Rental information in consumer reports plays a critical role in consumers' access to rental housing, credit, and other opportunities. 1 As the eviction moratoria and other government interventions aimed at alleviating the economic and public health impacts of the 2019 novel coronavirus (COVID-19) pandemic begin to expire, the Bureau anticipates that many renters will face eviction from their homes, rental arrearages, and collection attempts to recover unpaid rent. 2 Consumers have complained to the Bureau about the financial impacts of the pandemic on their ability to stay current on rental payments and about negative rental information related to the pandemic in consumer reports. 3 An increase in negative rental information in the consumer reporting system, combined with an increase in the number of consumers seeking rental housing, may create new risks that inaccurate negative rental information will be included in tenant-screening reports and that such inaccuracies will affect increased numbers of consumers. Inaccurate rental information in tenant-screening reports can have devastating impacts on consumers, including impairing the ability of renters negatively impacted by the pandemic to secure new rental housing and otherwise recover from the pandemic's economic effects. An increase in housing instability caused by inaccurate rental information could undermine the nation's efforts to recover from the pandemic.

On January 31, 2020, the Department of Health and Human Services declared a public health emergency for the entire United States to aid the nation's healthcare community in responding to the COVID-19 pandemic. 4 On March 13, 2020, then-President Trump declared a national emergency concerning the COVID-19 pandemic, citing the strain on the healthcare system and the need for additional measures to contain and combat the spread of COVID-19. 5 Income shocks resulting from the pandemic, such as a job loss, reduced work hours, or the death or illness of a family member, contributed to an increase in housing and financial insecurity for many households. 6 The financial impact of the pandemic was especially pronounced for renters. 7 Survey data indicate that about half of all renters saw their incomes fall during the pandemic due to lost employment or reductions in hours worked. 8 In August 2020, some estimates projected that up to 30 to 40 million individuals in 13 to 17 million renter households were at risk of eviction over the course of the pandemic. 9 In comparison, approximately 900,000 renter households are evicted in a typical year. 10

On September 4, 2020, the Centers for Disease Control and Prevention (CDC) published an agency order entitled “Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19” (CDC Order). 11 Citing the historic threat to public health posed by the COVID-19 pandemic, the CDC Order established an eviction moratorium that generally limits the circumstances in which certain persons may be evicted from residential property. 12 The CDC Order initially was set to expire on December 31, 2020. 13 The CDC Order has been extended four times and currently is set to expire on July 31, 2021. 14

In addition to the CDC's eviction moratorium, Federal, State, and local governments have taken a variety of other actions to alleviate the rental housing-related impacts of the COVID-19 pandemic, including establishing other eviction moratoria and rental assistance programs. For instance, section 4024 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)  15 provided a temporary moratorium on eviction filings  16 as well as other protections for tenants in certain rental properties with Federal assistance or federally related financing. 17 In addition, as discussed in more detail below, the Federal Emergency Rental Assistance (ERA) programs established by the U.S. Department of the Treasury (Treasury) have made billions of dollars available to eligible households by funding rental assistance programs administered by State and local governments. 18 State and local governments have also implemented temporary eviction moratoria, rent freezes, and additional rental assistance programs. 19

These governmental actions have reduced evictions so far. 20 However, the Bureau is aware of concerns that some landlords may have evicted tenants in violation of applicable eviction moratoria and that other tenants may have preemptively moved out of rental housing to avoid an eviction filing or been subject to other types of informal evictions outside the judicial eviction process. 21 The Bureau's analysis of recent consumer complaints indicates that renters have expressed concerns about debt collection activities following evictions, including attempts to collect questionable charges and fees. 22 These reports and complaints are an area of concern for the Bureau, and Bureau staff will be monitoring and investigating eviction practices to ensure that they are complying with the law. Evicting tenants in violation of the CDC Order, State, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices under the Fair Debt Collection Practices Act and the Federal Trade Commission Act. 23

Moreover, as the CDC Order and other measures begin to expire, many households will face difficulties navigating significant rental payment arrearages. 24 Low-income and minority renters have been disproportionately affected by the economic effects of the COVID-19 pandemic, including job losses. 25 Although economic conditions have improved in recent months, 26 13 percent of adult renters were behind on rent in May 2021. 27 Renters in low-income households were more likely to report they were behind on rental payments than those in higher-income households. As of May 2021, more than one in six renters with household incomes under $25,000 reported that they were behind on their rent. 28 An estimated 19 percent of renters with children report being not caught up on rent, compared to 10 percent not living with anyone under 18. 29 Minority renters were more likely to report that their household was not caught up on rent: 21 percent of Black renters, 17 percent of Hispanic renters, and 17 percent of Asian renters said they were not caught up on rent, compared to 9 percent of white renters. 30 Accordingly, low-income and minority renters are more likely to be affected by the expiration of the CDC's eviction moratorium and other temporary measures aimed at reducing evictions and supporting renters unable to make their rental payments.

The Federal ERA programs were established to address the concerns about rental arrearages. 31 ERA funds may be used to provide assistance to eligible households and their landlords to pay rent, utilities, and certain other housing costs, including arrearages for rent and utility payments. 32 Grantees of ERA funds have been working to ramp up their deployment of funds. 33 As the CDC has noted, though there are indications that emergency rental assistance has started to reach increasing numbers of households over recent months, there are likely hundreds of thousands of applications for assistance that currently remain outstanding as programs accelerate their activity. 34 The Bureau is concerned that renters may be evicted for nonpayment of rent even as they are attempting to access these funds. The Bureau encourages landlords and renters to consider their options under these programs. In addition to the extensive information about rental assistance programs under the ERA available on Treasury's website, 35 information about rental assistance programs under the ERA is also available on the Bureau's website. 36

The Bureau anticipates that many tenants who face eviction or have experienced economic shocks during the pandemic will seek alternative housing in the rental market. In addition to current renters seeking new housing, the Bureau also anticipates a likely rise in consumers who are currently homeowners seeking rental housing as pandemic-related mortgage forbearance programs and foreclosure moratoria come to an end. 37

The Bureau is concerned that information concerning evictions and rental payment arrearages related to the pandemic's effects may not be a reliable predictor of a consumer's future performance given the extent of the economic dislocation caused by the pandemic. The use of pre-pandemic relationships and scoring models on pandemic data may lead to unreliable conclusions regarding a consumer's future performance and may hinder public policy efforts to protect consumers during the pandemic and promote an equitable recovery from the pandemic. Some States and local governments have taken steps to prevent the reporting or use of information related to evictions and rental arrearages arising during the pandemic. 38 For example, some States have taken or are considering taking steps to make it easier to seal or expunge eviction records. 39

In the upcoming transition period during which the Bureau anticipates both an increase in negative rental information in the consumer reporting system and an increase in consumers seeking rental housing, the Bureau is concerned that existing problems with the accuracy of tenant-screening and other consumer reports will be exacerbated. According to a 2019 report by the National Consumer Law Center (NCLC), the vast majority of landlords use tenant-screening reports to screen rental-housing applicants. 40 These reports, which are obtained from one of the nation's many tenant-screening companies, 41 may include traditional credit report data, criminal background history, and rental information. Inaccuracies in negative rental information included in consumer reports can have significant damaging consequences for tenants' future access to rental housing, credit, and other opportunities. For example, an applicant whose tenant-screening report shows past litigation or a poor rental payment history may find it difficult or more expensive to rent property, and many landlords will not rent to an applicant if their screening report shows an eviction filing. 42 Concerns about lack of access to rental housing are further heightened during the continuing pandemic. For example, a basis for the CDC's eviction moratorium is the concern that individuals moving into close quarters in congregate or shared living settings, such as homeless shelters, puts individuals at higher risk of contracting COVID-19. 43 CRAs and debt collectors and landlords that furnish information for inclusion in consumer reports have important obligations under the FCRA and Regulation V relating to the accuracy of information included in consumer reports, 44 and the Bureau urges CRAs and furnishers to ensure they are complying with these obligations.

Concerns about the accuracy of information included in consumer reports are long-standing, 45 and the Bureau is especially concerned about the effects of these accuracy problems in light of the economic and public health impacts of COVID-19. The Bureau has received consumer complaints alleging that inaccuracies in tenant-screening reports have caused landlords to deny some consumers rental housing and charge others higher security deposits than they would have otherwise. 46 The Bureau is particularly concerned that the procedures that some tenant-screening companies use to match public records and other rental information to specific consumers may create a high risk that inaccurate data will be included in tenant-screening reports, 47 a risk that may be further heightened by increased volumes of negative rental information resulting from the pandemic. The risk of mismatching may be greater among Hispanic, Black, and Asian individuals because there is less surname diversity than among the white population. 48

In addition, the Bureau is concerned that tenant-screening companies may report information, such as information about an eviction filing, in a consumer report without having reasonable procedures to report information about the disposition of the eviction filing or to prevent the inclusion of multiple entries for the same eviction action in the same consumer report. 49 The Bureau is also concerned that tenant-screening companies may lack reasonable procedures to exclude from consumer reports eviction information that has been sealed or expunged. 50

CRAs frequently include rental information, such as eviction records, that comes from public records; landlords and debt collectors also furnish information about rental housing payments and debts to CRAs. The FCRA and Regulation V set forth important requirements for furnishers concerning both the accuracy of information furnished and the handling of consumer disputes related to the accuracy of information included in consumer reports. 51 The Bureau is concerned that existing accuracy problems related to the furnishing of rental information may be exacerbated by the anticipated increase in the amount of negative rental information furnished.

