The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0165, dated July 23, 2020 (EASA AD 2020-0165) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus SAS Model A318, A319, and A321 series airplanes and Model A320-211, -212, -214, -215, -216, -231, -232, -233, -251N, -252N, -253N, -271N, -272N, and -273N airplanes. Model A320-215 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.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus SAS Model A318, A319, A320, and A321 series airplanes. The NPRM published in the Federal Register on November 5, 2020 (85 FR 70523). The NPRM was prompted by a report that the oil used to protect the NLG main fittings for transportation and storage was not removed before final heat treatment of the affected parts, possibly generating sub-surface cavities during heat treatment of the affected parts. The NPRM proposed to require replacing each affected NLG main fitting with a serviceable part, as specified in EASA AD 2020-0165.

The FAA is issuing this AD to address possible sub-surface cavities in the NLG main fittings, which could cause detrimental impact on fatigue performance and affect the structural integrity of the NLG. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

The Air Line Pilots Association, International (ALPA) indicated its support for the NPRM.

A typographical error in paragraph (c)(3) of the proposed AD was introduced during the publication process. This AD corrects that typographical error. Paragraph (c)(3) of the proposed AD specified Model A320-251 airplanes, however the correct Model designation is Model A320-251N airplanes. The Summary and Discussion sections of the proposed AD, along with the incorporated by reference document, correctly identified the affected airplanes. The FAA has revised paragraph (c)(3) of this AD accordingly.

An individual commenter recommended that the FAA expand on the estimated cost analysis by providing more support for labor costs and quantifying the parts cost. The commenter stated that the overall cost estimate seemed low, and noted that no parts cost estimate was included in the NPRM. The commenter suggested that the FAA could provide a breakdown of how the labor hours were calculated, as well as a parts cost estimate. The commenter noted that landing gears on Airbus airplanes are expensive, and provided a link to a document with information on the cost of main landing gears on Airbus products. The individual commenter also recommended that the FAA provide a brief quantitative benefit analysis. The commenter stated that a benefit analysis would bolster the proposition that the FAA is following statutory text, but acknowledged that consideration of the benefits might not be required since the proposed AD corrects an unsafe condition. The commenter stated that these recommendations will help prevent this rulemaking from being considered arbitrary.

The FAA agrees to clarify the labor and parts cost estimate. The manufacturer determines labor cost estimates and provides a breakdown of those costs in Airbus Mandatory Service Bulletin A320-32-1492, dated November 25, 2019; and Airbus Mandatory Service Bulletin A320-32-1493, dated November 25, 2019. This service information is available in the AD docket. The 8 work-hours specified in this final rule matches the manufacturer's estimate. In regards to parts cost, the document that the commenter referred to includes information on the cost of main landing gears (not nose landing gears). The replacement part specified in this AD is a main fitting associated with the nose landing gear, and not the entire nose landing gear assembly. The FAA has received new parts cost information and has updated the parts cost for the main fitting. In addition, as noted in the NPRM, some or all of the costs may be covered under warranty, but the FAA does not control warranty coverage and has therefore included all known costs in the estimate.

As for the request that the FAA conduct a “benefit analysis” of the AD, as a matter of law, in order to be airworthy, an aircraft must conform to its type design and be in a condition for safe operation. The type design is approved only after the FAA determines that it complies with all applicable airworthiness requirements. In adopting and maintaining those requirements, the FAA has already determined that those requirements establish a level of safety that is cost beneficial. If the FAA later makes a finding of an unsafe condition in an aircraft and issues an AD to address that unsafe condition, that means the original cost-benefit level of safety is no longer being achieved and that the required AD actions are necessary to restore that level of safety. Because this level of safety has already been determined to be cost beneficial, and because the AD does not add an additional regulatory requirement that increases the level of safety beyond the level established by the type design, a full cost-benefit analysis for each AD would be redundant and unnecessary. The FAA has not changed this AD in this regard.

The FAA reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

The FAA also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

EASA AD 2020-0165 describes procedures for replacing each NLG main fitting having a certain part number and serial number with a serviceable part. 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.

The FAA estimates that this AD affects 15 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators. The FAA does not control warranty coverage for affected operators. As a result, the FAA has included all known costs in the cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0212, dated August 27, 2019 (EASA AD 2019-0212) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus Defense and Space S.A. Model CN-235, CN-235-100, CN-235-200, and CN-235-300 airplanes; and Model C-295 airplanes.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2017-19-25, Amendment 39-19055 (82 FR 44895, September 27, 2017) (AD 2017-19-25). AD 2017-19-25 applied to all Airbus Defense and Space S.A. Model CN-235, CN-235-100, CN-235-200, and CN-235-300 airplanes; and Model C-295 airplanes. The NPRM published in the Federal Register on December 17, 2020 (85 FR 81851). The NPRM was prompted by leakage of a motorized cross-feed fuel valve and a determination that it is necessary to limit the installation of affected parts specified in AD 2017-19-25 to those parts that are maintained in accordance with certain instructions. The NPRM proposed to continue to require repetitive inspections and operational checks of the affected fuel valves, and corrective actions if necessary, as specified in EASA AD 2019-0212. The NPRM also proposed to limit the installation of affected parts to those that are maintained in accordance with certain instructions, as specified in EASA AD 2019-0212.

The FAA is issuing this AD to address leaks in a motorized fuel valve, which could lead to failure of the fuel valve and consequent improper fuel system functioning or, in case of the presence of an ignition source, an airplane fire. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA received no comments on the NPRM or on the determination of the cost to the public.

The FAA reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

EASA AD 2019-0212 describes procedures for repetitive inspections and operational checks of the affected fuel valves (cycling procedures and reapplication of grease or overhaul as applicable), and corrective actions if necessary. Corrective actions include replacement. EASA AD 2019-0212 also describes procedures for reporting inspection results.

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.

The FAA estimates that this AD affects 8 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

The FAA estimates that it would take about 1 work-hour per product to comply with the on-condition reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be $85 per product.

The FAA has received no definitive data on which to base the cost estimates for the on-condition corrective actions for the operational check specified in this AD.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0177, dated August 11, 2020 (EASA AD 2020-0177) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all ATR-GIE Avions de Transport Régional Model ATR42-200, -300, -320, -400, and -500 airplanes; and Model ATR72 airplanes. Model ATR42-400 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.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all ATR-GIE Avions de Transport Régional Model ATR42-200, -300, -320, and -500 airplanes; and Model ATR72-101, -102, -201, -202, -211, -212, and -212A airplanes. The NPRM published in the Federal Register on December 8, 2020 (85 FR 78974). The NPRM was prompted by in-service data, which revealed that the minimum operating airspeeds in severe icing conditions, computed to provide adequate stall margins, do not provide sufficient margins to stall speeds at high bank angle while exiting severe icing conditions. The NPRM proposed to require revising the existing AFM and applicable corresponding operational procedures to provide emergency procedures and limitations for operating in severe icing conditions, as specified in EASA AD 2020-0177.

The FAA is issuing this AD to address airplane stalling due to inadvertent exposure to severe icing conditions, which could result in loss of control of the airplane. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA has considered the comment received. The Air Line Pilots Association, International (ALPA) stated that it supports the NPRM.

The FAA reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

EASA AD 2020-0177 specifies procedures for revising the AFM to provide emergency procedures and limitations for operating in severe icing conditions. 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.

The FAA estimates that this AD affects 59 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued TCCA AD CF-2014-07R1, dated July 13, 2020 (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for certain MHI RJ Aviation ULC Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. You may examine the MCAI in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0913.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2015-05-03, Amendment 39-18113 (80 FR 13758, March 17, 2015) (AD 2015-05-03). AD 2015-05-03 applied to certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. The NPRM published in the Federal Register on October 14, 2020 (85 FR 64987). The NPRM was prompted by a determination that new or more restrictive airworthiness limitations are necessary, as well as the corresponding structural repairs and modifications to preclude WFD. The NPRM proposed to continue to require the actions specified in AD 2015-05-03. The NPRM also proposed to require revising the existing maintenance or inspection program, as applicable, to incorporate additional new or more restrictive airworthiness limitations, and incorporating structural repairs and modifications to preclude WFD. The FAA is issuing this AD to address WFD, which could adversely affect the structural integrity of the airplane. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comment received on the NPRM and the FAA's response to each comment.

MHI RJ Aviation ULC (MHI) requested that the FAA revise the NPRM to include credit for initial inspections accomplished using certain Bombardier REOs that were not specified in paragraph (l) of the proposed AD. MHI specified that, since issuance of the MCAI, it has continued to support U.S. operators with REOs. MHI provided the additional REOs and specified the applicable manufacturer serial number for each specific REO.

The FAA agrees for the reasons provided. Additionally, the FAA finds that including the additional REOs would allow operators of the affected airplanes to receive credit for the initial inspections required by the service information specified in paragraph (j) of this AD if those actions were performed before the effective date of this AD using those REOs without requesting an alternative method of compliance. The FAA has revised figure 1 to paragraph (l) of this AD accordingly.

The FAA reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

The FAA also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

MHI RJ Aviation has issued Bombardier Temporary Revision 2B-2280, dated June 12, 2020. This service information, among other actions, describes airworthiness limitation (AWL) Task 53-41-207, which specifies airworthiness limitations and inspections for fuselage and longitudinal skin splices at stringers (STR) 6 and 20.

This AD also requires the following service information, which the Director of the Federal Register approved for incorporation by reference as of April 21, 2015 (80 FR 13758, March 17, 2015).

• AWL Task 53-41-110, Longitudinal Str. 6 splice butt strap at Str. 6, FS409.0 to FS617.0, of Appendix B, Airworthiness Limitations, of Part 2, Airworthiness Requirements, Revision 9, dated June 10, 2013, of the Bombardier CL-600-2B19 Maintenance Requirements Manual, CSP A-053.

• AWL Task 53-41-204, Frame splice angles at STR 6 and 20, of Appendix B, Airworthiness Limitations, of Part 2, Airworthiness Requirements, Revision 9, dated June 10, 2013, of the Bombardier CL-600-2B19 Maintenance Requirements Manual, CSP A-053.

This service information 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.

The FAA estimates that this AD affects 431 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the total cost per operator for the retained actions from AD 2015-05-03 to be $7,650 (90 work-hours × $85 per work-hour).

The FAA has determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. In the past, the agency has estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the agency estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

The FAA has received no definitive data that would enable us to provide cost estimates for the repairs and modifications specified in this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0246, dated October 1, 2019 (EASA AD 2019-0246) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus Helicopters Model EC 155B and EC155B1 helicopters.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Helicopters Model EC 155B and EC155B1 helicopters. The NPRM published in the Federal Register on January 15, 2021 (86 FR 3883). The NPRM was prompted by a report of mechanical deformation of the protective cover of the “SHEAR” control pushbutton on the copilot collective stick. The NPRM proposed to require replacement of the protective cover of the “SHEAR” control pushbutton on the pilot and copilot collective sticks and re-identification of the pilot and copilot collective sticks, as specified in an EASA AD.

The FAA is issuing this AD to address mechanical deformation of the protective cover of the “SHEAR” control pushbutton on the copilot collective stick, which could lead to uncommanded shearing of the hoist cable and possible injury to hoisted person(s). See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA received no comments on the NPRM or on the determination of the cost to the public.

The FAA reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

EASA AD 2019-0246 describes procedures for replacement of the protective cover of the “SHEAR” control pushbutton on the pilot and copilot collective sticks and re-identification of the pilot and copilot collective sticks. 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.

Where paragraph (1) of EASA AD 2019-0246 refers to a table for the compliance time for the modification, for this AD, the compliance time for the modification is before any hoist operations after the effective date of this AD but no later than 3 months after the effective date of this AD.

The FAA estimates that this AD affects 17 helicopters of U.S. registry. The FAA estimates the following costs to comply with this AD:

According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators. The FAA does not control warranty coverage for affected operators. As a result, the FAA has included all known costs in the cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0215, dated September 4, 2019 (referred to after this as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for certain Airbus SAS Model A330-201, A330-202, A330-203, A330-223, A330-243, A330-301, A330-302, A330-303, A330-321, A330-322, A330-323, A330-341, A330-342 and A330-343 airplanes. You may examine the MCAI on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0182.

