In order to improve the effectiveness of CMPs and to maintain their deterrent effect, the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461 note (“the Inflation Adjustment Act”), as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74) (“the 2015 Act”), requires Federal agencies to adjust each CMP provided by law within the jurisdiction of the agency. The 2015 Act required agencies to adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rulemaking and to make subsequent annual adjustments for inflation, notwithstanding 5 U.S.C. 553. DOE's initial catch-up adjustment interim final rule was published June 28, 2016 (81 FR 41790) and adopted as final without amendment on December 30, 2016 (81 FR 96349). The 2015 Act also provides that any increase in a CMP shall apply only to CMPs, including those whose associated violation predated such increase, which are assessed after the date the increase takes effect.

In accordance with the 2015 Act, the Office of Management and Budget (OMB) must issue annually guidance on adjustments to civil monetary penalties. This final rule to adjust civil monetary penalties for 2021 is issued in accordance with applicable law and OMB's guidance memorandum on implementation of the 2021 annual adjustment. 1

The method of calculating CMP adjustments applied in this final rule is required by the 2015 Act. Under the 2015 Act, annual inflation adjustments subsequent to the initial catch-up adjustment are to be based on the percent change between the October Consumer Price Index for all Urban Consumers (CPI-U) preceding the date of the adjustment, and the prior year's October CPI-U. Pursuant to the aforementioned OMB guidance memorandum, the adjustment multiplier for 2021 is 1.01182. In order to complete the 2021 annual adjustment, each CMP is multiplied by the 2021 adjustment multiplier. Under the 2015 Act, any increase in CMP must be rounded to the nearest multiple of $1.

The following list summarizes DOE authorities containing CMPs, and the penalties before and after adjustment.

In response to the President's directive to simplify regulations, on October 16, 2020, SBA published a final rule revising the regulations pertaining to the 8(a) BD and size programs in order to further reduce unnecessary or excessive burdens on small businesses and to eliminate confusion or more clearly delineate SBA's intent in certain regulations. (85 FR 66146). This is the second set of corrections. The first set of corrections was published in the Federal Register on November 16, 2020. (85 FR 72916). This document augments those corrections.

First, in amending § 121.404(a) to provide clarification as to the time at which size is determined for multiple award contracts, SBA inadvertently deleted the general rule that size is determined as of the date of the concern submits a written self-certification that it is small to the procuring activity as part of its initial offer or response which includes price. In other words, in amending the exception to the general rule for multiple award contracts, the final rule inadvertently deleted the general rule itself. That was not SBA's intent and SBA did not intend to make any substantive changes to the general rule itself. This rule adds back the general rule language to § 121.404(a).

Second, the final rule eliminated the requirement that 8(a) Participants seeking to be awarded a competitive 8(a) contract as a joint venture submit the joint venture agreement to SBA for review and approval prior to contract award. The preamble to the final rule explained that such approval is no longer necessary because the size protest process has worked well to ensure that small business joint venture partners control performance on non-8(a) contracts with their large business mentors and could work similarly to monitor a joint venturing activity on competitive 8(a) contracts. To this end, where another offeror believes that a joint venture between a protégé and its large business mentor has not complied with the applicable control regulations, it may protest the size of the joint venture. The appropriate Area Office of SBA's Office of Government Contracting would then review the joint venture agreement to determine whether it meets the requirements of SBA's regulations. If that Office determines that the applicable regulations were not followed, the joint venture would lose its exclusion from affiliation, be found to be other than small, and, thus, ineligible for an award as a small business. Because size protests are authorized for competitive 8(a) contracts, SBA reasoned that prior approval is no longer necessary for joint venture agreements seeking to be awarded such contracts.

The final rule inadvertently did not adequately address how the Area Office will review certain joint venture agreements to perform 8(a) contracts formed outside the Mentor-Protégé Program, such as a joint venture between an 8(a) Participant and one or more other small business concerns. Currently, an unsuccessful offeror, SBA, or a contracting officer may protest the status of the apparent successful offeror for a Service-Disabled Veteran Owned (SDVO), Historically Underutilized Business Zone (HUBZone), Women-Owned Small Business (WOSB), or Economically-Disadvantaged Women-Owned Small Business (EDWOSB) contract. In determining the status eligibility of a joint venture apparent awardee, SBA will review the joint venture agreement to assess whether it complies with the formal requirements to receive and perform the award as a joint venture. If the joint venture does not comply with these requirements, SBA will sustain the protest and deem the joint venture ineligible for award. However, there is no existing regulatory process for an unsuccessful offeror, SBA, or a contracting officer to challenge whether a joint venture meets the formal requirements to receive and perform a competitive 8(a) contract. To this end, the eligibility of a Participant for a sole source or competitive 8(a) requirement may not be challenged by a disappointed offeror or any other party because SBA reviews the apparent successful offeror's eligibility for award in connection with each 8(a) contract. In addition, prior to the final rule, where the apparent successful offeror was a joint venture, the joint venture had to be approved by SBA prior to or concurrent with the contract eligibility review. In eliminating SBA's role to review and approve joint ventures formed to perform competitive 8(a) contracts, it was not SBA's intent to allow 8(a) contract benefits to flow to joint ventures that do not meet the applicable regulatory requirements. To the contrary, as noted above, SBA envisioned that the size protest process would work to ensure compliance with the formal 8(a) joint venture requirements. However, in the context of a joint venture between an 8(a) Participant and one or more other small business concerns, the current size protest procedures are not adequate. Under SBA's size regulations, a joint venture is small if each of the partners to the joint venture individually qualify as small. Thus, a joint venture that does not comply with the applicable requirements set forth in § 124.513(c) and (d) could still qualify as small even though the 8(a) partner to the joint venture was not the lead or controlling partner. This rule amends § 121.103(h)(1)(i) to implement SBA's intent that a joint venture must meet the requirements of § 124.513(c) and (d) in order to be eligible for a competitive 8(a) procurement and to make joint ventures in the 8(a) program consistent with those in the HUBZone, WOSB and SDVO programs. Additionally, SBA inadvertently left out conforming revisions in the final rule to remove references to SBA's now obsolete review and approval of joint ventures formed to receive and perform competitive 8(a) contracts. Specifically, the final rule did not make corresponding changes to § 124.513(a), (f), (g), (h), and (j), leaving inconsistency with respect to the requirement for SBA approval. This rule corrects this inconsistency by removing or clarifying references to joint venture approval in § 124.513(a), (f), (g), (h), and (j).

Third, the final rule added a new § 124.501(k) to clearly make the bona fide office requirement applicable to both sole source and competitive 8(a) awards and better defined the geographical area in which an office needs to be in order to meet the bona fide place of business requirement. Although SBA intended to allow an office in the geographic area served by a contiguous SBA district office to meet the bona fide place of business requirement, the final regulatory provision did not make that clear. This rule corrects that ambiguity.

Fourth, the final rule clarified a procuring activity's responsibilities when evaluating the past performance, experience, business systems and certifications of an entity submitting an offer for a small business contract as a joint venture. Specifically, the final rule amended § 125.8(e) to provide that when evaluating such offers, the procuring activity should not require a small business protégé partner to the joint venture to individually meet any evaluation or responsibility criteria as those required of other offerors generally. SBA inadvertently left out conforming revisions in the final rule to §§ 124.513, 125.18, 126.616, and 127.506 to address the evaluation of past performance, experience, business systems and certifications of a joint venture formed outside SBA's Mentor-Protégé Program to pursue a contract set-aside or reserved for 8(a) Participants, SDVO small business concerns, HUBZone small business concerns, WOSB concerns, or EDWOSB concerns. This rule corrects the inconsistency by revising §§ 124.513, 125.18, 126.616, and 127.506 to incorporate this clarification.

Accordingly, 13 CFR parts 121, 124, 125, 126, and 127 are corrected by making the following correcting amendments:

This is a correction to a final rule published in the Federal Register on May 11, 2020 (85 FR 27650). SBA is correcting dates that were inadvertently transposed in one of the examples to 13 CFR 127.400. Additionally, SBA is correcting the language in two of the examples to 13 CFR 127.400 to ensure the examples accurately illustrate the application of the new regulatory provisions.

Accordingly, 13 CFR part 127 is corrected by making the following correcting amendments:

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0279, dated December 14, 2020 (EASA AD 2020-0279) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Model A330-201, A330-202, A330-203, A330-223, A330-223F, A330-243, A330-243F, A330-301, A330-302, A330-303, A330-321, A330-322, A330-323, A330-341, A330-342, A330-343, A330-743L, A330-841, A330-941, A340-211, A340-212, A340-213, A340-311, A340-312, A340-313, A340-541, A340-542, A340-642, and A340-643 airplanes. Model A330-743L, A340-542, and A340-643 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability.

This AD was prompted by a report that an erroneous torque value for the attachment nuts to install a pitot probe was included in the affected AMM task. The FAA is issuing this AD to address the erroneous torque value. If not addressed it could lead to erroneous total pressure measurement being relayed to navigation systems, possibly resulting in reduced control of the airplane. See the MCAI for additional background information.

EASA AD 2020-0279 describes procedures for re-torqueing the attachment nuts of each affected part and prohibits the use of the affected AMM task. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI referenced above. The FAA is issuing this AD because the FAA evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

This AD requires accomplishing the actions specified in EASA AD 2020-0279 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities (CAAs) to use this process. As a result, EASA AD 2020-0279 is incorporated by reference in this final rule. This AD, therefore, requires compliance with EASA AD 2020-0279 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2020-0279 that is required for compliance with EASA AD 2020-0279 is available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-1172.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because an erroneous torque value for the attachment nuts to install a pitot probe could lead to erroneous total pressure measurement being relayed to navigation systems, possibly resulting in reduced control of the airplane. In addition, the compliance time for the required action is shorter than the time necessary for the public to comment and for publication of the final rule. Therefore, the FAA finds good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reasons stated above, the FAA finds that good cause exists for making this amendment effective in less than 30 days.

The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2020-1172; Project Identifier MCAI-2020-01661-T” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to https://www.regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this final rule.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Vladimir Ulyanov, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3229; email vladimir.ulyanov@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The requirements of the RFA do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.

The FAA estimates that this AD affects 112 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

On November 2, 2015, Congress enacted the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, sec. 701 (Inflation Adjustment Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 as previously amended by the 1996 Debt Collection Improvement Act (collectively, the “Prior Inflation Adjustment Act”), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The Inflation Adjustment Act required agencies to (1) adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule (IFR); and (2) make subsequent annual adjustments for inflation no later than January 15 of each year.

On July 1, 2016, the Department published an IFR that established the initial catch-up adjustment for most civil penalties that the Department administers and requested comments. See 81 FR 43430 (DOL IFR). On January 18, 2017, the Department published the final rule establishing the 2017 Annual Adjustment for those civil monetary penalties adjusted in the DOL IFR. See 82 FR 5373 (DOL 2017 Annual Adjustment). On July 1, 2016, the U.S. Department of Homeland Security (DHS) and the U.S. Department of Labor (DOL) (collectively, “the Departments”) jointly published an IFR that established the initial catch-up adjustment for civil monetary penalties assessed or enforced in connection with the employment of temporary nonimmigrant workers under the H-2B program. See 81 FR 42983 (Joint IFR). On March 17, 2017, the Departments jointly published the final rule establishing the 2017 Annual Adjustment for the H-2B civil monetary penalties. See 82 FR 14147 (Joint 2017 Annual Adjustment). The Joint 2017 Annual Adjustment also explained that DOL would make future adjustments to the H-2B civil monetary penalties consistent with DOL's delegated authority under 8 U.S.C. 1184(c)(14), Immigration and Nationality Act section 214(c)(14), and the Inflation Adjustment Act. See 82 FR 14147-48. On January 2, 2018, the Department published the final rule establishing the 2018 Annual Adjustment for civil monetary penalties assessed or enforced by the Department, including H-2B civil monetary penalties. See 83 FR 7 (DOL 2018 Annual Adjustment). On January 23, 2019, the Department published the final rule establishing the 2019 Annual Adjustment for civil monetary penalties assessed or enforced by the Department, including H-2B civil monetary penalties. See 84 FR 213 (DOL 2019 Annual Adjustment). On January 15, 2020, the Department published the final rule establishing the 2020 Annual Adjustment for civil monetary penalties assessed or enforced by the Department, including H-2B civil monetary penalties. See 85 FR 2292 (DOL 2020 Annual Adjustment).

This rule implements the 2021 annual inflation adjustments, as required by the Inflation Adjustment Act, for civil monetary penalties assessed or enforced by the Department, including H-2B civil monetary penalties. 1 The Inflation Adjustment Act provides that the increased penalty levels apply to any penalties assessed after the effective date of the increase. Pursuant to the Inflation Adjustment Act, this final rule is published notwithstanding Section 553 of the APA.

This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a `major rule,' as defined by 5 U.S.C. 804(2).

The Department has undertaken a thorough review of civil penalties administered by its various components pursuant to the Inflation Adjustment Act and in accordance with guidance issued by the Office of Management and Budget. 2

The Department first identified the most recent penalty amount, which is the amount established by the 2020 annual adjustment as set forth in the DOL 2020 Annual Adjustment published on January 15, 2020. The Department is required to calculate the annual adjustment based on the Consumer Price Index for all Urban Consumers (CPI-U). Annual inflation adjustments are based on the percent change between the October CPI-U preceding the date of the adjustment, and the prior year's October CPI-U; in this case, the percent change between the October 2020 CPI-U and the October 2019 CPI-U. The cost-of-living adjustment multiplier for 2021, based on the Consumer Price Index (CPI-U) for the month of October 2020, not seasonally adjusted, is 1.01182. 3 In order to compute the 2021 annual adjustment, the Department multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.01182, and rounded to the nearest dollar. This resulted in increases to all but four of the penalties administered by the Department, as set forth in the Appendix.

As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after the effective date of this rule. 4 Accordingly, for penalties assessed after January 15, 2021, whose associated violations occurred after November 2, 2015, the higher penalty amounts outlined in this rule will apply. The tables below demonstrate the penalty amounts that apply:

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the Department consider the impact of paperwork and other information collection burdens imposed on the public. The Department has determined that this final rule does not require any collection of information.

The Inflation Adjustment Act provides that agencies shall annually adjust civil monetary penalties for inflation notwithstanding section 553 of the APA. Additionally, the Inflation Adjustment Act provides a nondiscretionary cost-of-living formula for annual adjustment of the civil monetary penalties. For these reasons, the requirements in sections 553(b), (c), and (d) of the APA, relating to notice and comment and requiring that a rule be effective 30 days after publication in the Federal Register , are inapplicable.

Executive Order 12866 requires that regulatory agencies assess both the costs and benefits of significant regulatory actions. Under the Executive Order, a “significant regulatory action” is one meeting any of a number of specified conditions, including the following: Having an annual effect on the economy of $100 million or more; creating a serious inconsistency or interfering with an action of another agency; materially altering the budgetary impact of entitlements or the rights of entitlement recipients; or raising novel legal or policy issues.

The Department has determined that this final rule is not a “significant” regulatory action and a cost-benefit and economic analysis is not required. This regulation merely adjusts civil monetary penalties in accordance with inflation as required by the Inflation Adjustment Act, and has no impact on disclosure or compliance costs. The benefit provided by the inflationary adjustment to the maximum civil monetary penalties is that of maintaining the incentive for the regulated community to comply with the laws enforced by the Department, and not allowing the incentive to be diminished by inflation.

Executive Order 13563 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility to minimize burden.

The Inflation Adjustment Act directed the Department to issue the annual adjustments without regard to section 553 of the APA. In that context, Congress has already determined that any possible increase in costs is justified by the overall benefits of such adjustments. This final rule makes only the statutory changes outlined herein; thus there are no alternatives or further analysis required by Executive Order 13563.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes certain requirements on Federal agency rules that are subject to the notice and comment requirements of the APA, 5 U.S.C. 553(b). This final rule is exempt from the requirements of the APA because the Inflation Adjustment Act directed the Department to issue the annual adjustments without regard to section 553 of the APA. Therefore, the requirements of the RFA applicable to notices of proposed rulemaking, 5 U.S.C. 603, do not apply to this rule. Accordingly, the Department is not required to either certify that the final rule would not have a significant economic impact on a substantial number of small entities or conduct a regulatory flexibility analysis.

The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a state, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. This Final Rule will not result in such an expenditure. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Section 18 of the Occupational Safety and Health Act of 1970 (OSH Act) (29 U.S.C. 667) requires Occupational Safety and Health Administration (OSHA)-approved State Plans to have standards and an enforcement program that are at least as effective as Federal OSHA's standards and enforcement program. OSHA-approved State Plans must have maximum and minimum penalty levels that are at least as effective as Federal OSHA's, per section 18(c)(2) of the OSH Act. See also 29 CFR 1902.4(c)(2)(xi); 1902.37(b)(12). State Plans are required to increase their penalties in alignment with OSHA's penalty increases to maintain at least as effective penalty levels.

State Plans are not required to impose monetary penalties on state and local government employers. See § 1956.11(c)(2)(x). Five (5) states and one territory have State Plans that cover only state and local government employees: Connecticut, Illinois, Maine, New Jersey, New York, and the Virgin Islands. Therefore, the requirements to increase the penalty levels do not apply to these State Plans. Twenty-one states and one U.S. territory have State Plans that cover both private sector employees and state and local government employees: Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. They must increase their penalties for private-sector employers.

Other than as listed above, this final rule does not have federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Accordingly, Executive Order 13132, Federalism, requires no further agency action or analysis.

This final rule does not have “tribal implications” because it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Accordingly, Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.

For the reasons set out in the preamble, 20 CFR chapters V and VI, 29 CFR chapters V and XVII, and 30 CFR chapter I are amended as follows:

On October 9, 2020, the Commission published a Notice of Proposed Rulemaking (NPRM) outlining proposed revisions designed to update the Commission's conciliation procedures for charges alleging violations of Title VII of the Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), and/or the Age Discrimination in Employment Act (ADEA). 85 FR 64079. The NPRM described the Commission's obligations to engage in conciliation to resolve these charges, as articulated in Title VII and other statutes and explained by the Supreme Court in Mach Mining, LLC v. EEOC , 575 U.S. 480 (2015).

Conciliation is an essential component of Title VII's statutory framework that Congress designed to prohibit, identify, and eradicate discriminatory employment practices. See Alexander v. Gardner-Denver, Co., 415 U.S. 36, 44 (1974); Ford Motor Co. v. EEOC , 458 U.S. 219, 228 (1982) (“[t]he `primary objective' of Title VII is to bring employment discrimination to an end.”); Griggs v. Duke Power Co. , 401 U.S. 424, 429-30 (1971) (the objective of Title VII was to break down discriminatory employment practices that “favor an identifiable group . . . over other employees”). Rather than simply afford victims a cause of action for damages as in other statutory regimes, Congress settled on a framework that “preferred” cooperation and voluntary compliance, over litigation. Mach Mining, 575 U.S. at 486 (citation omitted). The Supreme Court explained that Title VII was designed to encourage “ `. . . `voluntary compliance' and ending discrimination far more quickly than could litigation proceeding at its often ponderous pace.” Ford Motor, 458 U.S. at 228. “Delays in litigation unfortunately are now commonplace, forcing the victims of discrimination to suffer years of underemployment or unemployment before they can obtain a court order awarding them the jobs unlawfully denied them.” Id. Conciliation was designed—and remains—a critical component of the Commission's mission to eliminate discriminatory employment practices, if possible, without litigation.

The Commission issued conciliation regulatory procedures in 1977 and has not changed them significantly since that time. See 85 FR at 64079. The NPRM described various challenges confronting the Commission's conciliation program. Notably, approximately one-third of respondents who receive a reasonable cause finding refuse to participate in conciliation. Overall, more than half of the cases in which the Commission finds reasonable cause that discrimination occurred are not resolved through conciliation. Id. at 64080. 1 In order to increase the effectiveness of the EEOC's conciliation program and more frequently achieve the agency's statutory mission, the NPRM proposed certain targeted and straightforward revisions to the Commission's conciliation procedures. See 85 FR at 64083-84. The primary objective of these revisions is to make conciliation a more powerful mechanism to halt and remedy unlawful discriminatory employment practices in a greater percentage of charges without litigation—either by the Commission or by employees. The Commission aims to accomplish this with these revisions by implementing requirements regarding the information that it must provide in preparation for and during conciliation, particularly with respect to its findings and demands. At their core, they ensure the Commission will provide certain information—the essential facts and the law supporting the claim, findings, and demands. Compliance with these requirements should put beyond reasonable dispute in most, if not all, cases the Commission's compliance with Mach Mining. More important, it will facilitate as a matter of course in all cases respondents' identification of the specific discriminatory practices at issue. This will directly facilitate voluntary prospective remedial action regarding the policy or practice, notwithstanding respondents' position during conciliation or subsequent litigation. And by eliminating such discriminatory practices without litigation, the Commission accomplishes its primary statutory objective in conciliation to purge unlawful discrimination in employment. Moreover, by providing information regarding the basis for the Commission's finding and demands, the respondent will be able to more effectively assess its potential liability. This increased information will enhance the conciliation process for all parties to conciliation and may focus discussions in a way more likely to achieve a meeting of the minds or, alternatively, clearly distill areas of disagreement that may aid the Commission in subsequent litigation.

The Commission recognizes that currently, certain information is generally provided to employers prior to a cause finding and in the Letter of Determination, all of which occur prior to conciliation. The Commission also recognizes that the respondent is generally the holder of its own records and information. This rule is not meant to replace those disclosures or duplicate them, 2 but instead to ensure that the information the Commission provides about its position and findings enables respondents to properly evaluate their potential liability and the Commission's settlement offer, and ultimately, result in respondents becoming more likely to participate and resolve the charge.

The comment period for the NPRM closed on November 9, 2020. The Commission received a total of 58 comments in response to the NPRM—15 in favor, 33 in opposition, and 10 non-responsive. Commenters on both sides of the proposal included organizations and individuals. The Commission also received a comment from members of Congress in support of the rule. Former officials and employees of the Commission also submitted comments against the proposed changes. At least one commenter submitted two comments.

As explained in greater detail below, the Commission has carefully considered each of the comments it received. Based on these submissions, the Commission is publishing this final rule that, while similar to the proposed rule in most respects, nevertheless contains certain modifications, which are explained below.

Several commenters agreed that there are challenges in the Commission's conciliation practices and procedures as recounted in the proposed rule. Specifically, they echoed and illustrated the ways in which the Commission's procedures and practices complicated and prevented the communication necessary to conciliate charges and stop employment practices that the Commission has determined after an investigation to be discriminatory. Commenters highlighted illustrative examples of conciliations in which the commenters allege the Commission issued large demands, with minimal explanation and insufficient support for the Commission's position. The commenters noted that in these and similar circumstances, the Commission's communications did not describe the act or practice alleged to be discriminatory, why it violated federal law, and which person or class was unlawfully harmed. 42 U.S.C. 2000e-5(b); Mach Mining, 575 U.S. at 488. The Commission agrees that without this basic information, the respondent may not be able to evaluate the merit of the Commission's position or demand, weigh the demand against the risk and expense of possible litigation and take directed action to ameliorate the problem. Even more important, a demand without commensurate support does not “inform the employer about the specific allegations” in a way that “endeavors to achieve voluntary compliance.” Mach Mining, 575 U.S. at 488, 494. Indeed, it is axiomatic that a party cannot adequately evaluate a claim or related demand without understanding the factual and legal basis for it. A lack of information can also impact the employer's ability to evaluate its practices or provide potentially helpful information to the Commission that may facilitate conciliation or, at a minimum, inform the Commission's subsequent litigation assessment. In the commenters' view, this short-circuits the conciliation process before meaningful communication between the parties even commences. Without this information, a respondent cannot engage in this analysis and determine whether the offer presented by the EEOC is the best way to resolve the case under the circumstances.

Commenters emphasized the importance of a thorough understanding of the opposing party's position during discussions aimed at reaching a resolution prior to litigation. As one commenter put it, the lack of factual and legal support for a demand or response leaves both the Commission and the employer with an “asymmetrical view” of their own position and a lack of understanding of the other side's position. One law firm asserted that the ubiquity of the EEOC's “no facts” strategy during conciliation indicates it is deeply engrained in the agency's culture. In the commenter's experience, the dearth of factual and legal support for demands frequently implies weaknesses in the underlying reasonable cause determinations. As another law firm put it: “[w]hen the conciliation process becomes simply a series of demands, unsupported by relevant facts or legal authority, it is at best a futile and resource-consuming exercise, and at worst, an attempt to bring the weight of the federal government to bear on and extort an employer with little proof of wrongdoing.”