For example, furnishers may fail to account for COVID-19-related aid or protections when reporting overdue rent amounts. In addition to providing a temporary moratorium on eviction filings for tenants in certain rental properties with Federal assistance or federally related financing, the CARES Act prohibited landlords of these rental properties from charging fees, penalties, or other charges related to the nonpayment of rent during the Act's eviction moratorium. 52 State and local laws may also in some cases prohibit landlords from charging certain late fees or penalties to renters. The Bureau is concerned that furnishers may include prohibited penalties or fees when reporting rental arrearages. In addition, under many rental assistance programs, funds to make rental payments may be provided to landlords to pay the rent of specific tenants who are eligible for the program. If furnishers providing rental information do not appropriately account for funds received pursuant to these programs and fail to offset overdue rent amounts, this could lead to inaccuracies in consumer reports.

Finally, the dispute-resolution obligations the FCRA and Regulation V impose on CRAs and furnishers are also critical to ensuring that consumer reports are accurate. CRAs and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of the information furnished. 53 An increase in the amount of negative rental information in public records and furnished to CRAs is likely to lead to a corresponding increase in dispute volumes. A reasonable and timely investigation of a consumer dispute is critical to mitigating the harmful impact that inaccurate negative information in a consumer report may have on the consumer. Moreover, proper handling of disputes not only ensures that inaccuracies in the disputing consumer's report are resolved, it also facilitates CRA and furnisher identification of systemic problems related to their consumer reporting and furnishing practices. 54

As pandemic-related government interventions aimed at protecting renters begin to expire, the Bureau will continue to look carefully at consumer reporting agencies' and furnishers' compliance with their FCRA accuracy obligations with respect to rental information. CRAs and furnishers should take immediate steps to ensure they are fulfilling their obligations under the law. If the Bureau determines that a CRA or furnisher has engaged in any acts or practices that violate the FCRA, Regulation V, or other Federal consumer financial laws, the Bureau will take appropriate enforcement action to address violations and seek all appropriate corrective measures, including remediation of harm to consumers.

The Bureau plans to pay particular attention to the areas outlined below.

1. Whether CRAs are reporting accurate rental information.

2. Whether CRAs are using a sufficient number of identifiers to match consumer report information to the consumer who is the subject of the report, including whether CRAs are using name-matching procedures or limited identifiers likely to heighten the risk of inaccurate matching.

3. Whether CRAs are reporting eviction information that is inaccurate, incomplete, or misleading (such as may result from a failure to have reasonable procedures to report information about the disposition of an eviction filing, to prevent the inclusion of multiple entries for the same eviction action in the same consumer report, or to prevent the inclusion of eviction information that has been sealed or expunged).

4. Whether CRAs are complying with their obligations to investigate disputed information in a consumer report, including whether they are conducting timely and reasonable investigations.

1. Whether furnishers are providing accurate rental information to CRAs.

2. Whether furnishers are providing information about rental arrearages that include amounts that were already paid on behalf of a tenant through a government grant or relief program, such as the Emergency Rental Assistance programs.

3. Whether furnishers are providing information about rental arrearages that include fees or penalties that CARES Act section 4024(b) or other laws prohibit charging.

4. Whether furnishers are complying with their obligations to investigate disputed information in a consumer report, including whether they are conducting timely and reasonable investigations.

The Bureau issues this Bulletin to highlight that the Bureau will hold CRAs and furnishers accountable if they do not comply with their accuracy and dispute obligations under the FCRA and Regulation V with respect to rental information.

This Bulletin constitutes a general statement of policy exempt from the notice and comment rulemaking requirements of the Administrative Procedure Act. 55 It summarizes existing legal requirements and articulates considerations relevant to the Bureau's exercise of its enforcement discretion for institutions under its jurisdiction. It does not impose any legal requirements on external parties, nor does it create or confer any substantive rights on external parties that could be enforceable in any administrative or civil proceeding. Because no notice of proposed rulemaking is required in issuing this Bulletin, the Regulatory Flexibility Act also does not require an initial or final regulatory flexibility analysis. 56 The Bureau has also determined that the issuance of this Bulletin does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995. 57

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Model EC135P1, EC135P2, EC135P2+, EC135P3, EC135T1, EC135T2, EC135T2+, and EC135T3 helicopters with serial number (S/N) up to and including 1254 (except S/N 1235). The NPRM published in the Federal Register on April 16, 2021 (86 FR 20089). In the NPRM, the FAA proposed to require modifying the T/R control within 360 hours time-in-service (TIS) by installing a Teflon washer and performing a functional test in accordance with specified portions of Airbus Helicopters Alert Service Bulletin ASB EC135-67A-031, Revision 0, dated March 30, 2017 (ASB EC135-67A-031). Based on the results of the functional test, the NPRM proposed to require making repairs in accordance with FAA-approved procedures. The NPRM was prompted by EASA AD 2017-0147, dated August 10, 2017 (EASA AD 2017-0147), issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition for Airbus Helicopters Model EC135P1, EC135P2, EC135P2+, EC135P3, EC135T1, EC135T2, EC135T2+, EC135T3, EC635P2+, EC635P3, EC635T1, EC635T2+, and EC635T3 helicopters. EASA advises that several cases of insufficient clearance between a certain T/R bearing connection and the helicopter structure were detected during inspections of helicopters on the production line. EASA states that this condition, if not corrected and in the case of an unglued bearing, could lead to blockage of the pedal controlling the T/R thrust and loss of the T/R control. EASA further advises that this could result in a forced landing with damage to the helicopter and injury to the occupants.

Accordingly, EASA AD 2017-0147 requires modifying the T/R control installation by adding a Teflon washer, which reduces the degree of freedom in case of a drifting bearing at the affected connection. EASA AD 2017-0147 also requires a functional test for clearance, and depending on the results, either accomplishing additional corrective actions or contacting Airbus Helicopters for instructions.

The FAA received no comments on the NPRM or on the determination of the costs.

These helicopters have been approved by EASA and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the European Union, EASA has notified the FAA about the unsafe condition described in its AD. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these helicopters.

The FAA reviewed ASB EC135-67A-031 for Airbus Helicopters Model EC135P1, EC135P2, EC135P2+, EC135P3, EC135T1, EC135T2, EC135T2+, EC135T3, EC635P2+, EC635P3, EC635T1, EC635T2+, and EC635T3 helicopters. For S/Ns up to 1254 inclusive, except S/N 1235, this service information specifies retrofitting a Teflon washer on the T/R controls, performing a functional test of the modified T/R control installation to inspect for clearance, and making any necessary adjustments. This service information advises that S/N 1255 and up will have the Teflon washer installed in production.

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 EASA AD sets compliance times at 12 months, while this AD requires compliance within 360 hours TIS. The EASA AD applies to Airbus Helicopters Model EC635T1, EC635T2+, EC635T3, EC635P2+, and EC635P3 helicopters; this AD does not because these models do not have an FAA type certificate. The EASA AD requires contacting Airbus Helicopters for approved repair procedures; this AD requires a repair using FAA-approved procedures. The EASA AD requires revising the “aircraft maintenance program,” whereas this AD does not because not all U.S. operators are required to have a maintenance program.

The FAA estimates that this AD affects 331 helicopters of U.S. registry. Labor rates are estimated at $85 per work-hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Modifying the T/R control installation and conducting a functional test takes about 3 work-hours and parts cost about $25 for an estimated cost of $280 per helicopter and $92,680 for the U.S. fleet.

If required, adjusting the clearance takes about 1 work-hour for an estimated cost of $85 per helicopter.

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 helicopters 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 2020-0021, dated February 6, 2020 (EASA AD 2020-0021) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus Helicopters Model AS332C, AS332C1, AS332L, and AS332L1 helicopters. Although EASA AD 2020-0021 applies to all Model AS332C, AS332C1, AS332L, and AS332L1 helicopters, this AD applies to helicopters with an affected part installed instead.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Helicopters Model AS332C, AS332C1, AS332L, and AS332L1 helicopters. The NPRM published in the Federal Register on April 22, 2021 (86 FR 21238). The NPRM was prompted by a report of a yaw control failure that was the result of the disconnection of the TRH pitch control rod from the tail rotor servo-control, which resulted from a seized TRH bearing. The TRH bearing had grease dissolving after contamination by leaked hydraulic fluid from the tail rotor servo-control that came through the TRH assembly boot. The NPRM proposed to require repetitive inspections for hydraulic leaks, corrective actions if necessary, and an optional modification which constitutes terminating action, as specified in an EASA AD.