This AD was prompted by reports of cracked flexible hoses in the CAOS. The FAA is issuing this AD to address cracked CAOS hoses. This condition, if not addressed, could lead to oxygen leakage in the flexible hoses of the CAOS, which, in combination with in-flight depressurization or smoke evacuation procedure, could result in injury to occupants of the courier area. See the MCAI for additional background information.

Elbe Flugzeugwerke GmbH (EFW) has issued Service Bulletin EFW-SB-35-0001, dated March 8, 2019; and Service Bulletin EFW-SB-35-0002, dated September 2, 2019. This service information describes procedures for repetitive detailed inspections (including functional tests) of the CAOS to detect any leakage or damage (cracking) in the 32209-series oxygen distribution hoses installed in the courier area and in lavatory A, and replacement.

This service information 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 and service information 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 the service information described previously.

There are currently no domestic operators of these products. Therefore, the FAA finds that notice and opportunity for prior public comment are unnecessary and 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-2021-0182; Product Identifier 2020-NM-072-AD” 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 Darren Gassetto, Aerospace Engineer, Mechanical Systems and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email 9-avs-nyaco-cos@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.

Currently, there are no affected U.S.-registered airplanes. If an affected airplane is imported and placed on the U.S. Register in the future, the FAA provides the following cost estimates to comply with this AD:

The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866, and

(2) Will not affect intrastate aviation in Alaska.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The FAA has received reports indicating that the pitot heat switch is not always set to ON, which could result in misleading air data. The failure to activate the manually activated pitot anti-icing system likely resulted in misleading air data that contributed to an accident and three incidents involving Boeing Model 737 airplanes. This condition, if not addressed, could result in the air data sensors not being heated, which could allow ice to form on the sensors and cause erroneous air data. This erroneous air data can lead to loss of crew situational awareness and could ultimately result in the inability to maintain continued safe flight and landing.

The FAA is issuing this AD because the agency has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

The FAA reviewed Boeing Alert Service Bulletin 737-30A1064, Revision 2, dated June 26, 2020. The service information describes procedures for replacement and repetitive testing of the P5-9 window and pitot heat module, and changing the anti-icing system to automatically supply power to heat the air data sensors.

This AD also requires Boeing Service Bulletin 737-30-1067, Revision 1, dated May 4, 2017; and Boeing Service Bulletin 737-30-1068, Revision 1, dated May 4, 2017, which the Director of the Federal Register approved for incorporation by reference as of June 26, 2019 (84 FR 23458, May 22, 2019).

This service information 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.

The FAA allows operators to utilize a MEL provision for time-limited operation with certain equipment inoperative, after which the system must be fully restored. (See 14 CFR 91.213, 121.628, 125.201, and 129.14.) This AD continues to allow use of an existing FAA-approved MEL even if the modified air data probe heat (ADPH) system is inoperable, so long as the operator's existing FAA-approved MEL has a provision to allow for this inoperability.

This AD requires accomplishing the actions identified as “RC” (required for compliance) in the Accomplishment Instructions of Boeing Alert Service Bulletin 737-30A1064, Revision 2, dated June 26, 2020, described previously, except as discussed under “Differences Between this AD and the Service Information,” and except for any differences identified as exceptions in the regulatory text of this AD.

This AD also requires accomplishing the actions specified in Boeing Service Bulletin 737-30-1067, Revision 1, dated May 4, 2017; and Boeing Service Bulletin 737-30-1068, Revision 1, dated May 4, 2017, described previously.

For information on the procedures and compliance times, see this service information at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0190.

The FAA previously issued AD 2019-09-01, Amendment 39-19635 (84 FR 23458, May 22, 2019) (AD 2019-09-01), which applies to the airplanes identified in Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017. This AD requires using Boeing Alert Service Bulletin 737-30A1064, Revision 2, dated June 26, 2020, which adds Model 737-200 series airplanes having variable numbers PK625 through PK627 inclusive to the effectivity. The unsafe condition and requirements are the same for this AD and AD 2019-09-01. This AD therefore applies only to the 737-200 series airplanes having variable numbers PK625 through PK627 inclusive.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

There are currently no U.S.-registered airplanes affected by this AD. Accordingly, notice and opportunity for prior public comment are unnecessary, pursuant to 5 U.S.C. 553(b)(3). In addition, for the foregoing reason(s), the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days.

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include Docket No. FAA-2021-0190 and Project Identifier AD-2020-01348-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 Jeffrey W. Palmer, Aerospace Engineer, Systems and Equipment Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5851; fax: 562-627-5210; email: jeffrey.w.palmer@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The requirements of the Regulatory Flexibility Act (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.

Currently, there are no affected U.S.-registered airplanes. For any affected airplane that is imported and placed on the U.S. Register in the future, the FAA provides the following cost estimates to comply with this AD:

The FAA has received no definitive data that would enable providing cost estimates for the on-condition actions specified in this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866, and

(2) Will not affect intrastate aviation in Alaska.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0238, dated November 4, 2020 (EASA AD 2020-0238) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Fokker Services B.V. Model F28 Mark 0070 and 0100 airplanes.

This AD was prompted by a report indicating that a passenger door opened under residual cabin pressure during taxiing after landing, and following the display of the CAB PRESS CTL alert. After this event occurred, the AFM procedures were reviewed and it was determined that the Cabin Pressurization Control Fault procedure may have the potential for confusion if the associated alert appears after landing. The FAA is issuing this AD to address the consequences of a passenger door opening forcefully under residual cabin pressure, including injury to cabin crew or ground personnel. See the MCAI for additional background information.

EASA AD 2020-0238 specifies procedures for updating the Cabin Pressurization Control Fault procedure of the applicable AFM. 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 2020-0238 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

EASA AD 2020-0238 requires operators to “inform all flight crews” of revisions to the AFM, and thereafter to “operate the aeroplane accordingly.” However, this AD would not specifically require those actions as those actions are already required by FAA regulations.

FAA regulations require operators furnish to pilots any changes to the AFM (ex: 14 CFR 121.137), and to ensure the pilots are familiar with the AFM (ex: 14 CFR 91.505). As with any other training requirement, training on the updated AFM content is tracked by the operators and recorded in each pilot's training record, which is available for the FAA to review.

FAA regulations also require pilots to follow the procedures in the existing AFM including all updates. 14 CFR 91.9 requires that no person may operate a civil aircraft without complying with the operating limitations specified in the AFM. Therefore, including a requirement in this AD to operate the airplane according to the revised AFM would be redundant and unnecessary. Further, compliance with such a requirement in an AD would be impracticable to demonstrate or track on an ongoing basis; therefore, a requirement to operate the airplane in such a manner would be unenforceable.

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 2020-0238 is incorporated by reference in this final rule. This AD, therefore, requires compliance with EASA AD 2020-0238 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 2020-0238 that is required for compliance with EASA AD 2020-0238 is available at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0186.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

There are currently no U.S. registered airplanes affected by this AD. Accordingly, notice and opportunity for prior public comment are unnecessary, pursuant to 5 U.S.C. 553(b)(3). In addition, for the foregoing reasons, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) 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-2021-0186; Project Identifier MCAI-2020-01489-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 Tom Rodriguez, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3226; email: tom.rodriguez@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.

Currently, there are no affected U.S.-registered airplanes. If an affected airplane is imported and placed on the U.S. Register in the future, the FAA provides the following cost estimates to comply with this AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866, and

(2) Will not affect intrastate aviation in Alaska.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The ANAC, which is the aviation authority for Brazil, has issued ANAC AD 2021-02-02, effective February 26, 2021; corrected February 26, 2021 (ANAC AD 2021-02-02) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI); to correct an unsafe condition for all Yaborã Indústria Aeronáutica S.A. Model EMB-135 and EMB-145 airplanes. Model EMB-145EU, -145LU, and -145MK airplanes (which are included in the MCAI applicability) 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 involving disconnection of a side arm strut from the right MLG; a subsequent investigation found that the side arm strut lower bearing was installed inverted on the airplane. Further inspections found more instances of inverted installations on other airplanes as well as other improper installations ( e.g., damaged or missing sealant, or grease fittings incorrectly installed). The FAA is issuing this AD to address disconnection of the MLG side arm strut, which could prevent the MLG from being locked in the down position and possibly lead to loss of control of the airplane during take-off and landing. See the MCAI for additional background information.

ANAC AD 2021-02-02 specifies procedures for doing a general visual inspection of the right and left MLG to verify the following: That the grease fittings are installed on the same side of the MLG lower side arm and the fittings are facing the flight direction, that the flanges of the MLG side arm bearings are facing the flight direction, and that there is no migration of the MLG side arm bearings. ANAC AD 2021-02-02 also specifies procedures for applicable on-condition actions, including replacing the MLG lower side arm and the MLG side arm bearings with serviceable parts, and reinstalling the MLG lower side arm and the MLG bearing in the correct position. 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 ANAC AD 2021-02-02 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 the European Union Aviation Safety Agency (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, ANAC AD 2021-02-02 is incorporated by reference in this final rule. This AD, therefore, requires compliance with ANAC AD 2021-02-02 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Service information specified in ANAC AD 2021-02-02 that is required for compliance with ANAC AD 2021-02-02 is available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0253.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

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 forgoing notice and comment prior to adoption of this rule because disconnection of the MLG side arm strut could prevent the MLG from being locked in the down position and possibly lead to loss of control of the airplane during take-off and landing. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.

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-2021-0253; Project Identifier MCAI-2021-00220-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 Ho-Joon Lim, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3405; email ho-joon.lim@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 304 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates that it would take about 1 work-hour per product to comply with the on-condition reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be $25,840, or $85 per product.

The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number. The OMB control number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866, and

(2) Will not affect intrastate aviation in Alaska.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

This rule amends 14 CFR part 97 by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, 8260-15B, when required by an entry on 8260-15A, and 8260-15C.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers or aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the typed of SIAPS, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flights safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CRF part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

This rule amends 14 CFR part 97 by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary. This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, CFR part 97, (is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

We are adopting interim final amendments to the following forms.

Compliance: As discussed in Section II, a registrant will not be required to comply with the amendments until it has been identified by the Commission as having a non-inspection year pursuant to a process to be subsequently established by the Commission with appropriate notice. Once identified, a registrant will be required to comply with the amendments in its annual report for each fiscal year in which it is so identified.

We are adopting interim final amendments to Form 10-K, Form 20-F, Form 40-F, and Form N-CSR to implement the disclosure and submission requirements of the HFCA Act, 3 which became law on December 18, 2020. Among other things, Section 2 of the HFCA Act amended Section 104 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”)  4 to require the Commission to identify each “covered issuer”  5 that has retained a registered public accounting firm  6 to issue an audit report  7 where that registered public accounting firm has a branch or office  8 that:

• Is located in a foreign jurisdiction; and

• The PCAOB has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction.

The scope of the interim final amendments is limited to (1) the statutory mandate to issue rules that establish the manner and form in which a Commission-Identified Issuer must make the submissions required under Section 104(i)(2)(B) of the Sarbanes-Oxley Act, and (2) the disclosure obligations set forth in Section 3 of the HFCA Act that we have added to the relevant Commission forms. The new disclosure and submission requirements established by the HFCA Act are triggered by the identification of affected registered public accounting firms by the PCAOB and affected registrants by the Commission.

Under Section 104(i)(2) of the Sarbanes-Oxley Act, as added by the HFCA Act, the PCAOB is responsible for determining that it is unable to inspect or investigate completely a registered public accounting firm because of a position taken by an authority in a foreign jurisdiction. We understand that the PCAOB is considering its obligations under the HFCA Act, including the process for making these determinations. We believe it is important that the PCAOB act quickly to identify the best manner in which to make these determinations. Any PCAOB rulemaking in response to the HFCA Act will be subject to Commission review and approval prior to taking effect. Once the PCAOB process has been established, the Commission will use the PCAOB's determination about which firms it is unable to inspect or investigate completely, along with information in a registrant's annual reports, to compile a list of registrants that are Commission-Identified Issuers.

