendance—are to purported dates of birth and Social offender resides in state A and be reported through in-person Security numbers, passports and commutes to work in state B. Pursuant appearances in the jurisdictions in immigration documents, and to 34 U.S.C. 20913(a), the sex offender which they occur. Section 72.7(c) also professional licenses). Sex offenders can must register in both states—in state A provides definiteness regarding the keep their registrations current with as his residence state, and in state B as reporting of name changes under 34 respect to the latter categories of his employment state. Suppose that the U.S.C. 20913(c), providing that such information by reporting any changes in sex offender changes his place of changes are to be reported in the their periodic verifications. See 73 FR at residence in state A and continues to residence jurisdiction, as the 38067–68. work at the same place in state B. jurisdiction in which a sex offender is Logically, the sex offender should carry likely to have his most substantial Paragraph (c)—Reporting of Initiation out his in-person appearance in state A presence and contacts. and Changes Concerning Name, to report his change of residence in state Paragraph (d)—Reporting of Departure Residence, Employment, and School A, rather than in state B, where his and Termination Concerning Residence, Attendance contact with the latter state Employment, and School Attendance Paragraph (c) of § 72.7 is based on (employment) has not changed. SORNA’s express requirement that ‘‘[a] Conversely, varying the example, Paragraph (d) of § 72.7 requires sex sex offender shall, not later than 3 suppose that the sex offender changes offenders to inform the jurisdictions in business days after each change of his place of employment from one which they reside if they will be name, residence, employment, or employer to another in state B, but commencing residence, employment, or student status, appear in person in at continues to reside in the same place in school attendance in another least 1 jurisdiction involved pursuant to state A. The sex offender should carry jurisdiction or outside of the United [34 U.S.C. 20913(a)] and inform that out his in-person appearance in state B States, and to inform the relevant jurisdiction of all changes in the to report his change of employment in jurisdictions if they will be terminating information required for that offender in state B, rather than in state A, where his residence, employment, or school the sex offender registry.’’ 34 U.S.C. contact with the latter state (residence) attendance in a jurisdiction. The 20913(c); see 73 FR at 38065–66. has not changed. Attorney General has previously While SORNA provides a definite These conclusions follow from the articulated these requirements in the timeframe for reporting these changes underlying policies of SORNA’s in- SORNA Guidelines. See 73 FR at

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38065–67. These requirements are not attendance in the other jurisdiction or absconder or unlocatable. See 34 U.S.C. part of the requirement under 34 U.S.C. outside of the United States; and (ii) 20924; 73 FR at 38069. In the context of 20913(c) to report certain changes intended termination of residence, this system, the requirement of § 72.7(d) through in-person appearances and they employment, or school attendance in a for a sex offender to notify the residence may be reported by any means allowed jurisdiction is to be reported to the jurisdiction concerning his departure is by registration jurisdictions in their jurisdiction (by whatever means it an important element. It helps to ensure discretion. See 73 FR at 38067. allows) prior to the termination of that agencies and officials responsible Paragraph (d)(1) of § 72.7, relating to residence, employment, or school for sex offender registration and its notice about intended commencement attendance in the jurisdiction. Section enforcement are promptly made aware of residence, employment, or school 72.7(d)’s requirement that the intended of major changes in the location of sex attendance outside of a jurisdiction, and actions or changes are to be reported offenders, and thereby reduces the risk paragraph (d)(2), relating to notice about prior to the termination of residence, that sex offenders will disappear in the termination of residence, employment, employment, or school attendance in interstices between jurisdictions. or school attendance in a jurisdiction, the relevant jurisdiction ensures that the In so doing, § 72.7(d) resolves certain are complementary, each applying in reporting requirement applies while the potential problems in the operation of certain situations that may be outside sex offender is still subject to the SORNA’s registration system following the scope of the other. For example, requirement to register and keep the the Supreme Court’s decision in Nichols § 72.7(d)(1) requires a sex offender to registration current in the jurisdiction v. United States, 136 S Ct. 1113 (2016), inform his residence jurisdiction if he pursuant to 34 U.S.C. 20913(a). This and a similar earlier decision by the will be starting a job in another approach avoids any question about the Eighth Circuit Court of Appeals, United jurisdiction, even if he will continue to validity of requiring a sex offender to States v. Lunsford, 725 F.3d 859 (8th reside where he has resided and will not provide or update information in a Cir. 2013). Nichols involved a sex be terminating any existing connection jurisdiction in which he is no longer offender who abandoned his residence to the residence jurisdiction. Section required to register under SORNA. in Kansas and relocated to the 72.7(d)(2) requires a sex offender to The exercise of the authorities Philippines, without informing the inform a jurisdiction of his intended described above in § 72.7(d) furthers Kansas registration authorities of his termination of residence, employment, SORNA’s objective of creating a departure. The issue in the case was or school attendance in that jurisdiction ‘‘comprehensive national system for the whether Nichols had violated 34 U.S.C. ‘‘even if there is no ascertainable or registration of [sex] offenders,’’ 34 20913(c), which requires a sex offender expected future place of residence, U.S.C. 20901, which reliably tracks sex ‘‘not later than three business days after employment, or school attendance for offenders as they move away from and each change of name, residence, the sex offender.’’ 73 FR at 38066. into registration jurisdictions. A sex employment, or student status’’ to Regarding the underlying legal authority offender’s departure from a jurisdiction ‘‘appear in person in at least 1 for § 72.7(d), its informational in which he is registered may eventually jurisdiction involved pursuant to requirements overlap with types of be discovered—e.g., because he fails to subsection (a) and inform that information 34 U.S.C. 20914(a) appear for the next periodic verification jurisdiction of all changes’’ in the expressly requires sex offenders to of his registration, see id. 20918—even required registration information. provide, which include information as if he does not affirmatively notify the to where a sex offender ‘‘will reside,’’ jurisdiction that he is leaving. But The Court noted that subsection (a) of ‘‘will be an employee,’’ or ‘‘will be a considerable time may elapse before section 20913 mentions three student.’’ Id. 20914(a)(3)–(5). To the that happens, leaving a cold trail for law jurisdictions as possibly ‘‘involved’’— extent § 72.7(d) goes beyond the enforcement efforts to locate the sex ‘‘where the offender resides, where the registration information that SORNA offender, if he does not register in the offender is an employee, and where the expressly requires, it is a destination jurisdiction as SORNA offender is a student’’— which would straightforward exercise of the Attorney requires. not include the state of Kansas after General’s authority under 34 U.S.C. For example, for a sex offender who Nichols had moved to the Philippines. 20914(a)(8) to require any additional decides to change his residence from Nichols, 136 S Ct. at 1117 (quoting 34 registration information. one state to another, § 72.7(d) requires U.S.C. 20913(a)). The Court further Even before the enactment of the sex offender to inform the state he noted that section 20913(c) requires International Megan’s Law, the Attorney is leaving prior to his departure, and appearance and registration within three General’s implementation authority § 72.7(c) requires him to inform the business days after a change of under 34 U.S.C. 20912(b) was destination state within three business residence, and Nichols could not have understood to include the authority to days of his arrival there. Under appeared in Kansas after he left the specify time and manner requirements SORNA’s procedures for information state. Id. at 1117–18. The Court for providing and updating registration sharing among registration jurisdictions, accordingly concluded that Nichols’ information, as discussed above. the state of origin in such a case directly failure to inform Kansas of his departure Currently, section 20914(c) confers notifies the identified destination state. was not a violation of section 20913(c), express authority on the Attorney See 34 U.S.C. 20921(b), 20923(b)(3); 73 since Kansas was no longer an General to adopt the time and manner FR at 38065; 76 FR at 1638. If the sex ‘‘involved’’ jurisdiction in which requirements set forth in § 72.7(d)—i.e., offender then fails to appear and register section 20913(c) may require a sex that (i) intended commencement of as expected in the destination state, offender to report changes in residence. residence, employment, or school appropriate follow-up ensues, which Id. at 1118. Applying the same attendance in another jurisdiction or may include investigative efforts by reasoning to the domestic context, if a outside the United States is to be state and local law enforcement and the sex offender terminates his residence in reported to the residence jurisdiction U.S. Marshals Service to locate the sex a state and thereafter takes up residence (by whatever means it allows) prior to offender, issuance of a warrant for his in another state, he cannot violate any termination of residence in that arrest, and entry of information into section 20913(c) by failing to inform the jurisdiction and prior to commencing national law enforcement databases state he is leaving. For, following the residence, employment, or school reflecting the sex offender’s status as an termination of residence in that state, it

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is no longer a ‘‘jurisdiction involved’’ of its registration requirements for sex obligation to update his registration in for purposes of section 20913(c). offenders, instead authorizing the the first place.’’ 136 S Ct. at 1118. In There is no comparable problem, Attorney General to complete the context, the Court’s point was that however, with § 72.7(d)’s requirement regulatory scheme through section 20914(a)(3) just specifies a type that a sex offender inform a jurisdiction interpretation and implementation of of information sex offenders must in which he resides of his intended SORNA. See, e.g., 34 U.S.C. 20912(b), provide, and does not say when they departure from the jurisdiction, because 20913(d), 20914(a)(8), 20914(c). Given must provide it, so section 20914(a)(3) § 72.7(d) does not depend on the the extent of the Attorney General’s does not in itself require sex offenders requirements of section 20913(c). powers under SORNA, it was not to provide change of residence Rather, § 72.7(d) is grounded in the necessary for Congress to include an information in advance when they leave requirement of section 20914(a) that sex express provision in SORNA requiring a jurisdiction. For example, without offenders provide certain information, sex offenders to notify jurisdictions they more, section 20914(a)(3) might be taken including ‘‘[a]ny other information are leaving. Nor can there be any doubt to entail that sex offenders must advise required by the Attorney General,’’ and that requiring such notification is now where they ‘‘will reside’’ when initially the requirement of section 20914(c) that within the terms of the Attorney registering before release from they report the required information in General’s powers under SORNA, as imprisonment, see 34 U.S.C. the ‘‘time and manner . . . prescribed discussed above. Indeed, 34 U.S.C. 20913(b)(1), but not necessarily that by the Attorney General.’’ 20923(b)(3)—which provides that a they give advance notice to their The Attorney General’s exercise of his jurisdiction’s officials are to inform each registration jurisdictions of expected authorities under section 20914(a) and jurisdiction ‘‘from or to which a change future residence on subsequent 20914(c) to require sex offenders to of residence, employment, or student relocations. inform their registration jurisdictions status occurs’’— contemplates the However, this understanding of that they will be going elsewhere in no Attorney General’s adoption of section 20914(a)(3) does not imply any way conflicts with Nichols’ conclusion requirements like those appearing in limitation on the Attorney General’s that section 20913(c) does not require § 72.7(d). For if sex offenders were not authority to require a sex offender to such pre-departure notice of intended required to advise the jurisdictions they ‘‘update his registration in the first relocation. Section 20914(a)(8) says that leave of their departure and destination, place,’’ Nichols, 136 S Ct. at 1118, on sex offenders must provide ‘‘[a]ny other those jurisdictions could not inform the the basis of 34 U.S.C. 20914(c), which information required by the Attorney jurisdictions ‘‘to which’’ sex offenders directs that ‘‘[a] sex offender shall General.’’ The statute does not say that relocate. provide and update information sex offenders must provide ‘‘[a]ny other Second, the Court in Nichols rejected required under subsection (a) . . . in information required by the Attorney an argument that a jurisdiction conformity with any time and manner General, except for information about necessarily remains ‘‘involved’’ for requirements prescribed by the Attorney intended departure from the purposes of section 20913(c) if the sex General.’’ Nor does it imply any jurisdiction.’’ Nichols’ interpretation of offender continues to appear on the limitation on the Attorney General’s section 20913(c) provides no basis for jurisdiction’s registry as a current authority under SORNA to require sex reading such an unstated limitation into resident. The Court responded that offenders to report the full range of section 20914(a)(8). Likewise, Nichols section 20913(a) gives jurisdictions information described in § 72.7(d). In provides no basis for reading unstated where the offender resides, is an § 72.7(d), as discussed above, the limitations into the Attorney General’s employee, or is a student as the only Attorney General exercises these authority—now expressly granted by possibilities for an ‘‘involved’’ authorities to require sex offenders to section 20914(c)—to prescribe time and jurisdiction, and does not include a inform jurisdictions of intended manner requirements for providing and jurisdiction ‘‘where the offender appears departure and expected future residence updating registration information, on a registry.’’ 136 S Ct. at 1118. The prior to any termination of residence in which adequately supports § 72.7(d)’s Court said ‘‘[w]e decline the . . . a jurisdiction. requirement that a sex offender inform invitation to add an extra clause to the Finally, the Court in Nichols rejected the jurisdiction in which he resides text of § [20]913(a).’’ Id. In contrast, an argument that Nichols had to notify about intended departure prior to any § 72.7(d) in this rule does not require Kansas of his departure on the theory termination of residence and before the addition of an extra clause to section that he engaged in two changes of going elsewhere. 20913(a). It involves the exercise of the residence—the first when he abandoned The Attorney General’s adoption of Attorney General’s authorities under his residence in Kansas, and the second the § 72.7(d) requirements is also SORNA to include the information when he checked into a hotel in the consistent with the Supreme Court’s described in § 72.7(d) in the information Philippines. 136 S Ct. at 1118–19. analysis of particular arguments and that a sex offender must provide to the Section 72.7(d) in this rule, however, issues in Nichols. The salient points are jurisdictions described in the actual does not assume any such multiplicity as follows: clauses of section 20913(a)—i.e., those in changes of residence. Rather, it First, the Court in Nichols noted that in which he resides, is an employee, or establishes a freestanding requirement the predecessor Federal sex offender is a student. to inform registration jurisdictions in registration law (the ‘‘Wetterling Act’’) Third, the Court rejected an argument advance of termination of residence and required a sex offender to ‘‘report the that Nichols was required to inform commencement of intended future change of address to the responsible Kansas of his intended departure based residence. agency in the State the person is on 34 U.S.C. 20914(a)(3)’s direction to At the end of the Nichols decision, the leaving,’’ while SORNA contains no sex offenders to provide information Court noted that—considering the comparable provision that expressly about where they ‘‘will reside.’’ The International Megan’s Law amendments requires sex offenders to notify Court noted that ‘‘§ [20]914(a) merely to SORNA—‘‘[o]ur interpretation of the jurisdictions they are leaving. 136 S Ct. lists the pieces of information that a sex SORNA provisions at issue in this case at 1118 (quoting 42 U.S.C. 14071(b)(5) offender must provide if and when he in no way means that sex offenders will (2000)). However, SORNA does not updates his registration; it says nothing be able to escape punishment for attempt to articulate all the particulars about whether the offender has an leaving the United States without

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notifying the jurisdictions in which they § 72.7(d) in their registration laws by the provide to registration jurisdictions, and lived while in this country.’’ 136 S. Ct. Attorney General’s prior articulation of the Attorney General’s authority to at 1119. The Court noted the addition of those requirements in the SORNA prescribe the time and manner for a new subsection (b) to 18 U.S.C. 2250, Guidelines. See 73 FR at 38065–66. The providing and updating registration which ‘‘criminalized the ‘knowin[g] consequences of noncompliance with information. See 34 U.S.C. 20912(b), fail[ure] to provide information required § 72.7(d) will also include potential 20913(a), 20914(a)(8), (c), 20916(b); 73 by [SORNA] relating to intended travel Federal prosecution under 18 U.S.C. FR at 38066; 76 FR at 1637. (The in foreign commerce,’ ’’ and the addition 2250 for violations committed under SORNA Guidelines state that such of 34 U.S.C. 20914(a)(7), which requires circumstances supporting Federal changes are to be reported sex offenders to provide information jurisdiction. ‘‘immediately’’ and explain at an earlier about intended international travel. 136 Sex offenders must comply both with point that ‘‘immediately’’ in the context S. Ct. at 1119 (brackets in original) the requirements of § 72.7(c) and with of SORNA’s timing requirements means (quoting 18 U.S.C. 2250(b)(2)). The the requirements of § 72.7(d). For within three business days, see 73 FR at Court concluded: ‘‘We are thus example, suppose a sex offender 38060, 38066.) SORNA does not require reassured that our holding today is not changes residence from state A to state that these changes be reported through likely to create ‘loopholes and B. It is not sufficient if (i) the sex in-person appearances and they may be deficiencies’ in SORNA’s nationwide offender complies with § 72.7(d) by reported by any means allowed by sex-offender registration scheme.’’ Id. telling state A that he is leaving and registration jurisdictions in their (quoting United States v. Kebodeaux, going to state B, but (ii) he fails to discretion. See id. at 38067. 570 U.S. 387, 399 (2013)). appear in state B and register there as Section 72.7(d) in this rule similarly required by § 72.7(c), and then (iii) he Paragraph (f)—Reporting of helps to ensure that the interpretation of attempts to excuse his failure to comply International Travel 34 U.S.C. 20913(c) in Nichols and with § 72.7(c) on the ground that state Paragraph (f) of § 72.7 requires sex Lunsford does not create ‘‘loopholes and A could have told state B about his offenders to report intended travel deficiencies’’ in the operation of relocation. Likewise, it is not sufficient outside of the United States to their SORNA’s tracking system, in relation to if the sex offender in such a case (i) residence jurisdictions. The expected both domestic and international complies with § 72.7(c) by registering in travel must be reported at least 21 days relocations. For example, consider a sex state B, but (ii) he fails to inform state in advance and, if applicable, prior to offender who terminates his residence A about the intended relocation prior to any termination of residence in the in a state without informing the state. his departure, and then (iii) he attempts jurisdiction. Reporting of information Suppose the sex offender is later found to excuse his failure to comply with about intended international travel is an elsewhere in the United States, but he § 72.7(d) on the ground that state B express SORNA requirement following cannot be shown to have taken up could have told state A about his SORNA’s amendment by International residence—or to have been employed or relocation. As discussed above, Megan’s Law. See 34 U.S.C. 20914(a)(7); a student—in another jurisdiction after appearance and registration by sex Public Law 114–119, sec. 6(a). The leaving the original state of residence. In offenders in jurisdictions in which they underlying reasons for requiring light of Nichols, section 20913(c) does commence residence, employment, or reporting of international travel are not require the sex offender to report his school attendance, as required by explained above in connection with relocation to the original state because § 72.7(c), and notification by sex § 72.6(d) of this rule. it is no longer an ‘‘involved’’ offenders to jurisdictions in which they The 21-day advance notice jurisdiction after he leaves, and there terminate residence, employment, or requirement is designed to provide may be no other relevant jurisdiction in school attendance, as required by relevant agencies, including the U.S. which he must report the change, i.e., § 72.7(d), both serve important purposes Marshals Service and INTERPOL one in which he presently resides, is in SORNA’s registration system as Washington-U.S. National Central employed, or is a student. However, articulated in this rule and the Bureau, sufficient lead time for any with § 72.7(d) in effect, a sex offender in previously issued SORNA guidelines. investigation or inquiry that may be this circumstance will have violated 34 Compliance with both requirements is warranted relating to the sex offender’s U.S.C. 20914(a) and (c)’s requirements necessary to the seamless and effective international travel, and for notification to provide registration information, operation of that system for the reasons of U.S. and foreign authorities in including ‘‘[a]ny other information’’ explained above. destination countries, prior to the sex prescribed by the Attorney General, in offender’s arrival in a destination Paragraph (e)—Reporting of Changes in the time and manner prescribed by the country. The requirement that the Information Relating to Remote Attorney General. At a minimum, in the intended international travel be Communication Identifiers, Temporary case described, the sex offender would reported prior to any termination of Lodging, and Vehicles have failed to provide the information residence in the jurisdiction— that he is terminating his residence in Paragraph (e) requires sex offenders to potentially an issue in cases in which the original state of residence prior to report to their residence jurisdictions the sex offender is terminating his U.S. his termination of residence in that within three business days changes in residence and relocating to a foreign state, contravening § 72.7(d). remote communication identifier country—ensures that a SORNA Hence, § 72.7(d) provides an information, temporary lodging violation has occurred in case of additional safeguard against registered information, and vehicle information. In noncompliance while the sex offender is sex offenders’ simply disappearing terms of legal authority, as discussed still residing in the jurisdiction and without informing anyone about their earlier, these requirements are hence required by 34 U.S.C. 20913(a) to relocation. The consequences for non- supportable on the basis of the Attorney register and keep the registration current compliant sex offenders include General’s authority to interpret and in that jurisdiction. The requirement to potential prosecution by registration implement SORNA’s requirement to report intended international travel at jurisdictions, which have been keep the registration current, the least 21 days in advance applies in encouraged to adopt departure Attorney General’s authority to expand relation to all international travel, notification requirements similar to the information that sex offenders must including both cases in which the sex

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offender is temporarily traveling abroad unable to comply with these requirements into their registration while maintaining a domestic residence requirements in some circumstances. programs, with suitable timeframes and and cases in which the sex offender is The difficulty can arise in cases in procedures, as the jurisdictions progress terminating his residence in the which a jurisdiction has no provision with SORNA implementation. See 73 particular jurisdiction or the United for registering certain sex offenders as FR at 38063–64. Of course sex offenders States. required by SORNA at the time of their are independently required by the laws The rule recognizes, however, that release—or even no registration program of their registration jurisdictions to reporting of intended international at all at that time—but the jurisdiction comply with the jurisdictions’ time and travel 21 days in advance is not possible can register them later as it progresses manner specifications for registering in some circumstances. Section in its implementation of SORNA’s and updating their registrations. The 72.8(a)(2) of the rule generally addresses requirements. The SORNA Guidelines effect of § 72.7(g) is to adopt the situations in which sex offenders cannot provide guidance to registration jurisdictions’ time and manner comply with SORNA requirements jurisdictions about integrating specifications as SORNA requirements because of circumstances beyond their previously excluded sex offenders into in the situations it covers. control, and it specifically addresses their registration programs in such Section 72.7(g)(1) includes four inability to comply with the timeframe circumstances and ensuring that these examples. The first example concerns a for reporting of international travel in sex offenders fully comply with situation in which a state does not Example 3 in that provision. SORNA’s requirements. See 73 FR at register sex offenders before release, but In terms of legal authority, the 38063–64; see also Smith, 538 U.S. 84 a sex offender can register soon after requirement to report intended (application of new sex offender release in conformity with the state’s international travel to the residence registration requirements to previously procedures. The second example jurisdiction at least 21 days in advance convicted sex offenders does not violate concerns a situation in which a and prior to any termination of the constitutional prohibition on ex post jurisdiction does not register certain sex residence is supportable as an exercise facto laws). offenders at all at the time of their of the express authority of the Attorney Because the normal timeframe for release or entry into the jurisdiction, but General under 34 U.S.C. 20914(c), initial registration under SORNA may a sex offender in the excluded class which states in part that ‘‘[a] sex be past in these situations, SORNA becomes able to register at a later time offender shall provide and update . . . authorizes the Attorney General to and is directed by the jurisdiction to do information relating to intended travel prescribe rules for registration. so after it extends its registration outside the United States . . . in Specifically, 34 U.S.C. 20913(d) gives requirements. conformity with any time and manner the Attorney General the authority to As the Supreme Court noted in requirements prescribed by the Attorney specify the applicability of SORNA’s Reynolds, SORNA, in section 20913(b), General.’’ As discussed above, the requirements to sex offenders with pre- ‘‘says that a sex offender must register international travel reporting SORNA or pre-SORNA-implementation before completing his prison term, but requirement, including its associated convictions, ‘‘and to prescribe rules for the provision says nothing about when timeframe requirement, is also the registration of any such sex a pre-Act offender who completed his supportable on the basis of other offenders and for other categories of sex prison term pre-Act must register.... SORNA authorities of the Attorney offenders who are unable to comply Pre-Act offenders . . . might, on their General, which were relied on in with’’ SORNA’s initial registration own, reach different conclusions about SORNA guidelines preceding the requirements. More broadly, as whether, or how, the new registration addition of 34 U.S.C. 20914(a)(7), (c) by discussed above, the Attorney General’s requirements applied to them. A ruling International Megan’s Law. These general authority under 34 U.S.C. from the Attorney General [under authorities include the Attorney 20912(b) to interpret and implement section 20913(d)], however, could General’s authority under 34 U.S.C. SORNA includes the authority to fill diminish or eliminate those 20914(a)(8) to expand the range of gaps in SORNA’s time and manner uncertainties . . . .’’ 565 U.S. at 441– required registration information and requirements for registering and keeping 42. In § 72.7(g), the Attorney General the Attorney General’s authority under the registration current, and 34 U.S.C. exercises his authorities under sections 34 U.S.C. 20912(b) to issue rules to 20914(c) expressly requires sex 20912(b), 20913(d), and 20914(c) to interpret and implement SORNA’s offenders to provide and update ‘‘eliminate those uncertainties’’ in requirement to keep the registration registration information required by conformity with Congress’s intent current. SORNA in the time and manner concerning the filling of ‘‘potential prescribed by the Attorney General. lacunae’’ in SORNA, 565 U.S. at 441–42. Paragraph (g)—Compliance With In section 72.7(g) in this rule, the Section 72.7(g) fills the gaps in such Jurisdictions’ Requirements for Attorney General proposes to exercise cases by adopting the timing rules and Registering and Keeping the Registration his authorities under 34 U.S.C. procedures of the relevant registration Current 20912(b), 20913(d), and 20914(c) to jurisdictions. This applies in relation to Paragraph (g) of § 72.7 requires sex require sex offenders to register and sex offenders who do not register offenders to register and keep the keep their registrations current in the initially in conformity with SORNA registration current in conformity with time and manner specified by their because they were convicted and the time and manner requirements of registration jurisdictions, where the sex released before SORNA’s enactment, as their registration jurisdictions, where offenders have not registered or kept the described by the Court in Reynolds, and they have not done so in the time and registrations up to date in the time and in relation to all other sex offenders who manner normally required under manner normally required by SORNA as do not register in accordance with the SORNA. articulated in the earlier portions of normal time and manner requirements SORNA generally requires sex § 72.7. This proposal complements the under SORNA, e.g., because of shortfalls offenders to register initially before directions to registration jurisdictions in in a jurisdictions’ registration release from imprisonment or within the SORNA Guidelines about integrating requirements that may later be corrected three business days of sentencing, but it previously excluded sex offenders and or that allow registration in some recognizes that sex offenders may be previously omitted SORNA variant way.

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The third example in § 72.7(g)(1) Section 72.7(g) does not, in any case, SORNA relating to intended travel in concerns a sex offender in a jurisdiction relieve sex offenders of the obligation to foreign commerce and (ii) ‘‘engages or that initially does not provide for sex comply fully with SORNA if able to do attempts to engage in the intended offenders’ periodically updating so or shift the burden of proof to the travel in foreign commerce.’’ The registrations through verification government to establish that a jurisdictional language in section appearances as required by SORNA, but registration jurisdiction’s procedures 2250(b) reaches cases in which the the jurisdiction later directs the sex would have allowed a sex offender to contemplated travel is not carried out, offender to do so after it incorporates register or keep the registration current in addition to those in which the sex this aspect of SORNA into its in conformity with SORNA. Rather, the offender does travel abroad. For registration program. Since the periodic defense under 18 U.S.C. 2250(c) is an example, consider a sex offender who (i) verification appearances required by 34 affirmative defense, as that provision purchases a plane ticket to a foreign U.S.C. 20918 fall under SORNA’s explicitly provides, and as §§ 72.7(g)(2) destination but (ii) fails to report the requirement to keep the registration and 72.8(a)(2) in this rule reiterate. intended international travel as required current and involve updating the Section 72.8—Liability for Violations by SORNA and (iii) does not actually registration information required by Section 72.8 of the rule explains the leave the country because the SORNA, it is within the Attorney unreported travel is detected by the General’s authority under 34 U.S.C. liability of sex offenders for SORNA authorities who arrest him at the airport. 20912(b) and 20914(c) to specify the violations and limitations on that The attempted travel in foreign time and manner for the verifications potential liability. commerce provides a sufficient where SORNA’s verification Paragraph (a)(1)—Offense requirement or normal timeframes for jurisdictional basis for Federal verifications have not been followed. SORNA’s criminal provision, 18 prosecution under section 2250(b). Section 72.7(g)(1) directs sex offenders U.S.C. 2250, provides criminal liability Section 72.8(a)(1)(iii) in the rule to comply with the jurisdiction’s for sex offenders based on SORNA explains the condition for liability requirements for periodic verification in violations. under 18 U.S.C. 2250(a)–(b) that the such situations. Section 72.8(a)(1)(i) in the rule refers defendant ‘‘knowingly’’ fail to comply The fourth example in § 72.7(g)(1) to potential criminal liability under 18 with a SORNA requirement. The U.S.C. 2250(a). Section 2250(a) concerns a sex offender who does not ‘‘knowingly’’ limitation ensures that sex authorizes imprisonment for up to 10 provide particular information within offenders are not held liable under years based on a knowing failure to the time required by SORNA because a section 2250 for violations of register or update a registration as jurisdiction’s informational registration requirements they did not required by SORNA. Federal criminal requirements fall short of SORNA’s know about. However, this does not requirements but are later brought into liability may result under this provision when the violation occurs under require knowledge that the requirement line. The example illustrates the point is imposed by SORNA. State sex by reference to email addresses. As circumstances supporting Federal jurisdiction as specified in the statute. offenders, for example, are likely to be provided in § 72.6(b), sex offenders instructed in the registration process must include this information when These jurisdictional circumstances include (i) violation of SORNA by sex regarding many of the registration they register and, as provided in requirements appearing in SORNA, § 72.7(e), they must report any offenders convicted of sex offenses under Federal (including military) law, which are widely paralleled in state subsequent changes within three registration laws, such as the need to business days. Where the normal the law of the District of Columbia, Indian tribal law, or the law of a U.S. report changes in residence, reporting time is past when a employment, internet identifiers, and jurisdiction decides to include a type of territory or possession; or (ii) travel in interstate or foreign commerce or vehicle information; the need to report information in its sex offender registry, intended international travel; and the § 72.7(g)(1) requires sex offenders to entering, leaving, or residing in Indian need to appear periodically to update comply with the jurisdiction’s country. Section 2250(a) reaches all and verify registration information. The directions to provide the information at types of SORNA violations, including acknowledgment forms obtained from a later time. failure to register or keep the Section 72.7(g)(2) provides that, in a registration current in each jurisdiction sex offenders in registration often prosecution under 18 U.S.C. 2250, of residence, employment, or school provide a means of establishing their § 72.7(g)(1) does not relieve a sex attendance, as required by 34 U.S.C. knowledge of the registration offender of the need to show an inability 20913; failure to provide or update requirements in later prosecutions for to comply with SORNA as an registration information required by 34 violations. See 76 FR at 1634–35, 1638. affirmative defense to liability. The U.S.C. 20914; or failure to appear But sex offenders may not be informed situations described in § 72.7(g)(1), periodically and verify the registration that the registration requirements they which may involve noncompliance with information, as required by 34 U.S.C. are subject to are imposed by a SORNA’s requirements because of 20918. particular Federal law, SORNA. This deficits in registration jurisdictions’ Section 72.8(a)(1)(ii) in the rule refers does not impugn the fairness or requirements or procedures, overlap to potential criminal liability under 18 propriety of holding sex offenders liable with situations in which a sex offender U.S.C. 2250(b), which was added by under 18 U.S.C. 2250 for knowingly may have a defense under 18 U.S.C. International Megan’s Law. See Public violating a registration requirement that 2250(c) because he was prevented from Law 114–119, sec. 6(b). Section 2250(b) is in fact imposed by SORNA, so long complying with SORNA by defines an offense that specifically as they are aware of an obligation from circumstances beyond his control. reaches violations of SORNA’s some source to comply with the However, the purpose and effect of international travel reporting requirement. See, e.g., United States v. § 72.7(g)(1) are to hold sex offenders to requirement. The provision authorizes Elkins, 683 F.3d 1039, 1050 (9th Cir. compliance with the registration rules imprisonment for up to 10 years for a 2012); United States v. Whaley, 577 and procedures of registration sex offender who (i) knowingly fails to F.3d 254, 261–62 (5th Cir. 2009). jurisdictions in the situations it covers. provide information required by Section 72.8(a)(1)(iii) makes these

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points about 18 U.S.C. 2250’s state’s refusal to register sex offenders compliance with SORNA is a mandatory knowledge requirement in the rule. based on the offense for which the sex condition of probation and supervised offender was convicted. For example, release. See 18 U.S.C. 3563(a)(8), Paragraph (a)(2)—Defense SORNA requires registration based on 3583(d) (third sentence). Violation of Subsection (c) of 18 U.S.C. 2250 conviction for child pornography this condition may result in revocation provides an affirmative defense to possession offenses, see 34 U.S.C. of release. See 18 U.S.C. 3565(a)(2), liability under certain conditions where 20911(7)(G), but some states that have 3583(e)(3). Section 72.8(b) also notes uncontrollable circumstances prevented not fully implemented SORNA’s that compliance with SORNA is a a sex offender from complying with requirements in their registration mandatory condition of parole for sex SORNA, so long as the sex offender programs may be unwilling to register a offenders convicted of Federal offenses, complied as soon as the preventing sex offender on the basis of such an see 18 U.S.C. 4209(a) (second sentence), circumstances ceased. Section 72.8(a)(2) offense. Section 2250(c)’s excuse of the a requirement of narrow application in the rule reproduces this affirmative failure to register terminates if the state given the abolition of parole in Federal defense provision and provides subsequently becomes willing to register cases, except for offenses committed examples of its operation. the sex offender, because the before November 1, 1987. Registration is a reciprocal process, circumstance preventing compliance Regulatory Flexibility Act involving the provision of registration with SORNA no longer exists. However, information by sex offenders, and the liability based on a continuing failure by The Attorney General, in accordance registration jurisdiction’s acceptance of the sex offender to comply with SORNA with the Regulatory Flexibility Act (5 the information for inclusion in the sex in such a case—following a change in U.S.C. 605(b)), has reviewed this offender registry. The circumstances state policy or practice allowing regulation and by approving it certifies preventing compliance with SORNA compliance—depends on the sex that this regulation will not have a under section 2250(c) accordingly may offender’s becoming aware of the change significant economic impact on a be a registration jurisdiction’s failure or since, as discussed above, 18 U.S.C. substantial number of small entities for refusal to carry out the reciprocal role 2250 does not impose liability for the purposes of that Act because the needed to effect registration, or the violation of unknown registration regulation only articulates SORNA’s updating of a registration, as required by obligations. Cf. 73 FR at 38063–64 registration requirements for sex SORNA. (direction to registration jurisdictions to offenders. Example 1 in § 72.8(a)(2) illustrates instruct sex offenders about new or this type of situation, describing a case Executive Orders 12866 and 13563— additional registration duties in Regulatory Planning and Review in which a sex offender cannot appear connection with SORNA and report an inter-jurisdictional change implementation). This regulation has been drafted and of residence within three business days Example 3 in § 72.8(a)(2) describes a reviewed in accordance with Executive because the office with which he needs situation in which the circumstance Order 12866, ‘‘Regulatory Planning and to register will not meet with him for a preventing compliance with SORNA Review,’’ section 1(b), Principles of week. The case implicates both 34 relates to the situation of the sex Regulation, and Executive Order 13563, U.S.C. 20913(a)’s requirement that a sex offender rather than the registration ‘‘Improving Regulation and Regulatory offender register in each jurisdiction in jurisdiction. The second sentence of Review.’’ The regulation expands part which he resides and 34 U.S.C. § 72.7(f) in the rule requires in part that 72 of title 28 of the Code of Federal 20913(c)’s requirement that sex a sex offender report intended Regulations to provide a concise and offenders report changes of residence international travel 21 days in advance, comprehensive statement of what sex within three business days. These which he cannot do if he does not offenders must do to comply with provisions’ net effect is that a sex anticipate a trip abroad that far in SORNA’s requirements, following offender establishing residence in a new advance. In such a case, as described in express requirements appearing in jurisdiction must register there but with the example, 18 U.S.C. 2250(c) would SORNA and previous exercises of a three-business-days grace period. In excuse a sex offender’s failure to report authority SORNA grants to the Attorney the case described, 18 U.S.C. 2250(c) the travel 21 days in advance. Cf. 76 FR General to interpret and implement would excuse the failure to report at 1638 (‘‘[R]equiring 21 days advance SORNA. The justification of these within the three-business-day notice may occasionally be unnecessary requirements as means of furthering timeframe. However, the inability to or inappropriate. For example, a sex SORNA’s objectives is explained in the meet section 20913(c)’s specific offender may need to travel abroad preamble to this regulation and in timeframe does not obviate the need to unexpectedly because of a family or previous SORNA-related documents, comply with section 20913(a)’s work emergency.’’). However, inability including the rulemaking entitled requirement to register in each state of to comply with the 21-day timeframe in ‘‘Applicability of the Sex Offender residence. Nothing prevents the sex a particular case does not prevent a sex Registration and Notification Act,’’ 75 offender from complying with this offender from otherwise complying with FR 81849 (final rule), 72 FR 8894 registration requirement once the office SORNA’s requirements to inform the (interim rule); the SORNA Guidelines, is willing to meet with him, so he will residence jurisdiction about intended 73 FR 38030; and the SORNA need to appear and carry out the international travel, appearing in 34 Supplemental Guidelines, 76 FR 1630. registration at the appointed time in U.S.C. 20914(a)(7) and in §§ 72.6(d) and The Department of Justice has order to have the benefit of the 18 U.S.C. 72.7(f) in this rule. Hence, once the determined that this rule is a 2250(c) defense. intention to travel exists, the sex ‘‘significant regulatory action’’ under Example 2 in § 72.8(a)(2) also offender must inform the registration Executive Order 12866, section 3(f), and illustrates a situation in which the jurisdiction to avoid liability under 18 accordingly this rule has been reviewed circumstance preventing compliance U.S.C. 2250. by the Office of Management and with SORNA is a failure by the Budget. registration jurisdiction to carry out a Paragraph (b)—Supervision Condition The Department of Justice expects necessary reciprocal role. The specific Section 72.8(b) recounts that, for sex that the proposed rule will not entail situation described in the example is a offenders convicted of Federal offenses, new costs and will result in a number

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of benefits. For registration While the proposed rule is expected previously issued sets of guidelines jurisdictions, there are no new costs to result in cost reductions, as discussed determine what state, local, and tribal because their requirements under above, additional information would be jurisdictions must do to achieve SORNA continue to be those articulated helpful in determining the extent of substantial implementation of the in the previously issued SORNA these savings. We accordingly seek SORNA standards in their registration guidelines. Likewise, for sex offenders, comment on the extent to which this programs. Reiteration of some of these the requirements articulated in the rule rule will result in reductions in time, requirements in a concise set of either appear expressly in SORNA or expense, or other costs. directions to sex offenders in this rule have previously been articulated by the Executive Order 13132—Federalism will not change what jurisdictions need Attorney General in the SORNA to do to implement SORNA or affect guidelines. The procedures by which This regulation will not have their costs in doing so. sex offenders register will continue to substantial direct effects on the states, depend on the registration processes of on the relationship between the national Small Business Regulatory Enforcement the jurisdictions that register them, Government and the states, or on the Fairness Act of 1996 which will not be made more time- distribution of power and This rule is not a ‘‘major rule’’ as consuming or expensive or otherwise responsibilities among the various defined by section 251 of the Small changed by this rule. levels of government. There has been Business Regulatory Enforcement In terms of benefits, the rule will substantial consultation with state Fairness Act of 1996. 5 U.S.C. 804(2). provide in one place a clear, concise, officials regarding the interpretation and This rule will not result in an annual and comprehensive statement of sex implementation of SORNA. The effect on the economy of $100 million offenders’ registration requirements previously issued SORNA Guidelines or more; a major increase in costs or under SORNA. This will reduce any and SORNA Supplemental Guidelines prices; or significant adverse effects on expenditure by sex offenders of time or articulate the requirements for competition, employment, investment, money required for inquiry with state or implementation of the SORNA productivity, or innovation, or on the Federal authorities or others to resolve standards by states and other ability of U.S.-based enterprises to uncertainties, or required in attempting jurisdictions in their sex offender compete with foreign-based enterprises to comply with perceived registration registration and notification programs, in domestic and export markets. requirements under SORNA that go requirements that are not changed by beyond the requirements the Attorney this regulation’s provision of a separate List of Subjects in 28 CFR Part 72 General has actually specified. The statement of the registration obligations Crime, Information, Law enforcement, clarity provided by this rule will make of sex offenders under SORNA. Prisoners, Prisons, Probation and parole, it easier for sex offenders to determine Therefore, in accordance with Executive Records. what SORNA requires them to do and Order 13132, it is determined that this ■ Accordingly, for the reasons stated in thereby facilitate compliance with rule does not have sufficient federalism the preamble, chapter I of title 28 of the SORNA. implications to warrant the preparation Code of Federal Regulations is proposed There are also expected benefits for of a federalism assessment. to be amended by revising part 72 to the government. As the preamble read as follows: explains, the rule’s comprehensive Executive Order 12988—Civil Justice Reform articulation of SORNA’s registration PART 72—SEX OFFENDER requirements in regulations addressed This regulation meets the applicable REGISTRATION AND NOTIFICATION to sex offenders will provide a secure standards set forth in section 3(a) and basis for Federal prosecution of 3(b)(2) of Executive Order 12988. Sec. knowing violations of any of SORNA’s 72.1 Purpose. Unfunded Mandates Reform Act of 72.2 Definitions. requirements. It will resolve specific 1995 problems that have arisen in past 72.3 Applicability of the Sex Offender litigation or can be expected to arise in This rule will not result in the Registration and Notification Act. 72.4 Where sex offenders must register. future litigation if not clarified and expenditure by state, local and tribal governments, in the aggregate, or by the 72.5 How long sex offenders must register. resolved by this rule, thereby avoiding 72.6 Information sex offenders must the expenditure of litigation resources private sector, of $100 million or more provide. on these matters. in any one year, and it will not 72.7 How sex offenders must register and As explained in the existing SORNA significantly or uniquely affect small keep the registration current. guidelines, SORNA aims to prevent the governments. Therefore, no actions were 72.8 Liability for violations. commission of sex offenses, and to bring deemed necessary under the provisions Authority: 34 U.S.C. 20901–45; Pub. L. the perpetrators of such offenses to of the Unfunded Mandates Reform Act 109–248, 120 Stat. 587; Pub. L. 114–119, 130 justice more speedily and reliably, by of 1995. This rule adds provisions to Stat. 15. enabling the authorities to better part 72 of title 28 of the Code of Federal identify, track, and monitor released sex Regulations that articulate SORNA’s § 72.1 Purpose. offenders and by informing the public registration requirements for sex (a) This part specifies the registration regarding the presence of released sex offenders, including where, when, and requirements of the Sex Offender offenders in the community. See 73 FR how long sex offenders must register, Registration and Notification Act at 38044–45. Hence, by facilitating the what information they must provide, (SORNA), 34 U.S.C. 20901 et seq., and enforcement of, and compliance with, and how they must keep their the scope of those requirements’ SORNA’s registration requirements, and registrations current. The Attorney application. The Attorney General has enhancing the basis for public General has previously addressed these the authority to specify the notification, the rule is expected to matters and has resolved them in the requirements of SORNA and their further SORNA’s public safety same way in the SORNA Guidelines, applicability as provided in this part objectives and reduce the time and appearing at 73 FR 38030, and in the pursuant to provisions of SORNA, resources required in achieving these SORNA Supplemental Guidelines, including 34 U.S.C. 20912(b), 20913(d), objectives. appearing at 76 FR 1630. Those and 20914(a)(8), (c).

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(b) This part does not preempt or limit sex offender must also register in the (b) Remote communication identifiers. any obligations of or requirements jurisdiction in which convicted if that All designations the sex offender uses relating to sex offenders under other jurisdiction is different from the for purposes of routing or self- Federal laws, rules, or policies, or under jurisdiction of residence. identification in internet or telephonic the laws, rules, or policies of communications or postings, including § 72.5 How long sex offenders must email addresses and telephone numbers. registration jurisdictions or other register. entities. States and other governmental (c) Residence, temporary lodging, entities may prescribe registration (a) Duration. A sex offender has a employment, and school attendance. (1) requirements and other requirements, continuing obligation to register and The address of each residence at which keep the registration current (except with which sex offenders must comply, the sex offender resides or will reside when the sex offender is in custody or that are more extensive or stringent than or, if the sex offender has no present or civilly committed) for the following those prescribed by SORNA. expected residence address, other periods of time: information describing where the sex § 72.2 Definitions. (1) 15 years, if the offender is a tier offender resides or will reside with All terms used in this part have the I sex offender; whatever definiteness is possible under same meaning as in SORNA. (2) 25 years, if the offender is a tier the circumstances. II sex offender; and (2) Information about any place in § 72.3 Applicability of the Sex Offender (3) The life of the offender, if the which the sex offender is staying when Registration and Notification Act. offender is a tier III sex offender. away from his residence for seven or (b) Commencement. The registration The requirements of SORNA apply to more days, including the identity of the period begins to run— all sex offenders. All sex offenders must place and the period of time the sex comply with all requirements of that (1) When a sex offender is released from imprisonment following offender is staying there. Act, regardless of when the conviction (3) The name and address of any place conviction for the offense giving rise to of the offense for which registration is where the sex offender is or will be an the registration requirement, including required occurred (including if the employee or, if the sex offender is or in cases in which the term of conviction occurred before the will be employed but with no fixed imprisonment is based wholly or in part enactment of that Act), regardless of place of employment, other information on the sex offender’s conviction for whether a jurisdiction in which describing where the sex offender works registration is required has substantially another offense; or (2) If the sex offender is not sentenced or will work with whatever definiteness implemented that Act’s requirements or to imprisonment, when the sex offender is possible under the circumstances. has implemented any particular (4) The name and address of any place is sentenced for the offense giving rise requirement of that Act, and regardless where the sex offender is a student or to the registration requirement. of whether any particular requirement (c) Reduction. If a tier I sex offender will be a student. or class of sex offenders is mentioned in (d) International travel. Information has maintained for 10 years a clean examples in this regulation or in other relating to intended travel outside the record, as described in 34 U.S.C. regulations or guidelines issued by the United States, including any anticipated 20915(b)(1), the period for which the Attorney General. itinerary, dates and places of departure sex offender must register and keep the Example 1. A sex offender is federally from, arrival in, or return to the United registration current under paragraph (a) convicted of aggravated sexual abuse States and each country visited, carrier of this section is reduced by 5 years. If under 18 U.S.C. 2241 in 1990 and is and flight numbers for air travel, a tier III sex offender required to register released following imprisonment in destination country or countries and on the basis of a juvenile delinquency 2009. The sex offender is subject to the address or other contact information adjudication has maintained a clean requirements of SORNA and could be therein, and means and purpose of record, as described in 34 U.S.C. held criminally liable under 18 U.S.C. travel. 20915(b)(1), for 25 years, the period for 2250 for failing to register or keep the (e) Passports and immigration which the sex offender must register registration current in any jurisdiction documents. Information about each and keep the registration current under in which the sex offender resides, is an passport the sex offender has and, if the paragraph (a) of this section is reduced employee, or is a student. sex offender is an alien, information to the period for which the clean record Example 2. A sex offender is about any document or documents has been maintained. convicted by a state jurisdiction in 1997 establishing the sex offender’s for molesting a child and is released § 72.6 Information sex offenders must immigration status, including passport following imprisonment in 2000. The provide. or immigration document type and sex offender initially registers as Sex offenders must provide the number. required but relocates to another state in following information for inclusion in (f) Vehicle information. The license 2009 and fails to register in the new the sex offender registries of the plate number and a description of any state of residence. The sex offender has jurisdictions in which they are required vehicle owned or operated by the sex violated the requirement under SORNA to register: offender, including watercraft and to register in any jurisdiction in which (a) Name, date of birth, and Social aircraft in addition to land vehicles. If he resides, and could be held criminally Security number. a vehicle has no license plate but has liable under 18 U.S.C. 2250 for the (1) The name of the sex offender, some other type of registration number violation because he traveled in including any alias used by the sex or identifier, then the registration interstate commerce. offender. number or identifier must be provided. (2) The sex offender’s date of birth Information must also be provided as to § 72.4 Where sex offenders must register. and any date that the sex offender uses where any vehicle owned or operated by A sex offender must register, and keep as his purported date of birth. the sex offender is habitually parked, the registration current, in each (3) The Social Security number of the docked, or otherwise kept. jurisdiction in which the offender sex offender and any number that the (g) Professional licenses. Information resides, is an employee, or is a student. sex offender uses as his purported concerning all licensing of the sex For initial registration purposes only, a Social Security number. offender that authorizes the sex offender

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to engage in an occupation or carry out register or update the registration within paragraph (a)(1) of this section, because a trade or business. three business days. the state has no procedure for pre- (d) Reporting of departure and release registration of sex offenders. § 72.7 How sex offenders must register termination concerning residence, Instead, the state informs sex offenders and keep the registration current. employment, and school attendance. (1) that they must go to a local police (a) Initial registration—(1) In general. A sex offender residing in a jurisdiction station within seven days of release to Except as provided in paragraph (a)(2) must inform that jurisdiction (by register. The sex offender must comply of this section, a sex offender must whatever means the jurisdiction allows) with the state’s requirements for initial register before release from if the sex offender will be commencing registration, i.e., the offender must imprisonment following conviction for residence, employment, or school report to the police station to register the offense giving rise to the registration attendance in another jurisdiction or within seven days of release. requirement, or, if the sex offender is outside of the United States. The sex Example 2. A sex offender does not not sentenced to imprisonment, within offender must so inform the jurisdiction register when he is released from three business days after being in which he is residing prior to any custody, or does not register upon sentenced for that offense. termination of residence in that entering a jurisdiction to reside as (2) Special rules for certain cases. The jurisdiction and prior to commencing required by 34 U.S.C. 20913(c) and following special requirements apply: residence, employment, or school paragraph (c) of this section, because the (i) Federal and military offenders. A attendance in the other jurisdiction or jurisdiction, at the time, does not sex offender who is released from outside of the United States. register sex offenders based on the Federal or military custody, or who is (2) A sex offender who will be offense for which he was convicted. The convicted for a Federal or military sex terminating residence, employment, or jurisdiction later sends the sex offender offense but not sentenced to school attendance in a jurisdiction must a notice advising that it has extended its imprisonment, must register within so inform that jurisdiction (by whatever registration requirements to include sex three business days of entering or means the jurisdiction allows) prior to offenders like him and directing him to remaining in a jurisdiction to reside the termination of residence, report to a specified agency within 90 following the release or sentencing. employment, or school attendance in (ii) Foreign convictions. A sex days to register. The sex offender must the jurisdiction. report to the agency to register within offender required to register on the basis (e) Reporting of changes in the specified timeframe. of a conviction in a foreign country information relating to remote must register within three business days communication identifiers, temporary Example 3. A sex offender registers as of entering any jurisdiction in the lodging, and vehicles. A sex offender required when released from United States to reside, work, or attend must report within three business days imprisonment or upon entering a school. to his residence jurisdiction (by jurisdiction to reside, but the (b) Periodic in-person verification. A whatever means the jurisdiction allows) jurisdiction has no procedure for sex sex offender must appear in person, any change in remote communication offenders to appear periodically in allow the jurisdiction to take a current identifier information, as described in person to update and verify the photograph, and verify the information § 72.6(b), temporary lodging registration information as required by in each registry in which the offender is information, as described in § 72.6(c)(2), 34 U.S.C. 20918 and paragraph (b) of required to register. In carrying out the and any change in vehicle information, this section. The jurisdiction later sends required verification of information in as described in § 72.6(f). the sex offender a notice advising that each registry, the sex offender must (f) Reporting of international travel. A it has adopted a periodic verification correct any information that has sex offender must report intended travel requirement and directing the sex changed or is otherwise inaccurate and outside the United States, including the offender to appear at a designated time must report any new registration information described in § 72.6(d), to and place for an initial update meeting. information. A sex offender must appear his residence jurisdiction (by whatever The sex offender must appear and in person for these purposes not less means the jurisdiction allows). The sex update the registration as directed. frequently than— offender must report the travel Example 4. A sex offender does not (1) Each year, if the offender is a tier information to the jurisdiction at least report his email address to the I sex offender; 21 days in advance of the intended jurisdiction in which he resides when (2) Every six months, if the offender travel and, if the sex offender is he initially registers, or within three is a tier II sex offender; and terminating his residence in the business days of a change as required by (3) Every three months, if the offender jurisdiction, prior to his termination of paragraph (e) of this section, because is a tier III sex offender. residence in the jurisdiction. email addresses are not among the (c) Reporting of initiation and changes (g) Compliance with jurisdictions’ information the jurisdiction accepts for concerning name, residence, requirements for registering and keeping inclusion in its registry. The jurisdiction employment, and school attendance. A the registration current. (1) A sex later notifies the sex offender that it has sex offender who enters a jurisdiction to offender who does not comply with a extended the registration information it reside, or who resides in a jurisdiction requirement of SORNA in conformity collects to include email addresses and and changes his name or his place of with the time and manner specifications directs him to send a reply within a residence in the jurisdiction, must of paragraphs (a) through (f) of this specified time that provides his current appear in person in that jurisdiction and section must comply with the email address. The sex offender must register or update the registration within requirement in conformity with any comply with this direction. three business days. A sex offender who applicable time and manner (2) In a prosecution under 18 U.S.C. commences employment or school specifications of a jurisdiction in which 2250, paragraph (g)(1) of this section attendance in a jurisdiction, or who the offender is required to register. does not in any case relieve a sex changes employer, school attended, or Example 1. A sex offender convicted offender of the need to establish as an place of employment or school in a state does not initially register affirmative defense an inability to attendance in a jurisdiction, must before release from imprisonment, as comply with SORNA because of appear in person in that jurisdiction and required by 34 U.S.C. 20913(b)(1) and circumstances beyond his control as

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provided in 18 U.S.C. 2250(c) and because its registration authorities will ACTION: Proposed rule; request for § 72.8(a)(2). not register offenders on the basis of the comments. offense for which the sex offender was § 72.8 Liability for violations. convicted. The sex offender would have SUMMARY: NMFS proposes regulations to (a) Criminal liability—(1) Offense. (i) a defense to liability because the state’s implement Amendment 11 to the A sex offender who knowingly fails to unwillingness to register sex offenders Fishery Management Plan (FMP) for the register or update a registration as like him is a circumstance beyond his Shrimp Fishery of the South Atlantic required by SORNA may be liable to control. However, if the sex offender Region (Shrimp FMP), as prepared and criminal penalties under 18 U.S.C. failed to register after becoming aware of submitted by the South Atlantic Fishery 2250(a). a change in state policy or practice Management Council (Council). This (ii) A sex offender who knowingly allowing his registration, the 18 U.S.C. proposed rule would modify the transit fails to provide information required by 2250(c) defense would no longer apply, provisions for shrimp trawl vessels with SORNA relating to intended travel because in such a case the circumstance penaeid shrimp, i.e., brown, pink, and outside the United States may be liable preventing compliance with the white shrimp, on board in Federal to criminal penalties under 18 U.S.C. registration requirement would no waters of the South Atlantic that have 2250(b). been closed to shrimp trawling to (iii) As a condition of liability under longer exist. Example 3. A sex offender needs to protect white shrimp as a result of cold 18 U.S.C. 2250(a)–(b) for failing to weather events. The purpose of this comply with a requirement of SORNA, travel to a foreign country on short notice—less than 21 days—because of proposed rule is to update the a sex offender must have been aware of regulations to more closely align with the requirement he is charged with an unforeseeable family or work emergency. The sex offender would current fishing practices, reduce the violating, but need not have been aware socio-economic impacts for fishermen that the requirement is imposed by have a defense to liability for failing to report the intended travel 21 days in who transit these closed areas, and SORNA. improve safety at sea while maintaining (2) Defense. A sex offender may have advance, as required by § 72.7(f), because it is impossible to report an protection for overwintering white an affirmative defense to liability, as shrimp. provided in 18 U.S.C. 2250(c), if intention to travel outside the United uncontrollable circumstances prevented States before the intention exists. DATES: Written comments must be the sex offender from complying with However, if the sex offender failed to received on or before September 14, SORNA, where the sex offender did not inform the registration jurisdiction 2020. contribute to the creation of those (albeit on short notice) once he intended ADDRESSES: You may submit comments circumstances in reckless disregard of to travel, 18 U.S.C. 2250(c) would not on the proposed rule, identified by the requirement to comply and excuse that failure, because the ‘‘NOAA–NMFS–2020–0066,’’ by either complied as soon as the circumstances preventing circumstance—absence of an of the following methods: preventing compliance ceased to exist. intent to travel abroad—would no • Electronic Submission: Submit all Example 1. A sex offender changes longer exist. electronic public comments via the residence from one jurisdiction to (b) Supervision condition. For a sex Federal e-Rulemaking Portal. Go to another, bringing into play SORNA’s offender convicted of a Federal offense, www.regulations.gov/ requirement to register in each compliance with SORNA is a mandatory #!docketDetail;D=NOAA-NMFS-2020- jurisdiction where the sex offender condition of probation, supervised 0066, click the ‘‘Comment Now!’’ icon, resides and SORNA’s requirement to release, and parole. The release of such complete the required fields, and enter appear in person and report changes of an offender who does not comply with or attach your comments. residence within three business days. SORNA may be revoked. • Mail: Submit written comments to See 34 U.S.C. 20913(a), (c). The sex Dated: July 15, 2020. Frank Helies, Southeast Regional Office, offender attempts to comply with these William P. Barr, NMFS, 263 13th Avenue South, St. requirements by contacting the local Attorney General. Petersburg, FL 33701. sheriff’s office, which is responsible for [FR Doc. 2020–15804 Filed 8–12–20; 8:45 am] Instructions: Comments sent by any sex offender registration in the other method, to any other address or BILLING CODE 4410–18–P destination jurisdiction. The sheriff’s individual, or received after the end of office advises that it cannot schedule an the comment period, may not be appointment for him to register within considered by NMFS. All comments three business days but that he should DEPARTMENT OF COMMERCE received are a part of the public record come by in a week. The sex offender National Oceanic and Atmospheric and will generally be posted for public would have a defense to liability if he Administration viewing on www.regulations.gov appeared at the sheriff’s office at the without change. All personal identifying appointed time and registered as 50 CFR Part 622 information (e.g., name, address), required. The sex offender’s temporary confidential business information, or inability to register and inability to [Docket No. 200723–0200] otherwise sensitive information report the change of residence within submitted voluntarily by the sender will RIN 0648–BJ76 three business days in the new be publicly accessible. NMFS will residence jurisdiction was due to a Fisheries of the Caribbean, Gulf of accept anonymous comments (enter ‘‘N/ circumstance beyond his control—the Mexico, and South Atlantic; Shrimp A’’ in the required fields if you wish to sheriff office’s refusal to meet with him Fishery Off the South Atlantic States; remain anonymous). until a week had passed—and he Amendment 11 Electronic copies of Amendment 11, complied with the requirement to which includes a fishery impact register as soon as the circumstance AGENCY: National Marine Fisheries statement, a Regulatory Flexibility Act preventing compliance ceased to exist. Service (NMFS), National Oceanic and (RFA) analysis, and a regulatory impact Example 2. A sex offender cannot Atmospheric Administration (NOAA), review, may be obtained from the register in a state in which he resides Commerce. Southeast Regional Office website at

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https://www.fisheries.noaa.gov/action/ fishermen requested that the Council enable law enforcement on the water or amendment-11-shrimp-trawl-transit- update these transit provisions. in the air to see from a distance if provisions/. Fishermen requested this change to fishermen are complying with the FOR FURTHER INFORMATION CONTACT: increase their ability to transit the transit provisions without having to Frank Helies, telephone: 727–824–5305, closed areas, as more recent vessel actually board the vessel, thereby saving or email: [email protected]. design changes have limited access to time and reducing the safety risks below deck storage. Also, requirements associated with a vessel boarding. SUPPLEMENTARY INFORMATION: The The proposed rule would reduce the penaeid shrimp fishery of the South for a larger turtle excluder device (TED) time needed to stow gear because Atlantic is managed under the FMP. The in the trawl net to protect leatherback sea turtles have increased the size of a fishermen would no longer need to FMP was prepared by the Council and net that would need to be folded and disassemble the trawl gear (remove nets implemented through regulations at 50 stored below deck. Fishermen also from the rigging and the doors) prior to CFR part 622 under the authority of the stated that having to disassemble trawl stowing nets with mesh sizes less than Magnuson-Stevens Fishery gear for below deck stowage in rough 4 inches (10.2 cm) below deck. The Conservation and Management Act sea conditions is a safety-at-sea concern. proposed rule is expected to reduce (Magnuson-Stevens Act). Additionally, some fishermen stated adverse socio-economic and safety at Background that they avoid the closed areas entirely sea impacts associated with the current transit provisions through reduced Amendment 9 to the Shrimp FMP as they were not able to meet the transit travel time around the closed areas and revised the criteria and procedures by requirements. Amendment 11 and the proposed rule reduced time on the water for fishermen which a South Atlantic state may are expected to update the regulations to by not requiring gear stowage below request that NMFS implement a better match the current design of the deck. concurrent closure to the harvest of vessels in the fishery, reduce the socio- penaeid shrimp (brown, pink, and white Classification economic impact for fishermen who shrimp) in the exclusive economic zone have difficulty transiting the cold Pursuant to section 304(b)(1)(A) of the (EEZ) when state waters close as a result weather closed areas under the current Magnuson-Stevens Act, the NMFS of severe winter weather (78 FR 35571; regulations, and improve safety at sea Assistant Administrator has determined June 13, 2013). The Shrimp FMP for fishermen through reduced travel that this proposed rule is consistent provides that if a state has determined time around the closed areas and by not with Amendment 11, the Shrimp FMP, there is at least an 80-percent reduction having to disassemble fishing gear in other provisions of the Magnuson- in the population of overwintering rough weather for stowage below deck, Stevens Act, and other applicable law, white shrimp, or that state water subject to further consideration after ° ° while maintaining protection for temperatures were 9 C (48 F) or less for overwintering white shrimp and public comment. at least 7 consecutive days, the state can enforceability of the regulations for the This proposed rule has been request NMFS to close the EEZ adjacent cold weather closed areas. determined to be not significant for to that state’s closed waters to the purposes of Executive Order 12866. harvest of penaeid shrimp to protect the Management Measures Contained in This rule is expected to be an Executive white shrimp spawning stock that has This Proposed Rule Order 13771 deregulatory action. been severely depleted by cold weather. This proposed rule would revise the The Magnuson-Stevens Act provides The Shrimp FMP procedures allow a transit provisions for shrimp trawl the legal basis for this proposed rule. No state, after determining that the vessels with penaeid shrimp on board duplicative, overlapping, or conflicting concurrent closure criteria have been transiting through cold weather closed Federal rules have been identified. In met, to submit a letter directly to the areas in Federal waters of the South addition, no new reporting and record- NMFS Regional Administrator (RA) Atlantic. The proposed rule would keeping requirements are introduced by with the request and supporting data for allow a vessel to transit South Atlantic this proposed rule. Accordingly, the a concurrent closure of penaeid shrimp cold weather closed areas while Paperwork Reduction Act does not harvest in the EEZ adjacent to the closed possessing penaeid shrimp provided the apply to this proposed rule. A state waters. After a review of the vessel is in transit and fishing gear is description of this proposed rule, why request and supporting information, if appropriately stowed. Transit would be it is being considered, and the purposes the RA determines the recommended defined as non-stop progression through of this proposed rule are contained in closure is in accordance with the the area with fishing gear appropriately the preamble and in the SUMMARY procedures and criteria specified in the stowed. Fishing gear appropriately section of the preamble. The objectives FMP and the Magnuson-Stevens Act, stowed would be defined as trawl doors of this proposed rule are to ensure NMFS would implement the closure are in the rack (cradle) on deck, nets transit regulations are consistent with through a notification in the Federal would be in the rigging and tied down, current fishing vessel designs, reduce Register. The closure will usually and the try net would be on the deck. the adverse social and economic effects remain effective until the ending date of Doors in the rack means the trawl doors on commercial shrimp fishing the state’s closure, but may be ended are stowed in their storage racks out of businesses that have not been able to earlier based upon a request from the the water on the vessel’s deck. Nets in transit closed areas due to an inability state. the rigging means the trawl nets are out to comply with the current transit Currently, shrimp trawl vessels of the water and are tied to the trawl regulations, improve safety at sea and transiting these EEZ cold weather closed vessel’s rigging. the enforceability of transit regulations, areas with penaeid shrimp on board are The proposed transit provision was and maintain protection for over- required to stow a trawl net with a mesh developed and recommended to the wintering white shrimp. size of less than 4 inches (10.2 cm) Council by the Council’s Law The Chief Counsel for Regulation of below deck. Since the most recent cold Enforcement, Shrimp, and Deep-water the Department of Commerce has weather EEZ closures off South Carolina Shrimp Advisory Panels. Doors in the certified to the Chief Counsel for (83 FR 2931; January 22, 2018) and rack (cradle), nets in the rigging and tied Advocacy of the Small Business Georgia (83 FR 3404; January 25, 2018), down, and try net on the deck would Administration that this rule, if

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adopted, will not have a significant cash flow for these vessels is estimated rather than at their homeport. Based on economic impact on a substantial to be about $61,770 per year on average, landings data during the most recent number of small entities. A description and net revenue from commercial cold weather closures (i.e., January of the factual basis for this fishing operations is estimated to be through June of 2018), 33 vessels with determination follows. All monetary approximately $35,030 per year on homeports in states north of Florida estimates in the following analysis are average from 2014 to 2018. The offloaded shrimp in Florida during that in 2018 dollars. This proposed rule, if maximum annual gross revenue earned time. This proposed rule would make it implemented, would allow vessels by a single vessel (business) was easier for these vessels to comply with possessing penaeid shrimp, i.e., brown, approximately $2.6 million from 2014 to the gear stowage requirements and, as a white, or pink shrimp, to transit through 2018. result, more easily return to their cold weather closed areas in affected On December 29, 2015, NMFS issued homeport with penaeid shrimp on portions of the South Atlantic EEZ a final rule establishing a small business board. provided that the vessel remains in size standard of $11 million in annual Although the economic effects of the transit, gear is stowed with trawl doors gross receipts (revenue) for all proposed rule on commercial shrimp in the rack, and nets in the rigging are businesses primarily engaged in the vessels cannot be quantified given tied down with the try net on the deck. commercial fishing industry (NAICS available data and models, they are Thus, this proposed rule is expected to code 11411) for RFA compliance expected to be positive. Specifically, if directly regulate federally permitted purposes only (50 CFR 200.1 and 200.2). vessels are able to land shrimp at their vessels in the commercial South In addition to this gross revenue homeport with their homeport dealer, Atlantic shrimp fishing industry that standard, a business primarily involved their profits would potentially increase harvest penaeid shrimp and transit in commercial fishing is classified as a as a result of expected cost reductions. through cold weather closed areas in small business if it is independently Shrimp vessels would not incur affected portions of the South Atlantic owned and operated, and is not additional offloading costs if they could EEZ. dominant in its field of operations offload their shrimp at their homeport Only permitted vessels that harvest (including its affiliates). Based on the dealer, and they would no longer have penaeid shrimp would be directly information above, all 262 businesses to absorb the costs of shipping shrimp regulated by this proposed rule. From directly regulated by this proposed rule back to their homeport dealer. Finally, 2014 through 2018, the average number are determined to be small entities for shrimp vessels’ fuel costs are expected of vessels with valid South Atlantic the purpose of this analysis. Therefore, to decrease as they would no longer penaeid or rock shrimp permits was it is determined that this proposed rule need to take longer routes back to their 594. From 2014 through 2018, the will affect a substantial number of small homeports to avoid transiting through average number of vessels with valid entities. the cold water closed areas in the EEZ. permits that actively fished (i.e., had Under the current regulations, shrimp Based on the information above, landings) in the South Atlantic penaeid trawl vessels transiting cold weather although a substantial number of small shrimp fishery was 262. Because it is closed areas in the EEZ with penaeid entities would be affected by this not currently feasible to accurately shrimp on board are required to stow proposed rule, this rule would not have determine affiliations between trawl nets with a mesh size of less than a significant economic impact on those businesses that possess South Atlantic 4 inches (10.2 cm) below deck. Because entities. Because this proposed rule, if shrimp permits, for purposes of this many vessels are now required to use implemented, would not have a analysis it is assumed each of these larger TEDS, they also use larger nets significant economic impact on a vessels is independently owned by a compared to when the current transit substantial number of small entities, an single business; however, this regulations were implemented. Shrimp initial regulatory flexibility analysis is assumption likely leads to an fishermen also typically stow their spare not required and none has been overestimate of the actual number of nets on the wheelhouse roof because prepared. businesses directly regulated by this there is little room below deck to stow proposed rule. Thus, this proposed rule their gear. List of Subjects in 50 CFR Part 622 is estimated to directly regulate 262 In addition, cold weather closures are Commercial, Fisheries, Fishing, businesses in the commercial South implemented more quickly now than Shrimp, South Atlantic. when the transit regulations were Atlantic shrimp fishing industry, or Dated: July 24, 2020. about 44 percent of the average number initially established. While the reduced Samuel D. Rauch III, of businesses that held valid South time to implement closures has Atlantic penaeid or rock shrimp permits enhanced protection of over-wintering Deputy Assistant Administrator for white shrimp, shrimp vessel captains Regulatory Programs, National Marine from 2014 through 2018. Fisheries Service. For vessels with South Atlantic with homeports in states north of For the reasons set out in the penaeid or rock shrimp permits, annual Florida can be caught unaware if they preamble, 50 CFR part 622 is proposed gross revenue was about $404,810 on are operating off Florida when a closure to be amended as follows: average from 2014 through 2018, of is implemented. Furthermore, shoals which approximately $169,240 (about extending into the EEZ off Georgia and PART 622—FISHERIES OF THE 42 percent) came from South Atlantic South Carolina cause transiting through CARIBBEAN, GULF OF MEXICO, AND shrimp landings on average. Almost all state waters to be dangerous and SOUTH ATLANTIC trips that harvest rock shrimp also increase the risk to the vessel and crew. harvest penaeid shrimp. Many vessels Thus, traveling back to a vessel’s ■ 1. The authority citation for part 622 are also relatively dependent on revenue homeport can be risky for shrimp continues to read as follows: from other Atlantic fisheries (e.g., vessels that cannot comply with the Authority: 16 U.S.C. 1801 et seq. scallops and flounder) as well revenue current stowage requirements. ■ 2. In § 622.206, revise paragraph from the Gulf of Mexico shrimp fishery. Shrimp vessels that have been unable (a)(2)(iii) to read as follows: Based on average economic return to store fishing gear according to the estimates from 2011 through 2014, current transit regulations have been § 622.206 Area and seasonal closures. which are the most recent available, net forced to land their shrimp in Florida (a) * * *

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(2) * * * (10.2 cm), as measured between the in the rack/cradle on deck, the nets (iii) Brown shrimp, pink shrimp, or centers of opposite knots when pulled must be out of the water and in the white shrimp may be possessed on taut, is appropriately stowed. For the rigging and tied down, and any try net board a fishing vessel in a closed area, purposes of this paragraph (a), transit must be on deck. provided the vessel is in transit and that means a non-stop progression through a * * * * * the shrimp fishing gear with trawl nets closed area and appropriately stowed [FR Doc. 2020–16434 Filed 8–12–20; 8:45 am] having a mesh size less than 4 inches means trawl doors out of the water and BILLING CODE 3510–22–P

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Notices Federal Register Vol. 85, No. 157

Thursday, August 13, 2020

This section of the FEDERAL REGISTER procedures would help improve the Authority, grantee of FTZ 27, requesting contains documents other than rules or plant’s international competitiveness. subzone status subject to the existing proposed rules that are applicable to the Components and materials sourced activation limit of FTZ 27, on behalf of public. Notices of hearings and investigations, from abroad (representing 50–60% of Ipswich Shellfish Company, Inc., in committee meetings, agency decisions and the value of the finished product) Ipswich, Massachusetts. rulings, delegations of authority, filing of petitions and applications and agency include: 12,000 tow PAN fiber The application was processed in statements of organization and functions are (precursor) and 24,000 tow PAN fiber accordance with the FTZ Act and examples of documents appearing in this (precursor) (duty rates are 8% and 7.5%, Regulations, including notice in the section. respectively). The request indicates that Federal Register inviting public the PAN fiber is subject to special duties comment (85 FR 36529–36530, June 17, under Section 301 of the Trade Act of 2020). The FTZ staff examiner reviewed DEPARTMENT OF COMMERCE 1974 (Section 301), depending on the the application and determined that it country of origin. The applicable meets the criteria for approval. Pursuant Foreign-Trade Zones Board Section 301 decisions require subject to the authority delegated to the FTZ [B–52–2020] merchandise to be admitted to FTZs in Board Executive Secretary (15 CFR Sec. privileged foreign status (19 CFR 400.36(f)), the application to establish Foreign-Trade Zone 38—Spartanburg 146.41). Subzone 27Q was approved on August County, South Carolina; Application In accordance with the FTZ Board’s 7, 2020, subject to the FTZ Act and the for Production Authority; Teijin Carbon regulations, Diane Finver of the FTZ Board’s regulations, including Section Fibers, Inc. (Polyacrylonitrile-Based Staff is designated examiner to evaluate 400.13, and further subject to FTZ 27’s Carbon Fiber); Greenwood, South and analyze the facts and information 129-acre activation limit. Carolina presented in the application and case Dated: August 7, 2020. record and to report findings and An application has been submitted to Andrew McGilvray, recommendations to the FTZ Board. the Foreign-Trade Zones (FTZ) Board by Public comment is invited from Executive Secretary. the South Carolina State Ports interested parties. Submissions shall be [FR Doc. 2020–17724 Filed 8–12–20; 8:45 am] Authority, grantee of FTZ 38, requesting addressed to the FTZ Board’s Executive BILLING CODE 3510–DS–P production authority on behalf of Teijin Secretary and sent to: [email protected]. The Carbon Fibers, Inc. (TCF), located in closing period for their receipt is Greenwood, South Carolina. The October 13, 2020. Rebuttal comments in DEPARTMENT OF COMMERCE application conforming to the response to material submitted during requirements of the regulations of the National Oceanic and Atmospheric the foregoing period may be submitted FTZ Board (15 CFR 400.23) was Administration during the subsequent 15-day period to docketed on August 6, 2020. [RTID 0648–XA350] The TCF facility (currently under October 27, 2020. A copy of the application will be construction, projected to have 90 Notice of Availability of the Portland employees, 440 acres) is located within available for public inspection in the ‘‘Reading Room’’ section of the FTZ Harbor Draft Supplemental Restoration Site 35 of FTZ 38. The facility is used Plan and Environmental Assessment for the production of polyacrylonitrile- Board’s website, which is accessible via based carbon fiber. In 2019, TCF www.trade.gov/ftz. AGENCY: National Marine Fisheries requested production authority in a For further information, contact Diane Service (NMFS), National Oceanic and notification proceeding (15 CFR 400.22 Finver at [email protected] or Atmospheric Administration (NOAA), and 400.37). After an initial review, the (202) 482–1367. Department of Commerce. requested production authority was Dated: August 7, 2020. ACTION: Notice of availability; request approved subject to a restriction Andrew McGilvray, for comments. requiring that all foreign-status Executive Secretary. SUMMARY: The Portland Harbor Natural polyacrylonitrile (PAN) fiber admitted [FR Doc. 2020–17723 Filed 8–12–20; 8:45 am] Resource Trustee Council (Trustee for production activity be re-exported BILLING CODE 3510–DS–P (entry for U.S. consumption was not Council) has prepared a Draft authorized) (see B–38–2019, 84 FR Supplemental Restoration Plan and 54837, 10/11/2019). DEPARTMENT OF COMMERCE Environmental Assessment (Draft SRP/ If the application were approved, on EA). The Draft SRP/EA describes the its domestic sales, TCF would be able to Foreign-Trade Zones Board Trustee Council’s preferred restoration choose the duty rate during custom alternative to restore natural resources entry procedures that applies to PAN [S–104–2020] and ecological services injured or lost as carbon fiber (duty-free) for the foreign- Approval of Subzone Status; Ipswich a result of releases of hazardous status inputs noted below. TCF would Shellfish Company, Inc.; Ipswich, substances and discharges of oil within be able to avoid duties on foreign-status Massachusetts the Portland Harbor assessment area PAN fiber which becomes scrap/waste. (applicable to the current phase of Customs duties also could possibly be On June 11, 2020, the Executive restoration, but subject to revision in the deferred or reduced on foreign-status Secretary of the Foreign-Trade Zones future). The Federal Trustees also production equipment. The request (FTZ) Board docketed an application considered potential environmental indicates that the savings from FTZ submitted by the Massachusetts Port impacts of the considered alternatives in

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the context of the National Restoration Plan also provided a restoration concepts considered in the Environmental Policy Act (NEPA). The comprehensive framework for Draft SRP/EA, and the criteria against purpose of this notice is to inform the implementing integrated habitat which project ideas are evaluated can be public of the availability of the Draft restoration and a broad analysis of the viewed in the Programmatic Restoration SRP/EA and to seek public comments environmental impacts. The Trustee Plan (https://www.fws.gov/ on the document. Council has now developed a Draft SRP/ portlandharbor/sites/default/files/2018- DATES: Submit comments on or before EA that uses the criteria identified in 12/201706_FINAL_PEIS.pdf) and its September 14, 2020. the Programmatic Restoration Plan to appendices (https://www.fws.gov/ ADDRESSES: Obtaining Documents: You evaluate and select one of three portlandharbor/sites/default/files/2018- _ _ _ may download the Draft SRP/EA at: alternatives to implement restoration 12/201706 FINAL PEIS Appendix.pdf). https://www.fws.gov/portlandharbor/ actions during the Trustee Council’s Site Background sites/default/files/documents/2020-07_ first phase of restoration. The Trustee Since the 1900s, industrial facilities DraftSRP-EA_forRelease.pdf. Council may revisit its preferred along the Willamette River at Portland Alternatively, you may make restoration alternatives in future phases Harbor have released an array of arrangements to view the document at of restoration as the ongoing NRDA hazardous substances and discharged the following location (subject to any process continues. The Draft SRP/EA oil into the river system. In December Federal, state, or local public health also evaluates potential environmental 2000, the Environmental Protection restrictions associated with the COVID– impacts from the alternatives under the Agency (EPA) listed Portland Harbor on 19 pandemic): Parametrix, 700 NE NEPA. the National Priorities List due to Multnomah Street, Suite 1000, Portland, The Trustee Council is conducting the elevated concentrations of OR 97232. NRDA for Portland Harbor under the Submitting Comments: You may Comprehensive Environmental contaminants. Two months later, the submit comments on the Draft SRP/EA Response, Compensation, and Liability Portland Harbor Natural Resource by one of the following methods: Act (CERCLA), the Clean Water Act Trustees entered into an • Via the Web: Email comments to (CWA), and the Oil Pollution Act (OPA). intergovernmental memorandum of [email protected] using Pursuant to CERCLA, CWA, and OPA, understanding with the EPA and the the comment table available online at: natural resource trustees act on behalf of Oregon Department of Environmental https://www.fws.gov/portlandharbor/ the public to assess natural resource Quality (DEQ) to coordinate efforts at news/draft-supplemental-restoration- injuries and losses and to determine the the Portland Harbor Superfund Site. In plan-available-comment. actions required to compensate the 2002, the Natural Resource Trustees • Via U.S. Mail: Lauren Senkyr, public for those injuries and losses. established the Trustee Council. The NOAA Restoration Center (C/O CERCLA, CWA, and OPA further restoration activities discussed in the Parametrix), 700 NE Multnomah Street, instruct the designated trustees to Trustee Council’s 2017 Programmatic Suite. 1000, Portland, OR 97232. Please develop and implement a plan for the Restoration Plan and the current Draft note that mailed comments must be restoration, rehabilitation, replacement, SRP/EA are associated with the Trustee postmarked on or before the comment or acquisition of the equivalent of the Council’s ongoing NRDA. deadline of September 14, 2020 to be injured natural resources under their Overview of the Draft SRP/EA considered. trusteeship, including the loss of use In the Programmatic Restoration Plan, FOR FURTHER INFORMATION CONTACT: and services from those resources from the time of injury until the time of the Trustee Council described the National Oceanic and Atmospheric following three ways that a potentially Administration—Lauren Senkyr, NOAA restoration to baseline (the resource quality and conditions that would exist responsible party (PRP) could provide Restoration Center, 503–231–2110, restoration to resolve its liability for [email protected]. if the releases of hazardous substances and discharges of oil had not occurred) damages at Portland Harbor: SUPPLEMENTARY INFORMATION: • Trustee-Led Project Alternative— is complete. The Trustee Council would use Introduction The Portland Harbor Trustee Council members are as follows: settlement funds to design and construct Since January 2007, the Trustee • a restoration project; Council has been conducting a Natural National Oceanic and Atmospheric • Administration (NOAA), on behalf of Partnering Project Alternative—The Resource Damage Assessment (NRDA) Trustee Council would provide within the Portland Harbor Assessment the U.S. Department of Commerce; • U.S. Department of the Interior settlement funds to a third-party entity Area (PHAA or Portland Harbor). Under (DOI); to develop and implement a restoration the NRDA process, the Trustee • project; and State of Oregon, acting through the • Council’s overall goal is to restore, Oregon Department of Fish and Restoration Bank Credit rehabilitate, replace, or acquire the Wildlife; Alternative—The Trustee Council or a equivalent of natural resources and their • Confederated Tribes of the Grand PRP would purchase ecological benefits, services that have been injured by Ronde Community of Oregon; in the form of credits, from a restoration contamination within the PHAA and to • Confederated Tribes of Siletz bank. compensate the public for those losses. Indians; At the time the Programmatic One critical part of this process is • Confederated Tribes of the Umatilla Restoration Plan was published, it identifying suitable activities to restore Indian Reservation; would have been premature for the the injured natural resources. In May • Confederated Tribes of the Warm Trustee Council to evaluate specific 2017, the Trustee Council published its Springs Reservation of Oregon; and actions under these three alternatives. Final Portland Harbor Programmatic • Nez Perce Tribe. The Trustee Council anticipates that it Environmental Impact Statement and This restoration planning activity is will soon be in a position to begin its Restoration Plan (Programmatic proceeding in accordance with the first phase of restoration Restoration Plan) that provided an Programmatic Restoration Plan. implementation. In January 2020, the overall restoration approach: Integrated Information on the site background, Trustee Council published a Request for habitat restoration. The Programmatic phased approach to the NRDA, Proposals (RFP) for ecological

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restoration projects that outlined the Act (33 U.S.C. 2701 et seq.), and the SUPPLEMENTARY INFORMATION: The eligibility and evaluation criteria that National Environmental Policy Act (42 Department of Education (ED), in would be used to select specific U.S.C. 4321 et seq.). accordance with the Paperwork restoration actions that could be Dated: August 7, 2020. Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general implemented in the first phase of Carrie Selberg, restoration implementation. Now, public and Federal agencies with an Director, Office of Habitat Conservation, opportunity to comment on proposed, having received responses to the RFP, National Marine Fisheries Service. and with the prospect of potential revised, and continuing collections of natural resource damages settlements in [FR Doc. 2020–17679 Filed 8–12–20; 8:45 am] information. This helps the Department the near future, the Trustee Council is BILLING CODE 3510–22–P assess the impact of its information preparing to implement restoration collection requirements and minimize actions. the public’s reporting burden. It also After evaluating the projects DEPARTMENT OF EDUCATION helps the public understand the submitted in response to the RFP, the [Docket No.: ED–2020–SCC–0131] Department’s information collection Trustee Council has identified the requirements and provide the requested Restoration Bank Credit Alternative as Agency Information Collection data in the desired format. ED is the Preferred Alternative. Five Activities; Comment Request; soliciting comments on the proposed restoration bank projects were Department of Education Green information collection request (ICR) that determined to be eligible under the Ribbon Schools Nominee Presentation is described below. The Department of Preferred Alternative. Form Education is especially interested in public comment addressing the Next Steps AGENCY: Office of Communications and following issues: (1) Is this collection The public is encouraged to review Outreach (OCO), Department of necessary to the proper functions of the and comment on the Draft SRP/EA. Education (ED). Department; (2) will this information be After the close of the public comment ACTION: Notice. processed and used in a timely manner; period, the Trustee Council will (3) is the estimate of burden accurate; consider and address the comments SUMMARY: In accordance with the (4) how might the Department enhance received before issuing a Final SRP/EA. Paperwork Reduction Act of 1995, ED is the quality, utility, and clarity of the A summary of comments received and proposing an extension to an existing information to be collected; and (5) how the Trustee Council’s responses will be information collection. might the Department minimize the included in the final document. DATES: Interested persons are invited to burden of this collection on the submit comments on or before October Invitation to Comment respondents, including through the use 13, 2020. of information technology. Please note The Trustee Council seeks public ADDRESSES: To access and review all the that written comments received in review and comment on the Draft SRP/ documents related to the information response to this notice will be EA (see ADDRESSES above). Before collection listed in this notice, please considered public records. including your address, telephone use http://www.regulations.gov by Title of Collection: U.S. Department of number, email address, or other searching the Docket ID number ED– Education Green Ribbon Schools personally identifiable information in 2020–SCC–0131. Comments submitted Nominee Presentation Form. your comment, please be aware that in response to this notice should be OMB Control Number: 1860–0509. your entire comment, including your submitted electronically through the Type of Review: An extension of an personally identifiable information, will Federal eRulemaking Portal at http:// existing information collection. Respondents/Affected Public: State, become part of the public record. www.regulations.gov by selecting the The Trustee Council will conduct a Local and Tribal Organizations. Docket ID number or via postal mail, virtual public meeting on Tuesday, Total Estimated Number of Annual commercial delivery, or hand delivery. September 1, 2020 beginning at 6 p.m. Responses: 90. If the regulations.gov site is not Pacific Time to provide information and Total Estimated Number of Annual available to the public for any reason, answer questions. Information on how Burden Hours: 22. ED will temporarily accept comments at to attend the virtual meeting is available Abstract: The U.S. Department of [email protected]. Please include the at https://www.fws.gov/portlandharbor/ Education Green Ribbon Schools (ED– docket ID number and the title of the news/draft-supplemental-restoration- GRS) is a recognition award that honors information collection request when plan-available-comment. schools, districts, and postsecondary requesting documents or submitting institutions that are making great strides Administrative Record comments. Please note that comments in three Pillars: (1) Reducing The documents comprising the submitted by fax or email and those environmental impact and costs, Administrative Record for the Draft submitted after the comment period will including waste, water, energy use, and SRP/EA can be viewed electronically at not be accepted. Written requests for transportation; (2) improving the health https://www.diver.orr.noaa.gov/web/ information or comments submitted by and wellness of students and staff, guest/portland-harbor-admin-record. postal mail or delivery should be including environmental health of addressed to the Director of the Strategic premises, nutrition, and fitness; and (3) Authority Collections and Clearance Governance providing effective sustainability The authority for this action is the and Strategy Division, U.S. Department education, including STEM, civic skills, Comprehensive Environmental of Education, 400 Maryland Ave. SW, and green career pathways. Response, Compensation, and Liability LBJ, Room 6W208B, Washington, DC ED collects information on nominees Act (42 U.S.C. 9601 et seq.) and its 20202–8240. from state nominating authorities implementing Natural Resource Damage FOR FURTHER INFORMATION CONTACT: For regarding their schools, districts, and Assessment Regulations found at 43 specific questions related to collection postsecondary nominees. The CFR part 11, the Clean Water Act (33 activities, please contact Andrea Falken, recognition award is part of a U.S. U.S.C. 1251 et seq.), the Oil Pollution 202–503–8985. Department of Education (ED) effort to

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identify and communicate practices that in the Federal Register a notice DATES: Interested persons are invited to result in improved student engagement, announcing that the inventory is submit comments on or before October academic achievement, graduation rates, available to the public along with the 13, 2020. and workforce preparedness, and name, telephone number, and email ADDRESSES: To access and review all the reinforce federal efforts to increase address of the agency point of contact. documents related to the information energy independence and economic Through this notice, the Department collection listed in this notice, please security. announces the availability of its use http://www.regulations.gov by Dated: August 10, 2020. inventory for FY 2017 and FY 2018 on searching the Docket ID number ED– Stephanie Valentine, the following website: www2.ed.gov/ 2020–SCC–0132. Comments submitted PRA Coordinator, Strategic Collections and fund/data/report/contracts/ in response to this notice should be Clearance, Governance and Strategy Division, servicecontractinventoryappendix/ submitted electronically through the Office of Chief Data Officer, Office of servicecontractinventory.html. The Federal eRulemaking Portal at http:// Planning, Evaluation and Policy point of contact is provided under FOR www.regulations.gov by selecting the Development. FURTHER INFORMATION CONTACT. Docket ID number or via postal mail, [FR Doc. 2020–17697 Filed 8–12–20; 8:45 am] Accessible Format: Individuals with commercial delivery, or hand delivery. BILLING CODE 4000–01–P disabilities can obtain this document in If the regulations.gov site is not an accessible format (e.g., braille, large available to the public for any reason, print, audiotape, or compact disc) on ED will temporarily accept comments at DEPARTMENT OF EDUCATION request to the person listed under FOR [email protected]. Please include the FURTHER INFORMATION CONTACT. docket ID number and the title of the Service Contract Inventory for Fiscal information collection request when Electronic Access to This Document: Years (FY) 2017 and 2018 requesting documents or submitting The official version of this document is comments. Please note that comments AGENCY: Office of Finance and the document published in the Federal submitted by fax or email and those Operations, Department of Education. Register. You may access the official submitted after the comment period will ACTION: Notice of availability—FY 2017 edition of the Federal Register and the not be accepted. Written requests for and FY 2018 service contract inventory. Code of Federal Regulations at information or comments submitted by www.govinfo.gov. At this site you can SUMMARY: postal mail or delivery should be Through this notice, the view this document, as well as all other addressed to the Director of the Strategic Secretary announces the availability of documents of this Department Collections and Clearance Governance the Department of Education’s service published in the Federal Register, in and Strategy Division, U.S. Department contract inventory for FY 2017 and FY text or Portable Document Format of Education, 400 Maryland Ave. SW, 2018 on its website, at www2.ed.gov/ (PDF). To use PDF you must have LBJ, Room 6W208D, Washington, DC fund/data/report/contracts/ Adobe Acrobat Reader, which is 20202–8240. servicecontractinventoryappendix/ available free at the site. servicecontractinventory.html. A service FOR FURTHER INFORMATION CONTACT: For contract inventory is a tool for assisting You may also access documents of the specific questions related to collection the agency in better understanding how Department published in the Federal activities, please contact Christine contracted services are being used to Register by using the article search Grassman, 202–245–6973. feature at www.federalregister.gov. support mission and operations and SUPPLEMENTARY INFORMATION: Specifically, through the advanced The whether the contractors’ skills are being Department of Education (ED), in utilized in an appropriate manner. search feature at this site, you can limit your search to documents published by accordance with the Paperwork FOR FURTHER INFORMATION CONTACT: the Department. Reduction Act of 1995 (PRA) (44 U.S.C. April Bolton-Smith, U.S. Department of 3506(c)(2)(A)), provides the general Education, Office of Finance and Denise Carter, public and Federal agencies with an Operations, 400 Maryland Avenue SW, Acting Assistant Secretary, Office of Finance opportunity to comment on proposed, Washington, DC 20202. Telephone: and Operations. revised, and continuing collections of (202) 245–6345. Email: April.Bolton- [FR Doc. 2020–17739 Filed 8–12–20; 8:45 am] information. This helps the Department [email protected]. BILLING CODE 4000–01–P assess the impact of its information If you use a telecommunications collection requirements and minimize device for the deaf (TDD) or a text the public’s reporting burden. It also telephone (TTY), call the Federal Relay DEPARTMENT OF EDUCATION helps the public understand the Service, toll free, at 1–800–877–8339. Department’s information collection SUPPLEMENTARY INFORMATION: Section [Docket No. ED–2020–SCC–0132] requirements and provide the requested 743 of Division C of the Consolidated data in the desired format. ED is Appropriations Act of 2010, Public Law Agency Information Collection soliciting comments on the proposed 111–117, requires civilian agencies, Activities; Comment Request; Report information collection request (ICR) that other than the Department of Defense, of the Randolph-Sheppard Vending is described below. The Department of that are required to submit an inventory Facility Program Education is especially interested in in accordance with the Federal public comment addressing the Activities Inventory Reform Act of 1998 AGENCY: Office of Special Education and following issues: (1) Is this collection (Pub. L. 105–270, 31 U.S.C. 501 note) to Rehabilitative Services (OSERS), necessary to the proper functions of the submit their inventories to the Office of Department of Education (ED). Department; (2) will this information be Federal Procurement Policy in the ACTION: Notice. processed and used in a timely manner; Office of Management and Budget. In (3) is the estimate of burden accurate; addition, section 743 requires these SUMMARY: In accordance with the (4) how might the Department enhance agencies, which include the Department Paperwork Reduction Act of 1995, ED is the quality, utility, and clarity of the of Education, to (1) make the inventory proposing an extension to an existing information to be collected; and (5) how available to the public, and (2) publish information collection. might the Department minimize the

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burden of this collection on the referenced in 34 CFR 395.12 related to Federal Energy Regulatory Commission, respondents, including through the use disclosure of program and financial 888 First Street NE, Washington, DC of information technology. Please note information and assists with the 20426. Hand delivered submissions in that written comments received in requirement in 34 CFR 395.11 regarding docketed proceedings should be response to this notice will be the provision of training. delivered to Health and Human considered public records. Dated: August 10, 2020. Services, 12225 Wilkins Avenue, Title of Collection: Report of the Kate Mullan, Rockville, Maryland 20852. Randolph-Sheppard Vending Facility In addition to publishing the full text Program. PRA Coordinator, Strategic Collections and Clearance, Governance and Strategy Division, of this document in the Federal OMB Control Number: 1820–0009. Register, the Commission provides all Type of Review: An extension of an Office of Chief Data Officer, Office of Planning, Evaluation and Policy interested persons an opportunity to existing information collection. Development. view and/or print the contents of this Respondents/Affected Public: State, [FR Doc. 2020–17715 Filed 8–12–20; 8:45 am] document via the internet through the Local and Tribal Organizations. Commission’s Home Page (http:// Total Estimated Number of Annual BILLING CODE 4000–01–P ferc.gov) using the ‘‘eLibrary’’ link. Responses: 51. Total Estimated Number of Annual Enter the docket number excluding the Burden Hours: 689. DEPARTMENT OF ENERGY last three digits in the docket number Abstract: The licensing and operation field to access the document. At this of vending facilities by blind vendors Federal Energy Regulatory time, the Commission has suspended under the Act is supported by a Commission access to the Commission’s Public combination of VR program funds, state Reference Room, due to the [Docket No. ER20–2618–000] appropriations, Federal vending proclamation declaring a National machine income, and levied set asides Emergency concerning the Novel Thordin ApS; Supplemental Notice Coronavirus Disease (COVID–19), issued from vendors. It provides persons who That Initial Market-Based Rate Filing are blind with remunerative by the President on March 13, 2020. For Includes Request for Blanket Section assistance, contact the Federal Energy employment and self-support through 204 Authorization the operation of vending facilities on Regulatory Commission at Federal and other property. The This is a supplemental notice in the [email protected] or call program recruits qualified individuals above-referenced Thordin ApS’s toll-free, (886) 208–3676 or TYY, (202) who are blind, trains them on the application for market-based rate 502–8659. management and operation of small authority, with an accompanying rate Dated: August 6, 2020. business enterprises, and then licenses tariff, noting that such application Nathaniel J. Davis, Sr., qualified blind vendors to operate the includes a request for blanket Deputy Secretary. facilities. As required by 20 U.S.C. authorization, under 18 CFR part 34, of [FR Doc. 2020–17675 Filed 8–12–20; 8:45 am] 107a(6)(a), the Secretary of Education, future issuances of securities and BILLING CODE 6717–01–P through the Commissioner of the assumptions of liability. Rehabilitation Services Administration Any person desiring to intervene or to (RSA), conducts periodic evaluations of protest should file with the Federal DEPARTMENT OF ENERGY the programs authorized under the Act. Energy Regulatory Commission, 888 In addition, section 107b(4) requires First Street NE, Washington, DC 20426, Federal Energy Regulatory entities designated as the SLA to make in accordance with Rules 211 and 214 Commission such reports in such form and of the Commission’s Rules of Practice containing such information as the and Procedure (18 CFR 385.211 and Combined Notice of Filings #1 Secretary may from time to time require. 385.214). Anyone filing a motion to Take notice that the Commission The information to be collected is a intervene or protest must serve a copy received the following electric rate necessary component of the evaluation of that document on the Applicant. filings: process and forms the basis for annual Notice is hereby given that the reporting to the Department. The data deadline for filing protests with regard Docket Numbers: ER10–1285–009. are also used to understand the to the applicant’s request for blanket Applicants: Craven County Wood distribution type and profitability of authorization, under 18 CFR part 34, of Energy Limited Partnership. vending facilities throughout the future issuances of securities and Description: Notice of Non-Material country. Such information is useful in assumptions of liability, is August 26, Change in Status of Craven County providing technical assistance to SLAs 2020. Wood Energy Limited Partnership. and property managers and in The Commission encourages Filed Date: 8/6/20. monitoring the implementation of the electronic submission of protests and Accession Number: 20200806–5130. program. The Code of Federal interventions in lieu of paper, using the Comments Due: 5 p.m. ET 8/27/20. Regulations, at 34 CFR 395.8, specifies FERC Online links at http:// Docket Numbers: ER10–2645–004. that vending machine income received www.ferc.gov. To facilitate electronic Applicants: Baconton Power LLC. by the state from Federal property service, persons with internet access Description: Notice of Non-Material managers can be distributed to blind who will eFile a document and/or be Change in Status of Baconton Power vendors in an amount not to exceed the listed as a contact for an intervenor LLC. national average income for blind must create and validate an Filed Date: 8/5/20. vendors. This amount is determined eRegistration account using the Accession Number: 20200805–5162. through data collected by the RSA–15: eRegistration link. Select the eFiling Comments Due: 5 p.m. ET 8/26/20. Report of Randolph-Sheppard Vending link to log on and submit the Docket Numbers: ER20–57–002; Facility Program. In addition, the intervention or protests. ER20–339–002; ER20–58–002; ER19– collection of information ensures the Persons unable to file electronically 115–002; ER20–59–002; ER20–27–002; provision and transparency of activities may mail similar pleadings to the ER16–2019–003; ER17–1607–002;

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ER17–1608–002; ER17–318–003; ER16– Comments Due: 5 p.m. ET 8/27/20. Accession Number: 20200806–5130. 2520–003; ER19–8–003; ER19–119–003; Docket Numbers: ER20–2621–000. Comments Due: 5 p.m. ET 8/27/20. ER19–2476–003; ER20–1799–001; Applicants: Midcontinent Docket Numbers: ER10–2645–004. ER20–1800–001; ER20–1801–002; Independent System Operator, Inc. Applicants: Baconton Power LLC. ER18–97–002; ER20–422–002. Description: § 205(d) Rate Filing: Description: Notice of Non-Material Applicants: GA Solar 3, LLC, Twiggs 2020–08–06_Attachment X GIA Section Change in Status of Baconton Power County Solar, LLC, FL Solar 1, LLC, FL 9.7.3 Inverter Based Resources to be LLC. Solar 4, LLC, FL Solar 5, LLC, AZ Solar effective 10/6/2020. Filed Date: 8/5/20. 1, LLC, Wright Solar Park LLC, Five Filed Date: 8/6/20. Accession Number: 20200805–5162. Points Solar Park LLC, Sunray Energy 2, Accession Number: 20200806–5085. Comments Due: 5 p.m. ET 8/26/20. LLC, Sunray Energy 3 LLC, Three Peaks Comments Due: 5 p.m. ET 8/27/20. Docket Numbers: ER20–57–002; Power, LLC, Grand View PV Solar Two Docket Numbers: ER20–2622–000. ER20–339–002; ER20–58–002; ER19– LLC, Sweetwater Solar, LLC, Techren Applicants: Wilmot Energy Center, 115–002; ER20–59–002; ER20–27–002; Solar I LLC, Techren Solar II LLC, LLC. ER16–2019–003; ER17–1607–002; Techren Solar III LLC, Techren Solar IV Description: Baseline eTariff Filing: ER17–1608–002; ER17–318–003; ER16– LLC, Techren Solar V LLC, MS Solar 3, Wilmot Energy Center, LLC Application 2520–003; ER19–8–003; ER19–119–003; LLC. for MBR Authority to be effective 10/5/ ER19–2476–003; ER20–1799–001; Description: Supplement to June 2, 2020. ER20–1800–001; ER20–1801–002; 2020 Notice of Non-Material Change in Filed Date: 8/6/20. ER18–97–002; ER20–422–002. Status of GA Solar 3, LLC, et. al. Accession Number: 20200806–5093. Applicants: GA Solar 3, LLC, Twiggs Filed Date: 7/20/20. Comments Due: 5 p.m. ET 8/27/20. County Solar, LLC, FL Solar 1, LLC, FL Accession Number: 20200720–5039. The filings are accessible in the Solar 4, LLC, FL Solar 5, LLC, AZ Solar Comments Due: 5 p.m. ET 8/10/20. Commission’s eLibrary system (https:// 1, LLC, Wright Solar Park LLC, Five Docket Numbers: ER20–2032–001. elibrary.ferc.gov/idmws/search/ Points Solar Park LLC, Sunray Energy 2, Applicants: Hardin Wind LLC. fercgensearch.asp) by querying the LLC, Sunray Energy 3 LLC, Three Peaks Description: Tariff Amendment: docket number. Power, LLC, Grand View PV Solar Two Response to Commission Staff Request Any person desiring to intervene or LLC, Sweetwater Solar, LLC, Techren Regarding Application for Market-Based protest in any of the above proceedings Solar I LLC, Techren Solar II LLC, Rate to be effective 8/10/2020. must file in accordance with Rules 211 Techren Solar III LLC, Techren Solar IV Filed Date: 8/5/20. and 214 of the Commission’s LLC, Techren Solar V LLC, MS Solar 3, Accession Number: 20200805–5140. Regulations (18 CFR 385.211 and LLC. Comments Due: 5 p.m. ET 8/26/20. 385.214) on or before 5:00 p.m. Eastern Description: Supplement to June 2, Docket Numbers: ER20–2617–000. time on the specified comment date. 2020 Notice of Non-Material Change in Applicants: California Independent Protests may be considered, but Status of GA Solar 3, LLC, et. al. System Operator Corporation. intervention is necessary to become a Filed Date: 7/20/20. Description: § 205(d) Rate Filing: party to the proceeding. Accession Number: 20200720–5039. 2020–08–06 Settlement Timeline Tariff eFiling is encouraged. More detailed Comments Due: 5 p.m. ET 8/10/20. Amendment to be effective 1/1/2021. information relating to filing Filed Date: 8/6/20. Docket Numbers: ER20–2032–001. requirements, interventions, protests, Applicants: Hardin Wind LLC. Accession Number: 20200806–5001. service, and qualifying facilities filings Comments Due: 5 p.m. ET 8/27/20. Description: Tariff Amendment: can be found at: http://www.ferc.gov/ Response to Commission Staff Request Docket Numbers: ER20–2618–000. docs-filing/efiling/filing-req.pdf. For Regarding Application for Market-Based Applicants: Thordin ApS. other information, call (866) 208–3676 Rate to be effective 8/10/2020. Description: Baseline eTariff Filing: (toll free). For TTY, call (202) 502–8659. Filed Date: 8/5/20. Baseline Aug 2020 to be effective 8/10/ Accession Number: 20200805–5140. 2020. Dated: August 6, 2020. Comments Due: 5 p.m. ET 8/26/20. Filed Date: 8/6/20. Kimberly D. Bose, Accession Number: 20200806–5010. Secretary. Docket Numbers: ER20–2617–000. Comments Due: 5 p.m. ET 8/27/20. [FR Doc. 2020–17713 Filed 8–12–20; 8:45 am] Applicants: California Independent Docket Numbers: ER20–2619–000. BILLING CODE 6717–01–P System Operator Corporation. Applicants: Midcontinent Description: § 205(d) Rate Filing: Independent System Operator, Inc., 2020–08–06 Settlement Timeline Tariff American Transmission Company LLC. DEPARTMENT OF ENERGY Amendment to be effective 1/1/2021. Description: § 205(d) Rate Filing: Filed Date: 8/6/20. _ Federal Energy Regulatory Accession Number: 20200806–5001. 2020–08–06 Revisions to Attachment Commission FF–ATCLLC to Align with Cost Comments Due: 5 p.m. ET 8/27/20. Allocation to be effective 10/6/2020. Combined Notice of Filings #1 Docket Numbers: ER20–2618–000. Filed Date: 8/6/20. Applicants: Thordin ApS. Accession Number: 20200806–5051. Take notice that the Commission Description: Baseline eTariff Filing: Comments Due: 5 p.m. ET 8/27/20. received the following electric rate Baseline Aug 2020 to be effective 8/10/ Docket Numbers: ER20–2620–000. filings: 2020. Applicants: Southern California Docket Numbers: ER10–1285–009. Filed Date: 8/6/20. Edison Company. Applicants: Craven County Wood Accession Number: 20200806–5010. Description: § 205(d) Rate Filing: DSA Energy Limited Partnership. Comments Due: 5 p.m. ET 8/27/20. Hecate Energy Desert Storage 1 LLC SA Description: Notice of Non-Material Docket Numbers: ER20–2619–000. No. 1113 to be effective 10/6/2020. Change in Status of Craven County Applicants: Midcontinent Filed Date: 8/6/20. Wood Energy Limited Partnership. Independent System Operator, Inc., Accession Number: 20200806–5081. Filed Date: 8/6/20. American Transmission Company LLC.

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Description: § 205(d) Rate Filing: DEPARTMENT OF ENERGY to access the document. At this time, the 2020–08–06_Revisions to Attachment Commission has suspended access to FF–ATCLLC to Align with Cost Federal Energy Regulatory the Commission’s Public Reference Allocation to be effective 10/6/2020. Commission Room, due to the proclamation Filed Date: 8/6/20. [Docket No. ER20–2618–000] declaring a National Emergency Accession Number: 20200806–5051. concerning the Novel Coronavirus Comments Due: 5 p.m. ET 8/27/20. Thordin ApS; Supplemental Notice Disease (COVID–19), issued by the That Initial Market-Based Rate Filing President on March 13, 2020. For Docket Numbers: ER20–2620–000. Includes Request for Blanket Section assistance, contact the Federal Energy Applicants: Southern California 204 Authorization Regulatory Commission at Edison Company. [email protected] or call Description: § 205(d) Rate Filing: DSA This is a supplemental notice in the toll-free, (886) 208–3676 or TYY, (202) Hecate Energy Desert Storage 1 LLC SA above-referenced Thordin ApS’s 502–8659. application for market-based rate No. 1113 to be effective 10/6/2020. Dated: August 6, 2020. Filed Date: 8/6/20. authority, with an accompanying rate tariff, noting that such application Kimberly D. Bose, Accession Number: 20200806–5081. includes a request for blanket Secretary. Comments Due: 5 p.m. ET 8/27/20. authorization, under 18 CFR part 34, of [FR Doc. 2020–17712 Filed 8–12–20; 8:45 am] Docket Numbers: ER20–2621–000. future issuances of securities and BILLING CODE 6717–01–P Applicants: Midcontinent assumptions of liability. Independent System Operator, Inc. Any person desiring to intervene or to Description: § 205(d) Rate Filing: protest should file with the Federal ENVIRONMENTAL PROTECTION 2020–08–06_Attachment X GIA Section Energy Regulatory Commission, 888 AGENCY 9.7.3 Inverter Based Resources to be First Street NE, Washington, DC 20426, effective 10/6/2020. in accordance with Rules 211 and 214 [EPA–HQ–OPP–2020–0360; FRL–10012–55] Filed Date: 8/6/20. of the Commission’s Rules of Practice and Procedure (18 CFR 385.211 and Lambda-Cyhalothrin; Receipt of Accession Number: 20200806–5085. 385.214). Anyone filing a motion to Application for Emergency Exemption, Comments Due: 5 p.m. ET 8/27/20. intervene or protest must serve a copy Solicitation of Public Comment Docket Numbers: ER20–2622–000. of that document on the Applicant. AGENCY: Environmental Protection Applicants: Wilmot Energy Center, Notice is hereby given that the Agency (EPA). LLC. deadline for filing protests with regard ACTION: Notice. Description: Baseline eTariff Filing: to the applicant’s request for blanket Wilmot Energy Center, LLC Application authorization, under 18 CFR part 34, of SUMMARY: EPA has received a specific for MBR Authority to be effective 10/5/ future issuances of securities and exemption request from the California 2020. assumptions of liability, is August 26, Department of Pesticide Regulation to Filed Date: 8/6/20. 2020. use the pesticide lambda-cyhalothrin The Commission encourages Accession Number: 20200806–5093. (CAS No. 91465–08–6) to treat up to electronic submission of protests and Comments Due: 5 p.m. ET 8/27/20. 3,000 acres of asparagus to control the interventions in lieu of paper, using the European asparagus aphid. The The filings are accessible in the FERC Online links at http:// applicant proposes a use which is Commission’s eLibrary system (https:// www.ferc.gov. To facilitate electronic supported by the Interregional (IR)–4 elibrary.ferc.gov/idmws/search/ service, persons with internet access program and has been requested in 5 or fercgensearch.asp) by querying the who will eFile a document and/or be more previous years, and a petition for docket number. listed as a contact for an intervenor tolerance has not yet been submitted to Any person desiring to intervene or must create and validate an the Agency. EPA is soliciting public protest in any of the above proceedings eRegistration account using the comment before making the decision must file in accordance with Rules 211 eRegistration link. Select the eFiling whether to grant the exemption. and 214 of the Commission’s link to log on and submit the Regulations (18 CFR 385.211 and intervention or protests. DATES: Comments must be received on 385.214) on or before 5:00 p.m. Eastern Persons unable to file electronically or before August 28, 2020. time on the specified comment date. may mail similar pleadings to the ADDRESSES: Submit your comments, Protests may be considered, but Federal Energy Regulatory Commission, identified by docket identification (ID) intervention is necessary to become a 888 First Street NE, Washington, DC number EPA–HQ–OPP–2020–0360, by party to the proceeding. 20426. Hand delivered submissions in one of the following methods: • eFiling is encouraged. More detailed docketed proceedings should be Federal eRulemaking Portal: information relating to filing delivered to Health and Human https://www.regulations.gov. Follow the requirements, interventions, protests, Services, 12225 Wilkins Avenue, online instructions for submitting service, and qualifying facilities filings Rockville, Maryland 20852. comments. Do not submit electronically can be found at: http://www.ferc.gov/ In addition to publishing the full text any information you consider to be docs-filing/efiling/filing-req.pdf. For of this document in the Federal Confidential Business Information (CBI) other information, call (866) 208–3676 Register, the Commission provides all or other information whose disclosure is (toll free). For TTY, call (202) 502–8659. interested persons an opportunity to restricted by statute. view and/or print the contents of this • Mail: OPP Docket, Environmental Dated: August 6, 2020. document via the internet through the Protection Agency Docket Center (EPA/ Nathaniel J. Davis, Sr., Commission’s Home Page (http:// DC), (28221T), 1200 Pennsylvania Ave. Deputy Secretary. ferc.gov) using the eLibrary link. Enter NW, Washington, DC 20460–0001. [FR Doc. 2020–17676 Filed 8–12–20; 8:45 am] the docket number excluding the last • Hand Delivery: To make special BILLING CODE 6717–01–P three digits in the docket number field arrangements for hand delivery or

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delivery of boxed information, please 2. Tips for preparing your comments. of lambda-cyhalothrin (90 gallons of follow the instructions at https:// When preparing and submitting your formulated product). www.epa.gov/dockets/where-send- comments, see the commenting tips at This notice does not constitute a comments-epa-dockets. http://www.epa.gov/dockets/ decision by EPA on the application Due to the public health concerns comments.html. itself. The regulations governing FIFRA related to COVID–19, the EPA Docket 3. Environmental justice. EPA seeks to section 18 require publication of a Center (EPA/DC) and Reading Room is achieve environmental justice, the fair notice of receipt of an application for a closed to visitors with limited treatment and meaningful involvement specific exemption proposing a use exceptions. The staff continues to of any group, including minority and/or which is supported by the Inter- provide remote customer service via low-income populations, in the Regional Project Number 4 (IR–4) email, phone, and webform. For the development, implementation, and program and has been requested in 5 or latest status information on EPA/DC enforcement of environmental laws, more previous years, and a petition for services and docket access, visit https:// regulations, and policies. To help tolerance has not yet been submitted to www.epa.gov/dockets. address potential environmental justice the Agency. The notice provides an FOR FURTHER INFORMATION CONTACT: issues, the Agency seeks information on opportunity for public comment on the Marietta Echeverria, Registration any groups or segments of the application. The Agency will review Division (7505P), Office of Pesticide population who, as a result of their and consider all comments received Programs, Environmental Protection location, cultural practices, or other during the comment period in Agency, 1200 Pennsylvania Ave. NW, factors, may have atypical or determining whether to issue the Washington, DC 20460–0001; main disproportionately high and adverse specific exemption requested by the telephone number: (703) 305–7090; human health impacts or environmental CDPR, as well as any subsequent email address: [email protected]. effects from exposure to the pesticide specific exemption applications discussed in this document, compared submitted by other state lead agencies. SUPPLEMENTARY INFORMATION: to the general population. Authority: 7 U.S.C. 136 et seq. I. General Information II. What action is the Agency taking? Dated: July 29, 2020. A. Does this action apply to me? Under section 18 of the Federal Catherine Aubee, You may be potentially affected by Insecticide, Fungicide, and Rodenticide Acting Director, Registration Division, Office this action if you are an agricultural Act (FIFRA) (7 U.S.C. 136p), at the of Pesticide Programs. producer, food manufacturer, or discretion of the EPA Administrator, a [FR Doc. 2020–17734 Filed 8–12–20; 8:45 am] pesticide manufacturer. The following Federal or State agency may be BILLING CODE 6560–50–P list of North American Industrial exempted from any provision of FIFRA Classification System (NAICS) codes is if the EPA Administrator determines not intended to be exhaustive, but rather that emergency conditions exist which ENVIRONMENTAL PROTECTION provides a guide to help readers require the exemption. The California AGENCY determine whether this document Department of Pesticide Regulation applies to them. Potentially affected (CDPR) has requested the EPA [EPA–HQ–OPP–2020–0273; FRL–10010–43] entities may include: Administrator to issue a specific • Agency Information Collection Crop production (NAICS code 111). exemption for the use of lambda- Activities; Proposed Consolidation of • Animal production (NAICS code cyhalothrin on asparagus to control the Several Existing Collections (EPA ICR 112). European asparagus aphid (EAA). No. 2624.01); Comment Request • Food manufacturing (NAICS code Information in accordance with 40 CFR 311). part 166 was submitted as part of this AGENCY: Environmental Protection • Pesticide manufacturing (NAICS request. Agency (EPA). code 32532). As part of this request, the applicant ACTION: Notice. asserts that growers are reporting B. What should I consider as I prepare increased pressure from EAA, and with SUMMARY: In compliance with the my comments for EPA? chlorpyrifos banned for use in Paperwork Reduction Act (PRA), this 1. Submitting CBI. Do not submit this California, there is no efficacious document announces that EPA is information to EPA through product to control this pest. CDPR states planning to submit a request to renew www.regulations.gov or email. Clearly that uncontrolled EAA infestations will and consolidate several existing mark the part or all of the information cause significant plant stand reduction approved Information Collection that you claim to be CBI. For CBI and lower asparagus yields, which Requests (ICRs) to the Office of information in a disk or CD–ROM that could threaten the viability of the Management and Budget (OMB). Before you mail to EPA, mark the outside of the California asparagus industry if the submitting the consolidated ICR to OMB disk or CD–ROM as CBI and then emergency pest situation is not for review and approval, EPA is identify electronically within the disk or addressed. soliciting comments on specific aspects CD–ROM the specific information that The Applicant proposes to make no of the proposed information collection is claimed as CBI. In addition to one more than 2 applications at a maximum that is summarized in this document. complete version of the comment that rate of 0.03 fluid ounces per acre of The consolidated ICR is entitled: includes information claimed as CBI, a lambda-cyhalothrin, on up to 3,000 ‘‘Consolidated Pesticide Registration copy of the comment that does not acres of asparagus grown in the Activities’’ and identified by EPA ICR contain the information claimed as CBI California counties of Colusa, Kern, No. 2624.01 and OMB Control No. must be submitted for inclusion in the Merced, Monterey, San Joaquin and 2070–NEW. The ICR and accompanying public docket. Information so marked Solano from August 1 to October 31, material are available in the docket for will not be disclosed except in 2020. Treatment of the maximum public review and comment. accordance with procedures set forth in acreage at the maximum rate would DATES: Comments must be received on 40 CFR part 2. result in a total use of 180 fluid ounces or before October 13, 2020.

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ADDRESSES: Submit your comments, collection techniques or other forms of • ‘‘Submission of Unreasonable identified by docket identification (ID) information technology, e.g., permitting Adverse Effects Information Under number EPA–HQ–OPP–2020–0273, by electronic submission of responses. In FIFRA 6(a)(2),’’ EPA ICR No. 1204.14, one of the following methods: particular, EPA is requesting comments OMB Control No. 2070–0039, scheduled • Federal eRulemaking Portal: http:// from very small businesses (those that to expire on February 28, 2021; www.regulations.gov. Follow the online employ less than 25) on examples of • ‘‘Experimental Use Permits (EUPs) instructions for submitting comments. specific additional efforts that EPA for Pesticides,’’ EPA ICR No. 0276.17, Do not submit electronically any could make to reduce the paperwork OMB Control No. 2070–0040, scheduled information you consider to be burden for very small businesses to expire on February 28, 2021; Confidential Business Information (CBI) affected by this collection. • ‘‘Notice of Supplemental or other information whose disclosure is II. What should I consider when I Distribution of a Registered Pesticide restricted by statute. prepare my comments for EPA? Product,’’ EPA ICR No. 0278.13, OMB • Mail: OPP Docket, Environmental Control No. 2070–0044, scheduled to Protection Agency Docket Center (EPA/ You may find the following expire on October 31, 2021; DC), (28221T), 1200 Pennsylvania Ave. suggestions helpful for preparing your • ‘‘Compliance Requirement for Child NW, Washington, DC 20460–0001. comments: Resistant Packaging,’’ EPA ICR No. 1. Explain your views as clearly as • Hand Delivery: To make special 0616.13, OMB Control No. 2070–0052, possible and provide specific examples. arrangements for hand delivery or scheduled to expire on November 30, 2. Describe any assumptions that you delivery of boxed information, please 2021; used. • follow the instructions at http:// 3. Provide copies of any technical ‘‘Application for New and www.epa.gov/dockets/contacts.html. information and/or data you used that Amended Pesticide Registration,’’ EPA Please note that due to the public support your views. ICR No. 0277.21, OMB Control No. health emergency the EPA Docket 4. If you estimate potential burden or 2070–0060, scheduled to expire on Center (EPA/DC) and Reading Room costs, explain how you arrived at the September 30, 2020; was closed to public visitors on March estimate that you provide. • ‘‘Plant-Incorporated Protectants; 31, 2020. Our EPA/DC staff will 5. Submit your comments by the CBI Substantiation and Adverse Effects continue to provide customer service deadline identified under DATES. Reporting,’’ EPA ICR No. 1693.10, OMB via email, phone, and webform. For 6. Identify the docket ID number Control No. 2070–0142, scheduled to further information on EPA/DC services, assigned to the ICR in the subject line expire on February 28, 2021; docket contact information and the on the first page of your response. You • ‘‘Pesticide Program Public Sector current status of the EPA/DC and may also provide the ICR title and Collections (FIFRA § 18/24(c)),’’ EPA Reading Room, please visit https:// related EPA and OMB numbers. ICR No. 2311.04, OMB Control No. www.epa.gov/dockets. 2070–0182, scheduled to expire on III. What do I need to know about PRA? FOR FURTHER INFORMATION CONTACT: February 28, 2021. Carolyn Siu, Field and External Affairs An Agency may not conduct or Abstract: This is a new information Division, 7650P, Office of Pesticide sponsor, and a person is not required to collection request (ICR) that Programs, Environmental Protection respond to, a collection of information consolidates the collection activities Agency, 1200 Pennsylvania Ave. NW, subject to PRA approval unless it covered by eight ICRs that are currently Washington, DC 20460–0001; telephone displays a currently valid OMB control approved by the Office of Management number: (703) 347–0159; email address: number. The OMB control numbers for and Budget (OMB) under the separate [email protected]. the EPA regulations in title 40 of the OMB control numbers identified in the Code of Federal Regulations (CFR), after SUPPLEMENTARY INFORMATION: previous paragraph. This consolidation appearing in the preamble of the final is due to the shared collection method I. What information is EPA particularly rule, are further displayed either by or anticipated collection method of the interested in? publication in the Federal Register or information via the Pesticide Pursuant to PRA section 3506(c)(2)(A) by other appropriate means, such as on Submission Portal in EPA’s Central Data (44 U.S.C. 3506(c)(2)(A)), EPA the related collection instruments or Exchange (CDX) and fulfills OMB Terms specifically solicits comments and form, if applicable. The display of OMB of Clearance on several of the ICRs. This information to enable it to: control numbers for certain EPA consolidation is expected to clarify the 1. Evaluate whether the proposed regulations is consolidated in a list at 40 capabilities of the Pesticide Submission collection of information is necessary CFR 9.1. Portal for respondents as well as As used in the PRA context, burden for the proper performance of the streamline EPA’s ICR tracking, renewal, is defined in 5 CFR 1320.3(b). functions of the Agency, including and development process. whether the information will have IV. What ICR does this request apply The eight consolidated ICRs enable practical utility. to? the EPA to acquire the necessary data to 2. Evaluate the accuracy of the Title: Consolidated Pesticide support the statutorily mandated Agency’s estimates of the burden of the Registration Activities. information collection activities proposed collection of information, ICR number: EPA ICR No. 2624.01. pertaining to the pesticide registration including the validity of the OMB control number: OMB Control process under the Federal Insecticide, methodology and assumptions used. No. 2070–NEW. Fungicide and Rodenticide Act (FIFRA) 3. Enhance the quality, utility, and ICR status: This ICR reflects the and the Federal Food, Drug, and clarity of the information to be consolidation of the following currently Cosmetic Act (FFDCA) as amended by collected. approved ICRs: the Food Quality Protection Act (FQPA), 4. Minimize the burden of the • ‘‘Tolerance Petitions for Pesticides specifically: collection of information on those who on Food/Feed Crops and New Inert • Pesticide registration. are to respond, including through the Ingredients,’’ EPA ICR No. 0597.13, • Pesticide use. use of appropriate automated electronic, OMB Control No. 2070–0024, scheduled • Pesticide sale and distribution. mechanical, or other technological to expire April 30, 2022; • Pesticide permitting activities.

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• Determinations regarding whether a 5 CFR 1320.5(a)(1)(iv) to announce the SUPPLEMENTARY INFORMATION: product must be regulated under FIFRA. submission of the ICR to OMB and the I. General Information • Pesticide tolerances. opportunity for the public to submit The collection activities vary and are additional comments for OMB A. Does this action apply to me? dependent on the request from the consideration. This action is directed to the public Agency, respondent or both to fulfill the If you have any questions about this in general, and may be of interest to a associated requirement or voluntary ICR or the approval process, please wide range of stakeholders including submission. Due to the diverse nature of contact the person listed under FOR those with environmental and human the collections and affected industries, FURTHER INFORMATION CONTACT. health interests; the chemical industry, the term ‘‘respondent’’ will be used to Authority: 44 U.S.C. 3501 et seq. pesticide users; and members of the refer to those engaging in any or all of Dated: August 7, 2020. public interested in the sale, the collections described in this ICR, distribution, or use of articles that may unless a specific term offers more Alexandra Dapolito Dunn, Assistant Administrator, Office of Chemical be fabricated with this pesticide and/or clarity. potential impacts of this pesticide’s use Burden statement: The annual public Safety and Pollution Prevention. [FR Doc. 2020–17701 Filed 8–12–20; 8:45 am] on threatened or endangered (listed) reporting and recordkeeping burden for species and designated critical habitats. BILLING CODE 6560–50–P this collection of information is Since others may be interested, the estimated to average between 0.32– Agency has not attempted to describe all 1,739 hours per response. The the specific entities that may be affected consolidated ICR, a copy of which is ENVIRONMENTAL PROTECTION AGENCY by this action. If you have any questions available in the docket, provides a regarding the applicability of this action detailed explanation of this estimate, [EPA–HQ–OPP–2013–0433; FRL–10012–79] to a particular entity, consult the person which is only briefly summarized here: listed under FURTHER INFORMATION Respondents/Affected entities: Cuprous Iodide; Draft Ecological Risk CONTACT. Entities potentially affected by this ICR Assessment for Federally Listed include pesticide and other agricultural Species; Notice of Availability B. What should I consider as I prepare chemical manufacturing, research and my comments for EPA? AGENCY: Environmental Protection development in the physical, Agency (EPA). 1. Submitting CBI. Do not submit this engineering, and life sciences, biological ACTION: Notice. information to EPA through products (except diagnostic) regulations.gov or email. Clearly mark manufacturing, colleges, universities, SUMMARY: The Environmental Protection the part or all of the information that and professional schools, farm supplies Agency (EPA or the Agency) is you claim to be CBI. For CBI wholesalers, flower, nursery stock, and announcing the availability of and information in a disk or CD–ROM that florists’ supplies wholesalers, state soliciting public comment on EPA’s you mail to EPA, mark the outside of the government, other chemical and allied draft Ecological Risk Assessment for disk or CD–ROM as CBI and then products merchant wholesalers, Federally Listed Species for the identify electronically within the disk or exterminating and pest control service, antimicrobial pesticide, cuprous iodide. CD–ROM the specific information that management, scientific, and technical DATES: Comments must be received on is claimed as CBI. In addition to one consulting services. or before September 14, 2020. complete version of the comment that Estimated total number of potential ADDRESSES: Submit your comments, includes information claimed as CBI, a respondents: 136,168. identified by docket identification (ID) copy of the comment that does not Frequency of response: On occasion. contain the information claimed as CBI Estimated total annual burden hours: number EPA–HQ–OPP–2013–0433, through the Federal eRulemaking Portal must be submitted for inclusion in the 2,179,699. public docket. Information so marked Estimated total annual costs: at http://www.regulations.gov. Please will not be disclosed except in $174,892,655. This includes an follow the online instructions for accordance with procedures set forth in estimated burden cost of $174,892,655 submitting comments. Do not submit electronically any information you 40 CFR part 2. and an estimated cost of $0 for non- 2. Tips for preparing your comments. burden hour paperwork costs, e.g., consider to be Confidential Business Information (CBI) or other information When preparing and submitting your capital investment or maintenance and comments, see the commenting tips at operational costs. whose disclosure is restricted by statute. Due to the public health concerns https://www.epa.gov/dockets/ V. Are there changes in the estimates related to COVID–19, the EPA Docket commenting-epa-dockets#tips. from the last approvals? Center (EPA/DC) and Reading Room is II. What action is the Agency taking? The EPA estimates no quantifiable closed to visitors with limited A. Authority change in burden hours between the exceptions. The staff continues to combined burden in this ICR and the provide remote customer service via The Endangered Species Act (ESA) burden estimates in the previously email, phone, and webform. For the requires federal agencies, such as EPA, approved requests. latest status information on EPA/DC to ensure that their actions are not likely services and docket access, visit https:// to jeopardize the continued existence of VI. What is the next step in the process www.epa.gov/dockets. species listed as threatened or for this ICR? FOR FURTHER INFORMATION CONTACT: endangered under the ESA or destroy or EPA will consider the comments Jacqueline Hardy, Antimicrobials adversely modify the designated critical received and amend the consolidated Division (7510P), Office of Pesticide habitat of such species. The registration ICR as appropriate. The final ICR Programs, Environmental Protection of a pesticide containing a new active package will then be submitted to OMB Agency, 1200 Pennsylvania Ave. NW, ingredient under the Federal for review and approval pursuant to 5 Washington, DC 20460–0001; telephone Insecticide, Fungicide, and Rodenticide CFR 1320.12. EPA will issue another number: (703) 308–6416; email address: Action (FIFRA) constitutes an EPA Federal Register document pursuant to [email protected]. ‘‘action’’ under the ESA. If EPA

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determines a pesticide may affect a The Agency conducted an ecological initiate consultation with the Services, listed species or its designated critical risk assessment for federally listed as appropriate. habitat, EPA must initiate consultation species for cuprous iodide for the subset Authority: 7 U.S.C. 136 et seq. with the U.S. Fish and Wildlife Service of uses that would remain on the and/or the National Marine Fisheries revised label. The proposed label Dated: August 7, 2020. Service (collectively referred to as the includes uses for fibers (fiberfill for Alexandra Dapolito Dunn, Service), as appropriate. quilts and pillows, vacuum cleaner Assistant Administrator, Office of Chemical bags, sleeping bags, brush bristles, air Safety and Pollution Prevention. B. Background and dust filters, book covers, carpets, [FR Doc. 2020–17702 Filed 8–12–20; 8:45 am] Cupron Cuprous Iodide Masterbatch rugs, mats, carpet underlay, carpet BILLING CODE 6560–50–P (EPA Reg. No. 84542–9) containing the backing, broadloom and tile carpeting, new active ingredient, cuprous iodide, conveyor belts that do not come in was registered October 6, 2015. Cuprous contact with any type of food, FARM CREDIT ADMINISTRATION Iodide Masterbatch is a material automotive and truck upholstery, preservative that is incorporated into automotive and truck carpeting and Privacy Act of 1974; System of manufactured products to suppress the interior liners, shoes, gloves and Records growth of algae, mold, mildew, fungi, helmets, sails, ropes, canvas, ducking, AGENCY: Farm Credit Administration. and bacteria which may cause awnings, umbrellas) and for plastics and unpleasant odors, discoloration, films (automotive and vehicular parts, ACTION: Notice of a modified system of staining, deterioration, or corrosion. brush handles, building materials and records. This product is mixed with a components (excluding shingles), wood SUMMARY: Pursuant to the provisions of compatible polymer used to create composites, non-food contact plastic the Privacy Act of 1974, notice is hereby fibers, plastics, and films. Cuprous composites, conveyor belts that do not given that the Farm Credit iodide is incorporated at a rate not come in contact with any type of food, Administration (FCA or Agency) is exceed 5.0% by weight and is evenly floor covering, flooring, footwear amending an existing system of records, distributed throughout the final article. including boots, furniture, gaskets, FCA–13—Correspondence Files—FCA. The Cupron Cuprous Iodide glazing for cement tile and for toilets, The Correspondence Files—FCA system Masterbatch label allows a myriad of indoor furniture, insulation for wire and is used to track incoming and outgoing uses including but not limited to cable, insulators, kitchen and bathroom correspondence and to draft bedding, apparel, outerwear, hardware, plumbing supplies and correspondence and other memoranda. undergarments, hosiery, carpets, plastic fixtures including sinks, indoor sports The Agency is updating the notice to composites, floor coverings, carpet, equipment, tape, tiles, tubing, vacuum draperies, upholstery, plumbing include more details in the categories of cleaner bags, wallboard, walls, waste individuals and categories of records in supplies, tiles, wallboard, shoes, sails, containers, personal hygiene devices and awnings. As the cuprous iodide is the system, and to make administrative such as combs, brushes, and hairclips). updates and non-substantive changes to expected to be tightly bound within the The Cupron Cuprous Iodide polymer matrices, environmental conform to the SORN template Masterbatch label would specify that it requirements prescribed in the Office of exposure to cuprous iodide from these may not be used as a coating, film, or Management and Budget (OMB) uses is extremely limited and is not laminate on any other product than Circular No. A–108. reasonably expected to reach those listed on the label. concentrations high enough to cause The draft ecological risk assessment DATES: You may send written comments any discernible effects. for federally listed species for cuprous on or before September 14, 2020. FCA On March 4, 2019, the Center of iodide shows that the potential filed an amended System Report with Biological Diversity (CBD) filed a exposures to terrestrial and aquatic Congress and the Office of Management lawsuit against the Agency alleging that organisms (including listed species) and Budget on May 29, 2020. This EPA violated the ESA by failing to from cuprous iodide are not reasonably notice will become effective without ensure that the registration of Cupron expected to occur at levels that would further publication on September 22, Cuprous Iodide Masterbatch would not result in a discernible effect from the 2020 unless modified by a subsequent jeopardize any listed species or destroy uses that would be allowed on the notice to incorporate comments or modify their critical habitat, and by revised Cupron Cuprous Iodide received from the public. failing to consult with the U.S. Fish and Masterbatch label. The Agency proposes ADDRESSES: We offer a variety of Wildlife Service and the National to make a No Effects (NE) determination methods for you to submit your Marine Fisheries Service as required for all Federally-listed-threatened/ comments. For accuracy and efficiency, under the ESA. endangered species and critical habitats commenters are encouraged to submit The primary pathway by which for the narrowed set of uses of cuprous comments by email or through the cuprous iodide would be expected to be iodide that would be allowed under the FCA’s website. As facsimiles (fax) are released to the aquatic environment is proposed label amendments. difficult for us to process and achieve from down-the-drain discharges by compliance with section 508 of the C. Public Comments Sought leaching during in-service use of Rehabilitation Act, we are no longer manufactured products via fabric After reviewing public comments on accepting comments submitted by fax. washing at institutional facilities, the draft ecological risk assessment for Regardless of the method you use, commercial establishments, and federally listed species for cuprous please do not submit your comment residences. In order to facilitate iodide, EPA will issue, if necessary, a multiple times via different methods. settlement of the lawsuit, Cupron revised ecological risk assessment and a You may submit comments by any of submitted a label amendment removing response to comments document before the following methods: from its label approved uses in articles amending the registration. If EPA • Email: Send us an email at reg- that could be frequently washed such as determines that this set of pesticide uses [email protected]. bedding, mattress covers, apparel, may affect listed species and/or their • FCA Website: http://www.fca.gov. outerwear, undergarments, and hosiery. designated critical habitat, EPA will Click inside the ‘‘I want to . . .’’ field,

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near the top of the page; select align with the latest guidance from RECORD SOURCE CATEGORIES: ‘‘comment on a pending regulation’’ OMB. Persons corresponding with FCA and from the dropdown menu; and click The amended system of records is: FCISC and FCA and FCSIC employees. ‘‘Go.’’ This takes you to an electronic FCA–13—Correspondence Files—FCA. public comment form. As required by 5 U.S.C. 552a(r) of the ROUTINE USES OF RECORDS MAINTAINED IN THE • Mail: David Grahn, Director, Office Privacy Act, as amended, FCA sent SYSTEM, INCLUDING CATEGORIES OF USERS AND of Regulatory Policy, Farm Credit notice of this proposed system of PURPOSES OF SUCH USES: Administration, 1501 Farm Credit Drive, records to the Office of Management and See the ‘‘General Statement of Routine McLean, VA 22102–5090. Budget, the Committee on Oversight and Uses’’ (64 FR 8175). You may review copies of comments Government Reform of the House of we receive at our office in McLean, DISCLOSURE TO CONSUMER REPORTING Representatives, and the Committee on AGENCIES: NONE. Virginia, or from our website at http:// Homeland Security and Governmental www.fca.gov. Once you are in the Affairs of the Senate. The notice is POLICIES AND PRACTICES FOR STORAGE OF website, click inside the ‘‘I want to published in its entirety below. RECORDS: . . .’’ field, near the top of the page; Records are maintained in file folders select ‘‘find comments on a pending SYSTEM NAME AND NUMBER: and on a computerized database. regulation’’ from the dropdown menu; FCA–13—Correspondence Files— and click ‘‘Go.’’ This will take you to the FCA. POLICIES AND PRACTICES FOR RETRIEVAL OF Comment Letters page, where you can RECORDS: select the SORN for which you would SECURITY CLASSIFICATION: Records are retrieved by name. like to read public comments. The Unclassified. comments will be posted as submitted POLICIES AND PROCEDURES FOR RETENTION AND DISPOSAL OF RECORDS: but, for technical reasons, items such as SYSTEM LOCATION: logos and special characters may be Office of Congressional and Public Records are retained in accordance omitted. Identifying information that Affairs, Farm Credit Administration, with the National Archives and Records you provide, such as phone numbers 1501 Farm Credit Drive, McLean, VA Administration’s General Records and addresses, will be publicly 22102–5090. Schedule, and with the FCA available. However, we will attempt to Comprehensive Records Schedule. SYSTEM MANAGER: remove email addresses to help reduce Director, Office of Congressional and ADMINISTRATIVE, TECHNICAL, AND PHYSICAL internet spam. SAFEGUARDS: Public Affairs, Farm Credit FOR FURTHER INFORMATION CONTACT: FCA implements multiple layers of Autumn R. Agans, Privacy Act Officer, Administration, 1501 Farm Credit Drive, McLean, VA 22102–5090. security to ensure access to records is Farm Credit Administration, McLean, limited to those with a need-to-know in Virginia 22102–5090, (703) 883–4020, AUTHORITY FOR MAINTENANCE OF THE SYSTEM: support of their official duties. Records TTY (703) 883–4019. 12 U.S.C. 2243, 2252. are physically safeguarded in a secured SUPPLEMENTARY INFORMATION: This environment using locked file rooms, publication satisfies the requirement of PURPOSES OF THE SYSTEM: file cabinets, or locked offices and other the Privacy Act of 1974 that agencies We use information in this system of physical safeguards. Computerized publish a system of records notice in the records to track incoming and outgoing records are safeguarded through use of Federal Register when there is a correspondence and to draft user roles, passwords, firewalls, revision, change, or addition to the correspondence and other memoranda. encryption, and other information system of records. The substantive technology security measures. Only changes and modifications to the CATEGORIES OF INDIVIDUALS COVERED BY THE personnel with a need-to-know in SYSTEM: currently published version of FCA– support of their duties have access to 13—Correspondence Files—FCA Individuals who have correspondence the records. include: with FCA and the Farm Credit System 1. Identifying the records in the Insurance Corporation (FCSIC) and RECORD ACCESS PROCEDURES: system as unclassified. current and former FCA and FCSIC To obtain a record, contact: Privacy 2. Updating the system location to employees assigned to process review Act Officer, Farm Credit reflect the system’s current location. and/or respond to the correspondence. Administration, 1501 Farm Credit Drive, 3. Updating the system managers to McLean, VA 22102–5090, as provided CATEGORIES OF RECORDS IN THE SYSTEM: reflect the system’s current owner. in 12 CFR part 603. 4. Expanding and clarifying the This system contains incoming and categories of individuals and categories outgoing correspondence and internal CONTESTING RECORD PROCEDURES: of records to ensure they are consistent reports and memoranda, which are part Direct requests for amendments to a with the intended purpose for which the of a general correspondence file record to: Privacy Act Officer, Farm records are collected. maintained by the office(s) involved. Credit Administration, 1501 Farm 5. Clarifying the record source Additionally, information about the Credit Drive, McLean, VA 22102–5090, categories. correspondence is captured, including, as provided in 12 CFR part 603. 6. Revising the retention and disposal but not limited to: (1) The type of section to reflect updated guidance from correspondence (letter, fax, email); (2) NOTIFICATION PROCEDURE: the National Archives and Records dates and times received or sent; (3) Address inquiries about this system of Administration. name and office of FCA or FCSIC records to: Privacy Act Officer, Farm 7. Revising the safeguards section to employee assigned to the Credit Administration, McLean, VA reflect updated cybersecurity guidance correspondence; and (4) basic contact 22102–5090. and practices. information (name, address, email Additionally, non-substantive address, phone number) related to the EXEMPTIONS PROMULGATED FOR THE SYSTEM: changes have been made to the notice to correspondence. None.

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HISTORY: in any geographical political throughout the State of North Dakota for Federal Register Vol. 64, No. 100/ subdivision of a State, leading to a period of one year. The 2019 Order Tuesday, May 25, 1999 page 21875. significant delays in the performance of also provided that, among other things, Vol. 70, No. 183/Thursday, September such appraisals.’’ 2 The ASC has the parties requesting the waiver should 22, 2005, page 55621. promulgated regulations that set forth submit certain information to the ASC at procedures 3 that govern the processing least 30 days prior to the expiration of Dated: August 10, 2020. of temporary waiver requests. the one-year period and the ASC would Dale Aultman, On August 1, 2018, the Governor of consider the information submitted and Secretary, Farm Credit Administration Board. North Dakota, the North Dakota by vote in open session may extend the [FR Doc. 2020–17737 Filed 8–12–20; 8:45 am] Department of Financial Institutions, temporary waiver for an additional one- BILLING CODE 6705–01–P and the North Dakota Bankers year period. Association (Requesters) submitted a On July 6, 2020, Requesters submitted temporary waiver request to the ASC. certain information and as amended on FEDERAL FINANCIAL INSTITUTIONS The Requesters sought a temporary July 8, 2020, sought extension of the EXAMINATION COUNCIL waiver of not less than five years of commercial real estate transaction appraiser credentialing requirements for temporary waiver relief for an [Docket No. AS20–08] appraisals for FRTs under $500,000 for additional one-year period.8 On July 29, 1-to-4 family residential real estate 2020, the ASC convened a Special Appraisal Subcommittee; Order transactions and under $1,000,000 for Meeting via teleconference to consider Extending Commercial Real Estate agricultural and commercial real estate the information as presented by the Transaction Temporary Waiver Relief transactions throughout the State of Requesters and voted to extend the 4 AGENCY: Appraisal Subcommittee, North Dakota. commercial real estate transaction Federal Financial Institutions On July 9, 2019, the ASC convened a temporary waiver relief in North Dakota Examination Council. Special Meeting to consider the request. for an additional one-year period, Based on the information provided by subject to specified terms and ACTION: Order extending, with specified the Requester, the North Dakota Real conditions, and subject to FFIEC terms and conditions, commercial real Estate Appraiser Qualifications and approval. The FFIEC met on August 7, estate transaction temporary waiver Ethics Board (Appraiser Board), and by 2020, via WebEx, and a quorum of the relief. the public through comment letter Council being present, took the SUMMARY: The Appraisal Subcommittee submissions, the ASC issued an Order following action: Pursuant to § 1119(b) (ASC) of the Federal Financial (2019 Order) approving a limited of the Financial Institutions Reform, Institutions Examination Council version of the waiver request.5 The 2019 Recovery, and Enforcement Act of 1989, (FFIEC), with approval of the FFIEC, is Order was published in the Federal as amended, the Council approved the issuing an Order pursuant to section Register,6 and in pertinent part 7 attached waiver extension that was 1119(b) of Title XI of the Financial included a temporary waiver of approved by the ASC on July 29, 2020. Institutions Reform, Recovery, and appraiser credentialing requirements for ASC Discussion Enforcement Act of 1989, as amended appraisals of FRTs under $1,000,000 for In order to extend the commercial real (Title XI) and the rules promulgated commercial real estate transactions estate transaction temporary waiver thereunder, extending temporary waiver relief in North Dakota for an additional relief of appraiser credentialing (a) A federal financial institutions regulatory agency engages in, contracts for, or regulates; and (b) one-year period, the 2019 Order set requirements for appraisals of federally requires the services of an appraiser. (Title XI forth the following specified terms and related transactions (FRTs) under § 1121 (4), 12 U.S.C. 3350.) conditions: $1,000,000 for commercial real estate 2 12 U.S.C. 3348(b). transactions throughout the State of 3 12 CFR part 1102, subpart A. 1. During the one-year period, the North Dakota for an additional one-year 4 On September 7, 2018, ASC staff responded Requester is expected to develop a plan with a request for clarification and additional through continued dialogue with North period and subject to specified terms information, and on April 10, 2019, the Requesters Dakota stakeholders, including the Appraiser and conditions. submitted an additional letter with a clarification of Board, to identify potential solutions to DATES: Applicable August 7, 2020. the request and additional information. address appraiser scarcity and appraisal 5 An approval of a temporary waiver by the ASC FOR FURTHER INFORMATION CONTACT: delay. is subject to the approval of the FFIEC. (See 12 2. At least 30 days prior to the expiration James R. Park, Executive Director, at U.S.C. 3348(b); 12 CFR 1102.5.) On July 12, 2019, of the one-year period, the Requester should (202) 595–7575, or Alice M. Ritter, the FFIEC approved the temporary waiver granted provide (1) a status report to the ASC on the by the ASC on July 9, 2019. General Counsel, at (202) 595–7577, plan that was developed in collaboration 6 84 FR 38630 (August 7, 2019). ASC, 1325 G Street NW, Suite 500, 7 with stakeholders and any implementation The Order also included a temporary waiver of progress made on that plan toward Washington, DC 20005. appraiser credentialing requirements for appraisals identifying meaningful solutions to resolve SUPPLEMENTARY INFORMATION: Section of FRTs under $500,000 for 1-to-4 family residential appraiser scarcity and delay issues faced in 1119(b) of Title XI authorizes the ASC real estate transactions throughout the State of North Dakota for a period of one year, subject to North Dakota; and (2) supporting data to waive, on a temporary basis and earlier termination in the event the federal banking showing that appraiser scarcity leading to subject to the approval of the FFIEC, agencies issued a rule increasing appraisal significant delays continues to exist, which ‘‘any requirement relating to exemption threshold limits for residential real may include information to identify specific certification or licensing of a person to estate transactions, in which case the residential localities affected by appraiser scarcity. The waiver would terminate 60 days after the effective ASC will consider the information as perform appraisals under [Title XI]’’ date of that threshold increase. The federal banking upon ‘‘a written determination that presented by the Requester, and by vote in agencies issued a final rule increasing the appraisal open session, may extend the temporary exemption threshold for residential real estate there is a scarcity of certified or licensed waiver for an additional one-year period. appraisers to perform appraisals in transactions with an effective date of October 9, 1 2019. 83 FR 63110 (December 7, 2018). The connection with [FRTs] in a State, or temporary waiver for residential real estate 8 Requesters were joined in their July 6 transactions terminated by its own terms 60 days submission by the Credit Union Association of the 1 ‘‘Federally related transaction’’ (FRT) refers to after the effective date of that rule on December 8, Dakotas and the Independent Community Banks of any real estate related financial transaction which: 2019. North Dakota.

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In their July 6 submission, Requesters United States has been operating under 1. A temporary waiver of appraiser reported that a November 6, 2019 a presidentially declared emergency credentialing requirements for appraisals of meeting had been held with North since March 13, 2020. The ASC FRTs under $1,000,000 for commercial real Dakota stakeholders, including acknowledges challenges posed by estate transactions throughout the State of appraisers.9 Requesters provided a list Coronavirus Disease 2019 (COVID–19). North Dakota is extended for an additional of 25 ‘‘ideas and potential solutions’’ As stated in the Interagency Statement one-year period, expiring August 7, 2021. identified by the meeting’s 58 attendees on Appraisals and Evaluations for Real 2. During the additional one-year period, as potential steps to address appraiser Estate Related Financial Transactions Requesters are expected to continue efforts to develop, through continued dialogue with scarcity or appraisal delays. Requesters Affected by the Coronavirus,10 ‘‘COVID– the Appraiser Board and other North Dakota stated that a follow-up meeting was 19 has significantly affected financial planned for the spring of 2020, but that stakeholders, a plan to identify potential institutions and their customers.’’ It is solutions to address appraiser scarcity and ‘‘due to the challenges presented by the reasonable to conclude that the appraisal delays. COVID–19 pandemic, all in-person Requesters’ intentions to further 3. The ASC pursuant to 12 CFR 1102.7 may meetings and conventions were collaborate with financial institutions as terminate this waiver order on a finding that canceled when travel became restricted well as other North Dakota stakeholders significant delays in the receipt of appraisals and everyone responded to the crisis.’’ were negatively impacted by the for FRTs no longer exists, or that the terms Requesters further stated that disruption resulting from COVID–19. and conditions of the order are not being ‘‘[a]lthough our collaboration efforts Further, the disruption resulting from satisfied. have been disrupted for the time being, COVID–19 impacted the ASC’s we are anticipating future collaboration expectations of what steps the Order to do as much as we can locally.’’ Requesters could be expected to take to After reviewing all the facts of record, In support of their assertion that a further collaborate with financial including submissions by the scarcity of appraisers persists in North institutions as well as other North Requesters and by the Appraiser Board, Dakota, Requesters cited data from the Dakota stakeholders. Given the the ASC has determined that a scarcity Appraiser Board indicating that the impediments resulting from COVID–19, of appraisers continues to exist in North number of certified general appraisers the State has sufficiently fulfilled the Dakota and that the scarcity is leading (needed to appraise commercial and requirements of the 2019 Order to meet to a significant delays in appraisal agricultural properties) has fallen from the ASC’s altered expectations. services for FRTs under $1,000,000 for 67 as of September 17, 2018, to 65 as of commercial real estate transactions in April 30, 2020. Requesters reported that Specifically, in order to extend the North Dakota. a May 2020 survey by the North Dakota temporary waiver, the ASC must make Department of Financial Institutions a determination that a scarcity of Accordingly, and for the reasons found that turnaround times for credentialed appraisers leading to stated in the ‘‘ASC Discussion’’ section commercial appraisals have improved significant delays in obtaining above, and pursuant to section 1119(b) over the past year (which Requesters appraisals for FRTs continues to exist. of Title XI and 12 CFR part 1102, attributed to the current waiver and the In considering whether to extend the subpart A, the ASC is extending the increased appraisal threshold for credit current waiver, the ASC has examined commercial real estate transaction unions for commercial real estate both evidence of scarcity of appraisers temporary waiver relief for North transactions) but 23 percent of in North Dakota, and the evidence of Dakota for an additional one-year respondents still report delays more scarcity leading to significant delays. period, subject to the following than 50 percent of the time and 23 The ASC considered the challenges the specified terms and conditions, and percent of respondents reported 5 or current pandemic has posed in subject to FFIEC approval: gathering data about turnaround times. more delays in the past 12 months. 1. A temporary waiver of appraiser The ASC also considered information After reviewing all the facts of record, a majority of the ASC members have credentialing requirements for appraisals of received from the Appraiser Board. The FRTs under $1,000,000 for commercial real determined that a scarcity of appraisers Appraiser Board stated that a July 2020 estate transactions throughout the State of survey found that at least 80 percent of continues to exist in North Dakota and North Dakota is extended for an additional commercial appraisers responding that the scarcity is leading to significant one-year period, expiring August 7, 2021. reported appraisal turn times of five delays in appraisal services for FRTs 2. During the additional one-year period, weeks or less in each of North Dakota’s under $1,000,000 for commercial real Requesters are expected to continue efforts to six regions. According to the same estate transactions in North Dakota. develop, through continued dialogue with survey, 90 percent of agricultural Therefore, for the reasons described the Appraiser Board and other North Dakota appraisers responding reported above and after considering all the facts stakeholders, a plan to identify potential appraisal turn times of six weeks or less of record, by majority vote, the ASC solutions to address appraiser scarcity and in five of North Dakota’s six regions. determined to extend commercial real appraisal delays. In considering this request to extend estate transaction temporary waiver 3. The ASC pursuant to 12 CFR 1102.7 may commercial real estate transaction relief for an additional one-year period, terminate this waiver order on a finding that temporary waiver relief in North Dakota, subject to specified terms and significant delays in the receipt of appraisals for FRTs no longer exists, or that the terms the ASC found the information conditions, and subject to FFIEC and conditions of the order are not being submitted by the Requesters to be less approval, as follows: satisfied. robust than the ASC had expected to * * * * * support a one-year extension under the 10 Interagency Statement on Appraisals and terms of the 2019 Order. The ASC also Evaluations for Real Estate Related Financial By the Appraisal Subcommittee, August 7, acknowledges extenuating and Transactions Affected by the Coronavirus was 2020. issued April 14, 2020, by the Office of the unprecedented circumstances. The Comptroller of the Currency, Board of Governors of Tim Segerson, the Federal Reserve System, Federal Deposit Chairman. 9 In its submission, the Appraiser Board advised Insurance Corporation, Consumer Financial that appraisers in attendance at this meeting were Protection Bureau, National Credit Union [FR Doc. 2020–17660 Filed 8–12–20; 8:45 am] not affiliated with the Appraiser Board. Administration. BILLING CODE 6700–01–P

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DEPARTMENT OF HEALTH AND ‘‘Currently under 30-day Review—Open importation of nonhuman primates with HUMAN SERVICES for Public Comments’’ or by using the the burden imposed on regulating their search function. Direct written importation. Centers for Disease Control and comments and/or suggestions regarding This information collection is Prevention the items contained in this notice to the designed to support real-time regulatory [30Day–20–0263] Attention: CDC Desk Officer, Office of and monitoring activities, and the Management and Budget, 725 17th prevention of disease transmission from Agency Forms Undergoing Paperwork Street NW, Washington, DC 20503 or by NHP to humans. Therefore, there is no Reduction Act Review fax to (202) 395–5806. Provide written standard reporting deadline or comments within 30 days of notice frequency. Respondents are only In accordance with the Paperwork publication. required to provide the information Reduction Act of 1995, the Centers for under the regulation if they seek to Proposed Project Disease Control and Prevention (CDC) import nonhuman primates in the has submitted the information Requirements for the Importation of United States. collection request titled Requirements Nonhuman Primates into the United The CDC is requesting approval for a for the Importation of Nonhuman States (OMB Control No. 0920–0263, set of adjustments to the previously Primates into the United States to the Exp. 08/31/2020)—Revision—National approved burden total for this Office of Management and Budget Center for Emerging and Zoonotic information collection. The adjustments (OMB) for review and approval. CDC Infectious Diseases (NCEZID), Centers are as follows: previously published a ‘‘Proposed Data for Disease Control and Prevention Collection Submitted for Public (CDC). Adjustments Comment and Recommendations’’ Background and Brief Description Based on the number of registered notice on December 6, 2019 to obtain importers processed by CDC, CDC is comments from the public and affected Under 42 CFR 71.53, CDC collects adjusting upward, two of the agencies. CDC received six comments information pertaining to importers and information collections within this related to the previous notice. This imported nonhuman primates (NHP). submission: notice serves to allow an additional 30 This information collection enables CDC • Nonhuman Primate Importer days for public and affected agency to evaluate compliance with pre-arrival Recordkeeping and reporting comments. of shipment notification requirements, requirements for importing NHPs: CDC will accept all comments for this to investigate the number and species of Notification of shipment arrival proposed information collection project. imported nonhuman primates, and to 71.53(n). The Office of Management and Budget determine if adequate measures being • Nonhuman Primate Importer is particularly interested in comments taken for the prevention of exposure to Quarantine release 71.53(l). persons and animals during that: Changes (a) Evaluate whether the proposed importation. collection of information is necessary Since May 1990, CDC has monitored CDC is proposing a reformatting and for the proper performance of the the arrival and/or uncrating of certain changes to CDC 75.10A Registration functions of the agency, including shipments of non-human primates Form for NHP Importation to clarify for whether the information will have imported into the United States. In respondents the information that should practical utility; February 2013, CDC promulgated two be submitted. This results in no changes (b) Evaluate the accuracy of the regulations pertaining to the in respondent burden. agencies estimate of the burden of the importation of nonhuman primates. The CDC is adding the following proposed collection of information, first rule, Establishment of User Fees for information collections to delineate including the validity of the Filovirus Testing of Nonhuman Primate between specific information collections methodology and assumptions used; Liver Samples, outlines a process by under the regulations at 42 CFR (c) Enhance the quality, utility, and which importers can send liver tissues 71.53(m): clarity of the information to be to CDC from primates that die during • Statements regarding the health of collected; importation from reasons other than the nonhuman primates during travel (d) Minimize the burden of the trauma (2/12/2013, Vol.78, No. 29, p. and CDC quarantine (42 CFR 71.53(m) collection of information on those who 9828). CDC performs these tests due to (no form) are to respond, including, through the the absence of a private sector option. • Statements, including necropsy use of appropriate automated, The second rule, Requirements for reports, about the nonhuman primates electronic, mechanical, or other Importers of Nonhuman Primates, upon their release from CDC quarantine. technological collection techniques or consolidates into 42 CFR 71.53 the (42 CFR 71.53(m) other forms of information technology, requirements previously found in 42 CDC is removing information e.g., permitting electronic submission of CFR part 71.53 with those found in the collections, because CDC is not using responses; and Special Permit to Import Cynomolgus, the Partner Government Agency (e) Assess information collection African Green, or Rhesus Monkeys into Message Set functionality within the costs. the United States (2/15/2013, Vol. 78, Automated Commercial Environment: To request additional information on No. 32/p. 11522). It also rescinded the • CDC Partner Government Agency the proposed project or to obtain a copy six-month special-permit requirements Message Set for Importing Live of the information collection plan and for cynomolgus, African green, and Nonhuman Primates instruments, call (404) 639–7570. rhesus monkeys and extended the time • CDC Partner Government Agency Comments and recommendations for the period for registration/permit renewal Message Set for Importing Nonhuman proposed information collection should from 180 days to two years, reducing Primate Products be sent within 30 days of publication of much of the respondent burden. CDC • Documentation of Non-infectiousness this notice to www.reginfo.gov/public/ feels these regulatory changes and 71.53(t) do/PRAMain. Find this particular reporting requirements balance the OMB approval is requested for three information collection by selecting public health risks posed by the years. The total number of hours

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requested for this information collection total 185, which is a decrease of 737 hours.