The FAA is issuing this AD to address seized TRH bearings, which could reduce the effectiveness of the pitch control of the tail rotor system, possibly resulting in reduced yaw control of the helicopter. 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 2020-0021 describes procedures for repetitive inspections for hydraulic leaks, corrective actions if necessary ( i.e., replacement of the pitch control rod bearing of the affected TRH assembly), and an optional modification ( i.e., installation of a TRH assembly having certain part numbers) which constitutes terminating action. 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 10 helicopters 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 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 helicopters that might need these on-condition actions:

On April 21, 2021, Tiki Lee's Dock Bar of Sparrows Point, MD, and David Schultz Airshows, LLC of Clearfield, PA, notified the Coast Guard, it will be conducting the 1st Annual Shootout on the River Airshow—Sparrows Point in Back River, between Lynch Point and Walnut Point, in Baltimore County, MD on July 10, 2021, and July 11, 2021. In response, on May 27, 2021, the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Special Local Regulation; Back River, Baltimore County, MD” (86 FR 28516). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended June 11, 2021, we received no comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Due to the date of the event, it would be impracticable to make the regulation effective 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable and contrary to the public interest because it would delay the safety measures necessary to respond to potential safety hazards associated with this marine event. Hazards from the air show include risks of injury or death resulting from aircraft accidents, dangerous projectiles, hazardous materials spills, falling debris, and near or actual contact among participants and spectator vessels or waterway users if normal vessel traffic were to interfere with the event. Additionally, such hazards include participants operating near a designated navigation channel, as well as operating adjacent to waterside residential communities. Immediate action is needed to protect participants, spectators, and other persons and vessels during the air show event on these navigable waters.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70041. The Captain of the Port Maryland-National Capital Region (COTP) has determined that potential hazards associated with the air show being held from July 9, 2021, through July 11, 2021, will be a safety concern for anyone intending to operate within certain waters of Back River in Baltimore County, MD, operating in or near the event area.

As noted above, we received no comments on our NPRM published May 27, 2021. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes special local regulations from 4 p.m. on July 9, 2021, through 4 p.m. on July 11, 2021. The regulated area will cover all navigable waters of Back River, within an area bounded by a line connecting the following points: From the shoreline at Lynch Point at latitude 39°14′46″ N, longitude 076°26′23″ W, thence northeast to Porter Point at latitude 39°15′13″ N, longitude 076°26′11″ W, thence north along the shoreline to Walnut Point at latitude 39°17′06″ N, longitude 076°27′04″ W, thence southwest to the shoreline at latitude 39°16′41″ N, longitude 076°27′31″ W, thence south along the shoreline to the point of origin, located in Baltimore County, MD. This rule provides additional information about areas within the regulated area and their definitions. These areas include “Aerobatics Box” and “Spectator Area.” The size of the regulated area and duration of the special local regulations are intended to ensure the safety of life on these navigable waters before, during, and after activities associated with the air show, scheduled from 5 p.m. to 6 p.m. on July 9, 2021, and from 2 p.m. to 3 p.m. both days on July 10, 2021, and July 11, 2021. The COTP and the Coast Guard Event Patrol Commander (PATCOM) will have authority to forbid and control the movement of all vessels and persons, including event participants, in the regulated area. When hailed or signaled by an official patrol, a vessel or person in the regulated area will be required to immediately comply with the directions given by the COTP or Event PATCOM. If a person or vessel fails to follow such directions, the Coast Guard may expel them from the area, issue them a citation for failure to comply, or both.

Except for 1st Annual Shootout on the River Airshow—Sparrows Point participants and vessels already at berth, a vessel or person will be required to get permission from the COTP or Event PATCOM before entering the regulated area. Vessel operators will be able to request permission to enter and transit through the regulated area by contacting the Event PATCOM on VHF-FM channel 16. Vessel traffic will be able to safely transit the regulated area once the Event PATCOM deems it safe to do so. A vessel within the regulated area must operate at safe speed that minimizes wake. A person or vessel not registered with the event sponsor as a participant or assigned as official patrols will be considered a spectator. Official Patrols are any vessel assigned or approved by the Commander, Coast Guard Sector Maryland-National Capital Region with a commissioned, warrant, or petty officer on board and displaying a Coast Guard ensign. Official Patrols enforcing this regulated area can be contacted on VHF-FM channel 16 and channel 22A.

If permission is granted by the COTP or Event PATCOM, a person or vessel will be allowed to enter the regulated area or pass directly through the regulated area as instructed. Vessels will be required to operate at a safe speed that minimizes wake while within the regulated area. A spectator vessel must not loiter within the navigable channel while within the regulated area. Official patrol vessels will direct spectators to the designated spectator area. Only participant vessels will be allowed to enter the aerobatics box. The Coast Guard will publish a notice in the Fifth Coast Guard District Local Notice to Mariners and issue a marine information broadcast on VHF-FM marine band radio announcing specific event dates and times.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the location, size and duration of the regulated area, which will impact a small designated area of Back River for 9 total enforcement hours. This waterway supports mainly recreational vessel traffic, which at its peak, occurs during the summer season. The Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the status of the regulated area. Moreover, the rule will allow vessels to seek permission to enter the regulated area, and vessel traffic will be able to safely transit the regulated area once the Event PATCOM deems it safe to do so.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves implementation of regulations within 33 CFR part 100 applicable to organized marine events on the navigable waters of the United States that could negatively impact the safety of waterway users and shore side activities in the event area lasting for 9 total enforcement hours. It is categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Memorandum for the Record supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

On February 22, 2021, the Postal Service published a revised notice of proposed rulemaking (86 FR 10507-10509) to update addressing standards. In response to the revised proposed rule, the mailing industry provided many valuable comments.

Eleven formal responses were received. Several expressed concern that the change would create cost increases for lower volume mailers that currently process their lists quarterly and would be required to process more frequently, increasing the cost paid to mail service providers that offer the address matching services. Other comments questioned the 60-day requirement from address matching to the mailing date with a product release that is still valid for use beyond that time frame. This final rule will clearly outline the ways in which the addressing standard rules have changed.

Currently, DMM section 602.6.0, ZIP Code Accuracy Standards, provides that a ZIP Code TM may be used on a mail piece within 12 months after having been verified using a Postal Service approved method. Once a ZIP Code is used on a mailpiece, the address associated with that ZIP Code is considered to meet Postal Service addressing standards for an additional 12 months from the date first used in the mail.

DMM sections 602.7.0, Carrier Route Accuracy Standard, and 9.0, Coding Accuracy Support System (CASS), provide that Address Matching and Coding Update standards require coding to be performed within 90 days before the mailing date for carrier route mailings and 180 days for all non-carrier route mailings using the most current USPS database. The current product release schedule allows for use of a database that is valid for 105 days and may be used in generating discounted mailings for an additional 6 months beyond that timeframe. As such, an address added or modified in the database may not be updated on a mailing list for nearly 1 year after the change was made.

In 2012, the Postal Service implemented address management product fulfillment via an electronic product fulfillment method designed to provide subscription products to customers more efficiently. The database product updates are posted each month to a secure site where customers can log in to simply download the product files. A survey of licensed Address Management data products indicates that CASS and Multiline Accuracy Support System (MASS) Certified software and service providers are retrieving and using the monthly updates during the address matching and coding processes.

The Postal Service is implementing a database product cycle that aligns with the release of other mailing products. This will provide consistency across all mailing products and the method by which the data files are available and distributed. The USPS will now require the use of monthly updates for both carrier route and non-carrier route mailings and reduces the risk of using data that is no longer current.

The updated release schedule allows for 120 days of use for generating discounted mailings and an overlap in dates for product use. Mailers that currently process their lists quarterly would still be compliant as long as they do not mail beyond the “last permissible mailing date” for the “product date” as shown in the USPS Product Cycle in Exhibit 9.3.1. Mailers will be expected to update their systems with the latest data files as soon as practicable and should not wait until the “last permissible use” date.

The Postal Service is implementing this change effective October 1, 2022. This implementation date allows mailers eighteen months to adjust to the new update standards, however, mailers may opt to use the new monthly update cycles for both carrier route and non-carrier route mailings immediately.

We believe this revision will provide customers with a more efficient process and will reduce the risk of using address information that is not current.

The Postal Service adopts the following changes to Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR 111.1.

We will publish an appropriate amendment to 39 CFR part 111 to reflect these changes.

Accordingly, 39 CFR part 111 is amended as follows:

Pursuant to section 110(a)(1) of the CAA, states are required to submit SIP revisions meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were previously required to submit such SIPs for the 2008 and 1997 8-hour Ozone and the 1997 Annual and 2006 24-hour PM 2.5 NAAQS to EPA within three years of promulgation of the respective NAAQS.

Through previous rulemakings, EPA disapproved portions of several SIP submissions from Florida regarding the 2008 and 1997 8-hour Ozone, as well as the 1997 Annual and 2006 24-hour PM 2.5 NAAQS, because at the time, Florida's SIP did not address or provide adequate legal authority for the implementation of a GHG PSD program in Florida. 1 However, on May 19, 2014 (79 FR 28607), EPA approved Florida's December 19, 2013, SIP revision that amended the State's definition of “PSD pollutant”. This Florida SIP revision addressed the Federal GHG requirements for PSD as specified in the June 3, 2010, GHG Tailoring Rule. 2

On August 6, 2020, Florida submitted a SIP revision to approve various infrastructure SIP elements that were previously disapproved by EPA. The submittal requested approval for the following elements from the 1997 and 2008 Ozone NAAQS and the 1997 and 2006 PM 2.5 NAAQS as it relates to Florida's regulation of greenhouse gases under the PSD program: (1). Sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) Prong 3, and 110(a)(2)(J) infrastructure elements for Florida's 2008 Ozone Infrastructure SIP; (2). Sections 110(a)(2)(C) and 110(a)(2)(J) infrastructure elements for Florida's 1997 Ozone Infrastructure SIP; (3). Section 110(a)(2)(D)(i)(II) Prong 3 infrastructure elements for Florida's 2006 PM 2.5 Infrastructure SIP; and (4). Section 110(a)(2)(D)(i)(II) Prong 3 infrastructure elements for Florida's 1997 PM 2.5 Infrastructure SIP. This action only pertains to sections 110(a)(2)(C), (D)(i)(II), and (J) as they relate to GHG under a SIP-approved PSD permitting program.