Section 3 of the HFCA Act requires a Commission-Identified Foreign Issuer to provide certain additional disclosure in its annual report for the year that the Commission so identifies the issuer. The HFCA Act requires this disclosure in the issuer's Form 10-K, Form 20-F, or a form that is the equivalent of, or substantially similar to, these forms. 11 Specifically, a Commission-Identified Issuer is required to disclose:

• That, during the period covered by the form, the registered public accounting firm has prepared an audit report for the issuer;  12

• The percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incorporated or otherwise organized;

• Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer;

• The name of each official of the Chinese Communist Party (“CCP”) who is a member of the board of directors of the issuer or the operating entity with respect to the issuer; and

• Whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the CCP, including the text of any such charter.

While Section 3 of the HFCA Act does not mandate specific rule or form changes, we believe that amending our forms to include the new disclosure requirements will help registrants comply with the HFCA Act. The Commission is therefore amending Form 10-K, Form 20-F, Form 40-F, 13 and Form N-CSR  14 to reflect the disclosure requirements in Section 3 of the HFCA Act.

Specifically, we are amending Form 10-K to add Part II, Item 9C, Form 20-F to add Part II, Item 16I, Form 40-F to add paragraph B.18, and Form N-CSR to add paragraphs (i) and (j) of Item 4. The added items entitled “Disclosure Regarding Foreign Jurisdictions that Prevent Inspections” in Form 10-K, Form 20-F, and Form 40-F are located with other accounting, financial, and corporate governance disclosure requirements but are not required to be included in a registrant's proxy or information statement. 15 The amendments to Form N-CSR are located in an existing item entitled “Principal Accountant Fees and Services.”

The registrant will be required to provide the disclosure for each year in which the registrant is a Commission-Identified Issuer. Because the period covered by the forms looks back at the prior year, a Commission-Identified Foreign Issuer that was identified in the prior year will be required to provide the HFCA Act Section 3 disclosure in its annual report for the year in which it was identified, even if the registrant's subsequent filing includes an audit report issued by a registered public accounting firm that the PCAOB is able to inspect or investigate completely.

In addition, we have added an instruction in each of Form 20-F and Form 40-F to specify that the disclosure applies to annual reports, and not to registration statements. 16

As discussed above, in addition to the Section 3 disclosure requirement, Section 2 of the HFCA Act amended Sarbanes-Oxley Act Section 104 to, in part, require any Commission-Identified Issuer to submit to the Commission documentation establishing that the issuer is not owned or controlled by a governmental entity in the foreign jurisdiction of the registered public accounting firm that the PCAOB is unable to inspect or investigate completely, and mandates that the Commission adopt rules establishing the manner and form in which such submissions will be made no later than 90 days after enactment.

Because the submission requirement is triggered by the preparation of an audit report on a registrant's financial statements, the Commission is amending Form 10-K, Form 20-F, Form 40-F, and Form N-CSR to implement this provision. 17 In contrast to the disclosure requirement in Section 3 of the HFCA Act that applies only to Commission-Identified Foreign Issuers, the submission requirement in Section 2 of the HFCA Act applies to all Commission-Identified Issuers. The amendments require a registrant that is a Commission-Identified Issuer that is not owned or controlled by a governmental entity in the described foreign jurisdiction to electronically submit documentation  18 to the Commission on a supplemental basis that establishes that the registrant is not so owned or controlled. Under the interim final amendments, such submissions will be made through the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system  19 on or before the due date of the relevant annual report form.

While the interim final amendments prescribe the timing and means by which such submissions shall be made, neither they nor the HFCA Act specify the particular types of documentation that can or should be submitted for this purpose. Moreover, we recognize that available documentation could vary depending upon the organizational structure and other factors specific to the registrant. Thus, as an initial matter, registrants will have flexibility under the interim final amendments to determine how best to satisfy this requirement. At the same time, we are requesting comment as to whether the Commission should require specific types of documentation or whether additional guidance would be necessary or useful to registrants as they seek to comply with the submission requirement.

For purposes of these requirements, we preliminarily believe that the use of the terms “owned or controlled” in Section 2 of the HFCA Act, and “owned” and “controlling financial interest” in Section 3 of the HFCA Act (which are not otherwise defined in the statute), are intended to reference a person's or governmental entity's ability to “control” the registrant as that term is used in the Exchange Act and the Exchange Act rules. 20 A registrant that is owned or controlled by a foreign governmental entity is not required to submit such documentation under the interim final amendments. However, we note that Commission-Identified Foreign Issuers are required to make certain disclosures about their foreign affiliations and ownership by governmental entities pursuant to the disclosure requirements of Section 3 of the HFCA Act. 21

Section 104(i)(1)(B) of the Sarbanes-Oxley Act  22 provides that a non-inspection year is any year, after the date of enactment of the HFCA Act, during which: (1) The Commission identifies an issuer as having retained a registered public accounting firm for the audit report on its financial statements; (2) That registered public accounting firm has a branch or office that is located in a foreign jurisdiction; and (3) The PCAOB is unable to inspect or investigate completely the registered public accounting firm because of a position taken by an authority in that foreign jurisdiction. Section 3 of the HFCA Act requires certain disclosures by a Commission-Identified Foreign Issuer to appear in an annual report that covers a “non-inspection year.” Similarly, Section 104(i)(2)(B) of the Sarbanes-Oxley Act  23 requires the submission to the Commission of documentation relating to government control of Commission-Identified Issuers.

An annual report requires audited consolidated financial statements for that year and certain prior periods under 17 CFR 210.3-01 through 3-20 (Article 3 of Regulation S-X) and corresponding provisions of Form 20-F and Form 40-F. 24 Audited financial statements include an audit report that must be provided with the financial statements included in a registrant's annual report. 25 Therefore, any year in which the Commission has identified a registrant as having retained a registered public accounting firm meeting the criteria described above for the audit report on its financial statements in its most recent annual report made under the Exchange Act will be deemed a non-inspection year. The submission requirement under Section 104(i)(2)(B) of the Sarbanes-Oxley Act and the disclosure requirements under Section 3 of the HFCA Act, if applicable, would then be required for the annual report covering such non-inspection year. 26 For example, if a registrant is identified based on its Form 10-K filing made in 2022 for the fiscal year ended December 31, 2021 as being a Commission-Identified Issuer, then 2022 would be deemed a non-inspection year. Such registrant would be required to comply with the submission and, if applicable, the disclosure requirements in its Form 10-K filing covering the fiscal year ended December 31, 2022, which is required to be filed in 2023.

The HFCA Act was enacted on December 18, 2020 and provides for identification of the issuers required to file reports under Section 13 or 15(d) of the Exchange Act during a year that begins “after the date of enactment” of the HFCA Act. Given this statutory language, a registrant will not be subject to a non-inspection year determination for any fiscal year ending on or prior to December 31, 2020, and accordingly, a registrant will not have to provide either the HFCA Act's Section 3 disclosure or the Section 2 submission for those years.

For fiscal years beginning after December 31, 2020, and once the PCAOB has made its determinations pursuant to the HFCA Act, the Commission will identify registrants pursuant to the HFCA Act based on the PCAOB's determination and on registrants' annual reports. The Commission will issue appropriate notice once it has established the process by which it will begin to identify registrants pursuant to the HFCA Act, and is requesting public comment herein regarding the appropriate mechanics for determining Commission-Identified Issuers. A registrant will not be required to comply with the disclosure requirement or the submission requirement until the Commission identifies it as having a non-inspection year. Once identified, a registrant will be required to provide the HFCA Act disclosure in its annual report for each non-inspection year, i.e., the report covering the fiscal year in which the registrant was included in the list of Commission-Identified Issuers.

We request and encourage any interested person to submit comments on any aspect of the interim final amendments, other matters that might have an impact on the amendments, and any suggestions for further revisions. When commenting, it would be most helpful if you include the reasoning behind your position or recommendation. In particular, we seek comment on the following:

1. The Commission is required to identify registrants subject to the HFCA Act disclosure and submission requirements based on the PCAOB's determination relating to the registered public accounting firm that is retained by the registrant and that prepares the registrant's audit report. We are currently considering what process to use for identifying registrants (including the process and feasibility of communicating to those registrants regarding their status) as Commission-Identified Issuers. We request comment related to this process on the following:

a. The HFCA Act requires the Commission to identify covered issuers that “retain” a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The HFCA Act does not define the term “retain.” While multiple public accounting firms may work on the audit of a registrant, for purposes of interpreting and applying the HFCA Act's provisions, we understand the retained firm to be the firm that signs an accountant's report on the registrant's consolidated financial statements that is included in a registrant's Exchange Act report. We believe this is consistent with the understanding of the term “retain” by the auditing profession. Is our understanding of the term “retained” appropriate in this context?

b. We are considering making the determination of Commission-Identified Issuers on an annual basis, not earlier than a date after the annual report forms for registrants with December 31 fiscal year ends are due to be filed, given that the majority of registrants have a calendar year end. The identification would be based on the audit report contained in a registrant's annual report filed with the Commission for the most recently completed fiscal year preceding the date of the Commission determination. Should we establish a single determination date each year? If so, should we make the determination on or around May 15? Would some other date, earlier or later in the year be more helpful to registrants affected by the determination? Alternatively, should we base the determination on when the PCAOB makes its determination public? Should we make the determination more often, such as monthly, quarterly, or semi-annually? Should we instead make individual determinations on issuer-specific dates, such as the measurement date for determining accelerated filer status  27 or a date linked to the fiscal year end of the registrant?

c. Should we publish a list of Commission-Identified Issuers on our website? Should Commission-Identified Issuers be identified on EDGAR so investors may more easily identify which registrants are on the list? If we publish a list of Commission-Identified Issuers, how should the Commission address any potential errors in identification relating to a registrant's status? Should the Commission provide guidance or prescribe rules relating to disclosure or procedures for identification of errors relating to a registrant's status?

d. To facilitate satisfaction of HFCA Act requirements, should we introduce a structured data tagging requirement pertaining to the auditor name and jurisdiction on the audit report signed by the registered public accounting firm in the registrant's Form 10-K, Form 20-F, and Form 40-F? Such tagging would provide machine-readable data directly from the registrant identifying the audit firm retained by it, and may therefore facilitate the Commission's determination of the registrants it should designate as Commission-Identified Issuers. If we introduced such a requirement, should the information be required to be tagged in Inline XBRL? Should we instead consider a tagging requirement to facilitate the determination of Commission-Identified Issuers that would not specify a particular structured data language to be used? Would the use of tagging also facilitate the ability of investors and other interested parties to identify registrants at risk of trading prohibitions resulting from three consecutive non-inspection years? What would be the costs associated with introducing a structured data tagging requirement pertaining to the auditor name and jurisdiction? Should we introduce this structured data tagging requirement for Form N-CSR? Is there any circumstance when that tagged information in the Form N-CSR would differ from the information the Commission already collects on Form N-CEN (17 CFR 249.330) in a structured data format regarding a fund's auditor?

2. We are adopting interim final amendments to reflect the disclosure requirements in Section 3 of the HFCA Act. With respect to such disclosure requirements, we further request comment on the following:

a. The interim final amendments require a registrant to disclose that, during the period covered by the form, a registered public accounting firm that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction has prepared an audit report for the registrant. Should a registrant that changes from using a non-inspected registered public accounting firm to an inspected firm be required to affirmatively state that it no longer retains the identified registered public accounting firm to audit its financial statements?

b. The interim final amendments require that the registrant disclose the name of each official of the CCP who is a member of the board of directors of the registrant or the operating entity with respect to the registrant. Should we define what it means to be an official of the CCP or would further guidance on this requirement be helpful? For example, would clarification of the phrase “operating entity with respect to the registrant” be helpful or is the term generally understood?

c. Do the interim final amendments cover all of the forms in which disclosure is required by the HFCA Act? Should the amendments cover any additional forms? If so, which forms and what is the basis for requiring the disclosure in those forms? For example, should we consider requiring the disclosure in initial registration statements, such as 17 CFR 249.210 (Form 10)? Requiring this disclosure in initial registration statements would provide potential investors in these new registrants with disclosure related to the risk that these registrants have retained a registered public accounting firm that may subject the registrant to the HFCA Act trading prohibition. Alternatively, or in addition, should we amend Form 8-K to require disclosure by a registrant of the Commission's determination that the registrant is a Commission-Identified Issuer? Requiring this disclosure in a Form 8-K would provide additional notice of the Commission's determination, prior to the filing of the annual report covering that non-inspection year. What would be the costs of expanding registrants' disclosure obligations in these ways?

d. Are the new disclosure requirements in Item 9C. of Form 10-K, Item 16I. of Form 20-F, paragraph B.18 of Form 40-F, and paragraphs (i) and (j) of Item 4 of Form N-CSR sufficiently clear? Is there any additional guidance or clarity that the Commission can provide to assist registrants in preparing and providing the disclosure?

e. Should we consider moving the disclosure requirement in Part II, Item 9C. of Form 10-K to Regulation S-K? Would the disclosure be more appropriate in a different part of the Form 10-K, such as in Part III where the information could be incorporated from the proxy statement? Similarly, would the disclosure be more appropriate in a different part of the Form 20-F or Form 40-F?

f. For registered investment companies, should we locate the requirements implementing the HFCA Act in another form? For example, should the Commission locate these requirements in Form N-CEN to cover unit investment trusts, which do not file audited financial statements on Exchange Act reporting forms? Would the requirements be more appropriate in a different part of the Form N-CSR?