ESTIMATED ANNUALIZED BURDEN HOURS

Average Number of Number of burden per Type of respondent Form name/CFR reference respondents responses per response respondent (in hours)

Nonhuman Primate Importer .. CDC 75.10A Application for Registration as an Importer of 1 1 10/60 Nonhuman Primates (New Importer). Nonhuman Primate Importer .. CDC 75.10A Application for Registration as an Importer of 12 1 10/60 Nonhuman Primates (Re-Registration). Nonhuman Primate Importer .. 71.53(g1)(iii) and (h) Documentation and Standard Oper- 1 1 10 ating Procedures (no form) (New Importer). Nonhuman Primate Importer .. 71.53(g)(1)(iii) and (h) Documentation and Standard Oper- 12 1 30/60 ating Procedures (no form) (Registered Importer). Nonhuman Primate Importer .. Recordkeeping and reporting requirements for importing 25 6 15/60 NHPs: Notification of shipment arrival 71.53(k), (n) (no form). Nonhuman Primate Importer .. Statements regarding the health of the nonhuman primates 25 6 15/60 during travel and CDC quarantine (42 CFR 71.53(m) (no form). Nonhuman Primate Importer.. Statements, including necropsy reports, about the 25 3 15/60 nonhuman primates upon their release from CDC quar- antine. (42 CFR 71.53(m) (no form). Nonhuman Primate Importer .. Quarantine release 71.53(l) (no form) ...... 25 6 15/60 Nonhuman Primate Importer .. 71.53(v) Form: Filovirus Diagnostic Specimen Submission 10 10 20/60 Form for Non-human Primate Materials.

Jeffrey M. Zirger, information collected to respond to SUPPLEMENTARY INFORMATION: Under the Lead, Information Collection Review Office, urgent requests from state and local Paperwork Reduction Act of 1995 (PRA) Office of Scientific Integrity, Office of Science, health authorities to provide (44 U.S.C. 3501–3520), Federal agencies Centers for Disease Control and Prevention. epidemiological information that allows must obtain approval from the Office of [FR Doc. 2020–17709 Filed 8–12–20; 8:45 am] for the selection of interventions to curb Management and Budget (OMB) for each BILLING CODE 4163–18–P local epidemics of drug overdose. collection of information they conduct DATES: Written comments must be or sponsor. In addition, the PRA also received on or before October 13, 2020. requires Federal agencies to provide a DEPARTMENT OF HEALTH AND 60-day notice in the Federal Register ADDRESSES: You may submit comments, HUMAN SERVICES concerning each proposed collection of identified by Docket No. CDC–2020– information, including each new Centers for Disease Control and 0090 by any of the following methods: proposed collection, each proposed Prevention • Federal eRulemaking Portal: extension of existing collection of [60Day–20–1054; Docket No. CDC–2020– Regulations.gov. Follow the instructions information, and each reinstatement of 0090] for submitting comments. • previously approved information Mail: Jeffrey M. Zirger, Information collection before submitting the Proposed Data Collection Submitted Collection Review Office, Centers for collection to the OMB for approval. To for Public Comment and Disease Control and Prevention, 1600 comply with this requirement, we are Recommendations Clifton Road NE, MS–D74, Atlanta, publishing this notice of a proposed Georgia 30329. AGENCY: Centers for Disease Control and data collection as described below. Instructions: All submissions received Prevention (CDC), Department of Health The OMB is particularly interested in must include the agency name and and Human Services (HHS). comments that will help: Docket Number. CDC will post, without ACTION: Notice with comment period. 1. Evaluate whether the proposed change, all relevant comments to collection of information is necessary SUMMARY: The Centers for Disease Regulations.gov. for the proper performance of the Control and Prevention (CDC), as part of Please note: Submit all comments functions of the agency, including its continuing efforts to reduce public through the Federal eRulemaking portal whether the information will have burden and maximize the utility of (regulations.gov) or by U.S. mail to the practical utility; government information, invites the address listed above. 2. Evaluate the accuracy of the general public and other Federal FOR FURTHER INFORMATION CONTACT: To agency’s estimate of the burden of the agencies to take this opportunity to request more information on the proposed collection of information, comment on proposed and/or proposed project or to obtain a copy of including the validity of the continuing information collections, as the information collection plan and methodology and assumptions used; required by the Paperwork Reduction instruments, contact Jeffrey M. Zirger, 3. Enhance the quality, utility, and Act of 1995. This notice invites Information Collection Review Office, clarity of the information to be comment on a proposed information Centers for Disease Control and collected; and collection entitled ‘‘Drug Overdose Prevention, 1600 Clifton Road NE, MS– 4. Minimize the burden of the Response Investigation (DORI) Data D74, Atlanta, Georgia 30329; phone: collection of information on those who Collections.’’ CDC will use the 404–639–7570; Email: [email protected]. are to respond, including through the

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use of appropriate automated, to urgent requests from state and local risk factors are undetermined, and/or electronic, mechanical, or other health authorities. Of particular interest subgroups at risk need to be identified, technological collection techniques or is response to increasing trends in, or immediate action by CDC is necessary to other forms of information technology, changing characteristics of, overdose minimize or prevent public harm. CDC e.g., permitting electronic submissions from prescription drugs (with a special must have the ability to rapidly deploy of responses. interest in opioid analgesics such as data collection tools to understand the 5. Assess information collection costs. oxycodone or methadone; scope of the problem and determine benzodiazepines such as alprazolam) Proposed Project appropriate action. Procedures for each and/or illicit drugs (e.g., heroin). CDC’s investigation, including specific data Drug Overdose Response Investigation National Center for Injury Prevention collection plans, depend on the time (DORI) Data Collections (OMB Control and Control (NCIPC) is frequently called and resources available, number of No. 0920–1054, Exp. 03/31/2018)— upon to conduct DORIs at the request of persons involved, and other Revision—National Center for Injury state or local health authorities seeking circumstances unique to the urgent Prevention and Control (NCIPC), support to respond to urgent public conditions at hand. Data are collected Centers for Disease Control and health problems resulting from drug by epidemiologists, psychologists, Prevention (CDC). use, misuse, addiction, and overdose. medical professionals, subject matter Such requests are typically, but not Background and Brief Description experts, and biostatisticians. always, made through the Epi-Aid In 2015, CDC received OMB approval mechanism. In most investigations, Data collected during a DORI are used (OMB Control No. 0920–1054) for a new CDC’s epidemiological response entails to understand sudden increases in drug Generic clearance for a three-year period rapid and flexible collection of data that use and misuse associated with fatal to collect information to respond to evolves during the investigation period. and nonfatal overdoses, understand the urgent requests from state and local A Generic clearance is requested to drivers and risk factors associated with health authorities to provide ensure that timely information is those trends, and identify the groups epidemiological information that allows collected during a DORI, which allows most affected. This allows CDC to for the selection of interventions to curb NCIPC to maintain critical mission effectively advise states on actions that local epidemics of drug overdose. CDC function by working with state and local could be taken to control the local seeks OMB approval for a Revision of health authorities to protect the public’s epidemic. During a DORI, data are this generic clearance for a three-year health. During an unanticipated rise in collected once, with the rare need for period. nonfatal or fatal drug overdose where follow-up. The estimated annual burden Drug Overdose Response Investigation the substances responsible for the health hours are 1,500, there are no costs to (DORI) are to be conducted in response event need to be identified, drivers and respondents other than their time.

ESTIMATED ANNUALIZED BURDEN HOURS

Average Number of Number of burden per Total Type of respondent Form name respondents responses per response burden respondent (in hours) hours

Drug Overdose Response Investiga- DORI Data Collection Instruments ... 3,000 1 30/60 1,500 tion Participants.

Jeffrey M. Zirger, comment on CMS’ intention to collect DATES: Comments must be received by Lead, Information Collection Review Office, information from the public. Under the October 13, 2020. Office of Scientific Integrity, Office of Science, Paperwork Reduction Act of 1995 (the ADDRESSES: When commenting, please Centers for Disease Control and Prevention. PRA), federal agencies are required to reference the document identifier or [FR Doc. 2020–17710 Filed 8–12–20; 8:45 am] publish notice in the Federal Register OMB control number. To be assured BILLING CODE 4163–19–P concerning each proposed collection of consideration, comments and information (including each proposed recommendations must be submitted in extension or reinstatement of an existing any one of the following ways: DEPARTMENT OF HEALTH AND collection of information) and to allow HUMAN SERVICES 1. Electronically. You may send your 60 days for public comment on the comments electronically to http:// Centers for Medicare & Medicaid proposed action. Interested persons are www.regulations.gov. Follow the Services invited to send comments regarding our instructions for ‘‘Comment or burden estimates or any other aspect of Submission’’ or ‘‘More Search Options’’ [Document Identifier: CMS–10390] this collection of information, including to find the information collection document(s) that are accepting Agency Information Collection the necessity and utility of the proposed comments. Activities: Proposed Collection; information collection for the proper Comment Request performance of the agency’s functions, 2. By regular mail. You may mail the accuracy of the estimated burden, written comments to the following AGENCY: Centers for Medicare & ways to enhance the quality, utility, and address: CMS, Office of Strategic Medicaid Services, HHS. clarity of the information to be Operations and Regulatory Affairs, ACTION: Notice. collected, and the use of automated Division of Regulations Development, collection techniques or other forms of Attention: Document Identifier/OMB SUMMARY: The Centers for Medicare & information technology to minimize the Control Number ll, Room C4–26–05, Medicaid Services (CMS) is announcing information collection burden. 7500 Security Boulevard, Baltimore, an opportunity for the public to Maryland 21244–1850.

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To obtain copies of a supporting All Medicare-certified hospice providers ADDRESSES: Written comments and statement and any related forms for the are required to submit HIS admission recommendations for the proposed proposed collection(s) summarized in and discharge records to CMS for each information collection should be sent this notice, you may make your request patient admission and discharge. The directly to the following: using one of following: HIS contains data elements that are used Office of Management and Budget, 1. Access CMS’ website address at by the CMS to calculate these measures Paperwork Reduction Project, Email: website address at https://www.cms.gov/ and also allows CMS to collect quality [email protected], Regulations-and-Guidance/Legislation/ data from hospices in compliance with Attn: Desk Officer for the PaperworkReductionActof1995/PRA- Section 3004 of the Affordable Care Act. Administration for Children and Listing.html. The information collection request was Families. 2. Call the Reports Clearance Office at revised to remove Section O of the HIS Copies of the proposed collection may (410) 786–1326. discharge assessment now that we be obtained by emailing FOR FURTHER INFORMATION CONTACT: proposed to replace it with the claims- [email protected]. William N. Parham at (410) 786–4669. based Hospice Visits in the Last Days of Alternatively, copies can also be SUPPLEMENTARY INFORMATION: Life quality measure. Form Number: obtained by writing to the CMS–10390 (OMB control number: Administration for Children and Contents 0938–1153); Frequency: On Occasion; Families, Office of Planning, Research This notice sets out a summary of the Affected Public: State, Local, or Tribal and Evaluation, 330 C Street SW, use and burden associated with the Governments, Private Sector (not-for- Washington, DC 20201, Attn: OPRE following information collections. More profit institutions); individuals or Reports Clearance Officer. All requests, detailed information can be found in households; Number of Respondents: emailed or written, should be identified each collection’s supporting statement 4,688; Total Annual Responses: by the title of the information collection. and associated materials (see 1,328,417; Total Annual Hours: 636,312. SUPPLEMENTARY INFORMATION: ADDRESSES). (For policy questions regarding this Description: OPRE/ACF/HHS CMS–10390 Hospice Quality collection contact Cindy Massuda at proposes data collection activities as Reporting Program (410) 786–0652.) part of the Youth Empowerment IDEAS Under the PRA (44 U.S.C. 3501– Dated: August 10, 2020. study. The goal of this project is to 3520), federal agencies must obtain William N. Parham, III, collect descriptive data that will inform approval from the Office of Management Director, Paperwork Reduction Staff, Office educational topics and strategies for and Budget (OMB) for each collection of of Strategic Operations and Regulatory adolescent pregnancy prevention and information they conduct or sponsor. Affairs. youth health and well-being. The The term ‘‘collection of information’’ is [FR Doc. 2020–17738 Filed 8–12–20; 8:45 am] project will identify messages and defined in 44 U.S.C. 3502(3) and 5 CFR BILLING CODE 4120–01–P themes that are most likely to resonate 1320.3(c) and includes agency requests with youth. The project will inform or requirements that members of the hypotheses on how to increase the public submit reports, keep records, or DEPARTMENT OF HEALTH AND effectiveness of sex education provide information to a third party. HUMAN SERVICES approaches so that more youth avoid the Section 3506(c)(2)(A) of the PRA risks associated with teen sex and teen requires federal agencies to publish a Administration for Children and pregnancy rates are reduced. To support 60-day notice in the Federal Register Families these efforts, we seek approval from the Office of Management and Budget to concerning each proposed collection of Submission for OMB Review; Youth information, including each proposed collect survey information from youth Empowerment Information, Data and young adults ages 14–24 and of extension or reinstatement of an existing Collection, and Exploration on collection of information, before parents of teens ages 14–18 using an Avoidance of Sex (IDEAS) (New online panel that is based on a submitting the collection to OMB for Collection) approval. To comply with this probability-based sample of the U.S. requirement, CMS is publishing this AGENCY: Office of Planning, Research, population. We propose the following notice. and Evaluation, Administration for data collection instruments: Children and Families, HHS. (1) Parent Survey: We will administer Information Collection ACTION: Request for public comment. this as a web survey. Information 1. Type of Information Collection collected through the Parent Survey will Request: Revision of a currently SUMMARY: The Office of Planning, be used to report on demographics, the approved collection without change; Research, and Evaluation (OPRE), parent-child relationship, parents’ Title of Information Collection: Hospice Administration for Children and attitudes and beliefs about youth sex Quality Reporting Program; Use: The Families (ACF), U.S. Department of education and sexual behaviors, and Hospice Item Set (HIS) is a Health and Human Services (HHS), parental knowledge about youth sexual standardized, patient-level data proposes survey data collection risk-taking. collection tool developed specifically activities as part of the Youth (2) Youth Survey: We will administer for use by hospices. It is currently used Empowerment IDEAS study. a web survey in two parts to youth ages for the collection of quality measure DATES: Comments due within 30 days of 14–18. Information collected on Part I of data pertaining to the Hospice Quality publication. OMB is required to make a the survey will be used to report on Reporting Program (HQRP). Since April decision concerning the collection of demographics, the parent-child 1, 2017, hospices have been using the information between 30 and 60 days relationship, future aspirations, and HIS V2.00.0 which specifies the after publication of this document in the attitudes and beliefs about youth sexual collection of data items that support Federal Register. Therefore, a comment behavior. Information collected on Part eight National Quality Forum (NQF) is best assured of having its full effect II of the survey will include knowledge endorsed Quality Measures (QMs) and if OMB receives it within 30 days of about sexual risk, experience with sex an additional measure pair for hospice. publication. education, and sexual risk behaviors.

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(3) Young Adult Survey: We will wording changes to reflect the older probability-based sample of the U.S. administer this to young adults ages 19– population. population of parents of youth ages 14– 24 as a web survey. Topics align with Respondents: The survey respondents 18 and their youth ages 14–18 and of the youth survey, but with slight are from an online panel of a young adults ages 19–24.

ANNUAL BURDEN ESTIMATES

Number of Number of responses per respondents respondent Avg. burden Total Annual Instrument (total over (total over per response burden burden request request (in hours) (in hours) (in hours) period) period)

(1) Parent Survey ...... 1,550 1 .333 516 172 (2) Part I Youth Survey ...... 675 1 .333 225 75 (3) Part II Youth Survey ...... 590 1 .333 197 66 (4) Young Adult Survey ...... 775 1 .583 452 151

Estimated Total Annual Burden drugs/news-events-human-drugs/ confidential information that you or a Hours: 464. integrated-assessment-marketing- third party may not wish to be posted, (Authority: Sec. 510. [42 U.S.C. 710]) applications-workshop-10302020- such as medical information, your or 10302020. anyone else’s Social Security number, or John M. Sweet, DATES: The public workshop will be confidential business information, such ACF/OPRE Certifying Officer. held virtually and broadcast via webcast as a manufacturing process. Please note [FR Doc. 2020–17680 Filed 8–12–20; 8:45 am] only on October 30, 2020, from 9 a.m. that if you include your name, contact BILLING CODE 4184–83–P to 3 p.m. Registration to attend the information, or other information that meeting and other information can be identifies you in the body of your found at http://wcms-internet.fda.gov/ comments, that information will be DEPARTMENT OF HEALTH AND drugs/news-events-human-drugs/ posted on https://www.regulations.gov. • HUMAN SERVICES integrated-assessment-marketing- If you want to submit a comment applications-workshop-10302020- with confidential information that you Food and Drug Administration 10302020. The public meeting may be do not wish to be made available to the public, submit the comment as a [Docket No. FDA–2020–N–1550] extended or may end early depending on the level of public participation. written/paper submission and in the New Drugs Regulatory Program Submit either electronic or written manner detailed (see ‘‘Written/Paper Modernization: Implementation of the comments on this public workshop by Submissions’’ and ‘‘Instructions’’). Integrated Assessment of Marketing December 30, 2020. See the Written/Paper Submissions Applications and Integrated Review SUPPLEMENTARY INFORMATION section for Documentation; Public Workshop; registration date and information. Submit written/paper submissions as follows: Request for Comments ADDRESSES: You may submit comments • as follows. Please note that late, Mail/Hand Delivery/Courier (for AGENCY: Food and Drug Administration, untimely filed comments will not be written/paper submissions): Dockets HHS. considered. Electronic comments must Management Staff (HFA–305), Food and ACTION: Notice of public workshop; be submitted on or before December 30, Drug Administration, 5630 Fishers request for comments. Lane, Rm. 1061, Rockville, MD 20852. 2020. The https://www.regulations.gov • electronic filing system will accept For written/paper comments SUMMARY: The Food and Drug comments until 11:59 p.m. Eastern Time submitted to the Dockets Management Administration (FDA or the Agency) is at the end of December 30, 2020. Staff, FDA will post your comment, as announcing the following public Comments received by mail/hand well as any attachments, except for workshop entitled ‘‘New Drugs delivery/courier (for written/paper information submitted, marked and Regulatory Program Modernization: submissions) will be considered timely identified, as confidential, if submitted Implementation of the Integrated if they are postmarked or the delivery as detailed in ‘‘Instructions.’’ Assessment of Marketing Applications service acceptance receipt is on or Instructions: All submissions received and Integrated Review Documentation.’’ before that date. must include the Docket No. FDA– The purpose of the public workshop is 2020–N–1550 for ‘‘New Drugs to seek public comments/feedback on Electronic Submissions Regulatory Program Modernization: the Integrated Review documentation Submit electronic comments in the Implementation of the Integrated generated by the new Integrated following way: Assessment of Marketing Applications Assessment of marketing applications • Federal eRulemaking Portal: and Integrated Review Documentation.’’ for new drug products developed as part https://www.regulations.gov. Follow the Received comments, those filed in a of the New Drugs Regulatory Program instructions for submitting comments. timely manner (see ADDRESSES), will be Modernization. The Agency hopes to Comments submitted electronically, placed in the docket and, except for receive public feedback on how this including attachments, to https:// those submitted as ‘‘Confidential Integrated Review documentation can www.regulations.gov will be posted to Submissions,’’ publicly viewable at continue supporting our stakeholders’ the docket unchanged. Because your https://www.regulations.gov or at the needs. Please see information and comment will be made public, you are Dockets Management Staff between 9 examples relevant to the Integrated solely responsible for ensuring that your a.m. and 4 p.m., Monday through Review at http://wcms-internet.fda.gov/ comment does not include any Friday, 240–402–7500.

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• Confidential Submissions—To Research. The resultant Integrated review process, and a brief discussion of submit a comment with confidential Review is the product of an the basis for the decisions. information that you do not wish to be interdisciplinary team assessment • Interdisciplinary Assessment: made publicly available, submit your process that provides collaborative Æ Includes succinct, integrated, comments only as a written/paper discussions of key review issues that focused analyses of the evidence of submission. You should submit two span multiple disciplines and includes benefit, risk and risk management, and copies total. One copy will include the resolution of important issues pertinent therapeutic individualization (e.g., information you claim to be confidential to benefit-risk assessments. This special populations, drug interactions). with a heading or cover note that states interdisciplinary approach facilitates Æ Highlights key review issues ‘‘THIS DOCUMENT CONTAINS clarity of decision making and ensures (including analyses specific to key CONFIDENTIAL INFORMATION.’’ The input from relevant disciplines in the issues) the review team thinks are Agency will review this copy, including consideration of scientific issues. FDA pertinent to the decision-making the claimed confidential information, in believes the format and content of the process. Issues are presented and its consideration of comments. The Integrated Review documentation will assessed in an interdisciplinary manner. Æ second copy, which will have the provide sufficient detail concerning the Includes any dissenting data claimed confidential information evidence of efficacy and assessment of interpretations. • Discipline-Specific Appendices: redacted/blacked out, will be available risk and risk management as well as a Æ for public viewing and posted on clearer description of FDA’s analysis of Contains assessments and analyses https://www.regulations.gov. Submit the scientific issues raised by the that are supportive and/or important to both copies to the Dockets Management application and the scientific reasoning key facts/data or conclusions included Staff. If you do not wish your name and supporting the benefit-risk in the overall review, and in certain contact information to be made publicly determination. The overall objective is instances may include discipline- available, you can provide this to more effectively communicate the specific content (e.g., relevant pharmacology/toxicology information), information on the cover sheet and not basis for FDA’s decision on Æ in the body of your comments and you applications. May contain work that did not must identify this information as This new Integrated Review directly impact the overall assessment ‘‘confidential.’’ Any information marked document replaces the current of benefit-risk, regulatory action, as ‘‘confidential’’ will not be disclosed documentation, which included a labeling, or risk-mitigation plans, and Æ includes separate reviews of except in accordance with 21 CFR 10.20 separate review document authored by reviewers who disagree with significant and other applicable disclosure law. For each discipline. It also replaces the elements of the Executive Summary and more information about FDA’s posting multidisciplinary review (i.e., Interdisciplinary Assessment sections or of comments to public dockets, see 80 Unireview) in which each discipline the decision of the Signatory Authority. FR 56469, September 18, 2015, or access provided a separate review section but In general, the first two parts of the the information at: https:// within a single review document. FDA Integrated Review document would be www.govinfo.gov/content/pkg/FR-2015- is currently undergoing a phased expected to provide a complete 09-18/pdf/2015-23389.pdf. implementation of the Integrated explanation of FDA’s action and Docket: For access to the docket to Review documentation for new supporting analyses, with the third read background documents or the molecular entities, original BLAs, and component (the appendices) providing electronic and written/paper comments select efficacy supplements. FDA plans additional detail on the comprehensive received, go to https:// to expand the scope to other marketing analyses FDA conducted in its review of www.regulations.gov and insert the application types in the near future. the drug application. docket number, found in brackets in the The following guiding principles The target audiences for this heading of this document, into the informed the Integrated Assessment document are diverse and include those ‘‘Search’’ box and follow the prompts process and associated Integrated with a specific interest in the and/or go to the Dockets Management Review documentation: application such as the lay public, drug Staff, 5630 Fishers Lane, Rm. 1061, • The importance of conducting an sponsors, researchers, and others who Rockville, MD 20852, 240–402–7500. issue-focused assessment, • are seeking to understand the basis for FOR FURTHER INFORMATION CONTACT: enhanced communication both FDA’s decision. Rhonda M. Hearns-Stewart, Center for within the review team and with the As part of FDA’s ongoing evaluation Drug Evaluation and Research, Food applicant, and of the Integrated Assessment and its • and Drug Administration, 10903 New strong interdisciplinary implementation, the Agency is Hampshire Ave., Bldg. 22, Rm. 3249, collaboration. interested in receiving responses to the Silver Spring, MD 20993–0002, 240– The Integrated Review documentation following questions/topics, in addition 402–3180, Rhonda.Hearns-Stewart@ template has three main components: to any general comments the public • fda.hhs.gov, with the subject line Executive Summary: might have. For convenience, it would Æ ‘‘Collecting Public Feedback on the Represents FDA’s conclusions be helpful if commenters refer to the Integrated Assessment.’’ regarding key scientific and regulatory numbered question and topic when SUPPLEMENTARY INFORMATION: issues while describing any differences submitting responses and comments. of scientific opinion or perspective, I. Background Æ provides a summary of FDA’s II. Topics for Discussion at the Public The Integrated Assessment of decision and assessment of the Workshop marketing applications includes a new application, including FDA’s benefit- The Agency is soliciting public process and review template for the risk determination (as currently feedback on how the Integrated Review assessment and documentation of new employed in marketing application can continue supporting our drug product marketing applications reviews), and stakeholders’ needs. (e.g., new drug applications or biologics Æ provides an overall Agency The Agency welcomes any relevant license applications (BLAs)) in the assessment, including an overview of information specific to the Integrated Center for Drug Evaluation and the major decisions made during the Review that stakeholders wish to share

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at the meeting or in a submission to the public comment session or participate DEPARTMENT OF HEALTH AND docket, but we emphasize that the focus in a specific session, and which topic(s) HUMAN SERVICES of this meeting is to seek input that you wish to address. We will do our prioritizes feedback specifically on best to accommodate requests to make Food and Drug Administration characteristics of the Integrated Review public comments and requests to [Docket No. FDA–2017–N–4951] document. Please see information and participate in the focused sessions. examples relevant to the Integrated Individuals and organizations with Agency Information Collection Review at http://wcms-internet.fda.gov/ common interests are urged to Activities; Proposed Collection; drugs/news-events-human-drugs/ consolidate or coordinate their Comment Request; Medical Devices; integrated-assessment-marketing- presentations, and request time for a Humanitarian Use Devices applications-workshop-10302020- joint presentation, or submit requests for AGENCY: Food and Drug Administration, 10302020. designated representatives to participate Furthermore, we anticipate that the HHS. in the focused sessions. Following the most informative suggestions would not ACTION: Notice. be specific to an indication, a close of registration, we will determine the amount of time allotted to each SUMMARY: The Food and Drug therapeutic area, or a disease but rather Administration (FDA or Agency) is apply across multiple indications, presenter and the approximate time each oral presentation is to begin, and announcing an opportunity for public therapeutic areas, or diseases. We are comment on the proposed collection of particularly interested in the topics that will select and notify participants by October 14, 2020. All requests to make certain information by the Agency. follow: Under the Paperwork Reduction Act of oral presentations must be received by 1. We are interested in preserving for 1995 (PRA), Federal Agencies are the close of registration on September stakeholders what they find most useful required to publish notice in the in FDA reviews. 30, 2020, by 11:59 p.m. EST. If selected Federal Register concerning each a. Comparing the Integrated Review to for presentation, submit electronic proposed collection of information previous reviews, is there any copies of any presentation materials including each proposed extension of an information you are having difficulty (Power Point or PDF) to existing collection of information, and locating? [email protected] to allow 60 days for public comment in b. Are you able to use the Integrated no later than October 21, 2020. No response to the notice. This notice Review for the same purpose that you commercial or promotional material solicits comments on information used previous reviews? If not, please will be permitted to be presented or collection requirements for provide specific examples. distributed at the public workshop. 2. We are interested in specific humanitarian use devices (HUDs). recommendations about any areas of the Streaming Webcast of the Public DATES: Submit either electronic or Integrated Review documentation of the Workshop: This webcast for this public written comments on the collection of Integrated Assessment that can be workshop is available at https:// information by October 13, 2020. improved to meet the needs of collaboration.fda.gov/newdrugs103020/. ADDRESSES: You may submit comments stakeholders. If you have never attended a Connect as follows. Please note that late, 3. We are interested in stakeholders’ Pro event before, test your connection at untimely filed comments will not be views regarding the advantages and https://collaboration.fda.gov/common/ considered. Electronic comments must disadvantages of an interdisciplinary help/en/support/meeting_test.htm. To be submitted on or before October 13, assessment presentation of key review get a quick overview of the Connect Pro 2020. The https://www.regulations.gov issues and resulting integration of the program, visit https://www.adobe.com/ electronic filing system will accept assessments of multiple disciplines into go/connectpro_overview. FDA has comments until 11:59 p.m. Eastern Time a single Integrated Review document. verified the website addresses in this at the end of October 13, 2020. 4. We would like to know whether the Comments received by mail/hand document, as of the date this document new format of the Integrated Review delivery/courier (for written/paper publishes in the Federal Register, but document for the Integrated Assessment submissions) will be considered timely websites are subject to change over time. can provide clarity of benefit-risk if they are postmarked or the delivery assessments and inform your knowledge Transcripts: Please be advised that as service acceptance receipt is on or of FDA’s basis for making decisions. soon as a transcript of the public before that date. workshop is available, it will be III. Participating in the Public Electronic Submissions accessible at https:// Workshop www.regulations.gov. It may be viewed Submit electronic comments in the Registration: Please visit the following following way: at the Dockets Management Staff (see • website to register: https:// ADDRESSES). A link to the transcript will Federal eRulemaking Portal: www.eventbrite.com/e/integrated- also be available on the internet at https://www.regulations.gov. Follow the instructions for submitting comments. assessment-of-marketing-applications- http://wcms-internet.fda.gov/drugs/ Comments submitted electronically, workshop-tickets-102979608782. Please news-events-human-drugs/integrated- including attachments, to https:// provide complete contact information assessment-marketing-applications- for each attendee, including name, title, www.regulations.gov will be posted to workshop-10302020-10302020. affiliation, address, email, and the docket unchanged. Because your telephone. Dated: August 7, 2020. comment will be made public, you are Persons interested in attending this Lowell J. Schiller, solely responsible for ensuring that your virtual public workshop must register Principal Associate Commissioner for Policy. comment does not include any confidential information that you or a by September 30, 2020, by 11:59 p.m. [FR Doc. 2020–17721 Filed 8–12–20; 8:45 am] Eastern Time. third party may not wish to be posted, Requests for Oral Presentations: BILLING CODE 4164–01–P such as medical information, your or During online registration you may anyone else’s Social Security number, or indicate if you wish to present during a confidential business information, such

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as a manufacturing process. Please note must identify this information as collection of information on that if you include your name, contact ‘‘confidential.’’ Any information marked respondents, including through the use information, or other information that as ‘‘confidential’’ will not be disclosed of automated collection techniques, identifies you in the body of your except in accordance with 21 CFR 10.20 when appropriate, and other forms of comments, that information will be and other applicable disclosure law. For information technology. posted on https://www.regulations.gov. more information about FDA’s posting Medical Devices; Humanitarian Use • If you want to submit a comment of comments to public dockets, see 80 Devices—21 CFR Part 814 with confidential information that you FR 56469, September 18, 2015, or access do not wish to be made available to the the information at: https:// OMB Control Number 0910–0332— public, submit the comment as a www.govinfo.gov/content/pkg/FR-2015- Extension written/paper submission and in the 09-18/pdf/2015-23389.pdf. This collection of information manner detailed (see ‘‘Written/Paper Docket: For access to the docket to implements the humanitarian use Submissions’’ and ‘‘Instructions’’). read background documents or the devices (HUDs) provision of section electronic and written/paper comments Written/Paper Submissions 520(m) of the Federal Food, Drug, and received, go to https:// Submit written/paper submissions as Cosmetic Act (FD&C Act) (21 U.S.C. www.regulations.gov and insert the 360j(m)) and part 814, subpart H (21 follows: docket number, found in brackets in the • CFR part 814, subpart H). Under section Mail/Hand Delivery/Courier (for heading of this document, into the written/paper submissions): Dockets 520(m) of the FD&C Act, FDA is ‘‘Search’’ box and follow the prompts authorized to exempt an HUD from the Management Staff (HFA–305), Food and and/or go to the Dockets Management Drug Administration, 5630 Fishers effectiveness requirements of sections Staff, 5630 Fishers Lane, Rm. 1061, 514 and 515 of the FD&C Act (21 U.S.C. Lane, Rm. 1061, Rockville, MD 20852. Rockville, MD 20852, 240–402–7500. • For written/paper comments 360d and 360e) provided that the FOR FURTHER INFORMATION CONTACT: submitted to the Dockets Management Ila device: (1) Is designed to treat or Staff, FDA will post your comment, as S. Mizrachi, Office of Operations, Food diagnose a disease or condition that well as any attachments, except for and Drug Administration, Three White affects no more than 8,000 individuals information submitted, marked and Flint North, 10A–12M, 11601 in the United States; (2) would not be identified, as confidential, if submitted Landsdown St., North Bethesda, MD available to a person with a disease or as detailed in ‘‘Instructions.’’ 20852, 301–796–7726, PRAStaff@ condition unless an exemption is Instructions: All submissions received fda.hhs.gov. granted and there is no comparable must include the Docket No. FDA– SUPPLEMENTARY INFORMATION: Under the device other than another HUD 2017–N–4951 for ‘‘Agency Information PRA (44 U.S.C. 3501–3521), Federal approved under this exemption that is Collection Activities; Proposed Agencies must obtain approval from the available to treat or diagnose such Collection; Comment Request: Medical Office of Management and Budget disease or condition; and (3) will not Devices; Humanitarian Use Devices.’’ (OMB) for each collection of expose patients to an unreasonable or Received comments, those filed in a information they conduct or sponsor. significant risk of illness or injury and timely manner (see ADDRESSES), will be ‘‘Collection of information’’ is defined the probable benefit to health from the placed in the docket and, except for in 44 U.S.C. 3502(3) and 5 CFR use of the device outweighs the risk of those submitted as ‘‘Confidential 1320.3(c) and includes Agency requests injury or illness from its use, taking into Submissions,’’ publicly viewable at or requirements that members of the account the probable risks and benefits https://www.regulations.gov or at the public submit reports, keep records, or of currently available devices or Dockets Management Staff between 9 provide information to a third party. alternative forms of treatment. a.m. and 4 p.m., Monday through Section 3506(c)(2)(A) of the PRA (44 Respondents may submit a Friday, 240–402–7500. U.S.C. 3506(c)(2)(A)) requires Federal humanitarian device exemption (HDE) • Confidential Submissions—To Agencies to provide a 60-day notice in application seeking exemption from the submit a comment with confidential the Federal Register concerning each effectiveness requirements of sections information that you do not wish to be proposed collection of information, 514 and 515 of the FD&C Act as made publicly available, submit your including each proposed extension of an authorized by section 520(m)(2) of the comments only as a written/paper existing collection of information, FD&C Act. The information collected submission. You should submit two before submitting the collection to OMB will assist FDA in making copies total. One copy will include the for approval. To comply with this determinations on the following: (1) information you claim to be confidential requirement, FDA is publishing notice Whether to grant HUD designation of a with a heading or cover note that states of the proposed collection of medical device; (2) whether to exempt ‘‘THIS DOCUMENT CONTAINS information set forth in this document. an HUD from the effectiveness CONFIDENTIAL INFORMATION.’’ The With respect to the following requirements under sections 514 and Agency will review this copy, including collection of information, FDA invites 515 of the FD&C Act, provided that the the claimed confidential information, in comments on these topics: (1) Whether device meets requirements set forth its consideration of comments. The the proposed collection of information under section 520(m) of the FD&C Act; second copy, which will have the is necessary for the proper performance and (3) whether to grant marketing claimed confidential information of FDA’s functions, including whether approval(s) for the HUD. Failure to redacted/blacked out, will be available the information will have practical collect this information would prevent for public viewing and posted on utility; (2) the accuracy of FDA’s FDA from making a determination on https://www.regulations.gov. Submit estimate of the burden of the proposed the factors listed previously in this both copies to the Dockets Management collection of information, including the document. Further, the collected Staff. If you do not wish your name and validity of the methodology and information would also enable FDA to contact information to be made publicly assumptions used; (3) ways to enhance determine whether the holder of an available, you can provide this the quality, utility, and clarity of the HUD is in compliance with the HUD information on the cover sheet and not information to be collected; and (4) provisions under section 520(m) of the in the body of your comments and you ways to minimize the burden of the FD&C Act.

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FDA estimates the burden of this collection of information as follows:

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

Number of Average Activity; 21 CFR section Number of responses per Total annual burden per Total hours respondents respondent responses response

Request for HUD designation—814.102 ...... 20 1 20 40 800 HDE Application—814.104 ...... 4 1 4 328 1,312 HDE Amendments and resubmitted HDEs—814.106 ... 20 5 100 50 5,000 HDE Supplements—814.108 ...... 116 1 116 80 9,280 Notification of withdrawal of an HDE—814.116(e)(3) ... 2 1 2 1 2 Notification of withdrawal of IRB approval—814.124(b) 1 1 1 2 2 Periodic reports—814.126(b)(1) ...... 50 1 50 120 6,000

Total ...... 22,396 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

TABLE 2—ESTIMATED ANNUAL RECORDKEEPING BURDEN 1

Number of Number of Total annual Average Activity; 21 CFR section records per burden per Total hours recordkeepers respondent records recordkeeping

HDE Records—814.126(b)(2) ...... 65 1 65 2 130 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

TABLE 3—ESTIMATED ANNUAL THIRD-PARTY DISCLOSURE BURDEN 1

Number of Average Activity; 21 CFR section Number of disclosures Total annual burden per Total hours respondents per respondent disclosures disclosure

Notification of emergency use—814.124(a) ...... 22 1 22 1 22 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

The number of respondents in tables 0741, this revision increases our burden 1995 (PRA), Federal Agencies are 1, 2, and 3 are an average based on data estimate for an HDE by 8 hours per required to publish notice in the for the previous 3 years, i.e., fiscal years submission. Federal Register concerning each 2017 through 2019. The number of Dated: August 7, 2020. proposed collection of information, respondents has been adjusted to reflect Lowell J. Schiller, including each proposed extension of an updated respondent data. This has Principal Associate Commissioner for Policy. existing collection of information, and resulted in an overall increase of 5,809 [FR Doc. 2020–17716 Filed 8–12–20; 8:45 am] to allow 60 days for public comment in hours to the total estimated burden. The response to the notice. This notice BILLING CODE 4164–01–P number of annual reports submitted solicits comments on requirements under § 814.126(b)(1) in table 1 reflects governing the acceptance of electronic 50 respondents with approved HUD DEPARTMENT OF HEALTH AND records and electronic signatures. applications. Under § 814.126(b)(2) in HUMAN SERVICES table 2, the estimated number of DATES: Submit either electronic or recordkeepers is 65. Food and Drug Administration written comments on the collection of We have also updated the burden information by October 13, 2020. [Docket No. FDA–2011–N–0076] estimate consistent with new provisions ADDRESSES: You may submit comments in § 814.104(b)(4)(i)) regarding ‘‘Human Agency Information Collection as follows. Please note that late, Subject Protection; Acceptance of Data Activities; Proposed Collection; untimely filed comments will not be from Clinical Investigations for Medical Comment Request; Electronic considered. Electronic comments must Devices’’ (83 FR 7366; February 21, Records; Electronic Signatures be submitted on or before October 13, 2018) (approved under OMB control 2020. The https://www.regulations.gov number 0910–0741). Section 814.104 is AGENCY: Food and Drug Administration, electronic filing system will accept being amended to address submission of HHS. comments until 11:59 p.m. Eastern Time data from clinical investigations in a ACTION: Notice. at the end of October 13, 2020. Humanitarian Device Exemption (HDE). Comments received by mail/hand To the extent the applicant includes SUMMARY: The Food and Drug data from clinical investigations, the Administration (FDA, Agency, or we) is delivery/courier (for written/paper applicant will be required to include the announcing an opportunity for public submissions) will be considered timely information and statements as described comment on the proposed collection of if they are postmarked or the delivery in § 814.104(b)(4)(i). Consistent with our certain information by the Agency. service acceptance receipt is on or estimate in OMB control number 0910– Under the Paperwork Reduction Act of before that date.

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Electronic Submissions copies total. One copy will include the for approval. To comply with this Submit electronic comments in the information you claim to be confidential requirement, FDA is publishing notice following way: with a heading or cover note that states of the proposed collection of • Federal eRulemaking Portal: ‘‘THIS DOCUMENT CONTAINS information set forth in this document. https://www.regulations.gov. Follow the CONFIDENTIAL INFORMATION.’’ The With respect to the following instructions for submitting comments. Agency will review this copy, including collection of information, FDA invites Comments submitted electronically, the claimed confidential information, in comments on these topics: (1) Whether including attachments, to https:// its consideration of comments. The the proposed collection of information www.regulations.gov will be posted to second copy, which will have the is necessary for the proper performance claimed confidential information the docket unchanged. Because your of FDA’s functions, including whether redacted/blacked out, will be available comment will be made public, you are the information will have practical for public viewing and posted on solely responsible for ensuring that your utility; (2) the accuracy of FDA’s https://www.regulations.gov. Submit comment does not include any estimate of the burden of the proposed both copies to the Dockets Management confidential information that you or a collection of information, including the Staff. If you do not wish your name and third party may not wish to be posted, validity of the methodology and contact information to be made publicly such as medical information, your or assumptions used; (3) ways to enhance available, you can provide this anyone else’s Social Security number, or the quality, utility, and clarity of the information on the cover sheet and not confidential business information, such information to be collected; and (4) in the body of your comments and you as a manufacturing process. Please note ways to minimize the burden of the must identify this information as that if you include your name, contact collection of information on ‘‘confidential.’’ Any information marked information, or other information that respondents, including through the use as ‘‘confidential’’ will not be disclosed identifies you in the body of your of automated collection techniques, except in accordance with 21 CFR 10.20 comments, that information will be when appropriate, and other forms of and other applicable disclosure law. For posted on https://www.regulations.gov. information technology. more information about FDA’s posting • If you want to submit a comment of comments to public dockets, see 80 Electronic Records; Electronic with confidential information that you FR 56469, September 18, 2015, or access Signatures—21 CFR Part 11 do not wish to be made available to the the information at: https:// public, submit the comment as a OMB Control Number 0910–0303— www.govinfo.gov/content/pkg/FR-2015- written/paper submission and in the Extension 09-18/pdf/2015-23389.pdf. manner detailed (see ‘‘Written/Paper Docket: For access to the docket to Submissions’’ and ‘‘Instructions’’). This information collection supports read background documents or the FDA regulations in part 11 (21 CFR part Written/Paper Submissions electronic and written/paper comments 11), which govern criteria for received, go to https:// Submit written/paper submissions as acceptance of electronic records, www.regulations.gov and insert the follows: electronic signatures, and handwritten docket number, found in brackets in the • Mail/Hand Delivery/Courier (for signatures executed to electronic heading of this document, into the written/paper submissions): Dockets records as equivalent to paper records. ‘‘Search’’ box and follow the prompts Management Staff (HFA–305), Food and Under these regulations, records and and/or go to the Dockets Management Drug Administration, 5630 Fishers reports may be submitted to us Staff, 5630 Fishers Lane, Rm. 1061, Lane, Rm. 1061, Rockville, MD 20852. electronically provided that we have Rockville, MD 20852. • For written/paper comments stated our ability to accept the records submitted to the Dockets Management FOR FURTHER INFORMATION CONTACT: electronically in an Agency-established Staff, FDA will post your comment, as Domini Bean, Office of Operations, public docket and that the other well as any attachments, except for Food and Drug Administration, Three requirements of part 11 are met. information submitted, marked and White Flint North, 10A–12M, 11601 The recordkeeping provisions in identified, as confidential, if submitted Landsdown St., North Bethesda, MD §§ 11.10, 11.30, 11.50, and 11.300 as detailed in ‘‘Instructions.’’ 20852, 301–796–5733, PRAStaff@ require the following standard operating Instructions: All submissions received fda.hhs.gov. procedures to ensure appropriate use of must include the Docket No. FDA– SUPPLEMENTARY INFORMATION: Under the and precautions for systems using 2011–N–0076 for ‘‘Agency Information PRA (44 U.S.C. 3501–3521), Federal electronic records and signatures: (1) Collection Activities; Proposed Agencies must obtain approval from the § 11.10 specifies procedures and Collection; Comment Request; Office of Management and Budget controls for persons who use closed Electronic Records; Electronic (OMB) for each collection of systems to create, modify, maintain, or Signatures.’’ Received comments, those information they conduct or sponsor. transmit electronic records; (2) § 11.30 filed in a timely manner (see ‘‘Collection of information’’ is defined specifies procedures and controls for ADDRESSES), will be placed in the docket in 44 U.S.C. 3502(3) and 5 CFR persons who use open systems to create, and, except for those submitted as 1320.3(c) and includes Agency requests modify, maintain, or transmit electronic ‘‘Confidential Submissions,’’ publicly or requirements that members of the records; (3) § 11.50 specifies procedures viewable at https://www.regulations.gov public submit reports, keep records, or and controls for persons who use or at the Dockets Management Staff provide information to a third party. electronic signatures; and (4) § 11.300 between 9 a.m. and 4 p.m., Monday Section 3506(c)(2)(A) of the PRA (44 specifies controls to ensure the security through Friday. U.S.C. 3506(c)(2)(A)) requires Federal and integrity of electronic signatures • Confidential Submissions—To Agencies to provide a 60-day notice in based upon use of identification codes submit a comment with confidential the Federal Register concerning each in combination with passwords. The information that you do not wish to be proposed collection of information, reporting provision (§ 11.100) requires made publicly available, submit your including each proposed extension of an persons to certify to us in writing that comments only as a written/paper existing collection of information, they will regard electronic signatures submission. You should submit two before submitting the collection to OMB used in their systems as the legally

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binding equivalent of traditional To assist respondents with the submit designated information handwritten signatures. information collection we have electronically and, as a result, have The burden created by the developed the guidance document become subject to part 11. Part 11 information collection provision of this entitled ‘‘Guidance for Industry: Part 11, applies to records in electronic form regulation is a one-time burden Electronic Records; Electronic that are created, modified, maintained, Signatures—Scope and Application,’’ archived, retrieved, or transmitted associated with the creation of standard available on our website at https:// under any records requirements set operating procedures, validation, and www.fda.gov/media/75414/download. forth in Agency regulations. Part 11 also certification. We anticipate that the use While we do not believe the guidance applies to electronic records submitted of electronic media will substantially creates any attendant burden, it to the Agency under the Federal Food, reduce the paperwork burden associated describes the Agency’s thinking Drug, and Cosmetic Act and the Public with maintaining FDA-required records. regarding persons who, in fulfillment of Health Service Act, even if such records The respondents are businesses and a requirement in a statute or another are not specifically identified in Agency other for-profit organizations, State or part of FDA’s regulations to maintain regulations (§ 11.1). local governments, Federal Agencies, records or submit information to FDA, We estimate the burden of this and nonprofit institutions. have chosen to maintain the records or collection of information as follows:

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

Number of Average 21 CFR section Number of responses per Total annual burden per Total hours respondents respondent responses response

§ 11.100 ...... 4,500 1 4,500 1 4,500 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

TABLE 2—ESTIMATED ANNUAL RECORDKEEPING BURDEN 1

Number of Average 21 CFR section Number of record per Total annual burden per Total hours recordkeepers recordkeepers records recordkeeping

§ 11.10 ...... 2,500 1 2,500 20 50,000 § 11.30 ...... 2,500 1 2,500 20 50,000 § 11.50 ...... 4,500 1 4,500 20 90,000 § 11.300 ...... 4,500 1 4,500 20 90,000

Total ...... 280,000 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

Based on a review of the information guidance for industry entitled ‘‘Acute by October 13, 2020 to ensure that the collection since our last request for Myeloid Leukemia: Developing Drugs Agency considers your comment on this OMB approval, we have made no and Biological Products for Treatment.’’ draft guidance before it begins work on adjustments to our burden estimate. This draft guidance is intended to assist the final version of the guidance. Dated: August 5, 2020. sponsors in the clinical development of ADDRESSES: You may submit comments Lowell J. Schiller, drugs and biological products for the on any guidance at any time as follows: treatment of acute myeloid leukemia Principal Associate Commissioner for Policy. Electronic Submissions (AML). This draft guidance addresses [FR Doc. 2020–17711 Filed 8–12–20; 8:45 am] FDA’s current thinking regarding the Submit electronic comments in the BILLING CODE 4164–01–P overall development program and following way: • clinical trial designs for the Federal eRulemaking Portal: development of drugs and biological https://www.regulations.gov. Follow the DEPARTMENT OF HEALTH AND instructions for submitting comments. HUMAN SERVICES products to support an indication of treatment of AML, including indications Comments submitted electronically, including attachments, to https:// Food and Drug Administration limited to an individual phase of treatment (for example, maintenance, www.regulations.gov will be posted to [Docket No. FDA–2020–D–1298] transplantation preparative regimen, the docket unchanged. Because your etc.). The draft guidance addresses the comment will be made public, you are Acute Myeloid Leukemia: Developing solely responsible for ensuring that your Drugs and Biological Products for topics of general drug development, efficacy endpoints, and exploratory and comment does not include any Treatment; Draft Guidance for confidential information that you or a Industry; Availability confirmatory trial considerations for AML drug development. In addition, the third party may not wish to be posted, AGENCY: Food and Drug Administration, draft guidance addresses investigational such as medical information, your or HHS. new drug applications, new drug anyone else’s Social Security number, or confidential business information, such ACTION: Notice of availability. applications, and biologics licensing as a manufacturing process. Please note applications for AML drugs. SUMMARY: The Food and Drug that if you include your name, contact Administration (FDA or Agency) is DATES: Submit either electronic or information, or other information that announcing the availability of a draft written comments on the draft guidance identifies you in the body of your

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comments, that information will be of comments to public dockets, see 80 New classes of drugs are being posted on https://www.regulations.gov. FR 56469, September 18, 2015, or access developed as alternatives to the • If you want to submit a comment the information at: https:// standard cytotoxic drugs for the with confidential information that you www.govinfo.gov/content/pkg/FR-2015- treatment of AML. The following factors do not wish to be made available to the 09-18/pdf/2015-23389.pdf. contribute substantially to the public, submit the comment as a Docket: For access to the docket to complexity of clinical development written/paper submission and in the read background documents or the programs for such new drugs: The manner detailed (see ‘‘Written/Paper electronic and written/paper comments expansion of treatment intent, Submissions’’ and ‘‘Instructions’’). received, go to https:// broadening of the intended population, Written/Paper Submissions www.regulations.gov and insert the and development of a wide range of new docket number, found in brackets in the drug classes as alternatives to cytotoxic Submit written/paper submissions as heading of this document, into the drugs. This draft guidance includes follows: ‘‘Search’’ box and follow the prompts • FDA’s thinking regarding general drug Mail/Hand Delivery/Courier (for and/or go to the Dockets Management development considerations, efficacy written/paper submissions): Dockets Staff, 5630 Fishers Lane, Rm. 1061, Management Staff (HFA–305), Food and Rockville, MD 20852. endpoints, exploratory and confirmatory Drug Administration, 5630 Fishers You may submit comments on any trial considerations, and regulatory Lane, Rm. 1061, Rockville, MD 20852. guidance at any time (see 21 CFR submissions for AML drugs to facilitate • For written/paper comments 10.115(g)(5)). the development of new drugs for the submitted to the Dockets Management Submit written requests for single treatment of AML. Staff, FDA will post your comment, as copies of the draft guidance to Division well as any attachments, except for This draft guidance is being issued of Drug Information, CDER, Food and information submitted, marked and consistent with FDA’s good guidance Drug Administration, 10001 New identified, as confidential, if submitted practices regulation (21 CFR 10.115). as detailed in ‘‘Instructions.’’ Hampshire Ave., Hillandale Building, The draft guidance, when finalized, will Instructions: All submissions received 4th Floor, Silver Spring, MD 20993– represent the current thinking of FDA must include the Docket No. FDA– 0002 or the Office of Communication, on ‘‘Acute Myeloid Leukemia: 2020–D–1298 for ‘‘Acute Myeloid Outreach and Development, CBER, Food Developing Drugs and Biological Leukemia: Developing Drugs and and Drug Administration, 10903 New Products for Treatment.’’ It does not Biological Products for Treatment.’’ Hampshire Ave., Bldg. 71, Rm. 3128, establish any rights for any person and Silver Spring, MD 20993–0002. Send Received comments will be placed in is not binding on FDA or the public. one self-addressed adhesive label to the docket and, except for those You can use an alternative approach if submitted as ‘‘Confidential assist that office in processing your requests. The draft guidance may also be it satisfies the requirements of the Submissions,’’ publicly viewable at applicable statutes and regulations. https://www.regulations.gov or at the obtained by mail by calling CBER at 1– Dockets Management Staff between 9 800–835–4709 or 240–402–8010. See II. Paperwork Reduction Act of 1995 a.m. and 4 p.m., Monday through the SUPPLEMENTARY INFORMATION section Friday. for electronic access to the draft This draft guidance refers to • Confidential Submissions—To guidance document. previously approved collections of submit a comment with confidential FOR FURTHER INFORMATION CONTACT: information found in FDA regulations. information that you do not wish to be Donna Przepiorka, Center for Drug These collections of information are made publicly available, submit your Evaluation and Research, Food and subject to review by the Office of comments only as a written/paper Drug Administration, 10903 New Management and Budget (OMB) under submission. You should submit two Hampshire Ave., Bldg. 22, Rm. 2116, the Paperwork Reduction Act of 1995 copies total. One copy will include the Silver Spring, MD 20993–0002, 301– (44 U.S.C. 3501–3521). The collections information you claim to be confidential 796–5358; or Stephen Ripley, Center for of information in 21 CFR 312 have been with a heading or cover note that states Biologics Evaluation and Research, approved under OMB control number ‘‘THIS DOCUMENT CONTAINS Food and Drug Administration, 10903 0910–0014; the collections of CONFIDENTIAL INFORMATION.’’ The New Hampshire Ave., Bldg. 71, Rm. information in 21 CFR part 314 have Agency will review this copy, including 7301, Silver Spring, MD 20993–0002, been approved under OMB control the claimed confidential information, in 240–402–7911. number 0910–0001; the collections of its consideration of comments. The SUPPLEMENTARY INFORMATION: information in 21 CFR part 601 have second copy, which will have the I. Background been approved under 0910–0338; and claimed confidential information the collections of information in 21 CFR redacted/blacked out, will be available FDA is announcing the availability of 201.56 and 201.57 have been approved for public viewing and posted on a draft guidance for industry entitled under OMB control number 0910–0572. https://www.regulations.gov. Submit ‘‘Acute Myeloid Leukemia: Developing both copies to the Dockets Management Drugs and Biological Products for III. Electronic Access Staff. If you do not wish your name and Treatment.’’ This draft guidance is contact information to be made publicly intended to assist sponsors in the Persons with access to the internet available, you can provide this clinical development of drugs and may obtain the draft guidance at either information on the cover sheet and not biological products for the treatment of https://www.fda.gov/Drugs/Guidance in the body of your comments and you AML. This draft guidance includes ComplianceRegulatoryInformation/ must identify this information as FDA’s current thinking regarding the Guidances/default.htm, https:// ‘‘confidential.’’ Any information marked overall development program and www.fda.gov/vaccines-blood-biologics/ as ‘‘confidential’’ will not be disclosed clinical trial designs to support an guidance-compliance-regulatory- except in accordance with 21 CFR 10.20 indication of treatment of AML, information-biologics/biologics- and other applicable disclosure law. For including indications limited to an guidances, or https:// more information about FDA’s posting individual phase of treatment. www.regulations.gov.

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Dated: August 7, 2020. Teaching Health Centers Graduate and sponsoring institutions that are Lowell J. Schiller, Medical Education Program Cost involved in residency training. Principal Associate Commissioner for Policy. Evaluation, OMB No. 0906–XXXX— A 60-day notice published in the [FR Doc. 2020–17714 Filed 8–12–20; 8:45 am] NEW. Federal Register on April 30, 2020, vol. BILLING CODE 4164–01–P Abstract: The Teaching Health Center 85, No. 84; pp. 23975–76. One public Graduate Medical Education (THCGME) comment was received. GW also program, authorized by Section 340H of consulted with a GME Expert Panel to DEPARTMENT OF HEALTH AND the Public Health Service Act, was provide an external informed review of HUMAN SERVICES established by Section 5508 of Public the THCGME Costing Instrument. Law (Pub. L.) 111–148. The Bipartisan Recommendations were received from Health Resources and Services Budget Act of 2018 (Pub. L. 115–123) the GME Expert Panel and minor Administration provided continued funding for the changes were made. The feedback THCGME Program for fiscal years 2018 provided by the public comment and Agency Information Collection and 2019 and the Coronavirus Aid, Activities: Submission to OMB for the GME Expert Panel included Relief, and Economic Security Act recommendations to: (1) Collect Review and Approval; Public Comment extends funding for FY 2020 and for the Request; Information Collection information on telehealth visits in first two months of FY 2021 (until 2018–2019 as a benchmark for Request Title: Teaching Health Center November 30, 2020). The THCGME Graduate Medical Education Program telehealth activity post COVID–19 program provides funding support for pandemic; (2) change to academic year Cost Evaluation, OMB No. 0906– new and the expansion of existing XXXX—NEW 2018–2019 for the data collection primary care residency training period; and (3) further solidify the IME AGENCY: Health Resources and Services programs in community-based settings. methodology for the non-THC Federally Administration (HRSA), Department of The primary goals of this program are to Qualified Health Center comparison Health and Human Services. increase the production of primary care group; and (4) enhance the THCGME ACTION: Notice. providers who are better prepared to Costing Instrument instructions. practice in community settings, HRSA is collecting costing SUMMARY: In compliance with the particularly with underserved information related to both DME and Paperwork Reduction Act of 1995, populations, and improve the IME in an effort to establish a THC’s HRSA has submitted an Information geographic distribution of primary care total cost of running a residency Collection Request (ICR) to the Office of providers. program, to assist the Secretary in Management and Budget (OMB) for Need and Proposed Use of the determining an appropriate update to review and approval. Comments Information: Statute requires the the per resident amount used to submitted during the first public review Secretary to determine an appropriate calculate the payment for DME and an of this ICR will be provided to OMB. THCGME program payment for indirect appropriate IME payment. The OMB will accept further comments from medical expenses (IME) as well as to described data collection activities will the public during the review and update, as deemed appropriate, the per serve to inform these statutory approval period. OMB may act on resident amount used to determine the requirements for the Secretary in a HRSA’s ICR only after the 30 day Program’s payment for direct medical uniform and consistent manner. comment period for this notice has expenses (DME). To inform these closed. determinations and to increase Likely Respondents: The likely understanding of this model of respondents to the THCGME Costing DATES: Comments on this ICR should be residency training, George Washington Instrument are the THCGME program received no later than September 14, award recipients. 2020. University (GW), under contract with HRSA, is conducting an evaluation of Burden Statement: Burden in this ADDRESSES: Written comments and the costs associated with training context means the time expended by recommendations for the proposed residents in the THC model. GW has persons to generate, maintain, retain, information collection should be sent developed a standardized THCGME disclose or provide the information within 30 days of publication of this Costing Instrument to gather data from requested. This includes the time notice to www.reginfo.gov/public/do/ all THCGME programs, which they will needed to review instructions; to PRAMain. Find this particular use to gather costing information related develop, acquire, install, and utilize information collection by selecting to both DME and IME. The information technology and systems for the purpose ‘‘Currently under 30-day Review—Open gathered in the THCGME Costing of collecting, validating and verifying for Public Comments’’ or by using the Instrument includes, but is not limited information, processing and search function. to, resident and faculty full-time maintaining information, and disclosing FOR FURTHER INFORMATION CONTACT: To equivalents, salaries and benefits, and providing information; to train request a copy of the clearance requests residency administration costs, personnel and to be able to respond to submitted to OMB for review, email Lisa educational costs, residency clinical a collection of information; to search Wright-Solomon, the HRSA Information operations and administrative costs, data sources; to complete and review Collection Clearance Officer at patient visits and clinical revenue the collection of information; and to [email protected] or call (301) 443– generated by medical residents, transmit or otherwise disclose the 1984. financial reports, as well as general information. The total annual burden SUPPLEMENTARY INFORMATION: program information to understand the hours estimated for this ICR are Information Collection Request Title: characteristics of the THCGME program summarized in the table below.

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TOTAL ESTIMATED ANNUALIZED BURDEN—HOURS

Average Number of Number of Total burden per Total burden Form name respondents responses per responses response hours respondent (in hours)

Teaching Health Center Costing Instrument ...... 56 1 56 10 560

Total ...... 56 ...... 56 ...... 560

Maria G. Button, Authority: 42 U.S.C. 1395. Indian Health (CAIH) mission is to work Director, Executive Secretariat. Alex M. Azar II, in partnerships with AI/AN communities to raise their health status, [FR Doc. 2020–17729 Filed 8–12–20; 8:45 am] Secretary. BILLING CODE 4165–15–P self-sufficiency, and health leadership [FR Doc. 2020–17748 Filed 8–12–20; 8:45 am] to the highest possible level. This BILLING CODE 4150–03–P mission is accomplished through DEPARTMENT OF HEALTH AND research, training and education, and service. The CAIH has more than nine HUMAN SERVICES DEPARTMENT OF HEALTH AND facilities and approximately 100 staff in HUMAN SERVICES Office of the Secretary the Southwestern tribal communities to Indian Health Service assist the Indian Health Service (IHS) in Delegation of Authority containing and mitigating COVID–19, [Assistance Listing Number 93.933] while building a response model and set Notice is hereby given that I have of communication materials for all IHS Awards Unsolicited Proposal for the delegated jointly to the Administrator, regions nationwide. The CAIH can draw Health Communication Initiative Centers for Medicare & Medicaid on broad expertise from JHU for Program Services (CMS), and to the Director, additional guidance and National Institutes of Health (NIH), the AGENCY: Office of Clinical and recommendations on best practices as authorities vested in the Secretary under Preventive Services, Indian Health the situation evolves. Section 1881(c)(7)(B)–(E) [42 U.S.C. Service, Department of Health and The materials will be developed from 1395rr(c)(7)(B)–(E)] of the Social Human Services. the Centers for Disease Control and Security Act (the Act), as amended, to ACTION: Notice of award of a single- Prevention (CDC) and the Substance assemble and analyze data reported by source unsolicited grant to Johns Abuse and Mental Health Services network organizations, transplant Hopkins University in Baltimore, Administration (SAMHSA) guidance. centers, and other sources on all end- Maryland. Based on an internal review of the stage renal disease (ESRD) patients. proposal and the immediate response of Recipient: Johns Hopkins University, the IHS to address the COVID–19 public Limitations Baltimore, Maryland. health emergency, OCPS determined that the proposal has merit. This delegation of authorities under Purpose of the Award: Cooperative agreement to collect, develop, package The long history between the federal Section 1881(c)(7)(B)–(E) [42 U.S.C. and distribute information to American government and Native American Tribes 1395rr(c)(7)(B)–(E)] of the Act shall be Indian and Alaska Native (AI/AN) and people has often been less than shared between CMS and NIH as these communities to address the coronavirus ideal. There are still barriers to the authorities relate to their respective disease 2019 (COVID–19)-specific Native American community accepting programs. CMS and NIH will implement recommendations on healthcare, in a instruction or direction from the federal proactive collaborative measures such culturally sensitive way. government. There is great value in as ongoing status checks to discuss Amount of Award: $127,644 in Fiscal having a third party that has a good progress and resolve any potential Year (FY) 2020. history with the community to gather, disputes. Period of Performance: April 24, package and deliver recommendations, This delegation supersedes any prior 2020–August 24, 2020. in a culturally sensitive way, on staying delegations under this section, SUMMARY: The Office of Clinical and safe from this disease, when those including the delegation dated Preventive Services (OCPS) announces recommendations may run contrary to September 6, 1984 (49 FR 35247). the award of a single-source cooperative cultural norms. This delivery avenue This delegation of authority may be agreement in response to an unsolicited will be more acceptable to the re-delegated. proposal from Johns Hopkins community, and will be more readily University, Baltimore, Maryland. The recognized for implementation within This delegation of authority is proposal submitted was not solicited AI/AN communities. effective immediately. either formally or informally by any This award is being made I hereby affirm and ratify any actions federal government official. noncompetitively because there is no taken by the Administrator, CMS, and OCPS performed an objective review current, pending, or planned funding the Director, NIH, or their subordinates, of the unsolicited proposal from Johns opportunity announcement under which involved the exercise of authority Hopkins University (JHU) to develop which this proposal could be competed. under Section 1881(c)(7)(B)–(E) [42 information on proper actions to OCPS has identified two additional key U.S.C. 1395rr(c)(7)(B)–(E)] of the Act, as mitigate the spread of COVID–19, in a reasons to support rationale for amended, delegated herein prior to the culturally sensitive way. The Johns awarding this unsolicited proposal: effective date of this delegation of Hopkins Bloomberg School of Public 1. The JHU CAIH is well known in the authority. Health (JHSPH) Center for American AI/AN communities for robust

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communication/messaging networks, Name of Committee: National Advisory listed in the Supplementary Information research, training, and subject matter Council for Biomedical Imaging and section of this notice. Upon expiration expertise. The dissemination of critical Bioengineering. of the evaluation period the granted COVID–19 information for tribal Date: September 15, 2020. licenses may be converted into a fully communities builds trust, credibility, Open: 12:00 p.m. to 3:00 p.m. Agenda: Report from the Institute Director exclusive patent commercialization and integrity of promoting a culturally and other Institute Staff. license for the term of the last to expire sensitive public health approach around Place: National Institutes of Health, of the patent estate upon the company the information. Democracy II, 6707 Democracy Boulevard, providing NHLBI with a commercial 2. The JHU CAIH is uniquely Bethesda, MD 20892 (Virtual Meeting). development plan supporting such a positioned to provide culturally specific Closed: 3:00 p.m. to 5:00 p.m. conversion. This notice is intended to subject matter expertise drawn from a Agenda: To review and evaluate grant apprise the public of a aforementioned direct care services or ‘‘boots on the applications. license and provide a fifteen (15) day ground’’ approach. The CAIH has nearly Place: National Institutes of Health, notice period for the objection. Democracy II, 6707 Democracy Boulevard, 40 years of collaboration with Native DATES: Only written comments and/or American tribes and supports public Bethesda, MD 20892 (Virtual Meeting). Contact Person: David T. George, Ph.D., applications for a license which are health interventions in more than 140 Associate Director, Office of Research received by the National Heart, Lung, tribal communities in over 21 states. Administration, National Institute of and Blood Institute on or before August The breadth of knowledge and existing Biomedical Imaging and Bioengineering, 28, 2020 will be considered. partnerships will enhance 6707 Democracy Boulevard, Room 920, ADDRESSES: Requests for copies of dissemination of information nationally. Bethesda, MD 20892, [email protected]. patent applications (electronic only), Legislative Authority: The Snyder Act, Any interested person may file inquiries, and comments relating to the 25 U.S.C. Section 13; the Indian Health written comments with the committee contemplated an exclusive patent Care Improvement Act, 25 U.S.C. by forwarding the statement to the license should be emailed to: Michael Section 1621b; and Coronavirus Aid, Contact Person listed on this notice. The Shmilovich, Esq., Senior Licensing and Relief, and Economic Security (CARES) statement should include the name, Patent Manager, 31 Center Drive Room Act, Public Law 116–136. address, telephone number and when 4A29, MSC2479, Bethesda, MD 20892– FOR FURTHER INFORMATION CONTACT: applicable, the business or professional 2479, phone number 301–435–5019 affiliation of the interested person. Audrey Solimon at Audrey.Solimon@ [email protected]. ihs.gov or by telephone at 301–590– Information is also available on the 5421. Institute’s/Center’s home page: http:// SUPPLEMENTARY INFORMATION: www.nibib1.nih.gov/about/NACBIB/ Intellectual Property (Patent Estate) Michael D. Weahkee, NACBIB.htm, where an agenda and any RADM, Assistant Surgeon General, U.S. additional information for the meeting HHS Ref. No. E–036–2015–0 and –1, Public Health Service, Director, Indian Health will be posted when available. U.S. Provisional Patent Application 62/ Service. 079,975 filed November 14, 2014 [FR Doc. 2020–17516 Filed 8–12–20; 8:45 am] Dated: August 7, 2020. (expired), International Patent BILLING CODE 4165–16–P Miguelina Perez, Application PCT/US2015/060646 filed Program Analyst, Office of Federal Advisory November 13, 2015 (nationalized), U.S. Committee Policy. Patent Application 15/525,921 having DEPARTMENT OF HEALTH AND [FR Doc. 2020–17678 Filed 8–12–20; 8:45 am] an effective filing date of November 13, HUMAN SERVICES BILLING CODE 4140–01–P 2015, and U.S. Divisional Patent Application 16/985,797 filed August 5, National Institutes of Health 2020, any and all continuation or DEPARTMENT OF HEALTH AND divisional applications claiming priority National Institute of Biomedical HUMAN SERVICES Imaging and Bioengineering; Notice of to any of the above. Meeting The patent rights in these inventions National Institutes of Health have been assigned or exclusively Pursuant to section 10(d) of the Prospective Grant of an Exclusive licensed to the Government of the Federal Advisory Committee Act, as Start-Up Patent License for Evaluation: United States of America. The prospective exclusive license amended, notice is hereby given of a Immunotherapy for Relapsed/ territory may be worldwide and in field meeting of the National Advisory Refractory Diffuse Large B Cell of use that may be limited to Council for Biomedical Imaging and Lymphoma Bioengineering. Immunotherapy against relapsed or The meeting will be open to the AGENCY: National Institutes of Health, refractory diffuse large B cell public by videocast as indicated below. Health and Human Services (HHS). lymphoma, and where the ‘‘Licensed The meeting will be closed to the public ACTION: Notice. Products’’ may be defined to be limited in accordance with the provisions set to transgenically modified allogeneic forth in sections 552b(c)(4) and SUMMARY: The National Heart, Lung, and natural killer cells within the scope of 552b(c)(6), Title 5 U.S.C., as amended. Blood Institute, of the National the Licensed Patent Rights that The grant applications and the Institutes of Health, Department of transiently express one or more of a (1) discussions could disclose confidential Health and Human Services, is CCR7 receptor, (2) CD16a (HA–CD16), trade secrets or commercial property contemplating the grant of an exclusive (3) a DR5 specific TRAIL, or (4) CD19 such as patentable material, and start-up patent license for evaluation to chimeric antigen receptor. personal information concerning ONK Therapeutics, a start-up company The aforementioned patent estates individuals associated with the grant spun-off from the National University of cover methods of treating a subject with applications and/or contract proposals, Ireland Galway, and incorporated under a tumor by administering transgenically the disclosure of which would the laws of the Republic of Ireland, to modified adoptive NK (natural killer constitute a clearly unwarranted practice, for a limited time, the cells), methods of generating transgenic invasion of personal privacy. inventions covered by the patent estate NK cells, and transgenic NK cells per se.

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In particular, the claims cover include Dated August 5, 2020. DEPARTMENT OF HEALTH AND transgenic NKs expressing CCR7 and Michael Shmilovich, HUMAN SERVICES CD16a (HA–CD16). The treatment Senior Licensing and Patenting Manager, methods also include dependent claims National Heart, Lung, and Blood Institute. National Institutes of Health where the transgenic NK cells are co- [FR Doc. 2020–17703 Filed 8–12–20; 8:45 am] National Institute of Nursing Research; administered with a monoclonal BILLING CODE 4140–01–P Notice of Meeting antibody therapeutic (e.g., rituximab). CCR7 is a chemokine receptor Pursuant to section 10(d) of the (chemokine (C—C motif) receptor 7) DEPARTMENT OF HEALTH AND Federal Advisory Committee Act, as known to direct cellular migration to HUMAN SERVICES amended, notice is hereby given of a secondary lymphoid tissues, including meeting of the National Advisory lymph nodes where hematological National Institutes of Health Council for Nursing Research. malignancies such as diffuse large B cell The meeting will be open to the lymphoma (DLBCL) reside. Normally, National Institute of Diabetes and public as indicated below. CCR7 is expressed by only a small Digestive and Kidney Diseases; Notice The meeting will be closed to the subset of resting primary NK cells. of Closed Meeting public in accordance with the CD16 includes Fc receptors FcgRIIIa provisions set forth in sections Pursuant to section 10(d) of the 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., (CD16a) and FcgRIIIb (CD16b) found on Federal Advisory Committee Act, as as amended. The grant applications and the surface of natural killer (NK) cells amended, notice is hereby given of the the discussions could disclose and other leukocytes. CD16a binds to following meeting. confidential trade secrets or commercial the Fc tail of IgG antibodies which then The meeting will be closed to the property such as patentable material, activates the NK cell for antibody- public in accordance with the and personal information concerning dependent cellular toxicity (ADCC). provisions set forth in sections individuals associated with the grant Human wild type CD16 has a relatively 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., applications, the disclosure of which low affinity for IgG1 antibodies. as amended. The grant applications and would constitute a clearly unwarranted However, a single nucleotide the discussions could disclose invasion of personal privacy. polymorphism (SNP rs396991) in the confidential trade secrets or commercial Name of Committee: National Advisory CD16a gene (F to V at position 158; property such as patentable material, Council for Nursing Research. referred to hereafter as HA–CD16) and personal information concerning Date: September 15, 2020. results in substantially higher IgG1 Open: 11:30 a.m. to 1:30 p.m. individuals associated with the grant affinity and superior NK mediated Agenda: Discussion of Program Policies applications, the disclosure of which ADCC. and Issues. would constitute a clearly unwarranted Place: https://videocast.nih.gov/ This notice is made in accordance invasion of personal privacy. watch=38169, Bethesda, MD 20892 (Virtual with 35 U.S.C. 209 and 37 CFR part 404. Meeting). Name of Committee: National Institute of The prospective exclusive licenses, both Closed: 2:00 p.m. to 3:30 p.m. Diabetes and Digestive and Kidney Diseases the one granted for the evaluation Agenda: To review and evaluate grant Special Emphasis Panel; PAR19–202: High applications. period and if converted into a full Impact, Interdisciplinary Science in NIDDK exclusive patent commercialization Place: National Institute of Nursing Research Areas (RC2 Clinical Trial Research, National Institutes of Health, 6701 license, will be royalty bearing. The Optional)—Hematological Diseases. Democracy Boulevard, One Democracy Plaza, prospective exclusive license may be Date: September 28, 2020. Bethesda, MD 20892 (Virtual Meeting). granted unless within fifteen (15) days Time: 2:00 p.m. to 4:00 p.m. Contact Person: Kay Wanke, Acting from the date of this published notice, Agenda: To review and evaluate grant Executive Secretary, National Institute of the National Heart, Lung, and Blood applications. Nursing Research, National Institutes of Institute receives written evidence and Place: National Institutes of Health, Two Health, 6701 Democracy Boulevard, One Democracy Plaza, Bethesda, MD 20817, (301) Democracy Plaza, 6707 Democracy Blvd., argument that establishes that the grant 402–0036, [email protected]. Bethesda, MD 20892 (Video Meeting). of the license would not be consistent Any interested person may file written Contact Person: Najma S. Begum, Ph.D., with the requirements of 35 U.S.C. 209 comments with the committee by forwarding and 37 CFR part 404. Scientific Review Officer, Review Branch, the statement to the Contact Person listed on DEA, NIDDK, National Institutes of Health, this notice. The statement should include the In response to this Notice, the public Room 7349, 6707 Democracy Boulevard, may file comments or objections. name, address, telephone number and when Bethesda, MD 20892–5452, (301) 594–8894, applicable, the business or professional Comments and objections, other than [email protected]. affiliation of the interested person. those in the form of a license (Catalogue of Federal Domestic Assistance Information is also available on the application, will not be treated Program Nos. 93.847, Diabetes, Institute’s/Center’s home page: www.nih.gov/ _ confidentially, and may be made Endocrinology and Metabolic Research; ninr/a advisory.html, where an agenda and any additional information for the meeting publicly available. 93.848, Digestive Diseases and Nutrition will be posted when available. License applications submitted in Research; 93.849, Kidney Diseases, Urology (Catalogue of Federal Domestic Assistance and Hematology Research, National Institutes response to this notice will be presumed Program Nos. 93.361, Nursing Research, of Health, HHS) to contain business confidential National Institutes of Health, HHS) information and any release of Dated: August 7, 2020. Dated: August 10, 2020. information in these license Miguelina Perez, Miguelina Perez, applications will be made only as Program Analyst, Office of Federal Advisory Program Analyst, Office of Federal Advisory required and upon a request under the Committee Policy. Committee Policy. Freedom of Information Act, 5 U.S.C. [FR Doc. 2020–17677 Filed 8–12–20; 8:45 am] [FR Doc. 2020–17743 Filed 8–12–20; 8:45 am] 552. BILLING CODE 4140–01–P BILLING CODE 4140–01–P

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DEPARTMENT OF HEALTH AND making oral presentations must notify use only one of the following methods HUMAN SERVICES the contact person by August 26, 2020. to submit comments: Up to three minutes will be allotted for (1) Email. Submit comments to: CBP_ Substance Abuse and Mental Health each presentation, and as time permits. [email protected]. Services Administration To obtain the call-in number, access code, and/or web access link; submit (2) Mail. Submit written comments to Meeting of the the Substance Abuse written or brief oral comments; or CBP Paperwork Reduction Act Officer, and Mental Health Services request special accommodations for U.S. Customs and Border Protection, Administration’s National Advisory persons with disabilities, please register Office of Trade, Regulations and Council on-line at: https:// Rulings, Economic Impact Analysis Branch, 90 K Street NE, 10th Floor, AGENCY: Substance Abuse and Mental snacregister.samhsa.gov/ Health Services Administration, HHS. MeetingList.aspx, or communicate with Washington, DC 20229–1177. SAMHSA’s Committee Management ACTION: Notice. FOR FURTHER INFORMATION CONTACT: Officer, CAPT Carlos Castillo. Meeting information and a roster of Requests for additional PRA information SUMMARY: Notice is hereby given of the should be directed to Seth Renkema, meeting on September 3, 2020, of the Council members may be obtained either by accessing the SAMHSA Chief, Economic Impact Analysis Substance Abuse and Mental Health Branch, U.S. Customs and Border Services Administration’s (SAMHSA) Council’s website at http:// www.samhsa.gov/about-us/advisory- Protection, Office of Trade, Regulations National Advisory Council (SAMHSA and Rulings, 90 K Street NE, 10th Floor, NAC). The meeting is open to the public councils/ or by contacting Carlos Washington, DC 20229–1177, and can only be accessed virtually. Castillo. Telephone number 202–325–0056 or via Agenda with call-in information will be Council Name: Substance Abuse and email [email protected]. Please posted on the SAMHSA website prior to Mental Health Services Administration the meeting at: https:// National Advisory Council. note that the contact information www.samhsa.gov/about-us/advisory- (Authority: Public Law 92–463) provided here is solely for questions regarding this notice. Individuals councils/meetings. The meeting will Dated: August 7, 2020. include remarks and discussion with seeking information about other CBP Carlos Castillo, programs should contact the CBP the Assistant Secretary for Mental Committee Management Officer, SAMHSA. Health and Substance Use; updates on National Customer Service Center at [FR Doc. 2020–17683 Filed 8–12–20; 8:45 am] SAMHSA priorities and initiatives, and 877–227–5511, (TTY) 1–800–877–8339, a council discussion on clinical trends BILLING CODE 4162–20–P or CBP website at https://www.cbp.gov/. and emerging national issues with SUPPLEMENTARY INFORMATION: CBP SAMHSA NAC members. DEPARTMENT OF HOMELAND invites the general public and other DATES: September 3, 2020, 1:00 p.m. to SECURITY Federal agencies to comment on the approximately 5:00 p.m. (ET)/Open. proposed and/or continuing information ADDRESSES: The meeting will be held U.S. Customs and Border Protection collections pursuant to the Paperwork virtually. [1651–0021] Reduction Act of 1995 (44 U.S.C. 3501 FOR FURTHER INFORMATION CONTACT: et seq.). This process is conducted in Carlos Castillo, Committee Management Agency Information Collection accordance with 5 CFR 1320.8. Written Officer and Designated Federal Official, Activities: Crew Member’s Declaration comments and suggestions from the SAMHSA National Advisory Council, public and affected agencies should AGENCY: U.S. Customs and Border 5600 Fishers Lane, Rockville, Maryland address one or more of the following Protection (CBP), Department of 20857 (mail), Telephone: (240) 276– four points: (1) Whether the proposed Homeland Security. 2787, Email: carlos.castillo@ collection of information is necessary samhsa.hhs.gov. ACTION: 60-Day notice and request for for the proper performance of the comments; extension of an existing functions of the agency, including SUPPLEMENTARY INFORMATION: The collection of information. SAMHSA NAC was established to whether the information will have advise the Secretary, Department of SUMMARY: The Department of Homeland practical utility; (2) the accuracy of the Health and Human Services (HHS), and Security, U.S. Customs and Border agency’s estimate of the burden of the the Assistant Secretary for Mental Protection will be submitting the proposed collection of information, Health and Substance Use, SAMHSA, to following information collection request including the validity of the improve the provision of treatments and to the Office of Management and Budget methodology and assumptions used; (3) related services to individuals with (OMB) for review and approval in suggestions to enhance the quality, respect to substance use and to improve accordance with the Paperwork utility, and clarity of the information to prevention services, promote mental Reduction Act of 1995 (PRA). The be collected; and (4) suggestions to health, and protect legal rights of information collection is published in minimize the burden of the collection of individuals with mental illness and the Federal Register to obtain comments information on those who are to individuals who are substance users. from the public and affected agencies. respond, including through the use of Interested persons may present data, Comments are encouraged and must be appropriate automated, electronic, information, or views orally or in submitted (no later than October 13, mechanical, or other technological writing, on issues pending before the 2020) to be assured of consideration. collection techniques or other forms of Council. Written submissions must be ADDRESSES: Written comments and/or information technology, e.g., permitting forwarded to the contact person no later suggestions regarding the item(s) electronic submission of responses. The than seven days before the meeting. Oral contained in this notice must include comments that are submitted will be presentations from the public will be the OMB Control Number 1651–0021 in summarized and included in the request scheduled at the conclusion of the the subject line and the agency name. for approval. All comments will become meeting. Individuals interested in To avoid duplicate submissions, please a matter of public record.

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Overview of This Information SUMMARY: The Department of Homeland including the validity of the Collection Security, U.S. Customs and Border methodology and assumptions used; (3) Title: Crew Member’s Declaration. Protection will be submitting the suggestions to enhance the quality, OMB Number: 1651–0021. following information collection request utility, and clarity of the information to Form Number: CBP Form 5129. to the Office of Management and Budget be collected; and (4) suggestions to Current Actions: CBP proposes to (OMB) for review and approval in minimize the burden of the collection of extend the expiration date of this accordance with the Paperwork information on those who are to information collection with no change Reduction Act of 1995 (PRA). The respond, including through the use of to the burden hours or to CBP Form information collection is published in appropriate automated, electronic, 5129. the Federal Register to obtain comments mechanical, or other technological Type of Review: Extension (without from the public and affected agencies. collection techniques or other forms of change). Comments are encouraged and must be information technology, e.g., permitting submitted (no later than October 13, Affected Public: Businesses. electronic submission of responses. The 2020) to be assured of consideration. Abstract: CBP Form 5129, Crew comments that are submitted will be ADDRESSES: Member’s Declaration, is a declaration Written comments and/or summarized and included in the request suggestions regarding the item(s) made by crew members listing all goods for approval. All comments will become contained in this notice must include acquired abroad which are in his/her a matter of public record. possession at the time of arrival in the the OMB Control Number 1651–0058 in United States. The data collected on the subject line and the agency name. Overview of This Information CBP Form 5129 is used for compliance To avoid duplicate submissions, please Collection with currency reporting requirements, use only one of the following methods to submit comments: Title: Documents Required Aboard supplemental immigration _ documentation, agricultural quarantine (1) Email. Submit comments to: CBP Private Aircraft. matters, and the importation of [email protected]. OMB Number: 1651–0058. (2) Mail. Submit written comments to merchandise by crew members who Form Number: None. complete the individual declaration. CBP Paperwork Reduction Act Officer, This form is authorized by 19 U.S.C. U.S. Customs and Border Protection, Current Actions: CBP proposes to 1431 and provided for by 19 CFR 4.7, Office of Trade, Regulations and extend the expiration date of this 4.81, 122.83, 122.84, and 148.61–148.67. Rulings, Economic Impact Analysis information collection. There is no CBP Form 5129 is accessible at https:// Branch, 90 K Street NE, 10th Floor, change to the burden hours or to the www.cbp.gov/sites/default/files/assets/ Washington, DC 20229–1177. information collected. documents/2018-Dec/ FOR FURTHER INFORMATION CONTACT: Type of Review: Extension (without CBP%20Form%205129.pdf. Requests for additional PRA information change). should be directed to Seth Renkema, Estimated Number of Respondents: Affected Public: Individuals. 6,000,000. Chief, Economic Impact Analysis Estimated Number of Annual Branch, U.S. Customs and Border Abstract: In accordance with 19 CFR Responses per Respondent: 1. Protection, Office of Trade, Regulations 122.27(c), a commander of a private Estimated Number of Total Annual and Rulings, 90 K Street NE, 10th Floor, aircraft arriving in the U.S. must present Responses: 6,000,000. Washington, DC 20229–1177, several documents to CBP officers for Estimated Time per Response: 10 Telephone number 202–325–0056 or via inspection. These documents include: _ minutes. email CBP [email protected]. Please (1) A pilot certificate/license; (2) a Estimated Total Annual Burden note that the contact information medical certificate; and (3) a certificate Hours: 996,000. provided here is solely for questions of registration. CBP officers use the regarding this notice. Individuals information on these documents as part Dated: August 10, 2020. seeking information about other CBP Seth D. Renkema, of the inspection process for private programs should contact the CBP aircraft arriving from a foreign country. Branch Chief, Economic Impact Analysis National Customer Service Center at Branch, U.S. Customs and Border Protection. This presentation of information is 877–227–5511, (TTY) 1–800–877–8339, authorized by 19 U.S.C. 1433, as [FR Doc. 2020–17736 Filed 8–12–20; 8:45 am] or CBP website at https://www.cbp.gov/. amended by Public Law 99–570. BILLING CODE P SUPPLEMENTARY INFORMATION: CBP invites the general public and other Estimated Number of Respondents: Federal agencies to comment on the 120,000. DEPARTMENT OF HOMELAND proposed and/or continuing information Estimated Number of Annual SECURITY collections pursuant to the Paperwork Responses per Respondent: 1. U.S. Customs and Border Protection Reduction Act of 1995 (44 U.S.C. 3501 Estimated Number of Total Annual et seq.). This process is conducted in Responses: 120,000. [1651–0058] accordance with 5 CFR 1320.8. Written comments and suggestions from the Estimated Time per Response: 1 Agency Information Collection public and affected agencies should minute. Activities: Documents Required address one or more of the following Estimated Total Annual Burden Aboard Private Aircraft four points: (1) Whether the proposed Hours: 1,992. collection of information is necessary AGENCY: U.S. Customs and Border Dated: August 10, 2020. for the proper performance of the Protection (CBP), Department of Seth D. Renkema, Homeland Security. functions of the agency, including whether the information will have Branch Chief, Economic Impact Analysis ACTION: 60-Day notice and request for practical utility; (2) the accuracy of the Branch, U.S. Customs and Border Protection. comments; extension of an existing agency’s estimate of the burden of the [FR Doc. 2020–17735 Filed 8–12–20; 8:45 am] collection of information. proposed collection of information, BILLING CODE 9111–14–P

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DEPARTMENT OF HOUSING AND A. Overview of Information Collection C. Authority URBAN DEVELOPMENT Title of Information Collection: Section 3507 of the Paperwork Monthly Report of Excess Income and Reduction Act of 1995, 44 U.S.C. [Docket No. FR–7027–N–27; OMB Control Annual Report of Uses of Excess Chapter 35. No. 2502–0086] Income. The Acting Assistant Secretary for OMB Approval Number: 2502–0086. Housing—Federal Housing 60-Day Notice of Proposed Information OMB Expiration Date: 2/29/2020. Commissioner, Len Wolfson, having Collection: Monthly Report of Excess Type of Request: Reinstatement, with reviewed and approved this document, Income and Annual Report of Uses of change, of previously approved is delegating the authority to Excess Income collection for which approval has electronically sign this document to expired. submitter, Nacheshia Foxx, who is the AGENCY: Office of the Assistant Form Number: N/A (Pay.gov). Federal Register Liaison for HUD, for Secretary for Housing—Federal Housing Description of the need for the purposes of publication in the Federal Commissioner, HUD. information and proposed use: Project Register. ACTION: Notice. owners are permitted to retain excess Dated: August 10, 2020. income for projects under terms and Nacheshia Foxx, SUMMARY: HUD is seeking approval from conditions established by HUD. Owners the Office of Management and Budget Federal Register Liaison for the Department must submit a written request to retain of Housing and Urban Development. (OMB) for the information collection some or all of their excess income. The [FR Doc. 2020–17718 Filed 8–12–20; 8:45 am] described below. In accordance with the request must be submitted at least 90 Paperwork Reduction Act, HUD is days before the beginning of each fiscal BILLING CODE 4210–67–P requesting comment from all interested year, or 90 days before any other time parties on the proposed collection of during a fiscal year that the owner plans information. The purpose of this notice to begin retaining excess income for that DEPARTMENT OF THE INTERIOR is to allow for 60 days of public fiscal year. HUD uses the information to Fish and Wildlife Service comment. ensure that required excess rents are remitted to the Department and/or [FWS–R5–ES–2020–0028; DATES: Comments Due Date: October 13, retained by the owner for project use. FXES111X0500000–XXX–FF05E00000] 2020. Respondents (i.e., affected public): Receipt of Incidental Take Permit ADDRESSES: Interested persons are Business or other for-profit. Project Application and Proposed Habitat invited to submit comments regarding owners with loans subsidized using the Conservation Plan for Karner Blue this proposal. Comments should refer to Section 236 program (Business or other Butterfly and Frosted Elfin in the the proposal by name and/or OMB for-profit). Albany Pine Bush Preserve, Albany, Control Number and should be sent to: Estimated Number of Respondents: Colonie and Guilderland, New York; Colette Pollard, Reports Management 835. Categorical Exclusion Officer, QDAM, Department of Housing Estimated Number of Responses: and Urban Development, 451 7th Street 10,855. AGENCY: Fish and Wildlife Service, SW, Room 4176, Washington, DC Frequency of Response: 12. Interior. 20410–5000; telephone 202–402–3400 Average Hours per Response: 0.25. ACTION: Notice of availability; request (this is not a toll-free number) or email Total Estimated Burden: 3,131 hours. for comment and information. at [email protected] for a copy of the proposed forms or other available B. Solicitation of Public Comment SUMMARY: We, the Fish and Wildlife information. Persons with hearing or This notice is soliciting comments Service (Service), announce receipt of speech impairments may access this from members of the public and affected an application from the Albany Pine number through TTY by calling the toll- parties concerning the collection of Bush Preserve Commission (applicant) free Federal Relay Service at (800) 877– information described in Section A on for an incidental take permit (ITP) under 8339. the following: the Endangered Species Act. The FOR FURTHER INFORMATION CONTACT: (1) Whether the proposed collection applicant requests the ITP to take the Colette Pollard, Reports Management of information is necessary for the federally listed endangered Karner blue Officer, QDAM, Department of Housing proper performance of the functions of butterfly incidental to otherwise lawful and Urban Development, 451 7th Street the agency, including whether the activities associated with expansion of SW, Washington, DC 20410; email information will have practical utility; an existing trail system and routine Colette Pollard at Colette.Pollard@ (2) The accuracy of the agency’s property maintenance and management hud.gov or telephone 202–402–3400. estimate of the burden of the proposed activities within the Albany Pine Bush This is not a toll-free number. Persons collection of information; Preserve. The applicant also seeks take with hearing or speech impairments (3) Ways to enhance the quality, coverage for the frosted elfin butterfly, may access this number through TTY by utility, and clarity of the information to listed as threatened by the State of New calling the toll-free Federal Relay be collected; and York, should it become federally listed Service at (800) 877–8339. (4) Ways to minimize the burden of in the future. The applicant proposes a the collection of information on those conservation program to minimize and Copies of available documents who are to respond; including through mitigate the impacts of unavoidable submitted to OMB may be obtained the use of appropriate automated incidental take of the two species, as from Ms. Pollard. collection techniques or other forms of described in its habitat conservation SUPPLEMENTARY INFORMATION: This information technology, e.g., permitting plan (HCP). We invite public comment notice informs the public that HUD is electronic submission of responses. on the application, which includes the seeking approval from OMB for the HUD encourages interested parties to applicant’s proposed HCP, and the information collection described in submit comment in response to these Service’s preliminary determination that Section A. questions. the covered actions and incidental take

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which may occur under this proposed found in the Code of Federal similarly situated projects, would not HCP, if implemented, qualifies as ‘‘low Regulations at 50 CFR 17.22 and 50 CFR over time result in significant effect,’’ and therefore our issuance of the 17.32. cumulative effects to environmental requested ITP authorizing the take Applicant’s Proposed Project values or resources. would be categorically excluded from further review under the National The applicant requests a 20-year ITP Next Steps to take two covered species, the Environmental Policy Act. To make this The Service will evaluate the determination, we used our endangered Karner blue butterfly and application and the comments received environmental action statement and the frosted elfin (should it become to determine whether the permit low-effect screening form, both of which federally listed in the future). The application meets the requirements of are also available for public review. We applicant determined that unavoidable provide this notice to seek comments take is reasonably certain to occur section 10(a) of the ESA (16 U.S.C. 1531 from the public and Federal, Tribal, incidental to the proposed construction et seq.). We will also conduct an intra- State, and local governments. of 2.7 miles of trail and routine property Service consultation pursuant to section maintenance and management activities 7 of the ESA to evaluate the effects of DATES: We will accept comments that will affect approximately 1.94 acres received or postmarked on or before the proposed take. After considering the (ac) of occupied or suitable habitat for September 14, 2020. above findings, we will determine the covered species. whether the permit issuance criteria of ADDRESSES: The conservation program in the section 10(a)(l)(B) of the ESA have been Reviewing documents: You may applicant’s proposed HCP is designed to obtain copies of the application, met. If met, the Service will issue the avoid, minimize, and mitigate the requested ITP to the applicant. including the HCP and the draft impacts of covered activities on the environmental action statement, in covered species, and is intended to Request for Public Comments Docket No. FWS–R5–ES–2020–0028 at complement ongoing conservation http://www.regulations.gov. efforts for the covered species in New The Service invites the public to Submitting Comments: You may York State. The HCP proposes comment on the proposed HCP and submit comments by one of the establishment and ongoing maintenance draft environmental action statement following methods: during a 30-day public comment period • of approximately 6 ac of wild blue Federal eRulemaking Portal: http:// lupine to increase breeding and foraging (see DATES). You may submit comments www.regulations.gov. Follow the habitat for the covered species to offset by one of the methods shown under instructions for submitting comments the anticipated impacts of the taking. ADDRESSES. on Docket No. FWS–R5–ES–2020–0028. • U.S. Mail: Public Comments National Environmental Policy Act Public Availability of Comments Processing; Attn: Docket No. FWS–R5– The issuance of an ITP is a Federal Before including your address, phone ES–2020–0028; U.S. Fish and Wildlife action that triggers the need for Service Headquarters, MS: PRB/3W; compliance with NEPA (42 U.S.C. 4321 number, email address, or other 5275 Leesburg Pike, Falls Church, VA et seq.). The Service has made a personal identifying information in your 22041–3803. preliminary determination that the comment, you should be aware that For additional information about impact of the covered actions and the your entire comment—including your submitting comments, see Request for incidental take likely to result from the personal identifying information—may Public Comments and Public applicant’s project, including expansion be made publicly available at any time. Availability of Comments under of the existing trail system, routine While you can request in your comment SUPPLEMENTARY INFORMATION. property maintenance and management that we withhold your personal FOR FURTHER INFORMATION CONTACT: activities, and the proposed identifying information from public Noelle Rayman-Metcalf, by telephone at conservation program, would review, we cannot guarantee that we 607–753–9334, or by email at Noelle_ individually and cumulatively have a will be able to do so. All submissions [email protected]. Hearing or speech minor or negligible effect on the Karner from organizations or businesses, and impaired individuals may call the blue butterfly, the frosted elfin, and the from individuals identifying themselves Federal Relay Service at 800–877–8339 environment. Therefore, we have as representatives or officials of for TTY assistance. preliminarily concluded the covered organizations or businesses, will be SUPPLEMENTARY INFORMATION: Section 9 actions and incidental take which may made available for public disclosure in of the ESA and its implementing occur under this proposed HCP, if their entirety. regulations prohibit the ‘‘take’’ of implemented, qualifies as ‘‘low effect,’’ animal species listed as endangered or and therefore our issuance of the Authority threatened (16 U.S.C. 1538). Take is requested ITP authorizing the take defined under the ESA as to ‘‘harass, would be categorically excluded from The Service provides this notice harm, pursue, hunt, shoot, wound, kill, further review under our NEPA under section 10(c) of the ESA (16 trap, capture, or collect [listed animal regulations at 43 CFR 46.205 and U.S.C. 1539(c)) and NEPA regulation 40 species], or to attempt to engage in such 46.210. A low-effect ITP is one in which CFR 1506.6. conduct’’ (16 U.S.C. 1532). However, covered actions and incidental take in Sharon Marino, under section 10(a) of the ESA, we may accordance with the HCP would result Assistant Regional Director, Ecological issue permits to authorize incidental in (1) minor or negligible effects on Services. take of listed species. ‘‘Incidental take’’ federally listed, proposed, and [FR Doc. 2020–17725 Filed 8–12–20; 8:45 am] is defined by the ESA as take that is candidate species and their habitats; (2) incidental to, and not the purpose of, minor or negligible effects on other BILLING CODE 4333–15–P carrying out an otherwise lawful activity environmental values or resources; and (16 U.S.C. 1539). Regulations governing (3) impacts that, when considered incidental take permits for endangered together with the impacts of other past, and threatened species, respectively, are present, and reasonably foreseeable

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DEPARTMENT OF THE INTERIOR details for the sessions will be provided implemented within existing authorities to registered participants in advance of and available resources. Office of the Secretary the calls. Consultations with Tribes and The scope of the Plan includes goals, [20XD4523WS, DS61200000, Alaska Native Corporations are also objectives, strategies and metrics; DWSN00000.000000, DP61202] being noticed through Dear Leader ongoing work and opportunities to focus Letters. on emerging priorities; actions both on Draft Invasive Species Strategic Plan; The John D. Dingell, Jr. Conservation, Interior-managed lands and waters and Tribal and Alaska Native Corporation Management and Recreation Act (Act) on lands and waters managed by others Consultations, Public Listening (Pub. L. 116–9) was enacted on March but for which Interior has a mandate; a Sessions and Request for Public 12, 2019. Title VII Section 7001 of the spectrum of strategies, invasive species Comments Act directs relevant Secretaries to take and scales of implementation; and a actions concerning invasive species; this five-year timeline, beginning in Fiscal AGENCY: Office of the Secretary, Interior. includes direction to each Secretary Year 2021, to be reviewed every five ACTION: Notice of planning document concerned to develop a strategic plan for years. with teleconference consultations with the implementation of the invasive Consultation and teleconference Tribes and Alaska Native Corporations, species program to achieve, to the listening sessions on the draft Plan, teleconference public listening sessions maximum extent practicable, a together with any written comments and public comment. substantive annual net reduction of received, will aid Interior in refining the invasive species populations or infested Plan. SUMMARY: Pursuant to the John D. acreage on land or water managed by An overview of the Plan and process Dingell Jr., Conservation, Management to develop it will be provided during and Recreation Act of 2019 (Pub. L. the Secretary concerned. The Act directed that the Plan be developed in the teleconference sessions. The 116–9), notice is hereby given of the majority of the time will be made development of the U.S. Department of coordination with affected eligible States, political subdivisions of eligible available for comment. Input to gain on the Interior Invasive Species Strategic the draft Plan includes but is not limited Plan. States, in consultation with Federally recognized Indian tribes and in to the following topics: DATES: A teleconference consultation accordance with the priorities of • Are the mission, vision, goals, with Tribes will be held on September Governors of eligible States. The Act is objectives and strategies clear as 17, 2020 at 4:00 p.m. Eastern. A available at: https://www.congress.gov/ written, and if not, what clarifications teleconference consultation with Alaska 116/bills/s47/BILLS-116s47enr.pdf. should be made? • Native Corporations will be held on To inform the Plan’s development, Do the goals, objectives and September 22 at 4:00 p.m. Eastern. Interior held a series of teleconference strategies build in sufficient flexibility RSVPs are required to participate in listening sessions in November 2019 for implementation to meet the needs of these sessions and must be received by with Federally recognized Indian tribes, ongoing and emerging efforts, and if not, 5:00 p.m. Eastern, September 14. State, county and territorial how should they be adjusted? • Teleconference listening sessions for governments, Alaska Native Do the goals, objectives and other interested parties and the public Corporations and the Native Hawaiian strategies emphasize the importance of will be held on September 24 at 4:00 Community. The purpose of the collaboration to advance mutual p.m. Eastern and September 28 at 4:00 sessions was for Interior to gain priorities of Tribal, State, local and p.m. Eastern. RSVPs are required to perspectives on topics including, but territorial governments and partners, participate and must be received by 5:00 and if not, how should they be adjusted? not limited to, priority invasive species • p.m. Eastern, September 21. Written of greatest concern to address to protect Based on the objectives, what comments must be submitted online or valued natural, economic and cultural metrics would be most useful to track by mail by 11:59 p.m. Eastern, October progress against the objectives? resources; opportunities to address • 9, 2020. For more information, invasive species at a meaningful scale to Are there any major omissions in including on how to RSVP, see achieve effective outcomes; the draft that should be addressed, and SUPPLEMENTARY INFORMATION. interjurisdictional efforts needed to if so, what are they? ADDRESSES: Written comments will be prevent, detect, eradicate and control For further information, contact accepted online only at http:// invasive species; opportunities to fulfill Hilary Smith, Senior Advisor for www.regulations.gov by entering ‘‘DOI– Invasive Species, (202) 763–3118; email: Trust responsibilities; and specific areas _ _ 2020–0007’’ in the Search bar and of interest to emphasize in the Plan. invasives strategic [email protected]. clicking ‘‘Search’’ or by mail to U.S. Written comments were also accepted. Note: As part of the teleconference Department of the Interior, Office of Input received at the onset of the Plan’s sessions, participants will be required to Policy Analysis—Mailstop 3530, ATTN: development informed the Plan’s provide their name, title, organization and Invasive Species Comments, 1849 C mission, vision, goals, objectives and telephone number to the operator before Street NW, Washington DC, 20240. strategies. being connected. SUPPLEMENTARY INFORMATION: The The Plan is intended to: Comply with Please note the following URLs Department of the Interior’s (Interior) the Act’s mandate for Interior to develop associated with this Federal Register Draft Invasive Species Strategic Plan an Interior-wide Plan; be broad enough Notice: (Plan) and other related information are to reflect Interior’s depth and breadth of 1. John D. Dingell, Jr. Conservation, posted on Interior’s website at https:// work underway; coordinate with and Management and Recreation Act: www.doi.gov/ppa/doi-invasive-species- build upon existing efforts; complement https://www.congress.gov/116/bills/ strategic-plan. existing plans, e.g., bureau and s47/BILLS-116s47enr.pdf To RSVP for the Tribal, Alaska Native interagency plans, and reporting efforts; 2. Draft Plan: https://www.doi.gov/ppa/ Corporation, or public teleconference be implemented in collaboration with doi-invasive-species-strategic-plan sessions, please enter your contact States, Tribes, territories, local 3. Regulations website for submitting information into the following form: governments, other Federal agencies written comments: https:// https://tinyurl.com/tfgu83p. Call-in and others, as appropriate, and be www.regulations.gov

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4. Required registration for consultation published in the Federal Register as Investigation Nos. 701–TA–650–651 and listening sessions: https:// provided in § 207.21 of the (Preliminary). tinyurl.com/tfgu83p Commission’s rules, upon notice from By order of the Commission. the U.S. Department of Commerce Public Availability of Comments (‘‘Commerce’’) of affirmative Issued: August 10, 2020. Before including your address, phone preliminary determinations in the Lisa Barton, number, email address or other personal investigations under § 703(b) of the Act, Secretary to the Commission. identifying information in your or, if the preliminary determinations are [FR Doc. 2020–17726 Filed 8–12–20; 8:45 am] comment, you should be aware that negative, upon notice of affirmative BILLING CODE 7020–02–P your entire comment—including your final determinations in those personal identifying information—may investigations under § 705(a) of the Act. be made publicly available at any time. Parties that filed entries of appearance INTERNATIONAL TRADE While you can ask us in your comment in the preliminary phase of the COMMISSION to withhold your personal identifying investigations need not enter a separate information from public review, we appearance for the final phase of the [Investigation Nos. 731–TA–986–987 (Third cannot guarantee that we will be able to investigations. Industrial users, and, if Review)] do so. the merchandise under investigation is Authority: John D. Dingell, Jr. sold at the retail level, representative Ferrovanadium From China and South Conservation, Management and Recreation consumer organizations have the right Africa; Determination Act (Public Law 116–9). to appear as parties in Commission countervailing duty investigations. The 1 Hilary Smith, On the basis of the record developed Secretary will prepare a public service in the subject five-year reviews, the Senior Advisor for Invasive Species, Office list containing the names and addresses of Policy Analysis, Office of the Secretary. United States International Trade of all persons, or their representatives, Commission (‘‘Commission’’) [FR Doc. 2020–17740 Filed 8–12–20; 8:45 am] who are parties to the investigations. BILLING CODE 4334–63–P determines, pursuant to the Tariff Act of Background 1930 (‘‘the Act’’), that revocation of the antidumping duty orders on On June 26, 2020, The Mosaic ferrovanadium from China and South INTERNATIONAL TRADE Company, Plymouth, Minnesota filed COMMISSION petitions with the Commission and Africa would be likely to lead to continuation or recurrence of material [Investigation Nos. 701–TA–650–651 Commerce, alleging that an industry in (Preliminary)] the United States is materially injured injury to an industry in the United or threatened with material injury by States within a reasonably foreseeable Phosphate Fertilizers From Morocco reason of subsidized imports of time. and Russia phosphate fertilizers from Morocco and Background Russia. Accordingly, effective June 26, Determinations 2020, the Commission instituted The Commission instituted these On the basis of the record 1 developed countervailing duty investigation Nos. reviews on January 2, 2020 (85 FR 122) in the subject investigations, the United 701–TA–650–651 (Preliminary). and determined on April 6, 2020 that it States International Trade Commission Notice of the institution of the would conduct expedited reviews (85 (‘‘Commission’’) determines, pursuant Commission’s investigations and of a FR 43258, July 16, 2020). to the Tariff Act of 1930 (‘‘the Act’’), public conference through written The Commission made these that there is a reasonable indication that submission to be held in connection determinations pursuant to section an industry in the United States is therewith was given by posting copies 751(c) of the Act (19 U.S.C. 1675(c)). It materially injured by reason of imports of the notice in the Office of the completed and filed its determinations of phosphate fertilizers from Morocco Secretary, U.S. International Trade and Russia, provided for in 3103.11.00; Commission, Washington, DC, and by in these reviews on August 7, 2020. The 3103.19.00; 3103.90.00; 3105.10.00; publishing the notice in the Federal views of the Commission are contained 3105.20.00; 3105.30.00; 3105.40.00; Register of July 6, 2020 (85 FR 40319). in USITC Publication 5099 (August 3105.40.00; 3105.51.00; 3105.59.00; In light of the restrictions on access to 2020), entitled Ferrovanadium from 3105.60.00; and 3105.90.00 of the the Commission building due to the China and South Africa: Investigation Harmonized Tariff Schedule of the COVID–19 pandemic, the Commission Nos. 731–TA–986–987 (Third Review). United States, that are alleged to be conducted its conference through By order of the Commission. subsidized by the governments of written questions, submissions of Issued: August 7, 2020. Morocco and Russia.2 opening remarks and written testimony, Lisa Barton, written responses to questions, and Commencement of Final Phase Secretary to the Commission. Investigations postconference briefs. All persons who requested the opportunity were [FR Doc. 2020–17681 Filed 8–12–20; 8:45 am] Pursuant to section 207.18 of the permitted to participate. BILLING CODE 7020–02–P Commission’s rules, the Commission The Commission made these also gives notice of the commencement determinations pursuant to § 703(a) of of the final phase of its investigations. the Act (19 U.S.C. 1671b(a)). It The Commission will issue a final phase completed and filed its determinations notice of scheduling, which will be in these investigations on August 17, 2020. The views of the Commission are 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 contained in USITC Publication 5105 1 The record is defined in § 207.2(f) of the CFR 207.2(f)). (August 2020), entitled Phosphate Commission’s Rules of Practice and Procedure (19 2 85 FR 44505, July 23, 2020. Fertilizers from Morocco and Russia: CFR 207.2(f)).

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DEPARTMENT OF JUSTICE of information technology, e.g., prosecutor offices located in counties of permitting electronic submission of 500,000 or more (N=145 offices), and a [OMB Number 1121–0149] responses. sample proportionate to size for Agency Information Collection Overview of this information counties with less than 500,000 Activities; Proposed Collection collection: residents (N=605 offices). Based on Comments Requested; Reinstatement, (1) Type of Information Collection: cognitive interview testing of 24 With Change, of a Previously Reinstatement of the National Survey of respondents, an average of 80 minutes Approved Collection for Which Prosecutors. per respondent was needed to complete Approval Has Expired: National Survey (2) The Title of the Form/Collection: form NSP–19, including time to review of Prosecutors (NSP) 2020 National Survey of Prosecutors. materials and conduct data quality (3) The agency form number, if any, follow-up. AGENCY: Bureau of Justice Statistics, and the applicable component of the (6) An estimate of the total public Department of Justice. Department sponsoring the collection: burden (in hours) associated with the ACTION: 60-Day notice. The form number is NSP–20. The collection: The total respondent burden applicable component within the is approximately 1,000 burden hours for SUMMARY: The Department of Justice Department of Justice is the Bureau of all the jurisdictions surveyed. (DOJ), Office of Justice Programs, Justice Statistics, in the Office of Justice If additional information is required Bureau of Justice Statistics (BJS), will be Programs. contact: Melody Braswell, Department submitting the following information (4) Affected public who will be asked Clearance Officer, United States collection request to the Office of or required to respond, as well as a brief Department of Justice, Justice Management and Budget (OMB) for abstract: Respondents will be chief state Management Division, Policy and review and approval in accordance with prosecutors or their staff. Abstract: Planning Staff, Two Constitution the Paperwork Reduction Act of 1995. Among other responsibilities, the Square, 145 N Street NE, 3E.405A, DATES: Comments are encouraged and Bureau of Justice Statistics is charged Washington, DC 20530. will be accepted for 60 days until with collecting data regarding the Dated: August 9, 2020. October 13, 2020. prosecution of crimes by state and Melody Braswell, FOR FURTHER INFORMATION CONTACT: If federal offices. This information Department Clearance Officer for PRA, U.S. you have additional comments collection is a survey of local prosecutor Department of Justice. especially on the estimated public offices that handles criminal cases in [FR Doc. 2020–17688 Filed 8–12–20; 8:45 am] burden or associated response time, state courts. The Bureau of Justice BILLING CODE 4410–18–P suggestions, or need a copy of the Statistics (BJS) proposes to implement proposed information collection the next iteration of the National Survey instrument with instructions or of Prosecutors (NSP). Local prosecutors DEPARTMENT OF JUSTICE additional information, please contact occupy a central role in a criminal George Browne, Statistician, justice system seeking to ensure justice [OMB Number 1121–0064] Prosecution and Judicial Statistics Unit, is served. Prosecutors represent the Bureau of Justice Statistics, 810 Seventh local government in deciding who is Agency Information Collection Street NW, Washington, DC 20531 charged with a crime, the type and Activities; Proposed Collection (email: [email protected]; number of charges filed, whether or not Comments Requested; Extension of a telephone: 202–307–1618). to offer a plea, and providing sentencing Currently Approved Collection: Annual SUPPLEMENTARY INFORMATION: Written recommendations for those convicted of Parole Survey, Annual Probation comments and suggestions from the crimes. Since 1990, the NSP has been Survey public and affected agencies concerning the only recurring national statistical the proposed collection of information program that captures the AGENCY: Bureau of Justice Statistics, are encouraged. Your comments should administrative and operational Department of Justice. address one or more of the following characteristics of the prosecutorial ACTION: 30-Day notice. four points: function in the State criminal justice SUMMARY: The Department of Justice —Evaluate whether the proposed system. The NSP will gather national (DOJ), Office of Justice Programs, collection of information is necessary statistics on local prosecutor office Bureau of Justice Statistics, will be for the proper performance of the staffing and services, budgets and submitting the following information functions of the Bureau of Justice caseloads. In addition, this study will collection request to the Office of Statistics, including whether the collect data on emerging topics such as Management and Budget (OMB) for information will have practical utility; provision of victim services, utilization review and approval in accordance with —Evaluate the accuracy of the agency’s of diversion programs and specialty the Paperwork Reduction Act of 1995. estimate of the burden of the courts and services provided on tribal proposed collection of information, lands by local prosecutor offices. These DATES: Comments are encouraged and including the validity of the data will allow BJS to conduct trend will be accepted for 30 days until methodology and assumptions used; analyses and comparisons with September 14, 2020. —Evaluate whether and if so how the historical data, where available, and ADDRESSES: Written comments and quality, utility, and clarity of the provide descriptive statistics on recommendations for the proposed information to be collected can be emerging crimes. information collection should be sent enhanced; and (5) An estimate of the total number of within 30 days of publication of this —Minimize the burden of the collection respondents and the amount of time notice to www.reginfo.gov/public/do/ of information on those who are to estimated for an average respondent to PRAMain. Find this particular respond, including through the use of respond: BJS will sample approximately information collection by selecting appropriate automated, electronic, 750 offices from the estimated 2,400 ‘‘Currently under 30-day Review—Open mechanical, or other technological prosecutor offices across the U.S. The for Public Comments’’ or by using the collection techniques or other forms sample will include a census of all search function.

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SUPPLEMENTARY INFORMATION: Written of Prisons, and 318 from local published in the Federal Register a comments and suggestions from the authorities responsible for keeping notice issuing the draft Environmental public and affected agencies concerning records on probationers. For the CJ–8A Impact Statement (EIS) for Holtec the proposed collection of information form, the affected public includes 448 International’s (Holtec’s) application to are encouraged. Your comments should reporters who are all local authorities construct and operate a consolidated address one or more of the following responsible for keeping records on interim storage facility (CISF) for spent four points: probationers. The Annual Parole Survey nuclear fuel and Greater-Than Class C — Evaluate whether the proposed and Annual Probation surveys have waste, along with a small quantity of collection of information is necessary been used since 1977 to collect annual mixed oxide fuel. The NRC is for the proper performance of the yearend counts and yearly movements announcing four public comment functions of the Bureau of Justice of community corrections populations; webinars to receive comments on the Statistics, including whether the characteristics of the community draft report. The meetings will allow information will have practical utility; supervision population, such as gender, interested members of the public to — Evaluate the accuracy of the agency’s racial composition, ethnicity, conviction submit their comments. estimate of the burden of the status, offense, and supervision status. DATES: The NRC staff will hold webinars proposed collection of information, In 2020, respondents will be asked a few on August 20, 2020, August 25, 2020, including the validity of the questions about the COVID–19 August 26, 2020, and September 2, methodology and assumptions used; pandemic and how it affected their 2020. The staff will present the findings — Evaluate whether and if so how the agency. of the draft report and will receive quality, utility, and clarity of the (5) An estimate of the total number of public comments during transcribed information to be collected can be respondents and the amount of time public meetings. Members of the public enhanced; and estimated for an average respondent to are invited to submit comments by — Minimize the burden of the respond: 860 respondents total; 412 September 22, 2020. Comments received collection of information on those with an averaged time of 1.75 hours for after this date will be considered if it is who are to respond, including response and 448 with an average time practical to do so, but the NRC is able through the use of appropriate 0.625 hours to respond. 860 respondents to ensure consideration only for automated, electronic, mechanical, or will be asked additional COVID–19 comments received on or before this other technological collection questions with an average time to date. techniques or other forms of complete of 0.33 hours. ADDRESSES: You may submit comments information technology, e.g., (6) An estimate of the total public by any of the following methods: permitting electronic submission of burden (in hours) associated with the • Federal Rulemaking website: Go to responses. collection: There is an estimated 1,001 total burden hours associated with this https://www.regulations.gov/ and search Overview of this information collection, with an additional 287 hours for Docket ID NRC–2018–0052. Address collection: in 2020 for the COVID–19 questions. questions about NRC docket IDs in (1) Type of Information Collection: Regulations.gov to Jennifer Borges; Extension of a currently approved The total burden for the 2020 data collection is 1,288. telephone: 301–287–9127; email: collection [email protected]. For technical (2) The Title of the Form/Collection: If additional information is required contact: Melody Braswell, Department questions, contact the individual listed Annual Parole Survey, Annual in the FOR FURTHER INFORMATION Probation Survey Clearance Officer, United States Department of Justice, Justice CONTACT section of this document. (3) The agency form number, if any, • Mail comments to: Office of and the applicable component of the Management Division, Policy and Planning Staff, Two Constitution Administration, Mail Stop: TWFN–7– Department sponsoring the collection: A60M, ATTN: Program Management, Form numbers for the questionnaire are Square, 145 N Street NE, 3E.405A, Washington, DC 20530. Announcements and Editing Staff, U.S. CJ–7 Annual Parole Survey; CJ–8 Nuclear Regulatory Commission, Annual Probation Survey; CJ–8a Annual Dated: August 9, 2020. Washington, DC 20555–0001. Probation Survey (Short Form). The Melody Braswell, • Email comments to: Holtec- applicable component within the Department Clearance Officer for PRA, U.S. [email protected]. Department of Justice is the Bureau of Department of Justice. For additional direction on obtaining Justice Statistics, in the Office of Justice [FR Doc. 2020–17690 Filed 8–12–20; 8:45 am] information and submitting comments, Programs. BILLING CODE 4410–18–P see ‘‘Obtaining Information and (4) Affected public who will be asked Submitting Comments’’ in the or required to respond, as well as a brief SUPPLEMENTARY INFORMATION SECTION of abstract: Primary: State departments of NUCLEAR REGULATORY this document. corrections or state probation and parole COMMISSION FOR FURTHER INFORMATION CONTACT: Jill authorities. Others: The Federal Bureau [Docket No. 72–1051; NRC–2018–0052] Caverly, Office of Nuclear Material of Prisons, city and county courts and Safety and Safeguards, U.S. Nuclear probation offices for which a central Regulatory Commission, Washington reporting authority does not exist. For Holtec International HI-STORE Consolidated Interim Storage Facility DC, 20555–0001; telephone: 301–415– the CJ–7 form, the affected public 7674; email: [email protected]. consists of 52 respondents including 50 Project SUPPLEMENTARY INFORMATION: central reporters, the District of AGENCY: Nuclear Regulatory Columbia, and the Federal Bureau of Commission. I. Obtaining Information and Prisons responsible for keeping records ACTION: Draft environmental impact Submitting Comments on parolees. For the CJ–8 form, the statement; public comment meetings. affected public includes 360 reporters A. Obtaining Information including 40 state respondents, the SUMMARY: On March 20, 2020, the U.S. Please refer to Docket ID NRC–2018– District of Columbia, the Federal Bureau Nuclear Regulatory Commission (NRC) 0052 when contacting the NRC about

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the availability of information regarding • Public Libraries: A copy of the inform those persons not to include this document. You may obtain staff’s draft EIS can be accessed at the identifying or contact information that publicly-available information related to following public libraries (library access they do not want to be publicly this action by the following methods: and hours are determined by local disclosed in their comment submission. • Federal Rulemaking Website: Go to policy): Your request should state that the NRC https://www.regulations.gov and search • Carlsbad Public Library, 101 S does not routinely edit comment for Docket ID NRC–2018–0052. Halagueno Street, Carlsbad, NM submissions to remove such information • NRC’s Agencywide Documents 88220 before making the comment Access and Management System • Hobbs Public Library, 509 N Shipp submissions available to the public or (ADAMS): You may obtain publicly- St., Hobbs, NM 88240 entering the comment into ADAMS. available documents online in the • Roswell Public Library, 301 N ADAMS Public Documents collection at Pennsylvania, Roswell, NM 88201 II. Meeting Information https://www.nrc.gov/reading-rm/ adams.html. To begin the search, select B. Submitting Comments On March 20, 2020, the NRC ‘‘Begin Web-based ADAMS Search.’’ Please include Docket ID NRC–2018– published in the Federal Register (85 The draft EIS can be found by searching 0052 in your comment submission. FR 16150), the availability of a draft EIS for ADAMS Accession No. The NRC cautions you not to include for Holtec’s proposed CISF for spent ML20069G420. For problems with identifying or contact information that nuclear fuel and requested public ADAMS, please contact the NRC’s you do not want to be publicly comments on the draft report. The NRC Public Document Room reference staff disclosed in your comment submission. is announcing that staff will hold four at 1–800–397–4209, 301–415–4737, or The NRC will post all comment public webinars. The webinars will be by email to [email protected]. submissions at https:// held online at the webinar address for • Project web page: Information www.regulations.gov as well as enter the video of the staff’s presentation and all related to the Holtec HI-STORE CISF comment submissions into ADAMS. audio will be through the telephone project can be accessed on the NRC’s The NRC does not routinely edit line. The telephone line will also be for Holtec HI–STORE CISF web page at comment submissions to remove members of the public to submit https://www.nrc.gov/waste/spent-fuel- identifying or contact information. comments. A court reporter will be storage/cis/holtec-international.html. If you are requesting or aggregating recording all comments received during Scroll down to Environmental Impact comments from other persons for the webinar. The dates and times for the Statement, Draft Report for Comment. submission to the NRC, then you should public webinars follow:

Meeting Date Time Webinar information

Public Webinar .. August 20, 2020 ... 6:00 p.m.–9:00 p.m. (ET) ...... Webinar (video): 4:00 p.m.–7:00 p.m. (MT) ...... Event address: https://usnrc.webex.com/. Event number: 199 831 2299. Event password: HOLTEC. Telephone access (audio): Phone number: 888–566–6509. Passcode: 1904459. Public Webinar .. August 25, 2020 ... 2:00 p.m.–5:00 p.m. (ET) ...... Webinar (video): 12:00 noon–3:00 p.m. (MT) ...... Event address: https://usnrc.webex.com/. Event number: 199 973 2733. Event password: HOLTEC. Telephone access: (audio) Phone number: 1–888–566–6509. Passcode: 1904459. Public Webinar .. August 26, 2020 ... 6:00 p.m.–9:00 p.m. (ET) ...... Webinar (video): 4:00 p.m.–7:00 p.m. (MT) ...... Event address: https://usnrc.webex.com/. Event number: 199 278 6216. Event password: HOLTEC. Telephone access: (audio): Phone number: 888–566–6509. Passcode: 1904459. Public Webinar .. September 2, 2020 11:00 a.m.–2:00 p.m. (ET) ...... Webinar (video): 9:00 a.m.–12 noon (MT)...... Event address: https://usnrc.webex.com/. Event number: 199 183 5099. Event password: HOLTEC. Telephone access (audio): Phone number: 888–566–6509. Passcode: 1904459.

Persons interested in attending these information, agendas for the meetings, For the Nuclear Regulatory Commission. meeting should check the NRC’s Public and access information for the webinar. Jessie M. Quintero, Meeting Schedule web page at https:// Dated: August 6, 2020. Acting Chief, Environmental Review Materials www.nrc.gov/pmns/mtg for additional Branch, Division of Rulemaking, Environmental and Financial Support, Office of Nuclear Material Safety, and Safeguards. [FR Doc. 2020–17536 Filed 8–12–20; 8:45 am] BILLING CODE 7590–01–P

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OFFICE OF PERSONNEL comment period. No comments were OFFICE OF PERSONNEL MANAGEMENT received for this collection. The purpose MANAGEMENT of this notice is to allow an additional Submission for Review: 3206–0162; 30 days for public comments. The Office Excepted Service Report of Medical Examination of of Management and Budget is Person Electing Survivor Benefits, particularly interested in comments AGENCY: Office of Personnel OPM 1530 that: Management (OPM). 1. Evaluate whether the proposed AGENCY: Office of Personnel collection of information is necessary ACTION: Notice. Management. for the proper performance of the ACTION: 30-Day notice and request for functions of the agency, including SUMMARY: This notice identifies comments. whether the information will have Schedule A, B, and C appointing practical utility; SUMMARY: The Retirement Services, authorities applicable to a single agency Office of Personnel Management (OPM) 2. Evaluate the accuracy of the that were established or revoked from offers the general public and other agency’s estimate of the burden of the January 1, 2020 to January 31, 2020. proposed collection of information, Federal agencies the opportunity to FOR FURTHER INFORMATION CONTACT: Julia comment on a revised information including the validity of the methodology and assumptions used; Alford, Senior Executive Resources collection request, OPM 1530, Report of Services, Senior Executive Services and Medical Examination of Person Electing 3. Enhance the quality, utility, and Performance Management, Employee Survivor Benefits. clarity of the information to be collected; and Services, 202–606–2246. DATES: Comments are encouraged and 4. Minimize the burden of the SUPPLEMENTARY INFORMATION: In will be accepted until September 14, collection of information on those who 2020. are to respond, including through the accordance with 5 CFR 213.103, ADDRESSES: Interested persons are use of appropriate automated, Schedule A, B, and C appointing invited to submit written comments on electronic, mechanical, or other authorities available for use by all the proposed information collection to technological collection techniques or agencies are codified in the Code of the Office of Information and Regulatory other forms of information technology, Federal Regulations (CFR). Schedule A, Affairs, Office of Management and e.g., permitting electronic submissions B, and C appointing authorities Budget, 725 17th Street NW, of responses. applicable to a single agency are not Washington, DC 20503, Attention: Desk OPM Form 1530 is used to collect codified in the CFR, but the Office of Officer for the Office of Personnel information regarding an annuitant’s Personnel Management (OPM) Management or sent via electronic mail health so that OPM can determine publishes a notice of agency-specific to: [email protected] or whether the insurable interest survivor authorities established or revoked each faxed to (202) 395–6974. benefit election can be allowed. month in the Federal Register at FOR FURTHER INFORMATION CONTACT: A Analysis www.gpo.gov/fdsys/. OPM also copy of this information collection, with publishes an annual notice of the applicable supporting documentation, Agency: Retirement Operations, consolidated listing of all Schedule A, may be obtained by contacting the Retirement Services, Office of B, and C appointing authorities, current Retirement Services Publications Team, Personnel Management. as of June 30, in the Federal Register. Office of Personnel Management, 1900 E Title: Report of Medical Examination of Street NW, Room 3316–L, Washington, Person Electing Survivor Benefits. Schedule A OMB Number: 3206–0162. DC 20415, Attention: Cyrus S. Benson, No Schedule A Authorities to report or sent via electronic mail to Frequency: On occasion. during January 2020. [email protected] or faxed to Affected Public: Individual or Households. (202) 606–0910 or via telephone at (202) Schedule B 606–4808. Number of Respondents: 500. Estimated Time per Respondent: 90 SUPPLEMENTARY INFORMATION: As No Schedule B Authorities to report minutes. during January 2020. required by the Paperwork Reduction Total Burden Hours: 750 hours. Act of 1995 OPM is soliciting comments Schedule C for this collection. The information Office of Personnel Management. collection (OMB No. 3206–0162) was Alexys Stanley, The following Schedule C appointing previously published in the Federal Regulatory Affairs Analyst. authorities were approved during Register on April 13, 2020 at 85 FR [FR Doc. 2020–17685 Filed 8–12–20; 8:45 am] January 2020. 20532, allowing for a 60-day public BILLING CODE 6325–38–P

Agency name Organization name Position title Authorization number Effective date

DEPARTMENT OF AGRI- Office of the Under Secretary Policy Advisor ...... DA200035 01/09/2020 CULTURE for Farm Production and Conservation. Office of Under Secretary for Senior Policy Advisor ...... DA200021 01/10/2020 Natural Resources and En- vironment.

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Agency name Organization name Position title Authorization number Effective date

Office of the Assistant Sec- Director of Intergovernmental DA200042 01/22/2020 retary for Congressional Affairs. Relations. Farm Service Agency ...... State Executive Director— DA200040 01/23/2020 Tennessee. DEPARTMENT OF COM- Bureau of Industry and Secu- Senior Advisor ...... DC200059 01/30/2020 MERCE rity. Office of Business Liaison ..... Senior Advisor for Policy and DC200048 01/31/2020 Engagement. Office of Legislative and Inter- Confidential Assistant ...... DC200014 01/31/2020 governmental Affairs. Office of the Chief Financial Special Assistant ...... DC200050 01/17/2020 Officer and Assistant Sec- retary for Administration. Office of the Chief of Staff ..... Senior Advisor ...... DC200003 01/17/2020 Office of the Deputy Sec- Senior Advisor ...... DC200044 01/22/2020 retary. Office of the General Counsel Confidential Assistant ...... DC200019 01/27/2020 Counsel (2) ...... DC200028 01/03/2020 DC200021 01/31/2020 Office of White House Liaison Confidential Assistant ...... DC200030 01/03/2020 Director, Office of White DC200043 01/31/2020 House Liaison. DEPARTMENT OF DE- Office of the Assistant Sec- Special Assistant for Legisla- DD200058 01/14/2020 FENSE retary of Defense (Legisla- tive Affairs. tive Affairs). Office of the Deputy Under Deputy Assistant Secretary of DD200063 01/14/2020 Secretary for Policy. Defense China. Washington Headquarters Defense Fellow ...... DD200059 01/27/2020 Services. DEPARTMENT OF EDU- Office of the General Counsel Confidential Assistant ...... DB200024 01/09/2020 CATION DEPARTMENT OF ENERGY Office of the Assistant Sec- Deputy Chief of Staff ...... DE200045 01/06/2020 retary for International Af- fairs. Office of the Assistant Sec- Senior Advisor ...... DE200056 01/16/2020 retary for Fossil Energy. Office of the Assistant Sec- Special Assistant ...... DE200057 01/16/2020 retary for Energy Efficiency and Renewable Energy. ENVIRONMENTAL PROTEC- Office of the Assistant Admin- Senior Science Advisor ...... EP200027 01/13/2020 TION AGENCY istrator for Research and Development. Office of the Administrator ..... Special Advisor for Oper- EP200028 01/22/2020 ations. Office of the Executive Secre- Attorney-Advisor ...... EP200030 01/22/2020 tariat. Region IV—San Francisco, Senior Advisor for Policy and EP200023 01/24/2020 California. Congressional Affairs. EXPORT-IMPORT BANK Office of the Chairman ...... Special Advisor and Deputy EB200009 01/30/2020 Scheduler. GENERAL SERVICES AD- Office of Strategic Commu- Speechwriter ...... GS200024 01/23/2020 MINISTRATION nication. Office of Congressional and Congressional Policy Analyst GS200025 01/30/2020 Intergovernmental Affairs. Policy Advisor ...... GS200026 01/30/2020 DEPARTMENT OF HEALTH Centers for Medicare and Senior Advisor ...... DH200011 01/10/2020 AND HUMAN SERVICES Medicaid Services. Office of Intergovernmental Regional Director, Denver, DH200049 01/10/2020 and External Affairs. Colorado, Region VIII. Office of the Assistant Sec- Senior Advisor ...... DH200051 01/27/2020 retary for Preparedness and Response. Office of the General Counsel Advisor and Legal Counsel ... DH200047 01/07/2020 Office of the Secretary ...... Deputy Scheduler ...... DH200054 01/03/2020 Advisor for Value-Based DH200059 01/16/2020 Transformation. DEPARTMENT OF HOME- Federal Emergency Manage- Deputy Press Secretary ...... DM200116 01/28/2020 LAND SECURITY ment Agency. Office of Countering Weapons Senior Advisor ...... DM200117 01/27/2020 of Mass Destruction. Office of the Assistant Sec- Director of Strategic Commu- DM200038 01/02/2020 retary for Public Affairs. nications. Press Secretary ...... DM200083 01/09/2020

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Agency name Organization name Position title Authorization number Effective date

Speechwriter ...... DM200102 01/09/2020 Office of the General Counsel Oversight Counsel ...... DM200097 01/09/2020 Office of Citizenship and Im- Senior Advisor (3) ...... DM200023 01/02/2020 migration Services. DM200081 01/02/2020 DM200091 01/08/2020 Office of Customs and Border Assistant Press Secretary ..... DM200098 01/09/2020 Protection. DEPARTMENT OF HOUSING Office of Community Planning Senior Advisor (2) ...... DU200039 01/03/2020 AND URBAN DEVELOP- and Development. MENT DU200045 01/14/2020 Office of Faith-Based and Special Advisor ...... DU200038 01/24/2020 Community Initiatives. Office of the General Counsel Senior Counsel ...... DU200044 01/27/2020 DEPARTMENT OF JUSTICE Office of the Attorney General White House Liaison Officer DJ200041 01/06/2020 and Special Assistant. Office of Violence Against Advisor ...... DJ200017 01/23/2020 Women. Office of Justice Programs .... Special Advisor for Policy and DJ200065 01/30/2020 Communications. DEPARTMENT OF LABOR Office of Congressional and Regional Representative ...... DL200043 01/14/2020 Intergovernmental Affairs. Office of the Secretary ...... Advance Representative ...... DL200052 01/24/2020 Special Assistant (2) ...... DL200045 01/14/2020 DL200042 01/30/2020 Office of Wage and Hour Divi- Senior Policy Advisor ...... DL200051 01/23/2020 sion. OFFICE OF MANAGEMENT Office of Information and Senior Advisor ...... BO200019 01/27/2020 AND BUDGET Regulatory Affairs. Office of the Director ...... Confidential Assistant ...... BO200020 01/30/2020 OFFICE OF PERSONNEL Office of Congressional, Leg- Legislative Analyst ...... PM200012 01/10/2020 MANAGEMENT islative, and Intergovern- mental Affairs. Presidents Commission on Confidential Assistant ...... PM200014 01/31/2020 White House Fellowships. SMALL BUSINESS ADMINIS- Office of Investment and In- Senior Advisor ...... SB200006 01/22/2020 TRATION novation. Office of Communications and Digital Media Manager ...... SB200009 01/23/2020 Public Liaison. SOCIAL SECURITY ADMIN- Office of the Commissioner ... Special Assistant ...... SZ200013 01/31/2020 ISTRATION DEPARTMENT OF STATE Bureau of Overseas Buildings Senior Strategic Advisor ...... DS200033 01/16/2020 Operations. Bureau of Legislative Affairs .. Special Advisor ...... DS200036 01/22/2020 Bureau of Global Public Af- Special Advisor ...... DS200032 01/27/2020 fairs. DEPARTMENT OF TRANS- Office of the Secretary ...... Deputy White House Liaison DT200064 01/09/2020 PORTATION Office of the Assistant Sec- Special Assistant ...... DT200065 01/14/2020 retary for Transportation Policy. Office of the Executive Secre- Special Assistant ...... DT200070 01/30/2020 tariat. DEPARTMENT OF THE Office of the Assistant Sec- Special Advisor ...... DY200032 01/24/2020 TREASURY retary (Legislative Affairs). Secretary of the Treasury ...... Advance Representative ...... DY200030 01/10/2020 Special Assistant ...... DY200041 01/30/2020 Treasurer of the United Senior Advisor ...... DY200033 01/16/2020 States. Office of the Under Secretary Special Assistant ...... DY200042 01/22/2020 for Terrorism and Financial Intelligence.

The following Schedule C appointing authorities were revoked during January 2020.

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Request Agency name Organization name Position title number Date vacated

DEPARTMENT OF AGRICULTURE Rural Utilities Service ...... Policy Advisor ...... DA190080 01/03/2020 Office of the Assistant Secretary Policy Advisor ...... DA180243 01/18/2020 for Congressional Relations. Office of Under Secretary for Nat- Staff Assistant ...... DA180169 01/18/2020 ural Resources and Environment. DEPARTMENT OF COMMERCE ... Office of the Chief Financial Officer Confidential Assistant ...... DC190027 01/10/2020 and Assistant Secretary for Ad- ministration. DEPARTMENT OF HEALTH AND Office of the General Counsel ...... Law Clerk ...... DH190201 01/06/2020 HUMAN SERVICES Center for Consumer Information Senior Advisor ...... DH170342 01/18/2020 and Insurance Oversight. Office of the Secretary ...... Advisor ...... DH190089 01/18/2020 DEPARTMENT OF JUSTICE ...... Office of the Attorney General ...... Special Assistant ...... DJ190237 01/04/2020 Office of Public Affairs ...... Public Affairs Specialist ...... DJ170102 01/18/2020 Office of Legal Policy ...... Senior Counsel ...... DJ180106 01/31/2020 OFFICE OF THE SECRETARY OF Office of the Under Secretary of Special Assistant ...... DD190012 01/04/2020 DEFENSE Defense (Acquisition, Tech- nology, and Logistics). Office of the Assistant Secretary of Special Assistant (2) ...... DD190145 01/04/2020 Defense (Legislative Affairs). DD190174 01/04/2020 Office of the Assistant to the Sec- Special Assistant ...... DD190001 01/18/2020 retary of Defense (Public Affairs). Washington Headquarters Services Defense Fellow ...... DD190169 01/18/2020 DEPARTMENT OF THE ARMY ..... Office of the Assistant Secretary Special Assistant ...... DW190032 01/18/2020 Army (Acquisition, Logistics and Technology). DEPARTMENT OF STATE ...... Office of the Counselor ...... Staff Assistant ...... DS180074 01/04/2020 DEPARTMENT OF THE ARMY ..... Office of the Assistant Secretary Special Assistant to the Deputy As- DW190032 01/18/2020 Army (Acquisition, Logistics and sistant Secretary of the Army Technology). (Strategy and Acquisition Re- form). DEPARTMENT OF VETERANS Veterans Benefits Administration ... Deputy Chief of Staff ...... DV180036 01/04/2020 AFFAIRS Office of the General Counsel ...... Counselor (Healthcare) ...... DV190032 01/27/2020 ENVIRONMENTAL PROTECTION Office of the Associate Adminis- House Relations Specialist ...... EP190061 01/11/2020 AGENCY trator for Congressional and Intergovernmental Relations. ENVIRONMENTAL PROTECTION Office of the Associate Adminis- Senior for Science and Policy ...... EP190128 01/18/2020 AGENCY trator for Policy. EXPORT-IMPORT BANK ...... Office of the Chairman ...... Director of Scheduling ...... EB190008 01/18/2020 OCCUPATIONAL SAFETY AND Occupational Safety and Health Confidential Assistant to the Chair- SH190003 01/03/2020 HEALTH REVIEW COMMISSION Review Commission. man. OFFICE OF PERSONNEL MAN- Office of the Director ...... Senior Advisor to the Director ...... PM200007 01/04/2020 AGEMENT Confidential Assistant to the Dep- PM190036 01/11/2020 uty Director. Office of Communications ...... Senior Press Officer ...... PM200001 01/24/2020 SMALL BUSINESS ADMINISTRA- Office of Congressional and Legis- Deputy Assistant Administrator ...... SB180043 01/10/2020 TION lative Affairs.

(Authority: 5 U.S.C. 3301 and 3302; E.O. OFFICE OF PERSONNEL Designation of Beneficiary, Standard 10577, 3 CFR, 1954–1958 Comp., p. 218) MANAGEMENT Form 3102. Office of Personnel Management. DATES: Comments are encouraged and Submission for Review: 3206–0173; will be accepted until October 13, 2020. Alexys Stanley, CSRS/FERS Designation of Regulatory Affairs Analyst. Beneficiary, Standard Form 3102 ADDRESSES: You may submit comments, [FR Doc. 2020–17687 Filed 8–12–20; 8:45 am] identified by docket number and/or AGENCY: Office of Personnel BILLING CODE 6325–39–P Regulatory Information Number (RIN) Management. and title, by the following method: ACTION: 60-Day notice and request for —Federal Rulemaking Portal: http:// comments. www.regulations.gov. Follow the SUMMARY: The Retirement Services, instructions for submitting comments. Office of Personnel Management (OPM) All submissions received must offers the general public and other include the agency name and docket federal agencies the opportunity to number or RIN for this document. The comment on a revised information general policy for comments and other collection request (ICR), CSRS/FERS submissions from members of the public

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is to make these submissions available Title: CSRS/FERS Designation of Section II identifies the docket for public viewing at http:// Beneficiary. number(s) associated with each Postal www.regulations.gov as they are OMB Number: 3206–0173. Service request, the title of each Postal received without change, including any Frequency: On occasion. Service request, the request’s acceptance personal identifiers or contact Affected Public: Individuals or date, and the authority cited by the information. Households. Postal Service for each request. For each Number of Respondents: 5,888. request, the Commission appoints an FOR FURTHER INFORMATION CONTACT: A Estimated Time per Respondent: 15 officer of the Commission to represent copy of this ICR with applicable minutes. supporting documentation, may be the interests of the general public in the Total Burden Hours: 1,472 hours. proceeding, pursuant to 39 U.S.C. 505 obtained by contacting the Retirement Office of Personnel Management. (Public Representative). Section II also Services Publications Team, Office of establishes comment deadline(s) Personnel Management, 1900 E Street Alexys Stanley, pertaining to each request. NW, Room 3316–L, Washington, DC Regulatory Affairs Analyst. [FR Doc. 2020–17686 Filed 8–12–20; 8:45 am] The public portions of the Postal 20415, Attention: Cyrus S. Benson, or Service’s request(s) can be accessed via BILLING CODE 6325–38–P sent via electronic mail to the Commission’s website (http:// [email protected] or faxed to www.prc.gov). Non-public portions of (202) 606–0910 or via telephone at (202) the Postal Service’s request(s), if any, 606–4808. POSTAL REGULATORY COMMISSION can be accessed through compliance SUPPLEMENTARY INFORMATION: As [Docket Nos. MC2020–211 and CP2020–239; with the requirements of 39 CFR required by the Paperwork Reduction Docket Nos. MC2020–212 and CP2020–240; 3011.301.1 Act of 1995 (Pub. L. 104–13, 44 U.S.C. MC2020–213 and CP2020–241; MC2020–214 The Commission invites comments on chapter 35) as amended by the Clinger- and CP2020–242] whether the Postal Service’s request(s) Cohen Act (Pub. L. 104–106), OPM is in the captioned docket(s) are consistent soliciting comments for this collection New Postal Products with the policies of title 39. For (OMB No. 3206–0228). The Office of AGENCY: Postal Regulatory Commission. request(s) that the Postal Service states Management and Budget is particularly ACTION: Notice. concern market dominant product(s), interested in comments that: applicable statutory and regulatory 1. Evaluate whether the proposed SUMMARY: The Commission is noticing a requirements include 39 U.S.C. 3622, 39 collection of information is necessary recent Postal Service filing for the U.S.C. 3642, 39 CFR part 3030, and 39 for the proper performance of functions Commission’s consideration concerning CFR part 3040, subpart B. For request(s) of the agency, including whether the a negotiated service agreement. This that the Postal Service states concern information will have practical utility; notice informs the public of the filing, competitive product(s), applicable 2. Evaluate the accuracy of the invites public comment, and takes other statutory and regulatory requirements agency’s estimate of the burden of the administrative steps. include 39 U.S.C. 3632, 39 U.S.C. 3633, proposed collection of information, DATES: Comments are due: August 17, 39 U.S.C. 3642, 39 CFR part 3035, and including the validity of the 2020. 39 CFR part 3040, subpart B. Comment methodology and assumptions used; deadline(s) for each request appear in 3. Enhance the quality, utility, and ADDRESSES: Submit comments section II. clarity of the information to be electronically via the Commission’s collected; and Filing Online system at http:// II. Docketed Proceeding(s) 4. Minimize the burden of the www.prc.gov. Those who cannot submit 1. Docket No(s).: MC2020–211 and collection of information on those who comments electronically should contact CP2020–239; Filing Title: USPS Request are to respond, including through the the person identified in the FOR FURTHER to Add Priority Mail & First-Class use of appropriate automated, INFORMATION CONTACT section by Package Service Contract 155 to electronic, mechanical, or other telephone for advice on filing Competitive Product List and Notice of technological collection techniques or alternatives. Filing Materials Under Seal; Filing other forms of information technology, FOR FURTHER INFORMATION CONTACT: Acceptance Date: August 7, 2020; Filing e.g., permitting electronic submissions David A. Trissell, General Counsel, at Authority: 39 U.S.C. 3642, 39 CFR of responses. 202–789–6820. 3040.130 through 3040.135, and 39 CFR Standard Form 3102, CSRS/FERS SUPPLEMENTARY INFORMATION: 3035.105; Public Representative: Designation of Beneficiary, is used by an Kenneth R. Moeller; Comments Due: employee or annuitant covered under Table of Contents August 17, 2020. the Civil Service Retirement System or I. Introduction 2. Docket No(s).: MC2020–212 and the Federal Employees Retirement II. Docketed Proceeding(s) CP2020–240; Filing Title: USPS Request System to designate a beneficiary to to Add Priority Mail & First-Class I. Introduction receive any lump sum due in the event Package Service Contract 156 to of his/her death. The SF 3102 (FERS The Commission gives notice that the Competitive Product List and Notice of Designation of Beneficiary) is being Postal Service filed request(s) for the Filing Materials Under Seal; Filing combined with the SF 2808 (CSRS Commission to consider matters related Acceptance Date: August 7, 2020; Filing Designation of Beneficiary). This to negotiated service agreement(s). The Authority: 39 U.S.C. 3642, 39 CFR proposed version of SF 3102 will request(s) may propose the addition or 3040.130 through 3040.135, and 39 CFR supersede all previous editions of SF removal of a negotiated service 3035.105; Public Representative: 2808 and SF 3102. agreement from the market dominant or Kenneth R. Moeller; Comments Due: the competitive product list, or the August 17, 2020. Analysis modification of an existing product Agency: Retirement Operations, currently appearing on the market 1 See Docket No. RM2018–3, Order Adopting Final Rules Relating to Non-Public Information, Retirement Services, Office of Personnel dominant or the competitive product June 27, 2018, Attachment A at 19–22 (Order No. Management. list. 4679).

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3. Docket No(s).: MC2020–213 and comments on the proposed rule change PAR for manual handling.5 Current Rule CP2020–241; Filing Title: USPS Request from interested persons. 5.34(a)(1)(A)(ii), as written, does not to Add First-Class Package Service specifically consider the case in which I. Self-Regulatory Organization’s Contract 111 to Competitive Product a User’s order instructions would route Statement of the Terms of Substance of List and Notice of Filing Materials an order to PAR when such order is not the Proposed Rule Change Under Seal; Filing Acceptance Date: eligible for electronic processing August 7, 2020; Filing Authority: 39 Cboe Exchange, Inc. (the ‘‘Exchange’’ because the NBO in the series is greater U.S.C. 3642, 39 CFR 3040.130 through or ‘‘Cboe Options’’) proposes to amend than $0.50. 3040.135, and 39 CFR 3035.105; Public Rule 5.34 (Order and Quote Price The System, however, currently Representative: Christopher C. Mohr; Protection Mechanisms and Risk handles orders under these Comments Due: August 17, 2020. Controls) in connection with sell market circumstances in accordance with the 4. Docket No(s).: MC2020–214 and orders in no-bid series. The text of the User instruction to route such an order CP2020–242; Filing Title: USPS Request proposed rule change is provided in for manual handling.6 The proposed to Add Priority Mail Contract 647 to Exhibit 5. rule change codifies this behavior. The Competitive Product List and Notice of The text of the proposed rule change Exchange notes that Rule 5.34 was Filing Materials Under Seal; Filing is also available on the Exchange’s recently revised in connection with a Acceptance Date: August 7, 2020; Filing website (http://www.cboe.com/ technology migration. The rule filing Authority: 39 U.S.C. 3642, 39 CFR AboutCBOE/ that revised Rule 5.34 consolidated all 3040.130 through 3040.135, and 39 CFR CBOELegalRegulatoryHome.aspx), at order and quote price protection 3035.105; Public Representative: the Exchange’s Office of the Secretary, mechanisms and risk controls Christopher C. Mohr; Comments Due: and at the Commission’s Public provisions from the pre-migration August 17, 2020. Reference Room. Exchange Rulebook into one single rule This Notice will be published in the (current Rule 5.34) as well as Federal Register. II. Self-Regulatory Organization’s harmonized Rule 5.34 with the Statement of the Purpose of, and corresponding rules of the Exchange’s Erica A. Barker, Statutory Basis for, the Proposed Rule affiliated exchanges, Cboe EDGX Secretary. Change Exchange, Inc. (‘‘EDGX Options’’) and [FR Doc. 2020–17731 Filed 8–12–20; 8:45 am] Cboe C2 Exchange, Inc. (‘‘C2’’).7 The BILLING CODE 7710–FW–P In its filing with the Commission, the Exchange included statements Exchange’s former rule provision concerning the purpose of and basis for regarding market orders in no-bid (offer) the proposed rule change and discussed series provided that if the Exchange’s SECURITIES AND EXCHANGE any comments it received on the best offer (i.e., NBO) was greater than COMMISSION $0.50, the order would route to PAR if proposed rule change. The text of these 8 statements may be examined at the so instructed by the submitting firm. [Release No. 34–89507; File No. SR–CBOE– places specified in Item IV below. The The Exchange inadvertently omitted 2020–077] Exchange has prepared summaries, set this specific handling process when it amended current Rule 5.34 in Self-Regulatory Organizations; Cboe forth in sections A, B, and C below, of the most significant aspects of such connection with the technology Exchange, Inc.; Notice of Filing and migration. Immediate Effectiveness of a Proposed statements. Rule Change To Amend Rule 5.34 A. Self-Regulatory Organization’s 2. Statutory Basis (Order and Quote Price Protection Statement of the Purpose of, and The Exchange believes the proposed Mechanisms and Risk Controls) in Statutory Basis for, the Proposed Rule rule change is consistent with the Connection With Sell Market Orders in Change Securities Exchange Act of 1934 (the No-Bid Series ‘‘Act’’) and the rules and regulations 1. Purpose August 7, 2020. thereunder applicable to the Exchange and, in particular, the requirements of Pursuant to Section 19(b)(1) of the The Exchange proposes to amend Section 6(b) of the Act.9 Specifically, Securities Exchange Act of 1934 (the Rule 5.34(a)(1) in connection with the the Exchange believes the proposed rule ‘‘Act’’),1 and Rule 19b–4 thereunder,2 System’s handling of a sell market change is consistent with the Section notice is hereby given that on August 5, orders in no-bid series. Specifically, if the System receives a sell market order 2020, Cboe Exchange, Inc. (the 5 See e.g. Rule 5.6(c), a ‘‘Default’’ order is an order ‘‘Exchange’’ or ‘‘Cboe Options’’) filed in a series after it is open for trading with a national best bid (‘‘NBB’’) of zero, a User designates for electronic processing, and with the Securities and Exchange which order (or unexecuted portion) routes to PAR Commission (the ‘‘Commission’’) the current Rule 5.34(a)(1)(A)(ii) provides for manual handling if not eligible for electronic proposed rule change as described in that if the NBO in the series is greater processing. 6 See Cboe U.S. Options FIX Specification (July Items I and II below, which Items have than $0.50, then the System cancels or rejects the market order. The proposed 13, 2020) at 12, available at https://cdn.cboe.com/ been prepared by the Exchange. The resources/membership/US_Options_FIX_ Exchange filed the proposal as a ‘‘non- rule change adds to Rule Specification.pdf. controversial’’ proposed rule change 5.34(a)(1)(A)(ii) that if the NBO in the 7 See Securities Exchange Release No. 86923 series is greater than $0.50, then the (September 10, 2019), 84 FR 48664 (September 16, pursuant to Section 19(b)(3)(A)(iii) of 2019) (SR–CBOE–2019–057). 3 System cancels or rejects the market the Act and Rule 19b–4(f)(6) 8 order or routes the market order to PAR Former Rule 6.13(b)(vi)(B) provided that if the thereunder.4 The Commission is Exchange best offer in a no-bid series is greater than publishing this notice to solicit for manual handling, subject to a User’s $0.50, then the order entry firm has the discretion instructions. This proposed handling in to have the market order to sell via the order consistent with order instructions a handling system pursuant to Rule 6.12 (which 1 15 U.S.C. 78s(b)(1). User may choose to apply to an order permitted a submitting firm to opt to route orders 2 17 CFR 240.19b–4. not eligible for electronic processing to a designated 3 15 U.S.C. 78s(b)(3)(A)(iii). wherein, if the order is not eligible for order management terminal or PAR Workstation). 4 17 CFR 240.19b–4(f)(6). electronic handling, the order routes to 9 15 U.S.C. 78f(b).

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6(b)(5) 10 requirements that the rules of Users’ orders that are designated to not raise any new or novel issue as the an exchange be designed to prevent route to PAR when ineligible for proposed rule is merely restating rule fraudulent and manipulative acts and electronic processing. language that had previously been practices, to promote just and equitable The Exchange does not believe that approved by the Commission in the principles of trade, to foster cooperation the proposed rule change will impose Exchange Rules up until less than a year and coordination with persons engaged any burden on intermarket competition ago.18 The Commission believes that in regulating, clearing, settling, that is not necessary or appropriate in waiver of the 30-day operative delay is processing information with respect to, furtherance of the purposes of the Act consistent with the protection of and facilitating transactions in because the proposed rule change is not investors and the public interest securities, to remove impediments to intended to address competitive issues, because the proposal does not raise any and perfect the mechanism of a free and but rather conforms the Rules to current new issues and will allow the Exchange open market and a national market System functionality in a manner that is to remedy its recent inadvertent system, and, in general, to protect consistent with order instructions omission without delay. Therefore, the investors and the public interest. already available to Users. The Commission hereby waives the Additionally, the Exchange believes the Exchange additionally notes that the operative delay and designates the proposed rule change is consistent with proposed rule change readopts rule proposal as operative upon filing.19 the Section 6(b)(5) 11 requirement that language that had prior been in the At any time within 60 days of the the rules of an exchange not be designed Exchange’s Rules up until less than a filing of the proposed rule change, the to permit unfair discrimination between year ago.13 Commission summarily may temporarily suspend such rule change if customers, issuers, brokers, or dealers. C. Self-Regulatory Organization’s In particular, the proposed rule it appears to the Commission that such Statement on Comments on the change will remove impediments to and action is necessary or appropriate in the Proposed Rule Change Received From perfect the mechanism of a free and public interest, for the protection of Members, Participants, or Others open market and national market investors, or otherwise in furtherance of system, as well as protect investors, The Exchange neither solicited nor the purposes of the Act. If the because it will allow the System to received comments on the proposed Commission takes such action, the handle orders in a manner that is rule change. Commission shall institute proceedings consistent with the intent of a User’s III. Date of Effectiveness of the to determine whether the proposed rule order instruction to route orders to PAR Proposed Rule Change and Timing for change should be approved or for manual handling that are not eligible Commission Action disapproved. for electronic processing, including IV. Solicitation of Comments when the NBO is greater than $0.50 in Because the foregoing proposed rule a no-bid (offer) series. Manual handling change does not: (i) Significantly affect Interested persons are invited to rather than cancellation of orders in the protection of investors or the public submit written data, views and these circumstances may provide these interest; (ii) impose any significant arguments concerning the foregoing, orders with additional execution burden on competition; and (iii) become including whether the proposed rule opportunities. Additionally, the operative for 30 days from the date on change is consistent with the Act. Exchange does not believe that the which it was filed, or such shorter time Comments may be submitted by any of proposed rule change raises any new or as the Commission may designate, it has the following methods: novel issues for, nor will affect the become effective pursuant to Section 14 Electronic Comments protection of investors, because, less 19(b)(3)(A) of the Act and Rule 19b– 15 • than a year ago, the Exchange’s effective 4(f)(6) thereunder. Use the Commission’s internet rules at the time included the same A proposed rule change filed comment form (http://www.sec.gov/ order handling provision.12 The pursuant to Rule 19b–4(f)(6) under the rules/sro.shtml); or 16 • proposed rule change codifies current Act normally does not become Send an email to rule-comments@ operative for 30 days after the date of its sec.gov. Please include File Number SR– functionality in the Rules, which was 17 inadvertently omitted in a previous rule filing. However, Rule 19b–4(f)(6)(iii) CBOE–2020–077 on the subject line. permits the Commission to designate a filing, which additional transparency Paper Comments benefits investors. shorter time if such action is consistent with the protection of investors and the • Send paper comments in triplicate B. Self-Regulatory Organization’s public interest. The Exchange has asked to Secretary, Securities and Exchange Statement on Burden on Competition the Commission to waive the 30-day Commission, 100 F Street NE, The Exchange does not believe that operative delay. The Exchange believes Washington, DC 20549–1090. the proposed rule change will impose that waiver of the operative delay is All submissions should refer to File any burden on competition that is not consistent with the protection of Number SR–CBOE–2020–077. This file necessary or appropriate in furtherance investors and the public interest number should be included on the of the purposes of the Act. The because the proposed rule change does subject line if email is used. To help the Exchange does not believe that the Commission process and review your proposed rule change will impose any 13 See id. comments more efficiently, please use burden on intramarket competition that 14 15 U.S.C. 78s(b)(3)(A). only one method. The Commission will 15 is not necessary or appropriate in 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– post all comments on the Commission’s 4(f)(6)(iii) requires a self-regulatory organization to internet website (http://www.sec.gov/ furtherance of the purposes of the Act give the Commission written notice of its intent to because it will allow orders to route in file the proposed rule change, along with a brief rules/sro.shtml). Copies of the accordance with a User’s intended order description and text of the proposed rule change, instruction, and will apply equally to all at least five business days prior to the date of filing 18 See supra note 7. of the proposed rule change, or such shorter time 19 For purposes only of waiving the 30-day as designated by the Commission. The Exchange operative delay, the Commission also has 10 15 U.S.C. 78f(b)(5). has satisfied this requirement. considered the proposed rule’s impact on 11 Id. 16 17 CFR 240.19b–4(f)(6). efficiency, competition, and capital formation. See 12 See supra note 7. 17 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f).