Members of Congress who submitted comments highlighted that on several occasions they had identified issues with the Commission's conciliation process; these issues were distinct from the examples provided by law firm and industry commenters.

The commenters in favor of the proposed rule agreed that the Commission's proposal addresses the principal challenges in its conciliation procedures and processes in ways that are likely to result in more meaningful conciliations and, ultimately, more agreements. Specifically, commenters stated that the proposed changes would “entice” more respondents to participate in conciliation. Commenters also noted that establishing these requirements through regulations, as opposed to through sub-regulatory guidance or employee training, would bring more certainty to the conciliation process. As articulated by the Ranking Member of the House Committee on Education and Labor, “[t]hese commonsense requirements will increase transparency in the conciliation process and facilitate quicker resolutions of charges as the employer will have more information about the underlying charge, EEOC's position, and the employer's legal obligations.”

Commission Response: The Commission recognizes the importance of an effective conciliation program in its mission to identify and eradicate discriminatory employment actions and practices and, in so doing, obtain relief for its victims without the delay, expense, and uncertainty of possible litigation. The Commission also appreciates the place of primacy that conciliation holds in Title VII's statutory framework. By providing information concerning the factual and legal bases for its position for charges where it has found reasonable cause, the Commission believes it places itself in a stronger position to achieve conciliation in more cases—eliminating a greater number of unlawful employment practices and obtaining relief for victims of discrimination earlier than it can through litigation. By providing such information, the Commission can alleviate criticisms that demands are excessive or not supported by the evidence and the law. Providing this information should facilitate respondents' identification and redress of discriminatory practices regardless of the outcome of conciliation. Provided with this information, the Commission believes that a greater number of respondents will be more likely to engage in the conciliation process and comply voluntarily to resolve the charge. And by employing its revised conciliation procedures, the Commission will satisfy the requirements of 42 U.S.C. 2000e-5(b), as elucidated in Mach Mining. The Commission hopes that this final rule will reduce collateral attacks on the conciliation process during Commission litigation. In the event of such a challenge, the Commission will be able to demonstrate that it has met the conciliation requirements of the statute by submitting an affidavit stating that it has taken the required steps. See Mach Mining, 575 U.S. at 494-95. Ultimately, the Commission has concluded that the final rule will improve its ability to carry out in more cases its statutory mandate to eliminate discriminatory employment practices and achieve relief for workers “far more quickly than could litigation proceeding at its often ponderous pace.” Ford Motor Co., 458 U.S. at 228.

As noted above, by improving the Commission's effectiveness to carry out its conciliation responsibilities, the final rule also affords considerable benefits to charging parties. As the EEOC is only able to litigate a small fraction of cases that fail conciliation, in most cases where conciliation fails, workers must fend for themselves in court to obtain relief. This means that charging parties must file and litigate their own lawsuits to secure any relief. Many choose not to sue. And, as several commenters noted, those that decide to seek legal action may be in the position of having to litigate without counsel. Even those who obtain counsel frequently fail to obtain significant relief and, if they prevail, may wait years for discovery, motions, trial, and appeals to conclude. By resolving more cases through conciliation, more victims of discrimination will obtain relief than would have otherwise and even the ones that would have obtained relief through litigation eventually, will receive relief more quickly, without incurring the expense and risk of litigation.

Suggestions by Commenters: Several commenters who supported the proposed rule also suggested what they saw as improvements. The Commission addresses each of the suggestions below:

1. Extend the time period by which respondents must respond to the Commission's conciliation offer beyond fourteen days: Several commenters stated that the Commission should give respondents more than 14 days to respond, especially in certain complex and systemic cases.

Commission response: The Commission declines to change the language or the requirement as it was originally proposed in sections 1601.24(d)(5) and 1626.12(b)(5) because the Commission concludes that these sections contain sufficient flexibility to allow longer response periods in appropriate cases. The proposed rule stated that respondents will be provided “ at least 14 days.” There will certainly be cases where the Commission extends this period beyond 14 days, and the language allows the Commission to make this determination on a case-by-case basis. As a result, the Commission leaves unchanged the proposed language in the final rule.

2. Allow anonymity in circumstances only where charging parties or aggrieved individuals are at risk of retaliation: Several commenters urged the Commission to limit the charging parties or aggrieved individuals to whom it grants anonymity in conciliation under sections 1604.24(d)(1) and 1626.12(b)(1). Specifically, commenters suggested that the Commission grant anonymity only to current employees of the respondent because they, unlike former employees or failed applicants, are at risk of retaliation. Commenters indicated that it is often difficult to respond to the Commission's findings of discrimination, particularly in individual cases, when they do not know the identity or circumstances of a particular victim. Although conciliation is not intended to provide an opportunity to challenge the cause finding, one commenter noted that that a respondent could face an allegation that it did not hire an individual because of her race and that if the identity of the individual is withheld, it would not be able to determine if there were other reasons the individual was not hired, such as failing to show up for her interview.

Commission response: The Commission acknowledges that it in some cases it may be difficult for respondents to evaluate the merits of the Commission's conciliation proposal if the respondent is unaware of the identity of the victim(s). Respondents do receive the name of the charging parties when they are notified of the charge soon after it is filed. Some commenters suggest that anonymity be limited to only current employees recognizing their concern about potential retaliation. However, the Supreme Court has noted that former, current, and prospective employees are protected from retaliation. See Robinson v. Shell Oil Co. , 519 U.S. 337, 345-46 (1997). Therefore, the Commission does not adopt this proposed change.

3. Requiring the charging party to participate in conciliation: One commenter suggested that the charging party should be required to participate in the conciliation, similar to a mediation.

Commission response: The Commission declines to adopt this proposed change. In conciliation, the Commission does not merely serve as the advocate of the charging party or aggrieved individual. Rather, the Commission's core objective is to vindicate the public's interest and eliminate discriminatory employment policies and practices. In some cases, but not all, this will achieve relief for the charging party as well as other workers and potential employees. Given these varied interests, conciliations take different forms and the charging party's participation varies from case to case for a myriad of reasons. The Commission believes it is important to the Commission's ability to achieve the broader purposes of conciliation to preserve its flexibility regarding the involvement of the charging party in each case. See EEOC v. Waffle House, Inc., 534 U.S. 279, 291 (2002) (“The statute clearly makes the EEOC the master of its own case and confers on the agency the authority to evaluate the strength of the public interest at stake.”). As a result, the Commission declines to mandate the charging party's participation in every instance.

4. Commission must respond to all counteroffers and affirmative defenses: Multiple commenters stated that the rule should require the Commission to respond to all counteroffers a respondent makes and that the Commission must respond to all affirmative defenses that are raised during conciliation.

Commission response: Conciliation is, first and foremost, the means Congress “preferred” the Commission to use to target and eliminate discrimination in employment. Indeed, Congress did not afford the Commission authority to commence litigation until 1972. Conciliation is not a rigid, structured, bargaining framework. As the Supreme Court made clear in Mach Mining, Congress afforded the Commission wide latitude to pursue voluntary compliance with a statutory provision, “every aspect” of which “smacks of flexibility.” Mach Mining, 575 U.S. at 492; 42 U.S.C. 2000e-5(b). And like the Supreme Court in that case, the Commission declines to infuse the conciliation process with a rigid code of rules that handcuffs the agency by limiting the broad strategic leeway Title VII affords to it to execute its mission. See Mach Mining, 575 U.S. at 492 (rejecting the petitioner's “proposed code of conduct” and “bargaining checklist” because “Congress left to the EEOC such strategic questions about whether to make a bare-minimum offer, to lay all its cards on the table, or to respond to each of an employer's counter-offers, however far afield.”). The Commission meets its statutory obligation by providing the basic factual and legal information for the respondent to evaluate the claim and identify the discriminatory action or practice. But once this is accomplished, the Commission retains “discretion over the pace and duration of conciliation efforts, the plasticity or firmness of its negotiating positions, and the content of its demands for relief.” Id. The Commission declines to adopt such proposals because they damage the flexibility critical to its ability to conciliate claims without any concomitant benefit.

5. Disclosures should be made in writing: In the NPRM, the Commission solicited comments on whether the disclosures described in the proposed rule should be made in writing. 85 FR at 64081. Several commenters advocated written disclosures in order to ensure clarity. Significantly, one commenter contended that written disclosure of all material should be required so that all parties have a complete and unambiguous understanding of the Commission's position. Another commenter explained that written disclosures are more effective than mere oral exchanges in the negotiation process. This commenter noted that if the parties are required to communicate and exchange information in writing, it is less likely that the parties will be unclear as to the other parties' positions and information exchanged during the process.

Commission response: The Commission agrees that written disclosures help ensure clarity throughout the conciliation process. The Commission further agrees that providing information in writing will ensure full transparency of the conciliation process. Exchanging information in writing, where appropriate, eliminates confusion and promotes more accurate and complete information regarding the relevant issues. For these reasons, the Commission will keep the “written” reference that was in the NRPM and clarify that the other disclosures be in writing. However, for sections 1601.24(d)(3) and 1626.12(b)(3), the requirement that the disclosure be in writing shall apply only to the initial conciliation proposal made by the EEOC. In order to preserve the Commission's flexibility in conciliation, in recognition of the fact that demands are made at various times in a sequence of offers and counteroffers, and in order to avoid the increased burden on its staff to prepare a written explanation to accompany each change of position, the Commission has determined that disclosures explaining the basis for its requests for relief for subsequent offers and counteroffers need not be in writing and may be issued orally.

6. Mediators should handle conciliation, not investigators: One commenter urged the Commission to assign mediators to handle conciliations instead of investigators.

Commission response: The Commission disagrees with this comment and shall not adopt it. As the Commission has maintained throughout this process, it is not looking fundamentally to change its conciliation structure with this rule. Investigators remain in the best position to handle conciliation discussions as they are familiar with the case and the issues surrounding it. Furthermore, the process and purpose of conciliation is different than mediation. Accordingly, the Commission rejects this proposal.

7. The Commission should disclose additional information: A number of commenters stated that the Commission should make certain disclosures under sections 1601.24(d)(1), such as the identity of harassers or at-fault supervisors and potential class sizes.

Commission response: The Commission agrees that these disclosures will allow respondents to better assess their potential liability by identifying discriminatory practices, policies, and actions, and as a result advance the Commission's conciliation efforts to identify and eliminate discriminatory employment practices. However, the identities of harassers or supervisors may not be known at the time of conciliation. Similarly, sometimes class size may not have been fully determined. Accordingly, the final rule makes the disclosures references in the last two sentences of § 1601.24(d)(1) mandatory, only if known to the Commission.

8. Establish a “good faith” standard: A few commenters requested that the Commission impose a “good faith” standard on itself during conciliation.

Commission Response: At the outset, the Commission rejects the notion that it does not undertake its statutory responsibilities in good faith. All Commission employees are expected to approach conciliation in good faith and endeavor to achieve conciliation and its purposes within the framework of the Commission's procedures. In those situations where a respondent may disagree with the Commission's strategy in a particular case or a hard line taken in discussions does not mean that Commission personnel are not acting in good faith. The Commission declines to impose upon itself a standard as suggested that could open a door to collateral litigation. For these reasons the Commission declines to adopt such a standard, preferring the straightforward approach as updated by the final rule.

9. Alter the privilege standard: Several commenters requested that the Commission revise provisions concerning privilege contained in sections 1601.24(e) and 1626.12(c). Specifically, these commenters argued that the Commission should preclude itself from claiming privilege on the underlying facts it gathers and limiting the discretion of Commission employees in identifying privileged material.

Commission response: The Commission declines to make specific statements regarding privilege beyond that which is set forth in the proposed rule. The Commission will continue to claim all privileges to which it is entitled by law. The Commission declines to amend the rule to outline specific criteria for employees to follow concerning assertions of privilege.

10. Confidentiality of conciliations: Multiple commenters asked that the Commission prohibit itself from seeking publication of the conciliation, through terms in the conciliation agreement. One commenter explains that, in their experience, it is common for the Commission to require, as a condition of successful conciliation, that a respondent agree to waive confidentiality and allow the Commission to issue a public press release announcing some or all of the terms of the parties' agreement. The commenter contends that this serves not only to deter employers from entering conciliation at the outset but can serve to lead a case that might otherwise be resolved via conciliation to instead fail to be resolved in conciliation.

Commission response: The Commission will not make this change. Section 706 of Title VII clearly requires approval to disclose information concerning conciliation. 42 U.S.C. 2000e-5(b) (“Nothing said or done during and as a part of such informal endeavors may be made public by the Commission, its officers or employees, or used as evidence in a subsequent proceeding without the written consent of the persons concerned.”). As the Commission has explained, conciliation is a “favored” method to identify and eliminate illegal discrimination in employment. Publication of conciliation results—or certain elements of those results—often furthers this objective. There are valid reasons for the Commission to seek approval to publicize certain successful agreements and the Commission will continue to do so where appropriate.

11. Limit disclosure of individual's information to another aggrieved individual: Some commenters were concerned that sections 1601.24(f) and 1626.12(d) would result in disclosure of information about other victims to the charging party or to other aggrieved individuals that may violate a victim's privacy.

Commission response: The Commission agrees with this concern and has included language in the rule that information may be shared with charging parties “except for information about another charging party or individual” to ensure that information about an individual is not disclosed to another charging party or aggrieved individual. Although objected to by some commenters who opposed the rule, the Commission will not be taking out the “upon request” language regarding disclosures to charging parties. It is important for the Commission to maintain its discretion and flexibility with how it engages with aggrieved individuals during the conciliation process. Moreover, the burden on staff to provide this information to all identified aggrieved parties would be substantial in class cases.

12. Commission should always make initial offer: One commenter advocated a requirement that the Commission always make the initial offer in conciliation.

Commission Response: The Commission will not add this requirement to the final rule. Although the Commission agrees that often it is appropriate for the Commission to make the initial offer in conciliation, this is not always the case. There are circumstances in which a respondent may prefer to make the initial offer or where such an outcome is otherwise appropriate or more likely to secure terms “acceptable to the Commission.” 42 U.S.C. 2000e-5(f)(1). The imposition of such a procedural requirement could operate to impede the Commission's ability to execute this critical statutory obligation to eliminate unlawful discriminatory practices. Therefore, the Commission declines to make this change.

13. Provide more details to support demands for monetary damages: Several commenters contend that the Commission should require more explanation for the basis of its damages requested in conciliation. One commenter argues that the Commission will often take the position with respect to compensatory or punitive damages that a charging party is entitled to the maximum statutory cap on compensatory and punitive damages from the start. Consequentially, the commenter urges the Commission to make clear that an initial offer should not routinely rely on the maximum statutory damages cap in an attempt to leverage a higher final settlement. Likewise, another commenter echoes this sentiment and states that the final rule should provide that merely reciting the statutory maximums for compensatory or punitive damages does not satisfy the rule's requirements.

Commission Response: The Commission believes that the descriptions provided in sections 1601.24(d)(3) and 1626.12(b)(3) in the NPRM are sufficient because the language covers all requests for damages and relief, including punitive damages. Under the final rule, whatever the Commission's offer—including if it is the statutory cap—must be accompanied by an explanation based on the facts of the case. Furthermore, the commenters' suggestions risk taking away the flexibility that the Commission is seeking to maintain while also increasing transparency in conciliation.

14. Add language about providing funds to third parties: One commenter suggested adding language to the rule that would expressly encourage terms allowing distribution of excess settlement funds to third parties, such as charities.

Commission response: The Commission declines to add this provision. While these type of clauses may be appropriate in certain circumstances, the Commission is aware that they have recently been subject to greater scrutiny. For these reasons, and to ensure maximum flexibility in conciliation and avoid unnecessary encumbrances on its discretion, the Commission concludes that it would be inappropriate to include such a provision in its regulations. See Frank v. Gaos, 139 S. Ct. 1041 (2019).

The EEOC also received comments opposing the rule change. These comments included concerns about the length of the comment period, particularly during the COVID-19 pandemic; whether the rule was premature in light of a pilot program; whether the rule favored employers over workers; whether the rule would undermine the Commission's ability to prevent and remedy discrimination; the rule's potential economic impact; the rule's relationship to the Mach Mining case; and whether the Commission sufficiently justified the rule's impact on its enforcement mission.

Comments Regarding the Length of the Comment Period: Several commenters claimed that a 30-day comment period was too short and asked that it be extended, some citing Executive Order 13563 and arguing that it provides comment periods should generally be at least 60 days. Others suggested that a short time period deprives the public of a sufficient opportunity to weigh in, citing the COVID-19 pandemic.

Commission Response: The Administrative Procedure Act (APA) requires that agencies give “interested persons an opportunity to participate” in rulemaking, but it does not establish specific time periods in which a rule must be open for public comment. 5 U.S.C. 553(c). Neither does Executive Order 13563, which provides that an agency “afford the public a meaningful opportunity to comment through the internet on a proposed regulation, with a comment period that should generally be at least 60 days.” The language of the APA and Executive Order 13563 anticipates that some rules are extensive and complex, running scores or hundreds of pages in the Federal Register ; others are far less so. As a result, the “60 days” benchmark is neither mandatory nor necessarily appropriate for all rules. Here, as with all EEOC rulemakings, the Office of Management and Budget reviewed the NPRM before publication and agreed that the 30-day comment period was appropriate in light of the contents of the proposed rule. 3 The comment period must afford the public a meaningful opportunity to comment. This has occurred. The depth and breadth of the substantive comments the Commission received evidences that interested persons had a meaningful opportunity to comment.

In addition, the Commission conducted a meeting that called attention to the proposed rule. Specifically, on August 18, 2020, the Commission held a public meeting to discuss and vote on the NPRM. Notice of the meeting was published in the Federal Register which identified the topic of the meeting. The public was invited to listen to the meeting live. Press reports before and after the meeting reported the discussion of the proposed rule. The transcript of the meeting was timely uploaded on to the EEOC website. 4 As a result, the public had notice of this proposed rule from several sources and ample opportunity to research and evaluate the proposal, beginning nearly two months before the NPRM was published in the Federal Register . The Commission concludes that the length of the comment period on this rule was appropriate and declines to extend it.

Allegation that the Rule is Premature Because of the Ongoing Pilot Program: Some commenters contend that the NPRM fails to acknowledge the Commission's ongoing pilot program regarding conciliation procedures and that the Commission should wait to finalize the rule until after the pilot has concluded and been studied. Others argued that the public too should be given the opportunity to study the pilot and incorporate those efforts in further comments regarding this rule. Some commenters expressed concern that the results of the pilot program could be at odds with the rule, suggesting the Commission should delay the final rule to ensure harmony with the results of the pilot.

Commission response: In May of 2020, the EEOC launched a six-month pilot program. The pilot was extended in November 2020. This pilot made only a single change to the conciliation process. 5 Specifically, the pilot added a requirement that conciliation offers of certain amounts be approved by the certain levels of management prior to being shared with respondents. This requirement adds additional oversight by management to ensure that conciliation proposals are in line with the facts of the case. The pilot program is not related to this rulemaking; it addresses a different aspect of conciliation. It does not incorporate or add any of the changes to the conciliation procedures that were proposed or are being implemented in this final rule. Given the lack of overlap or connection between the pilot program and this rule, the results of the pilot are not relevant to this rulemaking and there is no reason to delay the latter so that the Commission or the public may study the former. As this rule is neither related to nor dependent on the pilot or its outcome, the Commission declines the delay sought by these commenters.

Comments that the Rule Primarily Benefits Employers and Respondents: Some commenters faulted the rule for requiring the Commission to disclose certain information to respondent automatically, while only providing the information to charging parties and aggrieved individuals upon request. Others raised concerns that the new rules could turn the conciliation process into “quasi-litigation” by making conciliation more formal and could generate collateral litigation. Still others expressed concern that the disclosures contemplated could potentially reveal the Commission's litigation strategy and inadvertently assist respondents in litigation.

Commission Response: The Commission appreciates the concerns expressed regarding the circumstances under which disclosures are made to respondents versus charging parties and aggrieved individuals. However, because the Commission is mindful of the need to maintain flexibility with respect to how staff engage with charging parties and aggrieved individuals, and recognizes the burden disclosure would impose upon staff, the Commission will retain the language “upon request”.

The Commission is implementing the final rule to improve conciliation. The final rule should enhance the Commission's effectiveness in executing its statutory mandate to identify and eliminate discriminatory employment practices and obtain appropriate relief for victims without litigation, as Congress preferred. The rule accomplishes this end by requiring that the Commission provide certain basic information—the facts and law in support of the claim and who or what class of victims was affected by the allegedly discriminatory practice—that it already develops. By providing this information, respondents can better identify and correct the discriminatory action, policy, or practice. By facilitating such a result without litigation, the Commission achieves its primary goal of ending the discriminatory practice and potentially impacting other employees who may have been affected by the practice. As a result, the primary beneficiaries of more effective conciliations are victims and potential victims of discrimination, as well as the public. The Commission intends for these improvements to encourage more respondents to engage in the process, thus increasing the likelihood of voluntary compliance, and successful conciliations. These results should also provide benefits to discrimination victims by obtaining relief far sooner than would be possible in litigation. Without successful conciliation, employees and applicants are, in most cases, left to fend for themselves to try and obtain relief through litigation. For these reasons, the Commission disagrees with commenters' assertion that the final rule primarily benefits employers.

Nothing in the final rule is intended to create new causes of action for respondents or others; to the contrary, the rule is designed to alleviate concerns that the Commission has failed to meet its conciliation obligation, as explained in Mach Mining. Should the Commission's conciliation efforts be challenged in litigation, the final rule provides a framework that allows the Commission to easily demonstrate it has met the requirements laid out in Mach Mining, by simply affirming through an affidavit that it followed the procedures described in the statute. Thus, rather than raising the likelihood of collateral litigation over conciliation, the final rule will have the opposite effect by providing a guidepost for the Commission to follow in meeting its conciliation obligations. Furthermore, as the Commission pointed out in the NPRM, the confidentiality provisions of Title VII are inherent barriers to a probing judicial review of conciliation and protects the information disclosed. See 85 FR at 64080-81. For these reasons, the Commission has determined that this final rule will not unnecessarily open its conciliation process to judicial review or collateral attacks from employers.

The Commission appreciates the concerns expressed regarding the circumstances under which disclosures are made to respondents versus charging parties and aggrieved individuals. However, because the Commission is mindful of the need to maintain flexibility regarding how staff engage with charging parties and aggrieved individuals, and in recognition of the burden disclosure would impose upon staff, the Commission will retain the language “upon request” as it relates to charging parties and aggrieved individuals. As noted above, the level of engagement by a charging party or aggrieved individual can vary from conciliation to conciliation. Furthermore, as also noted above, the Commission must also focus on the public interest when attempting to resolve the case through conciliation.

The rule is designed to improve the conciliation process by making it more meaningful and effective. Adequate information must be provided to the respondent to allow it to address the discriminatory conduct as well as assess its potential liability. The rule protects disclosure of privileged information, which will protect any confidential attorney work product related to litigation strategy.

Concerns That the Rule Would Undermine the Commission's Ability to Prevent and Remedy Discrimination and Would Harm Workers: Some commenters expressed concern that compliance with this rule would divert resources that otherwise would be used to directly serve charging parties. For example, some commenters stated that the new rule would cause the Commission to initiate fewer actions in court or somehow disincentivize the Commission from issuing cause findings. There was also concern that the disclosures required by the proposed rule could lead to retaliation against workers.

Commission response: The law requires that the Commission provide information to respondents regarding “the alleged unlawful employment practice.” Mach Mining, 575 U.S. at 488. The Commission has determined that, at a minimum, this must include factual and legal information sufficient to support its reasonable cause finding and any demand that it has made. This affords a respondent with basic information about the claim, such as the action or practice that the Commission has determined to be discriminatory in violation of Title VII, and the person or categories of persons it has harmed. Id. Instead of being “extensive” or “burdensome,” the disclosures required by the final rule are straight forward. The Commission's employees already engage in the analysis and work outlined in the rule such that compliance with the rule will not “divert” resources away from services currently provided to the victims of discrimination. In every case where there is a finding of discrimination, the Commission develops facts, identifies aggrieved parties, evaluates the scope and potential of class or systemic allegations, analyzes legal theories, and calculates potential damages. The rule requires that some of this information be communicated to respondent so that it may evaluate the claim to be conciliated. In communicating this information, the Commission will support its conciliation demand and reinforce its reasonable cause finding, thereby increasing the likelihood of voluntary resolution of charges, just as Congress preferred.