Thus, in a notice of proposed rulemaking (NPRM) published on March 2, 2021, (86 FR 12143), EPA proposed to determine that Florida's SIP and practices are adequate for GHG PSD permitting of major sources and major modifications related to the 2008 8-hour Ozone NAAQS for sections 110(a)(2)(C), (D)(i) (prong 3), and (J); the 1997 8-hour Ozone NAAQS for sections 110(a)(2)(C) and (J); and the 1997 Annual and 2006 24-hour PM 2.5 NAAQS for section 110(a)(2)(D)(i)(ii) prong 3. Consequently, EPA proposed to convert the previous disapprovals of Florida's infrastructure SIPs related to the CAA GHG PSD permitting requirements for the 2008 and 1997 8-hour Ozone and the 1997 Annual and 2006 24-hour PM 2.5 NAAQS to full approvals. The March 2, 2021, NPRM provides additional detail regarding the background and rationale for EPA's action. Comments on the March 2, 2021, NPRM were due on or before April 1, 2021. EPA received no comments on the March 2, 2021, NPRM.

EPA is approving revisions to the Florida SIP, submitted on August 26, 2020, related to sections 110(a)(2)(C), (D)(i) (prong 3), and (J) as they relate to new major sources and major modifications in areas of the State designated attainment or unclassifiable. EPA has made the determination that Florida's SIP and practices are adequate for GHG PSD permitting of major sources and major modifications related to the 2008 8-hour Ozone NAAQS for sections 110(a)(2)(C), (D)(i) (prong 3), and (J); the 1997 8-hour Ozone NAAQS for sections 110(a)(2)(C) and (J); and the 1997 Annual and 2006 24-hour PM 2.5 NAAQS for section 110(a)(2)(D)(i)(ii) prong 3. Consequently, EPA is converting the previous disapprovals of Florida's infrastructure SIPs related to the CAA GHG PSD permitting requirements for the 2008 and 1997 8-hour Ozone and the 1997 Annual and 2006 24-hour PM 2.5 NAAQS to full approvals.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. 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 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).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

For the reason stated in the preamble, the EPA amends 40 CFR parts 52 as follows:

I. Background and Purpose

Under Clean Air Act (CAA or Act) section 110(a)(2)(D)(i)(I), also called the good neighbor provision, states are required to address the interstate transport of air pollution. Specifically, the good neighbor provision requires that each state's implementation plan contain adequate provisions to prohibit air pollutant emissions from within the state that will significantly contribute to nonattainment of the national ambient air quality standards (NAAQS), or that will interfere with maintenance of the NAAQS, in any other state.

In October 1998 (63 FR 57356), EPA finalized the “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone” (NO X SIP Call). The NO X SIP Call required eastern states, including Alabama, to submit SIPs that prohibit excessive emissions of ozone season NO X by implementing statewide emissions budgets. 1 The NO X SIP Call addressed the good neighbor provision for the 1979 ozone NAAQS and was designed to mitigate the impact of transported NO X emissions, one of the precursors of ozone. 2 EPA developed the NO X Budget Trading Program, an allowance trading program that states could adopt to meet their obligations under the NO X SIP Call. This trading program allowed the following sources to participate in a regional cap and trade program: Generally EGUs with capacity greater than 25 megawatts (MW); and large industrial non-EGUs, such as boilers and combustion turbines, with a rated heat input greater than 250 million British thermal units per hour (MMBtu/hr). The NO X SIP Call also identified potential reductions from cement kilns and stationary internal combustion engines.

To comply with the NO X SIP Call requirements, in 2001, the Alabama Department of Environmental Management (ADEM) submitted a revision to add new rule sections to the SIP-approved version of Alabama Administrative Code Chapter 335-3-1, General Provisions, and Chapter 335-3-8, Control of Nitrogen Oxides Emissions. EPA approved the revision as compliant with Phase I of the NO X SIP Call in 2001. See 66 FR 36919 (July 16, 2001). The approved revision required EGUs and large non-EGUs in the State to participate in the NO X Budget Trading Program beginning in 2004. In 2005, Alabama submitted, and EPA approved, a SIP revision to address additional emissions reductions required for the NO X SIP Call under Phase II. See 70 FR 76694 (December. 28, 2005).

In 2005, EPA published CAIR, which required several eastern states, including Alabama, to submit SIPs that prohibited emissions consistent with revised ozone season (and annual) NO X budgets. See 70 FR 25162 (May 12, 2005); see also 71 FR 25328 (April 28, 2006). CAIR addressed the good neighbor provision for the 1997 ozone NAAQS and 1997 fine particulate matter (PM 2.5 ) NAAQS and was designed to mitigate the impact of transported NO X emissions with respect to ozone and PM 2.5. CAIR established several trading programs that EPA implemented through federal implementation plans (FIPs) for EGUs greater than 25 MW in each affected state, but not large non-EGUs; states could submit SIPs to replace the FIPs that achieved the required emission reductions from EGUs and/or other types of sources. 3 When the CAIR trading program for ozone season NO X was implemented beginning in 2009, EPA discontinued administration of the NO X Budget Trading Program; however, the requirements of the NO X SIP Call continued to apply.

On October 1, 2007 (72 FR 55659), EPA approved changes to Alabama's SIP that incorporated requirements for CAIR. Consistent with CAIR's requirements, EPA approved a SIP revision in which Alabama regulations: (1) Sunset its NO X Budget Trading Program requirements, and (2) incorporated CAIR annual and ozone season NO X state trading programs. See 72 FR 55659. Participation of EGUs in the CAIR ozone season NO X trading program addressed the State's obligation under the NO X SIP Call for those units, and Alabama also chose to require non-EGUs subject to the NO X SIP Call to participate in the same CAIR trading program. In this manner, Alabama's CAIR rules incorporated into the SIP addressed the State's obligations under the NO X SIP Call with respect to both EGUs and non-EGUs.

The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR in 2008, but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR. See North Carolina v. EPA, 531 F.3d 896, modified on rehearing, 550 F.3d 1176 (D.C. Cir. 2008). The ruling allowed CAIR to remain in effect temporarily until a replacement rule consistent with the court's opinion was developed. While EPA worked on developing a replacement rule, the CAIR program continued to be implemented with the NO X annual and ozone season trading programs beginning in 2009 and the SO 2 annual trading program beginning in 2010.

Following the D.C. Circuit's remand of CAIR, EPA promulgated the Cross-State Air Pollution Rule (CSAPR) to replace CAIR and address good neighbor obligations for the 1997 ozone NAAQS, the 1997 PM 2.5 NAAQS, and the 2006 PM 2.5 NAAQS. See 76 FR 48208 (August 8, 2011). Through FIPs, CSAPR required EGUs in eastern states, including Alabama, to meet annual and ozone season NO X emission budgets and annual SO 2 emission budgets implemented through new trading programs. Implementation of CSAPR began on January 1, 2015. 4 CSAPR also contained provisions that would sunset CAIR-related obligations on a schedule coordinated with the implementation of the CSAPR compliance requirements. Participation by a state's EGUs in the CSAPR trading program for ozone season NO X generally addressed the state's obligation under the NOx SIP Call for EGUs. CSAPR did not initially contain provisions allowing states to incorporate large non-EGUs into that trading program to meet the requirements of the NO X SIP Call for non-EGUs. EPA also stopped administering CAIR trading programs with respect to emissions occurring after December 31, 2014. 5

To comply with CSAPR, Alabama adopted SO 2 and NO X CSAPR trading program rules, including budgets, in ADEM Administrative Code Chapters 335-3-5 and 335-3-8. On August 31, 2016, EPA approved Alabama's CSAPR annual SO 2 and annual NO X trading program rules into the SIP. 6 See 81 FR 59869. Because EPA stopped administering the CAIR trading programs after 2014, the approved CAIR rules in the State's SIP have not been implemented for several years. Furthermore, ADEM repealed all CAIR and CAIR-related regulations from Alabama Administrative Code Chapters 335-3-1, 335-3-5, and 335-3-8 on December 9, 2011. 7 Even though the CAIR programs were not being implemented in Alabama, ozone season NOx emissions have remained well below the NO X SIP Call budget levels.