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submission, all subsequent solicit comments on the proposed rule Exchange from the Clearing Member or amendments, all written statements change from interested persons. non-Clearing Member that ultimately with respect to the proposed rule clears the transaction. With respect to I. Self-Regulatory Organization’s change that are filed with the linkage transactions, the Exchange Statement of the Terms of Substance of reimburses its routing broker providing Commission, and all written the Proposed Rule Change communications relating to the Routing Services for options regulatory proposed rule change between the Cboe BZX Exchange, Inc. (the fees it incurs in connection with the Commission and any person, other than ‘‘Exchange’’ or ‘‘BZX’’) proposes to Routing Services it provides. those that may be withheld from the amend its Fees Schedule relating to the Revenue generated from ORF, when public in accordance with the Options Regulatory Fee. The text of the combined with all of the Exchange’s provisions of 5 U.S.C. 552, will be proposed rule change is provided in other regulatory fees and fines, is available for website viewing and Exhibit 5. designed to recover a material portion of printing in the Commission’s Public The text of the proposed rule change the regulatory costs to the Exchange of Reference Room, 100 F Street NE, is also available on the Exchange’s the supervision and regulation of website (http://markets.cboe.com/us/ Member customer options business Washington, DC 20549, on official _ business days between the hours of equities/regulation/rule filings/bzx/), at including performing routine 10:00 a.m. and 3:00 p.m. Copies of the the Exchange’s Office of the Secretary, surveillances, investigations, filing also will be available for and at the Commission’s Public examinations, financial monitoring, and inspection and copying at the principal Reference Room. policy, rulemaking, interpretive, and office of the Exchange. All comments II. Self-Regulatory Organization’s enforcement activities. Regulatory costs received will be posted without change. Statement of the Purpose of, and include direct regulatory expenses and Persons submitting comments are Statutory Basis for, the Proposed Rule certain indirect expenses for work cautioned that we do not redact or edit Change allocated in support of the regulatory function. The direct expenses include personal identifying information from In its filing with the Commission, the comment submissions. You should in-house and third-party service Exchange included statements provider costs to support the day to day submit only information that you wish concerning the purpose of and basis for to make available publicly. All regulatory work such as surveillances, the proposed rule change and discussed investigations and examinations. The submissions should refer to File any comments it received on the Number SR–CBOE–2020–077 and indirect expenses include support from proposed rule change. The text of these such areas as human resources, legal, should be submitted on or before statements may be examined at the September 3, 2020. information technology, facilities and places specified in Item IV below. The accounting. These indirect expenses are For the Commission, by the Division of Exchange has prepared summaries, set estimated to be approximately 6% of Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of BZX Options’ total regulatory costs for authority.20 the most significant aspects of such 2020. Thus, direct expenses are J. Matthew DeLesDernier, statements. estimated to be approximately 94% of Assistant Secretary. A. Self-Regulatory Organization’s total regulatory costs for 2020. In [FR Doc. 2020–17669 Filed 8–12–20; 8:45 am] Statement of the Purpose of, and the addition, it is BZX Options’ practice BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule that revenue generated from ORF not Change exceed more than 75% of total annual regulatory costs. SECURITIES AND EXCHANGE 1. Purpose The Exchange monitors its regulatory COMMISSION The Exchange proposes to reduce the costs and revenues at a minimum on a semi-annual basis. If the Exchange [Release No. 34–89471; File No. SR– Options Regulatory Fee (‘‘ORF’’) CboeBZX–2020–05] applicable to the Exchange’s options determines regulatory revenues exceed platform (‘‘BZX Options’’) from $0.0002 or are insufficient to cover a material Self-Regulatory Organizations; Cboe per contract to $0.0001 per contract, portion of its regulatory costs in a given BZX Exchange, Inc.; Notice of Filing effective August 3, 2020, in order to year, the Exchange will adjust the ORF and Immediate Effectiveness of a help ensure that revenue collected from by submitting a fee change filing to the Proposed Rule Change To Amend the the ORF, in combination with other Commission. The Exchange also notifies Options Regulatory Fee regulatory fees and fines, does not Members of adjustments to the ORF via exceed the Exchange’s total regulatory regulatory circular and/or Exchange August 4, 2020. 4 costs. Notice. Based on the Exchange’s most Pursuant to Section 19(b)(1) of the The ORF is assessed by the Exchange recent semi-annual review, the Securities Exchange Act of 1934 (the to each Member for options transactions Exchange is proposing to reduce the 1 2 ‘‘Act’’), and Rule 19b–4 thereunder, cleared by the Member that are cleared amount of ORF that will be collected by notice is hereby given that on July 21, by the Options Clearing Corporation the Exchange from $0.0002 per contract 2020, Cboe BZX Exchange, Inc. (the (‘‘OCC’’) in the customer range, side to $0.0001 per contract side. The ‘‘Exchange’’ or ‘‘BZX’’) filed with the regardless of the exchange on which the proposed decrease is based on the Securities and Exchange Commission transaction occurs.3 In other words, the Exchange’s estimated projections for its (the ‘‘Commission’’) the proposed rule Exchange imposes the ORF on all change as described in Items I, II, and 4 The Exchange provides Members with such customer-range transactions cleared by a notice at least 30 calendar days prior to the effective III below, which Items have been Member, even if the transactions do not date of the change. The Exchange notified Members prepared by the Exchange. The take place on the Exchange. The ORF is of the proposed rate change for August 3, 2020 on Commission is publishing this notice to collected by OCC on behalf of the July 1, 2020. See BZX Regulatory Circular RG20– 042 ‘‘Options Regulatory Fee Decrease and Discontinuation of Regulatory Circular’’ and 20 17 CFR 200.30–3(a)(12). 3 The Exchange notes ORF also applies to Exchange Notice, C2020070100 ‘‘Cboe Options 1 15 U.S.C. 78s(b)(1). customer-range transactions executed during Global Exchanges Regulatory Fee Update Effective August 2 17 CFR 240.19b–4. Trading Hours. 3, 2020.’’

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regulatory costs, which have decreased, the ORF in order to ensure it does not however, after its semi-annual review of balanced with recent options volumes, exceed its regulatory costs for the year. its regulatory costs and regulatory which has significantly increased. For Particularly, the Exchange believes that revenues, which includes revenues from example, total options contract volume by decreasing the ORF, as amended, ORF and other regulatory fees and fines, in June 2020 was 82.2% higher than the when combined with all of the the Exchange determined that absent a total options contract volume in June Exchange’s other regulatory fees and reduction in ORF, it would be collecting 2019.5 In fact, June 2020 was the highest fines, would allow the Exchange to revenue in excess of 75% of its options volume month in the history of continue covering a material portion of regulatory costs. Indeed, the Exchange U.S. equity options industry.6 In its regulatory costs, while lessening the notes that when taking into account the particular, customer options volume potential for generating excess revenue recent options volume, coupled with the across the industry has also significantly that may otherwise occur using the projected reduction in regulatory costs, increased year to date. For example, current rate.9 it estimates the ORF will generate total customer options contract volume The Exchange will continue to revenues that would cover more than in April 2020 was 50.27% higher than monitor the amount of revenue the approximated 75% of the total customer volume in April 2019 collected from the ORF to ensure that it, Exchange’s projected regulatory costs. and total customer options contract in combination with its other regulatory Moreover, when coupled with the volume in May 2020, was 29.10% fees and fines, does not exceed the Exchange’s other regulatory fees and higher than total customer volume in Exchange’s total regulatory costs. revenues, the Exchange estimates ORF May 2019. These expectations are to generate over 100% of the Exchange’s 2. Statutory Basis estimated, preliminary and may change. projected regulatory costs. As such, the There can be no assurance that the The Exchange believes the proposed Exchange believes it’s reasonable and Exchange’s final costs for 2020 will not rule change is consistent with the appropriate to decrease the ORF amount differ materially from these expectations Securities Exchange Act of 1934 (the from $0.0002 to $0.0001 per contract and prior practice, nor can the Exchange ‘‘Act’’) and the rules and regulations side. predict with certainty whether options thereunder applicable to the Exchange The Exchange also believes the volume will remain at the current level and, in particular, the requirements of proposed fee change is equitable and going forward. The Exchange notes Section 6(b) of the Act.10 Specifically, not unfairly discriminatory in that it is however, that when combined with the the Exchange believes the proposed rule charged to all Members on all their Exchange’s other non-ORF regulatory change is consistent with Section 6(b)(4) transactions that clear in the customer fees and fines, the revenue being of the Act 11, which provides that range at the OCC. The Exchange generated by ORF using the current rate Exchange rules may provide for the believes the ORF ensures fairness by results in revenue that is running in equitable allocation of reasonable dues, assessing higher fees to those Members excess of the Exchange’s estimated fees, and other charges among its that require more Exchange regulatory regulatory costs for the year.7 Members and other persons using its services based on the amount of Particularly, as noted above, the options facilities. Additionally, the Exchange customer options business they market has seen a substantial increase in believes the proposed rule change is conduct. Regulating customer trading volume over the first half of the year, consistent with the Section 6(b)(5) 12 activity is much more labor intensive due in large part to the extreme requirement that the rules of an and requires greater expenditure of volatility in the marketplace as a result exchange not be designed to permit human and technical resources than of the COVID–19 pandemic. This unfair discrimination between regulating non-customer trading unprecedented spike in volatility customers, issuers, brokers, or dealers. activity, which tends to be more resulted in significantly higher volume The Exchange believes the proposed automated and less labor-intensive. For than was originally projected by the fee change is reasonable because example, there are costs associated with Exchange (thereby resulting in customer transactions will be subject to main office and branch office substantially higher ORF revenue than a lower ORF fee than the current rate. examinations (e.g., staff and travel projected). Moreover, in addition to Moreover, the proposed reduction is expenses), as well as investigations into projected reductions in regulatory necessary in order for the Exchange to customer complaints and the expenses, the Exchange experienced not collect revenue in excess of its terminations of Registered persons. As a further unanticipated reductions in anticipated regulatory costs, in result, the costs associated with costs, in connection with COVID–19 combination with other regulatory fees administering the customer component (e.g., reduction in travel expenses).8 The and fines, which is consistent with the of the Exchange’s overall regulatory Exchange therefore proposes to decrease Exchange’s practices. The Exchange had program are materially higher than the designed the ORF to generate revenues costs associated with administering the 5 See https://www.theocc.com/Newsroom/Press- that would be less than or equal to 75% non-customer component (e.g., Member Releases/2020/07-01-OCC-June-2020-Total-Volume- of the Exchange’s regulatory costs, proprietary transactions) of its Up-Nearly-81-Perc. regulatory program.13 Moreover, the 6 which is consistent with the view of the Id. The previous record for highest U.S. equity Exchange notes that it has broad options volume was March 2020. For further Commission that regulatory fees be used context, the Exchange notes that The Options for regulatory purposes and not to regulatory responsibilities with respect Clearing Corporation total volume for March 2020 support the Exchange’s business to its Members’ activities, irrespective of was up 62.8% as compared to March 2019. operations. As discussed above, where their transactions take place. 7 Consistent with Rule 15.2 (Regulatory Revenue), Many of the Exchange’s surveillance the Exchange notes that notwithstanding the excess ORF revenue collected to date, it has not used such 9 The Exchange notes that its regulatory programs for customer trading activity revenue for nonregulatory purposes. responsibilities with respect to Member compliance may require the Exchange to look at 8 The Exchange notes that in connection with with options sales practice rules have largely been allocated to FINRA under a 17d–2 agreement. The proposed ORF rate changes, it provides the 13 If the Exchange changes its method of funding Commission confidential details regarding the ORF is not designed to cover the cost of that options regulation or if circumstances otherwise change in Exchange’s projected regulatory revenue, including sales practice regulation. the future, the Exchange may decide to modify the projected revenue from ORF, along with a breakout 10 15 U.S.C. 78f(b). ORF or assess a separate regulatory fee on Member of its projected regulatory expenses, including both 11 15 U.S.C. 78f(b)(4). proprietary transactions if the Exchange deems it direct and indirect allocations. 12 15 U.S.C. 78f(b)(5). advisable.

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activity across all markets, such as III. Date of Effectiveness of the Reference Room, 100 F Street NE, reviews related to position limit Proposed Rule Change and Timing for Washington, DC 20549, on official violations and manipulation. Indeed, Commission Action business days between the hours of the Exchange cannot effectively review The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the for such conduct without looking at and effective pursuant to Section 19(b)(3)(A) filing also will be available for evaluating activity regardless of where it of the Act 15 and paragraph (f) of Rule inspection and copying at the principal transpires. In addition to its own 19b–4 16 thereunder. At any time within office of the Exchange. All comments surveillance programs, the Exchange 60 days of the filing of the proposed rule received will be posted without change. also works with other SROs and change, the Commission summarily may Persons submitting comments are exchanges on intermarket surveillance temporarily suspend such rule change if cautioned that we do not redact or edit related issues. Through its participation it appears to the Commission that such personal identifying information from in the Intermarket Surveillance Group action is necessary or appropriate in the comment submissions. You should (‘‘ISG’’) 14 the Exchange shares public interest, for the protection of submit only information that you wish information and coordinates inquiries investors, or otherwise in furtherance of to make available publicly. All and investigations with other exchanges the purposes of the Act. If the submissions should refer to File No. SR–CboeBZX–2020–057, and should be designed to address potential Commission takes such action, the submitted on or before September 3, intermarket manipulation and trading Commission will institute proceedings 2020. abuses. Accordingly, there is a strong to determine whether the proposed rule nexus between the ORF and the change should be approved or For the Commission, by the Division of Exchange’s regulatory activities with disapproved. Trading and Markets, pursuant to delegated authority.17 respect to its Member’s customer trading IV. Solicitation of Comments activity. J. Matthew DeLesDernier, Interested persons are invited to Assistant Secretary. B. Self-Regulatory Organization’s submit written data, views, and [FR Doc. 2020–17352 Filed 8–12–20; 8:45 am] Statement on Burden on Competition arguments concerning the foregoing, BILLING CODE 8011–01–P including whether the proposed rule The Exchange does not believe that change is consistent with the Act. the proposed rule change will impose Comments may be submitted by any of SECURITIES AND EXCHANGE any burden on competition not the following methods: COMMISSION necessary or appropriate in furtherance Electronic Comments of the purposes of the Act. This [Release No. 34–89509; File No. SR–MEMX– 2020–03] proposal does not create an unnecessary • Use the Commission’s internet or inappropriate intra-market burden on comment form (http://www.sec.gov/ Self-Regulatory Organizations; MEMX competition because the ORF applies to rules/sro.shtml); or LLC; Notice of Filing and Order • Send an email to rule-comments@ all customer activity, thereby raising Granting Accelerated Approval of a sec.gov. Please include File No. SR– regulatory revenue to offset regulatory Proposed Rule Change To Amend Rule CboeBZX–2020–057 on the subject line. expenses. It also supplements the 8.15 and To Add the Consolidated regulatory revenue derived from non- Paper Comments Audit Trail Industry Member customer activity. The Exchange notes, • Send paper comments in triplicate Compliance Rules to the List of Minor however, the proposed change is not to Secretary, Securities and Exchange Rule Violations in Rule 8.15.01 designed to address any competitive Commission, 100 F Street NE, issues. Indeed, this proposal does not August 7, 2020. Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the create an unnecessary or inappropriate All submissions should refer to File No. inter-market burden on competition Securities Exchange Act of 1934 (the SR–CboeBZX–2020–057. This file 1 2 because it is a regulatory fee that ‘‘Act’’), and Rule 19b–4 thereunder, number should be included on the notice is hereby given that on July 31, supports regulation in furtherance of the subject line if email is used. To help the purposes of the Act. The Exchange is 2020, MEMX LLC (‘‘MEMX’’ or the Commission process and review your ‘‘Exchange’’) filed with the Securities obligated to ensure that the amount of comments more efficiently, please use and Exchange Commission (the regulatory revenue collected from the only one method. The Commission will ‘‘Commission’’) the proposed rule ORF, in combination with its other post all comments on the Commission’s change as described in Items I and II regulatory fees and fines, does not internet website (http://www.sec.gov/ below, which Items have been prepared exceed regulatory costs. rules/sro.shtml). Copies of the by the Exchange. The Commission is C. Self-Regulatory Organization’s submission, all subsequent publishing this notice to solicit Statement on Comments on the amendments, all written statements comments on the proposed rule change Proposed Rule Change Received From with respect to the proposed rule from interested persons and approving Members, Participants, or Others change that are filed with the the proposal on an accelerated basis. Commission, and all written The Exchange neither solicited nor communications relating to the I. Self-Regulatory Organization’s received comments on the proposed proposed rule change between the Statement of the Terms of Substance of rule change. Commission and any person, other than the Proposed Rule Change those that may be withheld from the The Exchange is filing with the 14 ISG is an industry organization formed in 1983 public in accordance with the Commission a proposed rule change to to coordinate intermarket surveillance among the provisions of 5 U.S.C. 552, will be add the Consolidated Audit Trail SROs by cooperatively sharing regulatory available for website viewing and (‘‘CAT’’) industry member compliance information pursuant to a written agreement printing in the Commission’s Public between the parties. The goal of the ISG’s information sharing is to coordinate regulatory 17 17 CFR 200.30–3(a)(12). efforts to address potential intermarket trading 15 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). abuses and manipulations. 16 17 CFR 240.19b–4(f). 2 17 CFR 240.19b–4.

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rules (‘‘CAT Compliance Rules’’) to the proposes to amend Rule 8.15.01 to add expects that the other exchanges will be list of minor rule violations in Rule 8.15 the CAT Compliance Rules in Rules 4.5 entering into similar RSAs. and to make an additional change to through 4.16 to the list of rules in Rule The Exchange notes that this proposal paragraph (a) of Rule 8.15. The text of 8.15.01 eligible for disposition pursuant is based upon the FINRA filing to the proposed rule change is provided in to a minor fine; specifically, under amend FINRA Rule 9217 in order to add Exhibit 5. proposed Rule 8.15.01(h).5 Proposed FINRA’s corresponding CAT Compliance Rules to FINRA’s list of II. Self-Regulatory Organization’s Rule 8.15.01(h) provides that for failures rules that are eligible for minor rule Statement of the Purpose of, and to comply with the Consolidated Audit violation plan treatment.7 The Exchange Statutory Basis for, the Proposed Rule Trail Compliance Rule requirements of also notes that the New York Stock Change Rules 4.5 through 4.16, the Exchange may impose a minor rule violation fine Exchange LLC (‘‘NYSE’’) submitted a In its filing with the Commission, the of up to $2,500. The Exchange may seek filing to amend its Minor Rule Violation Exchange included statements other disciplinary action for more Plan (‘‘MRVP’’) to add its CAT concerning the purpose of and basis for serious violations. Compliance Rules in a manner the proposed rule change and discussed consistent with FINRA’s proposal,8 and any comments it received on the The Exchange is coordinating with other Plan Participants intend to submit proposed rule change. The text of these the Financial Industry Regulatory the same. Thus, in order to achieve statements may be examined at the Authority, Inc. (‘‘FINRA’’) and other consistency with FINRA and the other places specified in Item IV below. The Plan Participants to promote Plan Participants, the Exchange Exchange has prepared summaries, set harmonized and consistent enforcement proposes to adopt fines up to $2,500 in forth in sections A, B, and C below, of of all the Plan Participants’ CAT connection with minor rule fines for the most significant aspects of such Compliance Rules. The Commission violations of the CAT Compliance Rules statements. recently approved a Rule 17d–2 Plan (Rules 4.5 through 4.16) in proposed under which the regulation of CAT Rule 8.15.01(h) under the Exchange’s A. Self-Regulatory Organization’s Compliance Rules will be allocated Statement of the Purpose of, and MRVP. In connection with FINRA’s among Plan Participants to reduce proposed amendment to FINRA Rule Statutory Basis for, the Proposed Rule regulatory duplication for industry Change 9217 to make FINRA’s CAT Compliance members that are members of more than Rules MRVP eligible, FINRA has stated 1. Purpose one Participant (‘‘common members’’).6 that it will apply the minor fines for In order to implement the National Under the Rule 17d–2 Plan, the CAT Compliance Rules in the same Market System Plan Governing the regulation of CAT Compliance Rules manner that FINRA has for its similar Consolidated Audit Trail (the ‘‘CAT with respect to common members that existing audit trail-related rules.9 NMS Plan’’ or ‘‘Plan’’), the Exchange are members of FINRA is allocated to Accordingly, in order to promote codified the CAT Compliance Rules in FINRA. Similarly, under the Rule 17d– regulatory consistency, the Exchange Rules 4.5 through 4.16 as part of its 2 Plan, responsibility for common plans to do the same. Specifically, initial Rules.3 The CAT NMS Plan was members of multiple other Plan application of a minor fine with respect filed by the Plan Participants to comply Participants and not a member of FINRA to CAT Compliance Rule violations will with Rule 613 of Regulation NMS under will be allocated among those other Plan be guided by the same factors that the Act,4 and each Plan Participant Participants, including to the Exchange. FINRA references in its filing. However, accordingly has adopted the same For those non-common members who more formal disciplinary proceedings compliance rules as in Exchange Rules are allocated to MEMX pursuant to the may be warranted instead of minor rule 4.5 through 4.16. The common Rule 17d–2 Plan, the Exchange and dispositions in certain circumstances compliance rules adopted by each Plan FINRA have entered into a Regulatory such as where violations prevent Participant are designed to require Services Agreement (‘‘RSA’’) pursuant regulatory users of the CAT from industry members to comply with the to which FINRA will assist the performing their regulatory functions. provisions of the CAT NMS Plan, which Exchange with conducting surveillance, Where minor rule dispositions are broadly calls for industry members to investigation, examination, and appropriate, the following factors help record and report timely and accurate enforcement activity in connection with guide the determination of fine customer, order, and trade information the CAT Compliance Rules on the amounts: relating to activity in NMS Securities Exchange’s behalf. The Exchange • Total number of reports that are not and OTC Equity Securities. submitted or submitted late; Rule 8.15 provides for disposition of 5 FINRA’s maximum fine for minor rule • The timeframe over which the certain violations through assessment of violations under FINRA Rule 9216(b) is $2,500. The violations occur; fines in lieu of conducting a formal Exchange will apply an identical maximum fine • Whether violations are batched; amount for eligible violations of Rules 4.5 through • disciplinary proceeding. Rule 8.15.01, 4.16 to achieve consistency with FINRA and also Whether the violations are the specifically, sets forth the list of specific amend its minor rule violation plan (‘‘MRVP’’) to result of the actions of one individual or Exchange Rules under which any include such fines. Like FINRA, the Exchange the result of faulty systems or would be able to pursue a fine greater than $2,500 procedures; member of the Exchange (‘‘Member’’), for violations of Rules 4.5 through 4.16 in a regular associated person of a Member, or disciplinary proceeding or a letter of consent under registered or non-registered employee of Chapter 8 as appropriate. Any fine imposed in 7 See Securities Exchange Act Release No. 88870 a Member may be subject to a fine for excess of $2,500 or not otherwise covered by Rule (May 14, 2020), 85 FR 30768 (May 20, 2020) (SR– 19d–1(c)(2) of the Act would be subject to prompt FINRA–2020–013). violations of such Rules. The Exchange notice to the Commission pursuant to Rule 19d–1 8 See Securities Exchange Act Release No. 89123 under the Act. As noted below, in assessing the (June 23, 2020), 85 FR 39016 (June 29, 2020) (SR– 3 On May 4, 2020, the Commission approved the appropriateness of a minor rule fine with respect to NYSE–2020–51). MEMX Form 1 application for registration as a CAT Compliance Rules, the Exchange will be 9 See supra note 7; see also FINRA Notice to national securities exchange. See Securities guided by the same factors that FINRA utilizes. See Members 04–19 (March 2004) available at https:// Exchange Release No. 88806 (May 4, 2020), 85 FR text accompanying notes 9–10, infra. www.finra.org/rules-guidance/notices/04-19 27451 (May 8, 2020). 6 See Securities Exchange Act Release No. 88366 (providing specific factors used to inform 4 17 CFR 242.613. (March 12, 2020), 85 FR 15238 (March 17, 2020). dispositions for violations of OATS reporting rules).

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• Whether the firm has taken securities, to remove impediments to applicable violation is a pattern or remedial measures to correct the and perfect the mechanism of a free and practice violation. violations; open market and a national market In connection with the fine level • Prior minor rule violations within system, and, in general, to protect specified in the proposed rule change, the past 24 months; investors and the public interest. adding proposed Rule 8.15.01(h) to • Collateral effects that the failure has Additionally, the Exchange believes the specifically provide that for violations on customers; and proposed rule change is consistent with of the CAT Compliance Rules in Rules • Collateral effects that the failure has the Section 6(b)(5) 13 requirement that 4.5 through 4.16 the Exchange may on the Exchange’s ability to perform its the rules of an exchange not be designed impose a fine not to exceed $2,500 10 regulatory function. to permit unfair discrimination between would further the goal of transparency Upon effectiveness of this rule customers, issuers, brokers, or dealers. within the Exchange’s rules. Adopting change, the Exchange will publish a the same cap as FINRA for minor rule regulatory notice notifying its Members Minor rule fines provide a meaningful fines in connection with the CAT of the rule change and the specific sanction for minor or technical Compliance Rules would also promote factors that will be considered in violations of rules when the conduct at regulatory consistency across self- connection with assessing minor rule issue does not warrant stronger, regulatory organizations. fines described above. immediately reportable disciplinary The Exchange further believes that the For the foregoing reasons, the sanctions. The inclusion of a rule in the proposed amendment to Rule 8.15.01 is Exchange believes that the proposed Exchange’s MRVP does not minimize consistent with Section 6(b)(6) of the rule change will result in a coordinated, the importance of compliance with the Act,15 which provides that members and harmonized approach to CAT rule, nor does it preclude the Exchange persons associated with members shall Compliance Rule enforcement across from choosing to pursue violations of be appropriately disciplined for Plan Participants that will be consistent eligible rules through a letter of consent violation of the provisions of the rules with the approach FINRA has taken if the nature of the violations or prior of the exchange, by expulsion, with the CAT rules. disciplinary history warrants more suspension, limitation of activities, In addition to the changes set forth significant sanctions. Rather, the functions, and operations, fine, censure, above, the Exchange proposes to remove Exchange believes that the proposed being suspended or barred from being a sentence from its current Rule 8.15(a) rule change will strengthen the associated with a member, or any other given the possibility that it may cause Exchange’s ability to carry out its fitting sanction. As noted, the proposed confusion. Specifically, as set forth oversight and enforcement rule change would provide the above, the provisions of Rule 8.15 are responsibilities in cases where full Exchange the ability to sanction minor intended to provide for a way to resolve disciplinary proceedings are or technical violations of Rules 4.5 violations of Exchange Rules that are unwarranted in view of the minor through 4.16 pursuant to the Exchange’s minor in nature. However, current nature of the particular violation. The rules. paragraph (a) of Rule 8.15 states that the Exchange believes the option to impose Finally, the Exchange also believes Exchange may, if no exceptional a minor rule sanction gives the that the proposed change is designed to circumstances are present, impose a fine Exchange additional flexibility to provide a fair procedure for the based upon a determination that there administer its enforcement program in disciplining of members and persons exists a pattern or practice of violative the most effective and efficient manner associated with members, consistent conduct. Given the fact that most while still fully meeting the Exchange’s with Sections 6(b)(7) and 6(d) of the violations involving a ‘‘pattern or remedial objectives in addressing Act.16 Rule 8.15 does not preclude a practice’’ of violative conduct are not violative conduct.14 Specifically, the Member, associated person of a considered to be minor in nature, the proposed rule change is designed to Member, or registered or non-registered Exchange believes this language might prevent fraudulent and manipulative employee of a Member from contesting cause confusion and proposes to delete acts and practices because it will an alleged violation and receiving a this sentence. provide the Exchange the ability to issue hearing on the matter with the same a minor rule fine for violations of the procedural rights through a litigated 2. Statutory Basis CAT Compliance Rules in Rules 4.5 disciplinary proceeding. The Exchange believes the proposed through 4.16 where a more formal rule change is consistent with the Act B. Self-Regulatory Organization’s disciplinary action may not be Statement on Burden on Competition and the rules and regulations warranted or appropriate consistent thereunder applicable to the Exchange with the approach of other Plan The Exchange does not believe that and, in particular, the requirements of Participants for the same conduct. For the proposed rule change will impose Section 6(b) of the Act.11 Specifically, the same reason, the Exchange believes any burden on competition that is not the Exchange believes the proposed rule its proposal to amend Rule 8.15(a) is necessary or appropriate in furtherance change is consistent with the Section consistent with the Act as it is designed of the purposes of the Act. The 6(b)(5) 12 requirements that the rules of to prevent fraudulent and manipulative proposed rule change is not intended to an exchange be designed to prevent acts and practices because it would address competitive issues but rather is fraudulent and manipulative acts and remove a reference to an action brought concerned solely with making the CAT practices, to promote just and equitable under the Exchange’s MRVP when the Compliance Rules in Rules 4.5 through principles of trade, to foster cooperation 4.16 eligible for a minor rule fine and coordination with persons engaged 13 Id. disposition, thereby strengthening the in regulating, clearing, settling, 14 Pursuant to Rule 8.15(a) and (e), the Exchange Exchange’s ability to carry out its processing information with respect to, has the discretion to impose a fine in lieu of oversight and enforcement functions and facilitating transactions in commencing a disciplinary proceeding for a and deter potential violative conduct. violation that is minor in nature. Rule 8.15(e) states Also, as stated above, the proposed rule specifically that nothing in Rule 8.15 requires the 10 See id. Exchange to impose a fine pursuant to Rule 8.15 11 15 U.S.C. 78f(b). with respect to the violation of any Rule included 15 15 U.S.C. 78f(b)(6). 12 15 U.S.C. 78f(b)(5). in any such listing. 16 15 U.S.C. 78f(b)(7) and 78f(d).

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change is consistent with similar comment submissions. You should when it approved the addition of CAT proposals recently filed by FINRA and submit only information that you wish Compliance Rules to FINRA’s MRVP.22 NYSE, and other Plan Participants to make available publicly. All As noted in that order, and similarly intend to submit the same. submissions should refer to File herein, the Commission believes that Number SR–MEMX–2020–03 and C. Self-Regulatory Organization’s Exchange’s treatment of CAT Statement on Comments on the should be submitted on or before Compliance Rules violations as part of Proposed Rule Change Received From September 3, 2020. its MRVP provides a reasonable means Members, Participants, or Others IV. Commission’s Findings and Order of addressing violations that do not rise The Exchange neither solicited nor Granting Accelerated Approval of to the level of requiring formal received comments on the proposed Proposed Rule Change disciplinary proceedings, while providing greater flexibility in handling rule change. The Commission finds that the certain violations. However, the III. Solicitation of Comments proposed rule change is consistent with the requirements of the Act and the Commission expects that, as with Interested persons are invited to rules and regulations thereunder FINRA, the Exchange will continue to submit written data, views, and applicable to a national securities conduct surveillance with due diligence arguments concerning the foregoing, exchange.17 In particular, the and make determinations based on its including whether the proposed rule Commission finds that the proposed findings, on a case-by-case basis, change is consistent with the Act. rule change is consistent with Section regarding whether a sanction under the Comments may be submitted by any of 6(b)(5) of the Act,18 which requires that rule is appropriate, or whether a the following methods: the rules of an exchange be designed to violation requires formal disciplinary Electronic Comments promote just and equitable principles of action. Accordingly, the Commission trade, to remove impediments and to believes the proposal raises no novel or • Use the Commission’s internet perfect the mechanism of a free and significant issues. In addition, the comment form (http://www.sec.gov/ open market and a national market Exchange proposes to amend Rule rules/sro.shtml); or 8.15(a) to remove a reference to an • Send an email to rule-comments@ system, and, in general, to protect sec.gov. Please include File Number SR– investors and the public interest. The action brought under the Exchange’s MEMX–2020–03 the subject line. Commission also believes that the MRVP when the applicable violation is proposal is consistent with Sections a pattern or practice violation. The Paper Comments 6(b)(1) and 6(b)(6) of the Act 19 which Commission believes that removal of • Send paper comments in triplicate require that the rules of an exchange such reference makes clear that a to Secretary, Securities and Exchange enforce compliance with, and provide pattern or practice of violative conduct Commission, 100 F Street NE, appropriate discipline for, violations of may require discipline beyond the scope Washington, DC 20549–1090. Commission and Exchange rules. of the Exchange’s MRVP, and is All submissions should refer to File Finally, the Commission finds that the therefore consistent with the Act. proposal is consistent with the public Number SR–MEMX–2020–03. This file For the same reasons discussed above, interest, the protection of investors, or number should be included on the the Commission finds good cause, subject line if email is used. To help the otherwise in furtherance of the purposes of the Act, as required by Rule 19d– pursuant to Section 19(b)(2) of the Commission process and review your 23 20 Act, for approving the proposed rule comments more efficiently, please use 1(c)(2) under the Act, which governs minor rule violation plans. change prior to the thirtieth day after only one method. The Commission will the date of publication of the notice of post all comments on the Commission’s As stated above, the Exchange proposes to add the CAT Compliance the filing thereof in the Federal internet website (http://www.sec.gov/ Register. The proposal merely adds the rules/sro.shtml). Copies of the Rules to the list of minor rule violations CAT Compliance Rules to the submission, all subsequent in Rule 8.15 to be consistent with the Exchange’s MRVP, harmonizes its amendments, all written statements approach FINRA has taken for minor application with FINRA’s application of with respect to the proposed rule violations of its corresponding CAT 21 CAT Compliance Rules under its own change that are filed with the Compliance Rules. The Commission Commission, and all written has already approved FINRA’s treatment MRVP, and amends Rule 8.15(a) to communications relating to the of CAT Compliance Rules violations remove a pattern or practice of violative proposed rule change between the conduct from the Exchange’s MRVP. 17 Commission and any person, other than In approving this proposed rule change, the Accordingly, the Commission believes Commission has considered the proposed rule’s that a full notice-and-comment period is those that may be withheld from the impact on efficiency, competition, and capital public in accordance with the formation. See 15 U.S.C. 78c(f). not necessary before approving the provisions of 5 U.S.C. 552, will be 18 15 U.S.C. 78f(b)(5). proposal. 19 15 U.S.C. 78f(b)(1) and 78f(b)(6). available for website viewing and V. Conclusion printing in the Commission’s Public 20 17 CFR 240.19d–1(c)(2). 21 As discussed above, the Exchange has entered Reference Room, 100 F Street NE, into a Rule 17d–2 Plan and an RSA with FINRA It is therefore ordered, pursuant to Washington, DC 20549 on official with respect to the CAT Compliance Rules. The Section 19(b)(2) of the Act 24 and Rule business days between the hours of Commission notes that, unless relieved by the 19d–1(c)(2) thereunder,25 that the 10:00 a.m. and 3:00 p.m. Copies of the Commission of its responsibility, as may be the case proposed rule change (SR–MEMX– under the Rule 17d–2 Plan, the Exchange continues filing also will be available for to bear the responsibility for self-regulatory conduct 2020–03) be, and hereby is, approved on inspection and copying at the principal and liability for self-regulatory failures, not the self- an accelerated basis. office of the Exchange. All comments regulatory organization retained to perform regulatory functions on the Exchange’s behalf received will be posted without change. 22 pursuant to an RSA. See Securities Exchange See SR–FINRA–2020–013. Persons submitting comments are Release No. 61419 (January 26, 2010), 75 FR 5157 23 15 U.S.C. 78s(b)(2). cautioned that we do not redact or edit (February 1, 2010) (SR–BATS–2009–031), note 93 24 15 U.S.C. 78s(b)(2). personal identifying information from and accompanying text. 25 17 CFR 240.19d–1(c)(2).

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For the Commission, by the Division of Percent The following areas have been Trading and Markets, pursuant to delegated determined to be adversely affected by authority.26 Businesses Without Credit the disaster: J. Matthew DeLesDernier, Available Elsewhere ...... 3.000 Assistant Secretary. Non-Profit Organizations With Primary Counties: McNairy. Credit Available Elsewhere ... 2.750 [FR Doc. 2020–17670 Filed 8–12–20; 8:45 am] Contiguous Counties: Non-Profit Organizations With- BILLING CODE 8011–01–P out Credit Available Else- Tennessee: Chester, Hardeman, Hardin. where ...... 2.750 Mississippi: Alcorn. For Economic Injury: SMALL BUSINESS ADMINISTRATION Businesses & Small Agricultural The Interest Rates are: Cooperatives Without Credit [Disaster Declaration #16571 and #16572; Available Elsewhere ...... 3.000 Percent Pennsylvania Disaster Number PA–00106] Non-Profit Organizations With- out Credit Available Else- For Physical Damage: Administrative Declaration of a where ...... 2.750 Homeowners With Credit Avail- Disaster for the Commonwealth of able Elsewhere ...... 2.500 Pennsylvania Homeowners Without Credit The number assigned to this disaster Available Elsewhere ...... 1.250 AGENCY: Small Business Administration. for physical damage is 16571 F and for Businesses With Credit Available economic injury is 16572 0. ACTION: Notice. Elsewhere ...... 6.000 The States which received an EIDL Businesses Without Credit Avail- SUMMARY: This is a notice of an Declaration # are Pennsylvania, New able Elsewhere ...... 3.000 Administrative declaration of a disaster Jersey. Non-Profit Organizations With Credit Available Elsewhere ...... 2.750 for the Commonwealth of Pennsylvania (Catalog of Federal Domestic Assistance dated 08/07/2020. Incident: Civil Non-Profit Organizations Without Number 59008) Credit Available Elsewhere ...... 2.750 Unrest. Incident Period: 05/30/2020 Jovita Carranza, For Economic Injury: through 06/08/2020. Businesses & Small Agricultural Administrator. DATES: Issued on 08/07/2020. Cooperatives Without Credit Physical Loan Application Deadline [FR Doc. 2020–17706 Filed 8–12–20; 8:45 am] Available Elsewhere ...... 3.000 Date: 10/06/2020. BILLING CODE 8026–03–P Non-Profit Organizations Without Economic Injury (EIDL) Loan Credit Available Elsewhere ...... 2.750 Application Deadline Date: 05/07/2021. SMALL BUSINESS ADMINISTRATION ADDRESSES: Submit completed loan The number assigned to this disaster applications to: U.S. Small Business for physical damage is 16573 6 and for Administration, Processing and [Disaster Declaration #16573 and #16574; economic injury is 16574 0. Tennessee Disaster Number TN–00124] Disbursement Center, 14925 Kingsport The States which received an EIDL Road, Fort Worth, TX 76155. Administrative Declaration of a Declaration # are Tennessee, FOR FURTHER INFORMATION CONTACT: A. Disaster for the State of Tennessee Mississippi. Escobar, Office of Disaster Assistance, (Catalog of Federal Domestic Assistance U.S. Small Business Administration, AGENCY: Small Business Administration. Number 59008) 409 3rd Street SW, Suite 6050, ACTION: Notice. Washington, DC 20416, (202) 205–6734. Jovita Carranza, Administrator. SUPPLEMENTARY INFORMATION: Notice is SUMMARY: This is a notice of an hereby given that as a result of the Administrative declaration of a disaster [FR Doc. 2020–17705 Filed 8–12–20; 8:45 am] Administrator’s disaster declaration, for the State of Tennessee dated 08/07/ BILLING CODE 8026–03–P applications for disaster loans may be 2020. Incident: Flooding. Incident filed at the address listed above or other Period: 07/01/2020. locally announced locations. DATES: Issued on 08/07/2020. The following areas have been Physical Loan Application Deadline SURFACE TRANSPORTATION BOARD determined to be adversely affected by Date: 10/06/2020. the disaster: Economic Injury (EIDL) Loan [Docket No. FD 36424] Primary Counties: Philadelphia Application Deadline Date: 05/07/2021. Union Pacific Railroad Company— Contiguous Counties: ADDRESSES: Submit completed loan Pennsylvania: Bucks, Delaware, Temporary Trackage Rights applications to: U.S. Small Business Exemption—BNSF Railway Company Montgomery. Administration, Processing and New Jersey: Burlington, Camden, Disbursement Center, 14925 Kingsport Gloucester. Union Pacific Railroad Company Road, Fort Worth, TX 76155. The Interest Rates are: (UP), a Class I railroad, has filed a FOR FURTHER INFORMATION CONTACT: A. verified notice of exemption under 49 Percent Escobar, Office of Disaster Assistance, CFR 1180.2(d)(8) for the acquisition of U.S. Small Business Administration, temporary trackage rights, for overhead For Physical Damage: 409 3rd Street, SW, Suite 6050, operations, over approximately 566.6 Homeowners With Credit Avail- Washington, DC 20416, (202) 205–6734. miles of rail line owned by BNSF able Elsewhere ...... 2.500 Railway Company (BNSF) between Homeowners Without Credit SUPPLEMENTARY INFORMATION: Notice is Available Elsewhere ...... 1.250 hereby given that as a result of the milepost 737.3 on BNSF’s Needles Businesses With Credit Avail- Administrator’s disaster declaration, Subdivision near Daggett, Cal., and able Elsewhere ...... 6.000 applications for disaster loans may be milepost 191.6 on BNSF’s Phoenix filed at the address listed above or other Subdivision near Phoenix, Ariz., 26 17 CFR 200.30–3(a)(12). locally announced locations. pursuant to the terms of a written

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temporary trackage rights agreement environmental review under 49 CFR Norfolk & Western Railway—Trackage dated August 6, 2020 (Agreement).1 1105.6(c) and from historic reporting Rights—Burlington Northern, Inc., 354 UP states that the sole purpose of the under 49 CFR 1105.8(b)(3). I.C.C. 605 (1978), as modified in temporary trackage rights is to allow UP Board decisions and notices are Mendocino Coast Railway—Lease & to reroute overhead trains due to a available at www.stb.gov. Operate—California Western Railroad, bridge outage on UP’s Phoenix Decided: August 10, 2020. 360 I.C.C. 653 (1980), and any 2 Subdivision near Tempe, Ariz. UP By the Board, Allison C. Davis, Director, employees affected by the states that the temporary trackage rights Office of Proceedings. discontinuance of those trackage rights will expire on September 18, 2020. Jeffrey Herzig, will be protected by the conditions set UP concurrently filed a petition for Clearance Clerk. out in Oregon Short Line Railroad— waiver of the 30-day period under 49 [FR Doc. 2020–17719 Filed 8–12–20; 8:45 am] Abandonment Portion Goshen Branch CFR 1180.4(g)(1) in this docket and in Between Firth & Ammon, in Bingham & BILLING CODE 4915–01–P Docket No. FD 36425, to allow the Bonneville Counties, Idaho, 360 I.C.C. proposed temporary trackage rights in 91 (1979). both dockets to become effective SURFACE TRANSPORTATION BOARD If the verified notice contains false or immediately. By decision served August misleading information, the exemption 10, 2020 the Board granted UP’s request. [Docket No. FD 36425] is void ab initio. Petitions to revoke the As a result, this exemption is now exemption under 49 U.S.C. 10502(d) Union Pacific Railroad Company— effective. may be filed at any time. The filing of Temporary Trackage Rights As a condition to this exemption, any a petition to revoke will not Exemption—BNSF Railway Company employees affected by the acquisition of automatically stay the effectiveness of the temporary trackage rights will be Union Pacific Railroad Company the exemption. protected by the conditions imposed in (UP), a Class I railroad, has filed a All pleadings, referring to Docket No. Norfolk & Western Railway—Trackage verified notice of exemption under 49 FD 36425, must be filed with the Rights—Burlington Northern, Inc., 354 CFR 1180.2(d)(8) for the acquisition of Surface Transportation Board either via I.C.C. 605 (1978), as modified in temporary trackage rights, for overhead e-filing or in writing addressed to 395 E Mendocino Coast Railway—Lease & operations, over approximately 674.4 Street SW, Washington, DC 20423–0001. Operate—California Western Railroad, miles of rail line owned by BNSF In addition, a copy of each pleading 360 I.C.C. 653 (1980), and any Railway Company (BNSF) between must be served on UP’s representative, employees affected by the milepost 787.4 on BNSF’s Clovis Jeremy Berman, 1400 Douglas Street, discontinuance of those trackage rights Subdivision near Vaughn, N.M., and Union Pacific Railroad Company, STOP will be protected by the conditions set milepost 191.6 on BNSF’s Phoenix 1580, Omaha, NE 68179. out in Oregon Short Line Railroad— Subdivision near Phoenix, Ariz., According to UP, this action is Abandonment Portion Goshen Branch pursuant to the terms of a written categorically excluded from Between Firth & Ammon, in Bingham & temporary trackage rights agreement environmental review under 49 CFR Bonneville Counties, Idaho, 360 I.C.C. dated August 6, 2020 (Agreement).1 1105.6(c) and from historic reporting 91 (1979). UP states that the sole purpose of the under 49 CFR 1105.8(b)(3). If the verified notice contains false or temporary trackage rights is to allow UP Board decisions and notices are misleading information, the exemption to reroute overhead trains due to a available at www.stb.gov. is void ab initio. Petitions to revoke the bridge outage on UP’s Phoenix Decided: August 10, 2020. exemption under 49 U.S.C. 10502(d) Subdivision near Tempe, Ariz.2 UP By the Board, Allison C. Davis, Director, may be filed at any time. The filing of states that the temporary trackage rights Office of Proceedings. a petition to revoke will not will expire on September 18, 2020. Jeffrey Herzig, automatically stay the effectiveness of UP concurrently filed a petition for the exemption. waiver of the 30-day period under 49 Clearance Clerk. All pleadings, referring to Docket No. CFR 1180.4(g)(1) in this docket and in [FR Doc. 2020–17720 Filed 8–12–20; 8:45 am] FD 36424, must be filed with the Docket No. FD 36424, to allow the BILLING CODE 4915–01–P Surface Transportation Board either via proposed temporary trackage rights in e-filing or in writing addressed to 395 E both dockets to become effective Street SW, Washington, DC 20423–0001. immediately. By decision served August OFFICE OF THE UNITED STATES In addition, a copy of each pleading 10, 2020 the Board granted UP’s request. TRADE REPRESENTATIVE must be served on UP’s representative, As a result, this exemption is now [Docket Number USTR–2020–0032] Jeremy Berman, 1400 Douglas Street, effective. Union Pacific Railroad Company, STOP As a condition to this exemption, any Request for Comments and Notice of 1580, Omaha, NE 68179. employees affected by the acquisition of Public Hearing Concerning Russia’s According to UP, this action is the temporary trackage rights will be Implementation of Its WTO categorically excluded from protected by the conditions imposed in Commitments

1 A redacted copy of the Agreement is attached to 1 A redacted copy of the Agreement is attached to AGENCY: Office of the United States the verified notice. An unredacted copy has been the verified notice. An unredacted copy has been Trade Representative. filed under seal along with a motion for protective filed under seal along with a motion for protective ACTION: order pursuant to 49 CFR 1104.14. That motion is order pursuant to 49 CFR 1104.14. That motion is Request for comments and addressed in a separate decision. addressed in a separate decision. notice of public hearing. 2 UP concurrently filed a verified notice of 2 UP concurrently filed a verified notice of exemption for the acquisition of additional exemption for the acquisition of additional SUMMARY: The interagency Trade Policy temporary trackage rights to allow UP to reroute temporary trackage rights to allow UP to reroute Staff Committee (TPSC) will seek public trains due to the bridge outage over approximately trains due to the bridge outage over approximately comment to assist the Office of the 674.4 miles of BNSF rail line in Union Pacific 566.6 miles of BNSF rail line in Union Pacific Railroad Company—Temporary Trackage Rights Railroad Company—Temporary Trackage Rights United States Trade Representative Exemption—BNSF Railway Company, Docket No. Exemption—BNSF Railway Company, Docket No. (USTR) in the preparation of its annual FD 36425. FD 36424. report to Congress on Russia’s

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implementation of its obligations as a Aspects of Intellectual Property Rights. i. Intellectual property rights Member of the World Trade The Russia WTO implementation report (including intellectual property rights Organization (WTO). Due to COVID–19, also must assess Russia’s progress on enforcement). the TPSC will foster public participation acceding to and implementing the j. Services. via written submissions rather than an Information Technology Agreement k. Government procurement. in-person hearing. This notice includes (ITA) and the Government Procurement l. Rule of law issues (e.g., the schedule for submission of Agreement (GPA). In addition, to the transparency, judicial review, uniform comments and responses to questions extent that USTR finds that Russia is not administration of laws and regulations). from the TPSC for the Russia WTO implementing fully any WTO agreement m. Other WTO commitments. implementation report. or is not making adequate progress in The TPSC will review comments and may ask clarifying questions to acceding to the ITA or the GPA, USTR DATES: commenters. The TPSC will post the September 21, 2020 (Monday) at 11:59 must describe in the Russia WTO questions on the public docket, other p.m. EDT: Deadline for submission of implementation report the actions it than questions that include properly plans to take to encourage Russia to written comments on 2020 Russia WTO designated business confidential improve its implementation and/or implementation report. information (BCI). USTR will send September 30, 2020 (Wednesday) at increase its accession efforts. In questions that include properly 11:59 p.m. EDT: Deadline for the TPSC accordance with section 201(a), and to designated BCI to the relevant to pose questions on written comments. assist it in preparing this year’s report, commenters by email, and will not post October 9, 2020 (Friday) at 11:59 p.m. the TPSC is soliciting public comments. these questions on the public docket. EDT: Deadline for submission of The terms of Russia’s accession to the Replies to questions that contain BCI responses to questions from the TPSC. WTO are contained in the Marrakesh must follow the procedures in section Agreement Establishing the World ADDRESSES: USTR strongly prefers IV below. electronic submissions made through Trade Organization and the Protocol on the Federal eRulemaking Portal: http:// the Accession of the Russian Federation III. Requirements for Submissions www.regulations.gov (Regulations.gov). to the WTO (including its annexes) To ensure consideration, interested Follow the instructions for submitting (Protocol). The Report of the Working parties must submit comments and comments in section III below. The Party on the Accession of the Russian responses to TPSC questions docket number is USTR–2020–0032. For Federation (Working Party Report) electronically via Regulations.gov by the alternatives to online submissions, provides detail and context to the applicable deadlines in the Dates please contact Yvonne Jamison at commitments listed in the Protocol. You section above. The docket number is [email protected] or can find the Protocol and Working Party USTR–2020–0032. All submissions (202) 395–3475 before transmitting a Report on USTR’s website at https:// must be in English. USTR will not comment and in advance of the relevant ustr.gov/node/5887 or on the WTO accept hand-delivered submissions. deadline. website at http://docsonline.wto.org To submit comments using FOR FURTHER INFORMATION CONTACT: For (document symbols: WT/ACC/RUS/70, Regulations.gov, enter docket number procedural questions concerning written WT/MIN(11)/2, WT/MIN(11)/24, WT/L/ USTR–2020–0032 in the ‘search for field comments, contact Yvonne Jamison at 839, WT/ACC/RUS/70/Add.1, WT/ on the home page and click ‘search.’ [email protected] or MIN(11)/2/Add.1, WT/ACC/RUS/70/ The site will provide a search-results (202) 395–3475. Direct all other Add.2, and WT/MIN(11)/2/Add.1.) page listing all documents associated questions to Betsy Hafner, Deputy II. Public Participation with this docket. Find a reference to this Assistant U.S. Trade Representative for notice by selecting ‘notice’ under Due to COVID–19, the TPSC will Russia and Eurasia at Elizabeth_ ‘document type’ in the ‘filter results by’ foster public participation via written [email protected] or (202) 395–9124. section on the left side of the screen and submissions rather than an in-person SUPPLEMENTARY INFORMATION: click on the link entitled ‘comment hearing on Russia’s implementation of now.’ Regulations.gov offers the option I. Background its WTO commitments. USTR invites of providing comments by filling in a Russia became a Member of the WTO public comments on Russia’s ‘type comment’ field or by attaching a on August 22, 2012. On December 21, implementation according to the document using the ‘upload file(s)’ 2012, following the termination of the schedule set out in the DATES section field. USTR prefers that you provide application of the Jackson-Vanik above. Written comments should submissions in an attached document amendment to Russia and the extension address Russia’s implementation of the and, in such cases, that you write ‘see of permanent normal trade relations to commitments made in connection with attached in the ‘type’ comment field, on the products of Russia, the United States its accession to the WTO, including, but the online submission form. In addition, and Russia both filed letters with the not limited to, commitments in the USTR prefers submissions in Microsoft WTO withdrawing their notices of non- following areas: Word (.doc) or Adobe Acrobat (.pdf). If a. Import regulation (e.g., tariffs, tariff- application and consenting to have the the submission is in an application rate quotas, quotas, import licenses). WTO Agreement apply between them. b. Export regulation. other than those two, please indicate the In accordance with section 201(a) of the c. Subsidies. name of the application in the ‘type Russia and Moldova Jackson-Vanik d. Standards and technical comment’ field. At the beginning of the Repeal and Sergei Magnitsky Rule of regulations. submission, include the following text: Law Accountability Act of 2012 (Pub. L. e. Sanitary and phytosanitary (1) 2020 Russia WTO Implementation 112–208), USTR annually is required to measures. Report, (2) your organization’s name, submit a report to Congress on the f. Trade-related investment measures and (3) whether the document is a extent to which Russia is implementing (including local content requirements). comment or an answer to a TPSC the WTO Agreement, including the g. Taxes and charges levied on question. Written comments should not Agreement on the Application of imports and exports. exceed 30 single-spaced, standard letter- Sanitary and Phytosanitary Measures h. Other internal policies affecting size pages in 12-point type, including and the Agreement on Trade Related trade. attachments. Include any data

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attachments to the submission in the OFFICE OF THE UNITED STATES (June 24, 2019), 84 FR 37381 (July 31, same file as the submission itself, and TRADE REPRESENTATIVE 2019), 84 FR 49600 (September 20, not as separate files. 2019), 84 FR 52553 (October 2, 2019), 84 Notice of Product Exclusion FR 69011 (December 17, 2019), 85 FR When you complete the submission Amendment: China’s Acts, Policies, procedure at Regulations.gov, you will 10808 (February 25, 2020), 85 FR 28691 and Practices Related to Technology (May 13, 2020), and 85 FR 43291 (July receive a tracking number confirming Transfer, Intellectual Property, and 16, 2020). successful transmission into Innovation Effective August 23, 2018, the U.S. Regulations.gov. For further information Trade Representative imposed on using the www.regulations.gov AGENCY: Office of the United States Trade Representative. additional 25 percent duties on goods of website, please consult the resources China classified in 279 eight-digit ACTION: Notice. provided on the website by clicking on subheadings of the Harmonized Tariff ‘How to Use Regulations.gov’ on the SUMMARY: Effective August 23, 2018, the Schedule of the United States (HTSUS), bottom of the home page. USTR is not U.S. Trade Representative imposed with an approximate annual trade value able to provide technical assistance for additional duties on goods of China of $16 billion. See 83 FR 40823. The Regulations.gov. with an annual trade value of U.S. Trade Representative’s IV. Business Confidential (BCI) approximately $16 billion as part of the determination included a decision to Submissions action in the Section 301 investigation establish a process by which U.S. of China’s acts, policies, and practices stakeholders could request exclusion of A commenter requesting that USTR related to technology transfer, particular products classified within an treat information contained in a intellectual property, and innovation. eight-digit HTSUS subheading covered submission as BCI must certify that the The U.S. Trade Representative’s by the $16 billion action from the information is business confidential and determination included a decision to additional duties. The U.S. Trade they would not customarily release it to establish a product exclusion process. Representative issued a notice setting the public. You must clearly designate The U.S. Trade Representative initiated out the process for the product BCI by marking the submission the exclusion process in September exclusions, and opened a public docket. ‘‘BUSINESS CONFIDENTIAL’’ at the top 2018, and stakeholders have submitted See 83 FR 47236 (September 18 notice). requests for the exclusion of specific and bottom of the cover page and on Under the September 18 notice, products. In July, September, and requests for exclusion had to identify each succeeding page, and indicating, October 2019, and February and July the product subject to the request in via brackets, the specific information 2020, the U.S. Trade Representative terms of the physical characteristics that that is BCI. Additionally, you must granted exclusion requests. This notice distinguish the product from other include ‘business confidential’ in the announces the U.S. Trade products within the relevant eight-digit ‘type comment’ field and add the Representative’s determination to make subheading covered by the $16 billion designation BCI to the end of the file an amendment to a previously granted action. Requestors also had to provide name for any attachments. For any exclusion. the ten-digit subheading of the HTSUS submission containing BCI, you must DATES: The amendment is retroactive to most applicable to the particular separately submit a non-confidential the date the original exclusion was product requested for exclusion, and version, i.e., not as part of the same published and does not extend the could submit information on the ability submission with the BCI version, period for the original exclusion. U.S. of U.S. Customs and Border Protection indicating where confidential Customs and Border Protection will to administer the requested exclusion. information has been redacted. USTR issue instructions on entry guidance and Requestors were asked to provide the will post the non-confidential version in implementation. quantity and value of the Chinese-origin the docket for public inspection. FOR FURTHER INFORMATION CONTACT: For product that the requestor purchased in the last three years. With regard to the V. Public Viewing of Review general questions about this notice, contact Associate General Counsel rationale for the requested exclusion, Submissions Philip Butler or Director of Industrial requests had to address the following Goods Justin Hoffmann at (202) 395– factors: USTR will post comments in the • docket for public inspection, except 5725. For specific questions on customs Whether the particular product is business confidential information. You classification or implementation of the available only from China and specifically whether the particular can view comments at Regulations.gov product exclusions identified in the product and/or a comparable product is by entering docket number USTR–2020– Annex to this notice, contact available from sources in the United 0032 in the search field on the home [email protected]. SUPPLEMENTARY INFORMATION: States and/or third countries. page. General information concerning • Whether the imposition of USTR is available at www.ustr.gov. A. Background additional duties on the particular Edward Gresser, For background on the proceedings in product would cause severe economic Chair of the Trade Policy Staff Committee, this investigation, please see prior harm to the requestor or other U.S. Office of the United States Trade notices including 82 FR 40213 (August interests. Representative. 24, 2017), 83 FR 14906 (April 6, 2018), • Whether the particular product is [FR Doc. 2020–17662 Filed 8–12–20; 8:45 am] 83 FR 28710 (June 20, 2018), 83 FR strategically important or related to 33608 (July 17, 2018), 83 FR 38760 ‘‘Made in China 2025’’ or other Chinese BILLING CODE 3290–F0–P (August 7, 2018), 83 FR 40823 (August industrial programs. 16, 2018), 83 FR 47236 (September 18, The September 18 notice stated that 2018), 83 FR 47974 (September 21, the U.S. Trade Representative would 2018), 83 FR 65198 (December 19, take into account whether an exclusion 2018), 84 FR 7966 (March 5, 2019), 84 would undermine the objective of the FR 20459 (May 9, 2019), 84 FR 29576 Section 301 investigation.

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The September 18 notice required intellectual property, and innovation. process by which U.S. stakeholders submission of requests for exclusion The U.S. Trade Representative’s could request exclusion of particular from the $16 billion action no later than determination included a decision to products classified within an eight-digit December 18, 2018, and noted that the establish a product exclusion process, HTSUS subheading covered by the $34 U.S. Trade Representative periodically which was initiated in July 2018. billion action from the additional would announce decisions. In July Stakeholders submitted requests for the duties. The U.S. Trade Representative 2019, the U.S. Trade Representative exclusion of specific products and in issued a notice setting out the process granted an initial set of exclusion December 2018, March, April, May, for the product exclusions and opened requests. See 84 FR 37381. The U.S. June, July, September, October, and a public docket. See 83 FR 32181 (July Trade Representative granted additional December 2019, and February, May, 11 notice). exclusions in September and October June, and July 2020, the U.S. Trade Under the July 11 notice, requests for 2019, and February and July 2020. See Representative granted exclusion exclusion had to identify the product 84 FR 49600; 84 FR 52553; 85 FR 10808; requests. This notice announces the U.S. subject to the request in terms of the 85 FR 43291. Trade Representative’s determination to physical characteristics that distinguish make a technical amendment to one the product from other products within B. Technical Amendment to Exclusion previously granted exclusion. the relevant eight-digit subheading Subparagraph A of the Annex makes DATES: The technical amendment covered by the $34 billion action. one technical amendment to U.S. note announced in this notice is retroactive Requestors also had to provide the ten- 20(o)(63) to subchapter III of chapter 99 to the date the original exclusion was digit subheading of the HTSUS most of the HTSUS, as set out in the Annexes published and does not extend the applicable to the particular product of the notices published at 84 FR 37381 period for the original exclusion. U.S. requested for exclusion, and could (July 31, 2019). Customs and Border Protection will submit information on the ability of U.S. The U.S. Trade Representative will issue instructions on entry guidance and Customs and Border Protection to continue to issue determinations on a implementation. administer the requested exclusion. periodic basis as needed. FOR FURTHER INFORMATION CONTACT: For Requestors were asked to provide the Annex general questions about this notice, quantity and value of the Chinese-origin contact Associate General Counsel product that the requestor purchased in A. Effective with respect to goods the last three years. With regard to the entered for consumption, or withdrawn Philip Butler or Director of Industrial Goods Justin Hoffmann at (202) 395– rationale for the requested exclusion, from warehouse for consumption, on or requests had to address the following after 12:01 a.m. eastern daylight time on 5725. For specific questions on customs classification or implementation of the factors: August 23, 2018: • 1. U.S. note 20(o)(63) to subchapter III product exclusions identified in the Whether the particular product is of chapter 99 of the Harmonized Tariff Annex to this notice, contact available only from China and, Schedule of the United States, as [email protected]. specifically, whether the particular modified by 85 FR 43291 (July 16, SUPPLEMENTARY INFORMATION: product and/or a comparable product is 2020), Annex B(1), is further modified available from sources in the United A. Background States and/or third countries. by deleting ‘‘Digital clinical • thermometers, valued not over $11 For background on the proceedings in Whether the imposition of each’’ and inserting ‘‘Digital clinical this investigation, please see prior additional duties on the particular thermometers’’ in lieu thereof. notices including 82 FR 40213 (August product would cause severe economic 24, 2017), 83 FR 14906 (April 6, 2018), harm to the requestor or other U.S. Joseph Barloon, 83 FR 28710 (June 20, 2018), 83 FR interests. General Counsel, Office of the United States 33608 (July 17, 2018), 83 FR 38760 • Whether the particular product is Trade Representative. (August 7, 2018), 83 FR 40823 (August strategically important or related to [FR Doc. 2020–17654 Filed 8–12–20; 8:45 am] 16, 2018), 83 FR 47974 (September 21, ‘‘Made in China 2025’’ or other Chinese BILLING CODE 3290–F0–P 2018), 83 FR 65198 (December 19, industrial programs. 2018), 83 FR 67463 (December 28, The July 11 notice stated that the U.S. 2018), 84 FR 7966 (March 5, 2019), 84 Trade Representative would take into OFFICE OF THE UNITED STATES FR 11152 (March 25, 2019), 84 FR 16310 account whether an exclusion would TRADE REPRESENTATIVE (April 18, 2019), 84 FR 21389 (May 14, undermine the objective of the Section 2019), 84 FR 25895 (June 4, 2019), 84 FR 301 investigation. Notice of Product Exclusion 32821 (July 9, 2019), 84 FR 49564 The July 11 notice required Amendment: China’s Acts, Policies, (September 20, 2019), 84 FR 52567 submission of requests for exclusion and Practices Related to Technology (October 2, 2019), 84 FR 69016 from the $34 billion action no later than Transfer, Intellectual Property, and (December 17, 2019), 85 FR 7816 October 9, 2018, and noted that the U.S. Innovation (February 11, 2020), 85 FR 28692 (May Trade Representative periodically AGENCY: Office of the United States 13, 2020), 85 FR 35158 (June 8, 2020), would announce decisions. In December Trade Representative. and 85 FR 42970 (July 15, 2020). 2018, the U.S. Trade Representative ACTION: Notice. Effective July 6, 2018, the U.S. Trade granted an initial set of exclusion Representative imposed additional 25 requests. See 83 FR 67463. The U.S. SUMMARY: Effective July 6, 2018, the U.S. percent duties on goods of China Trade Representative announced Trade Representative imposed classified in 818 eight-digit subheadings additional exclusion determinations in additional duties on goods of China of the Harmonized Tariff Schedule of March, April, May, June, July, with an annual trade value of the United States (HTSUS), with an September, October, and December approximately $34 billion as part of the approximate annual trade value of $34 2019, and February, May, June, and July action in the Section 301 investigation billion. See 83 FR 28710. The U.S. 2020. See 84 FR 11152; 84 FR 16310; 84 of China’s acts, policies, and practices Trade Representative’s determination FR 21389; 84 FR 25895; 84 FR 32821; related to technology transfer, included a decision to establish a 84 FR 49564; 84 FR 52567; 84 FR 69016;

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85 FR 7816; 85 FR 28692; 85 FR 35158; 2020–0112 using any of the following postcard or print the acknowledgment and 85 FR 42970. methods: page that appears after submitting • Website: http:// comments online. B. Technical Amendment to Exclusion www.regulations.gov. Follow the FOR FURTHER INFORMATION CONTACT: Mr. Paragraph A of the Annex makes one instructions for submitting comments Luke W. Loy, Vehicle and Roadside technical amendment to U.S. note on the Federal electronic docket site. • Operations Division, Office of Carrier, 20(x)(21) to subchapter III of chapter 99 Fax: 1–202–493–2251. Driver, and Vehicle Safety, MC–PSV, • Mail: Send comments to Docket of the HTSUS, as set out in the Annex (202) 366–0676, Federal Motor Carrier Operations, M–30; U.S. Department of of the notice published at 85 FR 7816 Safety Administration, 1200 New Jersey Transportation, 1200 New Jersey (February 11, 2020). Avenue SE, Washington, DC 20590– Avenue SE, Room W12–140, West The U.S. Trade Representative will 0001. continue to issue determinations on a Building Ground Floor, Washington, DC periodic basis as needed. 20590–0001. SUPPLEMENTARY INFORMATION: • Hand Delivery of Courier: Bring I. Public Participation and Request for Annex comments to Docket Operations in Comments A. Effective with respect to goods Room W12–140 of the West Building entered for consumption, or withdrawn Ground Floor, U.S. Department of FMCSA encourages you to participate from warehouse for consumption, on or Transportation, 1200 New Jersey by submitting comments and related after 12:01 a.m. eastern daylight time on Avenue SE, Washington, DC, between 9 materials. July 6, 2018: a.m. and 5 p.m. e.t., Monday–Friday, Submitting Comments 1. U.S. note 20(x)(21) to subchapter III except Federal holidays. of chapter 99 of the Harmonized Tariff Instructions: All submissions must If you submit a comment, please Schedule of the United States, is include the Agency name and docket include the docket number for this modified by deleting ‘‘operating weight number for this notice. For detailed notice (FMCSA–2020–0169), indicate of 19.1 t (42,000 lbs.)’’ and inserting instructions on submitting comments the specific section of this document to ‘‘operating weight of at least 19 t but no and additional information on the which the comment applies, and more than—19.2 t (at least 41,887 lbs.— exemption process, see the ‘‘Public provide a reason for suggestions or but not more than 42,329 lbs.)’’ in lieu Participation’’ heading below. Note that recommendations. You may submit thereof. all comments received will be posted your comments and material online or without change to http:// by fax, mail, or hand delivery, but Joseph Barloon, www.regulations.gov, including any please use only one of these means. General Counsel, Office of the United States personal information provided. Please FMCSA recommends that you include Trade Representative. see the ‘‘Privacy Act’’ heading for your name and a mailing address, an [FR Doc. 2020–17657 Filed 8–12–20; 8:45 am] further information. email address, or a phone number in the BILLING CODE 3290–F9–P Docket: For access to the docket to body of your document so the Agency read background documents or can contact you if it has questions comments received, go to http:// regarding your submission. DEPARTMENT OF TRANSPORTATION www.regulations.gov or to Docket To submit your comments online, go Operations in Room W12–140, U.S. to www.regulations.gov and put the Federal Motor Carrier Safety Department of Transportation, West docket number, ‘‘FMCSA–2020–0169’’ Administration Building Ground Floor, 1200 New Jersey in the ‘‘Keyword’’ box, and click [Docket No. FMCSA–2020–0169] Avenue SE, Washington, DC, between 9 ‘‘Search.’’ When the new screen a.m. and 5 p.m., Monday through appears, click on ‘‘Comment Now!’’ Parts and Accessories Necessary for Friday, except Federal holidays. To be button and type your comment into the Safe Operation; Application for an sure someone is there to help you, text box in the following screen. Choose Exemption From J. J. Keller & please call (202) 366–9317 or (202) 366– whether you are submitting your Associates, Inc. 9826 before visiting Docket Operations. comment as an individual or on behalf Privacy Act: In accordance with 5 of a third party and then submit. If you AGENCY: Federal Motor Carrier Safety U.S.C. 553(c), DOT solicits comments submit your comments by mail or hand Administration (FMCSA), from the public to better inform its delivery, submit them in an unbound Transportation (DOT). rulemaking process. DOT posts these format, no larger than 81⁄2 by 11 inches, ACTION: Notice of application for comments, without edit, including any suitable for copying and electronic exemption; request for comments. personal information the commenter filing. If you submit comments by mail provides, to www.regulations.gov, as and would like to know that they SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA) described in the system of records reached the facility, please enclose a requests public comment on an notice (DOT/ALL–14 FDMS), which can stamped, self-addressed postcard or application for exemption from J. J. be reviewed at www.dot.gov/privacy. envelope. FMCSA will consider all Public participation: The http:// Keller & Associates, Inc. (J. J. Keller) to comments and material received during www.regulations.gov website is allow its Advanced Driver Assistance the comment period and may grant or generally available 24 hours each day, System (ADAS) cameras to be mounted not grant this application based on your 365 days each year. You may find lower in the windshield on commercial comments. electronic submission and retrieval help motor vehicles than is currently and guidelines under the ‘‘help’’ section II. Legal Basis permitted. of the http://www.regulations.gov FMCSA has authority under 49 U.S.C. DATES: Comments must be received on website as well as the DOT’s http:// 31315(b) to grant exemptions from or before September 14, 2020. docketsinfo.dot.gov website. If you certain parts of the Federal Motor ADDRESSES: You may submit comments would like notification that we received Carrier Safety Regulations (FMCSRs). bearing the Federal Docket Management your comments, please include a self- FMCSA must publish a notice of each System (FDMS) Docket ID FMCSA– addressed, stamped envelope or exemption request in the Federal

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Register (49 CFR 381.315(a)). The practicable. In addition to late information provided, such as name and Agency must provide the public an comments, FMCSA will also continue to address information, email addresses, or opportunity to inspect the information file, in the public docket, relevant phone numbers. Comments received, relevant to the application, including information that becomes available after including attachments and other any safety analyses that have been the comment closing date. Interested supporting materials, are part of the conducted. The Agency must also persons should continue to examine the public record and subject to public provide an opportunity for public public docket for new material. disclosure. Do not include any comment on the request. The Agency information in your comment or reviews the safety analyses and the Larry W. Minor, supporting materials that you consider public comments and determines Associate Administrator for Policy. confidential or inappropriate for public whether granting the exemption would [FR Doc. 2020–17708 Filed 8–12–20; 8:45 am] disclosure. likely achieve a level of safety BILLING CODE 4910–EX–P You may review comments and other equivalent to or greater than the level related materials that pertain to this that would be achieved by the current information collection beginning on the regulation (49 CFR 381.305). The DEPARTMENT OF THE TREASURY date of publication of the second notice decision of the Agency must be for this collection 1 by any of the published in the Federal Register (49 Office of the Comptroller of the following methods: CFR 381.315(b)). If the Agency denies Currency • Viewing Comments Electronically: the request, it must state the reason for Go to www.reginfo.gov. Click on the doing so. If the decision is to grant the Agency Information Collection ‘‘Information Collection Review’’ tab. exemption, the notice must specify the Activities: Information Collection Underneath the ‘‘Currently under person or class of persons receiving the Renewal; Comment Request; Review’’ section heading, from the drop- exemption and the regulatory provision Licensing Manual down menu select ‘‘Department of Treasury’’ and then click ‘‘submit’’. This or provisions from which an exemption AGENCY: Office of the Comptroller of the is granted. The notice must specify the Currency (OCC), Treasury. information collection can be located by effective period of the exemption (up to searching by OMB control number ACTION: Notice and request for 5 years) and explain the terms and ‘‘1557–0014’’ or ‘‘Licensing Manual.’’ comment. conditions of the exemption. The Upon finding the appropriate exemption may be renewed (49 CFR SUMMARY: The OCC, as part of its information collection, click on the 381.315(c) and 49 CFR 381.300(b)). continuing effort to reduce paperwork related ‘‘ICR Reference Number.’’ On the and respondent burden, invites the next screen, select ‘‘View Supporting III. J. J. Keller’s Application for Statement and Other Documents’’ and Exemption general public and other Federal agencies to take this opportunity to then click on the link to any comment The Federal Motor Carrier Safety comment on a continuing information listed at the bottom of the screen. • For assistance in navigating Regulations require devices meeting the collection as required by the Paperwork definition of ‘‘vehicle safety www.reginfo.gov, please contact the Reduction Act of 1995 (PRA). In technology,’’ including J. J. Keller’s Regulatory Information Service Center accordance with the requirements of the ADAS cameras, to be mounted (1) not at (202) 482–7340. PRA, the OCC may not conduct or more than 4 inches below the upper sponsor, and respondents are not FOR FURTHER INFORMATION CONTACT: edge of the area swept by the required to respond to, an information Shaquita Merritt, Clearance Officer, windshield wipers, or (2) not more than collection unless it displays a currently (202) 649–5490 or, for persons who are 7 inches above the lower edge of the valid Office of Management and Budget deaf or hearing impaired, TTY, (202) area swept by the windshield wipers, (OMB) control number. The OCC is 649–5597, Chief Counsel’s Office, Office and outside the driver’s sight lines to soliciting comment concerning the of the Comptroller of the Currency, 400 the road and highway signs and signals. renewal of its information collection 7th Street SW, Suite 3E–218, J. J. Keller has applied for an exemption titled ‘‘Licensing Manual.’’ Washington, DC 20219. from 49 CFR 393.60(e)(1) to allow its SUPPLEMENTARY INFORMATION: Under the DATES: Comments must be received on ADAS cameras to be mounted lower in PRA (44 U.S.C. 3501–3520), Federal or before October 13, 2020. the windshield than is currently agencies must obtain approval from the permitted. A copy of the application is ADDRESSES: Commenters are encouraged OMB for each collection of information included in the docket referenced at the to submit comments by email, if that they conduct or sponsor. beginning of this notice. possible. You may submit comments by ‘‘Collection of information’’ is defined any of the following methods: IV. Request for Comments • in 44 U.S.C. 3502(3) and 5 CFR Email: [email protected]. 1320.3(c) to include agency requests or In accordance with 49 U.S.C. • Mail: Chief Counsel’s Office, requirements that members of the public 31315(b)(6), FMCSA requests public Attention: Comment Processing, 1557– submit reports, keep records, or provide comment from all interested persons on 0014, Office of the Comptroller of the information to a third party. Section J. J. Keller’s application for an Currency, 400 7th Street SW, Suite 3E– 3506(c)(2)(A) of title 44 requires Federal exemption from 49 CFR 393.60(e)(1). All 218, Washington, DC 20219. agencies to provide a 60-day notice in comments received before the close of • Hand Delivery/Courier: 400 7th the Federal Register concerning each business on the comment closing date Street SW, Suite 3E–218, Washington, proposed collection of information, indicated at the beginning of this notice DC 20219. including each proposed extension or will be considered and will be available • Fax: (571) 465–4326. revision of an existing collection of for examination in the docket at the Instructions: You must include information, before submitting the location listed under the ADDRESSES ‘‘OCC’’ as the agency name and ‘‘1557– collection to OMB for approval. To section of this notice. Comments 0014’’ in your comment. In general, the received after the comment closing date OCC will publish comments on 1 Following the close of this notice’s 60-day will be filed in the public docket and www.reginfo.gov without change, comment period, the OCC will publish a second will be considered to the extent including any business or personal notice with a 30-day comment period.

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comply with this requirement, the OCC performance of the OCC’s functions, OCC on steps the agency may be able to is publishing notice of the renewal of including whether the information has take to ensure the continued health and the collection of information set forth in practical utility; viability of minority depository this document. (b) The accuracy of the OCC’s institutions and other issues of concern Title: Licensing Manual. estimates of the burden of the to minority depository institutions. OMB Control No.: 1557–0014. information collections, including the Members of the public may submit Description: The Licensing Manual validity of the methodology and written statements to the MDIAC by sets forth the OCC’s policies and assumptions used; email to: [email protected]. procedures for the formation of a (c) Ways to enhance the quality, The OCC must receive written national bank or Federal branch or utility, and clarity of the information to statements no later than 5:00 p.m. EDT agency, entry into the Federal banking be collected; and on Tuesday, August 25, 2020. Members system by other institutions, and (d) Ways to minimize the burden of of the public who plan to attend the corporate expansion and structural information collections on respondents, meeting via remote means should changes by existing banks. The Manual including through the use of automated contact the OCC by 5:00 p.m. EDT on includes sample documents to assist the collection techniques or other forms of Tuesday, August 25, 2020, to inform the applicant in understanding the types of information technology. OCC of their desire to attend the information the OCC needs in order to meeting and to obtain information about process a filing. An applicant may use Theodore J. Dowd, participation via remote means. the format of the sample documents or Deputy Chief Counsel, Office of the Members of the public may contact the any other format that provides sufficient Comptroller of the Currency. OCC via email at [email protected] information for the OCC to act on a [FR Doc. 2020–17704 Filed 8–12–20; 8:45 am] or by telephone at (212) 790–4001. particular filing, including the OCC’s BILLING CODE 4810–33–P Attendees should provide their full electronic filing system, the Central name, email address, and organization, Application Tracking System (CATS). if any. Members of the public who are On May 28, 2020,2 the OCC issued an DEPARTMENT OF THE TREASURY hearing impaired should call (202) 649– interim final rule titled ‘‘Director, 5597 (TTY) no later than 5:00 p.m. EDT Office of the Comptroller of the Shareholder, and Member Meetings’’ on Tuesday, August 25, 2020, to arrange Currency providing that: auxiliary aids such as sign language • FSAs will need to amend their [Docket ID OCC–2020–0032] interpretation for this meeting. bylaws and file their amendments with the OCC if they wish to utilize remote Minority Depository Institutions Brian P. Brooks, means of participation for member or Advisory Committee Acting Comptroller of the Currency. shareholder meetings. [FR Doc. 2020–17741 Filed 8–12–20; 8:45 am] AGENCY: Office of the Comptroller of the • National banks and FSAs must elect BILLING CODE 4810–33–P procedures for remote participation at Currency, Department of the Treasury. member or shareholder meetings. ACTION: Notice. • Depending on which State or law DEPARTMENT OF THE TREASURY SUMMARY: The Office of the Comptroller the FSA elects to follow for procedures of the Currency (OCC) announces a Financial Crimes Enforcement Network for remote means of communication, the meeting of the Minority Depository FSA may have to amend its bylaws and Institutions Advisory Committee Agency Information Collection file the amendment with the OCC. Activities; Proposed Renewal; • (MDIAC). National banks must indicate the Comment Request; Renewal Without procedures it will use for telephonic or DATES: The OCC MDIAC will hold a Change of Anti-Money Laundering electronic participation at shareholder public meeting on Tuesday, September Programs for Certain Financial meetings in their bylaws. 1, 2020, via remote means, beginning at Institutions • The OCC is considering allowing 1:00 p.m. Eastern Daylight Time (EDT). alternative/electronic means of notifying ADDRESSES: The OCC will hold the AGENCY: Financial Crimes Enforcement members/shareholders of meetings. September 1, 2020 meeting of the Network (FinCEN), Treasury. OMB granted emergency clearance to MDIAC via remote means. ACTION: Notice and request for the OCC for these changes. The OCC is comments. FOR FURTHER INFORMATION CONTACT: now in the process of renewing the Beverly Cole, Designated Federal Officer emergency clearance. SUMMARY: As part of its continuing effort and Deputy Comptroller for the Type of Review: Extension of a to reduce paperwork and respondent Northeastern District, (212) 790–4001, currently approved collection. burden, FinCEN invites comments on Office of the Comptroller of the Affected Public: Individuals; the proposed renewal, without change, Currency, 340 Madison Ave., Fifth Businesses or other for-profit. of currently approved information Frequency of Response: On occasion. Floor, New York, New York 10173. collections found in existing Bank Estimated Number of Respondents: SUPPLEMENTARY INFORMATION: By this Secrecy Act regulations requiring 3,715. notice, under the authority of the money services businesses, mutual Estimated Total Annual Burden: Federal Advisory Committee Act, 5 funds, insurance companies, dealers in 12,534 hours. U.S.C. App. 2, and the regulations precious metals, precious stones, or Comments submitted in response to implementing the Act at 41 CFR part jewels, operators of credit card systems, this notice will be summarized and 102–3, the OCC is announcing that the and loan or finance companies to included in the submission to OMB. MDIAC will convene a meeting at 1:00 develop and implement written anti- Comments are requested on: p.m. EDT on Tuesday, September 1, money laundering programs reasonably (a) Whether the information 2020, via remote means. Agenda items designed to prevent those financial collections are necessary for the proper will include current topics of interest to institutions from being used to facilitate the industry. The purpose of the money laundering and the financing of 2 85 FR 31943. meeting is for the MDIAC to advise the terrorist activities. Although no changes

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are proposed to the information counter-intelligence activities, to protect type of financial institution subject to collections themselves, this request for against international terrorism, and to FinCEN AML program regulations.4 comments covers a future expansion of implement anti-money laundering Since 1987, all federally insured the scope of the annual burden and cost (AML) programs and compliance depository institutions and credit estimates associated with these procedures.1 Regulations implementing unions have been required to have AML regulations. This request for comments Title II of the BSA appear at 31 CFR programs. In addition, in the interim is made pursuant to the Paperwork Chapter X. The authority of the final rule, FinCEN clarified that it was Reduction Act of 1995. Secretary to administer the BSA has appropriate to implement section DATES: Written comments are welcome, been delegated to the Director of 5318(h)(1) of the BSA with respect to and must be received on or before FinCEN.2 brokers or dealers in securities and October 13, 2020. Section 352 of the USA PATRIOT Act futures commission merchants through added subsection (h) to 31 U.S.C. 5318 5 ADDRESSES: Comments may be their respective SROs. For that reason, of the BSA. Section 352 mandates that submitted by any of the following FinCEN does not maintain OMB control financial institutions establish AML methods: numbers for the AML program • Federal E-rulemaking Portal: http:// programs in order to guard against regulatory requirements of banks, www.regulations.gov. Follow the money laundering. Such AML programs savings associations, credit unions, instructions for submitting comments. must include, at a minimum, the following: (a) The development of 4 See 58 FR 13538 (March 12, 1993) (final rule Refer to Docket Number FINCEN–2020– imposing AML program requirements on casinos) 0009 and the specific Office of internal policies, procedures, and controls, (b) the designation of a and 59 FR 61660 (Dec. 1, 1994) (final rule amending Management and Budget (OMB) control the AML program requirements for casinos to numbers 1506–0020, 1506–0030, and compliance officer, (c) an ongoing requires the training of casino personnel). These 1506–0035. employee training program, and (d) an documents are available at https:// independent audit function to test www.govinfo.gov/content/pkg/FR-1993-03-12/pdf/ • Mail: Policy Division, Financial FR-1993-03-12.pdf and https://www.govinfo.gov/ Crimes Enforcement Network, P.O. Box programs. Pursuant to section 352, content/pkg/FR-1994-12-01/html/94-29662.htm, 39, Vienna, VA 22183. Refer to Docket FinCEN issued regulations requiring respectively. Number FINCEN–2020–0009 and OMB money services businesses (MSBs) (31 5 The casino AML program regulations are CFR 1022.210), mutual funds (31 CFR covered under FinCEN OMB control number 1506– control numbers 1506–0020, 1506–0030, 0051, which is not set to expire until February and 1506–0035. 1024.210), insurance companies (31 2021. The renewal of that control number, Please submit comments by one CFR 1025.210), dealers in precious therefore, will be addressed later in 2020 in a method only. Comments will also be metals, precious stones, or jewels (31 separate FinCEN notice. Since 1987, all federally CFR 1027.210), operators of credit card insured depository institutions and credit unions incorporated into FinCEN’s review of have been required by their Federal regulators to existing regulations, as provided by systems (31 CFR 1028.210), and loan or have AML programs. The applicable Federal Treasury’s 2011 Plan for Retrospective finance companies (31 CR 1029.210) to regulator maintains the OMB control number for the Analysis of Existing Rules. All develop and implement written AML AML program regulatory requirements of programs. This notice renews the OMB depository institutions and credit unions as follows: comments submitted in response to this (a) Office of Comptroller of the Currency (AML notice will become a matter of public control numbers associated with these program regulations at 12 CFR 21.21—covered by record. Therefore, you should submit specific AML program regulations. The OMB control number 1557–0180); (b) Federal only information that you wish to make notice is not renewing the OMB control Reserve Board (AML program regulations at 12 CFR 208.63—covered by OMB control number 7100– publicly available. numbers associated with other types of financial institutions’ AML program 0310); (c) Federal Deposit Insurance Corporation FOR FURTHER INFORMATION CONTACT: The (AML program regulations at 12 CFR 326.8— FinCEN Regulatory Support Section at regulatory requirements at this time for covered by OMB control number 3064–0087); and 1–800–767–2825 or electronically at the reasons described below. (d) National Credit Union Administration (AML On April 29, 2002, FinCEN issued an program regulations at 12 CFR 748.2—covered by [email protected]. interim final rule to provide guidance to OMB control number 3133–0108). In the 2002 SUPPLEMENTARY INFORMATION: interim final rule, FinCEN also noted it was certain financial institutions concerning appropriate to implement section 5318(h)(1) of the I. Statutory and Regulatory Provisions section 352 of the USA PATRIOT Act BSA with respect to brokers or dealers in securities that requires financial institutions to and futures commission merchants through their The legislative framework generally establish AML programs. The interim respective SROs, because the Securities and referred to as the Bank Secrecy Act Exchange Commission (SEC) and the Commodity final rule provided that banks, savings (BSA) consists of the Currency and Futures Trade Commission (CFTC) and their SROs associations, credit unions, brokers or Financial Transactions Reporting Act of significantly accelerated the implementation of dealers in securities, futures AML programs for their regulated financial 1970, as amended by the Uniting and commission merchants, and casinos institutions. Accordingly, 31 CFR 1023.210 and 31 Strengthening America by Providing CFR 1026.210 provide that brokers or dealers in would be deemed to be in compliance Appropriate Tools Required to Intercept securities, and futures commission merchants and with section 352 if they established and and Obstruct Terrorism Act of 2001 introducing brokers in commodities, respectively, maintained AML programs as required will be deemed to be in compliance with the (USA PATRIOT Act) (Pub. L. 107–56) by existing FinCEN regulations, or their requirements of section 5318(h)(1) of the BSA if and other legislation. The BSA is they comply with any applicable regulation of their respective Federal regulator or self- codified at 12 U.S.C. 1829b, 12 U.S.C. Federal functional regulator governing the regulatory organization (SRO).3 establishment and implementation of AML 1951–1959, 31 U.S.C. 5311–5314 and Prior to FinCEN issuing the interim programs. The SEC’s SRO is the Financial Industry 5316–5332, and notes thereto, with final rule in 2002, casinos were the only Regulatory Authority (FINRA). The AML program implementing regulations at 31 CFR requirements for brokers or dealers in securities is Chapter X. FINRA Rule 331. The CFTC’s SRO is the National 1 Section 358 of the USA PATRIOT Act added Futures Association (NFA). The AML program The BSA authorizes the Secretary of language expanding the scope of the BSA to requirements for futures commission merchant and the Treasury, inter alia, to require intelligence or counter-intelligence activities to introducing brokers in commodities is NFA Rule 2– financial institutions to keep records protect against international terrorism. 9(c). The SROs are not required to comply with the and file reports that are determined to 2 Treasury Order 180–01 (re-affirmed Jan. 14, Paperwork Reduction Act of 1995. Therefore, there 2020). are no OMB control numbers for the AML program have a high degree of usefulness in 3 67 FR 21110 (April 29, 2002). This document is regulatory requirements of brokers or dealers in criminal, tax, and regulatory matters, or available at https://www.fincen.gov/sites/default/ securities, futures commission merchants, and in the conduct of intelligence or files/federal_register_notice/352fininst.pdf. introducing brokers in commodities.

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brokers or dealers in securities, and burden that has been subject to notice sellers of prepaid access only.9 The futures commission merchants. and comment in the past (the additional criteria and the methodology ‘‘traditional annual PRA burden’’). for estimating cost are described in II. Paperwork Reduction Act of 1995 • Propose for review and comment an (PRA) 6 further detail in Part 2. In Part 3, expansion of the scope of the PRA FinCEN proposes for review and Title: AML program requirements for burden in the future (the ‘‘supplemental comment a method to estimate the MSBs (31 CFR 1022.210), mutual funds annual PRA burden’’). burden and cost of a future estimate of (31 CFR 1024.210), insurance Frequency: As required. a supplemental annual PRA burden. companies (31 CFR 1025.210), dealers Estimated Number of Respondents: 8 Finally, in Part 4, FinCEN solicits input in precious metals, precious stones, or 305,897 financial institutions. from the public about (a) the accuracy Estimated Recordkeeping Burden: In jewels (31 CFR 1027.210), operators of of the estimate of the traditional annual Part 1 of this notice, FinCEN describes credit card systems (31 CFR 1028.210), PRA burden; (b) the method proposed the breakdown of the estimated number and loan or finance companies (31 CFR for the calculation of a future 1029.210). of financial institution, by type, and the primary characteristics of their supplemental annual PRA burden; (c) OMB Control Numbers: 1506–0020, the criteria, metrics, and questions 1506–0030, and 1506–0035.7 individual AML program requirements. In Part 2, FinCEN proposes for review FinCEN should take into consideration Report Number: Not applicable. when researching the information Abstract: FinCEN is issuing this and comment a renewal of the required to determine the future notice to renew the OMB control traditional annual PRA burden, which supplemental annual PRA burden numbers for the AML program includes a scope and methodology estimate; and (d) any other comments regulatory requirements for certain similar to that used in the past, with a about the regulations and the proposed financial institutions. few additional criteria, and the Affected Public: Businesses or other incorporation of cost estimates. In past current and future burden and cost for-profit institutions, and non-profit renewals of the OMB control numbers estimates of these requirements the institutions. addressed in this document FinCEN public wishes to make. Type of Review: estimated the hourly burden of (a) Part 1. Breakdown of Financial • Renewal without change of documenting an AML program for each Institutions Covered by This Notice currently approved information type of financial institution, and (b) collections. obtaining and verifying the identity of The breakdown of financial • Propose for review and comment a customers at the moment of establishing institutions, by type, covered by this renewal of the portion of the PRA the initial relationship for providers and notice, is reflected in Table 1 below:

TABLE 1—BREAKDOWN OF FINANCIAL INSTITUTIONS COVERED BY THIS NOTICE, BY TYPE

Number of Type of financial institution financial institutions

Principal MSBs 10 ...... 11 22,939

Providers or sellers of prepaid access ...... 1,632 Others types of principal MSBs ...... 21,307

Agent MSBs ...... 12 229,161 Mutual funds ...... 13 1,591 Insurance companies ...... 14 1,200 Dealers in precious metals, stones, and jewels ...... 15 20,000 Operators of credit card systems ...... 16 6 Loans or finance companies ...... 17 31,000

Total ...... 305,897

6 Public Law 104–13, 44 U.S.C. 3506(c)(2)(A). 1022.210(d)(1)(iv) provides that a MSB that is a the AML program. However, each MSB remains 7 The AML program regulatory requirements are provider or seller of prepaid access must establish solely responsible for the actual implementation of currently covered under the following OMB control procedures to verify the identity of a person who an effective AML program. numbers: 1506–0020 (31 CFR 1022.210—AML obtains prepaid access under a prepaid program 11 FinCEN’s MSB registration database. programs for MSBs, 31 CFR 1024.210—AML and obtain identifying information concerning such 12 Id. programs for mutual funds, and 31 CFR 1028.210— a person, including name, date of birth, address, 13 Based on estimates provided for the 2018 AML programs for operators of credit card systems); and identification number. Sellers of prepaid access notice to renew OMB control number 1506–0033, 1506–0030 (31 CFR 1027.210—AML programs for must also establish procedures to verify the identity dealers in precious metals, precious stones, or 83 FR 46011 (Sept. 11, 2018). of a person who obtains prepaid access to funds jewels); and 1506–0035 (31 CFR 1025.210—AML 14 Based on estimates provided for the 2018 that exceed $10,000 during any one day and obtain programs for insurance companies, and 31 CFR notice to renew OMB control number 1506–0035 identifying information concerning such a person, 1029.210—AML programs for loan and finance (83 FR 34298 (July 19, 2018)). including name, date of birth, address, and companies). There is no OMB control number 15 identification number. Based on estimates provided for the 2018 associated with 31 CFR 1030.210—AML programs notice to renew OMB control number 1506–0030 for housing government sponsored enterprises, 10 The definition of MSB covers both principal (83 FR 46014 (Sept. 11, 2018)). because the purpose of the PRA is not to minimize MSBs and agents. Under 31 CFR 1022.210(d)(1)(iii), 16 burden on Federal agencies. (44 U.S.C. 3505(1)). a person that is a MSB solely because it is an agent Based on estimates provided for the 2018 8 Table 1 below breaks down the types of for another MSB and the MSB for which it serves notice to renew OMB control number 1506–0020 financial institutions covered by this notice. as an agent (the principal MSB), may by agreement (83 FR 42558 (Aug. 22, 2018)). 9 The MSB AML program regulations have a allocate between them responsibility for developing 17 See supra note 14. unique requirement. Specifically, 31 CFR the policies, procedures, and internal controls of

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Section 352 requires that an AML requirements.20 FinCEN will consider a (c) The written AML program is program must encompass four key mutual fund’s CDD requirements as part stored as an electronic file. The elements: (a) Establishing policies, of the future supplemental annual PRA estimated annual burden (5 minutes per procedures, and internal controls burden in this notice. financial institution) represents the reasonably designed to assurance administrative burden involved in Part 2. Traditional Annual PRA Burden compliance with the BSA; (b) processing the storage of the written and Cost designating a person to ensure day to program, and not just the time of actual day compliance with the AML program The scope of the traditional annual electronic storage, which would be and the BSA; (c) providing education PRA burden and cost estimates of the nearly instantaneous. and training to appropriate personnel AML program in this renewal is limited (d) Producing the written AML concerning their responsibilities under to: Maintaining and updating the program electronically to regulatory or the AML program; and (d) written AML program (Action A); law enforcement agencies, upon their implementing an independent review to storing the written AML program request. FinCEN estimates the annual monitor and maintain an adequate AML (Action B); producing a copy of the burden of producing the written 18 program. written AML program if requested by program at 5 minutes per financial The AML program regulations for regulatory examiners or law institution. The estimated annual MSBs, mutual funds, insurance enforcement (Action C); for mutual burden represents the administrative companies, dealers in precious metals, funds, securing approval of the AML burden involved in producing the precious stones, or jewels, operators of program by the board of directors or 21 program upon request, and not just the credit card systems, and loan or finance trustees (Action D); and for providers time required to make the program companies require these financial or sellers of prepaid access, obtaining, available to the requestor for inspection institutions to implement an AML verifying, and maintaining cardholder (for example, the actual electronic program that is reasonably designed to identifying information (Action E). transmission), which would be nearly prevent the financial institution from For purposes of the estimate of the instantaneous. being used to facilitate money AML program traditional annual PRA laundering and terrorist financing. The burden, FinCEN has made the following (e) The estimated number of prepaid AML program must be in writing and assumptions: access arrangements established must be commensurate with the (a) In all cases, agent MSBs agree to annually remains at approximately 2.6 financial institution’s risk profile.19 abide by the policies, procedures, and million. The collection and storage of The AML program regulations for internal controls established by their cardholder identification information is 23 mutual funds, for which the principal MSBs. automated. corresponding OMB control number is (b) Principal MSBs establish The estimated burden associated with being renewed as part of this notice, minimum training and independent each portion of the traditional annual include customer due diligence (CDD) review standards for their agents.22 PRA estimate is as follows:

TABLE 2—BURDEN ASSOCIATED WITH EACH PORTION OF THE TRADITIONAL ANNUAL PRA ESTIMATE

Time per Number of Total Action Instances per year instance Type of financial institution financial hourly institutions 24 burden

A. Maintaining and updating 1 per financial institution ...... 1 hour ...... All except agent MSBs ...... 76,736 76,736 the written AML program. B. Storing the written AML 1 per financial institution ...... 5 minutes ...... All ...... 305,897 25,491 program. C. Producing the AML pro- 1 per financial institution ...... 5 minutes ...... All ...... 305,897 25,491 gram upon request. D. Board of directors/trustees 1 per financial institution ...... 1 hour ...... Mutual funds ...... 1,591 1,591 approval of the AML pro- gram. E. Obtaining, verifying, and 2.6 million (once per card) ... 2 minutes ...... Providers or sellers of pre- 1,632 86,667 storing cardholder identi- paid access. fying information.

Total Hourly Burden ...... 215,976

18 Although FinCEN is providing information secure board of directors’ or trustees’ approval of risk-based policies, procedures, and internal about burden and cost with respect to the four key the AML program. For that reason, FinCEN is only controls that ensure adequate ongoing monitoring of elements of an AML program, FinCEN wants to including the burden and cost of the board of agent activity, as part of the principal’s emphasize that the four key elements of an AML directors’ or trustees’ approval for mutual funds in implementation of its AML program. Imposing a program are statutory requirements. the traditional annual PRA burden and cost minimum level of general training and a minimum estimate. FinCEN recognizes, however, that the 19 The AML program regulations for mutual frequency of independent review allows principal other financial institutions covered by this notice funds, specifically, also require the program to be MSBs to standardize in part these agent monitoring may also get their board or directors or trustees to responsibilities. This document is available at approved in writing by their board of directors or approve their AML programs as a best practice. trustees. 31 CFR 1024.210(a). https://www.fincen.gov/resources/statutes- 22 According to FIN–2016–G001, ‘‘Guidance on 20 31 CFR 1024.220. Existing AML Program Rule Compliance regulations/guidance/guidance-existing-aml- 21 The mutual fund AML program regulations are Obligations for MSB Principals with Respect to program-rule-compliance-obligations. the only AML program regulations being renewed Agent Monitoring,’’ (March 11, 2016), MSB 23 83 FR 42558 (Aug. 22, 2018). in this notice with a regulatory requirement to principals are required to develop and implement 24 As set out in Table 1 above.

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FinCEN’s estimate for the total are: (i) General oversight (board of administrative review and filing and traditional hourly annual PRA burden is directors/trustees approval of the AML producing the AML program on 215,976 hours. program); (ii) general supervision request). FinCEN identified four roles and (providing process oversight); (iii) direct FinCEN calculated the fully-loaded corresponding staff positions involved supervision (reviewing operational-level hourly wage for each of these four roles in maintaining an AML program in work and cross-checking all or a sample by taking the median wage as estimated order to estimate the hourly costs of the work product against their by the U.S. Bureau of Labor Statistics associated with the burden hour supporting documentation); and (iv) (BLS), and computing an additional estimates calculated in this part. Those clerical work (engaging in research and benefits cost as follows: 25

TABLE 3—TOTAL HOURLY REMUNERATION (FULLY-LOADED HOURLY WAGE) PER ROLE AND BLS JOB POSITION

Median Benefit Fully-loaded Role BLS-code BLS-name hourly wage factor hourly wage

Board of directors/trustees ...... 11–1010 Chief Executive 26 ...... $88.68 1.50 *$133.00 General supervision ...... 11–3031 Financial Manager ...... 62.45 1.50 93.68 Direct supervision ...... 13–1041 Compliance Officer ...... 33.20 1.50 49.80 Clerical work (research, review, and filing and pro- 43–3099 Financial Clerk...... 20.40 1.50 30.60 ducing the program upon request). * $133.02 rounded to $133.00.

FinCEN estimates that, in general and For Action A set out in Table 2 above, Action A applies to all financial on average,27 each role would spend annually maintaining and updating the institutions covered by this notice, different amounts of time on each AML program documentation, the cost except agent MSBs. portion of the traditional annual PRA of each hour of burden is estimated to burden, as follows: be $48.00, as shown in Table 4 below.

TABLE 4—WEIGHTED AVERAGE HOURLY COST OF MAINTAINING AND UPDATING AML PROGRAM DOCUMENTATION

General supervision Direct supervision Clerical work (case review) Weighted average Hourly Hourly Hourly hourly cost % time cost % time cost % time cost

10% $9.37 60% $29.88 30% $9.18 $48.00* *$48.43 rounded to $48.00.

For Actions B, C, and E set out in • Action C—producing of the AML to providers and sellers of prepaid Table 2 above, the cost of each hour of program upon request. (Applies to all access). burden is estimated to be $33.00, as financial institutions covered by this shown in Table 5 below: notice). • Action B—storing the AML • Action E—obtaining, verifying, and program. (Applies to all financial storing prepaid access customer institutions covered by this notice). identifying information. (Only applies

TABLE 5—WEIGHTED AVERAGE HOURLY COST OF STORING AND PRODUCING AML PROGRAM DOCUMENTATION UPON REQUEST, AND OBTAINING, VERIFYING, AND STORING PREPAID ACCESS CUSTOMER IDENTIFYING INFORMATION

General supervision Direct supervision Clerical work (recordkeeping) Weighted average % time Hourly cost % time Hourly cost % time Hourly cost hourly cost

1% $0.94 9% $4.48 90% $27.54 $33.00* *$32.96 rounded to $33.00.

For Action D set out in Table 2 above, program by the board of directors or approval of a mutual fund’s AML trustees, the cost of each hour of burden would be $133.00, as shown in Table 3 25 U.S. Bureau of Labor Statistics, Occupational intermediation and related activities is $15.95 Occupational Employment Statistics. For that Employment Statistics-National, May 2019, (hourly benefits)/$32.05 (hourly wages) = 0.50. The reason, FinCEN is conservatively estimating the available at https://www.bls.gov/oes/tables.htm. benefit factor is 1 plus the benefit/wages ratio, or highest wage rate available for its cost analysis. The most recent data from the BLS corresponds to 1.50. Multiplying each hourly wage by the benefit 27 By ‘‘in general,’’ FinCEN is speaking without May 2019. For the benefits component of total factor produces the fully-loaded hourly wage per regard to outliers (e.g., financial institutions with compensation, see U.S. Bureau of Labor Statistics, position. AML programs with complexities that are Employer’s Cost per Employee Compensation as of 26 FinCEN recognizes that a board of directors/ uncommonly higher or lower than those of the December 2019, available at https://www.bls.gov/ trustees would be on a different pay scale than a population at large). By ‘‘on average,’’ FinCEN news.release/ecec.nr0.htm. The ratio between chief executive officer, however, chief executive means the mean of the distribution of each subset benefits and wages for financial activities, credit officer is the highest paid category in the BLS of the population.

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above. Action D only applies to mutual The total cost of the traditional annual funds.28 PRA burden would be $8,437,348, as reflected in Table 6 below:

TABLE 6—TOTAL COST OF TRADITIONAL ANNUAL PRA BURDEN

Total burden Hourly cost Action in hours Total cost (Table 2) $ Source

A. Maintaining and updating the written AML program ...... 76,736 $48.00 Table 4 ...... $3,683,328 B. Storing the written AML program ...... 25,491 33.00 Table 5 ...... 841,203 C. Producing the written AML program upon request ...... 25,491 33.00 Table 5 ...... 841,203 D. Board of directors/trustees approval of the AML program ...... 1,591 133.00 Table 3 ...... 211,603 E. Obtaining, verifying, and storing prepaid access customer identifying in- 86,667 33.00 Table 5...... 2,860,011 formation.

Total Cost ...... 8,437,348

Part 3. Supplemental Annual PRA renewed in this notice, FinCEN ii. The burden and cost of any internal Burden generally does not intend to estimate or external independent review of burden hours and cost applicable to compliance with BSA-specific In the future, FinCEN intends to add these two key elements in the future obligations. a supplemental annual PRA burden supplemental annual PRA burden. iii. The annual burden and cost of the calculation for the AML program The future supplemental annual PRA implementation of CDD requirements regulations covered by this notice, burden calculation will include the for mutual funds, only. The CDD reflecting the annual PRA burden and estimated burden and cost to implement requirements include the cost involved in implementing certain the other two key elements of an AML implementation of risk-based actions that are part of the four key program ((c) BSA training, and (d) procedures for conducting ongoing elements of an AML program. As noted independent audit) relating to the customer due diligence, including (a) above, for all of the financial regulations and corresponding OMB understanding the nature and purpose institutions covered by this notice, an control numbers being renewed in this of customer relationships for the AML program must encompass four key notice. The future supplemental annual purpose of developing a customer risk elements: (a) Establishing policies, PRA burden calculation also will profile, and (b) conducting ongoing procedures, and internal controls include the estimated burden and cost monitoring to identify and report reasonably designed to ensure for a mutual fund to implement CDD, suspicious transactions and, on a risk compliance with the BSA; (b) because CDD is a requirement in the basis, to maintain and update customer designating a person to ensure day to mutual fund AML program regulations, information, such as information about day compliance with the AML program which are being renewed in this notice. the beneficial ownership of legal entity and the BSA; (c) providing education To further clarify, below are (1) a list customers. and training to appropriate personnel of actions FinCEN intends to include in (b) FinCEN does not intend to include concerning their responsibilities under a future supplemental annual PRA the following as part of a future the AML program; and (d) burden estimate relating to the supplemental annual PRA burden implementing an independent review to regulations and OMB control numbers estimate: monitor and maintain an adequate AML renewed in this notice, and (2) a list of i. The annual PRA burden and cost of program.29 actions FinCEN intends to cover in the policies, procedures, and internal The burden hours and cost of two of OMB control number renewals controls established in the AML the key elements of an AML program associated with other BSA regulatory program to ensure compliance with the (internal controls, and designation of a requirements. BSA; 30 BSA compliance officer) are accounted (a) FinCEN intends to include the ii. the designation of a person to for individually across all of the 42 following within a future supplemental ensure day to day compliance with the OMB control numbers FinCEN annual PRA burden estimate: financial institution’s AML program and maintains for the various BSA i. Any generic BSA-related education the BSA; 31 and regulatory requirements because those and training provided to all levels of the iii. AML education and training requirements necessitate that internal organization, and any training provided provided to personnel relating to their controls be put in place and that a BSA to appropriate personnel on BSA issues job specific responsibilities.32 compliance officer be designated. For in excess of that required by their job- FinCEN does not have the necessary that reason, for the OMB control specific responsibilities under their information to provide a tentative numbers and related regulations financial institution’s the AML program. estimate of these supplemental annual

28 See supra note 21. maintains for the various BSA regulatory 32 As noted above, generic BSA-related training 29 Although FinCEN is providing information requirements because those requirements provided to all levels of the organization will be about burden and cost with respect to the four key necessitate that internal controls be put in place. included in future burden and cost estimates 31 elements of an AML program, FinCEN wants to As noted above, the burden hours and cost of corresponding to the OMB control numbers being a BSA compliance officer will be accounted for emphasize that the four key elements of an AML renewed in this notice. Job-specific training related individually across all of the 42 OMB control to specific BSA requirements, will be covered in the program are statutory requirements. numbers FinCEN maintains for the various BSA 30 As noted above, the burden hours and cost of regulatory requirements because those requirements OMB control numbers corresponding to those internal controls will be accounted for individually necessitate that a BSA compliance officer be specific BSA requirements. across all of the 42 OMB control numbers FinCEN designated.

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PRA hourly burdens and costs within regulations, each of the five actions of this notice. In particular, FinCEN the current notice. FinCEN also listed below impact a different seeks comments on the following: recognizes that it does not have all the estimated number of financial (i) Is it realistic to estimate that the necessary information to precisely institutions as follows: PRA hourly burden and cost to estimate the traditional annual PRA (1) 76,736 (all financial institutions implement policies, procedures, and burden. For that reason, FinCEN is except agent MSBs) for the maintaining internal controls to ensure compliance relying on estimates used in prior the written AML Program; with BSA regulations and maintain a renewals of OMB control numbers and (2) 305,897 (total number of financial BSA compliance officer will be applicable regulations. FinCEN further institutions) for storing the written AML adequately reflected by estimating (a) recognizes that after receiving public program; the hourly burden and cost attributed to comments, the burden and cost (3) 305,897 (total number of financial internal controls, and (b) the BSA estimates for the traditional annual PRA institutions) for producing a copy of the compliance officer’s time across each of burden may vary significantly. FinCEN written AML program if requested by the specific BSA requirements, such as intends to conduct more granular regulatory examiners or law reports of transactions in currency, and studies of the actions included in the enforcement; reports of suspicious transactions. proposed scope of a supplemental (4) 1,591 (number of mutual funds) for (ii) Specific request for comments on annual PRA burden in the near future, securing approval of an AML program the appropriate criteria, methodology, to arrive at accurate estimates of net by the board of directors or trustees; and and questionnaire required to obtain BSA hourly burden and cost.33 The data (5) 2,600,000 (number of new prepaid information required for a realistic obtained in these studies also may result access arrangements added per year) for estimate of the future traditional and in a significant variation in the providers and sellers of prepaid access supplemental annual PRA hourly estimated traditional annual PRA hourly for obtaining, verifying, and maintaining burden and cost. For example, as it burden. customer identifying information. relates to training, independent review, An Agency may not conduct or Estimated Total Annual and maintaining and updating the AML sponsor, and a person is not required to Recordkeeping Burden: The estimated program: respond to, a collection of information total annual PRA burden is 215,976 Training: unless the collection of information hours, as described in Table 2. (1) How much time is spent on displays a valid OMB control number. Estimated Total Annual creating and implementing the AML Records required to be retained under Recordkeeping Cost: The cost of the training plan? the BSA must be retained for five years. estimated total annual PRA is (2) How much time is spent on Estimated Recordkeeping Burden: $8,437,348, as described in Table 6. delivering instructor led training or Due to the different scope and criteria Part 4. Request for Comments creating web- based training? used for the estimate, the average (3) How much time does the financial estimated annual traditional PRA (a) Specific request for comments on institution’s compliance department burden, measured in hours per the revised traditional annual PRA spend on creating AML related training respondent, is: (Action A) 1 hour per hourly burden and cost estimates. content, or is the training function FinCEN invites comments on any principal financial institution, for conducted by a team outside of the aspect of the revision to the traditional maintaining and updating the AML financial institution’s compliance annual PRA burden, as described in Part program; (Action B) 5 minutes per department of the financial institution? 2 of this notice. In particular, FinCEN financial institution, for storing the (4) How much time is spent seeks comments on the adequacy of (i) written AML program; (Action C) 5 identifying the proper audience for the estimated number of financial minutes per financial institution, for training? institutions, by type, covered by this producing a copy of the AML program (5) How much time is spent tracking, notice; (ii) the assumptions FinCEN if requested by regulatory examiners or and reporting on, AML-related training? employed to estimate the burden; (iii) law enforcement; (Action D) 1 hour per Independent Review: the estimated number of burden hours mutual fund, for securing approval of (1) How much of the financial attributed to each action set out in Table the AML program by the board of institution compliance department’s 2; (iv) the levels of the organization of directors or trustees; and (Action E) 2 time is spent on responding to inquiries the financial institution participating in minutes per provider or seller of or correcting deficiencies related to the such action, their estimated hourly prepaid access, for obtaining, verifying, independent review of the AML remuneration, and the estimated and maintaining customer identifying program? proportion of time each level (2) If the independent review is information. Estimated Number of Respondents: participated in each portion of the conducted by an internal audit 305,897, as described in Table 1. burden; and (v) the estimated number of department, how much of the internal Estimated Total Annual Responses: new prepaid access arrangements audit department’s time is spent Due to unique requirements in the established on an annual basis. FinCEN creating and implementing the required mutual fund and MSB AML program encourages commenters to include any testing plan for the independent review? publicly available source for alternative Updating and Maintaining a Written 33 Net hourly burden and cost are the burden and estimates or methodologies. AML Program: On average, how many cost a financial institution incurs to comply with (b) Specific requests for comments on times per year does your financial requirements that are unique to the BSA, and that the proposed criteria for determining institution update its AML program? do not support any other business purpose or the scope of a future traditional and (c) General request for comments. regulatory obligation of the financial institution. Comments submitted in response to Burden for purposes of the PRA does not include supplemental annual PRA hourly the time and financial resources needed to comply burden and cost estimate. this notice will be summarized and/or with an information collection if the time and FinCEN invites comments on any included in the request for OMB resources are for things a business (or other person) aspect of the criteria for a future approval. All comments will become a does in the ordinary course of its activities if the estimate of the traditional and matter of public record. Comments are agency demonstrates that the recordkeeping activities needed to comply are usual and supplemental annual PRA hourly invited on: (i) Whether the collection of customary. 5 CFR 1320.3(b)(2). burden and cost, as described in Part 3 information is necessary for the proper

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performance of the functions of the ADDRESSES: Comments may be Secretary to administer the BSA has agency, including whether the submitted by any of the following been delegated to the Director of information shall have practical utility; methods: FinCEN.2 (ii) the accuracy of the agency’s estimate • Federal E-rulemaking Portal: http:// 31 U.S.C. 5318(l) requires FinCEN to of the burden of the collection of www.regulations.gov. Follow the issue regulations prescribing minimum information; (iii) ways to enhance the instructions for submitting comments. standards for customer identification quality, utility, and clarity of the Refer to Docket Number FINCEN–2020– programs (CIP) for financial information to be collected; (iv) ways to 0010 and the specific Office of institutions.3 Regulations implementing minimize the burden of the collection of Management and Budget (OMB) control section 5318(l) are as follows: (i) Banks, information on respondents, including numbers 1506–0022, 1506–0026, 1506– savings associations, credit unions, and through the use of automated collection 0033, and 1506–0034. certain non-federally regulated banks techniques or other forms of information • Mail: Policy Division, Financial (31 CFR 1020.220); (ii) brokers or technology; and (v) estimates of capital Crimes Enforcement Network, P.O. Box dealers in securities (31 CFR 1023.220); or start-up costs and costs of operation, 39, Vienna, VA 22183. Refer to Docket (iii) mutual funds (31 CFR 1024.220); maintenance, and purchase of services Number FINCEN–2020–0010 and OMB and (iv) futures commission merchants to provide information. control numbers 1506–0022, 1506–0026, and introducing brokers in commodities 1506–0033, and 1506–0034. Dated: August 7, 2020. (31 CFR 1026.220). Please submit comments by one Michael Mosier, II. Paperwork Reduction Act of 1995 method only. Comments will also be 4 Deputy Director, Financial Crimes incorporated into FinCEN’s review of (PRA) Enforcement Network. existing regulations, as provided by Title: Customer identification [FR Doc. 2020–17696 Filed 8–12–20; 8:45 am] Treasury’s 2011 Plan for Retrospective programs (CIP) for certain financial BILLING CODE 4810–02–P Analysis of Existing Rules. All institutions (31 CFR 1020.220, 1023.220, comments submitted in response to this 1024.220, and 1026.220). notice will become a matter of public OMB Control Numbers: 1506–0022, DEPARTMENT OF THE TREASURY record. Therefore, you should submit 1506–0026, 1506–0033, and 1506– 0034.5 Financial Crimes Enforcement Network only information that you wish to make publicly available. Report Number: Not applicable. Abstract: FinCEN is issuing this Agency Information Collection FOR FURTHER INFORMATION CONTACT: The notice to renew the OMB control Activities; Proposed Renewal; FinCEN Regulatory Support Section at numbers for the CIP regulatory Comment Request; Renewal Without 1–800–767–2825 or electronically at requirements for certain financial Change of the Customer Identification [email protected]. institutions. Program Regulatory Requirements for SUPPLEMENTARY INFORMATION: Affected Public: Businesses or other Certain Financial Institutions I. Statutory and Regulatory Provisions for-profit institutions, and non-profit institutions. AGENCY: Financial Crimes Enforcement The legislative framework generally Network (FinCEN), Treasury. Type of Review: referred to as the Bank Secrecy Act • Renewal without change of ACTION: Notice and request for (BSA) consists of the Currency and currently approved information comments. Financial Transactions Reporting Act of collections. 1970, as amended by the Uniting and • Propose for review and comment a SUMMARY: As part of its continuing effort Strengthening America by Providing renewal of the portion of the PRA to reduce paperwork and respondent Appropriate Tools Required to Intercept burden, FinCEN invites comments on and Obstruct Terrorism Act of 2001 2 Treasury Order 180–01 (re-affirmed Jan. 14, the proposed renewal, without change, (USA PATRIOT Act) (Pub. L. 107–56) 2020). of currently approved information and other legislation. The BSA is 3 Section 5318(l)(2) prescribes that the collections found in existing Bank codified at 12 U.S.C. 1829b, 12 U.S.C. regulations, at a minimum, require financial institutions to implement reasonable procedures Secrecy Act regulations requiring banks, 1951–1959, 31 U.S.C. 5311–5314 and for: (1) Verifying the identity of any person seeking savings associations, credit unions, 5316–5332, and notes thereto, with to open an account, to the extent reasonable and certain non-federally regulated banks, implementing regulations at 31 CFR practicable; (2) maintaining records of the brokers or dealers in securities, mutual Chapter X. information used to verify the person’s identity, including name, address, and other identifying funds, futures commission merchants, The BSA authorizes the Secretary of information; and (3) determining whether the and introducing brokers in the Treasury, inter alia, to require person appears on any lists of known or suspected commodities, to develop and implement financial institutions to keep records terrorists or terrorist organizations provided to the customer identification programs and file reports that are determined to financial institution by any government agency. Section 5318(l)(3) further directed that the designed to allow the financial have a high degree of usefulness in regulations take into consideration the types of institution to form a reasonable belief it criminal, tax, and regulatory matters, or accounts maintained by financial institutions, the knows the true identity of each in the conduct of intelligence or methods of opening accounts, and the types of customer. Although no changes are counter-intelligence activities, to protect identifying information available. 4 proposed to the information collections against international terrorism, and to Public Law 104–13, 44 U.S.C. 3506(c)(2)(A). 5 The CIP regulatory requirements are currently themselves, this request covers a future implement anti-money laundering covered under the following OMB control numbers: expansion of the scope of the annual (AML) programs and compliance 1506–0022 (31 CFR 1026.220—Customer burden and cost estimates associated procedures.1 Regulations implementing identification programs for futures commission with these regulations. This request for Title II of the BSA appear at 31 CFR merchants and introducing brokers); 1506–0026 (31 CFR 1020.220—Customer identification programs comments is made pursuant to the Chapter X. The authority of the for banks, savings associations, credit unions, and Paperwork Reduction Act of 1995. certain non-federally regulated banks); 1506–0033 1 DATES: Section 358 of the USA PATRIOT Act added (31 CFR 1024.220—Customer identification Written comments are welcome, language expanding the scope of the BSA to programs for mutual funds); and 1506–0034 (31 and must be received on or before intelligence or counter-intelligence activities to CFR 1023.220—Customer identification programs October 13, 2020. protect against international terrorism. for brokers or dealers in securities).

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burden that has been subject to notice requirements.7 In Part 2, FinCEN method proposed for the calculation of and comment in the past (the proposes for review and comment a a future supplemental annual PRA ‘‘traditional annual PRA burden’’). renewal of the estimate of the traditional burden; (c) the criteria, metrics, and • Propose for review and comment a annual PRA hourly burden, which most appropriate questions FinCEN future expansion of the scope of the includes a scope and methodology should consider when researching the PRA burden (the ‘‘supplemental annual similar to that used in the past, with the information to estimate the future PRA burden’’). incorporation of cost estimates. The supplemental annual PRA burden, Frequency: As required. scope and methodology used in the past according to the methodology proposed; Estimated Number of Respondents: differed according to the type of covered and (d) any other comments about the 16,938 financial institutions.6 financial institution. In Part 3, FinCEN regulations and the proposed current Estimated Recordkeeping Burden: proposes for review and comment a and future hourly burden and cost In Part 1 of this notice, FinCEN methodology to estimate the hourly estimates of these requirements. describes the breakdown of the burden and cost of a future estimate of Part 1. Breakdown of the Financial estimated number of financial a supplemental annual PRA burden that Institutions and Transactions Covered institutions, by type, and for certain includes the full scope of CIP by This Notice financial institutions, the estimated requirements for all covered financial number of new accounts opened per institutions. Finally, in Part 4, FinCEN The breakdown of financial year. In addition, Part 1 describes the solicits input from the public about: (a) institutions and transactions, by type, primary characteristics of covered The accuracy of the estimate of the covered by this notice is reflected in financial institutions’ CIP traditional annual PRA burden; (b) the Table 1 below:

TABLE 1—BREAKDOWN OF FINANCIAL INSTITUTIONS AND TRANSACTIONS COVERED BY THIS NOTICE, BY TYPE OF INSTITUTION

Estimated number of annual responses Type of financial institution Number of financial Number of new accounts institutions opened

Banks ...... 8 10,542 Information not available. Brokers or dealers in securities ...... 9 3,640 9,000,000.10 Futures commission merchants ...... 11 61 Information not available. Introducing brokers in commodities ...... 12 1,104 Information not available. Mutual funds ...... 13 1,591 20,000,000.14

Totals ...... 16,938 29,000,000.

All covered financial institutions are identity of each customer to the extent such by Treasury in consultation with required to implement CIPs appropriate reasonable and practicable); 17 the Federal functional regulators); 19 and for their size and type of business. The (3) Recordkeeping (procedures for (5) Customer notice (procedures for CIP must include at minimum the making and maintaining a record of all providing bank customers with following five requirements: information obtained under the CIP adequate notice that the bank is 18 (1) Written CIP (if a financial requirements); requesting information to verify their institution is required to have an AML (4) Consultation of government lists identities).20 15 (procedures to determine whether the program, the CIP must be part of the The CIP may also include procedures written AML program); 16 customer appears on any list of known or suspected terrorists or terrorist specifying when a financial institution (2) Identity verification procedures organizations issued by any Federal may rely on another financial institution (risk-based procedures for verifying the government agency, and designated as to perform any of the financial

6 Table 1 below sets forth a breakdown of the dealers in securities registered with the SEC, as of 2018). FinCEN was unable to obtain a more recent types of financial institutions covered by this March 31, 2020. estimate. notice. 10 According to the SEC, there were 14 According to the SEC, there were 7 The term ‘‘covered financial institution’’ applies approximately 9,000,000 new accounts opened by approximately 20,000,000 new mutual fund to all financial institutions with a CIP regulatory broker or dealers in securities in 2017, based on accounts opened in 2017. The SEC provided this requirement namely banks, savings associations, forms filed with the SEC. The SEC provided this estimate to FinCEN for the last renewal of OMB credit unions, certain non-federally regulated estimate to FinCEN for the last renewal of OMB control number 1506–0033, 83 FR 46012 (Sept. 11, banks, brokers or dealers in securities, mutual control number 1506–0034 (83 FR 46012, Sept. 11, 2018). FinCEN was unable to obtain a more recent funds, futures commission merchants, and 2018). FinCEN was unable to obtain a more recent introducing brokers in commodities. estimate. estimate. 15 8 According to the Federal Deposit Insurance 31 CFR 1020.210; 1023.210; 1024.210; and 11 According to the Commodities and Futures Corporation (FDIC) there were 5,103 FDIC-insured 1026.210. Trading Commission (CFTC), there were 61 futures banks as of March 31, 2020. According to the 16 31 CFR 1020.220(a)(1); 1023.220(a)(1); commission merchants registered with the CFTC, as Federal Reserve Board (FRB), there were 203 other 1024.220(a)(1); and 1026.220(a)(1). of March 31, 2020. entities supervised by the FRB, as of June 16, 2020, 17 31 CFR 1020.220(a)(2); 1023.220(a)(2); 12 According to the CFTC, there were 1,104 that fall within the definition of bank. (20 Edge Act 1024.220(a)(2); and 1026.220(a)(2). institutions, 15 agreement corporations, and 168 introducing brokers in commodities registered with 18 31 CFR 1020.220(a)(3); 1023.220(a)(3); foreign banking organizations). According to the the CFTC as of March 31, 2020. National Credit Union Administration there were 13 According to the SEC, there were 1024.220(a)(3); and 1026.220(a)(3). 5,236 federally regulated credit unions as of approximately 1,591 mutual funds in 2017, based 19 31 CFR 1020.220(a)(4); 1023.220(a)(4); December 31, 2019. on forms filed with the SEC. The SEC provided the 1024.220(a)(4); and 1026.220(a)(4). 9 According to the Securities and Exchange estimate to FinCEN for the last renewal of OMB 20 31 CFR 1020.220(a)(5); 1023.220(a)(5); Commission (SEC), there were 3,640 brokers or control number 1506–0033, 83 FR 46012 (Sept. 11, 1024.220(a)(5); and 1026.220(a)(5).

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institution’s CIP procedures, provided government lists. The estimate did not i. FinCEN continues estimating the certain conditions are met.21 take into account the hourly burden of hourly burden of obtaining and maintaining and updating the written verifying a customer’s identity (i.e., Part 2. Traditional Annual PRA Burden CIP or customer notification of CIP and Cost verification and recordkeeping requirements. requirements, and consulting In the past, the scope of the For purposes of this renewal and the government lists) at two minutes per traditional annual PRA burden associated estimate of the traditional new account opened. estimates of the CIP differed according annual PRA burden, FinCEN is making the following assumptions: ii. FinCEN is also incorporating the to the type of financial institution annual hourly burden of maintaining involved: (a) For banks, futures commission merchants, and introducing brokers in and updating the CIP at ten hours per (a) For banks, futures commission financial institution. This estimate merchants, and introducing brokers in commodities: i. FinCEN continues estimating the covers: (a) The hourly burden of commodities, due to the practical annual hourly burden of maintaining updating the CIP to take into challenges of obtaining the total number and updating the CIP at ten hours per consideration any regulatory changes of new accounts opened per year, the financial institution. This estimate and any modifications required as a estimate was limited to the annual covers: (a) The hourly burden of result of a financial institution making hourly burden of maintaining and updating the CIP to take into changes to the type of accounts updating the written CIP, and providing consideration any regulatory changes maintained, the methods used to open customers with adequate notice that the and any modifications required as a accounts, and the types of documentary financial institution was requesting result of a financial institution making or non-documentary methods for information to verify their identities. changes to the type of accounts verifying identifying information the The estimate did not take into account maintained, the methods used to open financial institution intends to use; and the hourly burden of implementing the accounts, and the types of documentary (b) presenting the updated CIP to the other CIP requirements (i.e., verification or non-documentary methods for appropriate level of management within and recordkeeping requirements, and verifying identifying information the the financial institution for approval. consulting government lists). financial institution intends to use; and (b) For brokers or dealers in securities iii. In addition, FinCEN is (b) presenting the updated CIP to the incorporating an estimate of the hourly and mutual funds, where FinCEN appropriate level of management within obtained the approximate numbers of burden of providing customers with the financial institution for approval. notification of the CIP at one hour new accounts opened per year, the ii. FinCEN continues estimating the annually per financial institution. estimate took into consideration the hourly burden of providing customers annual hourly burden to implement the with notification of the CIP at one hour Under these assumptions, FinCEN’s CIP requirements for all new customers, annually per financial institution. estimate of the traditional annual PRA which included identity verification, (b) For brokers or dealers in securities burden is 1,152,985 hours, as detailed in recordkeeping, and consulting and mutual funds: Tables 2 and 3.22

TABLE 2—HOURLY BURDEN ASSOCIATED WITH MAINTAINING AND UPDATING THE CIP AND CUSTOMER NOTIFICATION FOR ALL COVERED FINANCIAL INSTITUTIONS

Number of Time per financial institution Total hourly burden Type of financial institution financial 23 Maintenance Notification institutions (hours) (hours) Maintenance Notification

Banks ...... 10,542 10 1 105,420 10,542 Futures commission merchants ...... 61 10 1 610 61 Introducing brokers in commodities ...... 1,104 10 1 11,040 1,104 Brokers or dealers in securities ...... 3,640 10 1 36,400 3,640 Mutual funds ...... 1,591 10 1 15,910 1,591

Totals ...... 16,938 ...... 169,380 16,938

TABLE 3—HOURLY BURDEN ASSOCIATED WITH IMPLEMENTATION OF THE IDENTITY VERIFICATION, RECORDKEEPING, AND CONSULTING GOVERNMENT LISTS REQUIREMENTS FOR BROKERS OR DEALERS IN SECURITIES AND MUTUAL FUNDS

Number of New accounts Time per Total hourly Type of financial institution financial per year new account burden * institutions 24 (minutes)

Brokers or dealers in securities ...... 3,640 9,000,000 2 300,000 Mutual funds ...... 1,591 20,000,000 2 666,667

Totals ...... 5,231 ...... 966,667 * New accounts per year times two minutes, divided by 60 minutes per hour

21 31 CFR 1020.220(a)(6); 1023.220(a)(6); of CIP maintenance (169,380), notification (16,938) 24 As set out in Table 1 above. 1024.220(a)(6); and 1026.220(a)(6). and implementation (966,667) as set out in Table 22 The total estimate of the traditional annual PRA 1 and 2. burden is the summation of the total hourly burden 23 As set out in Table 1 above.

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To calculate the hourly burden oversight); (iii) direct supervision FinCEN calculated the fully-loaded estimates in this notice, FinCEN (reviewing operational-level work and hourly wage for each of these four roles identified four roles and corresponding cross-checking all or a sample of the by taking the median wage as estimated staff positions involved in maintaining work product against supporting by the U.S. Bureau of Labor Statistics and implementing the CIP: (i) General documentation); and (iv) clerical work (BLS), and computing an additional oversight (board of directors and/or (engaging in research and administrative benefits cost as follows: 25 senior management); (ii) general review, and recordkeeping). supervision (providing process

TABLE 4—FULLY-LOADED HOURLY WAGE BY ROLE AND BLS JOB POSITION FOR ALL FINANCIAL INSTITUTIONS COVERED BY THIS NOTICE

Median hourly Fully-loaded Role BLS-code BLS-name wage Benefit factor hourly wage

Board of directors/senior management ...... 11–1010 Chief Executive ...... $88.68 1.50 * $133.02 General supervision ...... 11–3031 Financial Manager .... 62.45 1.50 93.68 Direct supervision ...... 13–1041 Compliance Officer ... 33.20 1.50 49.80 Clerical work (research, review, and recordkeeping) ... 43–3099 Financial Clerk ...... 20.40 1.50 30.60 * $133.20 rounded to $133.00.

FinCEN estimates that, in general and (a) For annually maintaining and hour at $133.00, representing the cost of on average,26 each role would spend updating the CIP, estimated at ten hours board of directors or senior management different amounts of time on each per covered financial institution, the review and approval, and (ii) nine hours portion of the traditional annual PRA cost of each hour of burden would be of work by other staff, averaging $48.00, burden, as follows: broken down as follows: (i) One burden as set out in Table 5 below:

TABLE 5—WEIGHTED AVERAGE HOURLY COST OF MAINTAINING AND UPDATING THE CIP AND OBTAINING BOARD APPROVAL FOR ALL COVERED FINANCIAL INSTITUTIONS

General Direct Clerical work Weighted supervision supervision (case review) average %time Hourly cost %time Hourly cost %time Hourly cost hourly cost

10% $9.37 60% $29.88 30% $9.18 *$48.00 * $48.43 rounded to $48.00.

(b) For providing customers the cost of each hour of burden would notification of the CIP, estimated at one be $32.00, as set out in Table 6 below: hour per covered financial institution,

TABLE 6—WEIGHTED AVERAGE HOURLY COST OF PROVIDING CUSTOMER NOTIFICATION OF CIP FOR ALL COVERED FINANCIAL INSTITUTIONS

General Direct Clerical work Weighted supervision supervision (case review) average %time Hourly cost %time Hourly cost %time Hourly cost hourly cost

0% $0.00 5% $2.49 95% $29.07 *$32.00 * $31.56 rounded to $32.00.

(c) For obtaining and verifying estimated at two minutes per account, burden would be $33.00, as reflected in customers’ identification information per broker or dealer in securities or Table 7 below: for purposes of implementing CIP, mutual fund, the cost of each hour of

25 The U.S. Bureau of Labor Statistics, https://www.bls.gov/news.release/ecec.nr0.htm. The 26 By ‘‘in general,’’ FinCEN means without regard Occupational Employment Statistics-National, May ratio between benefits and wages for financial to outliers (e.g., financial institutions with CIPs 2019, available at https://www.bls.gov/oes/ activities, credit intermediation and related with complexities that are uncommonly higher or tables.htm. The most recent data from the BLS activities is $15.95 (hourly benefits)/$32.05 (hourly lower than those of the population at large). By ‘‘on corresponds to May 2019. For the benefits wages) = 0.50. The benefit factor is 1 plus the average,’’ FinCEN means the mean of the component of total compensation, see U.S. Bureau benefit/wages ratio, or 1.50. Multiplying each of Labor Statistics, Employer’s Cost per Employee hourly wage by the benefit factor produces the distribution of each subset of the population. Compensation as of December 2019, available at fully-loaded hourly wage per position.

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TABLE 7—WEIGHTED AVERAGE HOURLY COST OF OBTAINING AND VERIFYING CUSTOMERS’ IDENTIFYING INFORMATION FOR BROKERS OR DEALERS IN SECURITIES AND MUTUAL FUNDS

General Direct Clerical work Weighted supervision supervision (case review) average %time Hourly cost %time Hourly cost %time Hourly cost hourly cost

1% $0.94 9% $4.48 90% $27.54 *$33.00 * $32.96 rounded to $33.00.

The total estimated cost of the $42,011,997, as reflected in Table 8 traditional annual PRA burden is below:

TABLE 8—TOTAL COST OF TRADITIONAL ANNUAL PRA BURDEN

Total burden Hourly cost Task Total cost Hours Source $ Source

Board of directors/senior management approval of CIP ... * 16,938 Table 2 ...... $133.00 Table 4 ...... $2,252,754 Maintaining and updating the CIP ...... * 152,442 Table 2 ...... 48.00 Table 5 ...... 7,317,216 Customer notification of CIP ...... 16,938 Table 2 ...... 32.00 Table 6 ...... 542,016 Implementing the CIP (identifying and verifying customer 966,667 Table 3 ...... 33.00 Table 7 ...... 31,900,011 information, maintain records, and consulting govern- ment lists).

Totals ...... 1,152,985 ...... 42,011,997 * As explained in item (a) above, the ten hours required for maintaining and updating a written CIP is broken down as follows: One hour per covered financial institution for senior management approval of the written CIP (16,938 covered financial institutions multiplied by one hour equals 16,938 hours in total) at $133.00 an hour; and nine hours per covered financial institution for maintaining and updating the written CIP (16,938 multiplied by nine hours equals 152,442 hours in total) at $48.00 an hour.

Part 3. Supplemental Annual PRA comments, the hourly burden and cost per financial institution, as set out in Burden estimates for the traditional annual PRA Table 2), and (b) 185 hours for brokers burden may vary significantly. FinCEN and dealers in securities and mutual In the future, FinCEN intends to add intends to conduct more granular funds to comply with the CIP a supplemental annual PRA burden studies of the actions included in the verification, recordkeeping, and calculation for the CIP and apply the proposed scope of a supplemental consulting government lists same scope and criteria for estimating annual PRA burden in the near future, requirements (i.e., the result of dividing annual PRA burden and cost to all to arrive at more precise estimates of net the total number of burden hours covered financial institutions. For BSA hourly burden and cost.27 The data (966,667) by the total number of banks, futures commission merchants, obtained in these studies also may result financial institutions (5,231), as set out and introducing brokers in in a significant variation of the in Table 3). commodities, the calculation of the estimated traditional annual PRA hourly Estimated Number of Respondents: future supplemental annual PRA burden burden. 16,938, as set out in Table 1. will include adding an annual hourly Estimated Recordkeeping Burden: burden and cost estimate reflecting the Estimated Total Annual Responses: Due to differences in the availability of work involved in: Verifying the identity Due to the different scope and criteria information, resulting in differences in of each customer; making and used for the estimates, the estimates are scope and criteria used to calculate the maintaining a record of all information (a) 16,938 for all covered financial burden estimates, the average estimated obtained under the CIP; and institutions; and (b) 29,000,000 new annual PRA burden, measured in hours determining whether a new customer accounts added per year by brokers or per respondent, is (a) 11 hours for all appears on any list of known or dealers in securities, and mutual funds. covered financial institutions to comply suspected terrorist organizations issued Estimated Total Annual with the CIP maintenance and notice by any Federal government agency. Recordkeeping Burden: The estimated requirements (i.e., ten hours for total annual PRA burden is 1,152,985 FinCEN does not have the necessary maintenance, and one hour for notice information to provide a tentative hours, as set out in Tables 2 and 3. Estimated Total Annual estimate of these supplemental annual 27 Net hourly burden and cost are the burden and PRA hourly burdens and costs within cost a financial institution incurs to comply with Recordkeeping Cost: The estimated total the current notice. FinCEN also requirements that are unique to the BSA, and that annual PRA cost is $42,011,997, as set recognizes that it does not have all the do not support any other business purpose or out in Table 8. regulatory obligation of the financial institution. necessary information to precisely Burden for purposes of the PRA does not include An Agency may not conduct or estimate the traditional annual PRA the time and financial resources needed to comply sponsor, and a person is not required to burden. For that reason, FinCEN is with an information collection if the time and respond to, a collection of information relying on estimates used in prior resources are for things a business (or other person) unless the collection of information does in the ordinary course of its activities if the renewals of OMB control numbers and agency demonstrates that the reporting activities displays a valid OMB control number. applicable regulations. FinCEN further needed to comply are usual and customary. 5 CFR Records required to be retained under recognizes that after receiving public 1320.3(b)(2) the BSA must be retained for five years.

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Part 4. Request for Comments elements that are used exclusively for • Are all CIP records stored (a) Specific request for comments on complying with CIP requirements. electronically? If not, please provide the revised traditional annual PRA Given the obvious complexity in details as to the type of storage method determining what portion of the effort to used. burden and cost. • FinCEN invites comments on any include in the estimate, FinCEN seeks How long does it take to store a aspect of the revision of the traditional comments from the public about how customer’s CIP information annual PRA burden, as set out in Part best to frame the questions and define electronically? • 2 of this notice. In particular, FinCEN the requirements, according to the How long does it take to store a seeks comments on the adequacy of: (i) business uses of financial institutions customer’s CIP information by other FinCEN’s assumptions underlying its covered by this notice. Also, due to the means? • estimate of the burden; (ii) the estimated evident difficulty involved in estimating Is the process of storing CIP number of hours required by each the number of new accounts opened information an automated or manual portion of the burden; and (iii) the during the year, as a proxy for new process at your financial institution? • organizational levels of the financial accountholders subject to CIP Does your financial institution have institution engaged in each portion of requirements, FinCEN welcomes any to invest in specific technology to the burden, their estimated hourly suggestions as to how to derive this maintain these records? If so, what is remuneration, and the estimated estimate by using publicly available the cost of implementation and proportion of participation by time at financial information. maintenance annually? • each level. FinCEN encourages (d) Specific questions for comment Is the technology exclusively to commenters to include any publicly associated with the five CIP comply with the CIP, or is it also to available source for alternative estimates requirements: comply with other regulatory (1) Written CIP—If a bank is required or methodologies. requirements? (b) Specific request for comments on to have an AML program, the CIP must (4) Consulting government lists—the the proposed criteria for determining be part of the AML program. CIP must include procedures for • On average, how long does it take the scope of a supplemental annual determining whether the customer your financial institution to revise its PRA hourly burden and cost estimate. appears on any list of known or written CIP annually? FinCEN invites comments on any suspected terrorists or terrorist • Does the process require review and aspect of the criteria for a future organizations issued by any Federal approval by senior management? government agency, and designated as estimate of the supplemental annual • How long does it take your financial PRA burden, as set out in Part 3 of this such by Treasury in consultation with institution to go through the internal the Federal functional regulators. notice. governance process to get the CIP (c) Specific request for comments on • How long does it take your financial approved? institution to check a new customer the criteria and methodology needed to • How much time on an annual basis against suspected terrorist lists issued obtain information to realistically does the compliance team spend by the Federal government? estimate the supplemental annual PRA training the business units or other • Do you use an automated system, a hourly burden and cost. compliance members on the CIP and hybrid of an automated system and FinCEN invites comments on the most associated updates? manual process, or a completely manual appropriate and comprehensive means (2) Identity verification procedures— process to conduct the searches? of questioning financial institutions the CIP must include risk-based • Does your financial institution have about the hourly burden and cost procedures for verifying the identity of to invest in specific technology to attributable solely to CIP-related each customer to the extent reasonable conduct the searches? If so, what is the activities (i.e., the hourly burden and and practicable. cost of complying with the • On average how many new cost of implementation and recordkeeping requirements imposed maintenance annually? accounts does your financial institution • exclusively by the BSA, which are not open per year? Is the consultation of government used to satisfy contractual obligations, Æ How many accounts are for new lists exclusively to comply with the CIP other regulatory requirements, or customers? requirements, or does it overlap with business purposes of the financial Æ How many accounts are new other regulatory requirements? • institution). For example, depending on personal accounts? What other regulatory or business the nature of the account, a financial Æ How many accounts are new requirements overlap with the CIP institution may be collecting and business accounts? requirements for your financial maintaining some of the same customer • How long does it take your financial institution? identification information required by institution to open a new account for an (5) Customer notice—the CIP must the CIP in order to satisfy other existing customer? include procedures for providing bank obligations including (i) protecting the • How long does it take your financial customers with adequate notice that the financial institution from fraud against institution to conduct identity bank is requesting information to verify itself or its customers, (ii) complying verification procedures for a new their identities. with other non-BSA regulatory personal or business account? • How does you financial institution requirements such as those imposed by • Is the collection of customer provide notification to customers of CIP the specific federal functional regulator, identification information exclusively to requirements? or (iii) improving the financial comply with the CIP requirements, or is • Does your financial institution use institution’s marketing efforts or the it also to comply with other regulatory a sign-in the institution’s offices, notices quality of its managerial information requirements or for other business contained in account opening products. reasons? documents, including electronic The estimate of the annual PRA (3) Recordkeeping—the CIP must notification in the case of online hourly burden and cost of the CIP must include procedures for making and account opening, or general take into consideration only the effort maintaining a record of all information notifications on the institution’s involved in obtaining those data obtained under the CIP requirements. website, or a combination of both?

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• How often does your financial SUMMARY: An open meeting of the 10(a)(2) of the Federal Advisory institution update the notice to Taxpayer Advocacy Panel’s Taxpayer Committee Act, 5 U.S.C. App. (1988) customers regarding CIP? Communications Project Committee will that an open meeting of the Taxpayer • What governance process does the be conducted. The Taxpayer Advocacy Advocacy Panel’s Notices and financial institution follow prior to Panel is soliciting public comments, Correspondence Project Committee will making a new update? ideas, and suggestions on improving be held Wednesday, September 9, 2020, (6) The CIP is not required to, but may customer service at the Internal Revenue at 1:00 p.m. Eastern Time. The public is also include procedures specifying when Service. invited to make oral comments or a financial institution may rely on DATES: The meeting will be held submit written statements for another financial institution to perform Tuesday, September 8, 2020. consideration. Due to limited time and any of the financial institution’s CIP FOR FURTHER INFORMATION CONTACT: structure of meeting, notification of procedures, if certain conditions are Cedric Jeans at 1–888–912–1227 or 901– intent to participate must be made with met. 707–3935. Robert Rosalia. For more information • What percentage of the time does SUPPLEMENTARY INFORMATION: Notice is please contact Robert Rosalia at 1–888– your financial institution rely on hereby given pursuant to Section 912–1227 or (718) 834–2203, or write another financial institution or 10(a)(2) of the Federal Advisory TAP Office, 2 Metrotech Center, 100 associated affiliate to conduct CIP on Committee Act, 5 U.S.C. App. (1988) Myrtle Avenue, Brooklyn, NY 11201 or new customers? that a meeting of the Taxpayer contact us at the website: http:// • What is the burden on your Advocacy Panel Taxpayer www.improveirs.org. The agenda will financial institution to vet another Communications Project Committee will include various IRS issues. financial institution or associated be held Tuesday, September 8, 2020, at Dated: August 7, 2020. affiliate, annually, in order to rely on 12:00 p.m. Eastern Time. The public is Kevin Brown, them to conduct CIP? What are your invited to make oral comments or Acting Director, Taxpayer Advocacy Panel. vetting process criteria? submit written statements for [FR Doc. 2020–17665 Filed 8–12–20; 8:45 am] (e) General request for comments. consideration. Due to limited time and BILLING CODE 4830–01–P Comments submitted in response to structure of meeting, notification of this notice will be summarized and/or intent to participate must be made with included in the request for OMB Cedric Jeans. For more information DEPARTMENT OF THE TREASURY approval. All comments will become a please contact Cedric Jeans at 1–888– matter of public record. Comments are 912–1227 or 901–707–3935, or write Internal Revenue Service invited on: (i) Whether the collection of TAP Office, 5333 Getwell Road, Open Meeting of the Taxpayer information is necessary for the proper Memphis, TN 38118 or contact us at the Advocacy Panel’s Tax Forms and performance of the functions of the website: http://www.improveirs.org. The Publications Project Committee agency, including whether the agenda will include various IRS issues. information shall have practical utility; Dated: August 7, 2020. AGENCY: Internal Revenue Service (IRS), (ii) the accuracy of the agency’s estimate Kevin Brown, Treasury. of the burden of the collection of Acting Director, Taxpayer Advocacy Panel. ACTION: Notice of meeting. information; (iii) ways to enhance the [FR Doc. 2020–17671 Filed 8–12–20; 8:45 am] quality, utility, and clarity of the SUMMARY: An open meeting of the BILLING CODE 4830–01–P information to be collected; (iv) ways to Taxpayer Advocacy Panel’s (TAP) Tax minimize the burden of the collection of Forms and Publications Project information on respondents, including DEPARTMENT OF THE TREASURY Committee will be conducted. The TAP through the use of automated collection is soliciting public comments, ideas, techniques or other forms of information Internal Revenue Service and suggestions on improving customer technology; and (v) estimates of capital service at the Internal Revenue Service. or start-up costs and costs of operation, Open Meeting of the Taxpayer DATES: The meeting will be held maintenance, and purchase of services Advocacy Panel’s Notices and Wednesday, September 9, 2020. Correspondence Project Committee to provide information. FOR FURTHER INFORMATION CONTACT: Fred Dated: August 7, 2020. AGENCY: Internal Revenue Service (IRS) Smith at 1–888–912–1227 or (202) 317– Michael Mosier, Treasury. 3087. Deputy Director, Financial Crimes ACTION: Notice of Meeting. SUPPLEMENTARY INFORMATION: Notice is Enforcement Network. hereby given pursuant to Section SUMMARY: [FR Doc. 2020–17694 Filed 8–12–20; 8:45 am] An open meeting of the 10(a)(2) of the Federal Advisory Taxpayer Advocacy Panel’s Notices and BILLING CODE 4810–02–P Committee Act, 5 U.S.C. App. (1988) Correspondence Project Committee will that a meeting of the Taxpayer be conducted. The Taxpayer Advocacy Advocacy Panel’s Tax Forms and DEPARTMENT OF THE TREASURY Panel is soliciting public comments, Publications Project Committee will be ideas, and suggestions on improving held Wednesday, September 9, 2020 at Internal Revenue Service customer service at the Internal Revenue 12:00 p.m. Eastern Time. The public is Service. Open Meeting of the Taxpayer invited to make oral comments or DATES: The meeting will be held submit written statements for Advocacy Panel Taxpayer Wednesday, September 9, 2020. Communications Project Committee consideration. Due to limited time and FOR FURTHER INFORMATION CONTACT: structure of meeting, notification of AGENCY: Internal Revenue Service (IRS), Robert Rosalia at 1–888–912–1227 or intent to participate must be made with Treasury. (718) 834–2203. Fred Smith. For more information SUPPLEMENTARY INFORMATION: Notice is please contact Fred Smith at 1–888– ACTION: Notice of Meeting. hereby given pursuant to Section 912–1227 or (202) 317–3087, or write

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TAP Office, 1111 Constitution Ave. NW, Dated: August 7, 2020. DEPARTMENT OF THE TREASURY Room 1509, Washington, DC 20224 or Kevin Brown, contact us at the website: http:// Acting Director, Taxpayer Advocacy Panel. Internal Revenue Service www.improveirs.org. [FR Doc. 2020–17664 Filed 8–12–20; 8:45 am] Open Meeting of the Taxpayer Dated: August 7, 2020. BILLING CODE 4830–01–P Advocacy Panel’s Toll-Free Phone Kevin Brown, Lines Project Committee Acting Director, Taxpayer Advocacy Panel. DEPARTMENT OF THE TREASURY [FR Doc. 2020–17666 Filed 8–12–20; 8:45 am] AGENCY: Internal Revenue Service (IRS), BILLING CODE 4830–01–P Internal Revenue Service Treasury. Open Meeting of the Taxpayer ACTION: Notice of meeting. DEPARTMENT OF THE TREASURY Advocacy Panel Joint Committee SUMMARY: An open meeting of the Internal Revenue Service AGENCY: Internal Revenue Service (IRS) Taxpayer Advocacy Panel’s Toll-Free Treasury. Open Meeting of the Taxpayer Phone Lines Project Committee will be ACTION: Notice of Meeting. Advocacy Panel’s Special Projects conducted. The Taxpayer Advocacy Panel is soliciting public comments, Committee SUMMARY: An open meeting of the Taxpayer Advocacy Panel Joint ideas, and suggestions on improving AGENCY: Internal Revenue Service (IRS), customer service at the Internal Revenue Treasury. Committee will be conducted. The Taxpayer Advocacy Panel is soliciting Service. ACTION: Notice of meeting. public comments, ideas, and DATES: The meeting will be held SUMMARY: An open meeting of the suggestions on improving customer Wednesday, September 9, 2020. Taxpayer Advocacy Panel’s Special service at the Internal Revenue Service. FOR FURTHER INFORMATION CONTACT: Projects Committee will be conducted. DATES: The meeting will be held The Taxpayer Advocacy Panel is Thursday, September 24, 2020. Rosalind Matherne at 1–888–912–1227 or 202–317–4115. soliciting public comments, ideas, and FOR FURTHER INFORMATION CONTACT: suggestions on improving customer Gilbert Martinez at 1–888–912–1227 or SUPPLEMENTARY INFORMATION: Notice is service at the Internal Revenue Service. (737) 800–4060. hereby given pursuant to Section DATES: The meeting will be held SUPPLEMENTARY INFORMATION: Notice is 10(a)(2) of the Federal Advisory Thursday, September 10, 2020. hereby given pursuant to Section Committee Act, 5 U.S.C. App. (1988) FOR FURTHER INFORMATION CONTACT: 10(a)(2) of the Federal Advisory that an open meeting of the Taxpayer Antoinette Ross at 1–888–912–1227 or Committee Act, 5 U.S.C. App. (1988) Advocacy Panel Toll-Free Phone Lines 202–317–4110. that an open meeting of the Taxpayer Project Committee will be held SUPPLEMENTARY INFORMATION: Notice is Advocacy Panel Joint Committee will be Wednesday, September 9, 2020 at 11:00 hereby given pursuant to Section held Thursday, September 24, 2020, at a.m. Eastern Time. The public is invited 10(a)(2) of the Federal Advisory 1:30 p.m. Eastern Time via to make oral comments or submit Committee Act, 5 U.S.C. App. (1988) teleconference. The public is invited to written statements for consideration. that an open meeting of the Taxpayer make oral comments or submit written Due to limited time and structure of Advocacy Panel’s Special Projects statements for consideration. For more meeting, notification of intent to Committee will be held Thursday, information please contact Gilbert September 10, 2020, at 11:00 a.m. participate must be made with Rosalind Martinez at 1–888–912–1227 or (737– Matherne. For more information please Eastern Time. The public is invited to 800–4060), or write TAP Office 3651 S. contact Rosalind Matherne at 1–888– make oral comments or submit written IH–35, STOP 1005 AUSC, Austin, TX 912–1227 or 202–317–4115, or write statements for consideration. Due to 78741, or post comments to the website: TAP Office, 1111 Constitution Ave. NW, limited time and structure of meeting, http://www.improveirs.org. notification of intent to participate must The agenda will include various Room 1509, Washington, DC 20224 or be made with Antoinette Ross. For more committee issues for submission to the contact us at the website: http:// information please contact Antoinette IRS and other TAP related topics. Public www.improveirs.org. The agenda will Ross at 1–888–912–1227 or 202–317– input is welcomed. include various IRS issues. 4110, or write TAP Office, 1111 Dated: August 7, 2020. Constitution Ave. NW, Room 1509, Dated: August 7, 2020. Washington, DC 20224 or contact us at Kevin Brown, Kevin Brown, the website: http://www.improveirs.org. Acting Director, Taxpayer Advocacy Panel. Acting Director, Taxpayer Advocacy Panel. The agenda will include various IRS [FR Doc. 2020–17667 Filed 8–12–20; 8:45 am] [FR Doc. 2020–17668 Filed 8–12–20; 8:45 am] issues. BILLING CODE 4830–01–P BILLING CODE 4830–01–P

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Part II

Environmental Protection Agency

40 CFR Part 63 National Emission Standards for Hazardous Air Pollutants: Plywood and Composite Wood Products Residual Risk and Technology Review; Final Rule

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ENVIRONMENTAL PROTECTION 31, 2020, to reduce the risk of NTTAA National Technology Transfer and AGENCY transmitting COVID–19. Our Docket Advancement Act Center staff will continue to provide OMB Office of Management and Budget 40 CFR Part 63 remote customer service via email, OSHA Occupational Safety and Health Administration [EPA–HQ–OAR–2016–0243; FRL–10009–65– phone, and webform. There is a PCWP Plywood and Composite Wood OAR] temporary suspension of mail delivery Products to the EPA, and no hand deliveries are PDF portable document format RIN 2060–AO66 currently accepted. For further PRA Paperwork Reduction Act National Emission Standards for information and updates on EPA Docket PV present value Center services and the current status, RATA relative accuracy test audit Hazardous Air Pollutants: Plywood and RCO regenerative catalytic oxidizer Composite Wood Products Residual please visit us online at https:// www.epa.gov/dockets. REL recommended exposure limit Risk and Technology Review RFA Regulatory Flexibility Act FOR FURTHER INFORMATION CONTACT: For RIN Regulatory Information Number AGENCY: Environmental Protection questions about this final action, contact RTC Response to Comments Agency (EPA). Ms. Katie Hanks, Sector Policies and RTO regenerative thermal oxidizer ACTION: Final rule. Programs Division (E143–03), Office of RTR residual risk and technology review Air Quality Planning and Standards, SSM startup, shutdown, and malfunction SUMMARY: This action finalizes the U.S. Environmental Protection Agency, the Court United States Court of Appeals residual risk and technology review Research Triangle Park, North Carolina for the District of Columbia Circuit (RTR) conducted for the Plywood and 27711; telephone number: (919) 541– TOSHI target organ-specific hazard index Composite Wood Products (PCWP) 2159; fax number: (919) 541–0516; and tpy tons per year UMRA Unfunded Mandates Reform Act source category regulated under email address: [email protected]. For national emission standards for specific information regarding the risk Background information. On hazardous air pollutants (NESHAP). In modeling methodology, contact Mr. September 6, 2019, the EPA proposed addition, the EPA is taking final action James Hirtz, Health and Environmental revisions to the PCWP NESHAP based addressing periods of startup, shutdown Impacts Division (C539–02), Office of on our RTR. See 84 FR 47074. In this and malfunction (SSM); adding Air Quality Planning and Standards, action, the EPA is finalizing decisions electronic reporting; adding repeat U.S. Environmental Protection Agency, and revisions for the rule. We emissions testing; and making technical Research Triangle Park, North Carolina summarize some of the more significant and editorial changes. These final 27711; telephone number: (919) 541– comments we timely received regarding amendments include no revisions to the 0881; fax number: (919) 541–0840; and the proposed rulemaking and provide numerical emission limits in the rule email address: [email protected]. For summaries of our responses in this based on the RTR. While the information about the applicability of preamble. A summary of all public amendments do not result in reductions the NESHAP to a particular entity, comments on the proposal and the of emissions of hazardous air pollutants contact Mr. John Cox, Office of EPA’s specific responses to those (HAP), this action results in improved Enforcement and Compliance comments is available in the Response monitoring, compliance, and Assurance, U.S. Environmental to Comments (RTC) document, National implementation of the rule. Protection Agency, WJC South Building, Emission Standards for Hazardous Air DATES: This final rule is effective on 1200 Pennsylvania Ave. NW, Pollutants: Plywood and Composite August 13, 2020. The incorporation by Washington, DC 20460; telephone Wood Products (40 CFR part 63, subpart reference of certain publications listed number: (202) 564–1395; and email DDDD) Residual Risk and Technology in the rule is approved by the Director address: [email protected]. Review, Final Amendments, Responses of the Federal Register as of August 13, SUPPLEMENTARY INFORMATION: to Public Comments on September 6, 2020. The incorporation by reference of Preamble acronyms and 2019 Proposal, Docket ID No. EPA–HQ– certain other publications listed in the abbreviations. Multiple acronyms and OAR–2016–0243. A ‘‘track changes’’ rule was approved by the Director of the terms are used in this preamble. While version of the regulatory language that Federal Register as of February 16, 2006. this list may not be exhaustive, to ease incorporates the changes in this action ADDRESSES: The U.S. Environmental the reading of this preamble and for is available in the docket. Protection Agency (EPA) has established reference purposes, the EPA defines the Organization of this document. The a docket for this action under Docket ID following terms and acronyms here: information in this preamble is organized as follows: No. EPA–HQ–OAR–2016–0243. All AEGL acute exposure guideline level documents in the docket are listed on CAA Clean Air Act I. General Information the https://www.regulations.gov/ CDX Central Data Exchange A. Does this action apply to me? website. Although listed, some CEDRI Compliance and Emissions Data B. Where can I get a copy of this document Reporting Interface and other related information? information is not publicly available, C. Judicial Review and Administrative e.g., Confidential Business Information CEMS continuous emission monitoring systems Reconsideration or other information whose disclosure is CFR Code of Federal Regulations II. Background restricted by statute. Certain other CMS continuous monitoring systems A. What is the statutory authority for this material, such as copyrighted material, EAV equivalent annualized value action? is not placed on the internet and will be EPA Environmental Protection Agency B. What is the PCWP source category and publicly available only in hard copy ERT Electronic Reporting Tool how does the NESHAP regulate HAP form. Publicly available docket HAP hazardous air pollutants(s) emissions from the source category? materials are available electronically HQ hazard quotient C. What changes did we propose for the PCWP source category in our September through https://www.regulations.gov/. ICR Information Collection Request km kilometer 6, 2019, proposal? Out of an abundance of caution for MACT maximum achievable control III. What is included in this final rule? members of the public and our staff, the technology A. What are the final rule amendments EPA Docket Center and Reading Room NESHAP national emission standards for based on the risk review for the PCWP was closed to public visitors on March hazardous air pollutants source category?