However, in recognition of the complications that could arise with respect to conciliations already in progress, this rule will only apply to conciliations for charges for which a Letter of Determination invitation to engage in conciliation has been sent to respondent on or after the effective date.

Concerns that the rule will cause fewer cases in which reasonable cause is found are inconsistent with the requirements of the final rule. The Commission's mission in conciliation is to identify and designate for elimination unlawful discriminatory employment practices, as well as to obtain relief for victims of discrimination. Whenever the investigation of a charge reveals that unlawful discrimination has likely occurred, the Commission will issue a finding of reasonable cause. This rule merely requires that certain basic information regarding such a charge be provided to the respondent. The Commission is confident that this information will support its findings of reasonable cause and convey the strength of the Commission's determination.

The Commission also rejects the assertion that the final rule will somehow frustrate its mission. The Commission's mission is to prevent and remedy unlawful employment discrimination. While litigation is a useful tool in achieving that end, it is not the exclusive means to achieve that result. Indeed, as noted above, Congress favored conciliation over litigation as a means to eliminate discriminatory employment practices. Furthermore, there is no reason to believe that the new rule will cause Commission employees to find reasonable cause in fewer cases where such a finding is merited pursuant to the facts and the law.

Section 706 of Title VII directs the Commission, after it finds reasonable cause, to endeavor to eliminate discrimination through informal methods of conference, conciliation, and persuasion. Congress further directed that the EEOC could only commence a civil action if, and only if, conciliation fails. By so doing, Congress made it clear that conciliation is the preferred method to address discrimination. See Mach Mining, 575 U.S. at 486 (“in pursuing the goal of bringing employment discrimination to an end, Congress chose `cooperation and voluntary compliance' as its preferred means”). This rule advances that choice.

Commenters' concerns that disclosures could result in retaliation against aggrieved parties are misplaced. The rule provides protection for all workers reasonably susceptible of retaliation, which, of course, is prohibited by Title VII. The Commission will vigorously pursue employers who engage in retaliation against employees who attempt to vindicate their rights.

Concerns About Economic Impact: Some commenters expressed concern that the rule does not take into account the negative economic effects of discrimination. Others lodged concerns that the rule claims economic benefits of more conciliations, while ignoring the additional costs to the Commission. One commenter said the Commission relied on “trickle-down economics” to claim that cost savings would benefit the economy overall.

Commission response: Concerns that the rule does not take into account the negative economic effects of discrimination are misplaced. The Commission is aware of the economic effects of unlawful discrimination and uses every tool available to it to prevent and end unlawful discrimination. Conciliation is an important part of that. The more cases the Commission successfully conciliates, the greater the number of unlawful employment practices it eliminates and the greater number of incidents of discrimination are remedied, achieving its statutory mission. The Commission believes the final rule will lead to greater participation and more successful conciliations, which will have positive economic impacts for employees, employers, and the public at large.

The Commission disagrees with the comments that this rule will increase the rates of discrimination or allow discrimination to go unpunished or unaddressed. These comments fail to explain how the rule will cause more employers to engage in unlawful discrimination or to discriminate more extensively. To the contrary, this rule requires the Commission to provide to respondents factual and legal information about the claim to be conciliated. This will allow the respondent to better identify and address any underlying policy or practice that is discriminatory, even if the respondent elects to contest the particular charge or litigate for other reasons. And as more such policies and practices are identified and eliminated, fewer workers will suffer unlawful discrimination.

Concerns That the Rule is Inconsistent with Mach Mining and Statutory Authority: Some commenters argued that the rule is inconsistent with the Supreme Court decision in Mach Mining, and that because the changes are not required by statute or court decision the Commission should not make them. For example, a number of commenters pointed to the language of the Mach Mining decision that said Title VII's conciliation provision “smacks of flexibility” to argue that the Commission's proposed rule was contrary to the Court's holding. Id. at 492. Others believe conciliation is already successful and fear that these additional procedures will introduce an unnecessary rigidity that will compromise that success. Still others suggest that any changes to the Commission's conciliation process should be accomplished through internal guidance or pilots instead of rulemaking. Some commenters also claimed that the proposal was inconsistent with the language of Title VII itself, primarily citing to the use of “informal” in the statute regarding conciliation, and was therefore outside of the Commission's authority.

Commission response: The Commission disagrees that the final rule conflicts with Mach Mining. In Mach Mining, the Supreme Court began by emphasizing the importance of conciliation. The Court noted that Title VII “imposes a duty on the EEOC to attempt conciliation of a discrimination charge prior to filing a lawsuit.” Mach Mining, 575 U.S. at 486. That “obligation,” as the Court has held repeatedly, is “mandatory, not precatory” and “is a key component of the statutory scheme. In pursuing the goal of bringing employment discrimination to an end, Congress chose cooperation and voluntary compliance as its preferred means.” Id. (punctuation and citations omitted). When undertaken effectively, conciliation should “end discrimination far more quickly than could litigation proceeding at its often ponderous pace.” Ford Motor, 458 U.S. at 228.

The Court found that Title VII “provides certain concrete standards pertaining to what that endeavor must entail.” Mach Mining, 575 U.S. at 488. Based on the statutory language describing the “attempt” the Commission must undertake in conciliation, namely “informal methods of conference, conciliation, and persuasion,” the Court explained that “[t]hose specified methods necessarily involve communication between parties, including the exchange of information and views.” Id. (citing 42 U.S.C. 2000e-5(b)). Not only does Title VII require “communication,” the Court continued, but “[t]hat communication . . . concerns a particular thing: The `alleged unlawful employment practice.' ” Id. (citing 42 U.S.C. 2000e-5(b)). Specifically, the Court held, in order “to meet the statutory condition, [the Commission] must tell the employer about the claim—essentially, what practice has harmed which person or class—and must provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance.” Id. If “the Commission does not take those specified actions, it has not satisfied Title VII's requirement to attempt conciliation.” Id.

Beyond these basic requirements that are mandatory in all cases, the Court recognized that the Commission enjoys broad discretion regarding the way in which it conducts conciliations. Id. at 492. The Court's statement regarding “flexibility” cited by commenters was in support of “the latitude Title VII gives the Commission to pursue voluntary compliance with the law's commands.” Id. The Commission is not required “to devote a set amount of time or resources” or take “any specific steps or measures” in conciliation. Id. The Commission “alone decides whether in the end to make an agreement or resort to litigation,” including “whenever [it is] unable to secure terms acceptable to the Commission.” Id. Once it has satisfied its obligations, the Commission decides how it will respond to the respondent and negotiate and how long it will do so. Id. (stating that “Congress left to the EEOC such strategic decisions as whether to make a bare-minimum offer, to lay all its cards on the table, or to respond to each of an employer's counter-offers, however far afield. So too Congress granted the EEOC discretion over the pace and duration of conciliation efforts, the plasticity or firmness of its negotiating positions, and the content of its demands for relief.”).

The Commission's final rule focuses on the requirement that it communicate about the “claim.” Id. at 488. The Supreme Court held that the Commission must, at a minimum, communicate to the respondent “what practice has harmed which person or class” in order to comply with its conciliation obligation and that courts may review such efforts to ensure compliance with Title VII. See id. The Commission has determined that the final rule comprehensively and thoroughly covers the information required to make it compliant with Mach Mining. If respondents raise specious challenges, the Commission will be in a strong position to respond and, as appropriate, seek sanctions or other relief.

Some commenters point out that the rule is not mandated by Mach Mining or Title VII. While the requirements set out in the rule are not spelled out in either the Court's opinion or the statute, the final rule—or any regulation—need not be required by the Supreme Court or a statute to be appropriate. In fact, both Title VII and Mach Mining make clear that the Commission “must tell the employer about the claim—essentially, what practice has harmed which person or class—and must provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance. Mach Mining, 575 U.S. at 488. The Commission is exercising its “wide latitude” and “expansive discretion” over the conciliation process to clarify the contents of statutorily required communications to respondents in such a way that its satisfaction of the requirements will be clear. Id. at 488-89. The Commission has concluded that a recitation and summary of the factual and legal basis is a core component of any “communication about the claim”. This would include the identification of the action or practice the Commission has deemed discriminatory, the reason for its conclusion, as well as “what person or class” has been unlawfully harmed—all so that the respondent might be able to bring itself into compliance. With this rule the Commission is implementing a procedure to ensure that it satisfies the conciliation requirements of Title VII, as elucidated in Mach Mining.

Some commenters argue that the final rule imposes “rigid” or “extensive” burdens that will curtail the Commission's “flexibility” and “discretion”. As noted above, the final rule requires the Commission to provide certain basic information that the Commission has concluded will categorically satisfy the minimum statutory requirements of its “communication” with respondents. Since EEOC staff already perform this work, this rule does not require the reallocation of resources, and is neither extensive nor voluminous. Contrary to assertions in many comments, this does not weaken the Commission's position in conciliation or litigation in that it does not require the Commission to “lay all its cards on the table,” “devote a set amount of time or resources,” or “take any specific steps or measures” in any conciliation. Once the information has been provided, the Commission “alone decides” in each case how it will respond to a particular respondent, the manner and particulars of how it will negotiate, and how long it will do so. See id. at 492. The Commission “alone decides whether in the end to make an agreement or resort to litigation,” including “whenever [it is] unable to secure terms acceptable to the Commission.” Id. The final rule ensures clear and consistent satisfaction of statutory requirements in accordance with the Court's opinion in Mach Mining while maintaining the Commission's flexibility to conciliate as it deems appropriate. 6

While several commenters expressed a preference for internal guidance or pilot programs rather than a rule, the Commission has previously implemented Quality Enforcement Practices and internal guidance to enhance its conciliation efforts, changes that resulted in significant training of EEOC staff. While these changes improved the conciliation process, the Commission believes more should be done to build on that progress and has concluded the structure and predictability of a rule is the best way to make sure that it is consistently satisfying its statutory conciliation obligations. As already noted in the NPRM and above, less than half the cases for which the Commission finds reasonable cause are resolved through conciliation. The Commission aims to achieve more success, including fewer cases in which the respondent opts out of the process entirely. The Commission's purpose is to enhance the processes that will improve its ability to remedy unlawful discrimination without the need to resort to litigation.

Some commenters argued that conciliation is already successful and that the allegedly rigid procedures imposed in the final rule are unnecessary. One commenter noted that following Mach Mining, the amount of collateral litigation attacking conciliation decreased and the number of successful conciliations increased. An increase in successful conciliations is admirable and the Commission recognizes and commends the achievements of its employees in the conciliation process. Nothing in the final rule diminishes or recharacterizes that success. To the contrary, the final rule aims to build upon that success. As noted in the NPRM, from fiscal years 2016 to 2019, the Commission successfully conciliated approximately 41.23% of those cases in which it found reasonable cause. This amounts to only a slight increase over the previous four fiscal years. Also, during these years, employers continued to decline to participate in conciliation in approximately 33% of such cases. 85 FR at 64080. The Commission is concerned about the overall rate of successful conciliation and that one-third of employers refuse to participate in conciliation. While there may be many reasons why an employer refuses to conciliate, at least some of these respondents may be motivated, at least in part, by the belief that the current conciliation process is flawed and not worth the effort. The Commission is not targeting a specific percentage of successful conciliations or employer participation. However, the Commission is making minor changes that it believes will allow it to continue to improve its processes and, in so doing, identify and eliminate more discriminatory employment practices.

Finally, this final rule is consistent with section 706 of Title VII's use of “informal” when describing the Commission's efforts to resolve cases after finding reasonable cause, and in turn, the Commission's procedural rulemaking authority. The Commission's final rule does not establish a “formal” process, but instead provides basic procedures for information sharing that are fundamental to any settlement discussion. The rule does not establish “quasi-litigation” with formal rules of evidence or rules of procedure that would be found in federal court. It instead establishes base level procedures, but otherwise leaves conciliation as an informal process that can be adjusted as needed by the case.

Concerns that the Commission Did Not Justify How the Rule Furthers Its Enforcement Mission: A few commenters contended that the Commission had not presented any statistics or other data to support its belief that the proposed changes would make successful conciliation more likely or increase respondents' participation in conciliation. In addition, one commenter, argued that many respondents simply have no interest in conciliating, for reasons beyond the Commission's control. In support of this position, the commenter described instances in which employers agreed to resolve a matter after the Commission had filed suit for a higher amount than what the Commission offered in conciliation. Finally, other commenters challenged the portions of the proposed rule requiring that the Commission disclose information obtained that caused it to doubt there was reasonable cause on a variety of grounds.

Commission response: The Commission has explained the reasons it believes that the final rule is reasonably likely to increase participation in conciliation. These provisions should encourage greater confidence that the communications in the conciliation process will include the sort of information that the Court determined were required. Providing such basic factual and legal information will encourage more employers to participate and will provide them with a better understanding of the Commission's position.

As explained above, there are many reasons that respondents elect not to conciliate and, as the commenter explained, some of these reasons are beyond the Commission's control. A decision by a respondent to settle a case during litigation for more than what it could have settled during conciliation actually supports the Commission's reason for the rule change. In these situations, a respondent was willing to reach an agreement with the Commission after it received more information about the strength of the case against them, which they obtained in the litigation process. By better explaining its case in conciliation, the Commission makes it more likely that respondents will understand the risk of litigation and be more willing to resolve the matter during conciliation, freeing the Commission's resources to litigate other more challenging cases.

The Commission's Office of Enterprise, Data, and Analytics (OEDA) has conducted a comprehensive analysis of the reasons why conciliations fail. 7 Their analysis identifies two primary reasons charges are not resolved through conciliation: (1) The respondent's choice not to participate and (2) the parties cannot agree on monetary relief. OEDA's statistics also indicate that in cases where employers agree to participate in conciliation, there is more than a 50% chance of achieving resolution. Getting more employers to agree to participate is the first step to getting more resolutions. By providing basic information about the facts and legal arguments behind the claim, the Commission increases the likelihood that the respondent will recognize the merit of the Commission's position and conciliate.

Finally, the Commission has decided to remove from the final rule any requirement that it disclose material information that caused it to doubt its determination of reasonable cause. After reviewing the points raised by several commenters, the Commission is concerned about the potential for collateral challenges that this requirement may create. As the Commission has stated above, the purpose of this final rule is not to create or encourage potential new avenues for dilatory litigation on conciliation. Based on its review of the comments, the Commission believes the litigation risks of this part of the proposal outweigh the increase in transparency that would be achieved specifically by this provision. The Commission expects that its personnel will continue to evaluate, weigh, and proactively address evidence that runs contrary to a reasonable cause finding in its summary under § 1601.24(d)(2). In cases where the facts or the law suggest that reasonable cause is lacking, existing protocols require field personnel not to make such a finding. And the Commission's employees adhere to these protocols—and their professional obligations—in evaluating cases. For these reasons and after carefully considering the comments regarding this proposal, the Commission has removed this requirement from the final rule.

After considering all comments received, the Commission is finalizing the proposed rule as modified in the discussion above. 8 These changes will bring more clarity, transparency, and consistency to the conciliation process. They will encourage more respondents to participate and the Commission to better articulate it positions at the outset of conciliation. The final rule sets out procedures that will support the Commission's ability to meet statutory obligations to attempt to conciliate, i.e., to “tell the employer about the claim—essentially, what practice has harmed which person or class—and provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance.” Mach Mining, 575 U.S. at 488. As the Court noted, conciliations “necessarily involve communication between parties, including the exchange of information and views.” Id. This final rule ensures that the Commission's exchange of information occurs in an open, transparent manner. These changes should make the conciliation process more successful and, in so doing, enhance the Commission's fulfilment of its mission to eliminate unlawful discrimination in employment.

This rule has been determined to be significant under E.O. 12866 by the Office of Management and Budget because it raises novel legal or policy issues arising out of legal mandates or the President's priorities. The rule will not have an annual effect on the economy of $100 million or more, nor will it adversely affect the economy in any material way. Thus, it is not economically significant for purposes of E.O. 12866 review. However, the rule will have many benefits as demonstrated by the following cost-benefit analysis.

The rule imposes no direct costs on any third parties and only imposes requirements on the EEOC itself. The rule, if implemented, will likely require the EEOC to conduct training of staff to ensure that it is complying with the new regulation. While these changes and training would likely be absorbed within the Commission's normal operating expenses, any additional expenses that the agency would incur could be offset by cost savings derived from these changes. For example, charging parties often file Freedom of Information Act (FOIA) requests with the Commission after receiving a “right to sue notice” in order to receive the charge file. If more cases are resolved in conciliation, these cases would not result in right to sue notices and the Commission would receive fewer FOIA requests, resulting in cost savings for the government.

Furthermore, while the parties ultimately determine whether a conciliation agreement is reached, if the Commission is able to conciliate more cases successfully, it will benefit employees, employers, and the economy as a whole. With respect to employees, an increase in successful conciliations will result in more employees receiving remedies for the discrimination they suffered within an accelerated timeframe. Many employees who receive reasonable cause findings are unable to obtain any relief without conciliation because they do not pursue litigation for fiscal, emotional, or other reasons, or even if they do pursue litigation, ultimately do not attain relief. Even employees who ultimately would otherwise be successful in litigation may benefit from a conciliation because they would then receive remedies sooner and avoid the time, cost, stress, and uncertainty of litigation.

Employers will also benefit from the EEOC conciliating cases more successfully. In some cases, conciliations may provide an opportunity for employers to more quickly correct any discriminatory conduct or policies and seek compliance assistance from the EEOC. Additionally, while employers pay $45,466  9 on average to settle cases in conciliation, they will save time, resources, and money by avoiding (often costly and lengthy) litigation. It is difficult to quantify the average cost of litigating an employment discrimination case for an employer because the cost of a case depends on several factors, such as the complexity of the case, length of the litigation, and the jurisdiction in which it is litigated. 10

The stage at which litigation concludes has a large effect on litigation costs—attorneys' fees and other litigation expenses are significantly higher for cases that go through trial, as opposed to those that end in summary judgment. For example, in 2013, one experienced defense attorney estimated that the average attorney's fees for employers for cases that end in summary judgment was between $75,000 and $125,000; while cases that go to trial average between $175,000 and $250,000 in fees. 11 Factoring for inflationary changes in legal fees, the present value of those costs is closer to $83,000 to $139,000 for cases ending in summary judgment and $195,000 to $279,000 for cases that end after a trial. 12 Taking the middle of each range in present value results in average costs of $111,000 for cases ending in summary judgment and $237,000 for cases that end after trial. The Commission recognizes that many employers will find these fee estimates to be low, but because there is insufficient, publicly available data for calculating the amount that employers have expended in defending against a charge through conciliation  13 and which otherwise would be subtracted for purposes of this analysis, the Commission believes such a conservative estimate is appropriate.

To determine the average amount spent on attorney's fees, the Commission also must consider the number of cases that were the subject of conciliation that are either resolved at summary judgment or proceed to trial. The majority of cases of employment discrimination are not tried. 14 Some studies suggest that two-thirds or more of employment discrimination lawsuits that are filed in court end in summary judgment. 15 Those statistics, however, include cases filed in court after the EEOC dismissed the charge without a reasonable cause determination. In conciliation cases, by contrast, the EEOC has conducted an investigation and found reasonable cause to conclude that discrimination may have occurred. The Commission believes it is reasonable to assume that more of these latter cases will survive summary judgment. With this assumption, the average litigation cost for employers is $174,000. 16

Resolving more cases through conciliation will be beneficial to the economy as a whole because the litigation costs that the parties save can be put towards more productive uses, such as expanding businesses and hiring more employees. It is difficult to quantify how many cases in which the Commission finds reasonable cause end up being litigated in court because, if the EEOC decides to not litigate the case, the Commission does not track lawsuits filed by private plaintiffs. The Commission believes that cases in which the EEOC found reasonable cause are the most likely to be litigated by a private plaintiff because the EEOC has already determined that there is reasonable cause to believe that the case has merit. While not all cases in which reasonable case is found and conciliation is unsuccessful are litigated, there is reason to believe that a significant portion are. The Commission itself files lawsuits in roughly 10% of the cases in which reasonable cause is found and conciliation is not successful. 17 It is reasonable to believe that private plaintiffs file lawsuits in at least an additional 40% of cases, so that overall half the cases in which reasonable cause is found, but conciliation is unsuccessful, end up being litigated in court. 18

Using the numbers above, if the Commission successfully conciliated only 100 more cases each year, that would save the economy over $4 million in litigation costs. 19

Therefore, the Commission's rule, which establishes basic information disclosure requirements that will make it more likely that employers have a better understanding of the EEOC's position in conciliation and, thus, make it more likely that the conciliation will be successful, will result in significant economic benefits when it is successfully implemented.

This rule is not expected to be an E.O. 13771 regulatory action because it will not impose total costs greater than $0. As described above, the Commission's rule will result in more successful conciliations and therefore, overall cost reduction, so this is considered a deregulatory action. Details on the expected impacts of the rule can be found in the Commission's analysis above.

This rule contains no new information collection requirements subject to review by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

The Commission certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities because it applies exclusively to employees and agencies of the federal government and does not impose a burden on any business entities. For this reason, a regulatory flexibility analysis is not required.

This rule will not result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

While the Commission believes the rule is a rule of agency procedure that does not substantially affect the rights or obligations of non-agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996), it will still follow the reporting requirement of 5 U.S.C. 801. This is not a “major rule” as the term is defined in 5 U.S.C. 804(2).

For the reasons set forth in the preamble, the Commission amends 29 CFR parts 1601 and 1626 as follows:

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), Public Law 114-74, 129 Stat. 584, amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (1990 Act), Public Law 101-410, 104 Stat. 890 (28 U.S.C. 2461 note), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. Section 3 of the 1990 Act specifically includes the Postal Service in the definition of “agency” subject to its provisions.

Beginning in 2017, the 2015 Act requires the Postal Service to make an annual adjustment for inflation to civil penalties that meet the definition of “civil monetary penalty” under the 1990 Act. The Postal Service must make the annual adjustment for inflation and publish the adjustment in the Federal Register by January 15 of each year. Each penalty will be adjusted as instructed by the Office of Management and Budget (OMB) based on the Consumer Price Index (CPI-U) from the most recent October. OMB has furnished detailed instructions regarding the annual adjustment for 2021 in memorandum M-21-10, Implementation of Penalty Inflation Adjustments for 2021, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (December 23, 2020), https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf. This year, OMB has advised that an adjustment multiplier of 1.01182 will be used. The new penalty amount must be rounded to the nearest dollar.

The 2015 Act allows the interim final rule and annual inflation adjustments to be published without prior public notice or opportunity for public comment.

Civil monetary penalties may be assessed for postal offenses under sections 106 and 108 of the Deceptive Mail Prevention and Enforcement Act, Public Law 106-168, 113 Stat. 1811, 1814 ( see, 39 U.S.C. 3012(a), (c)(1), (d), and 3017 (g)(2), (h)(1)(A)); and section 1008 of the Postal Accountability and Enhancement Act, Public Law 109-435, 120 Stat. 3259-3261 ( see, 39 U.S.C. 3018 (c)(1)(A)). The statutory civil monetary penalties subject to the 2015 Act and the amount of each penalty after implementation of the annual adjustment for inflation are as follows:

Under 39 U.S.C. 3005(a)(1)-(3), the Postal Service may issue administrative orders prohibiting persons from using the mail to obtain money through false representations or lotteries. Persons who evade, attempt to evade, or fail to comply with an order to stop such prohibited practices may be liable to the United States for a civil penalty under 39 U.S.C. 3012(a). The regulations implemented pursuant to this section currently impose a $73,951 penalty for each mailing less than 50,000 pieces, $147,899 for each mailing of 50,000 to 100,000 pieces, and $14,791 for each additional 10,000 pieces above 100,000 not to exceed $2,957,993. The new penalties will be as follows: A $74,825 penalty for each mailing less than 50,000 pieces, $149,647 for each mailing of 50,000 to 100,000 pieces, and $14,966 for each additional 10,000 pieces above 100,000 not to exceed $2,992,956.