3. We are adopting interim final amendments to implement the submission requirements in Section 104(i)(1)(B) of the Sarbanes-Oxley Act (as added by Section 2 of the HFCA Act) that track the statutory language. With respect to such submission requirements, we further request comment on the following:

a. The submission requirement for documentation relating to governmental ownership or control is included in certain annual report forms ( i.e., Form 10-K, Form 20-F, Form 40-F, and Form N-CSR), and registrants that are Commission-Identified Issuers will need to submit their documentation to the Commission on or before the due date for the relevant annual report. Should the submission be made in conjunction with the registrant's annual report? Should there be a different due date for the submission? Should we locate the submission requirement in a different form or rule, such as Form 8-K or Form 6-K (17 CFR 249.306)?

b. The interim final amendments provide that the submission be made electronically to the Commission on a supplemental basis. Should the documentation submitted to the Commission be made publicly available, should it be retained non-publicly (subject to applicable law), and/or should the registrant be allowed to request confidential treatment for some or all of the submission? Alternatively, should the submission be publicly filed as an exhibit to the form or filed with the Commission in some other way to make it more accessible?

c. Should the Commission require specific types of documentation for satisfying the HFCA Act Section 2 submission requirement? If so, what specific documentation should be required? Alternatively, is it appropriate to retain flexibility for registrants to determine what documentation to provide in order to meet this requirement? If so, is additional guidance necessary for registrants to determine what documentation is sufficient to establish that they are not owned or controlled by a governmental entity in the foreign jurisdiction? Should we provide a non-exclusive list of documents that could be submitted to satisfy the submission requirement, such as a legal opinion or a statement or certification from an officer or director of the company that it is not controlled by a governmental entity?

d. Commission-Identified Issuers that are owned or controlled by a foreign governmental entity are not required to submit documentation to the Commission. Should we require these Commission-Identified Issuers to affirmatively state that they are owned or controlled by a foreign governmental entity?

4. Should we define particular terms or provide guidance regarding the use of those particular terms in our form amendments? For example, should we provide additional definitions or guidance on what is considered a “governmental entity”? Is guidance necessary to help registrants comply with Section 2 and Section 3 of the HFCA Act? For example, we have provided guidance that the terms “owned or controlled,” “owned,” and “controlling financial interest” should be read with reference to how the term “control” is used in the Exchange Act and the existing definition in the Exchange Act rules. Would additional guidance as to what it means to be “owned or controlled,” “owned,” or having a “controlling financial interest” be helpful or is the guidance sufficient? Should we make any further amendments to our rules to address these points? For example, should we specify the basis of accounting that must be used in making a “controlling financial interest” determination? As another example, for registered investment companies, should the terms “owned or controlled,” “owned,” and “controlling financial interest” be read with reference to how the term control is used in the Investment Company Act and Investment Company Act rules?

5. The interim final amendments do not require the HFCA Act Section 3 disclosure until an issuer has been identified by the Commission and in no event would disclosure be required for fiscal years ending on or before December 31, 2020. Should we provide additional guidance on the required timing and disclosure? What additional guidance would be useful?

6. If a registrant is determined to be a Commission-Identified Issuer for three consecutive years, Section 2 of the HFCA directs the Commission to prohibit the securities of the registrant from being traded in the U.S. market. As mentioned earlier, implementation of such trading prohibitions will be addressed separately. Are there any considerations we should take into account while determining how to best implement the trading prohibition requirements of the HFCA Act?

With respect to any comments, we note that they are of greatest assistance if accompanied by supporting data and analysis of the issues addressed in those comments.

If any of the provisions of these rules, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.

Pursuant to the Congressional Review Act, 28 the Office of Information and Regulatory Affairs has designated these rules as not a “major rule,” as defined by 5 U.S.C. 804(2).

The Administrative Procedure Act (“APA”) generally requires an agency to publish notice of a rulemaking in the Federal Register and provide an opportunity for public comment. This requirement does not apply, however, if the agency “for good cause finds . . . that notice and public procedure are impracticable, unnecessary, or contrary to the public interest.”  29 Section 2 of the HFCA Act requires Commission rulemaking within 90 days of the date of enactment in order to “establish the manner and form in which a covered issuer shall make a submission required under paragraph (2)(B).” Furthermore, Section 3 of the HFCA Act requires certain disclosure from issuers, and the amendments to Form 10-K, Form 20-F, Form 40-F, and Form N-CSR clarify issuers' obligations under the HFCA Act. Because the amendments conform the specified forms to the requirements of a newly enacted statute and in light of the 90-day rulemaking directive in Section 2 of the HFCA Act, the Commission finds that notice and public comment are impracticable and unnecessary. 30 While the amendments being adopted in this release conform the specified forms to the HFCA Act's requirements, we also are soliciting comment on various related topics that the Commission may seek to address in subsequent releases, depending on the public feedback received and other considerations.

As discussed above, we are amending Form 10-K, Form 20-F, Form 40-F, and Form N-CSR to implement the disclosure and submission requirements of the HFCA Act. We are mindful of the costs imposed by, and the benefits obtained from, our rules. In this section, we analyze potential economic effects stemming from the amendments. 31 We analyze these effects against a baseline that consists of the current regulatory framework and current market practices.

As a threshold matter, we note that the amendments discussed in this economic analysis implement discrete components of the HFCA Act. Other aspects of the statute, such as the identification of issuers with non-inspection years and implementation of the trading prohibitions in Section 2 of the HFCA Act, will be addressed separately at a later date. Accordingly, the focus of this economic analysis is on the effects arising from the disclosure and submission requirements in the HFCA Act. Where possible, we have attempted to quantify the expected economic effects of the amendments. In some cases, however, we are unable to quantify these economic effects. Some of the potential economic effects are inherently difficult to quantify. In some instances, we lack the information or data necessary to provide reasonable estimates for the economic effects of the amendments. Where we cannot quantify the relevant economic effects, we discuss them in qualitative terms.

The new disclosure requirements will increase transparency about the reliability of affected issuers' financial statements as well as the characteristics of their ownership and control structures. High-quality disclosures, including high-quality financial statements, are a cornerstone of well-functioning capital markets. 32 Such disclosures reduce information asymmetries between investors and issuers, with positive effects on price efficiency and capital allocation. 33 Broadly speaking, academic research shows that increasing the quality of financial reporting improves price efficiency and reduces an issuer's cost of capital. 34

Financial reporting quality is in part determined by audit quality. According to academic studies, PCAOB oversight has led to improvements in audit quality and to increased investor confidence in the quality of the audited financial statements. 35 However, when the PCAOB is unable to inspect some auditors there is a lack of transparency with respect to the audit quality provided by such firms. As a result, there is uncertainty regarding the reliability of the financial information of issuers audited by firms that are not inspected, which can potentially lead to suboptimal investment decisions by investors.

In addition, academic literature provides evidence of varying types of impact of ownership and control structures on firm value. 36 Government ownership, in particular, can be related to both risks and benefits for investors. Evidence in the literature highlights inefficiencies and expropriation risks as a result of government ownership or control, whereas other studies provide evidence of easier access to financing. 37 Effects from government ownership or control on firm value may be further amplified when the regulatory environment in the foreign jurisdiction is weak, and when there is heightened political risk. 38

The required disclosures and submissions will reduce uncertainty about characteristics that may affect firm value and risk and therefore could facilitate investors' capital allocation decisions. Some of the information required to be disclosed under the amendments may be otherwise available to investors through other sources or overlap with existing mandated disclosures. 39 In such cases, we expect the required disclosures could nevertheless reduce search costs for investors and potentially enhance investor protection. In addition, the submission requirement will provide some reassurance to investors that Commission-Identified Issuers that do not disclose any ownership or control by governmental entities (in foreign jurisdictions that prevent PCAOB inspections) are not, in fact, owned or controlled by such entities.

The amendments will impose compliance costs on issuers that may vary based on characteristics of their audit arrangements and ownership structure. Although these compliance costs, in themselves, may not be significant for most firms, the costs may nonetheless cause certain issuers to accelerate their response to other aspects of the HFCA Act, such as switching audit firms or exiting the U.S. markets altogether. We do not assess the magnitude of the effects arising from implementation of other aspects of the HFCA Act, including the trading prohibition, at this time, as they will depend on the approach taken by the PCAOB and the Commission to implement those parts of the statute. 40 We note, however, that those effects are likely to be much more significant than the comparatively limited benefits and costs associated with the current amendments. For similar reasons, our analysis does not encompass the effects to audit firms of being identified by the PCAOB as being a firm that it is unable to inspect or investigate completely.

The disclosures and submissions required by the amendments will potentially provide the Commission, as well as market participants, with more readily accessible and comparable information regarding a number of Commission-Identified Issuers' characteristics, namely: (1) The extent of ownership or control by a governmental entity in a jurisdiction where the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction, (2) the use of a registered public accounting firm in preparation of an audit report that the PCAOB is unable to fully inspect, (3) the presence and identity of any official of the CCP who is a member of the board of directors, and (4) the presence and specific text of any charter of the CCP contained in the registrant's articles of incorporation (or equivalent organizing document). We therefore analyze the extent to which such requirements will change existing regulatory requirements or the current practices of potentially affected registrants.

Compliance with the HFCA Act will require disclosures and submissions pertaining to the ownership or control of a registrant by a governmental entity in the foreign jurisdiction of the registered public accounting firm that the PCAOB is unable to inspect or investigate completely. In practice, many registrants already include disclosures similar to the information required by the HFCA Act in the portions of their respective periodic reports pertaining to registrant-specific risks. 41 Others provide detailed diagrams to illustrate their ownership structure within their descriptions of business or otherwise seek to inform readers of their variable interest entity (“VIE”) arrangements within the financial statements included in periodic disclosures. 42 The levels of detail and specificity associated with these disclosures vary, however, and the information often is not easily comparable across filings given that similar disclosures may not occur within the same item or section of the report. 43

One notable exception to this variation in disclosures, however, is the disclosure by registrants of the PCAOB's inability to conduct inspections of their respective independent audit firms. We observe a highly similar type and pattern of disclosure regarding the PCAOB's inability to inspect those firms included in the majority of the potential Commission-Identified Issuers' Item 3 (for Form 20-F filers) and Item 1A (for Form 10-K filers) discussion of risk factors. 44 Such disclosures are readily accessible using the keyword search functionality on the Commission's EDGAR website. 45 In addition, similar identification of registrants whose independent auditors were not fully inspected by the PCAOB due to limitations and restrictions imposed by authorities in foreign jurisdictions has historically been available via the PCAOB's dedicated “Public Companies that are Audit Clients of PCAOB-Registered Firms from Non-U.S. Jurisdictions where the PCAOB is Denied Access to Conduct Inspections” web page. 46

Under the amendments, Commission-Identified Foreign Issuers will also be required to disclose the presence and identity of any official of the CCP who is a member of its board of directors in addition to the percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incorporated or otherwise organized and whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer. At present, some of this information may be elicited by Form 10-K disclosure requirements  47 or Form 20-F disclosure requirements. 48 Because Form 10-K, Part III disclosures may be incorporated by reference from the registrant's definitive proxy statement if filed within 120 days of the related Form 10-K fiscal year end, or alternatively filed as a Form 10-K amendment by the same 120 day deadline, such disclosures are not currently uniformly present in the annual report filings of the potentially affected issuers. Moreover, there are currently no requirements that such disclosures must include the political party affiliation of those responsible for registrants' management and oversight, including but not limited to members of the board. Nor is there a requirement to systematically disclose the identity and ownership stake of any person or group of persons—including government entities—who directly or indirectly acquire or have beneficial ownership of less than five percent of a class of a Commission-Identified Issuer's securities.