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B. What are the final rule amendments V. Summary of Cost, Environmental, and G. Executive Order 13175: Consultation based on the technology review for the Economic Impacts and Additional and Coordination With Indian Tribal PCWP source category? Analyses Conducted Governments C. What are the final rule amendments A. What are the affected facilities? H. Executive Order 13045: Protection of addressing emissions during periods of B. What are the air quality impacts? Children From Environmental Health SSM? C. What are the cost impacts? Risks and Safety Risks D. What other changes have been made to D. What are the economic impacts? I. Executive Order 13211: Actions the NESHAP? E. What are the benefits? Concerning Regulations That Significantly Affect Energy Supply, E. What are the effective and compliance F. What analysis of environmental justice Distribution, or Use dates of the standards? did we conduct? J. National Technology Transfer and IV. What is the rationale for our final G. What analysis of children’s Advancement Act (NTTAA) and 1 CFR decisions and amendments for the PCWP environmental health did we conduct? part 51 source category? VI. Statutory and Executive Order Reviews K. Executive Order 12898: Federal Actions A. Residual Risk Review for the PCWP A. Executive Orders 12866: Regulatory To Address Environmental Justice in Source Category Planning and Review and Executive Minority Populations and Low-Income B. Technology Review for the PCWP Order 13563: Improving Regulation and Populations Source Category Regulatory Review L. Congressional Review Act (CRA) C. SSM Provisions B. Executive Order 13771: Reducing D. Electronic Reporting Regulations and Controlling Regulatory I. General Information E. Repeat Emissions Testing Cost A. Does this action apply to me? F. Biofilter Bed Temperature C. Paperwork Reduction Act (PRA) G. Thermocouple Calibration D. Regulatory Flexibility Act (RFA) Regulated entities. Categories and H. Non-HAP Coating Definition E. Unfunded Mandates Reform Act entities potentially regulated by this I. Technical and Editorial Changes (UMRA) action are shown in Table 1 of this J. Compliance Dates F. Executive Order 13132: Federalism preamble.

TABLE 1—NESHAP AND INDUSTRIAL SOURCE CATEGORIES AFFECTED BY THIS FINAL ACTION

NESHAP and source category NAICS 1 code

National Emission Standards for Hazardous Air Pollutants: Plywood 321999, 321211, 321212, 321219, 321213. and Composite Wood Products. 1 North American Industry Classification System.

Table 1 of this preamble is not pollution/risk-and-technology-review- public comment (but within the time intended to be exhaustive, but rather to national-emissions-standards- specified for judicial review) and if such provide a guide for readers regarding hazardous. This information includes objection is of central relevance to the entities likely to be affected by the final an overview of the RTR program and outcome of the rule. Any person seeking action for the source category listed. To links to project websites for the RTR to make such a demonstration should determine whether your facility is source categories. submit a Petition for Reconsideration to affected, you should examine the the Office of the Administrator, U.S. C. Judicial Review and Administrative applicability criteria in the appropriate EPA, Room 3000, WJC South Building, Reconsideration NESHAP. If you have any questions 1200 Pennsylvania Ave. NW, regarding the applicability of any aspect Under Clean Air Act (CAA) section Washington, DC 20460, with a copy to of this NESHAP, please contact the 307(b)(1), judicial review of this final both the person(s) listed in the appropriate person listed in the action is available only by filing a preceding FOR FURTHER INFORMATION preceding FOR FURTHER INFORMATION petition for review in the United States CONTACT section, and the Associate CONTACT section of this preamble. Court of Appeals for the District of General Counsel for the Air and Columbia Circuit (the Court) by October Radiation Law Office, Office of General B. Where can I get a copy of this 13, 2020. Under CAA section 307(b)(2), Counsel (Mail Code 2344A), U.S. EPA, document and other related the requirements established by this 1200 Pennsylvania Ave. NW, information? final rule may not be challenged Washington, DC 20460. In addition to being available in the separately in any civil or criminal II. Background docket, an electronic copy of this final proceedings brought by the EPA to action will also be available on the enforce the requirements. A. What is the statutory authority for internet. Following signature by the Section 307(d)(7)(B) of the CAA this action? EPA Administrator, the EPA will post a further provides that only an objection Section 112 of the CAA establishes a copy of this final action at: https:// to a rule or procedure which was raised two-stage regulatory process to address www.epa.gov/stationary-sources-air- with reasonable specificity during the emissions of HAP from stationary pollution/plywood-and-composite- period for public comment (including sources. In the first stage, we must wood-products-manufacture-national- any public hearing) may be raised identify categories of sources emitting emission. Following publication in the during judicial review. This section also one or more of the HAP listed in CAA Federal Register, the EPA will post the provides a mechanism for the EPA to section 112(b) and then promulgate Federal Register version and key reconsider the rule if the person raising technology-based NESHAP for those technical documents at this same an objection can demonstrate to the sources. ‘‘Major sources’’ are those that website. Administrator that it was impracticable emit, or have the potential to emit, any Additional information is available on to raise such objection within the period single HAP at a rate of 10 tons per year the RTR website at https:// for public comment or if the grounds for (tpy) or more, or 25 tpy or more of any www.epa.gov/stationary-sources-air- such objection arose after the period for combination of HAP. For major sources,

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these standards are commonly referred standards and revise the standards, if and use of emissions control systems to as maximum achievable control necessary, to provide an ample margin with an efficiency of at least 90 percent; technology (MACT) standards and must of safety to protect public health or to (2) production-based limits that restrict reflect the maximum degree of emission prevent, taking into consideration costs, HAP emissions per unit of product; and reductions of HAP achievable (after energy, safety, and other relevant (3) emissions averaging that allows considering cost, energy requirements, factors, an adverse environmental effect. control of emissions from a group of and non-air quality health and The residual risk review is required sources collectively (at existing affected environmental impacts). In developing within 8 years after promulgation of the sources). These compliance options MACT standards, CAA section 112(d)(2) technology-based standards, pursuant to apply for the following process units: directs the EPA to consider the CAA section 112(f). In conducting the Fiberboard mat dryer heated zones (at application of measures, processes, residual risk review, if the EPA new affected sources); green rotary methods, systems, or techniques, determines that the current standards dryers; hardboard ovens; press including, but not limited to, those that provide an ample margin of safety to predryers (at new affected sources); reduce the volume of or eliminate HAP protect public health, it is not necessary pressurized refiners; primary tube emissions through process changes, to revise the MACT standards pursuant dryers; secondary tube dryers; substitution of materials, or other to CAA section 112(f) and the EPA may reconstituted wood product board modifications; enclose systems or readopt the MACT standards as residual coolers (at new affected sources); processes to eliminate emissions; risk standards.1 For more information reconstituted wood product presses; collect, capture, or treat HAP when on the statutory authority for this rule, softwood veneer dryer heated zones; released from a process, stack, storage, see 84 FR 47074 (September 6, 2019). rotary strand dryers; and conveyor or fugitive emissions point; are design, strand dryers (zone one at existing B. What is the PCWP source category equipment, work practice, or affected sources, and zones one and two and how does the NESHAP regulate operational standards; or any at new affected sources). In addition, the HAP emissions from the source combination of the above. PCWP NESHAP includes work practice category? For these MACT standards, the statute standards for dry rotary dryers, specifies certain minimum stringency The EPA originally promulgated the hardwood veneer dryers, softwood requirements, which are referred to as PCWP NESHAP on July 30, 2004. The veneer dryers, veneer redryers, and MACT floor requirements, and which standards are codified at 40 CFR part 63, group 1 miscellaneous coating may not be based on cost subpart DDDD. The PCWP industry operations (defined in 40 CFR 63.2292). considerations. See CAA section consists of facilities engaged in the 112(d)(3). For new sources, the MACT production of PCWP and/or kiln-dried C. What changes did we propose for the floor cannot be less stringent than the lumber. Plywood and composite wood PCWP source category in our September emission control achieved in practice by products are manufactured by bonding 6, 2019, proposal? the best-controlled similar source. The wood material (fibers, particles, strands, On September 6, 2019, the EPA MACT standards for existing sources etc.) or agricultural fiber, generally with published a proposed rulemaking in the can be less stringent than floors for new resin under heat and pressure, to form Federal Register for the PCWP sources, but they cannot be less a structural panel or engineered wood NESHAP, 40 CFR part 63, subpart stringent than the average emission product. PCWP manufacturing facilities DDDD, that took into consideration the limitation achieved by the best- also include facilities that manufacture RTR analyses. In the proposed performing 12 percent of existing dry veneer and lumber kilns located at rulemaking, we proposed revisions to sources in the category or subcategory any facility. PCWP include (but are not the SSM provisions for the NESHAP in (or the best-performing five sources for limited to) plywood, veneer, order to ensure that they are consistent categories or subcategories with fewer particleboard, oriented strand board with the decision of the Court in Sierra than 30 sources). In developing MACT (OSB), hardboard, fiberboard, medium Club v. EPA, 551 F.3d 1019 (D.C. Cir. standards, the EPA must also consider density fiberboard, laminated strand 2008), which vacated two provisions in control options that are more stringent lumber, laminated veneer lumber, wood EPA’s 40 CFR part 63, subpart A— than the floor under CAA section I-joists, kiln-dried lumber, and glue- General Provisions, that exempted 112(d)(2). We may establish standards laminated beams. As noted in the sources from the requirement to comply more stringent than the floor, based on preamble to the proposed amendments, with otherwise applicable CAA section the consideration of the cost of the PCWP source category covered by 112(d) emission standards during achieving the emissions reductions, any this MACT standard includes 230 major periods of SSM: 40 CFR 63.6(f)(1) and non-air quality health and source facilities: 93 PCWP facilities, 121 (h)(1). We also proposed various other environmental impacts, and energy lumber mills, and 16 facilities that changes, including addition of requirements. produce both PCWP and lumber. electronic reporting requirements, In the second stage of the regulatory The affected source under the PCWP addition of repeat emissions testing process, the CAA requires the EPA to NESHAP is the collection of dryers, requirements, revisions to parameter undertake two different analyses, which refiners, blenders, formers, presses, monitoring requirements, and various we refer to as the technology review and board coolers, and other process units technical and editorial changes. the residual risk review. Under the associated with the manufacturing of III. What is included in this final rule? technology review, we must review the PCWP. The NESHAP contains several technology-based standards and revise compliance options for process units This action finalizes the EPA’s them ‘‘as necessary (taking into account subject to the standards: (1) Installation determinations pursuant to the RTR developments in practices, processes, provisions of CAA section 112 for the and control technologies)’’ no less 1 The Court has affirmed this approach of PCWP source category. This action also frequently than every 8 years, pursuant implementing CAA section 112(f)(2)(A): NRDC v. finalizes other changes to the NESHAP, to CAA section 112(d)(6). Under the EPA, 529 F.3d 1077, 1083 (D.C. Cir. 2008) (‘‘If EPA including SSM provisions, electronic determines that the existing technology-based residual risk review, we must evaluate standards provide an ’ample margin of safety,’ then reporting, additional emissions testing the risk to public health remaining after the Agency is free to readopt those standards during requirements, and technical and application of the technology-based the residual risk rulemaking.’’). editorial changes.

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A. What are the final rule amendments C. What are the final rule amendments amendments. Repeat emissions testing based on the risk review for the PCWP addressing emissions during periods of is discussed further in section IV.E of source category? SSM? this preamble. 3. Revisions to parameter monitoring The EPA proposed no changes to the In its 2008 decision in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008), the requirements. As discussed at proposal, PCWP NESHAP based on the risk Court vacated portions of two the EPA is finalizing amendments to review conducted pursuant to CAA provisions in the EPA’s CAA section biofilter bed temperature provisions in section 112(f). We are finalizing our 112 regulations governing the emissions 40 CFR 63.2262(m)(1) and the proposed determination that risks from of HAP during periods of SSM. thermocouple calibration requirements the PCWP source category are Specifically, the Court vacated the SSM in 40 CFR 63.2269. The biofilter bed acceptable, considering all of the health exemption contained in 40 CFR temperature provisions are discussed information and factors evaluated, and 63.6(f)(1) and (h)(1), holding that under further in section IV.F of this preamble also considering risk estimation section 302(k) of the CAA, emissions and the thermocouple calibration uncertainty. We are also finalizing our standards or limitations must be requirements are discussed further in proposed determination that revisions continuous in nature and that the SSM section IV.G of this preamble. to the current standards are not exemption violates the CAA’s 4. Revisions to the non-HAP coating necessary to reduce risk to an acceptable requirement that some CAA section 112 definition. The EPA is finalizing level, to provide an ample margin of standards apply continuously. amendments to the non-HAP coating safety to protect public health, or to The EPA has eliminated the SSM definition in 40 CFR 63.2292 with prevent an adverse environmental exemption in this rule. Consistent with changes from the proposed revision. effect. As discussed further in section Sierra Club v. EPA, the EPA has The non-HAP coating definition is IV.A of this preamble, the EPA reviewed established standards in this rule that discussed further in section IV.H of this public comments and data revisions apply at all times. The standards that preamble. submitted during the public comment apply during normal operation have 5. Technical and editorial changes. period but none of the information been extended to apply at all times The EPA is finalizing technical and received affected our determinations. including SSM in most instances. editorial changes, as discussed further Therefore, we are not requiring However, in this final rule, the EPA has in section IV.I of this preamble. additional controls in order to reduce established work practice standards for E. What are the effective and risks and, thus, are not making any specific types of startup and shutdown compliance dates of the standards? revisions to the existing standards under events as described in section IV.C of this preamble. The EPA has also revised CAA section 112(f)(2). Instead, we are Table 10 of this rule (the General The revisions to the MACT standards readopting the existing standards under Provisions applicability table) in several being promulgated in this action are CAA section 112(f)(2), while making respects as is explained in more detail effective on August 13, 2020. The other modifications under other in section IV.C of this preamble. For compliance date of the rule authorities unrelated to risk. example, we have eliminated the amendments for existing affected sources and other affected sources that B. What are the final rule amendments incorporation of the General Provisions’ requirement that sources develop SSM commenced construction or based on the technology review for the reconstruction on or before September PCWP source category? plans. We have also eliminated or revised certain recordkeeping and 6, 2019, is August 13, 2021. Affected We determined that there are no reporting requirements that are related sources that commenced construction or reconstruction after September 6, 2019, developments in practices, processes, to the SSM exemption as described in are new sources. New sources must and control technologies that warrant detail in the proposed rulemaking and comply with all of the standards revisions to the MACT standards for this summarized again in section IV.C of this preamble. immediately upon the effective date of source category. In the proposal, the the standard, August 13, 2020, or upon EPA noted a development in resin D. What other changes have been made startup, whichever is later. All existing systems used to produce PCWP at some to the NESHAP? affected sources will have to continue to facilities but found that facilities Other changes to the NESHAP meet the current requirements of the generally have not altered their HAP include: NESHAP until the applicable emission control strategies to date as a 1. Electronic reporting. As discussed compliance date of the amended rule. result of resin changes and that it is not at proposal, the EPA is finalizing Section IV.D of this preamble necessary, or supported based on amendments to the reporting discusses electronic reporting and a available data, at this time, to amend the requirements in the rule to require semiannual reporting template that current standards. The EPA considered electronic reporting for notifications of facilities must use within 1 year after it comments received during the public compliance status, compliance test is posted in the EPA’s Compliance and comment period regarding our reports, and semiannual reports. Emissions Data Reporting Interface technology review, however, these Electronic reporting is discussed further (CEDRI). In addition, the EPA is comments contained no new data or in section IV.D of this preamble. finalizing new requirements to conduct other information that affected our 2. Repeat emissions testing. As repeat performance testing every 5 years determinations. Therefore, we are not discussed at proposal, the EPA is for facilities using an add-on control finalizing revisions to the MACT finalizing amendments to Table 7 to system other than a biofilter (see section standards under CAA section 112(d)(6). subpart DDDD of part 63 to require IV.E of this preamble). The first of the Section IV.B of this preamble provides repeat testing every 5 years for process repeat performance tests must be further details on our conclusion with units controlled with control devices conducted within 3 years after August respect to the technology review. other than biofilters. The first of the 5- 13, 2020, or within 60 months following year repeat tests will be required within the previous performance test, 3 years of the effective date of the final whichever is later.

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IV. What is the rationale for our final Docket ID No. EPA–HQ–OAR–2016– margin of safety, in the September 6, decisions and amendments for the 0243. 2019, proposed rulemaking for the PCWP source category? PCWP source category (84 FR 47074). A. Residual Risk Review for the PCWP The results of the risk assessment are For each issue, this section provides Source Category presented briefly in Table 2 of this a description of what was proposed and 1. What did we propose pursuant to preamble and in the risk report titled what is being finalized for the issue, the CAA section 112(f) for the PCWP source Residual Risk Assessment for the EPA’s rationale for the final decisions category? Plywood and Composite Wood Products and amendments, and a summary of key Source Category in Support of the 2019 comments and responses. Comment Pursuant to CAA section 112(f), the Risk and Technology Review Proposed summaries for all comments and the EPA conducted a risk review and Rule, and sections III and IV of the EPA’s specific responses can be found presented the results for the review, proposal preamble (84 FR 47074, in the RTC document, available in along with our proposed decisions September 6, 2019) available in the regarding risk acceptability and ample docket for this action. TABLE 2—INHALATION RISK ASSESSMENT SUMMARY FOR PLYWOOD AND COMPOSITE WOOD PRODUCTS SOURCE CATEGORY 1

Maximum individual Population at increased Annual Maximum chronic Maximum cancer risk risk of cancer cancer incidence noncancer TOSHI 4 screening (in 1 million) 3 ≥ 1-in-1 million (cases per year) acute Based on . . . noncancer Based on . . . Based on . . . Based on . . . HQ 5 Number of facilities 2 Actual Allowable Based on Actual Allowable Actual Allowable Actual Allowable emissions emissions actual emissions emissions emissions emissions emissions emissions level level emissions level level level level level level level

233 ...... 30 30 204,000 230,000 0.03 0.03 0.8 0.8 4 (REL) 0.2 (AEGL–1) 1 Based on actual and allowable emissions. 2 Number of facilities evaluated in the risk assessment. Includes 230 operating facilities subject to 40 CFR part 63, subpart DDDD, plus three existing facilities that are currently closed but maintain active operating permits. 3 Maximum individual excess lifetime cancer risk due to HAP emissions from the source category. 4 Maximum target organ-specific hazard index (TOSHI). The target organ with the highest TOSHI for the PCWP source category is the respiratory system. 5 The maximum estimated acute exposure concentration was divided by available short-term threshold values to develop an array of hazard quotient (HQ) values. The acute HQ values shown use the lowest available acute threshold value, which in most cases is the recommended exposure limit (REL). When an HQ exceeds 1, the EPA also shows the HQ using the next lowest available acute dose-response value.

For the risk assessment conducted at maximum acute HQs of 4 for acrolein measures, and costs reviewed under the proposal, the EPA estimated risks based and 2 for formaldehyde emissions based technology review) that could be on actual and allowable emissions from on the acute reference exposure level. applied to this source category to further the PCWP source category. The results Maximum cancer risk due to ingestion reduce the risks (or potential risks) due for the PCWP source category indicated exposures estimated using health- to emissions of HAP identified in our that both the actual and allowable protective risk screening assumptions risk assessment. The EPA did not inhalation cancer risks to the individual are below 6-in-1 million for the Tier 2 identify methods for further reducing most exposed are below the fisher scenario and below 40-in-1 HAP emissions from the PCWP source presumptive limit of acceptability of million for the Tier 2 rural gardener category that would achieve meaningful 100-in-1 million. The residual risk exposure scenario.2 Considering all the risk reductions. Therefore, the EPA assessment for the PCWP category health risk information and factors and proposed that the current PCWP estimated cancer incidence rate at 0.03 the uncertainties discussed in the standards provide an ample margin of cases per year (or one case every 33 preamble to the proposed amendments safety to protect public health and years) based on both source category (84 FR 47074, September 6, 2019), the revision of the promulgated standards is actual and allowable emissions. The EPA proposed that the risks posed by not required. The EPA also concluded estimated inhalation cancer risk to the emissions from the PCWP source that an adverse environmental effect as individual most exposed to actual and category are acceptable after a result of HAP emissions from this allowable emissions from the source implementation of the existing MACT source category is not expected and, category was 30-in-1 million. The standards. therefore, proposed that it is not assessment showed that approximately As directed by CAA section 112(f)(2), necessary to set a more stringent 204,000 people faced an increased the EPA also conducted an analysis to standard to prevent, taking into cancer risk equal to or above 1-in-1 determine if the current emission consideration costs, energy, safety, and standards provide an ample margin of million from source category actual other relevant factors, an adverse safety to protect public health. Under emissions from 170 facilities. The environmental effect. The results of the the ample margin of safety analysis, the number of people exposed to a cancer EPA’s residual risk analysis conducted EPA considers all health factors risk greater than 10-in-1 million from according to CAA section 112(f)(2) were evaluated in the risk assessment and source category actual emissions is 650 discussed in the preamble to the evaluates the cost and feasibility of people. The maximum chronic proposed rulemaking (84 FR 47074, available control technologies and other noncancer TOSHI due to inhalation September 6, 2019), in the risk report for measures (including the controls, exposures was less than 1 (0.8) for the proposed rulemaking titled Residual actual and allowable emissions from the Risk Assessment for the Plywood and 2 As explained in the preamble for the proposed source category. The results of the acute rulemaking, these multipathway risk estimates Composite Wood Products Source non-cancer refined analysis showed would be further reduced with Tier 3 screening. Category in Support of the 2019 Risk

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and Technology Review Proposed Rule, 112(f)(2) using ‘‘a two-step standard- PCWP NESHAP contains production- Docket Item No. EPA–HQ–OAR–2016– setting approach, with an analytical first based compliance options (PBCO) for 0243–0179, and in the risk report for the step to determine an ‘acceptable risk’ process units with low emissions due to final rule titled Residual Risk that considers all health information, pollution prevention measures inherent Assessment for the Plywood and including risk estimation uncertainty, in their process, an emissions averaging Composite Wood Products Source and includes a presumptive limit on compliance option, and work practice Category in Support of the 2019 Risk MIR of approximately 1-in-10 requirements for selected process units. and Technology Review Final Rule, in thousand’’ (see 54 FR 38045, September In the proposal, the EPA noted a the docket for this action. The risk 14, 1989). The EPA weighs all health development in resin systems used to report for the final rule is unchanged risk factors in our risk acceptability produce PCWP at some facilities but from the risk report prepared for the determination, including the cancer found that facilities generally have not proposed rulemaking. maximum individual risk (MIR), cancer altered their HAP emission control incidence, the maximum cancer TOSHI, strategies to date as a result of resin 2. How did the risk review change for the maximum acute noncancer HQ, the changes and that it is not necessary, or the PCWP source category? extent of noncancer risks, the supported, based on available data, at The EPA has not changed any aspect distribution of cancer and noncancer this time, to amend the current of the risk assessment since the risks in the exposed population, and the standards. The EPA proposed that no September 2019 proposal for the PCWP risk estimation uncertainties. revisions to the PCWP NESHAP are source category. Since proposal, neither the risk necessary pursuant to CAA section 3. What key comments did we receive assessment nor our determinations 112(d)(6). on the risk review, and what are our regarding risk acceptability, ample The EPA received comments responses? margin of safety, or adverse supporting and opposing our proposed environmental effects have changed. For determination from the technology The EPA received several comments the reasons explained in the proposed review that no revisions to the standards in support of and against the proposed rulemaking, the EPA determined that are necessary under CAA section residual risk review and our the risks from the PCWP source category 112(d)(6). Several commenters agreed determination that no revisions were are acceptable, the current standards with the EPA’s decision not to revise the warranted under CAA section 112(f)(2). provide an ample margin of safety to current standards pursuant to CAA Generally, the commenters disagreeing protect public health, and more section 112(d)(6). Conversely, another with the risk review misunderstood the stringent standards are not necessary to commenter opposed our determination type of data used for the development prevent an adverse environmental not to revise the standards and stated of the risk review or suggested changes effect. Therefore, the EPA is not revising that the EPA failed to satisfy the CAA to the underlying risk assessment the PCWP NESHAP (40 CFR part 63, because it did not set emission methodology. Some commenters noted subpart DDDD) to require additional standards for currently unrestricted the conservative nature of the controls pursuant to CAA section HAP (such as emissions from the PCWP underlying residual risk methodology. 112(f)(2) based on the residual risk process units not currently subject to Commenters also submitted data review, and the EPA is readopting the emissions limits) and regulating these revisions for 23 of the 233 modeled existing standards under CAA section emissions is ‘‘necessary’’ under the facilities. After reviewing the inventory 112(f)(2). CAA. The commenter asserted that the revisions, the EPA concluded that 21 of EPA must review and follow the CAA B. Technology Review for the PCWP the revisions would serve only to reduce and existing case law to ensure it sets Source Category modeled risk through reduced a numerical limit for every regulated emissions or improved dispersion The EPA’s technology review focused HAP in order to satisfy CAA sections inputs. Further, the EPA concluded that on identifying developments in 112(d)(2), (3), and (6). The commenter neither of the two remaining inventory practices, processes, and control further asserted that the EPA must revisions would increase the maximum technologies for process units subject to update standards when a development modeled risk for the PCWP source standards under the NESHAP that have is identified, such as the use of lower category or change our conclusions occurred since 2004 when emission HAP resins. regarding risk acceptability or ample standards were promulgated for the In response to the comments, the EPA margin of safety. See the memorandum, PCWP source category. The following maintains that our CAA section Review of Plywood and Composite process units were included in our 112(d)(6) review of developments in the Wood Products Emissions Inventory review: Green rotary dryers, hardboard processes, practices, and controls Revisions, in the docket for this action ovens, pressurized refiners, primary applied to sources regulated under 40 for details on the inventory revisions tube dryers, reconstituted wood product CFR part 63, subpart DDDD, was submitted. After review of the presses, softwood veneer dryer heated complete. The technology review was comments and information submitted, zones, rotary strand dryers, secondary based on responses to an Information we determined that no changes to the tube dryers, conveyor strand dryers, Collection Request (ICR) conducted proposed residual risk assessment were fiberboard mat dryers, press predryers, under CAA section 114, requiring a necessary. The comments and our and reconstituted wood product board mandatory response. In addition to ICR specific responses can be found in the coolers. The technological basis for the data provided by respondents, the EPA RTC document, which is available in promulgated PCWP NESHAP was use of requested and reviewed other the docket for this action, Docket ID No. incineration-based or biofilter add-on information from sources to determine if EPA–HQ–OAR–2016–0243. controls to reduce HAP emissions. there have been developments in Incineration-based controls include practices, processes, or control 4. What is the rationale for our final regenerative thermal oxidizers (RTOs), technologies by PCWP facilities, as approach and final decisions for the risk regenerative catalytic oxidizers (RCOs), described in section 3 of the RTC review? and incineration of process exhaust in document. The technology review was As noted in our proposal, the EPA an onsite combustion unit (referred to as documented in the memorandum, sets standards under CAA section ‘‘process incineration’’). In addition, the Technology Review for the Plywood and

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Composite Wood Products NESHAP, the context of CAA section 112(d)(6). PBCO in the PCWP NESHAP do not Docket Item No. EPA–HQ–OAR–2016– The EPA explained in the proposal that support revising the PCWP NESHAP. 0243–0189. as facilities conduct repeat testing, they Therefore, the EPA concluded it is not, Section 3 of the RTC document may find that the inlet concentration of at this time, necessary or supportable contains full responses to the comments formaldehyde and methanol from their under this CAA section 112(d)(6) review received. Regarding the comment that pressing operations has dropped if they to change the promulgated PCWP the technology review did not address are now using a different, lower-HAP NESHAP as a result of resin changes the unregulated sources, the EPA resin system to comply with the facilities made to meet the CARB and acknowledged in the preamble to the California Air Resources Board (CARB) TSCA rules. If additional emissions proposed rulemaking that there are and Toxic Substances Control Act information on resin changes or other unregulated sources with no-control (TSCA) standards. The decrease in inlet changes made by facilities becomes MACT determinations, and we stated concentration may allow for future use available and indicates updates need to our plans to address those units in a of the PBCO without an add-on control be made to standards in future separate action subsequent to the RTR at device, providing an existing technology reviews, the EPA will 84 FR 47077–47078. See section 9 of the compliance option in addition to the evaluate that information at that time. In RTC document for further discussion of current add-on control device summary, the EPA proposed, and is our position regarding our obligations compliance option. The EPA also finalizing the conclusion that no under CAA section 112(d)(6) with explained that while the CARB and revisions to the PCWP NESHAP are respect to unregulated sources.3 TSCA standards are a ‘‘development’’ necessary pursuant to CAA section Overall, the EPA’s review of the within the context of CAA section 112(d)(6). All amendments being made developments in technology for the 112(d)(6), these rules do not necessitate to the final NESHAP are for reasons process units subject to the PCWP revision of the previously-promulgated other than to reflect developments NESHAP did not reveal any changes PCWP emission standards because the under CAA section 112(d)(6). that require revisions to the emission promulgated PCWP emission standards C. SSM Provisions standards under CAA section 112(d)(6). already include the PBCO provisions for As discussed in the first paragraph in pollution prevention measures such as Consistent with the 2008 decision in this section of the preamble, the PCWP lower-HAP resins. The EPA disagrees Sierra Club v. EPA, the EPA proposed rule was promulgated with multiple that because resin changes made by eliminating the SSM exemption in this options for reducing HAP emissions to some mills were noted as a development rule and instead proposed that the same demonstrate compliance with the in the technology review that this standards that apply during normal standard. The EPA found that facilities necessitates revisions to the standards operation also apply during SSM, are using each type of control system or without regard to how the development except during specific periods of startup pollution prevention measure (such as is already addressed within the and shutdown as described in section lower-HAP resins) that was anticipated previously-promulgated emission IV.C.2 of this preamble. Additionally, when the PCWP emissions standards standards, to how it relates to control the EPA proposed several revisions to were promulgated. The EPA did not technologies used in the industry, or Table 10 (the General Provisions identify any developments in practices, other relevant factors. For the PCWP applicability table), proposed processes, or control technologies for source category, the EPA did not eliminating the incorporation of the the regulated units beyond those identify information suggesting the resin General Provisions’ requirement that the accounted for in the originally system changes have significantly source develop an SSM plan, and promulgated PCWP NESHAP. altered the type of process units or HAP proposed eliminating and revising Regarding lower-HAP resins, for the pollution control technologies used in certain recordkeeping and reporting proposal, the EPA characterized changes the PCWP industry to date or have led requirements related to the SSM exemption, all of which are further in the type of resin systems used in the to processes or practices that have not described in section IV.C.4 of this particleboard, MDF, and hardwood been accounted for in the promulgated preamble. plywood segments of the PCWP PCWP NESHAP compliance options. As industry due to the formaldehyde explained further in Section 3 of the 1. Elimination of the SSM Exemption standards limiting emissions from these RTC document, at present, limited HAP products 4 as a ‘‘development’’ within As noted in section III.C of this emissions data are available to compare preamble, in its 2008 decision in Sierra PCWP manufacturing process emissions Club v. EPA, 551 F.3d 1019 (D.C. Cir. 3 On April 21, 2020, as the Agency was preparing before and after implementation of resin the final rule for signature, a decision was issued 2008), the Court vacated portions of two in LEAN v. EPA, 955 F. 3d. 1088 (D.C. Cir. 2020) changes to meet the product provisions in the EPA’s CAA section in which the Court held that the EPA has an formaldehyde standards. Facilities made 112 regulations governing the emissions obligation to set standards for unregulated a variety of different resin system of HAP during periods of SSM. pollutants as part of technology reviews under CAA changes (if needed for their specific section 112(d)(6). At the time of signature, the Specifically, the Court vacated the SSM mandate in that case had not been issued and the products) in response to the CARB and exemption contained in 40 CFR EPA is continuing to evaluate the decision. TSCA rules, and, therefore, no single 63.6(f)(1) and (h)(1), holding that under 4 In 2008, the CARB finalized an Airborne Toxic broadly-applicable approach feasible for section 302(k) of the CAA, emissions Control Measure (ATCM) to reduce formaldehyde all mills was identified. The different emissions from hardwood plywood, MDF, and standards or limitations must be particleboard. Consistent with the CARB ATCM, in resin system changes facilities made, continuous in nature and that the SSM July 2010, Congress passed the Formaldehyde coupled with the limited available HAP exemption violates the CAA’s Standards for Composite Wood Products Act, as emissions data, ongoing use of add-on requirement that some CAA section 112 title VI of TSCA, [15 U.S.C. 2697], requiring the control technologies following resin EPA to promulgate a national rule. The EPA standards apply continuously. finalized the TSCA rule, Formaldehyde Emission system changes, and availability of Consistent with the Sierra Club Standards for Composite Wood Products, on decision, the EPA proposed eliminating December 12, 2016 (81 FR 89674), and finalized an the rule to implement TSCA title VI emphasize the implementation rule on February 7, 2018 (83 FR use of low emission resins, including ultra-low- the SSM exemption in this rule from 40 5340). Compliance with the TSCA rule was emitting formaldehyde and no added formaldehyde CFR 63.2250 and to remove the required by December 2018. The CARB ATCM and resin systems. incorporation of 40 CFR 63.6(f)(1). (40

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CFR 63.6(h)(1) was not applicable to during periods of SSM. Consistent with applying the standards applicable under this NESHAP.) the Court’s decision and for the reasons normal operations would be The EPA received comments explained in the proposal preamble at problematic for PCWP facilities during supporting and opposing our proposal 84 FR 47092–47096, we are finalizing startup and shutdown. Facilities to eliminate the SSM exemption in the our proposal to eliminate the SSM operating control systems generally rule. Commenters opposed to language in subpart DDDD. As operate the control systems while the eliminating the exemption stated that explained in the proposal, our SSM- process unit(s) controlled are started up neither the CAA nor judicial precedent related rule revisions are in response to and shut down. For example, RTOs and requires the EPA to delete the SSM the Court’s vacatur of the SSM RCOs are warmed to their operating provisions. According to these exemptions in 40 CFR 63.6(f)(1) and temperature set points using auxiliary commenters, the best-performing (h)(1). When incorporated into CAA fuel before the process unit(s) controlled facilities that are the basis for the MACT section 112(d) regulations for specific startup, and the oxidizers continue to floor experience SSM events, and so it source categories, these two provisions maintain their temperature until the is appropriate for the EPA to recognize exempted sources from the requirement process unit(s) controlled shutdown. and account for those events, as it has to comply with otherwise applicable Biofilters operate within a biofilter bed in the existing PCWP MACT standards. MACT standards during periods of temperature range that will be more One commenter noted that when the SSM. The Court’s vacatur rendered easily achieved during startup and EPA promulgated the 2004 PCWP those provisions null and void prior to shutdown with changes in biofilter bed NESHAP, the EPA determined it was this rulemaking. Eliminating reference temperature operating range discussed appropriate not to subject mills to the to these provisions and other related in section IV.F of this preamble. Based numerical emission limitations in those General Provisions referenced in on the information collected, the EPA standards during SSM events, requiring subpart DDDD reflects the vacatur by determined that PCWP facilities can instead that sources follow work the Court. We also eliminated the rule meet standards applicable under normal practices to minimize emissions during specific SSM provisions in subpart operations at all times except during such events, including developing and DDDD, as discussed further in section periods of safety-related shutdowns and following an SSM plan. The commenter IV.C.4 of this preamble. The specific pressurized refiner startups and asserted that the EPA’s proposal to changes in the language can be found in shutdowns. To ensure that a CAA eliminate 40 CFR 63.2250(a), and Docket ID No. EPA–HQ–OAR–2016– section 112 standard is met during all thereby require sources to meet the 0243 in the document titled Redline times, the EPA proposed alternate work same emission limitations during Version of 40 CFR Part 63, subpart practice standards for safety-related periods of SSM, except for very limited DDDD Showing Final Changes. shutdowns and pressurized refiner cases (safety related shutdowns and However, we do not agree with the startups and shutdowns. After brief periods during startup and commenter who characterized the 2008 considering comments on the proposed shutdown of pressurized refiners), Court ruling as a ‘‘development’’ that amendments, the EPA determined that represents an unauthorized change to compels elimination of the SSM an alternate work practice standard was existing MACT standards, specifically exemption under CAA section 112(d)(6). also needed for direct-fired softwood claiming that it is not the product of the The EPA is not and need not rely on veneer dryers undergoing startup or technology review described in the CAA section 112(d)(6) in order to shutdown of gas-fired burners. CAA, it is not required by case law, and eliminate the exemption but is choosing The following sections discuss the it is inconsistent with decades of the to take action at this time to make the work practices the EPA is finalizing. EPA practice and judicial NESHAP consistent with the 2009 Each work practice is designed to interpretations of NESHAP and new ruling. As discussed in section IV.C.2 minimize emissions, in keeping with source performance standards. below, we proposed and are CAA requirements. All three work Conversely, a commenter in favor of the promulgating work practice standards practices minimize the duration of time EPA’s proposal to eliminate the SSM for specific startup and shutdown and circumstances under which they exemption argued that it is legally events. Therefore, all current subpart can be applied. Further, because all required and necessary in this DDDD facilities affected by SSM must three work practices require the rulemaking under CAA section 112(d), be in compliance with a standard at all temporary suspension of material flow including CAA section 112(d)(6), for the times (i.e., with either the normal through the PCWP process, PCWP EPA to remove the SSM exemptions for operational standards or the work facilities are incentivized to minimize PCWP facilities as it has proposed to do practices that apply during selected the use and duration of these work because the CAA requires standards to startup and shutdown periods) practices. Sections IV.C.2.a and b of this apply continuously and the Court consistent with the Sierra Club v. EPA preamble discuss in more detail the precedent (Sierra Club v. EPA) is a decision. Section IV.C.3 of this work practice standards for safety- development since the prior standards preamble provides further information related shutdowns and pressurized were made. on our position with respect to periods refiner startup and shutdown, The EPA acknowledges comments in of malfunction. respectively, including comments support of the removal of the 40 CFR received about the standards following 2. Periods of Startup and Shutdown part 63, subpart DDDD, SSM exemption proposal and the EPA’s final decision and we are promulgating our proposed In finalizing the standards in this rule, regarding their requirements. Section SSM action. We disagree with the EPA considered and proposed IV.C.2.c of this preamble discusses the comments suggesting that the legal alternative actions to the simple details of the work practice standard for precedent established in case law removal of SSM provisions in the rule. direct-fired softwood veneer dryers (Sierra Club v. EPA, 551 F.3d 1019 (D.C. As an alternative approach consistent undergoing startup or shutdown of gas- Cir. 2008) should not apply to subpart with Sierra Club v. EPA, the EPA may fired burners. DDDD. The Court decision held that designate different standards to apply emission limits under CAA section 112 during startup and shutdown. The EPA a. Safety-Related Shutdowns must apply continuously and meet collected information with the PCWP As discussed in the preamble to the minimum stringency requirements, even ICR to use in determining whether proposed rulemaking (84 FR 47093,

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September 6, 2019) and further is removed from the process unit(s) as operational standards ‘‘if it is not elaborated in the RTC document, safety- expeditiously as possible given the feasible in the judgement of the related shutdowns differ from routine, system design. These actions are taken Administrator to prescribe or enforce an planned shutdowns where facilities can by all (including the best-performing) emission standard.’’ The phrase ‘‘if it is continue routing process unit emissions facilities when safety-related shutdowns not feasible to prescribe or enforce an to the control device until the process occur. emission standard’’ is defined in CAA unit is shut down. Safety-related Comments were received both section 112(h)(2)(A) and (B) to mean any shutdowns have been accounted for in supporting and opposing the proposed situation in which the Administrator the process design and are not work practice for safety-related determines that: (A) A HAP or necessarily frequent but are pre- shutdowns. Commenters in support of pollutants cannot be emitted through a determined remedial actions anticipated the standards stated that CAA section conveyance designed and constructed to to occasionally occur to such a degree 112(h) allows the EPA to promulgate a emit or capture such pollutant, or that that they are also distinguished from design, equipment, work practice, or any requirement for, or use of, such a malfunctions which are, by definition, operational standard, or combination conveyance would be inconsistent with infrequent and not reasonably thereof, in two circumstances: (1) When any federal, state or local law, or (B) the preventable (40 CFR 63.2). Malfunctions HAP ‘‘cannot be emitted through a application of measurement are unpredictable and may require conveyance designed and constructed to methodology to a particular class of different types of remediation. For emit or capture such a pollutant, or that sources is not practicable due to example, the PCWP process predictably any requirement for, or use of, such a technological and economic limitations. shuts down when these events are conveyance would be inconsistent with The EPA has determined that work triggered. Safety-related shutdowns any Federal, State, or local law,’’ and (2) practices are appropriate during safety- must occur rapidly in the event of when ‘‘the application of measurement related shutdowns in the PCWP unsafe conditions such as a suspected methodology . . . is not practicable due industry because facilities cannot fire in a process unit heating flammable to technological and economic capture and convey HAP emissions to a wood material. When unsafe conditions limitations.’’ Commenters stated that control device during these periods for are detected, facilities must act quickly safety-related shutdowns of process safety reasons. The control device could to shut off fuel flow (or indirect process units with add-on control equipment serve as an ignition source if there is an heat) to the system, cease addition of present both of those circumstances and upset in the oxygen concentration or raw materials (e.g., wood furnish, resin) provided operational details buildup of other combustibles in the to the process units, purge wood summarized in Section 4.3 of the RTC PCWP process or exhaust gas collection material and gases from the process document. The commenter explained system (e.g., combustible gas, unit, and isolate equipment to prevent that the best practice for controlling condensed pitch on ductwork if loss of property or life and protect HAP emissions during such safety- moisture-laden gases in the system are workers from injury. Because it is related shutdowns is to minimize the allowed to cool, or wood dust) due to unsafe to continue to route process duration of the event by promptly various conditions (e.g., if PCWP gases to the control system, the control ceasing the addition of raw materials process equipment or pneumatic system will be bypassed as the process and heat to the process and removing conveying systems become plugged). If quickly shuts down, in many cases materials from process equipment as there are sparks or fire in the PCWP soon as possible (although in some process unit, conveyance, or the control automatically, through a system of instances it is safer to have the material device, the equipment could be interlocks designed to prevent remain in the process equipment to damaged if exhaust continues to be dangerous conditions from occurring. contain a problem such as a fire). routed from the PCWP process unit to In order to clarify what constitutes a A separate commenter opposed the the control device. A PCWP dryer or safety-related shutdown, the EPA EPA’s proposed safety-related shutdown control device may experience an over- proposed a new definition in 40 CFR work practice standards, arguing that temperature condition indicative of a 63.2292 defining a safety-related the EPA has not explained how the fire and triggering rapid equipment shutdown as an unscheduled shutdown criteria under CAA section 112(h) are isolation. Thus, conveying emissions of a process unit subject to a compliance met to provide the EPA the statutory from the PCWP process unit to the option in Table 1B to 40 CFR part 63, authority to set work practices. The control device is not technically feasible subpart DDDD, (or a process unit with commenter stated that the work practice during safety-related shutdowns. HAP control under an emissions standards the EPA proposed are too lax Further, application of measurement averaging plan developed according to because they are written by the facilities methodology is not practicable due to 40 CFR 63.2240(c)) during which time with no requirement for approval by the technological and economic limitations. emissions from the process unit cannot EPA. The commenter contended that the Safety-related shutdowns are brief be safely routed to the control system in work practices will not achieve events that are incorporated into the place to meet the compliance options or ‘‘maximum’’ emission reduction process design for safety reasons but are operating requirements in subpart because they only instruct facilities to not desirable operating conditions that DDDD without imminent danger to the protect workers and process equipment, constitute normal operations. Even if process, control system, or system with no reference to reducing air staged especially for an emissions operator. The EPA also proposed a work emissions. The commenter urged the measurement (which is economically practice standard for safety-related EPA to clarify how recordkeeping impracticable due to lost production), shutdowns requiring facilities to follow requirements would apply in the the duration of safety-related shutdowns documented site-specific procedures context of work practice standards. The is necessarily brief (i.e., minutes), less such as use of automated controls or full comments and our responses than the 1 hour it takes to collect a other measures developed to protect pertaining to safety-related shutdowns single emissions measurement sample if workers and equipment to ensure that are included in the RTC document. the equipment is set up and the flow of raw materials (such as According to CAA section 112(h)(1), measurement contractors are onsite furnish or resin) and fuel or process heat MACT standards may take the form of ready to sample, let alone the 3 hours (as applicable) ceases and that material design, equipment, work practice, or needed for a full emissions test. Because

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a full emissions measurement sample requirement under 40 CFR for a brief time after they are initially cannot be obtained during a safety- 63.2282(a)(2)(i). Finally, a reporting fed wood material during startup and as related shutdown, application of requirement was added to 40 CFR wood material clears the refiner during measurement methodology is not 63.2281(c)(4) to require facilities to shutdown because they are not practicable due to technological report the number of instances and total producing useable fiber suitable for limitations in addition to being amount of time during the reporting drying or producing PCWP products economically impracticable. Therefore, period when the safety-related (hardboard or MDF). During this time, it is the EPA’s determination that shutdown work practice is used. If the instead of the pressurized refiner output PCWP-industry safety-related safety-related shutdown work practice is being discharged into the dryer, exhaust shutdowns meet the criteria in CAA used for more than 100 hours during a is vented to the atmosphere (e.g., section 112(h)(2)(B). reporting period, the facility must report through an abort cyclone) and the wood Based on our authority to set work the date, time, and duration of each is directed to a reclaim bin for storage practices, the EPA is finalizing a instance when the work practice was and, commonly, recycling back into the definition of ‘‘safety-related shutdown’’ used. The EPA has concluded that these refining process once it is running in 40 CFR 63.2292 and finalizing a work initial compliance and ongoing steadily. No resin is mixed with the off- practice for these shutdown events. The recordkeeping and reporting measures specification material and the time work practice is designed to be are sufficient to provide delegated periods are short (e.g., 15 minutes or consistent with actions commonly authorities with information needed for less) before the pressurized refiner undertaken by facilities to protect plant oversight. begins to discharge wood fiber and In addition, to clarify requirements, personnel, production equipment, and exhaust through the dryer and when the 40 CFR 63.2250(f)(6) was added to the control equipment from dangerous refiner is shutting down. final rule to state that the otherwise The EPA proposed a work practice circumstances like fires and explosions. applicable compliance options, requirement in Table 3 of the rule (40 The final work practice requires operating requirements, and work CFR part 63, subpart DDDD) to apply facilities to follow documented site- practice requirements (in rows 1 during pressurized refiner startup and specific procedures such as use of through 5 of Table 3 to 40 CFR part 63, shutdown that limits the amount of time automated controls or other measures subpart DDDD) do not apply when the (and, thus, emissions) when wood is developed to protect workers and startup/shutdown work practices apply being processed through the system equipment to ensure that the flow of (i.e., the work practices in rows 6 while exhaust is not routed through the raw materials (such as furnish or resin) through 8 of Table 3 to subpart DDDD dryer to its control system. This practice and fuel or process heat (as applicable) for safety-related shutdown, pressurized is consistent with how the best- ceases and that material is removed refiner startup and shutdown, and performing facilities complete startup from the process unit(s) as expeditiously softwood veneer dryer gas-burner and shutdown of pressurized refiners. as possible given the system design to relights). Thus, compliance with the The proposed work practice stated that reduce air emissions. The phrase ‘‘to startup/shutdown work practices (in facilities must route exhaust gases from reduce air emissions’’ was added to the Table 3 to subpart DDDD, rows 6 the pressurized refiner to its control standard to address the concern through 8) does not constitute a failure system no later than 15 minutes after expressed by one commenter that the to meet the otherwise applicable furnish is fed from the pressurized work practice should direct facilities to compliance options, operating refiner to the tube dryer when starting consider air quality. The actions requirements, and work practice up, and no more than 15 minutes after required by the safety-related shutdown requirements because these furnish ceases to be fed to the work practice represent the maximum requirements do not apply while the pressurized refiner when shutting degree of emissions reduction startup/shutdown work practices apply. down. achievable because they limit the Finally, 40 CFR 63.2271(b)(4) was added Comments were received both amount of time, as well as the flow of to clarify that instances when the supporting and opposing the raw materials and fuel into the process, startup/shutdown work practice pressurized refiner startup and and, therefore, emissions from the requirements are used (as reported shutdown work practice standard. process undergoing safety-related under 40 CFR 63.2281(c)(4)) are not Commenters supporting the work shutdown. Rule language relating to the considered to be deviations from (or practice stated that periods of startup safety-related shutdown work practice violations of) the otherwise applicable and shutdown of pressurized refiners was strengthened for the final rule in compliance options, operating meet the CAA section 112(h) criteria for response to the commenter’s concern requirements, and work practice establishing a work practice standard, that the EPA is giving full discretion to requirements (in rows 1 through 5 of while commenters opposing the work the facilities to develop their safety- Table 3 to subpart DDDD) as long as practice argued that the EPA does not related shutdown work practices for facilities do not exceed the minimum have statutory authority to apply work their own equipment configurations amount of time necessary for these practice standards instead of numerical without oversight by the EPA. To events. emissions limits to pressurized refiner strengthen the standard, the EPA added startup and shutdown periods. an initial compliance requirement to b. Pressurized Refiner Startups and Commenters in support of the EPA’s Table 6 of the final rule to clarify that Shutdowns proposed work practice standard for facilities must have a record of safety- Pressurized refiners use steam to heat startup and shutdown of pressurized related shutdown procedures available and soften wood under pressure to grind refiners noted that the language of the for inspection by the delegated authority it apart between rotating discs into standard in Table 3 to 40 CFR part 63, upon request. In addition, a fibers. Pressurized refiners discharge subpart DDDD appears to have a recordkeeping requirement was added wood fiber and exhaust gases from typographical error. The commenters to Table 8 of the final rule to ensure refining directly into a primary tube suggested rewording the standard in documentation is available to track dryer. Pressurized refiners cannot be Table 3 so that it instructs facilities to when the work practice is used, vented through the dryer to the control route exhaust gases from the pressurized consistent with the proposed system (i.e., the dryer control system) refiner to the dryer control system no

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later than 15 minutes after wood is fed clarification and has rewritten the routed to the control system as to the pressurized refiner when starting standard for the final rule to instruct expeditiously as possible following the up and to stop wood flow to the facilities to route exhaust gases from the burner re-light. Therefore, the pressurized refiner no more than 15 pressurized refiner to its dryer control commenter stated a dryer gas burner re- minutes after wood fiber stops being fed system no later than 15 minutes after lighting startup work practice is needed to the dryer from the pressurized wood is fed to the pressurized refiner for the same reasons as a safety refiner. The commenter opposing the during startup, and to stop wood flow shutdown work practice. However, work practice standard also questioned into the pressurized refiner no more because 40 CFR 63.2250(d) deals with the timing and recordkeeping than 15 minutes after wood fiber and dryer re-lights by defining them as requirements. The full comments and exhaust gases from the pressurized startups, and the proposed rulemaking our responses pertaining to pressurized refiner stop being routed to the dryer no longer contains a general exemption refiners are included in the RTC during shutdown. In addition, we for startups, the commenter stated that document. strengthened the work practice for some provision is needed for veneer In response to these comments, the startup/shutdown of pressurized dryer gas burner lighting and re-lighting. EPA concluded pressurized refiner refiners in the final rule by clarifying In response to this comment, the EPA startup and shutdown events meet the when the startup/shutdown work added a work practice to Table 3 of the criteria in CAA section 112(h)(2)(B). practice applies in 40 CFR 63.2250(f)(6), final rule to clarify the requirements Pressurized refiners are a particular adding an initial compliance surrounding softwood veneer dryer gas- class of sources where emissions are requirement to Table 6 of 40 CFR part fired burner relights to ensure a associated with wood processed through 63, subpart DDDD, and adding a standard applies continuously once the the refiner. Pressurized refiners cannot recordkeeping requirement to Table 8 of SSM plan is no longer required. The discharge unusable fiber through the subpart DDDD to track when the work work practice requires direct-fired tube dryer and its control system during practice is used, consistent with the softwood veneer dryers undergoing startup and shutdown. Because venting proposed requirement under 40 CFR startup or shutdown of gas-fired burners through the pressurized refiner abort 63.2282(a)(2)(i). Continuous compliance to cease feeding green veneer into the cyclone during startup and shutdown of and reporting provisions were also softwood veneer dryer and minimize the pressurized refiners typically lasts 15 added in 40 CFR 63.2271(b)(4) and amount of time direct gas-fired softwood minutes or less, there are technological 63.2281(c)(4), respectively, to provide veneer dryers are vented to the limitations to measuring emissions clarity and aid in enforceability of the atmosphere due to the conditions because HAP measurement methods work practice requirement. described in 40 CFR 63.2250(d). Related require a 1-hour sampling time per test text was added to 40 CFR 63.2250(f) run, and a total of three test runs. The c. Veneer Dryer Burner Relights noting the work practice in Table 3 of only way to obtain the required sample An issue with veneer dryer burner 40 CFR part 63, subpart DDDD, applies would be to operate in abort mode for relights stemming from removal of the when the otherwise applicable each 1-hour sampling time. However, SSM exemption was raised during the compliance options and operating abort ‘‘bins’’ used to collect the off-spec comment period for the proposed requirements in the rule cannot be met. wood furnish dumped from the system amendments. The EPA received a An initial compliance requirement was are not designed like material collection comment seeking clarification for direct- added to Table 6 of subpart DDDD to bins or silos for useable furnish at wood fired softwood veneer dryers undergoing have a record of the procedures for products facilities. Instead, the abort relights of gas-fired burners. startup and shutdown of softwood ‘‘bins’’ are often areas where off-spec Specifically, the commenter noted that veneer dryer gas-fired burners available fiber is dumped on the ground between 40 CFR 63.2250(d) of the current PCWP for inspection upon request by the concrete wind-breaks where it is rule defines shutoff of direct-fired delegated authority. In addition, a removed with a front-end loader. Such burners resulting from partial or full recordkeeping requirement was added areas do not have the capacity for production stoppages as shutdowns and to Table 8 of subpart DDDD to track dumping large amounts of fiber as the lighting or re-lighting of any one or when the work practice is used, would be needed to stage an event for all gas burners in direct-fired softwood consistent with the proposed 1 to 3 hours of testing, presenting veneer dryers as startups and not a requirement under 40 CFR another technological limitation. malfunction. The commenter noted that 63.2282(a)(2)(i). Continuous compliance Staging abort dumping of 1 to 3 hours the EPA proposed no changes to 40 CFR and reporting provisions were also of fiber production also presents 63.2250(d) which was originally added in 40 CFR 63.2271(b)(4) and obvious economic limitations due to included in the PCWP rule to clarify 63.2281(c)(4), respectively, to provide lost production for that time and loss or that veneer dryer burner relights are not clarity and aid in enforceability of the degradation of valuable fiber raw malfunctions due to their frequency. In work practice requirement. Conforming material. Finally, measuring emissions the 2004 promulgated standard, these changes to refer to the veneer dryer during pressurized refiner startup and startup/shutdown events were required burner relight work practice with the shutdown is impractical because the to be addressed under the SSM plan. other startup/shutdown work practices PCWP NESHAP requires emissions The commenter explained that were also made throughout the rule. measurement under representative following the flame out of the burner, Further clarification with respect to operating conditions that are the the dryer could contain non-combusted 40 CFR 63.2250(d) is needed as a result conditions under which the process unit natural gas that must be purged prior to of our proposal to remove the SSM typically operates, excluding periods of safely re-lighting the gas burners. Non- exemption (including the SSM plan). startup and shutdown. Therefore, the combusted natural gas cannot be The EPA determined that a work EPA is finalizing a work practice for exhausted to the control device due to practice is appropriate during direct- pressurized refiner startup and safety concerns and must be vented fired softwood veneer dryer startups/ shutdown periods. along with whatever process emissions shutdowns of gas-fired burners because The EPA agrees that the wording of are in the dryer. The length of the purge the conditions of CAA section the proposed work practice standard for varies based on system design, but only 112(h)(2)(A) and (B) are both present pressurized refiners in Table 3 needed lasts a matter of minutes. Emissions are during veneer dryer burner relights.

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Facilities cannot capture and convey category. There is nothing in CAA other eventualities, must be a matter for HAP emissions to a control device section 112 that directs the Agency to the administrative exercise of case-by- during these periods for safety reasons. consider malfunctions in determining case enforcement discretion, not for The control device for the veneer dryer the level ‘‘achieved’’ by the best specification in advance by could serve as an ignition source if there performing sources when setting regulation.’’). In addition, emissions is an upset in the oxygen concentration emission standards. As the Court has during a malfunction event can be or increase in the natural gas recognized, the phrase ‘‘average significantly higher than emissions at concentration in the system. Thus, is it emissions limitation achieved by the any other time of source operation. For not technically feasible for HAP best performing 12 percent of’’ sources example, if an air pollution control emissions to be conveyed to the control ‘‘says nothing about how the device with 99-percent removal goes off- device during startups/shutdowns performance of the best units is to be line as a result of a malfunction (as associated with softwood veneer dryer calculated.’’ Nat’l Ass’n of Clean Water might happen if, for example, the bags gas-burner relights. Further, application Agencies v. EPA, 734 F.3d 1115, 1141 in a baghouse catch fire) and the of measurement methodology is not (D.C. Cir. 2013). While the EPA emission unit is a steady state type unit practicable due to technological and accounts for variability in setting that would take days to shut down, the economic limitations. Softwood veneer emissions standards, nothing in CAA source would go from 99-percent dryer burner relights are brief events section 112 requires the Agency to control to zero control until the control that take less than the 1 hour it takes to consider malfunctions as part of that device was repaired. The source’s collect a single emissions measurement analysis. The EPA is not required to emissions during the malfunction sample if the equipment is set up and treat a malfunction in the same manner would be 100 times higher than during measurement contractors are onsite as the type of variation in performance normal operations. As such, the ready to sample, let alone the 3 hours that occurs during routine operations of emissions over a 4-day malfunction needed for a full emissions test. Because a source. A malfunction is a failure of period would exceed the annual a full emissions measurement sample the source to perform in a ‘‘normal or emissions of the source during normal cannot be obtained while softwood usual manner’’ and no statutory operations. As this example illustrates, veneer dryers are undergoing gas-burner language compels the EPA to consider accounting for malfunctions could lead relights, application of measurement such events in setting CAA section 112 to standards that are not reflective of methodology is not practicable due to standards. (and significantly less stringent than) technological limitations. In addition, levels that are achieved by a well- As the Court recognized in U.S. Sugar attempting to stage softwood veneer performing non-malfunctioning source. Corp, accounting for malfunctions in dryer burner relights for purposes of It is reasonable to interpret CAA section setting standards would be difficult, if emissions measurement is economically 112 to avoid such a result. The EPA’s not impossible, given the myriad impracticable because veneer is not approach to malfunctions is consistent different types of malfunctions that can being dried or moving through the with CAA section 112 and is a occur across all sources in the category veneer dryer when the burners are not reasonable interpretation of the statute. and given the difficulties associated lit, resulting in a production loss during Although no statutory language testing. Therefore, the EPA concludes with predicting or accounting for the compels the EPA to set standards for that direct-fired softwood veneer dryers frequency, degree, and duration of malfunctions, the EPA has the undergoing startup/shutdown of gas- various malfunctions that might occur. discretion to do so where feasible. For fired burners meet the criteria in CAA Id. at 608 (‘‘the EPA would have to example, in the Petroleum Refinery section 112(h)(2)(B). conceive of a standard that could apply Sector RTR, the EPA established a work equally to the wide range of possible practice standard for unique types of 3. Periods of Malfunction boiler malfunctions, ranging from an malfunction that result in releases from Periods of startup, normal operations, explosion to minor mechanical defects. pressure relief devices or emergency and shutdown are all predictable and Any possible standard is likely to be flaring events because the EPA had routine aspects of a source’s operations. hopelessly generic to govern such a information for that source category to Malfunctions, in contrast, are neither wide array of circumstances’’). As such, determine that such work practices predictable nor routine. Instead they the performance of units that are reflected the level of control that applies are, by definition, sudden, infrequent, malfunctioning is not ‘‘reasonably’’ to the best performers. 80 FR 75178, and not reasonably preventable failures foreseeable. See e.g., Sierra Club v. EPA, 75211–14 (December 1, 2015). In the of emissions control, process, or 167 F.3d 658, 662 (D.C. Cir. 1999) (‘‘The proposed rulemaking for the PCWP, the monitoring equipment (40 CFR 63.2) EPA typically has wide latitude in EPA did not propose a work practice (Definition of malfunction). The EPA determining the extent of data-gathering standard for malfunctions but instead interprets CAA section 112 as not necessary to solve a problem. We stated that the EPA would consider requiring emissions that occur during generally defer to an agency’s decision whether circumstances warrant setting periods of malfunction to be factored to proceed on the basis of imperfect standards for a particular type of into development of CAA section 112 scientific information, rather than to malfunction and, if so, whether the EPA standards and this reading has been ‘invest the resources to conduct the has sufficient information to identify the upheld as reasonable by the Court in perfect study.’’’). See also, relevant best performing sources and U.S. Sugar Corp. v. EPA, 830 F.3d 579, Weyerhaeuser v. Costle, 590 F.2d 1011, establish a standard for such 606–610 (2016). Under CAA section 1058 (D.C. Cir. 1978) (‘‘In the nature of malfunctions. The EPA encouraged 112, emissions standards for new things, no general limit, individual commenters to provide any such sources must be no less stringent than permit, or even any upset provision can information. the level ‘‘achieved’’ by the best anticipate all upset situations. After a Numerous comments were received controlled similar source and for certain point, the transgression of supporting and opposing the EPA’s existing sources generally must be no regulatory limits caused by decision not to set a standard for less stringent than the average emission ‘uncontrollable acts of third parties,’ malfunctions. One commenter opposed limitation ‘‘achieved’’ by the best such as strikes, sabotage, operator to the EPA’s decision stated that there performing 12 percent of sources in the intoxication or insanity, and a variety of are several options the EPA could use

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for setting emission standards under for periods of malfunction. In the PCWP b. SSM Plan CAA section 112 that would apply proposed rulemaking, we requested The EPA is finalizing revisions to the during malfunction events. For comment and information to support General Provisions table (Table 10) to example, the commenter stated that the the development of a work practice add an entry for 40 CFR 63.6(e)(3) by EPA might be able to establish a standard during periods of malfunction, changing the ‘‘yes’’ in column 4 to a numerical emission limitation that but we did not receive sufficient ‘‘no’’ in column 5. Generally, the applies at all times but has an averaging information, including additional paragraphs under 40 CFR 63.6(e)(3) time of sufficient duration that short, quantitative emissions data, on which to require development of an SSM plan infrequent spikes in emissions due to base a standard for periods of and specify SSM recordkeeping and malfunctions would not cause the malfunction. Absent sufficient reporting requirements related to the source to exceed the emission limitation information, it is not reasonable at this SSM plan. As noted, the EPA is (while at the same time ensuring that time to establish a work practice finalizing removal of the SSM the source does not operate in a way standard for malfunctions for this exemptions. Therefore, affected units that causes frequent, lengthy excursions source category. will be subject to an emission standard above the normal controlled emission during such events. The applicability of rate). The EPA also could use the 4. Revisions to Table 10 to Subpart flexibility accorded by CAA section DDDD of Part 63 a standard during such events will 302(k) (which defines ‘‘emission ensure that sources have ample The EPA proposed several specific incentive to plan for and achieve limitation’’ and ‘‘emission standard’’ to revisions to Table 10 to subpart DDDD include ‘‘any requirement relating to the compliance and, thus, the SSM plan of part 63 (the General Provisions table) requirements are no longer necessary. operation or maintenance of a source to to establish standards in this rule that ensure continuous emission reduction, apply at all times. The EPA is finalizing c. Compliance With Standards and any design, equipment, work the amendments as proposed, with the The EPA is finalizing revisions to the practice or operational standard clarifications noted in the following General Provisions table (Table 10) promulgated under’’ the CAA) to sections. The specific revisions are entry for 40 CFR 63.6(f)(1) by changing address emissions during malfunction described in the remainder of this the ‘‘yes’’ in column 4 to a ‘‘no’’ in events through operational requirements section. rather than by applying the same limits columns 4 and 5. The final revision in on pollutant emissions that apply a. General Duty (40 CFR 63.2250) column 4 refers to 40 CFR 63.2250(a). during normal operations. Similarly, the The current language of 40 CFR The EPA is finalizing the General 63.6(f)(1) exempts sources from non- commenter stated the EPA has grounds Provisions table (Table 10) entry for 40 to exercise its authority under CAA opacity standards during periods of CFR 63.6(e)(1) and (2) by redesignating SSM. As discussed in section IV.C.1 of section 112(h) to promulgate a design, it as 40 CFR 63.6(e)(1)(i) and changing equipment, work practice, or this preamble, the Court in Sierra Club the ‘‘yes’’ in column 4 to a ‘‘no’’ in v. EPA vacated the exemptions operational standard, or combination column 5 which was added to specify thereof, because it is not feasible to contained in this provision and held requirements 1 year after the effective that the CAA requires that some CAA prescribe or enforce an emission date of the final amendments. Section standard. The commenter noted that section 112 standards apply 63.6(e)(1)(i) describes the general duty continuously. Consistent with the Court even if the EPA does not identify a set to minimize emissions. Some of the of specific work practices that all decision, the EPA is finalizing the language in that section is no longer affected facilities can follow that revised standards in this rule to apply necessary or appropriate in light of the represent best practices for minimizing at all times. elimination of the SSM exemption. The emissions during malfunctions, the EPA The EPA is finalizing revisions to the EPA is instead adding a general duty might instead be able to address General Provisions table (Table 10) regulatory text at 40 CFR 63.2250 that malfunctions through a set of criteria entry for 40 CFR 63.6(h)(1) through (9) reflects the general duty to minimize that allows facilities to develop and by redesignating it as 40 CFR 63.6(h)(1) emissions while eliminating the follow a site-specific plan for and changing the ‘‘NA’’ in column 4 to reference to periods covered by an SSM minimizing the extent and duration of a ‘‘no’’ in column 5. The current exemption. The current language in 40 excess emissions during malfunctions. language of 40 CFR 63.6(h)(1) exempts The commenter suggested that the EPA CFR 63.6(e)(1)(i) characterizes what the sources from opacity standards during might use several of these approaches in general duty entails during periods of periods of SSM. As discussed in section combination and stated that SSM. With the elimination of the SSM IV.C.1 of this preamble, the Court in accommodating malfunctions need not exemption, there is no need to Sierra Club vacated the exemptions result in either an exemption or an differentiate between normal operations, contained in this provision and held increased numerical emission startup and shutdown, and malfunction that the CAA requires that some CAA limitation. The commenter urged the events in describing the general duty. section 112 standards apply EPA to use its authority under CAA Therefore, the language the EPA is continuously. Consistent with the Court sections 112 and 302(k) to address finalizing for 40 CFR 63.2250 does not decision, the EPA is finalizing the malfunctions in a reasonable, CAA include that language from 40 CFR revised standards in this rule to apply section 112-compliant manner. 63.6(e)(1). at all times. Conversely, another commenter The EPA is also revising the General d. Performance Testing (40 CFR supported the EPA’s proposed removal Provisions table (Table 10) by adding an 63.2262) of unlawful SSM exemptions in all entry for 40 CFR 63.6(e)(1)(ii) and forms because the CAA requires including a ‘‘no’’ in column 5. Section The EPA is finalizing revisions to the standards to apply continuously, and 63.6(e)(1)(ii) imposes requirements that General Provisions table (Table 10) the Court precedent is a development are not necessary with the elimination entry for 40 CFR 63.7(e)(1) by changing since the prior standards were issued. of the SSM exemption or are redundant the ‘‘yes’’ in column 4 to a ‘‘no’’ in After considering all comments, the with the general duty requirement being column 5. Section 63.7(e)(1) describes EPA is not finalizing a separate standard added at 40 CFR 63.2250. performance testing requirements. The

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EPA is finalizing instead the addition of program for monitoring equipment (40 affected source or equipment and a performance testing requirement at 40 CFR 63.8(d)). actions taken to minimize emissions, an CFR 63.2262(a) and (b). The The EPA is finalizing revisions to the estimate of the quantity of each performance testing requirements the General Provisions table (Table 10) by regulated pollutant emitted over the EPA is adding differ from the General adding an entry for 40 CFR 63.8(d)(3) compliance option in 40 CFR 63.2240 Provisions performance testing and including a ‘‘no’’ in column 5. The the source failed to meet (including the provisions in several respects. The final sentence in 40 CFR 63.8(d)(3) compliance options in Table 1A or B to regulatory text does not include the refers to the General Provisions’ SSM 40 CFR part 63, subpart DDDD, or the language in 40 CFR 63.7(e)(1) that plan requirement which is no longer emissions averaging compliance restated the SSM exemption. The applicable. The EPA is finalizing adding option), and a description of the method finalized performance testing provisions to the rule at 40 CFR 63.2282(f) text that used to estimate the emissions. remove reference to 40 CFR 63.7(e)(1), is identical to 40 CFR 63.8(d)(3) except Examples of such methods would reiterate the requirement that was that the final sentence is replaced with include product-loss calculations, mass already included in the PCWP rule to the following sentence: ‘‘The program of balance calculations, measurements conduct emissions tests under corrective action should be included in when available, or engineering representative operating conditions, and the plan required under 40 CFR judgment based on known process clarify that representative operating 63.8(d)(2).’’ parameters. The EPA is finalizing the conditions excludes periods of startup f. Recordkeeping (40 CFR 63.2282) requirement that sources keep records of and shutdown. As in 40 CFR 63.7(e)(1), this information to ensure that there is performance tests conducted under this The EPA is finalizing revisions to the adequate information to allow the EPA subpart should not be conducted during General Provisions table (Table 10) to determine the severity of any failure entry for 40 CFR 63.10(b)(2)(i) through malfunctions because conditions during to meet a standard, and to provide data (iv) by redesignating it as 40 CFR malfunctions are not representative of that may document how the source met 63.10(b)(2)(i) and changing the ‘‘yes’’ in normal operating conditions. The EPA the general duty to minimize emissions column 4 to a ‘‘no’’ in column 5. Section is finalizing added language that when the source has failed to meet an 63.10(b)(2)(i) describes the requires the owner or operator to record applicable standard. For each failure to recordkeeping requirements during the process information that is meet an operating requirement in Table startup and shutdown. The EPA is necessary to document operating 2 to subpart DDDD or work practice finalizing instead the addition of conditions during the test and include requirement in Table 3 to subpart recordkeeping requirements to 40 CFR in such record an explanation to DDDD, facilities must maintain 63.2282(a). When a source is subject to sufficient information to estimate the support that such conditions are a different standard during startup and representative. Section 63.7(e) requires quantity of each regulated pollutant shutdown, it will be important to know emitted over the emission limit. This that the owner or operator make when such startup and shutdown available to the Administrator such information must be sufficient to periods begin and end to determine provide a reliable emissions estimate if records ‘‘as may be necessary to compliance with the appropriate determine the condition of the requested by the Administrator. standard. Thus, the EPA is finalizing The EPA is finalizing revisions to the performance test’’ upon request but does adding language to 40 CFR 63.2282(a) not specifically require the information General Provisions table (Table 10) by requiring that sources subject to an adding an entry for 40 CFR to be recorded. The added regulatory emission standard during startup or 63.10(b)(2)(iv) and including a ‘‘no’’ in text to this provision that the EPA is shutdown that differs from the emission column 5. When applicable, the finalizing builds on that requirement standard that applies at all other times provision requires sources to record and makes explicit the requirement to must record the date, time, and duration actions taken during SSM events when record the information. of such periods. actions were inconsistent with their The EPA is also finalizing the The EPA is finalizing revisions to the SSM plan. The requirement is no longer definition of ‘‘representative operating General Provisions table (Table 10) by appropriate because SSM plans will no conditions’’ in 40 CFR 63.2292 to clarify adding an entry for 40 CFR longer be required. The requirement that it excludes periods of startup and 63.10(b)(2)(ii) and including a ‘‘no’’ in previously applicable under 40 CFR shutdown. Representative operating column 5. Section 63.10(b)(2)(ii) 63.10(b)(2)(iv)(B) to record actions to conditions include a range of operating describes the recordkeeping minimize emissions and record conditions under which the process unit requirements during a malfunction. The corrective actions is now applicable by and control device typically operate and EPA is finalizing the addition of such reference to 40 CFR 63.2282(a). are not limited to conditions of optimal requirements to 40 CFR 63.2282(a). The The EPA is finalizing revisions to the performance of the process unit and final regulatory text the EPA is adding General Provisions table (Table 10) by control device. differs from the General Provisions it is adding 40 CFR 63.10(b)(2)(v) to the replacing in that the General Provisions e. Monitoring entry for 40 CFR 63.10(b)(2)(iv) and requires the creation and retention of a including a ‘‘no’’ in column 5. When The EPA is finalizing revisions to the record of the occurrence and duration of applicable, the provision requires General Provisions table (Table 10) each malfunction of process, air sources to record actions taken during entry for 40 CFR 63.8(c)(1)(i) and (iii) by pollution control, and monitoring SSM events to show that actions taken changing the ‘‘yes’’ in column 4 to a equipment. The EPA is finalizing this were consistent with their SSM plan. ‘‘no’’ in column 5. The cross-references requirement to apply to any failure to The requirement is no longer to the general duty and SSM plan meet an applicable standard and is appropriate because SSM plans will no requirements in those subparagraphs are requiring that the source record the longer be required. not necessary in light of other date, time, and duration of the failure The EPA is finalizing revisions to the requirements of 40 CFR 63.8 that require rather than the ‘‘occurrence.’’ The EPA General Provisions table (Table 10) by good air pollution control practices (40 is also finalizing adding to 40 CFR adding an entry for 40 CFR 63.10(c)(15) CFR 63.8(c)(1)) and that set out the 63.2282(a) a requirement that sources and including a ‘‘no’’ in column 5. The requirements of a quality control keep records that include a list of the EPA is finalizing that 40 CFR

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63.10(c)(15) no longer apply. When be required to be recorded or reported stopped, and whether each deviation applicable, the provision allows an for failure to meet an emission limit. As occurred during a period of SSM. owner or operator to use the affected explained in the RTC document D. Electronic Reporting source’s SSM plan or records kept to included in the docket, EPA agrees that satisfy the recordkeeping requirements precise measurement of PCWP process The EPA proposed that owners or of the SSM plan, specified in 40 CFR unit emissions during an operating operators of PCWP facilities submit 63.6(e), to also satisfy the requirements requirement deviation under the PCWP electronic copies of required of 40 CFR 63.10(c)(10) through (12). The NESHAP is challenging unless the performance test reports, performance EPA is finalizing eliminating this failure occurs during a performance test. evaluation reports for continuous requirement because SSM plans would Therefore, 40 CFR 63.2281(e)(12) was monitoring systems (CMS) measuring no longer be required, and, therefore, 40 updated for the final rule to require relative accuracy test audit (RATA) CFR 63.10(c)(15) no longer serves any reporting of an emission estimate only pollutants (i.e., total hydrocarbon useful purpose for affected units. for failures to meet the numerical monitors), selected notifications, and semiannual reports through the EPA’s g. Reporting (40 CFR 63.2281) emission compliance options in 40 CFR 63.2240, including the compliance Central Data Exchange (CDX) using the The EPA is finalizing revisions to the options in Table 1A or 1B of subpart CEDRI. The EPA proposed that General Provisions table (Table 10) DDDD or the emissions averaging performance test results collected using entry for 40 CFR 63.10(d)(5) by compliance option. As noted in section test methods that are supported by the redesignating it as 40 CFR 63.10(d)(5)(i) IV.C.4.f of this preamble, 40 CFR EPA’s Electronic Reporting Tool (ERT) 5 and changing the ‘‘yes’’ in column 4 to 63.2282(a) requires recordkeeping of as listed on the ERT website at the time a ‘‘no’’ in column 5. Section sufficient information to provide an of the test be submitted in the format 63.10(d)(5)(i) describes the reporting emissions estimate associated with generated through the use of the ERT requirements for SSM events. To replace failure to meet an operating or work and that other performance test results the General Provisions reporting practice requirement, if requested by the be submitted in portable document requirement, the EPA is finalizing Administrator. format (PDF) using the attachment adding reporting requirements to 40 module of the ERT. Similarly, The EPA will no longer require CFR 63.2281(d) and (e). The performance evaluation results of CMS owners or operators to determine replacement language differs from the measuring RATA pollutants that are whether actions taken to correct a General Provisions requirement in that supported by the ERT at the time of the malfunction are consistent with an SSM it eliminates periodic SSM reports as a test would be submitted in the format plan, because plans would no longer be stand-alone report. The EPA is generated through the use of the ERT required. The finalized amendments, finalizing language that requires sources and other performance evaluation that fail to meet an applicable therefore, eliminate the cross-reference results be submitted in PDF using the compliance option in 40 CFR 63.2240 at to 40 CFR 63.10(d)(5)(i) that contains attachment module of the ERT. any time to report the information the description of the previously For the PCWP semiannual report, the concerning such events in the required SSM report format and EPA proposed that owners or operators semiannual compliance report already submittal schedule from this section. use a spreadsheet template to submit required under this rule. The EPA is These specifications are no longer information to CEDRI. A draft version of finalizing that the report must contain necessary because the events will be the spreadsheet template for this report the number, date, time, duration, and reported in otherwise required reports was included in the docket for the the cause of such events (including with similar format and submittal proposed rulemaking and the EPA unknown cause, if applicable), a list of requirements. specifically requested comment on its the affected source or equipment, an The EPA is finalizing revisions to the content, layout, and overall design.6 The estimate of the quantity of each General Provisions table (Table 10) by EPA also proposed to require future regulated pollutant emitted over any adding an entry for 40 CFR initial notifications developed according emission limit, and a description of the 63.10(d)(5)(ii) and including a ‘‘no’’ in to 40 CFR 63.2280(b) and notifications method used to estimate the emissions. column 5. Section 63.10(d)(5)(ii) of compliance status developed Examples of such methods would describes an immediate report for SSM according to 40 CFR 63.2280(d) to be include product-loss calculations, mass events when a source failed to meet an uploaded in CEDRI in a user-specified balance calculations, measurements applicable standard but did not follow (e.g., PDF) format. In addition, the EPA when available, or engineering the SSM plan. The EPA will no longer proposed two broad circumstances in judgment based on known process require owners or operators to report which electronic reporting extensions parameters. The EPA is finalizing this when actions taken during an SSM may be granted. In both circumstances, requirement to ensure that there is event were not consistent with an SSM the decision to accept the claim of adequate information to determine plan, because plans would no longer be needing additional time to report is compliance, to allow the EPA to required. within the discretion of the determine the severity of the failure to Also, the EPA is removing and Administrator, and reporting should meet an applicable standard, and to reserving 40 CFR 63.2281(e)(1) which occur as soon as possible. The EPA provide data that may document how required reporting of the date and time proposed these potential extensions to the source met the general duty to when each malfunction started and protect owners or operators from minimize emissions during a failure to stopped. As discussed in section noncompliance in cases where they meet an applicable standard. IV.C.4.f of this preamble, reporting is cannot successfully submit a report by A commenter on the proposed required for deviations from the the reporting deadline for reasons rulemaking stated that facilities may not applicable standard as opposed to every have information to estimate emissions malfunction occurrence regardless of 5 https://www.epa.gov/electronic-reporting-air- resulting from a deviation from an whether it results in a failure to meet emissions/electronic-reporting-tool-ert. 6 See 40 CFR part 63, subpart DDDD—Plywood operating parameter limit (e.g., low the standard. Section 40 CFR and Composite Wood Products Semiannual oxidizer or biofilter temperature), and 63.2281(e)(4) requires reporting of the Compliance Reporting Spreadsheet Template, requested that emissions estimates only date and time each deviation started and Docket Item No. EPA–HQ–OAR–2016–0243–0176.

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outside of their control. The situation continuous parameter monitoring efficiency testing and requested due to where an extension may be warranted systems. In response to these requests cost, that repeat press capture efficiency due to outages of the EPA’s CDX or for clarification, we revised Table 9 to testing only be required if an alteration CEDRI which precludes an owner or subpart DDDD to refer to state the CMS has been made to the enclosure that operator from accessing the system and performance evaluation to be reported is would significantly affect its efficacy. In submitting required reports is addressed the performance evaluation required for response to this comment, a footnote in 40 CFR 63.2281(k). The situation CEMS under 40 CFR 63.2269(d)(2). As was added to Table 7 to 40 CFR part 63, where an extension may be warranted discussed in section IV.G of this subpart DDDD, clarifying that capture due to a force majeure event, which is preamble, for the final rule, we also efficiency demonstration is not required defined as an event that will be or has revised Table 10 of subpart DDDD to with repeat performance tests if the been caused by circumstances beyond clarify that the CMS performance capture device is maintained and the control of the affected facility, its evaluation provisions in 40 CFR 63.8(e) operated consistent with its design as contractors, or any entity controlled by and the RATA provisions in 40 CFR well as its operation during the previous the affected facility that prevents an 63.8(f)(6) only apply for CEMS under capture efficiency demonstration owner or operator from complying with subpart DDDD. conducted according to Table 4 to the requirement to submit a report subpart DDDD, row 9 as specified in 40 E. Repeat Emissions Testing electronically as required by this rule is CFR 63.2267.7 Aside from this addressed in 40 CFR 63.2281(l). As part of an ongoing effort to clarification, the proposed requirements Examples of such events are acts of improve compliance with federal air for repeat emissions testing every 5 nature, acts of war or terrorism, or emission regulations, the EPA reviewed years for add-on controls other than equipment failure or safety hazards the emissions testing requirements of 40 biofilters are included in the final rule beyond the control of the facility. CFR part 63, subpart DDDD, and as proposed. The EPA received several comments proposed to require facilities complying Two commenters requested more regarding the proposed electronic with the standards in Table 1B of 40 flexibility for catalytic oxidizer catalyst reporting requirements, including CFR part 63, subpart DDDD, using an checks required by the rule given the favorable comments and comments add-on control system other than a added repeat testing requirements. The suggesting revisions. The electronic biofilter to conduct repeat emissions commenters requested the frequency of reporting requirements are included in performance testing every 5 years. catalyst checks be revised to ‘‘annual’’ the final rule as proposed with Currently, facilities operating add-on or no more than every 15 months and clarification of specific questions raised controls are required to conduct an requested the requirement for catalyst by commenters. Specific comments initial performance test by the date checks be eliminated during years when pertaining to the draft spreadsheet specified in 40 CFR 63.2261(a). In emissions tests are conducted. In template are detailed in the RTC addition to the initial performance test, response to these comments, the EPA document along with the EPA’s process units controlled by biofilters are revised Tables 2 and 7 to 40 CFR part responses explaining how these already required by the PCWP NESHAP 63, subpart DDDD, to refer to ‘‘annual’’ comments were used to improve the to conduct repeat performance testing catalyst checks and included a footnote template. A revised version of the every 2 years. Periodic performance stating that facilities may forego the semiannual electronic reporting tests for all types of control systems are annual catalyst activity check during the spreadsheet template is available in the already required by permitting calendar year when a performance test docket for the final rule. authorities for many facilities. Further, conducted according to Table 4 to One commenter requested that the the EPA believes that requiring repeat subpart DDDD. The final rule requires requirement to use a CEDRI form should performance tests will help to ensure that, in each calendar year, either a not begin until after the form has been that control systems are properly performance test or a catalyst activity available in CEDRI for at least 1 year. maintained over time. As proposed in check must be conducted. The commenter also recommended that Table 7 to 40 CFR part 63, subpart One commenter requested the transition to using the new reporting DDDD (row 7), the first of the repeat clarification that the Notification of form apply to an entire reporting period, performance tests would be required to Compliance Status (NCS) is only not come into effect in the middle of a be conducted within 3 years of the required with the initial performance reporting period and result in two effective date of the revised standards or test, not with each repeat performance different reports being prepared. In within 5 years (60 months) following test. As explained further in the RTC response to this comment, we revised the previous performance test, document, a NCS is required with initial the final rule to specify use of the whichever is later, and thereafter within and repeat performance tests under 40 semiannual reporting template for the 60 months following the previous CFR 63.9. In response to this comment, first full reporting period after it has performance test. Section IV.J of this the EPA deleted the word ‘‘initial’’ from been available on the CEDRI website for preamble provides more information on 40 CFR 63.2280(d) and added a phrase 1 year. Refer to section IV.J of this compliance dates. mentioning the ‘‘repeat performance test preamble for more discussion of the The EPA specifically requested as specified in Table 7 to this subpart’’ compliance timeline. The EPA proposed comments on the proposed so it is clearer that a NCS is required a conforming amendment in Table 9 to requirements for repeat performance when performing repeat testing 40 CFR part 63, subpart DDDD, to testing. One commenter agreed with the according to the methods in Table 4 to require submittal of CMS performance proposed requirements and stated they 40 CFR part 63, subpart DDDD. The EPA evaluations according to the electronic are well supported and legally required also deleted the word ‘‘initial’’ and reporting provisions for performance as part of meeting the EPA’s statutory added a reference to Table 7 to subpart evaluations proposed in 40 CFR obligations. The EPA received other DDDD (which includes repeat testing in 63.2281(j). One commenter requested comments requesting clarification of the that the EPA clarify that CMS requirements surrounding repeat 7 The footnote added to Table 7 to 40 CFR part performance evaluations should be testing. One commenter requested 63, subpart DDDD, clarifying when capture efficiency testing is required was included for submitted only for continuous emission clarification with regards to whether the biofilters and other control devices undergoing monitoring systems (CEMS) and not for repeat testing is to include press capture repeat emissions testing.

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rows 3 and 7) to 40 CFR 63.2280(d)(2) given months of advance notice when manufacturer that provides procedures and clarified that the NCS only needs to scheduling a test. for conducting electronic calibration of have ‘‘a summary of’’ the performance To address the commenters’ concern thermocouples. According to test results submitted according to the that a 5-percent variability margin is stakeholders, facilities have been electronic performance test reporting insufficient, the EPA increased the replacing thermocouples because they provisions in 40 CFR 63.2281(i). variability margin to 10 percent for the cannot electronically calibrate them. final rule with the stipulation that the The stakeholders requested the EPA F. Biofilter Bed Temperature variability margin not exceed 8 degrees consider an alternative approach to the Facilities using a biofilter to comply Fahrenheit (°F) on the upper end of the current requirement in 40 CFR with the PCWP NESHAP must monitor biofilter bed range. As noted in the 63.2269(b)(4). To address this issue, the biofilter bed temperature and maintain memorandum, Review of Select EPA proposed revisions to 40 CFR the 24-hour block biofilter bed Biofilter/Bioscrubber Data Submitted in 63.2269(b)(4) to allow multiple temperature within the range Response to the Plywood and Composite alternative approaches to thermocouple established during performance testing Wood Products Information Collection validation. showing compliance with the emission Request, Docket Item No. EPA–HQ– The EPA received comments limits. As originally promulgated, the OAR–2016–0243–0188, the biofilter bed supporting the proposed revisions to 40 upper and lower limits of the biofilter temperature across all of the biofilters in CFR 63.2269(b)(4) and we are ° bed temperature were required to be the PCWP industry spans from 40 F to promulgating these revisions as ° established as the highest and lowest 150 F. On the low end of this range, 5 proposed with minor clarifications. In ° 15-minute average bed temperatures, percent is 2 F while 10 percent is response to a comment that the word ° respectively, during the three test runs. 4 F. On the high end of the range, 5 ‘‘calibration’’ be removed from 40 CFR ° Facilities may conduct multiple percent is 8 F while 10 percent is 63.2269(b)(5), the EPA is amending this ° ° performance tests to expand the biofilter 15 F. The upper-end value of 15 F paragraph to replace ‘‘calibration and ° bed operating temperature range. See 40 added to 150 F would allow the facility validation checks’’ with ‘‘validation ° CFR 63.2262(m). to operate at 165 F, which the EPA checks’’ and to specify that validation The EPA learned that multiple considers excessive in the absence of checks be conducted using the facilities are having difficulty data showing this temperature is not procedures in 40 CFR 63.2269(b)(4). complying with the PCWP biofilter bed detrimental to the microbial population. One commenter requested the EPA to Therefore, for the final rule, the EPA clarify that temperature sensor temperature monitoring requirements capped the variability margin for the validations are not performance established according to the original high end of the biofilter bed temperature evaluations requiring formal notification rule. Biofilter bed temperature is range at 8 °F (which coincides with the and reporting under 40 CFR 63.8. For affected by ambient temperature which margin proposed). Thus, for the high- the final rule, the EPA has revised Table cannot always be accurately predicted end biofilter bed temperature, facilities 10 of 40 CFR part 63, subpart DDDD, to in advance of scheduling performance may add up to 10 percent, not to exceed clarify that the CMS performance tests. In consideration of this issue, as 8 °F. evaluation provisions in 40 CFR 63.8(e) discussed in the preamble for the The EPA anticipates that facilities and the RATA provisions in 40 CFR proposed amendments (at 84 FR 47097), currently having difficulty maintaining 63.8(f)(6) only apply for CEMS under the EPA proposed to revise 40 CFR the biofilter bed temperature limits may subpart DDDD. 63.2262(m)(1) to add a 5-percent wish to adjust their temperature limits. variability margin to the biofilter bed As originally promulgated, 40 CFR H. Non-HAP Coating Definition temperature upper and lower limits 63.2262(m)(1) states that facilities may The EPA proposed to replace the established during emissions testing. base their biofilter bed temperature references to Occupational Safety and Commenters on the proposal stated range on values recorded during Health Administration (OSHA)-defined that the proposed 5-percent variability previous performance tests provided carcinogens and 29 CFR 1910.1200(d)(4) margin is insufficient, particularly on that the data used to establish the in the PCWP ‘‘non-HAP coating’’ the lower end of the biofilter bed temperature ranges have been obtained definition with a reference to a new temperature range and recommended using the required test methods; and appendix B to 40 CFR part 63, subpart instead that the EPA provide a wider that facilities using data from previous DDDD. The proposed appendix listed margin allowance or extend the performance tests must certify that the the specific carcinogenic HAP that must operating limit averaging period beyond biofilter and associated process unit(s) be below 0.1 percent by mass for a the current 24-hour period. The have not been modified since the test. PCWP coating to be considered a non- commenters stated that, unlike other This provision (if met) clarifies that HAP coating. common air pollution control devices facilities can adjust their previously One commenter stated that the Hazard with operating parameters that can be established biofilter temperature range Communication Standard (HCS) (29 controlled within a small percentage of to include the 5-percent variability CFR 1910.1200(g)), revised in 2012, set point and are not subject to ambient margin, if desired. requires that a chemical manufacturer, atmospheric conditions, biofilters are distributor, or importer provide a Safety influenced by diurnal, day-to-day, and G. Thermocouple Calibration Data Sheet (SDS) (formerly MSDSs or seasonal ambient temperature variations At 40 CFR 63.2269(b)(4), the PCWP Material Safety Data Sheets) for each because they are typically located NESHAP currently requires conducting hazardous chemical to downstream outside due to their size. They further an electronic calibration of the users, and that PCWP facilities rely on stated that in practical terms, in order to temperature monitoring device at least SDSs to identify whether coatings set the widest bed temperature range, a semiannually according to the contain carcinogens. The commenter facility must test on the coldest and the procedures in the manufacturer’s stated that if the EPA finalizes a hottest day of the year, yet predicting owner’s manual. Stakeholders with separate list of HAP in appendix B to 40 those days is not possible and is further facilities subject to the standard CFR part 63, subpart DDDD, there will complicated by the fact that stack test explained to the EPA that they are be no certainty as to whether non-HAP teams and permitting agencies must be unaware of a thermocouple coatings are being used because of the

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discrepancy in HAP listed on SDSs (per • the equation number cross- related work practices; reworking the HCS) and in appendix B to subpart referenced in the definition of ‘‘MSF’’ recordkeeping and reporting systems to DDDD. The commenter suggested the was corrected; and match the layout of the new CEDRI form EPA should remove appendix B to • the cross-reference in 40 CFR (e.g., breaking out reporting by subpart DDDD and instead reference the 63.2290 was updated to include all individual equipment instead of by OSHA SDS requirements for sections of the General Provisions. process group); developing and classification of carcinogenicity at 29 communicating guidance to ensure J. Compliance Dates CFR 1910.1200, appendix A, section consistent implementation across a A.6.4, which match the requirements in The EPA proposed that existing company’s facilities; preparing permit the now obsolete OSHA regulatory affected sources and other affected applications and acquiring revised air reference proposed for deletion from the sources that commenced construction or permits to reflect the elimination of PCWP non-HAP coating definition. reconstruction on or before September SSM provisions and addition of new The EPA agrees that referencing 6, 2019, must comply with all of the requirements; developing procedures for appendix A to 29 CFR 1910.1200 in the amendments 6 months (180 days) after estimating excess emissions due to PCWP rule’s non-HAP coating the effective date of the final rule.8 The deviations; and developing and definition is a more streamlined EPA also proposed the addition of providing training for facility staff on approach for the PCWP NESHAP than electronic reporting requirements that the revised requirements. The use of the proposed appendix B to 40 will require use of a semiannual commenter further stated that applying CFR part 63, subpart DDDD. The OSHA reporting template once the template for and receiving a permit revision to language the PCWP proposal sought to has been available on the CEDRI website reflect the revised requirements alone replace is in appendix A to 29 CFR (https://www.epa.gov/electronic- will likely take more than 180 days and 1910.1200, section A.6.4. For the final reporting-air-emissions/compliance- expressed concern that if additional PCWP amendments, the EPA is defining and-emissions-data-reporting-interface- time is not provided and if current non-HAP coating to mean a coating with cedri) for 6 months. New requirements permit language conflicts with the final HAP contents below 0.1 percent by to conduct repeat performance testing RTR rule, facilities will have to mass for OSHA-defined carcinogens as every 5 years for facilities using an add- determine how to comply with both the specified in section A.6.4 of appendix A on control system other than a biofilter old requirements and the new to 29 CFR 1910.1200 and below 1.0 (see section IV.E of this preamble) were requirements. The commenter also percent by mass for other HAP also proposed. The first of the repeat noted that working with information compounds. As a result of the new performance tests would be required to technology support staff to re-program a reference, the proposed appendix B is be conducted within 3 years after the facility’s electronic systems to align not being finalized. effective date of the revised standards, with the new requirements is an effort or within 5 years (60 months) following that takes more than 180 days to plan I. Technical and Editorial Changes the previous performance test, and implement. The EPA is finalizing the following whichever is later, and thereafter within After considering the public technical and editorial changes to the 60 months following the previous comments, the EPA recognizes that 180 final rule as proposed: performance test. The EPA specifically days is not practicable for completion of • The clarifying reference to ‘‘SSM requested comment on whether the the steps needed to implement the plans’’ in 40 CFR 63.2252 was removed proposed compliance times provide PCWP rule changes given the because SSM plans would no longer be enough time for owners or operators to complexity of operations in the PCWP applicable after the date specified in 40 comply with the proposed amendments, source category. The PCWP industry CFR 63.2250(c); and if the proposed time window is not involves manufacturing of several • the redundant reference in 40 CFR adequate, requested that commenters different products, using a variety of 63.2281(c)(6) for submittal of provide an explanation of specific process unit and control system performance test results with the actions that would need to be combinations that differ from facility to compliance report was eliminated undertaken to comply with the facility. As documented in the because performance test results would proposed amended requirements and technology review, the PCWP processes be required to be electronically the time needed to make the and controls at many mills are highly reported; adjustments for compliance with any of interconnected (e.g., where multiple • the EPA revised 40 CFR the revised requirements. different types of process units are 63.2281(d)(2) and added language to 40 One commenter stated that the 180 routed to the same control device; CFR 63.2281(e) introductory text and days proposed by the EPA for existing process units of one type are routed (e)(12) and (13) to make these facilities to comply with all of the through process units of a different type paragraphs more consistent to facilitate proposed amendments is not enough to emissions control; or where the electronic reporting; time to complete all of the activities that furnace that provides process heat is • a provision stating that the EPA must be done in order to effect a smooth also part of the air pollution control retains authority to approve alternatives transition to the new requirements, system for some processes). The to electronic reporting was added to 40 including: Developing a site-specific interconnectivity of processes and fire- CFR 63.2291(c)(5); implementation plan; implementing prevention systems needed for • cross-references to the 40 CFR part new startup and shutdown procedures; processing wood requires a high degree 60 appendices containing test methods reprogramming of electronic systems of automation and interconnection in were updated in Table 4 of the rule; and automated alarms to account for the the programmable logic controllers and • cross-references were updated removal of SSM provisions and the data acquisition systems (DAS) tailored throughout the rule, as needed, to match addition of new startup and shutdown to each PCWP plant site. Some the proposed changes; companies have one PCWP facility 8 • The final action is not a ‘‘major rule’’ as defined while others have more than 10 cross-references to 40 CFR 63.14 by 5 U.S.C. 804(2), therefore, the effective date of were updated to remove outdated the final rule is the promulgation date as specified facilities manufacturing different PCWP paragraph references; in CAA section 112(d)(10). products using a variety of equipment

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configurations. The EPA understands the first of the repeat performance tests optimum performance. The EPA is not that companies with numerous PCWP must be conducted within 3 years after finalizing other revisions to the facilities need time for corporate August 13, 2020, or within 60 months emission limits that would impact coordination of IT programming following the previous performance test, emissions, so there are no quantifiable resources across multiple uniquely whichever is later. air quality impacts resulting from the configured plant sites, while companies final amendments. with fewer facilities have more-limited V. Summary of Cost, Environmental, C. What are the cost impacts? environmental staff that are sometimes and Economic Impacts and Additional shared across two or three PCWP Analyses Conducted No capital costs are estimated to be facilities to oversee reprogramming. The A. What are the affected facilities? incurred to comply with the final amendments. The costs associated with EPA has concluded that 1 year As noted in the preamble to the following the effective date of the final the final amendments are related to proposed amendments, the EPA amendments is the most expeditious recordkeeping and reporting labor costs identified 230 facilities that are compliance period practicable for and repeat performance testing. Because operating and subject to the PCWP existing PCWP affected sources to make repeat performance testing is required NESHAP. This includes 109 facilities the DAS adjustments needed to every 5 years, costs are estimated and manufacturing one or more PCWP demonstrate compliance with the summarized over a 5-year period. The products (e.g., plywood, veneer, revised requirements during startup and nationwide cost of the final particleboard, OSB, hardboard, shutdown periods and to transition to amendments is estimated to include a fiberboard, MDF, engineered wood electronic reporting. All existing one-time cost of $1.3 million for products) and 121 facilities that produce affected facilities will have to continue facilities to review the revised rule and to meet the current requirements of the kiln-dried lumber. Sixteen facilities make record systems adjustments and a NESHAP until the applicable produce PCWP products and kiln-dried cost of $3.5 million every 5 years for compliance date of the amended rule. lumber. Information on operational repeat emissions testing. These costs are Affected sources that commence facilities is included in the Technology in 2018 dollars. construction or reconstruction after Review for the Plywood and Composite Another metric for presenting the one- September 6, 2019 (the publication date Wood Products NESHAP, available as time costs is as a present value (PV), of the proposed rulemaking) must Docket Item No. EPA–HQ–OAR–2016– which is a technique that converts a comply with all requirements of the 0243–0189. In addition, the EPA is stream of costs over time into a one-time subpart, including the final aware of 13 greenfield facilities (four estimate for the present year or other amendments, no later than the effective PCWP and nine kiln-dried lumber mills) year. The EPA estimates that the PV of date of the final rule or upon initial that recently commenced construction costs for these final amendments is $5.6 startup, whichever is later. as major sources of HAP emissions. The million at a discount rate of 7 percent Regarding the compliance timeline for EPA is projecting that two new OSB and $6.9 million at a discount rate of 3 semiannual reporting, the EPA received mills will be constructed as major percent. In addition, the EPA presents comments requesting that the new sources within the next 5 years, and that these costs as an equivalent annualized requirements come into effect at the existing facilities will add or replace value (EAV) in order to provide an beginning of a semiannual reporting process units during this same time estimate of annual costs consistent with period, and not in the middle of a frame. More details on our projections the PV. The EAV for these final reporting period to avoid two different of new sources are available in amendments is estimated to be $0.9 reports being prepared. The EPA Projections of the Number of New and million at a discount rate of 7 percent recognizes that there can be a Reconstructed Sources for the Subpart and $1.0 million at a discount rate of 3 transitional compliance period because DDDD Technology Review, available as percent. The PV and EAV cost estimates of the way the effective date of the final Docket Item No. EPA–HQ–OAR–2016– are in 2016 dollars, in part, to conform PCWP rule is set as the date of 0243–0182. to Executive Order 13771 requirements. These estimates have not changed since publication of the final Federal Register B. What are the air quality impacts? document. During this transitional the proposal. For further information on period for existing sources, the The nationwide baseline HAP the costs associated with the previously promulgated rule emissions from the 230 facilities in the amendments, see the memorandum, requirements must be met until the PCWP source category are estimated to Cost, Environmental, and Energy compliance date (e.g., compliance with be 7,600 tpy. Emissions of the six Impacts of Regulatory Options for the SSM plan), and then the newly compounds defined as ‘‘total HAP’’ in Subpart DDDD, Docket Item No. EPA– promulgated requirements must be met the PCWP NESHAP (acetaldehyde, HQ–OAR–2016–0243–0184, and the thereafter. The EPA anticipates that this acrolein, formaldehyde, methanol, memorandum, Economic Impact and transitional semiannual reporting period phenol, and propionaldehyde) make up Small Business Analysis for the will occur before the PCWP semiannual 96 percent of the nationwide emissions. Proposed Plywood and Composite Wood electronic reporting spreadsheet is The amendments include removal of the Products Risk and Technology Review required to be used. To ensure this, we SSM exemption and addition of repeat (RTR) NESHAP, Docket Item No. EPA– have revised the final rule to specify use emissions testing for controls other than HQ–OAR–2016–0243–0185. of the semiannual reporting template for biofilters (which already require repeat D. What are the economic impacts? the first full reporting period after it has tests). Although the EPA is unable to been available on the CEDRI website for quantify the emission reduction The EPA estimated that none of the 1 year. associated with these changes, we ultimate parent owners affected by the Regarding the compliance timeline for expect that emissions will be reduced proposed amendments would incur repeat emissions testing, the compliance by requiring facilities to meet the annualized costs of 1.0 percent or dates are included in the final rule as applicable standard during periods of greater of their revenues, and that proposed. No comments were received SSM and that the repeat emissions estimate has not changed since regarding the compliance dates for testing requirements will encourage proposal. Thus, these economic impacts repeat emissions testing. As proposed, operation of add-on controls to achieve are low for affected companies and the

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industries impacted by this action, and below poverty level, and over 25 requirements are based on notification, there will not be substantial impacts in without a high school diploma) are recordkeeping, and reporting the markets for affected products. For greater than their respective nationwide requirements in the NESHAP General more information on the economic percentages. Provisions (40 CFR part 63, subpart A), impact analysis conducted for the The methodology and the results of which are mandatory for all operators proposal, see the memorandum titled the demographic analysis are presented subject to national emissions standards. Economic Impact and Small Business in the technical report, Risk and The information collection activities Analysis for the Proposed Plywood and Technology Review—Analysis of also include paperwork requirements Composite Wood Risk and Technology Demographic Factors for Populations associated with initial and repeat Review (RTR) NESHAP, Docket Item No. Living Near Plywood and Composite performance testing and parameter EPA–HQ–OAR–2016–0243–0185. Wood Products Source Category, Docket monitoring. The final amendments to E. What are the benefits? Item No. EPA–HQ–OAR–2016–0243– the rule eliminate the paperwork 0181. requirements associated with the SSM The EPA is not finalizing changes to plan and recordkeeping of SSM events G. What analysis of children’s emissions limits, except to the extent and require electronic submittal of environmental health did we conduct? necessary to make them applicable performance test results and semiannual during SSM periods and to establish The EPA does not believe the compliance reports. These work practice requirements for certain environmental health or safety risks recordkeeping and reporting startup and shutdown periods. The EPA addressed by this action present a requirements are specifically authorized estimates the final amendments (i.e., disproportionate risk to children. This by CAA section 114 (42 U.S.C. 7414). changes to SSM, recordkeeping, action’s health and risk assessments are Respondents/affected entities: reporting, and monitoring) are not contained in the Residual Risk Owners or operators of facilities subject economically significant. Because these Assessment for the Plywood and to 40 CFR part 63, subpart DDDD, that amendments are not considered Composite Wood Products Source produce plywood, composite wood economically significant, as defined by Category in Support of the 2019 Risk products, or kiln-dried lumber. Executive Order 12866, and because no and Technology Review Final Rule, Respondent’s obligation to respond: emissions reductions were estimated, available in the docket for this action, Mandatory (40 CFR part 63, subpart the EPA did not estimate any benefits Docket ID No. EPA–HQ–OAR–2016– DDDD). from reducing emissions. 0243. Estimated number of respondents: 244 facilities (including existing and F. What analysis of environmental VI. Statutory and Executive Order justice did we conduct? new facilities projected to begin Reviews reporting during the ICR period). Executive Order 12898 (59 FR 7629, Additional information about these Frequency of response: The frequency February 16, 1994) establishes federal statutes and Executive Orders can be varies depending on the type of executive policy on environmental found at https://www.epa.gov/laws- response (e.g., initial notification, justice. Its main provision directs regulations/laws-and-executive-orders. semiannual compliance report). federal agencies, to the greatest extent Total estimated burden: 39,700 hours practicable and permitted by law, to A. Executive Orders 12866: Regulatory (per year). Burden is defined at 5 CFR make environmental justice part of their Planning and Review and Executive 1320.3(b). mission by identifying and addressing, Order 13563: Improving Regulation and Total estimated cost: $6,930,000 (per as appropriate, disproportionately high Regulatory Review year), includes $2,365,000 annualized and adverse human health or This action is not a significant capital or operation and maintenance environmental effects of their programs, regulatory action and was, therefore, not costs. policies, and activities on minority submitted to the Office of Management An agency may not conduct or populations and low-income and Budget (OMB) for review. sponsor, and a person is not required to populations in the United States. respond to, a collection of information To examine the potential for any B. Executive Order 13771: Reducing unless it displays a currently valid OMB environmental justice issues that might Regulations and Controlling Regulatory control number. The OMB control be associated with the source category, Cost numbers for the EPA’s regulations in 40 the EPA performed a demographic This action is not an Executive Order CFR are listed in 40 CFR part 9. When analysis, which is an assessment of risks 13771 regulatory action because this OMB approves this ICR, the Agency will to individual demographic groups of the action is not significant under Executive announce that approval in the Federal populations living within 5 kilometers Order 12866. Register and publish a technical (km) and within 50 km of the facilities. amendment to 40 CFR part 9 to display C. Paperwork Reduction Act (PRA) In the analysis, we evaluated the the OMB control number for the distribution of HAP-related cancer and The information collection activities approved information collection noncancer risks from each source in this final rule have been submitted activities contained in this final rule. category across different demographic for approval to OMB under the PRA. groups within the populations living The ICR document that the EPA D. Regulatory Flexibility Act (RFA) near facilities. The results of the PCWP prepared has been assigned EPA ICR I certify that this action will not have source category demographic analysis number 1984.09. You can find a copy of a significant economic impact on a indicate that emissions from the source the ICR in the docket for this rule, and substantial number of small entities category expose approximately 200,000 it is briefly summarized here. The under the RFA. In making this people to a cancer risk at or above 1-in- information collection requirements are determination, the impact of concern is 1 million and zero people to a chronic not enforceable until OMB approves any significant adverse economic noncancer TOSHI greater than 1. The them. impact on small entities. An agency may percentages of the at-risk population in The information is being collected to certify that a rule will not have a four of the 11 demographic groups assure compliance with 40 CFR part 63, significant economic impact on a (African American, Native American, subpart DDDD. The information substantial number of small entities if

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the rule relieves regulatory burden, has Residual Risk Assessment for the K. Executive Order 12898: Federal no net burden, or otherwise has a Plywood and Composite Wood Products Actions To Address Environmental positive economic effect on the small Source Category in Support of the 2019 Justice in Minority Populations and entities subject to the rule. Of the 69 Risk and Technology Review Final Rule, Low-Income Populations ultimate parent entities that are subject which can be found in the docket for The EPA believes that this action does to the rule, 28 are small according to the this action. not have disproportionately high and Small Business Administration’s small adverse human health or environmental business size standards and standards I. Executive Order 13211: Actions Concerning Regulations That effects on minority populations, low regarding other entities (e.g., federally income populations, and/or indigenous Significantly Affect Energy Supply, recognized tribes). None of the affected peoples, as specified in Executive Order Distribution, or Use 28 small entities have annualized costs 12898 (59 FR 7629, February 16, 1994). of 1 percent or greater of sales. The EPA The documentation for this decision has, therefore, concluded that this This action is not subject to Executive Order 13211, because it is not a is contained in section IV.A.6 of the action will not have a significant impact preamble to the proposed amendments on a substantial number of small significant regulatory action under Executive Order 12866. (84 FR 47074, September 6, 2019) and entities. the technical report, Risk and E. Unfunded Mandates Reform Act J. National Technology Transfer and Technology Review—Analysis of (UMRA) Advancement Act (NTTAA) and 1 CFR Demographic Factors for Populations Living Near Plywood and Composite This action does not contain an Part 51 Wood Products Source Category, Docket unfunded mandate of $100 million or This action involves technical Item No. EPA–HQ–OAR–2016–0243– more as described in UMRA, 2 U.S.C. standards. The EPA is finalizing the use 0181. 1531–1538, and does not significantly or of the standards currently listed in uniquely affect small governments. Table 4 of the rule (40 CFR part 63, L. Congressional Review Act (CRA) While this action creates an enforceable subpart DDDD). The EPA is amending This action is subject to the CRA, and duty on the private sector, the cost does 40 CFR 63.14 to incorporate by the EPA will submit a rule report to not exceed $100 million or more. reference EPA Method 0011 for each House of the Congress and to the F. Executive Order 13132: Federalism measurement of formaldehyde. Method Comptroller General of the United This action does not have federalism 0011 is applicable to the determination States. This action is not a ‘‘major rule’’ implications. It will not have substantial of destruction and removal efficiency of as defined by U.S.C. 804(2). direct effects on the states, on the analytes including formaldehyde and List of Subjects in 40 CFR Part 63 relationship between the National other compounds. Pollutants withdrawn Environmental protection, Government and the states, or on the isokinetically from the emission source Administrative practice and procedures, distribution of power and and are collected in aqueous acidic 2,4- Air pollution control, Hazardous responsibilities among the various dinitrophenylhydrazine. Formaldehyde substances, Incorporation by reference, levels of government. present in the emission stream reacts to Intergovernmental relations, Reporting G. Executive Order 13175: Consultation form a derivative that extracted, solvent- and recordkeeping requirements. and Coordination With Indian Tribal exchanged, concentrated, and then Andrew Wheeler, Governments analyzed by high performance liquid chromatography. The SW–846 Method Administrator. This action does not have tribal 0011 (Revision 0, December 1996) is implications as specified in Executive For the reasons set forth in the Order 13175. It will not have substantial available in ‘‘Test Methods for preamble, 40 CFR part 63 is amended as direct effects on tribal governments, on Evaluating Solid Waste, Physical/ follows: the relationship between the Federal Chemical Methods,’’ EPA Publication No. SW–846. This method was included PART 63—NATIONAL EMISSION Government and Indian tribes, or on the STANDARDS FOR HAZARDOUS AIR distribution of power and in the PCWP rule when it was promulgated in 2004 and is reasonably POLLUTANTS FOR SOURCE responsibilities between the Federal CATEGORIES Government and Indian tribes. No tribal available from the EPA at https:// governments own facilities that are www.epa.gov/hw-sw846/sw-846- ■ 1. The authority citation for part 63 impacted by the proposed changes to compendium. Under 40 CFR 63.7(f) and continues to read as follows: the NESHAP. Thus, Executive Order 40 CFR 63.8(f) of subpart A of the Authority: 42 U.S.C. 7401 et seq. 13175 does not apply to this action. General Provisions, a source may apply to the EPA for permission to use H. Executive Order 13045: Protection of Subpart A—General Provisions Children From Environmental Health alternative test methods or alternative ■ Risks and Safety Risks monitoring requirements in place of any 2. Section 63.14 is amended by required testing methods, performance redesignating paragraphs (n)(8) through This action is not subject to Executive specifications, or procedures in the final (28) as (n)(9) through (29) and adding Order 13045 because it is not rule or any amendments. new paragraph (n)(8) to read as follows: economically significant as defined in Executive Order 12866, and because the The following standards, referenced § 63.14 Incorporations by reference. EPA does not believe the environmental in the regulatory text, are already * * * * * health or safety risks addressed by this approved for incorporation by reference (n) * * * action present a disproportionate risk to at their respective locations: NCASI (8) SW–846–0011, Sampling for children. This action’s health and risk Method CI/WP–98.01; NCASI Method Selected Aldehyde and Ketone assessments are discussed in sections III IM/CAN/WP–99.02; NCASI Method Emissions from Stationary Sources, and IV of this preamble and further ISS/FP–A105.01; ASTM D6348–03. Revision 0, December 1996, in EPA documented in the risk report titled Publication No. SW–846, Test Methods

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for Evaluating Solid Waste, Physical/ 2021, emissions during safety-related specified in paragraphs (f)(1) through (6) Chemical Methods, Third Edition, IBR shutdowns, pressurized refiner startups of this section. approved for table 4 to subpart DDDD. and shutdowns, or startup and (1) Prior to process unit initial startup. * * * * * shutdown of direct-fired softwood (2) During safety-related shutdowns veneer dryer gas-fired burners. conducted according to the work Subpart DDDD—National Emission * * * * * practice requirement in Table 3 to this Standards for Hazardous Air ■ 5. Section 63.2250 is amended by: subpart. Pollutants: Plywood and Composite ■ a. Adding two sentences to the end of (3) During pressurized refiner startup Wood Products paragraph (a); and shutdown according to the work ■ practice requirement in Table 3 to this ■ 3. Section 63.2233 is amended by b. Revising paragraphs (b) and (c); and ■ c. Adding paragraphs (e) through (g). subpart. revising paragraphs (a)(1) and (2) and (b) (4) During startup and shutdown of to read as follows: The revisions and additions read as follows: direct-fired softwood veneer dryer gas- § 63.2233 When do I have to comply with fired burners according to the work this subpart? § 63.2250 What are the general practice requirement in Table 3 to this requirements? (a) * * * subpart. (1) If the initial startup of your (a) * * * For any affected source that (5) You must minimize the length of affected source is before September 28, commences construction or time when compliance options and 2004, then you must comply with the reconstruction after September 6, 2019, operating requirements in this subpart compliance options, operating this paragraph (a) does not apply on and are not met due to the conditions in requirements, and work practice after August 13, 2020 or initial startup paragraphs (f)(2) and (4) of this section. requirements for new and reconstructed of the affected source, whichever is (6) The applicable standard during sources in this subpart no later than later. For all other affected sources, this each of the operating conditions September 28, 2004, except as otherwise paragraph (a) does not apply on and specified in paragraphs (f)(2) through (4) specified in §§ 63.2250, 63.2280(b) and after August 13, 2021. of this section are the work practice (d), 63.2281(b)(6), and 63.2282(a)(2) and (b) You must always operate and requirements in Table 3 to this subpart Tables 3, 6, 7, 8, 9, and 10 to this maintain your affected source, including for safety-related shutdowns (row 6), subpart. air pollution control and monitoring pressurized refiner startup and (2) If the initial startup of your equipment according to the provisions shutdown (row 7), and direct-fired affected source is after September 28, in § 63.6(e)(1)(i). For any affected source softwood veneer dryers undergoing 2004, then you must comply with the that commences construction or startup or shutdown of gas-fired burners compliance options, operating reconstruction after September 6, 2019, (row 8). The otherwise applicable requirements, and work practice this paragraph (b) does not apply on and compliance options, operating requirements for new and reconstructed after August 13, 2020 or initial startup requirements, and work practice sources in this subpart upon initial of the affected source, whichever is requirements (in rows 1 through 5 of startup of your affected source, except later. For all other affected sources, this Table 3 to this subpart) do not apply as otherwise specified in §§ 63.2250, paragraph (b) does not apply on and during the operating conditions 63.2280(b) and (d), 63.2281(b)(6), and after August 13, 2021. specified in paragraphs (f)(2) through (4) 63.2282(a)(2) and Tables 3, 6, 7, 8, 9, (c) You must develop a written SSMP of this section. and 10 to this subpart. according to the provisions in (g) For affected sources that (b) If you have an existing affected § 63.6(e)(3). For any affected source that commenced construction or source, you must comply with the commences construction or reconstruction after September 6, 2019, compliance options, operating reconstruction after September 6, 2019, and for all other affected sources on and requirements, and work practice this paragraph (c) does not apply on and after August 13, 2021, you must always requirements for existing sources no after August 13, 2020 or initial startup operate and maintain your affected later than October 1, 2007, except as of the affected source, whichever is source, including air pollution control otherwise specified in later. For all other affected sources, this and monitoring equipment in a manner §§ 63.2240(c)(2)(vi)(A), 63.2250, paragraph (c) does not apply on and consistent with good air pollution 63.2280(b) and (d), 63.2281(b)(6) and after August 13, 2021. control practices for minimizing (c)(4), and 63.2282(a)(2) and Tables 3, 6, * * * * * emissions at least to the levels required 7, 8, 9, and 10 to this subpart. (e) You must be in compliance with by this subpart. The general duty to minimize emissions does not require * * * * * the provisions of subpart A of this part, except as noted in Table 10 to this you to make any further efforts to ■ 4. Section 63.2240 is amended by subpart. reduce emissions if levels required by revising paragraph (c)(2)(vi)(A) to read (f) Upon August 13, 2020 or initial the applicable standard have been as follows: startup of the affected source, whichever achieved. Determination of whether a § 63.2240 What are the compliance options is later, for affected sources that source is operating in compliance with and operating requirements and how must commenced construction or operation and maintenance I meet them? reconstruction after September 6, 2019, requirements will be based on * * * * * and on and after August 13, 2021 for all information available to the (c) * * * other affected sources, you must be in Administrator which may include, but (2) * * * compliance with the compliance is not limited to, monitoring results, (vi) * * * options, operating requirements, and the review of operation and maintenance (A) Before August 13, 2021, emissions work practice requirements in this procedures, review of operation and during periods of startup, shutdown, subpart when the process unit(s) subject maintenance records, and inspection of and malfunction as described in the to the compliance options, operating the source. startup, shutdown, and malfunction requirements, and work practice ■ 6. Section 63.2252 is revised to read plan (SSMP). On and after August 13, requirements are operating, except as as follows:

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§ 63.2252 What are the requirements for temperature limits. The biofilter bed simulation device. When the process units that have no control or work temperature range must be established temperature measurement device practice requirements? as the temperature values 10 percent method is used, the sensor of the NIST For process units not subject to the below the minimum and 10 percent (not traceable calibrated device must be compliance options or work practice to exceed 8° F) above the maximum 15- placed as close as practicable to the requirements specified in § 63.2240 minute biofilter bed temperatures process sensor, and both devices must (including, but not limited to, lumber monitored during the three test runs. be subjected to the same environmental kilns), you are not required to comply You may base your biofilter bed conditions. The accuracy of the with the compliance options, work temperature range on values recorded temperature measured must be 2.5 practice requirements, performance during previous performance tests percent of the temperature measured by testing, monitoring, and recordkeeping provided that the data used to establish the NIST traceable device or 5 °F, or reporting requirements of this the temperature ranges have been whichever is greater. subpart, or any other requirements in obtained using the test methods (ii) Follow applicable procedures in subpart A of this part, except for the required in this subpart. If you use data the thermocouple manufacturer owner’s initial notification requirements in from previous performance tests, you manual. § 63.9(b). must certify that the biofilter and (iii) Request thermocouple ■ 7. Section 63.2262 is amended by associated process unit(s) have not been manufacturer to certify or re-certify revising paragraphs (a), (b), (m)(1), and modified subsequent to the date of the electromotive force (electrical (n)(1) to read as follows: performance tests. Replacement of the properties) of the thermocouple. § 63.2262 How do I conduct performance biofilter media with the same type of (iv) Replace thermocouple with a new tests and establish operating material is not considered a certified thermocouple in lieu of requirements? modification of the biofilter for validation. (a) Testing procedures. You must purposes of this section. (v) Permanently install a redundant conduct each performance test * * * * * temperature sensor as close as according to the requirements in (n) * * * practicable to the process temperature (1) During the performance test, you sensor. The sensors must yield a reading paragraphs (b) through (o) of this section ° and according to the methods specified must identify and document the process within 30 F of each other for thermal unit controlling parameter(s) that affect oxidizers and catalytic oxidizers; within in Table 4 to this subpart. ° (b) Periods when performance tests total HAP emissions during the three- 5 F of each other for biofilters; and ° must be conducted. You must conduct run performance test. The controlling within 20 F of each other for dry rotary each performance test based on parameters you identify must coincide dryers. representative performance (i.e., with the representative operating (5) Conduct validation checks using performance based on representative conditions you describe according to the procedures in paragraph (b)(4) of operating conditions as defined in paragraph (b) of this section. For each this section any time the sensor exceeds § 63.2292) of the affected source for the parameter, you must specify appropriate the manufacturer’s specified maximum period being tested. Representative monitoring methods, monitoring operating temperature range or install a conditions exclude periods of startup frequencies, and for continuously new temperature sensor. and shutdown. You may not conduct monitored parameters, averaging times * * * * * performance tests during periods of not to exceed 24 hours. The operating ■ 9. Section 63.2270 is amended by malfunction. You must describe limit for each controlling parameter revising paragraph (c) to read as follows: representative operating conditions in must then be established as the your performance test report for the minimum, maximum, range, or average § 63.2270 How do I monitor and collect process and control systems and explain (as appropriate depending on the data to demonstrate continuous compliance? why they are representative. You must parameter) recorded during the record the process information that is performance test. Multiple three-run * * * * * necessary to document operating performance tests may be conducted to (c) You may not use data recorded conditions during the test and include establish a range of parameter values during monitoring malfunctions, in such record an explanation to under different operating conditions. associated repairs, and required quality support that such conditions are assurance or control activities or data * * * * * recorded during periods of safety- representative. Upon request, you shall ■ 8. Section 63.2269 is amended by make available to the Administrator related shutdown, pressurized refiner revising paragraphs (b)(4) and (5) to read startup or shutdown, startup and such records as may be necessary to as follows: determine the conditions of shutdown of direct-fired softwood performance tests. § 63.2269 What are my monitoring veneer dryer gas-fired burners, or control device downtime covered in any * * * * * installation, operation, and maintenance (m) * * * requirements? approved routine control device (1) During the performance test, you * * * * * maintenance exemption in data averages must continuously monitor the biofilter (b) * * * and calculations used to report emission bed temperature during each of the (4) Validate the temperature sensor’s or operating levels, nor may such data required 1-hour test runs. To monitor reading at least semiannually using the be used in fulfilling a minimum data biofilter bed temperature, you may use requirements of paragraph (b)(4)(i), (ii), availability requirement, if applicable. multiple thermocouples in (iii), (iv), or (v) of this section: You must use all the data collected representative locations throughout the (i) Compare measured readings to a during all other periods in assessing the biofilter bed and calculate the average National Institute of Standards and operation of the control system. biofilter bed temperature across these Technology (NIST) traceable * * * * * thermocouples prior to reducing the temperature measurement device or ■ 10. Section 63.2271 is amended by: temperature data to 15-minute averages simulate a typical operating temperature ■ a. Revising paragraph (b) introductory for purposes of establishing biofilter bed using a NIST traceable temperature text;

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■ b. Removing and reserving paragraph be submitted following the procedure other affected sources, submit all (b)(2); and specified in § 63.2281(h), (k), and (l). subsequent reports following the ■ c. Adding paragraph (b)(4). * * * * * procedure specified in paragraphs (h), (d) If you are required to conduct a (k) and (l) of this section. The revisions and additions read as (c) * * * follows: performance test, design evaluation, or other compliance demonstration as (4) If you had a startup, shutdown, or § 63.2271 How do I demonstrate specified in Tables 4, 5, and 6 to this malfunction during the reporting period continuous compliance with the compliance subpart, or a repeat performance test as and you took actions consistent with options, operating requirements, and work specified in Table 7 to this subpart, you your SSMP, the compliance report must practice requirements? must submit a Notification of include the information specified in * * * * * Compliance Status as specified in § 63.10(d)(5)(i) before August 13, 2021 (b) You must report each instance in § 63.9(h)(2)(ii). After August 13, 2020 for for affected sources that commenced which you did not meet each affected sources that commence construction or reconstruction before compliance option, operating construction or reconstruction after September 6, 2019. After August 13, requirement, and work practice September 6, 2019, and on and after 2020 for affected sources that requirement in Tables 7 and 8 to this August 13, 2021 for all other affected commenced construction or subpart that applies to you. This sources, submit all subsequent reconstruction after September 6, 2019, includes periods of startup, shutdown, Notifications of Compliance Status and on and after August 13, 2021 for all and malfunction and periods of control following the procedure specified in other affected sources, the compliance device maintenance specified in § 63.2281(h), (k), and (l). report must include the number of instances and total amount of time paragraphs (b)(1) through (4) of this * * * * * section. These instances are deviations (2) For each compliance during the reporting period in which from the compliance options, operating demonstration required in Tables 5, 6, each of the startup/shutdown work requirements, and work practice and 7 to this subpart that includes a practice requirements in Table 3 to this requirements in this subpart. These performance test conducted according subpart (rows 6 through 8) is used in deviations must be reported according to the requirements in Table 4 to this place of the otherwise applicable to the requirements in § 63.2281. subpart, you must submit the compliance options, operating requirements, and work practice * * * * * Notification of Compliance Status, including a summary of the requirements (in Table 3 to this subpart (4) Instances of safety-related performance test results, before the rows 1 through 5). If a startup/shutdown shutdown, pressurized refiner startup close of business on the 60th calendar work practice in Table 3 to this subpart and shutdown, and startup and day following the completion of the (rows 6 through 8) is used for more than shutdown of direct-fired softwood performance test. a total of 100 hours during the veneer dryer gas-fired burners subject to semiannual reporting period, you must the work practice requirements in Table * * * * * report the date, time and duration of 3 to this subpart (rows 6 through 8) ■ 12. Section 63.2281 is amended by: each instance when that startup/ must be reported as required in ■ a. Revising paragraph (b) introductory shutdown work practice was used. § 63.2281(c)(4). Instances when the text; ■ * * * * * work practice requirements in Table 3 to b. Adding paragraph (b)(6); (d) * * * ■ this subpart (rows 6 through 8) are used c. Revising paragraph (c)(4); (2) Information on the date, time, ■ are not considered to be deviations from d. Removing and reserving paragraph duration, and cause of deviations (or violations of) the otherwise (c)(6); (including unknown cause, if applicable compliance options, ■ e. Revising paragraph (d)(2); ■ applicable), as applicable, and the operating requirements and work f. Revising the first sentence of corrective action taken. practice requirements (in rows 1 paragraph (e) introductory text; (e) For each deviation from a ■ through 5 of Table 3 to this subpart) as g. Removing and reserving paragraph compliance option, operating long as you do not exceed the minimum (e)(1); ■ requirement, or work practice amount of time necessary for these h. Revising paragraph (e)(2); requirement occurring at an affected ■ i. Adding paragraphs (e)(12) and (13); events. source where you are using a CMS to and comply with the compliance options, ■ 11. Section 63.2280 is amended by ■ j. Adding paragraphs (h) through (l). operating requirements, or work revising paragraphs (b), (d) introductory The revisions and additions read as practice requirements in this subpart, text, and (d)(2) to read as follows: follows: you must include the information in § 63.2280 What notifications must I submit § 63.2281 What reports must I submit and paragraphs (c)(1) through (6) and (e)(1) and when? when? through (13) of this section. * * * * * * * * * * * * * * * * * * (b) You must submit an Initial (b) Unless the EPA Administrator has (2) The date, time, and duration that Notification no later than 120 calendar approved a different schedule for each CMS was inoperative, except for days after September 28, 2004, or after submission of reports under § 63.10(a), zero (low-level) and high-level checks. initial startup, whichever is later, as you must submit each report by the date * * * * * specified in § 63.9(b)(2). Initial in Table 9 to this subpart and as (12) For any failure to meet a Notifications required to be submitted specified in paragraphs (b)(1) through compliance option in § 63.2240, after August 13, 2020 for affected (6) of this section. including the compliance options in sources that commence construction or * * * * * Table 1A or 1B to this subpart or the reconstruction after September 6, 2019, (6) After August 13, 2020 for affected emissions averaging compliance option, and on and after August 13, 2021 for all sources that commenced construction or provide an estimate of the quantity of other affected sources submitting initial reconstruction after September 6, 2019, each regulated pollutant emitted over notifications required in § 63.9(b) must and on and after August 13, 2021 for all any emission limit, and a description of

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the method used to estimate the Policy Group, MD C404–02, 4930 Old as CBI. Mail the electronic medium to emissions. Page Rd., Durham, NC 27703. The same U.S. EPA/OAQPS/CORE CBI Office, (13) The total operating time of each file with the CBI omitted must be Attention: Group Leader, Measurement affected source during the reporting submitted to the EPA via the EPA’s Policy Group, MD C404–02, 4930 Old period. CDX. All CBI claims must be asserted at Page Rd., Durham, NC 27703. The same * * * * * the time of submission. Furthermore, file with the CBI omitted must be (h) If you are required to submit under CAA section 114(c) emissions submitted to the EPA via the EPA’s CDX reports following the procedure data is not entitled to confidential as described in this paragraph (i). All specified in this paragraph (h), you must treatment and requires EPA to make CBI claims must be asserted at the time submit reports to the EPA via the emissions data available to the public. of submission. Furthermore, under CAA Compliance and Emissions Data Thus, emissions data will not be section 114(c) emissions data is not Reporting Interface (CEDRI), which can protected as CBI and will be made entitled to confidential treatment and be accessed through the EPA’s Central publicly available. requires EPA to make emissions data Data Exchange (CDX) (https:// (i) Within 60 days after the date of available to the public. Thus, emissions cdx.epa.gov/). The EPA will make all completing each performance test data will not be protected as CBI and the information submitted through required by this subpart, you must will be made publicly available. CEDRI available to the public without submit the results of the performance (j) Within 60 days after the date of further notice to you. Do not use CEDRI test following the procedures specified completing each continuous monitoring in paragraphs (i)(1) through (3) of this system (CMS) performance evaluation to submit information you claim as section. (as defined in § 63.2), you must submit confidential business information (CBI). (1) Data collected using test methods the results of the performance Anything submitted using CEDRI cannot supported by the EPA’s Electronic evaluation following the procedures later be claimed to be CBI. For Reporting Tool (ERT) as listed on the specified in paragraphs (j)(1) through (3) semiannual compliance reports required EPA’s ERT website (https:// of this section. in this section and Table 9 (row 1) to www.epa.gov/electronic-reporting-air- (1) Performance evaluations of CMS this subpart, you must use the emissions/electronic-reporting-tool-ert) measuring relative accuracy test audit appropriate electronic report template at the time of the test. Submit the results (RATA) pollutants that are supported by on the CEDRI website (https:// of the performance test to the EPA via the EPA’s ERT as listed on the EPA’s www.epa.gov/electronic-reporting-air- CEDRI, which can be accessed through ERT website at the time of the emissions/compliance-and-emissions- the EPA’s CDX (https://cdx.epa.gov/). evaluation. Submit the results of the data-reporting-interface-cedri) for this The data must be submitted in a file performance evaluation to the EPA via subpart once the reporting template has format generated through the use of the CEDRI, which can be accessed through been available on the CEDRI website for EPA’s ERT. Alternatively, you may the EPA’s CDX. The data must be 1 year. The date report templates submit an electronic file consistent with submitted in a file format generated become available will be listed on the the extensible markup language (XML) through the use of the EPA’s ERT. CEDRI website. If the reporting form for schema listed on the EPA’s ERT Alternatively, you may submit an the semiannual compliance report website. electronic file consistent with the XML specific to this subpart is not available (2) Data collected using test methods schema listed on the EPA’s ERT in CEDRI at the time that the report is that are not supported by the EPA’s ERT website. due, you must submit the report to the as listed on the EPA’s ERT website at (2) Performance evaluations of CMS Administrator at the appropriate the time of the test. The results of the measuring RATA pollutants that are not addresses listed in § 63.13. You must performance test must be included as an supported by the EPA’s ERT as listed on begin submitting all subsequent reports attachment in the ERT or an alternate the EPA’s ERT website at the time of the via CEDRI in the first full reporting electronic file consistent with the XML evaluation. The results of the period after the report template for this schema listed on the EPA’s ERT performance evaluation must be subpart has been available in CEDRI for website. Submit the ERT generated included as an attachment in the ERT or 1 year. Initial Notifications developed package or alternative file to the EPA via an alternate electronic file consistent according to § 63.2280(b) and CEDRI. with the XML schema listed on the Notifications of Compliance Status (3) Confidential Business Information EPA’s ERT website. Submit the ERT developed according to § 63.2280(d) (CBI). The EPA will make all the generated package or alternative file to may be uploaded in a user-specified information submitted through CEDRI the EPA via CEDRI. format such as portable document available to the public without further (3) Confidential Business Information format (PDF). The report must be notice to you. Do not use CEDRI to (CBI). The EPA will make all the submitted by the deadline specified in submit information you claim as CBI. information submitted through CEDRI this subpart, regardless of the method in Anything submitted using CEDRI cannot available to the public without further which the report is submitted. Although later be claimed to be CBI. Although we notice to you. Do not use CEDRI to we do not expect persons to assert a do not expect persons to assert a claim submit information you claim as CBI. claim of CBI, if persons wish to assert of CBI, if you claim some of the Anything submitted using CEDRI cannot a CBI claim, submit a complete report, information submitted under this later be claimed to be CBI. Although we including information claimed to be paragraph (i) is CBI, you must submit a do not expect persons to assert a claim CBI, to the EPA. The report must be complete file, including information of CBI, if you claim some of the generated using the appropriate form on claimed to be CBI, to the EPA. The file information submitted under this the CEDRI website. Submit the file on a must be generated through the use of the paragraph (j) is CBI, you must submit a compact disc, flash drive, or other EPA’s ERT or an alternate electronic file complete file, including information commonly used electronic storage consistent with the XML schema listed claimed to be CBI, to the EPA. The file medium and clearly mark the medium on the EPA’s ERT website. Submit the must be generated through the use of the as CBI. Mail the electronic medium to file on a compact disc, flash drive, or EPA’s ERT or an alternate electronic file U.S. EPA/OAQPS/CORE CBI Office, other commonly used electronic storage consistent with the XML schema listed Attention: Group Leader, Measurement medium and clearly mark the medium on the EPA’s ERT website. Submit the

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file on a compact disc, flash drive, or (7) In any circumstance, the report § 63.2282 What records must I keep? other commonly used electronic storage must be submitted electronically as (a) * * * medium and clearly mark the medium soon as possible after the outage is (2) Before August 13, 2021, the as CBI. Mail the electronic medium to resolved. records in § 63.6(e)(3)(iii) through (v) U.S. EPA/OAQPS/CORE CBI Office, (l) If you are required to electronically related to startup, shutdown, and Attention: Group Leader, Measurement submit a report through CEDRI in the malfunction for affected sources that Policy Group, MD C404–02, 4930 Old EPA’s CDX by this subpart, you may commenced construction or Page Rd., Durham, NC 27703. The same assert a claim of force majeure for reconstruction before September 6, file with the CBI omitted must be failure to timely comply with the 2019. After August 13, 2021] for affected submitted to the EPA via the EPA’s CDX electronic submittal requirement in this sources that commenced construction or as described in this paragraph (j). All section. To assert a claim of force reconstruction after September 6, 2019, CBI claims must be asserted at the time majeure, you must meet the and on and after August 13, 2021 for all of submission. Furthermore, under CAA requirements outlined in paragraphs other affected sources, the records section 114(c) emissions data is not (l)(1) through (5) of this section. related to startup and shutdown, entitled to confidential treatment and (1) You may submit a claim if a force failures to meet the standard, and requires EPA to make emissions data majeure event is about to occur, occurs, actions taken to minimize emissions, available to the public. Thus, emissions or has occurred or there are lingering specified in paragraphs (a)(2)(i) through data will not be protected as CBI and effects from such an event within the (iv) of this section. will be made publicly available. period of time beginning five business (i) Record the date, time, and duration (k) If you are required to days prior to the date the submission is of each startup and/or shutdown period, electronically submit a report or due. For the purposes of this section, a including the periods when the affected notification through CEDRI in the EPA’s force majeure event is defined as an source was subject to the standard CDX by this subpart, you may assert a event that will be or has been caused by applicable to startup and shutdown. claim of EPA system outage for failure circumstances beyond the control of the (ii) In the event that an affected unit to timely comply with the electronic affected facility, its contractors, or any fails to meet an applicable standard, submittal reporting requirement in this entity controlled by the affected facility record the number of failures; for each section. To assert a claim of EPA system that prevents you from complying with failure, record the date, time, cause and outage, you must meet the requirements the requirement to submit a report duration of each failure. outlined in paragraphs (k)(1) through (7) electronically within the time period (iii) For each failure to meet an of this section. prescribed. Examples of such events are applicable standard, record and retain a (1) You must have been or will be acts of nature (e.g., hurricanes, list of the affected sources or equipment, precluded from accessing CEDRI and earthquakes, or floods), acts of war or and the following information: submitting a required report within the terrorism, or equipment failure or safety (A) For any failure to meet a time prescribed due to an outage of hazard beyond the control of the compliance option in § 63.2240, either the EPA’s CEDRI or CDX systems. affected facility (e.g., large scale power including the compliance options in (2) The outage must have occurred outage). Table 1A or 1B to this subpart or the within the period of time beginning 5 (2) You must submit notification to emissions averaging compliance option, business days prior to the date that the the Administrator in writing as soon as record an estimate of the quantity of submission is due. possible following the date you first each regulated pollutant emitted over (3) The outage may be planned or knew, or through due diligence should any emission limit and a description of unplanned. have known, that the event may cause the method used to estimate the (4) You must submit notification to or has caused a delay in reporting. emissions. (B) For each failure to meet an the Administrator in writing as soon as (3) You must provide to the operating requirement in Table 2 to this possible following the date you first Administrator: subpart or work practice requirement in knew, or through due diligence should (i) A written description of the force have known, that the event may cause Table 3 to this subpart, maintain majeure event; sufficient information to estimate the or has caused a delay in reporting. (ii) A rationale for attributing the (5) You must provide to the quantity of each regulated pollutant delay in reporting beyond the regulatory emitted over the emission limit. This Administrator a written description deadline to the force majeure event; identifying: information must be sufficient to (iii) Measures taken or to be taken to (i) The date(s) and time(s) when CDX provide a reliable emissions estimate if minimize the delay in reporting; and or CEDRI was accessed and the system requested by the Administrator. was unavailable; (iv) The date by which you propose to (iv) Record actions taken to minimize (ii) A rationale for attributing the report, or if you have already met the emissions in accordance with delay in reporting beyond the regulatory electronic submittal requirement in this § 63.2250(g), and any corrective actions deadline to EPA system outage; subpart at the time of the notification, taken to return the affected unit to its the date you submitted the report. (iii) Measures taken or to be taken to normal or usual manner of operation. minimize the delay in reporting; and (4) The decision to accept the claim * * * * * (iv) The date by which you propose to of force majeure and allow an extension (c) * * * report, or if you have already met the to the reporting deadline is solely (2) Previous (i.e., superseded) electronic submittal requirement in this within the discretion of the versions of the performance evaluation subpart at the time of the notification, Administrator. plan, with the program of corrective the date you submitted the report. (5) In any circumstance, the reporting action included in the plan required (6) The decision to accept the claim must occur as soon as possible after the under § 63.8(d)(2). of EPA system outage and allow an force majeure event occurs. * * * * * extension to the reporting deadline is ■ 13. Section 63.2282 is amended by (f) You must keep the written CMS solely within the discretion of the revising paragraphs (a)(2) and (c)(2) and quality control procedures required by Administrator. adding paragraph (f) to read as follows: § 63.8(d)(2) on record for the life of the

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affected source or until the affected ■ 16. Section 63.2291 is amended by Non-HAP coating means a coating source is no longer subject to the revising paragraph (c) introductory text with HAP contents below 0.1 percent by provisions of this subpart, to be made and adding paragraph (c)(5) to read as mass for Occupational Safety and available for inspection, upon request, follows: Health Administration-defined by the Administrator. If the performance carcinogens as specified in section A.6.4 evaluation plan is revised, you must § 63.2291 Who implements and enforces of appendix A to 29 CFR 1910.1200, and this subpart? keep previous (i.e., superseded) versions below 1.0 percent by mass for other of the performance evaluation plan on * * * * * HAP compounds. (c) The authorities that will not be record to be made available for * * * * * delegated to State, local, or tribal inspection, upon request, by the Representative operating conditions agencies are listed in paragraphs (c)(1) Administrator, for a period of 5 years means operation of a process unit through (5) of this section. after each revision to the plan. The during performance testing under the program of corrective action should be * * * * * conditions that the process unit will included in the plan required under (5) Approval of an alternative to any typically be operating in the future, § 63.8(d)(2). electronic reporting to the EPA required including use of a representative range ■ 14. Section 63.2283 is amended by by this subpart. of materials (e.g., wood material of a adding paragraph (d) to read as follows: ■ 17. Section 63.2292 is amended by: typical species mix and moisture ■ a. Revising the definitions of ‘‘MSF,’’ content or typical resin formulation) § 63.2283 In what form and how long must ‘‘Non-HAP coating,’’ and and representative operating I keep my records? ‘‘Representative operating conditions’’; temperature range. Representative * * * * * ■ b. Adding the definition of ‘‘Safety- operating conditions exclude periods of (d) Any records required to be related shutdown’’ in alphabetical startup and shutdown. maintained by this part that are order; and * * * * * submitted electronically via the EPA’s ■ c. Removing the definition of Safety-related shutdown means an CEDRI may be maintained in electronic ‘‘Startup, shutdown, and malfunction unscheduled shutdown of a process unit format. This ability to maintain plan.’’ subject to a compliance option in Table electronic copies does not affect the The revisions and addition read as 1B to this subpart (or a process unit requirement for facilities to make follows: with HAP control under an emissions records, data, and reports available averaging plan developed according to upon request to a delegated air agency § 63.2292 What definitions apply to this subpart? § 63.2240(c)) during which time or the EPA as part of an on-site emissions from the process unit cannot compliance evaluation. * * * * * MSF means thousand square feet (92.9 be safely routed to the control system in ■ 15. Section 63.2290 is revised to read square meters). Square footage of panels place to meet the compliance options or as follows: is usually measured on a thickness operating requirements in this subpart § 63.2290 What parts of the general basis, such as 3⁄8-inch, to define the total without imminent danger to the process, provisions apply to me? volume of panels. Equation 3 of control system, or system operator. Table 10 to this subpart shows which § 63.2262(j) shows how to convert from * * * * * parts of the general provisions in §§ 63.1 one thickness basis to another. ■ 18. Table 2 to subpart DDDD is revised through 63.16 apply to you. * * * * * to read as follows:

TABLE 2 TO SUBPART DDDD OF PART 63—OPERATING REQUIREMENTS

If you operate a(n) . . . You must . . . Or you must . . .

(1) Thermal oxidizer ...... Maintain the 3-hour block average firebox temperature Maintain the 3-hour block average THC above the minimum temperature established during the concentration 1 in the thermal oxi- performance test. dizer exhaust below the maximum concentration established during the performance test. (2) Catalytic oxidizer ...... Maintain the 3-hour block average catalytic oxidizer tem- Maintain the 3-hour block average THC perature above the minimum temperature established concentration 1 in the catalytic oxi- during the performance test; AND check the activity level dizer exhaust below the maximum of a representative sample of the catalyst annually ex- concentration established during the cept as specified in footnote ‘‘2’’ to this table. performance test. (3) Biofilter ...... Maintain the 24-hour block biofilter bed temperature within Maintain the 24-hour block average the range established according to § 63.2262(m). THC concentration 1 in the biofilter exhaust below the maximum con- centration established during the per- formance test. (4) Control device other than a thermal Petition the EPA Administrator for site-specific operating Maintain the 3-hour block average THC oxidizer, catalytic oxidizer, or biofilter. parameter(s) to be established during the performance concentration 1 in the control device test and maintain the average operating parameter(s) exhaust below the maximum con- within the range(s) established during the performance centration established during the per- test. formance test.

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TABLE 2 TO SUBPART DDDD OF PART 63—OPERATING REQUIREMENTS—Continued

If you operate a(n) . . . You must . . . Or you must . . .

(5) Process unit that meets a compliance Maintain on a daily basis the process unit controlling oper- Maintain the 3-hour block average THC option in Table 1A to this subpart, or a ating parameter(s) within the ranges established during concentration 1 in the process unit process unit that generates debits in the performance test according to § 63.2262(n). exhaust below the maximum con- an emissions average without the use centration established during the per- of a control device. formance test. 1 You may choose to subtract methane from THC measurements. 2 You may forego the annual catalyst activity check during the calendar year when a performance test is conducted according to Table 4 to this subpart.

■ 19. Table 3 to subpart DDDD is revised to read as follows:

TABLE 3 TO SUBPART DDDD OF PART 63—WORK PRACTICE REQUIREMENTS

For the following process units at existing or new affected sources . . . You must . . .

(1) Dry rotary dryers ...... Process furnish with a 24-hour block average inlet moisture content of less than or equal to 30 percent (by weight, dry basis); AND operate with a 24-hour block average inlet dryer tem- perature of less than or equal to 600 °F. (2) Hardwood veneer dryers ...... Process less than 30 volume percent softwood species on an annual basis. (3) Softwood veneer dryers ...... Minimize fugitive emissions from the dryer doors through (proper maintenance procedures) and the green end of the dryers (through proper balancing of the heated zone exhausts). (4) Veneer redryers ...... Process veneer that has been previously dried, such that the 24-hour block average inlet moisture content of the veneer is less than or equal to 25 percent (by weight, dry basis). (5) Group 1 miscellaneous coating operations .. Use non-HAP coatings as defined in § 63.2292. (6) Process units and control systems under- Follow documented site-specific procedures such as use of automated controls or other meas- going safety-related shutdown on and after ures that you have developed to protect workers and equipment to ensure that the flow of August 13, 2021 except as noted in footnote raw materials (such as furnish or resin) and fuel or process heat (as applicable) ceases and ‘‘1’’ to this table. that material is removed from the process unit(s) as expeditiously as possible given the sys- tem design to reduce air emissions. (7) Pressurized refiners undergoing startup or Route exhaust gases from the pressurized refiner to its dryer control system no later than 15 shutdown on and after August 13, 2021 ex- minutes after wood is fed to the pressurized refiner during startup. Stop wood flow into the cept as noted in footnote ‘‘1’’ to this table. pressurized refiner no more than 15 minutes after wood fiber and exhaust gases from the pressurized refiner stop being routed to the dryer during shutdown. (8) Direct-fired softwood veneer dryers under- Cease feeding green veneer into the softwood veneer dryer and minimize the amount of time going startup or shutdown of gas-fired burn- direct gas-fired softwood veneer dryers are vented to the atmosphere due to the conditions ers on and after August 13, 2021 except as described in § 63.2250(d). noted in footnote ‘‘1’’ to this table. 1 New or reconstructed affected sources that commenced construction or reconstruction after September 6, 2019 must comply with this re- quirement beginning on August 13, 2020 or upon initial startup, whichever is later.

■ 20. Table 4 to subpart DDDD is revised to read as follows:

TABLE 4 TO SUBPART DDDD OF PART 63—REQUIREMENTS FOR PERFORMANCE TESTS

For . . . You must . . . Using . . .

(1) each process unit subject to a compliance option in select sampling port’s loca- Method 1 or 1A of 40 CFR part 60, appendix A–1 (as table 1A or 1B to this subpart or used in calculation of tion and the number of appropriate). an emissions average under § 63.2240(c). traverse ports. (2) each process unit subject to a compliance option in determine velocity and vol- Method 2 in addition to Method 2A, 2C, 2D, 2F, or 2G table 1A or 1B to this subpart or used in calculation of umetric flow rate. in appendices A–1 and A–2 to 40 CFR part 60 (as an emissions average under § 63.2240(c). appropriate). (3) each process unit subject to a compliance option in conduct gas molecular Method 3, 3A, or 3B in appendix A–2 to 40 CFR part table 1A or 1B to this subpart or used in calculation of weight analysis. 60 (as appropriate). an emissions average under § 63.2240(c). (4) each process unit subject to a compliance option in measure moisture content Method 4 in appendix A–3 to 40 CFR part 60; OR table 1A or 1B to this subpart or used in calculation of of the stack gas. Method 320 in appendix A to this part; OR ASTM an emissions average under § 63.2240(c). D6348–03 (IBR, see § 63.14). (5) each process unit subject to a compliance option in measure emissions of total Method 25A in appendix A–7 to 40 CFR part 60. You table 1B to this subpart for which you choose to dem- HAP as THC. may measure emissions of methane using EPA onstrate compliance using a total HAP as THC com- Method 18 in appendix A–6 to 40 CFR part 60 and pliance option. subtract the methane emissions from the emissions of total HAP as THC.

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TABLE 4 TO SUBPART DDDD OF PART 63—REQUIREMENTS FOR PERFORMANCE TESTS—Continued

For . . . You must . . . Using . . .

(6) each process unit subject to a compliance option in measure emissions of total Method 320 in appendix A to this part; OR the NCASI table 1A to this subpart; OR for each process unit HAP (as defined in Method IM/CAN/WP–99.02 (IBR, see § 63.14); OR used in calculation of an emissions average under § 63.2292). the NCASI Method ISS/FP–A105.01 (IBR, see § 63.2240(c). § 63.14); OR ASTM D6348–03 (IBR, see § 63.14) provided that percent R as determined in Annex A5 of ASTM D6348–03 is equal or greater than 70 per- cent and less than or equal to 130 percent. (7) each process unit subject to a compliance option in measure emissions of Method 308 in appendix A to this part; OR Method 320 table 1B to this subpart for which you choose to dem- methanol. in appendix A to this part; OR the NCASI Method CI/ onstrate compliance using a methanol compliance op- WP–98.01 (IBR, see § 63.14); OR the NCASI Method tion. IM/CAN/WP–99.02 (IBR, see § 63.14); OR the NCASI Method ISS/FP–A105.01 (IBR, see § 63.14). (8) each process unit subject to a compliance option in measure emissions of form- Method 316 in appendix A to this part; OR Method 320 table 1B to this subpart for which you choose to dem- aldehyde. in appendix A to this part; OR Method 0011 in ‘‘Test onstrate compliance using a formaldehyde compliance Methods for Evaluating Solid Waste, Physical/Chem- option. ical Methods’’ (EPA Publication No. SW–846) for formaldehyde (IBR, see § 63.14); OR the NCASI Method CI/WP–98.01 (IBR, see § 63.14); OR the NCASI Method IM/CAN/WP–99.02 (IBR, see § 63.14); OR the NCASI Method ISS/FP–A105.01 (IBR, see § 63.14). (9) each reconstituted wood product press at a new or meet the design specifica- Methods 204 and 204A through 204F of 40 CFR part existing affected source or reconstituted wood product tions included in the defi- 51, appendix M, to determine capture efficiency (ex- board cooler at a new affected source subject to a nition of wood products cept for wood products enclosures as defined in compliance option in table 1B to this subpart or used enclosure in § 63.2292; § 63.2292). Enclosures that meet the definition of in calculation of an emissions average under or determine the percent wood products enclosure or that meet Method 204 § 63.2240(c). capture efficiency of the requirements for a permanent total enclosure (PTE) enclosure directing emis- are assumed to have a capture efficiency of 100 per- sions to an add-on con- cent. Enclosures that do not meet either the PTE re- trol device. quirements or design criteria for a wood products en- closure must determine the capture efficiency by con- structing a TTE according to the requirements of Method 204 and applying Methods 204A through 204F (as appropriate). As an alternative to Methods 204 and 204A through 204F, you may use the tracer gas method contained in appendix A to this subpart. (10) each reconstituted wood product press at a new or determine the percent cap- a TTE and Methods 204 and 204A through 204F (as existing affected source or reconstituted wood product ture efficiency. appropriate) of 40 CFR part 51, appendix M. As an board cooler at a new affected source subject to a alternative to installing a TTE and using Methods 204 compliance option in table 1A to this subpart. and 204A through 204F, you may use the tracer gas method contained in appendix A to this subpart. En- closures that meet the design criteria (1) through (4) in the definition of wood products enclosure, or that meet Method 204 requirements for a PTE (except for the criteria specified in section 6.2 of Method 204) are assumed to have a capture efficiency of 100 per- cent. Measured emissions divided by the capture effi- ciency provides the emission rate. (11) each process unit subject to a compliance option in establish the site-specific data from the parameter monitoring system or THC tables 1A and 1B to this subpart or used in calculation operating requirements CEMS and the applicable performance test meth- of an emissions average under § 63.2240(c). (including the parameter od(s). limits or THC concentra- tion limits) in table 2 to this subpart.

■ 21. Table 6 to subpart DDDD is revised to read as follows:

TABLE 6 TO SUBPART DDDD OF PART 63—INITIAL COMPLIANCE DEMONSTRATIONS FOR WORK PRACTICE REQUIREMENTS

For each . . . For the following work practice requirements . . . You have demonstrated initial compliance if . . .

(1) Dry rotary dryer ...... Process furnish with an inlet moisture content less You meet the work practice requirement AND you than or equal to 30 percent (by weight, dry basis) submit a signed statement with the Notification of AND operate with an inlet dryer temperature of Compliance Status that the dryer meets the cri- less than or equal to 600 °F. teria of a ‘‘dry rotary dryer’’ AND you have a record of the inlet moisture content and inlet dryer temperature (as required in § 63.2263).

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TABLE 6 TO SUBPART DDDD OF PART 63—INITIAL COMPLIANCE DEMONSTRATIONS FOR WORK PRACTICE REQUIREMENTS—Continued

For each . . . For the following work practice requirements . . . You have demonstrated initial compliance if . . .