In lieu of or as part of an order issued under 39 U.S.C. 3005(a)(1)-(3), the Postal Service may assess a civil penalty. Currently, the amount of this penalty, set in the implementing regulations to 39 U.S.C. 3012(c)(1), is $36,975 for each mailing that is less than 50,000 pieces, $73,951 for each mailing of 50,000 to 100,000 pieces, and an additional $7,395 for each additional 10,000 pieces above 100,000 not to exceed $1,478,996. The new penalties will be $37,412 for each mailing that is less than 50,000 pieces, $74,825 for each mailing of 50,000 to 100,000 pieces, and an additional $7,482 for each additional 10,000 pieces above 100,000 not to exceed $1,496,478.

Persons may be liable to the United States for a civil penalty under 39 U.S.C. 3012(d) for sending certain deceptive mail matter described in 39 U.S.C. 3001((h)-(k), including:

• Solicitations making false claims of Federal Government connection or approval;

• Certain solicitations for the purchase of a product or service that may be obtained without cost from the Federal Government;

• Solicitations containing improperly prepared “facsimile checks”; and

• Certain solicitations for “skill contests” and “sweepstakes” sent to individuals who, in accordance with 39 U.S.C. 3017(d), have requested that such materials not be mailed to them.

Currently, under the implementing regulations, this penalty is not to exceed $14,791 for each mailing. The new penalty will be $14,966.

Under 39 U.S.C. 3017(g)(2), the Postal Service may impose a civil penalty against a person who provides information for commercial use about individuals who, in accordance with 39 U.S.C. 3017(d), have elected not to receive certain sweepstakes and contest information. Currently, this civil penalty may not exceed $2,957,993 per violation, pursuant to the implementing regulations. The new penalty may not exceed $2,992,956 per violation.

Currently, under 39 U.S.C. 3017(h)(1)(A) and its implementing regulations, any promoter who recklessly mails nonmailable skill contest or sweepstakes matter may be liable to the United States in the amount of $14,791 per violation for each mailing to an individual. The new penalty is $14,966 per violation.

Under 39 U.S.C. 3018(c)(1)(A), the Postal Service may impose a civil penalty payable into the Treasury of the United States on a person who knowingly mails nonmailable hazardous materials or fails to follow postal laws on mailing hazardous materials. Currently, this civil penalty is at least $320, but not more than $127,525 for each violation, pursuant to the implementing regulations. The new penalty is at least $324, but not more than $129,032 for each violation.

For the reasons set out in the preamble, the Postal Service amends 39 CFR part 233 as follows:

The Department is committed to ensuring Medicare beneficiaries have access to new cures and technologies that improve health outcomes. Section 6 of the October 3, 2019 Executive Order 13890 (E.O. 13890) “Executive Order on Protecting and Improving Medicare for Our Nation's Seniors,”  1 directs the Secretary to “propose regulatory and sub-regulatory changes to the Medicare program to encourage innovation for patients” including by “streamlining the approval, coverage, and coding process”. 2 The E.O. 13890 explicitly includes making coverage of breakthrough medical devices “widely available, consistent with the principles of patient safety, market-based policies, and value for patients.”  3 The E.O. also directs the Secretary to “clarify the application of coverage standards.”  4

Consistent with these directives, we proposed to create a new coverage pathway for breakthrough devices, which we are calling Medicare Coverage of Innovative Technology (MCIT). This pathway will accelerate the coverage of new, innovative breakthrough devices to Medicare beneficiaries. We also proposed to codify the term “reasonable and necessary” to provide greater certainty to stakeholders seeking coverage for innovative items and services and to ensure that this substantive legal standard is codified.

The MCIT coverage pathway is specifically for Medicare coverage of devices that are designated as part of the Food and Drug Administration's (FDA) Breakthrough Devices Program (hereafter referred to as “breakthrough devices”) and are FDA market authorized. FDA's Breakthrough Devices Program is for certain medical devices, device-led combination products, and can include lab tests. 5 The MCIT pathway would be voluntary and device manufacturers would notify CMS if they want to utilize this coverage option.

We proposed that National Medicare coverage under the MCIT pathway could begin immediately upon the date of FDA market authorization (that is, the date the medical device receives Premarket Approval (PMA); 510(k) clearance; or the granting of a De Novo classification request) for the breakthrough device or on the date designated by the manufacturer within any point during the four year eligibility period for coverage under MCIT. This coverage can occur unless the device does not have a Medicare benefit category or is otherwise excluded from coverage by statute (that is, the Medicare statute does not allow for coverage of the particular device.) This coverage pathway delivers on the Administration's commitment to give Medicare beneficiaries access to the newest innovations on the market, consistent with the statutory definitions of Medicare benefits. Because Medicare is a defined benefit program, devices that do not fit within the statutory definitions may not be considered for MCIT. As an example, medical equipment for home use by the beneficiary must be durable (that is, withstand repeated use) for it to be coverable by Medicare (as defined in statutes and regulations by the Secretary).

The Secretary has authority to determine whether a particular medical item or service is “reasonable and necessary” under section 1862(a)(1)(A) of the Act. ( See Heckler v. Ringer, 466 U.S. 602, 617 (1984).) When making coverage determinations, our policies have long considered whether the item or service is safe and effective, not experimental or investigational, and appropriate. (For more information see the January 30, 1989 notice of proposed rulemaking (54 FR 4307)). These factors are found in Chapter 13 of the Medicare Program Integrity Manual (PIM) at section 13.5.4— Reasonable and Necessary Provisions in LCDs as instructions for Medicare contractors. 6 We proposed to codify in regulations the Program Integrity Manual definition of “reasonable and necessary” with modifications, including to add a reference to Medicare patients and a reference to commercial health insurer coverage policies. We proposed that an item or service would be considered “reasonable and necessary” if it is—(1) safe and effective; (2) not experimental or investigational; and (3) appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is—

• Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient's condition or to improve the function of a malformed body member;

• Furnished in a setting appropriate to the patient's medical needs and condition;

• Ordered and furnished by qualified personnel;

• One that meets, but does not exceed, the patient's medical need; and

• At least as beneficial as an existing and available medically appropriate alternative.

We also proposed that an item or service would be “appropriate for Medicare patients” under (3) if it is covered in the commercial insurance market, except where evidence supports that there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals. An item or service deemed appropriate for Medicare coverage based on commercial coverage would be covered on that basis without also having to satisfy the previously listed bullets. We believed this definition would be a significant step in meeting the E.O.'s discussion of the need to bring clarity to coverage standards. Stakeholders have expressed interest in codifying a definition of “reasonable and necessary” for many years.

As stated in the previous section, we proposed to codify the PIM's definition of reasonable and necessary with a modification to the appropriateness factor to allow CMS to refer to commercial coverage. We will finalize in regulation the factors we have historically used in making “reasonable and necessary” determinations under section 1862(a)(1)(A) of the Act, with a modification, discussed below, to factor (3) to determine whether an item or service is appropriate based, in prescribed circumstances, on coverage in the commercial market. In general, this section of the Act permits Medicare payment under part A or part B for any expenses incurred for items or services that are reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. Thus, with some exceptions, section 1862(a)(1)(A) of the Act requires that an item or service be “reasonable and necessary” to be covered by Medicare. The courts have recognized that the Secretary has significant authority to determine whether a particular item or service is “reasonable and necessary,” and that the statute affords broad discretion to interpret this term ( Heckler v. Ringer, 466 U.S. 602, 617 (1984). See also, Yale-New Haven Hospital v. Leavitt, 470 F.3d 71, 84 (2d Cir. 2006); Kort v. Burwell, 209 F. Supp. 3d 98, 110 (D. D.C. 2016) (The statute vests substantial authority in the Secretary.)) In regard to the MCIT coverage pathway, we proposed national Medicare coverage for breakthrough devices that are FDA market-authorized and used consistent with the FDA approved or cleared indication for use (also referred to as the “FDA-required labeling”). 7 This device coverage under the MCIT pathway is reasonable and necessary for a duration of time under section 1862(a)(1)(A) of the Act because the device has met the very unique criteria of the FDA Breakthrough Devices Program.

This is a synopsis of the Commission's Report and Order, MB Docket No. 20-340; RM-11865; DA 20-1425, adopted December 2, 2020, and released December 2, 2020. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

NHTSA requests comment on this interim final rule. This section describes how you can participate in this process.

(1) How do I prepare and submit comments?

Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the Docket number NHTSA-2021-0001 in your comments. Your comments must not be more than 15 pages long. 1 NHTSA established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments, and there is no limit on the length of the attachments. If you are submitting comments electronically as a PDF (Adobe) file, we ask that the documents submitted be scanned using the Optical Character Recognition (OCR) process, thus allowing the Agency to search and copy certain portions of your submissions. 2 Please note that pursuant to the Data Quality Act, in order for the substantive data to be relied upon and used by the Agency, it must meet the information quality standards set forth in the OMB and Department of Transportation (DOT) Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB's guidelines may be accessed at http://www.whitehouse.gov/omb/fedreg/reproducible.html. DOT's guidelines may be accessed at http://www.dot.gov/dataquality.htm.

(2) Tips for Preparing Your Comments

When submitting comments, please remember to:

• Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

• Explain why you agree or disagree, suggest alternatives, and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment period deadline identified in the DATES section above.

(3) How can I be sure that my comments were received?

If you submit your comments by mail and wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

(4) How do I submit confidential business information?

If you wish to submit any information under a claim of confidentiality, you should submit your complete submission, including the information you claim to be confidential business information (CBI), to the NHTSA Chief Counsel. When you send a comment containing CBI, you should include a cover letter setting forth the information specified in our CBI regulation. 3 In addition, you should submit a copy from which you have deleted the claimed CBI to the Docket by one of the methods set forth above.

To facilitate social distancing due to COVID-19, NHTSA is treating electronic submission as an acceptable method for submitting CBI to the Agency under 49 CFR part 512. Any CBI submissions sent via email should be sent to an attorney in the Office of Chief Counsel at the address given above under FOR FURTHER INFORMATION CONTACT . Likewise, for CBI submissions via a secure file transfer application, an attorney in the Office of Chief Counsel must be set to receive a notification when files are submitted and have access to retrieve the submitted files. At this time, regulated entities should not send a duplicate hardcopy of their electronic CBI submissions to DOT headquarters.

Please note that these modified submission procedures are only to facilitate continued operations while maintaining appropriate social distancing due to COVID-19. Regular procedures for part 512 submissions will resume upon further notice, when NHTSA and regulated entities discontinue operating primarily in telework status.

If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section.

(5) How can I read the comments submitted by other people?

You may read the materials placed in the docket for this document ( e.g., the comments submitted in response to this document by other interested persons) at any time by going to http://www.regulations.gov. Follow the online instructions for accessing the dockets. You may also read the materials at the NHTSA Docket Management Facility by going to the street addresses given above under ADDRESSES .

NHTSA sets  4 and enforces  5 corporate average fuel economy (CAFE) standards for the United States light-duty automobile fleet, and in doing so, assesses civil penalties against manufacturers that fall short of their compliance obligations and are unable to make up the shortfall with credits obtained for exceeding the standards. 6 The civil penalty amount for CAFE non-compliance was originally set by statute in 1975, and beginning in 1997, included a rate of $5.50 per each tenth of a mile per gallon (0.1) that a manufacturer's fleet average CAFE level falls short of its compliance obligation. This shortfall amount is then multiplied by the number of vehicles in that manufacturer's fleet. 7 The basic equation for calculating a manufacturer's civil penalty amount before accounting for credits, is as follows:

Starting with model year 2011, the CAFE program was amended by the Energy Independence and Security Act of 2007 (EISA) to provide for credit transfers among a manufacturer's various fleets. 8 Starting with that model year, the law also provided for trading between vehicle manufacturers, which has allowed vehicle manufacturers the opportunity to acquire credits from competitors rather than paying civil penalties for non-compliance. Credit purchases involve significant expenditures, and NHTSA believes that an increase in the penalty rate would correlate with an increase in such expenditures.

On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act (Inflation Adjustment Act or 2015 Act), Public Law 114-74, Section 701, was signed into law. The 2015 Act required Federal agencies to make an initial “catch-up” adjustment to the “civil monetary penalties,” as defined, they administer through an interim final rule and then to make subsequent annual adjustments for inflation. The amount of increase for any “catch-up” adjustment to a civil monetary penalty pursuant to the 2015 Act was limited to 150 percent of the then-current penalty. Agencies were required to issue an interim final rule for the initial “catch-up” adjustment by July 1, 2016, without providing the opportunity for public comment ordinarily required under the Administrative Procedure Act.

The Director of the Office of Management and Budget (OMB) provided guidance to all Federal agencies in a February 24, 2016 memorandum. 9 For those penalties an agency determined to be “civil monetary penalties,” the memorandum provided guidance on how to calculate the initial adjustment required by the 2015 Act. The initial catch up adjustment is based on the change between the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October in the year the penalty amount was established or last adjusted by Congress and the October 2015 CPI-U. The February 24, 2016 memorandum contains a table with a multiplier for the change in CPI-U from the year the penalty was established or last adjusted to 2015. To arrive at the adjusted penalty, an agency must multiply the penalty amount when it was established or last adjusted by Congress, excluding adjustments under the 1990 Inflation Adjustment Act, by the multiplier for the increase in CPI-U from the year the penalty was established or adjusted as provided in the February 24, 2016 memorandum. The 2015 Act limits the initial inflationary increase to 150 percent of the current penalty. To determine whether the increase in the adjusted penalty is less than 150 percent, an agency must multiply the current penalty by 250 percent. The adjusted penalty is the lesser of either the adjusted penalty based on the multiplier for CPI-U in Table A of the February 24, 2016 memorandum or an amount equal to 250 percent of the current penalty. Ensuing guidance from OMB identifies the appropriate inflation multiplier for agencies to use to calculate the subsequent annual adjustments. 10

The 2015 Act also gives agencies discretion to adjust the amount of a civil monetary penalty by less than otherwise required for the initial catch-up adjustment if an agency determines that increasing the civil monetary penalty by the otherwise required amount will have either a negative economic impact or if the social costs of the increased civil monetary penalty will outweigh the benefits. 11 In either instance, the agency must publish a notice, take and consider comments on this finding, and receive concurrence on this determination from the Director of OMB prior to finalizing a lower civil penalty amount.

On July 5, 2016, NHTSA published an interim final rule, adopting inflation adjustments for civil penalties under its administration, following the procedure and the formula in the 2015 Act. NHTSA did not analyze at that time whether the 2015 Act applied to all of its civil penalties, instead applying the inflation multiplier to increase all amounts found in its penalty schemes as a rote matter. One of the adjustments NHTSA made at the time was raising the civil penalty rate for CAFE non-compliance from $5.50 to $14 starting with model year 2015. 12 NHTSA also indicated in that interim final rule that the maximum penalty rate that the Secretary is permitted to establish for such violations would increase from $10 to $25, but did not codify this change in the regulatory text. NHTSA also raised the maximum civil penalty for other violations of EPCA, as amended, to $40,000. 13

The then-Alliance of Automobile Manufacturers and the Association of Global Automakers (since combined to form the Alliance for Automotive Innovation) jointly petitioned NHTSA for reconsideration of the CAFE penalty provisions issued in the interim final rule. 14 This petition raised concerns with the significant impact that the increased penalty rate would have on CAFE compliance costs, which they estimated to be at least $1 billion annually. Specifically, this petition identified the issue of retroactivity (applying the penalty increase associated with model years that have already been completed or for which a company's compliance plan had already been “set”); which “base year” ( i.e., the year the penalty was established or last adjusted) NHTSA should use for calculating the adjusted penalty rate; and whether an increase in the penalty rate to $14 would cause a “negative economic impact.”

In response to the joint petition, NHTSA issued a final rule on December 28, 2016. 15 In that rule, NHTSA agreed that raising the penalty rate for model years already fully complete would be inappropriate, given how courts generally disfavor the retroactive application of statutes and that doing so could not deter non-compliance, incentivize compliance, or lead to any improvements in fuel economy. NHTSA also agreed that raising the rate for model years for which product changes were infeasible due to lack of lead time did not seem consistent with Congress' intent that the CAFE program be responsive to consumer demand. Accordingly, NHTSA stated that it would not apply the inflation-adjusted penalty rate of $14 until model year 2019, as the Agency believed that would be the first year in which product changes could reasonably be made in response to the higher penalty rate.

Beginning in January 2017, NHTSA took a series of actions to delay the effective date of the December 2016 final rule as it, for the first time, assessed whether the CAFE civil penalty rate was subject to the 2015 Act. 16 As a result of a subsequent decision of the United States Court of Appeals for the Second Circuit, however, that December 2016 final rule was considered to be in force. 17 That decision by the Second Circuit did not affect NHTSA's authority to reconsider the applicability of the 2015 Act to the EPCA CAFE civil penalty provision through notice-and- comment rulemaking. Absent any further action, the rate would have increased beginning with model year 2019. 18

In July 2019, NHTSA finalized a rule determining that the 2015 Act did not apply to the CAFE civil penalty rate. In line with its statutory role and pursuant to its previous guidance to all Federal Agencies, OMB provided guidance to NHTSA agreeing with this statutory interpretation. 19 The July 2019 rule also stated that, in the alternative, even if the 2015 Act applied, increasing the CAFE civil penalty rate would have a negative economic impact. As discussed in the July 2019 rule, OMB concurred with this negative economic impact determination, as required by the 2015 Act. 20 In either case, NHTSA concluded that the current CAFE civil penalty rate of $5.50 should be retained, instead of increasing to $14 beginning with model year 2019.

On August 31, 2020, the United States Court of Appeals for the Second Circuit issued a ruling vacating the July 2019 rule and announcing that the December 2016 rule is back in force. The Second Circuit denied panel rehearing on November 2, 2020. NHTSA stands by the reasoning set forth in its July 2019 rule, but recognizes that the Second Circuit's decision is currently binding and remains in effect absent a Supreme Court decision to the contrary.

On September 9, 2019, the Institute for Policy Integrity at New York University School of Law (IPI) submitted a petition for reconsideration of NHTSA's July 2019 final rule. IPI argued that the rule was unreasonable and not in the public interest for ignoring and improperly weighing the costs and benefits. 21 IPI also alleged that the OMB letters NHTSA relied on were not presented for public comment, contained factual misstatements, and contradicted NHTSA's reasoning. Lastly, IPI challenged NHTSA's statutory interpretations.

On October 2, 2020, the Alliance for Automotive Innovation (the Alliance) submitted a petition for rulemaking (Alliance Petition) to delay the applicability of the increased $14 CAFE civil penalty rate until model year 2022 for largely the same reasons NHTSA relied on in the December 2016 rule. 22 According to the Alliance Petition, “Model Years 2019 and 2020 are effectively lapsed now,” and “[m]anufacturers are unable to change MY 2021 plans at this point.”  23 The Alliance argued that applying the increased penalty to any non-compliances that are temporally impossible to avoid or cannot practically be remedied does not serve the statutory purposes of deterring prohibited conduct or incentivizing favored conduct. Doing so would effectively be punishing violators retroactively.

In addition to relying on the reasoning of the December 2016 rule, the Alliance Petition notes the significant economic impact suffered by the industry due to COVID-19. Accordingly, the Alliance Petition also cites Executive Order 13924, requiring Federal Agencies to take appropriate action, consistent with applicable law, to combat the economic emergency caused by COVID-19. 24 Several individual vehicle manufacturers submitted supplemental information to NHTSA further articulating the negative economic position they are in due to COVID-19 and the potential and significant adverse economic consequences of the increased civil penalty rate, particularly during this time of stress on the industry.

NHTSA granted the Alliance Petition and commenced this rulemaking action. Having carefully considered the issues raised by the petitioner and other available information, NHTSA issues this interim final rule and requests comment. If the August 31, 2020 decision of the United States Court of Appeals for the Second Circuit in Case No. 19-2395 is vacated, NHTSA's July 2019 rule keeping the CAFE civil penalty rate at $5.50 will be reinstated. If that decision is not vacated, however, the CAFE civil penalty rate will increase to $14 beginning with model year 2022, pursuant to the 2015 Act. NHTSA will make any subsequent annual adjustments as necessary and appropriate. 25

Prior to granting the petition, NHTSA had to determine whether it had authority to issue the requested rule as a threshold matter. NHTSA notes first that it has authority to administer the CAFE program. 26 It is common practice for agencies—including NHTSA—to exercise their authority to administer programs they oversee. 27 NHTSA also has specific statutory authority to administer the program  28 and possesses the general authority—beyond its inherent authority—to do so efficiently and in the public interest. 29 NHTSA's obligation to administer the CAFE program consistent with law includes the statutory requirement to establish maximum feasible fuel economy standards through a balancing of competing factors, including economic practicability, and to do so at least eighteen months in advance for more stringent standards. 30 CAFE civil penalties are merely one component of this overall program.

Moreover, EPCA expressly details a procedure for NHTSA, as delegated by the Secretary, to increase the CAFE civil penalty rate. 31 EPCA's delegation necessarily implies that NHTSA also has authority to oversee the administration and enforcement of the rate more generally. 32 Indeed, NHTSA already promulgated a similar rule in December 2016 establishing the first model years to which the increased CAFE civil penalty rate would apply, which was not challenged and has been held to be operative twice by the Second Circuit. The 2015 Act also applies only to penalties that are “assessed or enforced by an Agency pursuant to Federal law.”  33 For the CAFE civil penalty rate to be covered under the 2015 Act, NHTSA must have authority to assess or enforce it, and thus inevitably the authority to oversee and administer it as appropriate. To the extent there is any statutory ambiguity, NHTSA is the expert agency on its CAFE program, has been given authority to administer the Federal fuel economy program, and has expert authority to interpret and apply the requirements of EPCA and EISA, including the civil penalty provisions.

If the August 31, 2020 decision of the United States Court of Appeals for the Second Circuit in Case No. 19-2395 is vacated, NHTSA's July 2019 rule will be reinstated, keeping the CAFE civil penalty rate at $5.50. But turning to the merits of the Alliance Petition, NHTSA will assume arguendo that the July 2019 rule remains vacated. Under those circumstances, NHTSA agrees with the petitioner that the reasoning of the Agency's December 2016 rule applies here. As NHTSA said then, “[i]f all the vehicles for a model year have already been produced, then there is no way for their manufacturers to raise the fuel economy level of those vehicles in order to avoid higher penalty rates for non-compliance.”  34 At the time, NHTSA noted that by November 2015, “nearly all manufacturers subject to the CAFE standards had completed both model years 2014 and 2015, and no further vehicles in those model years were being produced in significant numbers.” Likewise now, vehicles for model years 2019 and 2020 have largely if not entirely been produced already, many manufacturers are already selling model year 2021 vehicles, and since some manufacturers launch subsequent model year vehicles as early as the spring, it is reasonable to assume that model year 2022 vehicles will be launched in the coming months. Applying the increased civil penalty rate to violations in these model years “would not result in additional fuel savings, and thus would seem to impose retroactive punishment without accomplishing Congress' specific intent in establishing the civil penalty provision of the Energy Policy and Conservation Act (`EPCA').”  35

As NHTSA explained previously, “the purpose of civil penalties for non-compliance is to encourage manufacturers to comply with the CAFE standards.”  36 And more generally, one of the stated purposes of the 2015 Act is to “maintain the deterrent effect of civil monetary penalties and promote compliance with the law.”  37 NHTSA agrees with the petitioner that it would be inappropriate to apply the adjustment to model years that could have no deterrence effect and promote no additional compliance with the law. 38

In addition to failing to serve the purpose of the statutory framework and the regulatory scheme, applying the increased civil penalty rate to completed or largely completed model years would raise serious retroactivity concerns. As NHTSA explained in the December 2016 rule, and in various other contexts, “[r]etroactivity is not favored in the law.”  39 NHTSA does not believe that it is appropriate to impose a higher civil penalty rate for model years when doing so would not have incentivized improvements to fuel economy—one of the core purposes of EPCA. 40 Moreover, as NHTSA noted in the December 2016 rule, “[t]he decision not to apply the increased penalties retroactively is similar to the approach taken by various other [F]ederal [a]gencies in implementing the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.”  41 For instance, a fellow DOT agency concluded that applying an inflation adjustment when a penalty had been proposed but not finalized “would not induce further compliance” and would thus be contrary to the goals of its specific enforcement statute. 42 Accordingly, the agency announced it would not retroactively adjust the proposed penalty amounts for violations that predated the inflation adjustments.