Finally, under the amendments, Commission-Identified Foreign Issuers will be required to state whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the CCP, including the text of any such charter. While periodic reporting requirements currently instruct registrants to include a complete copy of the articles of incorporation and bylaws as an exhibit to the annual report, 49 there are no requirements to identify the political or textual origins of any portion of a registrant's articles of incorporation. In practice, given that a registrant may simply indicate in its annual report exhibit index that such articles are incorporated by reference, 50 few filers include the full text of such articles, bylaws, or charters in annual report filings after initially doing so at the time of IPO registration. Similarly, amended or revised versions of the registrant's articles of incorporation and bylaws are generally not included in the annual report filing, but are incorporated by reference as well. In these cases, locating the submission to which the registrant's complete and most recent version of its articles of incorporation are attached in their entirety requires a search and review of the registrant's current reports (on Forms 8-K or 6-K). 51 Therefore, under current regulatory requirements and in practice, the majority of annual reports filed by potential Commission-Identified Foreign Issuers do not include, neither in part nor in complete form, the registrant's articles of incorporation, from which the reader might assess the presence or absence of text from the charter of the CCP.

Registrants subject to periodic reporting requirements under the Exchange Act will not be affected by the amendments unless and until they are Commission-Identified Issuers. Commission identification of such issuers is in turn contingent upon initial identification of affected registered public accounting firms that are retained by registrants with periodic disclosure obligations. Based upon a review of such registrants in calendar year 2020, we identified 273 registrants for whom future identification as a Commission-Identified Issuer could be possible on the basis of current facts and circumstances. 53 Of these potential Commission-Identified Issuers candidates, 18.2 percent filed annual disclosures using Form 10-K while 78.2 percent are Form 20-F filers. No filings submitted by potential candidates were made using Forms 40-F or N-CSR. Among filers, approximately 22 percent were incorporated in the United States while 78 percent were incorporated in foreign jurisdictions, including 4.8 percent who self-disclosed to be state- owned enterprises. These registrants' securities are either listed on a national exchange (88.7 percent), OTC-listed (9.9 percent), or report no U.S. listing (1.5 percent). 54

The amendments may impact both current investors in affected registrants as well as potential investors that may consider investing in these registrants in the future. As mentioned above, at least some of the information elicited by the required disclosures is likely to already be available to investors through various existing channels but at varying costs. As such, we expect that the required disclosures are likely to affect mostly retail investors who directly invest or consider investing in affected registrants since it may be more costly for these investors to obtain such information absent the required disclosures. Institutional or other sophisticated investors may also be impacted by the amendments; however, we expect that such impact might be limited given their resources to obtain the required information from other sources, when such sources are available.

For Commission-Identified Foreign Issuers, the amendments will require specific disclosures to be made in these registrants' annual reports. 55 In general, as discussed above, the required disclosures elicit information that the academic literature shows is value-relevant to investors. As such, we expect the required disclosures to be beneficial to investors since they are likely to reduce search costs when the information in the required disclosure is otherwise available through other sources or existing disclosures, and also potentially provide investors with information about aspects of these registrants' governance characteristics that otherwise might not be available or relatively costly to obtain. We do not expect significant compliance costs for Commission-Identified Foreign Issuers given that these registrants likely already possess the information required by the amendment; however, registrants may incur additional compliance costs if the required information is not readily accessible to them or needs to be formatted for the required disclosure.

The amendments will require disclosure that a registered public accounting firm that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction has issued an audit report for the registrant. The disclosure will provide transparency about the inspection status of the engaged audit firm. As discussed above, the academic literature provides evidence that the PCAOB's oversight has led to improvements in audit quality and financial reporting quality, for both domestic and foreign issuers. The inability of the PCAOB to inspect the auditors of these registrants could generate uncertainty regarding their financial reporting quality. Thus, to the extent this information is new to investors, 56 we expect the specific required disclosure to potentially facilitate investors' capital allocation decisions. We further expect that the presentation of such information in a standardized form in the annual report is likely to be helpful to investors by reducing their search costs.

The amendments will require disclosure of the percentage of the shares of the registrant owned by a government in the foreign jurisdiction. As discussed above, government ownership is information that is likely to facilitate investors' capital allocation decisions. For example, disclosure of government ownership may allow investors to better assess potential political risks/effects related to government ownership in the foreign jurisdiction that may influence the value of their investment. These benefits would be limited to the extent that affected registrants already provide disclosure relevant to assessing such risks.

In addition to the disclosure of ownership though equity holdings, the amendments will require affected registrants to disclose whether a governmental entity has a controlling financial interest in the registrant. We expect such disclosure may benefit investors as it could provide information about other mechanisms, besides direct equity ownership, such as control through a pyramidal ownership structure that might allow a governmental entity to influence registrants' operational and other decisions, thus providing additional insight into potential risks to investors that might arise from such control/ownership structures. 57

The amendments also require disclosure of board members' affiliations with the CCP and whether the articles of incorporation of the registrant (or equivalent organizing document) includes any charter of the CCP, including the text of any such charter. These disclosures will enhance existing information on the composition of the board and could increase insight into its quality and the related consequences for firm value. One study shows that the degree of a board's political affiliation in China is related to firm value, and this varies based on facts and circumstances. 58 For example, political affiliation of members of the board may imply that the incentives of such board members do not align with shareholders' interests, which in turn may affect registrants' decisions with potentially negative consequence for the registrants' value. Under different circumstances, politically connected board members may facilitate the execution of financing transactions for the registrant. To the extent that these disclosures may benefit investors by facilitating their efforts to evaluate characteristics of registrants that may have an impact on the value of their investments, these specific disclosures may facilitate investors' capital allocation decisions and potentially increase investor protection.

The required disclosures are likely to impose some compliance costs on Commission-Identified Foreign Issuers. We do not expect these compliance costs to be significant since these registrants likely already possess the information required by the amendments. However, to the extent that such information is not readily accessible or needs to be formatted to comply with the required disclosure, we expect potential additional costs to these registrants. 59

The required disclosures may impact the cost of capital for some affected registrants. As discussed above, empirical evidence suggests that the information elicited by the required disclosures is, in general, related to potential risks and more broadly to firm value. 60 We discuss the potential impact of the required disclosures on affected registrants' cost of capital further below, but note that the magnitude of any such impact is likely to be moderated depending on the extent information is otherwise available to investors.

The required disclosure regarding the use of a non-inspected firm to audit the registrant's annual report, which will now be required in a standardized manner, may lead investors to re-evaluate potential risks related to financial reporting quality due to the inability of the PCAOB to inspect the auditors of these registrants. Academic literature shows that PCAOB oversight is broadly related to improvements of audit quality, and also investor perceptions of such audit quality. 61 As described above, many registrants already disclose, and also provide a discussion of, the risks or decreased benefits associated with using a non-inspected auditor. 62 Given the extent to which information specifically required in the new disclosures overlaps with disclosures already observed in practice, in addition to the information being available from other sources such as the PCAOB, we expect the impact of these specific required disclosures on affected registrants' cost of capital to be small.

Section 3 of the HFCA Act also requires registrants to disclose information in a standardized manner in annual reports about their ownership and control structures, including the magnitude of direct equity ownership by a government in non-cooperating foreign jurisdictions and the degree of control a government in the non-cooperating jurisdiction may exert on the registrant through channels other than ownership. As described above, government ownership and control is likely to have an impact on the registrant's decision-making processes, and such impact is likely to vary under facts and circumstances. 63 The required disclosures may affect registrants' cost of capital insofar as the information disclosed triggers a re-assessment of the affected registrant's exposure to governmental ownership or control.

The amendments also will require registrants to disclose information about potential additional links to the CCP. Such disclosure is likely to be informative of the registrant's governance, and may also lead investors to re-assess potential political risks that may not have been previously known through existing registrants' disclosures. For example, such links between the registrant and the CCP may indicate increased political influence on registrants' decision-making processes and consequent impacts on registrants' value. While some, but not all, of the information in the required disclosures may already be publicly available through disclosures in forms other than in annual reports, the content of such disclosures may not be standardized across registrants. We expect these specific disclosures may potentially impact registrants' cost of capital, particularly for registrants about which such information is not otherwise known by the market.

The amendments implementing the submission requirement of Section 104(i)(1)(B) of the Sarbanes-Oxley Act (as added by Section 2 of the HFCA Act) provide that a Commission-Identified Issuer that is not owned or controlled by a foreign governmental entity in a foreign jurisdiction that prevents PCAOB inspections must submit documentation to the Commission that establishes that the registrant is not so owned or controlled. As discussed above, the amendments specify that if an affected registrant is owned or controlled by a foreign governmental entity, it will not be required to submit such documentation. We estimate in the baseline that a large majority of current registrants that are potential future Commission-Identified Issuers are also foreign issuers that will be subject to the disclosures required by Section 3 of the HFCA Act. Therefore, we expect the submission requirement to serve as a complement to these required disclosures.

We anticipate that requiring Commission-Identified Issuers to provide documentation to support a lack of foreign control will provide further reassurance to investors that the registrants' disclosures in this regard are materially accurate and complete. In particular, because the submission requirement generally would apply to those Commission-Identified Issuers who otherwise do not disclose that they are owned or controlled by a foreign governmental entity, this requirement will provide some reassurance to investors that such control does not exist. We believe that greater certainty about which Commission-Identified Issuers lack governmental ownership and control may improve investors' assessments of the risks of investing in Commission-Identified Issuers' securities. If the submitted documentation is made publicly available, we expect the reassurance benefit to be larger than if the submission is retained non-publicly by the Commission. Because affected registrants will have flexibility to determine the specific types of documentation to submit to the Commission, if the submitted documentation is made publicly available, we expect the magnitude of the reassurance benefit to depend on the nature of information issuers submit. We generally expect this reassurance benefit to be limited given the HFCA Act's required Section 3 disclosure and other information about ownership and control required by existing Commission rules. 64

Because we expect the submission requirement to impose (on average) only minor compliance costs on affected registrants and no other significant costs, we also do not generally expect any significant negative effects on investors from this requirement, such as a reduction in the prices of affected registrants' securities they currently own.

Commission-Identified Issuers who lack ownership or control by a governmental entity in the foreign jurisdiction of the registered public accounting firm that the PCAOB is unable to inspect or investigate completely will incur some direct compliance costs related to producing the documentation they will be required to submit to the Commission. The magnitude of these compliance costs will depend on how easily the affected registrants can produce documentation to satisfy the submission requirement. The amendments do not specify particular types of documentation that can or must be submitted to satisfy this requirement. Affected registrants will thus have flexibility to determine how best to establish that they are not owned or controlled by a foreign governmental entity. This should help limit compliance costs, as registrants will be able to produce documentation that is suited to their particular circumstances. At the same time, at least as an initial matter, uncertainty about the scope of the requirement could lead some registrants to seek additional advice from attorneys and other advisers, which could marginally increase compliance costs. Overall, because we expect that affected registrants will have information readily available about their ownership structures and controlling parties, we expect the direct compliance costs associated with this requirement will be minor. 65

As discussed above, the required disclosures may provide new or more easily accessible information about whether registrants have retained non-inspected registered auditors and whether such registrants are owned or controlled by governmental entities of the foreign jurisdictions that prevent PCAOB inspections. To the extent this disclosed information is new or reduces search costs, we expect it could potentially reduce information asymmetries in securities markets, thereby improving price efficiency and helping investors achieve more efficient portfolio allocations. Overall, we believe that any efficiency gains will be modest since the potential increase in informational content and reduction in search costs to investors is likely to be limited given existing disclosures.

To the extent the amendments will reduce information asymmetries, affected registrants may experience a change in cost of capital (either a reduction or an increase is possible, depending on circumstances), which may in turn affect capital formation. However, similar to any effects on efficiency, we expect such capital formation effects to be small in aggregate. Likewise, we do not expect the amendments to significantly impact overall competition, based on the expected low compliance costs for registrants and the expected limited incremental impact on investors' information environment. However, we do not rule out that there could be instances where the required disclosures provide new information about some registrants that could potentially impact (either positively or negatively) their individual competitive situation due to investors' reassessment of such registrants' risk and prospects.