(2) Hardwood veneer dryer ...... Process less than 30 volume percent softwood spe- You meet the work practice requirement AND you cies. submit a signed statement with the Notification of Compliance Status that the dryer meets the cri- teria of a ‘‘hardwood veneer dryer’’ AND you have a record of the percentage of softwoods processed in the dryer (as required in § 63.2264). (3) Softwood veneer dryer ...... Minimize fugitive emissions from the dryer doors You meet the work practice requirement AND you and the green end. submit with the Notification of Compliance Status a copy of your plan for minimizing fugitive emis- sions from the veneer dryer heated zones (as re- quired in § 63.2265). (4) Veneer redryers ...... Process veneer with an inlet moisture content of You meet the work practice requirement AND you less than or equal to 25 percent (by weight, dry submit a signed statement with the Notification of basis). Compliance Status that the dryer operates only as a redryer AND you have a record of the ve- neer inlet moisture content of the veneer proc- essed in the redryer (as required in § 63.2266). (5) Group 1 miscellaneous coating Use non-HAP coatings as defined in §63.2292 ...... You meet the work practice requirement AND you operations. submit a signed statement with the Notification of Compliance Status that you are using non-HAP coatings AND you have a record showing that you are using non-HAP coatings. (6) Process units and control sys- Follow documented site-specific procedures to en- You meet the work practice requirement AND you tems undergoing safety-related sure the flow of raw materials and fuel or process have a record of safety-related shutdown proce- shutdown on and after August 13, heat ceases and that material is removed from dures available for inspection by the delegated 2021, except as noted in footnote the process unit(s) as expeditiously as possible authority upon request. ‘‘1’’ to this table. given the system design to reduce air emissions. (7) Pressurized refiners undergoing Route exhaust gases from the pressurized refiner You meet the work practice requirement AND you startup or shutdown on and after to its dryer control system no later than 15 min- have a record of pressurized refiner startup and August 13, 2021, except as noted utes after wood is fed to the pressurized refiner shutdown procedures available for inspection by in footnote ‘‘1’’ to this table. during startup. Stop wood flow into the pressur- the delegated authority upon request. ized refiner no more than 15 minutes after wood fiber and exhaust gases from the pressurized re- finer stop being routed to the dryer during shut- down. (8) Direct-fired softwood veneer dry- Cease feeding green veneer into the softwood ve- You meet the work practice requirement AND you ers undergoing startup or shut- neer dryer and minimize the amount of time di- have a record of the procedures for startup and down of gas-fired burners on and rect gas-fired softwood veneer dryers are vented shutdown of softwood veneer dryer gas-fired after August 13, 2021, except as to the atmosphere due to the conditions de- burners available for inspection by the delegated noted in footnote ‘‘1’’ to this table. scribed in § 63.2250(d). authority upon request. 1 New or reconstructed affected sources that commenced construction or reconstruction after September 6, 2019 must comply with this re- quirement beginning on August 13, 2020 or upon initial startup, whichever is later.

■ 22. Table 7 to subpart DDDD is revised to read as follows:

TABLE 7 TO SUBPART DDDD OF PART 63—CONTINUOUS COMPLIANCE WITH THE COMPLIANCE OPTIONS AND OPERATING REQUIREMENTS

For the following compliance options and operating You must demonstrate continuous compliance For . . . requirements . . . by . . .

(1) Each process unit listed in Table Compliance options in Table 1B to this subpart or Collecting and recording the operating parameter 1B to this subpart or used in cal- the emissions averaging compliance option in monitoring system data listed in Table 2 to this culation of an emissions average § 63.2240(c) and the operating requirements in subpart for the process unit according to under § 63.2240(c). Table 2 to this subpart based on monitoring of §§ 63.2269(a) through (b) and 63.2270; AND re- operating parameters. ducing the operating parameter monitoring sys- tem data to the specified averages in units of the applicable requirement according to calculations in § 63.2270; AND maintaining the average oper- ating parameter at or above the minimum, at or below the maximum, or within the range (which- ever applies) established according to § 63.2262.

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TABLE 7 TO SUBPART DDDD OF PART 63—CONTINUOUS COMPLIANCE WITH THE COMPLIANCE OPTIONS AND OPERATING REQUIREMENTS—Continued

For the following compliance options and operating You must demonstrate continuous compliance For . . . requirements . . . by . . .

(2) Each process unit listed in Ta- Compliance options in Tables 1A and 1B to this Collecting and recording the THC monitoring data bles 1A and 1B to this subpart or subpart or the emissions averaging compliance listed in Table 2 to this subpart for the process used in calculation of an emis- option in § 63.2240(c) and the operating require- unit according to § 63.2269(d); AND reducing the sions average under § 63.2240(c). ments in Table 2 to this subpart based on THC CEMS data to 3-hour block averages according CEMS data. to calculations in § 63.2269(d); AND maintaining the 3-hour block average THC concentration in the exhaust gases less than or equal to the THC concentration established according to § 63.2262. (3) Each process unit using a bio- Compliance options in Tables 1B to this subpart or Conducting a repeat performance test using the ap- filter. the emissions averaging compliance option in plicable method(s) specified in Table 4 to this § 63.2240(c). subpart 1 within 2 years following the previous performance test and within 180 days after each replacement of any portion of the biofilter bed media with a different type of media or each re- placement of more than 50 percent (by volume) of the biofilter bed media with the same type of media. (4) Each process unit using a cata- Compliance options in Table 1B to this subpart or Checking the activity level of a representative sam- lytic oxidizer. the emissions averaging compliance option in ple of the catalyst at least annually 2 and taking § 63.2240(c). any necessary corrective action to ensure that the catalyst is performing within its design range. (5) Each process unit listed in Table Compliance options in Table 1A to this subpart or Collecting and recording on a daily basis process 1A to this subpart, or each proc- the emissions averaging compliance option in unit controlling operating parameter data; AND ess unit without a control device § 63.2240(c) and the operating requirements in maintaining the operating parameter at or above used in calculation of an emis- Table 2 to this subpart based on monitoring of the minimum, at or below the maximum, or within sions averaging debit under process unit controlling operating parameters. the range (whichever applies) established ac- § 63.2240(c). cording to § 63.2262. (6) Each Process unit listed in Table Compliance options in Table 1B to this subpart or Implementing your plan to address how organic 1B to this subpart using a wet the emissions averaging compliance option in HAP captured in the wastewater from the wet control device as the sole means § 63.2240(c). control device is contained or destroyed to mini- of reducing HAP emissions. mize re-release to the atmosphere. (7) Each process unit listed in Table Compliance options in Tables 1B to this subpart ..... Conducting a repeat performance test using the ap- 1B to this subpart using a control plicable method(s) specified in Table 4 to this device other than a biofilter. subpart 1 by August 13, 2023 or within 60 months following the previous performance test, which- ever is later, and thereafter within 60 months fol- lowing the previous performance test. 1 When conducting a repeat performance test, the capture efficiency demonstration required in Table 4 to this subpart, row 9 is not required to be repeated with the repeat emissions test if the capture device is maintained and operated consistent with its design as well as its operation during the previous capture efficiency demonstration conducted according to Table 4 to this subpart, row 9 as specified in § 63.2267. 2 You may forego the annual catalyst activity check during the calendar year when a performance test is conducted according to Table 4 to this subpart.

■ 23. Table 8 to subpart DDDD is revised to read as follows:

TABLE 8 TO SUBPART DDDD OF PART 63—CONTINUOUS COMPLIANCE WITH THE WORK PRACTICE REQUIREMENTS

You must demonstrate continuous compliance For . . . For the following work practice requirements . . . by . . .

(1) Dry rotary dryer ...... Process furnish with an inlet moisture content less Maintaining the 24-hour block average inlet furnish than or equal to 30 percent (by weight, dry basis) moisture content at less than or equal to 30 per- AND operate with an inlet dryer temperature of cent (by weight, dry basis) AND maintaining the less than or equal to 600 °F. 24-hour block average inlet dryer temperature at less than or equal to 600 °F; AND keeping records of the inlet temperature of furnish mois- ture content and inlet dryer temperature. (2) Hardwood veneer dryer ...... Process less than 30 volume percent softwood spe- Maintaining the volume percent softwood species cies. processed below 30 percent AND keeping records of the volume percent softwood species processed. (3) Softwood veneer dryer ...... Minimize fugitive emissions from the dryer doors Following (and documenting that you are following) and the green end. your plan for minimizing fugitive emissions.

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TABLE 8 TO SUBPART DDDD OF PART 63—CONTINUOUS COMPLIANCE WITH THE WORK PRACTICE REQUIREMENTS— Continued

You must demonstrate continuous compliance For . . . For the following work practice requirements . . . by . . .

(4) Veneer redryers ...... Process veneer with an inlet moisture content of Maintaining the 24-hour block average inlet mois- less than or equal to 25 percent (by weight, dry ture content of the veneer processed at or below basis). of less than or 25 percent AND keeping records of the inlet moisture content of the veneer proc- essed. (5) Group 1 miscellaneous coating Use non-HAP coatings as defined in § 63.2292 ...... Continuing to use non-HAP coatings AND keeping operations. records showing that you are using non-HAP coatings. (6) Process units and control sys- Follow documented site-specific procedures to en- Keeping records showing that you are following the tems undergoing safety-related sure the flow of raw materials and fuel or process work practice requirements during safety-related shutdown on and after August 13, heat ceases and that material is removed from shutdowns. 2021, except as noted in footnote the process unit(s) as expeditiously as possible ‘‘1’’ to this table. given the system design to reduce air emissions. (7) Pressurized refiners undergoing Route exhaust gases from the pressurized refiner Keeping records showing that you are following the startup or shutdown on and after to its dryer control system no later than 15 min- work practice requirements during pressurized re- August 13, 2021, except as noted utes after wood is fed to the pressurized refiner finer startup and shutdown events. in footnote ‘‘1’’ to this table. during startup. Stop wood flow into the pressur- ized refiner no more than 15 minutes after wood fiber and exhaust gases from the pressurized re- finer stop being routed to the dryer during shut- down.. (8) Direct-fired softwood veneer dry- Cease feeding green veneer into the softwood ve- Keeping records showing that you are following the ers undergoing startup or shut- neer dryer and minimize the amount of time di- work practice requirements while undergoing down of gas-fired burners on and rect gas-fired softwood veneer dryers are vented startup or shutdown of softwood veneer dryer di- after August 13, 2021, except as to the atmosphere due to the conditions de- rect gas-fired burners. noted in footnote ‘‘1’’ to this table. scribed in § 63.2250(d). 1 New or reconstructed affected sources that commenced construction or reconstruction after September 6, 2019 must comply with this re- quirement beginning on August 13, 2020 or upon initial startup, whichever is later.

■ 24. Table 9 to subpart DDDD is revised to read as follows:

TABLE 9 TO SUBPART DDDD OF PART 63—REQUIREMENTS FOR REPORTS

You must submit a(n) . . . The report must contain . . . You must submit the report . . .

(1) Compliance report ...... The information in § 63.2281(c) through (g) ...... Semiannually according to the requirements in § 63.2281(b). (2) Immediate startup, shutdown, (i) Actions taken for the event ...... By fax or telephone within 2 working days after and malfunction report if you had starting actions inconsistent with the plan. a startup, shutdown, or malfunc- (ii) The information in § 63.10(d)(5)(ii) ...... By letter within 7 working days after the end of the tion during the reporting period event unless you have made alternative arrange- that is not consistent with your ments with the permitting authority. SSMP before August 13, 2021.1 (3) Performance test report ...... The information required in § 63.7(g) ...... According to the requirements of § 63.2281(i). (4) CMS performance evaluation, as The information required in § 63.7(g) ...... According to the requirements of § 63.2281(j). required for CEMS under § 63.2269(d)(2). 1 The requirement for the SSM report in row 2 of this table does not apply for new or reconstructed affected sources that commenced con- struction or reconstruction after September 6, 2019.

■ 25. Table 10 to subpart DDDD is revised to read as follows: TABLE 10 TO SUBPART DDDD OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO THIS SUBPART

Applies to this subpart Applies to this subpart on before August 13, 2021, and after August 13, Citation Subject Brief description except as noted in 2021, except as noted in footnote ‘‘1’’ to this table footnote ‘‘1’’ to this table

§ 63.1 ...... Applicability ...... Initial applicability determination; applicability after Yes ...... Yes. standard established; permit requirements; exten- sions, notifications. § 63.2 ...... Definitions ...... Definitions for standards in this part ...... Yes ...... Yes. § 63.3 ...... Units and Abbreviations .. Units and abbreviations for standards in this part .... Yes ...... Yes.

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TABLE 10 TO SUBPART DDDD OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO THIS SUBPART—Continued

Applies to this subpart Applies to this subpart on before August 13, 2021, and after August 13, Citation Subject Brief description except as noted in 2021, except as noted in footnote ‘‘1’’ to this table footnote ‘‘1’’ to this table

§ 63.4 ...... Prohibited Activities and Prohibited activities; compliance date; circumven- Yes ...... Yes. Circumvention. tion, fragmentation. § 63.5 ...... Preconstruction Review Preconstruction review requirements of section Yes ...... Yes. and Notification Re- 112(i)(1). quirements. § 63.6(a) ...... Applicability ...... GP apply unless compliance extension; GP apply to Yes ...... Yes. area sources that become major. § 63.6(b)(1)–(4) ...... Compliance Dates for Standards apply at effective date; 3 years after ef- Yes ...... Yes. New and Reconstructed fective date; upon startup; 10 years after con- Sources. struction or reconstruction commences for section 112(f). § 63.6(b)(5) ...... Notification ...... Must notify if commenced construction or recon- Yes ...... Yes. struction after proposal. § 63.6(b)(6) ...... [Reserved]. § 63.6(b)(7) ...... Compliance Dates for Area sources that become major must comply with Yes ...... Yes. New and Reconstructed major source standards immediately upon becom- Area Sources that Be- ing major, regardless of whether required to com- come Major. ply when they were an area source. § 63.6(c)(1)–(2) ...... Compliance Dates for Ex- Comply according to date in subpart, which must be Yes ...... Yes. isting Sources. no later than 3 years after effective date; for sec- tion 112(f) standards, comply within 90 days of ef- fective date unless compliance extension. § 63.6(c)(3)–(4) ...... [Reserved]. § 63.6(c)(5) ...... Compliance Dates for Ex- Area sources that become major must comply with Yes ...... Yes. isting Area Sources that major source standards by date indicated in sub- Become Major. part or by equivalent time period (e.g., 3 years). § 63.6(d) ...... [Reserved]. § 63.6(e)(1)(i) ...... General Duty to Minimize You must operate and maintain affected source in a Yes ...... No, see § 63.2250 for Emissions. manner consistent with safety and good air pollu- general duty require- tion control practices for minimizing emissions. ment. § 63.6(e)(1)(ii) ...... Requirement to Correct You must correct malfunctions as soon as prac- Yes ...... No. Malfunctions ASAP. ticable after their occurrence. § 63.6(e)(1)(iii) ...... Operation and Mainte- Operation and maintenance requirements are en- Yes ...... Yes. nance Requirements. forceable independent of emissions limitations or other requirements in relevant standards. § 63.6(e)(2) ...... [Reserved]. § 63.6(e)(3) ...... Startup, Shutdown, and Requirement for SSM and SSMP; content of SSMP Yes ...... No. Malfunction Plan (SSMP). § 63.6(f)(1) ...... SSM Exemption ...... You must comply with emission standards at all No. See § 63.2250(a) ...... No. times except during SSM. § 63.6(f)(2)–(3) ...... Methods for Determining Compliance based on performance test, operation Yes ...... Yes. Compliance/Finding of and maintenance plans, records, inspection. Compliance. § 63.6(g)(1)–(3) ...... Alternative Standard ...... Procedures for getting an alternative standard ...... Yes ...... Yes. § 63.6(h)(1) ...... SSM Exemption ...... You must comply with opacity and visible emission NA ...... No. standards at all times except during SSM. § 63.6(h)(2)–(9) ...... Opacity/Visible Emission Requirements for opacity and visible emission NA ...... NA. (VE) Standards. standards. § 63.6(i)(1)–(14) ...... Compliance Extension ..... Procedures and criteria for Administrator to grant Yes ...... Yes. compliance extension. § 63.6(i)(15) ...... [Reserved]. § 63.6(i)(16) ...... Compliance Extension ..... Compliance extension and Administrator’s authority Yes ...... Yes. § 63.6(j) ...... Presidential Compliance President may exempt source category from re- Yes ...... Yes. Exemption. quirement to comply with rule. § 63.7(a)(1)–(2) ...... Performance Test Dates Dates for conducting initial performance testing and Yes ...... Yes. other compliance demonstrations; must conduct 180 days after first subject to rule. § 63.7(a)(3) ...... Section 114 Authority ...... Administrator may require a performance test under Yes ...... Yes. CAA section 114 at any time. § 63.7(b)(1) ...... Notification of Perform- Must notify Administrator 60 days before the test .... Yes ...... Yes. ance Test. § 63.7(b)(2) ...... Notification of Resched- If have to reschedule performance test, must notify Yes ...... Yes. uling. Administrator as soon as practicable. § 63.7(c) ...... Quality Assurance/Test Requirement to submit site-specific test plan 60 Yes ...... Yes. Plan. days before the test or on date Administrator agrees with; test plan approval procedures; per- formance audit requirements; internal and exter- nal QA procedures for testing. § 63.7(d) ...... Testing Facilities ...... Requirements for testing facilities ...... Yes ...... Yes. § 63.7(e)(1) ...... Performance Testing ...... Performance tests must be conducted under rep- Yes ...... No, see § 63.2262(a)–(b). resentative conditions; cannot conduct perform- ance tests during SSM; not a violation to exceed standard during SSM. § 63.7(e)(2) ...... Conditions for Conducting Must conduct according to rule and EPA test meth- Yes ...... Yes. Performance Tests. ods unless Administrator approves alternative.

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TABLE 10 TO SUBPART DDDD OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO THIS SUBPART—Continued

Applies to this subpart Applies to this subpart on before August 13, 2021, and after August 13, Citation Subject Brief description except as noted in 2021, except as noted in footnote ‘‘1’’ to this table footnote ‘‘1’’ to this table

§ 63.7(e)(3) ...... Test Run Duration ...... Must have three test runs for at least the time spec- Yes ...... Yes. ified in the relevant standard; compliance is based on arithmetic mean of three runs; specifies conditions when data from an additional test run can be used. § 63.7(f) ...... Alternative Test Method .. Procedures by which Administrator can grant ap- Yes ...... Yes. proval to use an alternative test method. § 63.7(g) ...... Performance Test Data Must include raw data in performance test report; Yes ...... Yes. Analysis. must submit performance test data 60 days after end of test with the notification of compliance sta- tus; keep data for 5 years. § 63.7(h) ...... Waiver of Tests ...... Procedures for Administrator to waive performance Yes ...... Yes. test. § 63.8(a)(1) ...... Applicability of Monitoring Subject to all monitoring requirements in standard .. Yes ...... Yes. Requirements. § 63.8(a)(2) ...... Performance Specifica- Performance specifications in appendix B of part 60 Yes ...... Yes. tions. of this chapter apply. § 63.8(a)(3) ...... [Reserved]. § 63.8(a)(4) ...... Monitoring with Flares ..... Requirements for flares in § 63.11 apply ...... NA ...... NA. § 63.8(b)(1) ...... Monitoring ...... Must conduct monitoring according to standard un- Yes ...... Yes. less Administrator approves alternative. § 63.8(b)(2)–(3) ...... Multiple Effluents and Specific requirements for installing monitoring sys- Yes ...... Yes. Multiple Monitoring Sys- tems; must install on each effluent before it is tems. combined and before it is released to the atmos- phere unless Administrator approves otherwise; if more than one monitoring system on an emission point, must report all monitoring system results, unless one monitoring system is a backup. § 63.8(c)(1) ...... Monitoring System Oper- Maintain monitoring system in a manner consistent Yes ...... Yes. ation and Maintenance. with and good air pollution control practices. § 63.8(c)(1)(i) ...... Operation and Mainte- Must maintain and operate CMS in accordance with Yes ...... No. nance of CMS. § 63.6(e)(1). § 63.8(c)(1)(ii) ...... Spare Parts for CMS ...... Must maintain spare parts for routine CMS repairs .. Yes ...... Yes. § 63.8(c)(1)(iii) ...... Requirements to Develop Must develop and implement SSMP for CMS ...... Yes ...... No. SSMP for CMS. § 63.8(c)(2)–(3) ...... Monitoring System Instal- Must install to get representative emission of pa- Yes ...... Yes. lation. rameter measurements; must verify operational status before or at performance test. § 63.8(c)(4) ...... CMS Requirements ...... CMS must be operating except during breakdown, Yes ...... Yes. out-of-control, repair, maintenance, and high-level calibration drifts; COMS must have a minimum of one cycle of sampling and analysis for each suc- cessive 10-second period and one cycle of data recording for each successive 6-minute period; CEMS must have a minimum of one cycle of op- eration for each successive 15-minute period. § 63.8(c)(5) ...... Continuous Opacity Moni- COMS minimum procedures ...... NA ...... NA. toring System (COMS) Minimum Procedures. § 63.8(c)(6)–(8) ...... CMS Requirements ...... Zero and high-level calibration check requirements; Yes ...... Yes. out-of-control periods. § 63.8(d)(1)–(2) ...... CMS Quality Control...... Requirements for CMS quality control, including Yes. Refer to Yes. Refer to calibration, etc.. § 63.2269(a)–(c) for § 63.2269(a)–(c) for CPMS quality control CPMS quality control procedures to be in- procedures to be in- cluded in the quality cluded in the quality control program. control program. § 63.8(d)(3) ...... Written Procedures for Must keep quality control plan on record for 5 years. Yes ...... No, see § 63.2282(f). CMS. Keep old versions for 5 years after revisions. May incorporate as part of SSMP to avoid duplication.. § 63.8(e) ...... CMS Performance Eval- Notification, performance evaluation test plan, re- Yes, for CEMS ...... Yes, for CEMS. uation. ports. § 63.8(f)(1)–(5) ...... Alternative Monitoring Procedures for Administrator to approve alternative Yes ...... Yes. Method. monitoring. § 63.8(f)(6) ...... Alternative to Relative Ac- Procedures for Administrator to approve alternative Yes, for CEMS ...... Yes, for CEMS. curacy Test. relative accuracy tests for CEMS. § 63.8(g) ...... Data Reduction ...... COMS 6-minute averages calculated over at least Yes ...... Yes. 36 evenly spaced data points; CEMS 1 hour aver- ages computed over at least 4 equally spaced data points; data that can’t be used in average; rounding of data. § 63.9(a) ...... Notification Requirements Applicability and State delegation ...... Yes ...... Yes. § 63.9(b)(1)–(2) ...... Initial Notifications...... Submit notification 120 days after effective date; Yes ...... Yes. contents of notification. § 63.9(b)(3) ...... [Reserved].

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TABLE 10 TO SUBPART DDDD OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO THIS SUBPART—Continued

Applies to this subpart Applies to this subpart on before August 13, 2021, and after August 13, Citation Subject Brief description except as noted in 2021, except as noted in footnote ‘‘1’’ to this table footnote ‘‘1’’ to this table

§ 63.9(b)(4)–(5) ...... Initial Notifications ...... Submit notification 120 days after effective date; no- Yes ...... Yes. tification of intent to construct/reconstruct; notifica- tion of commencement of construct/reconstruct; notification of startup; contents of each. § 63.9(c) ...... Request for Compliance Can request if cannot comply by date or if installed Yes ...... Yes. Extension. best available control technology/lowest achiev- able emission rate. § 63.9(d) ...... Notification of Special For sources that commence construction between Yes ...... Yes. Compliance Require- proposal and promulgation and want to comply 3 ments for New Source. years after effective date. § 63.9(e) ...... Notification of Perform- Notify EPA Administrator 60 days prior ...... Yes ...... Yes. ance Test. § 63.9(f) ...... Notification of Visible Notify EPA Administrator 30 days prior ...... No ...... No. Emissions/Opacity Test. § 63.9(g) ...... Additional Notifications Notification of performance evaluation; notification Yes ...... Yes. When Using CMS. using COMS data; notification that exceeded cri- terion for relative accuracy. § 63.9(h)(1)–(6) ...... Notification of Compliance Contents; due 60 days after end of performance Yes ...... Yes. Status. test or other compliance demonstration, except for opacity/VE, which are due 30 days after; when to submit to Federal vs. State authority. § 63.9(i) ...... Adjustment of Submittal Procedures for Administrator to approve change in Yes ...... Yes. Deadlines. when notifications must be submitted. § 63.9(j) ...... Change in Previous Infor- Must submit within 15 days after the change ...... Yes ...... Yes. mation. § 63.10(a) ...... Recordkeeping/Reporting Applies to all, unless compliance extension; when to Yes ...... Yes. submit to Federal vs. State authority; procedures for owners of more than one source. § 63.10(b)(1) ...... Recordkeeping/Reporting General Requirements; keep all records readily Yes ...... Yes. available; keep for 5 years. § 63.10(b)(2)(i) ...... Recordkeeping of Occur- Records of occurrence and duration of each startup Yes ...... No, see § 63.2282(a). rence and Duration of or shutdown that causes source to exceed emis- Startups and Shut- sion limitation. downs. § 63.10(b)(2)(ii) ...... Recordkeeping of Failures Records of occurrence and duration of each mal- Yes ...... No, see § 63.2282(a) for to Meet a Standard. function of operation or air pollution control and recordkeeping of (1) monitoring equipment. date, time and duration; (2) listing of affected source or equipment, and an estimate of the quantity of each regu- lated pollutant emitted over the standard; and (3) actions to minimize emissions and correct the failure. § 63.10(b)(2)(iii) ...... Maintenance Records ...... Records of maintenance performed on air pollution Yes ...... Yes. control and monitoring equipment. § 63.10(b)(2)(iv)–(v) ...... Actions Taken to Mini- Records of actions taken during SSM to minimize Yes ...... No. mize Emissions During emissions. SSM. § 63.10(b)(2)(vi) and (x)– CMS Records ...... Malfunctions, inoperative, out-of-control ...... Yes ...... Yes. (xi). § 63.10(b)(2)(vii)–(ix) ...... Records ...... Measurements to demonstrate compliance with Yes ...... Yes. compliance options and operating requirements; performance test, performance evaluation, and visible emission observation results; measure- ments to determine conditions of performance tests and performance evaluations. § 63.10(b)(2)(xii) ...... Records ...... Records when under waiver ...... Yes ...... Yes. § 63.10(b)(2)(xiii) ...... Records ...... Records when using alternative to relative accuracy Yes ...... Yes. test. § 63.10(b)(2)(xiv) ...... Records ...... All documentation supporting initial notification and Yes ...... Yes. notification of compliance status. § 63.10(b)(3) ...... Records ...... Applicability determinations ...... Yes ...... Yes. § 63.10(c)(1)–(6), (9)– Records ...... Additional records for CMS ...... Yes ...... Yes. (14). § 63.10(c)(7)–(8) ...... Records ...... Records of excess emissions and parameter moni- No ...... No. toring exceedances for CMS. § 63.10(c)(15) ...... Use of SSMP ...... Use SSMP to satisfy recordkeeping requirements Yes ...... No. for identification of malfunction, correction action taken, and nature of repairs to CMS. § 63.10(d)(1) ...... General Reporting Re- Requirement to report ...... Yes ...... Yes. quirements. § 63.10(d)(2) ...... Report of Performance When to submit to Federal or State authority ...... Yes ...... Yes. Test Results. § 63.10(d)(3) ...... Reporting Opacity or VE What to report and when ...... NA ...... NA. Observations.

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TABLE 10 TO SUBPART DDDD OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO THIS SUBPART—Continued

Applies to this subpart Applies to this subpart on before August 13, 2021, and after August 13, Citation Subject Brief description except as noted in 2021, except as noted in footnote ‘‘1’’ to this table footnote ‘‘1’’ to this table

§ 63.10(d)(4) ...... Progress Reports ...... Must submit progress reports on schedule if under Yes ...... Yes. compliance extension. § 63.10(d)(5)(i) ...... Periodic SSM Reports ..... Contents and submission of periodic SSM reports ... Yes ...... No, see § 63.2281(d)–(e) for malfunction report- ing requirements. § 63.10(d)(5)(ii) ...... Immediate SSM Reports Contents and submission of immediate SSM reports Yes ...... No. § 63.10(e)(1)–(2) ...... Additional CMS Reports .. Must report results for each CEM on a unit; written Yes ...... Yes. copy of performance evaluation; 3 copies of COMS performance evaluation. § 63.10(e)(3) ...... Reports ...... Excess emission reports ...... No ...... No. § 63.10(e)(4) ...... Reporting COMS Data .... Must submit COMS data with performance test data NA ...... NA. § 63.10(f) ...... Waiver for Record- Procedures for EPA Administrator to waive ...... Yes ...... Yes. keeping/Reporting. § 63.11 ...... Control Device and Work Requirements for flares and alternative work prac- NA ...... NA. Practice Requirements. tice for equipment leaks. § 63.12 ...... State Authority and Dele- State authority to enforce standards ...... Yes ...... Yes. gations. § 63.13 ...... Addresses ...... Addresses where reports, notifications, and re- Yes ...... Yes. quests are sent. § 63.14 ...... Incorporations by Ref- Test methods incorporated by reference ...... Yes ...... Yes. erence. § 63.15 ...... Availability of Information Public and confidential information ...... Yes ...... Yes. and Confidentiality. § 63.16 ...... Performance Track Provi- Requirements for Performance Track member facili- Yes ...... Yes. sions. ties. 1 New or reconstructed affected sources that commenced construction or reconstruction after September 6, 2019 must comply with the requirements in column 5 of this table beginning on August 13, 2020 or upon initial startup, whichever is later.

[FR Doc. 2020–12725 Filed 8–12–20; 8:45 am] BILLING CODE 6560–50–P

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Part III

Department of Commerce

International Trade Administration 19 CFR Part 351 Regulations To Improve Administration and Enforcement of Antidumping and Countervailing Duty Laws; Proposed Rule

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DEPARTMENT OF COMMERCE Commerce, 1401 Constitution Ave. NW, The purpose of the regulatory changes Washington, DC 20230. proposed in this rulemaking is to International Trade Administration Commerce will consider all comments strengthen the administration and received before the close of the enforcement of AD/CVD laws, make 19 CFR Part 351 comment period. All comments such administration and enforcement responding to this document will be a more efficient, and create new [Docket No. 200626–0170] matter of public record and will enforcement tools for Commerce to generally be available on the Federal address circumvention and evasion of RIN 0625–AB10 eRulemaking Portal at http:// trade remedies. If adopted, these Regulations To Improve www.Regulations.gov. Commerce will changes would equip Commerce to Administration and Enforcement of not accept comments accompanied by a better fulfill the Congressional intent Antidumping and Countervailing Duty request that part or all of the material be behind the AD/CVD laws—namely, to Laws treated confidentially because of its protect U.S. companies, workers, business proprietary nature or for any farmers, and ranchers from the injurious AGENCY: Enforcement and Compliance, other reason. Therefore, do not submit effects of unfairly traded imports. In International Trade Administration, confidential business information or addition, if adopted, these changes Department of Commerce. otherwise sensitive or protected would promote the Administration’s ACTION: Proposed rule; request for information. objective to enforce the AD/CVD laws comments. Any questions concerning the process rigorously, and to aggressively pursue for submitting comments should be parties that seek to skirt them. SUMMARY: Pursuant to its authority submitted to Enforcement & Compliance Moreover, the proposed regulations under Title VII of the Tariff Act of 1930, (E&C) Communications office at (202) facilitate a stronger and more efficient as amended (the Act), the Department of 482–0063 or [email protected]. administration of the AD and CVD laws Commerce (Commerce) proposes to FOR FURTHER INFORMATION CONTACT: in the context of Commerce’s modify its regulations under Part 351 of Scott McBride at (202) 482–6292; David proceedings. The proposed changes are Title 19 to improve administration and Mason at (202) 482–5051; or Jessica summarized briefly here, and discussed enforcement of the antidumping duty Link at (202) 482–1411. further below: (AD) and countervailing duty (CVD) SUPPLEMENTARY INFORMATION: • Modify section 351.203 to provide laws. Specifically, Commerce proposes General Background for the establishment of a deadline by to modify its regulation concerning the which parties may file comments on time for submission of comments Title VII of the Act vests Commerce industry support. At present, comments pertaining to industry support in AD with authority to administer the AD/ on industry support may be filed up to and CVD proceedings; to modify its CVD laws, known as trade remedies. In and including the scheduled date of an regulation regarding new shipper particular, section 731 of the Act directs initiation determination, leaving reviews; to modify its regulation Commerce to impose an AD order on Commerce little or no time to consider concerning scope matters in AD and merchandise entering the United States fully such comments for purposes of CVD proceedings; to promulgate a new when it determines that a producer or determining whether the petition has regulation concerning circumvention of exporter is selling a class or kind of sufficient industry support. Therefore, AD and CVD orders; to promulgate a foreign merchandise into the United such modifications are necessary to new regulation concerning covered States at less than fair value (i.e., enhance Commerce’s ability to consider merchandise referrals received from dumping), and material injury or threat and act upon such comments in a timely U.S. Customs and Border Protection of material injury to that industry in the manner. (CBP); to promulgate a new regulation United States is found by the • Revise numerous provisions to pertaining to Commerce requests for International Trade Commission (ITC). section 351.214 concerning new shipper certifications from interested parties to Section 701 of the Act directs reviews to address abuse of those establish whether merchandise is Commerce to impose a CVD order when procedures and ensure that the sales to subject to an AD or CVD order; and to it determines that a government of a be reviewed are, in fact, bona fide sales. modify its regulation regarding importer country or any public entity within the These changes are necessary to conform reimbursement certifications filed with territory of a country is providing, the regulation to recent statutory CBP. Finally, Commerce proposes to directly or indirectly, a countervailable changes 2 and to ensure Commerce modify its regulations regarding letters subsidy with respect to the expends its limited resources on new of appearance in AD and CVD manufacture, production, or export of a shipper reviews only where warranted. proceedings and importer filing class or kind of merchandise that is • Revise numerous provisions to requirements for access to business imported into the United States, and section 351.225 concerning scope proprietary information. Commerce is material injury or threat of material inquiries by adopting new procedures to seeking public comments on this injury to that industry in the United preserve resources, expedite deadlines, 1 proposed rule. States is found by the ITC. and remove unnecessary and DATES: To be assured of consideration, burdensome notice and service 1 A countervailable subsidy is further defined written comments must be received no under section 771(5)(B) of the Act as existing when: requirements. These revisions also later than September 14, 2020. A government or any public entity within the clarify and codify the substantive basis ADDRESSES: Submit comments through territory of a country provides a financial for Commerce’s scope rulings pertaining contribution; provides any form of income or price to country of origin, scope language the Federal eRulemaking Portal at support; or makes a payment to a funding http://www.Regulations.gov, Docket No. mechanism to provide a financial contribution, or interpretation, and ‘‘mixed-media’’ ITA–2020–0001. Comments may also be entrusts or directs a private entity to make a submitted by mail or hand delivery/ financial contribution, if providing the contribution a subsidy must be specific within the meaning of would normally be vested in the government and section 771(5A) of the Act. courier, addressed to Jeffrey I. Kessler, the practice does not differ in substance from 2 Trade Facilitation and Trade Enforcement Act of Assistant Secretary for Enforcement and practices normally followed by governments; and a 2015, Public Law 114–125, 130 Stat. 122, 155 Compliance, Room 1870, Department of benefit is thereby conferred. To be countervailable, (2016).

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products, which incorporate subject maximum of 40 days solely for purposes Act of 2015’’ or ‘‘EAPA’’).5 Section 433 merchandise in some form, in light of of determining industry support. At of EAPA (entitled ‘‘Addressing past practice and various court present, comments on industry support Circumvention by New Shippers’’) decisions. These revisions also ensure may be filed up to and including the made two important revisions to the that AD/CVD duties are appropriately scheduled date of an initiation new shipper review procedures under applied to products determined to be determination, leaving Commerce little section 751(a)(2)(B) of the Act. subject to the scope of the order. or no time to consider fully such First, in legislative history explaining • comments for purposes of determining Adopt new section 351.226 these amendments, Congress expressed whether the petition has sufficient concerning circumvention inquiries, concern regarding the abuse of new industry support. To address this, which largely mirrors the proposed shipper review procedures to avoid AD/ scope procedures. These provisions also Commerce proposes to modify section CVD duties.6 One area of abuse in clarify Commerce’s authority to self- 351.203 to provide for the establishment particular involved the ability of an initiate circumvention inquiries and of a deadline for comments no later than importer of a new shipper’s apply circumvention determinations on five business days before the scheduled merchandise to post a bond or security a ‘‘country-wide’’ basis. date of initiation; and rebuttal in lieu of cash deposits for entries of • Adopt new section 351.227 comments no later than two days that merchandise for the duration of the concerning ‘‘covered merchandise thereafter. new shipper review.7 Therefore, to referrals’’ from CBP under section 517 of New Shipper Reviews—Section 351.214 the Act, which largely mirror the prevent such abuse of these procedures, proposed scope and circumvention Commerce proposes to modify its section 433 of EAPA removed the ability procedures and allow Commerce regulation pertaining to new shipper for importers to post AD/CVD-specific maximum flexibility to further develop reviews under section 751(a)(2)(B) of the bonds or security in lieu of AD/CVD its procedures and practice as it gains Act and section 351.214. Section cash deposits by striking this provision 8 more experience in this new area of the 751(a)(2)(B) of the Act provides a from section 751(a)(2)(B) of the Act. law. procedure by which exporters or Second, section 433 added a • Adopt new section 351.228, which producers who did not export the provision that the individual dumping is specifically targeted at improving product during the original AD or CVD margin or countervailing duty rate enforcement of AD and CVD orders and investigation can obtain their own determined for a new shipper must be ensuring the effectiveness of those individual dumping margin or based on bona fide sales in the United orders. Under new section 351.228, countervailing duty rate on an States, and codified the factors that Commerce may determine to impose a accelerated basis (referred to as a ‘‘new Commerce has historically used to certification requirement on an importer shipper review’’). This provision was determine whether a sale is bona fide.9 or another interested party to further enacted in the Uruguay Round 3 In explaining this proposed change, ensure that entries of merchandise Agreements Act (URAA) in 1994, and Congress identified abuse of new subject to an AD/CVD order are Commerce promulgated its shipper review procedures where a new accompanying new shipper review { } appropriately classified as subject 4 shipper ‘‘enter s into a scheme to merchandise. regulation, section 351.214, in 1997. structure a few sales to show little or no • Modify section 351.402 regarding This regulation provides the rules dumping or subsidization when those importer certifications for the payment regarding requests for new shipper sales are reviewed . . . resulting in a reviews and procedures for conducting or reimbursement of AD/CVD duties on low or zero antidumping or such reviews, and is largely unchanged entries subject to AD orders to account countervailing duty rate for that for updated procedures. since 1997. Under this provision, Commerce conducts a new shipper • Adopt necessary changes, 5 review to establish an individual Public Law 114–125, 130 Stat. 122, 155 (2016). consistent with certain substantive 6 See H.R. Rep. No. 114–114, at 89 (2015) (‘‘The proposed rules discussed above, to two weighted-average dumping margin or Committee is concerned that the ability of new procedural provisions: Section countervailable subsidy rate if it exporters and producers to obtain their own receives a properly documented request individual weighted average dumping margins or 351.103(d)(1) pertaining to letters of individual countervailing duty rates from the appearance and public service lists, and for review. In 2016, the Trade Facilitation and Department of Commerce on an expedited basis section 351.305(d) pertaining to (known as ‘new shipper reviews’) has been abused Trade Enforcement Act of 2015 was importer filing requirements for access to avoid antidumping and countervailing duties.’’) signed into law, which contains Title 7 Id. (‘‘One area of abuse is taking advantage of to business proprietary information in IV—Prevention of Evasion of the option to post a bond or security, rather than Commerce’s proceedings. Antidumping and Countervailing Duty the normally required cash deposit, while the Department of Commerce conducts a new shipper Explanation of the Proposed Rules Orders (short title ‘‘Enforce and Protect review. This allows an importer to bring in large Comment Period on Industry Support quantities of dumped or subsidized merchandise 3 See Uruguay Round Agreements Act, Statement from the exporter or producer under review without Prior to Initiation Determination— of Administrative Action, H.R. Doc. No. 103–316, having to provide in cash the full amount of Section 351.203 vol. 1, at 816 (1994) (SAA) (‘‘Article 9.5 {of the estimated duties that could be owed on those Anti-Dumping Agreement} establishes special imports. Having to put up less capital makes it Once an AD petition under section procedures for imposing antidumping duties on easier for unscrupulous importers to enter into 732(b) of the Act or a CVD petition exporters or producers who did not export the schemes to bring in dumped and subsidized under section 702(b) is filed, the statute product to the importing country during the merchandise with the intent of disappearing or provides Commerce with 20 days in original period of investigation (so-called ‘new otherwise not being available to pay the shippers’).’’). antidumping and countervailing duties owed on the which to determine whether the 4 See Antidumping Duties; Countervailing Duties, imports. This loophole would be closed by elements necessary for initiation of an Proposed Rule, 61 FR 7308, 7317–18 (Feb. 27, 1996) requiring importers of merchandise from a producer investigation have been satisfied, (1996 Proposed Rule) (discussing the proposed new or exporter in a new shipper review to provide a including the requirement to shipper review regulation); Antidumping Duties; cash deposit of estimated duties.’’) Countervailing Duties, Final Rule, 62 FR 27296, 8 See § 433, 130 Stat. at 171; see also H.R. Rep No. demonstrate industry support. In 27318–19 (May 19, 1997) (1997 Final Rule) 114–376, at 192 (2015) (Conf. Rep.). exceptional circumstances, Commerce (discussing the finalized new shipper review 9 See § 433, 130 Stat. at 171; see also H.R. Rep. may extend the 20-day period to a regulation). No. 114–376 at 192–193.

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producer or exporter.’’ 10 As a result of fide new shipper.’’ 13 In doing so, from the unaffiliated customer in the such scheme: ‘‘An importer could then Commerce explained: United States that it will provide bring in that producer or exporter’s The purpose of these certifications is to necessary information requested by merchandise at highly dumped or ensure that new shipper status is not Commerce regarding its purchase of subsidized prices but with little or no achieved through mere restructuring of subject merchandise. With respect to cash deposit. The problem is further corporate organizations or channels of (1), this language was previously exacerbated if the importer disappears distribution. In accordance with the SAA, at discussed in the 1997 Final Rule, among 875, this provision also makes clear that a number of other suggestions which or otherwise becomes unavailable to pay parties will not be granted new shipper status the duties owed and U.S. Customs and were aimed at discouraging meritless merely because they were not individually 17 Border Protection (CBP) has little or no examined during the investigation.14 requests for new shipper reviews. At the time, Commerce was beginning to cash deposit against which to recover In responding to comments in the the owed duties.’’ 11 Accordingly, to develop its practice with respect to new 12 1997 Final Rule, Commerce noted that shipper reviews, which was a new protect against such schemes, section it had received one request that 433 added section 751(a)(2)(B)(iv) to the procedure adopted in the URAA in Commerce ‘‘clarify that a person can 1994.18 In light of this limited Act, providing that, in determining request a new shipper review as long as whether the sales in the United States experience, Commerce declined to there is a bona fide sale of subject adopt a proposal to require additional of a new shipper made during the merchandise to the United States, even period covered by the review is bona documentation from an exporter if that merchandise has not yet been claiming to be a new shipper, or to fide, Commerce shall consider with shipped to or entered the United require certifications from the respect to such sales: Pricing, 15 States.’’ Although Commerce did not purchaser, explaining that ‘‘{w}hile the commercial quantities, timing, address the ‘‘bona fide’’ nature of such Department has no interest in dealing expenses, resale at profit, and arm’s- sale, Commerce explained: with meritless claims for new shipper length basis. Additionally, under The initiation of new shipper reviews and reviews, by the same token, we do not section 751(a)(2)(B)(iv), Commerce may the issuance of questionnaires requires an want to discourage meritorious consider any other factor which it expenditure of administrative resources by claims.’’ 19 However, in light of determines to be relevant as to whether the Department that is not inconsiderable Commerce’s past 20 years of practice in such sales are, or are not, likely to be when cumulated across all AD/CVD this area, and the circumvention and proceedings. In our view, the Department typical of those the new shipper will abuse of procedures concerns expressed make after completion of the review. should not expend these resources unless there is a reasonable likelihood that there by Congress in adopting the 2016 As a result of the above, Commerce is ultimately will be a transaction for the amendments to the new shipper review making conforming amendments to Department to review; namely, as discussed statute, we believe that the additional section 351.214 discussed below. The below, an entry and sale to an unaffiliated requirements above are needed to modifications to section 351.214 would purchaser.16 discourage meritless claims, and to clarify the circumstances under which Consistent with this earlier preserve Commerce’s resources in Commerce will expend the resources discussion, and in light of the concerns conducting new shipper reviews where required to reach a determination in a related to circumvention and abuse of there is a reasonable likelihood that the review conducted under section new shipper review procedures unaffiliated customer will participate in 751(a)(2)(B) of the Act, among other expressed by Congress in enacting the review. issues. section 751(a)(2)(B)(iv) of the Act, Consistent with these same considerations, proposed paragraph Revised paragraph (a) would update Commerce proposes to expend its resources in conducting a new shipper (b)(2)(v) (currently paragraph (b)(2)(iv)) the introduction to section 351.214 by requires specific documentation which including reference to current section review only where there is a reasonable likelihood that there ultimately will be would allow Commerce to conduct a 751(a)(2)(B) of the Act and the statutory bona fides analysis under section requirement for bona fide sales in a new a bona fide sale for Commerce to review. Thus, proposed revisions to 751(a)(2)(B)(iv) of the Act. This includes shipper review. Consistent with the paragraph (b)(1) provide that a producer information pertaining to whether revised statutory language in section or exportermay request a new shipper shipments were made in commercial 751(a)(2)(B)(iv) of the Act, proposed review if it can demonstrate the quantities, the date of any subsequent revisions to paragraph (b)(1), pertaining existence of a bona fide sale. Commerce sales, circumstances surrounding the to requests for new shipper reviews, expects that a producer or exporter sale, such as price, expenses, resale for provide that, in requesting a new could make such a demonstration by profit, and the arm’s-length basis of the shipper review, an exporter or producer complying with the proposed sale. Additionally, documentation must not only satisfy the export or sale requirements in proposed paragraph establishing the business activities of requirement but must also demonstrate (b)(2)(iv), and proposed revisions to the producer or exporter would also be the existence of a bona fide sale. With paragraph (b)(2)(v). required under this proposed paragraph regard to existing section 351.214(b), Under proposed paragraph (b)(2)(iv), a (i.e., the producer’s or exporter’s offers Commerce explained in the 1996 request for a new shipper review must to sell merchandise in the United States, Proposed Rule that it was requiring contain (1) a certification from the identification of the complete certain certifications from the requestor unaffiliated customer in the United circumstances surrounding the ‘‘demonstrating that the party is a bona States that it did not purchase the exporter’s or producers’ sales to the subject merchandise from the producer United States, home market or any third 10 H.R. Rep. No. 114–114 at 89. or exporter during the period of country markets (if applicable), an 11 Id. investigation, and (2) a certification explanation of any non-producing 12 Id. (‘‘This provision would prevent such exporter’s relationship with its arrangements by requiring that the U.S. sales in a 13 new shipper review be bona fide sales and setting See 1996 Proposed Rule, 61 FR at 7317–18. out criteria for identifying bona fide sales, reflecting 14 See 1997 Final Rule, 62 FR at 27318–19. 17 Id., 62 FR at 27319. the Department of Commerce’s current regulations 15 Id., 62 FR at 27319. 18 See 1996 Proposed Rule, 61 FR at 7317. and practices in this area.’’) 16 Id. 19 See 1997 Final Rule, 62 FR at 27319.

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producer/supplier, and identification of provide that Commerce likewise may factors would aid Commerce in the producer’s or exporter’s relationship rescind a new shipper review, in whole developing a consistent practice of to the first unrelated U.S. customer). or in part, where (1) information that evaluating typical behavior of the new Proposed revisions to paragraph (c) Commerce considers necessary to shipper. Additionally, we believe this provide a conforming amendment to conduct a bona fide sales analysis is not proposal reflects Commerce’s past reflect the change in numbering in on the record, or (2) the producer or twenty years of practice in this area, and paragraph (b)(2). exporter at issue has failed to would address the concerns regarding Proposed paragraph (d) would be demonstrate, to the satisfaction of circumvention, duty evasion, and abuse entitled ‘‘Initiation of new shipper Commerce, the existence of a bona fide of procedures expressed by Congress in review.’’ Paragraph (d)(1) would clarify sale to an unaffiliated customer. This adopting the 2016 amendments to the that Commerce will initiate a new new provision would be consistent with new shipper review statute. shipper review if the requirements for a Commerce’s existing practice in both Scope—Section 351.225 request for new shipper review under new shipper reviews and administrative paragraph (b) are satisfied. Paragraphs reviews, that Commerce cannot conduct Upon issuance of an AD or CVD (d)(1)–(3), discussing time limits for the a review where there is no bona fide order, the Act requires Commerce to initiation of a new shipper review, sale.22 This would also clarify that provide a description of the class or would remain unchanged (with the Commerce has the option to rescind kind of merchandise subject to the order exception of a minor grammatical edit where the information required for its at issue (i.e., subject merchandise).23 in paragraph (d)(2)). These provisions analysis is missing. However, nothing in That description is known as the scope would require Commerce to initiate a this provision is intended to preclude of the AD/CVD order. Because the new shipper review in the calendar Commerce from completing the new statute ‘‘does not require Commerce to month immediately following the shipper review by applying the define the class or kind of foreign anniversary month, or semi-annual provision governing facts available in merchandise in any particular anniversary month of the order, as section 776 of the Act where necessary. manner{,} Commerce has the authority applicable. This is consistent with the Commerce proposes no changes to to fill that gap and define the scope of statement in the SAA that new exporters paragraphs (g)–(j), and current an order consistent with the or producers may request an accelerated paragraphs (k) and (l) would be re- countervailing duty and antidumping new shipper review at any time.20 lettered to (l) and (m), respectively. duty laws.’’ 24 Further, ‘‘under the Paragraph (d)(4) would provide that if Further, re-lettered paragraph (l) statutory scheme, Commerce owes Commerce determines that the contains minor formatting amendments deference to the intent of the proposed requirements for a request for new and also removes reference to the scope of an antidumping investigation shipper review under paragraph (b) posting of an AD/CVD-specific bond or as expressed in an antidumping have not been satisfied, the Secretary security in lieu of an AD/CVD cash petition.’’ 25 Thus, Commerce retains will reject the request and provide a deposit pursuant to the changes in considerable discretion to define the written explanation of the reasons for paragraph (e) discussed above. scope of the order to ensure that all the rejection. Lastly, proposed paragraph (k) would imports causing injury have been Proposed revisions to paragraph (e) clarify the factors Commerce will addressed, and, additionally, may take would eliminate language that requires consider in making a bona fide sale into account potential circumvention Commerce to allow, at the option of the determination. This paragraph would and duty evasion concerns in crafting importer, the posting of an AD/CVD- explain that Commerce shall consider the scope language.26 specific bond or security in lieu of an the enumerated factors in section After issuance of an AD/CVD order, AD/CVD cash deposit for each entry of 751(a)(2)(B)(iv) and identifies, for Commerce directs CBP to ‘‘suspend the subject merchandise. This proposed purposes of section 751(a)(2)(B)(iv)(VII) liquidation’’ and collect cash deposits, modification implements the same of the Act, the additional factors that or estimated amounts of duties, on amendment to section 751(a)(2)(B) of Commerce shall consider in appropriate entries subject to the scope the Act under section 433 of the EAPA determining whether the examined sale of the order corresponding to the as discussed above, which eliminated is typical, or not, of any future sales by margins of dumping established under the option of posting an AD/CVD bond the new shipper. These additional an AD order and the countervailable or security in new shipper reviews.21 factors include whether the parties in duty rates established under a CVD 27 Proposed paragraph (e) would also the transaction were established for order. On a yearly basis, interested clarify that, when a new shipper review purposes of the sale(s) in question after parties may request that Commerce is initiated, Commerce will direct CBP the imposition of the order, whether the conduct an administrative review to to suspend or continue to suspend parties have other lines of business determine the appropriate dumping liquidation of any relevant unliquidated unrelated to the subject merchandise, margin or CVD rate for entries subject to entry of subject merchandise at the whether there is an established history 23 See section 706(a)(2) of the Act; section applicable cash deposit rate. of duty evasion with respect to new 736(a)(2) of the Act; section 771(25) of the Act. Proposed revisions to paragraph (f) shipper reviews under the order or 24 See Canadian Solar, Inc. v. United States, 918 would expand on Commerce’s ability to circumvention in the same or similar F.3d 909, 917 (Fed. Cir. 2019) (internal citations rescind new shipper reviews, in whole industry, the quantity of sales, and any and punctuation omitted) (Canadian Solar). or in part, where a producer or exporter other factor which Commerce 25 Ad Hoc Shrimp Trade Action Committee v. United States, 637 F. Supp. 2d 1166, 1174 (CIT timely withdraws its request for a new determines to be relevant with respect 2009). shipper review, or where Commerce to the future selling behavior of the 26 See Canadian Solar, 918 F.3d at 921–22 (‘‘It is determines there is an absence of entry producer or exporter, including any unnecessary for Commerce to engage in a game of or sale to an unaffiliated customer. other indicia that the sale was not whack-a-mole when it may reasonably define the class or kind of merchandise in a single set of Proposed new paragraph (f)(3) would commercially viable. These additional orders, and within the context of a single set of investigations, to include all imports causing 20 See SAA at 816. 22 See, e.g., Haixing Jingmei Chem. Prods. Sales injury.’’). 21 See § 433, 130 Stat. at 171; see also H.R. Rep. Co. v. United States, 357 F. Supp. 3d 1337, 1351 27 See generally section 706 of the Act; section No. 114–376 at 192–193. (Ct. Int’l Trade 2018). 736 of the Act. See also 19 CFR 351.211.

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the order during the previous review Furthermore, each agency has its own determine that certain products are year.28 Commerce directs CBP to ‘‘lift authority to ensure the effectiveness of circumventing existing AD/CVD orders, suspension of liquidation’’ and assess the trade remedy laws in accordance and thus lawfully may be considered final duties according to Commerce’s with its statutory mandate. Congress, within the scope of the order(s), even administrative review procedures.29 and the courts, have long recognized when the products do not fall within the Under this dual statutory framework, that Commerce has the vested authority literal scope language.36 Commerce Commerce is the agency charged with to administer the trade remedy laws in proposes to revise section 351.225 in its establishing and interpreting the scope accordance with their intent, and has entirety to clarify and improve of AD/CVD orders,30 and CBP is the the discretion to take appropriate Commerce’s procedures and standards agency charged with applying and enforcement measures to ensure the related to scope matters which have enforcing the AD/CVD orders by—upon effectiveness of its AD/CVD orders by evolved since Commerce’s current scope instruction from Commerce—collecting preventing duty evasion and regulations were issued in 1997.37 As appropriate cash deposits and assessing circumvention.34 As discussed below, discussed further below, Commerce final duties on appropriate entries of Commerce has several existing proposes to adopt new section 351.226 merchandise into the United States mechanisms to ensure effective to address circumvention matters. covered by the scope of an order.31 As enforcement of its AD/CVD orders, We propose revising paragraph (a) to part of its statutory responsibility ‘‘to fix while CBP has its own authority to set forth the general purpose and rules the amount of duty owed on imported conduct civil administrative which govern scope proceedings. This is goods{,}’’ CBP ‘‘is both empowered and investigations of duty evasion of AD/ distinguished from the current obligated to determine in the first CVD orders, including as provided for paragraph (a), which governs both scope instance whether goods are subject to in section 517 of the Act.35 In exercising proceedings and circumvention existing {AD/CVD orders}.’’ 32 Pursuant their separate authorities, Commerce proceedings. Commerce is now to 19 U.S.C. 1514(b) (section 514 of the and CBP frequently work together to proposing that circumvention Act), this ‘‘determination is then ‘final ensure the effectiveness of the trade proceedings under section 781 of the and conclusive’ unless an interested remedy laws. In this proposed rule, Act be covered by a new regulation, party seeks a scope ruling from Commerce has taken additional steps to proposed section 351.226. An additional Commerce (which ruling would then be ensure that it continues to exercise its significant change in this proposed rule, reviewable pursuant to {19 U.S.C. authority to administer the AD/CVD which would be codified in proposed 1516a}).’’ 33 laws, in cooperation with CBP, and in paragraph (a) and throughout revised accordance with its mandate to prevent section 351.225, eliminates the 28 See section 751(a)(1) of the Act. duty evasion and circumvention. distinction between a simpler, or 29 See 19 CFR 351.212–213. Because the scope of an AD/CVD informal, scope ruling procedure (i.e., a 30 See Xerox Corp. v. United States, 289 F.3d 792, order is written in general terms, ruling based upon the application) and 795 (Fed. Cir. 2002) (‘‘Commerce should in the first questions may arise as to whether a a formal scope inquiry. This is instance decide whether an antidumping order certain product is within the scope, and covers particular products, because the order’s discussed in further detail below. meaning and scope are issues particularly within therefore covered by the order. In such Proposed paragraph (a) also explains the expertise of that agency.’’) (internal citations cases, Commerce’s existing regulation, that, unless otherwise specified in and punctuation omitted). section 351.225, describes the 31 See Sunpreme Inc. v. United States, 892 F.3d revised section 351.225, Commerce’s applicable procedures and standards existing procedures contained in 1186, 1188 (Fed. Cir. 2018) (Sunpreme I). In concerning ‘‘scope rulings’’ that Sunpreme I, the CAFC held that a party cannot subpart C (i.e., relating to factual Commerce will issue upon application invoke the CIT’s jurisdiction under 28 U.S.C. information (sections 351.102(b)(21) and of an interested party, or by initiating a 1581(i) to challenge CBP’s decision to apply an AD/ 351.301) and the extension of time CVD order to the party’s merchandise where the ‘‘scope inquiry.’’ Additionally, section limits (section 351.302)) apply to scope party had an available remedy by seeking a scope 351.225 provides procedures concerning ruling from Commerce, which subsequently could inquiries. circumvention proceedings conducted have been challenged under 28 U.S.C. 1581(c). Id. Additionally, regarding the term pursuant to section 781 of the Act. at 1192–94. In Sunpreme Inc. v. United States, 924 ‘‘clarify’’ in current paragraph (a), the F.3d 1198 (Fed. Cir. 2019) (Sunpreme II), the CAFC Under these provisions, Commerce may upheld Commerce’s affirmative scope ruling, courts have used this term to try to draw however, a divided panel found that CBP had merchandise. The statute states that such a decision exceeded its authority when it suspended 36 is ‘final and conclusive’ unless it is appealed by See Target Corp. v. United States, 609 F.3d liquidation based on its interpretation of ambiguous petition to Commerce.’’ (citations omitted)). 1352, 1355 (Fed. Cir. 2010). 37 scope language prior to Commerce’s scope ruling, 34 See 1996 Proposed Rule, 61 FR at 7321–22; and, therefore, Commerce could not lawfully order See generally section 781 of the Act; SAA at 892–95; Tung Mung Development Co., Ltd. v. 1997 Final Rule, 62 FR at 27327–30. Section the continuation of suspension of liquidation prior United States, 219 F. Supp. 2d 1333, 1343 (CIT 351.225 in its current form adopted many of the to the initiation of Commerce’s scope inquiry. See 2002) (Tung Mung) (‘‘Commerce has a duty to avoid existing procedures from the preceding regulations, 924 F.3d at 1212–15. In Sunpreme Inc. v. United the evasion of antidumping duties. {Commerce} sections 353.29 and 355.29, which were issued in States, 946 F.3d 1300 (Fed. Cir. 2020) (Sunpreme ‘has been vested with authority to administer the 1990. See 1996 Proposed Rule, 61 FR at 7321 III), the CAFC vacated Sunpreme II in part and held (‘‘With a few exceptions, section 351.225 is {} antidumping laws in accordance with the that ‘‘it is within Customs’ authority to legislative intent. To this end, {Commerce} has a substantively unchanged from existing §§ 353.29 preliminarily suspend liquidation of goods based { } and 355.29{.}’’); see also Antidumping and { } certain amount of discretion to act . . . with the on an ambiguous AD or CVD order, such that the purpose in mind of preventing the intentional Countervailing Duties, Interim Final Rule, 55 FR suspension may be continued following a scope evasion or circumvention of the antidumping duty 9046 (March 9, 1990) (1990 Interim Final Rule) (‘‘To inquiry by Commerce.’’ 946 F.3d at 1303. law.’ ’’) (quoting Mitsubishi Elec. Corp. v. United implement section 781 of the Act (as added by 32 See Sunpreme III, 946 F.3d at 1317 (citing 19 States, 700 F. Supp. 538, 555 (CIT 1988) (Mitsubishi section 1321 of {the Omnibus Trade and U.S.C. 1500(c); Section 500(c) of the Act). I), aff’d 898 F.2d 1577, 1583 (Fed. Cir. 1990) Competitiveness Act of 1988}), new §§ 353.29 and 33 See TR International Trading Co. v. United (Mitsubishi II)). See also Torrington Co. v. United 355.29 establish procedures for the Secretary to States, Ct. No. 19–00022, Slip Op. 20–34 at *7 (CIT States, 745 F. Supp. 718, 721 (CIT 1990), aff’d 938 conduct inquiries to determine whether Mar. 16, 2020) (citing Sunpreme III, 946 F.3d at F.2d 1276 (Fed. Cir. 1991). merchandise is included within the scope of an 1318) (TR International) (appeal pending) 35 Additionally, Homeland Security existing antidumping or countervailing duty finding (referencing section 516 of the Act); see also Fujitsu Investigations (HSI), at the Department of or order. The procedures apply to all scope Ten Corp. v. United States, 957 F. Supp. 245, 248 Homeland Security, has the authority to investigate determinations, including those under section 781 (CIT 1997) (‘‘The statute recognizes Customs makes criminal violations related to illegal evasion of of the Act. In applying these procedures to scope the initial determination that an existing payment of required duties, including payment of determinations other than those under section 781, antidumping order applies to a specific entry of AD/CV duties. See, e.g., 18 U.S.C. 542. {Commerce} is codifying existing practice.’’).

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a distinction between scope language would allow Commerce to address application which would be available to which is ‘‘unambiguous’’ and therefore scope questions in another segment of parties on Commerce’s website. Revised does not require ‘‘clarification’’ under the proceeding, such as an paragraph (c)(2) would list the the section 351.225 procedures, and administrative review under section information required which should be scope language which is ‘‘ambiguous’’ 351.213, a circumvention inquiry under contained in the scope ruling and does require such ‘‘clarification.’’ In new section 351.226, or a covered application. It is understood that practice, the procedures under section merchandise referral under new section interested parties requesting a scope 351.225 are intended to cover a wide 351.227, without separately having to ruling may not have access to all of the variety of scope questions and are not initiate a scope inquiry under section information that would be requested. intended to be restrictive to only those 351.225. To be clear, Commerce would For example, a domestic interested scenarios in which certain language in retain discretion to determine if self- party seeking a scope ruling on a the scope requires ‘‘clarification.’’ initiation is warranted under section product will not be likely to provide the Therefore, we have removed the term 351.225(b) or to address scope questions narrative history of the production of ‘‘clarify’’ from proposed paragraph (a). outside the context of a scope inquiry. the product at issue, including a history Additionally, proposed paragraph (a) Moreover, the onus would remain on of earlier versions of the product, if this explains that a scope ruling that a parties who wish to raise scope is not the first model of the product. For product is within the scope of the order questions in another segment of a this reason, the regulation would is a determination that the product has proceeding, such as an administrative require that the requested information always been within the scope of the review under section 351.213, to in the scope ruling application be order. As explained further below in the provide Commerce with the relevant provided to the extent reasonably discussion of proposed section information needed to address such available to the requestor. The applicant 351.225(l), the fact that an importer did matters (i.e., by submitting a scope would have to explain the reason it does not declare merchandise as subject to an application and supporting information not have certain requested information AD and/or CVD order for a period of as provided in paragraph (c)). when filling out the scope ruling time before Commerce issued a scope Paragraph (c) addresses the application, and Commerce would ruling finding that such merchandise information needed for interested retain the ability to both ask 38 was covered does not justify treating parties to file a scope ruling supplemental questions about those entries that preceded that scope ruling application. Domestic industries, explanations if necessary, as well as as non-subject merchandise. foreign exporters, foreign producers, reject a scope ruling application if the Accordingly, scope rulings will be importers, and those considering information and explanations provided applied to all unliquidated entries of exporting or importing merchandise to are insufficient. subject merchandise, as discussed the United States all have different The use of the term ‘‘particular further below. interests in Commerce making scope product’’ in the current text of rulings on particular merchandise. This paragraphs (a) and (c) of section 351.225 Furthermore, the procedures under paragraph proposes certain amendments has also generated questions over time. section 351.225 are not intended to be to address specific concerns which In practice, Commerce issues scope the only means by which Commerce Commerce has identified with the rulings, which generally apply to a may address scope questions that arise current scope inquiry process. One particular interested party’s product, in its proceedings. The language in concern is that scope ruling requests do relying on the description provided by paragraph (b) in the current version of not always include the requisite the interested party. Sometimes the section 351.225, which states that sufficient description and supporting description of the product does not lend Commerce ‘‘will’’ initiate a scope information necessary for Commerce to itself to a broader ruling that applies to inquiry if certain information is complete an analysis. This has resulted all similar products (for instance, the available, also has raised questions in Commerce issuing numerous requests description of the product is specific to about the agency’s authority to address for further clarification and supporting a party’s specific description, product scope questions outside the section evidence, which have further delayed number, contract, packaging, or 351.225 procedures. For example, its proceedings. Commerce has manufacturing process, etc.). To address Commerce has the existing authority to determined that one way to make this these concerns, proposed revisions to address scope issues in the context of less pervasive is to require parties to fill paragraph (c)(2)(ii) would require another segment of the proceeding out and file a standardized scope ruling parties submitting scope ruling under the AD and/or CVD order, such applications to provide a concise public as an administrative review or 38 The term ‘‘interested party’’ is defined in description of the product at issue. It is circumvention inquiry. Over time, there section 771(9) of the Act, and pertains, for example, Commerce’s intent that the description have been questions about Commerce’s to ‘‘foreign manufacturers,’’ ‘‘producers,’’ ‘‘exporters,’’ or ‘‘United States importers’’ ‘‘of used throughout the scope inquiry and discretion to self-initiate a scope inquiry subject merchandise.’’ However, the nature of a in the final scope ruling will reflect the under the current regulation when an scope ruling is to determine whether the ‘‘particular product’’ at issue—thereby interested party raises the possibility merchandise produced, imported by, or exported by enabling the public and CBP to more that its product is not covered by an a party is ‘‘subject’’ to an AD or CVD order. Thus, easily identify the product at issue. in many cases, the question of whether a party is order during the course of an an ‘‘interested party’’ is tied to the question of Proposed revisions to paragraph administrative review under section whether the merchandise at issue is determined to (c)(2)(v) would also mandate that, in 751(a) of the Act. Commerce has always be subject merchandise or not. Accordingly, for requesting a scope ruling on argued that it has such authority under purposes of these scope regulations, reference to the merchandise which has already been term ‘‘interested party’’ includes a party that current laws and regulations. This issue potentially meets the definition of ‘‘interested imported into the United States as of the would be addressed by revised party’’ under section 771(9) of the Act, depending filing of the scope ruling application, to paragraphs (b) and (i). In particular, upon the outcome of the scope inquiry. This the extent reasonably available, an revised paragraph (b) would clarify that clarification of the term ‘‘interested party’’ for applicant must provide a statement as to purposes of this regulation is in no way intended Commerce ‘‘may’’ self-initiate a scope to negate the requirement that the product is, or has whether an entry of the product has inquiry, if it believes such initiation is been, in actual production as of the filing of the been classified as subject to an AD/CVD warranted; revised paragraph (i)(1) scope ruling application, as discussed below. order by the filer or reclassified as

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subject to an AD/CVD order by CBP adopted in the 1997 rulemaking.40 This demand supplemental information if along with documentation, including was initially intended to streamline the necessary. print-outs of the CBP ACE entry process and expedite review of certain, On a related matter, revised section summary information, identifying the less complex scope issues, but in 351.225 would provide that all scope product upon importation and other Commerce’s experience this has not rulings be issued pursuant to a scope related commercial documents. been the case. Instead, it has led to inquiry consistent with this regulatory Additionally, proposed paragraph unnecessary delay and questions on the provision, with certain exceptions. For (c)(1) provides that the applicant must part of outside parties. For example, in example, Commerce recognizes that demonstrate that the product is or has this 45-day window, Commerce often there may be instances in which been in actual production as of the filing solicits and receives new factual Commerce has already expressly of the scope ruling application.39 It is information and comments from considered the product at issue, and Commerce’s expectation that a party numerous parties, leaving little time to thus a new scope inquiry is not will be able to satisfy this requirement consider the evidence and argument, necessary to address the issue. In such by providing the requisite information and reach a well-reasoned decision instances, new paragraph (m)(1) under proposed paragraphs (c)(2)(iii), within the time allotted. Frequently, discussed below would allow for concerning a narrative of the production Commerce must extend this deadline at Commerce to notify parties that it is history, and (c)(2)(iv), concerning the least once before ultimately determining applying a prior scope ruling to volume of annual production of the to formally initiate a scope inquiry (at products with the identical physical product for the most recently completed which point, a new round of comments description from the same country of fiscal year. is triggered pursuant to paragraph (f), origin. It is Commerce’s intent that this Another procedural matter that has further delaying Commerce’s decision). notification would serve in place of a arisen is a party’s reference to prior This has also led to questions from final scope ruling under new paragraph agency scope rulings and parties as to whether a decision to (h), but the requirements of paragraph determinations in scope requests formally initiate a scope inquiry is a (h) would still apply. As another without the placement of those scope reflection of the difficulty of the issue, example, as noted above and discussed rulings, or the full source document, on thus warranting analysis of the further below, under proposed the record of the segment of the additional factors under paragraph paragraph (i), Commerce would be able administrative proceeding. Those (k)(2). Instead, a decision to formally to address scope questions in the determinations, along with any other initiate is often the result of the limited context of another segment of the relevant source document supporting window in which Commerce has to proceeding, as a means of preserving the party’s position, such as the petition consider the evidence and comments departmental resources. Additionally, or relevant documents from the and reach a well-reasoned decision, under revised paragraph (f)(6) discussed underlying investigation, must be even where the issue itself is neither below, Commerce would be able to placed on the record for Commerce to be complex nor controversial. rescind a scope inquiry under able to consider them as part of its appropriate circumstances. analysis. Accordingly, paragraph Thus, one change in these proposed Proposed revisions to paragraph (e) (c)(2)(viii) would also require that full regulations is that there would no longer would provide new deadlines for scope copies of relevant prior determinations be a distinction between an informal inquiries. The current provision by the Secretary (including scope scope ruling procedure and a formal indicates that informal scope rulings rulings) and relevant excerpts of other scope inquiry procedure, as the based upon the application under the documents identified in paragraph (k)(1) distinction between those two current version of § 351.225(d) would be be placed on the administrative record procedures sometimes causes confusion completed within 45 days of receipt of if cited by an applicant for support of its and adds unnecessary delay to the a scope ruling application. But years of arguments. proceedings. Proposed paragraph (d), experience have shown Commerce that Additional changes under paragraphs once a scope ruling application has been this is a difficult and frequently (c), (d), and (e) deal with the distinction filed and appropriately served on all unworkable deadline, for the reasons between an informal scope ruling necessary parties, would allow discussed above. Accordingly, the procedure and a formal scope inquiry Commerce 30 days to determine proposed deadlines are timed off the procedure. In the context of its scope whether to accept or reject the scope initiation of the scope inquiry, with ruling practice, there is a 45-day ruling application. If Commerce most scope inquiries being completed deadline for Commerce to either (A) determines that the scope ruling within 120 days (which is consistent issue a scope ruling based upon the application is deficient or otherwise with current paragraph (f)(5) of scope ruling application and unacceptable, Commerce could reject it § 351.225). If good cause exists, descriptions of the merchandise listed with an explanation. The applicant may however, such as the need for further under paragraph (k)(1) pursuant to correct the problems and refile the information on the record, or the current paragraphs (c)(2) and (d), or (B) scope ruling application, restarting the issuance of a preliminary scope ruling, initiate a formal inquiry pursuant to regulatory deadlines. On the other hand, Commerce would have the authority current paragraph (e), which Commerce if Commerce does not reject the scope under proposed paragraph (e)(2) to ruling application, then after 31 days, a extend the deadline an additional 180 39 See Antidumping and Countervailing Duty scope inquiry would be deemed days, up to 300 days—similar to the Proceedings: Documents Submission Procedures; initiated. At that point, Commerce deadlines allowed for circumvention APO Procedures, 73 FR 3634, 3639 (January 22, cannot reject the scope ruling inquiries under section 781(f) of the Act. 2008) (‘‘{Commerce’s} practice is to issue a scope application for deficiencies, but could ruling or conduct a scope inquiry when the party Proposed revisions to paragraph (f) requesting the ruling can show that the specific would clarify certain procedures for product in question is actually in production. The 40 See 1996 Proposed Rule, 61 FR at 7321–22; scope inquiries. As an initial matter, as product need not be imported into the United States 1997 Final Rule, 62 FR at 27327–30. These noted above, proposed paragraph (a) so long as the requestor can show evidence that the procedures clarified Commerce’s existing practice product is in production. {Commerce} will not as codified in sections 353.29 and 355.29, adopted explains that, unless otherwise specified issue a scope ruling or conduct a scope inquiry on in the 1990 rulemaking. See 1990 Interim Final in proposed section 351.225, a purely hypothetical product.’’). Rule, 55 FR at 9046. Commerce’s existing procedures

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contained in subpart C apply to scope preliminary scope ruling and mostly section 516A(a)(2)(B)(vi) of the Act, inquiries. Proposed paragraph (f) tracks paragraph (f)(3) of the current such as scope rulings, are based off of therefore identifies procedures which regulation, with some exceptions. Under the date of mailing of such otherwise deviate from subpart C, current paragraph (f)(3), whenever determination. Section 516A(a)(2)(A)(ii) including the deadlines for parties to Commerce determines that a scope of the Act further provides that only ‘‘an comment and submit new factual inquiry presents an issue of significant interested party who is a party to the information regarding Commerce’s self- difficulty, Commerce will issue a proceeding’’ may commence judicial initiation of a scope inquiry under preliminary scope ruling, based upon review procedures. Therefore, paragraph (b) and a scope ruling the available information at the time, as Commerce proposes to convey the final application. These deadlines would to whether there is a reasonable basis to scope ruling in the manner prescribed generally maintain the deadlines of believe or suspect that the product is by section 516A(a)(2)(A)(ii) of the Act to current paragraph (f) (i.e., 20/10 day covered by the scope. Under proposed interested parties who are parties to the comment/rebuttal periods). paragraph (g), Commerce would, proceeding (see § 351.102(b)(36)), Additionally, proposed paragraph (f) pursuant to the same ‘‘reasonable basis because these are the only parties that would maintain Commerce’s ability to to believe or suspect’’ standard, have legal standing to appeal the final issue questionnaires and conduct maintain the discretion to issue a scope ruling under section verifications, as appropriate, as well as preliminary scope ruling, but Commerce 516A(a)(2)(A)(ii) of the Act. However, as its discretion to limit the number of need not consider whether the inquiry noted above, as with any other respondents in a scope inquiry, if presents an issue of significant document that is placed on the record warranted. However, proposed difficulty. Similar to existing paragraph by the agency, all parties on the paragraph (f)(4) would also establish (g), proposed paragraph (g) would allow segment-specific service lists will be deadlines regarding comments and Commerce to issue a preliminary scope notified of the final scope ruling rebuttal comments after a preliminary ruling, based on available information at through Commerce’s electronic ACCESS scope ruling under proposed paragraph the time, as to whether there is a system. (g) if the preliminary scope ruling is not reasonable basis to believe or suspect Additionally, paragraph (h) states that issued concurrently with the initiation that the product is covered by the scope Commerce will ‘‘promptly’’ convey the of the scope inquiry. These deadlines of the order. Further, proposed scope ruling to all parties to the would be reduced from 20 to 10 days paragraph (g) would maintain proceeding. The use of this term is and 10 to 5 days, respectively. Commerce’s discretion to issue a consistent with the use of the same term Proposed paragraph (f)(5) would preliminary scope ruling at the same in new §§ 351.226 and 227. It is provide Commerce with the ability to time Commerce initiates a scope Commerce’s expectation that prompt establish alternative procedures if the inquiry. This could be done, for conveyance of the scope ruling normally preliminary scope ruling issued under example, if the scope question before would occur no more than 5 business proposed paragraph (g) is issued Commerce previously has been days from the issuance of the final scope concurrently with the initiation of the addressed by Commerce, or Commerce ruling. Consistent with sections scope inquiry.41 Additionally, proposed finds the issue to be relatively 516A(a)(2)(A)(ii) and (B)(vi) of the Act, paragraph (f)(6) would allow Commerce straightforward. In determining whether judicial review procedures would be to maintain the discretion to rescind a to issue a preliminary scope ruling, commenced based on the date of scope inquiry, as appropriate. Commerce may consider the complexity conveyance, as opposed to the date of Commerce intends to exercise this of the issues and the arguments raised receipt, of a scope ruling. discretion as a means of preserving by parties. As noted above, proposed paragraph departmental resources, for example, in It is worth noting that, in accordance (i) would clarify the interaction between instances in which a scope matter may with proposed paragraph (n)(4), if scope inquiries and other segments of be better addressed in another segment Commerce issues a preliminary scope the proceeding and would replace of a proceeding (see revised paragraph ruling, it would no longer be required to paragraphs (f)(6) and (l)(4). These (i)(1)) or instances in which a new scope notify all parties on the scope service revisions acknowledge Commerce’s inquiry or scope ruling is unnecessary list of that preliminary ruling. Instead, discretion to determine after reviewing because of a related or prior scope only parties who are on the segment- all of the information on the record, on ruling (see revised paragraph (m)). In specific public service list or the APO a case-by-case basis, the most efficient addition, Commerce may rescind a service list (see § 351.103(d)), as means of addressing a scope question in scope inquiry, for example, if an applicable, would receive notice of the an effort to preserve departmental interested party has failed to provide preliminary scope ruling, as with any resources. For example, Commerce information necessary for Commerce to other document that is placed on the would be able to address scope issue a scope ruling.42 Finally, proposed record by the agency, through questions in another segment of a paragraph (f)(7) would continue to Commerce’s Antidumping and proceeding, such as an administrative provide Commerce with the discretion Countervailing Duty Centralized review under § 351.213, a to consider extension requests and alter Electronic Service System (ACCESS) circumvention inquiry under new the comment deadlines during the scope system. § 351.226, or a covered merchandise inquiry, as appropriate. Proposed revisions to paragraph (h) inquiry under new § 351.227, without Proposed revisions to paragraph (g) largely follow paragraph (f)(4) of the invoking the § 351.225 procedures; address the potential issuance of a current regulation concerning the conduct a scope inquiry under § 351.225 issuance of final scope rulings, with a in addition to another segment of the 41 To be clear, Commerce already has the few exceptions. Significantly, proposed proceeding; or align the deadlines, authority under existing regulations to issue a paragraph (h) provides that Commerce maintaining them as separate segments preliminary scope ruling concurrently with would ‘‘convey’’ the final scope ruling of the proceeding. Further, under initiation. in accordance with the requirements of revised paragraph (i)(3), during the 42 Commerce also maintains the discretion to apply facts available pursuant to section 776 of the section 516A(a)(2)(A)(ii) of the Act, pendency of a scope inquiry or upon Act, as appropriate, rather than rescind a scope which states that judicial review of issuance of a final scope ruling, inquiry. ‘‘class or kind’’ determinations under Commerce could consider the products

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subject to the scope inquiry in an Commerce proceedings, Commerce is clarified the legal framework required of ongoing administrative review, as not bound by the country of origin a scope ruling determination: appropriate (i.e., if sufficient time determinations of other agencies, such First, the plain language of an antidumping remains in the administrative review to as CBP.45 While such determinations order is paramount in determining whether collect and analyze such information), may be informative, when determining particular products are included within its although it would not be required to do the scope of AD/CVD orders, scope. If the scope is unambiguous, it so. Commerce’s country of origin analysis is governs. In reviewing the plain language of Proposed revisions to paragraphs (j) ultimately made independently and is a duty order, Commerce must consider the and (k) address the substance of based upon the information on the descriptions of the merchandise contained in Commerce’s scope ruling record of the proceeding. the petition, the initial investigation, and the determinations of the Secretary (including determinations. Aside from the Furthermore, if for some reason the substantial transformation test is not prior scope determinations) and the description of the merchandise subject Commission. Second, if the above sources do to the scope of an order, an essential appropriate for purposes of determining not dispositively answer the question, element in determining whether a the country of origin of a particular Commerce may consider the (k)(2) factors.49 product, Commerce would continue to product is covered by an order is the Accordingly, proposed paragraph (k) country of origin of the product at issue. retain the ability to apply another reasonable test to determine the country would codify this judicially created and Therefore, proposed paragraph (j) would affirmed framework, explaining that the codify Commerce’s longstanding of origin of a specific product. This would particularly be the case where primary analysis in any scope inquiry is ‘‘substantial transformation’’ test or the language of the scope itself. Revised analysis, which is used to determine the ‘‘‘rote application’ of the substantial transformation test would be inadequate paragraph (k) also explains that country of origin of a product or Commerce may issue its scope ruling on products.43 In particular, Commerce to remedy the unfair pricing decisions and/or unfair subsidization because it this basis alone if the language of the generally uses a substantial scope, including the descriptions of transformation analysis to determine would exclude the very imports found to injure the domestic industry.’’ 46 merchandise expressly excluded from whether a product’s country of origin the scope, and the language of the scope has changed as a result of processing Paragraph (k) of current § 351.225 describes the substantive basis for as a whole, is dispositive. Furthermore, that occurs in third countries before a in light of our experience and prior product is imported into the United Commerce’s scope rulings, and, as a result, has been the source of much court holdings, proposed paragraph States. The courts have upheld (k)(1) indicates that, in considering the Commerce’s substantial transformation litigation over the life of the regulation. 44 Although the U.S. Court of International plain language of the scope, Commerce, analysis, which has, in different at its discretion, could also consider the iterations, looked at factors such as Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit (CAFC) underlying petition, Commerce’s whether the processed downstream investigation, prior Commerce product is a different class or kind of have generally recognized that Commerce has ‘‘substantial freedom to determinations (including but not merchandise than the upstream product; limited to prior scope rulings,50 the technical, physical, and chemical interpret and clarify’’ the scope of AD/ 47 memoranda, or clarifications),51 and characteristics of the product and its CVD orders through scope rulings, the parts; the intended end-use of the Courts have held that Commerce’s scope rulings must still be issued in scope of antidumping or countervailing orders. product; the cost of production and Commerce has filled the statutory gap with a value added to the product as a result accordance with the requirements of its regulation that sets forth a two-step test for of further processing in third countries; scope ruling regulations, and in answering scope questions, 19 CFR 351.225(k), and our case law has added another layer to the the nature and sophistication of particular, the sequence of factors to consider set forth in paragraph (k). In inquiry.’’) (internal citations and punctuation processing in third countries; the level omitted). light of Commerce’s years of experience of investment in third countries; and 49 Meridian Prods., LLC v. United States, 890 F.3d where the essential component of the drafting scope rulings, and numerous 1272, 1277–78 (Fed. Cir. 2018) (Meridian) (internal product is produced or where the holdings of the CIT and CAFC citations and punctuation omitted). 50 This is not limited to Commerce’s scope rulings essential characteristics of the product addressing Commerce’s scope determinations, Commerce is proposing within the same order, and Commerce may consider are imparted. In addition, Commerce its analysis of the same or similar scope language has considered other relevant case- that certain modifications be made to used in other orders. specific factors in applying its paragraph (k). As an initial matter, 51 Scope clarifications are not defined in the current paragraph (k) makes no specific statute or regulation. Scope clarifications are substantial transformation analysis sometimes issued during an ongoing investigation when necessary. reference to the scope language as the starting point for any scope analysis. if arguments or information pertaining to the scope Additionally, Commerce continues to of an investigation comes to Commerce’s attention recognize that, in addressing country of However, the CAFC has added this following the issuance of a scope memorandum and origin issues in the context of initial step, sometimes referred to as a Commerce determines that it is necessary to place ‘‘k(0)’’ analysis.48 Recently, the CAFC a clarification on the administrative record to address those scope claims. Scope clarifications 43 See Bell Supply Company, LLC v. United also may be issued after an AD/CVD order has been 45 States, 888 F.3d 1222, 1228–29 (Fed. Cir. 2018) (‘‘A While the ‘‘Department may consider the in place for a period of time and Commerce has substantial transformation occurs where, ‘as a result decisions of Customs, it is not obligated to follow, found that multiple parties have requested scope of manufacturing or processing steps . . . {,} the nor is it bound by, the classification determinations rulings over and over covering the same or similar {product} loses its identity and is transformed into of Customs. . . .’’ Wirth Ltd. v. United States, 5 F. scope language. In that situation, Commerce may a new product having a new name, character and Supp. 2d 968, 973 (CIT 1998) (‘‘Commerce, not issue a scope clarification addressing that particular use.’ ’’) (internal citations omitted). Customs, has authority to clarify the scope of AD/ scope language, and then further memorialize that 44 See E.I. DuPont de Nemours & Co. v. United CVD orders and findings.’’). clarification in the form of an interpretive footnote States, 8 F. Supp. 2d 854, 858 (CIT 1998) (‘‘The 46 See Canadian Solar, 918 F.3d at 919. to the scope of the order. Following the issuance ‘substantial transformation’ rule provides a 47 Duferco Steel, Inc. v. United States, 296 F.3d of a scope clarification in that context, the yardstick for determining whether the processes 1087, 1096 (Fed. Cir. 2002) (quotation marks and interpretive footnote will normally accompany the performed on merchandise in a country are of such citations omitted). text of the scope itself when it is published in significance as to require the resulting merchandise 48 See Meridian Prods., LLC v. United States, 851 Commerce’s administrative determinations and to be considered the product of the country in F.3d 1375, 1381 (Fed. Cir. 2017) (‘‘No specific instructions to CBP. The procedures and timetables which the transformation occurred.’’). statutory provision governs the interpretation of the set forth in these regulations covering scope

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determinations of the ITC. In addition to media’’ analysis may not be necessary. and until the order is revoked.56 the (k)(1) sources, Commerce could also However, because scope language is Further, the publication in the Federal consider traditional interpretive tools, written in general terms, the language Register of Commerce’s preliminary and such as a dictionary and industry usage itself may not contemplate assembled or final investigation determinations, as of a particular word or phrase, or other packaged items that contain subject well as the publication of the resulting record evidence, to provide context and merchandise as a component. Therefore, orders, serve as notice to producers, understanding in considering the plain in conducting a scope inquiry, exporters, and importers that their language of the scope. However, in the Commerce may need to conduct a merchandise might be covered by those event of a conflict between these ‘‘mixed-media’’ analysis to determine investigations and/or orders, and, interpretive tools or other record whether a combination of products or a therefore, it is incumbent upon the evidence and the sources identified in component thereof constitutes subject importing parties to (1) declare the paragraph (k)(1), Commerce would merchandise. Under such situations, in status of their merchandise truthfully to adopt the interpretation supported by accordance with Commerce’s practice CBP upon entry, or (2) seek a scope the (k)(1) sources.52 and proposed paragraph (k)(3), ruling from Commerce if there is a Proposed revisions to paragraph (k)(2) Commerce could first determine question as to whether the merchandise would maintain that if, based on the whether the component product, if is covered by an AD and/or CVD order. scope language and the factors separated from the other component As discussed above for proposed enumerated above, Commerce is unable products, would be considered covered paragraph (a), a scope ruling that a to determine whether a product is by the scope. If the determination is that product is within the scope of the order covered by a scope, then Commerce the product would be covered by the is a determination that the product has would consider the listed five scope, then Commerce would conduct a always been within the scope of the additional factors.53 These factors are further analysis and determine if the order, and Commerce’s scope largely consistent with current product is nonetheless excluded from regulations must reflect that paragraph (k)(2), with some minor the scope through its inclusion in the determination. Put another way, if a clarifications. It is Commerce’s intent combined product. To determine if the party has imported merchandise and that the first factor—the characteristics product is covered or excluded from the declared that merchandise as not of the product, including the technical, scope of the order, Commerce would covered by the scope of an order, and physical, or chemical characteristics of consider the practicability of separating then Commerce issues a scope ruling the product—may be given greater the in-scope component for repackaging finding that such merchandise is subject weight than the other individual factors. or resale, the measurable value of the in- to an order, under these proposed Nonetheless, Commerce should scope component as compared to the regulations Commerce’s scope ruling consider each of the factors in making measurable value of the merchandise as would apply to all unliquidated entries its determination under paragraph a whole, and the ultimate use or of the merchandise, as discussed below. (k)(2). function of the in-scope component Importing parties are already notified Finally, proposed paragraph (k)(3) relative to the ultimate use or function through the publication in the Federal would codify and clarify Commerce’s of the merchandise as a whole. If Register of Commerce’s determinations analysis for certain products, Commerce determines that the and/or order, and, therefore, cannot colloquially referred to as ‘‘mixed component product at issue is covered claim ignorance or reliance on another media’’ products (i.e., subject by the scope of an order, but the other agency’s determinations or actions to merchandise assembled or packaged components of the larger merchandise avoid the application of Commerce’s with non-subject merchandise), which are not covered by the scope of an order, scope ruling to their merchandise. has been recognized by the courts.54 In Commerce proposes to amend some instances, the scope language of the value of the in-scope subject paragraph (l) as necessary in light of an order may clearly address these types component should be reported to CBP these considerations. of products.55 In such cases, a ‘‘mixed- for AD/CVD purposes in accordance with CBP’s reporting requirements. Additionally, current paragraph (l) reflects the distinction between a formal inquiries and scope rulings do not apply to scope Paragraph (l) of the current regulation, clarifications, nor do they inhibit Commerce’s governing the suspension of liquidation scope inquiry as provided under current ability or discretion to issue such scope and requirement of cash deposits for paragraphs (b), (e), and (f) and a final clarifications. entries affected by Commerce’s scope scope ruling based on the application 52 See Meridian, 890 F.3d at 1280–81 (overruling rulings, also has been the source of under current paragraph (d) (also a CIT decision that adopted the common and commercial meaning and dictionary definition of a varying interpretations and litigation referred to as an informal scope scope term over Commerce’s interpretation in prior and requires revision. inquiry). Although current paragraph (l) scope rulings). As an initial matter, as discussed expressly addresses suspension of 53 Those factors are sometimes referred to as the above, AD and CVD orders provide the liquidation and requirement of cash Diversified Products factors because they were first deposits under the first procedure, it is articulated in Diversified Prods. Corp. v. United legal basis for the suspension of States, 572 F. Supp. 883 (CIT 1983). See Walgreen liquidation of importations of subject largely silent with respect to scope Co. of Deerfield, IL v. United States, 620 F.3d 1350, merchandise that enter for consumption rulings based on the application—and 1355 & n.2 (Fed. Cir. 2010) (Walgreen). on or after the date of publication of that this silence has been the source of some 54 See Mid Continent Nail Corporation v. United confusion and litigation. As discussed States, 725 F.3d 1295, 1302–04 (Fed. Cir. 2013) order, throughout the life of the order, (Mid Continent Nail) (referencing the ‘‘mixed- above, we are proposing to eliminate the media’’ analysis); Walgreen, 620 F.3d at 1355–57 scope does not include the non-aluminum distinction between these two (same). extrusion components of subassemblies or subject procedures, and, with these proposed 55 See, e.g., Aluminum Extrusions from the kits.’’); Narrow Woven Ribbons With Woven changes, we are proposing to adapt the People’s Republic of China: Antidumping Duty Selvedge From Taiwan and the People’s Republic Order, 76 FR 30650, 30651 (May 26, 2011) (‘‘The of China: Amended Antidumping Duty Orders, 75 current structure of paragraph (l) scope includes the aluminum extrusion FR 56982, 56983 (September 17, 2010) (‘‘Narrow components that are attached (e.g., by welding or woven ribbons subject to the orders may. . . be 56 See Ugine & ALZ Belgium v. United States, 551 fasteners) to form subassemblies, i.e., partially included within a kit or set such as when packaged F.3d 1339, 1340–43 (Fed. Cir. 2009); Am. Power assembled merchandise unless imported as part of with other products, including but not limited to Pull Corp. v. United States, 121 F. Supp. 3d 1296, the finished goods ‘kit’ defined further below. The gift bags, gift boxes and/or other types of ribbon.’’). 1300–02 (CIT 2015).

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accordingly to reflect a single scope suspended entries to continue after the earliest suspension date under the inquiry procedure. That is, all scope initiation of a formal scope inquiry. order, which is normally the rulings would be subject to the same However, this also deviates from preliminary determination in the procedures under revised paragraph (l), current paragraphs (l)(1) and (2), which underlying investigation. Further, and there will no longer be any provide that when Commerce issues a Commerce will direct CBP to apply the distinction between formal and informal preliminary scope ruling finding the applicable cash deposit rate to all such scope inquiries (as discussed above). product is not covered by the scope of entries. As provided under revised the AD and/or CVD order (i.e., a paragraphs (l)(2) and (3), these Revised paragraph (l)(1) provides that ‘‘negative’’ scope ruling), it will instruct instructions will remain in place until when Commerce initiates a scope CBP to terminate suspension of appropriate liquidation instructions are inquiry under proposed paragraphs (b) liquidation and refund all cash deposits issued pursuant to §§ 351.212 and or (d), it will notify CBP of the initiation for already-suspended entries. 351.213.59 and direct CBP to continue the Notably, revised paragraph (l)(2) This deviates from current paragraph suspension of liquidation of all (pertaining to preliminary scope rulings) (l) in certain respects. As stated above, unliquidated entries of products subject does not require Commerce to notify current paragraph (l) expressly to the scope inquiry that are already CBP of a negative preliminary scope addresses suspension of liquidation and subject to the suspension of ruling. In such instances, suspension of requirement of cash deposits for entries liquidation,57 until appropriate liquidation and application of cash in a formal scope inquiry, but is less liquidation instructions are issued.58 deposits for already suspended entries clear when Commerce issues a final Further, Commerce will direct CBP to (if any) under revised paragraph (l)(1) scope ruling based upon the application apply the cash deposit rate that would will remain in effect pending in an informal scope inquiry. For be applicable if the product were Commerce’s subsequent issuance of a instance, current paragraphs (l)(2) and final scope ruling and appropriate determined to be covered by the scope (3) provide that if Commerce issues an instructions as described in revised affirmative preliminary or final scope of the order. These revisions are paragraphs (l)(3) or (4). Thus, any ruling pursuant to a formal scope consistent with current paragraph (l)(1) suspension of liquidation prior to the inquiry, then ‘‘any suspension of to the extent that both call for the negative preliminary scope ruling will liquidation’’ will continue. Where there suspension of liquidation and remain in effect until the conclusion of has been no previous suspension of application of cash deposits for already- the scope inquiry to ensure appropriate liquidation, Commerce will direct CBP application of AD/CVD duties in the (in the event of an affirmative 57 Entries may be already subject to the event of a final scope ruling finding the preliminary or final scope ruling) to suspension of liquidation under a variety of product is covered by the scope of the suspend liquidation of unliquidated scenarios. As recently affirmed by the CAFC and as discussed in more detail above, CBP has AD and/or CVD order (i.e., an entries dating back to the date of independent authority to suspend liquidation of ‘‘affirmative’’ scope ruling). Further, initiation of the scope inquiry. entries that CBP determines are within the scope of under revised paragraph (l)(4), if Current paragraph (l)(3) also provides an AD or CVD order; such determinations are ‘‘final Commerce issues a negative final scope that if Commerce issues an affirmative and conclusive’’ unless appealed to Commerce through a request for a scope ruling. See Sunpreme ruling that the product is not covered by final scope ruling based on the III, 946 F.3d at 1317–18. Additionally, section 517 an order, and the product is not application, then ‘‘any suspension of of the Act (concerning CBP’s civil administrative otherwise subject to suspension as a liquidation’’ will continue. However, investigations of duty evasion of AD/CVD orders) result of another segment of a paragraph (l) does not expressly address authorizes CBP to suspend liquidation of entries for proceeding, such as a circumvention instances in which Commerce issues an which it has reasonable suspicion, or, in the case of final determination, substantial evidence, that inquiry under § 351.226 or a covered affirmative final scope ruling based covered merchandise is entered into the United merchandise inquiry under § 351.227, upon the application (and thus, there States through evasion under section 517(e) and (d) for merchandise that was suspended has been no initiation of the scope of the Act. and for which cash deposit rates were inquiry) and entries have not already 58 At the time Commerce initiates a scope inquiry, there may be entries of products subject to the paid, Commerce would instruct CBP to been suspended. Therefore, in such scope inquiry that CBP has liquidated but for which terminate suspension of liquidation and instances Commerce may direct CBP to liquidation is not yet final (e.g., entries under refund cash deposits (if any) on entries suspend liquidation of all unliquidated protest pursuant to 19 U.S.C. 1514). Consistent with of this non-subject merchandise. entries subject to the scope inquiry not current practice and in accordance with CBP’s Paragraphs (l)(2) and (3) also have already subject to the suspension of statutory and regulatory authorities, Commerce expects that CBP may stay its action on these been revised to address the liquidation (and continue suspension of entries pending the outcome of the scope inquiry. considerations highlighted above, liquidation for any entries already This is consistent with the CAFC’s decision in specifically, to ensure that the results of suspended), and apply the applicable Thyssenkrupp Steel North America, Inc. v. United affirmative scope rulings are cash deposit rates to such entries. This States, 886 F.3d 1215 (Fed. Cir. 2018). In Thyssenkrupp, the CAFC recognized that appropriately applied to all entries of action applies to all such entries dating instructions revoking an antidumping duty order subject merchandise, which should be back to the earliest suspension date superseded previously issued liquidation covered by those rulings. Therefore, instructions, as of the effective date of the under revised paragraphs (l)(2) and (3), 59 As discussed above, consistent with current revocation, and applied to entries under protest that at the time of the first affirmative scope practice and in accordance with CBP’s statutory and entered the United States after the effective date of regulatory authorities, CBP may stay its action on the revocation. Id. at 1223–27. The CAFC explained ruling (preliminary or final), Commerce entries of products that CBP has liquidated but for that this ‘‘serves the purpose of the protest will direct CBP to suspend liquidation which liquidation is not yet final pending the mechanism—to allow agency consideration of of all unliquidated entries of products outcome of a scope inquiry. Additionally, any issues after an initial liquidation determination— subject to the scope inquiry that are not instructions issued by Commerce directing CBP to and respects the longstanding principle . . . that ‘‘lift suspension of liquidation’’ and assess duties at newly governing law, if retroactive to particular already subject to the suspension of the applicable AD/CVD rate would not limit CBP’s events, is to be applied to those events in ordinary, liquidation (and continue suspension of ability to (1) suspend liquidation/assess duties/take timely initiated direct-review proceedings.’’ Id. at liquidation for any entries already any other measures pursuant to CBP’s EAPA 1224. A similar point was recognized in TR suspended as provided under revised investigation authority under section 517 of the Act International, Slip Op. 20–34 at *11, currently on specifically, or (2) take any other action within appeal, concerning CBP’s potential application of a paragraph (l)(1)). This action would CBP’s or HSI’s authority with respect to AD/CVD Commerce scope ruling to entries under protest. apply to all such entries dating back to entries.

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under the order, which is normally the inquiry is filed, and then eliminate AD/ the current regulation imposes a ‘‘cut- preliminary determination in the CVD duty liability for such imports by off’’ of the initiation date of the scope underlying investigation. requesting a scope inquiry. Such inquiry—the proposed regulation In short, under the current regulatory manipulation of AD/CVD duty liability removes this limitation so that any framework, Commerce has employed would undermine the effectiveness and unliquidated entries found within the two distinct approaches for suspension remedial purpose of the AD/CVD laws. scope of the order appropriately will be of liquidation and application of cash Accordingly, Commerce proposes to subject to duties, not just those that deposits reflecting the different adopt the procedures discussed above. entered after the initiation date.67 procedures for informal and formal We recognize that the CAFC recently This exercise of Commerce’s scope inquiries. As Commerce proposes held that Commerce’s current discretion is reasonable and balanced. to eliminate the distinction between regulations did not allow for As explained above, Congress, and the these different procedures, and, in light ‘‘retroactively suspending liquidation to courts, have long recognized that of the considerations highlighted above, the issuance date’’ of the antidumping Commerce has the vested authority to revised paragraph (l) largely mirrors the order in that litigation, where administer the trade remedy laws in approach for informal scope inquiries Commerce issued a final scope ruling accordance with their intent, and has discussed above. Specifically, as stated based on the application in an informal the discretion to take appropriate above, the proposed action under scope inquiry.61 However, the CAFC enforcement measures to ensure the paragraphs (l)(2) and (3) would apply to relied on the existing regulatory effectiveness of its AD/CVD orders by all unliquidated entries dating back to framework that delineates between an preventing duty evasion and the earliest suspension date under the informal and formal scope inquiry circumvention.68 Further, over the last order, which is normally the described above, and that Commerce is twenty years, the United States has preliminary determination in the now proposing to change in this faced various complications in fully underlying investigation, as opposed to proposed rule.62 Therefore, collecting AD and CVD duties from the the date of initiation of the scope notwithstanding the CAFC’s holding in obligated parties.69 Although Commerce inquiry (i.e., the approach currently Fasteners, Commerce is not precluded is cognizant of the concerns raised in taken in formal scope inquiries). from amending its regulations through the 1997 Final Rule regarding the risk of The reason that Commerce is notice and comment procedures to potential unfairness to certain importers proposing to take this approach to adopt the procedures discussed herein. who genuinely may not be aware that suspension of liquidation and Additionally, to the extent the CAFC their products are within the scope of an application of cash deposits is to relied on concerns in the 1997 Final order until Commerce issues a ruling, prevent a situation which, in the terms Rule regarding potential retroactive Commerce cannot distinguish between of the CAFC, ‘‘would encourage suspension of liquidation,63 those importers with a genuine gamesmanship by importers’’ and concerns pertained to the inconvenience misunderstanding from those who (1) ‘‘permit importers to potentially avoid to importers and exporters if domestic have failed to do their due diligence by paying duties....’’60 Under the industries filed a scope request based reviewing Commerce scope descriptions proposed approach, importers have an ‘‘on nothing more’’ than a mere or past scope rulings, or (2) are aware of incentive to seek a determination as ‘‘allegation’’ and Commerce began their potential (or actual) AD/CVD soon as possible whether a particular suspension of liquidation on entries not liability and have opted not to seek a product is subject to the scope of an already subject to suspension of scope ruling or enter their merchandise existing AD/CVD order. If they fail to do liquidation.64 This was in response to a as subject to an AD/CVD order, so as to so, then they may be liable for AD/CVD suggestion that, at the time Commerce avoid the likely application of AD/CVD duties if Commerce eventually duties. On balance, Commerce has determines that the products are initiates a formal scope inquiry based on a scope request, Commerce should determined that the very real risk and covered by the scope of an existing AD/ concerns of duty evasion, CVD order. By contrast, the alternative instruct CBP to suspend liquidation of 65 circumvention, and duty collection approach (i.e., the approach currently any unliquidated entries. However, Commerce’s proposed regulation does should guide its updated regulations. taken in rulings based on a formal scope Commerce also has considered the inquiry) would encourage not adopt such a position. Rather, Commerce proposes that only upon practical effect this change in policy gamesmanship, delay, and indeed, duty may have on importers’ liability. evasion. Foreign producers and issuance of an affirmative preliminary or final scope ruling will Commerce Significantly, the statute generally exporters, as well as U.S. importers, directs CBP to liquidate entries which would understand that all entries not direct that any unliquidated entries under the order (dating back to the have not been declared as subject to an already suspended prior to the date on AD/CVD order within one year of which Commerce initiates a scope earliest suspension date under the order) be suspended. This proposal is entry.70 Therefore, practically speaking, inquiry are essentially excused from it is unlikely that once Commerce issues AD/CVD duties, even if Commerce finds consistent with the 1997 Final Rule through the scope inquiry that such statement that ‘‘the Department will not order the suspension of liquidation until 67 As discussed above, consistent with current duties should have applied. In turn, this practice and in accordance with CBP’s statutory and would lead parties to import as much as it makes either a preliminary or final regulatory authorities, CBP may stay its action on possible before any request for a scope affirmative scope ruling, whichever entries of products that CBP has liquidated but for occurs first.’’ 66 The difference is that which liquidation is not yet final pending the outcome of a scope inquiry. 60 Sunpreme III, 946 F.3d at 1317 and 1321. In the 1997 Final Rule as promulgated in 68 See generally section 781 of the Act; SAA at United Steel and Fasteners, Inc. v. United States, 892–95; Tung Mung, 219 F. Supp. 2d at 1343. 947 F.3d 794 (Fed. Cir. 2020) (Fasteners), discussed 61 See Fasteners, 947 F.3d at 800–03. 69 See, e.g., U.S. Gov’t Accountability Office, further below, the CAFC did not disagree with 62 Id. Commerce’s concerns of potential ‘‘gamesmanship Report to the Chairman, Committee on Finance, 63 Id. at 802 (citing 1997 Final Rule, 62 FR at and delay’’ if importers did not report their U.S. Senate, GAO 16–542, Antidumping and 27327–38). merchandise to CBP as subject merchandise. See Countervailing Duties: CBP Action Needed to 64 Fasteners, 947 F.3d at 803 (finding narrowly that See 1997 Final Rule, 62 FR at 27328. Reduce Duty Processing Errors and Mitigate ‘‘we do not find that such gamesmanship occurred 65 Id., 62 FR at 27327–28. Nonpayment Risk, at 13 (July 2016). in this case.’’) 66 Id., 62 FR at 27328. 70 19 U.S.C. 1504(a); Section 504 of the Act.

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a preliminary or final scope ruling Commerce would initiate and conduct appearance in the relevant scope finding a product covered by an AD/ that inquiry pertaining to both orders segment. However, as discussed further CVD order that there will be any only on the record of the AD below, Commerce proposes to amend unliquidated entries, other than those proceeding.71 This is because § 351.103(d)(1) to reflect that an already suspended, more than a year Commerce has noticed over the years interested party that submits a scope old. In light of this, Commerce believes that, in certain inquiries, interested ruling application need not file an entry that it has settled on a policy which will parties have inadvertently placed of appearance under § 351.103(d)(1), as effectuate its authority under the AD/ relevant information, for example, on that interested party would be placed on CVD laws, while mitigating the harm to the AD proceeding record, but not on the segment-specific service list by importers who may be acting in good the CVD proceeding record, or vice- Commerce. faith by importing without paying versa. Once Commerce issues a final Finally, proposed revisions to duties. Moreover, should this change in scope ruling on the record of the AD paragraphs (o) and (p) provide that policy be adopted in any final rule, the proceeding, Commerce would include a Commerce would publish in the Federal effective date of the policy change copy of that scope ruling on the record Register on a quarterly basis a list of all would be 30 days after publication of of the CVD proceeding. By limiting the of the final scope rulings issued within the final rule. Therefore, scope inquiries scope inquiry only to the record of one the previous three months and that initiated prior to this effective date proceeding, the chances of incomplete scope rulings may, as appropriate, apply would maintain the initiation date of records, or confusing records being filed to suspension agreements as well, in the inquiry as the furthest potential with courts on appeal, should be accordance with § 351.208. ‘‘retroactive’’ date for unliquidated lessened. Circumvention—Section 351.226 entries not already suspended. That Proposed revisions to paragraph (n) said, given that this proposal involves addresses service requirements. The When the current scope regulations complex and technical issues, and given current regulations require that any were drafted, there was a belief that that important trade enforcement party that has ever participated in there were similarities between scope objectives are implicated, Commerce proceedings under an order must be inquiries and circumvention inquiries invites public comment on revised served with a scope request based on sufficient to place them both in the § 351.225(l). We will carefully consider the scope service list maintained on same general regulatory provision. all public comments before issuing a Commerce’s website. However, because Circumvention inquiries (sometimes final rule that revises the existing some orders are decades old and the called anti-circumvention inquiries) are regulation. scope service list contains dozens of conducted pursuant to section 781 of Proposed revisions to paragraph (m) parties who have participated over the the Act, while scope inquiries are address the application of scope rulings years, the proposed regulations would referenced only in sections under two different scenarios. Paragraph require that parties (other than the 516a(a)(2)(A)(ii) and 516a(a)(2)(B)(vi) of (m)(1) would clarify that if a scope petitioner) who wish to be served with the Act. As the two latter provisions ruling application requests a scope new scope ruling applications, under pertain to determinations by Commerce ruling on a product, which is physically paragraph (c), or be notified of as to ‘‘whether a particular type of identical to that of another product for Commerce’s self-initiation of a scope merchandise is within the class or kind which a scope ruling has already been inquiry, under paragraph (b), would of merchandise described in an existing issued under the same order, Commerce have to take the affirmative step of filing finding of dumping or antidumping or could apply the previous scope ruling a request for inclusion on the annual countervailing duty order,’’ it is clear directly to the requested product inquiry service list. Requests for that Commerce derives its authority to without conducting a new scope inclusion on the annual inquiry service conduct a scope ruling from multiple inquiry. In that situation, for example, list must be filed with Commerce during sources, including, for example, Commerce may issue a letter to the the anniversary month of the AD or CVD sections 771(25) (defining subject applicant and attach the scope ruling order at issue, and Commerce would merchandise as a ‘‘class or kind of upon which it has relied, making its update the list on an annual basis at that merchandise that is within the scope of determination without the need of a time. an investigation, a review, a suspension larger, more detailed scope ruling. In In addition, under proposed agreement, (or) an order’’), 701(a) such instances, the requirements for paragraph (n), once a scope ruling (directing Commerce to impose duties issuing a final scope ruling under application is accepted by Commerce in on a class or kind of merchandise being paragraph (h) would apply. accordance with paragraph (d), and after subsidized), and 731(a) of the Act Proposed paragraphs (m) and (n) Commerce has notified parties on the (directing Commerce to impose duties together address a problem that arises annual inquiry service list of its self- on a class or kind of merchandise being when a scope ruling would apply initiation of a scope inquiry under dumped). equally to companion AD and CVD paragraph (b), a segment-specific service Because there is unique authority for orders, which cover the same list would be established, under these different inquiries and merchandise from the same country. In § 351.103(d)(1), and the requirements of corresponding determinations, and we that scenario, an interested party § 351.303(f) would apply. To be clear, conduct the two proceedings differently, submitting a scope ruling application once the segment-specific service list is we have determined that it is pertaining to both orders pursuant to established, parties on the annual appropriate to establish separate paragraph (c) must file its scope ruling inquiry service list for all orders that regulations for each type of proceeding. application on the record of the AD may be affected by the scope ruling With respect to circumvention inquiries proceeding only, and serve its scope would no longer be served with filings in particular, paragraphs (h), (i), (j), and ruling application to all parties on the made pursuant to the scope inquiry, (k) of proposed new § 351.226 are annual inquiry service list for both the unless they had followed the procedures derived directly from section 781 of the AD and CVD orders. The annual inquiry of § 351.103(d)(1) by filing an entry of Act and current regulation service list and related procedures are §§ 351.225(g), (h), (i), and (j). discussed in paragraph (n). Once 71 Commerce will follow the procedures of Proposed paragraph (a) introduces Commerce initiates the scope inquiry, paragraph (l) for both orders. new § 351.226 and briefly addresses

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section 781 of the Act. Congress enacted information available to it, while under provided to the extent reasonably section 781 of the Act to combat certain proposed paragraph (c), Commerce available to the requestor. forms of circumvention of AD and CVD could initiate a circumvention inquiry Proposed paragraph (d) would orders. When Congress passed the based on the filing of an inquiry request provide the deadlines for initiation of a Omnibus Trade and Competitiveness by an interested party.77 If Commerce circumvention inquiry. The deadline for { } Act in 1988, it explained that ‘‘ a n self-initiates, it would publish a notice initiation would be shortened from the order on an article presumptively of initiation in the Federal Register. If current 45 days to 20 days, with a includes articles altered in minor a circumvention inquiry request is filed possible extension of up to a total of 35 days. However, initiation would only respects in form or appearance . . . .’’ with Commerce, the filing party would The legislative history explains that the occur if Commerce concludes that the have to notify all parties on the annual purpose of the circumvention statute ‘‘is request properly alleges that the inquiry service list, set forth in to authorize the Commerce Department elements necessary for a circumvention to apply AD and {CVD} orders in such proposed §§ 351.225(n) and 351.226(n). determination under section 781 of the a way as to prevent circumvention and Proposed paragraph (c)(2) would also Act exist and is accompanied by diversion of U.S. law.’’ 72 Further, it set forth the information to be included information reasonably available to the indicates that Congress was concerned in a circumvention inquiry request. interested party supporting these with the existence of ‘‘loopholes,’’ i.e., Commerce expects that such a request allegations. If the circumvention request foreign companies evading orders by would include not only a detailed is incomplete or otherwise making slight changes in their method description of the merchandise unacceptable, the Secretary may reject of production, because such scenarios allegedly circumventing the order, but the request and will reconsider it if it is ‘‘seriously undermine the effectiveness also public identification of any resubmitted with sufficient of the remedies provided by the producers, exporters, or importers of the documentation. Additionally, antidumping and countervailing duty merchandise.78 As with respect to the Commerce could defer its initiation of a proceedings, and frustrated the revised scope ruling application circumvention inquiry if it determines purposes for which these laws were described in proposed § 351.225(c), it is that a scope question should first be enacted.’’ 73 Congress also recognized understood that not all of the addressed in a new or ongoing segment { that ‘‘aggressive implementation of the information listed will be available to of a proceeding, such as a scope inquiry } circumvention statute by the all interested parties requesting a under the proposed revisions to Commerce Department can foreclose circumvention inquiry. For example, the § 351.225. 74 Paragraph (d)(2) refers to proposed these practices.’’ When implementing domestic industry may know certain the Uruguay Round Agreements Act of § 351.225(i)(1), which expressly allows details about a company’s ‘‘further 1994, the Administration expressed Commerce to address scope issues in manufacturing’’ of a product, but it may similar concerns about scenarios the context of a circumvention inquiry, limiting the effectiveness of the AD duty not be able to supply ‘‘a description of rather than conduct a separate scope law (i.e., completion or assembly in a parts, materials, and the production inquiry under § 351.225. In certain country other than the subject process employed in the production of circumstances, a party may submit a country).75 Accordingly, Commerce the product.’’ For this reason, proposed request for a circumvention inquiry, ‘‘has been vested with authority to paragraph (c)(2) would require that the which requires Commerce to consider, administer the antidumping laws in described information in the in the first instance, whether the accordance with the legislative intent’’ circumvention inquiry request be product at issue is already covered by and, thus, ‘‘has a certain amount of the scope of the order at issue in its discretion {to act} . . . with the purpose 77 To be clear, Commerce already has the scope ruling procedures under in mind of preventing the intentional authority to self-initiate anti-circumvention § 351.225. If a product is already subject evasion or circumvention of the inquiries under the current regulations. See 19 CFR to the scope of the order, a 351.225(b). As noted above with respect to the 76 antidumping duty law.’’ Proposed proposed changes to the scope regulations, the term circumvention inquiry may not be paragraph (a), as well as additional ‘‘interested party’’ is defined in section 771(9) of the necessary. To consolidate its resources paragraphs discussed below, would Act, and pertains, for example, to ‘‘foreign and avoid unnecessary duplication of codify these principles. Additionally, manufacturers,’’ ‘‘producers,’’ ‘‘exporters,’’ or effort, proposed §§ 351.226(d)(2) and ‘‘United States importers’’ ‘‘of subject 351.225(i)(1) would allow Commerce to proposed § 351.226(a) tracks proposed merchandise.’’ However, the nature of a § 351.225(a), and explains that, unless circumvention proceeding is to determine whether address scope and circumvention issues otherwise specified in proposed new the merchandise produced, imported by, or more efficiently, by allowing scope § 351.226, Commerce’s existing exported by a party is circumventing an AD or CVD issues to be addressed within the procedures contained in subpart C (i.e., order. Thus, in many cases, the question of whether context of a circumvention inquiry. a party is an ‘‘interested party’’ is tied to the Proposed paragraph (e) would provide relating to factual information question of whether the merchandise at issue is (§§ 351.102(b)(21) and 351.301) and the determined to be subject merchandise, or not. the deadlines for Commerce to conduct extension of time limits (§ 351.302)) Accordingly, for purposes of these circumvention circumvention inquiries, consistent apply to circumvention inquiries. regulations, the term ‘‘interested party’’ includes a with section 781(f) of the Act, which party that potentially meets the definition of sets a deadline for circumvention Under proposed paragraph (b), ‘‘interested party’’ under section 771(9) of the Act, Commerce could self-initiate a depending upon the outcome of the circumvention determinations within 300 days from circumvention inquiry based on inquiry. the date of publication of the initiation 78 Commerce recognizes that the identity of the notice, to the maximum extent producers, exporters and or importers alleged to be 72 Omnibus Trade Act of 1987, Report of the practicable. Proposed paragraph (e)(1) participants to circumvention may not be public, Senate Finance Committee, S. Rep. No. 100–71, at but that such information can be very important to would establish a new deadline for 101 (1987). the conduct of a circumvention inquiry. preliminary determinations of 150 days 73 Id. Accordingly, although the regulation requests from the date of publication of the 74 Id. public names be provided, if available, it also initiation notice. Proposed paragraph 75 See SAA at 892–95. stresses that this provision is not intended to 76 Tung Mung, 219 F. Supp. 2d at 1343 (quoting restrict the inclusion of the business proprietary (e)(2) restates the statutory deadline, Mitsubishi I, 700 F. Supp. at 555, aff’d 898 F.2d at names of those entities in the application if the and also sets forth that Commerce 1583). requester has access to that data. would only be able to extend the 300-

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day statutory deadline by no more than (f)(7) would allow Commerce to alter appeal the final circumvention 65 days if it determined that an inquiry deadlines under this paragraph, as determination under section was extraordinarily complicated. It is appropriate, including to align the 516A(a)(2)(A)(ii) of the Act. Commerce’s understanding that for an deadlines of the circumvention inquiry Furthermore, paragraph (g)(2) states inquiry to be extraordinarily with another segment of the proceeding, that Commerce will ‘‘promptly’’ convey complicated there would exist, for such as a scope inquiry, under proposed a copy of the final circumvention example, novel facts or issues (such as new § 351.225. determination after publication in the facilities being ravaged by natural Finally, proposed paragraph (f)(8) Federal Register. The use of the term disasters or unusual or complicated would also maintain provisions ‘‘promptly’’ is consistent with the use of government or business practices), or a regarding notification to the ITC under the same term in revised section 225 large number of firms involved in the current § 351.225(f)(7). Unless otherwise and new section 227. It is Commerce’s inquiry. specified, Commerce’s current expectation that prompt conveyance of Proposed paragraph (f) would provide procedural regulations concerning a copy of the final circumvention the procedures for circumvention factual information (19 CFR determination normally would occur no inquiries, and largely tracks the 351.102(b)(21) and 19 CFR 351.301), more than 5 business days from the proposed new scope inquiry procedures including the extension of time limits publication of the determination in the provided under proposed § 351.225(f), (19 CFR 351.302), apply to Federal Register. Consistent with as well as the requirements provided circumvention procedures and would sections 516A(a)(2)(A)(ii) and (B)(vi) of under current § 351.225(f)(7) concerning continue to apply under the proposed the Act, judicial review procedures notification to the ITC. This provision revisions. would be commenced based on the date also explains that Commerce could limit Proposed paragraph (g) follows of conveyance, as opposed to the date of the issuance of questionnaires to a proposed §§ 351.225(g) and (h) with receipt, of a final circumvention reasonable number of respondents. In respect to preliminary and final determination. Additionally, as with practice, Commerce could do this circumvention determinations. any other document that is placed on through a respondent selection process. However, unlike preliminary and final the record by the agency, all interested Proposed paragraph (f)(4) would also scope rulings, preliminary and final parties on the segment-specific service establish deadlines regarding comments circumvention determinations will both lists will be notified of the final and rebuttal comments after a be published in the Federal Register. circumvention determination through preliminary circumvention Similar to proposed § 351.225(g), Commerce’s electronic ACCESS system. determination under proposed proposed paragraph (g)(1) would allow Proposed paragraphs (h) and (i) relate paragraph (g) if the preliminary Commerce to issue a preliminary to the current regulatory provisions for circumvention determination is not circumvention determination, based on products completed or assembled in the issued concurrently with the initiation available information at the time, as to United States or other foreign countries of the circumvention inquiry. Proposed whether there is a reasonable basis to found in current §§ 351.225(g) and (h), paragraph (f)(5) would provide believe or suspect that the elements respectively, with two important Commerce with the ability to establish necessary for a circumvention proposed revisions. First, we have alternative procedures if the preliminary determination under section 781 of the removed statements that no one single circumvention determination issued Act exist. Proposed paragraph (g)(2) factor under sections 781(a)(2) and under proposed paragraph (g) is issued largely tracks the similar provision 781(b)(2) of the Act will be controlling. concurrently with the initiation of the under proposed § 351.225(h) concerning We recognize that this language adopts 80 circumvention inquiry.79 Additionally, the issuance of final scope rulings. similar language from the SAA. proposed paragraph (f)(6) would allow Thus, proposed paragraph (g)(2) However, this statement alone, without Commerce to forego or rescind a provides that Commerce would additional context, has raised questions. ‘‘convey’’ the final circumvention In particular, the SAA states: circumvention inquiry, in whole or in { part, if a circumvention request is determination in accordance with the ‘‘Commerce will evaluate each of the withdrawn or if Commerce issues a final requirements of section 516A(a)(2)(A)(ii) factors under sections 781(a)(2) and of the Act, which states that judicial } determination in another segment of the 781(b)(2) of the Act as they exist either review of ‘‘class or kind’’ in the United States or a third country, proceeding under an AD and/or CVD determinations under section depending on the particular order that the merchandise at issue in 516A(a)(2)(B)(vi) of the Act, such as circumvention scenario. No single factor the circumvention inquiry is covered by scope rulings and circumvention will be controlling.’’ The SAA also that order (or orders). Commerce could determinations, are based off of the date provides that these provisions ‘‘do not also rescind if the basis for the initiation of mailing of such determination. establish rigid numerical standards for of the circumvention inquiry included Section 516A(a)(2)(A)(ii) of the Act determining the significance of the multiple provisions under section 781 further provides that only ‘‘an interested assembly (or completion) activities in of the Act, and Commerce need only party who is a party to the proceeding’’ the United States or for determining the reach a final determination with respect may commence judicial review significance of the value of the imported to one of those provisions. This most procedures. Therefore, aside from its parts or components.’’ 81 Therefore, frequently happens if a circumvention obligation to publish notice of the final although no one single factor should inquiry examines whether merchandise circumvention determination in the control Commerce’s analysis, this is altered in minor respects or later- Federal Register, Commerce proposes to statement in the SAA should be developed merchandise, and Commerce convey a copy of the final considered in light of the evidence need only address one of those circumvention determination in the before Commerce in a given case and is provisions to reach an affirmative manner prescribed by section not intended to limit Commerce’s determination. Proposed paragraph 516A(a)(2)(A)(ii) of the Act (i.e., discretion to evaluate the particularities mailing) to interested parties who are of the circumvention scenario. 79 To be clear, Commerce already has the authority under existing regulations to issue a parties to the proceeding (see preliminary circumvention determination § 351.102(b)(36)), because these are the 80 See SAA at 893. concurrently with initiation. only parties that have legal standing to 81 Id. at 894.

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Accordingly, we are proposing to circumvention determination.84 would incorporate the commercial remove the statement from paragraphs Previous circumvention cases availability standard into paragraph (k), (h) and (i). conducted by Commerce have relied on as this is judicially-affirmed and well- 85 Second, we propose removing specific those enumerated criteria. These established in our practice. Commerce reference to the major input rule under would now be incorporated into intends to consider whether a product is section 773(f)(3) of the Act in paragraph (j). Additionally, in ‘‘commercially available’’ on a case-by- case basis in light of the record of the paragraphs (h) and (i). Under current conducting a minor alteration proceeding. If Commerce determines §§ 351.225(g) and (h), in determining circumvention inquiry, under section 781(c) of the Act, we have analyzed that such merchandise was not the value of parts or components other factors, as appropriate on a case- commercially available at the time of purchased from an affiliated person by-case basis, including the the investigation, and is, thus, later- under sections 781(a)(1)(D) and circumstances under which the developed, Commerce would consider 781(b)(1)(D) of the Act, or of processing products enter the United States, the whether the later-developed performed by an affiliated person under timing of the entries during the merchandise is covered by the orders sections 781(a)(2)(E) and 781(b)(2)(E) of circumvention review period, and the pursuant to the statutory factors the Act, the value of the part or quantity of merchandise entered during identified in section 781(d)(1) of the component may be based on the cost of the circumvention review period.86 We Act. producing the part or component under would incorporate these additional Proposed paragraph (l) of § 351.226 section 773(f)(3) of the Act. The 1996 factors, which is a non-exhaustive list, would alter the suspension of Proposed Rule added this reference to in paragraph (j). liquidation requirements found in the ‘‘transactions disregarded’’ and Proposed paragraph (k) would current § 351.225(l) (which apply to ‘‘major input’’ rules applicable to incorporate the current regulatory circumvention inquiries) and mirror the affiliated transactions set forth in provision, § 351.225(j), pertaining to proposals to § 351.225(l) pertaining to 773(f)(3) of the Act in response to later-developed merchandise, under scope, which have already been comments raised before Commerce at section 781(d) of the Act, with some described above. the time.82 Additionally, the 1997 Final additions. In conducting a later- Thus, proposed paragraph (l)(1) of Rule further explained that the SAA developed merchandise circumvention § 351.226 provides that when Commerce clearly contemplates the use of the inquiry, under section 78l(d)(l) of the initiates a circumvention inquiry under major input rule in appropriate Act, and in determining whether the proposed paragraphs (b) or (d), it will circumstances, and, in response to merchandise is ‘‘later-developed,’’ notify CBP of the initiation and direct comments, also explained that cost of Commerce first examines whether the CBP to continue the suspension of production may be used as the basis of merchandise at issue was commercially liquidation of all unliquidated entries of products subject to the circumvention the value for inputs from affiliated available at the time of the initiation of persons.83 Based on our more recent 87 inquiry that are currently suspended by the AD and CVD investigation. We 88 experience, we believe it would be CBP at the applicable cash deposit beneficial to codify that determinations 84 See Omnibus Trade Act of 1987, Report of the rate that would apply if the product of the value of parts or components on Senate Finance Committee, S. Rep. No. 100–71, at were determined to be circumventing the basis of the cost of producing the 100 (1987) (stating that Commerce ‘‘should apply the order. practical measurements regarding minor alterations, Further, proposed paragraph (l)(2) of part or component may be conducted so that circumvention can be dealt with effectively, § 351.226 provides that if Commerce under the various applicable provisions even where such alterations to an article technically issues a preliminary circumvention of section 773—in this case, section transform it into a differently designated article{,}’’ determination under proposed 773(e) (constructed value) and 773(c) and providing a list of criteria to be considered). 85 See, e.g., Final Results of Anti-Circumvention paragraph (g)(1) that the product at issue (factors of production under the Review of Antidumping Order: Corrosion-Resistant is circumventing an AD and/or CVD nonmarket economy methodology) of Carbon Steel Flat Products From Japan, 68 FR order, Commerce will direct CBP to: (1) 33676, 33677 (June 5, 2003). the Act. The major input rule under Continue suspension of liquidation of section 773(f)(3) will still apply, as 86 See Preliminary Determination of Circumvention of Antidumping Order; Cut to already suspended entries; (2) suspend appropriate, in accordance with this Length Carbon Steel Plate from Canada, 65 FR applicable statutory framework. 64926, 64929–31 (October 31, 2000), unchanged in merchandise was commercially available at the Proposed paragraph (j) would Final Determination of Circumvention of time of the investigation, is reasonable). See also Antidumping Order; Cut to Length Carbon Steel Erasable Programmable Read Only Memories from incorporate the current regulatory Plate from Canada, 66 FR 7617 (January 24, 2001). Japan; Final Scope Ruling, 57 FR 11599 (April 6, provision, § 351.225(i), pertaining to 87 See Later-Developed Merchandise 1992); Electrolytic Manganese Dioxide from Japan; minor alteration of merchandise under Anticircumvention Inquiry of the Antidumping Final Scope Ruling, 57 FR 395 (January 6, 1992); section 781(c) of the Act, with some Duty Order on Petroleum Wax Candles from the Portable Electronic Typewriters from Japan, 55 FR People’s Republic of China: Affirmative Preliminary 47358 (November 13, 1990). additions. Although the statute is silent Determination of Circumvention of the 88 As discussed above, entries may be ‘‘currently regarding what factors to consider in Antidumping Duty Order, 71 FR 32033, 32037–40 suspended by CBP’’ under a variety of scenarios. determining whether alterations are (June 2, 2006), unchanged in Later-Developed See Sunpreme III, 946 F.3d at 1317–18 (discussing properly considered ‘‘minor,’’ the Merchandise Anticircumvention Inquiry of the CBP’s authority to suspend liquidation of entries Antidumping Duty Order on Petroleum Wax that CBP determines are within the scope of an AD/ legislative history of this provision Candles from the People’s Republic of China: CVD order unless appealed to Commerce); section indicates there are certain criteria that Affirmative Final Determination of Circumvention 517 of the Act (authorizing CBP to suspend should be considered before reaching a of the Antidumping Duty Order, 71 FR 59075 liquidation of entries for which it has reasonable (October 6, 2006); Candles Anticircumvention suspicion, or, in the case of final determination, Final, 71 FR at 59077 and accompanying Issues and substantial evidence, that covered merchandise is 82 See 1996 Proposed Rule, 61 FR at 7322. Decision Memorandum at Comment 4, amended by entered into the United States through evasion Clarifying edits to this language were made in the Redetermination Pursuant to Court Remand Order under section 517(e) and (d) of the Act). 1997 Final Rule. See 1997 Final Rule, 62 FR at in Target Corporation v. United States, 578 F. Supp. Additionally, as discussed above, consistent with 27328 (clarifying that application of the major input 2d 1369 (CIT 2008) (November 7, 2008), affirmed current practice and in accordance with CBP’s rule is discretionary for purposes of both U.S. and by Target Corp. v. United States, 626 F. Supp. 2d statutory and regulatory authorities, CBP may stay third country assembly). 1285 (CIT 2009), and Target Corp., 609 F.3d at its action on entries of products that CBP has 83 See 1997 Final Rule, 62 FR at 27328 (citing 1358–60 (holding that Commerce’s interpretation of liquidated but for which liquidation is not yet final SAA at 894). later-developed, as turning on whether the pending the outcome of a circumvention inquiry.

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liquidation of all other products at issue in effect pending Commerce’s issuance subsequent circumvention by other that are unliquidated; and (3) apply the of a final circumvention determination. producers, exporters, or importers applicable cash deposit rate under the These suspension of liquidation following the issuance of an affirmative order to unliquidated entries. procedures and cash deposit company-specific circumvention Proposed paragraph (l)(4) provides requirements will result in a more determination. that if Commerce issues a negative final effective application of circumvention Proposed paragraph (m) would also determination under paragraph (g)(2), determinations. As discussed above, address the potential overlap between a and the product is not otherwise subject Congress enacted section 781 of the Act circumvention inquiry and other to suspension as a result of another to combat certain forms of segments of the proceeding and would segment of a proceeding, such as a circumvention of AD and CVD orders, allow Commerce to take appropriate covered merchandise inquiry under however, neither section 781 of the Act action in such other proceedings. For § 351.227, for merchandise that was nor any other provision of the Act example, Commerce could request suspended and for which cash deposit contains specific guidance regarding information concerning the product that rates were paid, Commerce would when merchandise found to be is the subject of the circumvention instruct CBP to terminate suspension of circumventing an AD and/or CVD order inquiry for purpose of an administrative liquidation and refund cash deposits (if should be subject to suspension of review under § 351.213. any) on entries of this non-subject liquidation and cash deposit Proposed paragraphs (m) and (n) merchandise. requirements. When Congress passed would together address a problem that On the other hand, if Commerce the Omnibus and Trade arises when a circumvention concludes in a final determination Competitiveness Act of 1988, it determination would apply equally to under proposed paragraph (g)(2) that explained that the purpose of the companion AD and CVD orders, which circumvention has occurred, then under circumvention statute ‘‘is to authorize cover the same merchandise from the proposed paragraph (l)(3) Commerce the Commerce Department to apply same country, and largely mirror the would direct CBP to: (1) Continue antidumping and countervailing duty same paragraphs under the proposed suspension of liquidation of already orders in such a way as to prevent revisions to § 351.225. In that scenario, suspended entries, including those circumvention and diversion of U.S. an interested party requesting a entries subject to suspension of law.’’ 90 Congress also recognized that circumvention inquiry pertaining to liquidation as a result of another ‘‘aggressive implementation of {the both orders pursuant to paragraph (c) segment of a proceeding, such as an circumvention statute} by the must file its request on the record of the administrative review under § 351.213; Commerce Department can foreclose AD duty proceeding only, and serve its (2) suspend liquidation of all products these practices.’’ 91 Consistent with circumvention inquiry request to all parties on the annual inquiry service list at issue which are unliquidated; and (3) Congress’s intent when enacting the for both the AD and CVD orders. The apply the applicable cash deposit rate circumvention statute, these proposals annual inquiry service list and related under the order to unliquidated entries, for paragraph (l) of § 351.226 will help procedures are discussed in proposed until appropriate liquidation prevent companies from eluding the § 351.225(n). Once Commerce initiates instructions are issued pursuant to payment of duties if Commerce the circumvention inquiry, Commerce §§ 351.212 and 351.213.89 ultimately concludes that the would initiate and conduct that inquiry As described in further detail above in merchandise is circumventing an AD pertaining to both orders only on the the discussion of proposed paragraph (l) and/or CVD order. record of the AD duty proceeding.92 of § 351.225, these procedures deviate Proposed paragraph (m) would Once Commerce issues a final from the current § 351.225 framework in address the effect and application of circumvention determination on the two key respects. First, upon an circumvention determinations. In its record of the AD proceeding, Commerce affirmative preliminary or final experience, Commerce has witnessed would include a copy of that circumvention determination, scenarios in which the circumvention determination on the record of the CVD Commerce will instruct CBP to suspend determined to exist was unique to the proceeding and notify CBP in liquidation of any unliquidated entries, interested party under review. In that accordance with paragraph (l). As noted not only those that entered on or after situation, a company-specific above, by limiting the circumvention the date of initiation of the circumvention determination is inquiry only to the record of one circumvention inquiry. Second, the warranted. However, Commerce has proceeding, the chances of incomplete proposed regulation does not require also found circumvention to exist in records, or confusing records being filed Commerce to notify CBP of a negative other cases in which the circumvention with courts on appeal, should be preliminary circumvention warranted a country-wide lessened. determination, and, therefore, determination. Accordingly, the Proposed paragraph (n) would suspension of liquidation for already regulation would recognize that section address service requirements and suspended entries (if any) will remain 781 of the Act provides Commerce with the discretion to apply a circumvention largely tracks the same provision under proposed § 351.225(n), i.e., interested 89 As discussed above, consistent with current decision on a country-wide basis, and practice and in accordance with CBP’s statutory and therefore allows for Commerce to parties filing a circumvention inquiry regulatory authorities, CBP may stay its action on consider whether a country-wide request must serve all parties on the entries of products that CBP has liquidated but for application is warranted on a case-by- annual inquiry service list for that order which liquidation is not yet final pending the and any companion order. Under outcome of a circumvention inquiry. Additionally, case basis in circumvention inquiries. any instructions issued by Commerce directing CBP One of the factors Commerce may proposed paragraph (n), once a to ‘‘lift suspension of liquidation’’ and assess duties consider in making such a circumvention inquiry is initiated under at the applicable AD/CVD rate are not intended to determination is the possibility of paragraph (b) or (d), a segment-specific impugn CBP’s ability to (1) suspend liquidation/ service list would be established, under assess duties/take any other measures pursuant to CBP’s EAPA investigation authority under section 90 Omnibus Trade Act of 1987, Report of the § 351.103(d)(1), and the requirements of 517 of the Act specifically, or (2) take any other Senate Finance Committee, S. Rep. No. 100–71, at action within CBP’s or HSI’s authority with respect 101 (1987). 92 Under that scenario, Commerce would follow to AD/CVD entries. 91 Id. the procedures of paragraph (l) for both orders.

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§ 351.303(f) would apply. Once the herein as a ‘‘covered merchandise thus, we are still familiarizing ourselves segment-specific service list is referral’’).96 with the facts and circumstances that established, parties on the annual Section 421 of the EAPA requires that would lead CBP to choose to make such inquiry service list would no longer be the Secretary of the Treasury prescribe a referral, as well as the facts and served with filings made pursuant to the regulations as necessary to implement circumstances that would be circumvention inquiry, unless they the amendments.97 Although the EAPA appropriate for Commerce to consider in follow the procedures of § 351.103(d)(1) does not mandate that Commerce reaching its covered merchandise by filing an entry of appearance in the promulgate regulations, in order to determination. For instance, there may relevant circumvention segment. provide clarity and consistency to the be a need for Commerce to seek further However, as discussed further below, public, Commerce proposes to adopt information to establish a more detailed § 351.227, a new regulation to address Commerce proposes to amend description of the merchandise at issue, procedures and standards specific to § 351.103(d)(1) to reflect that an or engage in a complex analysis, before Commerce’s consideration of covered determining whether the merchandise is interested party that submits a request merchandise referrals. In particular, this covered merchandise. Commerce, for circumvention inquiry need not file new regulation would govern therefore, needs to maintain flexibility an entry of appearance under Commerce’s receipt of a covered in both its opportunities to request § 351.103(d)(1), as that party will be merchandise referral, Commerce’s information and the issues that it placed on the segment-specific service initiation and conduct of a covered considers in its analysis, before reaching list by Commerce. Additionally, as merchandise inquiry, and Commerce’s a covered merchandise determination. discussed further below, Commerce covered merchandise determination, Second, the EAPA does not prescribe proposes to amend § 351.305(d) to adopt pursuant to section 517(b)(4) of the Act. timing requirements for Commerce to special filing requirements for importers The proposed rulemaking is intended to reach its covered merchandise seeking access to business proprietary provide for efficient notice and service determination. Nevertheless, section information in circumvention inquiries. requirements, expedited deadlines, and 517(b)(4)(B) of the Act instructs Finally, proposed paragraph (o) streamlined opportunities to solicit Commerce to promptly transmit its would allow for the circumvention information and comment from determination to CBP. In addition, the inquiry procedures of § 351.226, interested parties. These proposed EAPA (section 517(b)(4)(C) of the Act) discussed above, to apply to suspended changes are procedural in nature and provides that CBP’s own deadlines to investigations and suspension pertain to the agency’s internal process complete its EAPA investigation will be agreements. in conducting its covered merchandise stayed pending completion of inquiry. In addition, these changes Commerce’s covered merchandise Covered Merchandise Referrals— would not alter the current statutory or determination. In drafting the proposed Section 351.227 regulatory framework under which regulations, Commerce is taking Commerce may already request timeliness into account, which we As discussed above, Commerce and participation of interested parties and believe is consistent with the intent of CBP work together to ensure the issue a substantive determination that Congress in drafting the EAPA. effectiveness of AD/CVD orders, and certain merchandise is within the scope Third, section 517(b)(4)(D) of the Act both agencies have their own of an AD/CVD order, as detailed above. provides that the statutory scheme for independent authority to examine In promulgating the proposed judicial review under section 516A(a)(2) potential circumvention and duty procedures, Commerce is mindful of of the Act applies to Commerce’s evasion of existing orders.93 Pursuant to three aspects of the EAPA. First, as covered merchandise determinations.99 section 421 of the Enforce and Protect discussed above, section 517(b)(4) of the Under the applicable standard of Act of 2015,94 effective August 22, 2016, Act requires CBP to make a covered review, Commerce’s determinations section 517 was added to the Act, which merchandise referral to Commerce if it must be supported by substantial establishes a formal process for CBP to is unable to determine whether the evidence and in accordance with law conduct civil administrative merchandise at issue is covered (see section 516A(b)(1)(B) of the Act). investigations of potential duty evasion merchandise within the meaning of Thus, to ensure that its covered of AD and CVD orders on the basis of section 517(a)(3) of the Act. To date, merchandise determinations meet this an allegation by an interested party or Commerce has received only a few standard, Commerce intends to ensure upon referral by another Federal agency covered merchandise referrals,98 and, that parties are afforded opportunities to (referred to herein as an ‘‘EAPA submit evidence and argument for 96 investigation’’).95 See H.R. Rep. No. 114–376, at 190 (2015) Commerce’s consideration in reaching Pursuant to section (EAPA Conf. Rep.) (‘‘If the Commissioner is unable 517(b)(4)(A) of the Act, if CBP is to determine whether the merchandise at issue is its determination. Further, Commerce conducting an EAPA investigation covered merchandise, the Commissioner shall refer intends to allow sufficient time for it to based on an allegation from an the matter to the Department of Commerce to consider such evidence and arguments determine whether the merchandise is covered for purposes of drafting a well-reasoned interested party, and is unable to merchandise. The Department of Commerce is to determine whether the merchandise at make this determination pursuant to its applicable determination that may be subject to issue is ‘‘covered merchandise’’ within statutory and regulatory authority, and the judicial review. the meaning of section 517(a)(3) of the determination shall be subject to judicial review In short, in proposing new § 351.227, under 19 U.S.C. 1516a(a)(2). The Conferees intend we have taken into account Act, it shall refer the matter to that such determinations include whether the Commerce to make a covered merchandise at issue is subject merchandise under considerations relating to: (1) Flexibility merchandise determination (referred to 19 U.S.C. 1677j.’’) (referencing sections 516 and 781 of the Act). Merchandise Referral, 83 FR 9272 (March 5, 2018); 97 See also Investigation of Claims of Evasion of Hydrofluorocarbon Blends From the People’s 93 Additionally, HSI has the authority to Antidumping and Countervailing Duties, Interim Republic of China: Notice of Covered Merchandise investigate criminal violations related to illegal Regulations, 81 FR 56477 (August 22, 2016) (setting Referral, 83 FR 9277 (March 5, 2018); and Diamond evasion of payment of required duties, including forth CBP’s interim regulations under section 517 Sawblades and Parts Thereof From the People’s payment of AD/CV duties. See, e.g., 18 U.S.C. 542. of the Act). Republic of China: Notice of Covered Merchandise 94 Public Law 114–125, 130 Stat. 122, 155 (2016). 98 See Wooden Bedroom Furniture From the Referral, 83 FR 9280 (March 5, 2018). 95 Id., sections 421(a)-(d), 130 Stat. at 161–169. People’s Republic of China: Notice of Covered 99 See EAPA Conf. Rep. at 190.

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in Commerce’s ability to request with proposed section 351.226(b) and proceeding, which can provide the basis information necessary for its analysis in publish notice of its initiation in the for the Secretary’s covered merchandise reaching a covered merchandise Federal Register. Third, under determination, thus negating the need determination; (2) timeliness; and (3) paragraph (b)(3), if Commerce for a separate covered merchandise scheduling that allows Commerce determines that the covered inquiry; and, third, where Commerce sufficient time to analyze the issues and merchandise referral can be addressed otherwise determines that it is not the record evidence and issue a in an ongoing segment of a proceeding, necessary to initiate or conduct a determination that may be subject to such as a scope inquiry, under the covered merchandise inquiry in judicial review. However, although we proposed revisions to section 351.225, response to a covered merchandise are setting forth these proposed or circumvention inquiry, under referral because the matter at issue may regulations, as noted above, covered proposed section 351.226, Commerce be addressed by other means. With merchandise inquiries constitute a new will publish a notice in the Federal respect to this third category, this could type of segment of a proceeding at Register that it intends to address the happen where Commerce believes a Commerce and, therefore, Commerce referral in the context of such other prior scope ruling or circumvention will continue to develop its practice and segment. determination can provide the basis for procedures in this area. Further, as In determining whether a covered Commerce’s covered merchandise detailed below, Commerce recognizes merchandise referral is sufficient, determination. In such instances, the potential significant overlap Commerce may consider, among other Commerce will issue a final covered between a covered merchandise inquiry, things, whether the referral has merchandise determination in scope inquiry and circumvention provided the name and contact accordance with the requirements of inquiry procedures discussed above information of the parties to CBP’s paragraph (e)(2) of this section. EAPA investigation, including the name under §§ 351.225 and 351.226, and Proposed paragraph (e) would and contact information of any known possibly any other segment of a incorporate preliminary and final representative acting on behalf of such proceeding that may address scope covered merchandise determinations, 100 parties; an adequate description of the issues. Therefore, in crafting these which will both be published in the alleged covered merchandise; regulations, Commerce has allowed for Federal Register, and largely tracks the identification of the applicable AD or the flexibility to address CBP’s covered requirements under proposed section CVD orders; and any necessary merchandise referrals in the context of 351.226 pertaining to circumvention another segment of the proceeding, or to information reasonably available to CBP regarding whether the merchandise at inquiries. Similar to proposed section otherwise rely on the standards under 351.226(g)(1), proposed paragraph (e)(1) section 351.225 and 226, in issuing a issue is covered merchandise. Additionally, Commerce will review the would allow Commerce to issue a covered merchandise determination. preliminary covered merchandise Proposed section 351.227(a) would covered merchandise referral and any determination, based on available introduce the new section and briefly accompanying documentation to ensure information at the time, as to whether describes the framework of CBP’s EAPA any business proprietary information is there is a reasonable basis to believe or investigations and covered merchandise properly redacted in accordance with suspect that the product that is the referrals under section 517 of the Act. Commerce’s statutory and regulatory subject of the covered merchandise Additionally, paragraph (a) tracks the requirements. Regardless of which of inquiry is covered by the scope of the similar provision in proposed sections the three actions Commerce takes with order. Proposed paragraph (e)(2), which 351.225 (scope inquiries) and 351.226 respect to the covered merchandise tracks proposed section 351.226(g)(2), (circumvention inquiries), explaining referral, Commerce will place the would provide that, promptly after that, unless otherwise specified in new documents on the record of the segment publication of the final covered section 351.227, Commerce’s existing of the proceeding under which merchandise determination, Commerce procedures contained in subpart C (i.e., Commerce intends to address the would convey a copy of the final relating to factual information (sections referral. determination, in the manner prescribed 351.102(b)(21) and 351.301) and the Proposed paragraph (c) would provide by section 516A(a)(2)(A)(ii) of the Act, extension of time limits (section the deadline for Commerce to conduct to all parties to the proceeding, and 351.302)), apply to covered merchandise covered merchandise inquiries and transmit a copy of the final inquiries. would also set forth that Commerce determination to CBP, thus fulfilling its Proposed paragraph (b) would could only extend the deadline if it obligation under section 517(b)(4)(B) of provide that, within 15 days after determines that the inquiry is the Act. The use of the term ‘‘promptly’’ receiving a covered merchandise referral extraordinarily complicated. This tracks is not defined in section 517(b)(4)(B) of that Commerce determines to be similar language under new section the Act. Consistent with the use of the sufficient, Commerce will take one of 351.226 (circumvention inquiries). same term in revised section 351.225 three actions. First, under paragraph Proposed paragraph (d) would and new section 351.226, it is (b)(1), Commerce may initiate a covered provide the procedures for covered Commerce’s expectation that prompt merchandise inquiry and will publish merchandise inquiries, and largely conveyance and transmittal of a copy of notice of its initiation in the Federal tracks the new procedures provided the final covered merchandise Register. Second, under paragraph under proposed sections 351.225(f) (scope inquiries) and 351.226(f) determination normally would occur no (b)(2), Commerce may self-initiate a (circumvention inquiries), with some more than 5 business days from the circumvention inquiry in accordance exceptions. For example, paragraph publication of the determination in the Federal Register. Consistent with 100 Id. (‘‘The Department of Commerce is to make (d)(5) would allow Commerce to forego this determination pursuant to its applicable or rescind a covered merchandise sections 516A(a)(2)(A)(ii) and (B)(vi) of statutory and regulatory authority, and the inquiry, in whole or in part, for one of the Act, judicial review procedures determination shall be subject to judicial review three reasons: First, if CBP withdraws would be commenced based on the date under 19 U.S.C. 1516a(a)(2). The Conferees intend of conveyance, as opposed to the date of that such determinations include whether the its covered merchandise referral; merchandise at issue is subject merchandise under second, if the Secretary issues a final receipt, of a final covered merchandise 19 U.S.C. 1677j.’’). determination in another segment of a determination.

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Paragraph (e)(3) would also clarify scheme is necessary to ensure the authority and consideration of the that if Commerce addresses the covered enforcement of the AD/CVD orders or normal meaning of those terms.106 merchandise referral in the context of suspension agreements. For example, to Importer Reimbursement Certification— another segment of the proceeding, or carry out the terms of certain Section 351.402(f)(2) issues a scope ruling, under section suspension agreements, Commerce has 351.225, or a circumvention required importers, producers, and Section 351.402(f)(1)(i) of Commerce’s determination, under section 351.226, exporters to certify to certain regulations provide that in calculating which provides the basis for the covered requirements with respect to the entries the export price, or constructed export merchandise determination, Commerce and sales of merchandise subject to the price in determining an AD margin, would promptly transmit a copy of the agreement.102 Commerce has also Commerce will deduct any AD or CVD final action in that segment to CBP in required certifications for various AD duties that the exporter or producer accordance with section 517(b)(4)(B) of and CVD orders.103 Additionally, paid on behalf of the importer or the Act. Commerce has established a reimbursed to the importer. Section Proposed paragraph (f) would explain certification scheme in the context of its 351.402(f)(1)(ii) provides an exception that, if Commerce issues a covered circumvention inquiries to ensure that that in calculating export price or merchandise determination after parties claiming merchandise is not constructed export price, Commerce conducting a covered merchandise subject to an AD/CVD order, as a result will not deduct AD or CVD duties if an inquiry, Commerce may rely on the of a circumvention determination, must exporter or producer granted to the standards provided under proposed certify and maintain documentation to importer before initiation of the AD sections 351.225(j) (country of origin) or that effect.104 investigation in question a warranty of (k) (scope rulings). Commerce also Proposed section 351.228 would nonapplicability of AD/CVD duties with could rely on the provisions of section codify and enhance Commerce’s respect to subject merchandise (1) sold 781 of the Act regarding the four forms existing authority and practice to before the date of publication of the of circumvention (proposed sections require certifications by importers and notice of first suspension of liquidation, 351.226(h), (i), (j), or (k)). We believe other interested parties as to whether and (2) exported before the date of this is consistent with the legislative merchandise is subject to an AD/CVD publication of the final AD history, which specifically identifies order. Under proposed section determination. that Commerce may follow its existing 351.228(b), where that party fails to Section 351.402(f)(2) currently statutory and regulatory authority in comply with the certification requires importers of AD entries to file issuing a covered merchandise requirements by failing to provide the prior to liquidation a certificate with 101 determination. certification upon request, or providing CBP that identifies whether the importer To maintain consistency with a certification that contains materially has or has not entered into an agreement proposed sections 351.225 and 351.226, false, fictitious, or fraudulent statements for the payment or reimbursement of AD proposed paragraphs (g)–(k) would be or representations, or material or CVD duties. This certificate is reserved. Additionally, the following omissions, to Commerce or CBP, as required for each entry (or a group of paragraphs would largely mirror the appropriate, Commerce would have the entries) subject to AD duties, and must same provisions in proposed sections authority to instruct CBP to collect from identify the relevant merchandise to 351.225 and 351.226, which have been the importer cash deposits for the AD or which it relates. Consistent with section discussed in detail above: Paragraph (l) CVD at the applicable rate. Commerce 351.402(f)(1)(i), if an importer certifies concerning suspension of liquidation; recognizes that CBP has its own that it has entered into an agreement for paragraph (m) concerning applicability independent authority to address import the payment or reimbursement of AD or of covered merchandise determinations; documentation related to negligence, CVD duties, Commerce will deduct any other segments of the proceeding, and gross negligence, or fraud.105 This AD or CVD duties that the exporter or companion AD and CVD orders; producer paid on behalf of the importer paragraph (n) concerning service; and provision is not intended to supplant CBP’s authority, nor is a formal finding or reimbursed to the importer. However, paragraph (o) concerning suspended consistent with section 351.402(f)(2)(ii), investigations and suspension by CBP required for Commerce to determine, within its own authority, Commerce will not deduct AD or CVD agreements. Additionally, with respect duties paid or reimbursed with respect to proposed paragraph (l), as discussed that the certification is deficient and unreliable for the reasons discussed to subject merchandise (1) sold before above, any instructions issued by the date of publication of the notice of Commerce directing CBP to ‘‘lift above. Whether a certification contains ‘‘material’’ or ‘‘fraudulent’’ information first suspension of liquidation, and (2) suspension of liquidation’’ and assess exported before the date of publication duties at the applicable AD/CVD rate are is a determination that would be made by Commerce pursuant to its own of the final AD determination where, not intended to impugn CBP’s ability to before the initiation of the AD (1) suspend liquidation/assess duties/ 102 investigation in question, the exporter take any other measures pursuant to See, e.g., Sugar From Mexico: Suspension of Countervailing Duty Investigation, 79 FR 78044 or producer granted a warranty of CBP’s EAPA investigation authority (December 29, 2014). nonapplicability of AD or CVD duties under section 517 of the Act 103 See, e.g., Notice of Amended Final with respect to the merchandise. specifically, or (2) take any other action Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Low Enriched Uranium Additionally, under section within CBP’s or HSI’s authority with 351.402(f)(3), if the importer does not respect to AD/CVD entries. From France, 67 FR 6680 (February 13, 2002) (requiring certifications of the importer and end provide the certificate prior to Certifications—Section 351.228 user). liquidation, Commerce presumes that 104 See, e.g., Glycine From the People’s Republic At various points throughout its of China: Final Partial Affirmative Determination of the exporter or producer paid or history of administering the AD and Circumvention of the Antidumping Duty Order, 77 reimbursed such duties and will deduct CVD laws, Commerce has determined FR 73426 (December 10, 2012). 105 Additionally, HSI has the authority to 106 Commerce does not intend to be restricted by that the establishment of a certification investigate criminal violations related to illegal the interpretations or policies set forth by other evasion of payment of required duties, including agencies in interpreting those terms in applying 101 See id. at 190. payment of AD/CV duties. See, e.g., 18 U.S.C. 542. other areas of law.