For similar reasons—and applying the same reasoning as in the December 2016 rule—NHTSA concludes that it would be inappropriate to apply the increased civil penalty rate to model year 2021 as well. In the December 2016 rule, NHTSA recognized the reality of the timeline for the design, development, and production of new vehicles: “because of industry design, development, and production cycles, vehicle designs (including drivetrains, which are where many fuel economy improvements are made) are often fixed years in advance, making adjustments to fleet fuel economy difficult without a lead time of multiple years.”  43 At the time of the recent judicial decision indicating that the increase would go into effect, the industry plans for what remains of model year 2020 and model year 2021 were “fixed and inalterable.”  44 Accordingly, “it is too late at this juncture to make significant changes to those plans and avoid non-compliances.”  45

NHTSA's decision here also takes account of the industry's serious reliance interests, having made design, development, and production plans based on the $5.50 rate. And reliance upon that rate was reasonable, as NHTSA reconsidered application of the 2015 Act by proposing in 2018 that the 2015 Act did not apply and finalizing the proposal in 2019. 46 The Director of the Office of Management and Budget—the Agency charged with overseeing implementation of the 2015 Act—also issued guidance concurring with NHTSA that the 2015 Act did not apply to the CAFE penalty rate with the final rule, further increasing the reasonableness of such reliance.

The Alliance Petition observes that “[m]anufacturers long ago made their technology choices, locked in suppliers and production requirements, developed credit purchase/sales strategies, and have largely begun to implement their planned production runs for Model Year 2021”—all with the $5.50 rate in effect. 47 The issue of credits is particularly noteworthy as manufacturers can apply credits well beyond one or two model years. Manufacturers can choose to carry back credits to apply to any of three model years before they are earned or carry them forward to apply to any of the five model years after they are earned. With such a long window of potential applicability, it is likely that manufacturers make long-term plans in determining how to acquire and apply credits. Increasing the rate is likely to lead to an increase in the price of credits, many of which have already been planned around and negotiated and contracted for. For example, in a recent securities filing, Fiat Chrysler Automobiles N.V. stated that it “has accrued estimated amounts for any probable CAFE penalty based on the $5.50 rate,” but if the rate was applied to model year 2019, “FCA may need to accrue additional amounts due to increased CAFE penalties and additional amounts owed under certain agreements for the purchase of regulatory emissions credits” and “[t]he amounts accrued could be up to €500 million [nearly $600 million].”  48 To disregard the industry's serious reliance interests would be unfair and improper. 49

Accounting for the timeline of vehicle development comports with NHTSA's broader approach to establishing fuel economy standards. As NHTSA explained in the December 2016 rule, NHTSA “includes product cadence in its assessment of CAFE standards, by limiting application of technology in its analytical model to years in which vehicles are refreshed or redesigned.”  50 Not only does this consideration function within the industry's long-established development cycle, “NHTSA believes that this approach facilitates continued fuel economy improvements over the longer term by accounting for the fact that manufacturers will seek to make improvements when and where they are most cost-effective.”  51

In the December 2016 rule, NHTSA also analogized the need to provide appropriate lead time for an increase in the civil penalty rate to the EPCA provision requiring that when NHTSA amends a fuel economy standard to make it more stringent, NHTSA must promulgate the standard “at least 18 months before the beginning of the model year to which the amendment applies.”  52 As NHTSA explained:

The 18 months' notice requirement for increases in fuel economy standards represents a congressional acknowledgement of the importance of advance notice to vehicle manufacturers to allow them the lead time necessary to adjust their product plans, designs, and compliance plans to address changes in fuel economy standards. Similarly here, affording manufacturers lead time to adjust their products and compliance plans helps them to account for such an increase in the civil penalty amount. In this unique case, the 18-month lead time for increases in the stringency of fuel economy standards provides a reasonable proxy for appropriate advance notice of the application of substantially increased—here nearly tripled—civil penalties. 53

Similarly, EPCA provides that an increase in the CAFE civil penalty rate prescribed through the statutory process can also only take effect “for the model year beginning at least 18 months after the regulation stating the higher amount becomes final.”  54

As in the December 2016 rule, NHTSA acknowledges that—while none of the individual manufacturers that submitted supplemental information indicated this to be the case—it is conceivable that some manufacturers might be able to change production volumes of certain lower- or higher-fuel-economy models for model years that have not happened yet, which could help them to reduce or avoid CAFE non-compliance penalties. However, NHTSA noted then and reiterates here that compelling such a change by immediately adjusting the civil penalty rate to apply to design decisions that are already locked in would contravene a fundamental purpose of the CAFE program—namely, the statutory requirement that fuel economy standards be attribute-based and thus responsive to consumer demand. 55 Affording some lead time to manufacturers mitigates the concern that manufacturers will be forced to disregard consumer demand, for example by having to restrict the availability of vehicles that consumers want.

The Alliance Petition was submitted on October 2, 2020, and requested that the adjustment apply beginning in model year 2022. While NHTSA accepts that the petitioner believes that timeline provides a sufficient and reasonable lead time under the circumstances for its industry members to adjust reasonably to the increased penalty rate and, in this interim final rule, postpones the increased rate until that model year, NHTSA also seeks comment on whether it should provide 18 months of lead time before the increase becomes effective. Since NHTSA treats model years as commencing in October of the calendar year prior to the model year, an 18-month lead time would have the $14 penalty rate apply to the 2023 model year under this approach. Such an approach would be consistent with the December 2016 rule's application of the adjustment beginning in model year 2019.

NHTSA also recognizes the significant negative economic consequences caused by the global outbreak of COVID-19. On May 19, 2020, President Trump issued Executive Order (E.O.) 13924, “Regulatory Relief to Support Economic Recovery,” ordering agencies to address the economic emergency caused by the pandemic “by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery, consistent with applicable law and with protection of the public health and safety, with national and homeland security, and with budgetary priorities and operational feasibility.”  56 Where such measures are made temporarily, agencies must evaluate whether those measures would “promote economic recovery if made permanent.”

The Alliance Petition provided information about the significant negative economic impact on the automotive sector caused by COVID-19. All domestic auto factories were closed by April 2020, for the first time since World War II, for approximately eight weeks. 57 One analyst described the second quarter of 2020 as “likely to be the toughest in modern history” for the automotive sector, as companies “grappled with close to a zero revenue environment for a few months.”  58 Market projections as of September 2020 indicate that domestic vehicle sales for all of 2020 will be down by as much as 26 percent from 2019. 59 And beyond the immediate economic hit, this negative economic impact is expected to have effects beyond 2020. One market analyst predicts that the auto sector recovery will take several years and that the market will not reach the sales that were previously projected for 2020 until at least 2025. 60 The analyst also notes that because of the COVID-19 effects on sales and revenue, manufacturers have been forced to delay capital-intensive product actions to conserve resources, with the greatest impact to showrooms in calendar years 2023 and 2024. 61

NHTSA also received information from five individual vehicle manufacturers supplementing the Alliance Petition: Mercedes-Benz AG, Jaguar Land Rover North America, LLC, FCA US LLC, Ford Motor Company, and Ferrari North America, Inc. 62 Each cited the ongoing pandemic in concluding that applying the increased CAFE civil penalty rate prior to model year 2022 would present a substantial hardship.

Mercedes-Benz indicated that since March of this year, it has experienced pandemic-related disruption of supply chains, production, and work force, which has caused unforeseen financial loss for the company and has created a tenuous financial climate. Jaguar Land Rover indicated that due to the pandemic, it had to close showrooms and manufacturing plants, and pause engineering work for months, resulting in reduced sale revenue and the prevention of investment in future fuel-efficient technology product programs. FCA and Ford detailed similar negative economic impacts to their companies. Each company argued that a decision to apply the civil penalty of $14 vehicles prior to MY 2022 would only aggravate their financial hardships during this economic emergency. These economic consequences are on top of those NHTSA already projected for the increase from $5.50 to $14, including the significant increase in costs to manufacturers, increased unemployment, adverse effects on competition, and increases in automobile imports. 63 And these impacts come at a time where NHTSA data shows that the number of fleets with credit shortfalls has substantially increased, while the number of fleets generating credit surpluses has decreased, indicating that more manufacturers—particularly domestic manufacturers—are expected to need to pay penalties going forward. 64 The financial burden on domestic manufacturers is exacerbated by the statutory prohibition against the use of credits acquired by another automaker or transferred from another fleet to offset any non-compliance with the domestic passenger car minimum standard. 65 Manufacturers have already begun to realize this impact: One manufacturer paid over $77 million in civil penalties for failing to meet the minimum domestic passenger car standard for model year 2016 and over $79 million in model year 2017, the highest civil penalties assessed in the history of the CAFE program. Ferrari stated that applying the $14 rate before model year 2022 would save no fuel, instead serving only as a wealth transfer to the manufacturers that have surplus CAFE credits. Other facets of the CAFE program, such as credit transfer caps, credit adjustment factors, availability and price of tradeable credits, and credit banking, are causing similar economic pressures. 66

Based on the available information, NHTSA believes that applying the adjustment to the CAFE civil penalty rate beginning in model year 2019 “may inhibit economic recovery,” while applying the adjustment beginning in model year 2022 is an appropriate action to take “for the purpose of promoting job creation and economic growth.”  67

If the August 31, 2020 decision of the United States Court of Appeals for the Second Circuit in Case No. 19-2395 is vacated, NHTSA's July 2019 rule will be reinstated, keeping the CAFE civil penalty rate at $5.50. Regardless, NHTSA will continue to apply the $5.50 civil penalty rate for violations that occur prior to model year 2022. If the July 2019 rule remains vacated, per the Second Circuit's ruling, the rate will be adjusted to $14 beginning in model year 2022 under this interim final rule for all of the foregoing reasons. And if NHTSA's determination in the July 2019 rule that the CAFE civil penalty rate is not a “civil monetary penalty” under the 2015 Act is not restored, NHTSA expects to make subsequent annual adjustments to the rate as appropriate, pursuant to the 2015 Act and in accordance with EPCA and EISA. 68 As it did in the December 2016 rule, “NHTSA believes this approach appropriately harmonizes the two congressional directives of adjusting civil penalties to account for inflation and maintaining attribute-based, consumer-demand-focused standards, applied in the context of the presumption against retroactive application of statutes” and particularly “in the unique context of multi-year vehicle product cycles.”  69

Either the Second Circuit's vacatur of the July 2019 final rule or the promulgation of this interim final rule is sufficient to render IPI's petition for reconsideration of the July 2019 final rule moot, since NHTSA's July 2019 final rule is no longer operative. To the extent that the petition is not moot, it is denied. As IPI noted, many of the arguments raised in its petition were already presented to NHTSA in its comments to the April 2018 NPRM. 70 NHTSA adequately responded to these comments in the July 2019 final rule and reaffirms those points here. 71 In accord with OMB's government-wide guidance on implementing the statute, NHTSA sought clarifying guidance from OMB and, as required by the 2015 Act, NHTSA requested OMB's concurrence in its “negative economic impact” determination. OMB's interpretations were consistent with those presented in NHTSA's NPRM, on which IPI commented. And OMB's guidance did not contain any material misstatements that undercut NHTSA's determinations in the July 2019 final rule.

Pursuant to the 2015 Act and 5 U.S.C. 553(b)(3)(B), NHTSA finds that good cause exists for immediate implementation of this interim final rule without prior notice and comment because it would be impracticable to delay publication of this rule for notice and comment, public comment is unnecessary, and doing so is in the public interest. As explained above, manufacturers have a compelling need for ample advance notice of an increase to the CAFE civil penalty rate in order to modify their design, development, and production plans accordingly, in order for the inflation adjustment to have its statutorily-intended effect, and as a matter of fairness. It would be impracticable to follow notice-and-comment procedures, further delaying a decision on when the rate should be adjusted. That would leave in place an increased rate applicable to model years 2019 and 2020, which are complete, as well as model year 2021, which is underway. To the extent any manufacturers would have been able to adjust their production volumes in response to an increased penalty rate, NHTSA cannot effectively compel them to do so because it would disregard consumer demand, in contravention of NHTSA's statutory duties. Thus, there is good cause for an immediate effective date to avoid any retroactive application of an increased rate to model years for which manufacturers could not plan to accommodate.

Public comment is also unnecessary. The 2015 Act provides that the first adjustment shall be made through an interim final rulemaking. Because this action is establishing the parameters of NHTSA's first adjustment of the CAFE civil penalty rate, NHTSA is utilizing the process provided by the 2015 Act. NHTSA also notes that pursuant to the 2015 Act, its initial catch-up adjustment was promulgated through an interim final rule without public comment and, more significantly, the December 2016 rule on which this action is largely based was also promulgated without public comment.

The public interest also counsels towards NHTSA's issuance of an interim final rule. As discussed above, the automotive industry has faced unprecedented economic challenges arising from the COVID-19 national emergency situation. 72 The entire manufacturing base was effectively shut down mere months ago, and the industry still faces severe supply chain constraints that have reduced automobile production. Similarly, the general economic difficulties facing the nation have significantly reduced vehicle sales, reducing revenue for manufacturers. Applying the adjustment to the CAFE civil penalty rate beginning in model year 2019 will result in serious harm, including increased penalties for manufacturers with no corresponding societal gain and could very well inhibit economic recovery by reducing the capital manufacturers would have to invest in their product. Applying the adjustment beginning in model year 2022 is an appropriate action to take to avoid serious harm and “for the purpose of promoting job creation and economic growth.”  73

Issuing an interim final rule now while the COVID-19 emergency is ongoing is particularly in the public interest, and consistent with the Executive order to promote the economic recovery. For these reasons, NHTSA finds that notice-and-comment before the interim final rule is promulgated would be impracticable, is unnecessary in this situation, and is contrary to the public interest. NHTSA is nonetheless providing an opportunity for interested parties to comment on the interim final rule. 74

For these reasons, the Agency has also determined that it has good cause under 5 U.S.C. 553(d)(3) and 5 U.S.C. 808(2) to issue this rule with an immediate effective date. In addition, a delayed effective in not required under 5 U.S.C 553(d)(2) because it “relieves a restriction” by allowing additional time before the higher penalty rate begins to apply.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. This rulemaking document has been considered a “significant regulatory action” under Executive Order 12866. NHTSA also believes that this rulemaking is “economically significant,” as the Agency believes that the difference in the amount of penalties received by the government as a result of this rule, classified as “transfers,” are likely to exceed $100 million in at least one of the years affected by this rulemaking. As noted above, the Agency believes this rule will have a limited effect, in any, on the composition of the fleet, as model years 2019 and 2020 are complete and model year 2021 is already well under way. 75 If the August 31, 2020 decision of the United States Court of Appeals for the Second Circuit in Case No. 19-2395 is not vacated, NHTSA would have no discretion in whether to make the adjustment to $14 and thus no regulatory impact analysis is required. If the August 31, 2020 decision of the United States Court of Appeals for the Second Circuit in Case No. 19-2395 is vacated, NHTSA's July 2019 rule keeping the CAFE civil penalty rate at $5.50 will be reinstated, and as noted in that rule, it has no economic impact because it merely maintains the existing penalty rate.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of proposed rulemaking or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( i.e., small businesses, small organizations, and small governmental jurisdictions). Because this is an interim final rule, no regulatory flexibility analysis is required. In any event, no regulatory flexibility analysis is required if the head of an agency certifies the proposal will not have a significant economic impact on a substantial number of small entities.

Even though this is an interim final rule for which no regulatory flexibility analysis is required, NHTSA has considered the impacts of this notice under the Regulatory Flexibility Act and does not believe that this rule would have a significant economic impact on a substantial number of small entities. NHTSA requests comment on the economic impact of this interim final rule on small entities.

The Small Business Administration's (SBA) regulations define a small business in part as a “business entity organized for profit, with a place of business located in the United States, and which operates primarily within the United States or which makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.” 13 CFR 121.105(a). SBA's size standards were previously organized according to Standard Industrial Classification (“SIC”) Codes. SIC Code 336211 “Motor Vehicle Body Manufacturing” applied a small business size standard of 1,000 employees or fewer. SBA now uses size standards based on the North American Industry Classification System (“NAICS”), Subsector 336—Transportation Equipment Manufacturing. This action is expected to affect manufacturers of motor vehicles. Specifically, this action affects manufacturers from NAICS codes 336111—Automobile Manufacturing, and 336112—Light Truck and Utility Vehicle Manufacturing, which both have a small business size standard threshold of 1,500 employees.

Though civil penalties collected under 49 CFR 578.6(h)(1) and (2) apply to some small manufacturers, low volume manufacturers can petition for an exemption from the Corporate Average Fuel Economy standards under 49 CFR part 525. This would lessen the impacts of this rulemaking on small business by allowing them to avoid liability for penalties under 49 CFR 578.6(h)(2). Small organizations and governmental jurisdictions will not be significantly affected as the price of motor vehicles and equipment ought not change as the result of this rule.

Executive Order 13132 requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the [N]ational [G]overnment and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the Agency may not issue a regulation with federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal Government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132.

The reason is that this rule will generally apply to motor vehicle manufacturers. Thus, the requirements of Section 6 of the Executive order do not apply.

The Unfunded Mandates Reform Act of 1995, Public Law 104-4, requires agencies to prepare a written assessment of the cost, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually. Because this rule is not expected to include a Federal mandate, no unfunded mandate assessment will be prepared.

The National Environmental Policy Act of 1969 (NEPA)  76 directs that Federal agencies proposing “major Federal actions significantly affecting the quality of the human environment” must, “to the fullest extent possible,” prepare “a detailed statement” on the environmental impacts of the proposed action (including alternatives to the proposed action). 77 However, as a threshold question, Federal agencies must assess whether NEPA applies to a particular proposed activity or decision. 78 If an agency determines that NEPA is inapplicable, no further analysis is required pursuant to NEPA or the Council on Environmental Quality's (CEQ) NEPA implementing regulations. 79

In assessing whether NEPA applies, NHTSA has considered “[w]hether compliance with NEPA would be inconsistent with Congressional intent expressed in another statute.”  80 In particular, NHTSA has considered the Congressional intent with regard to both EPCA (as amended by EISA) and the 2015 Act. As quoted above from the December 2016 rule, “the purpose of civil penalties for non-compliance is to encourage manufacturers to comply with the CAFE standards.”  81 And more generally, one of the stated purposes of the 2015 Act is to “maintain the deterrent effect of civil monetary penalties and promote compliance with the law.”  82 Further, as part of the statutory scheme established by EPCA and the 2015 Act, Congress requires NHTSA to account for such issues as lead time, consumer demand, and negative economic impacts of its actions (especially in light of COVID-19 and the Executive order to combat the economic emergency caused by it). Assuming arguendo that NHTSA is obligated to raise the civil penalty rate to $14, the aforementioned factors, as well as legal doctrines of retroactivity and fairness, all point to the necessity of delaying effectiveness until at least model year 2022. Consideration of environmental impacts is inconsistent with these obligations and Congressional intent, and no further analysis pursuant to NEPA is required.

Still, NHTSA “may prepare an environmental assessment on any action in order to assist agency planning and decision making.”  83 When a Federal agency prepares an environmental assessment, the CEQ NEPA implementing regulations require it to (1) “[b]riefly provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact” and (2) “[b]riefly discuss the purpose and need for the proposed action, alternatives . . . , and the environmental impacts of the proposed action and alternatives, and include a listing of [a]gencies and persons consulted.”  84 Generally, based on the environmental assessment, the agency must make a determination to prepare an environmental impact statement or “prepare a finding of no significant impact if the [a]gency determines, based on the environmental assessment, not to prepare an environmental impact statement because the proposed action will not have significant effects.”  85 Although NHTSA concludes that a NEPA analysis is not required, this section may serve as the Agency's Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) for this interim final rule.

This interim final rule sets forth the purpose of and need for this action. In response to the Alliance Petition, NHTSA considered whether it is appropriate, pursuant to the Inflation Adjustment Act and EPCA (as amended by EISA), to increase the CAFE civil penalty rate beginning in model year 2022. The Alliance Petition cited cost, retroactivity, and lead time as reasons why a delay in effectiveness until model year 2022 is required. NHTSA considered the findings of this EA prior to deciding that the adjusted rate will go into effect beginning in model year 2022.

NHTSA considered a range of alternatives for this action, including the No Action Alternative of adjusting the CAFE civil penalty rate from $5.50 to $14 beginning in model year 2019 (as originally established by the December 2016 final rule), and the alternatives of applying the adjustment beginning in model years 2020, 2021, 2022, and 2023. This EA describes the potential environmental impacts associated with the various model years in comparison with each other.

Upon consideration of the information presented in this EA, NHTSA is deciding to apply the adjustment beginning in model year 2022 in this interim final rule. NHTSA is seeking comment on whether to instead apply the increase beginning in model year 2023, and commenters should consider NEPA in their discussions of such an approach.

NHTSA considered a range of alternatives for when to apply the inflation adjustment in the CAFE civil penalty rate from $5.50 to $14. For the reasons explained in the preamble, NHTSA anticipates no differences in environmental impacts associated with the alternatives of applying the adjustment beginning in model years 2019, 2020, 2021, or 2022. Vehicles for model years 2019 and 2020 have largely if not entirely been produced already, and many manufacturers are already selling model year 2021 vehicles. Since some manufacturers launch subsequent model year vehicles as early as the spring, it is reasonable to assume that model year 2022 vehicles will be launched in the coming months. It is impossible for manufacturers to change the design and manufacture of vehicles that are already on the market, and the logistical realities of the industry make it infeasible for manufacturers to change course in the middle of a model year that is already underway or just prior to the start of a model year. Imposing a higher penalty on manufacturers for vehicles that, at this point, cannot be manufactured with improved fuel economy and for which adjustment in production volumes costs manufacturers significantly more compared to the higher civil penalty rate would have no environmental benefit—only incurring costs to those manufacturers (which are likely to be passed on to consumers). In fact, imposing those costs on manufacturers now may make it even harder financially for those manufacturers to make further gains in fuel economy in the future, with less capital to invest in fuel-saving technology, design, marketing of the benefits, and production.

While this interim final rule adjusts the CAFE civil penalty rate beginning no earlier than model year 2022, NHTSA is seeking comment on whether to apply the adjustment beginning in model year 2023. Based on the information included in NHTSA's Final EA in its July 2019 rule, NHTSA tentatively expects that applying the adjustment beginning in model year 2023 would have a minimal environmental impact. NHTSA seeks comments on the environmental impacts of applying the adjustment beginning in model year 2023.

NHTSA and DOT have consulted with OMB and the U.S. Department of Justice and provided other Federal agencies with the opportunity to review and provide feedback on this rulemaking.

NHTSA has reviewed the information presented in this EA and concludes that the alternatives to adjust the CAFE civil penalty rate beginning in model years 2019, 2020, 2021, or 2022 all would have the same environmental impacts on the quality of the human environment (or the differences among alternatives would be de minimis ). Given the practical realities of the design and production process, the environmental impact of adjusting the CAFE civil penalty rate in model year 2022 is expected to be negligible as compared to the No Action Alternative. NHTSA has not made a final decision on whether to apply the adjustment beginning in model year 2023 and seeks comments on the environmental impacts of that alternative.

I have reviewed this EA. Based on the EA, I conclude that implementation of any of the action alternatives through model year 2022 (including the interim final rule) will not have a significant effect on the human environment and that a “finding of no significant impact” is appropriate. This statement constitutes the Agency's “finding of no significant impact,” and an environmental impact statement will not be prepared. 86 NHTSA will review comments regarding applying the adjustment beginning in model year 2023 as appropriate.

This rule does not have a preemptive or retroactive effect—specifically, it modifies a regulation to avoid having a retroactive effect. Judicial review of a rule based on this interim final rule may be obtained pursuant to 5 U.S.C. 702.

In accordance with the Paperwork Reduction Act of 1980, NHTSA states that there are no requirements for information collection associated with this rulemaking action.

Please note that anyone is able to search the electronic form of all comments received into any of DOT's dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477), or you may visit http://dms.dot.gov.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this action as a “major rule,” as defined by 5 U.S.C. 804(2). For the reasons explained above, NHTSA finds that notice and public comment are impracticable, unnecessary, and contrary to the public interest. NHTSA will submit a rule report to each House of the Congress and to the Comptroller General of the United States.

In consideration of the foregoing, 49 CFR part 578 is amended as set forth below.