Certain provisions of Form 10-K and Form 20-F that will be affected by the interim final amendments contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”). 66 The Commission is submitting the interim final amendments to the Office of Management and Budget (“OMB”) for review in accordance with the PRA. 67 The titles for the collections of information are:

“Form 10-K” (OMB Control No. 3235-0063); and

“Form 20-F” (OMB Control No. 3235-0288).

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information requirement unless it displays a currently valid OMB control number. Compliance with the information collections is mandatory. Responses to the information collections are not kept confidential and there is no mandatory retention period for the information disclosed. The affected forms were adopted under the Exchange Act and set forth the disclosure requirements for annual reports filed by registrants to help investors make informed investment decisions. The hours and costs associated with preparing and filing the forms constitute reporting and cost burdens imposed by each collection of information.

As described in more detail above, we are adopting interim final amendments to implement the disclosure and submission requirements of the HFCA Act. The amendments will require certain disclosure from foreign issuers relating to foreign jurisdictions that prevent PCAOB inspections and require all registrants to submit documentation to the Commission establishing that such a covered issuer is not owned or controlled by a governmental entity in that foreign jurisdiction.

We anticipate that new disclosure and submission requirements will increase the burdens and costs for these registrants. We derived our burden hour and cost estimates by estimating the average amount of time it would take a registrant to prepare and review the required disclosure and submission, as well as the average hourly rate for outside professionals who assist with such preparation. In addition, our burden estimates are based on several assumptions.

For the HFCA Act Section 3 disclosure requirements we estimated the number of affected registrants by determining the number of foreign issuer registrants that retained registered public accounting firms that issued an audit report and are located in a jurisdiction where obstacles to PCAOB inspections exist. For the Section 104(i)(1)(B) of the Sarbanes-Oxley Act (as added by Section 2 of the HFCA Act) submission requirements we estimated the number of affected registrants by determining the number of registrants that retained registered public accounting firms that issued an audit report and are located in a jurisdiction where obstacles to PCAOB inspections exist. Based on these estimates, for purposes of the PRA, we estimate that there will be:

• No affected Form 10-K filers for the HFCA Act Section 3 disclosure requirements and 55 affected filers for the Section 104(i)(1)(B) of the Sarbanes-Oxley Act submission requirement; and

• Two hundred twenty affected Form 20-F filers for the HFCA Act Section 3 disclosure requirements and 206 affected filers for the Section 104(i)(1)(B) of the Sarbanes-Oxley Act submission requirement. 68

Commission-Identified Issuers will generally have information readily available about their audit arrangements, ownership structures, and controlling parties. Therefore we estimate that the average incremental burden for an affected registrant to prepare the submission would be 1 hour and for an affected registrant that is a foreign issuer to prepare the disclosure would be 1 hour. These estimates represent the average burdens for all affected registrants, both large and small. In deriving our estimates, we recognize that the burdens will likely vary among individual registrants based on a number of factors, including the size and complexity of their operations. We believe that some registrants will experience costs in excess of this average and some registrants may experience less than the average costs.

The table below shows the total annual compliance burden, in hours and in costs, of the collection of information resulting from the interim final amendments. 69 The burden estimates were calculated by multiplying the estimated number of responses by the estimated average amount of time it would take a registrant to prepare and review the required information. The portion of the burden carried by outside professionals is reflected as a cost, while the portion of the burden carried by the registrant internally is reflected in hours. For purposes of the PRA, we estimate that 75 percent of the burden of preparation of Form 10-K and Form 20-F is carried by the registrant internally and that 25 percent of the burden of preparation is carried by outside professionals retained by the registrant at an average cost of $400 per hour. 70

We request comments in order to evaluate: (1) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information would have practical utility; (2) the accuracy of our estimate of the burden of the collection of information; (3) whether there are ways to enhance the quality, utility and clarity of the information to be collected; and (4) whether there are ways to minimize the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology. 71 Specifically, we request comment on the estimated number or percentage of affected registrants.

Any member of the public may direct to us any comments concerning the accuracy of these burden estimates and any suggestions for reducing these burdens. Persons who desire to submit comments on the collection of information requirements should direct their comments to the Office of Management and Budget, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and send a copy of the comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549, with reference to File No. S7-03-21. Requests for materials submitted to the OMB by us with regard to these collections of information should be in writing, refer to File No. S7-03-21 and be submitted to the Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington DC 20549.

Because the OMB is required to make a decision concerning the collections of information between 30 and 60 days after publication, a comment to the OMB is best assured of having its full effect if the OMB receives it within 30 days of publication.

The amendments contained in this release are being adopted under the authority set forth in Sections 2 and 3 of the HFCA Act, Section 104 of the Sarbanes-Oxley Act, Sections 3, 12, 13, 15(d), and 23(a) of the Exchange Act, and Sections 8(b), 24(a), 30(a), and 38(a) of the Investment Company Act.

Throughout this document “we,” “us,” and “our” means the EPA.

On January 15, 2020, we published a direct final rule and accompanying proposed rule notifying the public that we had received CAA section 111(d)/129 negative declarations from New Mexico and Albuquerque-Bernalillo County for existing OSWI (85 FR 2316; 85 FR 2359). These negative declarations certify that existing OSWI subject to the requirements of sections 111(d) and 129 of the CAA do not exist within the specified jurisdictions in New Mexico. In the January 15, 2020, rulemakings, we proposed and finalized to accept the negative declarations and amend the Code of Federal Regulations (CFR) in accordance with CAA requirements. The direct final rule was published without prior proposal because we anticipated no adverse comments. We stated in the direct final rule that if we received relevant adverse comments by February 14, 2020, we would publish a timely withdrawal in the Federal Register . We received a relevant adverse comment on the direct final rule, and we withdrew the direct final rule on March 23, 2020 (85 FR 16270).

On September 28, 2020, we published a supplemental notice of proposed rulemaking (SNPRM) (85 FR 60746). The SNPRM supplemented the proposal published on January 15, 2020, where we proposed to notify the public that we received CAA section 111(d)/129 negative declarations from New Mexico and Albuquerque-Bernalillo County, New Mexico, for existing OSWI; these negative declarations certify that existing OSWI subject to the requirements of sections 111(d) and 129 of the CAA do not exist within the specified jurisdictions in New Mexico. In order to reaffirm and clarify the prior negative declaration, New Mexico submitted a revised negative declaration for incinerators subject to the OSWI EG by letter dated June 15, 2020; this letter clarifies that incinerators (including OSWI and air curtain incinerators (ACI)) subject to the OSWI EG do not exist within its air quality jurisdiction. In the SNPRM, we appropriately expanded the inclusion of the facilities addressed in the negative declarations from New Mexico and Albuquerque-Bernalillo County from “existing OSWI” to “incinerators subject to the OSWI EG”. The term “incinerators subject to the OSWI EG” is more technically and legally accurate as all facilities affected by the OSWI EG are required to be addressed in state plans and negative declarations. The Albuquerque-Bernalillo County negative declaration letter that was submitted on December 13, 2006, appropriately addressed the subject facilities. Details on CAA sections 111(d) and 129, the OSWI EG, and the negative declarations submitted by New Mexico and Albuquerque-Bernalillo County, can be found in the September 28, 2020, supplemental proposal.

All comments received on the original proposal and on the supplemental proposal are addressed in this final rule. As detailed below, we received one comment on the direct final rule and accompanying proposed rule during the public comment period that closed on February 14, 2020. 1 No comments were received on the supplemental proposal during the comment period that closed on October 28, 2020. Our response to the comment received is presented below. After careful consideration of the comments, we have decided to finalize our action with no changes from the proposed action.

Comment: The commenter stated that the EPA should not allow for negative declarations and should ensure the State of New Mexico has a regulation in place to control emissions from solid waste incineration units throughout the State. The commenter adds that even though the State says they do not have any units subject to this regulation, the EPA should require the State to develop and implement a regulation in case a new source is constructed in the State. The commenter asserts that sections 111(d) and 129 of the CAA require states to develop a regulation for the control of emissions from these units and, therefore, the EPA must require states to develop and implement a new regulation to control emissions from these units.

Response: We disagree with the commenter's statements that the EPA should not allow for negative declarations. Federal regulations at 40 CFR 60.23(b) and 62.06 specifically provide that if there are no existing sources of the designated pollutants in the state, the state may submit a letter of certification to that effect ( i.e., a negative declaration) in lieu of a plan, which exempts the state from the 40 CFR part 60, subpart B, requirement to submit a CAA section 111(d)/129 plan.

We also disagree with the commenter's statements that the EPA should require the State to develop and implement a regulation in case a new source is constructed in the State. State plans under CAA section 111(d)/129 apply only to existing facilities. The designated facilities to which the OSWI EG (40 CFR part 60, subpart FFFF) apply are OSWI and certain ACI  2 that commenced construction on or before December 9, 2004, and were not modified or reconstructed on or after June 16, 2006, as specified in 40 CFR 60.2991 and 60.2992, with limited exceptions as provided under 40 CFR 60.2993. Any incinerator (OSWI or certain ACI)  3 that commenced construction after December 9, 2004, or that commenced reconstruction or modification on or after June 16, 2006, would be subject to the OSWI New Source Performance Standards (NSPS) codified at 40 CFR part 60, subpart EEEE. 4 The negative declarations for incinerators subject to the OSWI EG were submitted to the EPA by the New Mexico Environment Department (NMED) and the City of Albuquerque Environmental Health Department (AEHD) on June 15, 2020, and December 13, 2006, respectively. In addition, the EPA proposed revisions to the OSWI EG and NSPS on August 31, 2020 (85 FR 54178). When the EPA finalizes the revisions to the OSWI EG, 5 each state (and air quality control jurisdiction) will need to submit a negative declaration or plan, as applicable, for those sources subject to the requirements of the final revised OSWI EG.

In this final action, the EPA is amending 40 CFR part 62, subpart GG, to reflect receipt of the negative declaration letters from NMED and AEHD received on June 15, 2020, and December 13, 2006, respectively, certifying that there are no existing incinerators subject to 40 CFR part 60, subpart FFFF, in their respective jurisdictions in accordance with 40 CFR 60.23(b), 62.06, and 60.2982 and sections 111(d) and 129 of the CAA.

Under the CAA, the Administrator is required to approve a CAA section 111(d)/129 submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7411(d); 42 U.S.C. 7429; 40 CFR part 60, subparts B and FFFF; and 40 CFR part 62, subpart A. With regard to negative declarations for designated facilities received by the EPA from states, the EPA's role is to notify the public of the receipt of such negative declarations and revise 40 CFR part 62 accordingly. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

This rule also does not have Tribal implications because it will not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 4, 2021. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, the Environmental Protection Agency amends 40 CFR part 62 as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Publishing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl. To access the OCSPP test guidelines referenced in this document electronically, please go to http://www.epa.gov/ocspp and select “Test Methods and Guidelines.”

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2020-0335 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before June 4, 2021. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2020-0335, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of August 5, 2020 (85 FR 47330) (FRL-10012-32), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 9F8808) by ISK BIOSCIENCES Corporation, 7470 Auburn Road, Suite A, Concord, OH, 44077. The petition requested that 40 CFR 180.660 be amended by establishing tolerances for residues of the fungicide, pyriofenone, (5-chloro-2-methoxy-4-methyl-3-pyridinyl)(2,3,4-trimethoxy-6-methylphenyl) methanone, in or on fruit, small vine climbing subgroup 13-07E, except grape at 1.5 parts per million (ppm); grape at 0.8 ppm; and grape, raisin at 2.5 ppm. In addition, although not mentioned in EPA's document, ISK's petition also requested that the currently established tolerances for residues of pyriofenone in/on fruit, small vine climbing subgroup 13-07D at 1.5 ppm be removed from 40 CFR 180.660, as establishment of the requested tolerances for subgroup 13-07E and grape include all the crops in subgroup 13-07D. That document referenced a summary of the petition prepared by ISK BIOSCIENCES Corporation, the registrant, which is available in the docket, http://www.regulations.gov. No comment was received in response to the notice of filing.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for pyriofenone including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with pyriofenone follows.