After litigation that reached the Supreme Court, the D.C. Circuit generally upheld CSAPR but remanded several state budgets to EPA for reconsideration. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 129-30 (D.C. Cir. 2015). EPA addressed the remanded ozone season NO X budgets in the Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS (CSAPR Update), which also partially addressed eastern states' good neighbor obligations for the 2008 ozone NAAQS. See 81 FR 74504 (October 26, 2016). The air quality modeling for the CSAPR Update demonstrated that Alabama contributes significantly to nonattainment and/or interferes with maintenance of the 2008 ozone NAAQS in other states. The CSAPR Update reestablished an option for most states to meet their ongoing obligations for non-EGUs under the NO X SIP Call by including the units in the CSAPR Update trading program.

The CSAPR Update trading program replaced the original CSAPR trading program for ozone season NO X for most covered states. On October 6, 2017, EPA approved Alabama's CSAPR Update ozone season NO X trading program rules for EGUs into the State's SIP. 8 See 82 FR 46674. Alabama's EGUs participate in the CSAPR Update trading program, generally also addressing the state's obligations under the NO X SIP Call for EGUs. However, Alabama elected not to include its large non-EGUs in the CSAPR Update ozone season trading program. Because Alabama's large non-EGUs no longer participate in any CSAPR or CSAPR Update trading program for ozone season NOx emissions, the NO X SIP Call regulations at 40 CFR 51.121(r)(2) as well as anti-backsliding provisions at 40 CFR 51.905(f) and 40 CFR 51.1105(e) require these non-EGUs to maintain compliance with NO X SIP Call requirements in some other way.

Under 40 CFR 51.121(f)(2) of the NOx SIP Call regulations, where a State's SIP contains control measures for EGUs and large non-EGU boilers and combustion turbines, the SIP must contain enforceable limits on the ozone season NOx mass emissions from these sources. In addition, under 40 CFR 51.121(i)(4) of the NOx SIP Call regulations as originally promulgated, the SIP also had to require these sources to monitor emissions according to the provisions of 40 CFR part 75, which generally entails the use of continuous emission monitoring systems (CEMS). Alabama triggered these requirements by including control measures in its SIP for these types of sources, and the requirements have remained in effect despite the discontinuation of the NO X Budget Trading Program after the 2008 ozone season. On March 8, 2019, EPA revised some of the regulations that were originally promulgated in 1998 to implement the NO X SIP Call. 9 The revision gave states covered by the NO X SIP Call greater flexibility concerning the form of the NOx emissions monitoring requirements that the states must include in their SIPs for certain emissions sources. The revision amended 40 CFR 51.121(i)(4) to make Part 75 monitoring, recordkeeping, and reporting optional, such that SIPs may establish alternative monitoring requirements for SIP Call budget units that meet the general requirements of 40 CFR 51.121(f)(1) and (i)(1). Under the updated provision, a state's implementation plan still needs to include some form of emissions monitoring requirements for these types of sources, consistent with the NO X SIP Call's general enforceability and monitoring requirements at §§ 51.121(f)(1) and (i)(1), respectively, but states are no longer be required to satisfy these general NO X SIP Call requirements specifically through the adoption of 40 CFR part 75 monitoring requirements.

After evaluating the various options available following EPA's March 8, 2019, revision to the NO X SIP Call requirements, ADEM revised its regulations to address NO X SIP Call requirements and adopt alternative monitoring options for certain large non-EGUs. The changes require large non-EGUs in the State to address the NO X SIP Call's requirements for enforceable limits on ozone season NO X mass emissions in a manner that does not rely on the administration of an interstate trading program. In addition, Alabama had previously revised its regulations to remove NO X Budget Trading Program and CAIR trading program provisions after EPA stopped administering those programs. Alabama also revised its regulations non-substantively to renumber the regulation titled, “New Combustion Sources” from Rule 335-3-8-.14 to Rule 335-3-8-.05. The February 27, 2020, SIP revision submitted by ADEM requests approval into the SIP of all of these rule changes.

For a comprehensive discussion of EPA's analysis and rationale for approval of the State's submittal, please refer to EPA's March 3, 2021, notice of proposed rulemaking. See 86 FR 12305 (March 3, 2021). EPA received no comments on the proposed approval of Alabama's SIP.

In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of Alabama Administrative Code Rule 335-3-8-.71, “NO X Budget Program,” which reestablishes enforceable limits on ozone season NO X mass emission for certain units as required by EPA's NO X SIP Call regulations, and conditionally approving Rule 335-3-8-.72, “NO X Budget Program Monitoring and Reporting,” which establishes alternative emission monitoring requirements for the units, both state effective on April 13, 2020. Further, EPA is approving the renumbering of Rule 335-3-8-.14, “New Combustion Sources” to 335-3-8-.05, “New Combustion Sources,” state effective January 16, 2012. Also in this document, EPA is finalizing the removal of provisions from the Alabama State Implementation Plan regarding the State's NO X Budget Trading Program and CAIR trading program regulations at Rules 335-3-1-.14, 335-3-1-.16, 10 335-3-5-.06 through 335-3-5-.08, 335-3-5-.11 through 335-3-5-.14, 335-3-8-.05 through 335-3-8-.13, 335-3-8-.16 through 335-3-8-.18, 335-3-8-.20, 335-3-8-.21, 335-3-8-.23 through 335-3-8-.27, 335-3-8-.29, 335-3-8-.30, 335-3-8-.32, and 335-3-8-.33, which were incorporated by reference in accordance with the requirements of 1 CFR part 51. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information). Therefore, the revised materials as stated above, have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation. 11

EPA is taking final action to approve revisions to Alabama's SIP, which the State submitted to EPA on February 27, 2020, regarding the NO X Budget Program. EPA has determined that these portions of Alabama's SIP meet the applicable requirements of sections 110 and 172 of the CAA and applicable regulatory requirements at 40 CFR part 51. In addition, EPA is conditionally approving certain revisions, as described above, regarding the NO X Budget Program's monitoring and reporting requirements, per Alabama's commitment through a letter dated September 15, 2020.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. 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 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).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

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. EPA will submit a report containing this action 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 September 7, 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 EPA amends 40 CFR part 52 as follows:

Section 1331 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010) (collectively referred to as the Patient Protection and Affordable Care Act) provides states with an option to establish a Basic Health Program (BHP). In the states that elect to operate a BHP, the BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the federal poverty level (FPL) who are not otherwise eligible for Medicaid, the Children's Health Insurance Program (CHIP), or affordable employer-sponsored coverage, or for individuals whose income is below these levels but are lawfully present non-citizens ineligible for Medicaid. For those states that have expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act (the Act), the lower income threshold for BHP eligibility is effectively 138 percent due to the application of a required 5 percent income disregard in determining the upper limits of Medicaid income eligibility (section 1902(e)(14)(I) of the Act).

A BHP is another option for states to provide affordable health benefits to individuals with incomes in the ranges described above. States may find a BHP a useful option for several reasons, including the ability to potentially coordinate standard health plans in the BHP with their Medicaid managed care plans, or to potentially reduce the costs to individuals by lowering premiums or cost-sharing requirements.

Federal funding for a BHP under section 1331(d)(3)(A) of the Patient Protection and Affordable Care Act is based on the amount of premium tax credit (PTC) and cost-sharing reductions (CSRs) that would have been provided for the fiscal year to eligible individuals enrolled in BHP standard health plans in the state if such eligible individuals were allowed to enroll in a qualified health plan (QHP) through Health Insurance Exchanges (“Exchanges”). These funds are paid to trusts established by the states and dedicated to the BHP, and the states then administer the payments to standard health plans within the BHP.

In the March 12, 2014 Federal Register (79 FR 14112), we published a final rule entitled the “Basic Health Program: State Administration of Basic Health Programs; Eligibility and Enrollment in Standard Health Plans; Essential Health Benefits in Standard Health Plans; Performance Standards for Basic Health Programs; Premium and Cost Sharing for Basic Health Programs; Federal Funding Process; Trust Fund and Financial Integrity” (hereinafter referred to as the BHP final rule) implementing section 1331 of the Patient Protection and Affordable Care Act), which governs the establishment of BHPs. The BHP final rule established the standards for state and federal administration of BHPs, including provisions regarding eligibility and enrollment, benefits, cost-sharing requirements and oversight activities. While the BHP final rule codified the overall statutory requirements and basic procedural framework for the funding methodology, it does not contain the specific information necessary to determine federal payments. We anticipated that the methodology would be based on data and assumptions that would reflect ongoing operations and experience of BHPs, as well as the operation of the Exchanges. For this reason, the BHP final rule indicated that the development and publication of the funding methodology, including any data sources, would be addressed in a separate annual BHP Payment Notice.

In the BHP final rule, we specified that the BHP Payment Notice process would include the annual publication of both a proposed and final BHP payment methodology. The proposed BHP Payment Notice would be published in the Federal Register each October, 2 years prior to the applicable program year, and would describe the proposed funding methodology for the relevant BHP year, 1 including how the Secretary of the Department of Health and Human Services (the Secretary) considered the factors specified in section 1331(d)(3) of the Patient Protection and Affordable Care Act, along with the proposed data sources used to determine the federal BHP payment rates for the applicable program year. The final BHP Payment Notice would be published in the Federal Register in February, and would include the final BHP payment methodology, as well as the federal BHP payment rates for the applicable BHP program year. For example, payment rates in the final BHP Payment Notice published in February 2015 applied to BHP program year 2016, beginning in January 2016. As discussed in section II.D. of this final methodology, and as referenced in 42 CFR 600.610(b)(2), state data needed to calculate the federal BHP payment rates for the final BHP Payment Notice must be submitted to CMS.