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), enacted as part of the Bipartisan Budget Act of 2015, Public Law 114-74, sec. 701, 129 Stat. 584, 599-601, requires agencies to adjust their civil penalties for inflation annually, beginning on July 1, 2016, and no later than January 15 of every year thereafter. In accordance with the 2015 Act, annual inflation adjustments are to be based on the percent change between the Consumer Price Index for all Urban Consumers (CPI-U) for October of the previous year and the October CPI-U of the year before that. Penalty level adjustments should be rounded to the nearest dollar.

The statutory definition of civil monetary penalty covers various civil penalty provisions under the Rail (Part A); Motor Carriers, Water Carriers, Brokers, and Freight Forwarders (Part B); and Pipeline Carriers (Part C) provisions of the Interstate Commerce Act, as amended. The Board's civil (and criminal) penalty authority related to rail transportation appears at 49 U.S.C. 11901-11908. The Board's penalty authority related to motor carriers, water carriers, brokers, and freight forwarders appears at 49 U.S.C. 14901-14916. The Board's penalty authority related to pipeline carriers appears at 49 U.S.C. 16101-16106. 1 The Board has regulations at 49 CFR part 1022 that codify the method set forth in the 2015 Act for annually adjusting for inflation the civil monetary penalties within the Board's jurisdiction.

As set forth in this final rule, the Board is amending 49 CFR part 1022 to make an annual inflation adjustment to the civil monetary penalties in conformance with the requirements of the 2015 Act. The adjusted penalties set forth in the rule will apply only to violations that occur after the effective date of this regulation.

In accordance with the 2015 Act, the annual adjustment adopted here is calculated by multiplying each current penalty by the cost-of-living adjustment factor of 1.01182, which reflects the percentage change between the October 2020 CPI-U (260.388) and the October 2019 CPI-U (257.346). The table at the end of this decision shows the statutory citation for each civil penalty, a description of the provision, the adjusted statutory civil penalty level for 2020, and the adjusted statutory civil penalty level for 2021.

The final rule set forth at the end of this decision is being issued without notice and comment pursuant to the rulemaking provision of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), which does not require that process “when the agency for good cause finds” that public notice and comment are “unnecessary.” Here, Congress has mandated that the agency make an annual inflation adjustment to its civil monetary penalties. The Board has no discretion to set alternative levels of adjusted civil monetary penalties, because the amount of the inflation adjustment must be calculated in accordance with the statutory formula. Given the absence of discretion, the Board has determined that there is good cause to promulgate this rule without soliciting public comment and to make this regulation effective immediately upon publication.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601-612, generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because the Board has determined that notice and comment are not required under the APA for this rulemaking, the requirements of the RFA do not apply.

Pursuant to the Congressional Review Act, 5 U.S.C. 801-808, the Office of Information and Regulatory Affairs has designated this rule as a non-major rule, as defined by 5 U.S.C. 804(2).

This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521.

It is ordered:

1. The Board amends its rules as set forth in this decision. Notice of the final rule will be published in the Federal Register .

2. This decision is effective on January 14, 2021.

For the reasons set forth in the preamble, part 1022 of title 49, chapter X, of the Code of Federal Regulations is amended as follows:

Section 118 of the MMPA requires NMFS to place all U.S. commercial fisheries into one of three categories based on the level of incidental mortality and serious injury of marine mammals occurring in each fishery (16 U.S.C. 1387(c)(1)). The classification of a fishery on the LOF determines whether participants in that fishery may be required to comply with certain provisions of the MMPA, such as registration, observer coverage, and take reduction plan requirements. NMFS must reexamine the LOF annually, considering new information in the Marine Mammal Stock Assessment Reports (SARs) and other relevant sources, and publish in the Federal Register any necessary changes to the LOF after notice and opportunity for public comment (16 U.S.C. 1387 (c)(1)(C)).

The definitions for the fishery classification criteria can be found in the implementing regulations for section 118 of the MMPA (50 CFR 229.2). The criteria are also summarized here.

The fishery classification criteria consist of a two-tiered, stock-specific approach that first addresses the total impact of all fisheries on each marine mammal stock and then addresses the impact of individual fisheries on each stock. This approach is based on consideration of the rate, in numbers of animals per year, of incidental mortalities and serious injuries of marine mammals due to commercial fishing operations relative to the potential biological removal (PBR) level for each marine mammal stock. The MMPA (16 U.S.C. 1362 (20)) defines the PBR level as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (OSP). This definition can also be found in the implementing regulations for section 118 of the MMPA (50 CFR 229.2).

Tier 1: Tier 1 considers the cumulative fishery mortality and serious injury for a particular stock. If the total annual mortality and serious injury of a marine mammal stock, across all fisheries, is less than or equal to 10 percent of the PBR level of the stock, all fisheries interacting with the stock will be placed in Category III (unless those fisheries interact with other stock(s) for which total annual mortality and serious injury is greater than 10 percent of PBR). Otherwise, these fisheries are subject to the next tier (Tier 2) of analysis to determine their classification.

Tier 2: Tier 2 considers fishery-specific mortality and serious injury for a particular stock.

Category I: Annual mortality and serious injury of a stock in a given fishery is greater than or equal to 50 percent of the PBR level ( i.e., frequent incidental mortality and serious injury of marine mammals).

Category II: Annual mortality and serious injury of a stock in a given fishery is greater than 1 percent and less than 50 percent of the PBR level ( i.e., occasional incidental mortality and serious injury of marine mammals).

Category III: Annual mortality and serious injury of a stock in a given fishery is less than or equal to 1 percent of the PBR level ( i.e., a remote likelihood of or no known incidental mortality and serious injury of marine mammals).

Additional details regarding how the categories were determined are provided in the preamble to the final rule implementing section 118 of the MMPA (60 FR 45086; August 30, 1995).

Because fisheries are classified on a per-stock basis, a fishery may qualify as one category for one marine mammal stock and another category for a different marine mammal stock. A fishery is typically classified on the LOF at its highest level of classification ( e.g., a fishery qualifying for Category III for one marine mammal stock and for Category II for another marine mammal stock will be listed under Category II). Stocks driving a fishery's classification are denoted with a superscript “1” in Tables 1 and 2.

The tier analysis requires a minimum amount of data, and NMFS does not have sufficient data to perform a tier analysis on certain fisheries. Therefore, NMFS has classified certain fisheries by analogy to other fisheries that use similar fishing techniques or gear that are known to cause mortality or serious injury of marine mammals, or according to factors discussed in the final LOF for 1996 (60 FR 67063; December 28, 1995) and listed in the regulatory definition of a Category II fishery. In the absence of reliable information indicating the frequency of incidental mortality and serious injury of marine mammals by a commercial fishery, NMFS will determine whether the incidental mortality or serious injury is “occasional” by evaluating other factors such as fishing techniques, gear used, methods used to deter marine mammals, target species, seasons and areas fished, qualitative data from logbooks or fishermen reports, stranding data, and the species and distribution of marine mammals in the area, or at the discretion of the Assistant Administrator for Fisheries (50 CFR 229.2).

Further, eligible commercial fisheries not specifically identified on the LOF are deemed to be Category II fisheries until the next LOF is published (50 CFR 229.2).

The LOF includes a list of marine mammal species and/or stocks incidentally killed or injured in each commercial fishery. The list of species and/or stocks incidentally killed or injured includes “serious” and “non-serious” documented injuries as described later in the List of Species and/or Stocks Incidentally Killed or Injured in the Pacific Ocean and List of Species and/or Stocks Incidentally Killed or Injured in the Atlantic Ocean, Gulf of Mexico, and Caribbean sections. To determine which species or stocks are included as incidentally killed or injured in a fishery, NMFS annually reviews the information presented in the current SARs and injury determination reports. SARs are brief reports summarizing the status of each stock of marine mammals occurring in waters under U.S. jurisdiction, including information on the identity and geographic range of the stock, population statistics related to abundance, trend, and annual productivity, notable habitat concerns, and estimates of human-caused mortality and serious injury (M/SI) by source. The SARs are based upon the best available scientific information and provide the most current and inclusive information on each stock's PBR level and level of interaction with commercial fishing operations. The best available scientific information used in the SARs and reviewed for the 2021 LOF generally summarizes data from 2013-2017. NMFS also reviews other sources of new information, including injury determination reports, bycatch estimation reports, observer data, logbook data, stranding data, disentanglement network data, fishermen self-reports ( i.e., MMPA mortality/injury reports), and anecdotal reports from that time period. In some cases, more recent information may be available and used in the LOF.

For fisheries with observer coverage, species or stocks are generally removed from the list of marine mammal species and/or stocks incidentally killed or injured if no interactions are documented in the 5-year timeframe summarized in that year's LOF. For fisheries with no observer coverage and for observed fisheries with evidence indicating that undocumented interactions may be occurring ( e.g., fishery has low observer coverage and stranding network data include evidence of fisheries interactions that cannot be attributed to a specific fishery) species and stocks may be retained for longer than 5 years. For these fisheries, NMFS will review the other sources of information listed above and use its discretion to decide when it is appropriate to remove a species or stock.

The best available information on the level of observer coverage and the spatial and temporal distribution of observed marine mammal interactions is presented in the SARs. Data obtained from the observer program and observer coverage levels are important tools in estimating the level of marine mammal mortality and serious injury in commercial fishing operations. Starting with the 2005 SARs, each Pacific and Alaska SAR includes an appendix with detailed descriptions of each Category I and II fishery on the LOF, including the observer coverage in those fisheries. For Atlantic fisheries, this information can be found in the LOF Fishery Fact Sheets. The SARs do not provide detailed information on observer coverage in Category III fisheries because, under the MMPA, Category III fisheries are not required to accommodate observers aboard vessels due to the remote likelihood of mortality and serious injury of marine mammals. Fishery information presented in the SARs' appendices and other resources referenced during the tier analysis may include: Level of observer coverage; target species; levels of fishing effort; spatial and temporal distribution of fishing effort; characteristics of fishing gear and operations; management and regulations; and interactions with marine mammals. Copies of the SARs are available on the NMFS Office of Protected Resources website at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-stock-assessment-reports-region. Information on observer coverage levels in Category I, II, and III fisheries can be found in the fishery fact sheets on the NMFS Office of Protected Resources' website: https://www.fisheries.noaa.gov/national/marine-mammal-protection/list-fisheries-summary-tables. Additional information on observer programs in commercial fisheries can be found on the NMFS National Observer Program's website: https://www.fisheries.noaa.gov/national/fisheries-observers/national-observer-program.

The LOF includes three tables that list all U.S. commercial fisheries by Category. Table 1 lists all of the commercial fisheries in the Pacific Ocean (including Alaska); Table 2 lists all of the commercial fisheries in the Atlantic Ocean, Gulf of Mexico, and Caribbean; and Table 3 lists all U.S. authorized commercial fisheries on the high seas. A fourth table, Table 4, lists all commercial fisheries managed under applicable TRPs or take reduction teams (TRT).

Beginning with the 2009 LOF, NMFS includes high seas fisheries in Table 3 of the LOF, along with the number of valid High Seas Fishing Compliance Act (HSFCA) permits in each fishery. As of 2004, NMFS issues HSFCA permits only for high seas fisheries analyzed in accordance with the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). The authorized high seas fisheries are broad in scope and encompass multiple specific fisheries identified by gear type. For the purposes of the LOF, the high seas fisheries are subdivided based on gear type ( e.g., trawl, longline, purse seine, gillnet, troll, etc.) to provide more detail on composition of effort within these fisheries. Many fisheries operate in both U.S. waters and on the high seas, creating some overlap between the fisheries listed in Tables 1 and 2 and those in Table 3. In these cases, the high seas component of the fishery is not considered a separate fishery, but an extension of a fishery operating within U.S. waters (listed in Table 1 or 2). NMFS designates those fisheries in Tables 1, 2, and 3 with an asterisk (*) after the fishery's name. The number of HSFCA permits listed in Table 3 for the high seas components of these fisheries operating in U.S. waters does not necessarily represent additional effort that is not accounted for in Tables 1 and 2. Many vessels/participants holding HSFCA permits also fish within U.S. waters and are included in the number of vessels and participants operating within those fisheries in Tables 1 and 2.

HSFCA permits are valid for 5 years, during which time Fishery Management Plans (FMPs) can change. Therefore, some vessels/participants may possess valid HSFCA permits without the ability to fish under the permit because it was issued for a gear type that is no longer authorized under the most current FMP. For this reason, the number of HSFCA permits displayed in Table 3 is likely higher than the actual U.S. fishing effort on the high seas. For more information on how NMFS classifies high seas fisheries on the LOF, see the preamble text in the final 2009 LOF (73 FR 73032; December 1, 2008). Additional information about HSFCA permits can be found at https://www.fisheries.noaa.gov/permit/high-seas-fishing-permits.

Starting with the 2010 LOF, NMFS developed summary documents, or fishery fact sheets, for each Category I and II fishery on the LOF. These fishery fact sheets provide the full history of each Category I and II fishery, including: When the fishery was added to the LOF; the basis for the fishery's initial classification; classification changes to the fishery; changes to the list of species and/or stocks incidentally killed or injured in the fishery; fishery gear and methods used; observer coverage levels; fishery management and regulation; and applicable TRPs or TRTs, if any. These fishery fact sheets are updated after each final LOF and can be found under “How Do I Find Out if a Specific Fishery is in Category I, II, or III?” on the NMFS Office of Protected Resources' website: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-protection-act-list-fisheries, linked to the “List of Fisheries Summary” table. NMFS is developing similar fishery fact sheets for each Category III fishery on the LOF. However, due to the large number of Category III fisheries on the LOF and the lack of accessible and detailed information on many of these fisheries, the development of these fishery fact sheets is taking significant time to complete. NMFS began posting Category III fishery fact sheets online with the LOF for 2016.

Owners of vessels or gear engaging in a Category I or II fishery are required under the MMPA (16 U.S.C. 1387(c)(2)), as described in 50 CFR 229.4, to register with NMFS and obtain a marine mammal authorization to lawfully take non-endangered and non-threatened marine mammals incidental to commercial fishing operations. Owners of vessels or gear engaged in a Category III fishery are not required to register with NMFS or obtain a marine mammal authorization.

NMFS has integrated the MMPA registration process, implemented through the Marine Mammal Authorization Program (MMAP), with existing state and Federal fishery license, registration, or permit systems for Category I and II fisheries on the LOF. Participants in these fisheries are automatically registered under the MMAP and are not required to submit registration or renewal materials.

In the Pacific Islands, West Coast, and Alaska regions, NMFS will issue vessel or gear owners an authorization certificate via U.S. mail or with their state or Federal license or permit at the time of issuance or renewal. In the Greater Atlantic and Southeast Regions, NMFS will issue vessel or gear owners an authorization certificate via U.S. mail automatically at the beginning of each calendar year.

Vessel or gear owners who participate in fisheries in these regions and have not received authorization certificates by the beginning of the calendar year, or with renewed fishing licenses, must contact the appropriate NMFS Regional Office (see FOR FURTHER INFORMATION ). Authorization certificates may also be obtained by visiting the MMAP website https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-authorization-program#obtaining-a-marine-mammal-authorization-certificate.

The authorization certificate, or a copy, must be on board the vessel while it is operating in a Category I or II fishery, or for non-vessel fisheries, in the possession of the person in charge of the fishing operation (50 CFR 229.4(e)). Although efforts are made to limit the issuance of authorization certificates to only those vessel or gear owners that participate in Category I or II fisheries, not all state and Federal license or permit systems distinguish between fisheries as classified by the LOF. Therefore, some vessel or gear owners in Category III fisheries may receive authorization certificates even though they are not required for Category III fisheries.

Individuals fishing in Category I and II fisheries for which no state or Federal license or permit is required must register with NMFS by contacting their appropriate Regional Office (see ADDRESSES ).

In recognition of logistical challenges with certificate issuance related to the ongoing COVID-19 pandemic, the MMAP certificate issued in 2020 remains in effect, valid through December 31, 2021, for vessel or gear owners participating in all Category I and II fisheries as of the final 2021 LOF. 2020 certificates may be retained or replacements downloaded from https://go.usa.gov/xArUW. Vessel or gear owners participating in previous Category III fisheries reclassified as a Category II fishery in this final 2021 LOF can obtain their MMAP certificate on our website https://go.usa.gov/xArUW.

In accordance with the MMPA (16 U.S.C. 1387(e)) and 50 CFR 229.6, any vessel owner or operator, or gear owner or operator (in the case of non-vessel fisheries), participating in a fishery listed on the LOF must report to NMFS all incidental mortalities and injuries of marine mammals that occur during commercial fishing operations, regardless of the category in which the fishery is placed (I, II, or III) within 48 hours of the end of the fishing trip or, in the case of non-vessel fisheries, fishing activity. “Injury” is defined in 50 CFR 229.2 as a wound or other physical harm. In addition, any animal that ingests fishing gear or any animal that is released with fishing gear entangling, trailing, or perforating any part of the body is considered injured, regardless of the presence of any wound or other evidence of injury, and must be reported.

Mortality/injury reporting forms and instructions for submitting forms to NMFS can be found at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-authorization-program#reporting-a-death-or-injury-of-a-marine-mammal-during-commercial-fishing-operations or by contacting the appropriate regional office (see FOR FURTHER INFORMATION ). Forms may be submitted via any of the following means: (1) Online using the electronic form; (2) emailed as an attachment to nmfs.mireport@noaa.gov; (3) faxed to the NMFS Office of Protected Resources at 301-713-0376; or (4) mailed to the NMFS Office of Protected Resources (mailing address is provided on the postage-paid form that can be printed from the web address listed above). Reporting requirements and procedures are found in 50 CFR 229.6.

Individuals participating in a Category I or II fishery are required to accommodate an observer aboard their vessel(s) upon request from NMFS. MMPA section 118 states that the Secretary is not required to place an observer on a vessel if the facilities for quartering an observer or performing observer functions are so inadequate or unsafe that the health or safety of the observer or the safe operation of the vessel would be jeopardized; thereby authorizing the exemption of vessels too small to safely accommodate an observer from this requirement. However, U.S. Atlantic Ocean, Caribbean, or Gulf of Mexico large pelagics longline vessels operating in special areas designated by the Pelagic Longline Take Reduction Plan implementing regulations (50 CFR 229.36(d)) will not be exempted from observer requirements, regardless of their size. Observer requirements are found in 50 CFR 229.7.

Table 4 provides a list of fisheries affected by TRPs and TRTs. TRP regulations are found at 50 CFR 229.30 through 229.37. A description of each TRT and copies of each TRP can be found at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-take-reduction-plans-and-teams. It is the responsibility of fishery participants to comply with applicable take reduction regulations.

Information regarding the LOF and the MMAP, including registration procedures and forms; current and past LOFs; descriptions of each Category I and II fishery and some Category III fisheries; observer requirements; and marine mammal mortality/injury reporting forms and submittal procedures; may be obtained at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-protection-act-list-fisheries, or from any NMFS Regional Office at the addresses listed below:

NMFS, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930-2298, Attn: Allison Rosner;

NMFS, Southeast Region, 263 13th Avenue South, St. Petersburg, FL 33701, Attn: Jessica Powell;

NMFS, West Coast Region, Long Beach Office, 501 W. Ocean Blvd., Suite 4200, Long Beach, CA 90802-4213, Attn: Dan Lawson;

NMFS, Alaska Region, Protected Resources, P.O. Box 22668, 709 West 9th Street, Juneau, AK 99802, Attn: Suzie Teerlink; or

NMFS, Pacific Islands Regional Office, Protected Resources Division, 1845 Wasp Blvd., Building 176, Honolulu, HI 96818, Attn: Diana Kramer.

NMFS reviewed the marine mammal incidental mortality and serious injury information presented in the SARs for all fisheries to determine whether changes in fishery classification are warranted. The SARs are based on the best scientific information available at the time of preparation, including the level of mortality and serious injury of marine mammals that occurs incidental to commercial fishery operations and the PBR levels of marine mammal stocks. The information contained in the SARs is reviewed by regional Scientific Review Groups (SRGs) representing Alaska, the Pacific (including Hawaii), and the U.S. Atlantic, Gulf of Mexico, and Caribbean. The SRGs were established by the MMPA to review the science that informs the SARs, and to advise NMFS on marine mammal population status, trends, and stock structure, uncertainties in the science, research needs, and other issues.

NMFS also reviewed other sources of new information, including marine mammal stranding and entanglement data, observer program data, fishermen self-reports, reports to the SRGs, conference papers, FMPs, and ESA documents.

The LOF for 2021 was based on, among other things, stranding data; fishermen self-reports; and SARs, primarily the 2019 SARs, which are based on data from 2013-2017. The SARs referenced in this LOF include: 2016 (82 FR 29039; June 27, 2017), 2018 (84 FR 28489; June 19, 2019), and 2019 (84 FR 65353; November 27, 2019). The SARs are available at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-stock-assessment-reports-region.

NMFS received nine comment letters on the proposed LOF for 2021 (85 FR 59258; September 21, 2020). Comments were received from members of the public, Atlantic Offshore Lobstermen's Association (AOLA), Freezer Longline Coalition (FLC), Hawaii Longline Association (HLA), Maine Lobstermen's Association (MLA), Massachusetts Division of Marine Fisheries (MA DMF), Marine Mammal Commission (Commission) and Whale Safe USA. Responses to substantive comments are below; comments on actions not related to the LOF are not included.

Comment 1: A commenter recommends that NMFS require Category III fisheries to accommodate observers aboard vessels in order to expand data collection on marine mammal bycatch in fisheries.

Response: MMPA section 118 requires individuals participating in a Category I or II fishery to accommodate an observer aboard their vessel(s) upon request from NMFS. In addition, MMPA section 118(d)(7) provides NMFS, with the consent by the vessel owner, the ability to place an observer on board a vessel participating in Category III fisheries (50 CFR 229.7(d)). The MMPA and implementing regulations (50 CFR 229.6) also include a marine mammal mortality and injury reporting requirement for all Category I, II and III fisheries. Any vessel owner or operator participating in a fishery listed on the LOF must report to NMFS all incidental mortalities and injuries of marine mammals that occur during commercial fishing operations within 48 hours of the end of the fishing trip.

Comment 2: FLC recommends NMFS reclassify the AK Bering Sea, Aleutian Islands (BSAI) Pacific cod longline fishery from a Category II to Category III. They note that the following marine mammal stocks are included on the list of species/stocks incidentally killed or injured in the BSAI Pacific cod longline fishery: Killer whale (Eastern North Pacific AK resident); killer whale (Gulf of Alaska, BSAI transient); Northern fur seal (Eastern Pacific); spotted seal (AK) and Steller sea lion (Western U.S). FLC provides evidence that from 2013 through 2017 the only marine mammal stock incidentally killed or injured in the BSAI Pacific cod longline fishery was the Western U.S. stock of Steller sea lions and these did not result in annual M/SI greater than 1 percent of the stock's PBR level.

FLC also states that the BSAI Pacific cod longline fishery is currently classified as a Category II based on a killer whale M/SI in 2012. They note that this M/SI is assigned to both the resident and transient stocks of killer whales and is outside the 5 year timeframe (2013-2017) of the 2021 LOF. Therefore, FLC recommends that the BSAI Pacific cod longline fishery be reclassified as a Category III fishery.

Response: NMFS reviewed the information provided and agrees with FLC. One killer whale (Gulf of Alaska, BSAI transient stock) M/SI was driving the Category II classification of the BSAI Pacific cod longline fishery. This killer whale M/SI occurred in 2012, and no additional M/SI have been observed or reported for the 2013-2017 data analysis timeframe for this fishery. Therefore, NMFS reclassifies the AK BSAI Pacific cod longline fishery from a Category II to a Category III fishery in this final rule. NMFS also removes both the Eastern North Pacific AK resident stock and Gulf of Alaska, BSAI transient stock of killer whales from the list of species and/or stocks incidentally killed or injured in the BSAI Pacific cod longline fishery.

Comment 3: FLC recommends NMFS re-evaluate how a single marine mammal M/SI is assigned to multiple stocks when stock ranges overlap. They state that the M/SI should be distributed between stocks based on the relative proportion of the population of the two stocks combined.

As noted in the 2016 SAR (Muto et al., 2017), the 2012 killer whale M/SI in the BSAI Pacific cod longline fishery was assigned to both the resident and transient stocks of killer whale, given no genetic samples were collected and the overlap in the range of the two stocks in Alaska waters. FLC further states that NMFS attributes the single M/SI to both stocks equally. However, the probability of encountering either stock is not 100 percent, but proportional to the relative population of the stocks throughout the range. The commenter notes that revising the single M/SI between both killer whale stocks (based on probability of encounter) would distribute the single 2012 M/SI in the BSAI Pacific cod longline fishery from 100 percent for both stocks to 80 percent to the resident stock and 20 percent to the transient stock.