In an effort to streamline its publications in the Federal Register , EPA is not reprinting sections that repeat what has been previously published for tolerance rulemakings of the same pesticide chemical. Where scientific information concerning a particular chemical remains unchanged, the content of those sections would not vary between tolerance rulemakings, and republishing the same sections is unnecessary; therefore, EPA considers referral back to those sections as sufficient to provide an explanation of the information EPA considered in making its safety determination for the new rulemaking.

EPA has previously published a number of tolerance rulemakings for pyriofenone, in which EPA concluded, based on the available information, that there is a reasonable certainty that no harm would result from aggregate exposure to pyriofenone and established tolerances for residues of that chemical. EPA is incorporating previously published sections from those rulemakings as described further in this rulemaking, as they remain unchanged.

Toxicological Profile. For a discussion of the Toxicological Profile of pyriofenone, see Unit III.A. of the May 30, 2019 rulemaking (84 FR 24983) (FRL-9993-11).

Toxicological Points of Departure/Levels of Concern. For a summary of the Toxicological Points of Departure/Levels of Concern used for the safety assessment, see Unit III.B. of the May 30, 2019 rulemaking.

Exposure Assessment. EPA's exposure assessment remains unchanged from what was done in support of the May 30, 2019 rulemaking. EPA's aggregate exposure assessments include exposures from food, drinking water and residential sources, and there have been no changes since the last assessment. For a discussion of EPA's assessment of aggregate exposures, see Unit III.C. of the May 30, 2019 rulemaking.

Safety Factor for Infants and Children. EPA continues to conclude that there is reliable data showing that the safety of infants and children would be adequately protected if the FQPA SF were reduced from 10X to 1X for all exposure scenarios. The reasons for that decision are articulated in Unit III.D. of the May 30, 2019 rulemaking.

Aggregate Risks and Determination of Safety. EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists. For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure.

Pyriofenone is not expected to pose an acute risk, due to the lack of acute adverse effects in the database. Chronic dietary risks are below the Agency's level of concern: 6.9% of the chronic population adjusted dose (cPAD) for children 1 to 2 years old, the group with the highest exposure. There are no residential uses for pyriofenone; therefore, the chronic aggregate risk is limited to the chronic dietary risk and is not of concern. Short- and intermediate-term aggregate risks are addressed by the chronic aggregate risk estimates and are not a concern.

Therefore, based on the risk assessments and information described above, EPA concludes there is a reasonable certainty that no harm will result to the general populations, or to infants and children for aggregate exposure to pyriofenone residues. More detailed information on the subject action can be found at https://www.regulations.gov in the document entitled, “Pyriofenone. Human Health Risk Assessment for the Section 3 Registration on Fruiting Vegetables (Crop Group 8-10)” in the docket ID number EPA-HQ-OPP-2020-0335 and the document titled, “Pyriofenone. Human Health Risk Assessment for the Section 3 Registration on Fruiting Vegetables (Crop Group 8-10)” in docket ID number EPA-HQ-OPP-2018-0677.

For a discussion of the available analytical enforcement method, see Unit IV.A. of the May 30, 2019 rulemaking.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has established MRLs for pyriofenone in or on grape at 0.8 ppm and grape, raisin at 2.5 ppm. The U.S. tolerances for these commodities are harmonized with these MRLs.

Under FFDCA section 408(d)(4)(A)(i), EPA may establish tolerances that vary from those sought by the petition. The tolerance level has been modified to be consistent with the Agency's rounding class practices.

In this Final Rule, EPA is establishing an individual tolerance for grape at 0.8 ppm, which is lower than the current allowed amount of residue on grape, by virtue of its inclusion in the small vine climbing fruit subgroup 13-07D at 1.5 ppm. The Agency is reducing this tolerance to harmonize with the Codex MRL on grape, and available residue data demonstrate that this tolerance is sufficient to cover residues on this commodity.

In accordance with the World Trade Organization's (WTO) Sanitary and Phytosanitary Measures (SPS) Agreement, EPA intends to notify the WTO of this revision. In addition, the SPS Agreement requires that Members provide a “reasonable interval” between the publication of a regulation subject to the Agreement and its entry into force to allow time for producers in exporting Member countries to adapt to the new requirement. To accommodate this reasonable interval, EPA is establishing an expiration date for the existing tolerance for small vine climbing fruit subgroup 13-07D to allow those tolerances to remain in effect for a period of 6 months after the effective date of this rule. At the end of that 6-month period, the existing tolerances for subgroup 13-07D will no longer be valid; residues on grape will need to comply with the new grape tolerance and residues on other commodities in that subgroup will need to comply with the new subgroup 13-07E tolerance.

This reduction in tolerance level is not discriminatory; the same food safety standard contained in the FFDCA applies equally to domestically produced and imported foods. The new tolerance level is supported by available residue data.

Therefore, tolerances are established for residues of pyriofenone, (5-chloro-2-methoxy-4-methyl-3-pyridinyl)(2,3,4-trimethoxy-6-methylphenyl) methanone, in or on fruit, small vine climbing subgroup 13-07E, except grape at 1.5 ppm; grape at 0.8 ppm; and grape, raisin at 2.5 ppm. EPA is also establishing an expiration date for the existing tolerance for fruit, small vine climbing subgroup 13-07D.

This action establishes and modifies tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal Governments, on the relationship between the National Government and the States or Tribal Governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

Under 49 CFR part 1201, General Instructions section 1-1(a), rail carriers are grouped into one of three classes for purposes of accounting and reporting. 1 The Board's classification of rail carriers affects the degree to which they must file annual, quarterly, and other operational reports, see, e.g., 49 CFR pt. 1243 and also is used in a variety of other contexts, including differentiating the legal standards and procedures that apply to certain transactions subject to Board licensing, see, e.g., 49 U.S.C. 10902, 11324, 11325, and prescribing labor protection conditions, see, e.g., 49 U.S.C. 10903(b)(2), 11326, among others.

The class to which any rail carrier belongs is determined by its annual operating revenues after application of a revenue deflator adjustment. 49 CFR pt. 1201, section 1-1(b)(1). Currently, Class I carriers have annual operating revenues of $504,803,294 or more, Class II carriers have annual operating revenues of less than $504,803,294 and more than $40,384,263, and Class III carriers have annual operating revenues of $40,384,263 or less, all when adjusted for inflation. Section 1-1(a) (setting thresholds unadjusted for inflation); Indexing the Annual Operating Revenues of R.Rs., EP 748 (STB served June 10, 2020) (calculating revenue deflator factor and publishing thresholds adjusted for inflation based on 2019 data). 2 The revenue classification levels for railroads set forth at 49 CFR part 1201, General Instructions section 1-1(a) were adopted in 1992 by the Board's predecessor, the Interstate Commerce Commission, in the 1992 Rulemaking.

On February 14, 2020, Montana Rail Link, Inc. (MRL), filed a petition for rulemaking to amend the Board's rail carrier classification regulations. In its petition, MRL requested that the Board increase the revenue threshold for Class I carriers to $900 million. (Pet. 1.) MRL contended that it continues to be a regional carrier operationally and economically but may exceed the Class I revenue threshold within two years. ( Id. ) Citing principles drawn from the 1992 Rulemaking, in which the revenue thresholds were last raised, MRL asked that the Board address “whether a regional carrier such as MRL should be treated as a Class I carrier, taking into account (1) the financial and operational differences between MRL and existing Class I carriers, and (2) the cost-benefit analysis of imposing Class I requirements on MRL.” ( Id. at 12.)

MRL submitted eight letters in support of its petition. 3 No replies to MRL's petition were received.

On May 14, 2020, the Board initiated a rulemaking proceeding to consider MRL's petition and consider issues related to the Class I carrier revenue threshold determination. The Board invited “comment about whether it should amend 49 CFR part 1201, General Instructions section 1-1(a), to increase the revenue threshold for Class I carriers, and, if so, whether $900 million or another amount would be appropriate.” Mont. Rail Link, Inc.—Pet. for Rulemaking—Classification of Carriers, EP 763, slip op. at 2 (STB served May 14, 2020).

The Board received two comments in response to its May 14, 2020 decision. On June 15, 2020, the American Short Line and Regional Railroad Association (ASLRRA) filed in support of MRL's petition, arguing, among other things, that Class II carriers such as MRL are distinctly different from Class I carriers and should continue to be classified in their current category. (ASLRRA Comment 2-4, June 15, 2020.) ASLRRA stated that there is a “massive” revenue gap between the largest Class II and the smallest Class I carrier, ( id. at 3), and that the accounting, financial, and other burdens imposed on a Class II carrier by becoming a Class I carrier would outweigh any resulting benefits, ( id. at 2-4). Also on June 15, 2020, the Transportation Trades Department, AFL-CIO (TTD), a coalition of 33 affiliate unions, filed in opposition to MRL's petition. Among other things, TTD raised concerns about the impact on MRL employees with respect to labor protective conditions if the Class I threshold were raised and argued that MRL had not shown that raising the threshold is appropriate or necessary. (TTD Comment 1-2, June 15, 2020.) MRL filed a reply on July 2, 2020, reiterating that its operating and financial profiles are distinct from those of the current Class I carriers (noting, for example, that in 2018 it operated only about 720 miles of mainline track, nearly all of which is in one state, whereas the smallest current Class I carrier operated 3,397 miles of track across 10 states and two countries) and that significant burdens would be imposed on MRL if the threshold is not increased, while limited, if any, benefits would accrue to the public. (MRL Reply 2, 5, July 2, 2020.)

On September 30, 2020, the Board issued a Notice of Proposed Rulemaking to amend its rail carrier classification regulations. The proposed amendments would raise the Class I revenue threshold from $504,803,294 (as adjusted for inflation) to $900 million and have the effect of excluding MRL and other similarly situated carriers from Class I status unless they have met the proposed revenue threshold for three years. Mont. Rail Link, Inc.—Pet. for Rulemaking—Classification of Carriers ( NPRM ), EP 763 (STB served Sept. 30, 2020). The Board sought comment on the proposed amendments.

In response to the NPRM, the Board received comments from ASLRRA on October 29, 2020, and from TTD and the National Grain and Feed Association (NGFA) on November 2, 2020. On December 1, 2020, MRL submitted its reply.

ASLRRA fully supports the Board's proposed amendments and references and reiterates the arguments it made in support of MRL's proposal in its June 15, 2020 comment. (ASLRRA Comment 2, Oct. 29, 2020.) According to ASLRRA, the Board's proposal recognizes that Class II carriers, such as MRL, are operationally and financially different from Class I carriers and would enable regional railroads to continue to serve their customers efficiently. ( Id. ) ASLRRA further notes that the Board's proposal would not deprive regional carriers of the benefit of the Short Line Rehabilitation Tax Credit, which has provided MRL almost $3 million per year in additional funds to invest in infrastructure, and the Railroad Industry Agreement, which provides a mechanism for short lines to work together to increase rail traffic. ( Id.; ASLRRA Comment 4, June 15, 2020.)

TTD opposes the Board's proposed amendments. (TTD Comment 1, Nov. 2, 2020.) TTD also reiterates its concern that the proposed amendments would deny employees certain protective conditions that would have otherwise applied. ( Id. at 2.) TTD argues that its position in its June 15, 2020 comment was not that status quo conditions would worsen for employees, but rather that maintaining MRL's Class II status would deny employees coverage that they would otherwise be entitled to if MRL became a Class I carrier. ( Id. at 2.) TTD states that the Board should give greater consideration to how the proposed amendments may impact the application of employee protective conditions. ( Id. ) TTD also states that it believes that MRL and the Board have failed to document the undue burden that Class I status would place on MRL, or a similar carrier. ( Id. ) TTD argues that MRL has provided no information that suggests that the costs of becoming a Class I carrier would be overly burdensome. ( Id. ) TTD requests that the Board either withdraw its NPRM or, in the alternative, alleviate only reporting/accounting burdens on MRL, instead of “permitting the evasion of protective conditions.” ( Id. at 3.)