As described in the BHP final rule, once the final methodology for the applicable program year has been published, we will generally make modifications to the BHP funding methodology on a prospective basis, with limited exceptions. The BHP final rule provided that retrospective adjustments to the state's BHP payment amount may occur to the extent that the prevailing BHP funding methodology for a given program year permits adjustments to a state's federal BHP payment amount due to insufficient data for prospective determination of the relevant factors specified in the applicable final BHP Payment Notice. For example, the population health factor adjustment described in section III.D.3. of this final methodology allows for a retrospective adjustment (at the state's option) to account for the impact that BHP may have had on the risk pool and QHP premiums in the Exchange. Additional adjustments could be made to the payment rates to correct errors in applying the methodology (such as mathematical errors).

Under section 1331(d)(3)(ii) of the Patient Protection and Affordable Care Act, the funding methodology and payment rates are expressed as an amount per eligible individual enrolled in a BHP standard health plan (BHP enrollee) for each month of enrollment. These payment rates may vary based on categories or classes of enrollees. Actual payment to a state would depend on the actual enrollment of individuals found eligible in accordance with a state's certified BHP Blueprint eligibility and verification methodologies in coverage through the state BHP. A state that is approved to implement a BHP must provide data showing quarterly enrollment of eligible individuals in the various federal BHP payment rate cells. Such data must include the following:

• Personal identifier;

• Date of birth;

• County of residence;

• Indian status;

• Family size;

• Household income;

• Number of persons in household enrolled in BHP;

• Family identifier;

• Months of coverage;

• Plan information; and

• Any other data required by CMS to properly calculate the payment.

On October 11, 2017, the Attorney General of the United States provided the Department of Health and Human Services and the Department of the Treasury with a legal opinion indicating that the permanent appropriation at 31 U.S.C. 1324, from which the Departments had historically drawn funds to make CSR payments, cannot be used to fund CSR payments to insurers. In light of this opinion—and in the absence of any other appropriation that could be used to fund CSR payments—the Department of Health and Human Services directed us to discontinue CSR payments to issuers until Congress provides for an appropriation. In the absence of a Congressional appropriation for federal funding for CSRs, we cannot provide states with a federal payment attributable to CSRs that BHP enrollees would have received had they been enrolled in a QHP through an Exchange.

Starting with the payment for the first quarter (Q1) of 2018 (which began on January 1, 2018), we stopped paying the CSR component of the quarterly BHP payments to New York and Minnesota (the states), the only states operating a BHP in 2018. The states then sued the Secretary for declaratory and injunctive relief in the United States District Court for the Southern District of New York. See New York v. U.S. Dep't of Health & Human Servs., No. 18-cv-00683 (RJS) (S.D.N.Y. filed Jan. 26, 2018). On May 2, 2018, the parties filed a stipulation requesting a stay of the litigation so that HHS could issue an administrative order revising the 2018 BHP payment methodology. As a result of the stipulation, the court dismissed the BHP litigation. On July 6, 2018, we issued a Draft Administrative Order on which New York and Minnesota had an opportunity to comment. Each state submitted comments. We considered the states' comments and issued a Final Administrative Order on August 24, 2018 (Final Administrative Order) setting forth the payment methodology that would apply to the 2018 BHP program year.

In the November 5, 2019 Federal Register (84 FR 59529) (hereinafter referred to as the November 2019 final BHP Payment Notice), we finalized the payment methodologies for BHP program years 2019 and 2020. The 2019 payment methodology is the same payment methodology described in the Final Administrative Order. The 2020 payment methodology is the same methodology as the 2019 payment methodology with one additional adjustment to account for the impact of individuals selecting different metal tier level plans in the Exchange, referred to as the Metal Tier Selection Factor (MTSF). 2 In the August 13, 2020 Federal Register (85 FR 49264 through 49280) (hereinafter referred to as the August 2020 final BHP Payment Notice), we finalized the payment methodology for BHP program year 2021. The 2021 payment methodology is the same methodology as the 2020 payment methodology, with one adjustment to the income reconciliation factor (IRF). The 2022 final payment methodology is the same as the 2021 payment methodology, except for the removal of the MTSF.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2). This action has a significant impact on state Medicaid, CHIP, and BHP programs and beneficiaries. 3 ARP also impacts federal payments to states' BHPs.

Section 9661 of the ARP temporarily modifies for 2021 and 2022 the applicable percentages of household income used to calculate the amount of advance payments of the premium tax credit (APTC) that taxpayers are eligible to have paid on their behalf for coverage purchased through an Exchange under the Patient Protection and Affordable Care Act. The applicable percentages determine the maximum amount of an individual's household income that can be charged in premiums for purchasing the second lowest cost silver plan on the Exchange. The difference between the maximum amount of an individual's household income that can be charged in premiums and the cost of the second lowest cost silver plan is paid to the individual as a PTC. As discussed in section III.D.5. of this final notice, the applicable percentages are factored into the equation for calculating the amount of PTC provided for individuals enrolled in QHPs through the Exchange and, accordingly, the amount of the federal BHP payment owed to states. Lower applicable percentages result in higher PTCs provided for QHP enrollees and higher federal BHP payments for states. Therefore, this ARP provision has the effect under the BHP payment methodology of increasing the amount of the federal payments owed to states for their BHPs in 2022.

We published the BHP proposed funding methodology for program year 2022 in “Basic Health Program; Federal Funding Methodology for Program Year 2022” in the November 3, 2020 Federal Register (85 FR 69525) (hereinafter referred to as the 2022 proposed BHP Payment Notice). In the 2022 proposed BHP Payment Notice, we proposed that the applicable percentages, as then defined in 26 U.S.C. 36B(b)(3)(A) and 26 CFR 1.36B-3(g), for calendar year 2021 would be effective for BHP program year 2022. Because the applicable percentages have since been amended for 2022 by the ARP, we are revising the applicable percentages in the final BHP payment notice to comply with the ARP; we discuss this further in section III.D.5. of this final notice. We note that updating the applicable percentage amounts themselves does not alter the BHP payment methodology, but are inputs under that methodology that, when changed will impact the payment amounts paid by the federal government to the states that operate a BHP under the methodology. In previous payment methodologies, we have used the prior year's applicable percentages to calculate BHP payments because those were the most recently published percentages at the time the methodologies were finalized. However, the 2022 applicable percentages are available now as a result of section 9661 of ARP, so we are updating the applicable percentages in this final notice.

In addition, in the 2022 proposed BHP Payment Notice, we proposed to include the IRF to account for potential differences between BHP enrollees' household income reported at the beginning of the year and the actual income over the year. This factor is needed because, unlike PTC recipients enrolled through Exchanges, BHP enrollees will not experience a reconciliation at the end of the tax year. This adjustment has been included in the methodology since 2015. In the 2022 proposed BHP Payment Notice, we proposed to set the value of the IRF equality to 99.01. However, due to changes made by the ARP, the Office of Tax Analysis (OTA) of the Department of the Treasury has revised its estimate for the IRF to be 100.63 percent. Therefore, we are updating the value of the IRF to be 100.63, as further discussed in section III.D.7 of this final notice.

In the final payment methodologies for program years 2020 and 2021 and proposed payment methodology for 2022, we included a factor to account for the impact of the discontinuation of CSR payments on individuals' selection of metal tier level plans in the Exchange, referred to as the Metal Tier Selection Factor. Specifically, the MTSF was included to account for the impact of QHP enrollees eligible for PTC choosing bronze-level plans (which have lower premiums than silver-level plans) and receiving less than the full value of the PTC, which was amplified after the discontinuation of the CSR payments. However, because section 9661 of the ARP reduces the maximum percentage of an individual's household income that can be charged in premiums for purchasing the second lowest cost silver plan on the Exchange, we believe consumer behavior around selecting different metal tier level plans likely will change significantly. In other words, we anticipate that, as a result of the ARP, more individuals with household income below 200 percent FPL will enroll in silver-level plans because these plans can now be purchased for a lower premium amount, and for many individuals, there will be silver-level plans with $0 premium. Therefore, we are removing the MTSF from the final payment methodology for program year 2022.

The following sections, arranged by subject area, include a summary of the public comments that we received and our responses. We received 11 public comments from individuals and organizations, including, but not limited to, state government agencies, other government agencies, and private citizens. In this section, we outline the proposed provisions and provide a summary of the public comments received and our responses. For a complete and full description of the BHP proposed funding methodology for program year 2022, see the 2022 proposed BHP Payment Notice.

In the 2022 proposed BHP Payment Notice, we proposed the methodology for how the federal BHP payments would be calculated for program year 2022.

We received the following comments on the background information included in the 2022 proposed BHP Payment Notice:

Comment: Several commenters were supportive of the 2022 BHP payment methodology described in the 2022 proposed BHP Payment Notice.

Response: We appreciate the support from these commenters. As described further in this final notice, we are finalizing the 2022 methodology as proposed in the 2022 proposed BHP Payment Notice, with the exception of the removal of the MTSF and updating the applicable percentages of household income used to calculate APTC amounts and the value of the IRF, as described in section I.C in this final notice.