Response: The SARs are drafted according to NMFS' “Guidelines for Preparing Stock Assessment Reports Pursuant to the 1994 Amendments to the MMPA” (NMFS 2016, 02-204-01). This provides directives for consistently assigning M/SI to stocks, including times when the M/SI is documented in an area of overlapping stocks. Because there were no data to indicate specific stock or reliable data that could be used to partition the 2012 killer whale M/SI, the M/SI was assigned to both stocks as prescribed by NMFS' “Guidelines for Preparing Stock Assessment Reports Pursuant to the 1994 Amendments to the MMPA”.

Comment 4: FLC requests that NMFS update the LOF fishery fact sheet for the Category II BSAI Pacific cod longline fishery. The LOF fishery fact sheet for the BSAI Pacific cod longline fishery has an incorrect description for the observer coverage in both the catcher processor and catcher vessel longline sectors. The description of observer coverage included in the LOF fishery fact sheet is outdated and does not reflect the Observer Program structuring for catcher processor and catcher vessels sectors since 2012.

Response: NMFS thanks FLC for bringing to our attention that the observer coverage information in the AK BSAI Pacific cod longline fishery fact sheet on NMFS' website needs updating. The fishery fact sheets summarize LOF classification information for the public and we will review and correct this error.

Comment 5: The Commission restates a previous comment and recommends NMFS reclassify both the Category II SE Alaska salmon drift gillnet and Yakutat salmon set gillnet fisheries as Category I fisheries. The Commission previously noted that the 2016 SAR for the Southeast Alaska stock of harbor porpoise reported a population-size estimate of 975 and an estimated minimum population size (Nmin) of 896, which produced a PBR of 8.9 animals. That 2016 SAR also reported a total annual M/SI estimate of 34 animals for the two fisheries combined. The Commission states that the estimated annual M/SI has not changed, and although the stock's PBR increased to 12 in the 2019 SAR, fishery-related M/SI still exceed PBR by nearly threefold.

The Commission states that the clearer case can be made for reclassifying the Category II SE Alaska salmon drift gillnet fishery as a Category I fishery. They note that the estimated annual harbor porpoise M/SI in the SE Alaska salmon drift gillnet fishery included the 2019 SAR is 12 animals which equals PBR for the stock and exceeds the Category I classification threshold of 50 percent of PBR. The Commission continues to state that this M/SI estimate is based on data collected in salmon management areas 6-8 in 2012 and 2013, and is a conservative estimate since salmon management areas 6-8 comprise only a small portion of the total area surveyed.

The Commission notes that is more difficult to address the harbor porpoise M/SI in Category II Yakutat salmon set gillnet because there is a geographical disconnect between where observer data was collected and the population surveys were conducted. Thus, the comparison of the estimated annual M/SI does not provide a meaningful basis for classifying this fishery, given the likely population structure found in the Southeast Alaska (SEAK) harbor porpoise stock, as described in the 2019 SAR. Therefore, the Commission reiterates its recommendation that NMFS reclassify the SE Alaska salmon drift gillnet as a Category I fishery.

Response: This comment has been addressed previously (see 85 FR 21079, April 16, 2020). The PBR level for the SEAK harbor porpoise stock was estimated based on a survey that covered only a portion of the currently-recognized distribution of this stock, and it included commercial fishery M/SI that occurred far north of the surveyed areas. Over the last year, NMFS has made substantial progress in analyzing genetic data to resolve stock structure of harbor porpoise in Southeast Alaska. Once finalized, the analysis of these data will be helpful in addressing management concerns related to SEAK harbor porpoise and effects from commercial fishing. NMFS continues to pursue options for additional observer coverage to collect more recent and more geographically comprehensive data on mortality in Alaska's state fisheries, and we will prioritize observation of the Southeast Alaska drift gillnet fishery. For the 2021 LOF, NMFS retains the Category II classification for the Yakutat salmon set gillnet and SE Alaska salmon drift gillnet fisheries until more data are available.

Comment 6: HLA restates a previous comment recommending NMFS remove the Main Hawaiian Islands (MHI) insular and Northwestern Hawaiian Islands (NWHI) stocks of false killer whales from the list of species and/or stocks incidentally killed or injured in the Category I Hawaii deep-set longline fishery. HLA notes that (a) the False Killer Whale Take Reduction Plan (FKWTRP) closed the deep-set longline fishery for almost the entire range of the MHI insular stock, (b) since this change was made in 2013 there have been no false killer whale interactions in the fishery, and (c) there has never been a deep-set longline fishery interaction in the very small area of the stocks' range where the fishery operates. The commenter also states that no information has been presented to the False Killer Whale TRT or the Pacific Scientific Review Group suggesting any false killer whale interactions in the deep-set fishery can reliably be attributed to the Insular or NWHI stocks of false killer whales. HLA requests that NMFS remove the MHI insular and NWHI stocks of false killer whales from the list of species and/or stocks incidentally killed or injured in the Category I Hawaii deep-set longline fishery.

Response: This comment has been addressed previously (see 84 FR 22051, May 16, 2019; 85 FR 21079, April 16, 2020). The MHI insular stock of false killer whales have been documented via telemetry to move far enough offshore to reach longline fishing areas (Bradford et al., 2015). The MHI insular, Hawaii pelagic, and NWHI stocks have partially overlapping ranges. MHI insular false killer whales have been satellite tracked as far as 115 km from the MHI, while pelagic stock animals have been tracked to within 11 kilometers (km) of the MHI and throughout the NWHI. Thus, M/SI of false killer whales of unknown stock within the stock overlap zones must be prorated to MHI insular, pelagic, or NWHI stocks. Annual bycatch estimates are prorated using a process outlined in detail in the SARs, which account for M/SI that occur within the MHI-pelagic or NWHI-pelagic overlap zones.

For observed fisheries with evidence indicating that undocumented interactions may be occurring ( e.g., fishery has evidence of fisheries interactions that cannot be attributed to a specific fishery, and stranding network data include evidence of fisheries interactions that cannot be attributed to a specific fishery), stocks may be retained on the LOF for longer than 5 years. For these fisheries, NMFS will review the other sources of relevant information to determine when it is appropriate to remove a species or stock from the LOF. As described in the 2019 LOF (84 FR 22051, May 16, 2019), six false killer whale M/SI incidental to the deep-set longline fishery were observed inside the exclusive economic zone (EEZ) around Hawaii, including three that occurred close to the outer boundary of the Main Hawaiian Islands Longline Fishing Prohibited Area, in close proximity to the outer boundary of the MHI Insular false killer whale stocks' range. Also, MHI Insular false killer whale range overlaps with areas that are open to deep-set longline fishing and MHI Insular false killer whales have been documented with injuries consistent with fisheries interactions that have not been attributed to a specific fishery (Baird et al., 2014). Additionally, in August 2020, NMFS reopened the Southern Exclusion Zone to Hawaii deep-set longline fishing (85 FR 50959, August 19, 2020).

In addition to the SARs, NMFS also reviews other sources of new information for the LOF, including injury determination reports, bycatch estimation reports, and observer data. In some cases, more recent information may be available and used in the LOF. In January 2019, there was an observed mortality of a false killer whale incidental to the Hawaii deep-set longline fishery that occurred within the range of the NWHI stock. Therefore, NMFS retains both the MHI insular and NWHI false killer whale stocks on the list of species and/or stocks incidentally killed or injured in the Category I Hawaii deep-set longline fishery.

Comment 7: HLA restates a previous comment opposing the inclusion of the Hawaii stocks of Kogia species (pygmy or dwarf sperm whales) on the list of species and/or stocks incidentally killed or injured in the Category I HI deep-set longline fishery. HLA requests that NMFS remove Kogia species from the list of species and/or stocks incidentally killed or injured in the deep-set longline fishery because SARs for the two stock does not include M/SI in the deep-set fishery.

Response: This comment has been addressed previously (see 84 FR 22051, May 16, 2019). The 2021 LOF generally summarizes data from 2013-2017, and in addition to the SARs, the LOF also reviews other sources of information, including injury determination reports and observer data. In February 2014, there was an observed interaction with a pygmy sperm whale ( Kogia breviceps ) in the Category I HI deep-set longline fishery. Therefore, NMFS retains Kogia on the list of species and/or stocks incidentally killed or injured in the Category I HI deep-set longline fishery.

Comment 8: HLA recommends NMFS remove the Central North Pacific humpback whale stock from the list of species and/or stocks incidentally killed or injured in the Category II HI shallow-set longline fishery. HLA states that the proposed 2021 LOF includes the Central North Pacific stock of humpback whales on the list of species and/or stocks incidentally killed or injured from the Category II HI shallow-set longline fishery, but the most recent SAR does not identify M/SI in the shallow-set fishery. The HI shallow-set longline fishery has 100 percent observer coverage and therefore, the Central North Pacific stock of humpback whale stock should be removed the list of species and/or stocks incidentally killed or injured in the Category II HI shallow-set longline fishery.

Response: In addition to the M/SI included in the SARs, the LOF references data from injury determination reports, bycatch estimation reports, observer data, logbook data, stranding data, disentanglement network data, fishermen self-reports, and anecdotal reports. In March 2015, there was an observed humpback whale, Central North Pacific stock, injury in the Category II Hawaii shallow-set longline fishery. The injury was determined to be non-serious. Due to the observed injury, the Central North Pacific stock of humpback whale is retained on the list of species and/or stocks incidentally killed or injured in the Category II HI shallow-set longline fishery.

Comment 9: The Commission recommends that NMFS reclassify the Category III Hawaii troll fishery as a Category II fishery. The Commission states that NMFS proposed to reclassify the Category III Hawaii charter vessel fishery, which is primarily a troll fishery, and the HI trolling, rod and reel fisheries as Category II fisheries in the 2012 LOF (76 FR 37716, June 28, 2011). In the proposed rule, NMFS based the proposed change on reports of hooking spotted dolphins, and information on the prevalence of vessels from these fisheries targeting Pantropical spotted dolphin pods. NMFS estimated that M/SI would be, at a minimum, approximately 2 percent of PBR, justifying the Category II classifications for both fisheries. The Commission notes the final 2012 LOF (76 FR 73912, November 29, 2011) did not finalize the fishery proposed reclassifications.

The Commission states that implementing regulations allow for NMFS, in the absence of reliable estimates of the M/SI, to determine whether M/SI occurs `not at all or with a remote likelihood' (Category III), `occasionally' (Category II), or `frequently' based on analogy to similar fisheries. This is the approach NMFS took this approach in 2012 proposed LOF.

The Commission also notes that the case for reclassifying the troll fisheries as Category II fisheries has strengthened since serious injuries due to hooking or entanglement in fishing line have been documented, and reliable estimates of rates of troll vessels fishing in and through spotted dolphin groups have been published (Baird and Webster, 2020). In addition, the spotted dolphin stock considered in 2011, was later split into four stocks (three insular and one pelagic) in the 2013 SAR, and each of the insular stocks is likely to have a smaller PBR than the estimates used in 2012 proposed LOF. Given NMFS's assessment in 2012 proposed LOF that interactions were likely `occasional', combined with more recent information, the Commission recommends that NMFS reclassify the Category III Hawaii troll fishery as a Category II fishery.

Response: As noted by the Commission, there are four stocks of pantropical spotted dolphins in the Hawaii Islands region: Oahu stock, 4-Islands stock, Hawaii Island stock, and Hawaii pelagic stock. In 2014, one pantropical spotted dolphin from the Hawaii Island stock was observed hooked above the jaw and trailing 8-10 feet of fishing line (Bradford and Lyman, 2018). In 2017, a spotted dolphin from the 4-Islands stock was observed with a band of debris around its rostrum preventing it from opening its mouth (Bradford and Lyman, 2019). Both of these injuries are considered serious injuries and the responsible fishery is not known for either case. In addition, of the four pantropical spotted dolphin stocks, only the Hawaii pelagic stock has a minimum population estimate and resulting PBR.

Without known M/SI attributed to the HI troll fishery, and a minimum population estimate and PBR for only one of the four stocks, we evaluated classification of the fishery by analogy. However, in reviewing available data, there are no documented mortalities or injuries of pantropical spotted dolphins in similar fisheries. There are no current data on interactions with pantropical dolphins (or other dolphin species) in any other Pacific Ocean commercial troll fisheries. In other stocks of pantropical dolphins, the only documented fishery-related M/SI in the Northern Gulf of Mexico stock of pantropical are incidental to the pelagic longline fishery (2015 SAR). The Western North Atlantic stock of pantropical spotted dolphins' total annual estimated fishery-related M/SI is presumed to be zero, as there were no reports of mortalities or serious injuries (2019 SAR). There are no documented interactions with pantropical spotted dolphins in commercial troll fisheries on the high seas (2020 LOF). Therefore, the HI troll fishery cannot be classified by analogy to other fisheries that use similar fishing techniques that are known to cause mortality or serious injury of pantropical spotted dolphins.

The mentioned study, (Baird and Webster, 2020) presented findings on the magnitude and nature of associations between fishing vessels and pantropical spotted dolphin stocks. The study did not estimate mortality or injury rates incidental to fisheries. Results of the study indicated that there is a high frequency of associations between troll and rod and reel fishing, and pantropical spotted dolphins, and in particular with the Hawaii Island stock. This information suggests hookings and/or entanglements may occur, and the fishing technique of trolling through groups and repositioning presents a heightened risk of hooking or entanglement to pantropical spotted dolphins. However, this information alone does not provide sufficient evidence with which to conclude that spotted dolphins are being seriously injured or killed on an “occasional basis” as necessary for a Category II fishery classification. Therefore, NMFS is retaining the Category III classification of the Hawaii troll fishery.

Comment 10: MLA states that NMFS has the flexibility to consider a variety of criteria, such as differences in gear and fishing techniques, and the distribution of endangered stocks relative to individual fisheries when classifying fisheries on the LOF. The commenter notes that the Maine state waters lobster fishery is managed and enforced by the state of Maine. While the Federal waters portion of the Maine lobster fishery is managed through the Atlantic States Marine Fisheries Commission as part of Lobster Management Area 1, it is also subject to further regulation and enforcement by the state of Maine through the Lobster Management Policy Councils. In addition, Maine's state and Federal waters lobstermen must declare a lobster zone and are required to fish the majority of gear in their home zone, limiting the spatial footprint of where individual lobstermen can set gear. MLA states that this requirement differentiates the Maine lobster fishery from all other lobster fisheries throughout the Northeast and mid-Atlantic.

Response: NMFS agrees that the Agency has the flexibility to separate out individual fisheries where it is appropriate; however, the commenter has not presented adequate information to substantiate any difference in risk that Maine state and Federal lobster fisheries pose to North Atlantic right whales, or other large whale species, that would warrant a current change in classification for these fisheries. As stated in the 2020 Final LOF (85 FR 21079, April 16, 2020), fisheries are classified based on the gear types used, how the gear is fished, and the behavior of the fishery related to the risk to marine mammals. Multiple states participate in the Northeast/mid-Atlantic American lobster trap/pot fishery, using a wide variety of gear and gear configurations throughout a large portion of coastal waters. While we recognize this variety within the fishery at large, there are not clear boundaries to divide gear use across the wider area as suggested by this comment. Importantly, the state of Maine does not use unique gear configurations from other states and gear configurations within Maine's waters are not uniform or divided across the geographic boundaries ( i.e., exemption lines) that MLA has identified. Further, gear marking and right whale monitoring efforts throughout Maine waters are insufficient to determine that the gear or area presents a different risk to large whales. Below we provide further detail as to why the information presented by the MLA is insufficient for the requested changes. At this time, we do not have enough information to suggest Maine's fisheries should be split from the Northeast/mid-Atlantic American lobster trap/pot fishery, because the gear used in Maine waters is not unique from other states.

While NMFS appreciates the state of Maine's efforts to manage the footprint of where individual lobstermen may set their gear, NMFS must look at the risk that the gear itself poses to large whales, particularly North Atlantic right whales. Current Maine state lobster management does not represent unique gear characteristics ( e.g., the use of weak rope exclusively or exclusion of vertical lines). In non-exempted waters, risk reduction can be calculated based on implemented changes to gear configurations, and if that risk reduction is substantial enough, NMFS could revisit the fishery classification in a future LOF.

Comment 11: MLA states that the NMFS Category I Northeast/mid-Atlantic American lobster trap/pot fishery does not accurately capture marine mammal interactions and risk. MLA recommends NMFS classify Maine's state and Federal water's lobster fisheries as unique fisheries, separate from the Category I Northeast/mid-Atlantic American lobster trap/pot fishery.

The commenter notes that in the absence of sufficient data to properly classify all fisheries, the MMPA provides that NMFS may evaluate other factors such as fishing techniques, gear used, methods used to deter marine mammals, target species, seasons and areas fished, qualitative data from logbooks or fishermen reports, stranding data, and the species and distribution of marine mammals in the area, or at the discretion of the Assistant Administrator for Fisheries. MLA further states that there are several factors with disparity among the Northeast and mid-Atlantic lobster fisheries, as well as significant differences in potential overlap with North Atlantic right whales. These differences among the lobster fisheries include: Fishing techniques, gear used, seasons and areas fished, fishermen's observations of right whales and distribution of marine mammals. MLA alleges that based on these factors, the lobster fishery prosecuted close to shore in Maine is significantly different than lobster fisheries which occur in offshore Lobster Management Area 3 or off of New Jersey.

MLA also alleges that Maine's state and Federal lobster fisheries do not meet the criteria of a Category I fishery under the MMPA. MLA recommends NMFS reclassify the Maine state waters lobster fishery as Category III fishery since there are no documented serious injuries or mortalities with this fishery, and NMFS determined that regulating the waters exempt from the Atlantic Large Whale Take Reduction Plan (ALWTRP) would have no significant benefit to large whales. MLA also recommends NMFS reclassify the Maine Federal waters lobster fishery as Category II fishery. MLA alleges there are no documented M/SI in the Maine Federal lobster fishery, but the Category II classification may be warranted under an abundance of precaution that a future interaction could occur due to the offshore migration of North Atlantic right whales.

MLA states that according to the 2019 North Atlantic right whale SAR, PBR is 0.8, and M/SI for commercial fisheries is 5.55. MLA's further analysis shows zero M/SI attributed to the Maine lobster fishery over this most recent 5 year period, while there were six documented cases in Canadian trap/pot fisheries. In addition, MLA alleges, there has been only one right whale entangled in Maine lobster gear in April 2002, and the entanglement was determined to be a non-serious injury. Maine gear was involved in a second case in 2004, but it was not the primary entangling gear in this case. The commenter states that there are four additional trap/pot entanglement cases that resulted in right whale M/SI for which a fishery was not determined and, therefore, for which the Maine lobster fishery cannot be completely ruled out. However, a close look at these cases reveals that the entangling gear is no longer fished, efforts to trace registration numbers to U.S. fishery were unsuccessful, or a Maine fishery was explicitly ruled out.

Response: NMFS uses the classification criteria described in the preamble to classify fisheries as Category I, Category II, or Category III. As noted, a fishery is classified under Category I if the annual M/SI of a stock in a given fishery is greater than or equal to 50 percent of the stock's PBR level. Additional details regarding categorization of fisheries is provided in the preamble to the final rule implementing section 118 of the MMPA (60 FR 45086; August 30, 1995).

As noted in the section of this rule and the LOF proposed rule describing how NMFS determines which species or stocks are included as incidentally killed or injured in a fishery, for fisheries with no observer coverage and for observed fisheries with evidence indicating that undocumented interactions may be occurring ( e.g., fishery has evidence of fisheries interactions that cannot be attributed to a specific fishery, and stranding network data include evidence of fisheries interactions that cannot be attributed to a specific fishery), stocks may be retained on the LOF for longer than 5 years. For these fisheries, NMFS will review the other sources of relevant information to determine when it is appropriate to remove a species or stock from the LOF.

At this time, we consider it appropriate to retain North Atlantic right whales as a species listed as driving the classification of the Northeast/mid-Atlantic lobster trap/pot fishery given that PBR is 0.8 and the further detail provided below, which reiterates responses provided in the 2020 Final LOF (85 FR 21079, April 16, 2020).

The commenter cites four cases of unknown entanglements they believe explicitly rule out Maine lobster fisheries from the origin of entanglement. However, the evidence presented is not sufficient to draw these conclusions. In one of the commenter's cited cases (E43-12/RW 4193), red tracers were identified in the recovered gear. Red tracers are indicative of the gear marking scheme required for the ALWTRP Northern Inshore Trap/Pot fishery management area, a management area that overlaps Maine, New Hampshire, and Massachusetts state waters. Therefore, it cannot be ruled out that the entanglement may have occurred off the coast of Maine in non-exempt waters. An additional case from 2011, previously noted in our 2020 Final LOF response to comments (85 FR 21079, April 16, 2020) but not mentioned in MLA's comment, also included recovered gear with these red tracers, though the location of that entanglement remains unknown (E11-11/RW 4040). Therefore, Maine lobster trap/pot fisheries cannot be ruled out as the potential origin for entanglements with undetermined origins.

We also note that two additional entanglements have been identified as Massachusetts lobster trap/pot entanglements (E36-16/RW 3623 and E25-09). This is relevant to the discussion since Maine state and Federal lobster fisheries are functionally equivalent to gear found in these entanglements; and, therefore, gear fished in Maine presents similar risks.

While floating groundline is prohibited in ALWTRP non-exempt management areas, there are waters along the east coast (including off the coast of Maine) that are exempted from this ALWTRP requirement. Therefore, the recovery of floating groundline from an entanglement does not explicitly rule out Maine lobster fisheries. For example, in case E25-10/RW 3911, the gear analysis found “wire mesh is likely the remains of wire traps that parted off from themselves. This wire mesh, along with the 7/16 inch poly and associated gangions, is consistent with gear used in trap/pot fisheries conducted along the east coast of the U.S. and Canada” (NMFS 2010 Large Whale Entanglement Report), which is consistent with some gear fished in exempted waters. Additionally, unless a rope diameter is explicitly prohibited in an area, rope diameter does not rule out the potential for an entanglement to have occurred in Maine waters, even if it does not represent the majority's normal fishing practices. Therefore, the 9/16 inch float rope that was recovered from E01-09/RW 3311, again, does not explicitly rule out Maine lobster fisheries.

With this request, the commenter is also not taking into consideration the high percentage of unidentified entanglements that are both first sighted in the U.S. and in Canada. Over the past 5 years, there have been 4.15 M/SI entanglements documented annually where the origin of the entanglement is unknown (Hayes et al., 2020).

The sample size of recovered gear from entanglements is small and much of the retrieved gear is unmarked and cannot be attributed to a particular location. Currently, the state of Maine does not require gear marking in ALWTRP exempted areas. The lack of marks on retrieved gear may indicate the current marking scheme is inadequate, or that entanglements are occurring in areas where gear is not currently marked, such as international waters or current exempted areas. The state is currently pursuing a gear marking regime in these exempted waters that may provide additional data about entanglement risk in these areas in the future.

The commenter alleges “There are zero instances of Maine lobster gear associated with a right whale serious injury or mortality in any data set, and only one known entanglement where Maine lobster was the primary entangling gear in 2002 resulting in non-serious injury determination.” We recognize that there has only been one confirmed mortality (in 2012) in identified U.S. trap/pot gear in the past decade. Those cases where we could identify lobster gear from right whale entanglements during the past 10 years were determined to result in non-serious injuries. However, there have been a number of life-threatening entanglements since 2010 that have resulted in a non-serious injury due to disentanglement intervention. (Henry et al., 2019). According to NMFS' “Process for Distinguishing Serious from Non-Serious Injury of Marine Mammals (NMFS 2015, 02-238-01),” cases that would have been serious injuries prior to disentanglement are not counted against PBR in the SAR, but they are included in the recorded takes for the LOF and associated management measures. Aerial surveys, whale watching boats, the presence of other fisheries, and the presence and associated outreach by a disentanglement team contribute to the higher reporting of entanglement sightings in certain areas ( i.e., Massachusetts) than in Maine state and offshore waters; we cannot conclude that risk is nonexistent in other areas where entanglements are not observed. With 85 percent of all observed right whales exhibiting entanglement scars, it is likely that entanglements are indeed occurring in areas where entanglements have not yet been observed and/or reported.