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the applicable AD or CVD duties that Other Procedural Amendments— inquiry to be added to the segment- the exporter or producer is presumed to Sections 351.103(d)(1) and 305(d) specific service list for that segment of have paid on behalf of the importer or Consistent with the substantive the proceeding. Additionally, under reimbursed to the importer. The current proposed rules discussed above, revised section 351.305(d), an applicant regulation, which is largely unchanged Commerce proposes to adopt necessary for access to business proprietary as it existed 40 years ago,107 is changes to two procedural regulations, information on behalf of a party that has otherwise silent regarding the specific section 351.103(d)(1) pertaining to been publicly identified by CBP as the filing requirements for the certificate. letters of appearance and public service importer in a covered merchandise lists, and section 351.305(d) pertaining referral is exempt from the requirements Section 405 of the Security and of demonstrating that the party is an Accountability for Every (SAFE) Port to importer filing requirements for access to business proprietary importer for purposes of a covered Act of 2006, Public Law 109–347, merchandise inquiry. established the International Data Trade information in Commerce’s proceedings. System (ITDS), the purpose of which ‘‘is As discussed above, under revised Classifications section 351.225, pertaining to scope to eliminate redundant information Executive Order 12866 inquiries, Commerce proposes to amend requirements, to efficiently regulate the section 351.103(d)(1) to reflect that an OMB has determined that this flow of commerce, and to effectively interested party that submits a scope proposed rule is significant for purposes enforce laws and regulations relating to ruling application need not file an entry of Executive Order 12866. international trade, by establishing a of appearance, under section Executive Order 13771 single portal system, operated by CBP, 351.103(d)(1), as that interested party for the collection and distribution of will be placed on the segment-specific This rule is not subject to the standard electronic import and export service list for that scope inquiry by requirements of E.O. 13771 because this data required by all participating Commerce. Similarly, as discussed rule results in no more than de minimis Federal agencies.’’ Flowing from this, above, under revised section 351.226, costs. one goal of the ITDS is to encourage and pertaining to circumvention inquiries, Paperwork Reduction Act facilitate the transition of paper filing Commerce proposes to amend section This proposed rule contains no requirements for certain import 351.103(d)(1) to reflect that an collection of information subject to the documentation to electronic format. interested party that submits a request Paperwork Reduction Act, 44 U.S.C. Accordingly, Commerce proposes to for a circumvention inquiry need not chapter 35. modify section 351.402(f)(2) to clarify file an entry of appearance under Executive Order 13132 that for all entries subject to AD duties, section 351.103(d)(1) to be placed on the the importer must file a reimbursement segment-specific service list for that This proposed rule does not contain circumvention inquiry. We have also certification in either electronic or paper policies with federalism implications as made minor amendments to section form in accordance with CBP’s that term is defined in section 1(a) of 351.103(d)(1) to reflect the filing of an requirements, as applicable. Executive Order 13132, dated August 4, ‘‘entry of appearance,’’ rather than a 1999 (64 FR 43255 (August 10, 1999)). Additionally, Commerce proposes to ‘‘letter of appearance,’’ to more remove the requirement for specific accurately describe Commerce’s Regulatory Flexibility Act certification language, and instead allow electronic filing process. The Chief Counsel for Regulation has importers to certify to the substance of Further, current section 351.305(d) certified to the Chief Counsel for the certification. Moreover, for ease of would provide special filing Advocacy of the Small Business administration, Commerce proposes to requirements for importers seeking Administration under the provisions of clarify that a certification is required for access to business proprietary the Regulatory Flexibility Act, 5 U.S.C. each entry of merchandise subject to AD information in Commerce’s proceedings, 605(b), that the proposed rule would not duties imported on or after the date of and would mandate that for scope have a significant economic impact on the first suspension of liquidation.108 segments of a proceeding, under a substantial number of small business Furthermore, although such certification existing section 351.225, an applicant entities. A summary of the need for, is required prior to liquidation, seeking access to business proprietary objectives of, and legal basis for this rule Commerce proposes to clarify that CBP information on behalf of an importer is provided in the preamble, and is not may also accept the reimbursement must demonstrate that the party is an repeated here. certification in accordance with its importer, or has taken steps to import, The entities upon which this protest procedures under 19 U.S.C. the merchandise subject to the scope rulemaking could have an impact 1514. Commerce is also proposing non- inquiry. This language would be include foreign governments, foreign substantive restructuring of the unchanged with respect to importers in exporters and producers, some of whom are affiliated with U.S. companies, and regulation. scope inquiries, but we have added similar language for importers in U.S. importers. Enforcement & Compliance currently does not have 107 circumvention inquiries, under See 19 CFR 153.49 (‘‘Reimbursement of information on the number of entities dumping duties’’) (1979). proposed section 351.226. 108 Sections 351.402(f)(1(i) and (ii) are unchanged Lastly, with respect to covered that would be considered small under in this proposed rule. Therefore, Commerce will not merchandise inquiries under proposed the Small Business Administration’s deduct AD or CVD duties paid or reimbursed with section 351.227, we propose changes to size standards for small businesses in respect to subject merchandise (1) sold before the both sections 351.103(d)(1) and 305(d). the relevant industries. However, some date of publication of the notice of first suspension Specifically, under revised section of these entities may be considered of liquidation, and (2) exported before the date of 351.103(d)(1), any publicly identified small entities under the appropriate publication of the final AD determination where, parties in a covered merchandise industry size standards. Although this before the initiation of the AD investigation in question, the exporter or producer granted a referral from CBP, under section 517 of proposed rule may indirectly impact warranty of nonapplicability of AD or CVD duties the Act, need not file an entry of small entities that are parties to with respect to the merchandise. appearance in the covered merchandise individual AD and CVD proceedings, it

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will not have a significant economic entry of appearance and qualify as an reviews by non-investigated exporters in impact on any such entities because the interested party will be included in the certain countervailing duty proceedings proposed rule applies to administrative public service list for the segment of the and procedures for conducting such enforcement actions, only clarifying and proceeding in which the entry of reviews. establishing streamlined procedures; it appearance is submitted. The entry of (b) Request for new shipper review— does not impose any significant costs on appearance may be filed as a cover letter (1) Requirement of sale or export. regulated entities. Therefore, the to an application for APO access. If the Subject to the requirements of section proposed rule would not have a representative of the interested party is 751(a)(2)(B) of the Act and this section, significant economic impact on a not requesting access to business an exporter or producer may request a substantial number of small business proprietary information under APO, the new shipper review if it has exported, entities. For this reason, an Initial entry of appearance must be filed or sold for export, subject merchandise Regulatory Flexibility Analysis is not separately from any other document to the United States and can required and one has not been prepared. filed with the Department. If the demonstrate the existence of a bona fide interested party is a coalition or sale. List of Subjects in 19 CFR Part 351 association as defined in subparagraph (2) Contents of request. A request for Administrative practice and (A), (E), (F) or (G) of section 771(9) of a new shipper review must contain the procedure, Antidumping, Business and the Act, the entry of appearance must following: industry, Cheese, Confidential business identify all of the members of the (i) If the person requesting the review information, Countervailing duties, coalition or association. is both the exporter and producer of the Freedom of information, Investigations, * * * * * merchandise, a certification that the Reporting and recordkeeping ■ 3. Add paragraph (g) to § 351.203 to person requesting the review did not requirements. read as follows: export subject merchandise to the Dated: July 7, 2020. United States (or, in the case of a § 351.203 Determination of sufficiency of regional industry, did not export the Jeffrey I. Kessler, petition. subject merchandise for sale in the Assistant Secretary for Enforcement and * * * * * region concerned) during the period of Compliance. (g) Time limits for filing interested investigation; For the reasons stated in the party comments on industry support. (ii) If the person requesting the review preamble, the Department of Commerce For purposes of sections 702(c)(4)(E) is the exporter, but not the producer, of proposes to amend 19 CFR part 351 as and 732(c)(4)(E) of the Act, the Secretary the subject merchandise: follows: will consider comments or information (A) The certification described in on the issue of industry support paragraph (b)(2)(i) of this section; and PART 351—ANTIDUMPING AND submitted no later than 5 business days (B) A certification from the person COUNTERVAILING DUTIES before the date referenced in paragraph that produced or supplied the subject (b)(1) of this section by any interested merchandise to the person requesting ■ 1. The authority citation for 19 CFR party under section 771(9) of the Act. the review that that producer or part 351 continues to read as follows: The Secretary will consider rebuttal supplier did not export the subject Authority: 5 U.S.C. 301; 19 U.S.C. 1202 comments or information to rebut, merchandise to the United States (or, in note; 19 U.S.C. 1303 note; 19 U.S.C. 1671 et clarify, or correct such information on the case of a regional industry, did not seq.; and 19 U.S.C. 3538. industry support submitted by any export the subject merchandise for sale ■ 2. Revise paragraph (d)(1) of § 351.103 interested party no later than two in the region concerned) during the to read as follows: calendar days from the time limit for period of investigation; filing comments. (iii)(A) A certification that, since the § 351.103 Central Records Unit and ■ 4. Revise § 351.214 to read as follows: investigation was initiated, such Administrative Protective Order and exporter or producer has never been Dockets Unit. § 351.214 New shipper reviews under affiliated with any exporter or producer * * * * * section 751(a)(2)(B) of the Act. who exported the subject merchandise (d) * * * (a) Introduction. Section 751(a)(2)(B) to the United States (or in the case of a (1) With the exception of a petitioner of the Act provides a procedure by regional industry, who exported the filing a petition in an investigation which so-called ‘‘new shippers’’ can subject merchandise for sale in the pursuant to § 351.202, an interested obtain their own individual dumping region concerned) during the period of party filing a scope ruling application margin or countervailable subsidy rate investigation, including those not pursuant to § 351.225(c), an interested on an expedited basis. In general, a new individually examined during the party filing a request for a shipper is an exporter or producer that investigation; and circumvention inquiry pursuant to did not export, and is not affiliated with (B) In an antidumping proceeding § 351.226(c), and those relevant parties an exporter or producer that did export, involving imports from a nonmarket identified by the Customs Service in a to the United States during the period economy country, a certification that the covered merchandise referral pursuant of investigation. Furthermore, section export activities of such exporter or to § 351.226, all persons wishing to 751(a)(2)(B)(iv) requires that the producer are not controlled by the participate in a segment of a proceeding Secretary make a determination of central government; must file an entry of appearance. The whether the sales under review are bona (iv)(A) A certification from the entry of appearance must identify the fide. This section contains rules unaffiliated customer in the United name of the interested party, how that regarding requests for new shipper States that it did not purchase the party qualifies as an interested party reviews and procedures for conducting subject merchandise from the producer under § 351.102(b)(29) and section such reviews, as well as requirements or exporter during the period of 771(9) of the Act, and the name of the for determining whether sales are bona investigation; and firm, if any, representing the interested fide under section 751(a)(2)(B)(iv) of the (B) A certification from the party in that particular segment of the Act. In addition, this section contains unaffiliated customer in the United proceeding. All persons who file an rules regarding requests for expedited States that it will provide necessary

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information requested by the Secretary in the calendar month immediately time limits set forth in paragraph (i) of regarding its purchase of subject following the anniversary month or the this section; merchandise. semiannual anniversary month if the (3) Absence of bona fide sale to an (v) Documentation establishing: request for the review is made during unaffiliated customer. The Secretary (A) The date on which subject the 6–month period ending with the end may rescind a new shipper review, in merchandise of the exporter or producer of the anniversary month or the whole or in part, if the Secretary making the request was first entered, or semiannual anniversary month concludes that: withdrawn from warehouse, for (whichever is applicable). (i) Information that the Secretary consumption, or, if the exporter or (2) Semiannual anniversary month. considers necessary to conduct a bona producer cannot establish the date of The semiannual anniversary month is fide sale analysis is not on the record; first entry, the date on which the the calendar month that is 6 months or exporter or producer first shipped the after the anniversary month. (ii) The producer or exporterseeking a subject merchandise for export to the (3) Example. An order is published in new shipper review has failed to United States; January. The anniversary month would demonstrate to the satisfaction of the (B) The volume of that and be January, and the semiannual Secretary the existence of a bona fide subsequent shipments, including anniversary month would be July. If the sale to an unaffiliated customer. whether such shipments were made in Secretary received a request for a new (4) Notice of Rescission. If the commercial quantities; shipper review at any time during the Secretary rescinds a new shipper review (C) The date of the first sale, and any period February–July, the Secretary (in whole or in part), the Secretary will subsequent sales, to an unaffiliated would initiate a new shipper review in publish in the Federal Register notice of customer in the United States; and August. If the Secretary received a ‘‘Rescission of Antidumping (D) The circumstances surrounding request for a new shipper review at any (Countervailing Duty) New Shipper such sale(s), including but not limited time during the period August–January, Review’’ or, if appropriate, ‘‘Partial to: the Secretary would initiate a new Rescission of Antidumping (1) The price of such sales; shipper review in February. (Countervailing Duty) New Shipper (4) Exception. If the Secretary (2) Any expenses arising from such Review.’’ sales; determines that the requirements for a (g) Period of review—(1) Antidumping (3) Whether the subject merchandise request for new shipper review under proceeding—(i) In general. Except as involved in such sales was resold in the paragraph (b) of this section have not provided in paragraph (g)(1)(ii) of this United States at a profit; been satisfied, the Secretary will reject section, in an antidumping proceeding, (4) Whether such sales were made on the request and provide a written a new shipper review under this section an arms-length basis; explanation of the reasons for the normally will cover, as appropriate, (E) Additional documentation rejection. regarding the business activities of the (e) Suspension of liquidation. When entries, exports, or sales during the producer or exporter, including but not the Secretary initiates a new shipper following time periods: limited to: review under this section, the Secretary (A) If the new shipper review was (1) The producer or exporter’s offers will direct the Customs Service to initiated in the month immediately to sell merchandise in the United States; suspend or continue to suspend following the anniversary month, the (2) An identification of the complete liquidation of any unliquidated entries twelve-month period immediately circumstance surrounding the producer of the subject merchandise from the preceding the anniversary month; or or exporter’s sales to the United States, relevant exporter or producer at the (B) If the new shipper review was as well as any home market or third applicable cash deposit rate. initiated in the month immediately country sales; (f) Rescission of new shipper review— following the semiannual anniversary (3) In the case of a non-producing (1) Withdrawal of request for review. month, the period of review will be the exporter, an explanation of the The Secretary may rescind a new six-month period immediately exporter’s relationship with its shipper review under this section, in preceding the semiannual anniversary producer/supplier; and whole or in part, if a producer or month. (4) An identification of the producer’s exporter that requested a review (ii) Exceptions. (A) If the Secretary or exporter’s relationship to the first withdraws its request not later than 60 initiates a new shipper review under unrelated U.S. purchaser; days after the date of publication of this section in the month immediately (vi) In the case of a review of a notice of initiation of the requested following the first anniversary month, countervailing duty order, a certification review. the review normally will cover, as that the exporter or producer has (2) Absence of entry and sale to an appropriate, entries, exports, or sales informed the government of the unaffiliated customer. The Secretary during the period from the date of exporting country that the government may rescind a new shipper review, in suspension of liquidation under this will be required to provide a full whole or in part, if the Secretary part to the end of the month response to the Department’s concludes that: immediately preceding the first questionnaire. (i) As of the end of the normal period anniversary month. (c) Deadline for requesting review. An of review referred to in paragraph (g) of (B) If the Secretary initiates a new exporter or producer may request a new this section, there has not been an entry shipper review under this section in the shipper review within one year of the and sale to an unaffiliated customer in month immediately following the first date referred to in paragraph (b)(2)(v)(A) the United States of subject semiannual anniversary month, the of this section. merchandise; and review normally will cover, as (d) Initiation of new shipper review— (ii) An expansion of the normal appropriate, entries, exports, or sales (1) In general. If the requirements for a period of review to include an entry and during the period from the date of request for new shipper review under sale to an unaffiliated customer in the suspension of liquidation under this paragraph (b) of this section are United States of subject merchandise part to the end of the month satisfied, the Secretary will initiate a would be likely to prevent the immediately preceding the first new shipper review under this section completion of the review within the semiannual anniversary month.

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(2) Countervailing duty proceeding. In (2) Whether the producer, exporter, or (i) The period of review will be the a countervailing duty proceeding, the customer has lines of business unrelated period of investigation used by the period of review for a new shipper to the subject merchandise; Secretary in the investigation that review under this section will be the (3) Whether there is an established resulted in the publication of the same period as that specified in history of duty evasion with respect to countervailing duty order (see § 351.213(e)(2) for an administrative new shipper reviews or circumvention § 351.204(b)(2)); review. under the relevant antidumping or (ii) The final results of a review under (h) Procedures. The Secretary will countervailing duty order; this paragraph (l) will not be the basis conduct a new shipper review under (4) Whether there is an established for the assessment of countervailing this section in accordance with history of duty evasion with respect to duties; and § 351.221. new shipper reviews or circumvention (iii) The Secretary may exclude from the countervailing duty order in (i) Time limits—(1) In general. Unless under any antidumping or question any exporter for which the the time limit is waived under countervailing duty orders in the same Secretary determines an individual net paragraph (j)(3) of this section, the or similar industry; (5) The quantity of sales; and countervailable subsidy rate of zero or Secretary will issue preliminary results (6) Any other factor that the Secretary de minimis (see § 351.204(e)(1)), of review (see § 351.221(b)(4)) within determines to be relevant with respect provided that the Secretary has verified 180 days after the date on which the to the future selling behavior of the the information on which the exclusion new shipper review was initiated, and producer or exporter, including any is based. final results of review (see other indicia that the sale was not (m) Exception from assessment in § 351.221(b)(5)) within 90 days after the commercially viable. regional industry cases. For procedures date on which the preliminary results (l) Expedited reviews in relating to a request for the exception were issued. countervailing duty proceedings for from the assessment of antidumping or (2) Exception. If the Secretary noninvestigated exporters—(1) Request countervailing duties in a regional concludes that a new shipper review is for review. If, in a countervailing duty industry case, see § 351.212(f). extraordinarily complicated, the investigation, the Secretary limited the ■ 5. Revise § 351.225 to read as follows: Secretary may extend the 180-day number of exporters or producers to be period to 300 days, and may extend the individually examined under section § 351.225 Scope rulings. 90-day period to 150 days. 777A(e)(2)(A) of the Act, an exporter (a) Introduction. Questions sometimes (j) Multiple reviews. Notwithstanding that the Secretary did not select for arise as to whether a particular product any other provision of this subpart, if a individual examination or that the is covered by the scope of an review (or a request for a review) under Secretary did not accept as a voluntary antidumping or countervailing duty § 351.213 (administrative review), respondent (see § 351.204(d)) may order. Such questions may arise for a § 351.214 (new shipper review), request a review under this paragraph variety of reasons given that the § 351.215 (expedited antidumping (l). An exporter must submit a request description of the merchandise subject review), or § 351.216 (changed for review within 30 days of the date of to the scope is written in general terms. circumstances review) covers publication in the Federal Register of The Secretary will initiate and conduct merchandise of an exporter or producer the countervailing duty order. A request a scope inquiry and issue a scope ruling subject to a review (or to a request for must be accompanied by a certification to determine whether or not a product a review) under this section, the that: is covered by the scope of an order at Secretary may, after consulting with the (i) The requester exported the subject the request of an interested party or on exporter or producer: merchandise to the United States during the Secretary’s initiative. A scope ruling (1) Rescind, in whole or in part, a the period of investigation; that a product is within the scope of the review in progress under this subpart; (ii) The requester is not affiliated with order is a determination that the product has always been within the (2) Decline to initiate, in whole or in an exporter or producer that the scope of the order. This section contains part, a review under this subpart; or Secretary individually examined in the investigation; and rules and procedures regarding scope (3) Where the requesting producer or (iii) The requester has informed the rulings, including scope ruling exporter agrees in writing to waive the government of the exporting country applications, scope inquiries, and time limits of paragraph (i) of this that the government will be required to standards used in determining whether section, conduct concurrent reviews, in provide a full response to the a product is covered by the scope of an which case all other provisions of this Department’s questionnaire. order. Unless otherwise specified, the section will continue to apply with (2) Initiation of review—(i) In general. procedures as described in subpart C of respect to the exporter or producer. The Secretary will initiate a review in this part (§§ 351.301 through 351.308 (k) Determinations based on bona fide the month following the month in and §§ 351.312 through 351.313) apply sales. In determining whether the U.S. which a request for review is due under to this section. sales of an exporter or producer made paragraph (l)(1) of this section. (b) Self-initiation of a scope inquiry. during the period covered by the review (ii) Example. The Secretary publishes If the Secretary determines from are bona fide, the Secretary shall a countervailing duty order on January available information that an inquiry is consider the factors identified at section 15. An exporter would have to submit warranted to determine whether a 752(a)(2)(B)(iv) of the Act. In accordance a request for a review by February 14. product is covered by the scope of an with section 751(a)(2)(B)(iv)(VII) of the The Secretary would initiate a review in order, the Secretary may initiate a scope Act, the Secretary shall consider the March. inquiry and notify, electronically or following factors: (3) Conduct of review. The Secretary otherwise, all parties on the annual (1) Whether the producer, exporter, or will conduct a review under this inquiry service list (see paragraph (n) of customer was established for purposes paragraph (l) in accordance with the this section). of the sale(s) in question after the provisions of this section applicable to (c) Scope ruling application—(1) imposition of the relevant antidumping new shipper reviews, subject to the Contents. An interested party may or countervailing duty order; following exceptions: submit a scope ruling application

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requesting that the Secretary conduct a importation, and a statement as to the parties are permitted one opportunity to scope inquiry to determine whether a relevance of this processing to the scope submit comment and factual product, which is or has been in actual of the order. information addressing the self- production by the time of the filing of (vii) The applicant’s statement as to initiation. Within 10 days of the filing the application, is covered by the scope whether the product is covered by the of such comments, any interested party of an order. The Secretary will make scope of the order, including: is permitted one opportunity to submit available a scope ruling application, (A) An explanation with specific comment and factual information to which the applicant must fully reference to paragraph (j) and (k) of this rebut, clarify, or correct factual complete and serve in accordance with section, as appropriate; information submitted by the other the requirements of paragraph (n) of this (B) Citations to any applicable legal interested parties. section. To the extent reasonably authority; and (2) Within 20 days of the initiation of available to the applicant, the scope (C) Whether there are companion a scope inquiry under paragraph (d)(2) ruling application must include the orders as described in paragraph (m)(2) of this section, an interested party other requested information under paragraph of this section. than the applicant is permitted one (c)(2) of this section and relevant (viii) Factual information supporting opportunity to submit comment and supporting documentation. the applicant’s position, including full factual information to rebut, clarify, or (2) Requested information. (i) A copies of prior scope determinations correct factual information contained in detailed physical description of the and relevant excerpts of other the scope ruling application. Within 10 product, including: documents identified in paragraph (k)(1) days of the filing of such rebuttal, (A) The characteristics (including of this section. clarification, or correction, the applicant technical, physical, chemical or (d) Initiation of a scope inquiry based is permitted one opportunity to submit otherwise) of the product; on a scope ruling application. (1) comment and factual information to (B) The uses of the product; Within 30 days after the filing of a scope rebut, clarify, or correct factual (C) The product’s tariff classification ruling application, the Secretary will information submitted in the interested under the Harmonized Tariff Schedule determine whether to accept or reject party’s rebuttal, clarification or of the United States; the scope ruling application. If the correction. (D) Clear and legible photographs, Secretary determines that a scope ruling (3) Following initiation of a scope schematic drawings, specifications, application is incomplete or otherwise inquiry under paragraph (b) or (d) of standards, marketing materials, and any unacceptable, the Secretary may reject this section, the Secretary may issue other exemplars providing a visual the scope ruling application and will questionnaires and verify submissions depiction of the product; and provide a written explanation of the received, where appropriate. The (E) A description of parts, materials, reasons for the rejection. If the scope Secretary may limit issuance of and the production process employed in ruling application is rejected, the questionnaires to a reasonable number the production of the product. applicant may resubmit the full of respondents. Questionnaire responses (ii) A concise public description of application at any time, with all are due on the date specified by the the product and public identification of identified deficiencies corrected. Secretary. Within 10 days after a the name and address of the producer, (2) If the Secretary does not reject the questionnaire response has been filed exporter, and importer of the product, if scope ruling application, it will be with the Secretary, an interested party reasonably available to the applicant. deemed accepted 31 days after filing other than the original submitter is (iii) A narrative history of the and the scope inquiry will be deemed permitted one opportunity to submit production of the product at issue, initiated. comment and factual information to including a history of earlier versions of (e) Time limits—(1) In general. The rebut, clarify, or correct factual the product if this is not the first model Secretary shall issue a final scope ruling information contained in the of the product. within 120 days after the date on which questionnaire response. Within five (iv) The volume of annual production the scope inquiry was initiated under days of the filing of such rebuttal, of the product for the most recently paragraph (b) or (d) of this section. (2) clarification, or correction, the original completed fiscal year. Extension. The Secretary may extend submitter is permitted one opportunity (v) If the product has been imported the deadline in paragraph (e)(1) of this to submit comment and factual into the United States as of the date of section by no more than 180 days if the information to rebut, clarify, or correct the filing of the scope ruling Secretary determines that good cause factual information submitted in the application: exists to warrant an extension. interested party’s rebuttal, clarification (A) An explanation as to whether an Situations in which good cause has been or correction. entry of the product has been classified demonstrated may include, but are not (4) If the Secretary issues a as subject to an order; and limited to, the following: preliminary scope ruling under (B) Relevant documentation, (i) If the Secretary has issued paragraph (g) of this section, which is including dated copies of the Customs questionnaires to the applicant or other not issued concurrently with the and Border Protection entry summary interested parties; received responses to initiation of the scope inquiry, the forms (or electronic entry processing those questionnaires; and determined Secretary will establish a schedule for system documentation) identifying the that an extension is warranted to request the filing of scope comments and product upon importation and other further information or consider and rebuttal comments. Unless otherwise related commercial documents, address the parties’ responses on the specified, any interested party may including, but not limited to, invoices record adequately; or submit scope comments within 10 days and contracts, which reflect the details (ii) The Secretary has issued a after the issuance of the preliminary surrounding the sale and purchase of preliminary scope ruling (see paragraph scope ruling, and any interested party that imported product. (g) of this section). may submit rebuttal comments within 5 (vi) A statement as to whether the (f) Scope inquiry procedures. (1) days thereafter. Unless otherwise product undergoes any additional Within 20 days of the Secretary’s self- specified, no factual information will be processing in the United States after initiation of a scope inquiry under accepted in the scope or rebuttal importation, or in a third country before paragraph (b) of this section, interested comments.

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(5) If the Secretary issues a inquiry to align with the deadlines of (i) The descriptions of the preliminary scope ruling concurrently another segment of the proceeding or merchandise contained in the petition; with the initiation of a scope inquiry make no changes to its scope inquiry (ii) The descriptions of the under paragraph (g) of this section, deadlines. merchandise contained in the initial paragraphs (f)(1) through (4) of this (3) During the pendency of a scope investigation; section will not apply. In such a inquiry or upon issuance of a final (iii) Determinations of the Secretary, situation, the Secretary will establish scope ruling under paragraph (h) of this including, but not limited to, prior appropriate procedures on a case- section, the Secretary may take any scope rulings, memoranda, or specific basis. further action, as appropriate, with clarifications; and (6) If the Secretary determines it is respect to another segment of the (iv) Determinations of the appropriate to do so, the Secretary may proceeding. For example, if the Commission, including reports issued rescind a scope inquiry under this Secretary considers it appropriate, the pursuant to the Commission’s initial section. Secretary may request information investigation. (7) The Secretary may alter any concerning the product that is the (2) If the Secretary determines that the deadlines under this paragraph or subject of the scope inquiry for purpose above sources are not dispositive, the establish a separate schedule for the of an administrative review under Secretary will then further consider: filing of comments and/or factual § 351.213. (i) The characteristics (including information during the scope inquiry, as (j) Country of origin determinations. technical, physical, chemical or appropriate. In considering whether a product is otherwise) of the product; (g) Preliminary scope ruling. The covered by the scope of the order at (ii) The expectations of the ultimate Secretary may issue a preliminary scope issue, the Secretary may need to purchasers; ruling, based upon the available (iii) The ultimate use of the product; determine the country of origin of the information at the time, as to whether (iv) The channels of trade in which product. To make such a determination, there is a reasonable basis to believe or the product is sold; and the Secretary may use any reasonable suspect that the product subject to a (v) The manner in which the product method and is not bound by the scope inquiry is covered by the scope of is advertised and displayed. determinations of any other agency, the order. In determining whether to (3) If merchandise contains two or including tariff classification and issue a preliminary scope ruling, the more components and the product at country of origin marking rulings issued Secretary may consider the complexity issue in the scope inquiry is a by the Customs Service. In determining of the issues and arguments raised in component of that merchandise, the the country of origin, the Secretary may the scope inquiry. The Secretary may Secretary will first analyze the scope issue a preliminary scope ruling conduct a substantial transformation language and the criteria above to concurrently with the initiation of a analysis that considers relevant factors determine if the product, standing scope inquiry under paragraph (b) or (d) that arise on a case-by-case basis, alone, would be covered by an order. If of this section. including: the Secretary determines that a (h) Final scope ruling. The Secretary (1) Whether the processed component product would otherwise be will issue a final scope ruling as to downstream product is a different class covered by the scope of an order, the whether the product that is the subject or kind of merchandise than the Secretary next will examine the same of the scope inquiry is covered by the upstream product; criteria to determine if the component scope of the order, including an (2) The characteristics (including product’s inclusion in the larger explanation of the factual and legal technical, physical, chemical or merchandise is directly addressed by conclusions on which the final scope otherwise) and intended end-use of the the scope of the order for purposes of ruling is based. The Secretary will product; inclusion or exclusion from the promptly convey a copy of the final (3) The cost of production/value coverage of the scope. Finally, if the scope ruling in the manner prescribed added of further processing in the third scope language and the criteria above do by section 516A(a)(2)(A)(ii) of the Act to country or countries; not address that situation, then the all parties to the proceeding (see (4) The nature and sophistication of Secretary will consider, as appropriate, § 351.102(b)(36)). processing in the third country or relevant factors that may arise on a (i) Other segments of the proceeding. countries; and product-specific basis to determine (1) Notwithstanding any other provision (5) The level of investment in the whether the component product’s of this section, the Secretary may, but is third country or countries. inclusion in the larger merchandise not required to, address scope issues in In conducting a country of origin results in its exclusion from the scope another segment of the proceeding, such determination, the Secretary also may of the order, or leaves it within the as an administrative review under consider where the essential component coverage of the scope. Such relevant § 351.213, a circumvention inquiry of the product is produced or where the factors include: under § 351.226, or a covered essential characteristics of the product (i) The practicability of separating the merchandise inquiry under § 351.227, are imparted. in-scope component for repackaging or without initiating or conducting a scope (k) Scope rulings. In determining resale; inquiry under this section. For example, whether a product is covered by the (ii) The measurable value of the in- the Secretary may forego or rescind a scope of the order at issue, the Secretary scope component as compared to the scope inquiry under this section and will consider the language of the scope measurable value of the merchandise as determine whether the product at issue and may make its determination on this a whole; and is covered by the scope of the order in basis alone if the language of the scope, (iii) The ultimate use or function of another segment of the proceeding including the descriptions of the in-scope component relative to the (including another scope inquiry, see merchandise expressly excluded from ultimate use or function of the paragraph (m)(1) of this section). the scope, is dispositive. merchandise as a whole. (2) Notwithstanding any other (1) In considering the language of the (l) Suspension of liquidation. (1) provision of this section, the Secretary scope, at the Secretary’s discretion, the When the Secretary initiates a scope may modify the deadlines of the scope following may also be considered: inquiry under paragraph (b) or (d) of

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this section, the Secretary will notify the liquidation and refund any cash parties that file a request for inclusion Customs Service of the initiation and deposits for such entries. on the annual inquiry service list for a direct the Customs Service to continue (m) Applicability of scope rulings; proceeding, in accordance with the the suspension of liquidation of entries companion orders—(1) In general. To Secretary’s established procedures. (3) A of products subject to the scope inquiry the extent practicable, the Secretary new ‘‘annual inquiry service list’’ will that were already subject to the normally will initiate and conduct a be established on a yearly basis. Parties suspension of liquidation, and to apply single scope inquiry and issue a single filing a request for inclusion on that list the cash deposit rate that would be scope ruling for an order under this must file a request during the applicable if the product were section with respect to all products with anniversary month of the publication of determined to be covered by the scope the identical physical description from the antidumping or countervailing duty of the order, until appropriate the same country of origin as the order. Only the petitioner will be liquidation instructions are issued. particular product at issue, regardless of automatically placed on the new annual (2) If the Secretary issues a producer, exporter, or importer. If the inquiry service list once the previous preliminary scope ruling under Secretary has previously issued a scope year’s list has been replaced. paragraph (g) of this section that the ruling for an order with respect to a (4) Once a scope ruling application is product at issue is covered by the scope particular product, the Secretary may accepted by the Secretary, a segment- of the order, the Secretary will direct the apply that scope ruling to all products specific service list will be established Customs Service as follows: with the identical physical description and the requirements of § 351.303(f) will (i) To continue the suspension of from the same country of origin as the apply. Parties other than the scope liquidation of previously suspended particular product at issue, regardless of ruling applicant that wish to participate entries of the product at issue as producer, exporter, or importer, without in the scope inquiry must file an entry directed under paragraph (l)(1) of this initiating or conducting a new scope of appearance in accordance with section; and inquiry under this section. In such § 351.103(d)(1). (ii) To suspend liquidation of all other instances, the requirements of paragraph (o) Publication of list of final scope unliquidated entries of the product at (h) of this section will apply. rulings. On a quarterly basis, the (2) Companion antidumping and issue, and apply the applicable cash Secretary will publish in the Federal countervailing duty orders. If there are deposit rate under the order to those Register a list of final scope rulings companion antidumping and entries. issued within the previous three countervailing duty orders covering the months. This list will include the case (3) If the Secretary issues a final scope same merchandise from the same name, and a brief description of the ruling under paragraph (h) of this country of origin, the requesting ruling. The Secretary also may include section that the product at issue is interested party under paragraph (c) of complete public versions of its scope covered by the scope of the order, the this section must file the scope ruling rulings on its website, should the Secretary will direct the Customs application pertaining to both orders Secretary determine such placement is Service as follows: only on the record of the antidumping warranted. (i) To continue the suspension of duty proceeding. Should the Secretary (p) Suspended investigations; liquidation of entries suspended as determine to initiate a scope inquiry suspension agreements. The Secretary directed under paragraph (l)(1) and/or under paragraph (b) or (d) of this may, as appropriate, apply the (l)(2) of this section (including entries of section, the Secretary will initiate and procedures set forth in this section in the product at issue that are subject to conduct a single inquiry with respect to determining the scope of a suspended suspension of liquidation as a result of the merchandise at issue for both orders investigation or a suspension agreement another segment of a proceeding, such only on the record of the antidumping (see § 351.208). as an administrative review under proceeding. Once the Secretary issues a ■ 6. Add § 351.226 as follows: § 351.213 or a circumvention inquiry final scope ruling on the record of the under § 351.226) and apply the antidumping duty proceeding, the § 351.226 Circumvention inquiries. applicable cash deposit rate under the Secretary will include a copy of that (a) Introduction. Section 781 of the order until appropriate liquidation scope ruling on the record of the Act addresses the circumvention of instructions are issued pursuant to countervailing duty proceeding. antidumping and countervailing duty §§ 351.212 and 351.213; and (n) Service of scope ruling orders. This provision recognizes that (ii) To suspend liquidation of all other application; annual inquiry service list; circumvention seriously undermines the unliquidated entries of the product at entry of appearance. (1) The effectiveness of the remedies provided issue that are not otherwise subject to requirements of § 351.303(f) apply to by the antidumping and countervailing suspension of liquidation, and apply the this section, except that an interested duty proceedings, and frustrates the applicable cash deposit rate under the party that submits a scope ruling purposes for which these laws were order until appropriate liquidation application under paragraph (c) of this enacted. Section 781 of the Act allows instructions are issued pursuant to section must serve a copy of the the Secretary to apply antidumping and §§ 351.212 and 351.213. application on all persons on the annual countervailing duty orders in such a (4) If the Secretary issues a final scope inquiry service list for that order, as way as to prevent circumvention by ruling under paragraph (h) of this well as the companion order, if any, as including within the scope of the order section that the product is not covered described in paragraph (m)(2) of this four distinct categories of merchandise. by the scope of the order, and entries of section. If a scope ruling application is The Secretary will initiate and conduct the product at issue are not otherwise rejected and resubmitted pursuant to a circumvention inquiry at the request subject to suspension of liquidation as paragraph (d)(1) of this section, service of an interested party or on the a result of another segment of a of the resubmitted application is not Secretary’s initiative, and issue a proceeding, such as a circumvention required under this paragraph, unless circumvention determination as inquiry under § 351.226 or a covered otherwise specified. provided for under section 781 of the merchandise inquiry under § 351.227, (2) For purposes of this section, the Act and the rules and procedures in this the Secretary will direct the Customs ‘‘annual inquiry service list’’ will section. Unless otherwise specified, the Service to terminate the suspension of include the petitioner(s) and those procedures as described in subpart C of

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this part (§§ 351.301 through 351.308 Act, such as a description of the paragraph (g)(1) of this section no later and §§ 351.312 through 351.313) apply procedures, channels of trade, and than 150 days from the date of to this section. foreign countries involved (including a publication of the notice of initiation of (b) Self-initiation of circumvention description of the processes occurring in a circumvention inquiry under inquiry. If the Secretary determines from each country), as appropriate. paragraph (b) or (d) of this section. available information that an inquiry is (iv) A statement of the requestor’s (2) Final Determination. In warranted into the question of whether position as to whether the accordance with section 781(f) of the the elements necessary for a circumvention inquiry, if initiated, Act, the Secretary shall, to the circumvention determination under should be conducted on a country-wide maximum extent practicable, issue a section 781 of the Act exist, the basis. final determination under paragraph Secretary may initiate a circumvention (iv) Factual information supporting (g)(2) of this section no later than 300 inquiry and publish a notice of this position, including import and days from the date of publication of the initiation in the Federal Register. export data relevant to the merchandise notice of initiation of a circumvention (c) Circumvention inquiry request—(1) allegedly circumventing the inquiry under paragraph (b) or (d) of In general. An interested party may antidumping or countervailing duty this section. If the Secretary concludes submit a request for a circumvention order. that the inquiry is extraordinarily inquiry that alleges that the elements (d) Initiation of a circumvention complicated and additional time is necessary for a circumvention inquiry based on a request. Within 20 necessary to issue a final circumvention determination under section 781 of the days after the filing of a request for a determination, then the Secretary may Act exist and that is accompanied by circumvention inquiry, the Secretary extend the 300-day deadline by no more information reasonably available to the will determine whether to accept or than 65 days. interested party supporting these reject the request. If it is not practicable (f) Circumvention inquiry procedures. allegations. The circumvention inquiry to determine whether to accept or reject (1) Within 20 days of the publication of request must be served in accordance a request within 20 days, the Secretary the Secretary’s self-initiation of a with the requirements of paragraph (n) may extend that deadline by an circumvention inquiry under paragraph of this section. additional 15 days. (b) of this section, interested parties are (2) Contents of request. To the extent (1) If the Secretary determines that the permitted one opportunity to submit reasonably available to the requestor, a request is incomplete or otherwise comment and factual information circumvention inquiry request must unacceptable, the Secretary may reject addressing the self-initiation. Within 10 include the requested information under the request, and will provide a written days of the filing of such comments, any paragraph (c)(1) of this section and the explanation of the reasons for the interested party is permitted one following: rejection. If the request is rejected, the opportunity to submit comment and (i) A detailed physical description of requestor may resubmit the full request factual information to rebut, clarify, or the merchandise allegedly at any time, with all identified correct factual information submitted by circumventing the antidumping or deficiencies corrected. the other interested parties. countervailing duty order, including: (2) If the Secretary determines upon (2) Within 20 days of the publication (A) The characteristics (including review of a request for a circumvention of the initiation of a circumvention technical, physical, chemical or inquiry that a scope ruling is warranted inquiry under paragraph (d) of this otherwise) of the product; before the Secretary can conduct a section, an interested party other than (B) The uses of the product; circumvention analysis, the Secretary the requestor is permitted one (C) The product’s tariff classification may either, in accord with opportunity to submit comment and under the Harmonized Tariff Schedule § 351.225(i)(1), initiate the factual information to rebut, clarify, or of the United States; circumvention inquiry and address correct factual information contained in (D) Clear and legible photographs, scope issues in the context of the the request. Within 10 days of the filing schematic drawings, specifications, circumvention inquiry, or defer of such rebuttal, clarification, or standards, marketing materials, and any initiation of the circumvention inquiry correction, the requestor is permitted other exemplars providing a visual pending the completion of any ongoing one opportunity to submit comment and depiction of the product; and or new segment of the proceeding factual information to rebut, clarify, or (E) A description of parts, materials, addressing the scope issue. When correct factual information contained in and the production process employed in initiation is deferred pending another the interested party’s rebuttal, the production of the product. segment of the proceeding, if the result clarification or correction. (ii) A concise public description of of that other segment is that the product (3) Following initiation of a the product and public identification of at issue is not covered by the scope of circumvention inquiry under paragraph the name and address of any producer, the antidumping and/or countervailing (b) or (d) of this section, the Secretary exporter, and importer of the product duty order(s) at issue, the Secretary may may issue questionnaires and verify allegedly circumventing the immediately initiate the circumvention submissions received, where antidumping or countervailing duty inquiry upon the issuance of the final appropriate. The Secretary may limit order if reasonably available to the decision in that other segment. issuance of questionnaires to a requesting interested party. If the full (3) If the Secretary determines that a reasonable number of respondents. universe of parties allegedly request for a circumvention inquiry Questionnaire responses are due on the circumventing the order(s) is unknown, satisfies the requirements of paragraph date specified by the Secretary. Within then examples are sufficient. (c) of this section, the Secretary will 10 days after a questionnaire response Furthermore, this provision is not accept the request and initiate a has been filed with the Secretary, an intended to restrict the inclusion of circumvention inquiry. The Secretary interested party other than the original business proprietary information in the will publish a notice of initiation in the submitter is permitted one opportunity request where appropriate. Federal Register. to submit comment and factual (iii) A statement of the requestor’s (e) Time limits—(1) Preliminary information to rebut, clarify, or correct position as to the nature of the alleged Determination. The Secretary will issue factual information contained in the circumvention under section 781 of the a preliminary determination under questionnaire response. Within 5 days

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of the filing of such rebuttal, (7) The Secretary may alter any (2) Final determination. The Secretary clarification, or correction, the original deadlines under this paragraph or will issue a final determination as to submitter is permitted one opportunity establish a separate schedule for the whether the elements necessary for a to submit comment and factual filing of comments and/or factual circumvention determination under information to rebut, clarify, or correct information during the circumvention section 781 of the Act exist, in which factual information contained in the inquiry, as appropriate. case the merchandise at issue will be interested party’s rebuttal, clarification Notwithstanding any other provision of included within the scope of the order. or correction. this section, the Secretary may modify As part of its determination, the (4) If the Secretary issues a the deadlines of the circumvention Secretary will include an explanation of preliminary circumvention inquiry to align with the deadlines of the factual and legal conclusions on determination under paragraph (g)(1) of another segment of the proceeding or which the final determination is based. this section, which is not issued make no changes to its inquiry The final determination will be concurrently with the initiation of the deadlines. published in the Federal Register. circumvention inquiry, the Secretary (8)(i) The Secretary will notify the Promptly after publication, the will establish a schedule for the filing of Commission in writing of the proposed Secretary will convey a copy of the final comments and rebuttal comments. inclusion of products in an order prior determination in the manner prescribed Unless otherwise specified, any to issuing a final determination under by section 516A(a)(2)(A)(ii) of the Act to interested party may submit comments paragraph (g)(2) of this section based on all parties to the proceeding (see within 10 days after the issuance of the a determination under: § 351.102(b)(36)). preliminary circumvention (A) Section 781(a) of the Act (h) Products completed or assembled determination, and any interested party (paragraph (h) of this section) with in the United States. Under section may submit rebuttal comments within 5 respect to merchandise completed or 781(a) of the Act, the Secretary may days thereafter. Unless otherwise assembled in the United States (other include within the scope of an specified, no factual information will be than minor completion or assembly); antidumping or countervailing duty accepted in the comments or rebuttal (B) Section 781(b) of the Act order imported parts or components comments. (paragraph (i) of this section) with referred to in section 781(a)(1)(B) of the (5) If the Secretary issues a respect to merchandise completed or Act that are used in the completion or preliminary circumvention assembly of the merchandise in the assembled in other foreign countries; or determination concurrently with the United States at any time such order is (C) Section 781(d) of the Act initiation of the circumvention inquiry in effect. In determining the value of (paragraph (k) of this section) with under paragraph (g)(1) of this section, parts or components (including such respect to later-developed products that paragraphs (g)(1) through (4) will not purchases from another person) under incorporate a significant technological apply. In such a situation, the Secretary section 781(a)(1)(D) of the Act, or of advance or significant alteration of an will establish appropriate procedures on processing performed (including by a case-specific basis. earlier product. another person) under section (6) Notwithstanding any other (ii) If the Secretary notifies the 781(a)(2)(E) of the Act, the Secretary provision of this section, the Secretary Commission under paragraph (f)(7)(i) of may determine the value of the part or may forego or rescind a circumvention this section, upon the written request of component on the basis of the cost of inquiry, in whole or in part, under this the Commission, the Secretary will producing the part or component under section for the following reasons: consult with the Commission regarding section 773(e) of the Act—or, in the case (i) The requestor timely withdraws its the proposed inclusion, and any such of nonmarket economies, on the basis of request for a circumvention inquiry consultation will be completed within section 773(c) of the Act. under paragraph (c) of this section; 15 days after the date of such request. (i) Products completed or assembled (ii) The Secretary issues a final If, after consultation, the Commission in other foreign countries. Under section determination in another segment of a believes that a significant injury issue is 781(b) of the Act, the Secretary may proceeding, and has determined that the presented by the proposed inclusion of include within the scope of an merchandise at issue in the a product within an order, the antidumping or countervailing duty circumvention inquiry is covered by the Commission may provide written advice order, at any time such order is in effect, scope of the antidumping or to the Secretary as to whether the imported merchandise completed or countervailing duty order; inclusion would be inconsistent with assembled in a foreign country other (iii) Where the Secretary has initiated the affirmative injury determination of than the country to which the order a circumvention inquiry under the Commission on which the order is applies. In determining the value of paragraph (b) or (d) of this section to based. parts or components (including such examine circumvention under two or (g) Circumvention determinations— purchases from another person) under more provisions under paragraphs (h), (1) Preliminary determination. The section 781(b)(1)(D) of the Act, or of (i), (j), or (k) of this section, and Secretary will issue a preliminary processing performed (including by determines that it is not necessary to determination, based upon the available another person) under section issue a final circumvention information at the time, as to whether 781(b)(2)(E) of the Act, the Secretary determination with respect to one of there is a reasonable basis to believe or may determine the value of the part or those paragraphs. For example, if the suspect that the elements necessary for component on the basis of the cost of Secretary initiates a circumvention a circumvention determination under producing the part or component under inquiry to examine whether section 781 of the Act exist. The section 773(e) of the Act—or, in the case merchandise is altered in minor respects preliminary determination will be of nonmarket economies, on the basis of under paragraph (j) of this section or published in the Federal Register. The section 773(c) of the Act. later-developed merchandise under Secretary may publish notice of a (j) Minor alterations of merchandise. paragraph (k) of this section, the preliminary determination concurrently Under section 781(c) of the Act, the Secretary may rescind the inquiry in with the notice of initiation of a Secretary may include within the scope part to address only one of those circumvention inquiry under paragraph of an antidumping or countervailing provisions. (b) or (d) of this section. duty order articles altered in form or

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appearance in minor respects. The the product at issue that are subject to both orders only on the record of the Secretary may consider such criteria suspension of liquidation as a result of antidumping proceeding. Once the including, but not limited to, the overall another segment of a proceeding, such Secretary issues a final circumvention physical characteristics of the as an administrative review under determination on the record of the merchandise, the expectations of the § 351.213) and apply the applicable cash antidumping duty proceeding, the ultimate users, the use of the deposit rate under the order until Secretary will include a copy of that merchandise, the channels of marketing appropriate liquidation instructions are determination on the record of the and the cost of any modification relative issued pursuant to §§ 351.212 and countervailing duty proceeding. to the total value of the imported 351.213; and (n) Service of circumvention inquiry products. The Secretary also may (ii) To suspend liquidation of all other request; annual inquiry service list; consider the circumstances under which unliquidated entries of the product at entry of appearance. (1) The the products enter the United States, issue that are not otherwise subject to requirements of § 351.303(f) apply to including but not limited to the timing suspension of liquidation, and apply the this section, except that an interested of the entries and the quantity of applicable cash deposit rate under the party that submits a circumvention merchandise entered during the order until appropriate liquidation inquiry request under paragraph (c) of circumvention review period. instructions are issued pursuant to this section must serve a copy of that (k) Later-developed merchandise. In §§ 351.212 and 351.213. inquiry request on all persons on the determining whether later-developed (4) If the Secretary issues a negative annual inquiry service list for that order, merchandise is within the scope of an final determination under paragraph as well as the companion order, if any, antidumping or countervailing duty (g)(2) of this section, and entries of the as described in paragraph (m)(3) of this order, the Secretary will apply section product are not otherwise subject to section. The procedures and description 781(d) of the Act. In determining suspension of liquidation as a result of pertaining to the ‘‘annual inquiry whether merchandise is ‘‘later- another segment of a proceeding, such service list’’ are set forth in developed’’ the Secretary will examine as a covered merchandise inquiry under § 351.225(n)(1)–(3). whether the merchandise at issue was § 351.227, the Secretary will order the (2) Once a circumvention inquiry commercially available at the time of Customs Service to terminate the request is accepted by the Secretary, a the initiation of the underlying suspension of liquidation and refund segment-specific service list will be antidumping or countervailing duty any cash deposits for such entries. established and the requirements of investigation. (m) Applicability of circumvention § 351.303(f) will apply. Parties other (l) Suspension of liquidation. (1) determination; other segments of the than the interested party requesting a When the Secretary publishes a notice proceeding; companion orders—(1) circumvention inquiry that wish to of initiation of a circumvention inquiry Applicability of circumvention participate in the circumvention inquiry under paragraph (b) or (d) of this determination. In conducting a must file an entry of appearance in section, the Secretary will notify the circumvention inquiry under this accordance with § 351.103(d)(1). Customs Service of the initiation and section, the Secretary shall consider, (o) Suspended investigations; direct the Customs Service to continue based on the available record evidence, suspension agreements. The Secretary the suspension of liquidation of entries whether the circumvention may, in accordance with section 781 of of products subject to the circumvention determination should be applied on a the Act, apply the procedures set forth inquiry that were already subject to the country-wide basis. in this section in determining whether suspension of liquidation, and to apply (2) Other segments of the proceeding. the elements necessary for a the cash deposit rate that would be During the pendency of a circumvention circumvention determination under applicable if the product were inquiry or upon issuance of a final section 781 of the Act exist with respect determined to be covered by the scope circumvention determination under to a suspended investigation or a of the order, until appropriate paragraph (g)(2) of this section, the suspension agreement (see § 351.208). liquidation instructions are issued. Secretary may take any further action, as ■ 7. Add § 351.227 to read as follows: (2) If the Secretary issues an appropriate, with respect to another affirmative preliminary determination segment of the proceeding. For example, § 351.227 Covered merchandise referrals. under paragraph (g)(1) of this section, if the Secretary considers it appropriate, (a) Introduction. The Trade the Secretary will direct the Customs the Secretary may request information Facilitation and Trade Enforcement Act Service as follows: concerning the product that is the of 2015 contains Title IV-Prevention of (i) To continue the suspension of subject of the circumvention inquiry for Evasion of Antidumping and liquidation of previously suspended purpose of an administrative review Countervailing Duty Orders (short title entries of the product at issue as under § 351.213. ‘‘Enforce and Protect Act of 2015’’ or directed under paragraph (l)(1) of this (3) Companion antidumping and ‘‘EAPA’’) (Pub. L. 114–125, sections section; and countervailing duty orders. If there are 401, 421, 130 Stat. 122, 155, 161 (2016)). (ii) To suspend liquidation of all other companion antidumping and The Enforce and Protect Act of 2015 unliquidated entries of the product at countervailing duty orders covering the added section 517 to the Act, which issue, and apply the applicable cash same merchandise from the same established a new framework by which deposit rate under the order to those country of origin, the requesting the Customs Service can conduct civil entries. interested party under paragraph (c) of administrative investigations of (3) If the Secretary issues an this section must file the request potential duty evasion of an affirmative final determination under pertaining to both orders only on the antidumping and/or countervailing duty paragraph (g)(2) of this section, the record of the antidumping duty order (referred to herein as an ‘‘EAPA Secretary will direct the Customs proceeding. Should the Secretary investigation’’). Section 517(b)(4)(A)(i) Service as follows: determine to initiate a circumvention of the Act provides a procedure (i) To continue the suspension of inquiry under paragraph (b) or (d) of whereby if, during the course of an liquidation of entries suspended as this section, the Secretary will initiate EAPA investigation, the Customs directed under paragraph (l)(1) and/or and conduct a single inquiry with Service is unable to determine whether (l)(2) of this section (including entries of respect to the merchandise at issue for the merchandise at issue is covered

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merchandise within the meaning of interested parties are permitted one (i) The Customs Service withdraws its section 517(a)(3) of the Act, it shall refer opportunity to submit comment and request for a covered merchandise the matter to the Secretary to make such factual information addressing the inquiry under paragraph (b) of this a determination (referred to herein as a initiation. Within 10 days of the filing section; ‘‘covered merchandise referral’’). of such comments, any interested party (ii) The Secretary issues a final Section 517(b)(4)(B) of the Act directs is permitted one opportunity to submit determination in another segment of a the Secretary to determine whether the comment and factual information to proceeding that can provide the basis merchandise is covered merchandise rebut, clarify, or correct factual for the Secretary’s covered merchandise and promptly transmit the information submitted by the other determination. determination to the Customs Service. interested parties. (iii) Where the Secretary otherwise The Secretary shall consider a covered (2) Following initiation of a covered determines that it is not necessary to merchandise referral and issue a merchandise inquiry under paragraph initiate or conduct a covered covered merchandise determination in (b)(1) of this section, the Secretary may merchandise inquiry to address the accordance with the rules and issue questionnaires and verify covered merchandise referral, in which procedures in this section. Unless submissions received, where case the requirements of paragraph otherwise specified, the procedures as appropriate. The Secretary may limit (e)(2) of this section will apply. described in subpart C of this part issuance of questionnaires to a (6) The Secretary may alter any (§§ 351.301 through 351.308 and reasonable number of respondents. deadlines under this paragraph or §§ 351.312 through 351.313) apply to Questionnaire responses are due on the establish a separate schedule for the this section. date specified by the Secretary. Within filing of comments and/or factual (b) Actions with respect to covered 10 days after a questionnaire response information during the covered merchandise referral. Within 15 days has been filed with the Secretary, an merchandise inquiry, as appropriate. after receiving a covered merchandise interested party other than the original Notwithstanding any other provision of referral from the Customs Service submitter is permitted one opportunity this section, the Secretary may modify pursuant to section 517(b)(4)(A)(i) of the to submit comment and factual the deadlines of the covered Act that the Secretary determines to be information to rebut, clarify, or correct merchandise inquiry to align with the sufficient, the Secretary will take the factual information contained in the deadlines of another segment of the following action. questionnaire response. Within five proceeding or make no changes to its (1) Initiate a covered merchandise days of the filing of such rebuttal, inquiry deadlines. inquiry (the Secretary will publish a clarification, or correction, the original (e) Covered merchandise notice of initiation in the Federal submitter is permitted one opportunity determinations—(1) Preliminary Register); to submit comment and factual determination. The Secretary may issue (2) Self-initiate a circumvention information to rebut, clarify, or correct a preliminary determination, based inquiry pursuant to § 351.226(b) to factual information submitted in the upon the available information at the address the covered merchandise interested party’s rebuttal, clarification time, as to whether there is a reasonable referral; or or correction. basis to believe or suspect that the (3) If the Secretary determines upon (3) If the Secretary issues a product that is the subject of the review of the covered merchandise preliminary covered merchandise covered merchandise inquiry is covered referral that the question before the determination under paragraph (e)(1) of by the scope of the order. In Secretary can be addressed in an this section, which is not issued determining whether to issue a ongoing segment of the proceeding, concurrently with a covered preliminary determination, the such as a scope inquiry under § 351.225 merchandise inquiry, the Secretary will Secretary may consider the complexity or a circumvention inquiry under establish a schedule for the filing of of the issues and arguments raised in § 351.226, the Secretary will publish a comments and rebuttal comments. the context of the covered merchandise notice of its intent to address the Unless otherwise specified, any inquiry. The preliminary determination covered merchandise referral in the interested party may submit comments will be published in the Federal context of such other segment in the within 10 days after the issuance of the Register. The Secretary may publish Federal Register. preliminary covered merchandise notice of a preliminary determination (c) Time limits—(1) In general. When determination, and any interested party concurrently with the notice of the Secretary initiates a covered may submit rebuttal comments within initiation of a covered merchandise merchandise inquiry under paragraph five days thereafter. Unless otherwise inquiry under paragraph (b)(1) of this (b)(1) of this section, the Secretary shall specified, no factual information will be section. issue a final covered merchandise accepted in the comments or rebuttal (2) Final determination. The Secretary determination within 120 days from the comments. will issue a final determination as to date of publication of the notice of (4) If the Secretary issues a whether the product that is the subject initiation. preliminary covered merchandise of the covered merchandise inquiry is (2) Extension. If the Secretary determination concurrently with the covered by the scope of the order. As concludes that the inquiry is initiation of the covered merchandise part of its determination, the Secretary extraordinarily complicated and inquiry under paragraph (e)(1) of this will include an explanation of the additional time is necessary to issue a section, paragraphs (e)(1) through (3) factual and legal conclusions on which final covered merchandise will not apply. In such a situation, the the final determination is based. The determination, then the Secretary may Secretary will establish appropriate final determination will be published in extend the deadline in paragraph (c)(1) procedures on a case-specific basis. the Federal Register. Promptly after by no more than 60 days. (5) Notwithstanding any other publication, the Secretary will: (d) Covered merchandise inquiry provision of this section, the Secretary (i) Convey a copy of the final procedures. (1) Within 20 days of the may forego or rescind a covered determination in the manner prescribed date of publication of the notice of a merchandise inquiry, in whole or in by section 516A(a)(2)(A)(ii) of the Act to covered merchandise inquiry under part, under this section for the following all parties to the proceeding (see paragraph (b)(1) of this section, reasons: § 351.102(b)(36)); and

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(ii) Transmit a copy of the final directed under paragraph (l)(1) and/or issues a final covered merchandise covered merchandise determination to (l)(2) of this section (including entries of determination on the record of the the Customs Service in accordance with the product at issue that are subject to antidumping duty proceeding, the section 517(b)(4)(B) of the Act. suspension of liquidation as a result of Secretary will include a copy of that (3) Covered merchandise another segment of a proceeding, such determination on the record of the determinations in other segments of the as an administrative review under countervailing duty proceeding, and proceeding. If the Secretary addresses § 351.213) and apply the applicable cash notify the Customs Service in the covered merchandise referral in the deposit rate under the order until accordance with paragraph (l) of this context of another segment of the appropriate liquidation instructions are section. proceeding as provided for under this issued pursuant to §§ 351.212 and (n) Service list. Once the Secretary section, or issues a scope ruling under 351.213; and initiates a covered merchandise inquiry § 351.225 or a circumvention (ii) To suspend liquidation of all other under paragraph (b)(1) of this section, a determination under § 351.226 that can unliquidated entries of the product at segment-specific service list will be provide the basis for the Secretary’s issue that are not otherwise subject to established and the requirements of covered merchandise determination, the suspension of liquidation, and apply the § 351.303(f) will apply. Parties other Secretary will promptly transmit a copy applicable cash deposit rate under the than those relevant parties identified by of the final action in that segment to the order until appropriate liquidation the Customs Service in the covered Customs Service in accordance with instructions are issued pursuant to merchandise referral that wish to section 517(b)(4)(B) of the Act. §§ 351.212 and 351.213. participate in the covered merchandise (f) Basis for covered merchandise (4) If the Secretary issues a negative inquiry must file an entry of appearance determination. In issuing a final determination under paragraph in accordance with § 351.103(d)(1). determination under paragraph (e)(1) or (e)(2) of this section, and entries of the (o) Suspended investigations; (2) of this section, the Secretary may product are not otherwise subject to suspension agreements. The Secretary base its determination on paragraphs (j) suspension of liquidation as a result of may apply the procedures set forth in and (k) of § 351.225 or any provision another segment of a proceeding, such this section in determining whether the under section 781 of the Act (paragraphs as a circumvention inquiry under elements necessary for a circumvention (h), (i), (j), or (k) of § 351.226). § 351.226, the Secretary will direct the determination under section 781 of the (g)–(k) [Reserved] Customs Service to terminate the Act exist with respect to a suspended (l) Suspension of liquidation. (1) suspension of liquidation and refund investigation or a suspension agreement When the Secretary publishes a notice any cash deposits for such entries. (see § 351.208). of initiation of a covered merchandise (m) Applicability of covered ■ 8. Add § 351.228 to read as follows: inquiry under paragraph (b)(1) of this merchandise determination; other section, the Secretary will notify the segments of the proceeding; companion § 351.228 Certification by importer or other Customs Service of the initiation and orders—(1) Applicability of covered interested party. direct the Customs Service to continue merchandise determination. In (a) Certification Requirements. The the suspension of liquidation of entries conducting a covered merchandise Secretary may determine in the context of products subject to the covered inquiry under this section, the Secretary of an antidumping or countervailing merchandise inquiry that were already shall consider, based on the available duty proceeding that an importer or subject to the suspension of liquidation, record evidence, whether the covered other interested party shall: and to apply the cash deposit rate that merchandise determination should be (1) Maintain a certification for entries would be applicable if the product were applied on a country-wide basis. of merchandise into the customs determined to be covered by the scope (2) Other segments of the proceeding. territory of the United States; or of the order until appropriate During the pendency of a covered (2) Provide a certification by liquidation instructions are issued. merchandise inquiry or upon issuance electronic means at the time of entry or (2) If the Secretary issues an of a final covered merchandise entry summary; or affirmative preliminary determination determination under paragraph (e)(2) of (3) Otherwise demonstrate under paragraph (e)(1) of this section this section, the Secretary may take any compliance with a certification that the product at issue is covered by further action, as appropriate, with requirement as determined by the the scope of the Order, the Secretary respect to another segment of the Secretary, in consultation with the will direct the Customs Service as proceeding. For example, if the Customs Service. Where the follows: Secretary considers it appropriate, the certification is required to be (i) To continue the suspension of Secretary may request information maintained by the importer or other liquidation of previously suspended concerning the product that is the interested party, the Secretary and/or entries of the product at issue as subject of the covered merchandise the Customs Service may require the described under paragraph (l)(1) of this inquiry for purpose of an administrative importer or other interested party to section; and review under § 351.213. provide such a certification to the (ii) To suspend liquidation of all other (3) Companion antidumping and requesting agency upon request. unliquidated entries of the product at countervailing duty orders. If there are (b) Consequences For No Provision of issue, and apply the applicable cash companion antidumping and a Certificate; Provision of a False deposit rate under the order to those countervailing duty orders covering the Certificate. The Secretary may instruct entries. same merchandise from the same the Customs Service to suspend (3) If the Secretary issues an country of origin, and should the liquidation of an importer’s or other affirmative final determination under Secretary determine to initiate a covered interested party’s entries and require the paragraph (e)(2) of this section that the merchandise inquiry under paragraph importer to post a cash deposit for the product at issue is covered by the scope (b)(1) of this section, the Secretary will antidumping duty or countervailing of the order, the Secretary will direct the initiate and conduct a single inquiry duty at the applicable rate if: Customs Service as follows: with respect to the merchandise at issue (1) The importer or other interested (i) To continue the suspension of only on the record of the antidumping party has not provided to the Secretary liquidation of entries suspended as duty proceeding. Once the Secretary or the Customs Service, as appropriate,

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the certification required under imported subject merchandise. For a been reimbursed or entered into any paragraph (a) of this section upon scope segment of a proceeding pursuant agreement or understanding for the request; or to § 351.225 or a circumvention segment payment or for the refunding to the (2) The importer or other interested of a proceeding pursuant to § 351.226, importer by the manufacturer, producer, party provided a certification in the applicant must present documentary seller, or exporter for all or any part of accordance with paragraph (a) of this evidence that the interested party the antidumping and countervailing section, but the certification contained imported subject merchandise, or that it duties, as appropriate. Such materially false, fictitious or fraudulent has taken steps towards importing the certifications should identify the statements or representations, or merchandise subject to the scope or commodity, the country, and the contained material omissions. Under circumvention inquiry. For a covered relevant entry number(s). either of these scenarios, the Secretary merchandise referral segment of a (ii) The reimbursement certification may also instruct the Customs Service to proceeding pursuant to § 351.227, an may be filed either electronically or in assess an antidumping duty or applicant representing an interested paper in accordance with the Customs countervailing duty at the applicable party that has been identified by the Service’s requirements, as applicable. rate at the time of liquidation or Customs Service as the importer in a (iii) If an importer does not provide its reliquidation of the entry. covered merchandise referral is exempt from the requirements of providing reimbursement certification prior to ■ 9. Revise paragraph (d) of § 351.305 to documentary evidence to demonstrate liquidation, the Customs Service may read as follows: that it is an importer for purposes of that accept the reimbursement certification § 351.305 Access to business proprietary segment of a proceeding. in accordance with its protest information. ■ 10. Revise paragraph (f)(2) of procedures under 19 U.S.C. 1514. * * * * * § 351.402 to read as follows: (iv) Reimbursement certifications are (d) Additional filing requirements for § 351.402 Calculation of export price and applicable to entries for the relevant importers. If an applicant represents a constructed export price; reimbursement of commodity that has been imported on party claiming to be an interested party antidumping and countervailing duties. or after the date of publication of the by virtue of being an importer, then the * * * * * antidumping notice in the Federal applicant shall submit, along with the (f) * * * Register that first suspended liquidation Form ITA–367, documentary evidence (2) Reimbursement Certification. (i) in that proceeding. demonstrating that during the The importer must certify with the * * * * * applicable period of investigation or Customs Service prior to liquidation [FR Doc. 2020–15283 Filed 8–12–20; 8:45 am] period of review the interested party whether the importer has or has not BILLING CODE 3510–DS–P

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Part IV

Office of Management and Budget

2 CFR Parts 25, 170, 183, et al. Guidance for Grants and Agreements; Final Rule

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OFFICE OF MANAGEMENT AND management community, the amended by the Digital Accountability BUDGET Administration established the Results- and Transparency Act (DATA Act). Oriented Accountability for Grants Finally, OMB is implementing 2 CFR Parts 25, 170, 183, and 200 Cross Agency Priority Goal (Grants CAP revisions to 2 CFR to clarify areas of Goal) in the President’s Management misinterpretation. The revisions are Guidance for Grants and Agreements Agenda on March 20, 2018 (available at: intended to reduce recipient burden by https://www.performance.gov/CAP/ improving consistent interpretation. ACTION: Final guidance. grants/). The Grants CAP Goal OMB consulted and collaborated with SUMMARY: The Office of Management recognizes that grants managers report agency representatives identified by the and Budget (OMB) is revising sections spending a disproportionate amount of Grants CAP Goal ESC to support the of OMB Guidance for Grants and time using antiquated processes to implementation of these revisions. OMB Agreements. This revision reflects the monitor compliance. Efficiencies could also solicited feedback from the broader foundational shift outlined in the be gained from modernization and Federal financial assistance community President’s Management Agenda (PMA) grants managers could instead shift their by publishing the proposed changes to to set the stage for enhanced result- time to analyze data to improve results. 2 CFR in the Federal Register for a sixty oriented accountability for grants. This To address this challenge, the Grants (60) day public comment period guidance is reflects the Administration’s CAP Goal Executive Steering Committee (https://www.federalregister.gov/d/2019- focus on improved stewardship and (ESC), which reports to the Chief 28524). OMB received 215 submissions ensuring that the American people are Financial Officer’s Council (CFOC), has with over 1,200 comments from the receiving value for funds spent on grant identified four strategies to work toward public, around 1,200 comments from programs. The revisions are limited in maximizing the value of grant funding Federal agencies, and around 100 scope to support implementation of the by developing a risk-based, data-driven comments from the Council of the President’s Management Agenda, framework that balances compliance Inspectors General on Integrity and Results-Oriented Accountability for requirements with demonstrating Efficiency (CIGIE) Grant Reform Grants Cross-Agency Priority Goal successful results for the American Workgroup for a total of over 2,500 (Grants CAP Goal) and other taxpayer. comments. OMB reconvened agency Administration priorities; 1. Strategy 1: Operationalize the Grants representatives to review the comments implementation of statutory Management Standards and make changes to the proposed requirements and alignment of these 2. Strategy 2: Establish a Robust revisions as appropriate. sections with other authoritative source Marketplace of Modern Solutions In summary and as discussed further requirements; and clarifications of 3. Strategy 3: Manage Risk in the sections below, OMB is revising existing requirements in particular areas 4. Strategy 4: Achieve Program Goals 2 CFR parts 25, 170, and 200. within these sections. and Objectives Additionally, OMB is adding part 183 to DATES: These revisions to the guidance The revisions to 2 CFR support these 2 CFR to implement Never Contract are effective November 12, 2020, except four strategies. In support of Strategies with the Enemy. The sections are for the amendments to §§ 200.216 and 1 and 2, OMB is implementing changes revised within the following scope. 200.340, which are effective on August throughout 2 CFR to modernize Comments received that were out of 13, 2020. reporting by recipients of Federal grants scope for the revision were not accepted FOR FURTHER INFORMATION CONTACT: by requiring Federal agencies to adopt by OMB. Nicole Waldeck or Gil Tran at the OMB standard data elements for the I. To support implementation of the Office of Federal Financial Management information recipients are required to President’s Management Agenda at [email protected] or 202– report (available at: https:// Results-Oriented Accountability for 395–3993. ussm.gsa.gov/fibf/). This adoption will Grants CAP Goal and other Administration priorities; SUPPLEMENTARY INFORMATION: enable technology solutions to better manage the data the recipients report to II. To meet statutory requirements and Background and Objectives the Federal government. These changes to align with other authoritative source In 2013, OMB partnered with the also support implementation of the requirements; and III. To clarify existing requirements. Council on Financial Assistance Reform Grants Reporting Efficiency and (COFAR) to revise and streamline Agreements Transparency Act of 2019 I. Support Implementation of the guidance to develop the Uniform (GREAT Act). OMB is also President’s Management Agenda and Administrative Requirements, Cost implementing revisions to strengthen Other Administration Priorities Principles, and Audit Requirements for the governmentwide approach to A. Emphasizing Stewardship and Federal Awards (Uniform Guidance) performance and risk, to support efforts Results-Oriented Accountability for located in title 2 of the Code of Federal under Strategies 3 and 4 by encouraging Grant Program Results Regulations (2 CFR part 200) (79 FR agencies to measure the recipient’s 78589; December 26, 2013). The intent performance in a way that will help The President’s Management Agenda, of this effort was to simultaneously Federal awarding agencies and non- Results-Oriented Accountability for reduce administrative burden and the Federal entities to improve program Grants CAP goal is working toward risk of waste, fraud, and abuse while goals and objectives, share lessons shifting the balance between delivering better performance on behalf learned, and spread the adoption of compliance and performance while of the American people. Implementation promising performance practices. reducing burden. Agencies are of the Uniform Guidance became OMB is also revising 2 CFR to encouraged to promote promising effective on December 26, 2014 (79 FR implement relevant statutory performance practices that support the 75867, December 19, 2014) and must be requirements. These revisions include achievement of program goals and reviewed every five years in accordance requirements from several National objectives. Many Federal agencies are with 2 CFR 200.109. Defense Authorization Acts (NDAAs) working together to innovate and Based on feedback and ongoing and the Federal Funding Accountability develop a risk-based approach that engagement with the grants and Transparency Act (FFATA), as incorporates performance to achieve

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results-oriented grants (where objectives, and intended results before changes support the Administration’s applicable). By shifting the focus to the specifying the goals and objectives of in priority to ensure a fair and transparent balance between performance and a solicitation. A well-designed program process for the selection of award compliance, agencies may have the has clear goals and objectives that recipients and supports efforts under opportunity to streamline burdensome facilitate the delivery of meaningful the President’s Management Agenda to compliance requirements for programs results, whether a new scientific ensure that Federal awards are designed that demonstrate results. To support this discovery, positive impact on citizen’s to achieve program goals and objectives. goal, OMB is publishing revisions in daily life, or improvement of the Changes to 2 CFR 200.206 Federal multiple sections of the guidance that Nation’s infrastructure. Well-designed awarding agency review of risk posed by together emphasize the importance of programs also represent a critical applicants allow Federal awarding focusing on performance to achieve component of an agency’s agencies to adjust requirements when a program results throughout the Federal implementation strategies and efforts risk-evaluation indicates that it may be award lifecycle. that contribute to and support the merited. Changes are included in 2 CFR The provisions that were revised to longer-term outcomes of an agency’s 200.211 Information contained in a improve the governmentwide approach strategic plan. OMB encourages Federal Federal award and 2 CFR 200.301 to performance and risk emphasize awarding agencies to reference the Performance measurement further stewardship and results-oriented grant ‘‘Managing for Results: The Performance emphasize existing requirements for making. Revisions to 2 CFR 200.102 Management Playbook for Federal requiring Federal awarding agencies to Exceptions encourages Federal Awarding Agencies’’ for promising provide recipients with clear awarding agencies to apply a risk-based, performance practices throughout the performance goals, indicators, targets, data-driven framework to alleviate Federal award lifecycle, including steps and baseline data. OMB is adding select compliance requirements for to develop a strong program plan and language to § 200.102 Exceptions to programs that demonstrate results. 2 design (www.performance.gov/CAP/ emphasize that Federal awarding CFR 200.202 Program planning and grants/). agencies are encouraged to request design highlights the importance of Program design elements may include exceptions to certain provisions of 2 developing a strong plan and design to a problem or needs statement, goals and CFR part 200 in support of innovative set the stage for demonstrating program objectives; a logic model depicting the program designs that apply a risk-based, results. 2 CFR 200.205 Federal awarding program’s structure; program activities; data-driven framework to alleviate agency review of merit proposals a theory or theories of change and the select compliance requirements and strengthens the merit review process evidence supporting them; performance hold recipients accountable for good which is linked to 2 CFR 200.301 and other indicators to measure program performance. OMB recognizes that Performance measurement requiring accomplishments and find ways to Federal financial assistance program Federal awarding agencies to measure improve, set priorities, and identify goals and their intended results will recipient performance, which is derived targets of opportunity. In addition, it differ by type of Federal program. For from program planning and design may include use or intended use of example, criminal justice grant (§ 200.202). Performance information independently available sources of data, programs may focus on specific goals focused on results must be made development and support of learning such as reducing crime, basic scientific available to recipients in the solicitation communities which may benefit from a research grant programs may focus on and in the award, which is reflected in shared understanding of promising expanding knowledge, and 2 CFR 200.211 Information contained in practices and collaboration on common infrastructure projects may fund a Federal award. Award recipients must challenges and opportunities, and a building or infrastructure projects. also be aware of termination provisions system to periodically review award Related to the above changes that aim in 2 CFR 200.340 Termination and selection criteria. to strengthen program planning and reinforced in 2 CFR 200.211 Information OMB is revising to 2 CFR 200.205 Federal award terms and conditions, contained in a Federal award, which are Federal awarding agency review of merit OMB is revising §§ 200.211 Information linked to performance goals of the proposals, 2 CFR 200.203 Requirement contained in a Federal award and program (§ 200.301). Revisions to 2 CFR to provide public notice of Federal 200.340 Termination to strengthen the 200.413 Direct costs were also made to financial assistance programs and ability of the Federal awarding agency include evaluation costs as an example § 200.204 Notices of funding to terminate Federal awards, to the of a direct cost, which demonstrates opportunities to strengthen merit greatest extent authorized by law, when program results. review, public notice of Federal the Federal award no longer effectuates Revisions to 2 CFR 200.202 Program financial assistance programs, and the the program goals or Federal awarding planning and design develops a new notices of funding opportunities to agency priorities. Federal awarding provision. This section formalizes a further the goals of results-oriented agencies must clearly and requirement that are already expected of grantmaking. These changes require unambiguously articulate the conditions Federal awarding agencies to develop a Federal awarding agencies to extend under which a Federal award may be strong program design by establishing their merit review process to terminated in their applicable program goals, objectives, and discretionary Federal awards, unless regulations and in the terms and indicators, to the extent permitted by prohibited by Federal statute, the conditions of Federal awards. The intent law, before the applications are Federal awarding agency must design of this change is to ensure that Federal solicited. The development of 2 CFR and execute a merit review process for awarding agencies prioritize ongoing 200.202 emphasizes the importance of applications. support to Federal awards that meet sound program design as an essential Additional language was included to program goals. For instance, following component of performance management articulate an explanation of the merit the issuance of a Federal award, if and program administration. Ideally, review process that Federal awarding additional evidence reveals that a program design takes place before an agencies are expected to follow. Further, specific award objective is ineffective at agency drafts related projects. This Federal awarding agencies are required achieving program goals, it may be in enables Federal agency leadership and to periodically review their Federal the government’s interest to terminate employees to codify program goals, award merit review process. These the Federal award. Further, additional

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evidence may cause the Federal language ‘‘or less restrictive 200.203 Requirement To Provide awarding agency to significantly requirements’’ with ‘‘adjust Public Notice of Federal Financial question the feasibility of the intended requirements’’ within the final Assistance Programs objective of the award, such that it may guidance. OMB strongly encourages be in the interest of the government to Federal awarding agencies to add or There were several comments terminate the Federal award. OMB is remove requirements by applying a risk- provided in response to the changes also eliminating the termination for based, data-driven framework to made to 2 CFR 200.203. One comment cause provision because this term is not alleviate select compliance inquired as to why no similar substantially different than the requirements and hold recipients requirements exist within the Uniform provision allowing Federal awarding accountable for good performance. One Guidance and is applicable to pass- agencies to terminate Federal awards commenter felt that the inclusion of the through entities within 2 CFR 200.332. when the recipient fails to comply with requirement for agencies to ‘‘apply more OMB notes that the Federal awarding the terms and conditions. restrictive terms and conditions when agency does not have a direct In addition, OMB is expanding the merited as indicated by a risk relationship with the subaward definition of fixed amount awards in evaluation’’ did not warrant an recipient; that is the role of the pass- § 200.1 to allow Federal awarding exception from OMB and thus did not through entity. Mandating application agencies to apply the provision to both belong in the exceptions section. OMB of this requirement would require grant agreements and cooperative concurred with the commenter and additional public comment as it would agreements. moved this language to 2 CFR 200.206 add burden to the process. Further, The revisions in 2 CFR 200.301 Federal awarding agency review of risk comments asked for OMB to develop emphasize that agencies are encouraged posed by applicants. guidance to help ensure that Federal to measure recipient performance to awarding agencies have the appropriate improve program goals and objectives, 200.202 Program Planning and Design controls in place with respect to their share lessons learned, and spread the Many commenters were supportive of processes for making awarding adoption of promising practices. While this new section and the other revisions decisions. OMB rejects this change for understanding that grant program goals related to results-based grant making. this iteration of 2 CFR as it would be a and their intended results will differ by Some commenters also thought the type of program, the Grants CAP Goal is significant change that would require an proposal could go further to better working to shift the culture of Federal opportunity for public comment based utilize federal grantees’ activities to grant making from a heavy focus on on the language and requirements build and disseminate evidence of what compliance to a balanced approach that imposed. Additionally, some works. One commenter expressed includes a focus on the degree to which commenters requested for language to concern that revisions to the grant programs achieve their goals and be added regarding how often updates performance sections would lead to the intended results. To provide clarity and are expected. OMB rejects these unintended consequence of making consistency among Federal awarding suggestions as the language references research look like a contract agreement. agencies, a revision to include program guidance provided by General Services OMB provided explicit language to state evaluation costs as an example of a Administration (GSA) in consultation direct cost under a Federal award has that performance measures for each with OMB. That is where the been included in 2 CFR 200.413 Direct program will be different. One requirement to update each Assistance costs. Please refer to OMB Circular A– commenter expressed concern that this Listing on an annual basis is specified, 11 for a definition on program new requirement would add burden. and it is not necessary to include this evaluation. Evaluation costs are allowed OMB respectfully disagrees, as this level of detail in 2 CFR 200.203. as a direct cost in existing guidance. requirement is not new and does not This language is intended to strengthen add burden. This section reflects 200.204 Notice of Funding this intent and ensure that agencies are activities that were previously implied Opportunities applying this consistently. within 2 CFR and not explicitly included in its own section. Commenters observed that the change Agencies are reminded that in terminology from ‘‘competitive’’ to evaluation costs are allowable costs OMB appreciates the commenters who challenged OMB to go even further ‘‘discretionary’’ appears to broaden the (either as direct or indirect), unless requirement of these notices to not just prohibited by statute or regulation. The with the proposal with regards to competitive announcements, but also work under the Grants CAP goal evidence-building. OMB looks forward sole source discretionary performance work group emphasizes to furthering this discussion with announcements. Some commenters evaluation as an important practice to stakeholder sessions in fall 2020 and suggested for the language to be changed understand the results achieved with will also consider these proposals in back to ‘‘competitive’’ and questioned Federal funding. future revisions of 2 CFR. This provision is designed to operate in the value of this revision. One 200.102 Exceptions tandem with evidence-related statutes commenter requested clarification as to OMB received several comments on (e.g., The Foundations for Evidence- whether or not this new requirement is this section asking for clarification on Based Policymaking Act of 2018, which intended to apply when the the proposed revisions. Some emphasizes collaboration and discretionary award is non-competitive. commenters also noted that the addition coordination to advance data and Another commenter suggested that it of the ‘‘or less restrictive requirements’’ evidence-building functions in the would be burdensome and inefficient to in 2 CFR 200.102(c) and 200.208 is Federal government) and related OMB require agencies to have notices of confusing, redundant and not needed implementation guidance (e.g., OMB funding opportunities for because Federal awarding agencies Memorandum M–19–23: Phase 1 noncompetitive awards. OMB already have the discretion to impose implementation of the Foundations for deliberated these comments and conditions on the recipient. OMB Evidence-Based Policymaking Act of subsequently decided to change this deliberated upon these comments and 2018. Learning Agendas, Personnel, and language to reflect discretionary awards ultimately agreed to replace the Planning Guidance). that are competed.

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200.205 Federal Awarding Agency 200.102(c) and 200.208. Some language to be written strongly and use Review of Merit Proposals commenters described this new the word ‘‘must’’ throughout, others Some of the comments received were language as confusing, redundant and preferred ‘‘should’’ and many suggested from Federal agencies who wanted to not needed because Federal awarding the use of these words should be know the purpose and the benefits agencies already have the discretion to consistent throughout this section. impose conditions on the recipient. One Some commenters also expressed the behind the proposed revisions to justify commenter applauded OMB’s decision need for OMB to include data quality the added burden. There were also to further emphasize the flexibilities within this section. OMB concurs with concerns about the efficiency of the afforded to Federal awarding agencies the comments that consistent use of awarding process if these changes are revise or remove certain requirements ‘‘must’’ and ‘‘may’’ should be used in made. Some commenters asked for based on a risk analysis. After this section. Some commenters also clarity on what a systematic review deliberation, OMB replaced this pointed out discrepancies between meant and what would classify as language with ‘‘the Federal awarding various performance sections and a few ‘‘effective.’’ OMB considered all agency may adjust requirements to a commenters pointed out that there are comments and made further revisions to class of Federal awards or non-Federal discrepancies between what is required specify that the merit review process entities when approved by OMB . . . .’’ in 2 CFR 200.211 and 200.301. In should be periodically reviewed as a response to commenters, OMB re-wrote point of clarity on the process review. 200.211 Information Contained in a this section for clarity and consistency. OMB disagrees with the commenters Federal Award that expressed these revisions will add Some comments asked for clarity on 200.340 Termination burden. The purpose of these revisions the revisions that were proposed. One There were several comments is to add clarity to the merit review clarifying question was the difference received in response to the revisions process which should already be between the data point for the ‘‘Total proposed to this section. The comments occurring and is not a new requirement. Approved Cost Sharing or Matching, can be group into the following discreet 200.206 Federal Awarding Agency where applicable’’ and ‘‘Total Amount categories: • Review of Risk Posed by Applicants of the Federal Award including Concern over arbitrary Federal approved Cost Sharing or Matching.’’ award termination; As stated in the above section These are two completely separate data • Adding or editing language for describing the comments received for points which call for the approved cost clarity; § 200.102, one commenter felt that the sharing or matching to be identified, • Concern over how Federal awarding inclusion of the requirement for and then the total amount of the Federal agencies will evaluate awards with long- agencies to ‘‘apply more restrictive award that is approved cost sharing or term outcomes; terms and conditions when merited as matching. OMB did not recommend that • Request further OMB guidance; and • indicated by a risk evaluation’’ did not these were removed. Further, in Not relevant. warrant an exception from OMB and response to various comments, the The largest number of commenters thus did not belong in the exceptions language in (a) was streamlined and expressed a concern that the proposed section. OMB concurred with the users are referred to the relevant language will provide Federal agencies commenter, moved this language to 2 performance sections for additional too much leverage to arbitrarily CFR 200.206 Federal awarding agency information. The data points previously terminate awards without sufficient review of risk posed by applicants, and proposed in paragraph (b) related to cause. Several commenters requested provided revisions to the language to performance were already captured in OMB reinstate the language, for cause, read ‘‘. . . adjust requirements when a paragraph (a), and thus removed from to address this issue. Some commenters risk-evaluation indicates that it may be (b). The proposed language for (e) was requested additional clarity and merited either pre-award or post- revised and moved to § 200.105(b) examples. OMB deliberated upon these award.’’ One commenter requested pass- within the guidance. Many comments requests and decided as written through entities to have access to enter received suggested revisions that would agencies are not able to terminate grants information into the FAPIIS system and make the language more prescriptive. arbitrarily and that it was not require a pass-through entity review as Title 2 CFR was written as guidance for appropriate to include examples in 2 part of the risk assessment process. a large array of users. If the language is CFR for this section. OMB made a OMB deliberated this comment and too prescriptive, it doesn’t provide technical correction to provide while it is an important topic for sufficient flexibility for use by the large additional clarity. Some commenters discussion, OMB feels the scope of this array of users. Additional technical expressed concerns over how Federal revision would be too substantial for corrections were made for clarity awarding agencies will evaluate awards finalization without receiving additional throughout this provision. Revisions with long-term outcomes. One example comments from the public. Thus, OMB were made to § 200.211(c)(1)(iv) to from the commenter was an respectfully declines this comment. clarify that if the underlying legal environmental program where the Some commenters requested for OMB to authority for a program changes, that performance will require years to include the requirement for Federal may be a reason why there would be no measure. The example from the awarding agencies to leverage future budget periods under an award. commenter should be determined in commercially available data coordination with the Federal awarding management tools. OMB declines this 200.301 Performance Measurement agency. OMB respectfully declines this comment and does not specify tools Some commenters were in support of comment. Title 2 CFR is intended to be required for use. the revisions to this section. Many written and used by a large array of commenters provided suggestions for stakeholders and thus the language is 200.208 Specific Conditions further revisions to the guidance. not intended to be prescriptive, as the As stated above in 2 CFR 200.102, Several commenters provided commenter has requested. Some some commenters were not supportive suggestions with regards to the use of commenters requested further OMB of the requirement of the language ‘‘or ‘‘should’’ and ‘‘must’’ throughout this guidance on this provision. OMB less restrictive requirements’’ in 2 CFR section. Some commenters wanted the appreciates the request for additional

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guidance and notes that guidance assists OMB with execution of the be used for non-Federal entities that beyond what has been provided in the requirements of the GREAT Act. have never received a negotiated proposed rule is out of scope for this In response to commenters’ requests indirect cost rate. The use of the de revision effort. Other comments for clarity on the performance sections minimis rate has reduced burden for provided were not relevant to the of the guidance, OMB moved the both the non-Federal entities and the revisions proposed and thus OMB has financial reporting requirement noted Federal agencies for preparing, rejected these comments. currently in 2 CFR 200.301 Performance reviewing, and negotiating indirect cost measurement to 2 CFR 200.328 rates. Since the publication of 2 CFR in 200.413 Direct Costs Financial reporting. 2013, both Federal agencies and non- Most comments received for this 2 200.329 Monitoring and Reporting Federal entities have advocated CFR 200.413 were in agreement of the Program Performance expansion of the de minimis rate for revisions. The remaining comments non-Federal entities that have Several commenters requested clarity were out of scope. Therefore, OMB did negotiated an indirect cost rate regarding the ‘‘OMB-designated not make changes to the revised previously, but for some circumstances, standards lead’’ and notes that this language. Some commenters requested the negotiated rates have expired. The terminology has been used throughout OMB include additional examples for expiration may be due to breaks in the guidance. As mentioned above, one clarity that the activities are direct costs Federal relationships and grant funding, commenter also suggested a technical such as planning and program or lack of resources for preparing an correction to reference the Grant coordination, data technology, analytics, indirect cost proposal. This change will Reporting Efficiency and Agreements staff training, data collection, storage, further reduce the administrative Transparency (GREAT) Act for clarity communication of evaluation and burden for non-Federal entities and on this designation. One commenter analytics, and more. OMB appreciates Federal agencies and shift more suggested that this provision should be the request to clarify additional resources toward accomplishing the tied together with the closeout provision examples as direct costs and would like program mission. with regards to the timeframe to to expand on this further in future Another revision adds language to 2 submission of reports. OMB concurred revisions of 2 CFR. OMB does not think CFR 200.414(f) to clarify that when a with this commenter and made it is appropriate to include specific non-Federal entity is using the de revisions accordingly. One commenter examples within the guidance because it minimis rate for its Federal grants, it is noted concern and confusion regarding could be unintentionally interpreted to not required to provide proof of costs the requirement that ‘‘costs must be be limited to only that list of items. that are covered under that rate. The 10 charged to the approved budget period However, as we think of ways to percent de minimis rate was designed to in which they were incurred.’’ The encourage promising performance reduce burden for small non-Federal commenter also suggested edits to practices, OMB would like to discuss entities and the requirement to clarify this requirement. OMB this further during stakeholder sessions document the actual indirect costs concurred with the commenter and in the fall 2020. would eliminate the benefits of using accepted the edits for incorporation into the de minimis rate. Lastly, for 200.328 Financial Reporting the package. transparency purposes, another revision There were some comments received Appendix I to Part 200—Full Text of the adds a new paragraph (h) to § 200.414 in response to the revisions made to this Notice of Funding Opportunity to require that negotiated agreements for indirect cost rates are collected and provision. One commenter requested A number of commenters suggested displayed on a public website. that the collection of information be no edits to this section. One commenter more frequently than semiannually to suggested including the term ‘‘outcome’’ 200.414 Indirect (F&A) Costs reduce burden. OMB declines this to indicate the end result and also 200.414(f) comment and notes that it was out of include terms for tracking and scope because there were no proposed determining if that end result is being or OMB received several comments that changes to the frequency of financial has been achieved. OMB agreed with were concerned with awarding a de reporting. One commenter requested this commenter and made the revisions minimis rate that is higher than a that OMB add language to discourage accordingly. Another commenter Negotiated Indirect Cost Rate Agreement pass-through entities from the practice suggested that OMB include the (NICRA). OMB concurs with the of requiring more frequent and more requirement for Federal awarding concerns regarding applying a higher de detailed financial reporting. After agencies to ensure SAM registration is minimis rate in cases where a NICRA discussion, OMB declines this comment current before making any advanced rate is lower than 10 percent. However, as it is out of scope for this revision but payments and/or issuing any the regulation states in paragraph (c)(1) will consider the comment for a future reimbursements. OMB disagrees with that Federal agencies must honor revision of 2 CFR. Several commenters this recommendation, as this negotiated rates. Additionally, some sought clarification on the use of the requirements is already stated in 2 CFR commenters expressed concern that term ‘‘OMB-designated standards lead.’’ 25.205. guidance will be misinterpreted to allow Pursuant to the Grant Reporting provisional rates to be considered as Efficiency and Agreements B. Expanded Use of the De Minimis Rate expired. OMB intends to include Transparency Act of 2019 (GREAT Act), The revision to 2 CFR 200.414(f) provisional rates and added clarifying the OMB Director is required to expands use of the de minimis rate of language to the section in response to designate a standard-setting agency (i.e., 10 percent of modified total direct costs these comments. Further, commenters the Executive department that (MTDC) to all non-Federal entities were concerned with a lack of required administers the greatest number of (except for those described in Appendix documentation. OMB concurs with programs under which Federal awards VII to Part 200—State and Local concerns that the language implies are issued in a calendar year). The Government and Indian Tribe Indirect source documents rather than the Executive department designated by Cost Proposals, paragraph D.1.b). indirect cost rate agreement and altered OMB as the standard-setting agency Currently, the de minimis rate can only the language accordingly. There were

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several comments that suggested that commenter’s suggestion and moved the ‘‘obligation’’ to either ‘‘financial the Modified Total Direct Cost (MTDC) requirement accordingly. obligation’’ or ‘‘responsibility’’ within be used as the base. However, this the guidance as appropriate, to ensure 200.105 Effect on Other Issuances suggestion is out of the scope of this alignment with DATA Act definitions. revision. Additionally, OMB would like There were several commenters in OMB is adding changes across the to note that Federal agencies must strong support of this new provision entirety of 2 CFR to ensure consistent accept the negotiated rate even if it is while other commenters expressed use of terms across parts 25, 170, 183, lower than the de minimis rate. concerns regarding the implementation. and 200 where possible, relying on 2 One commenter mentioned that CFR part 200 as the primary source. As 200.414(h) finalizing this proposal would cause reflected in the changes, there are OMB appreciated the many comments significant difficulties in effective instances where the terms within 2 CFR that supported the proposed implementation and effectively cannot be made consistent. For requirement to post NICRAs to a public overseeing programs. OMB appreciates example, the term ‘‘non-Federal entity’’ website. There were several comments the comments received. To address cannot be consistently defined across 2 that cited concerns over the sharing of concerns, the language was re-written to CFR: Parts 25 and 170 apply to Federal proprietary information through the better align with E.O. 13892 and provide awards to foreign organizations, foreign posting of NICRA information on a clarity. public entities, and for-profit organizations, while part 200 only public website. To address these D. Promoting Free Speech concerns, OMB clarified that the applies to these type of non-Federal Several provisions within 2 CFR are requirement is not for the entire rate entities when a Federal awarding revised to align with E.O. 13798 agreement and added language to agency elects for part 200 to apply. For ‘‘Promoting Free Speech and Religious specify the exact information that is definitions that are consistent across 2 Liberty’’ and E.O. 13864 ‘‘Improving requested be provided for a non-Federal CFR parts 25, 170, and 200, revisions Free Inquiry, Transparency, and entity; the indirect negotiated rate; have been made to parts 25 and 170 to Accountability at Colleges and distribution base; and the rate type. In refer definitions to part 200 as the Universities.’’ These sections include 2 addition, the Indian tribes or tribal authoritative source. CFR 200.300 Statutory and national organizations, as defined in the Indian The definitions ‘‘Catalog for Federal policy requirements, 200.303 Internal Domestic Assistance (CFDA) number’’ Self Determination, Education and controls, 200.339 Remedies for and ‘‘CFDA program title’’ have been Assistance Act, 25 U.S.C. 450b(1)) are noncompliance, and 200.341 replaced with the terms ‘‘Assistance excluded. Further, there were several Notification of termination requirement. Listings number’’ and ‘‘Assistance comments that inquired about the These E.O.s advise Federal awarding Listings program title’’ to reflect the applicability of this section. Lastly, agencies on the requirements of change in terminology. there were comments that inquired religious liberty laws, including those OMB is also revising several about who is responsible for making laws that apply to grants and provide a definitions for clarity. For example, the sure this information is publically policy for free inquiry at institutions term management decision is revised to posted. OMB recognizes this concern receiving Federal grants. The revision to emphasize that it is a written and notes that the responsibility of the 2 CFR underscores the importance of determination provided by a Federal Federal government will be compliance with the First Amendment. awarding agency or pass-through entity. communicated appropriately. To promote uniform application of 200.209 Certifications and C. Eliminate References to Non- standard data elements in future Representations, 200.300 Statutory Authoritative Guidance information collection requests, OMB is and National Policy Requirements, also revising 2 CFR 200.207 and 200.328 To support implementation of E.O. 200.303 Internal Controls, 200.339 to reflect that information collection 13892 of October 9, 2019 (Promoting the Remedies for Noncompliance, 200.341 requests must adhere to the standards Rule of Law Through Transparency and Notification of Termination available from the OMB-designated Fairness in Civil Administrative Requirement standards lead. This change further Enforcement and Adjudication) and to OMB received several comments in supports OMB Memorandum M–19–16 prohibit Federal awarding agencies from response to this policy proposal. Some Centralized Mission Support including references to non- commenters supported compliance with Capabilities for the Federal Government, authoritative guidance in the terms and the Constitution while other which requires that future shared conditions of Federal awards, OMB commenters questioned the need to service solutions must adhere to the proposed changes to § 200.105 Effect on include a reference to the Constitution. Federal Integrated Business Framework other issuances. The proposed change OMB appreciates all comments received standards (available at: https:// was intended to reduce recipient burden and after consideration has decided to ussm.gsa.gov/fibf/). and prevent Federal awarding agencies retain the proposed language within Further, OMB is revising 2 CFR part from imposing non-binding guidance as these sections. One comment suggested 200 to replace the term ‘‘standard form’’ award requirements for recipients that the removal of the word ‘‘statutory.’’ with ‘‘common form.’’ Some has not gone through appropriate public OMB concurred with this commenters submitted feedback with notice and comment. The proposed recommendation and made the change. concerns that the change in terminology revisions related to eliminating would allow agencies to create unique references to non-authoritative guidance E. Standardization of Terminology and forms with a lack of standardization. were included in 2 CFR 200.211(e) Implementation of Standard Data OMB did not make any changes to the Information contained in a Federal Elements final language based on these award. Some commenters suggested for OMB is standardizing terms across 2 comments. Existing forms widely this requirement to be moved within the CFR part 200 to support efforts under adopted by Federal awarding agencies guidance to 2 CFR 200.105(b) Effect on the Grants CAP Goal to standardize the that are regularly referred to as standard other issuances for clarity of the policy grants management business process forms are in fact common forms. For intent. OMB concurred with the and data. OMB is replacing the term instance, the SF–424 series, SF–425,

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and research performance progress Modification to Existing Definitions assessment and updated the definition report are all common forms/formats. Several commenters sought to clarify to make it easier to read, understand, OMB acknowledges that this is a existing definitions by providing and use. Another commenter significant change in how the technical corrections or clarification recommended the addition of mutual community refers to these forms and statements. aid or intergovernmental agreements to will ensure that any future guidance on In several cases, OMB agrees that the definition of contract. This change the adoption of standard data elements technical corrections are necessary. The was not considered because it would clarifies the use of common forms. More updates to these definitions are minor substantively alter the definition information regarding common forms and did not affect the intent of the term. without providing the public the and flexibility under the Paperwork In other cases, the recommendations opportunity to comment on the revision. Reduction Act is available at: https:// were either too substantive or did not Cooperative Agreement, Grant www.whitehouse.gov/omb/information- align with the intent of this update to Agreement regulatory-affairs/federal-collection- the regulation. OMB may consider these One commenter recommended information/. Finally, OMB is recommendations in future updates to 2 specifically explaining ‘‘transfer reformatting the definitions section of 2 CFR. CFR part 200, subpart A—Acronyms anything of value’’ in the definitions of and Definitions, by removing the section Formatting cooperative agreement and grant numbers to facilitate future additions to Several commenters disagreed with agreement. OMB opted to keep the this section. the removal of the numbering of the existing language because both definitions. The commenters were definitions cite 31 U.S.C. 6101(3), which Subpart A—Acronyms and Definitions concerned about the overall changes to provides the scope of the ‘‘transfer of anything of value.’’ A commenter New Defined Terms the numbering of 2 CFR part 200, which would add burden to updating the non- recommended further describing Several commenters sought to clarify Federal entities’ policies and substantial involvement in the existing parts within 2 CFR and grant procedures. definition of cooperative agreement. processes and procedures through the OMB appreciates these concerns, but This change was not considered because addition of several defined terms under does not believe that the removal of the the Federal awarding agency and the 200.1 Definitions. Examples of definition numbering will generate any recipient are given the discretion to recommended terms to include were significant additional burden on non- negotiate this relationship. Another formula grant, program beneficiary/ Federal entities, because these groups commenter stated that there was a recipient, procurement, administrative already should regularly review and conflict §§ 25.306 and 200.1 associated costs, for-profit organization, conflict of update their policies and procedures to with the transfer of land or property. interest, covered technology, ensure compliance with Federal, state, OMB disagrees as the two definitions architectural/engineering professional and local laws and regulations. This align and are also in alignment with the services, Federally-owned property, and revision is expected to limit future associated legislation. Through the demonstration. burden for non-Federal entities in the review of the definitions of cooperative event of new terms are added to this agreement and grant agreement, OMB In certain cases OMB agrees that and members of the working group additional terms may provide greater section of part 200, which would change the section’s numeration. clarified that the relationship was clarification to the regulation and the between the Federal awarding agency management of Federal financial Subpart A—Specific Definitions and a recipient or a pass-through entity assistance. OMB may consider the Compliance Supplement and a subrecipient. recommended definitions for the suggested terms in future updates to 2 A number of commenters Discretionary, Non-Discretionary Award CFR. In other cases, the terms are either recommended clarifying the definition Technical edits were made to the not used in 2 CFR or are only applicable of compliance supplement and offered definitions of discretionary award and to a small number of Federal awarding revised wording for the definition. OMB non-discretionary award to provide agencies. OMB declined these concurred and adapted the definition in clarity to the intended definitions. recommendation either due to scope, or consultation with members of the Federal Interest because they do not align with the interagency working group. One intent of this regulation. commenter recommended revising the Two commenters recommended definition to frame the compliance correcting the formula for determining Inserting Programmatic Instruction in supplement as the sole source of Federal interest, noting that reliance on Definitions information for auditors. OMB did not the Federal share of the total project include this recommendation because costs does not appropriately account for Several commenters recommended the compliance supplement is one of the the Federal interest in real property, inserting programmatic instruction for authoritative sources that auditors can equipment, or supplies. OMB agreed specific terms, which would provide use when auditing Federal programs. with this recommendation and amended more guidance for Federal agencies, Other sources include Federal awarding the definition to appropriately rely on non-Federal entities, auditors, or others. agency and program specific the percentage of Federal participation OMB considered these comments, but documents. in the total cost of the real property, determined that it was inappropriate to equipment, or supplies as part of the Contract include programmatic guidance in the formula. definition of terms for the regulation. One commenter noted that the The purpose of 2 CFR 200.1 Definitions definition of contract was confusing, Recipient is to provide meaning for specified while another recommended cross- One commenter recommended terms within the regulation; guidance referencing the Subrecipient and amending recipient be inclusive of and instruction is more appropriate Contractor Determinations subsection entities that are not necessarily non- other parts of 2 CFR. (§ 200.331). OMB agreed with this Federal entities such as for-profit and

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foreign entities as well as Federal approved budget period. The definition the simplified acquisition may be agencies. OMB agreed with this of budget period was edited to clarify determined. Minor technical edits were assessment and updated the definition that recipients are authorized to expend made to the definition for micro- appropriately. the current funds awarded, including purchase, based on comments, to clarify any funds carried forward or other that the cognizant agency for indirect Subsidiary revisions pursuant to 2 CFR 200.308. costs may approve a higher micro- One commenter recommended Further, recipients may only incur costs purchase threshold if requested by the replacing non-Federal entity with entity, during the first year budget period until non-Federal entity. while another recommended adding ‘‘or subsequent budget periods are funded controlled’’ after owned to be more F. Support for Domestic Preferences for based on the availability of Procurement inclusive of a diversity of organizations appropriations, satisfactory that may have subsidiaries. Several performance, and compliance with the As expressed in Executive Order (E.O) other commenters were confused by the terms and conditions of the award. The 13788 of April 18, 2017 (Buy American reference to the FAR or found it to be definition of renewal was edited to help and Hire American) and E.O. 13858 of redundant, recommending that it be clarify that a renewal award begins a January 21, 2019 (Executive Order on removed from the definition. OMB distinct period of performance that Strengthening Buy-American agreed with these recommended starts contiguous with, or closely Preferences for Infrastructure Projects), changes to the definition and following, the end of the expiring it is the policy of this Administration to incorporated them, as appropriate. award. This change also ensures maximize, consistent with law, the use of goods, products, and materials Period of Performance, Budget Period, consistent use of the term for purposes produced in the United States, in and Renewal of transparency reporting as required by FFATA. Federal procurements and through the OMB also revised the proposed terms and conditions of Federal definitions of period of performance, 200.403 Factors Affecting Allowability financial assistance awards. In support budget period, and renewal in 2 CFR of Costs of this policy, OMB is adding a new part 200, as there were a significant To maintain consistency within the section 2 CFR 200.322 Domestic number of comments from varying guidance regarding the definition of preferences for procurement, stakeholders indicating that the Budget Period, 2 CFR 200.403(h) has encouraging Federal award recipients, proposed revised definitions of period been added to clarify that costs must be to the extent permitted by law, to of performance, budget period, and incurred during the approved budget maximize use of goods, products, and renewal created more confusion than period and the Federal awarding agency materials produced in the United States clarity. In response, the final rule may waive prior written approval to when procuring goods and services revises the definitions for these terms to carry forward unobligated balances to under Federal awards. This Part will clarify how period of performance, subsequent budget periods. apply to procurements under a grant or budget period, and renewal cooperative agreement. operationally relate. Additionally, the Improper Payment, Questioned Costs final rule revises 2 CFR 200.309 to better 200.322 Domestic Preferences for Based on some confusion expressed Procurement describe how the period of performance in comments, the definition of improper is modified if there is an extension or payment was revised to accurately OMB appreciates the many comments termination of a current award. Some reflect how questioned costs, including were very supportive of this section. commenters expressed concern about costs questioned costs identified in Several comments suggested including the removal of pass-through entities’ audits, are not improper payments until language in Appendix II because the authority to allow pre-award costs to reviewed and confirmed as such. proposed new 2 CFR 200.322 includes subrecipients. It was not OMB’s the requirement that such term be intention to remove the pass-through Internal Controls flowed down to all contracts and entities’ authority to allow pre-award Based on some confusion expressed purchase orders. OMB accepts this costs to subrecipients. OMB recognizes in comments, minor modifications to change and has made the appropriate these concerns and added language to 2 the definition of internal controls were edits to the final language. Several CFR 200.458 for clarification in made to provide greater clarity on the comments asked for clarification response to commenters. Further, there internal controls requirements for non- regarding how preference is given. OMB were many comments that expressed Federal entities and Federal agencies. rejects this change as the language gives concern about removing 2 CFR 200.309 Federal awarding agencies the flexibility from the guidance due to burden with Oversight Agency for Audit to adjust their guidance accordingly. other entities that reference 2 CFR Several commenters expressed Further, another comment suggested to within their own rules and regulations. confusion with the revision to this exempt purchases below the micro- Including 2 CFR 200.309 in the final definition. Some commenters provided purchase threshold from requirements publication will eliminate that concern suggested edits for clarity. After in this section to reduce the burden on from commenters. deliberation and in response to the non-Federal entities. OMB rejects this The definition of period of commenters, OMB made further edits to suggestion as OMB does not agree with performance and renewal was revised to this definition for clarity. the assessment that an additional help clarify that the term period of burden is being placed. The language performance reflects the total estimated Simplified Acquisition Threshold, did not set a dollar threshold and time interval between the start of an Micro-Purchase instead states that domestic preference initial Federal award and the planned Multiple commenters were confused should be used as appropriate and to ‘‘to end date, and that the period of by the second paragraph proposed to be the maximum extent practicable.’’ One performance may include one or more added to the definition for simplified commenter suggested a reference to this budget periods, but the identification of acquisition threshold. Revisions were section should also be included in the period of performance does not made to this paragraph to alleviate Appendix II to Part 200—Contract commit funding beyond the currently confusion and accurately reflect how Provisions for Non-Federal Entity

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Contracts Under Federal Awards. OMB Acquisition Thresholds for Financial tribal laws and regulations; and Federal concurred with this commenter and Assistance (June 20, 2018) which is now law. In addition, procurements for made the revision accordingly. incorporated in 200.320. With the final goods and services that are directly procurement guidance now G. Changes to the Procurement charged to a Federal award must implemented, OMB Memorandum M– Standards to Better Target Areas of conform to the standards identified in Greater Risk and Conform to Statutory 18–18 is rescinded. this part.’’ OMB agreed with this Requirements 200.320 Methods of Procurement To clarifying revision and incorporated it within 2 CFR 200.318. To better target 2 CFR requirements Be Followed on areas of greater risk consistent with There were nearly 100 comments 200.319 Competition the intent of the Grants CAP Goal, and received relating to this section. Many One commenter expressed support for to align with legislation related to expressed confusion with the proposed the revisions to 2 CFR 200.319. Other procurement standards, OMB is revising revisions and provided the guidance to increase the micro- recommendations for clarity. In commenters provided suggested edits purchase threshold from $3,500 to response, the section was rewritten to for clarity. One commenter asked for $10,000, raising the simplified incorporate many of the suggestions clarity of the meaning ‘‘section’’ and acquisition threshold from $100,000 to from commenters. expressed the entire subpart D should $250,000, and allowing non-Federal The following revisions were made to be referenced. OMB declines this entities to request a micro-purchase 2 CFR 200.320: comment and notes that the term threshold higher than $10,000 based on • The procurement types were grouped ‘‘section’’ should not be interpreted to certain conditions. The NDAA 2017 into three categories: (1) Informal mean the entire subpart D and the increased the micro-purchase threshold (micro-purchase, small purchase); (2) proposed revisions to 2 CFR 200.319 from $3,500 to $10,000 for institutions formal (sealed bids, proposals) and (3) only adds a new reference to 2 CFR of higher education, or related or Non-Competitive (sole source) 200.320. This new language in no way affiliated nonprofit entities, nonprofit • The micro-purchase threshold was infers that the other procurement research organizations or independent raised from $3,500 to $10,000 provisions do not apply. One research institutes (41 U.S.C. 1908). • All non-Federal entities are now commenter expressed that it is unclear The NDAA 2017 also established an authorized to request a micro- what ‘‘required’’ under an award means. interim uniform process by which these purchase threshold higher than OMB notes that this language is used recipients can request, and Federal $10,000 based on certain conditions throughout the document as no such awarding agencies can approve requests that include a requirement to change was made. to apply, a higher micro-purchase maintain records for threshold up to threshold. Specifically, the NDAA 2017 H. Emphasis on Machine-Readable $50,000 and a formal approval Information Format allowed a threshold above $10,000, if process by the Federal government for approved by the head of the relevant threshold above $50,000; and OMB aims to clarify the methods for executive agency and consistent with • The simplified acquisition threshold collection, transmission, and storage of clean audit findings under chapter 75 of was raised from $150,000 to $250,000 data in 2 CFR 200.336 to further explain title 31, internal institutional risk and promote the collection of data in assessment, or State law. The NDAA for 200.321 Contracting With Small and machine-readable formats. A machine- FY 2018 (NDAA 2018) increased the Minority Businesses, Women’s Business readable format is a format that can be micro-purchase threshold to $10,000 for Enterprises, and Labor Surplus Area easily processed by a computer without all recipients and also increased the Firms human intervention while ensuring no simplified acquisition threshold from Several comments were made semantic meaning is lost (44 U.S.C. $100,000 to $250,000 for all recipients. regarding this section that were out of 3502(18)). The clarification reinforces The revisions to § 200.320 outline a scope for the current set of revisions. As the machine-readable requirements in permanent process by which non- such, no changes to the proposed the Foundations of Evidence-Based Federal entities may establish a micro- language will be made at this time. Policymaking Act of 2018 (Pub. L. 115– purchase level above the $10,000 435) and accompanying OMB guidance. threshold. 200.317 Procurements by States This requirement also reflects the need A proposal to increase the micro- One commenter suggested that 2 CFR to continually evaluate which formats purchase and simplified acquisition 200.317 should reference the (and structures) maximize accessibility thresholds in the Federal Acquisition procurement requirements in 2 CFR and usability for all stakeholders. Regulation (FAR) was published in the 200.322 Domestic preference for Machine-readable formats will also help Federal Register on October 2, 2019 (84 procurements, as it is applicable to all support the Leveraging Data as a FR 52420), FAR Case 2018–004. The non-Federal entities. OMB concurred Strategic Asset Cross-Agency Priority FAR Rules at 48 CFR part 2, subpart 2.1, with the commenter and made revisions Goal (CAP Goal #2) and efforts under were finalized on July 2, 2020 (85 FR accordingly. 40060, 85 FR 40064) with the effective the Grants CAP Goal to Build Shared IT date of August 31, 2020. In addition, the 200.318 General Procurement Infrastructure. Standards American Innovation and 200.336 Methods for Collection, Competitiveness Act of 2017 (AICA), One commenter expressed strong Transmission, and Storage of section 207(b) required that 2 CFR part support for the revisions proposed for Information 200 be revised to conform to the this provision. Most commenters requirements concerning the micro- provided suggested edits for clarity. One OMB received some comments on 2 purchase threshold. commenter provided suggested edits to CFR 200.336 requesting the inclusion of In response to these statutory changes, clarify that the ‘‘. . . non-Federal entity PDFs in the language. OMB declined OMB issued OMB Memorandum M–18– must use its own documented this suggestion since prescribing a 18, Implementing Statutory Changes to procurement procedures which must specific format in official guidance was the Micro-Purchase and the Simplified conform to applicable State, local, and deemed inappropriate.

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I. Changes to Closeout Provisions To proposed extension of deadlines for the funding and total funding were positive Reduce Recipient Burden and Support submission of reports. Due to the and thus OMB did not make changes to GONE Act Implementation significant amount of support for the the language for the final publication. Based on lessons learned from the changes, OMB is keeping the language We clarified that the determination for funding is based the federal award implementation of 2 CFR part 200 and published in the proposed version. expenditures as reported in the the Grants Oversight and New OMB also received comments to permit recipient’s Schedule of expenditures of Efficiency Act (GONE Act), OMB is pass-through entities to establish earlier Federal Awards (see § 200.510(b)). revising 2 CFR 200.344 Closeout to dates, in accordance with existing Commenters in response on the support timely closeout of awards, practice. OMB accepts this governmentwide project to determine improve the accuracy of final closeout recommendation. OMB also received the quality of single audits suggested a reporting, and reduce recipient burden. comments relating to final indirect cost delay on such project by a few years due The final language will increase the rates after the end of the period of the changes in the 2019 Compliance number of days for recipients to submit performance. OMB rejects these Supplement regarding the maximum of closeout reports and liquidate all suggestions, as a revised final Federal review for compliance areas. financial obligations from 90 days to financial report can be submitted after Commenters also suggested the use of 120 days. This change takes into closeout. Therefore, lengthening the current and on-going quality review consideration the challenges faced by deadline would not have an impact. performed by agencies on single audits pass-through entities with respect to OMB is making several small changes to substitute or complement the awards that contain a large number of based on received comments, such as governmentwide project. We agreed on subawards. These recipients must changing ‘‘non-Federal entity’’ to the suggested timing of the project and reconcile subawards and submit final ‘‘recipient’’ and adding ‘‘or an earlier have removed the specific date listed in reports to Federal awarding agencies date as agreed upon by the pass-through the proposal. OMB will work with the within the same 90 day period. entity and subrecipient.’’ agencies and the single audit Recognizing the need for pass-through 200.344(i) stakeholders to determine a future date entities to receive timely reports from OMB received several comments that for the project that is more optimal. subrecipients to report back to Federal recommended making the Federal OMB added language to address that awarding agencies, OMB will continue Awardee Performance and Integrity current quality control review work to require subrecipients to submit their Information System (FAPIIS) entries performed by the agencies can be reports to the pass-through entity within optional. The intent of the added leveraged for the governmentwide 90 days. The intent of this change is to regulation was to hold recipients project. support financial reconciliation, help accountable and share performance ease the burden associated with across Federal agencies, which II. Meeting Statutory Requirements and submitting reports for closeout, and promotes results-oriented grantmaking. Aligning 2 CFR With Other promote improved accuracy. However, Therefore, OMB is finalizing the Authoritative Source Requirements OMB recognizes that providing language that makes entry into FAPIIS A. Prohibition on Certain additional time may increase the mandatory. Further, it should be noted Telecommunication and Video likelihood that non-Federal entities will that entry into FAPIIS does not Surveillance Services or Equipment not submit their final closeout reports. constitute a termination, which OMB OMB revised 2 CFR to align with To mitigate this risk, OMB is requiring has clarified in the final language. Federal awarding agencies to report section 889 of the NDAA for FY 2019 when a non-Federal entity does not 200.345 Post-Closeout Adjustments (NDAA 2019). The NDAA 2019 submit final closeout reports as a failure and Continuing Responsibilities prohibits the head of an executive to comply with the terms and Some commenters expressed concerns agency from obligating or expending conditions of the award to the OMB- that the language proposed for this loan or grant funds to procure or obtain, designated integrity and performance provision was too open-ended and the extend or renew a contract to procure or system. Finally, OMB is publishing the period could extend beyond record obtain, or enter into a contract (or requirement of Federal awarding retention. OMB concurred with the extend or renew a contract) to procure agencies to make every effort to close commenters and made revisions to or obtain the equipment, services, or out Federal awards within one year after address these concerns. systems prohibited systems as identified the end of the period of performance in NDAA 2019. To implement this unless otherwise directed by J. Changes to Performing the requirement, OMB is adding a new authorizing statute. The language is Governmentwide Audit Quality Project section, 2 CFR 200.216 Prohibition on intended to promote timely closeout of Revisions to 2 CFR 200.513 include a certain telecommunication and video awards, assist with reconciling closeout change in the date for the requirement surveillance services or equipment, activities, and hold recipients for a governmentwide audit data quality which prohibit Federal award recipients accountable for submitting required project that must be performed once from using government funds to enter closeout reports. every 6 years beginning with audits into contracts (or extend or renew submitted in 2018. This date has been contracts) with entities that use covered 200.344 Closeout changed to 2021, given the significant telecommunications equipment or Many of the comments in response to changes to the 2019 Compliance services. This prohibition applies even revisions to 2 CFR 200.344 were in Supplement in support of the Grants if the contract is not intended to procure support of the proposed revisions. The CAP Goal. or obtain, any equipment, system, or two sections listed below received the service that uses covered highest volume of comments. 200.513 Responsibilities telecommunications equipment or Comments in response to the change services. As described in section 889 of 200.344(a) regarding the assignment of the the NDAA 2019, covered OMB is appreciative of the many cognizant agency for audit telecommunications equipment or commenters who supported the responsibilities based on the direct services includes:

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D Telecommunications equipment necessary for affected entities to to procurement as well as to grants and produced by Huawei Technologies transition from covered cooperative agreements. OMB Company or ZTE Corporation (or any communications equipment and coordinated with the procurement subsidiary or affiliate of such entities). services, to procure replacement community as appropriate before D For the purpose of public safety, equipment and services, and to ensure issuing this final guidance, including security of government facilities, that communications service to users the roles and responsibilities of the physical security surveillance of critical and customers is sustained. Further, covered combatant command and infrastructure, and other national OMB added a new 2 CFR 200.471 Federal awarding agencies. security purposes, video surveillance Telecommunication and video Part 183 Never Contract With the and telecommunications equipment surveillance costs to provide clarity that Enemy produced by Hytera Communications the telecommunications and video Corporation, Hangzhou Hikvision surveillance costs associated with 2 CFR Many of the comments focused on Digital Technology Company, or Dahua 200.216 are unallowable. A new aligning the regulation with the Technology Company (or any subsidiary definition for telecommunication and authorizing legislation and streamlining or affiliate of such entities). video surveillance costs, which is and using consistent terms in the D Telecommunications or video described in 2 CFR 200.471, has also regulatory language. OMB concurred surveillance services provided by such been added to 2 CFR for clarity. with these comments and made the entities or using such equipment. necessary changes to the language. OMB D Telecommunications or video B. Never Contract With the Enemy also agreed with several comments surveillance equipment or services To meet statutory requirements, OMB suggested the use of ‘‘recipient’’ rather produced or provided by an entity that is adding part 183 to 2 CFR to than ‘‘non-Federal entity.’’ In addition, the Secretary of Defense, in consultation implement Never Contract with the OMB revised part 183 to include a with the Director of the National Enemy, consistent with the fact that the reference to void covered grants or Intelligence or the Director of the law applies to only a small number of cooperative agreements, and updated Federal Bureau of Investigation, grants and cooperative agreements. specific parts of the legislative authority reasonably believes to be an entity Never Contract with the Enemy applies that were set to expire by aligning with owned or controlled by, or otherwise only to grants and cooperative recently passed legislation for the connected to, the government of a agreements that exceed $50,000, are extension of dates. covered foreign country. performed outside the United States, A couple commenters noted the including U.S. territories, to a person or 200.216 Prohibition on Certain potential burden associated with entity that is actively opposing United Telecommunication and Video checking SAM.gov on a monthly basis. States or coalition forces involved in a Surveillance Services or Equipment OMB concurred with these comments contingency operation in which and revised the language accordingly. Commenters expressed widespread members of the Armed Forces are concerns on the impact and actively engaged in hostilities. C. Requirement for the FAPIIS To implementation of the statutory To implement Never Contract with Include Information on a Non-Federal requirement. OMB sought to address the Enemy and to reflect current Entity’s Parent, Subsidiary, or Successor commenter concerns by re-writing this practice, OMB requires Federal Entities section to align closely with the law, awarding agencies to utilize the System To meet statutory requirements, OMB add a new definition for for Award Management (SAM) revised 2 CFR parts 25 and 200 to telecommunications and video Exclusions and the FAPIIS to ensure implement Sec. 852 of the NDAA for FY surveillance costs, and add a new compliance before awarding a grant or 2013 (NDAA 2013), which requires that section 2 CFR 200.471. The final cooperative agreement. Federal the FAPIIS include information on a language provides guidance describing awarding agencies are prohibited from non-Federal entity’s parent, subsidiary, the meaning of covered making awards to persons or entities or successor entities. OMB requires telecommunications as explained in the listed in SAM Exclusions (NDAA 2017) financial assistance applicants to statute. The language also aligns with pursuant to Never Contract with the provide information in SAM on their the requirements in the statute affecting Enemy and are required to list in FAPIIS immediate owner and highest-level the financial assistance community to any grant or cooperative agreement owner and subsidiaries, as well as on all include the prohibition of non-Federal terminated due to Never Contract with predecessors that have been awarded a entities from obligating or expending the Enemy as a Termination for Material Federal contract, grant, or cooperative loan or grant funds to (1) procure or Failure to Comply. The revisions also agreement within the last three years. In obtain, (2) extend or renew a contract to require agencies to insert terms and addition, OMB requires that prior to procure or obtain, or (3) enter into a conditions in grants and cooperative making a grant or cooperative contract (or extend or renew a contract) agreements regarding non-Federal agreement, agencies must consider all of to procure or obtain, equipment, entities’ responsibilities to ensure no the information in FAPIIS with regard to services, or systems that uses covered Federal award funds are provided an applicant’s immediate owner or telecommunications equipment or directly or indirectly to the enemy, to highest-level owner and predecessor, or services as a substantial or essential terminate subawards in violation of subsidiary, if applicable. These component of any system, or as a Never Contract with the Enemy, and to revisions are consistent with the Federal critical technology as part of any allow the Federal Government access to Acquisition Regulation (FAR) final rule system. records to ensure that no Federal award regarding this law published at 81 FR Federal awarding agencies are also funds are provided to the enemy. 11988 on March 7, 2016. required by the law to work with OMB The law allows Federal awarding to prioritize available funding and agencies to terminate, in whole or in Part 25 Universal Identifier and technical support to assist affected part any grant, cooperative agreement, System for Award Management businesses, institutions and or contract that provides funds to the OMB received a significant number of organizations. In addition, the funds enemy, as defined in the NDAA for FY comments concerning subrecipient must be prioritized as reasonably 2015 (NDAA 2015). This statute applies requirements and registration with the

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SAM database. These commenters Federal entities. OMB has revised the Listings information for display on expressed concern with requiring reporting thresholds to further align www.usaspending.gov. subrecipients to fully register with the financial assistance requirements with Part 25 Universal Identifier and SAM database. The commenters thought those of the Federal acquisition System for Award Management this requirement would be overly community. burdensome and was unnecessary. To increase transparency, OMB Some commenters expressed concern It was not OMB’s intention to require extended the applicability of Federal regarding the proposal to expand SAM subrecipients to fully register with the financial assistance in 2 CFR part 25 registration requirements to all type of SAM database. To address this concern, and 2 CFR part 170 beyond grants and Federal financial assistance as required OMB added a new ‘‘Subpart C-Recipient cooperative agreements so that it by FFATA. Specifically, commenters requirements of subrecipients’’ and a includes other types of financial requested clarity on who is considered note to the terms in appendix A to assistance that Federal agencies receive the applicant or recipient in cases when clearly state that subrecipients do not or administer such as loans, insurance, the intended recipient does not have a need to fully register with the SAM contributions, and direct direct relationship with the Federal database. appropriations. awarding agency. For instance, for Further, several commenters thought OMB also made changes throughout 2 certain loan and loan guarantee the addition of the requirement for CFR to make it clear that Federal programs, a third-party administers the subrecipients to register with the SAM agencies may receive Federal financial program on behalf of the Federal database, Federal agencies applying for assistance awards. This will increase awarding agency. One organization or receiving Federal awards register in transparency for Federal awards specifically expressed concern that these third-party administers may not the SAM database made sections of part received by Federal agencies. participate in loan guarantee programs, 25 confusing. The commenters thought To further align implementation of if they are required to register in SAM. that using the term ‘‘Federal agency’’ FFATA, as amended by DATA Act, OMB disagrees that it is overly could be misunderstood. Some between the Federal financial assistance burdensome for third-party commenters thought this was and acquisition communities, OMB particularly true with regard to section administrators to register in SAM, revises the Federal awarding agency and however, OMB agreed that it would be 100. pass-through entity reporting OMB agreed that the addition of the inappropriate to have the intended thresholds. For Federal awarding term ‘‘Federal agency’’ in part 25 made recipient who does not have a direct agencies, OMB revises 2 CFR part 170 the requirements in part 25 less clear. relationship with the Federal awarding to require agencies to report Federal OMB and the interagency work group agency to register in these instances. In awards that equal or exceed the micro- also thought that there was a need for response to these comments, OMB purchase threshold as set by the FAR at additional clarity on who the revised the definitions of applicant and 48 CFR part 2, subpart 2.1. Consistent requirements actually apply to and in recipient to clarify that SAM registration with the FAR threshold for subcontract what situation. As a result, OMB added requirements apply to those entities that reporting, OMB will raise the reporting definitions for ‘‘applicant’’ and receive Federal awards directly from a threshold for subawards that equal or ‘‘recipient’’ in part 25 and removed Federal awarding agency and that exceed $30,000. ‘‘non-Federal entity’’ and ‘‘Federal applicants and recipients also include agency’’ where appropriate throughout OMB proposed to revise 2 CFR part 25 those entities that administer Federal part 25. to allow agencies the flexibility to awards on behalf of Federal awarding exempt a foreign entity applying for or agencies. 25.200 Requirements for Notice of receiving an award for a project or Funding Opportunities, Regulations, program performed outside the United 25.110 Exceptions to This Part and Application Instructions States valued at less than $100,000. Some commenters supported raising Several commenters stated that their Currently, Federal awarding agencies the threshold for foreign organizations organizations do not have a higher level have the flexibility to exempt this or foreign public entities to $100,000 in owner or subsidiaries and they may not requirement for awards valued at less 2 CFR 25.110. Other commenters have predecessors. OMB recognizes that than $25,000. The exemption applies to expressed concerns that a thorough pre- not all entities will have the same cases where the Federal agency has award Federal review would not be organizational structure. The purpose of conducted a risk-based analysis and conducted for foreign entity recipients providing this information is for greater deems it impractical for the entity to under this higher threshold and it transparency in the awarding of Federal comply with the requirements(s). OMB would be a disservice to the American financial assistance. The regulatory proposed to make this revision after taxpayer to raise the threshold. OMB language requires that applicants and receiving feedback from the also received comments that requiring recipients must provide the information international community that requiring Federal awarding agencies to only grant ‘‘if applicable.’’ If the requested certain foreign entities to register in exemptions to foreign organizations or information is not applicable, an SAM introduces substantial burden foreign public entities on a case-by-case applicant or recipient would not be with no significant value for the Federal basis to be overly burdensome. required to report it. awarding agency. Federal awarding OMB does not think that requiring agencies will continue to remain Federal awarding agencies to determine D. Increase Transparency Through responsible for reporting these awards whether to grant exemptions to foreign FFATA, as Amended by the DATA Act for transparency purposes. organizations or foreign public entities OMB made several revisions to Finally, OMB will require Federal on a case-by-case basis is overly increase transparency regarding Federal awarding agencies to associate Federal burdensome. Considering the comments spending as required by FFATA, as Assistance Listings with the authorizing received, OMB decided to retain the amended by the DATA Act, which statute to make listings more consistent. current threshold of $25,000. mandates Federal agencies to report This supports implementation of the Based on feedback provided by Federal appropriations received or DATA Act which requires agencies to agencies and in light of the COVID–19 expended by Federal agencies and non- report award level Federal Assistance emergency and past emergency

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situations where this requirement has 170.200 Federal Awarding Agency Federal financial assistance and been waived, OMB added an exception Reporting acquisition communities. in § 25.110 allowing agencies to waive 170.305 Federal Award the requirement to register in SAM OMB received several comments when there are exigent circumstances suggesting that a reference to the Commenters had questions relating to definition for micro-purchase in § 200.1 that would prevent an applicant from how this definition differs from part be added to the end of the section. OMB registering prior to the submission of an 200. OMB would like to note that the concurred and made this change in the definition differs because this section is application. Federal awarding agencies final language. Further, OMB received discussing Federal awards in the are responsible for the determination on comments relating to the grammatical context of ‘‘direct’’ federal awards. whether there are exigent circumstances structuring of this section. After further Federal award in part 200 includes is that prevent an applicant from review, OMB retained the existing more expansive to include caveats registering in SAM and are no longer language. depending on which section it is required to request a waiver from OMB applied to, so the definition cannot be in these instances. 170.210 Requirements for Notices of Funding Opportunities, Regulations, the same. As such, the proposed Part 170 Reporting Subaward and and Application Instructions language remains. Executive Compensation Information 170.315 Executive OMB concurred with a comment that 170 Definitions suggested including the information on One comment suggested clarifying the requirements for Notice of Funding this definition as many recipients of Several commenters mentioned the Federal awards are state and local difference between the term non-Federal Opportunity found in 2 CFR 200.204 and appendix I to part 200. OMB made governments with elected officials. entity in part 170 and part 200 and the suggested changes to appendix I to OMB rejected this change as this is requested that part 170 reference part include these references. Further, already covered within the 200 for this definition. Related comments inquired if OMB has ‘‘Exceptions’’ to this section. Further, comments also were provided to the considered collecting the assurance one comment requested that this definitions of foreign organizations and from applicants when they register and definition be included in part 200. OMB foreign public entity. The definition of renew in beta.SAM.gov. OMB would aims to eliminate duplicative non-Federal entity in part 170 like to note that this is already part of definitions and thus respectfully intentionally includes foreign the requirements for award terms and declines this comment to also include organizations, foreign public entities, conditions, and the needed assurance the definition in part 200. and for-profit organizations, which is should go into the Compliance 170.320 Federal Financial Assistance not included in the definition of non- Supplement for auditors to check that Subject to the Transparency Act Federal entity in part 200. Part 200 only the assurance is received from the applies to these organization types recipient. Therefore, no changes related A commenter noted that the term when a Federal awarding agency to obtaining assurances were made to Federal financial assistance subject to chooses to apply the requirements in the language in this section. the Transparency Act is not defined in their adoption of part 200. Part 170 part 200. OMB concurred with this 170.220 Award Term applies to foreign and for-profit comment and made edits to the definition in § 170.320 to clarify that the organizations because of the Federal Several commenters referenced the term includes Federal financial Funding Accountability and thresholds discussed in part 25. OMB assistance as defined in part 200, with Transparency Act (Pub. L. 109–282, would like to point out that the some limited exceptions. hereafter cited as ‘‘Transparency Act’’) thresholds in part 25 are unrelated to requirements. Thus, the definition for the threshold in § 170.220. Additionally, 170.325 Subaward non-Federal entity in part 200 and part several comments suggested changes Commenters recommended deleting 170 will remain different. that were outside of the scope of this the definition for ‘‘Subaward’’ and revision. OMB concurred with a 170.110 Types of Entities to Which including a reference to the definition suggestion to remove a reference to the This Part Applies used in part 200 to reduce duplication. Recovery Act in appendix A. Further, a OMB concurred with this Several commenters requested comment suggested the deletion of the recommendation and made the clarification on the language insertion of ‘‘and Federal agency’’ in subsequent change. surrounding ‘‘non-Federal’’ and paragraph (a) of this section. OMB notes that some agencies can make awards to E. Aligning 2 CFR With Authoritative ‘‘Federal agencies.’’ OMB concurred Sources with these comments and made the other agencies, dependent on the corresponding changes to ensure clarity. authority. Therefore, it is necessary to OMB revises 2 CFR 200.431 to allow keep the language that was used in the states to conform with Generally Further, OMB also agreed with proposed version. One commenter Accepted Accounting Principles comments that suggested clarification to noted that raising the subaward (GAAP), specifically Governmental § 170.110(b) in relation to Title IV funds reporting threshold from $25,000 to Accounting Standards Board (GASB) and made the subsequent edits in the $30,000 is unlikely to result in greater Statement 68, and to continue to claim final language. efficiencies or ease administrative pension costs that are both actual and 170.115 Deviations requirements and recommended for the funded. OMB has made this revision threshold to be increased to at least because GASB issued Statement 68, OMB concurred with comments $75,000 or $100,000. OMB disagrees Accounting and Financial Reporting for asking to define ‘‘deviation’’ to with this commenter’s recommendation, Pensions which amends GASB differentiate between exceptions by as the purpose of this change was to Statement 27 and allows non-Federal removing ‘‘deviation’’ and adding further align implementation of FFATA, entities (NFE) to claim only estimated paragraph (c) to ‘‘Types of Exemptions.’’ as amended by DATA Act, between the pension costs in their financial

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statements. OMB’s revision will allow subrecipient’s auditors and cognizant B. Reducing Burden on Universities by non-Federal entities to continue to agency’s oversight for routine audit Clarifying Timing of the Disclosure claim pension costs that are both actual follow-up and management decisions. Statement and funded. These changes reduce the burden for OMB is adding language to the timing 200.431 Compensation PTEs by allowing a PTE to rely on the cognizant agency to address a of submission of the disclosure OMB appreciated the comments in subrecipient’s entity-wide issues. statement (DS–2), which is only support of the proposed changes. In required for institutions of higher response to several comments that asked 200.332 Requirements for Pass- education that meet certain thresholds for clarification, OMB is revising the Through Entities as defined in 48 CFR 9903.202–1(f). final language to require state and local This revision reduces burden while governments to be compliant with OMB received substantial feedback maintaining the requirement for GASB #68 for pension costs. OMB relating to the changes made in this institutions of higher education to would like to note that the cost section. The two main changes for this implement policies that are in associated with each fiscal year should section are related to the clarification of compliance with 2 CFR. be determined in accordance with the pass-through entities responsibilities GAAP. toward the establishment of the 200.419 Cost Accounting Standards The definition for ‘‘Improper subrecipient indirect cost rates and the and Disclosure Statement Payment’’ has been revised to refer to pass-through entities responsibilities for OMB received several comments in the authoritative source for clarity, OMB resolving the sub recipient’s audit response to 2 CFR 200.419 that focused Circular A–123—Management’s findings (§ 200.332(d)). on concerns with the legal instruments Responsibility for Internal Control in Although most commenters approved that were subject to this part. In Federal Agencies, Appendix C— of the proposed changes regarding the response to these concerns, the language Requirements for Payment Integrity pass-through entities responsibilities for was revised to provide clarification. Improvement. See above Section I for the subrecipient indirect cost rates, additional information on the changes some requested clarification on specific C. Response to Frequently Asked to ‘‘Improper Payment.’’ situations: Questions Related to the Prior Release Some commenters expressed that the of 2 CFR reference to OMB Circular A–123 for the • Where the subrecipient has a federally definition of ‘‘Improper Payment’’ approved indirect cost rate In July 2017, OMB developed and posted Frequently Asked Questions added confusion and suggested • where the subrecipient receives funds (FAQs) on the Chief Financial Officers retaining the original language. OMB from multiple pass-through entities Council website in response to considered this request and respectfully from which it may be already stakeholder requests for clarification on declined the comment in keeping with established an indirect cost rate with the practice to align the guidance with the first publication of 2 CFR (https:// one of the pass-through entity; or source documents, if possible. cfo.gov//wp-content/uploads/2017/08/ • where the subrecipient decides to use July2017-UniformGuidanceFrequently III. Clarifying Requirements Regarding the direct allocation method instead AskedQuestions.pdf). Due to the volume Areas of Misinterpretation of the use of indirect cost rate for cost of questions related to these topics, Following the publication of 2 CFR reimbursement. OMB is including revisions to clarify part 200, OMB received a substantial OMB provides clarifications in the final the following: The meaning of the words amount of questions from stakeholders ‘‘must’’ and ‘‘may’’ as they pertain to requesting clarifications about key language for all of the three situations above. requirements; applicability and aspects of the guidance. In other documentation requirements when a instances, it has come to OMB’s Most commenters supported the non-Federal entity elects to charge the attention that the interpretation of proposed changes to clarify the pass- de minimis indirect cost rate of MTDC; certain provisions was not consistent through entities responsibility in the PTE responsibilities related to indirect with the intent of 2 CFR part 200. In resolution of audit findings reported by cost rates and audits; and applicability response, OMB is publishing the subrecipients and the required of 2 CFR to FAR based contracts. These clarifications that are aimed at reducing management decision letters to address proposed revisions are intended to recipient administration burden and the audit findings. Some commenters improve clarity and reduce recipient ensuring consistent interpretation of questioned the use of the term burden by providing guidance on guidance. ‘‘systemic findings’’ to describe the implementing 2 CFR. A. Responsibilities of the Pass-Through findings that impact the whole The Words ‘‘must’’ and ‘‘may’’ as They Entity To Address Only a Subrecipient’s organization. This section has been Pertain to Requirements Audit Findings Related to Their revised to streamline and clarify the Subaward original intent of the revision which All commenters that provided To clarify requirements regarding limits the pass-through entity to review feedback on this section were in favor responsibility for audit findings, OMB and resolve the audit findings that are of incorporating the meaning of ‘‘must’’ revises 2 CFR 200.332 Requirements for specifically related to the subaward. and ‘‘may’’ within the guidance. One pass-through entities to clarify that pass- OMB replaced the term ‘‘systemic commenter suggested that the location through entities (PTE) are responsible findings’’ with ‘‘cross-cutting findings.’’ for this change within the guidance for addressing only a subrecipient’s OMB also added that written could be within its own section. After audit findings that are specifically confirmation by the subrecipients for consideration, OMB disagrees with the related to their subaward. For example, corrective actions on audit findings can commenter and has determined that this a PTE is not required to address all of be used as a means for follow-up and change should remain in the the subrecipient’s audit findings. In monitoring of the subrecipient’s applicability section of the guidance addition, the PTE may rely on the performance. under the stated sub title.

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De Minimis Indirect Cost Rate of MTDC agreements as direct recipients or need for the public to have an Applicability and Documentation subrecipients. This addition clarifies opportunity to provide input before See Section I (K) for additional that subparts A through E of 2 CFR part finalizing. All comments within these information on the comments received. 200 is applicable when determined by categories were not accepted by OMB. the Federal awarding agency. There will Changes From the Proposed Revisions PTE Responsibilities Related to Indirect be no change from the proposed version. Cost Rates and Audits Not Recommended E. Other Clarifications See Section III or additional Comments received for several information on the comments received. Parts 25 and 170 provisions within 2 CFR were reviewed, Many commenters expressed deliberated, and determined that no Applicability of 2 CFR to FAR Based changes were needed from the proposed Contracts concerns that parts 25 and 170 were confusing, inconsistent and needed to revisions. Some of these provisions Many commenters expressed be edited for clarity. In response to these within 2 CFR include the following: confusion regarding the changes to this comments, parts 25 and 170 have been • 200.201 Use of grant agreements section. The intent of the changes to this revised throughout with many technical (including fixed amount awards), section are to make clear that the FAR corrections to add clarity and cooperative agreements, and contracts applies to Federal contracts awarded to consistency. • 200.207 Standard application non-Federal entities, and that these requirements requirements supersede the 200.110 Effective/Applicability Date • 200.311 Real property requirements of 2 CFR part 200 in a A number of comments, particularly • 200.312 Federally-owned and Federal contract. Clarification was from Federal agencies, expressed exempt property requested from a commenter to confirm concern about the effective date for • 200.313 Equipment if an audit conducted for a Cost negotiated indirect cost rate agreements • 200.314 Supplies Accounting Standards (CAS) applicable (NICRAs) in paragraph (b). The intent of • 200.331 Subrecipient and contractor contract will take the place of a Single this section is to retain the existing determinations • Audit and how an entity with multiple NICRAs until they are renegotiated and 200.430 Compensation—personal grants and only one CAS-contract would incorporate the requirements from the services • meet the requirements of the Single revision to 2 CFR upon renegotiation. 400.458 Pre-award costs Audit Act. Non-Federal entities with a NIRCA are 200.402 Composition of Costs The language clarified in § 200.101(c) expected to work with their cognizant to state that for CAS covered contracts, agency for indirect costs as appropriate. Some commenters requested clarity the CAS requirements regarding audit OMB clarified the intent for 2 CFR and noted that the use of ‘‘approved would supersede the audit requirements 200.110(b). One Federal agency budget period’’ is specific to Federal in subpart F. In addition, in the case commenter stated that OMB should financial assistance when 2 CFR where an entity receives many grants specify if the applicability date is for the 200.402 would apply to both contracts and one CAS covered contracts, the entire guidance or for the revisions. and Federal financial assistance entity must comply to both the Single OMB accepted this comment and made awarded to non-Federal entities. Audits for its grants and the CAS audit revisions accordingly. Another commenter suggested that requirements for the CAS covered further clarification is needed for what contract. 200.200 Purpose ‘‘cost principle’’ and ‘‘budget period’’ All commenters provided mean. Based on the vast array of D. Applicability of Guidance to Federal recommendations to revise this section comments received and the revised Agencies to better align the terms ‘‘competitive’’ definitions for finalization, OMB OMB is making changes to 2 CFR and ‘‘non-competitive’’ with the new decided to remove the language 200.101 Applicability to clarify that terms ‘‘discretionary’’ and ‘‘non- proposed for 2 CFR 200.402. Federal awarding agencies may apply discretionary.’’ OMB concurs with the 200.449 Interest the requirements of 2 CFR part 200 to recommendation to revise this section to other Federal agencies, to the extent align with other changes within the One comment was received for this permitted by law. This change guidance. In response to commenters, provision. The commenter suggested recognizes that there are instances when OMB has removed 2 CFR 200.200(b) and that OMB provide a different example Federal awarding agencies or pass- made other technical corrections within 2 CFR 200.449 because lease through entities have the authority to accordingly. contracts that transfer ownership are issue Federal awards to Federal agencies essentially debt financing. The and in these instances, the provisions of 200.207 Standard Application commenter explains that the example is 2 CFR part 200 may be applied, as Requirements comparing debt financing to debt appropriate. This change is consistent OMB received one comment on this financing, which doesn’t work for the with how for-profit entities, foreign section that was out of scope for the intent. The commenter provided a public entities, or foreign organizations current set of revisions, and therefore suggested edit that would enable the are treated in the Uniform Guidance. the proposed language remains the example to remain and retain the same. original intent. OMB concurred with the 200.101 Applicability commenter and made the suggested edit Out of Scope Comments Several comments expressed concerns accordingly. as to whether or not it is appropriate to Many commenters submitted include awards to Federal agencies in comments that were either not part of 200.461 Publication and Printing Costs the scope of 2 CFR. It was determined the scope of the effort, were not relevant All commenters requested clarity and that it was appropriate to include to the revisions proposed, pertained to suggested revisions to this provision. Federal agencies in the scope of 2 CFR sections of the guidance that were not One commenter objected to specifying as some Federal agencies are authorized proposed to be revised, or would be a that costs must be charged to the last to receive grants or cooperative change too drastic that would warrant a budget period, citing that printing costs

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are historically charged at various stages economic impact on a substantial may exercise the flexibility provided in of the award. One commenter noted that number of such entities. There are some 2 CFR 25.110 to either exempt an these costs have historically been proposed revisions that may impose applicant or recipient from this allowable up until the closeout of the burden, however, there are more requirement or request an exception award. Edits were suggest to provide proposed revisions that reduce burden from OMB on a case-by-case for a class additional clarity in § 200.461(b)(3) to to small entities. When reviewing all the applicants or recipients, particularly in specify that The non-Federal entity may revisions, the burden that will be situations of national emergency such as charge the Federal award during reduced for recipients is much greater natural disasters and pandemics. closeout. OMB concurs with this than the burden imposed. As noted in the Paperwork Reduction suggested revision and made the change The revisions to 2 CFR are not Act section, as of July 1, 2020, there accordingly. applicable to Federal financial were 159,477 unique Federal financial assistance awards issued prior to the assistance registrants in the SAM. 200.507 Program-Specific Audits effective dates provided in the DATES According to data accessed from One comment was received for 2 CFR section of this Notice of Final Guidance, USASpending.gov, in FY 2018, 200.507. The commenter requested a including financial assistance awards approximately 2,952 small entities who clarification on the first phase to issued prior to those dates under the received awards for other types of indicate ‘‘in some cases’’ rather than ‘‘in Coronavirus Aid, Relief, and Economic financial assistance did not have a many cases’’ because Appendix VI of Support (CARES) Act of 2020 (Pub. L. unique entity identifier. Assuming that the 2019 Compliance Supplement only 116–136). OMB plans to consult with non-Federal entities with a unique shows two current program specific applicable agencies to provide entity identifier reported to audit guides. OMB concurred with the regulatory flexibility analyses in future USASpending.gov are already registered commenter and made the revision revisions to 2 CFR and its in SAM, this change will impact accordingly. The commenter provided a subcomponents. approximately 2,952 small entities second recommendation to remove the The applicability of Federal financial annually. SAM registration is estimated 2014 beginning date and instead include assistance in 2 CFR part 25 will be to take 2.5 hours per response, which the current reference to the Compliance expanded beyond grants and results in 7,380 burden hours annually. Supplement appendix. OMB also cooperative agreements to include other The guidance also provides concurs with this suggestion from the types of financial assistance such as consistency among definitions and commenter and made the revisions. loans and insurance. This revision terms and proposes several provisions ensures compliance with FFATA, as to increase transparency regarding 200.515 Audit Reporting amended by the DATA Act, and will Federal spending. These revisions are The comments submitted for 2 CFR impact small entities that voluntarily intended to reduce recipient burden and 200.515 provided suggestions for clarity. seek financial assistance. It will not will not have a significant economic One commenter suggested reviewing have a significant impact on a impact on a substantial number of small this subsection against what the Federal substantial number of U.S. small entities entities because they will affect Federal Audit Clearinghouse is collecting in Part as approximately 69,185 small entities awarding agencies; they do not include III: Information from the Schedule of who received awards for other types of any new requirements for non-Federal Findings and Questioned Costs, Item 2. financial assistance did not have a entities. Financial Statements, to ensure an unique entity identifier in FY 2019, The guidance introduces a new appropriate alignment between the while the Small Business provision to align with section 889 of regulation and the Form. Another Administration’s Office of Advocacy the NDAA 2019, prohibition on certain commenter inquired about the intent of reported 30.7 million U.S. small telecommunication and video the revisions to this provision. OMB businesses in that same calendar year. surveillance services or equipment. This considered and discussed all the Currently, 2 CFR part 25 requires all statutory requirement will introduce comments for clarity and made non-Federal entities that apply for burden to small entities that are revisions accordingly. grants and cooperative agreements to prohibited from obligating or expending register in the SAM. In alignment with grant or loan funds to procure or obtain, Executive Orders 12866 and 13563 FFATA, the guidance provides that all extend or renew a contract to procure or Executive Orders 12866 and 13563 entities that apply directly to a Federal obtain, or enter in a contract with, as direct agencies to assess all costs and program for financial assistance such as identified in the NDAA 2019. Since this benefits of available regulatory loans and insurance must register in is a new legal requirement, the burden alternatives and, if regulation is SAM, which requires the establishment estimate is difficult to calculate. It will necessary, to select regulatory of a unique entity identifier. Individuals impact all unique entities awarded approaches that maximize net benefits who receive Federal financial assistance Federal financial assistance, of which (including potential economic, as a natural person remain exempt from 69,185 are small entities. environmental, public health and safety this requirement. In practice, some The guidance implements a new effects, distributive impacts, and Federal awarding agencies already statute that requires applicants of equity). The revision of 2 CFR is not a require SAM registration for all types of Federal assistance to provide significant regulatory action under Federal financial assistance and the information on their owner, predecessor Executive Order 12866. change would make this practice and subsidiary, including the consistent among agencies. OMB Commercial and Government Entity Regulatory Flexibilities Act recognizes that this new requirement (CAGE) Code and name of all The Regulatory Flexibility Act 5 may be burdensome to small entities predecessors, if applicable. This will not U.S.C. 601, et seq., requires a regulatory and there may be instances where it is have a significant economic impact on flexibility analysis or a certification that appropriate for Federal awarding a substantial number of small entities the rule will not have a significant agencies to request an exception or because small entities typically do not economic impact on a substantial delay implementation of this have a complex corporate structure number of small entities. OMB expects requirement for their programs. In requiring them to report information on this guidance to have a significant response, Federal awarding agencies their owner, predecessor, and

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subsidiary. Further, the burden is registrants in SAM as a result of the Respondents: 172,084. minimal for a non-Federal entity to updates to the proposed guidance. Responses per respondent: 1. provide the name of its immediate OMB removed duplicate recipients Total annual responses: 172,084. owner and highest-level owner. based on recipient Data Universal Preparation hours per response: 0.1. The NDAA for FY2018 increased the Numbering System Number (DUNS) Total response Burden Hours: 17,208. micro-purchase threshold from $3,500 numbers, from Dun & Bradstreet (D&B). List of Subjects to $10,000 and increased the simplified At this time all Federal financial acquisition threshold from $100,000 to assistance recipients are required to 2 CFR Part 25 $250,000 for all recipients. OMB’s register for DUNS numbers. Administrative practice and revisions reduces burden and will not In FY 2019 there were 1,751 loan and procedure, Grant programs, Grants have a significant economic impact on 8,915 other Federal financial assistance administration, Loan programs. a substantial number of small entities recipients with unique DUNS numbers because it is likely to reduce burden for reported in USASpending.gov. 2 CFR Part 170 all non-Federal entities. Therefore, based on the number of Colleges and universities, Grant entities with unique DUNS numbers programs, Hospitals, International Paperwork Reduction Act that are registered in SAM (159,477), organizations, Loan programs, Reporting Consistent with the Regulatory plus entities that receive loans (122) or and recordkeeping requirements. Flexibility Act analysis discussion, the other Federal financial assistance 2 CFR Part 183 Paperwork Reduction Act (44 U.S.C. (8,915) reported in USASpending.gov chapter 35) applies. The guidance that may not be reflected in SAM, the Foreign aid, Grant programs, Grants contains information collection total number of entities that may be administration, International requirements and will impact the impacted by the proposed guidance organizations, Reporting and current Information Collection Requests associated Information Collection recordkeeping requirements. approved under OMB control number Requests under OMB control number 2 CFR Part 200 3090–0290 managed by GSA. 3090–0290 could be 172,084 registrants. Accordingly, GSA will submit a request Public reporting burden for Accounting, Colleges and universities, for approval to amend the existing Information Collection Requests under Grant programs, Grants administration, Information Collection Requests for OMB control number 3090–0290 is Hospitals, Indians, Nonprofit SAM registration requirements for managed by the GSA and estimated to organizations, Reporting and Federal financial assistance recipients. average 2.5 hours per response, recordkeeping requirements, State and local governments. Annual Reporting Burden including the time for reviewing instructions, searching existing data The estimated annual reporting Timothy F. Soltis, sources, gathering and maintaining the Deputy Controller. burden includes all possible entities for data needed, and completing and Federal financial assistance that may be reviewing the collection of information. For the reasons stated in the required to register in SAM. The The annual reporting burden is preamble, the Office of Management and estimated annual reporting burden also estimated as follows: Budget amends 2 CFR chapters I and II includes entities that receive Federal Respondents: 172,084. as set forth below: financial assistance reported in Responses per Respondent: 1. USASpending.gov and either may or Total annual responses: 172,084. PART 25—UNIVERSAL IDENTIFIER may not be required to register in SAM. Hours per Response: 2.5. AND SYSTEM FOR AWARD Previously, SAM only requires that Total response Burden Hours: MANAGEMENT applicants and recipients of Federal 430,210. ■ financial assistance in the form of grants The guidance also requires that 1. The authority citation for part 25 register in the system. However, registrants for Federal financial continues to read as follows: applicants and recipients are required to assistance provide information on their Authority: Pub. L. 109–282; 31 U.S.C. maintain accurate SAM registration at owner, predecessor, and subsidiary, 6102. all times during which they have an including the CAGE code and name of ■ 2. Amend § 25.100 by revising the active Federal award, an application, or all predecessors, if applicable. This introductory text and paragraph (a) to a plan under consideration by a Federal information is required to implement read as follows: awarding agency. Sec. 852 of the NDAA of FY 2013, The burden estimates are which requires that the FAPIIS include § 25.100 Purposes of this part. approximations based on the best information on a non-Federal entity’s This part provides guidance to available data. parent, subsidiary, or successor entities. Federal awarding agencies to establish: As of July 7, 2019, there were 159,477 Non-Federal entities are already (a) The unique entity identifier as a unique Federal financial assistance required to obtain a CAGE code for universal identifier for Federal financial registrants in SAM. However, not all purposes of SAM registration. It is assistance applicants, as well as registrants ultimately apply for, or anticipated that including this recipients and their direct subrecipients, receive, Federal financial assistance. information as part of SAM registration and; OMB aggregated SAM data with Federal or for a renewal should not result in * * * * * financial assistance recipient data from significant additional time. Public ■ 3. Revise § 25.105 to read as follows: USASpending.gov, excluding grants, to reporting burden for this collection of determine the anticipated number of information is estimated to average 0.1 § 25.105 Types of awards to which this additional Federal financial assistance hours per response. Based on the part applies. in SAM. OMB ran reports in burden estimates for the total number of This part applies to a Federal USASpending.gov to identify the SAM registrants indicated in the awarding agency’s grants, cooperative number of unique recipients of Federal previous section, the annual reporting agreements, loans, and other types of financial assistance other than grants to burden for this proposal is estimated as Federal financial assistance as defined isolate the total number of potential follows: in § 25.406.

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■ 4. Revise § 25.110 to read as follows: that there are exigent circumstances that Federal award to be made to the prohibit the applicant from receiving a consortium as the recipient, the § 25.110 Exceptions to this part. unique entity identifier and completing consortium must have a unique entity (a) General. Through a Federal SAM registration prior to receiving a identifier. If a consortium is eligible to awarding agency’s implementation of Federal award. In these instances, receive funding under a Federal the guidance in this part, this part Federal awarding agencies must require awarding agency program but the applies to all applicants and recipients the recipient to obtain a unique entity agency’s policy is to make the Federal of Federal awards, other than those identifier and complete SAM award to a lead entity for the exempted by statute or exempted in registration within 30 days of the consortium, the unique entity identifier paragraphs (b) and (c) of this section Federal award date. of the lead applicant will be used. that apply for or receive agency awards. (3) Federal awarding agencies’ use of (2) A notice of funding opportunity is (b) Exceptions for individuals. None generic unique entity identifier, as any paper or electronic issuance that an of the requirements in this part apply to described in paragraphs (c)(1) and (2) of agency uses to announce a funding an individual who applies for or this section, should be rare. Having a opportunity, whether it is called a receives Federal financial assistance as generic unique entity identifier limits a ‘‘program announcement,’’ ‘‘notice of a natural person (i.e., unrelated to any recipient’s ability to use funding availability,’’ ‘‘broad agency business or nonprofit organization he or Governmentwide systems that are announcement,’’ ‘‘research she may own or operate in his or her needed to comply with some reporting announcement,’’ ‘‘solicitation,’’ or some name). requirements. other term. (c) Other exceptions. (1) Under a (d) Class exceptions. OMB may allow (3) To remain registered in the SAM condition identified in paragraph (c)(2) exceptions for classes of Federal awards, database after the initial registration, the of this section, a Federal awarding applicants, and recipients subject to the applicant is required to review and agency may exempt an applicant or requirements of this part when update its information in the SAM recipient from an applicable exceptions are not prohibited by statute. database on an annual basis from the requirement to obtain a unique entity date of initial registration or subsequent identifier and register in the SAM, or § 25.115 [Removed] updates to ensure it is current, accurate both. ■ 5. Remove § 25.115. and complete. (i) In that case, the Federal awarding ■ 6. Revise § 25.200 to read as follows: ■ 7. Revise § 25.205 to read as follows: agency must use a generic unique entity identifier in data it reports to § 25.200 Requirements for notice of § 25.205 Effect of noncompliance with a USAspending.gov if reporting for a funding opportunities, regulations, and requirement to obtain a unique entity prime award to the recipient is required application instructions. identifier or register in the SAM. by the Federal Funding Accountability (a) Each Federal awarding agency that (a) A Federal awarding agency may and Transparency Act (Pub. L. 109–282, awards the types of Federal financial not make a Federal award or financial hereafter cited as ‘‘Transparency Act’’). assistance defined in § 25.406 must modification to an existing Federal (ii) Federal awarding agency use of a include the requirements described in award to an applicant or recipient until generic unique entity identifier should paragraph (b) of this section in each the entity has complied with the be used rarely for prime award reporting notice of funding opportunity, requirements described in § 25.200 to because it prevents prime awardees regulation, or other issuance containing provide a valid unique entity identifier from being able to fulfill the subaward instructions for applicants that is issued and maintain an active SAM registration or executive compensation reporting on or after August 13, 2020. with current information (other than required by the Transparency Act. (b) The notice of funding opportunity, any requirement that is not applicable (2) The conditions under which a regulation, or other issuance must because the entity is exempted under Federal awarding agency may exempt require each applicant that applies and § 25.110). an applicant or recipient are— does not have an exemption under (b) At the time a Federal awarding (i) For any applicant or recipient, if § 25.110 to: agency is ready to make a Federal the Federal awarding agency determines (1) Be registered in the SAM prior to award, if the intended recipient has not that it must protect information about submitting an application or plan; complied with an applicable the entity from disclosure if it is in the (2) Maintain an active SAM requirement to provide a unique entity national security or foreign policy registration with current information, identifier or maintain an active SAM interests of the United States, or to including information on a recipient’s registration with current information, avoid jeopardizing the personal safety of immediate and highest level owner and the Federal awarding agency: the applicant or recipient’s staff or subsidiaries, as well as on all (1) May determine that the applicant clients. predecessors that have been awarded a is not qualified to receive a Federal (ii) For a foreign organization or Federal contract or grant within the last award; and foreign public entity applying for or three years, if applicable, at all times (2) May use that determination as a receiving a Federal award or subaward during which it has an active Federal basis for making a Federal award to for a project or program performed award or an application or plan under another applicant. outside the United States valued at less consideration by a Federal awarding ■ 8. Revise § 25.210 to read as follows: than $25,000, if the Federal awarding agency; and agency deems it to be impractical for the (3) Provide its unique entity identifier § 25.210 Authority to modify agency entity to comply with the in each application or plan it submits to application forms or formats. requirement(s). This exemption must be the Federal awarding agency. To implement the policies in determined by the Federal awarding (c) For purposes of this policy: §§ 25.200 and 25.205, a Federal agency on a case-by-case basis while (1) The applicant meets the Federal awarding agency may add a unique utilizing a risk-based approach and does awarding agency’s eligibility criteria entity identifier field to information not apply if subawards are anticipated. and has the legal authority to apply and collections previously approved by (iii) For an applicant, if the Federal to receive the Federal award. For OMB, without having to obtain further awarding agency makes a determination example, if a consortium applies for a approval to add the field.