NGFA does not oppose the proposed amendments but argues that the Board needs to guard against exempting Class II carriers from regulatory oversight and standards as it increases the revenue thresholds. (NGFA Comment 2-5.) NGFA states that it does not oppose increasing the Class I revenue threshold to $900 million for freight carriers and acknowledges that MRL's petition is supported by its Montana affiliate, the Montana Grain Elevator Association. ( Id. at 2.) NGFA also states that denoting MRL as a Class I carrier would make it ineligible for assistance such as the short line rehabilitation tax credits; the Federal Railroad Administration's Railroad Rehabilitation and Infrastructure Express Program, which provides funds to Class II and III carriers to repair tracks; and the Railroad Industry Agreement, which outlines ways Class I and short line carriers are allowed to collaborate to resolve issues concerning car supply, service quality, routing, and interchange requirements. ( Id. at 2-3.)

Nonetheless, NGFA argues that MRL is a significant regional carrier that has a virtual monopoly on all rail traffic in the state of Montana and that MRL often exercises that market power with its customers in a manner not dissimilar from Class I carriers. ( Id. at 3-4.) NGFA contends that regulatory oversight should apply to Class II carriers. ( Id. at 3-5.) For example, NGFA argues that (1) simplified standards being considered by the Board for rail customers to challenge unreasonable rail rates, such as Final Offer Rate Review, 4 should apply to Class II carriers; (2) the Board should examine whether to require larger Class II carriers like MRL to submit data sufficient to enable rail customers to analyze whether to bring a rate challenge under the STB's Three-Benchmark methodology; and (3) the Board should consider applying to at least Class II carriers any new rules related to reciprocal switching. 5 ( Id. at 4-5.)

In reply, MRL reasserts that it continues to function as a Class II carrier, not a Class I carrier, and requests that the Board adopt the amendments put forth in the NPRM. (MRL Reply 4, Dec. 1, 2020.) In response to TTD's argument that increasing the Class I threshold will deprive MRL employees of enhanced labor protections, MRL argues that the current level of labor protection is fair and appropriate because its operating and financial characteristics continue to be that of a Class II carrier, even with rising revenues. ( Id. at 1-2 (citing Pet. 7 n.4).) MRL also argues that TTD gives no rationale to support why MRL should be excused only from the Class I accounting and reporting requirements and not the Class I labor protection requirements. (MRL Reply 2, Dec. 1, 2020.) MRL reiterates that the Class I accounting and reporting requirements would impose a significant burden on MRL, without any significant offsetting public benefit. ( Id. ) As to NGFA's comments about MRL having a monopoly on traffic in Montana, MRL argues it does not generally have ratemaking authority for its freight movements because BNSF Railway Company, its sole interchange partner, sets the freight transportation rates for approximately 96% of MRL's traffic, excluding switching. ( Id. at 3.) MRL asserts that NGFA's argument that the Board's regulatory oversight should apply to Class II carriers is beyond the scope of this rulemaking. ( Id. )

After considering the record, the Board agrees that MRL and any other Class II carriers that may be approaching the current revenue threshold are properly classified as regional carriers rather than as Class I carriers. The operational characteristics of regional carriers, like MRL, significantly differentiate them from Class I carriers. See NPRM, EP 763, slip op. at 4. The record establishes that even the largest Class II carriers, such as MRL, have much smaller rail networks and service territories than Class I carriers, have local or regional service territories, and lower traffic densities, (MRL Reply 3, Dec. 1, 2020; MRL Reply 2, July 2, 2020; ASLRRA Comment 2, June 15, 2020); are heavily dependent in many critical ways on their Class I interchange partners, (ASLRRA Comment 2, June 15, 2020); and have more limited and less diverse traffic bases than Class I carriers, (MRL Reply 2, July 2, 2020; ASLRRA Comment 3, June 15, 2020). Similarly, even the largest Class II carriers generate far less revenue than the smallest Class I. (MRL Reply 1, July 2, 2020; ASLRRA Comment 3, June 15, 2020.)

Based on this record, including the comments and reply received in response to the NPRM, regional carriers, such as MRL, do not possess the comparative attributes of Class I carriers. Considering the operating and financial characteristics of these carriers, it is appropriate to continue to classify these railroads as Class II carriers, rather than classifying them as Class I carriers and imposing on them the burdens associated with a Class I classification. Doing so maintains an appropriate balance between ensuring the availability of accurate cost information and avoiding imposing additional regulatory requirements on railroads when expanded regulation is not necessary; this also furthers the rail transportation policy. See 49 U.S.C. 10101(2), (13). Additionally, the Board determines that $900 million is a reasonable demarcation between Class I railroads and Class II railroads because it is sufficiently above the current Class II annual revenue level and below the revenue level of the smallest Class I carrier, maintaining an appropriate division between the two classes of carriers for the foreseeable future. See NPRM, EP 763, slip op. at 5-6. No commenter raised specific concerns with the Board's proposed $900 million figure.

TTD's argument that the Board should not change the revenue threshold due to the impact on labor protections remains unpersuasive. ( See TTD Comment 2, Nov. 2, 2020.) MRL's employees have long been subject to the labor protections applicable to Class II carriers, and that will not change as a result of this rulemaking. With respect to TTD's argument that MRL employees will be denied the additional labor protections that would be available to them if MRL were classified as a Class I carrier, the Board finds that because MRL is more appropriately classified as a Class II carrier based on its operational and financial characteristics, it is also appropriate for MRL to continue to provide the labor protections of a Class II carrier. Nothing in the record, including TTD's comments, indicates that MRL's employees are being inadequately protected today. Moreover, there is nothing that indicates that MRL's operational or financial characteristics have changed significantly as it approached the current revenue threshold.

The Board also disagrees with TTD's assertion that there is no record evidence of the undue burden that Class I status would place on MRL or similarly situated carriers. There is no question that Class I railroads face much more substantial financial reporting and accounting requirements under the Board's regulations than Class II or III railroads do. NPRM, EP 763, slip op. at 5. Among other requirements, Class I carriers must submit annual R-1 reports, see 49 CFR 1241.11, quarterly operating reports, see 49 CFR pt. 1243, and service performance data, see 49 CFR pt. 1250. Each of these reports, while important to the Board's regulation with regard to larger carriers, has an associated compliance burden. MRL's petition discussed the increased burden it would face complying with just a subset of the Class I reports. 6 (Pet. 8-9; see also ASLRRA Comment 2-4, June 15, 2020.) The NPRM also recognized that the regulatory compliance burden of a Class I designation by the Board extends beyond the Board's regulations, see NPRM, EP 763, slip op. at 5, and MRL's reply provided several examples of these regulatory impacts, including in programs administered by the Federal Railroad Administration, (MRL Reply 2-3). Moreover, as the NPRM indicated, the Board is concerned not just with the absolute burden, but also with the relative lack of benefits associated with such reporting by carriers with MRL's characteristics. NPRM, EP 763, slip op. at 5. 7

While NGFA does not oppose the proposed amendments, NGFA does express concern that MRL operates as a monopoly, and NGFA maintains that regulatory oversight should apply to Class II carriers. (NGFA Comment 3-5.) As a Class II carrier, MRL will continue to be subject to Board regulation and the applicable provisions of the Interstate Commerce Act, including those governing rate reasonableness and reasonable practices. NGFA's argument that specific proposed regulations, such as those related to particular rate case processes and reciprocal switching procedures, should apply to Class II carriers is beyond the scope of this proceeding. 8

For the foregoing reasons, the Board will adopt as a final rule the amendments to its rail carrier classification regulations as proposed in the NPRM, without modification. The final rule set forth below will raise the Class I revenue threshold to $900 million and round the current Class II/Class III threshold to $40.4 million. The final rule also will amend Note A to replace the 1991 Average Index with the 2019 Average Index, as the new threshold levels will be calculated in 2019 dollars.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. Sections 601-604. In its final rule, the agency must either include a final regulatory flexibility analysis, section 604(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” section 605(b).

Because the goal of the RFA is to reduce the cost to small entities of complying with federal regulations, the RFA requires an agency to perform a regulatory flexibility analysis of impacts on small entities only when a rule directly regulates those entities. In other words, the impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).

The amendments to the Board's regulations adopted here are intended to update the Board's class classifications and do not mandate or circumscribe the conduct of small entities. For the purpose of RFA analysis for rail carriers subject to the Board's jurisdiction, the Board defines a “small business” as only including those rail carriers classified as Class III rail carriers under 49 CFR part 1201, General Instructions section 1-1. See Small Entity Size Standards Under the Regulatory Flexibility Act, EP 719 (STB served June 30, 2016) (with the Board Member Begeman dissenting). Here, no substantive changes are being made to the Class III threshold, as the Board is only updating the regulations to reflect the current Class III threshold in 2019 dollars (rounded) as opposed to 1991 dollars. Therefore, the Board certifies under 5 U.S.C. 605(b) that these proposed rules, if promulgated, would not have a significant economic impact on a substantial number of small entities within the meaning of RFA.

The Board's proposal does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521.

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).

It is ordered:

1. The Board adopts the final rule set forth in this decision. Notice of the final rule will be published in the Federal Register .

2. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

3. This decision is effective on June 4, 2021.

For the reasons set forth in the preamble, the Surface Transportation Board amends title 49, chapter X, part 1201 of the Code of Federal Regulations as follows:

The Regional Administrator for the Greater Atlantic Region monitors Atlantic herring fishery catch in each of the management areas based on vessel and dealer reports, state data, and other available information. The regulations at 50 CFR 648.201(a)(1)(i)(B)(2) require that the Regional Administrator prohibits federally permitted vessels from fishing for, possessing, transferring, receiving, landing, or selling more than 2,000 pounds (lb) (907.2 kilograms (kg)) in or from Atlantic herring Management Area 3 when 98 percent of the sub-Annual Catch Limit (ACL) is harvested. Based on dealer reports, state data, and other available information, the Regional Administrator projects that 98 percent of the Management Area 3 sub-ACL was harvested as of April 1, 2021. Therefore, effective 00:01 hr local time April 1, 2021, vessels may not fish for, possess, transfer, receive, land, or sell more than 2,000 lb (907.2 kg) of Atlantic herring per trip or calendar day, in or from Management Area 3, through December 31, 2021. Vessels that have entered port before 00:01 hr local time, April 1, 2021, may land or sell more than 2,000 lb (907.2 kg) of Atlantic herring from Area 3 from that trip. A vessel may transit through Area 3 with more than 2,000 lb (907.2 kg) of Atlantic herring on board, provided all herring was caught outside Area 3 and all fishing gear is stowed and not available for immediate use as defined by 50 CFR 648.2. All herring vessels must land in accordance with state landing restrictions.

Effective 00:01 hr local time, April 1, 2021, through 24:00 hr local time, December 31, 2021, federally permitted dealers may not purchase, possess, have custody or control of, sell, barter, trade or transfer, or attempt to sell, barter, trade, or transfer more than 2,000 lb of herring per vessel per trip or calendar day from Management Area 3 through 24:00 hr local time, December 31, 2021, unless it is from a vessel that enters port before 00:01 local time on April 1, 2021.

This action is required by 50 CFR 648.201(a)(1)(i)(B) and is exempt from review under Executive Order 12866.

NMFS finds good cause pursuant to 5 U.S.C. 553(b)(3)(B) to waive prior notice and the opportunity for public comment because it would be contrary to the public interest and impracticable. NMFS also finds good cause to waive the 30-day delayed effectiveness in accordance with 5 U.S.C 553(d)(3). NMFS is required by Federal regulation to implement a 2,000 lb (907.2 kg) herring trip limit for Management Area 3, when 98 percent of the area quota is projected to be harvested. The 2021 herring fishing year opened on January 1, 2021, and Management Area 3 opened to fishing on that day. Data indicating the herring fleet will have landed at least 98 percent of the 2021 sub-ACL allocated to Management Area 3 only recently became available. High-volume catch and landings in this fishery increase total catch relative to the sub-ACL quickly, especially in this fishing year where annual catch limits are unusually low. If implementation of this closure is delayed to solicit prior public comment, the sub-ACL for Management Area 3 for this fishing year will likely be exceeded, undermining conservation objectives of the Fishery Management Plan. When sub-ACLs are exceeded, the overage must be deducted from a future sub-ACL and would reduce future fishing opportunities. In addition, the public had prior notice and full opportunity to comment on this process when these provisions were put in place.

The public expects these actions to occur in a timely way consistent with the fishery management plan's objectives.