NMFS will continue to annually evaluate marine mammal interactions and risk posed by a variety of gear types and fisheries through the LOF process. As stated previously, should information suggest that unique gear characteristics have lowered the risk of interaction in a particular geographically unique portion of a fishery, NMFS will evaluate to determine if the risk reduction is sufficient for separating the fishery out from the broader, current, classification of the Category I Northeast/mid-Atlantic American lobster trap/pot fishery.

As stated above, we find that there is insufficient information to suggest that Maine's fisheries should be split from the Northeast/mid-Atlantic American lobster trap/pot fishery because the gear used in Maine waters and the manner in which the gear is used are not unique from other states. Further, we maintain that entanglement data indicate that the gear used across this fishery remains a risk to right whales. Should Maine fisheries make significant changes to their gear configurations that differentiate these fisheries from other state and Federal lobster trap/pot fisheries, such as eliminating vertical lines, NMFS will reconsider this decision.

Comment 12: AOLA expresses concern that data used in the LOF do not represent the current conditions of the Category I Northeast/mid-Atlantic American lobster trap/pot fishery nor marine mammal stocks. The commenter notes that the primary information used in the 2021 LOF comes from 2019 SARs, which are based on data from 2013-2017. Yet since 2013, the northwest Atlantic has undergone considerable climatic changes that have influenced the distributions of marine mammals and their prey. AOLA further states that the 2014 ALWTRP regulations as well as the American lobster fishery management plan regulations, reduced vertical lines and enhanced gear marking in the fishery. AOLA requests NMFS incorporate more timely data and recent information into the 2021 LOF.

Response: NMFS agrees that the best available scientific information is important for assessing the risk fisheries pose to marine mammal stocks. NMFS uses the best available scientific information to prepare the annual LOF. This includes relying on the SARs, which are peer reviewed by the U.S. Atlantic, Gulf of Mexico, and Caribbean Scientific Review Group. The MMPA established this SRG, along with two others, to review the science that informs the SARs, and to advise NMFS on marine mammal population status, trends, and stock structure, uncertainties in the science, research needs, and other issues. We recognize that this peer review process takes additional time to ensure that the best available are used to inform the LOF. However, the SARs generally provide the most current and inclusive information on each stock's PBR level and level of interaction with commercial fishing operations; there may also be more recent reports that include bycatch estimates.

Comment 13: AOLA expresses concern with how NMFS assigns M/SI when the origin of entanglement is unknown. AOLA states to that according to the 2019 North Atlantic right whale SAR the 5-year mean estimated M/SI from entanglements is 5.55. Of those, 0.2 were attributed to U.S. fisheries, 1.2 to Canadian fisheries, and the remaining 4.15 were undetermined. The commenter notes that NMFS splits undetermined North Atlantic right whale M/SI evenly between the two countries. However, 86 percent of known entanglements were in Canadian gear. AOLA recommends NMFS split undetermined North Atlantic right whale M/SI between the two countries based on the percentage of known entanglements from each country and this prorated distribution of M/SI should be used when classifying fisheries on the LOF.

Response: For determining a fishery's classification on the LOF, NMFS must assess the M/SI with respect to a stock's PBR. See response to comment #11 above about M/SI of right whales that is attributed to the Northeast/mid-Atlantic American lobster trap/pot fishery.

With respect to the current unknown North Atlantic right whale M/SI being assumed to be divided between both Canada and U.S. equally, this was a scenario that NMFS generated to support ALWTRT deliberations and is not used for classifying fisheries on the MMPA LOF. Given the additional regulatory requirements for Category I and II fisheries, NMFS uses known M/SI that can be attributed to a specific fishery for LOF analysis.

Comment 14: AOLA expresses concern over the perceived lack of parity when assessing the impacts of fisheries on marine mammals. AOLA understands that with limited observer coverage and data gaps there is a level of subjectivity into the LOF classification process; however, the process should be equal among fisheries. The commenter notes that the Northeast/mid-Atlantic American lobster trap/pot fishery is classified as a Category I fishery for North Atlantic right whales, yet there has been only one confirmed mortality in American lobster trap/pot gear in the past decade (2012) and no documented serious injuries (as stated in the 2020 LOF final rule). In the 2020 LOF final rule, NMFS cites all U.S. undetermined M/SI, potential M/SI prevented by intervention, and North Atlantic right whale entanglement scarring rates as data used for the Category I classification of the Northeast/mid-Atlantic American lobster trap/pot fishery. AOLA recommends NMFS take a more equitable approach when assessing entanglement risk across fisheries, countries, and non-fishery sources, and also notes this would assist in assuring fishermen are treated fairly.

Response: The LOF is the annual process NMFS conducts to place all U.S. commercial fisheries into one of three categories based on the level of incidental mortality and serious injury of marine mammals occurring in each fishery. See response to comment #11 above about how cases that would have been serious injuries prior to disentanglement are not counted against PBR in the SAR, but are included in the LOF classification process.

For fisheries with no observer coverage and for observed fisheries with evidence indicating that undocumented interactions may be occurring ( e.g., fishery has low observer coverage and stranding network data include evidence of fisheries interactions that cannot be attributed to a specific fishery), NMFS uses the best available data to inform the LOF; thus, data older than 5 years may be used to retain a fishery classification or the list of species and stocks killed/injured incidental to a fishery. For these fisheries, NMFS will review the other sources of information listed above and use its discretion to decide when it is appropriate to remove a species or stock.

The assessment of large whale M/SI in fisheries with limited observer coverage remains a considerable challenge compared to other gear types that interact with pinniped or small cetaceans. In fisheries with sufficient observer coverage, NMFS extrapolates annual M/SI estimates for bycaught species. However, large whale fishery interaction assessments are dependent on direct counts of entangled whales, not the fishery per se. This observed count of entanglements is not representative of total fishery-related M/SI that goes undetected or unattributed to a particular cause, and therefore represents the minimum M/SI. A method to assign cause to these unknown, as well as undetected mortalities, while addressing country entanglement of origin, is currently under development (Hayes et al., 2020). When these estimations become available, NMFS will solicit public comment through the SAR publication process.

Comment 15: MA DMF recommends NMFS reclassify the Massachusetts state waters lobster trap/pot fishery as its own non-Category I fishery, separate from the Category I Northeast/mid-Atlantic American lobster trap/pot fishery based on the gear restrictions and large whale conservation programs that are unique to Massachusetts. They note that the state of Massachusetts has a number of actions currently in place, as well as a number of additional actions that will be in place for the 2021 fishing season, that distinguish the Massachusetts state lobster trap/pot fishery as unique from the rest of the Category I Northeast/mid-Atlantic American lobster trap/pot fishery. MA DMF states that they are the only state lobster trap/trap fishery implementing the following actions either currently or in the future: (1) Lobster trap/pot fishery closure from February 1st to April 30th (currently in place for the Massachusetts Bay Restricted Area, proposed closure of all state waters beginning February 1, 2021); (2) dynamic extension of the lobster trap/pot fishery closure to ensure safe passage of right whales from our waters prior to fixed gear being set (currently in place for the Massachusetts Bay Restricted Area, proposed for all state waters beginning February 1, 2021); (3) ban use of vertical buoy lines greater than 3/8 inch diameter (proposed to begin February 1, 2021); (4) ban fishing single traps by the majority of its active fleet (proposed to begin January 1, 2022); (5) universal requirement of 1,700 pound breaking strength line or equivalent contrivance (proposed to begin February 1, 2021); (6) permitting and regulatory scheme designed to reduce participation and effort over time (currently in place); and (7) demonstrated substantial decline in the number of participants and the number of buoy lines deployed (currently in place). Based on these mitigation efforts, MA DMF recommends NMFS reclassify the Massachusetts state waters lobster trap/pot fishery as its own non-Category I fishery.

Response: NMFS appreciates the actions the state of Massachusetts has taken, and continues to take, to help conserve and protect North Atlantic right whales. However, the current implemented measures are not enough to suggest Massachusetts's state waters lobster trap/pot fishery should be split from the Category I Northeast/mid-Atlantic American lobster trap/pot fishery. At this time, NMFS retains the Category I classification for the Northeast/Mid-Atlantic American lobster trap/pot fishery, which includes the state waters of Massachusetts. Additional detail on how gear would be considered unique to differentiate it from other state lobster and trap/pot fisheries is included in response to Comment #11. NMFS looks forward to seeing what measures the state of Massachusetts will finalize and implement for the state lobster trap/pot fishery in the future. Should major changes to lobster gear and fishing practices be required and implemented for all Massachusetts state lobster fishing gear, making this gear unique and easily identified from other state and Federal gear, NMFS will re-evaluate the status of this fishery and consider it in a future proposed LOF.

Comment 16: Whale Safe USA requests NMFS maintain the Category I classifications for Northeast/Mid-Atlantic American lobster trap/pot fishery and Northeast sink gillnet fishery.

Response: As stated above in response to Comments #11 and 15, NMFS retains the Category I classification of the Northeast/Mid-Atlantic American lobster trap/pot fishery. Additionally, no data is currently available to suggest state fisheries should be separated from the Category I Northeast sink gillnet fishery, therefore NMFS retains the Category I classification for the Northeast sink gillnet fishery.

NMFS reclassifies the AK BSAI Pacific cod longline fishery from a Category II to Category III fishery. NMFS also removes both the Eastern North Pacific AK resident stock and Gulf of Alaska, BSAI transient stock of killer whales from the list of species and/or stocks incidentally killed or injured in the BSAI Pacific cod longline fishery.

NMFS updates the MMAP certificate process for calendar year 2021. MMAP certificates issued in 2020 remain in effect, valid through December 31, 2021, for vessel or gear owners participating in all Category I and II fisheries as of the final 2021 LOF.

The following summarizes changes to the LOF for 2021, including the classification of fisheries, fisheries listed, the estimated number of vessels/persons in a particular fishery, and the species and/or stocks that are incidentally killed or injured in a particular fishery. NMFS re-classifies two fisheries in the LOF for 2021. NMFS also makes changes to the estimated number of vessels/persons and list of species and/or stocks killed or injured in certain fisheries. The classifications and definitions of U.S. commercial fisheries for 2021 are identical to those provided in the LOF for 2020 with the changes discussed below. State and regional abbreviations used in the following paragraphs include: AK (Alaska), CA (California), HI (Hawaii), OR (Oregon), WA (Washington), and WNA (Western North Atlantic).

NMFS reclassifies the AK Bering Sea, Aleutian Islands Pacific cod pot fishery from a Category III to a Category II fishery.

NMFS reclassifies the AK BSAI Pacific cod longline fishery from at Category II to Category III fishery.

NMFS adds a superscript “1” to the CA/OR/WA stock of minke whale indicating it is driving the Category II classification of the CA thresher shark/swordfish drift gillnet (≥14 in mesh) fishery.

NMFS updates the estimated number of vessels/persons in the Pacific Ocean (Table 1) as follows:

• HI deep-set longline fishery from 145 to 143 vessels/persons;

• HI shallow-set longline fishery from 18 to 11 vessels/persons;

• American Samoa longline fishery from 15 to 13 vessels/persons; and

• American Samoa bottomfish handline fishery from fewer than 30 to fewer than 20 vessels/persons.

NMFS adds the Aleutian Islands stock of harbor seal to the list of species/stocks incidentally killed or injured in the Category II AK Bering Sea, Aleutian Islands rockfish trawl fishery.

NMFS adds three stocks to the list of species/stocks incidentally killed or injured in the Category II AK Bering Sea, Aleutian Islands Pacific cod pot fishery: (1) Bristol Bay stock of harbor seal, (2) Western North Pacific stock of humpback whale, and (3) Central North Pacific stock of humpback whale.

NMFS adds both the Eastern North Pacific Gulf of Alaska, Aleutian Islands, and Bering Sea Transient stock, and West Coast Transient stock, of killer whales to the list of species/stocks incidentally killed or injured in the Category II CA Dungeness crab pot fishery.

NMFS adds two stocks to the list of species/stocks incidentally killed or injured in the Category III CA squid purse seine fishery: (1) CA/OR/WA stock of Risso's dolphin and (2) U.S. stock of California sea lion.

NMFS adds the Cook Inlet stock of harbor seal to the list of species/stocks incidentally killed or injured in the Category III AK Gulf of Alaska halibut longline fishery.

NMFS adds the Aleutian Islands stock of harbor seal to the list of species/stocks incidentally killed or injured in the Category III AK Bering Sea, Aleutian Islands Atka mackerel trawl fishery.

NMFS adds the U.S. stock of California sea lion to the list of species/stocks incidentally killed or injured in the Category III WA/OR/CA shrimp trawl fishery.

NMFS adds two stocks to the list of species/stocks incidentally killed or injured in the Category III WA/OR/CA groundfish trawl fishery: (1) California breeding stock of northern elephant seal and (2) CA/OR/WA stock of northern right whale dolphin.

NMFS adds to the Western North Pacific stock of humpback whale to the list of species/stocks incidentally killed or injured in the Category III AK/WA/OR/CA commercial passenger fishing vessel fishery. NMFS removes three stocks from the list of species/stocks incidentally killed or injured in the Category II AK Bering Sea, Aleutian Islands pollock trawl fishery: (1) Alaska stock of ringed seal, (2) Central North Pacific stock of humpback whale and (3) Western North Pacific stock of humpback whale.

NMFS removes the Alaska stock of ringed seal from the list of species/stocks incidentally killed or injured in the Category II AK Bering Sea, Aleutian Islands Pacific cod longline fishery.

NMFS removes the Western U.S. stock of Steller sea lion from the list of species/stocks incidentally killed or injured in the Category II AK Gulf of Alaska sablefish longline fishery.

NMFS removes the Alaska stock of ringed seal from the list of species/stocks incidentally killed or injured in the Category III AK Bering Sea, Aleutian Islands Pacific cod trawl fishery.

NMFS removes the Alaska stock of harbor seal from the list of species/stocks incidentally killed or injured in the Category III AK Gulf of Alaska flatfish trawl fishery.

NMFS adds a superscript “1” to the following four stocks to indicate they are driving the Category II classification of the Northeast trawl fishery: (1) Western North Atlantic stock of Risso's dolphin, (2) Western North Atlantic stock of long-finned pilot whale, (3) Western North Atlantic offshore stock of bottlenose dolphin, and (4) Western North Atlantic stock of gray seal.

NMFS clarifies the fishery description of the Category II Southeastern U.S. Atlantic, Gulf of Mexico shrimp trawl fishery. NMFS clarifies that this fishery targets shrimp species with various gear types, but mainly utilizes skimmer or otter trawls. These gear types likely entangle marine mammals, particularly bottlenose dolphins, in very similar ways. The common entangling mechanism of these gear types are the “lazy” or “easy” line.

NMFS clarifies the fishery description of the Category I Atlantic Ocean, Caribbean, Gulf of Mexico large pelagics longline fishery. NMFS clarifies that the fishery does not target bluefin tuna, shortfin mako sharks and other shark species.

As discussed in the proposed rule, NMFS clarifies its response to Comment #14 in the 2020 Final LOF (85 FR 21079; April 16, 2020). In Comment #14, MLA notes “there has been only one right whale entangled in Maine gear in April 2002, and the entanglement was determined to be a non-serious injury. There are two additional non-serious injury entanglement cases that involved Maine lobster gear. However, Maine lobster gear was not the primary entangling gear in these cases.” In the 2020 Final LOF, NMFS' response in part to this comment stated: “We recognize that there has only been one confirmed mortality (in 2012) in American lobster gear in the past decade. All other documented lobster interactions were determined to result in non-serious injuries. However, there have been a number of entanglements for which interventions occurred because these entanglements were determined to be resulting in serious injuries (Henry et al., 2019).”

NMFS clarifies part of the response to Comment #14 to state: We recognize there has been only one confirmed mortality (in 2012) in the past decade in U.S. Northern inshore/nearshore trap/pot gear which could be gear from the Northeast/Mid-Atlantic American lobster trap/pot fishery or the Atlantic mixed species trap/pot fishery. All other documented lobster interactions were determined to result in non-serious injuries. However, there have been a number of entanglements for which interventions occurred because these entanglements were determined to be resulting in serious injuries (Henry et al., 2019).

NMFS updates the estimated number of vessels/persons in the Atlantic Ocean, Gulf of Mexico, and Caribbean (Table 2) as follows:

• Mid-Atlantic gillnet fishery from 3,950 to 4,020 vessels/person;

• Northeast sink gillnet fishery from 3,163 to 4,072 vessels/persons;

• Chesapeake Bay inshore gillnet fishery from 248 to 265 vessels/persons;

• Northeast bottom trawl fishery from 2,238 to 968 vessels/persons;

• Southeastern U.S. Atlantic, Gulf of Mexico shrimp trawl fishery from 4,950 to 10,824 vessels/persons;

• Atlantic mixed species trap/pot fishery from 3,332 to 3,493 vessels/persons;

• Mid-Atlantic menhaden purse seine fishery from 19 to 17 vessels/persons;

• Virginia pound net fishery from 26 to 20 vessels/persons;

• Caribbean gillnet fishery from >991 to 127 vessels/persons;

• Caribbean mixed species trap/pot fishery from >501 to 154 vessels/persons;

• Caribbean spiny lobster trap/pot fishery from >197 to 40 vessels/persons; and

• Caribbean haul/beach seine fishery from 15 to 38 vessels/person.

NMFS notes there is variability in the estimated number of vessels/persons in the Southeastern U.S. Atlantic, Gulf of Mexico shrimp trawl fishery. This variability is due to multiple permitting agencies, differences in fishery management, and artifacts with available data sets. A complete explanation of the variability is available in the Environmental Impact Statement to Reduce the Incidental Bycatch and Mortality of Sea Turtles in the Southeastern U.S. Shrimp Fisheries (November 4, 2019).

NMFS adds the Mobile Bay, Bonsecour Bay stock of bottlenose dolphin to the list of species/stocks incidentally killed or injured in the Category II Gulf of Mexico gillnet fishery.

NMFS adds the Western North Atlantic offshore stock of bottlenose dolphin to the list of species/stocks incidentally killed or injured in the Category II mid-Atlantic mid-water trawl (including pair trawl) fishery.

NMFS adds the Puerto Rico and U.S. Virgin Islands stock of bottlenose dolphin to the list of species/stocks incidentally killed or injured in Category III Caribbean mixed species trap/pot fishery.

Following consultation with the U.S. Fish and Wildlife Service, NMFS adds the Antillean subspecies (Puerto Rico stock) of West Indian manatee to the list of species/stocks incidentally killed or injured in Category III Caribbean haul/beach seine fishery.

NMFS removes the Western North Atlantic offshore stock of bottlenose dolphin from the list of species/stocks incidentally killed or injured in the Category III Gulf of Maine, U.S. mid- Atlantic tuna, shark, swordfish hook-and line/harpoon fishery.

NMFS updates the estimated number of HSFCA permits for high seas fisheries (Table 3) as follows:

• Atlantic highly migratory species longline fishery from 53 to 45 HSFCA permits;

• Western Pacific pelagic longline (HI deep-set component) fishery from 145 to 143 HSFCA permits;

• South Pacific tuna purse seine fishery from 33 to 26 HSFCA permits;

• South Pacific tuna longline fishery from 2 to 3 HSFCA permits;

• Western Pacific pelagic longline (HI shallow-set component) fishery from 18 to 11 HSFCA permits;

• Atlantic highly migratory species handline/pole and line fishery from 2 to 1 HSFCA permits;

• Pacific highly migratory species handline/pole and line fishery from 41 to 43 HSFCA permits;

• South Pacific albacore troll handline/pole and line fishery from 11 to 10 HSFCA permits;

• South Pacific albacore troll fishery from 17 to 18 HSFCA permits;

• Western Pacific pelagic troll fishery from 5 to 4 HSFCA permits;

• Northwest Atlantic bottom longline fishery from 3 to 2 HSFCA permits;

• Pacific highly migratory species longline fishery from 108 to 105 HSFCA permits; and

• Pacific highly migratory species troll fishery from 119 to 111 HSFCA permits.

The following tables set forth the list of U.S. commercial fisheries according to their classification under section 118 of the MMPA. Table 1 lists commercial fisheries in the Pacific Ocean (including Alaska), Table 2 lists commercial fisheries in the Atlantic Ocean, Gulf of Mexico, and Caribbean, Table 3 lists commercial fisheries on the high seas, and Table 4 lists fisheries affected by TRPs or TRTs.

In Tables 1 and 2, the estimated number of vessels or persons participating in fisheries operating within U.S. waters is expressed in terms of the number of active participants in the fishery, when possible. If this information is not available, the estimated number of vessels or persons licensed for a particular fishery is provided. If no recent information is available on the number of participants, vessels, or persons licensed in a fishery, then the number from the most recent LOF is used for the estimated number of vessels or persons in the fishery. NMFS acknowledges that, in some cases, these estimates may be inflations of actual effort. For example, the State of Hawaii does not issue fishery-specific licenses, and the number of participants reported in the LOF represents the number of commercial marine license holders who reported using a particular fishing gear type/method at least once in a given year, without considering how many times the gear was used. For these fisheries, effort by a single participant is counted the same whether the fisherman used the gear only once or every day. In the Mid-Atlantic and New England fisheries, the numbers represent the potential effort for each fishery, given the multiple gear types for which several state permits may allow. Changes made to Mid-Atlantic and New England fishery participants will not affect observer coverage or bycatch estimates, as observer coverage and bycatch estimates are based on vessel trip reports and landings data. Tables 1 and 2 serve to provide a description of the fishery's potential effort (state and Federal). If NMFS is able to extract more accurate information on the gear types used by state permit holders in the future, the numbers will be updated to reflect this change. For additional information on fishing effort in fisheries found on Table 1 or 2, contact the relevant regional office (contact information included above in Where can I find more information about the LOF and the MMAP? section).

For high seas fisheries, Table 3 lists the number of valid HSFCA permits currently held. Although this likely overestimates the number of active participants in many of these fisheries, the number of valid HSFCA permits is the most reliable data on the potential effort in high seas fisheries at this time. As noted previously in this LOF, the number of HSFCA permits listed in Table 3 for the high seas components of fisheries that also operate within U.S. waters does not necessarily represent additional effort that is not accounted for in Tables 1 and 2. Many vessels holding HSFCA permits also fish within U.S. waters and are included in the number of vessels and participants operating within those fisheries in Tables 1 and 2.

Tables 1, 2, and 3 also list the marine mammal species and/or stocks incidentally killed or injured (seriously or non-seriously) in each fishery based on SARs, injury determination reports, bycatch estimation reports, observer data, logbook data, stranding data, disentanglement network data, fishermen self-reports ( i.e., MMAP reports), and anecdotal reports. The best available scientific information included in these reports is based on data through 2017. This list includes all species and/or stocks known to be killed or injured in a given fishery, but also includes species and/or stocks for which there are anecdotal records of a mortality or injury. Additionally, species identified by logbook entries, stranding data, or fishermen self-reports ( i.e., MMAP reports) may not be verified. In Tables 1 and 2, NMFS has designated those species/stocks driving a fishery's classification ( i.e., the fishery is classified based on mortalities and serious injuries of a marine mammal stock that are greater than or equal to 50 percent (Category I), or greater than 1 percent and less than 50 percent (Category II), of a stock's PBR) by a “1” after the stock's name.

In Tables 1 and 2, there are several fisheries classified as Category II that have no recent documented mortalities or serious injuries of marine mammals, or fisheries that did not result in a mortality or serious injury rate greater than 1 percent of a stock's PBR level based on known interactions. NMFS has classified these fisheries by analogy to other Category I or II fisheries that use similar fishing techniques or gear that are known to cause mortality or serious injury of marine mammals, as discussed in the final LOF for 1996 (60 FR 67063; December 28, 1995), and according to factors listed in the definition of a “Category II fishery” in 50 CFR 229.2 ( i.e., fishing techniques, gear types, methods used to deter marine mammals, target species, seasons and areas fished, qualitative data from logbooks or fishermen reports, stranding data, and the species and distribution of marine mammals in the area). NMFS has designated those fisheries listed by analogy in Tables 1 and 2 by adding a “2” after the fishery's name.

There are several fisheries in Tables 1, 2, and 3 in which a portion of the fishing vessels cross the EEZ boundary and therefore operate both within U.S. waters and on the high seas. These fisheries, though listed separately on Table 1 or 2 and Table 3, are considered the same fisheries on either side of the EEZ boundary. NMFS has designated those fisheries in each table with an asterisk (*) after the fishery's name.