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■ 9. Revise § 25.215 to read as follows: 25.433 Indian Tribe (or ‘‘Federally § 25.410 System for Award Management recognized Indian Tribe’’). (SAM). § 25.215 Requirements for agency 25.440 Local government. System for Award Management (SAM) information systems. 25.443 Non-Federal entity. has the meaning given in paragraph C.1 Each Federal awarding agency that 25.445 Nonprofit organization. 25.447 Predecessor. of the award term in appendix A to this awards Federal financial assistance (as part. defined in § 25.406) must ensure that 25.450 State. 25.455 Subaward. systems processing information related § 25.415 Unique entity identifier. 25.460 Subrecipient. to the Federal awards, and other 25.462 Subsidiary. Unique entity identifier has the systems as appropriate, are able to 25.465 Successor. meaning given in paragraph C.2 of the accept and use the unique entity award term in appendix A to this part. identifier as the universal identifier for Subpart D—Definitions Federal financial assistance applicants § 25.425 For-profit organization. and recipients. § 25.400 Applicant. For-profit organization means a non- ■ 10. Revise § 25.220 to read as follows: Applicant, for the purposes of this Federal entity organized for profit. It part, means a non-Federal entity or includes, but is not limited to: § 25.220 Use of award term. Federal agency that applies for Federal (a) An ‘‘S corporation’’ incorporated (a) To accomplish the purposes awards. under Subchapter S of the Internal described in § 25.100, a Federal § 25.401 Federal Awarding Agency. Revenue Code; awarding agency must include in each (b) A corporation incorporated under Federal award (as defined in § 25.405) Federal Awarding Agency has the another authority; the award term in appendix A to this meaning given in 2 CFR 200.1. (c) A partnership; part. § 25.405 Federal Award. (d) A limited liability corporation or (b) A Federal awarding agency may Federal Award, for the purposes of partnership; and use different letters and numbers than this part, means an award of Federal (e) A sole proprietorship. those in appendix A to this part to financial assistance that a non-Federal designate the paragraphs of the Federal § 25.430 Foreign organization. entity or Federal agency received from Foreign organization has the meaning award term, if necessary, to conform the a Federal awarding agency. system of paragraph designations with given in 2 CFR 200.1. the one used in other terms and § 25.406 Federal financial assistance. § 25.431 Foreign public entity. conditions in the Federal awarding (a) Federal financial assistance, for Foreign public entity has the meaning agency’s Federal awards. the purposes of this part, means given in 2 CFR 200.1. ■ 11. Revise subpart C to read as assistance that entities received or follows: administer in the form of: § 25.432 Highest level owner. (1) Grant; Subpart C—Recipient Requirements of Highest level owner has the meaning (2) Cooperative agreements (which given in 2 CFR 200.1. Subrecipients does not include a cooperative research and development agreement pursuant to § 25.433 Indian Tribe (or ‘‘federally § 25.300 Requirement for recipients to recognized Indian Tribe’’). ensure subrecipients have a unique entity the Federal Technology Transfer Act of identifier. 1986, as amended (15 U.S.C. 3710a)); Indian Tribe (or ‘‘federally recognized (3) Loans; (a) A recipient may not make a Indian Tribe’’) has the meaning given in (4) Loan guarantees; 2 CFR 200.1. subaward to a subrecipient unless that (5) Subsidies; subrecipient has obtained and provided (6) Insurance; § 25.440 Local government. to the recipient a unique entity (7) Food commodities; Local government has the meaning identifier. Subrecipients are not (8) Direct appropriations; given in 2 CFR 200.1. required to complete full SAM (9) Assessed or voluntary registration to obtain a unique entity contributions; or § 25.443 Non-Federal entity. identifier. (10) Any other financial assistance Non-Federal entity, as it is used in (b) A recipient must notify any transaction that authorizes the non- this part, has the meaning given in potential subrecipients that the Federal entity’s expenditure of Federal paragraph C.3 of the award term in recipient cannot make a subaward funds. appendix A to this part. unless the subrecipient has obtained a (b) Federal financial assistance, for unique entity identifier as described in the purposes of this part, does not § 25.445 Nonprofit organization. paragraph (a) of this section. include: Non-Federal organization, has the ■ 12. Add subpart D to read as follows: (1) Technical assistance, which meaning given in 2 CFR 200.1. provides services in lieu of money; and Subpart D—Definitions (2) A transfer of title to federally § 25.447 Predecessor. Sec owned property provided in lieu of Predecessor means a non-Federal 25.400 Applicant. money, even if the award is called a entity that is replaced by a successor 25.401 Federal Awarding Agency. grant. and includes any predecessors of the 25.405 Federal Award. 25.406 Federal financial assistance. § 25.407 Recipient. predecessor. 25.407 Recipient. Recipient, for the purposes of this § 25.450 State. 25.410 System for Award Management part, means a non-Federal entity or (SAM). State has the meaning given in 2 CFR 25.415 Unique entity identifier. Federal agency that received a Federal 200.1. 25.425 For-profit organization. award. This term also includes a non- § 25.455 Subaward. 25.430 Foreign organization. Federal entity who administers Federal 25.431 Foreign public entity. financial assistance awards on behalf of Subaward has the meaning given in 2 25.432 Highest level owner. a Federal agency. CFR 200.1.

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§ 25.460 Subrecipient. which a recipient must provide exempted by law or excepted in Subrecipient has the meaning given in information required for the conduct of accordance with paragraphs (b) and (c) 2 CR 200.1. business as a recipient. Additional of this section, that— information about registration (1) Apply for or receive Federal § 25.462 Subsidiary. procedures may be found at the SAM awards; or Subsidiary has the meaning given in internet site (currently at https:// (2) Receive subawards under Federal 2 CFR 200.1. www.sam.gov). awards. 2. Unique Entity Identifier means the (b) Exceptions. (1) None of the § 25.465 Successor. identifier assigned by SAM to uniquely requirements in this part apply to an Successor means a non-Federal entity identify business entities. individual who applies for or receives a that has replaced a predecessor by 3. Entity includes non-Federal entities Federal award as a natural person (i.e., acquiring the assets and carrying out the as defined at 2 CFR 200.1 and also unrelated to any business or nonprofit affairs of the predecessor under a new includes all of the following, for organization he or she may own or name (often through acquisition or purposes of this part: operate in his or her name). merger). The term ‘‘successor’’ does not a. A foreign organization; (2) None of the requirements include new offices or divisions of the b. A foreign public entity; regarding reporting names and total same company or a company that only c. A domestic for-profit organization; compensation of a non-Federal entity’s changes its name. and five most highly compensated ■ 13. Revise appendix A to part 25 to d. A domestic or foreign for-profit executives apply unless in the non- read as follows: organization; and Federal entity’s preceding fiscal year, it d. A Federal agency. received— Appendix A to Part 25—Award Term 4. Subaward has the meaning given in (i) 80 percent or more of its annual I. System for Award Management and 2 CFR 200.1. gross revenue in Federal procurement Universal Identifier Requirements 5. Subrecipient has the meaning given contracts (and subcontracts) and Federal financial assistance awards subject to A. Requirement for System for Award in 2 CFR 200.1. the Transparency Act, as defined at Management PART 170—REPORTING SUBAWARD § 170.320 (and subawards); and Unless you are exempted from this AND EXECUTIVE COMPENSATION (ii) $25,000,000 or more in annual requirement under 2 CFR 25.110, you as INFORMATION gross revenue from Federal procurement the recipient must maintain current contracts (and subcontracts) and Federal information in the SAM. This includes ■ 14. The authority citation for part 170 financial assistance awards subject to information on your immediate and continues to read as follows: the Transparency Act, as defined at highest level owner and subsidiaries, as Authority: Pub. L. 109–282; 31 U.S.C. § 170.320; and well as on all of your predecessors that 6102. (3) The public does not have access to have been awarded a Federal contract or ■ 15. Revise § 170.100 read as follows: information about the compensation of Federal financial assistance within the senior executives, unless otherwise last three years, if applicable, until you § 170.100 Purposes of this part. publicly available, through periodic submit the final financial report This part provides guidance to reports filed under section 13(a) or 15(d) required under this Federal award or Federal awarding agencies on reporting of the Securities Exchange Act of 1934 receive the final payment, whichever is Federal awards to establish (15 U.S.C. 78m(a), 78o(d)) or section later. This requires that you review and requirements for recipients’ reporting of 6104 of the Internal Revenue Code of update the information at least annually information on subawards and 1986. after the initial registration, and more executive total compensation, as (c) Exceptions for classes of Federal frequently if required by changes in required by the Federal Funding awards or recipients. OMB may allow your information or another Federal Accountability and Transparency Act of exceptions for classes of Federal awards award term. 2006 (Pub. L. 109–282), as amended by or recipients subject to the requirements section 6202 of Public Law 110–252, of this part when exceptions are not B. Requirement for Unique Entity hereafter referred to as ‘‘the prohibited by statute. Identifier Transparency Act’’. § 170.115 [Removed] If you are authorized to make ■ 16. Revise § 170.105 to read as subawards under this Federal award, follows: ■ 18. Remove § 170.115. you: ■ 19. Revise § 170.200 to read as 1. Must notify potential subrecipients § 170.105 Types of awards to which this follows: that no entity (see definition in part applies. paragraph C of this award term) may This part applies to Federal awarding § 170.200 Federal awarding agency receive a subaward from you until the agency’s grants, cooperative agreements, reporting requirements. entity has provided its Unique Entity loans, and other forms of Federal (a) Federal awarding agencies are Identifier to you. financial assistance subject to the required to publicly report Federal 2. May not make a subaward to an Transparency Act, as defined in awards that equal or exceed the micro- entity unless the entity has provided its § 170.320. purchase threshold and publish the Unique Entity Identifier to you. ■ 17. Revise § 170.110 to read as required information on a public-facing, Subrecipients are not required to obtain follows: OMB-designated, governmentwide an active SAM registration, but must website and follow OMB guidance to obtain a Unique Entity Identifier. § 170.110 Exceptions to which this part support Transparency Act applies. implementation. C. Definitions (a) General. Through a Federal (b) Federal awarding agencies that For purposes of this term: awarding agency’s implementation of obtain post-award data on subaward 1. System for Award Management the guidance in this part, this part obligations outside of this policy should (SAM) means the Federal repository into applies to recipients, other than those take the necessary steps to ensure that

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their recipients are not required, due to § 170.301 Federal awarding agency. Appendix A to Part 170—Award Term the combination of agency-specific and Federal awarding agency has the I. Reporting Subawards and Executive Transparency Act reporting meaning given in 2 CFR 200.1. Compensation requirements, to submit the same or ■ 24. Revise § 170.305 to read as a. Reporting of first-tier subawards. similar data multiple times during a follows: given reporting period. Applicability. Unless you are exempt as provided in paragraph d. of this ■ 20. Add § 170.210 to read as follows: § 170.305 Federal award. Federal award, for the purposes of award term, you must report each action § 170.210 Requirements for notices of this part, means an award of Federal that equals or exceeds $30,000 in funding opportunities, regulations, and financial assistance that a recipient Federal funds for a subaward to a non- application instructions. receives directly from a Federal Federal entity or Federal agency (see (a) Each Federal awarding agency that awarding agency. definitions in paragraph e. of this award term). makes awards of Federal financial ■ 25. Add § 170.307 to read as follows: assistance subject to the Transparency 2. Where and when to report. Act must include the requirements § 170.307 Foreign organization. i. The non-Federal entity or Federal described in paragraph (b) of this Foreign organization has the meaning agency must report each obligating section in each notice of funding given in 2 CFR 200.1. action described in paragraph a.1. of this award term to http://www.fsrs.gov. opportunity, regulation, or other ■ 26. Add § 170.308 to read as follows: issuance containing instructions for ii. For subaward information, report applicants under which Federal awards § 170.308 Foreign public entity. no later than the end of the month may be made that are subject to Foreign public entity has the meaning following the month in which the Transparency Act reporting given in 2 CFR 200.1. obligation was made. (For example, if the obligation was made on November requirements, and is issued on or after ■ 27. Revise § 170.310 to read as 7, 2010, the obligation must be reported the effective date of this part. follows: (b) The notice of funding opportunity, by no later than December 31, 2010.) regulation, or other issuance must § 170.310 Non-Federal entity. 3. What to report. You must report the require each non-Federal entity that Non-Federal entity has the meaning information about each obligating action applies for Federal financial assistance given in 2 CFR 200.1 and also includes that the submission instructions posted and that does not have an exception all of the following, for the purposes of at http://www.fsrs.gov specify. b. Reporting total compensation of under § 170.110(b) to have the necessary this part: processes and systems in place to (a) A foreign organization; recipient executives for non-Federal comply with the reporting requirements (b) A foreign public entity; and entities. 1. Applicability and what to report. should they receive Federal funding. (c) A domestic or foreign for-profit You must report total compensation for organization. ■ 21. Revise § 170.220 to read as each of your five most highly ■ follows: 28. Amend § 170.320 by correctly compensated executives for the designating the paragraph (b) that § 170.220 Award term. preceding completed fiscal year, if— follows paragraph (j) as paragraph (k) i. The total Federal funding (a) To accomplish the purposes and by revising paragraphs (k) authorized to date under this Federal described in § 170.100, a Federal introductory text and (k)(2) to read as award equals or exceeds $30,000 as awarding agency must include the follows: defined in 2 CFR 170.320; award term in appendix A to this part ii. in the preceding fiscal year, you in each Federal award to a recipient § 170.320 Federal financial assistance subject to the Transparency Act. received— under which the total funding is (A) 80 percent or more of your annual anticipated to equal or exceed $30,000 * * * * * (k) Federal financial assistance subject gross revenues from Federal in Federal funding. procurement contracts (and (b) A Federal awarding agency, to the Transparency Act, does not include— subcontracts) and Federal financial consistent with paragraph (a) of this assistance subject to the Transparency section, is not required to include the * * * * * Act, as defined at 2 CFR 170.320 (and award term in appendix A to this part (2) A transfer of title to federally- subawards), and if it determines that there is no owned property provided in lieu of (B) $25,000,000 or more in annual possibility that the total amount of money, even if the award is called a gross revenues from Federal Federal funding under the Federal grant; procurement contracts (and award will equal or exceed $30,000. * * * * * subcontracts) and Federal financial However, the Federal awarding agency ■ 29. Add § 170.322 to read as follows: assistance subject to the Transparency must subsequently modify the award to Act, as defined at 2 CFR 170.320 (and add the award term if changes in § 170.322 Recipient. subawards); and, circumstances increase the total Federal Recipient, for the purposes of this iii. The public does not have access to funding under the award is anticipated part, means a non-Federal entity or information about the compensation of to equal or exceed $30,000 during the Federal agency that received a Federal the executives through periodic reports period of performance. award. filed under section 13(a) or 15(d) of the ■ 22. Revise § 170.300 to read as ■ 30. Revise § 170.325 to read as Securities Exchange Act of 1934 (15 follows: follows: U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To § 170.300 Federal agency. § 170.325 Subaward. determine if the public has access to the Federal agency means a Federal Subaward has the meaning given in 2 compensation information, see the U.S. agency as defined at 5 U.S.C. 551(1) and CFR 200.1. Security and Exchange Commission further clarified by 5 U.S.C. 552(f). ■ 31. Revise appendix A to part 170 to total compensation filings at http:// ■ 23. Add § 170.301 to read as follows: read as follows: www.sec.gov/answers/execomp.htm.)

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2. Where and when to report. You ii. The total compensation of the five § 183.5 Purpose of this part. must report executive total most highly compensated executives of This part provides guidance to compensation described in paragraph any subrecipient. Federal awarding agencies on the b.1. of this award term: e. Definitions. For purposes of this implementation of the Never Contract i. As part of your registration profile award term: with the Enemy requirements applicable at https://www.sam.gov. 1. Federal Agency means a Federal to certain grants and cooperative ii. By the end of the month following agency as defined at 5 U.S.C. 551(1) and agreements, as specified in subtitle E, the month in which this award is made, further clarified by 5 U.S.C. 552(f). title VIII of the National Defense and annually thereafter. 2. Non-Federal entity means all of the Authorization Act (NDAA) for Fiscal c. Reporting of Total Compensation of following, as defined in 2 CFR part 25: Year (FY) 2015 (Pub. L. 113–291), as Subrecipient Executives. i. A Governmental organization, amended by Sec. 822 of the National 1. Applicability and what to report. which is a State, local government, or Defense Authorization Act for Fiscal Unless you are exempt as provided in Indian tribe; Year 2020 (Pub. L. 116–92). paragraph d. of this award term, for each ii. A foreign public entity; first-tier non-Federal entity subrecipient iii. A domestic or foreign nonprofit § 183.10 Applicability. under this award, you shall report the organization; and, (a) This part applies only to grants names and total compensation of each iv. A domestic or foreign for-profit and cooperative agreements that are of the subrecipient’s five most highly organization expected to exceed $50,000 and that are compensated executives for the 3. Executive means officers, managing performed outside the United States, subrecipient’s preceding completed partners, or any other employees in including U.S. territories, and that are in fiscal year, if— management positions. support of a contingency operation in i. in the subrecipient’s preceding 4. Subaward: which members of the Armed Forces are fiscal year, the subrecipient received— i. This term means a legal instrument actively engaged in hostilities. It does (A) 80 percent or more of its annual to provide support for the performance not apply to the authorized intelligence gross revenues from Federal of any portion of the substantive project or law enforcement activities of the procurement contracts (and or program for which you received this Federal Government. subcontracts) and Federal financial award and that you as the recipient (b) All elements of this part are assistance subject to the Transparency award to an eligible subrecipient. applicable until the date of expiration as Act, as defined at 2 CFR 170.320 (and ii. The term does not include your provided in law. subawards) and, procurement of property and services needed to carry out the project or § 183.15 Responsibilities of Federal (B) $25,000,000 or more in annual awarding agencies. gross revenues from Federal program (for further explanation, see 2 procurement contracts (and CFR 200.331). (a) Prior to making an award for a subcontracts), and Federal financial iii. A subaward may be provided covered grant or cooperative agreement assistance subject to the Transparency through any legal agreement, including (see also § 183.35), the Federal awarding Act (and subawards); and an agreement that you or a subrecipient agency must check the current list of ii. The public does not have access to considers a contract. prohibited or restricted persons or information about the compensation of 5. Subrecipient means a non-Federal entities in the System Award the executives through periodic reports entity or Federal agency that: Management (SAM) Exclusions. filed under section 13(a) or 15(d) of the i. Receives a subaward from you (the (b) The Federal awarding agency may Securities Exchange Act of 1934 (15 recipient) under this award; and include the award term provided in U.S.C. 78m(a), 78o(d)) or section 6104 of ii. Is accountable to you for the use of appendix A of this part in all covered the Internal Revenue Code of 1986. (To the Federal funds provided by the grant and cooperative agreement awards determine if the public has access to the subaward. in accordance with Never Contract with compensation information, see the U.S. 6. Total compensation means the cash the Enemy. Security and Exchange Commission and noncash dollar value earned by the (c) A Federal awarding agency may total compensation filings at http:// executive during the recipient’s or become aware of a person or entity that: www.sec.gov/answers/execomp.htm.) subrecipient’s preceding fiscal year and (1) Provides funds, including goods 2. Where and when to report. You includes the following (for more and services, received under a covered must report subrecipient executive total information see 17 CFR 229.402(c)(2)). grant or cooperative agreement of an compensation described in paragraph ■ 31a. Add part 183 to read as follows: executive agency directly or indirectly c.1. of this award term: to covered persons or entities; or PART 183—NEVER CONTRACT WITH i. To the recipient. (2) Fails to exercise due diligence to THE ENEMY ii. By the end of the month following ensure that none of the funds, including the month during which you make the Sec. goods and services, received under a subaward. For example, if a subaward is 183.5 Purpose of this part. covered grant or cooperative agreement obligated on any date during the month 183.10 Applicability. of an executive agency are provided of October of a given year (i.e., between 183.15 Responsibilities of Federal awarding directly or indirectly to covered persons October 1 and 31), you must report any agencies. or entities. required compensation information of 183.20 Reporting responsibilities of Federal (d) When a Federal awarding agency the subrecipient by November 30 of that awarding agencies. becomes aware of such a person or 183.25 Responsibilities of recipients. year. 183.30 Access to records. entity, it may do any of the following d. Exemptions. 183.35 Definitions. actions: If, in the previous tax year, you had (1) Restrict the future award of all gross income, from all sources, under APPENDIX A TO PART 183—CLAUSES Federal contracts, grants, and $300,000, you are exempt from the FOR AWARD AGREEMENTS cooperative agreements to the person or requirements to report: entity based upon concerns that Federal i. Subawards, and Authority: Pub. L. 113–291. awards to the entity would provide

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grant funds directly or indirectly to a (d) Each report referenced in cooperative agreement may have been covered person or entity. paragraph (c)(1) of this section shall provided directly or indirectly to a (2) Terminate any contract, grant, or include: covered person or entity. cooperative agreement to a covered (1) The executive agency taking such person or entity upon becoming aware action. § 183.35 Definitions. that the recipient has failed to exercise (2) An explanation of the basis for the Terms used in this part are defined as due diligence to ensure that none of the action taken. follows: award funds are provided directly or (3) The value of the terminated or Contingency operation, as defined in indirectly to a covered person or entity. voided grant or cooperative agreement. 10 U.S.C. 101a, means a military (3) Void in whole or in part any grant, (4) The value of all grants and operation that— cooperative agreement or contracts of cooperative agreements of the executive (1) Is designated by the Secretary of the executive agency concerned upon a agency with the person or entity Defense as an operation in which written determination by the head of concerned at the time the grant or members of the armed forces are or may contracting activity or other appropriate cooperative agreement was terminated become involved in military actions, official that the grant or cooperative or voided. operations, or hostilities against an agreement provides funds directly or (e) Each report referenced in enemy of the United States or against an indirectly to a covered person or entity. paragraph (c)(2) of this section shall opposing military force; or (e) The Federal awarding agency must include: (2) Results in the call or order to, or notify recipients in writing regarding its (1) The executive agency concerned. retention on, active duty of members of decision to restrict all future awards (2) An explanation of the basis for not the uniformed services under 10 U.S.C. and/or to terminate or void a grant or taking the action. 688, 12301a, 12302, 12304, 12304a, cooperative agreement. The agency must (f) For each instance in which an 12305, 12406 of 10 U.S.C. chapter 15, 14 also notify the recipient in writing about executive agency exercised the U.S.C. 712 or any other provision of law the recipient’s right to request an additional authority to examine during a war or during a national administrative review (using the recipient and lower tier entity (e.g., emergency declared by the President or agency’s procedures) of the restriction, subrecipient or contractor) records, the Congress. termination, or void of the grant or agency must report in writing to the Covered combatant command means cooperative agreement within 30 days of head of the executive agency concerned the following: receiving notification. (or the designee of such head) and the (1) The United States Africa commander of the covered combatant Command. § 183.20 Reporting responsibilities of command concerned (or specific (2) The United States Central Federal awarding agencies. deputies) the following: Command. (a) If a Federal awarding agency (1) An explanation of the basis for the (3) The United States European restricts all future awards to a covered action taken; and Command. person or entity, it must enter (2) A summary of the results of any (4) The United States Pacific information on the ineligible person or examination of records. Command. entity into SAM Exclusions as a (5) The United States Southern prohibited or restricted source pursuant § 183.25 Responsibilities of recipients. Command. to Subtitle E, Title VIII of the NDAA for (a) Recipients of covered grants or (6) The United States Transportation FY 2015 (Pub. L. 113–291). cooperative agreements must fulfill the Command. (b) When a Federal awarding agency requirements outlined in the award term Covered grant or cooperative terminates or voids a grant or provided in appendix A to this part. agreement means a grant or cooperative cooperative agreement due to Never (b) Recipients must also flow down agreement, as defined in 2 CFR 200.1 Contract with the Enemy, it must report the provisions in award terms covered with an estimated value in excess of the termination as a Termination for in appendix A to this part to all $50,000 that is performed outside the Material Failure to Comply in the Office contracts and subawards under the United States, including its possessions of Management and Budget (OMB)- award. and territories, in support of a designated integrity and performance contingency operation in which system accessible through SAM § 183.30 Access to records. members of the Armed Forces are (currently the Federal Awardee In addition to any other existing actively engaged in hostilities. Except Performance and Integrity Information examination-of-records authority, the for U.S. Department of Defense grants System (FAPIIS)). Federal Government is authorized to and cooperative agreements that were (c) The Federal awarding agency shall examine any records of the recipient awarded on or before December 19, document and report to the head of the and its subawards, to the extent 2017, that will be performed in the executive agency concerned (or the necessary, to ensure that funds, United States Central Command, where designee of such head) and the including supplies and services, the estimated value is in excess of commander of the covered combatant received under a covered grant or $100,000. command concerned (or specific cooperative agreement (see § 183.35) are Covered person or entity means a deputies): not provided directly or indirectly to a person or entity that is actively (1) Any action to restrict all future covered person or entity in accordance opposing United States or coalition awards or to terminate or void an award with Never Contract with the Enemy. forces involved in a contingency with a covered person or entity. The Federal awarding agency may only operation in which members of the (2) Any decision not to restrict all exercise this authority upon a written Armed Forces are actively engaged in future awards, terminate, or void an determination by the Federal awarding hostilities. award along with the agency’s reasoning agency that relies on a finding by the for not taking one of these actions after commander of a covered combatant Appendix A to Part 183—Award Terms the agency became aware that a person command that there is reason to believe for Never Contract With the Enemy or entity is a prohibited or restricted that funds, including supplies and Federal awarding agencies may source. services, received under the grant or include the following award terms in all

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awards for covered grants and agreement are not provided, directly or those development costs capitalized in cooperative agreements in accordance indirectly, to a person or entity that is accordance with generally accepted with Never Contract with the Enemy: actively opposing United States or accounting principles (GAAP). coalition forces involved in a Ancillary charges, such as taxes, duty, Term 1 contingency operation in which protective in transit insurance, freight, Prohibition on Providing Funds to the members of the Armed Forces are and installation may be included in or Enemy actively engaged in hostilities, except excluded from the acquisition cost in (a) The recipient must— for awards awarded by the Department accordance with the non-Federal (1) Exercise due diligence to ensure of Defense on or before Dec 19, 2017 entity’s regular accounting practices. that none of the funds, including that will be performed in the United Advance payment means a payment supplies and services, received under States Central Command that a Federal awarding agency or pass- this grant or cooperative agreement are (USCENTCOM) theater of operations. through entity makes by any appropriate provided directly or indirectly (b) The substance of this clause, payment mechanism, including a (including through subawards or including this paragraph (b), is required predetermined payment schedule, contracts) to a person or entity who is to be included in subawards or contracts before the non-Federal entity disburses actively opposing the United States or under this grant or cooperative the funds for program purposes. coalition forces involved in a agreement that have an estimated value Allocation means the process of contingency operation in which over $50,000 and will be performed assigning a cost, or a group of costs, to members of the Armed Forces are outside the United States, including its one or more cost objective(s), in actively engaged in hostilities, which outlying areas. reasonable proportion to the benefit must be completed through 2 CFR (End of term) provided or other equitable relationship. 180.300 prior to issuing a subaward or The process may entail assigning a contract and; PART 200—UNIFORM cost(s) directly to a final cost objective (2) Terminate or void in whole or in ADMINISTRATIVE REQUIREMENTS, or through one or more intermediate part any subaward or contract with a COST PRINCIPLES, AND AUDIT cost objectives. person or entity listed in SAM as a REQUIREMENTS FOR FEDERAL Assistance listings refers to the prohibited or restricted source pursuant AWARDS publicly available listing of Federal to subtitle E of Title VIII of the NDAA assistance programs managed and for FY 2015, unless the Federal ■ 32. The authority citation for part 200 administered by the General Services awarding agency provides written continues to read as follows: Administration, formerly known as the approval to continue the subaward or Authority: 31 U.S.C. 503 Catalog of Federal Domestic Assistance contract. (CFDA). (b) The recipient may include the ■ 33. Amend § 200.0 by removing the Assistance listing number means a substance of this clause, including acronym CFDA, revising the acronym unique number assigned to identify a paragraph (a) of this clause, in MTDC, adding in alphabetical order the Federal Assistance Listings, formerly subawards under this grant or acronym NFE, and revising the acronym known as the CFDA Number. cooperative agreement that have an SAM to read as follows: Assistance listing program title means the title that corresponds to the Federal estimated value over $50,000 and will § 200.0 Acronyms. be performed outside the United States, Assistance Listings Number, formerly * * * * * including its outlying areas. known as the CFDA program title. MTDC Modified Total Direct Cost (c) The Federal awarding agency has Audit finding means deficiencies NFE Non-Federal Entity the authority to terminate or void this which the auditor is required by grant or cooperative agreement, in * * * * * § 200.516(a) to report in the schedule of whole or in part, if the Federal awarding SAM System for Award Management findings and questioned costs. agency becomes aware that the recipient * * * * * Auditee means any non-Federal entity failed to exercise due diligence as ■ 34. Revise § 200.1 to read as follows: that expends Federal awards which required by paragraph (a) of this clause must be audited under subpart F of this § 200.1 Definitions. or if the Federal awarding agency part. becomes aware that any funds received These are the definitions for terms Auditor means an auditor who is a under this grant or cooperative used in this part. Different definitions public accountant or a Federal, State, agreement have been provided directly may be found in Federal statutes or local government, or Indian tribe audit or indirectly to a person or entity who regulations that apply more specifically organization, which meets the general is actively opposing coalition forces to particular programs or activities. standards specified for external auditors involved in a contingency operation in These definitions could be in generally accepted government which members of the Armed Forces are supplemented by additional auditing standards (GAGAS). The term actively engaged in hostilities. instructional information provided in auditor does not include internal governmentwide standard information auditors of nonprofit organizations. (End of term) collections. For purposes of this part, Budget means the financial plan for Term 2 the following definitions apply: the Federal award that the Federal Acquisition cost means the cost of the awarding agency or pass-through entity Additional Access to Recipient Records asset including the cost to ready the approves during the Federal award (a) In addition to any other existing asset for its intended use. Acquisition process or in subsequent amendments to examination-of-records authority, the cost for equipment, for example, means the Federal award. It may include the Federal Government is authorized to the net invoice price of the equipment, Federal and non-Federal share or only examine any records of the recipient including the cost of any modifications, the Federal share, as determined by the and its subawards or contracts to the attachments, accessories, or auxiliary Federal awarding agency or pass- extent necessary to ensure that funds, apparatus necessary to make it usable through entity. including supplies and services, for the purpose for which it is acquired. Budget period means the time interval available under this grant or cooperative Acquisition costs for software includes from the start date of a funded portion

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of an award to the end date of that (iii) Other relief arising under or (3) For State and local governments: funded portion during which recipients relating to a Federal award. Appendix V to this part, paragraph F.1. are authorized to expend the funds (2) A request for payment that is not (4) For Indian tribes: Appendix VII to awarded, including any funds carried in dispute when submitted. this part, paragraph D.1. forward or other revisions pursuant to Class of Federal awards means a Compliance supplement means an § 200.308. group of Federal awards either awarded annually updated authoritative source Capital assets means: under a specific program or group of for auditors that serves to identify (1) Tangible or intangible assets used programs or to a specific type of non- existing important compliance in operations having a useful life of Federal entity or group of non-Federal requirements that the Federal more than one year which are entities to which specific provisions or Government expects to be considered as capitalized in accordance with GAAP. exceptions may apply. part of an audit. Auditors use it to Capital assets include: Closeout means the process by which understand the Federal program’s (i) Land, buildings (facilities), the Federal awarding agency or pass- objectives, procedures, and compliance equipment, and intellectual property through entity determines that all requirements, as well as audit objectives (including software) whether acquired applicable administrative actions and and suggested audit procedures for by purchase, construction, manufacture, all required work of the Federal award determining compliance with the exchange, or through a lease accounted have been completed and takes actions relevant Federal program. for as financed purchase under as described in § 200.344. Computing devices means machines Government Accounting Standards Cluster of programs means a grouping used to acquire, store, analyze, process, Board (GASB) standards or a finance of closely related programs that share and publish data and other information lease under Financial Accounting common compliance requirements. The electronically, including accessories (or Standards Board (FASB) standards; and types of clusters of programs are ‘‘peripherals’’) for printing, transmitting (ii) Additions, improvements, research and development (R&D), and receiving, or storing electronic modifications, replacements, student financial aid (SFA), and other information. See also the definitions of rearrangements, reinstallations, clusters. ‘‘Other clusters’’ are as defined supplies and information technology renovations or alterations to capital by OMB in the compliance supplement systems in this section. assets that materially increase their or as designated by a State for Federal Contract means, for the purpose of value or useful life (not ordinary repairs awards the State provides to its Federal financial assistance, a legal and maintenance). subrecipients that meet the definition of instrument by which a recipient or (2) For purpose of this part, capital a cluster of programs. When designating subrecipient purchases property or assets do not include intangible right-to- an ‘‘other cluster,’’ a State must identify services needed to carry out the project use assets (per GASB) and right-to-use the Federal awards included in the or program under a Federal award. For operating lease assets (per FASB). For cluster and advise the subrecipients of additional information on subrecipient example, assets capitalized that compliance requirements applicable to and contractor determinations, see recognize a lessee’s right to control the the cluster, consistent with § 200.332(a). § 200.331. See also the definition of use of property and/or equipment for a A cluster of programs must be subaward in this section. period of time under a lease contract. considered as one program for Contractor means an entity that See also § 200.465. determining major programs, as receives a contract as defined in this Capital expenditures means described in § 200.518, and, with the section. Cooperative agreement means a legal expenditures to acquire capital assets or exception of R&D as described in instrument of financial assistance expenditures to make additions, § 200.501(c), whether a program-specific between a Federal awarding agency and improvements, modifications, audit may be elected. a recipient or a pass-through entity and replacements, rearrangements, Cognizant agency for audit means the a subrecipient that, consistent with 31 reinstallations, renovations, or Federal agency designated to carry out U.S.C. 6302–6305: alterations to capital assets that the responsibilities described in (1) Is used to enter into a relationship materially increase their value or useful § 200.513(a). The cognizant agency for the principal purpose of which is to life. audit is not necessarily the same as the transfer anything of value to carry out a cognizant agency for indirect costs. A Central service cost allocation plan public purpose authorized by a law of list of cognizant agencies for audit can means the documentation identifying, the United States (see 31 U.S.C. be found on the Federal Audit accumulating, and allocating or 6101(3)); and not to acquire property or Clearinghouse (FAC) website. developing billing rates based on the services for the Federal Government or allowable costs of services provided by Cognizant agency for indirect costs pass-through entity’s direct benefit or a State or local government or Indian means the Federal agency responsible use; tribe on a centralized basis to its for reviewing, negotiating, and (2) Is distinguished from a grant in departments and agencies. The costs of approving cost allocation plans or that it provides for substantial these services may be allocated or billed indirect cost proposals developed under involvement of the Federal awarding to users. this part on behalf of all Federal agency in carrying out the activity Claim means, depending on the agencies. The cognizant agency for contemplated by the Federal award. context, either: indirect cost is not necessarily the same (3) The term does not include: (1) A written demand or written as the cognizant agency for audit. For (i) A cooperative research and assertion by one of the parties to a assignments of cognizant agencies see development agreement as defined in 15 Federal award seeking as a matter of the following: U.S.C. 3710a; or right: (1) For Institutions of Higher (ii) An agreement that provides only: (i) The payment of money in a sum Education (IHEs): Appendix III to this (A) Direct United States Government certain; part, paragraph C.11. cash assistance to an individual; (ii) The adjustment or interpretation (2) For nonprofit organizations: (B) A subsidy; of the terms and conditions of the Appendix IV to this part, paragraph (C) A loan; Federal award; or C.2.a. (D) A loan guarantee; or

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(E) Insurance. awarding agency or pass-through such as annuities, insurance claims, or Cooperative audit resolution means entity). other benefit payments. the use of audit follow-up techniques Disallowed costs means those charges Federal agency means an ‘‘agency’’ as which promote prompt corrective action to a Federal award that the Federal defined at 5 U.S.C. 551(1) and further by improving communication, fostering awarding agency or pass-through entity clarified by 5 U.S.C. 552(f). collaboration, promoting trust, and determines to be unallowable, in Federal Audit Clearinghouse (FAC) developing an understanding between accordance with the applicable Federal means the clearinghouse designated by the Federal agency and the non-Federal statutes, regulations, or the terms and OMB as the repository of record where entity. This approach is based upon: conditions of the Federal award. non-Federal entities are required to (1) A strong commitment by Federal Discretionary award means an award transmit the information required by agency and non-Federal entity in which the Federal awarding agency, subpart F of this part. leadership to program integrity; in keeping with specific statutory Federal award has the meaning, (2) Federal agencies strengthening authority that enables the agency to depending on the context, in either partnerships and working cooperatively exercise judgment (‘‘discretion’’), selects paragraph (1) or (2) of this definition: with non-Federal entities and their the recipient and/or the amount of (1)(i) The Federal financial assistance auditors; and non-Federal entities and Federal funding awarded through a that a recipient receives directly from a their auditors working cooperatively competitive process or based on merit of Federal awarding agency or indirectly with Federal agencies; proposals. A discretionary award may from a pass-through entity, as described (3) A focus on current conditions and be selected on a non-competitive basis, in § 200.101; or corrective action going forward; as appropriate. (ii) The cost-reimbursement contract (4) Federal agencies offering Equipment means tangible personal under the Federal Acquisition appropriate relief for past property (including information Regulations that a non-Federal entity noncompliance when audits show technology systems) having a useful life receives directly from a Federal prompt corrective action has occurred; of more than one year and a per-unit awarding agency or indirectly from a and acquisition cost which equals or pass-through entity, as described in (5) Federal agency leadership sending exceeds the lesser of the capitalization § 200.101. a clear message that continued failure to level established by the non-Federal (2) The instrument setting forth the correct conditions identified by audits entity for financial statement purposes, terms and conditions. The instrument is which are likely to cause improper or $5,000. See also the definitions of the grant agreement, cooperative payments, fraud, waste, or abuse is capital assets, computing devices, agreement, other agreement for unacceptable and will result in general purpose equipment, information assistance covered in paragraph (2) of sanctions. technology systems, special purpose the definition of Federal financial Corrective action means action taken equipment, and supplies in this section. assistance in this section, or the cost- by the auditee that: Expenditures means charges made by reimbursement contract awarded under (1) Corrects identified deficiencies; a non-Federal entity to a project or the Federal Acquisition Regulations. (2) Produces recommended program for which a Federal award was (3) Federal award does not include improvements; or received. other contracts that a Federal agency (3) Demonstrates that audit findings (1) The charges may be reported on a uses to buy goods or services from a are either invalid or do not warrant cash or accrual basis, as long as the contractor or a contract to operate methodology is disclosed and is auditee action. Federal Government owned, contractor consistently applied. Cost allocation plan means central operated facilities (GOCOs). (2) For reports prepared on a cash service cost allocation plan or public (4) See also definitions of Federal assistance cost allocation plan. basis, expenditures are the sum of: (i) Cash disbursements for direct financial assistance, grant agreement, Cost objective means a program, and cooperative agreement. function, activity, award, organizational charges for property and services; (ii) The amount of indirect expense Federal award date means the date subdivision, contract, or work unit for when the Federal award is signed by the which cost data are desired and for charged; (iii) The value of third-party in-kind authorized official of the Federal which provision is made to accumulate awarding agency. and measure the cost of processes, contributions applied; and (iv) The amount of cash advance Federal financial assistance means products, jobs, capital projects, etc. A payments and payments made to (1) Assistance that non-Federal cost objective may be a major function subrecipients. entities receive or administer in the of the non-Federal entity, a particular (3) For reports prepared on an accrual form of: service or project, a Federal award, or an basis, expenditures are the sum of: (i) Grants; indirect (Facilities & Administrative (i) Cash disbursements for direct (ii) Cooperative agreements; (F&A)) cost activity, as described in charges for property and services; (iii) Non-cash contributions or subpart E of this part. See also the (ii) The amount of indirect expense donations of property (including definitions of final cost objective and incurred; donated surplus property); intermediate cost objective in this (iii) The value of third-party in-kind (iv) Direct appropriations; section. contributions applied; and (v) Food commodities; and Cost sharing or matching means the (iv) The net increase or decrease in (vi) Other financial assistance (except portion of project costs not paid by the amounts owed by the non-Federal assistance listed in paragraph (2) of this Federal funds or contributions (unless entity for: definition). otherwise authorized by Federal (A) Goods and other property (2) For § 200.203 and subpart F of this statute). See also § 200.306. received; part, Federal financial assistance also Cross-cutting audit finding means an (B) Services performed by employees, includes assistance that non-Federal audit finding where the same contractors, subrecipients, and other entities receive or administer in the underlying condition or issue affects all payees; and form of: Federal awards (including Federal (C) Programs for which no current (i) Loans; awards of more than one Federal services or performance are required (ii) Loan Guarantees;

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(iii) Interest subsidies; and which the Federal awarding agency or definitions of equipment and special (iv) Insurance. pass-through entity provides a specific purpose equipment in this section. (3) For § 200.216, Federal financial level of support without regard to actual Generally accepted accounting assistance includes assistance that non- costs incurred under the Federal award. principles (GAAP) has the meaning Federal entities receive or administer in This type of Federal award reduces specified in accounting standards issued the form of: some of the administrative burden and by the GASB and the FASB. (i) Grants; record-keeping requirements for both Generally accepted government (ii) Cooperative agreements; the non-Federal entity and Federal auditing standards (GAGAS), also (iii) Loans; and awarding agency or pass-through entity. known as the Yellow Book, means (iv) Loan Guarantees. generally accepted government auditing (4) Federal financial assistance does Accountability is based primarily on standards issued by the Comptroller not include amounts received as performance and results. See General of the United States, which are reimbursement for services rendered to §§ 200.102(c), 200.201(b), and 200.333. Foreign organization means an entity applicable to financial audits. individuals as described in § 200.502(h) that is: Grant agreement means a legal and (i). (1) A public or private organization instrument of financial assistance Federal interest means, for purposes of § 200.330 or when used in connection located in a country other than the between a Federal awarding agency or with the acquisition or improvement of United States and its territories that is pass-through entity and a non-Federal real property, equipment, or supplies subject to the laws of the country in entity that, consistent with 31 U.S.C. under a Federal award, the dollar which it is located, irrespective of the 6302, 6304: (1) Is used to enter into a relationship amount that is the product of the: citizenship of project staff or place of (1) The percentage of Federal performance; the principal purpose of which is to participation in the total cost of the real (2) A private nongovernmental transfer anything of value to carry out a property, equipment, or supplies; and organization located in a country other public purpose authorized by a law of (2) Current fair market value of the than the United States that solicits and the United States (see 31 U.S.C. property, improvements, or both, to the receives cash contributions from the 6101(3)); and not to acquire property or extent the costs of acquiring or general public; services for the Federal awarding agency improving the property were included (3) A charitable organization located or pass-through entity’s direct benefit or as project costs. in a country other than the United use; Federal program means: States that is nonprofit and tax exempt (2) Is distinguished from a cooperative (1) All Federal awards which are under the laws of its country of agreement in that it does not provide for assigned a single Assistance Listings domicile and operation, and is not a substantial involvement of the Federal Number. university, college, accredited degree- awarding agency in carrying out the (2) When no Assistance Listings granting institution of education, private activity contemplated by the Federal Number is assigned, all Federal awards foundation, hospital, organization award. from the same agency made for the same engaged exclusively in research or (3) Does not include an agreement purpose must be combined and scientific activities, church, synagogue, that provides only: considered one program. mosque or other similar entities (i) Direct United States Government (3) Notwithstanding paragraphs (1) organized primarily for religious cash assistance to an individual; and (2) of this definition, a cluster of purposes; or (ii) A subsidy; programs. The types of clusters of (4) An organization located in a (iii) A loan; programs are: country other than the United States not (vi) A loan guarantee; or (i) Research and development (R&D); recognized as a foreign public entity. (v) Insurance. (ii) Student financial aid (SFA); and Foreign public entity means: Highest level owner means the entity (iii) ‘‘Other clusters,’’ as described in (1) A foreign government or foreign that owns or controls an immediate the definition of cluster of programs in governmental entity; owner of the offeror, or that owns or this section. (2) A public international controls one or more entities that Federal share means the portion of organization, which is an organization control an immediate owner of the the Federal award costs that are paid entitled to enjoy privileges, exemptions, offeror. No entity owns or exercises using Federal funds. and immunities as an international control of the highest-level owner as Final cost objective means a cost organization under the International defined in the Federal Acquisition objective which has allocated to it both Organizations Immunities Act (22 Regulations (FAR) (48 CFR 52.204–17). direct and indirect costs and, in the U.S.C. 288–288f); Hospital means a facility licensed as non-Federal entity’s accumulation (3) An entity owned (in whole or in a hospital under the law of any state or system, is one of the final accumulation part) or controlled by a foreign a facility operated as a hospital by the points, such as a particular award, government; or United States, a state, or a subdivision internal project, or other direct activity (4) Any other entity consisting wholly of a state. of a non-Federal entity. See also the or partially of one or more foreign Improper payment means: definitions of cost objective and governments or foreign governmental (1) Any payment that should not have intermediate cost objective in this entities. been made or that was made in an section. General purpose equipment means incorrect amount under statutory, Financial obligations, when equipment which is not limited to contractual, administrative, or other referencing a recipient’s or research, medical, scientific or other legally applicable requirements. subrecipient’s use of funds under a technical activities. Examples include (i) Incorrect amounts are Federal award, means orders placed for office equipment and furnishings, overpayments or underpayments that property and services, contracts and modular offices, telephone networks, are made to eligible recipients subawards made, and similar information technology equipment and (including inappropriate denials of transactions that require payment. systems, air conditioning equipment, payment or service, any payment that Fixed amount awards means a type of reproduction and printing equipment, does not account for credit for grant or cooperative agreement under and motor vehicles. See also the applicable discounts, payments that are

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for an incorrect amount, and duplicate or community, including any Alaska the achievement of objectives in the payments). An improper payment also Native village or regional or village following categories: includes any payment that was made to corporation as defined in or established (i) Effectiveness and efficiency of an ineligible recipient or for an pursuant to the Alaska Native Claims operations; ineligible good or service, or payments Settlement Act (43 U.S.C. Chapter 33), (ii) Reliability of reporting for internal for goods or services not received which is recognized as eligible for the and external use; and (except for such payments authorized by special programs and services provided (iii) Compliance with applicable laws law). by the United States to Indians because and regulations. Note 1 to paragraph (1)(i) of this of their status as Indians (25 U.S.C. (2) Federal awarding agencies are definition. Applicable discounts are 450b(e)). See annually published Bureau required to follow internal control only those discounts where it is both of Indian Affairs list of Indian Entities compliance requirements in OMB advantageous and within the agency’s Recognized and Eligible to Receive Circular No. A–123, Management’s control to claim them. Services. Responsibility for Enterprise Risk (ii) When an agency’s review is Institutions of Higher Education Management and Internal Control. unable to discern whether a payment (IHEs) is defined at 20 U.S.C. 1001. Loan means a Federal loan or loan was proper as a result of insufficient or Indirect (facilities & administrative guarantee received or administered by a lack of documentation, this payment (F&A)) costs means those costs incurred non-Federal entity, except as used in the should also be considered an improper for a common or joint purpose definition of program income in this payment. When establishing benefitting more than one cost objective, section. documentation requirements for and not readily assignable to the cost (1) The term ‘‘direct loan’’ means a payments, agencies should ensure that objectives specifically benefitted, disbursement of funds by the Federal all documentation requirements are without effort disproportionate to the Government to a non-Federal borrower necessary and should refrain from results achieved. To facilitate equitable under a contract that requires the imposing additional burdensome distribution of indirect expenses to the repayment of such funds with or documentation requirements. cost objectives served, it may be without interest. The term includes the (iii) Interest or other fees that may necessary to establish a number of pools purchase of, or participation in, a loan result from an underpayment by an of indirect (F&A) costs. Indirect (F&A) made by another lender and financing agency are not considered an improper cost pools must be distributed to arrangements that defer payment for payment if the interest was paid benefitted cost objectives on bases that more than 90 days, including the sale of correctly. These payments are generally will produce an equitable result in a Federal Government asset on credit separate transactions and may be consideration of relative benefits terms. The term does not include the necessary under certain statutory, derived. acquisition of a federally guaranteed contractual, administrative, or other Indirect cost rate proposal means the loan in satisfaction of default claims or legally applicable requirements. the price support loans of the (iv) A ‘‘questioned cost’’ (as defined documentation prepared by a non- Federal entity to substantiate its request Commodity Credit Corporation. in this section) should not be (2) The term ‘‘direct loan obligation’’ considered an improper payment until for the establishment of an indirect cost rate as described in appendices III means a binding agreement by a Federal the transaction has been completely awarding agency to make a direct loan reviewed and is confirmed to be through VII and appendix IX to this part. when specified conditions are fulfilled improper. by the borrower. Information technology systems (v) The term ‘‘payment’’ in this (3) The term ‘‘loan guarantee’’ means means computing devices, ancillary definition means any disbursement or any Federal Government guarantee, equipment, software, firmware, and transfer of Federal funds (including a insurance, or other pledge with respect similar procedures, services (including commitment for future payment, such as to the payment of all or a part of the support services), and related resources. cash, securities, loans, loan guarantees, principal or interest on any debt See also the definitions of computing and insurance subsidies) to any non- obligation of a non-Federal borrower to devices and equipment in this section. Federal person, non-Federal entity, or a non-Federal lender, but does not Intangible property means property Federal employee, that is made by a include the insurance of deposits, having no physical existence, such as Federal agency, a Federal contractor, a shares, or other withdrawable accounts trademarks, copyrights, patents and Federal grantee, or a governmental or in financial institutions. other organization administering a patent applications and property, such (4) The term ‘‘loan guarantee Federal program or activity. as loans, notes and other debt commitment’’ means a binding (vi) The term ‘‘payment’’ includes instruments, lease agreements, stock agreement by a Federal awarding agency disbursements made pursuant to prime and other instruments of property to make a loan guarantee when specified contracts awarded under the Federal ownership (whether the property is conditions are fulfilled by the borrower, Acquisition Regulation and Federal tangible or intangible). the lender, or any other party to the awards subject to this part that are Intermediate cost objective means a guarantee agreement. expended by recipients. cost objective that is used to accumulate Local government means any unit of (2) See definition of improper indirect costs or service center costs that government within a state, including a: payment in OMB Circular A–123 are subsequently allocated to one or (1) County; appendix C, part I A (1) ‘‘What is an more indirect cost pools or final cost (2) Borough; improper payment?’’ Questioned costs, objectives. See also the definitions of (3) Municipality; including those identified in audits, are cost objective and final cost objective in (4) City; not an improper payment until this section. (5) Town; reviewed and confirmed to be improper Internal controls for non-Federal (6) Township; as defined in OMB Circular A–123 entities means: (7) Parish; appendix C. (1) Processes designed and (8) Local public authority, including Indian tribe means any Indian tribe, implemented by non-Federal entities to any public housing agency under the band, nation, or other organized group provide reasonable assurance regarding United States Housing Act of 1937;

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(9) Special district; exercise judgement (‘‘discretion’’). A Participant support costs means direct (10) School district; non-discretionary award amount could costs for items such as stipends or (11) Intrastate district; be determined specifically or by subsistence allowances, travel (12) Council of governments, whether formula. allowances, and registration fees paid to or not incorporated as a nonprofit Non-Federal entity (NFE) means a or on behalf of participants or trainees corporation under State law; and State, local government, Indian tribe, (but not employees) in connection with (13) Any other agency or Institution of Higher Education (IHE), or conferences, or training projects. instrumentality of a multi-, regional, or nonprofit organization that carries out a Pass-through entity (PTE) means a intra-State or local government. Federal award as a recipient or non-Federal entity that provides a Major program means a Federal subrecipient. subaward to a subrecipient to carry out program determined by the auditor to be Nonprofit organization means any part of a Federal program. a major program in accordance with corporation, trust, association, Performance goal means a target level § 200.518 or a program identified as a cooperative, or other organization, not of performance expressed as a tangible, major program by a Federal awarding including IHEs, that: measurable objective, against which agency or pass-through entity in (1) Is operated primarily for scientific, actual achievement can be compared, accordance with § 200.503(e). educational, service, charitable, or including a goal expressed as a Management decision means the similar purposes in the public interest; quantitative standard, value, or rate. In Federal awarding agency’s or pass- (2) Is not organized primarily for some instances (e.g., discretionary through entity’s written determination, profit; and research awards), this may be limited to provided to the auditee, of the adequacy (3) Uses net proceeds to maintain, the requirement to submit technical of the auditee’s proposed corrective improve, or expand the operations of performance reports (to be evaluated in actions to address the findings, based on the organization. accordance with agency policy). its evaluation of the audit findings and Notice of funding opportunity means Period of performance means the total proposed corrective actions. a formal announcement of the estimated time interval between the Micro-purchase means a purchase of availability of Federal funding through start of an initial Federal award and the supplies or services, the aggregate a financial assistance program from a planned end date, which may include amount of which does not exceed the Federal awarding agency. The notice of one or more funded portions, or budget micro-purchase threshold. Micro- funding opportunity provides periods. Identification of the period of purchases comprise a subset of a non- information on the award, who is performance in the Federal award per Federal entity’s small purchases as eligible to apply, the evaluation criteria § 200.211(b)(5) does not commit the defined in § 200.320. for selection of an awardee, required awarding agency to fund the award Micro-purchase threshold means the components of an application, and how beyond the currently approved budget dollar amount at or below which a non- to submit the application. The notice of period. Federal entity may purchase property or funding opportunity is any paper or Personal property means property services using micro-purchase electronic issuance that an agency uses other than real property. It may be procedures (see § 200.320). Generally, to announce a funding opportunity, tangible, having physical existence, or the micro-purchase threshold for whether it is called a ‘‘program intangible. procurement activities administered announcement,’’ ‘‘notice of funding Personally Identifiable Information under Federal awards is not to exceed availability,’’ ‘‘broad agency (PII) means information that can be used the amount set by the FAR at 48 CFR announcement,’’ ‘‘research to distinguish or trace an individual’s part 2, subpart 2.1, unless a higher announcement,’’ ‘‘solicitation,’’ or some identity, either alone or when combined threshold is requested by the non- other term. with other personal or identifying Federal entity and approved by the Office of Management and Budget information that is linked or linkable to cognizant agency for indirect costs. (OMB) means the Executive Office of the a specific individual. Some information Modified Total Direct Cost (MTDC) President, Office of Management and that is considered to be PII is available means all direct salaries and wages, Budget. in public sources such as telephone applicable fringe benefits, materials and Oversight agency for audit means the books, public websites, and university supplies, services, travel, and up to the Federal awarding agency that provides listings. This type of information is first $25,000 of each subaward the predominant amount of funding considered to be Public PII and (regardless of the period of performance directly (direct funding) (as listed on the includes, for example, first and last of the subawards under the award). schedule of expenditures of Federal name, address, work telephone number, MTDC excludes equipment, capital awards, see § 200.510(b)) to a non- email address, home telephone number, expenditures, charges for patient care, Federal entity unless OMB designates a and general educational credentials. The rental costs, tuition remission, specific cognizant agency for audit. definition of PII is not anchored to any scholarships and fellowships, When the direct funding represents less single category of information or participant support costs and the than 25 percent of the total Federal technology. Rather, it requires a case-by- portion of each subaward in excess of expenditures (as direct and sub-awards) case assessment of the specific risk that $25,000. Other items may only be by the non-Federal entity, then the an individual can be identified. Non-PII excluded when necessary to avoid a Federal agency with the predominant can become PII whenever additional serious inequity in the distribution of amount of total funding is the information is made publicly available, indirect costs, and with the approval of designated cognizant agency for audit. in any medium and from any source, the cognizant agency for indirect costs. When there is no direct funding, the that, when combined with other Non-discretionary award means an Federal awarding agency which is the available information, could be used to award made by the Federal awarding predominant source of pass-through identify an individual. agency to specific recipients in funding must assume the oversight Program income means gross income accordance with statutory, eligibility responsibilities. The duties of the earned by the non-Federal entity that is and compliance requirements, such that oversight agency for audit and the directly generated by a supported in keeping with specific statutory process for any reassignments are activity or earned as a result of the authority the agency has no ability to described in § 200.513(b). Federal award during the period of

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performance except as provided in also the definition of Improper payment research, medical, scientific, or other § 200.307(f). (See the definition of in this section). technical activities. Examples of special period of performance in this section.) Real property means land, including purpose equipment include Program income includes but is not land improvements, structures and microscopes, x-ray machines, surgical limited to income from fees for services appurtenances thereto, but excludes instruments, and spectrometers. See performed, the use or rental or real or moveable machinery and equipment. also the definitions of equipment and personal property acquired under Recipient means an entity, usually but general purpose equipment in this Federal awards, the sale of commodities not limited to non-Federal entities that section. or items fabricated under a Federal receives a Federal award directly from State means any state of the United award, license fees and royalties on a Federal awarding agency. The term States, the District of Columbia, the patents and copyrights, and principal recipient does not include subrecipients Commonwealth of Puerto Rico, U.S. and interest on loans made with Federal or individuals that are beneficiaries of Virgin Islands, Guam, American Samoa, award funds. Interest earned on the award. the Commonwealth of the Northern advances of Federal funds is not Renewal award means an award made Mariana Islands, and any agency or program income. Except as otherwise subsequent to an expiring Federal award instrumentality thereof exclusive of provided in Federal statutes, for which the start date is contiguous local governments. regulations, or the terms and conditions with, or closely follows, the end of the Student Financial Aid (SFA) means expiring Federal award. A renewal of the Federal award, program income Federal awards under those programs of award’s start date will begin a distinct does not include rebates, credits, general student assistance, such as those discounts, and interest earned on any of period of performance. Research and Development (R&D) authorized by Title IV of the Higher them. See also § 200.407. See also 35 means all research activities, both basic Education Act of 1965, as amended, (20 U.S.C. 200–212 ‘‘Disposition of Rights and applied, and all development U.S.C. 1070–1099d), which are in Educational Awards’’ applies to activities that are performed by non- administered by the U.S. Department of inventions made under Federal awards. Federal entities. The term research also Education, and similar programs Project cost means total allowable includes activities involving the training provided by other Federal agencies. It costs incurred under a Federal award of individuals in research techniques does not include Federal awards under and all required cost sharing and where such activities utilize the same programs that provide fellowships or voluntary committed cost sharing, facilities as other research and similar Federal awards to students on a including third-party contributions. development activities and where such competitive basis, or for specified Property means real property or activities are not included in the studies or research. personal property. See also the instruction function. ‘‘Research’’ is Subaward means an award provided definitions of real property and personal defined as a systematic study directed by a pass-through entity to a property in this section. toward fuller scientific knowledge or subrecipient for the subrecipient to Protected Personally Identifiable understanding of the subject studied. carry out part of a Federal award Information (Protected PII) means an ‘‘Development’’ is the systematic use of received by the pass-through entity. It individual’s first name or first initial knowledge and understanding gained does not include payments to a and last name in combination with any from research directed toward the contractor or payments to an individual one or more of types of information, production of useful materials, devices, that is a beneficiary of a Federal including, but not limited to, social systems, or methods, including design program. A subaward may be provided security number, passport number, and development of prototypes and through any form of legal agreement, credit card numbers, clearances, bank processes. including an agreement that the pass- numbers, biometrics, date and place of Simplified acquisition threshold through entity considers a contract. birth, mother’s maiden name, criminal, means the dollar amount below which Subrecipient means an entity, usually medical and financial records, a non-Federal entity may purchase but not limited to non-Federal entities, educational transcripts. This does not property or services using small that receives a subaward from a pass- include PII that is required by law to be purchase methods (see § 200.320). Non- through entity to carry out part of a disclosed. See also the definition of Federal entities adopt small purchase Federal award; but does not include an Personally Identifiable Information (PII) procedures in order to expedite the individual that is a beneficiary of such in this section. purchase of items at or below the award. A subrecipient may also be a Questioned cost means a cost that is simplified acquisition threshold. The recipient of other Federal awards questioned by the auditor because of an simplified acquisition threshold for directly from a Federal awarding audit finding: procurement activities administered agency. (1) Which resulted from a violation or under Federal awards is set by the FAR Subsidiary means an entity in which possible violation of a statute, at 48 CFR part 2, subpart 2.1. The non- more than 50 percent of the entity is regulation, or the terms and conditions Federal entity is responsible for owned or controlled directly by a parent of a Federal award, including for funds determining an appropriate simplified corporation or through another used to match Federal funds; acquisition threshold based on internal subsidiary of a parent corporation. (2) Where the costs, at the time of the controls, an evaluation of risk, and its Supplies means all tangible personal audit, are not supported by adequate documented procurement procedures. property other than those described in documentation; or However, in no circumstances can this the definition of equipment in this (3) Where the costs incurred appear threshold exceed the dollar value section. A computing device is a supply unreasonable and do not reflect the established in the FAR (48 CFR part 2, if the acquisition cost is less than the actions a prudent person would take in subpart 2.1) for the simplified lesser of the capitalization level the circumstances. acquisition threshold. Recipients should established by the non-Federal entity for (4) Questioned costs are not an determine if local government laws on financial statement purposes or $5,000, improper payment until reviewed and purchasing apply. regardless of the length of its useful life. confirmed to be improper as defined in Special purpose equipment means See also the definitions of computing OMB Circular A–123 appendix C. (See equipment which is used only for devices and equipment in this section.

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Telecommunications cost means the § 200.100 Purpose. § 200.101 Applicability. cost of using communication and (a) Purpose. (1) This part establishes (a) General applicability to Federal telephony technologies such as mobile uniform administrative requirements, agencies. (1) The requirements phones, land lines, and internet. cost principles, and audit requirements established in this part apply to Federal Termination means the ending of a for Federal awards to non-Federal agencies that make Federal awards to Federal award, in whole or in part at entities, as described in § 200.101. non-Federal entities. These any time prior to the planned end of Federal awarding agencies must not requirements are applicable to all costs period of performance. A lack of impose additional or inconsistent related to Federal awards. available funds is not a termination. requirements, except as provided in Third-party in-kind contributions §§ 200.102 and 200.211, or unless (2) Federal awarding agencies may means the value of non-cash specifically required by Federal statute, apply subparts A through E of this part contributions (i.e., property or services) regulation, or Executive order. to Federal agencies, for-profit entities, foreign public entities, or foreign that— * * * * * organizations, except where the Federal (1) Benefit a federally-assisted project (c) Cost principles. Subpart E of this awarding agency determines that the or program; and part establishes principles for application of these subparts would be (2) Are contributed by non-Federal determining the allowable costs inconsistent with the international third parties, without charge, to a non- incurred by non-Federal entities under responsibilities of the United States or Federal entity under a Federal award. Federal awards. The principles are for the statutes or regulations of a foreign Unliquidated financial obligations the purpose of cost determination and government. means, for financial reports prepared on are not intended to identify the a cash basis, financial obligations circumstances or dictate the extent of (b) Applicability to different types of incurred by the non-Federal entity that Federal Government participation in the Federal awards. (1) Throughout this part have not been paid (liquidated). For financing of a particular program or when the word ‘‘must’’ is used it reports prepared on an accrual project. The principles are designed to indicates a requirement. Whereas, use of expenditure basis, these are financial provide that Federal awards bear their the word ‘‘should’’ or ‘‘may’’ indicates obligations incurred by the non-Federal fair share of cost recognized under these a best practice or recommended entity for which an expenditure has not principles except where restricted or approach rather than a requirement and been recorded. prohibited by statute. permits discretion. Unobligated balance means the (d) Single Audit Requirements and (2) The following table describes what amount of funds under a Federal award Audit Follow-up. Subpart F of this part portions of this part apply to which that the non-Federal entity has not is issued pursuant to the Single Audit types of Federal awards. The terms and obligated. The amount is computed by Act Amendments of 1996, (31 U.S.C. conditions of Federal awards (including subtracting the cumulative amount of 7501–7507). It sets forth standards for this part) flow down to subawards to the non-Federal entity’s unliquidated obtaining consistency and uniformity subrecipients unless a particular section financial obligations and expenditures among Federal agencies for the audit of of this part or the terms and conditions of funds under the Federal award from non-Federal entities expending Federal of the Federal award specifically the cumulative amount of the funds that awards. These provisions also provide indicate otherwise. This means that the Federal awarding agency or pass- the policies and procedures for Federal non-Federal entities must comply with through entity authorized the non- awarding agencies and pass-through requirements in this part regardless of Federal entity to obligate. entities when using the results of these whether the non-Federal entity is a Voluntary committed cost sharing audits. recipient or subrecipient of a Federal means cost sharing specifically pledged (e) Guidance on challenges and award. Pass-through entities must on a voluntary basis in the proposal’s prizes. For OMB guidance to Federal comply with the requirements described budget on the part of the non-Federal awarding agencies on challenges and in subpart D of this part, §§ 200.331 entity and that becomes a binding prizes, please see memo M–10–11 through 200.333, but not any requirement of Federal award. See also Guidance on the Use of Challenges and requirements in this part directed § 200.306. Prizes to Promote Open Government, towards Federal awarding agencies ■ 35. Amend § 200.100 by revising issued March 8, 2010, or its successor. unless the requirements of this part or paragraphs (a)(1), (c), (d), and (e) to read ■ 36. Revise § 200.101 to read as the terms and conditions of the Federal as follows: follows: award indicate otherwise.

TABLE 1 TO PARAGRAPH (b)

Are applicable to the following types of Fed- eral Awards and Fixed-Price Contracts and Are NOT applicable to the following types of The following portions of this Part Subcontracts (except as noted in paragraphs Federal Awards and Fixed-Price Contracts (d) and (e) of this section): and Subcontracts:

Subpart A—Acronyms and Definitions ...... —All. Subpart B—General Provisions, except for —All. §§ 200.111 English Language, 200.112 Con- flict of Interest, 200.113 Mandatory Disclo- sures. §§ 200.111 English Language, 200.112 Conflict —Grant Agreements and cooperative agree- —Agreements for loans, loan guarantees, in- of Interest, 200.113 Mandatory Disclosures. ments. terest subsidies and insurance. —Procurement contracts awarded by Federal Agencies under the Federal Acquisition Regulation and subcontracts under those contracts.

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TABLE 1 TO PARAGRAPH (b)—Continued

Are applicable to the following types of Fed- eral Awards and Fixed-Price Contracts and Are NOT applicable to the following types of The following portions of this Part Subcontracts (except as noted in paragraphs Federal Awards and Fixed-Price Contracts (d) and (e) of this section): and Subcontracts:

Subparts C–D, except for §§ 200.203 Require- —Grant Agreements and cooperative agree- —Agreements for loans, loan guarantees, in- ment to provide public notice of Federal fi- ments. terest subsidies and insurance. nancial assistance programs, 200.303 Inter- —Procurement contracts awarded by Federal nal controls, 200.331–333 Subrecipient Moni- Agencies under the Federal Acquisition toring and Management. Regulation and subcontracts under those contracts. § 200.203 Requirement to provide public notice —Grant Agreements and cooperative agree- —Procurement contracts awarded by Federal of Federal financial assistance programs. ments. Agencies under the Federal Acquisition —Agreements for loans, loan guarantees, in- Regulation and subcontracts under those terest subsidies and insurance. contracts. §§ 200.303 Internal controls, 200.331–333 Sub- —All. recipient Monitoring and Management. Subpart E—Cost Principles ...... —Grant Agreements and cooperative agree- —Grant agreements and cooperative agree- ments, except those providing food com- ments providing foods commodities. modities. —Fixed amount awards. —All procurement contracts under the Federal —Agreements for loans, loans guarantees, in- Acquisition Regulations except those that terest subsidies and insurance. are not negotiated. —Federal awards to hospitals (see Appendix IX Hospital Cost Principles). Subpart F—Audit Requirements ...... —Grant Agreements and cooperative agree- —Fixed-price contracts and subcontracts ments. awarded under the Federal Acquisition —Contracts and subcontracts, except for fixed Regulation. price contacts and subcontracts, awarded under the Federal Acquisition Regulation. —Agreements for loans, loans guarantees, in- terest subsidies and insurance and other forms of Federal Financial Assistance as defined by the Single Audit Act Amendment of 1996.

(c) Federal award of cost- which is required by the Single Audit (i) Child Care and Development Block reimbursement contract under the FAR Act, in any circumstances where the Grant (42 U.S.C. 9858). to a non-Federal entity. When a non- provisions of Federal statutes or (ii) Child Care Mandatory and Federal entity is awarded a cost- regulations differ from the provisions of Matching Funds of the Child Care and reimbursement contract, only subpart D, this part, the provision of the Federal Development Fund (42 U.S.C. 9858). §§ 200.331 through 200.333, and statutes or regulations govern. This (f) Additional program applicability. subparts E and F of this part are includes, for agreements with Indian Except for § 200.203, the guidance in incorporated by reference into the tribes, the provisions of the Indian Self- subpart C of this part does not apply to contract, but the requirements of Determination and Education and the following programs: subparts D, E, and F are supplementary Assistance Act (ISDEAA), as amended, (1) Entitlement Federal awards to to the FAR and the contract. When the 25 U.S.C 450–458ddd–2. carry out the following programs of the Cost Accounting Standards (CAS) are (e) Program applicability. Except for Social Security Act: applicable to the contract, they take §§ 200.203 and 200.331 through precedence over the requirements of 200.333, the requirements in subparts C, (i) Temporary Assistance for Needy this part, including subpart F of this D, and E of this part do not apply to the Families (title IV–A of the Social part, which are supplementary to the following programs: Security Act, 42 U.S.C. 601–619); CAS requirements. In addition, costs (1) The block grant awards authorized (ii) Child Support Enforcement and that are made unallowable under 10 by the Omnibus Budget Reconciliation Establishment of Paternity (title IV–D of U.S.C. 2324(e) and 41 U.S.C. 4304(a) as Act of 1981 (including Community the Social Security Act, 42 U.S.C. 651– described in the FAR 48 CFR part 31, Services), except to the extent that 669b); subpart 31.2, and 48 CFR 31.603 are subpart E of this part apply to (iii) Foster Care and Adoption always unallowable. For requirements subrecipients of Community Services Assistance (title IV–E of the Act, 42 other than those covered in subpart D, Block Grant funds pursuant to 42 U.S.C. U.S.C. 670–679c); §§ 200.331 through 200.333, and 9916(a)(1)(B); (iv) Aid to the Aged, Blind, and subparts E and F of this part, the terms (2) Federal awards to local education Disabled (titles I, X, XIV, and XVI– of the contract and the FAR apply. Note agencies under 20 U.S.C. 7702–7703b, AABD of the Act, as amended); that when a non-Federal entity is (portions of the Impact Aid program); (v) Medical Assistance (Medicaid) awarded a FAR contract, the FAR (3) Payments under the Department of (title XIX of the Act, 42 U.S.C. 1396– applies, and the terms and conditions of Veterans Affairs’ State Home Per Diem 1396w–5) not including the State the contract shall prevail over the Program (38 U.S.C. 1741); and Medicaid Fraud Control program requirements of this part. (4) Federal awards authorized under authorized by section 1903(a)(6)(B) of (d) Governing provisions. With the the Child Care and Development Block the Social Security Act (42 U.S.C. exception of subpart F of this part, Grant Act of 1990, as amended: 1396b(a)(6)(B)); and

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(vi) Children’s Health Insurance this part when exceptions are not (c) Subpart F of this part is authorized Program (title XXI of the Act, 42 U.S.C. prohibited by statute. In the interest of under the Single Audit Act 1397aa–1397mm). maximum uniformity, exceptions from Amendments of 1996, (31 U.S.C. 7501– (2) A Federal award for an the requirements of this part will be 7507). experimental, pilot, or demonstration permitted as described in this section. ■ 39. Amend § 200.104 by revising the project that is also supported by a (b) Exceptions on a case-by-case basis introductory text and paragraphs (g) and Federal award listed in paragraph (f)(1) for individual non-Federal entities may (h) to read as follows: of this section. be authorized by the Federal awarding (3) Federal awards under subsection agency or cognizant agency for indirect § 200.104 Supersession. 412(e) of the Immigration and costs, except where otherwise required As described in § 200.110, this part Nationality Act and subsection 501(a) of by law or where OMB or other approval supersedes the following OMB guidance the Refugee Education Assistance Act of is expressly required by this part. documents and regulations under title 2 1980 (Pub. L. 96–422, 94 Stat. 1809), for (c) The Federal awarding agency may of the Code of Federal Regulations: cash assistance, medical assistance, and apply adjust requirements to a class of * * * * * supplemental security income benefits Federal awards or non-Federal entities (g) A–133, ‘‘Audits of States, Local to refugees and entrants and the when approved by OMB, or when Governments and Non-Profit administrative costs of providing the required by Federal statutes or Organizations’’; and assistance and benefits (8 U.S.C. regulations, except for the requirements (h) Those sections of A–50 related to 1522(e)). in subpart F of this part. A Federal audits performed under subpart F of this (4) Entitlement awards under the awarding agency may apply less part. following programs of The National restrictive requirements when making ■ School Lunch Act: 40. Revise § 200.105 to read as fixed amount awards as defined in follows: (i) National School Lunch Program subpart A of this part, except for those (section 4 of the Act, 42 U.S.C. 1753); requirements imposed by statute or in § 200.105 Effect on other issuances. (ii) Commodity Assistance (section 6 subpart F of this part. (a) Superseding inconsistent of the Act, 42 U.S.C. 1755); (d) Federal awarding agencies may requirements. For Federal awards (iii) Special Meal Assistance (section request exceptions in support of subject to this part, all administrative 11 of the Act, 42 U.S.C. 1759a); innovative program designs that apply a requirements, program manuals, (iv) Summer Food Service Program for risk-based, data-driven framework to handbooks and other non-regulatory Children (section 13 of the Act, 42 alleviate select compliance materials that are inconsistent with the U.S.C. 1761); and requirements and hold recipients (v) Child and Adult Care Food requirements of this part must be accountable for good performance. See superseded upon implementation of this Program (section 17 of the Act, 42 also § 200.206. U.S.C. 1766). part by the Federal agency, except to the (5) Entitlement awards under the ■ 38. Revise § 200.103 to read as extent they are required by statute or following programs of The Child follows: authorized in accordance with the provisions in § 200.102. Nutrition Act of 1966: § 200.103 Authorities. (i) Special Milk Program (section 3 of (b) Imposition of requirements on the Act, 42 U.S.C. 1772); This part is issued under the recipients. Agencies may impose legally (ii) School Breakfast Program (section following authorities. binding requirements on recipients only 4 of the Act, 42 U.S.C. 1773); and (a) Subparts B through D of this part through the notice and public comment (iii) State Administrative Expenses are authorized under 31 U.S.C. 503 (the process through an approved agency (section 7 of the Act, 42 U.S.C. 1776). Chief Financial Officers Act, Functions process, including as authorized by this (6) Entitlement awards for State of the Deputy Director for Management), part, other statutes or regulations, or as Administrative Expenses under The 41 U.S.C. 1101–1131 (the Office of incorporated into the terms of a Federal Food and Nutrition Act of 2008 (section Federal Procurement Policy Act), award. 16 of the Act, 7 U.S.C. 2025). Reorganization Plan No. 2 of 1970, and ■ 41. Revise § 200.106 to read as (7) Non-discretionary Federal awards Executive Order 11541 (‘‘Prescribing the follows: under the following non-entitlement Duties of the Office of Management and programs: Budget and the Domestic Policy Council § 200.106 Agency implementation. (i) Special Supplemental Nutrition in the Executive Office of the The specific requirements and Program for Women, Infants and President’’), the Single Audit Act responsibilities of Federal agencies and Children (section 17 of the Child Amendments of 1996, (31 U.S.C. 7501– non-Federal entities are set forth in this Nutrition Act of 1966) 42 U.S.C. 1786; 7507), as well as The Federal Program part. Federal agencies making Federal (ii) The Emergency Food Assistance Information Act (Pub. L. 95–220 and awards to non-Federal entities must Programs (Emergency Food Assistance Pub. L. 98–169, as amended, codified at implement the language in subparts C Act of 1983) 7 U.S.C. 7501 note; and 31 U.S.C. 6101–6106). through F of this part in codified (iii) Commodity Supplemental Food (b) Subpart E of this part is authorized regulations unless different provisions Program (section 5 of the Agriculture under the Budget and Accounting Act of are required by Federal statute or are and Consumer Protection Act of 1973) 7 1921, as amended; the Budget and approved by OMB. U.S.C. 612c note. Accounting Procedures Act of 1950, as ■ 42. Revise § 200.110 to read as ■ 37. Revise § 200.102 to read as amended (31 U.S.C. 1101–1125); the follows: follows: Chief Financial Officers Act of 1990 (31 U.S.C. 503–504); Reorganization Plan § 200.110 Effective/applicability date. § 200.102 Exceptions. No. 2 of 1970; and Executive Order (a) The standards set forth in this part (a) With the exception of subpart F of 11541, ‘‘Prescribing the Duties of the that affect the administration of Federal this part, OMB may allow exceptions for Office of Management and Budget and awards issued by Federal awarding classes of Federal awards or non-Federal the Domestic Policy Council in the agencies become effective once entities subject to the requirements of Executive Office of the President.’’ implemented by Federal awarding

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agencies or when any future amendment 200.214 Suspension and debarment. (iii) In one payment at Federal award to this part becomes final. 200.215 Never contract with the enemy. completion. (b) Existing negotiated indirect cost 200.216 Prohibition on certain (2) A fixed amount award cannot be rates (as of the publication date of the telecommunications and video used in programs which require surveillance services or equipment. revisions to the guidance) will remain in mandatory cost sharing or match. place until they expire. The effective Subpart C—Pre-Federal Award (3) The non-Federal entity must date of changes to indirect cost rates Requirements and Contents of Federal certify in writing to the Federal must be based upon the date that a Awards awarding agency or pass-through entity newly re-negotiated rate goes into effect at the end of the Federal award that the for a specific non-Federal entity’s fiscal § 200.200 Purpose. project or activity was completed or the year. Therefore, for indirect cost rates Sections 200.201 through 200.216 level of effort was expended. If the and cost allocation plans, the revised prescribe instructions and other pre- required level of activity or effort was Uniform Guidance (as of the publication award matters to be used by Federal not carried out, the amount of the date for revisions to the guidance) awarding agencies in the program Federal award must be adjusted. become effective in generating proposals planning, announcement, application (4) Periodic reports may be and negotiating a new rate (when the and award processes. established for each Federal award. rate is re-negotiated). (5) Changes in principal investigator, § 200.201 Use of grant agreements ■ 43. Revise § 200.113 to read as project leader, project partner, or scope (including fixed amount awards), of effort must receive the prior written follows: cooperative agreements, and contracts. approval of the Federal awarding agency § 200.113 Mandatory disclosures. (a) Federal award instrument. The or pass-through entity. Federal awarding agency or pass- The non-Federal entity or applicant through entity must decide on the § 200.202 Program planning and design. for a Federal award must disclose, in a appropriate instrument for the Federal timely manner, in writing to the Federal The Federal awarding agency must award (i.e., grant agreement, cooperative awarding agency or pass-through entity design a program and create an agreement, or contract) in accordance all violations of Federal criminal law Assistance Listing before announcing with the Federal Grant and Cooperative involving fraud, bribery, or gratuity the Notice of Funding Opportunity. The Agreement Act (31 U.S.C. 6301–08). program must be designed with clear violations potentially affecting the (b) Fixed amount awards. In addition Federal award. Non-Federal entities that goals and objectives that facilitate the to the options described in paragraph (a) delivery of meaningful results have received a Federal award including of this section, Federal awarding the term and condition outlined in consistent with the Federal authorizing agencies, or pass-through entities as legislation of the program. Program appendix XII to this part are required to permitted in § 200.333, may use fixed report certain civil, criminal, or performance shall be measured based on amount awards (see Fixed amount the goals and objectives developed administrative proceedings to SAM awards in § 200.1) to which the (currently FAPIIS). Failure to make during program planning and design. following conditions apply: See § 200.301 for more information on required disclosures can result in any of (1) The Federal award amount is the remedies described in § 200.339. performance measurement. Performance negotiated using the cost principles (or measures may differ depending on the (See also 2 CFR part 180, 31 U.S.C. other pricing information) as a guide. 3321, and 41 U.S.C. 2313.) type of program. The program must The Federal awarding agency or pass- align with the strategic goals and ■ 44. Revise subpart C to read as through entity may use fixed amount objectives within the Federal awarding follows: awards if the project scope has agency’s performance plan and should measurable goals and objectives and if Subpart C—Pre-Federal Award support the Federal awarding agency’s adequate cost, historical, or unit pricing performance measurement, Requirements and Contents of Federal data is available to establish a fixed Awards management, and reporting as required amount award based on a reasonable by Part 6 of OMB Circular A–11 Sec. estimate of actual cost. Payments are (Preparation, Submission, and 200.200 Purpose. based on meeting specific requirements Execution of the Budget). The program 200.201 Use of grant agreements (including of the Federal award. Accountability is must also be designed to align with the fixed amount awards), cooperative based on performance and results. Program Management Improvement agreements, and contracts. Except in the case of termination before Accountability Act (Pub. L. 114–264). 200.202 Program planning and design. completion of the Federal award, there 200.203 Requirement to provide public is no governmental review of the actual § 200.203 Requirement to provide public notice of Federal financial assistance costs incurred by the non-Federal entity notice of Federal financial assistance programs. programs. 200.204 Notices of funding opportunities. in performance of the award. Some of 200.205 Federal awarding agency review of the ways in which the Federal award (a) The Federal awarding agency must merit of proposals. may be paid include, but are not limited notify the public of Federal programs in 200.206 Federal awarding agency review of to: the Federal Assistance Listings risk posed by applicants. (i) In several partial payments, the maintained by the General Services 200.207 Standard application requirements. amount of each agreed upon in advance, Administration (GSA). 200.208 Specific conditions. and the ‘‘milestone’’ or event triggering (1) The Federal Assistance Listings is 200.209 Certifications and representations. the payment also agreed upon in the single, authoritative, 200.210 Pre-award costs. advance, and set forth in the Federal governmentwide comprehensive source 200.211 Information contained in a Federal of Federal financial assistance program award. award; 200.212 Public access to Federal award (ii) On a unit price basis, for a defined information produced by the executive information. unit or units, at a defined price or branch of the Federal Government. 200.213 Reporting a determination that a prices, agreed to in advance of (2) The information that the Federal non-Federal entity is not qualified for a performance of the Federal award and awarding agency must submit to GSA Federal award. set forth in the Federal award; or, for approval by OMB is listed in

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paragraph (b) of this section. GSA must (6) Applicability of Single Audit (2) Federal award information, prescribe the format for the submission Requirements. Applicability of Single including sufficient information to help in coordination with OMB. Audit Requirements as required by an applicant make an informed decision (3) The Federal awarding agency may subpart F of this part. about whether to submit an application. not award Federal financial assistance (See also § 200.414(c)(4)). without assigning it to a program that § 200.204 Notices of funding (3) Specific eligibility information, opportunities. has been included in the Federal including any factors or priorities that Assistance Listings as required in this For discretionary grants and affect an applicant’s or its application’s section unless there are exigent cooperative agreements that are eligibility for selection. circumstances requiring otherwise, such competed, the Federal awarding agency (4) Application Preparation and as timing requirements imposed by must announce specific funding Submission Information, including the statute. opportunities by providing the applicable submission dates and time. (b) For each program that awards following information in a public (5) Application Review Information discretionary Federal awards, non- notice: including the criteria and process to be (a) Summary information in notices of discretionary Federal awards, loans, used to evaluate applications. See also funding opportunities. The Federal insurance, or any other type of Federal §§ 200.205 and 200.206. awarding agency must display the financial assistance, the Federal (6) Federal Award Administration following information posted on the awarding agency must, to the extent Information. See also § 200.211. OMB-designated governmentwide practicable, create, update, and manage (7) Applicable terms and conditions website for funding and applying for Assistance Listings entries based on the for resulting awards, including any Federal financial assistance, in a authorizing statute for the program and exceptions from these standard terms. location preceding the full text of the comply with additional guidance announcement: § 200.205 Federal awarding agency review provided by GSA in consultation with (1) Federal Awarding Agency Name; of merit of proposals. OMB to ensure consistent, accurate (2) Funding Opportunity Title; For discretionary Federal awards, information is available to prospective (3) Announcement Type (whether the unless prohibited by Federal statute, the applicants. Accordingly, Federal funding opportunity is the initial Federal awarding agency must design awarding agencies must submit the announcement of this funding and execute a merit review process for following information to GSA: opportunity or a modification of a applications, with the objective of (1) Program Description, Purpose, previously announced opportunity); selecting recipients most likely to be Goals, and Measurement. A brief (4) Funding Opportunity Number successful in delivering results based on summary of the statutory or regulatory (required, if applicable). If the Federal the program objectives outlined in requirements of the program and its awarding agency has assigned or will section § 200.202. A merit review is an intended outcome. Where appropriate, assign a number to the funding objective process of evaluating Federal the Program Description, Purpose, opportunity announcement, this award applications in accordance with Goals, and Measurement should align number must be provided; written standards set forth by the with the strategic goals and objectives (5) Assistance Listings Number(s); Federal awarding agency. This process within the Federal awarding agency’s (6) Key Dates. Key dates include due must be described or incorporated by performance plan and should support dates for applications or Executive reference in the applicable funding the Federal awarding agency’s Order 12372 submissions, as well as for opportunity (see appendix I to this performance measurement, any letters of intent or pre-applications. part.). See also § 200.204. The Federal management, and reporting as required For any announcement issued before a awarding agency must also periodically by Part 6 of OMB Circular A–11; program’s application materials are review its merit review process. (2) Identification. Identification of available, key dates also include the whether the program makes Federal date on which those materials will be § 200.206 Federal awarding agency review awards on a discretionary basis or the released; and any other additional of risk posed by applicants. Federal awards are prescribed by information, as deemed applicable by (a) Review of OMB-designated Federal statute, such as in the case of the relevant Federal awarding agency. repositories of governmentwide data. (1) formula grants. (b) Availability period. The Federal Prior to making a Federal award, the (3) Projected total amount of funds awarding agency must generally make Federal awarding agency is required by available for the program. Estimates all funding opportunities available for the Improper Payments Elimination and based on previous year funding are application for at least 60 calendar days. Recovery Improvement Act of 2012, 31 acceptable if current appropriations are The Federal awarding agency may make U.S.C. 3321 note, and 41 U.S.C. 2313 to not available at the time of the a determination to have a less than 60 review information available through submission; calendar day availability period but no any OMB-designated repositories of (4) Anticipated source of available funding opportunity should be available governmentwide eligibility qualification funds. The statutory authority for for less than 30 calendar days unless or financial integrity information as funding the program and, to the extent exigent circumstances require as appropriate. See also suspension and possible, agency, sub-agency, or, if determined by the Federal awarding debarment requirements at 2 CFR part known, the specific program unit that agency head or delegate. 180 as well as individual Federal agency will issue the Federal awards, and (c) Full text of funding opportunities. suspension and debarment regulations associated funding identifier (e.g., The Federal awarding agency must in title 2 of the Code of Federal Treasury Account Symbol(s)); include the following information in the Regulations. (5) General eligibility requirements. full text of each funding opportunity. (2) In accordance 41 U.S.C. 2313, the The statutory, regulatory or other For specific instructions on the content Federal awarding agency is required to eligibility factors or considerations that required in this section, refer to review the non-public segment of the determine the applicant’s qualification appendix I to this part. OMB-designated integrity and for Federal awards under the program (1) Full programmatic description of performance system accessible through (e.g., type of non-Federal entity); and the funding opportunity. SAM (currently the Federal Awardee

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Performance and Integrity Information and conditions of previous Federal (2) The applicant or recipient’s System (FAPIIS)) prior to making a awards, and if applicable, the extent to history of compliance with the general Federal award where the Federal share which any previously awarded amounts or specific terms and conditions of a is expected to exceed the simplified will be expended prior to future awards; Federal award; acquisition threshold, defined in 41 (iv) Audit reports and findings. (3) The applicant or recipient’s ability U.S.C. 134, over the period of Reports and findings from audits to meet expected performance goals as performance. As required by Public Law performed under subpart F of this part described in § 200.211; or 112–239, National Defense or the reports and findings of any other (4) A responsibility determination of Authorization Act for Fiscal Year 2013, available audits; and an applicant or recipient. prior to making a Federal award, the (v) Ability to effectively implement (c) Additional Federal award Federal awarding agency must consider requirements. The applicant’s ability to conditions may include items such as all of the information available through effectively implement statutory, the following: FAPIIS with regard to the applicant and regulatory, or other requirements (1) Requiring payments as any immediate highest level owner, imposed on non-Federal entities. reimbursements rather than advance predecessor (i.e.; a non-Federal entity (c) Risk-based requirements payments; that is replaced by a successor), or adjustment. The Federal awarding (2) Withholding authority to proceed subsidiary, identified for that applicant agency may adjust requirements when a to the next phase until receipt of in FAPIIS, if applicable. At a minimum, risk-evaluation indicates that it may be evidence of acceptable performance the information in the system for a prior merited either pre-award or post-award. within a given performance period; Federal award recipient must (d) Suspension and debarment (3) Requiring additional, more demonstrate a satisfactory record of compliance. (1) The Federal awarding detailed financial reports; executing programs or activities under agency must comply with the guidelines (4) Requiring additional project Federal grants, cooperative agreements, on governmentwide suspension and monitoring; or procurement awards; and integrity debarment in 2 CFR part 180, and must (5) Requiring the non-Federal entity to and business ethics. The Federal require non-Federal entities to comply obtain technical or management awarding agency may make a Federal with these provisions. These provisions assistance; or award to a recipient who does not fully restrict Federal awards, subawards and (6) Establishing additional prior meet these standards, if it is determined contracts with certain parties that are approvals. (d) If the Federal awarding agency or that the information is not relevant to debarred, suspended or otherwise pass-through entity is imposing the current Federal award under excluded from or ineligible for consideration or there are specific participation in Federal programs or additional requirements, they must conditions that can appropriately activities. notify the applicant or non-Federal mitigate the effects of the non-Federal entity as to: § 200.207 Standard application (1) The nature of the additional entity’s risk in accordance with requirements. requirements; § 200.208. (a) Paperwork clearances. The Federal (2) The reason why the additional (b) Risk evaluation. (1) The Federal awarding agency may only use requirements are being imposed; awarding agency must have in place a application information collections (3) The nature of the action needed to framework for evaluating the risks approved by OMB under the Paperwork remove the additional requirement, if posed by applicants before they receive Reduction Act of 1995 and OMB’s applicable; Federal awards. This evaluation may implementing regulations in 5 CFR part (4) The time allowed for completing incorporate results of the evaluation of 1320 and in alignment with OMB- the actions if applicable; and the applicant’s eligibility or the quality approved, governmentwide data (5) The method for requesting of its application. If the Federal elements available from the OMB- reconsideration of the additional awarding agency determines that a designated standards lead. Consistent requirements imposed. Federal award will be made, special with these requirements, OMB will (e) Any additional requirements must conditions that correspond to the degree authorize additional information be promptly removed once the of risk assessed may be applied to the collections only on a limited basis. conditions that prompted them have Federal award. Criteria to be evaluated (b) Information collection. If been satisfied. must be described in the announcement applicable, the Federal awarding agency of funding opportunity described in may inform applicants and recipients § 200.209 Certifications and § 200.204. that they do not need to provide certain representations. (2) In evaluating risks posed by information otherwise required by the Unless prohibited by the U.S. applicants, the Federal awarding agency relevant information collection. Constitution, Federal statutes or may use a risk-based approach and may regulations, each Federal awarding consider any items such as the § 200.208 Specific conditions. agency or pass-through entity is following: (a) Federal awarding agencies are authorized to require the non-Federal (i) Financial stability. Financial responsible for ensuring that specific entity to submit certifications and stability; Federal award conditions are consistent representations required by Federal (ii) Management systems and with the program design reflected in statutes, or regulations on an annual standards. Quality of management § 200.202 and include clear performance basis. Submission may be required more systems and ability to meet the expectations of recipients as required in frequently if the non-Federal entity fails management standards prescribed in § 200.301. to meet a requirement of a Federal this part; (b) The Federal awarding agency or award. (iii) History of performance. The pass-through entity may adjust specific applicant’s record in managing Federal Federal award conditions as needed, in § 200.210 Pre-award costs. awards, if it is a prior recipient of accordance with this section, based on For requirements on costs incurred by Federal awards, including timeliness of an analysis of the following factors: the applicant prior to the start date of compliance with applicable reporting (1) Based on the criteria set forth in the period of performance of the Federal requirements, conformance to the terms § 200.206; award, see § 200.458.

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§ 200.211 Information contained in a order, other Presidential directive, or § 200.212 Public access to Federal award Federal award. regulatory requirements that apply by information. A Federal award must include the specific reference and are not program- (a) In accordance with statutory following information: specific. See § 200.300 Statutory and requirements for Federal spending (a) Federal award performance goals. national policy requirements. transparency (e.g., FFATA), except as Performance goals, indicators, targets, (iii) Recipient integrity and noted in this section, for applicable and baseline data must be included in performance matters. If the total Federal Federal awards the Federal awarding the Federal award, where applicable. share of the Federal award may include agency must announce all Federal The Federal awarding agency must also more than $500,000 over the period of awards publicly and publish the specify how performance will be performance, the Federal awarding required information on a publicly assessed in the terms and conditions of agency must include the term and available OMB-designated the Federal award, including the timing condition available in appendix XII of governmentwide website. and scope of expected performance. See this part. See also § 200.113. (b) All information posted in the §§ 200.202 and 200.301 for more (iv) Future budget periods. If it is designated integrity and performance information on Federal award anticipated that the period of system accessible through SAM performance goals. performance will include multiple (currently FAPIIS) on or after April 15, (b) General Federal award budget periods, the Federal awarding 2011 will be publicly available after a information. The Federal awarding agency must indicate that subsequent waiting period of 14 calendar days, agency must include the following budget periods are subject to the except for: general Federal award information in availability of funds, program authority, (1) Past performance reviews required each Federal award: satisfactory performance, and by Federal Government contractors in (1) Recipient name (which must compliance with the terms and accordance with the Federal Acquisition match the name associated with its conditions of the Federal award. Regulation (FAR) 48 CFR part 42, unique entity identifier as defined at 2 (v) Termination provisions. Federal subpart 42.15; CFR 25.315); awarding agencies must make recipients (2) Information that was entered prior (2) Recipient’s unique entity aware, in a clear and unambiguous to April 15, 2011; or identifier; manner, of the termination provisions in (3) Unique Federal Award (3) Information that is withdrawn § 200.340, including the applicable during the 14-calendar day waiting Identification Number (FAIN); termination provisions in the Federal (4) Federal Award Date (see Federal period by the Federal Government awarding agency’s regulations or in each official. award date in § 200.201); Federal award. (5) Period of Performance Start and (c) Nothing in this section may be (2) The Federal award must construed as requiring the publication End Date; incorporate, by reference, all general (6) Budget Period Start and End Date; of information otherwise exempt under terms and conditions of the award, (7) Amount of Federal Funds the Freedom of Information Act (5 U.S.C which must be maintained on the Obligated by this action; 552), or controlled unclassified (8) Total Amount of Federal Funds agency’s website. information pursuant to Executive Obligated; (3) If a non-Federal entity requests a Order 13556. (9) Total Approved Cost Sharing or copy of the full text of the general terms § 200.213 Reporting a determination that a Matching, where applicable; and conditions, the Federal awarding agency must provide it. non-Federal entity is not qualified for a (10) Total Amount of the Federal Federal award. Award including approved Cost Sharing (4) Wherever the general terms and or Matching; conditions are publicly available, the (a) If a Federal awarding agency does (11) Budget Approved by the Federal Federal awarding agency must maintain not make a Federal award to a non- Awarding Agency; an archive of previous versions of the Federal entity because the official (11) Federal award description, (to general terms and conditions, with determines that the non-Federal entity comply with statutory requirements effective dates, for use by the non- does not meet either or both of the (e.g., FFATA)); Federal entity, auditors, or others. minimum qualification standards as (12) Name of Federal awarding agency (d) Federal awarding agency, described in § 200.206(a)(2), the Federal and contact information for awarding program, or Federal award specific awarding agency must report that official, terms and conditions. The Federal determination to the designated (13) Assistance Listings Number and awarding agency must include with integrity and performance system Title; each Federal award any terms and accessible through SAM (currently (14) Identification of whether the conditions necessary to communicate FAPIIS), only if all of the following award is R&D; and requirements that are in addition to the apply: (15) Indirect cost rate for the Federal requirements outlined in the Federal (1) The only basis for the award (including if the de minimis rate awarding agency’s general terms and determination described in this is charged per § 200.414). conditions. See also § 200.208. paragraph (a) is the non-Federal entity’s (c) General terms and conditions. (1) Whenever practicable, these specific prior record of executing programs or Federal awarding agencies must terms and conditions also should be activities under Federal awards or its incorporate the following general terms shared on the agency’s website and in record of integrity and business ethics, and conditions either in the Federal notices of funding opportunities (as as described in § 200.206(a)(2) (i.e., the award or by reference, as applicable: outlined in § 200.204) in addition to entity was determined to be qualified (i) Administrative requirements. being included in a Federal award. See based on all factors other than those two Administrative requirements also § 200.207. standards); and implemented by the Federal awarding (e) Federal awarding agency (2) The total Federal share of the agency as specified in this part. requirements. Any other information Federal award that otherwise would be (ii) National policy requirements. required by the Federal awarding made to the non-Federal entity is These include statutory, executive agency. expected to exceed the simplified

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acquisition threshold over the period of the system to incorporate the update in as critical technology as part of any performance. a timely way. system. As described in Public Law (b) The Federal awarding agency is (e) Federal awarding agencies must 115–232, section 889, covered not required to report a determination not post any information that will be telecommunications equipment is that a non-Federal entity is not qualified made publicly available in the non- telecommunications equipment for a Federal award if they make the public segment of designated integrity produced by Huawei Technologies Federal award to the non-Federal entity and performance system that is covered Company or ZTE Corporation (or any and include specific award terms and by a disclosure exemption under the subsidiary or affiliate of such entities). conditions, as described in § 200.208. Freedom of Information Act. If the (i) For the purpose of public safety, (c) If a Federal awarding agency recipient asserts within seven calendar security of government facilities, reports a determination that a non- days to the Federal awarding agency physical security surveillance of critical Federal entity is not qualified for a that posted the information that some or infrastructure, and other national Federal award, as described in all of the information made publicly security purposes, video surveillance paragraph (a) of this section, the Federal available is covered by a disclosure and telecommunications equipment awarding agency also must notify the exemption under the Freedom of produced by Hytera Communications non-Federal entity that— Information Act, the Federal awarding Corporation, Hangzhou Hikvision (1) The determination was made and agency that posted the information must Digital Technology Company, or Dahua reported to the designated integrity and remove the posting within seven Technology Company (or any subsidiary performance system accessible through calendar days of receiving the assertion. or affiliate of such entities). SAM, and include with the notification Prior to reposting the releasable (ii) Telecommunications or video an explanation of the basis for the information, the Federal awarding surveillance services provided by such determination; agency must resolve the issue in entities or using such equipment. (2) The information will be kept in the accordance with the agency’s Freedom (iii) Telecommunications or video system for a period of five years from of Information Act procedures. surveillance equipment or services the date of the determination, as produced or provided by an entity that required by section 872 of Public Law § 200.214 Suspension and debarment. the Secretary of Defense, in consultation 110–417, as amended (41 U.S.C. 2313), Non-Federal entities are subject to the with the Director of the National then archived; non-procurement debarment and Intelligence or the Director of the (3) Each Federal awarding agency that suspension regulations implementing Federal Bureau of Investigation, considers making a Federal award to the Executive Orders 12549 and 12689, 2 reasonably believes to be an entity non-Federal entity during that five year CFR part 180. The regulations in 2 CFR owned or controlled by, or otherwise period must consider that information part 180 restrict awards, subawards, and connected to, the government of a in judging whether the non-Federal contracts with certain parties that are covered foreign country. entity is qualified to receive the Federal debarred, suspended, or otherwise (b) In implementing the prohibition award when the total Federal share of excluded from or ineligible for under Public Law 115–232, section 889, the Federal award is expected to include participation in Federal assistance subsection (f), paragraph (1), heads of an amount of Federal funding in excess programs or activities. executive agencies administering loan, of the simplified acquisition threshold grant, or subsidy programs shall over the period of performance; § 200.215 Never contract with the enemy. prioritize available funding and (4) The non-Federal entity may go to Federal awarding agencies and technical support to assist affected the awardee integrity and performance recipients are subject to the regulations businesses, institutions and portal accessible through SAM implementing Never Contract with the organizations as is reasonably necessary (currently the Contractor Performance Enemy in 2 CFR part 183. The for those affected entities to transition Assessment Reporting System (CPARS)) regulations in 2 CFR part 183 affect from covered communications and comment on any information the covered contracts, grants and equipment and services, to procure system contains about the non-Federal cooperative agreements that are replacement equipment and services, entity itself; and expected to exceed $50,000 within the and to ensure that communications (5) Federal awarding agencies will period of performance, are performed service to users and customers is consider that non-Federal entity’s outside the United States and its sustained. comments in determining whether the territories, and are in support of a (c) See Public Law 115–232, section non-Federal entity is qualified for a contingency operation in which 889 for additional information. future Federal award. members of the Armed Forces are (d) See also § 200.471. (d) If a Federal awarding agency actively engaged in hostilities. ■ 45. Revise subpart D to read as enters information into the designated follows: integrity and performance system § 200.216 Prohibition on certain accessible through SAM about a telecommunications and video surveillance services or equipment. Subpart D—Post Federal Award determination that a non-Federal entity Requirements is not qualified for a Federal award and (a) Recipients and subrecipients are subsequently: prohibited from obligating or expending Sec. (1) Learns that any of that information loan or grant funds to: 200.300 Statutory and national policy is erroneous, the Federal awarding (1) Procure or obtain; requirements. agency must correct the information in (2) Extend or renew a contract to 200.301 Performance measurement. the system within three business days; procure or obtain; or 200.302 Financial management. and (3) Enter into a contract (or extend or 200.303 Internal controls. 200.304 Bonds. (2) Obtains an update to that renew a contract) to procure or obtain 200.305 Federal payment. information that could be helpful to equipment, services, or systems that 200.306 Cost sharing or matching. other Federal awarding agencies, the uses covered telecommunications 200.307 Program income. Federal awarding agency is strongly equipment or services as a substantial or 200.308 Revision of budget and program encouraged to amend the information in essential component of any system, or plans.

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200.309 Modifications to Period of Subpart D—Post Federal Award requirements must be aligned, to the Performance. Requirements extent permitted by law, with the Property Standards Federal awarding agency strategic goals, § 200.300 Statutory and national policy strategic objectives or performance goals 200.310 Insurance coverage. requirements. that are relevant to the program. See 200.311 Real property. (a) The Federal awarding agency must also OMB Circular A–11, Preparation, 200.312 Federally-owned and exempt manage and administer the Federal property. Submission, and Execution of the award in a manner so as to ensure that Budget Part 6. 200.313 Equipment. Federal funding is expended and 200.314 Supplies. (b) The Federal awarding agency associated programs are implemented in 200.315 Intangible property. should provide recipients with clear 200.316 Property trust relationship. full accordance with the U.S. performance goals, indicators, targets, Constitution, Federal Law, and public and baseline data as described in Procurement Standards policy requirements: Including, but not § 200.211. Performance reporting 200.317 Procurements by states. limited to, those protecting free speech, frequency and content should be 200.318 General procurement standards. religious liberty, public welfare, the established to not only allow the 200.319 Competition. environment, and prohibiting Federal awarding agency to understand 200.320 Methods of procurement to be discrimination. The Federal awarding the recipient progress but also to followed. agency must communicate to the non- facilitate identification of promising 200.321 Contracting with small and Federal entity all relevant public policy practices among recipients and build minority businesses, women’s business requirements, including those in general the evidence upon which the Federal enterprises, and labor surplus area firms. appropriations provisions, and awarding agency’s program and 200.322 Domestic preferences for incorporate them either directly or by procurements. performance decisions are made. See 200.323 Procurement of recovered reference in the terms and conditions of § 200.328 for more information on materials. the Federal award. reporting program performance. 200.324 Contract cost and price. (b) The non-Federal entity is (c) This provision is designed to 200.325 Federal awarding agency or pass- responsible for complying with all operate in tandem with evidence-related through entity review. requirements of the Federal award. For statutes (e.g.; The Foundations for 200.326 Bonding requirements. all Federal awards, this includes the Evidence-Based Policymaking Act of 200.327 Contract provisions. provisions of FFATA, which includes 2018, which emphasizes collaboration requirements on executive Performance and Financial Monitoring and and coordination to advance data and Reporting compensation, and also requirements evidence-building functions in the implementing the Act for the non- Federal government). The Federal 200.328 Financial reporting. Federal entity at 2 CFR parts 25 and awarding agency should also specify 200.329 Monitoring and reporting program 170. See also statutory requirements for performance. any requirements of award recipients’ 200. 330 Reporting on real property. whistleblower protections at 10 U.S.C. participation in a federally funded 2409, 41 U.S.C. 4712, and 10 U.S.C. evaluation, and any evaluation activities Subrecipient Monitoring and Management 2324, 41 U.S.C. 4304 and 4310. required to be conducted by the Federal 200.331 Subrecipient and contractor § 200.301 Performance measurement. award. determinations. 200.332 Requirements for pass-through (a) The Federal awarding agency must § 200.302 Financial management. entities. measure the recipient’s performance to (a) Each state must expend and 200.333 Fixed amount subawards. show achievement of program goals and account for the Federal award in objectives, share lessons learned, Record Retention and Access accordance with state laws and improve program outcomes, and foster procedures for expending and 200.334 Retention requirements for records. adoption of promising practices. accounting for the state’s own funds. In 200.335 Requests for transfer of records. Program goals and objectives should be 200.336 Methods for collection, addition, the state’s and the other non- derived from program planning and transmission, and storage of information. Federal entity’s financial management 200.337 Access to records. design. See § 200.202 for more systems, including records documenting 200.338 Restrictions on public access to information. Where appropriate, the compliance with Federal statutes, records. Federal award may include specific regulations, and the terms and program goals, indicators, targets, conditions of the Federal award, must Remedies for Noncompliance baseline data, data collection, or be sufficient to permit the preparation of 200.339 Remedies for noncompliance. expected outcomes (such as outputs, or reports required by general and 200.340 Termination. services performance or public impacts program-specific terms and conditions; 200.341 Notification of termination of any of these) with an expected and the tracing of funds to a level of requirement. timeline for accomplishment. Where 200.342 Opportunities to object, hearings, expenditures adequate to establish that applicable, this should also include any and appeals. such funds have been used according to 200.343 Effects of suspension and performance measures or independent the Federal statutes, regulations, and the termination. sources of data that may be used to terms and conditions of the Federal measure progress. The Federal awarding award. See also § 200.450. Closeout agency will determine how performance (b) The financial management system 200.344 Closeout. progress is measured, which may differ of each non-Federal entity must provide Post-Closeout Adjustments and Continuing by program. Performance measurement for the following (see also §§ 200.334, Responsibilities progress must be both measured and 200.335, 200.336, and 200.337): reported. See § 200.329 for more (1) Identification, in its accounts, of 200.345 Post-closeout adjustments and continuing responsibilities. information on monitoring program all Federal awards received and performance. The Federal awarding expended and the Federal programs Collection of Amounts Due agency may include program-specific under which they were received. 200.346 Collection of amounts due. requirements, as applicable. These Federal program and Federal award

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identification must include, as Committee of Sponsoring Organizations redemption of checks, warrants, or applicable, the Assistance Listings title of the Treadway Commission (COSO). payment by other means. See also and number, Federal award (b) Comply with the U.S. § 200.302(b)(6). Except as noted identification number and year, name of Constitution, Federal statutes, elsewhere in this part, Federal agencies the Federal agency, and name of the regulations, and the terms and must require recipients to use only pass-through entity, if any. conditions of the Federal awards. OMB-approved, governmentwide (2) Accurate, current, and complete (c) Evaluate and monitor the non- information collection requests to disclosure of the financial results of Federal entity’s compliance with request payment. each Federal award or program in statutes, regulations and the terms and (1) The non-Federal entity must be accordance with the reporting conditions of Federal awards. paid in advance, provided it maintains requirements set forth in §§ 200.328 and (d) Take prompt action when or demonstrates the willingness to 200.329. If a Federal awarding agency instances of noncompliance are maintain both written procedures that requires reporting on an accrual basis identified including noncompliance minimize the time elapsing between the from a recipient that maintains its identified in audit findings. transfer of funds and disbursement by records on other than an accrual basis, (e) Take reasonable measures to the non-Federal entity, and financial the recipient must not be required to safeguard protected personally management systems that meet the establish an accrual accounting system. identifiable information and other standards for fund control and This recipient may develop accrual data information the Federal awarding accountability as established in this for its reports on the basis of an analysis agency or pass-through entity designates part. Advance payments to a non- of the documentation on hand. as sensitive or the non-Federal entity Federal entity must be limited to the Similarly, a pass-through entity must considers sensitive consistent with minimum amounts needed and be timed not require a subrecipient to establish applicable Federal, State, local, and to be in accordance with the actual, an accrual accounting system and must tribal laws regarding privacy and immediate cash requirements of the allow the subrecipient to develop responsibility over confidentiality. non-Federal entity in carrying out the purpose of the approved program or accrual data for its reports on the basis § 200.304 Bonds. of an analysis of the documentation on project. The timing and amount of hand. The Federal awarding agency may advance payments must be as close as include a provision on bonding, (3) Records that identify adequately is administratively feasible to the actual insurance, or both in the following the source and application of funds for disbursements by the non-Federal entity circumstances: for direct program or project costs and federally-funded activities. These (a) Where the Federal Government the proportionate share of any allowable records must contain information guarantees or insures the repayment of indirect costs. The non-Federal entity pertaining to Federal awards, money borrowed by the recipient, the must make timely payment to authorizations, financial obligations, Federal awarding agency, at its contractors in accordance with the unobligated balances, assets, discretion, may require adequate contract provisions. expenditures, income and interest and bonding and insurance if the bonding (2) Whenever possible, advance be supported by source documentation. and insurance requirements of the non- payments must be consolidated to cover (4) Effective control over, and Federal entity are not deemed adequate anticipated cash needs for all Federal accountability for, all funds, property, to protect the interest of the Federal awards made by the Federal awarding and other assets. The non-Federal entity Government. agency to the recipient. must adequately safeguard all assets and (b) The Federal awarding agency may (i) Advance payment mechanisms assure that they are used solely for require adequate fidelity bond coverage include, but are not limited to, Treasury authorized purposes. See § 200.303. where the non-Federal entity lacks check and electronic funds transfer and (5) Comparison of expenditures with sufficient coverage to protect the must comply with applicable guidance budget amounts for each Federal award. Federal Government’s interest. in 31 CFR part 208. (6) Written procedures to implement (c) Where bonds are required in the (ii) Non-Federal entities must be the requirements of § 200.305. situations described above, the bonds authorized to submit requests for (7) Written procedures for must be obtained from companies advance payments and reimbursements determining the allowability of costs in holding certificates of authority as at least monthly when electronic fund accordance with subpart E of this part acceptable sureties, as prescribed in 31 transfers are not used, and as often as and the terms and conditions of the CFR part 223. they like when electronic transfers are Federal award. used, in accordance with the provisions § 200.305 Federal payment. of the Electronic Fund Transfer Act (15 § 200.303 Internal controls. (a) For states, payments are governed U.S.C. 1693–1693r). The non-Federal entity must: by Treasury-State Cash Management (3) Reimbursement is the preferred (a) Establish and maintain effective Improvement Act (CMIA) agreements method when the requirements in this internal control over the Federal award and default procedures codified at 31 paragraph (b) cannot be met, when the that provides reasonable assurance that CFR part 205 and Treasury Financial Federal awarding agency sets a specific the non-Federal entity is managing the Manual (TFM) 4A–2000, ‘‘Overall condition per § 200.208, or when the Federal award in compliance with Disbursing Rules for All Federal non-Federal entity requests payment by Federal statutes, regulations, and the Agencies’’. reimbursement. This method may be terms and conditions of the Federal (b) For non-Federal entities other than used on any Federal award for award. These internal controls should states, payments methods must construction, or if the major portion of be in compliance with guidance in minimize the time elapsing between the the construction project is accomplished ‘‘Standards for Internal Control in the transfer of funds from the United States through private market financing or Federal Government’’ issued by the Treasury or the pass-through entity and Federal loans, and the Federal award Comptroller General of the United the disbursement by the non-Federal constitutes a minor portion of the States or the ‘‘Internal Control entity whether the payment is made by project. When the reimbursement Integrated Framework’’, issued by the electronic funds transfer, or issuance or method is used, the Federal awarding

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agency or pass-through entity must Federal entity that payments must not Management System (PMS) through an make payment within 30 calendar days be made for financial obligations electronic medium using either after receipt of the billing, unless the incurred after a specified date until the Automated Clearing House (ACH) Federal awarding agency or pass- conditions are corrected or the network or a Fedwire Funds Service through entity reasonably believes the indebtedness to the Federal Government payment. request to be improper. is liquidated. (i) For returning interest on Federal (4) If the non-Federal entity cannot (iii) A payment withheld for failure to awards paid through PMS, the refund meet the criteria for advance payments comply with Federal award conditions, should: and the Federal awarding agency or but without suspension of the Federal (A) Provide an explanation stating pass-through entity has determined that award, must be released to the non- that the refund is for interest; reimbursement is not feasible because Federal entity upon subsequent (B) List the PMS Payee Account the non-Federal entity lacks sufficient compliance. When a Federal award is Number(s) (PANs); working capital, the Federal awarding suspended, payment adjustments will (C) List the Federal award number(s) agency or pass-through entity may be made in accordance with § 200.343. for which the interest was earned; and provide cash on a working capital (iv) A payment must not be made to (D) Make returns payable to: advance basis. Under this procedure, a non-Federal entity for amounts that Department of Health and Human the Federal awarding agency or pass- are withheld by the non-Federal entity Services. through entity must advance cash from payment to contractors to assure (ii) For returning interest on Federal payments to the non-Federal entity to satisfactory completion of work. A awards not paid through PMS, the cover its estimated disbursement needs payment must be made when the non- refund should: for an initial period generally geared to Federal entity actually disburses the (A) Provide an explanation stating the non-Federal entity’s disbursing withheld funds to the contractors or to that the refund is for interest; cycle. Thereafter, the Federal awarding escrow accounts established to assure (B) Include the name of the awarding agency or pass-through entity must satisfactory completion of work. agency; reimburse the non-Federal entity for its (7) Standards governing the use of (C) List the Federal award number(s) actual cash disbursements. Use of the banks and other institutions as for which the interest was earned; and working capital advance method of depositories of advance payments under (D) Make returns payable to: payment requires that the pass-through Federal awards are as follows. Department of Health and Human entity provide timely advance payments (i) The Federal awarding agency and Services. to any subrecipients in order to meet the pass-through entity must not require (10) Funds, principal, and excess cash subrecipient’s actual cash separate depository accounts for funds returns must be directed to the original disbursements. The working capital provided to a non-Federal entity or Federal agency payment system. The advance method of payment must not be establish any eligibility requirements for non-Federal entity should review used by the pass-through entity if the depositories for funds provided to the instructions from the original Federal reason for using this method is the non-Federal entity. However, the non- agency payment system. Returns should unwillingness or inability of the pass- Federal entity must be able to account include the following information: through entity to provide timely for funds received, obligated, and (i) Payee Account Number (PAN), if advance payments to the subrecipient to expended. the payment originated from PMS, or meet the subrecipient’s actual cash (ii) Advance payments of Federal Agency information to indicate whom to disbursements. funds must be deposited and credit the funding if the payment (5) To the extent available, the non- maintained in insured accounts originated from ASAP, NSF, or another Federal entity must disburse funds whenever possible. Federal agency payment system. available from program income (8) The non-Federal entity must (ii) PMS document number and (including repayments to a revolving maintain advance payments of Federal subaccount(s), if the payment originated fund), rebates, refunds, contract awards in interest-bearing accounts, from PMS, or relevant account numbers settlements, audit recoveries, and unless the following apply: if the payment originated from another interest earned on such funds before (i) The non-Federal entity receives Federal agency payment system. requesting additional cash payments. less than $250,000 in Federal awards (iii) The reason for the return (e.g., (6) Unless otherwise required by per year. excess cash, funds not spent, interest, Federal statutes, payments for allowable (ii) The best reasonably available part interest part other, etc.) costs by non-Federal entities must not interest-bearing account would not be (11) When returning funds or interest be withheld at any time during the expected to earn interest in excess of to PMS you must include the following period of performance unless the $500 per year on Federal cash balances. as applicable: conditions of § 200.208, subpart D of (iii) The depository would require an (i) For ACH Returns: this part, including § 200.339, or one or average or minimum balance so high Routing Number: 051036706 more of the following applies: that it would not be feasible within the Account number: 303000 (i) The non-Federal entity has failed expected Federal and non-Federal cash Bank Name and Location: Credit to comply with the project objectives, resources. Gateway—ACH Receiver St. Paul, MN (iv) A foreign government or banking Federal statutes, regulations, or the 1 terms and conditions of the Federal system prohibits or precludes interest- (ii) For Fedwire Returns : award. bearing accounts. Routing Number: 021030004 (ii) The non-Federal entity is (9) Interest earned amounts up to Account number: 75010501 delinquent in a debt to the United States $500 per year may be retained by the Bank Name and Location: Federal as defined in OMB Circular A–129, non-Federal entity for administrative Reserve Bank Treas NYC/Funds ‘‘Policies for Federal Credit Programs expense. Any additional interest earned Transfer Division New York, NY and Non-Tax Receivables.’’ Under such on Federal advance payments deposited 1 Please note that the organization conditions, the Federal awarding agency in interest-bearing accounts must be initiating payment is likely to incur a or pass-through entity may, upon remitted annually to the Department of charge from their Financial Institution reasonable notice, inform the non- Health and Human Services Payment for this type of payment.

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(iii) For International ACH Returns: available for such program can be reasonable, necessary, allocable, and Beneficiary Account: Federal Reserve applied to matching or cost sharing otherwise allowable, and indirect costs Bank of New York/ITS (FRBNY/ITS) requirements of other Federal programs; at either the third-party organization’s Bank: Citibank N.A. (New York) (6) Are provided for in the approved approved federally-negotiated indirect Swift Code: CITIUS33 budget when required by the Federal cost rate or, a rate in accordance with Account Number: 36838868 awarding agency; and § 200.414(d) provided these services Bank Address: 388 Greenwich Street, (7) Conform to other provisions of this employ the same skill(s) for which the New York, NY 10013 USA part, as applicable. employee is normally paid. Where Payment Details (Line 70): Agency (c) Unrecovered indirect costs, donated services are treated as indirect Locator Code (ALC): 75010501 including indirect costs on cost sharing costs, indirect cost rates will separate Name (abbreviated when possible) and or matching may be included as part of the value of the donated services so that ALC Agency POC cost sharing or matching only with the reimbursement for the donated services prior approval of the Federal awarding (iv) For recipients that do not have will not be made. agency. Unrecovered indirect cost electronic remittance capability, please (g) Donated property from third means the difference between the make check 2 payable to: ‘‘The parties may include such items as amount charged to the Federal award Department of Health and Human equipment, office supplies, laboratory and the amount which could have been Services.’’ supplies, or workshop and classroom charged to the Federal award under the supplies. Value assessed to donated Mail Check to Treasury approved non-Federal entity’s approved lockbox: property included in the cost sharing or negotiated indirect cost rate. matching share must not exceed the fair HHS Program Support Center, P.O. Box (d) Values for non-Federal entity market value of the property at the time 530231, Atlanta, GA 30353–0231 contributions of services and property of the donation. 2 Please allow 4–6 weeks for must be established in accordance with processing of a payment by check to be the cost principles in subpart E of this (h) The method used for determining applied to the appropriate PMS account. part. If a Federal awarding agency cost sharing or matching for third-party- donated equipment, buildings and land (v) Questions can be directed to PMS authorizes the non-Federal entity to for which title passes to the non-Federal at 877–614–5533 or PMSSupport@ donate buildings or land for entity may differ according to the psc.hhs.gov. construction/facilities acquisition projects or long-term use, the value of purpose of the Federal award, if § 200.306 Cost sharing or matching. the donated property for cost sharing or paragraph (h)(1) or (2) of this section (a) Under Federal research proposals, matching must be the lesser of applies. voluntary committed cost sharing is not paragraph (d)(1) or (2) of this section. (1) If the purpose of the Federal award expected. It cannot be used as a factor (1) The value of the remaining life of is to assist the non-Federal entity in the during the merit review of applications the property recorded in the non- acquisition of equipment, buildings or or proposals, but may be considered if Federal entity’s accounting records at land, the aggregate value of the donated it is both in accordance with Federal the time of donation. property may be claimed as cost sharing awarding agency regulations and (2) The current fair market value. or matching. specified in a notice of funding However, when there is sufficient (2) If the purpose of the Federal award opportunity. Criteria for considering justification, the Federal awarding is to support activities that require the voluntary committed cost sharing and agency may approve the use of the use of equipment, buildings or land, any other program policy factors that current fair market value of the donated normally only depreciation charges for may be used to determine who may property, even if it exceeds the value equipment and buildings may be made. receive a Federal award must be described in paragraph (d)(1) of this However, the fair market value of explicitly described in the notice of section at the time of donation. equipment or other capital assets and funding opportunity. See also (e) Volunteer services furnished by fair rental charges for land may be §§ 200.414 and 200.204 and appendix I third-party professional and technical allowed, provided that the Federal to this part. personnel, consultants, and other awarding agency has approved the (b) For all Federal awards, any shared skilled and unskilled labor may be charges. See also § 200.420. costs or matching funds and all counted as cost sharing or matching if (i) The value of donated property contributions, including cash and third- the service is an integral and necessary must be determined in accordance with party in-kind contributions, must be part of an approved project or program. the usual accounting policies of the accepted as part of the non-Federal Rates for third-party volunteer services non-Federal entity, with the following entity’s cost sharing or matching when must be consistent with those paid for qualifications: such contributions meet all of the similar work by the non-Federal entity. (1) The value of donated land and following criteria: In those instances in which the required buildings must not exceed its fair (1) Are verifiable from the non- skills are not found in the non-Federal market value at the time of donation to Federal entity’s records; entity, rates must be consistent with the non-Federal entity as established by (2) Are not included as contributions those paid for similar work in the labor an independent appraiser (e.g., certified for any other Federal award; market in which the non-Federal entity real property appraiser or General (3) Are necessary and reasonable for competes for the kind of services Services Administration representative) accomplishment of project or program involved. In either case, paid fringe and certified by a responsible official of objectives; benefits that are reasonable, necessary, the non-Federal entity as required by (4) Are allowable under subpart E of allocable, and otherwise allowable may the Uniform Relocation Assistance and this part; be included in the valuation. Real Property Acquisition Policies Act (5) Are not paid by the Federal (f) When a third-party organization of 1970, as amended, (42 U.S.C. 4601– Government under another Federal furnishes the services of an employee, 4655) (Uniform Act) except as provided award, except where the Federal statute these services must be valued at the in the implementing regulations at 49 authorizing a program specifically employee’s regular rate of pay plus an CFR part 24, ‘‘Uniform Relocation provides that Federal funds made amount of fringe benefits that is Assistance And Real Property

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Acquisition For Federal And Federally- this section must apply. In specifying § 200.308 Revision of budget and program Assisted Programs’’. alternatives to paragraphs (e)(1) and (2) plans. (2) The value of donated equipment of this section, the Federal awarding (a) The approved budget for the must not exceed the fair market value of agency may distinguish between income Federal award summarizes the financial equipment of the same age and earned by the recipient and income aspects of the project or program as condition at the time of donation. earned by subrecipients and between approved during the Federal award (3) The value of donated space must the sources, kinds, or amounts of process. It may include either the not exceed the fair rental value of income. When the Federal awarding Federal and non-Federal share (see comparable space as established by an agency authorizes the approaches in definition for Federal share in § 200.1) independent appraisal of comparable paragraphs (e)(2) and (3) of this section, or only the Federal share, depending space and facilities in a privately-owned program income in excess of any upon Federal awarding agency building in the same locality. amounts specified must also be requirements. The budget and program (4) The value of loaned equipment deducted from expenditures. plans include considerations for must not exceed its fair rental value. (1) Deduction. Ordinarily program performance and program evaluation (j) For third-party in-kind income must be deducted from total purposes whenever required in contributions, the fair market value of allowable costs to determine the net accordance with the terms and goods and services must be documented allowable costs. Program income must conditions of the award. and to the extent feasible supported by be used for current costs unless the (b) Recipients are required to report the same methods used internally by the Federal awarding agency authorizes deviations from budget or project scope non-Federal entity. otherwise. Program income that the or objective, and request prior approvals (k) For IHEs, see also OMB non-Federal entity did not anticipate at from Federal awarding agencies for memorandum M–01–06, dated January the time of the Federal award must be budget and program plan revisions, in 5, 2001, Clarification of OMB A–21 used to reduce the Federal award and accordance with this section. Treatment of Voluntary Uncommitted non-Federal entity contributions rather (c) For non-construction Federal Cost Sharing and Tuition Remission than to increase the funds committed to awards, recipients must request prior Costs. the project. approvals from Federal awarding (2) Addition. With prior approval of agencies for the following program or § 200.307 Program income. the Federal awarding agency (except for budget-related reasons: (a) General. Non-Federal entities are IHEs and nonprofit research (1) Change in the scope or the encouraged to earn income to defray institutions, as described in this objective of the project or program (even program costs where appropriate. paragraph (e)) program income may be if there is no associated budget revision (b) Cost of generating program added to the Federal award by the requiring prior written approval). income. If authorized by Federal Federal agency and the non-Federal (2) Change in a key person specified regulations or the Federal award, costs entity. The program income must be in the application or the Federal award. incidental to the generation of program used for the purposes and under the (3) The disengagement from the income may be deducted from gross conditions of the Federal award. project for more than three months, or income to determine program income, (3) Cost sharing or matching. With a 25 percent reduction in time devoted provided these costs have not been prior approval of the Federal awarding to the project, by the approved project charged to the Federal award. agency, program income may be used to director or principal investigator. (c) Governmental revenues. Taxes, meet the cost sharing or matching (4) The inclusion, unless waived by special assessments, levies, fines, and requirement of the Federal award. The the Federal awarding agency, of costs other such revenues raised by a non- amount of the Federal award remains that require prior approval in Federal entity are not program income the same. accordance with subpart E of this part unless the revenues are specifically (f) Income after the period of as applicable. identified in the Federal award or performance. There are no Federal (5) The transfer of funds budgeted for Federal awarding agency regulations as requirements governing the disposition participant support costs to other program income. of income earned after the end of the categories of expense. (d) Property. Proceeds from the sale of period of performance for the Federal (6) Unless described in the real property, equipment, or supplies award, unless the Federal awarding application and funded in the approved are not program income; such proceeds agency regulations or the terms and Federal awards, the subawarding, will be handled in accordance with the conditions of the Federal award provide transferring or contracting out of any requirements of the Property Standards otherwise. The Federal awarding agency work under a Federal award, including §§ 200.311, 200.313, and 200.314, or as may negotiate agreements with fixed amount subawards as described in specifically identified in Federal recipients regarding appropriate uses of § 200.333. This provision does not apply statutes, regulations, or the terms and income earned after the period of to the acquisition of supplies, material, conditions of the Federal award. performance as part of the grant equipment or general support services. (e) Use of program income. If the closeout process. See also § 200.344. (7) Changes in the approved cost- Federal awarding agency does not (g) License fees and royalties. Unless sharing or matching provided by the specify in its regulations or the terms the Federal statute, regulations, or terms non-Federal entity. and conditions of the Federal award, or and conditions for the Federal award (8) The need arises for additional give prior approval for how program provide otherwise, the non-Federal Federal funds to complete the project. income is to be used, paragraph (e)(1) of entity is not accountable to the Federal (d) No other prior approval this section must apply. For Federal awarding agency with respect to requirements for specific items may be awards made to IHEs and nonprofit program income earned from license imposed unless an exception has been research institutions, if the Federal fees and royalties for copyrighted approved by OMB. See also §§ 200.102 awarding agency does not specify in its material, patents, patent applications, and 200.407. regulations or the terms and conditions trademarks, and inventions made under (e) Except for requirements listed in of the Federal award how program a Federal award to which 37 CFR part paragraphs (c)(1) through (8) of this income is to be used, paragraph (e)(2) of 401 is applicable. section, the Federal awarding agency is

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authorized, at its option, to waive other agency. The Federal awarding agency If a renewal award is issued, a distinct cost-related and administrative prior cannot permit a transfer that would Period of Performance will begin. written approvals contained in subparts cause any Federal appropriation to be Property Standards D and E of this part. Such waivers may used for purposes other than those include authorizing recipients to do any consistent with the appropriation. § 200.310 Insurance coverage. one or more of the following: (g) All other changes to non- The non-Federal entity must, at a (1) Incur project costs 90 calendar construction budgets, except for the minimum, provide the equivalent days before the Federal awarding agency changes described in paragraph (c) of insurance coverage for real property and makes the Federal award. Expenses this section, do not require prior equipment acquired or improved with more than 90 calendar days pre-award approval (see also § 200.407). Federal funds as provided to property require prior approval of the Federal (h) For construction Federal awards, owned by the non-Federal entity. awarding agency. All costs incurred the recipient must request prior written Federally-owned property need not be before the Federal awarding agency approval promptly from the Federal insured unless required by the terms makes the Federal award are at the awarding agency for budget revisions and conditions of the Federal award. recipient’s risk (i.e., the Federal whenever paragraph (h)(1), (2), or (3) of awarding agency is not required to this section applies: § 200.311 Real property. reimburse such costs if for any reason (1) The revision results from changes (a) Title. Subject to the requirements the recipient does not receive a Federal in the scope or the objective of the and conditions set forth in this section, award or if the Federal award is less project or program. title to real property acquired or than anticipated and inadequate to (2) The need arises for additional improved under a Federal award will cover such costs). See also § 200.458. Federal funds to complete the project. vest upon acquisition in the non-Federal (2) Initiate a one-time extension of the entity. period of performance by up to 12 (3) A revision is desired which (b) Use. Except as otherwise provided months unless one or more of the involves specific costs for which prior by Federal statutes or by the Federal conditions outlined in paragraphs written approval requirements may be awarding agency, real property will be (e)(2)(i) through (iii) of this section imposed consistent with applicable used for the originally authorized apply. For one-time extensions, the OMB cost principles listed in subpart E. purpose as long as needed for that recipient must notify the Federal (4) No other prior approval purpose, during which time the non- awarding agency in writing with the requirements for budget revisions may Federal entity must not dispose of or supporting reasons and revised period be imposed unless an exception has encumber its title or other interests. of performance at least 10 calendar days been approved by OMB. (c) Disposition. When real property is before the end of the period of (5) When a Federal awarding agency no longer needed for the originally performance specified in the Federal makes a Federal award that provides authorized purpose, the non-Federal award. This one-time extension must support for construction and non- entity must obtain disposition not be exercised merely for the purpose construction work, the Federal awarding instructions from the Federal awarding of using unobligated balances. agency may require the recipient to agency or pass-through entity. The Extensions require explicit prior Federal obtain prior approval from the Federal instructions must provide for one of the awarding agency approval when: awarding agency before making any following alternatives: (i) The terms and conditions of the fund or budget transfers between the (1) Retain title after compensating the Federal award prohibit the extension. two types of work supported. Federal awarding agency. The amount (ii) The extension requires additional (i) When requesting approval for paid to the Federal awarding agency Federal funds. budget revisions, the recipient must use will be computed by applying the (iii) The extension involves any the same format for budget information Federal awarding agency’s percentage of change in the approved objectives or that was used in the application, unless participation in the cost of the original scope of the project. the Federal awarding agency indicates a purchase (and costs of any (3) Carry forward unobligated letter of request suffices. improvements) to the fair market value balances to subsequent budget periods. (j) Within 30 calendar days from the of the property. However, in those (4) For Federal awards that support date of receipt of the request for budget situations where the non-Federal entity research, unless the Federal awarding revisions, the Federal awarding agency is disposing of real property acquired or agency provides otherwise in the must review the request and notify the improved with a Federal award and Federal award or in the Federal recipient whether the budget revisions acquiring replacement real property awarding agency’s regulations, the prior have been approved. If the revision is under the same Federal award, the net approval requirements described in this still under consideration at the end of proceeds from the disposition may be paragraph (e) are automatically waived 30 calendar days, the Federal awarding used as an offset to the cost of the (i.e., recipients need not obtain such agency must inform the recipient in replacement property. prior approvals) unless one of the writing of the date when the recipient (2) Sell the property and compensate conditions included in paragraph (e)(2) may expect the decision. the Federal awarding agency. The of this section applies. amount due to the Federal awarding (f) The Federal awarding agency may, § 200.309 Modifications to Period of agency will be calculated by applying at its option, restrict the transfer of Performance. the Federal awarding agency’s funds among direct cost categories or If a Federal awarding agency or pass- percentage of participation in the cost of programs, functions and activities for through entity approves an extension, or the original purchase (and cost of any Federal awards in which the Federal if a recipient extends under improvements) to the proceeds of the share of the project exceeds the § 200.308(e)(2), the Period of sale after deduction of any actual and simplified acquisition threshold and the Performance will be amended to end at reasonable selling and fixing-up cumulative amount of such transfers the completion of the extension. If a expenses. If the Federal award has not exceeds or is expected to exceed 10 termination occurs, the Period of been closed out, the net proceeds from percent of the total budget as last Performance will be amended to end sale may be offset against the original approved by the Federal awarding upon the effective date of termination. cost of the property. When the non-

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Federal entity is directed to sell title to equipment acquired under a second preference must be given to property, sales procedures must be Federal award will vest upon programs or projects under Federal followed that provide for competition to acquisition in the non-Federal entity. awards from other Federal awarding the extent practicable and result in the Unless a statute specifically authorizes agencies. Use for non-federally-funded highest possible return. the Federal agency to vest title in the programs or projects is also permissible. (3) Transfer title to the Federal non-Federal entity without further User fees should be considered if awarding agency or to a third party responsibility to the Federal appropriate. designated/approved by the Federal Government, and the Federal agency (3) Notwithstanding the awarding agency. The non-Federal elects to do so, the title must be a encouragement in § 200.307 to earn entity is entitled to be paid an amount conditional title. Title must vest in the program income, the non-Federal entity calculated by applying the non-Federal non-Federal entity subject to the must not use equipment acquired with entity’s percentage of participation in following conditions: the Federal award to provide services the purchase of the real property (and (1) Use the equipment for the for a fee that is less than private cost of any improvements) to the current authorized purposes of the project companies charge for equivalent fair market value of the property. during the period of performance, or services unless specifically authorized until the property is no longer needed by Federal statute for as long as the § 200.312 Federally-owned and exempt for the purposes of the project. Federal Government retains an interest property. (2) Not encumber the property in the equipment. (a) Title to federally-owned property without approval of the Federal (4) When acquiring replacement remains vested in the Federal awarding agency or pass-through entity. equipment, the non-Federal entity may Government. The non-Federal entity (3) Use and dispose of the property in use the equipment to be replaced as a must submit annually an inventory accordance with paragraphs (b), (c), and trade-in or sell the property and use the listing of federally-owned property in its (e) of this section. proceeds to offset the cost of the custody to the Federal awarding agency. (b) General. A state must use, manage replacement property. Upon completion of the Federal award and dispose of equipment acquired (d) Management requirements. or when the property is no longer under a Federal award by the state in Procedures for managing equipment needed, the non-Federal entity must accordance with state laws and (including replacement equipment), report the property to the Federal procedures. Other non-Federal entities whether acquired in whole or in part awarding agency for further Federal must follow paragraphs (c) through (e) under a Federal award, until disposition agency utilization. of this section. takes place will, as a minimum, meet (b) If the Federal awarding agency has (c) Use. (1) Equipment must be used the following requirements: no further need for the property, it must by the non-Federal entity in the program (1) Property records must be declare the property excess and report it or project for which it was acquired as maintained that include a description of for disposal to the appropriate Federal long as needed, whether or not the the property, a serial number or other disposal authority, unless the Federal project or program continues to be identification number, the source of awarding agency has statutory authority supported by the Federal award, and the funding for the property (including the to dispose of the property by alternative non-Federal entity must not encumber FAIN), who holds title, the acquisition methods (e.g., the authority provided by the property without prior approval of date, and cost of the property, the Federal Technology Transfer Act (15 the Federal awarding agency. The percentage of Federal participation in U.S.C. 3710 (i)) to donate research Federal awarding agency may require the project costs for the Federal award equipment to educational and nonprofit the submission of the applicable under which the property was acquired, organizations in accordance with common form for equipment. When no the location, use and condition of the Executive Order 12999, ‘‘Educational longer needed for the original program property, and any ultimate disposition Technology: Ensuring Opportunity for or project, the equipment may be used data including the date of disposal and All Children in the Next Century.’’). The in other activities supported by the sale price of the property. Federal awarding agency must issue Federal awarding agency, in the (2) A physical inventory of the appropriate instructions to the non- following order of priority: property must be taken and the results Federal entity. (i) Activities under a Federal award reconciled with the property records at (c) Exempt property means property from the Federal awarding agency least once every two years. acquired under a Federal award where which funded the original program or (3) A control system must be the Federal awarding agency has chosen project, then developed to ensure adequate to vest title to the property to the non- (ii) Activities under Federal awards safeguards to prevent loss, damage, or Federal entity without further from other Federal awarding agencies. theft of the property. Any loss, damage, responsibility to the Federal This includes consolidated equipment or theft must be investigated. Government, based upon the explicit for information technology systems. (4) Adequate maintenance procedures terms and conditions of the Federal (2) During the time that equipment is must be developed to keep the property award. The Federal awarding agency used on the project or program for in good condition. may exercise this option when statutory which it was acquired, the non-Federal (5) If the non-Federal entity is authority exists. Absent statutory entity must also make equipment authorized or required to sell the authority and specific terms and available for use on other projects or property, proper sales procedures must conditions of the Federal award, title to programs currently or previously be established to ensure the highest exempt property acquired under the supported by the Federal Government, possible return. Federal award remains with the Federal provided that such use will not interfere (e) Disposition. When original or Government. with the work on the projects or replacement equipment acquired under program for which it was originally a Federal award is no longer needed for § 200.313 Equipment. acquired. First preference for other use the original project or program or for See also § 200.439. must be given to other programs or other activities currently or previously (a) Title. Subject to the requirements projects supported by Federal awarding supported by a Federal awarding and conditions set forth in this section, agency that financed the equipment and agency, except as otherwise provided in

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Federal statutes, regulations, or Federal (b) As long as the Federal Government FOIA request, the Federal awarding awarding agency disposition retains an interest in the supplies, the agency may charge the requester a instructions, the non-Federal entity non-Federal entity must not use reasonable fee equaling the full must request disposition instructions supplies acquired under a Federal incremental cost of obtaining the from the Federal awarding agency if award to provide services to other research data. This fee should reflect required by the terms and conditions of organizations for a fee that is less than costs incurred by the Federal agency the Federal award. Disposition of the private companies charge for equivalent and the non-Federal entity. This fee is equipment will be made as follows, in services, unless specifically authorized in addition to any fees the Federal accordance with Federal awarding by Federal statute. awarding agency may assess under the agency disposition instructions: FOIA (5 U.S.C. 552(a)(4)(A)). § 200.315 Intangible property. (1) Items of equipment with a current (2) Published research findings means (a) Title to intangible property (see per unit fair market value of $5,000 or when: less may be retained, sold or otherwise definition for Intangible property in disposed of with no further § 200.1) acquired under a Federal award (i) Research findings are published in responsibility to the Federal awarding vests upon acquisition in the non- a peer-reviewed scientific or technical agency. Federal entity. The non-Federal entity journal; or (2) Except as provided in § 200.312(b), must use that property for the (ii) A Federal agency publicly and or if the Federal awarding agency fails originally-authorized purpose, and must officially cites the research findings in to provide requested disposition not encumber the property without support of an agency action that has the instructions within 120 days, items of approval of the Federal awarding force and effect of law. ‘‘Used by the equipment with a current per-unit fair agency. When no longer needed for the Federal Government in developing an market value in excess of $5,000 may be originally authorized purpose, agency action that has the force and retained by the non-Federal entity or disposition of the intangible property effect of law’’ is defined as when an sold. The Federal awarding agency is must occur in accordance with the agency publicly and officially cites the entitled to an amount calculated by provisions in § 200.313(e). research findings in support of an multiplying the current market value or (b) The non-Federal entity may agency action that has the force and proceeds from sale by the Federal copyright any work that is subject to effect of law. awarding agency’s percentage of copyright and was developed, or for (3) Research data means the recorded participation in the cost of the original which ownership was acquired, under a factual material commonly accepted in purchase. If the equipment is sold, the Federal award. The Federal awarding the scientific community as necessary to Federal awarding agency may permit agency reserves a royalty-free, validate research findings, but not any the non-Federal entity to deduct and nonexclusive and irrevocable right to of the following: Preliminary analyses, retain from the Federal share $500 or reproduce, publish, or otherwise use the drafts of scientific papers, plans for ten percent of the proceeds, whichever work for Federal purposes, and to future research, peer reviews, or is less, for its selling and handling authorize others to do so. communications with colleagues. This expenses. (c) The non-Federal entity is subject ‘‘recorded’’ material excludes physical (3) The non-Federal entity may to applicable regulations governing objects (e.g., laboratory samples). transfer title to the property to the patents and inventions, including Research data also do not include: governmentwide regulations issued by Federal Government or to an eligible (i) Trade secrets, commercial the Department of Commerce at 37 CFR third party provided that, in such cases, information, materials necessary to be part 401, ‘‘Rights to Inventions Made by the non-Federal entity must be entitled held confidential by a researcher until Nonprofit Organizations and Small to compensation for its attributable they are published, or similar Business Firms Under Government percentage of the current fair market information which is protected under Awards, Contracts and Cooperative value of the property. law; and (4) In cases where a non-Federal Agreements.’’ entity fails to take appropriate (d) The Federal Government has the (ii) Personnel and medical disposition actions, the Federal right to: information and similar information the awarding agency may direct the non- (1) Obtain, reproduce, publish, or disclosure of which would constitute a Federal entity to take disposition otherwise use the data produced under clearly unwarranted invasion of actions. a Federal award; and personal privacy, such as information (2) Authorize others to receive, that could be used to identify a § 200.314 Supplies. reproduce, publish, or otherwise use particular person in a research study. See also § 200.453. such data for Federal purposes. (a) Title to supplies will vest in the (e)(1) In response to a Freedom of § 200.316 Property trust relationship. non-Federal entity upon acquisition. If Information Act (FOIA) request for Real property, equipment, and there is a residual inventory of unused research data relating to published intangible property, that are acquired or supplies exceeding $5,000 in total research findings produced under a improved with a Federal award must be aggregate value upon termination or Federal award that were used by the held in trust by the non-Federal entity completion of the project or program Federal Government in developing an as trustee for the beneficiaries of the and the supplies are not needed for any agency action that has the force and project or program under which the other Federal award, the non-Federal effect of law, the Federal awarding property was acquired or improved. The entity must retain the supplies for use agency must request, and the non- Federal awarding agency may require on other activities or sell them, but Federal entity must provide, within a the non-Federal entity to record liens or must, in either case, compensate the reasonable time, the research data so other appropriate notices of record to Federal Government for its share. The that they can be made available to the indicate that personal or real property amount of compensation must be public through the procedures has been acquired or improved with a computed in the same manner as for established under the FOIA. If the Federal award and that use and equipment. See § 200.313 (e)(2) for the Federal awarding agency obtains the disposition conditions apply to the calculation methodology. research data solely in response to a property.