We proposed in the overview of the funding methodology to calculate the PTC and CSR as consistently as possible and in general alignment with the methodology used by Exchanges to calculate APTC and CSR, and by the Internal Revenue Service (IRS) to calculate the allowable PTC. We proposed four equations (1, 2a, 2b, and 3) that would, if finalized, compose the overall BHP payment methodology.

We received the following comments on the overview of the funding methodology included in the 2022 proposed BHP Payment Notice:

Comment: One commenter recommended CMS apply the proposed methodology only when a state initially establishes a BHP. This commenter recommended that after a BHP is established, states should be allowed to use prior program year premiums for payments. The commenter reasoned that simplifying the BHP payment methodology would provide administrative relief as well as greater certainty of expected funds for states.

Response: We did not propose and are not adopting the recommendation related to the proposed methodology applying only to a state's initial program year. We also note that current Federal BHP regulations in § 600.605 specify the BHP payment methodology. Specifically, § 600.605(c) provides that the Secretary will annually adjust the payment methodology on a prospective basis to adjust for any changes in the calculation of the PTC and CSR components to the extent that necessary data is available. Further, regulations at § 600.610 require that a proposed BHP payment methodology be published in the Federal Register each October, 2 years prior to the applicable program year, and describe the proposed funding methodology for the relevant BHP year. The final BHP payment methodology must be published in the Federal Register in February, and include the final BHP payment methodology, as well as the federal BHP payment rates for the applicable BHP program year. Changes to this process, like the one suggested by the commenter, would require amendments to existing BHP regulations.

Comment: One commenter recommended that for the purpose of calculating BHP payments, CMS assume that American Indian and Alaska Native (AI/AN) enrollees in BHPs would have enrolled in the second-lowest cost bronze-level plan instead of the second-lowest cost silver-level plan on the Exchanges.

Response: While AI/AN enrollees may enroll in the second-lowest cost bronze-level plan and continue to receive CSRs, PTCs continue to be based on the second-lowest cost silver-level QHP. Therefore, BHP payments to states for AI/AN and all other enrollees need to continue to be based on the second-lowest cost silver QHP.

We did not propose and are not adopting this recommendation. The only portion of the rate affected by the use of the lowest-cost bronze-level plan is the CSR portion of the BHP payment; due to the discontinuance of CSR payments and the accompanying modification to the BHP payment methodology, the CSR portion of the payment is assigned a value of 0, and therefore, any change to the assumption about which bronze-level QHP is used would have no effect on the BHP payments.

Comment: One commenter recommended that AI/AN premiums in a BHP should not exceed the cost of the second-lowest cost bronze-level plan and suggested that CMS provide additional BHP funding to states in order to ensure that AI/AN populations do not experience a premium increase when enrolling in BHP from a bronze-level plan on the Exchange.

Response: We appreciate and understand the commenter's concern regarding the premium levels for the AI/AN population. However, section 1331(a)(2)(A)(i) of the Patient Protection and Affordable Care Act requires that states operating BHPs must ensure that individuals do not pay a higher monthly premium than they would have if they had been enrolled in the second lowest cost silver-level QHP in an Exchange, after reduction for any PTCs and CSRs allowable with respect to either plan. In addition, as specified in § 600.705(c)(1), BHP states are permitted to use BHP trust funds to reduce premiums and cost sharing for eligible individuals enrolled in standard health plans under BHP. For example, Minnesota does not charge premiums for the AI/AN population. This premium policy is required by state law and included in Minnesota's BHP Blueprint. 4

In this section of the 2022 proposed BHP Payment Notice, we proposed to continue to require that a state implementing BHP provide us with an estimate of the number of BHP enrollees it will enroll in the upcoming BHP program quarter, by applicable rate cell, to determine the federal BHP payment amounts. For each state, we proposed using rate cells that separate the BHP population into separate cells based on the following factors: Age, geographic rating area, coverage status, household size, and income. For specific discussions of these proposals, please refer to the 2022 proposed BHP Payment Notice.

We received no comments on this aspect of the proposed methodology. Therefore, we are finalizing these policies as proposed.

We proposed in this section of the 2022 proposed BHP Payment Notice to continue to use, to the extent possible, data submitted to the federal government by QHP issuers seeking to offer coverage through an Exchange that uses HealthCare.gov to determine the federal BHP payment cell rates. However, for states operating a State-based Exchange (SBE), which do not use HealthCare.gov , we proposed to continue to require such states to submit required data for CMS to calculate the federal BHP payment rates in those states. For specific discussions, please refer to the 2022 proposed BHP Payment Notice.

We received no comments on this aspect of the proposed methodology. Therefore, we are finalizing these policies as proposed.

In this section of the 2022 proposed BHP Payment Notice, we proposed to continue to use eight specific variables in the payment equations that compose the overall BHP funding methodology (seven variables are described in section III.D. of this final notice, and the premium trend factor is described in section III.E. of this final notice). For each proposed variable, we included a discussion on the assumptions and data sources used in developing the variables. For specific discussions, please refer to 2022 proposed BHP Payment Notice.

Below is a summary of the public comments we received regarding specific factors and our responses.

Comment: One commenter supported maintaining the value of the premium adjustment factor (PAF) at 1.188 for program year 2022.

Response: We appreciate the support from this commenter. As described further in this final notice, we are finalizing the methodology as proposed in the 2022 proposed BHP Payment Notice, and will be maintaining the value of the PAF at 1.188 for program year 2022.

Comment: One commenter expressed their support of using 2019 data to calculate the MTSF as proposed in the 2022 proposed BHP Payment Notice. This commenter stated that using partial 2020 data to calculate the MTSF would likely not be a reasonable predictor of consumer behavior in 2022 due to the impact of the COVID-19 public health emergency (PHE).

Response: We appreciate the support from this commenter. However, since publication of the 2022 proposed Payment Notice, Congress passed the ARP, which, as discussed in section I.C. of this final notice, modifies the applicable percentages of household income used to calculate the amount of APTC taxpayers are eligible to have paid on their behalf for coverage purchased through an Exchange during taxable years 2021 and 2022. We believe that these changes are likely to significantly affect enrollees' plan choices starting in 2022. For this reason and the reasons discussed in sections I.C. and III.D.6. of this final notice, we are not finalizing inclusion of the MTSF in the 2022 final BHP Payment Notice.

In this section of the 2022 BHP proposed Payment Notice, we proposed to continue to provide states operating a BHP with the option to use the 2021 QHP premiums multiplied by a premium trend factor to calculate the federal BHP payment rates instead of using the 2022 QHP premiums. We proposed to require states to make their election for the 2022 program year by May 15, 2021, or within 60 days of publication of the final payment methodology, whichever is later. For specific discussions, please refer to the 2022 BHP proposed Payment Notice.

Below is a summary of the public comments we received regarding this section and our responses.

Comment: One commenter expressed support for the proposed approach of using state-specific premiums and giving states the choice of applying actual current year premiums or the prior year's premiums multiplied by the premium trend factor (PTF). Due to the annual timing of this decision, this choice allows the state flexibility in making a determination that it believes is consistent with program goals for the upcoming year.

Response: We appreciate the support from this commenter. As described further in this final notice, we are finalizing the methodology as proposed in the 2022 proposed BHP Payment Notice.

In this section of the 2022 BHP proposed Payment Methodology, we proposed to provide states implementing BHP the option to develop a methodology to account for the impact that including the BHP population in the Exchange would have had on QHP premiums based on any differences in health status between the BHP population and persons enrolled through the Exchange. We proposed that states would submit their optional protocol to CMS by the later of August 1, 2021 or 60 days after the publication of the final methodology. For specific discussions, please refer to the 2022 BHP proposed Payment Notice.

We received no comments on this aspect of the methodology. Therefore, we are finalizing this policy as proposed. Because we are finalizing the 2022 payment methodology within 60 days of August 1, 2021, a state electing this option must submit their protocol to CMS within 60 days of publication of this final notice.

Section 1331(d)(3) of the Patient Protection and Affordable Care Act directs the Secretary to consider several factors when determining the federal BHP payment amount, which, as specified in the statute, must equal 95 percent of the value of the PTC and CSRs that BHP enrollees would have been provided had they enrolled in a QHP through an Exchange. Thus, the BHP funding methodology is designed to calculate the PTC and CSRs as consistently as possible and in general alignment with the methodology used by Exchanges to calculate APTC and CSRs, and by the IRS to calculate PTC for the tax year. In general, we have relied on values for factors in the payment methodology specified in statute or other regulations as available, and have developed values for other factors not otherwise specified in statute, or previously calculated in other regulations, to simulate the values of the PTCs and CSRs that BHP enrollees would have received if they had enrolled in QHPs offered through an Exchange. In accordance with section 1331(d)(3)(A)(iii) of the Patient Protection and Affordable Care Act, the final funding methodology must be certified by the Chief Actuary of CMS, in consultation with the Office of Tax Analysis (OTA) of the Department of the Treasury, as having met the requirements of section 1331(d)(3)(A)(ii) of the Patient Protection and Affordable Care Act.