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Procurement Standards (2) If the non-Federal entity has a (i) The non-Federal entity must parent, affiliate, or subsidiary maintain records sufficient to detail the § 200.317 Procurements by states. organization that is not a State, local history of procurement. These records When procuring property and services government, or Indian tribe, the non- will include, but are not necessarily under a Federal award, a State must Federal entity must also maintain limited to, the following: Rationale for follow the same policies and procedures written standards of conduct covering the method of procurement, selection of it uses for procurements from its non- organizational conflicts of interest. contract type, contractor selection or Federal funds. The State will comply Organizational conflicts of interest rejection, and the basis for the contract with §§ 200.321, 200.322, and 200.323 means that because of relationships price. and ensure that every purchase order or with a parent company, affiliate, or (j)(1) The non-Federal entity may use other contract includes any clauses subsidiary organization, the non-Federal a time-and-materials type contract only required by § 200.327. All other non- entity is unable or appears to be unable after a determination that no other Federal entities, including subrecipients to be impartial in conducting a contract is suitable and if the contract of a State, must follow the procurement procurement action involving a related includes a ceiling price that the standards in §§ 200.318 through organization. contractor exceeds at its own risk. Time- 200.327. (d) The non-Federal entity’s and-materials type contract means a procedures must avoid acquisition of § 200.318 General procurement standards. contract whose cost to a non-Federal unnecessary or duplicative items. entity is the sum of: (a) The non-Federal entity must have Consideration should be given to (i) The actual cost of materials; and and use documented procurement consolidating or breaking out (ii) Direct labor hours charged at fixed procedures, consistent with State, local, procurements to obtain a more hourly rates that reflect wages, general and tribal laws and regulations and the economical purchase. Where and administrative expenses, and profit. standards of this section, for the appropriate, an analysis will be made of (2) Since this formula generates an acquisition of property or services lease versus purchase alternatives, and open-ended contract price, a time-and- required under a Federal award or any other appropriate analysis to materials contract provides no positive subaward. The non-Federal entity’s determine the most economical profit incentive to the contractor for cost documented procurement procedures approach. control or labor efficiency. Therefore, must conform to the procurement (e) To foster greater economy and each contract must set a ceiling price standards identified in §§ 200.317 efficiency, and in accordance with that the contractor exceeds at its own through 200.327. efforts to promote cost-effective use of risk. Further, the non-Federal entity (b) Non-Federal entities must shared services across the Federal awarding such a contract must assert a maintain oversight to ensure that Government, the non-Federal entity is high degree of oversight in order to contractors perform in accordance with encouraged to enter into state and local obtain reasonable assurance that the the terms, conditions, and specifications intergovernmental agreements or inter- contractor is using efficient methods of their contracts or purchase orders. entity agreements where appropriate for and effective cost controls. (c)(1) The non-Federal entity must procurement or use of common or (k) The non-Federal entity alone must maintain written standards of conduct shared goods and services. Competition be responsible, in accordance with good covering conflicts of interest and requirements will be met with applied administrative practice and sound governing the actions of its employees to documented procurement actions business judgment, for the settlement of engaged in the selection, award and using strategic sourcing, shared services, all contractual and administrative issues administration of contracts. No and other similar procurement arising out of procurements. These employee, officer, or agent may arrangements. issues include, but are not limited to, participate in the selection, award, or (f) The non-Federal entity is source evaluation, protests, disputes, administration of a contract supported encouraged to use Federal excess and and claims. These standards do not by a Federal award if he or she has a real surplus property in lieu of purchasing relieve the non-Federal entity of any or apparent conflict of interest. Such a new equipment and property whenever contractual responsibilities under its conflict of interest would arise when the such use is feasible and reduces project contracts. The Federal awarding agency employee, officer, or agent, any member costs. will not substitute its judgment for that of his or her immediate family, his or (g) The non-Federal entity is of the non-Federal entity unless the her partner, or an organization which encouraged to use value engineering matter is primarily a Federal concern. employs or is about to employ any of clauses in contracts for construction Violations of law will be referred to the the parties indicated herein, has a projects of sufficient size to offer local, state, or Federal authority having financial or other interest in or a reasonable opportunities for cost proper jurisdiction. tangible personal benefit from a firm reductions. Value engineering is a considered for a contract. The officers, systematic and creative analysis of each § 200.319 Competition. employees, and agents of the non- contract item or task to ensure that its (a) All procurement transactions for Federal entity may neither solicit nor essential function is provided at the the acquisition of property or services accept gratuities, favors, or anything of overall lower cost. required under a Federal award must be monetary value from contractors or (h) The non-Federal entity must conducted in a manner providing full parties to subcontracts. However, non- award contracts only to responsible and open competition consistent with Federal entities may set standards for contractors possessing the ability to the standards of this section and situations in which the financial interest perform successfully under the terms § 200.320. is not substantial or the gift is an and conditions of a proposed (b) In order to ensure objective unsolicited item of nominal value. The procurement. Consideration will be contractor performance and eliminate standards of conduct must provide for given to such matters as contractor unfair competitive advantage, disciplinary actions to be applied for integrity, compliance with public contractors that develop or draft violations of such standards by officers, policy, record of past performance, and specifications, requirements, statements employees, or agents of the non-Federal financial and technical resources. See of work, or invitations for bids or entity. also § 200.214. requests for proposals must be excluded

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from competing for such procurements. (2) Identify all requirements which appropriate micro-purchase threshold Some of the situations considered to be the offerors must fulfill and all other based on internal controls, an restrictive of competition include but factors to be used in evaluating bids or evaluation of risk, and its documented are not limited to: proposals. procurement procedures. The micro- (1) Placing unreasonable requirements (e) The non-Federal entity must purchase threshold used by the non- on firms in order for them to qualify to ensure that all prequalified lists of Federal entity must be authorized or not do business; persons, firms, or products which are prohibited under State, local, or tribal (2) Requiring unnecessary experience used in acquiring goods and services are laws or regulations. Non-Federal entities and excessive bonding; current and include enough qualified may establish a threshold higher than (3) Noncompetitive pricing practices sources to ensure maximum open and the Federal threshold established in the between firms or between affiliated free competition. Also, the non-Federal Federal Acquisition Regulations (FAR) companies; entity must not preclude potential in accordance with paragraphs (a)(1)(iv) (4) Noncompetitive contracts to bidders from qualifying during the and (v) of this section. consultants that are on retainer solicitation period. (iv) Non-Federal entity increase to the contracts; (f) Noncompetitive procurements can micro-purchase threshold up to $50,000. (5) Organizational conflicts of interest; only be awarded in accordance with Non-Federal entities may establish a (6) Specifying only a ‘‘brand name’’ § 200.320(c). threshold higher than the micro- product instead of allowing ‘‘an equal’’ purchase threshold identified in the product to be offered and describing the § 200.320 Methods of procurement to be FAR in accordance with the performance or other relevant followed. requirements of this section. The non- requirements of the procurement; and The non-Federal entity must have and Federal entity may self-certify a (7) Any arbitrary action in the use documented procurement threshold up to $50,000 on an annual procurement process. procedures, consistent with the basis and must maintain documentation (c) The non-Federal entity must standards of this section and §§ 200.317, to be made available to the Federal conduct procurements in a manner that 200.318, and 200.319 for any of the awarding agency and auditors in prohibits the use of statutorily or following methods of procurement used accordance with § 200.334. The self- administratively imposed state, local, or for the acquisition of property or certification must include a tribal geographical preferences in the services required under a Federal award justification, clear identification of the evaluation of bids or proposals, except or sub-award. threshold, and supporting in those cases where applicable Federal (a) Informal procurement methods. documentation of any of the following: statutes expressly mandate or encourage When the value of the procurement for (A) A qualification as a low-risk geographic preference. Nothing in this property or services under a Federal auditee, in accordance with the criteria section preempts state licensing laws. award does not exceed the simplified in § 200.520 for the most recent audit; When contracting for architectural and acquisition threshold (SAT), as defined (B) An annual internal institutional engineering (A/E) services, geographic in § 200.1, or a lower threshold risk assessment to identify, mitigate, location may be a selection criterion established by a non-Federal entity, and manage financial risks; or, provided its application leaves an formal procurement methods are not (C) For public institutions, a higher appropriate number of qualified firms, required. The non-Federal entity may threshold consistent with State law. given the nature and size of the project, use informal procurement methods to (v) Non-Federal entity increase to the to compete for the contract. expedite the completion of its micro-purchase threshold over $50,000. (d) The non-Federal entity must have transactions and minimize the Micro-purchase thresholds higher than written procedures for procurement associated administrative burden and $50,000 must be approved by the transactions. These procedures must cost. The informal methods used for cognizant agency for indirect costs. The ensure that all solicitations: procurement of property or services at non-federal entity must submit a request (1) Incorporate a clear and accurate or below the SAT include: with the requirements included in description of the technical (1) Micro-purchases—(i) Distribution. paragraph (a)(1)(iv) of this section. The requirements for the material, product, The acquisition of supplies or services, increased threshold is valid until there or service to be procured. Such the aggregate dollar amount of which is a change in status in which the description must not, in competitive does not exceed the micro-purchase justification was approved. procurements, contain features which threshold (See the definition of micro- (2) Small purchases—(i) Small unduly restrict competition. The purchase in § 200.1). To the maximum purchase procedures. The acquisition of description may include a statement of extent practicable, the non-Federal property or services, the aggregate dollar the qualitative nature of the material, entity should distribute micro- amount of which is higher than the product or service to be procured and, purchases equitably among qualified micro-purchase threshold but does not when necessary, must set forth those suppliers. exceed the simplified acquisition minimum essential characteristics and (ii) Micro-purchase awards. Micro- threshold. If small purchase procedures standards to which it must conform if it purchases may be awarded without are used, price or rate quotations must is to satisfy its intended use. Detailed soliciting competitive price or rate be obtained from an adequate number of product specifications should be quotations if the non-Federal entity qualified sources as determined avoided if at all possible. When it is considers the price to be reasonable appropriate by the non-Federal entity. impractical or uneconomical to make a based on research, experience, purchase (ii) Simplified acquisition thresholds. clear and accurate description of the history or other information and The non-Federal entity is responsible technical requirements, a ‘‘brand name documents it files accordingly. Purchase for determining an appropriate or equivalent’’ description may be used cards can be used for micro-purchases if simplified acquisition threshold based as a means to define the performance or procedures are documented and on internal controls, an evaluation of other salient requirements of approved by the non-Federal entity. risk and its documented procurement procurement. The specific features of (iii) Micro-purchase thresholds. The procedures which must not exceed the the named brand which must be met by non-Federal entity is responsible for threshold established in the FAR. When offers must be clearly stated; and determining and documenting an applicable, a lower simplified

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acquisition threshold used by the non- (D) A firm fixed price contract award (3) The public exigency or emergency Federal entity must be authorized or not will be made in writing to the lowest for the requirement will not permit a prohibited under State, local, or tribal responsive and responsible bidder. delay resulting from publicizing a laws or regulations. Where specified in bidding documents, competitive solicitation; (b) Formal procurement methods. factors such as discounts, transportation (4) The Federal awarding agency or When the value of the procurement for cost, and life cycle costs must be pass-through entity expressly authorizes property or services under a Federal considered in determining which bid is a noncompetitive procurement in financial assistance award exceeds the lowest. Payment discounts will only be response to a written request from the SAT, or a lower threshold established used to determine the low bid when non-Federal entity; or by a non-Federal entity, formal prior experience indicates that such (5) After solicitation of a number of procurement methods are required. discounts are usually taken advantage sources, competition is determined Formal procurement methods require of; and inadequate. following documented procedures. (E) Any or all bids may be rejected if § 200.321 Contracting with small and Formal procurement methods also there is a sound documented reason. minority businesses, women’s business require public advertising unless a non- (2) Proposals. A procurement method enterprises, and labor surplus area firms. competitive procurement can be used in in which either a fixed price or cost- (a) The non-Federal entity must take accordance with § 200.319 or paragraph reimbursement type contract is all necessary affirmative steps to assure (c) of this section. The following formal awarded. Proposals are generally used that minority businesses, women’s methods of procurement are used for when conditions are not appropriate for business enterprises, and labor surplus procurement of property or services the use of sealed bids. They are awarded area firms are used when possible. above the simplified acquisition in accordance with the following (b) Affirmative steps must include: threshold or a value below the requirements: (1) Placing qualified small and simplified acquisition threshold the (i) Requests for proposals must be minority businesses and women’s non-Federal entity determines to be publicized and identify all evaluation business enterprises on solicitation lists; appropriate: factors and their relative importance. (2) Assuring that small and minority (1) Sealed bids. A procurement Proposals must be solicited from an businesses, and women’s business method in which bids are publicly adequate number of qualified offerors. enterprises are solicited whenever they solicited and a firm fixed-price contract Any response to publicized requests for are potential sources; (lump sum or unit price) is awarded to proposals must be considered to the (3) Dividing total requirements, when the responsible bidder whose bid, maximum extent practical; economically feasible, into smaller tasks conforming with all the material terms (ii) The non-Federal entity must have or quantities to permit maximum and conditions of the invitation for bids, a written method for conducting participation by small and minority is the lowest in price. The sealed bids technical evaluations of the proposals businesses, and women’s business method is the preferred method for received and making selections; enterprises; procuring construction, if the (iii) Contracts must be awarded to the (4) Establishing delivery schedules, conditions. responsible offeror whose proposal is where the requirement permits, which (i) In order for sealed bidding to be most advantageous to the non-Federal encourage participation by small and feasible, the following conditions entity, with price and other factors minority businesses, and women’s should be present: considered; and business enterprises; (A) A complete, adequate, and (iv) The non-Federal entity may use (5) Using the services and assistance, realistic specification or purchase competitive proposal procedures for as appropriate, of such organizations as description is available; qualifications-based procurement of the Small Business Administration and (B) Two or more responsible bidders architectural/engineering (A/E) the Minority Business Development are willing and able to compete professional services whereby offeror’s Agency of the Department of Commerce; effectively for the business; and qualifications are evaluated and the and (C) The procurement lends itself to a most qualified offeror is selected, (6) Requiring the prime contractor, if firm fixed price contract and the subject to negotiation of fair and subcontracts are to be let, to take the selection of the successful bidder can be reasonable compensation. The method, affirmative steps listed in paragraphs made principally on the basis of price. where price is not used as a selection (b)(1) through (5) of this section. (ii) If sealed bids are used, the factor, can only be used in procurement § 200.322 Domestic preferences for following requirements apply: of A/E professional services. It cannot procurements. (A) Bids must be solicited from an be used to purchase other types of (a) As appropriate and to the extent adequate number of qualified sources, services though A/E firms that are a consistent with law, the non-Federal providing them sufficient response time potential source to perform the entity should, to the greatest extent prior to the date set for opening the proposed effort. practicable under a Federal award, bids, for local, and tribal governments, (c) Noncompetitive procurement. provide a preference for the purchase, the invitation for bids must be publicly There are specific circumstances in acquisition, or use of goods, products, or advertised; which noncompetitive procurement can materials produced in the United States (B) The invitation for bids, which will be used. Noncompetitive procurement (including but not limited to iron, include any specifications and pertinent can only be awarded if one or more of aluminum, steel, cement, and other attachments, must define the items or the following circumstances apply: manufactured products). The services in order for the bidder to (1) The acquisition of property or requirements of this section must be properly respond; services, the aggregate dollar amount of included in all subawards including all (C) All bids will be opened at the time which does not exceed the micro- contracts and purchase orders for work and place prescribed in the invitation purchase threshold (see paragraph (a)(1) or products under this award. for bids, and for local and tribal of this section); (b) For purposes of this section: governments, the bids must be opened (2) The item is available only from a (1) ‘‘Produced in the United States’’ publicly; single source; means, for iron and steel products, that

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all manufacturing processes, from the (c) Costs or prices based on estimated (c) The non-Federal entity is exempt initial melting stage through the costs for contracts under the Federal from the pre-procurement review in application of coatings, occurred in the award are allowable only to the extent paragraph (b) of this section if the United States. that costs incurred or cost estimates Federal awarding agency or pass- (2) ‘‘Manufactured products’’ means included in negotiated prices would be through entity determines that its items and construction materials allowable for the non-Federal entity procurement systems comply with the composed in whole or in part of non- under subpart E of this part. The non- standards of this part. ferrous metals such as aluminum; Federal entity may reference its own (1) The non-Federal entity may plastics and polymer-based products cost principles that comply with the request that its procurement system be such as polyvinyl chloride pipe; Federal cost principles. reviewed by the Federal awarding aggregates such as concrete; glass, (d) The cost plus a percentage of cost agency or pass-through entity to including optical fiber; and lumber. and percentage of construction cost determine whether its system meets methods of contracting must not be these standards in order for its system § 200.323 Procurement of recovered used. to be certified. Generally, these reviews materials. must occur where there is continuous A non-Federal entity that is a state § 200.325 Federal awarding agency or high-dollar funding, and third-party pass-through entity review. agency or agency of a political contracts are awarded on a regular basis; subdivision of a state and its contractors (a) The non-Federal entity must make (2) The non-Federal entity may self- must comply with section 6002 of the available, upon request of the Federal certify its procurement system. Such Solid Waste Disposal Act, as amended awarding agency or pass-through entity, self-certification must not limit the by the Resource Conservation and technical specifications on proposed Federal awarding agency’s right to Recovery Act. The requirements of procurements where the Federal survey the system. Under a self- Section 6002 include procuring only awarding agency or pass-through entity certification procedure, the Federal items designated in guidelines of the believes such review is needed to awarding agency may rely on written Environmental Protection Agency (EPA) ensure that the item or service specified assurances from the non-Federal entity at 40 CFR part 247 that contain the is the one being proposed for that it is complying with these highest percentage of recovered acquisition. This review generally will standards. The non-Federal entity must materials practicable, consistent with take place prior to the time the cite specific policies, procedures, maintaining a satisfactory level of specification is incorporated into a regulations, or standards as being in competition, where the purchase price solicitation document. However, if the compliance with these requirements of the item exceeds $10,000 or the value non-Federal entity desires to have the and have its system available for review. review accomplished after a solicitation of the quantity acquired during the § 200.326 Bonding requirements. preceding fiscal year exceeded $10,000; has been developed, the Federal awarding agency or pass-through entity For construction or facility procuring solid waste management improvement contracts or subcontracts services in a manner that maximizes may still review the specifications, with such review usually limited to the exceeding the Simplified Acquisition energy and resource recovery; and Threshold, the Federal awarding agency establishing an affirmative procurement technical aspects of the proposed purchase. or pass-through entity may accept the program for procurement of recovered bonding policy and requirements of the (b) The non-Federal entity must make materials identified in the EPA non-Federal entity provided that the available upon request, for the Federal guidelines. Federal awarding agency or pass- awarding agency or pass-through entity through entity has made a § 200.324 Contract cost and price. pre-procurement review, procurement determination that the Federal interest documents, such as requests for (a) The non-Federal entity must is adequately protected. If such a proposals or invitations for bids, or perform a cost or price analysis in determination has not been made, the independent cost estimates, when: connection with every procurement minimum requirements must be as (1) The non-Federal entity’s action in excess of the Simplified follows: Acquisition Threshold including procurement procedures or operation (a) A bid guarantee from each bidder contract modifications. The method and fails to comply with the procurement equivalent to five percent of the bid degree of analysis is dependent on the standards in this part; price. The ‘‘bid guarantee’’ must consist facts surrounding the particular (2) The procurement is expected to of a firm commitment such as a bid procurement situation, but as a starting exceed the Simplified Acquisition bond, certified check, or other point, the non-Federal entity must make Threshold and is to be awarded without negotiable instrument accompanying a independent estimates before receiving competition or only one bid or offer is bid as assurance that the bidder will, bids or proposals. received in response to a solicitation; upon acceptance of the bid, execute (b) The non-Federal entity must (3) The procurement, which is such contractual documents as may be negotiate profit as a separate element of expected to exceed the Simplified required within the time specified. the price for each contract in which Acquisition Threshold, specifies a (b) A performance bond on the part of there is no price competition and in all ‘‘brand name’’ product; the contractor for 100 percent of the cases where cost analysis is performed. (4) The proposed contract is more contract price. A ‘‘performance bond’’ is To establish a fair and reasonable profit, than the Simplified Acquisition one executed in connection with a consideration must be given to the Threshold and is to be awarded to other contract to secure fulfillment of all the complexity of the work to be performed, than the apparent low bidder under a contractor’s requirements under such the risk borne by the contractor, the sealed bid procurement; or contract. contractor’s investment, the amount of (5) A proposed contract modification (c) A payment bond on the part of the subcontracting, the quality of its record changes the scope of a contract or contractor for 100 percent of the of past performance, and industry profit increases the contract amount by more contract price. A ‘‘payment bond’’ is one rates in the surrounding geographical than the Simplified Acquisition executed in connection with a contract area for similar work. Threshold. to assure payment as required by law of

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all persons supplying labor and material award, recipients must provide cost (i) A comparison of actual in the execution of the work provided information to demonstrate cost accomplishments to the objectives of the for in the contract. effective practices (e.g., through unit Federal award established for the cost data). In some instances (e.g., period. Where the accomplishments of § 200.327 Contract provisions. discretionary research awards), this will the Federal award can be quantified, a The non-Federal entity’s contracts be limited to the requirement to submit computation of the cost (for example, must contain the applicable provisions technical performance reports (to be related to units of accomplishment) may described in appendix II to this part. evaluated in accordance with Federal be required if that information will be Performance and Financial Monitoring awarding agency policy). Reporting useful. Where performance trend data and Reporting requirements must be clearly articulated and analysis would be informative to such that, where appropriate, the Federal awarding agency program, § 200.328 Financial reporting. performance during the execution of the the Federal awarding agency should Unless otherwise approved by OMB, Federal award has a standard against include this as a performance reporting the Federal awarding agency must which non-Federal entity performance requirement. solicit only the OMB-approved can be measured. (ii) The reasons why established goals governmentwide data elements for (c) Non-construction performance were not met, if appropriate. collection of financial information (at reports. The Federal awarding agency (iii) Additional pertinent information time of publication the Federal must use standard, governmentwide including, when appropriate, analysis Financial Report or such future, OMB- OMB-approved data elements for and explanation of cost overruns or high approved, governmentwide data collection of performance information unit costs. elements available from the OMB- including performance progress reports, (d) Construction performance reports. designated standards lead. This Research Performance Progress Reports. For the most part, onsite technical information must be collected with the (1) The non-Federal entity must inspections and certified percentage of frequency required by the terms and submit performance reports at the completion data are relied on heavily by conditions of the Federal award, but no interval required by the Federal Federal awarding agencies and pass- less frequently than annually nor more awarding agency or pass-through entity through entities to monitor progress frequently than quarterly except in to best inform improvements in program under Federal awards and subawards unusual circumstances, for example outcomes and productivity. Intervals for construction. The Federal awarding where more frequent reporting is must be no less frequent than annually agency may require additional necessary for the effective monitoring of nor more frequent than quarterly except performance reports only when the Federal award or could significantly in unusual circumstances, for example considered necessary. affect program outcomes, and preferably where more frequent reporting is (e) Significant developments. Events in coordination with performance necessary for the effective monitoring of may occur between the scheduled reporting. The Federal awarding agency the Federal award or could significantly performance reporting dates that have must use OMB-approved common affect program outcomes. Reports significant impact upon the supported information collections, as applicable, submitted annually by the non-Federal activity. In such cases, the non-Federal when providing financial and entity and/or pass-through entity must entity must inform the Federal awarding performance reporting information. be due no later than 90 calendar days agency or pass-through entity as soon as the following types of conditions § 200.329 Monitoring and reporting after the reporting period. Reports become known: program performance. submitted quarterly or semiannually (1) Problems, delays, or adverse must be due no later than 30 calendar (a) Monitoring by the non-Federal conditions which will materially impair days after the reporting period. entity. The non-Federal entity is the ability to meet the objective of the Alternatively, the Federal awarding responsible for oversight of the Federal award. This disclosure must agency or pass-through entity may operations of the Federal award include a statement of the action taken, require annual reports before the supported activities. The non-Federal or contemplated, and any assistance anniversary dates of multiple year entity must monitor its activities under needed to resolve the situation. Federal awards to assure compliance Federal awards. The final performance (2) Favorable developments which with applicable Federal requirements report submitted by the non-Federal enable meeting time schedules and and performance expectations are being entity and/or pass-through entity must objectives sooner or at less cost than achieved. Monitoring by the non- be due no later than 120 calendar days anticipated or producing more or Federal entity must cover each program, after the period of performance end different beneficial results than function or activity. See also § 200.332. date. A subrecipient must submit to the originally planned. (b) Reporting program performance. pass-through entity, no later than 90 (f) Site visits. The Federal awarding The Federal awarding agency must use calendar days after the period of agency may make site visits as OMB-approved common information performance end date, all final warranted by program needs. collections, as applicable, when performance reports as required by the (g) Performance report requirement providing financial and performance terms and conditions of the Federal waiver. The Federal awarding agency reporting information. As appropriate award. See also § 200.344. If a justified may waive any performance report and in accordance with above request is submitted by a non-Federal required by this part if not needed. mentioned information collections, the entity, the Federal agency may extend Federal awarding agency must require the due date for any performance report. § 200. 330 Reporting on real property. the recipient to relate financial data and (2) As appropriate in accordance with The Federal awarding agency or pass- accomplishments to performance goals above mentioned performance through entity must require a non- and objectives of the Federal award. reporting, these reports will contain, for Federal entity to submit reports at least Also, in accordance with above each Federal award, brief information annually on the status of real property mentioned common information on the following unless other data in which the Federal Government collections, and when required by the elements are approved by OMB in the retains an interest, unless the Federal terms and conditions of the Federal agency information collection request: interest in the real property extends 15

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years or longer. In those instances where the contractor. See the definition of (viii) Total Amount of Federal Funds the Federal interest attached is for a contract in § 200.1 of this part. Obligated to the subrecipient by the period of 15 years or more, the Federal Characteristics indicative of a pass-through entity including the awarding agency or pass-through entity, procurement relationship between the current financial obligation; at its option, may require the non- non-Federal entity and a contractor are (ix) Total Amount of the Federal Federal entity to report at various multi- when the contractor: Award committed to the subrecipient by year frequencies (e.g., every two years or (1) Provides the goods and services the pass-through entity; every three years, not to exceed a five- within normal business operations; (x) Federal award project description, year reporting period; or a Federal (2) Provides similar goods or services as required to be responsive to the awarding agency or pass-through entity to many different purchasers; Federal Funding Accountability and may require annual reporting for the (3) Normally operates in a competitive Transparency Act (FFATA); first three years of a Federal award and environment; (xi) Name of Federal awarding agency, thereafter require reporting every five (4) Provides goods or services that are pass-through entity, and contact years). ancillary to the operation of the Federal information for awarding official of the program; and Pass-through entity; Subrecipient Monitoring and (5) Is not subject to compliance (xii) Assistance Listings number and Management requirements of the Federal program as Title; the pass-through entity must § 200.331 Subrecipient and contractor a result of the agreement, though similar identify the dollar amount made determinations. requirements may apply for other available under each Federal award and the Assistance Listings Number at time The non-Federal entity may reasons. of disbursement; concurrently receive Federal awards as (c) Use of judgment in making (xiii) Identification of whether the a recipient, a subrecipient, and a determination. In determining whether an agreement between a pass-through award is R&D; and contractor, depending on the substance (xiv) Indirect cost rate for the Federal of its agreements with Federal awarding entity and another non-Federal entity casts the latter as a subrecipient or a award (including if the de minimis rate agencies and pass-through entities. is charged) per § 200.414. Therefore, a pass-through entity must contractor, the substance of the relationship is more important than the (2) All requirements imposed by the make case-by-case determinations pass-through entity on the subrecipient whether each agreement it makes for the form of the agreement. All of the characteristics listed above may not be so that the Federal award is used in disbursement of Federal program funds accordance with Federal statutes, casts the party receiving the funds in the present in all cases, and the pass- through entity must use judgment in regulations and the terms and role of a subrecipient or a contractor. conditions of the Federal award; The Federal awarding agency may classifying each agreement as a subaward or a procurement contract. (3) Any additional requirements that supply and require recipients to comply the pass-through entity imposes on the with additional guidance to support § 200.332 Requirements for pass-through subrecipient in order for the pass- these determinations provided such entities. through entity to meet its own guidance does not conflict with this All pass-through entities must: responsibility to the Federal awarding section. (a) Ensure that every subaward is agency including identification of any (a) Subrecipients. A subaward is for clearly identified to the subrecipient as required financial and performance the purpose of carrying out a portion of a subaward and includes the following reports; a Federal award and creates a Federal information at the time of the subaward (4)(i) An approved federally assistance relationship with the and if any of these data elements recognized indirect cost rate negotiated subrecipient. See definition for change, include the changes in between the subrecipient and the Subaward in § 200.1 of this part. subsequent subaward modification. Federal Government. If no approved rate Characteristics which support the When some of this information is not exists, the pass-through entity must classification of the non-Federal entity available, the pass-through entity must determine the appropriate rate in as a subrecipient include when the non- provide the best information available to collaboration with the subrecipient, Federal entity: describe the Federal award and which is either: (1) Determines who is eligible to subaward. Required information (A) The negotiated indirect cost rate receive what Federal assistance; includes: between the pass-through entity and the (2) Has its performance measured in (1) Federal award identification. subrecipient; which can be based on a relation to whether objectives of a (i) Subrecipient name (which must prior negotiated rate between a different Federal program were met; match the name associated with its PTE and the same subrecipient. If basing (3) Has responsibility for unique entity identifier); the rate on a previously negotiated rate, programmatic decision-making; (ii) Subrecipient’s unique entity the pass-through entity is not required (4) Is responsible for adherence to identifier; to collect information justifying this applicable Federal program (iii) Federal Award Identification rate, but may elect to do so; requirements specified in the Federal Number (FAIN); (B) The de minimis indirect cost rate. award; and (iv) Federal Award Date (see the (ii) The pass-through entity must not (5) In accordance with its agreement, definition of Federal award date in require use of a de minimis indirect cost uses the Federal funds to carry out a § 200.1 of this part) of award to the rate if the subrecipient has a Federally program for a public purpose specified recipient by the Federal agency; approved rate. Subrecipients can elect in authorizing statute, as opposed to (v) Subaward Period of Performance to use the cost allocation method to providing goods or services for the Start and End Date; account for indirect costs in accordance benefit of the pass-through entity. (vi) Subaward Budget Period Start and with § 200.405(d). (b) Contractors. A contract is for the End Date; (5) A requirement that the purpose of obtaining goods and services (vii) Amount of Federal Funds subrecipient permit the pass-through for the non-Federal entity’s own use and Obligated by this action by the pass- entity and auditors to have access to the creates a procurement relationship with through entity to the subrecipient; subrecipient’s records and financial

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statements as necessary for the pass- not responsible for resolving cross- Record Retention and Access through entity to meet the requirements cutting findings. If a subrecipient has a of this part; and current Single Audit report posted in § 200.334 Retention requirements for records. (6) Appropriate terms and conditions the Federal Audit Clearinghouse and concerning closeout of the subaward. has not otherwise been excluded from Financial records, supporting documents, statistical records, and all (b) Evaluate each subrecipient’s risk receipt of Federal funding (e.g., has been other non-Federal entity records of noncompliance with Federal statutes, debarred or suspended), the pass- pertinent to a Federal award must be regulations, and the terms and through entity may rely on the retained for a period of three years from conditions of the subaward for purposes subrecipient’s cognizant audit agency or the date of submission of the final of determining the appropriate cognizant oversight agency to perform subrecipient monitoring described in expenditure report or, for Federal audit follow-up and make management awards that are renewed quarterly or paragraphs (d) and (e) of this section, decisions related to cross-cutting which may include consideration of annually, from the date of the findings in accordance with section submission of the quarterly or annual such factors as: § 300.513(a)(3)(vii). Such reliance does (1) The subrecipient’s prior financial report, respectively, as not eliminate the responsibility of the experience with the same or similar reported to the Federal awarding agency pass-through entity to issue subawards subawards; or pass-through entity in the case of a (2) The results of previous audits that conform to agency and award- subrecipient. Federal awarding agencies including whether or not the specific requirements, to manage risk and pass-through entities must not subrecipient receives a Single Audit in through ongoing subaward monitoring, impose any other record retention accordance with Subpart F of this part, and to monitor the status of the findings requirements upon non-Federal entities. and the extent to which the same or that are specifically related to the The only exceptions are the following: similar subaward has been audited as a subaward. (a) If any litigation, claim, or audit is major program; (e) Depending upon the pass-through started before the expiration of the 3- (3) Whether the subrecipient has new entity’s assessment of risk posed by the year period, the records must be personnel or new or substantially subrecipient (as described in paragraph retained until all litigation, claims, or changed systems; and (b) of this section), the following audit findings involving the records (4) The extent and results of Federal monitoring tools may be useful for the have been resolved and final action awarding agency monitoring (e.g., if the pass-through entity to ensure proper taken. subrecipient also receives Federal accountability and compliance with (b) When the non-Federal entity is awards directly from a Federal awarding program requirements and achievement notified in writing by the Federal agency). of performance goals: awarding agency, cognizant agency for (c) Consider imposing specific audit, oversight agency for audit, subaward conditions upon a (1) Providing subrecipients with cognizant agency for indirect costs, or subrecipient if appropriate as described training and technical assistance on pass-through entity to extend the in § 200.208. program-related matters; and retention period. (d) Monitor the activities of the (2) Performing on-site reviews of the (c) Records for real property and subrecipient as necessary to ensure that subrecipient’s program operations; equipment acquired with Federal funds the subaward is used for authorized (3) Arranging for agreed-upon- must be retained for 3 years after final purposes, in compliance with Federal procedures engagements as described in disposition. statutes, regulations, and the terms and § 200.425. (d) When records are transferred to or conditions of the subaward; and that maintained by the Federal awarding subaward performance goals are (f) Verify that every subrecipient is agency or pass-through entity, the 3-year achieved. Pass-through entity audited as required by Subpart F of this retention requirement is not applicable monitoring of the subrecipient must part when it is expected that the to the non-Federal entity. include: subrecipient’s Federal awards expended (e) Records for program income (1) Reviewing financial and during the respective fiscal year equaled transactions after the period of performance reports required by the or exceeded the threshold set forth in performance. In some cases recipients pass-through entity. § 200.501. must report program income after the (2) Following-up and ensuring that (g) Consider whether the results of the period of performance. Where there is the subrecipient takes timely and subrecipient’s audits, on-site reviews, or such a requirement, the retention period appropriate action on all deficiencies other monitoring indicate conditions for the records pertaining to the earning pertaining to the Federal award that necessitate adjustments to the pass- of the program income starts from the provided to the subrecipient from the through entity’s own records. end of the non-Federal entity’s fiscal pass-through entity detected through year in which the program income is audits, on-site reviews, and written (h) Consider taking enforcement earned. confirmation from the subrecipient, action against noncompliant (f) Indirect cost rate proposals and highlighting the status of actions subrecipients as described in § 200.339 cost allocations plans. This paragraph planned or taken to address Single of this part and in program regulations. applies to the following types of Audit findings related to the particular § 200.333 Fixed amount subawards. documents and their supporting subaward. records: Indirect cost rate computations (3) Issuing a management decision for With prior written approval from the or proposals, cost allocation plans, and applicable audit findings pertaining Federal awarding agency, a pass- any similar accounting computations of only to the Federal award provided to through entity may provide subawards the rate at which a particular group of the subrecipient from the pass-through based on fixed amounts up to the costs is chargeable (such as computer entity as required by § 200.521. Simplified Acquisition Threshold, usage chargeback rates or composite (4) The pass-through entity is provided that the subawards meet the fringe benefit rates). responsible for resolving audit findings requirements for fixed amount awards (1) If submitted for negotiation. If the specifically related to the subaward and in § 200.201. proposal, plan, or other computation is

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required to be submitted to the Federal General of the United States, and the will be subject to FOIA and applicable Government (or to the pass-through pass-through entity, or any of their exemptions. entity) to form the basis for negotiation authorized representatives, must have Remedies for Noncompliance of the rate, then the 3-year retention the right of access to any documents, period for its supporting records starts papers, or other records of the non- § 200.339 Remedies for noncompliance. from the date of such submission. Federal entity which are pertinent to the If a non-Federal entity fails to comply (2) If not submitted for negotiation. If Federal award, in order to make audits, with the U.S. Constitution, Federal the proposal, plan, or other computation examinations, excerpts, and transcripts. statutes, regulations or the terms and is not required to be submitted to the The right also includes timely and conditions of a Federal award, the Federal Government (or to the pass- reasonable access to the non-Federal Federal awarding agency or pass- through entity) for negotiation purposes, entity’s personnel for the purpose of through entity may impose additional then the 3-year retention period for the interview and discussion related to such conditions, as described in § 200.208. If proposal, plan, or computation and its documents. the Federal awarding agency or pass- supporting records starts from the end (b) Extraordinary and rare through entity determines that of the fiscal year (or other accounting circumstances. Only under noncompliance cannot be remedied by period) covered by the proposal, plan, extraordinary and rare circumstances imposing additional conditions, the or other computation. would such access include review of the Federal awarding agency or pass- true name of victims of a crime. Routine through entity may take one or more of § 200.335 Requests for transfer of records. monitoring cannot be considered the following actions, as appropriate in The Federal awarding agency must extraordinary and rare circumstances the circumstances: request transfer of certain records to its that would necessitate access to this (a) Temporarily withhold cash custody from the non-Federal entity information. When access to the true payments pending correction of the when it determines that the records name of victims of a crime is necessary, deficiency by the non-Federal entity or possess long-term retention value. appropriate steps to protect this more severe enforcement action by the However, in order to avoid duplicate sensitive information must be taken by Federal awarding agency or pass- both the non-Federal entity and the recordkeeping, the Federal awarding through entity. agency may make arrangements for the Federal awarding agency. Any such (b) Disallow (that is, deny both use of non-Federal entity to retain any records access, other than under a court order or funds and any applicable matching that are continuously needed for joint subpoena pursuant to a bona fide credit for) all or part of the cost of the use. confidential investigation, must be activity or action not in compliance. approved by the head of the Federal (c) Wholly or partly suspend or § 200.336 Methods for collection, awarding agency or delegate. transmission, and storage of information. terminate the Federal award. (c) Expiration of right of access. The (d) Initiate suspension or debarment The Federal awarding agency and the rights of access in this section are not proceedings as authorized under 2 CFR non-Federal entity should, whenever limited to the required retention period part 180 and Federal awarding agency practicable, collect, transmit, and store but last as long as the records are regulations (or in the case of a pass- Federal award-related information in retained. Federal awarding agencies and through entity, recommend such a open and machine-readable formats pass-through entities must not impose proceeding be initiated by a Federal rather than in closed formats or on any other access requirements upon awarding agency). paper in accordance with applicable non-Federal entities. (e) Withhold further Federal awards legislative requirements. A machine- for the project or program. readable format is a format in a standard § 200.338 Restrictions on public access to records. (f) Take other remedies that may be computer language (not English text) legally available. that can be read automatically by a web No Federal awarding agency may browser or computer system. The place restrictions on the non-Federal § 200.340 Termination. Federal awarding agency or pass- entity that limit public access to the (a) The Federal award may be through entity must always provide or records of the non-Federal entity terminated in whole or in part as accept paper versions of Federal award- pertinent to a Federal award, except for follows: related information to and from the non- protected personally identifiable (1) By the Federal awarding agency or Federal entity upon request. If paper information (PII) or when the Federal pass-through entity, if a non-Federal copies are submitted, the Federal awarding agency can demonstrate that entity fails to comply with the terms awarding agency or pass-through entity such records will be kept confidential and conditions of a Federal award; must not require more than an original and would have been exempted from (2) By the Federal awarding agency or and two copies. When original records disclosure pursuant to the Freedom of pass-through entity, to the greatest are electronic and cannot be altered, Information Act (5 U.S.C. 552) or extent authorized by law, if an award no there is no need to create and retain controlled unclassified information longer effectuates the program goals or paper copies. When original records are pursuant to Executive Order 13556 if agency priorities; paper, electronic versions may be the records had belonged to the Federal (3) By the Federal awarding agency or substituted through the use of awarding agency. The Freedom of pass-through entity with the consent of duplication or other forms of electronic Information Act (5 U.S.C. 552) (FOIA) the non-Federal entity, in which case media provided that they are subject to does not apply to those records that the two parties must agree upon the periodic quality control reviews, remain under a non-Federal entity’s termination conditions, including the provide reasonable safeguards against control except as required under effective date and, in the case of partial alteration, and remain readable. § 200.315. Unless required by Federal, termination, the portion to be state, local, and tribal statute, non- terminated; § 200.337 Access to records. Federal entities are not required to (4) By the non-Federal entity upon (a) Records of non-Federal entities. permit public access to their records. sending to the Federal awarding agency The Federal awarding agency, The non-Federal entity’s records or pass-through entity written Inspectors General, the Comptroller provided to a Federal agency generally notification setting forth the reasons for

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such termination, the effective date, calendar days to the Federal awarding (c) Upon termination of a Federal and, in the case of partial termination, agency who posted the information, that award, the Federal awarding agency the portion to be terminated. However, some of the information made publicly must provide the information required if the Federal awarding agency or pass- available is covered by a disclosure under FFATA to the Federal website through entity determines in the case of exemption under the Freedom of established to fulfill the requirements of partial termination that the reduced or Information Act, the Federal awarding FFATA, and update or notify any other modified portion of the Federal award agency who posted the information relevant governmentwide systems or or subaward will not accomplish the must remove the posting within seven entities of any indications of poor purposes for which the Federal award calendar days of receiving the assertion. performance as required by 41 U.S.C. was made, the Federal awarding agency Prior to reposting the releasable 417b and 31 U.S.C. 3321 and or pass-through entity may terminate information, the Federal agency must implementing guidance at 2 CFR part 77 the Federal award in its entirety; or resolve the issue in accordance with the (forthcoming at time of publication). See (5) By the Federal awarding agency or agency’s Freedom of Information Act also the requirements for Suspension pass-through entity pursuant to procedures. and Debarment at 2 CFR part 180. termination provisions included in the (d) When a Federal award is Federal award. terminated or partially terminated, both § 200.342 Opportunities to object, hearings, and appeals. (b) A Federal awarding agency should the Federal awarding agency or pass- clearly and unambiguously specify through entity and the non-Federal Upon taking any remedy for non- termination provisions applicable to entity remain responsible for compliance, the Federal awarding each Federal award, in applicable compliance with the requirements in agency must provide the non-Federal regulations or in the award, consistent §§ 200.344 and 200.345. entity an opportunity to object and with this section. provide information and documentation (c) When a Federal awarding agency § 200.341 Notification of termination challenging the suspension or terminates a Federal award prior to the requirement. termination action, in accordance with end of the period of performance due to (a) The Federal agency or pass- written processes and procedures the non-Federal entity’s material failure through entity must provide to the non- published by the Federal awarding to comply with the Federal award terms Federal entity a notice of termination. agency. The Federal awarding agency or and conditions, the Federal awarding (b) If the Federal award is terminated pass-through entity must comply with agency must report the termination to for the non-Federal entity’s material any requirements for hearings, appeals the OMB-designated integrity and failure to comply with the U.S. or other administrative proceedings to performance system accessible through Constitution, Federal statutes, which the non-Federal entity is entitled SAM (currently FAPIIS). regulations, or terms and conditions of under any statute or regulation (1) The information required under the Federal award, the notification must applicable to the action involved. paragraph (c) of this section is not to be state that— (1) The termination decision will be § 200.343 Effects of suspension and reported to designated integrity and termination. performance system until the non- reported to the OMB-designated Costs to the non-Federal entity Federal entity either— integrity and performance system (i) Has exhausted its opportunities to accessible through SAM (currently resulting from financial obligations object or challenge the decision, see FAPIIS); incurred by the non-Federal entity § 200.342; or (2) The information will be available during a suspension or after termination (ii) Has not, within 30 calendar days in the OMB-designated integrity and of a Federal award or subaward are not after being notified of the termination, performance system for a period of five allowable unless the Federal awarding informed the Federal awarding agency years from the date of the termination, agency or pass-through entity expressly that it intends to appeal the Federal then archived; authorizes them in the notice of awarding agency’s decision to (3) Federal awarding agencies that suspension or termination or terminate. consider making a Federal award to the subsequently. However, costs during (2) If a Federal awarding agency, after non-Federal entity during that five year suspension or after termination are entering information into the designated period must consider that information allowable if: integrity and performance system about in judging whether the non-Federal (a) The costs result from financial a termination, subsequently: entity is qualified to receive the Federal obligations which were properly (i) Learns that any of that information award, when the Federal share of the incurred by the non-Federal entity is erroneous, the Federal awarding Federal award is expected to exceed the before the effective date of suspension agency must correct the information in simplified acquisition threshold over or termination, are not in anticipation of the system within three business days; the period of performance; it; and (ii) Obtains an update to that (4) The non-Federal entity may (b) The costs would be allowable if information that could be helpful to comment on any information the OMB- the Federal award was not suspended or other Federal awarding agencies, the designated integrity and performance expired normally at the end of the Federal awarding agency is strongly system contains about the non-Federal period of performance in which the encouraged to amend the information in entity for future consideration by termination takes effect. the system to incorporate the update in Federal awarding agencies. The non- Closeout a timely way. Federal entity may submit comments to (3) Federal awarding agencies, must the awardee integrity and performance § 200.344 Closeout. not post any information that will be portal accessible through SAM The Federal awarding agency or pass- made publicly available in the non- (currently (CPARS). through entity will close out the Federal public segment of designated integrity (5) Federal awarding agencies will award when it determines that all and performance system that is covered consider non-Federal entity comments applicable administrative actions and by a disclosure exemption under the when determining whether the non- all required work of the Federal award Freedom of Information Act. If the non- Federal entity is qualified for a future have been completed by the non-Federal Federal entity asserts within seven Federal award. entity. If the non-Federal entity fails to

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complete the requirements, the Federal Federal awarding agency or pass- Federal award may be modified or awarding agency or pass-through entity through entity must promptly complete ended in whole or in part with the will proceed to close out the Federal all closeout actions for Federal awards. consent of the Federal awarding agency award with the information available. The Federal awarding agency must or pass-through entity and the non- This section specifies the actions the make every effort to complete closeout Federal entity, provided the non-Federal entity and Federal actions no later than one year after the responsibilities of the non-Federal awarding agency or pass-through entity end of the period of performance unless entity referred to in paragraph (a) of this must take to complete this process at the otherwise directed by authorizing section, including those for property end of the period of performance. statutes. Closeout actions include management as applicable, are (a) The recipient must submit, no later Federal awarding agency actions in the considered and provisions made for than 120 calendar days after the end grants management and payment continuing responsibilities of the non- date of the period of performance, all systems. Federal entity, as appropriate. financial, performance, and other (h) If the non-Federal entity does not Collection of Amounts Due reports as required by the terms and submit all reports in accordance with conditions of the Federal award. A this section and the terms and § 200.346 Collection of amounts due. subrecipient must submit to the pass- conditions of the Federal Award, the (a) Any funds paid to the non-Federal through entity, no later than 90 calendar Federal awarding agency must proceed entity in excess of the amount to which days (or an earlier date as agreed upon to close out with the information the non-Federal entity is finally by the pass-through entity and available within one year of the period determined to be entitled under the subrecipient) after the end date of the of performance end date. terms of the Federal award constitute a period of performance, all financial, (i) If the non-Federal entity does not debt to the Federal Government. If not performance, and other reports as submit all reports in accordance with paid within 90 calendar days after required by the terms and conditions of this section within one year of the demand, the Federal awarding agency the Federal award. The Federal period of performance end date, the may reduce the debt by: awarding agency or pass-through entity Federal awarding agency must report (1) Making an administrative offset may approve extensions when requested the non-Federal entity’s material failure against other requests for and justified by the non-Federal entity, to comply with the terms and reimbursements; as applicable. conditions of the award with the OMB- (2) Withholding advance payments (b) Unless the Federal awarding designated integrity and performance otherwise due to the non-Federal entity; agency or pass-through entity authorizes system (currently FAPIIS). Federal or an extension, a non-Federal entity must awarding agencies may also pursue (3) Other action permitted by Federal liquidate all financial obligations other enforcement actions per § 200.339. statute. incurred under the Federal award no (b) Except where otherwise provided later than 120 calendar days after the Post-Closeout Adjustments and by statutes or regulations, the Federal end date of the period of performance as Continuing Responsibilities awarding agency will charge interest on specified in the terms and conditions of § 200.345 Post-closeout adjustments and an overdue debt in accordance with the the Federal award. continuing responsibilities. Federal Claims Collection Standards (31 (c) The Federal awarding agency or (a) The closeout of a Federal award CFR parts 900 through 999). The date pass-through entity must make prompt from which interest is computed is not payments to the non-Federal entity for does not affect any of the following: (1) The right of the Federal awarding extended by litigation or the filing of costs meeting the requirements in any form of appeal. Subpart E of this part under the Federal agency or pass-through entity to award being closed out. disallow costs and recover funds on the Subpart E—Cost Principles (d) The non-Federal entity must basis of a later audit or other review. promptly refund any balances of The Federal awarding agency or pass- ■ 46. Amend § 200.400 by revising unobligated cash that the Federal through entity must make any cost paragraph (e) and (g) to read as follows: awarding agency or pass-through entity disallowance determination and notify § 200.400 Policy guide. paid in advance or paid and that are not the non-Federal entity within the record authorized to be retained by the non- retention period. * * * * * Federal entity for use in other projects. (2) The requirement for the non- (e) In reviewing, negotiating and See OMB Circular A–129 and see Federal entity to return any funds due approving cost allocation plans or § 200.346, for requirements regarding as a result of later refunds, corrections, indirect cost proposals, the cognizant unreturned amounts that become or other transactions including final agency for indirect costs should delinquent debts. indirect cost rate adjustments. generally assure that the non-Federal (e) Consistent with the terms and (3) The ability of the Federal awarding entity is applying these cost accounting conditions of the Federal award, the agency to make financial adjustments to principles on a consistent basis during Federal awarding agency or pass- a previously closed award such as their review and negotiation of indirect through entity must make a settlement resolving indirect cost payments and cost proposals. Where wide variations for any upward or downward making final payments. exist in the treatment of a given cost adjustments to the Federal share of costs (4) Audit requirements in subpart F of item by the non-Federal entity, the after closeout reports are received. this part. reasonableness and equity of such (f) The non-Federal entity must (5) Property management and treatments should be fully considered. account for any real and personal disposition requirements in §§ 200.310 See the definition of indirect (facilities property acquired with Federal funds or through 200.316 of this subpart. & administrative (F&A)) costs in § 200.1 received from the Federal Government (6) Records retention as required in of this part. in accordance with §§ 200.310 through §§ 200.334 through 200.337 of this * * * * * 200.316 and 200.330. subpart. (g) The non-Federal entity may not (g) When a recipient or subrecipient (b) After closeout of the Federal earn or keep any profit resulting from completes all closeout requirements, the award, a relationship created under the Federal financial assistance, unless

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explicitly authorized by the terms and ■ 48. Amend § 200.403 by revising potential application in the matter of conditions of the Federal award. See paragraphs (f) and (g) and adding Federal financing of activities.) also § 200.307. paragraph (h) to read as follows: ■ 51. Amend § 200.407 by revising ■ 47. Amend § 200.401 by revising § 200.403 Factors affecting allowability of paragraphs (g) and (y) to read as follows: paragraphs (a)(3) and (4), (b), and (c) to costs. § 200.407 Prior written approval (prior read as follows: * * * * * approval). (f) Not be included as a cost or used § 200.401 Application. * * * * * to meet cost sharing or matching (g) § 200.333 Fixed amount (a) * * * requirements of any other federally- subawards; financed program in either the current (3) Fixed amount awards. See also * * * * * § 200.1 Definitions and 200.201. or a prior period. See also § 200.306(b). (g) Be adequately documented. See (y) § 200.475 Travel costs. (4) Federal awards to hospitals (see also §§ 200.300 through 200.309 of this ■ 52. Revise § 200.409 to read as appendix IX to this part). part. follows: (h) Cost must be incurred during the * * * * * § 200.409 Special considerations. approved budget period. The Federal (b) Federal contract. Where a Federal awarding agency is authorized, at its In addition to the basic considerations contract awarded to a non-Federal entity discretion, to waive prior written regarding the allowability of costs is subject to the Cost Accounting approvals to carry forward unobligated highlighted in this subtitle, other Standards (CAS), it incorporates the balances to subsequent budget periods subtitles in this part describe special applicable CAS clauses, Standards, and pursuant to § 200.308(e)(3). considerations and requirements CAS administration requirements per ■ applicable to states, local governments, the 48 CFR Chapter 99 and 48 CFR part 49. Amend § 200.405 by revising paragraph (d) to read as follows: Indian tribes, and IHEs. In addition, 30 (FAR Part 30). CAS applies directly certain provisions among the items of to the CAS-covered contract and the § 200.405 Allocable costs. cost in this subpart are only applicable Cost Accounting Standards at 48 CFR * * * * * to certain types of non-Federal entities, parts 9904 or 9905 takes precedence (d) Direct cost allocation principles: If as specified in the following sections: over the cost principles in this subpart a cost benefits two or more projects or (a) Direct and Indirect (F&A) Costs E with respect to the allocation of costs. activities in proportions that can be (§§ 200.412–200.415) of this subpart; When a contract with a non-Federal determined without undue effort or (b) Special Considerations for States, entity is subject to full CAS coverage, cost, the cost must be allocated to the Local Governments and Indian Tribes the allowability of certain costs under projects based on the proportional (§§ 200.416 and 200.417) of this subpart; the cost principles will be affected by benefit. If a cost benefits two or more and the allocation provisions of the Cost projects or activities in proportions that (c) Special Considerations for Accounting Standards (e.g., CAS 414— cannot be determined because of the Institutions of Higher Education 48 CFR 9904.414, Cost of Money as an interrelationship of the work involved, (§§ 200.418 and 200.419) of this subpart. Element of the Cost of Facilities Capital, then, notwithstanding paragraph (c) of ■ 53. Revise § 200.410 to read as and CAS 417—48 CFR 9904.417, Cost of this section, the costs may be allocated follows: Money as an Element of the Cost of or transferred to benefitted projects on Capital Assets Under Construction), any reasonable documented basis. § 200.410 Collection of unallowable costs. apply rather the allowability provisions Where the purchase of equipment or Payments made for costs determined of § 200.449. In complying with those other capital asset is specifically to be unallowable by either the Federal requirements, the non-Federal entity’s authorized under a Federal award, the awarding agency, cognizant agency for application of cost accounting practices costs are assignable to the Federal award indirect costs, or pass-through entity, for estimating, accumulating, and regardless of the use that may be made either as direct or indirect costs, must be reporting costs for other Federal awards of the equipment or other capital asset refunded (including interest) to the and other cost objectives under the involved when no longer needed for the Federal Government in accordance with CAS-covered contract still must be purpose for which it was originally instructions from the Federal agency consistent with its cost accounting required. See also §§ 200.310 through that determined the costs are practices for the CAS-covered contracts. 200.316 and 200.439. unallowable unless Federal statute or In all cases, only one set of accounting * * * * * regulation directs otherwise. See also records needs to be maintained for the ■ 50. Amend § 200.406 by revising §§ 200.300 through 200.309 in subpart D allocation of costs by the non-Federal of this part. entity. paragraph (b) to read as follows: ■ 54. Amend § 200.413 by revising (c) Exemptions. Some nonprofit § 200.406 Applicable credits. paragraphs (a), (b), and (f) to read as organizations, because of their size and * * * * * follows: nature of operations, can be considered (b) In some instances, the amounts to be similar to for-profit entities for received from the Federal Government § 200.413 Direct costs. purpose of applicability of cost to finance activities or service (a) General. Direct costs are those principles. Such nonprofit organizations operations of the non-Federal entity costs that can be identified specifically must operate under Federal cost should be treated as applicable credits. with a particular final cost objective, principles applicable to for-profit Specifically, the concept of netting such such as a Federal award, or other entities located at 48 CFR 31.2. A listing credit items (including any amounts internally or externally funded activity, of these organizations is contained in used to meet cost sharing or matching or that can be directly assigned to such appendix VIII to this part. Other requirements) must be recognized in activities relatively easily with a high organizations, as approved by the determining the rates or amounts to be degree of accuracy. Costs incurred for cognizant agency for indirect costs, may charged to the Federal award. (See the same purpose in like circumstances be added from time to time. §§ 200.436 and 200.468, for areas of must be treated consistently as either

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direct or indirect (F&A) costs. See also nonprofit organizations, indirect (F&A) required to justify the 10% de minimis § 200.405. costs must be classified within two indirect cost rate. As described in (b) Application to Federal awards. broad categories: ‘‘Facilities’’ and § 200.403, costs must be consistently Identification with the Federal award ‘‘Administration.’’ ‘‘Facilities’’ is charged as either indirect or direct costs, rather than the nature of the goods and defined as depreciation on buildings, but may not be double charged or services involved is the determining equipment and capital improvement, inconsistently charged as both. If factor in distinguishing direct from interest on debt associated with certain chosen, this methodology once elected indirect (F&A) costs of Federal awards. buildings, equipment and capital must be used consistently for all Federal Typical costs charged directly to a improvements, and operations and awards until such time as a non-Federal Federal award are the compensation of maintenance expenses. entity chooses to negotiate for a rate, employees who work on that award, ‘‘Administration’’ is defined as general which the non-Federal entity may apply their related fringe benefit costs, the administration and general expenses to do at any time. costs of materials and other items of such as the director’s office, accounting, (g) Any non-Federal entity that has a expense incurred for the Federal award. personnel and all other types of current federally-negotiated indirect If directly related to a specific award, expenditures not listed specifically cost rate may apply for a one-time certain costs that otherwise would be under one of the subcategories of extension of the rates in that agreement treated as indirect costs may also be ‘‘Facilities’’ (including cross allocations for a period of up to four years. This considered direct costs. Examples from other pools, where applicable). For extension will be subject to the review include extraordinary utility nonprofit organizations, library and approval of the cognizant agency for consumption, the cost of materials expenses are included in the indirect costs. If an extension is granted supplied from stock or services ‘‘Administration’’ category; for IHEs, the non-Federal entity may not request rendered by specialized facilities, they are included in the ‘‘Facilities’’ a rate review until the extension period program evaluation costs, or other category. Major IHEs are defined as ends. At the end of the 4-year extension, institutional service operations. those required to use the Standard the non-Federal entity must re-apply to negotiate a rate. Subsequent one-time * * * * * Format for Submission as noted in extensions (up to four years) are (f) For nonprofit organizations, the appendix III to this part, and Rate permitted if a renegotiation is costs of activities performed by the non- Determination for Institutions of Higher completed between each extension Federal entity primarily as a service to Education paragraph C. 11. Major nonprofit organizations are those which request. members, clients, or the general public (h) The federally negotiated indirect when significant and necessary to the receive more than $10 million dollars in direct Federal funding. rate, distribution base, and rate type for non-Federal entity’s mission must be a non-Federal entity (except for the treated as direct costs whether or not * * * * * Indian tribes or tribal organizations, as allowable, and be allocated an equitable (c) Federal Agency Acceptance of defined in the Indian Self share of indirect (F&A) costs. Some Negotiated Indirect Cost Rates. (See also Determination, Education and examples of these types of activities § 200.306.) Assistance Act, 25 U.S.C. 450b(1)) must include: * * * * * be available publicly on an OMB- (1) Maintenance of membership rolls, (3) The Federal awarding agency must designated Federal website. subscriptions, publications, and related implement, and make publicly ■ 56. Amend § 200.415 by revising functions. See also § 200.454. available, the policies, procedures and paragraphs (b)(1) and (2), (c), and (d) to (2) Providing services and information general decision-making criteria that read as follows: to members, legislative or their programs will follow to seek and administrative bodies, or the public. See justify deviations from negotiated rates. § 200.415 Required certifications. also §§ 200.454 and 200.450. (4) As required under § 200.204, the * * * * * (3) Promotion, lobbying, and other Federal awarding agency must include (b) * * * forms of public relations. See also in the notice of funding opportunity the (1) A proposal to establish a cost §§ 200.421 and 200.450. policies relating to indirect cost rate allocation plan or an indirect (F&A) cost (4) Conferences except those held to reimbursement, matching, or cost share rate, whether submitted to a Federal conduct the general administration of as approved under paragraph (e)(1) of cognizant agency for indirect costs or the non-Federal entity. See also this section. As appropriate, the Federal maintained on file by the non-Federal § 200.432. agency should incorporate discussion of entity, must be certified by the non- (5) Maintenance, protection, and these policies into Federal awarding Federal entity using the Certificate of investment of special funds not used in agency outreach activities with non- Cost Allocation Plan or Certificate of operation of the non-Federal entity. See Federal entities prior to the posting of Indirect Costs as set forth in appendices also § 200.442. a notice of funding opportunity. III through VII, and IX of this part. The (6) Administration of group benefits (d) Pass-through entities are subject to certificate must be signed on behalf of on behalf of members or clients, the requirements in § 200.332(a)(4). the non-Federal entity by an individual including life and hospital insurance, * * * * * at a level no lower than vice president annuity or retirement plans, and (f) In addition to the procedures or chief financial officer of the non- financial aid. See also § 200.431. outlined in the appendices in paragraph Federal entity that submits the proposal. ■ 55. Amend § 200.414 by revising (e) of this section, any non-Federal (2) Unless the non-Federal entity has paragraphs (a), (c) introductory text, entity that does not have a current elected the option under § 200.414(f), (c)(3) and (4), (d), (f), and (g) and adding negotiated (including provisional) rate, the Federal Government may either paragraph (h) to read as follows: except for those non-Federal entities disallow all indirect (F&A) costs or described in appendix VII to this part, unilaterally establish such a plan or rate § 200.414 Indirect (F&A) costs. paragraph D.1.b, may elect to charge a when the non-Federal entity fails to (a) Facilities and administration de minimis rate of 10% of modified submit a certified proposal for classification. For major Institutions of total direct costs (MTDC) which may be establishing such a plan or rate in Higher Education (IHE) and major used indefinitely. No documentation is accordance with the requirements. Such

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a plan or rate may be based upon (b) Disclosure statement. An IHE that unallowable; rather, determination as to audited historical data or such other receives an aggregate total $50 million allowability in each case should be data that have been furnished to the or more in Federal awards and based on the treatment provided for cognizant agency for indirect costs and instruments subject to this subpart (as similar or related items of cost, and for which it can be demonstrated that all specified in § 200.101) during its most based on the principles described in unallowable costs have been excluded. recently completed fiscal year must §§ 200.402 through 200.411. In case of a When a cost allocation plan or indirect disclose their cost accounting practices discrepancy between the provisions of a cost rate is unilaterally established by by filing a Disclosure Statement (DS–2), specific Federal award and the the Federal Government because the which is reproduced in Appendix III to provisions below, the Federal award non-Federal entity failed to submit a Part 200. With the approval of the governs. Criteria outlined in § 200.403 certified proposal, the plan or rate cognizant agency for indirect costs, an must be applied in determining established will be set to ensure that IHE may meet the DS–2 submission by allowability. See also § 200.102. potentially unallowable costs will not submitting the DS–2 for each business ■ 61. Amend § 200.421 by revising be reimbursed. unit that received $50 million or more paragraphs (b)(1) and (e)(2) to read as (c) Certifications by nonprofit in Federal awards and instruments. follows: organizations as appropriate that they (1) The DS–2 must be submitted to the did not meet the definition of a major cognizant agency for indirect costs with § 200.421 Advertising and public relations. nonprofit organization as defined in a copy to the IHE’s cognizant agency for * * * * * § 200.414(a). audit. The initial DS–2 and revisions to (b) * * * (d) See also § 200.450 for another the DS–2 must be submitted in (1) The recruitment of personnel required certification. coordination with the IHE’s indirect required by the non-Federal entity for ■ 57. Revise § 200.417 to read as (F&A) rate proposal, unless an earlier performance of a Federal award (See follows: submission is requested by the also § 200.463); cognizant agency for indirect costs. IHEs § 200.417 Interagency service. * * * * * with CAS-covered contracts or (e) * * * The cost of services provided by one subcontracts meeting the dollar (2) Costs of meetings, conventions, agency to another within the threshold in 48 CFR 9903.202–1(f) must convocations, or other events related to governmental unit may include submit their initial DS–2 or revisions no other activities of the entity (see also allowable direct costs of the service plus later than prior to the award of a CAS- § 200.432), including: a pro-rated share of indirect costs. A covered contract or subcontract. standard indirect cost allowance equal (2) An IHE must maintain an accurate * * * * * to ten percent of the direct salary and DS–2 and comply with disclosed cost ■ 62. Revise § 200.422 to read as wage cost of providing the service accounting practices. An IHE must file follows: (excluding overtime, shift premiums, amendments to the DS–2 to the § 200.422 Advisory councils. and fringe benefits) may be used in lieu cognizant agency for indirect costs in of determining the actual indirect costs advance of a disclosed practice being Costs incurred by advisory councils or of the service. These services do not changed to comply with a new or committees are unallowable unless include centralized services included in modified standard, or when a practice is authorized by statute, the Federal central service cost allocation plans as changed for other reasons. An IHE may awarding agency or as an indirect cost described in Appendix V to Part 200. proceed with implementing the change where allocable to Federal awards. See ■ after it has notified the Federal § 200.444, applicable to States, local 58. Amend § 200.418 by revising governments, and Indian tribes. paragraph (a) to read as follows: cognizant agency for indirect costs. If the change represents a variation from 2 ■ 63. Amend § 200.425 by revising § 200.418 Costs incurred by states and CFR part 200, the change may require paragraphs (a)(1) and (2) and (c) local governments. approval by the Federal cognizant introductory text to read as follows: * * * * * agency for indirect costs, in accordance § 200.425 Audit services. (a) The costs meet the requirements of with § 200.102(b). Amendments of a § 200.402–411 of this subpart; DS–2 may be submitted at any time. * * * * * * * * * * Resubmission of a complete, updated (a) * * * (1) Any costs when audits required by ■ 59. Amend § 200.419 by revising DS–2 is discouraged except when there the Single Audit Act and subpart F of paragraphs (a), (b) introductory text, and are extensive changes to disclosed this part have not been conducted or (b)(1) and (2) to read as follows: practices. have been conducted but not in * * * * * accordance therewith; and § 200.419 Cost accounting standards and ■ disclosure statement. 60. Revise § 200.420 to read as (2) Any costs of auditing a non- follows: (a) An IHE that receive an aggregate Federal entity that is exempted from total $50 million or more in Federal § 200.420 Considerations for selected having an audit conducted under the awards and instruments subject to this items of cost. Single Audit Act and subpart F of this subpart (as specified in § 200.101) in its This section provides principles to be part because its expenditures under most recently completed fiscal year applied in establishing the allowability Federal awards are less than $750,000 must comply with the Cost Accounting of certain items involved in determining during the non-Federal entity’s fiscal Standards Board’s cost accounting cost, in addition to the requirements of year. standards located at 48 CFR 9905.501, Subtitle II of this subpart. These * * * * * 9905.502, 9905.505, and 9905.506. CAS- principles apply whether or not a (c) Pass-through entities may charge covered contracts and subcontracts particular item of cost is properly Federal awards for the cost of agreed- awarded to the IHEs are subject to the treated as direct cost or indirect (F&A) upon-procedures engagements to broader range of CAS requirements at 48 cost. Failure to mention a particular monitor subrecipients (in accordance CFR 9900 through 9999 and 48 CFR part item of cost is not intended to imply with subpart D, §§ 200.331–333) who 30 (FAR Part 30). that it is either allowable or are exempted from the requirements of

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the Single Audit Act and subpart F of (3) Is determined and supported as sick leave, holidays, court leave, this part. This cost is allowable only if provided in paragraph (i) of this section, military leave, administrative leave, and the agreed-upon-procedures when applicable. other similar benefits, are allowable if engagements are: * * * * * all of the following criteria are met: * * * * * (h) Institutions of Higher Education (1) They are provided under established written leave policies; ■ (IHEs). *** 64. Revise § 200.426 to read as (3) Intra-Institution of Higher (2) The costs are equitably allocated to follows: Education (IHE) consulting. Intra-IHE all related activities, including Federal awards; and, § 200.426 Bad debts. consulting by faculty should be undertaken as an IHE responsibility (3) The accounting basis (cash or Bad debts (debts which have been requiring no compensation in addition accrual) selected for costing each type of determined to be uncollectable), to IBS. However, in unusual cases leave is consistently followed by the including losses (whether actual or where consultation is across non-Federal entity or specified grouping estimated) arising from uncollectable departmental lines or involves a of employees. accounts and other claims, are separate or remote operation, and the (i) When a non-Federal entity uses the unallowable. Related collection costs, work performed by the faculty member cash basis of accounting, the cost of and related legal costs, arising from is in addition to his or her regular leave is recognized in the period that such debts after they have been responsibilities, any charges for such the leave is taken and paid for. determined to be uncollectable are also work representing additional Payments for unused leave when an unallowable. See also § 200.428. compensation above IBS are allowable employee retires or terminates employment are allowable in the year of ■ 65. Revise § 200.428 to read as provided that such consulting arrangements are specifically provided payment. follows: (ii) The accrual basis may be only for in the Federal award or approved in used for those types of leave for which § 200.428 Collections of improper writing by the Federal awarding agency. payments. a liability as defined by GAAP exists * * * * * when the leave is earned. When a non- The costs incurred by a non-Federal (iv) Encompass federally-assisted and Federal entity uses the accrual basis of entity to recover improper payments are all other activities compensated by the accounting, allowable leave costs are the allowable as either direct or indirect non-Federal entity on an integrated lesser of the amount accrued or funded. costs, as appropriate. Amounts collected basis, but may include the use of (c) Fringe benefits. The cost of fringe may be used by the non-Federal entity subsidiary records as defined in the benefits in the form of employer in accordance with cash management non-Federal entity’s written policy; contributions or expenses for social standards set forth in § 200.305. * * * * * security; employee life, health, ■ 66. Revise § 200.429 to read as (viii) * * * unemployment, and worker’s follows: (C) The non-Federal entity’s system of compensation insurance (except as internal controls includes processes to indicated in § 200.447); pension plan § 200.429 Commencement and review after-the-fact interim charges costs (see paragraph (i) of this section); convocation costs. made to a Federal award based on and other similar benefits are allowable, For IHEs, costs incurred for budget estimates. All necessary provided such benefits are granted commencements and convocations are adjustment must be made such that the under established written policies. Such unallowable, except as provided for in final amount charged to the Federal benefits, must be allocated to Federal (B)(9) Student Administration and award is accurate, allowable, and awards and all other activities in a Services, in appendix III to this part, as properly allocated. manner consistent with the pattern of activity costs. * * * * * benefits attributable to the individuals ■ 68. Revise § 200.431 to read as or group(s) of employees whose salaries ■ 67. Amend § 200.430 by revising follows: and wages are chargeable to such paragraphs (a) introductory text and Federal awards and other activities, and (a)(3), the paragraph (h) subject heading, § 200.431 Compensation—fringe benefits. charged as direct or indirect costs in and paragraphs (h)(3), (h)(8)(iv), and (a) General. Fringe benefits are accordance with the non-Federal (h)(8)(viii)(C) to read as follows: allowances and services provided by entity’s accounting practices. § 200.430 Compensation—personal employers to their employees as (d) Cost objectives. Fringe benefits services. compensation in addition to regular may be assigned to cost objectives by salaries and wages. Fringe benefits identifying specific benefits to specific (a) General. Compensation for include, but are not limited to, the costs individual employees or by allocating personal services includes all of leave (vacation, family-related, sick or on the basis of entity-wide salaries and remuneration, paid currently or military), employee insurance, wages of the employees receiving the accrued, for services of employees pensions, and unemployment benefit benefits. When the allocation method is rendered during the period of plans. Except as provided elsewhere in used, separate allocations must be made performance under the Federal award, these principles, the costs of fringe to selective groupings of employees, including but not necessarily limited to benefits are allowable provided that the unless the non-Federal entity wages and salaries. Compensation for benefits are reasonable and are required demonstrates that costs in relationship personal services may also include by law, non-Federal entity-employee to salaries and wages do not differ fringe benefits which are addressed in agreement, or an established policy of significantly for different groups of § 200.431. Costs of compensation are the non-Federal entity. employees. allowable to the extent that they satisfy (b) Leave. The cost of fringe benefits (e) Insurance. See also § 200.447(d)(1) the specific requirements of this part, in the form of regular compensation and (2). and that the total compensation for paid to employees during periods of (1) Provisions for a reserve under a individual employees: authorized absences from the job, such self-insurance program for * * * * * as for annual leave, family-related leave, unemployment compensation or

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workers’ compensation are allowable to Security Act (ERISA) of 1974 (29 U.S.C. method in accordance with established the extent that the provisions represent 1301–1461) are allowable. Late payment written policies of the non-Federal reasonable estimates of the liabilities for charges on such premiums are entity. such compensation, and the types of unallowable. Excise taxes on (1) For PRHP financed on a pay-as- coverage, extent of coverage, and rates accumulated funding deficiencies and you-go method, allowable costs will be and premiums would have been other penalties imposed under ERISA limited to those representing actual allowable had insurance been are unallowable. payments to retirees or their purchased to cover the risks. However, (6) Pension plan costs may be beneficiaries. provisions for self-insured liabilities computed using a pay-as-you-go method (2) PRHP costs calculated using an which do not become payable for more or an acceptable actuarial cost method actuarial cost method recognized by than one year after the provision is in accordance with established written GAAP are allowable if they are funded made must not exceed the present value policies of the non-Federal entity. for that year within six months after the of the liability. (i) For pension plans financed on a end of that year. Costs funded after the (2) Costs of insurance on the lives of pay-as-you-go method, allowable costs six-month period (or a later period trustees, officers, or other employees will be limited to those representing agreed to by the cognizant agency) are holding positions of similar actual payments to retirees or their allowable in the year funded. The responsibility are allowable only to the beneficiaries. Federal cognizant agency for indirect extent that the insurance represents (ii) Pension costs calculated using an costs may agree to an extension of the additional compensation. The costs of actuarial cost-based method recognized six-month period if an appropriate such insurance when the non-Federal by GAAP are allowable for a given fiscal adjustment is made to compensate for entity is named as beneficiary are year if they are funded for that year the timing of the charges to the Federal unallowable. within six months after the end of that Government and related Federal (3) Actual claims paid to or on behalf year. Costs funded after the six-month reimbursements and the non-Federal of employees or former employees for period (or a later period agreed to by the entity’s contributions to the PRHP fund. workers’ compensation, unemployment cognizant agency for indirect costs) are Adjustments may be made by cash compensation, severance pay, and allowable in the year funded. The refund, reduction in current year’s similar employee benefits (e.g., post- cognizant agency for indirect costs may PRHP costs, or other equitable retirement health benefits), are agree to an extension of the six-month procedures to compensate the Federal allowable in the year of payment period if an appropriate adjustment is Government for the time value of provided that the non-Federal entity made to compensate for the timing of Federal reimbursements in excess of follows a consistent costing policy. the charges to the Federal Government contributions to the PRHP fund. (f) Automobiles. That portion of and related Federal reimbursement and (3) Amounts funded in excess of the automobile costs furnished by the non- the non-Federal entity’s contribution to actuarially determined amount for a Federal entity that relates to personal the pension fund. Adjustments may be fiscal year may be used as the non- use by employees (including made by cash refund or other equitable Federal entity contribution in a future transportation to and from work) is procedures to compensate the Federal period. unallowable as fringe benefit or indirect Government for the time value of (4) When a non-Federal entity (F&A) costs regardless of whether the Federal reimbursements in excess of converts to an acceptable actuarial cost cost is reported as taxable income to the contributions to the pension fund. method and funds PRHP costs in employees. (iii) Amounts funded by the non- accordance with this method, the initial (g) Pension plan costs. Pension plan Federal entity in excess of the unfunded liability attributable to prior costs which are incurred in accordance actuarially determined amount for a years is allowable if amortized over a with the established policies of the non- fiscal year may be used as the non- period of years in accordance with Federal entity are allowable, provided Federal entity’s contribution in future GAAP, or, if no such GAAP period that: periods. exists, over a period negotiated with the (1) Such policies meet the test of (iv) When a non-Federal entity cognizant agency for indirect costs. reasonableness. converts to an acceptable actuarial cost (5) To be allowable in the current (2) The methods of cost allocation are method, as defined by GAAP, and funds year, the PRHP costs must be paid either not discriminatory. pension costs in accordance with this to: (3) Except for State and Local method, the unfunded liability at the (i) An insurer or other benefit Governments, the cost assigned to each time of conversion is allowable if provider as current year costs or fiscal year should be determined in amortized over a period of years in premiums, or accordance with GAAP. accordance with GAAP. (ii) An insurer or trustee to maintain (4) The costs assigned to a given fiscal (v) The Federal Government must a trust fund or reserve for the sole year are funded for all plan participants receive an equitable share of any purpose of providing post-retirement within six months after the end of that previously allowed pension costs benefits to retirees and other year. However, increases to normal and (including earnings thereon) which beneficiaries. past service pension costs caused by a revert or inure to the non-Federal entity (6) The Federal Government must delay in funding the actuarial liability in the form of a refund, withdrawal, or receive an equitable share of any beyond 30 calendar days after each other credit. amounts of previously allowed post- quarter of the year to which such costs (h) Post-retirement health. Post- retirement benefit costs (including are assignable are unallowable. Non- retirement health plans (PRHP) refers to earnings thereon) which revert or inure Federal entity may elect to follow the costs of health insurance or health to the non-Federal entity in the form of ‘‘Cost Accounting Standard for services not included in a pension plan a refund, withdrawal, or other credit. Composition and Measurement of covered by paragraph (g) of this section (i) Severance pay. (1) Severance pay, Pension Costs’’ (48 CFR 9904.412). for retirees and their spouses, also commonly referred to as dismissal (5) Pension plan termination dependents, and survivors. PRHP costs wages, is a payment in addition to insurance premiums paid pursuant to may be computed using a pay-as-you-go regular salaries and wages, by non- the Employee Retirement Income method or an acceptable actuarial cost Federal entities to workers whose

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employment is being terminated. Costs (j) For IHEs only. (1) Fringe benefits in available dependent-care resources are of severance pay are allowable only to the form of undergraduate and graduate allowable. Conference hosts/sponsors the extent that in each case, it is tuition or remission of tuition for must exercise discretion and judgment required by individual employees are allowable, in ensuring that conference costs are (i) Law; provided such benefits are granted in appropriate, necessary and managed in (ii) Employer-employee agreement; accordance with established non- a manner that minimizes costs to the (iii) Established policy that Federal entity policies, and are Federal award. The Federal awarding constitutes, in effect, an implied distributed to all non-Federal entity agency may authorize exceptions where agreement on the non-Federal entity’s activities on an equitable basis. Tuition appropriate for programs including part; or benefits for family members other than Indian tribes, children, and the elderly. (iv) Circumstances of the particular the employee are unallowable. See also §§ 200.438, 200.456, and employment. (2) Fringe benefits in the form of 200.475. (2) Costs of severance payments are tuition or remission of tuition for ■ 70. Amend § 200.433 by revising divided into two categories as follows: individual employees not employed by paragraphs (b) and (c) to read as follows: (i) Actual normal turnover severance IHEs are limited to the tax-free amount § 200.433 Contingency provisions. payments must be allocated to all allowed per section 127 of the Internal activities; or, where the non-Federal Revenue Code as amended. * * * * * entity provides for a reserve for normal (3) IHEs may offer employees tuition (b) It is permissible for contingency severances, such method will be waivers or tuition reductions, provided amounts other than those excluded in paragraph (a) of this section to be acceptable if the charge to current that the benefit does not discriminate in explicitly included in budget estimates, operations is reasonable in light of favor of highly compensated employees. to the extent they are necessary to payments actually made for normal Employees can exercise these benefits at improve the precision of those severances over a representative past other institutions according to estimates. Amounts must be estimated period, and if amounts charged are institutional policy. See § 200.466, for using broadly-accepted cost estimating allocated to all activities of the non- treatment of tuition remission provided methodologies, specified in the budget Federal entity. to students. (k) Fringe benefit programs and other documentation of the Federal award, (ii) Measurement of costs of abnormal benefit costs. For IHEs whose costs are and accepted by the Federal awarding or mass severance pay by means of an paid by state or local governments, agency. As such, contingency amounts accrual will not achieve equity to both fringe benefit programs (such as pension are to be included in the Federal award. parties. Thus, accruals for this purpose costs and FICA) and any other benefits In order for actual costs incurred to be are not allowable. However, the Federal costs specifically incurred on behalf of, allowable, they must comply with the Government recognizes its and in direct benefit to, the non-Federal cost principles and other requirements responsibility to participate, to the entity, are allowable costs of such non- in this part (see also §§ 200.300 and extent of its fair share, in any specific Federal entities whether or not these 200.403 of this part); be necessary and payment. Prior approval by the Federal costs are recorded in the accounting reasonable for proper and efficient awarding agency or cognizant agency for records of the non-Federal entities, accomplishment of project or program indirect cost, as appropriate, is required. subject to the following: objectives, and be verifiable from the (3) Costs incurred in certain severance (1) The costs meet the requirements of non-Federal entity’s records. pay packages which are in an amount in Basic Considerations in §§ 200.402 (c) Payments made by the Federal excess of the normal severance pay paid through 200.411; awarding agency to the non-Federal by the non-Federal entity to an (2) The costs are properly supported entity’s ‘‘contingency reserve’’ or any employee upon termination of by approved cost allocation plans in similar payment made for events the employment and are paid to the accordance with applicable Federal cost occurrence of which cannot be foretold employee contingent upon a change in accounting principles; and with certainty as to the time or management control over, or ownership (3) The costs are not otherwise borne intensity, or with an assurance of their of, the non-Federal entity’s assets, are directly or indirectly by the Federal happening, are unallowable, except as unallowable. Government. noted in §§ 200.431 and 200.447. (4) Severance payments to foreign ■ 69. Revise § 200.432 to read as ■ 71. Amend § 200.434 by revising nationals employed by the non-Federal follows: paragraphs (b), (c), (f), and (g)(2) to read entity outside the United States, to the as follows: extent that the amount exceeds the § 200.432 Conferences. customary or prevailing practices for the A conference is defined as a meeting, § 200.434 Contributions and donations. non-Federal entity in the United States, retreat, seminar, symposium, workshop * * * * * are unallowable, unless they are or event whose primary purpose is the (b) The value of services and property necessary for the performance of Federal dissemination of technical information donated to the non-Federal entity may programs and approved by the Federal beyond the non-Federal entity and is not be charged to the Federal award awarding agency. necessary and reasonable for successful either as a direct or indirect (F&A) cost. (5) Severance payments to foreign performance under the Federal award. The value of donated services and nationals employed by the non-Federal Allowable conference costs paid by the property may be used to meet cost entity outside the United States due to non-Federal entity as a sponsor or host sharing or matching requirements (see the termination of the foreign national of the conference may include rental of § 200.306). Depreciation on donated as a result of the closing of, or facilities, speakers’ fees, costs of meals assets is permitted in accordance with curtailment of activities by, the non- and refreshments, local transportation, § 200.436, as long as the donated Federal entity in that country, are and other items incidental to such property is not counted towards cost unallowable, unless they are necessary conferences unless further restricted by sharing or matching requirements. for the performance of Federal programs the terms and conditions of the Federal (c) Services donated or volunteered to and approved by the Federal awarding award. As needed, the costs of the non-Federal entity may be furnished agency. identifying, but not providing, locally to a non-Federal entity by professional

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and technical personnel, consultants, § 200.439 Equipment and other capital must be allocated as an appropriate and other skilled and unskilled labor. expenditures. share of indirect costs under the The value of these services may not be (a) See § 200.1 for the definitions of conditions described in § 200.413. charged to the Federal award either as capital expenditures, equipment, ■ 76. Amend § 200.443 by revising a direct or indirect cost. However, the special purpose equipment, general paragraphs (b)(1) and (3) and (d) to read value of donated services may be used purpose equipment, acquisition cost, as follows: to meet cost sharing or matching and capital assets. requirements in accordance with the * * * * * § 200.443 Gains and losses on disposition of depreciable assets. provisions of § 200.306. (b) * * * * * * * * (3) Capital expenditures for * * * * * (f) Fair market value of donated improvements to land, buildings, or (b) * * * services must be computed as described equipment which materially increase (1) The gain or loss is processed in § 200.306. their value or useful life are unallowable through a depreciation account and is * * * * * as a direct cost except with the prior reflected in the depreciation allowable (g) * * * written approval of the Federal under §§ 200.436 and 200.439. (2) The value of the donations may be awarding agency, or pass-through entity. * * * * * used to meet cost sharing or matching See § 200.436, for rules on the (3) A loss results from the failure to share requirements under the conditions allowability of depreciation on maintain permissible insurance, except described in § 200.300 of this part. The buildings, capital improvements, and as otherwise provided in § 200.447. value of the donations must be equipment. See also § 200.465. * * * * * determined in accordance with * * * * * (d) When assets acquired with Federal § 200.300. Where donations are treated (7) Equipment and other capital funds, in part or wholly, are disposed as indirect costs, indirect cost rates will expenditures are unallowable as of, the distribution of the proceeds must separate the value of the donations so indirect costs. See § 200.436. be made in accordance with §§ 200.310 that reimbursement will not be made. ■ 74. Revise § 200.441 to read as through 200.316 of this part. ■ 72. Amend § 200.436 by revising follows: ■ 77. Amend § 200.444 by revising paragraphs (c) introductory text, (c)(3) § 200.441 Fines, penalties, damages and paragraphs (a) introductory text, (a)(4), and (4), and (e) to read as follows: other settlements. and (b) to read as follows: § 200.436 Depreciation. Costs resulting from non-Federal § 200.444 General costs of government. * * * * * entity violations of, alleged violations (a) For states, local governments, and (c) Depreciation is computed applying of, or failure to comply with, Federal, Indian Tribes, the general costs of the following rules. The computation of state, tribal, local or foreign laws and government are unallowable (except as depreciation must be based on the regulations are unallowable, except provided in § 200.475). Unallowable acquisition cost of the assets involved. when incurred as a result of compliance costs include: with specific provisions of the Federal For an asset donated to the non-Federal * * * * * award, or with prior written approval of entity by a third party, its fair market (4) Costs of prosecutorial activities the Federal awarding agency. See also value at the time of the donation must unless treated as a direct cost to a § 200.435. be considered as the acquisition cost. specific program if authorized by statute ■ Such assets may be depreciated or 75. Revise § 200.442 to read as or regulation (however, this does not claimed as matching but not both. For follows: preclude the allowability of other legal the computation of depreciation, the activities of the Attorney General as acquisition cost will exclude: § 200.442 Fund raising and investment management costs. described in § 200.435); and * * * * * (a) Costs of organized fund raising, * * * * * (3) Any portion of the cost of including financial campaigns, (b) For Indian tribes and Councils of buildings and equipment contributed by endowment drives, solicitation of gifts Governments (COGs) (see definition for or for the non-Federal entity that are and bequests, and similar expenses Local government in § 200.1 of this already claimed as matching or where incurred to raise capital or obtain part), up to 50% of salaries and law or agreement prohibits recovery; contributions are unallowable. Fund expenses directly attributable to (4) Any asset acquired solely for the raising costs for the purposes of meeting managing and operating Federal performance of a non-Federal award; the Federal program objectives are programs by the chief executive and his and allowable with prior written approval or her staff can be included in the * * * * * from the Federal awarding agency. indirect cost calculation without (e) Charges for depreciation must be Proposal costs are covered in § 200.460. documentation. supported by adequate property records, (b) Costs of investment counsel and ■ 78. Amend § 200.447 by revising and physical inventories must be taken staff and similar expenses incurred to paragraph (a)(4) to read as follows: at least once every two years to ensure enhance income from investments are that the assets exist and are usable, unallowable except when associated § 200.447 Insurance and indemnification. used, and needed. Statistical sampling with investments covering pension, self- (a) * * * techniques may be used in taking these insurance, or other funds which include (4) Costs of insurance on the lives of inventories. In addition, adequate Federal participation allowed by this trustees, officers, or other employees depreciation records showing the part. holding positions of similar amount of depreciation must be (c) Costs related to the physical responsibilities are allowable only to the maintained. custody and control of monies and extent that the insurance represents ■ 73. Amend § 200.439 by revising securities are allowable. additional compensation (see paragraphs (a) and (b)(3) and (7) to read (d) Both allowable and unallowable § 200.431). The cost of such insurance as follows: fund-raising and investment activities when the non-Federal entity is

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identified as the beneficiary is (c) * * * facilities, personnel, and work products unallowable. (2) * * * are allowable. Such costs include, but * * * * * (v) When a non-Federal entity seeks are not limited to, wages and uniforms reimbursement for indirect (F&A) costs, ■ 79. Amend § 200.448 by revising of personnel engaged in security total lobbying costs must be separately paragraph (a)(1)(iii) to read as follows: activities; equipment; barriers; identified in the indirect (F&A) cost rate protective (non-military) gear, devices, § 200.448 Intellectual property. proposal, and thereafter treated as other and equipment; contractual security (a) * * * unallowable activity costs in accordance services; and consultants. Capital (1) * * * with the procedures of § 200.413. expenditures for plant security purposes (iii) General counseling services (vi) The non-Federal entity must are subject to § 200.439. submit as part of its annual indirect relating to patent and copyright matters, ■ 86. Revise § 200.458 to read as (F&A) cost rate proposal a certification such as advice on patent and copyright follows: laws, regulations, clauses, and employee that the requirements and standards of intellectual property agreements (See this section have been complied with. § 200.458 Pre-award costs. also § 200.459). (See also § 200.415.) Pre-award costs are those incurred (vii)(A) Time logs, calendars, or * * * * * prior to the effective date of the Federal similar records are not required to be ■ 80. Amend § 200.449 by revising award or subaward directly pursuant to created for purposes of complying with paragraphs (b)(1) and (c)(4) to read as the negotiation and in anticipation of the record keeping requirements in follows: the Federal award where such costs are § 200.302 with respect to lobbying costs necessary for efficient and timely during any particular calendar month § 200.449 Interest. performance of the scope of work. Such when: * * * * * costs are allowable only to the extent (b) Capital assets. (1) Capital assets is * * * * * that they would have been allowable if defined as noted in § 200.1 of this part. ■ 82. Revise § 200.452 to read as incurred after the date of the Federal An asset cost includes (as applicable) follows: award and only with the written acquisition costs, construction costs, § 200.452 Maintenance and repair costs. approval of the Federal awarding and other costs capitalized in agency. If charged to the award, these Costs incurred for utilities, insurance, accordance with GAAP. costs must be charged to the initial security, necessary maintenance, * * * * * budget period of the award, unless janitorial services, repair, or upkeep of (c) * * * otherwise specified by the Federal buildings and equipment (including (4) The non-Federal entity limits awarding agency or pass-through entity. claims for Federal reimbursement of Federal property unless otherwise ■ 87. Amend § 200.459 by revising interest costs to the least expensive provided for) which neither add to the paragraph (a) to read as follows: alternative. For example, a lease permanent value of the property nor contract that transfers ownership by the appreciably prolong its intended life, § 200.459 Professional service costs. but keep it in an efficient operating end of the contract may be determined (a) Costs of professional and less costly than purchasing through condition, are allowable. Costs incurred for improvements which add to the consultant services rendered by persons other types of debt financing, in which who are members of a particular case reimbursement must be limited to permanent value of the buildings and equipment or appreciably prolong their profession or possess a special skill, and the amount of interest determined if who are not officers or employees of the leasing had been used. intended life must be treated as capital expenditures (see § 200.439). These non-Federal entity, are allowable, * * * * * subject to paragraphs (b) and (c) of this ■ costs are only allowable to the extent 81. Amend § 200.450 by revising not paid through rental or other section when reasonable in relation to paragraphs (a), (c)(2)(v) and (vi), agreements. the services rendered and when not (c)(2)(vii)(A) introductory text to read as contingent upon recovery of the costs ■ 83. Amend § 200.454 by revising follows: from the Federal Government. In paragraph (e) to read as follows: addition, legal and related services are § 200.450 Lobbying. § 200.454 Memberships, subscriptions, limited under § 200.435. (a) The cost of certain influencing and professional activity costs. activities associated with obtaining * * * * * grants, contracts, or cooperative * * * * * ■ 88. Amend § 200.461 by revising (e) Costs of membership in agreements, or loans is an unallowable paragraph (b)(3) to read as follows: organizations whose primary purpose is cost. Lobbying with respect to certain lobbying are unallowable. See also § 200.461 Publication and printing costs. grants, contracts, cooperative § 200.450. agreements, and loans is governed by * * * * * ■ relevant statutes, including among 84. Revise § 200.456 to read as (b) * * * others, the provisions of 31 U.S.C. 1352, follows: (3) The non-Federal entity may charge as well as the common rule, ‘‘New § 200.456 Participant support costs. the Federal award during closeout for Restrictions on Lobbying’’ published on Participant support costs as defined in the costs of publication or sharing of February 26, 1990, including § 200.1 are allowable with the prior research results if the costs are not definitions, and the Office of approval of the Federal awarding incurred during the period of Management and Budget agency. performance of the Federal award. If ‘‘Governmentwide Guidance for New charged to the award, these costs must ■ 85. Revise § 200.457 to read as Restrictions on Lobbying’’ and notices be charged to the final budget period of follows: published on December 20, 1989, June the award, unless otherwise specified by 15, 1990, January 15, 1992, and January § 200.457 Plant and security costs. the Federal awarding agency. 19, 1996. Necessary and reasonable expenses ■ 89. Amend § 200.463 by revising * * * * * incurred for protection and security of paragraph (c) to read as follows:

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§ 200.463 Recruiting costs. lease asset (per GASB) or right of use §§ 200.471 through 200.475 [Redesignated * * * * * operating lease asset (per FASB) for as §§ 200.472 through 200.476] (c) Where relocation costs incurred purposes of financial reporting in ■ 95. Redesignate §§ 200.471 through incident to recruitment of a new accordance with GAAP. 200.475 as §§ 200.472 through 200.476. employee have been funded in whole or (f) The rental of any property owned ■ 96. Add new § 200.471 to read as in part to a Federal award, and the by any individuals or entities affiliated follows: newly hired employee resigns for with the non-Federal entity, to include reasons within the employee’s control commercial or residential real estate, for § 200.471 Telecommunication costs and within 12 months after hire, the non- purposes such as the home office video surveillance costs Federal entity will be required to refund workspace is unallowable. (a) Costs incurred for or credit the Federal share of such telecommunications and video relocation costs to the Federal ■ 92. Amend § 200.466 by revising paragraph (b) to read as follows: surveillance services or equipment such Government. See also § 200.464. as phones, internet, video surveillance, * * * * * § 200.466 Scholarships and student aid cloud servers are allowable except for ■ 90. Amend § 200.464 by revising costs. the following circumstances: paragraph (c) to read as follows: * * * * * (b) Obligating or expending covered telecommunications and video § 200.464 Relocation costs of employees. (b) Charges for tuition remission and other forms of compensation paid to surveillance services or equipment or * * * * * services as described in § 200.216 to: (c) Allowable relocation costs for new students as, or in lieu of, salaries and wages must be subject to the reporting (1) Procure or obtain, extend or renew employees are limited to those a contract to procure or obtain; described in paragraphs (b)(1) and (2) of requirements in § 200.430, and must be (2) Enter into a contract (or extend or this section. When relocation costs treated as direct or indirect cost in renew a contract) to procure; or incurred incident to the recruitment of accordance with the actual work being new employees have been charged to a performed. Tuition remission may be (3) Obtain the equipment, services, or Federal award and the employee resigns charged on an average rate basis. See systems. for reasons within the employee’s also § 200.431. ■ 97. Amend newly redesignated control within 12 months after hire, the ■ 93. Revise § 200.467 to read as § 200.472 by revising paragraphs (c)(2), non-Federal entity must refund or credit follows: (e)(1)(i), and (f) to read as follows: the Federal Government for its share of § 200.472 Termination costs. the cost. If dependents are not permitted § 200.467 Selling and marketing costs. * * * * * at the location for any reason and the Costs of selling and marketing any (c) * * * costs do not include costs of products or services of the non-Federal transporting household goods, the costs entity (unless allowed under § 200.421) (2) The interest of the Federal of travel to an overseas location must be are unallowable, except as direct costs, Government is protected by transfer of considered travel costs in accordance with prior approval by the Federal title or by other means deemed with § 200.474 Travel costs, and not this awarding agency when necessary for the appropriate by the Federal awarding relocations costs of employees (See also performance of the Federal award. agency (see also § 200.313 (d)), and § 200.464). * * * * * ■ * * * * * 94. Amend § 200.468 by revising (e) * * * paragraph (a) and (b)(2) to read as ■ 91. Amend § 200.465 by adding (1) * * * follows: paragraphs (d) through (f) to read as (i) The preparation and presentation follows: § 200.468 Specialized service facilities. to the Federal awarding agency of settlement claims and supporting data § 200.465 Rental costs of real property and (a) The costs of services provided by with respect to the terminated portion of equipment. highly complex or specialized facilities the Federal award, unless the * * * * * operated by the non-Federal entity, such termination is for cause (see subpart D, (d) Rental costs under leases which as computing facilities, wind tunnels, including §§ 200.339–200.343); and are required to be accounted for as a and reactors are allowable, provided the financed purchase under GASB charges for the services meet the * * * * * standards or a finance lease under FASB conditions of either paragraph (b) or (c) (f) Claims under subawards, including standards under GAAP are allowable of this section, and, in addition, take the allocable portion of claims which only up to the amount (as explained in into account any items of income or are common to the Federal award and paragraph (b) of this section) that would Federal financing that qualify as to other work of the non-Federal entity, be allowed had the non-Federal entity applicable credits under § 200.406. are generally allowable. An appropriate share of the non-Federal entity’s purchased the property on the date the * * * * * indirect costs may be allocated to the lease agreement was executed. Interest (b) * * * costs related to these leases are amount of settlements with contractors allowable to the extent they meet the (2) Is designed to recover only the and/or subrecipients, provided that the criteria in § 200.449. Unallowable costs aggregate costs of the services. The costs amount allocated is otherwise include amounts paid for profit, of each service must consist normally of consistent with the basic guidelines management fees, and taxes that would both its direct costs and its allocable contained in § 200.414. The indirect not have been incurred had the non- share of all indirect (F&A) costs. Rates costs so allocated must exclude the Federal entity purchased the property. must be adjusted at least biennially, and same and similar costs claimed directly (e) Rental or lease payments are must take into consideration over/ or indirectly as settlement expenses. allowable under lease contracts where under-applied costs of the previous ■ 98. Amend newly redesignated the non-Federal entity is required to period(s). § 200.475 by revising paragraphs (a) and recognize an intangible right-to-use * * * * * (c)(2) to read as follows:

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§ 200.475 Travel costs. specific audit conducted in accordance 180 calendar days prior to the end of the (a) General. Travel costs are the with § 200.507. A program-specific fiscal year to be audited. The auditee, expenses for transportation, lodging, audit may not be elected for R&D unless after consultation with its auditor, subsistence, and related items incurred all of the Federal awards expended were should promptly respond to such a by employees who are in travel status received from the same Federal agency, request by informing the Federal on official business of the non-Federal or the same Federal agency and the awarding agency whether the program entity. Such costs may be charged on an same pass-through entity, and that would otherwise be audited as a major actual cost basis, on a per diem or Federal agency, or pass-through entity program using the risk-based audit mileage basis in lieu of actual costs in the case of a subrecipient, approves approach described in § 200.518 and, if incurred, or on a combination of the in advance a program-specific audit. not, the estimated incremental cost. The two, provided the method used is (d) Exemption when Federal awards Federal awarding agency must then applied to an entire trip and not to expended are less than $750,000. A promptly confirm to the auditee selected days of the trip, and results in non-Federal entity that expends less whether it wants the program audited as charges consistent with those normally than $750,000 during the non-Federal a major program. If the program is to be allowed in like circumstances in the entity’s fiscal year in Federal awards is audited as a major program based upon non-Federal entity’s non-federally- exempt from Federal audit requirements this Federal awarding agency request, funded activities and in accordance for that year, except as noted in and the Federal awarding agency agrees with non-Federal entity’s written travel § 200.503, but records must be available to pay the full incremental costs, then reimbursement policies. for review or audit by appropriate the auditee must have the program Notwithstanding the provisions of officials of the Federal agency, pass- audited as a major program. A pass- § 200.444, travel costs of officials through entity, and Government through entity may use the provisions of covered by that section are allowable Accountability Office (GAO). this paragraph for a subrecipient. with the prior written approval of the * * * * * ■ 102. Revise § 200.505 to read as Federal awarding agency or pass- (f) Subrecipients and contractors. An follows: through entity when they are auditee may simultaneously be a specifically related to the Federal recipient, a subrecipient, and a § 200.505 Sanctions. award. contractor. Federal awards expended as In cases of continued inability or * * * * * a recipient or a subrecipient are subject unwillingness to have an audit (c) * * * to audit under this part. The payments conducted in accordance with this part, (2) Travel costs for dependents are received for goods or services provided Federal agencies and pass-through unallowable, except for travel of as a contractor are not Federal awards. entities must take appropriate action as duration of six months or more with Section § 200.331 sets forth the provided in § 200.339. prior approval of the Federal awarding considerations in determining whether ■ 103. Revise § 200.506 to read as agency. See also § 200.432. payments constitute a Federal award or follows: * * * * * a payment for goods or services § 200.506 Audit costs. ■ 99. Revise newly redesignated provided as a contractor. § 200.476 to read as follows: * * * * * See § 200.425. (h) For-profit subrecipient. Since this ■ 104. Amend § 200.507 by revising § 200.476 Trustees. part does not apply to for-profit paragraphs (a), (b)(2), (b)(3)(ii) through Travel and subsistence costs of subrecipients, the pass-through entity is (v), (b)(4)(iv), (c)(2) and (3), and (d)(8) to trustees (or directors) at IHEs and responsible for establishing read as follows: nonprofit organizations are allowable. requirements, as necessary, to ensure § 200.507 Program-specific audits. See also § 200.475. compliance by for-profit subrecipients. The agreement with the for-profit (a) Program-specific audit guide Subpart F—Audit Requirements subrecipient must describe applicable available. In some cases, a program- specific audit guide will be available to ■ 100. Amend § 200.501 by revising compliance requirements and the for- profit subrecipient’s compliance provide specific guidance to the auditor paragraphs (b), (c), (d), (f), and (h) to with respect to internal controls, read as follows: responsibility. Methods to ensure compliance for Federal awards made to compliance requirements, suggested § 200.501 Audit requirements. for-profit subrecipients may include audit procedures, and audit reporting * * * * * pre-award audits, monitoring during the requirements. A listing of current (b) Single audit. A non-Federal entity agreement, and post-award audits. See program-specific audit guides can be that expends $750,000 or more during also § 200.332. found in the compliance supplement, Part 8, Appendix VI, Program-Specific the non-Federal entity’s fiscal year in ■ 101. Amend § 200.503 by revising Audit Guides, which includes a website Federal awards must have a single audit paragraph (e) to read as follows: conducted in accordance with § 200.514 where a copy of the guide can be except when it elects to have a program- § 200.503 Relation to other audit obtained. When a current program- specific audit conducted in accordance requirements. specific audit guide is available, the with paragraph (c) of this section. * * * * * auditor must follow GAGAS and the (c) Program-specific audit election. (e) Request for a program to be guide when performing a program- When an auditee expends Federal audited as a major program. A Federal specific audit. awards under only one Federal program awarding agency may request that an * * * * * (excluding R&D) and the Federal auditee have a particular Federal (b) * * * program’s statutes, regulations, or the program audited as a major program in (2) The auditee must prepare the terms and conditions of the Federal lieu of the Federal awarding agency financial statement(s) for the Federal award do not require a financial conducting or arranging for the program that includes, at a minimum, a statement audit of the auditee, the additional audits. To allow for planning, schedule of expenditures of Federal auditee may elect to have a program- such requests should be made at least awards for the program and notes that

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describe the significant accounting reporting package must be electronically reflect its financial position, results of policies used in preparing the schedule, submitted to the FAC. operations or changes in net assets, and, a summary schedule of prior audit (d) * * * where appropriate, cash flows for the findings consistent with the (8) 200.521 Management decision; fiscal year audited. The financial requirements of § 200.511(b), and a and statements must be for the same corrective action plan consistent with * * * * * organizational unit and fiscal year that the requirements of § 200.511(c). ■ 105. Amend § 200.508 by revising is chosen to meet the requirements of (3) * * * paragraphs (a), (b), and (c) to read as this part. However, non-Federal entity- (ii) Obtain an understanding of follows: wide financial statements may also internal controls and perform tests of include departments, agencies, and internal controls over the Federal § 200.508 Auditee responsibilities. other organizational units that have program consistent with the * * * * * separate audits in accordance with requirements of § 200.514(c) for a major (a) Procure or otherwise arrange for § 200.514(a) and prepare separate program; the audit required by this part in financial statements. (iii) Perform procedures to determine accordance with § 200.509, and ensure (b) Schedule of expenditures of whether the auditee has complied with it is properly performed and submitted Federal awards. The auditee must also Federal statutes, regulations, and the when due in accordance with § 200.512. prepare a schedule of expenditures of terms and conditions of Federal awards (b) Prepare appropriate financial Federal awards for the period covered that could have a direct and material statements, including the schedule of by the auditee’s financial statements effect on the Federal program consistent expenditures of Federal awards in which must include the total Federal with the requirements of § 200.514(d) accordance with § 200.510. awards expended as determined in (c) Promptly follow up and take for a major program; accordance with § 200.502. While not corrective action on audit findings, (iv) Follow up on prior audit findings, required, the auditee may choose to including preparation of a summary provide information requested by perform procedures to assess the schedule of prior audit findings and a reasonableness of the summary Federal awarding agencies and pass- corrective action plan in accordance through entities to make the schedule schedule of prior audit findings with § 200.511(b) and (c), respectively. prepared by the auditee in accordance easier to use. For example, when a with the requirements of § 200.511, and * * * * * Federal program has multiple Federal report, as a current year audit finding, ■ 106. Amend § 200.509 by revising award years, the auditee may list the when the auditor concludes that the paragraph (a) to read as follows: amount of Federal awards expended for summary schedule of prior audit § 200.509 Auditor selection. each Federal award year separately. At a minimum, the schedule must: findings materially misrepresents the (a) Auditor procurement. In procuring status of any prior audit finding; and audit services, the auditee must follow * * * * * (v) Report any audit findings the procurement standards prescribed (3) Provide total Federal awards consistent with the requirements of by the Procurement Standards in expended for each individual Federal § 200.516. §§ 200.317 through 200.326 of subpart D program and the Assistance Listings (4) * * * of this part or the FAR (48 CFR part 42), Number or other identifying number (iv) A schedule of findings and as applicable. When procuring audit when the Assistance Listings questioned costs for the Federal services, the objective is to obtain high- information is not available. For a program that includes a summary of the quality audits. In requesting proposals cluster of programs also provide the auditor’s results relative to the Federal for audit services, the objectives and total for the cluster. program in a format consistent with scope of the audit must be made clear * * * * * § 200.515(d)(1) and findings and and the non-Federal entity must request (5) For loan or loan guarantee questioned costs consistent with the a copy of the audit organization’s peer programs described in § 200.502(b), requirements of § 200.515(d)(3). review report which the auditor is identify in the notes to the schedule the (c) * * * required to provide under GAGAS. balances outstanding at the end of the (2) When a program-specific audit Factors to be considered in evaluating audit period. This is in addition to guide is available, the auditee must each proposal for audit services include including the total Federal awards electronically submit to the FAC the the responsiveness to the request for expended for loan or loan guarantee data collection form prepared in proposal, relevant experience, programs in the schedule. accordance with § 200.512(b), as availability of staff with professional (6) Include notes that describe that applicable to a program-specific audit, qualifications and technical abilities, significant accounting policies used in and the reporting required by the the results of peer and external quality preparing the schedule, and note program-specific audit guide. control reviews, and price. Whenever whether or not the auditee elected to (3) When a program-specific audit possible, the auditee must make positive use the 10% de minimis cost rate as guide is not available, the reporting efforts to utilize small businesses, covered in § 200.414. package for a program-specific audit minority-owned firms, and women’s ■ 108. Amend § 200.511 by revising must consist of the financial business enterprises, in procuring audit paragraphs (a) and (c) to read as follows: statement(s) of the Federal program, a services as stated in § 200.321, or the summary schedule of prior audit FAR (48 CFR part 42), as applicable. § 200.511 Audit findings follow-up. findings, and a corrective action plan as * * * * * (a) General. The auditee is responsible described in paragraph (b)(2) of this ■ 107. Amend § 200.510 by revising for follow-up and corrective action on section, and the auditor’s report(s) paragraphs (a), (b) introductory text, and all audit findings. As part of this described in paragraph (b)(4) of this (b)(3), (5), and (6) to read as follows: responsibility, the auditee must prepare section. The data collection form a summary schedule of prior audit prepared in accordance with § 200.510 Financial statements. findings. The auditee must also prepare § 200.512(b), as applicable to a program- (a) Financial statements. The auditee a corrective action plan for current year specific audit, and one copy of this must prepare financial statements that audit findings. The summary schedule

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of prior audit findings and the that says that the auditee complied with (2) To provide for continuity of corrective action plan must include the the requirements of this part, the data cognizance, the determination of the reference numbers the auditor assigns to were prepared in accordance with this predominant amount of direct funding audit findings under § 200.516(c). Since part (and the instructions accompanying must be based upon direct Federal the summary schedule may include the form), the reporting package does awards expended in the non-Federal audit findings from multiple years, it not include protected personally entity’s fiscal years ending in 2019, and must include the fiscal year in which identifiable information, the every fifth year thereafter. the finding initially occurred. The information included in its entirety is (3) * * * corrective action plan and summary accurate and complete, and that the (ii) Obtain or conduct quality control schedule of prior audit findings must FAC is authorized to make the reporting reviews on selected audits made by non- include findings relating to the financial package and the form publicly available Federal auditors, and provide the results statements which are required to be on a website. to other interested organizations. reported in accordance with GAGAS. * * * * * Cooperate and provide support to the * * * * * (c) * * * Federal agency designated by OMB to lead a governmentwide project to (c) Corrective action plan. At the (1) Financial statements and schedule determine the quality of single audits by completion of the audit, the auditee of expenditures of Federal awards providing a reliable estimate of the must prepare, in a document separate discussed in § 200.510(a) and (b), extent that single audits conform to from the auditor’s findings described in respectively; § 200.516, a corrective action plan to applicable requirements, standards, and (2) Summary schedule of prior audit procedures; and to make address each audit finding included in findings discussed in § 200.511(b); the current year auditor’s reports. The recommendations to address noted (3) Auditor’s report(s) discussed in audit quality issues, including corrective action plan must provide the § 200.515; and name(s) of the contact person(s) recommendations for any changes to (4) Corrective action plan discussed in applicable requirements, standards and responsible for corrective action, the § 200.511(c). corrective action planned, and the procedures indicated by the results of anticipated completion date. If the * * * * * the project. The governmentwide project auditee does not agree with the audit (g) FAC responsibilities. The FAC can rely on the current and on-going findings or believes corrective action is must make available the reporting quality control review work performed not required, then the corrective action packages received in accordance with by the agencies, State auditors, and plan must include an explanation and paragraph (c) of this section and professional audit associations. This specific reasons. § 200.507(c) to the public, except for governmentwide audit quality project Indian tribes exercising the option in must be performed once every 6 years ■ 109. Amend § 200.512 by revising (b)(2) of this section, and maintain a (or at such other interval as determined paragraphs (b) introductory text, (b)(1), data base of completed audits, provide by OMB), and the results must be (c)(1) through (4), and (g) to read as appropriate information to Federal public. follows: agencies, and follow up with known * * * * * § 200.512 Report submission. auditees that have not submitted the (vii) Coordinate a management * * * * * required data collection forms and decision for cross-cutting audit findings (b) Data collection. The FAC is the reporting packages. (see in § 200.1 of this part) that affect the repository of record for subpart F of this * * * * * Federal programs of more than one part reporting packages and the data ■ 110. Amend § 200.513 by revising agency when requested by any Federal collection form. All Federal agencies, paragraphs (a)(1) and (2), (a)(3)(ii) and awarding agency whose awards are pass-through entities and others (vii), (b) introductory text, (c) included in the audit finding of the interested in a reporting package and introductory text, and (c)(3)(i) and (iii) auditee. data collection form must obtain it by to read as follows: * * * * * accessing the FAC. (b) Oversight agency for audit (1) The auditee must submit required § 200.513 Responsibilities. responsibilities. An auditee who does data elements described in Appendix X (a)(1) Cognizant agency for audit not have a designated cognizant agency to Part 200, which state whether the responsibilities. A non-Federal entity for audit will be under the general audit was completed in accordance with expending more than $50 million a year oversight of the Federal agency this part and provides information about in Federal awards must have a determined in accordance with § 200.1 the auditee, its Federal programs, and cognizant agency for audit. The oversight agency for audit. A Federal the results of the audit. The data must designated cognizant agency for audit agency with oversight for an auditee include information available from the must be the Federal awarding agency may reassign oversight to another audit required by this part that is that provides the predominant amount Federal agency that agrees to be the necessary for Federal agencies to use the of funding directly (direct funding) (as oversight agency for audit. Within 30 audit to ensure integrity for Federal listed on the Schedule of expenditures calendar days after any reassignment, programs. The data elements and format of Federal awards, see § 200.510(b)) to a both the old and the new oversight must be approved by OMB, available non-Federal entity unless OMB agency for audit must provide notice of from the FAC, and include collections designates a specific cognizant agency the change to the FAC, the auditee, and, of information from the reporting for audit. When the direct funding if known, the auditor. The oversight package described in paragraph (c) of represents less than 25 percent of the agency for audit: this section. A senior level total expenditures (as direct and * * * * * representative of the auditee (e.g., state subawards) by the non-Federal entity, (c) Federal awarding agency controller, director of finance, chief then the Federal agency with the responsibilities. The Federal awarding executive officer, or chief financial predominant amount of total funding is agency must perform the following for officer) must sign a statement to be the designated cognizant agency for the Federal awards it makes (See also included as part of the data collection audit. the requirements of § 200.211):

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(3) * * * decide whether the schedule of (1) Federal program and specific (i) Issue a management decision as expenditures of Federal awards is stated Federal award identification including prescribed in § 200.521; fairly in all material respects in relation the Assistance Listings title and * * * * * to the auditee’s financial statements as number, Federal award identification (iii) Use cooperative audit resolution a whole. number and year, name of Federal mechanisms (see the definition of * * * * * agency, and name of the applicable cooperative audit resolution in § 200.1 (d) * * * pass-through entity. When information, of this part) to improve Federal program (1) * * * such as the Assistance Listings title and outcomes through better audit (vi) A statement as to whether the number or Federal award identification resolution, follow-up, and corrective audit disclosed any audit findings that number, is not available, the auditor action; and the auditor is required to report under must provide the best information available to describe the Federal award. * * * * * § 200.516(a); (vii) An identification of major * * * * * ■ 111. Amend § 200.514 by revising programs by listing each individual (6) Identification of questioned costs paragraphs (d)(4), (e), and (f) to read as major program; however, in the case of and how they were computed. Known follows: a cluster of programs, only the cluster questioned costs must be identified by § 200.514 Scope of audit. name as shown on the Schedule of applicable Assistance Listings * * * * * Expenditures of Federal Awards is number(s) and applicable Federal award (d) * * * required; identification number(s). (4) When internal control over some (viii) The dollar threshold used to * * * * * or all of the compliance requirements distinguish between Type A and Type B (c) Reference numbers. Each audit for a major program are likely to be programs, as described in finding in the schedule of findings and ineffective in preventing or detecting § 200.518(b)(1) or (3) when a questioned costs must include a noncompliance, the planning and recalculation of the Type A threshold is reference number in the format meeting performing of testing described in required for large loan or loan the requirements of the data collection paragraph (c)(3) of this section are not guarantees; and form submission required by required for those compliance (ix) A statement as to whether the § 200.512(b) to allow for easy requirements. However, the auditor auditee qualified as a low-risk auditee referencing of the audit findings during must report a significant deficiency or under § 200.520. follow-up. material weakness in accordance with * * * * * ■ 114. Amend § 200.518 by revising § 200.516, assess the related control risk (3) Findings and questioned costs for paragraphs (b)(3) and (4), (c)(1) at the Federal awards which must include introductory text, (c)(1)(i) and (ii), (d)(1), (e) Audit follow-up. The auditor must audit findings as defined in and (f) to read as follows: § 200.516(a). follow-up on prior audit findings, § 200.518 Major program determination. perform procedures to assess the * * * * * reasonableness of the summary (e) Nothing in this part precludes * * * * * (b) * * * combining of the audit reporting schedule of prior audit findings (3) The inclusion of large loan and prepared by the auditee in accordance required by this section with the loan guarantees (loans) must not result with § 200.511(b), and report, as a reporting required by § 200.512(b) when in the exclusion of other programs as current year audit finding, when the allowed by GAGAS and appendix X to Type A programs. When a Federal auditor concludes that the summary this part. program providing loans exceeds four schedule of prior audit findings ■ 113. Amend § 200.516 by revising times the largest non-loan program it is materially misrepresents the status of paragraphs (a)(1) and (7), (b)(1) and (6), considered a large loan program, and any prior audit finding. The auditor and (c) to read as follows: the auditor must consider this Federal must perform audit follow-up § 200.516 Audit findings. program as a Type A program and procedures regardless of whether a prior exclude its values in determining other audit finding relates to a major program (a) * * * Type A programs. This recalculation of (1) Significant deficiencies and in the current year. the Type A program is performed after (f) Data collection form. As required material weaknesses in internal control removing the total of all large loan in § 200.512(b)(3), the auditor must over major programs and significant programs. For the purposes of this complete and sign specified sections of instances of abuse relating to major paragraph a program is only considered the data collection form. programs. The auditor’s determination to be a Federal program providing loans ■ 112. Amend § 200.515 by revising of whether a deficiency in internal if the value of Federal awards expended paragraphs (a), (d)(1)(vi) through (ix), control is a significant deficiency or a for loans within the program comprises (d)(3), and (e) to read as follows: material weakness for the purpose of fifty percent or more of the total Federal reporting an audit finding is in relation awards expended for the program. A § 200.515 Audit reporting. to a type of compliance requirement for cluster of programs is treated as one * * * * * a major program identified in the program and the value of Federal (a) Financial statements. The auditor Compliance Supplement. awards expended under a loan program must determine and provide an opinion * * * * * is determined as described in § 200.502. (or disclaimer of opinion) whether the (7) Instances where the results of (4) For biennial audits permitted financial statements of the auditee are audit follow-up procedures disclosed under § 200.504, the determination of presented fairly in all materials respects that the summary schedule of prior Type A and Type B programs must be in accordance with generally accepted audit findings prepared by the auditee based upon the Federal awards accounting principles (or a special in accordance with § 200.511(b) expended during the two-year period. purpose framework such as cash, materially misrepresents the status of (c) * * * modified cash, or regulatory as required any prior audit finding. (1) The auditor must identify Type A by state law). The auditor must also (b) * * * programs which are low-risk. In making

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this determination, the auditor must ■ 115. Amend § 200.519 by revising (c) Pass-through entity. As provided consider whether the requirements in paragraph (d)(1) to read as follows: in § 200.332(d), the pass-through entity § 200.519(c), the results of audit follow- must be responsible for issuing a up, or any changes in personnel or § 200.519 Criteria for Federal program risk. management decision for audit findings systems affecting the program indicate * * * * * that relate to Federal awards it makes to significantly increased risk and (d) * * * subrecipients. (1) The nature of a Federal program preclude the program from being low * * * * * may indicate risk. Consideration should risk. For a Type A program to be (e) Reference numbers. Management be given to the complexity of the considered low-risk, it must have been decisions must include the reference program and the extent to which the audited as a major program in at least numbers the auditor assigned to each Federal program contracts for goods and one of the two most recent audit periods audit finding in accordance with services. For example, Federal programs (in the most recent audit period in the § 200.516(c). that disburse funds through third-party case of a biennial audit), and, in the ■ contracts or have eligibility criteria may 118. Amend appendix I to part 200 by most recent audit period, the program be of higher risk. Federal programs revising sections A, B, C paragraph 2, D must have not had: primarily involving staff payroll costs paragraphs 3 through 5, E paragraph 3 (i) Internal control deficiencies which may have high risk for noncompliance introductory text, E paragraph 3.iii, and were identified as material weaknesses with requirements of § 200.430, but F paragraphs 1 and 3 to read as follows: in the auditor’s report on internal otherwise be at low risk. Appendix I to Part 200—Full Text of control for major programs as required * * * * * Notice of Funding Opportunity under § 200.515(c); ■ 116. Amend § 200.520 by revising the (ii) A modified opinion on the * * * * * introductory text and paragraphs (a) and program in the auditor’s report on major (e)(1) and (2) to read as follows: A. Program Description—Required programs as required under This section contains the full program § 200.515(c); or § 200.520 Criteria for a low-risk auditee. description of the funding opportunity. * * * * * An auditee that meets all of the It may be as long as needed to (d) * * * following conditions for each of the adequately communicate to potential (1) The auditor must identify Type B preceding two audit periods must applicants the areas in which funding programs which are high-risk using qualify as a low-risk auditee and be may be provided. It describes the professional judgment and the criteria eligible for reduced audit coverage in Federal awarding agency’s funding in § 200.519. However, the auditor is not accordance with § 200.518. priorities or the technical or focus areas required to identify more high-risk Type (a) Single audits were performed on in which the Federal awarding agency B programs than at least one fourth the an annual basis in accordance with the intends to provide assistance. As number of low-risk Type A programs provisions of this Subpart, including appropriate, it may include any program identified as low-risk under Step 2 submitting the data collection form and history (e.g., whether this is a new (paragraph (c) of this section). Except for the reporting package to the FAC within program or a new or changed area of known material weakness in internal the timeframe specified in § 200.512. A program emphasis). This section must control or compliance problems as non-Federal entity that has biennial include program goals and objectives, a discussed in § 200.519(b)(1) and (2) and audits does not qualify as a low-risk reference to the relevant Assistance (c)(1), a single criterion in risk would auditee. Listings, a description of how the award seldom cause a Type B program to be * * * * * will contribute to the achievement of considered high-risk. When identifying (e) * * * the program’s goals and objectives, and which Type B programs to risk assess, (1) Internal control deficiencies that the expected performance goals, the auditor is encouraged to use an were identified as material weaknesses indicators, targets, baseline data, data approach which provides an in the auditor’s report on internal collection, and other outcomes such opportunity for different high-risk Type control for major programs as required Federal awarding agency expects to B programs to be audited as major over under § 200.515(c); achieve, and may include examples of (2) A modified opinion on a major a period of time. successful projects that have been program in the auditor’s report on major * * * * * funded previously. This section also programs as required under may include other information the (f) Percentage of coverage rule. If the § 200.515(c); or Federal awarding agency deems auditee meets the criteria in § 200.520, * * * * * necessary, and must at a minimum the auditor need only audit the major ■ 117. Amend § 200.521 by revising include citations for authorizing statutes programs identified in Step 4 paragraph (b), (c), and (e) to read as and regulations for the funding (paragraphs (e)(1) and (2) of this section) follows: opportunity. and such additional Federal programs with Federal awards expended that, in § 200.521 Management decision. B. Federal Award Information— aggregate, all major programs * * * * * Required encompass at least 20 percent (0.20) of (b) Federal agency. As provided in This section provides sufficient total Federal awards expended. § 200.513(a)(3)(vii), the cognizant information to help an applicant make Otherwise, the auditor must audit the agency for audit must be responsible for an informed decision about whether to major programs identified in Step 4 coordinating a management decision for submit a proposal. Relevant information (paragraphs (e)(1) and (2) of this section) audit findings that affect the programs could include the total amount of and such additional Federal programs of more than one Federal agency. As funding that the Federal awarding with Federal awards expended that, in provided in § 200.513(c)(3)(i), a Federal agency expects to award through the aggregate, all major programs awarding agency is responsible for announcement; the expected encompass at least 40 percent (0.40) of issuing a management decision for performance indicators, targets, baseline total Federal awards expended. findings that relate to Federal awards it data, and data collection; the * * * * * makes to non-Federal entities. anticipated number of Federal awards;

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the expected amounts of individual approved by the Federal awarding greater than the simplified acquisition Federal awards (which may be a range); agency under 2 CFR 25.110(d)) is threshold on any Federal award under the amount of funding per Federal required to: (i) Be registered in SAM a notice of funding opportunity may award, on average, experienced in before submitting its application; (ii) include, over the period of performance, previous years; and the anticipated start Provide a valid unique entity identifier this section must also inform applicants: dates and periods of performance for in its application; and (iii) Continue to * * * * * new Federal awards. This section also maintain an active SAM registration iii. That the Federal awarding agency should address whether applications for with current information at all times will consider any comments by the renewal or supplementation of existing during which it has an active Federal applicant, in addition to the other projects are eligible to compete with award or an application or plan under information in the designated integrity applications for new Federal awards. consideration by a Federal awarding and performance system, in making a This section also must indicate the agency. It also must state that the judgment about the applicant’s integrity, type(s) of assistance instrument (e.g., Federal awarding agency may not make business ethics, and record of grant, cooperative agreement) that may a Federal award to an applicant until performance under Federal awards be awarded if applications are the applicant has complied with all when completing the review of risk successful. If cooperative agreements applicable unique entity identifier and posed by applicants as described in may be awarded, this section either SAM requirements and, if an applicant § 200.206. should describe the ‘‘substantial has not fully complied with the involvement’’ that the Federal awarding requirements by the time the Federal * * * * * agency expects to have or should awarding agency is ready to make a F. Federal Award Administration reference where the potential applicant Federal award, the Federal awarding Information can find that information (e.g., in the agency may determine that the funding opportunity description in applicant is not qualified to receive a 1. Federal Award Notices—Required. Section A. or Federal award Federal award and use that This section must address what a administration information in Section determination as a basis for making a successful applicant can expect to D. If procurement contracts also may be Federal award to another applicant. receive following selection. If the awarded, this must be stated. 4. Submission Dates and Times— Federal awarding agency’s practice is to Required. Announcements must provide a separate notice stating that an C. Eligibility Information identify due dates and times for all application has been selected before it * * * * * submissions. This includes not only the actually makes the Federal award, this 2. Cost Sharing or Matching— full applications but also any section would be the place to indicate Required. Announcements must state preliminary submissions (e.g., letters of that the letter is not an authorization to whether there is required cost sharing, intent, white papers, or pre- begin performance (to the extent that it matching, or cost participation without applications). It also includes any other allows charging to Federal awards of which an application would be submissions of information before pre-award costs at the non-Federal ineligible (if cost sharing is not required, Federal award that are separate from the entity’s own risk). This section should the announcement must explicitly say full application. If the funding indicate that the notice of Federal award so). Required cost sharing may be a opportunity is a general announcement signed by the grants officer (or certain percentage or amount, or may be that is open for a period of time with no equivalent) is the authorizing document, in the form of contributions of specified specific due dates for applications, this and whether it is provided through items or activities (e.g., provision of section should say so. Note that the postal mail or by electronic means and equipment). It is important that the information on dates that is included in to whom. It also may address the timing, announcement be clear about any this section also must appear with other form, and content of notifications to restrictions on the types of cost (e.g., in- overview information in a location unsuccessful applicants. See also kind contributions) that are acceptable preceding the full text of the § 200.211. as cost sharing. Cost sharing as an announcement (see § 200.204 of this * * * * * eligibility criterion includes part). requirements based in statute or 5. Intergovernmental Review— 3. Reporting—Required. This section regulation, as described in § 200.306 of Required, if applicable. If the funding must include general information about this Part. This section should refer to opportunity is subject to Executive the type (e.g., financial or performance), the appropriate portion(s) of section D. Order 12372, ‘‘Intergovernmental frequency, and means of submission stating any pre-award requirements for Review of Federal Programs,’’ the notice (paper or electronic) of post-Federal submission of letters or other must say so and applicants must contact award reporting requirements. Highlight documentation to verify commitments their state’s Single Point of Contact any special reporting requirements for to meet cost-sharing requirements if a (SPOC) to find out about and comply Federal awards under this funding Federal award is made. with the state’s process under Executive opportunity that differ (e.g., by report * * * * * Order 12372, it may be useful to inform type, frequency, form/format, or potential applicants that the names and circumstances for use) from what the D. Application and Submission addresses of the SPOCs are listed in the Federal awarding agency’s Federal Information Office of Management and Budget’s awards usually require. Federal * * * * * website. awarding agencies must also describe in 3. Unique entity identifier and System * * * * * this section all relevant requirements for Award Management (SAM)— such as those at 2 CFR 180.335 and Required. This paragraph must state E. Application Review Information 180.350. clearly that each applicant (unless the * * * * * If the Federal share of any Federal applicant is an individual or Federal 3. For any Federal award under a award may include more than $500,000 awarding agency that is excepted from notice of funding opportunity, if the over the period of performance, this those requirements under 2 CFR Federal awarding agency anticipates section must inform potential applicants 25.110(b) or (c), or has an exception that the total Federal share will be about the post award reporting

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requirements reflected in appendix XII 1. Major Functions of an Institution student services costs. Instead, to this part. * * * * * subsection B.4.c, may be used in the * * * * * d. Other institutional activities means recovery of utility costs. e. * * * ■ 119. Amend appendix II to part 200 by all activities of an institution except for (1) Indirect (F&A) costs are the broad revising paragraphs (A) and (J) and instruction, departmental research, categories of costs discussed in Section adding paragraphs (K) and (L) to read as organized research, and other sponsored B.1. follows: activities, as defined in this section; indirect (F&A) cost activities identified * * * * * Appendix II to Part 200—Contract in this Appendix paragraph B, B. Identification and Assignment of Provisions for Non-Federal Entity Identification and assignment of Indirect (F&A) Costs Contracts Under Federal Awards indirect (F&A) costs; and specialized * * * * * services facilities described in § 200.468 1. Definition of Facilities and (A) Contracts for more than the of this part. Administration simplified acquisition threshold, which * * * * * See § 200.414 which provides the is the inflation adjusted amount 2. Criteria for Distribution basis for these indirect cost determined by the Civilian Agency requirements. Acquisition Council and the Defense * * * * * Acquisition Regulations Council b. Need for cost groupings. The 2. Depreciation (Councils) as authorized by 41 U.S.C. overall objective of the indirect (F&A) a. The expenses under this heading 1908, must address administrative, cost allocation process is to distribute are the portion of the costs of the contractual, or legal remedies in the indirect (F&A) costs described in institution’s buildings, capital instances where contractors violate or Section B, Identification and assignment improvements to land and buildings, breach contract terms, and provide for of indirect (F&A) costs, to the major and equipment which are computed in such sanctions and penalties as functions of the institution in accordance with § 200.436. appropriate. proportions reasonably consistent with b. In the absence of the alternatives the nature and extent of their use of the * * * * * provided for in Section A.2.d, the institution’s resources. In order to (J) See § 200.323. expenses included in this category must achieve this objective, it may be be allocated in the following manner: (K) See § 200.216. necessary to provide for selective (L) See § 200.322. distribution by establishing separate 3. Interest ■ 120. Amend appendix III to part 200: groupings of cost within one or more of Interest on debt associated with ■ a. Under section A by revising the the indirect (F&A) cost categories certain buildings, equipment and capital introductory text and paragraphs 1.d referred to in subsection B.1. In general, improvements, as defined in § 200.449, introductory text, 2.b, 2.d(4) the cost groupings established within a must be classified as an expenditure introductory text, 2.d.(4)(b), 2.d.(5), and category should constitute, in each case, under the category Facilities. These 2.e.(1); and a pool of those items of expense that are costs must be allocated in the same ■ b. Under section B by revising considered to be of like nature in terms manner as the depreciation on the paragraphs 1, 2.a and b introductory of their relative contribution to (or buildings, equipment and capital text, 3, 4.c.(2)(ii)B, 5.a, 6.a.(2)(a), 6.b.(1), degree of remoteness from) the improvements to which the interest 8.a., and 9.a; particular cost objectives to which relates. ■ distribution is appropriate. Cost c. Under section C by revising 4. Operation and Maintenance Expenses paragraphs 1.a.(1) and (3), 2., 7, 8.a., groupings should be established 9.a., 11.a. introductory text, 11.a.(1), considering the general guides provided * * * * * 11.a.(2)b; in subsection c of this section. Each c. * * * ■ d. By revising section E; such pool or cost grouping should then (2) * * * be distributed individually to the ■ e. Under section F by revising (ii) * * * related cost objectives, using the paragraph 2.c. B. In July 2012, values for these two distribution base or method most The revisions read as follows: indices (taken respectively from the appropriate in light of the guidelines set Lawrence Berkeley Laboratory ‘‘Labs for Appendix III to Part 200—Indirect forth in subsection d of this section. the 21st Century’’ benchmarking tool (F&A) Costs Identification and * * * * * and the US Department of Energy Assignment, and Rate Determination d. * * * ‘‘Buildings Energy Databook’’ and were for Institutions of Higher Education (4) If a cost analysis study is not 310 kBtu/sq ft-yr. and 155 kBtu/sq ft-yr., (IHEs) performed, or if the study does not so that the adjustment ratio is 2.0 by this result in an equitable distribution of the A. General methodology. To retain currency, OMB costs, the distribution must be made in will adjust the EUI numbers from time This appendix provides criteria for accordance with the appropriate base to time (no more often than annually identifying and computing indirect (or cited in Section B, unless one of the nor less often than every 5 years), using indirect (F&A)) rates at IHEs following conditions is met: reliable and publicly disclosed data. (institutions). Indirect (F&A) costs are * * * * * Current values of both the EUIs and the those that are incurred for common or (b) The institution qualifies for, and REUI will be posted on the OMB joint objectives and therefore cannot be elects to use, the simplified method for website. identified readily and specifically with computing indirect (F&A) cost rates 5. General Administration and General a particular sponsored project, an described in Section D. instructional activity, or any other (5) Notwithstanding subsection (3), Expenses institutional activity. See subsection B.1 effective July 1, 1998, a cost analysis or a. The expenses under this heading for a discussion of the components of base other than that in Section B must are those that have been incurred for the indirect (F&A) costs. not be used to distribute utility or general executive and administrative

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offices of educational institutions and For example, salaries of technical staff, C. Determination and Application of other expenses of a general character laboratory supplies (e.g., chemicals), Indirect (F&A) Cost Rate or Rates which do not relate solely to any major telephone toll charges, animals, animal 1. Indirect (F&A) Cost Pools function of the institution; i.e., solely to care costs, computer costs, travel costs, (1) instruction, (2) organized research, and specialized shop costs must be a. (1) Subject to subsection b, the (3) other sponsored activities, or (4) treated as direct costs wherever separate categories of indirect (F&A) other institutional activities. The identifiable to a particular cost costs allocated to each major function of general administration and general objective. Direct charging of these costs the institution as prescribed in Section expense category should also include its may be accomplished through specific B, must be aggregated and treated as a allocable share of fringe benefit costs, identification of individual costs to common pool for that function. The amount in each pool must be divided by operation and maintenance expense, benefitting cost objectives, or through the distribution base described in depreciation, and interest costs. recharge centers or specialized service Examples of general administration and subsection 2 to arrive at a single indirect facilities, as appropriate under the general expenses include: Those (F&A) cost rate for each function. circumstances. See §§ 200.413(c) and expenses incurred by administrative 200.468. * * * * * offices that serve the entire university (3) Each institution’s indirect (F&A) system of which the institution is a part; * * * * * cost rate process must be appropriately central offices of the institution such as 8. Library Expenses designed to ensure that Federal the President’s or Chancellor’s office, sponsors do not in any way subsidize the offices for institution-wide financial a. The expenses under this heading the indirect (F&A) costs of other management, business services, budget are those that have been incurred for the sponsors, specifically activities and planning, personnel management, operation of the library, including the sponsored by industry and foreign and safety and risk management; the cost of books and library materials governments. Accordingly, each office of the General Counsel; and the purchased for the library, less any items allocation method used to identify and operations of the central administrative of library income that qualify as allocate the indirect (F&A) cost pools, as management information systems. applicable credits under § 200.406. The described in Sections A.2 and B.2 General administration and general library expense category should also through B.9, must contain the full expenses must not include expenses include the fringe benefits applicable to amount of the institution’s modified incurred within non-university-wide the salaries and wages included therein, total costs or other appropriate units of deans’ offices, academic departments, an appropriate share of general measurement used to make the organized research units, or similar computations. In addition, the final rate administration and general expense, organizational units. (See subsection 6.) distribution base (as defined in operation and maintenance expense, * * * * * subsection 2) for each major function and depreciation. Costs incurred in the (organized research, instruction, etc., as 6. Departmental Administration purchases of rare books (museum-type described in Section A.1 functions of an Expenses books) with no value to Federal awards institution) must contain all the a. * * * should not be allocated to them. programs or activities which utilize the (2) * * * * * * * * indirect (F&A) costs allocated to that (a) Salaries and fringe benefits major function. At the time an indirect 9. Student Administration and Services attributable to the administrative work (F&A) cost proposal is submitted to a (including bid and proposal a. The expenses under this heading cognizant agency for indirect costs, each preparation) of faculty (including are those that have been incurred for the institution must describe the process it department heads) and other administration of student affairs and for uses to ensure that Federal funds are not professional personnel conducting services to students, including expenses used to subsidize industry and foreign research and/or instruction, must be of such activities as deans of students, government funded programs. allowed at a rate of 3.6 percent of admissions, registrar, counseling and modified total direct costs. This 2. The Distribution Basis category does not include professional placement services, student advisers, Indirect (F&A) costs must be business or professional administrative student health and infirmary services, distributed to applicable Federal awards officers. This allowance must be added catalogs, and commencements and and other benefitting activities within to the computation of the indirect (F&A) convocations. The salaries of members each major function (see section A.1) on cost rate for major functions in Section of the academic staff whose the basis of modified total direct costs C; the expenses covered by the responsibilities to the institution require (MTDC), consisting of all salaries and allowance must be excluded from the administrative work that benefits wages, fringe benefits, materials and departmental administration cost pool. sponsored projects may also be included supplies, services, travel, and up to the No documentation is required to to the extent that the portion charged to first $25,000 of each subaward support this allowance. student administration is determined in (regardless of the period covered by the * * * * * accordance with subpart E of this Part. subaward). MTDC is defined in § 200.1. b. The following guidelines apply to This expense category also includes the For this purpose, an indirect (F&A) cost the determination of departmental fringe benefit costs applicable to the rate should be determined for each of administrative costs as direct or indirect salaries and wages included therein, an the separate indirect (F&A) cost pools (F&A) costs. appropriate share of general developed pursuant to subsection 1. The (1) In developing the departmental administration and general expenses, rate in each case should be stated as the administration cost pool, special care operation and maintenance, interest percentage which the amount of the should be exercised to ensure that costs expense, and depreciation. particular indirect (F&A) cost pool is of the modified total direct costs identified incurred for the same purpose in like * * * * * circumstances are treated consistently with such pool. as either direct or indirect (F&A) costs. * * * * *

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7. Fixed Rates for the Life of the ‘‘Administration’’ portion of indirect c. Certificate. The certificate required Sponsored Agreement (F&A) costs. The allowance could be by this section must be in the following a. Except as provided in paragraph either 24% of modified total direct costs form: or a percentage equal to 95% of the most (c)(1) of § 200.414, Federal agencies Certificate of Indirect (F&A) Costs must use the negotiated rates in effect at recently negotiated fixed or This is to certify that to the best of my the time of the initial award throughout predetermined rate for the cost pools knowledge and belief: the life of the Federal award. Award included under ‘‘Administration’’ as defined in Section B.1, whichever is (1) I have reviewed the indirect (F&A) levels for Federal awards may not be cost proposal submitted herewith; adjusted in future years as a result of less. Under this alternative, no cost proposal need be prepared for the (2) All costs included in this proposal changes in negotiated rates. ‘‘Negotiated [identify date] to establish billing or rates’’ per the rate agreement include ‘‘Administration’’ portion of the indirect (F&A) cost rate nor is further final indirect (F&A) costs rate for final, fixed, and predetermined rates [identify period covered by rate] are and exclude provisional rates. ‘‘Life’’ for identification or documentation of these costs required (see subsection c). Where allowable in accordance with the the purpose of this subsection means requirements of the Federal each competitive segment of a project. A a negotiated indirect (F&A) cost agreement includes this alternative, an agreement(s) to which they apply and competitive segment is a period of years with the cost principles applicable to approved by the Federal awarding institution must make no further charges for the expenditure categories those agreements. agency at the time of the Federal award. (3) This proposal does not include If negotiated rate agreements do not described in Section B.5, Section B.6, Section B.7, and Section B.9. any costs which are unallowable under extend through the life of the Federal subpart E of this part such as (without * * * * * award at the time of the initial award, limitation): Public relations costs, then the negotiated rate for the last year 11. Negotiation and Approval of Indirect contributions and donations, of the Federal award must be extended (F&A) Rate entertainment costs, fines and penalties, through the end of the life of the Federal lobbying costs, and defense of fraud award. a. Cognizant agency for indirect costs is defined in Subpart A. proceedings; and b. Except as provided in § 200.414, (4) All costs included in this proposal (1) Cost negotiation cognizance is when an educational institution does are properly allocable to Federal assigned to the Department of Health not have a negotiated rate with the agreements on the basis of a beneficial and Human Services (HHS) or the Federal Government at the time of an or causal relationship between the Department of Defense’s Office of Naval award (because the educational expenses incurred and the agreements Research (DOD), normally depending on institution is a new recipient or the to which they are allocated in which of the two agencies (HHS or parties cannot reach agreement on a accordance with applicable DOD) provides more funds directly to rate), the provisional rate used at the requirements. the educational institution for the most time of the award must be adjusted once I declare that the foregoing is true and recent three years. Information on a rate is negotiated and approved by the correct. cognizant agency for indirect costs. funding must be derived from relevant data gathered by the National Science Institution of Higher Education: lllllllllllll 8. Limitation on Reimbursement of Foundation. In cases where neither HHS Signature: llllllllll Administrative Costs nor DOD provides Federal funding Name of Official: lllllllllllllll a. Notwithstanding the provisions of directly to an educational institution, Title: llllllllll subsection C.1.a, the administrative the cognizant agency for indirect costs Date of Execution: costs charged to Federal awards assignment must default to HHS. ■ 121. Amend appendix IV to part 200: awarded or amended (including Notwithstanding the method for ■ a. By revising section A; continuation and renewal awards) with cognizance determination described in ■ b. Under section B by revising effective dates beginning on or after the this section, other arrangements for paragraphs 2.b through e, 3.b(1), (2), and start of the institution’s first fiscal year cognizance of a particular educational (4), 3.c.(4), 3.f and g, and 4.b and c; which begins on or after October 1, institution may also be based in part on ■ c. Under section C by revising 1991, must be limited to 26% of the types of research performed at the paragraphs 2.a through c; and modified total direct costs (as defined in educational institution and must be ■ d. Under section D by revising (D)(1), subsection 2) for the total of General decided based on mutual agreement and under the center heading Administration and General Expenses, between HHS and DOD. Where a non- ‘‘Certificate of Indirect (F&A) Costs’’, Departmental Administration, Federal entity only receives funds as a paragraphs (2) and (3). Sponsored Projects Administration, and subrecipient, see § 200.332. The revisions read as follows: Student Administration and Services (2) * * * Appendix IV to Part 200—Indirect (including their allocable share of b. Acceptance of rates. See § 200.414. (F&A) Costs Identification and depreciation, interest costs, operation * * * * * Assignment, and Rate Determination and maintenance expenses, and fringe for Nonprofit Organizations benefits costs, as provided by Section B, E. Documentation Requirements and all other types of expenditures not The standard format for A. General listed specifically under one of the documentation requirements for 1. Indirect costs are those that have subcategories of facilities in Section B. indirect (indirect (F&A)) rate proposals been incurred for common or joint * * * * * for claiming costs under the regular objectives and cannot be readily method is available on the OMB identified with a particular final cost 9. Alternative Method for website. objective. Direct cost of minor amounts Administrative Costs may be treated as indirect costs under a. Notwithstanding the provisions of F. Certification the conditions described in subsection C.1.a, an institution may * * * * * § 200.413(d). After direct costs have elect to claim a fixed allowance for the 2. * * * been determined and assigned directly

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to awards or other work as appropriate, (2) Interest. Interest on debt associated the basis of MTDC (see definition in indirect costs are those remaining to be with certain buildings, equipment and § 200.1). allocated to benefitting cost objectives. capital improvements are computed in g. Individual Rate Components. An A cost may not be allocated to a Federal accordance with § 200.449. indirect cost rate must be determined award as an indirect cost if any other * * * * * for each separate indirect cost pool developed. The rate in each case must cost incurred for the same purpose, in (4) General administration and be stated as the percentage which the like circumstances, has been assigned to general expenses. The expenses under amount of the particular indirect cost a Federal award as a direct cost. this heading are those that have been pool is of the distribution base 2. ‘‘Major nonprofit organizations’’ are incurred for the overall general identified with that pool. Each indirect defined in paragraph (a) of § 200.414. executive and administrative offices of cost rate negotiation or determination See indirect cost rate reporting the organization and other expenses of agreement must include development of requirements in sections B.2.e and B.3.g a general nature which do not relate of this Appendix. the rate for each indirect cost pool as solely to any major function of the well as the overall indirect cost rate. B. Allocation of Indirect Costs and organization. This category must also The indirect cost pools must be Determination of Indirect Cost Rates include its allocable share of fringe classified within two broad categories: benefit costs, operation and * * * * * ‘‘Facilities’’ and ‘‘Administration,’’ as maintenance expense, depreciation, and described in § 200.414(a). 2. Simplified Allocation Method interest costs. Examples of this category include central offices, such as the 4. Direct Allocation Method * * * * * director’s office, the office of finance, * * * * * b. Both the direct costs and the business services, budget and planning, indirect costs must exclude capital b. This method is acceptable, personnel, safety and risk management, provided each joint cost is prorated expenditures and unallowable costs. general counsel, management However, unallowable costs which using a base which accurately measures information systems, and library costs. the benefits provided to each Federal represent activities must be included in award or other activity. The bases must the direct costs under the conditions In developing this cost pool, special be established in accordance with described in § 200.413(e). care should be exercised to ensure that costs incurred for the same purpose in reasonable criteria and be supported by c. The distribution base may be total like circumstances are treated current data. This method is compatible direct costs (excluding capital consistently as either direct or indirect with the Standards of Accounting and expenditures and other distorting items, costs. For example, salaries of technical Financial Reporting for Voluntary such as subawards for $25,000 or more), staff, project supplies, project Health and Welfare Organizations direct salaries and wages, or other base publication, telephone toll charges, issued jointly by the National Health which results in an equitable computer costs, travel costs, and Council, Inc., the National Assembly of distribution. The distribution base must specialized services costs must be Voluntary Health and Social Welfare exclude participant support costs as treated as direct costs wherever Organizations, and the United Way of defined in § 200.1. identifiable to a particular program. The America. d. Except where a special rate(s) is salaries and wages of administrative and c. Under this method, indirect costs required in accordance with section B.5 pooled clerical staff should normally be consist exclusively of general of this Appendix, the indirect cost rate treated as indirect costs. Direct charging administration and general expenses. In developed under the above principles is of these costs may be appropriate as all other respects, the organization’s applicable to all Federal awards of the described in § 200.413. Items such as indirect cost rates must be computed in organization. If a special rate(s) is office supplies, postage, local telephone the same manner as that described in required, appropriate modifications costs, periodicals and memberships section B.2 of this Appendix. must be made in order to develop the should normally be treated as indirect * * * * * special rate(s). costs. e. For an organization that receives C. Negotiation and Approval of Indirect (c) * * * more than $10 million in direct Federal Cost Rates (4) General administration and funding in a fiscal year, a breakout of * * * * * the indirect cost component into two general expenses. General broad categories, Facilities and administration and general expenses 2. Negotiation and Approval of Rates Administration as defined in paragraph must be allocated to benefitting a. Unless different arrangements are (a) of § 200.414, is required. The rate in functions based on modified total costs agreed to by the Federal agencies each case must be stated as the (MTC). The MTC is the modified total concerned, the Federal agency with the percentage which the amount of the direct costs (MTDC), as described in largest dollar value of Federal awards particular indirect cost category (i.e., § 200.1, plus the allocated indirect cost directly funded to an organization will Facilities or Administration) is of the proportion. The expenses included in be designated as the cognizant agency distribution base identified with that this category could be grouped first for indirect costs for the negotiation and category. according to major functions of the approval of the indirect cost rates and, organization to which they render where necessary, other rates such as 3. Multiple Allocation Base Method services or provide benefits. The fringe benefit and computer charge-out * * * * * aggregate expenses of each group must rates. Once an agency is assigned (b) * * * then be allocated to benefitting cognizance for a particular nonprofit (1) Depreciation. The expenses under functions based on MTC. organization, the assignment will not be this heading are the portion of the costs * * * * * changed unless there is a shift in the of the organization’s buildings, capital f. Distribution basis. Indirect costs dollar volume of the Federal awards improvements to land and buildings, must be distributed to applicable directly funded to the organization for at and equipment which are computed in Federal awards and other benefitting least three years. All concerned Federal accordance with § 200.436. activities within each major function on agencies must be given the opportunity

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to participate in the negotiation process lobbying costs, and defense of fraud operating transfers (as defined by but, after a rate has been agreed upon, proceedings; and GAAP) into and out of the fund; a it will be accepted by all Federal * * * * * description of the procedures agencies. When a Federal agency has ■ 122. Amend appendix V to part 200 (methodology) used to charge the costs reason to believe that special operating by revising: of each service to users, including how factors affecting its Federal awards ■ a. Section A, paragraph 2; billing rates are determined; a schedule necessitate special indirect cost rates in ■ b. Section B, paragraph 4; of current rates; and, a schedule accordance with section B.5 of this ■ c. Section C comparing total revenues (including Appendix, it will, prior to the time the ■ d. Section E, paragraph 3.b.(1); and imputed revenues) generated by the rates are negotiated, notify the cognizant ■ e. Section G, paragraph 5. service to the allowable costs of the agency for indirect costs. (See also The revisions read as follows: service, as determined under this part, § 200.414.) If the nonprofit does not with an explanation of how variances receive any funding from any Federal Appendix V to Part 200—State/Local will be handled. Governmentwide Central Service Cost agency, the pass-through entity is * * * * * responsible for the negotiation of the Allocation Plans G. Other Polices indirect cost rates in accordance with A. General § 200.332(a)(4). * * * * * b. Except as otherwise provided in * * * * * 2. Guidelines and illustrations of § 200.414(f), a nonprofit organization 5. Records Retention central service cost allocation plans are which has not previously established an provided in a brochure published by the All central service cost allocation indirect cost rate with a Federal agency Department of Health and Human plans and related documentation used must submit its initial indirect cost Services entitled ‘‘A Guide for State, as a basis for claiming costs under proposal immediately after the Local and Indian Tribal Governments: Federal awards must be retained for organization is advised that a Federal Cost Principles and Procedures for audit in accordance with the records award will be made and, in no event, Developing Cost Allocation Plans and retention requirements contained in later than three months after the Indirect Cost Rates for Agreements with subpart D of this part. effective date of the Federal award. the Federal Government.’’ A copy of this * * * * * c. Unless approved by the cognizant brochure may be obtained from the HHS agency for indirect costs in accordance ■ 123. Amend appendix VI to part 200 Cost Allocation Services or at their with § 200.414(g), organizations that by revising paragraph 2 in section D to website. have previously established indirect read as follows: cost rates must submit a new indirect B. Definitions Appendix VI to Part 200—Public cost proposal to the cognizant agency * * * * * Assistance Cost Allocation Plans for indirect costs within six months 4. Cognizant agency for indirect costs * * * * * after the close of each fiscal year. is defined in § 200.1. The determination * * * * * of cognizant agency for indirect costs for D. Submission, Documentation, and Approval of Public Assistance Cost D. Certification of Indirect (F&A) Costs states and local governments is described in section F.1. Allocation Plans (1) Required Certification. No * * * * * * * * * * proposal to establish indirect (F&A) cost rates must be acceptable unless such C. Scope of the Central Service Cost 2. Under the coordination process costs have been certified by the Allocation Plans outlined in section E, affected Federal agencies will review all new plans and nonprofit organization using the The central service cost allocation Certificate of Indirect (F&A) Costs set plan amendments and provide plan will include all central service comments, as appropriate, to HHS. The forth in section j. of this appendix. The costs that will be claimed (either as a certificate must be signed on behalf of effective date of the plan or plan billed or an allocated cost) under amendment will be the first day of the the organization by an individual at a Federal awards and will be documented level no lower than vice president or calendar quarter following the event as described in section E. omitted from that required the amendment, unless chief financial officer for the the plan will not be reimbursed. organization. another date is specifically approved by HHS. HHS, as the cognizant agency for * * * * * E. Documentation Requirements for Submitted Plans indirect costs acting on behalf of all Certificate of Indirect (F&A) Costs affected Federal agencies, will, as * * * * * necessary, conduct negotiations with * * * * * the state public assistance agency and (2) All costs included in this proposal 3. Billed Services will inform the state agency of the [identify date] to establish billing or * * * * * action taken on the plan or plan final indirect (F&A) costs rate for b. * * * amendment. [identify period covered by rate] are (1) For each internal service fund or allowable in accordance with the similar activity with an operating * * * * * requirements of the Federal awards to budget of $5 million or more, the plan ■ 124. Amend appendix VII to part 200 which they apply and with subpart E of must include: A brief description of by revising: this part. each service; a balance sheet for each ■ a. Section A, paragraphs 2, 3, 4, and (3) This proposal does not include fund based on individual accounts 5; any costs which are unallowable under contained in the governmental unit’s ■ b. Section B, paragraph 3; subpart E of this part such as (without accounting system; a revenue/expenses ■ limitation): Public relations costs, statement, with revenues broken out by c. Section D, paragraph 1a.; and contributions and donations, source, e.g., regular billings, interest ■ d. Section E, paragraph 4. entertainment costs, fines and penalties, earned, etc.; a listing of all non- The revisions read as follows:

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Appendix VII to Part 200—States and entity, depreciation on buildings and adjustments or refunds will be made Local Government and Indian Tribe equipment, the costs of operating and regardless of the type of rate negotiated Indirect Cost Proposals maintaining facilities. (predetermined, final, fixed, or 5. This Appendix does not apply to provisional). A. General state public assistance agencies. These * * * * * * * * * * agencies should refer instead to ■ 125. Amend appendix VIII to part 200 2. Indirect costs include (a) the Appendix VI to this part. indirect costs originating in each by revising the heading and paragraphs department or agency of the B. Definitions 32 and 33 to read as follows: governmental unit carrying out Federal * * * * * Appendix VIII to Part 200—Nonprofit awards and (b) the costs of central 3. Cognizant agency for indirect costs Organizations Exempted From Subpart governmental services distributed means the Federal agency responsible E of Part 200 through the central service cost for reviewing and approving the allocation plan (as described in governmental unit’s indirect cost rate(s) * * * * * Appendix V to this part) and not on the behalf of the Federal 32. Nonprofit insurance companies, otherwise treated as direct costs. Government. The cognizant agency for such as Blue Cross and Blue Shield 3. Indirect costs are normally charged indirect costs assignment is described in Organizations to Federal awards by the use of an Appendix V, section F. 33. Other nonprofit organizations as negotiated with Federal awarding indirect cost rate. A separate indirect * * * * * cost rate(s) is usually necessary for each agencies department or agency of the D. Submission and Documentation of ■ 126. Appendix XI to part 200 is governmental unit claiming indirect Proposals revised to read as follows: costs under Federal awards. Guidelines 1. Submission of Indirect Cost Rate and illustrations of indirect cost Appendix XI to Part 200—Compliance Proposals proposals are provided in a brochure Supplement published by the Department of Health a. All departments or agencies of the The compliance supplement is and Human Services entitled ‘‘A Guide governmental unit desiring to claim available on the OMB website. indirect costs under Federal awards for States and Local Government ■ 127. Amend appendix XII to part 200 must prepare an indirect cost rate Agencies: Cost Principles and by revising section A, paragraph 2.b to proposal and related documentation to Procedures for Establishing Cost read as follows: Allocation Plans and Indirect Cost Rates support those costs. The proposal and for Grants and Contracts with the related documentation must be retained Appendix XII to Part 200—Award Federal Government.’’ A copy of this for audit in accordance with the records Term and Condition for Recipient brochure may be obtained from HHS retention requirements contained in Integrity and Performance Matters § 200.334. Cost Allocation Services or at their A. Reporting of Matters Related to website. * * * * * Recipient Integrity and Performance 4. Because of the diverse characteristics and accounting practices E. Negotiation and Approval of Rates * * * * * of governmental units, the types of costs * * * * * 2. Proceedings About Which You Must which may be classified as indirect 4. Refunds must be made if proposals Report costs cannot be specified in all are later found to have included costs situations. However, typical examples of that (a) are unallowable (i) as specified * * * * * indirect costs may include certain state/ by law or regulation, (ii) as identified in b. Reached its final disposition during local-wide central service costs, general § 200.420, or (iii) by the terms and the most recent five-year period; and administration of the non-Federal entity conditions of Federal awards, or (b) are * * * * * accounting and personnel services unallowable because they are clearly not [FR Doc. 2020–17468 Filed 8–11–20; 8:45 am] performed within the non-Federal allocable to Federal awards. These BILLING CODE 3110–01–P

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Part V

The President

Memorandum of August 8, 2020—Continued Student Loan Payment Relief During the COVID–19 Pandemic Memorandum of August 8, 2020—Deferring Payroll Tax Obligations in Light of the Ongoing COVID–19 Disaster

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Federal Register Presidential Documents Vol. 85, No. 157

Thursday, August 13, 2020

Title 3— Memorandum of August 8, 2020

The President Continued Student Loan Payment Relief During the COVID– 19 Pandemic

Memorandum for the Secretary of Education

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows: Section 1. Policy. The 2019 novel coronavirus known as SARS–CoV–2, the virus causing outbreaks of the disease COVID–19, has significantly disrupted the lives of Americans. In Proclamation 9994 of March 13, 2020 (Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID– 19) Outbreak), I declared, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.), that the COVID–19 outbreak in the United States con- stituted a national emergency (the ‘‘national emergency’’). The same day, I also determined that the COVID–19 outbreak constituted an emergency of nationwide scope, pursuant to section 501(b) of the Stafford Act (42 U.S.C. 5191(b)). On March 20, 2020, my Administration took action to provide immediate relief to tens of millions of student loan borrowers during the pandemic caused by COVID–19 by both suspending loan payments and temporarily setting interest rates to 0 percent. This relief has helped many students and parents retain financial stability. And many other Americans have contin- ued to routinely pay down their student loan balances, to more quickly eliminate their loans in the long run. During this time, borrowers have been able to determine the best path forward for themselves. The original announcement of this policy specified that it would continue for at least 60 days. In the interim, the Coronavirus Aid, Relief, and Economic Security Act provided this same student loan payment relief, but that program is scheduled to expire on September 30, 2020. Currently, many Americans remain unemployed due to the COVID–19 pandemic, and many more have accepted lower wages and reduced hours while States and localities continue to impose social distancing measures. It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID–19 pandemic has sub- sided. Sec. 2. Extension of Student Loan Payment Relief. (a) In light of the national emergency declared on March 13, 2020, the Secretary of Education shall take action pursuant to applicable law to effectuate appropriate waivers of and modifications to the requirements and conditions of economic hard- ship deferments described in section 455(f)(2)(D) of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087e(f)(2)(D), and provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020. (b) All persons who wish to continue making student loan payments shall be allowed to do so, notwithstanding the deferments provided pursuant to subsection (a) of this section. Sec. 3. General Provisions. (a) Nothing in this memorandum shall be con- strued to impair or otherwise affect: (i) the authority granted by law to an executive department or agency, or the head thereof; or

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(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals. (b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations. (c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. (d) You are authorized and directed to publish this memorandum in the Federal Register.

THE WHITE HOUSE, Washington, August 8, 2020

[FR Doc. 2020–17897 Filed 8–12–20; 11:15 am] Billing code 4000–01–P

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Memorandum of August 8, 2020 Deferring Payroll Tax Obligations in Light of the Ongoing COVID–19 Disaster

Memorandum for the Secretary of the Treasury

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows: Section 1. Policy. The 2019 novel coronavirus (COVID–19) that originated in the People’s Republic of China has caused significant, sudden, and unex- pected disruptions to the American economy. On March 13, 2020, I deter- mined that the COVID–19 pandemic is of sufficient severity and magnitude to warrant an emergency declaration under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121– 5207, and that is still the case today. American workers have been particularly hard hit by this ongoing disaster. While the Department of the Treasury has already undertaken historic efforts to alleviate the hardships of our citizens, it is clear that further temporary relief is necessary to support working Americans during these challenging times. To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employ- ment, right when the money is needed most. Sec. 2. Deferring Certain Payroll Tax Obligations. The Secretary of the Treas- ury is hereby directed to use his authority pursuant to 26 U.S.C. 7508A to defer the withholding, deposit, and payment of the tax imposed by 26 U.S.C. 3101(a), and so much of the tax imposed by 26 U.S.C. 3201 as is attributable to the rate in effect under 26 U.S.C. 3101(a), on wages or compensation, as applicable, paid during the period of September 1, 2020, through December 31, 2020, subject to the following conditions: (a) The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods. (b) Amounts deferred pursuant to the implementation of this memorandum shall be deferred without any penalties, interest, additional amount, or addi- tion to the tax. Sec. 3. Authorizing Guidance. The Secretary of the Treasury shall issue guidance to implement this memorandum. Sec. 4. Tax Forgiveness. The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum. Sec. 5. General Provisions. (a) Nothing in this memorandum shall be con- strued to impair or otherwise affect: (i) the authority granted by law to an executive department or agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals. (b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

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(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. (d) You are authorized and directed to publish this memorandum in the Federal Register.

THE WHITE HOUSE, Washington, August 8, 2020

[FR Doc. 2020–17899 Filed 8–12–20; 11:15 am] Billing code 4811–33–P

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Reader Aids Federal Register Vol. 85, No. 157 Thursday, August 13, 2020

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING AUGUST

Federal Register/Code of Federal Regulations At the end of each month the Office of the Federal Register General Information, indexes and other finding 202–741–6000 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Laws 741–6000 the revision date of each title. 240...... 46788 Presidential Documents 2 CFR 244...... 46788 Executive orders and proclamations 741–6000 25...... 49506 245...... 46788 The United States Government Manual 741–6000 170...... 49506 245a...... 46788 183...... 49506 Other Services 248...... 46788 200...... 49506 264...... 46788 Electronic and on-line services (voice) 741–6020 3 CFR 274a...... 46788 Privacy Act Compilation 741–6050 286...... 46788 Executive Orders: 301...... 46788 13940...... 47879 ELECTRONIC RESEARCH 319...... 46788 13941...... 47881 320...... 46788 World Wide Web 13942...... 48637 322...... 46788 13943...... 48641 324...... 46788 Full text of the daily Federal Register, CFR and other publications Administrative Orders: 334...... 46788 is located at: www.govinfo.gov. Memorandums: 341...... 46788 Federal Register information and research tools, including Public Memorandum of 343a...... 46788 Inspection List and electronic text are located at: August 3, 2020...... 47885 343b...... 46788 www.federalregister.gov. Memorandum of 392...... 46788 August 3, 2020...... 47887 E-mail Memorandum of 10 CFR FEDREGTOC (Daily Federal Register Table of Contents Electronic August 3, 2020...... 47889 Proposed Rules: Mailing List) is an open e-mail service that provides subscribers Memorandum of 430...... 49284, 49297 with a digital form of the Federal Register Table of Contents. The August 7, 2020...... 49223 431...... 47472 digital form of the Federal Register Table of Contents includes Memorandum of HTML and PDF links to the full text of each document. August 7, 2020...... 49225 11 CFR Memorandum of 111...... 47891 To join or leave, go to https://public.govdelivery.com/accounts/ August 7, 2020...... 49227 USGPOOFR/subscriber/new, enter your email address, then Memorandum of 12 CFR follow the instructions to join, leave, or manage your August 8, 2020...... 49585 9...... 49229 subscription. Memorandum of Proposed Rules: PENS (Public Law Electronic Notification Service) is an e-mail August 8, 2020...... 49587 1289...... 49312 service that notifies subscribers of recently enacted laws. Presidential Permits: Permit of July 29, To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 14 CFR 2020 ...... 46997 and select Join or leave the list (or change settings); then follow Permit of July 29, 21...... 47295 the instructions. 2020 ...... 47001 25...... 48645 FEDREGTOC and PENS are mailing lists only. We cannot Permit of July 29, 29...... 48646 respond to specific inquiries. 2020 ...... 47005 39 ...... 46531, 46533, 47013, 47295, 47297, 47635, 47638, Reference questions. Send questions and comments about the Permit of July 29, 47641, 48102, 48465, 49233, Federal Register system to: [email protected] 2020 ...... 47009 49235, 49238 The Federal Register staff cannot interpret specific documents or 5 CFR 61...... 47295 regulations. 630...... 48075, 48096 63...... 47295 65...... 47295 FEDERAL REGISTER PAGES AND DATE, AUGUST 7 CFR 71 ...... 47016, 47017, 47894 1150...... 47293 91...... 47295 46531–47012...... 3 Proposed Rules: 93...... 47895 47013–47292...... 4 205...... 47536 97...... 47643, 47645 47293–47634...... 5 984...... 47305 107...... 47295 47635–47890...... 6 1217...... 49281 125...... 47295 47891–48074...... 7 141...... 47295 8 CFR 48075–48464...... 10 Proposed Rules: 48465–48644...... 11 103...... 46788 39 ...... 46560, 46563, 47118, 47122, 47698, 47712, 47714, 48645–49228...... 12 106...... 46788 47716, 47919, 47921, 47925, 49229–49588...... 13 204...... 46788 211...... 46788 48122, 48480, 48482, 49322 212...... 46788 71 ...... 47317, 47321, 47322, 214...... 46788 47718, 47928, 49324, 49327 216...... 46788 217...... 46788 19 CFR 223...... 46788 24...... 47018 235...... 46788 Proposed Rules: 236...... 46788 351...... 49472

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21 CFR 1010...... 48104, 48105 97...... 49170 47 CFR 101...... 49240 180 ...... 48651, 48654, 49261 73...... 48120 33 CFR 228...... 47035 573...... 48650 Proposed Rules: 100 ...... 47027, 47912, 48108 721...... 46550 Proposed Rules: 1...... 48134 165 ...... 46536, 47027, 47030, 1...... 46566 Proposed Rules: 54...... 48134 47648, 47650, 47912, 47913, 112...... 48124 52 ...... 46576, 46581, 47125, 48107, 48110 47134, 47939, 48127 23 CFR Proposed Rules: 62...... 48485 48 CFR 100...... 47936 82...... 47940 Proposed Rules: 1539...... 46556 645...... 49328 110...... 47936 180...... 47330 1552...... 46556 117...... 47328 300...... 47331, 48132 24 CFR 165...... 47937 42 CFR 49 CFR 5...... 47899 34 CFR 409...... 47594 1002...... 47099 91...... 47899 Ch. III...... 46538, 47652, 47656, 412...... 47042, 48424 1011...... 47675 92...... 47899 47664, 47668, 47915 413...... 47594 1111...... 47675 214...... 47300 418...... 47070 570...... 47899 36 CFR 482...... 47042 50 CFR 574...... 47899 251...... 48475 600...... 49264 576...... 47899 Proposed Rules: 17...... 48332 903...... 47899 37 CFR 410...... 48772 223...... 48332 224...... 48332 26 CFR 1...... 46932 411...... 48772 11...... 46932 412...... 47723, 48772 622...... 47304, 47917 1 ...... 47027, 48467, 48651 41...... 46932 414...... 48772 635...... 48120 Proposed Rules: 42...... 46932 416...... 48772 648 ...... 47102, 47103, 48476, 1 ...... 47323, 47508, 48485 419...... 48772 48477 39 CFR 301...... 47931 423...... 47151 679...... 48477, 48478 Proposed Rules: Proposed Rules: 28 CFR 113...... 46575, 47720 44 CFR 17...... 48487 Proposed Rules: 64...... 47673 223...... 48144 26...... 47324 40 CFR 328...... 48113 224...... 48144 72...... 49332 9...... 46550 424...... 47333 52 ...... 47032, 47670, 48111 45 CFR 622...... 49355 31 CFR 63...... 49084, 49434 170...... 47099 648...... 48660 501...... 48474 81...... 47032, 47670 171...... 47099 680...... 47157

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Superintendent of Documents, Improvement Act of 2019 enacted public laws. To U.S. Government Publishing (Aug. 8, 2020; 134 Stat. 690) subscribe, go to https:// LIST OF PUBLIC LAWS Office, Washington, DC 20402 H.R. 4920/P.L. 116–155 listserv.gsa.gov/cgi-bin/ (phone, 202–512–1808). The This is a continuing list of Department of Veterans Affairs wa.exe?SUBED1=PUBLAWS- text will also be made public bills from the current Contracting Preference L&A=1 available at https:// session of Congress which Consistency Act of 2020 (Aug. www.govinfo.gov. Some laws 8, 2020; 134 Stat. 698) have become Federal laws. Note: This service is strictly may not yet be available. Last List August 7, 2020 This list is also available for email notification of new online at https:// H.R. 886/P.L. 116–153 laws. The text of laws is not www.archives.gov/federal- register/laws. Veteran Treatment Court Public Laws Electronic available through this service. Coordination Act of 2019 Notification Service PENS cannot respond to The text of laws is not (Aug. 8, 2020; 134 Stat. 688) specific inquiries sent to this published in the Federal (PENS) address. Register but may be ordered H.R. 3504/P.L. 116–154 in ‘‘slip law’’ (individual Ryan Kules and Paul Benne PENS is a free email pamphlet) form from the Specially Adaptive Housing notification service of newly

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