Section 1331(d)(3)(A)(ii) of the Patient Protection and Affordable Care Act specifies that the payment determination shall take into account all relevant factors necessary to determine the value of the PTCs and CSRs that would have been provided to eligible individuals, including but not limited to, the age and income of the enrollee, whether the enrollment is for self-only or family coverage, geographic differences in average spending for health care across rating areas, the health status of the enrollee for purposes of determining risk adjustment payments and reinsurance payments that would have been made if the enrollee had enrolled in a QHP through an Exchange, and whether any reconciliation of APTC and CSR would have occurred if the enrollee had been so enrolled. Under the payment methodologies for 2015 (79 FR 13887 through 14151) (published on March 12, 2014), for 2016 (80 FR 9636 through 9648) (published on February 24, 2015), for 2017 and 2018 (81 FR 10091 through 10105) (published on February 29, 2016), for 2019 and 2020 (84 FR 59529 through) (published on November 5, 2019), and for 2021 (85 FR 49264 through 49280) (published on August 13, 2020) (hereinafter referred to as the 2021 final BHP Payment Notice), the total federal BHP payment amount has been calculated using multiple rate cells in each state. Each rate cell represents a unique combination of age range (if applicable), geographic area, coverage category (for example, self-only or two-adult coverage through the BHP), household size, and income range as a percentage of FPL, and there is a distinct rate cell for individuals in each coverage category within a particular age range who reside in a specific geographic area and are in households of the same size and income range. The BHP payment rates developed also are consistent with the state's rules on age rating. Thus, in the case of a state that does not use age as a rating factor on an Exchange, the BHP payment rates would not vary by age.

Under the methodology finalized in the August 2020 final BHP Payment Notice, the rate for each rate cell is calculated in two parts. The first part is equal to 95 percent of the estimated PTC that would have been paid if a BHP enrollee in that rate cell had instead enrolled in a QHP in an Exchange. The second part is equal to 95 percent of the estimated CSR payment that would have been made if a BHP enrollee in that rate cell had instead enrolled in a QHP in an Exchange. These two parts are added together and the total rate for that rate cell would be equal to the sum of the PTC and CSR rates. As noted in the August 2020 final BHP Payment Notice, we currently assign a value of zero to the CSR portion of the BHP payment rate calculation, because there is presently no available appropriation from which we can make the CSR portion of any BHP Payment.

We finalize that Equation (1) will be used to calculate the estimated PTC for eligible individuals enrolled in the BHP in each rate cell. We note that throughout this final methodology, when we refer to enrollees and enrollment data, we mean data regarding individuals who are enrolled in the BHP who have been found eligible for the BHP using the eligibility and verification requirements that are applicable in the state's most recent certified Blueprint. By applying the equations separately to rate cells based on age (if applicable), income and other factors, we effectively take those factors into account in the calculation. In addition, the equations reflect the estimated experience of individuals in each rate cell if enrolled in coverage through an Exchange, taking into account additional relevant variables. Each of the variables in the equations is defined in this section, and further detail is provided later in this section of this final methodology. In addition, we describe in Equation (2a) and Equation (2b) (below) how we will calculate the adjusted reference premium that is used in Equation (1).

The estimated PTC, on a per enrollee basis, will be calculated for each rate cell for each state based on age range (if applicable), geographic area, coverage category, household size, and income range. The PTC portion of the rate will be calculated in a manner consistent with the methodology used to calculate the PTC for persons enrolled in a QHP, with 5 adjustments. First, the PTC portion of the rate for each rate cell will represent the mean, or average, expected PTC that all persons in the rate cell would receive, rather than being calculated for each individual enrollee. Second, the reference premium (RP) (described in section III.D.1. of this final methodology) used to calculate the PTC would be adjusted for the BHP population health status, and in the case of a state that elects to use 2021 premiums for the basis of the BHP federal payment, for the projected change in the premium from 2021 to 2022, to which the rates announced in the final payment methodology would apply. These adjustments are described in Equation (2a) and Equation (2b). Third, the PTC will be adjusted prospectively to reflect the mean, or average, net expected impact of income reconciliation on the combination of all persons enrolled in the BHP; this adjustment, the IRF, as described in section III.D.7. of this final methodology, will account for the impact on the PTC that would have occurred had such reconciliation been performed. Finally, the rate is multiplied by 95 percent, consistent with section 1331(d)(3)(A)(i) of the Patient Protection and Affordable Care Act. We note that in the situation where the average income contribution of an enrollee would exceed the adjusted reference premium, we will calculate the PTC to be equal to 0 and would not allow the value of the PTC to be negative.

We will use Equation (1) to calculate the PTC rate, consistent with the methodology described above:

As part of the calculations for the PTC component, we will calculate the value of the adjusted reference premium as described below. Consistent with the existing approach, we will allow states to choose between using the actual current year premiums or the prior year's premiums multiplied by the PTF (as described in section III.E. of this final methodology). Below we describe how we will calculate the adjusted reference premium under each option.

In the case of a state that elected to use the reference premium (RP) based on the current program year (for example, 2022 premiums for the 2022 program year), we will calculate the value of the adjusted reference premium as specified in Equation (2a). The adjusted reference premium will be equal to the RP, which will be based on the second lowest cost silver plan premium in the applicable program year, multiplied by the BHP population health factor (PHF) (described in section III.D.3. of this final methodology), which will reflect the projected impact that enrolling BHP-eligible individuals in QHPs through an Exchange would have had on the average QHP premium, and multiplied by the PAF (described in section III.D.2. of this final methodology), which will account for the change in silver-level premiums due to the discontinuance of CSR payments.

In the case of a state that elected to use the RP based on the prior program year (for example, 2021 premiums for the 2022 program year, as described in more detail in section II.E. of this final methodology), we will calculate the value of the adjusted reference premium as specified in Equation (2b). The adjusted reference premium will be equal to the RP, which will be based on the second lowest cost silver plan premium in 2021, multiplied by the BHP PHF (described in section III.D.3. of this final methodology), which will reflect the projected impact that enrolling BHP-eligible individuals in QHPs on an Exchange would have had on the average QHP premium, multiplied by the PAF (described in section III.D.2. of this final methodology), which will account for the change in silver-level premiums due to the discontinuance of CSR payments, and multiplied by the PTF (described in section III.E. of this final methodology), which would reflect the projected change in the premium level between 2021 and 2022.

In general, the rate for each rate cell will be multiplied by the number of BHP enrollees in that cell (that is, the number of enrollees that meet the criteria for each rate cell) to calculate the total monthly BHP payment. This calculation is shown in Equation (3).

In this equation, we will assign a value of zero to the CSR part of the BHP payment rate calculation ( CSR a,g,c,h,i ) because there is presently no available appropriation from which we can make the CSR portion of any BHP payment. In the event that an appropriation for CSRs for 2022 is made, we will determine whether and how to modify the CSR part of the BHP payment rate calculation ( CSR a,g,c,h,i ) or the PAF in the payment methodology.

Consistent with the previous payment methodologies, a state implementing a BHP will provide us an estimate of the number of BHP enrollees it projects will enroll in the upcoming BHP program quarter, by applicable rate cell, prior to the first quarter and each subsequent quarter of program operations until actual enrollment data is available. Upon our approval of such estimates as reasonable, we will use those estimates to calculate the prospective payment for the first and subsequent quarters of program operation until the state provides us with actual enrollment data for those periods. The actual enrollment data is required to calculate the final BHP payment amount and make any necessary reconciliation adjustments to the prior quarters' prospective payment amounts due to differences between projected and actual enrollment. Subsequent quarterly deposits to the state's trust fund will be based on the most recent actual enrollment data submitted to us. Actual enrollment data must be based on individuals enrolled for the quarter who the state found eligible and whose eligibility was verified using eligibility and verification requirements as agreed to by the state in its applicable BHP Blueprint for the quarter that enrollment data is submitted. Procedures will ensure that federal payments to a state reflect actual BHP enrollment during a year, within each applicable category, and prospectively determined federal payment rates for each category of BHP enrollment, with such categories defined in terms of age range (if applicable), geographic area, coverage status, household size, and income range, as explained above.

We are finalizing our proposal to require the use of certain rate cells as part of this final methodology. For each state, we will use rate cells that separate the BHP population into separate cells based on the five factors described as follows:

Factor 1—Age: We will separate enrollees into rate cells by age (if applicable), using the following age ranges that capture the widest variations in premiums under HHS's Default Age Curve:  5

• Ages 0-20.

• Ages 21-34.

• Ages 35-44.

• Ages 45-54.

• Ages 55-64.

This provision is unchanged from the current methodology. 6

Factor 2—Geographic area: For each state, we will separate enrollees into rate cells by geographic areas within which a single RP is charged by QHPs offered through the state's Exchange. Multiple, non-contiguous geographic areas will be incorporated within a single cell, so long as those areas share a common RP. 7 This provision is also unchanged from the current methodology.

Factor 3—Coverage status: We will separate enrollees into rate cells by coverage status, reflecting whether an individual is enrolled in self-only coverage or persons are enrolled in family coverage through the BHP, as provided in section 1331(d)(3)(A)(ii) of the Patient Protection and Affordable Care Act. Among recipients of family coverage through the BHP, separate rate cells, as explained below, will apply based on whether such coverage involves two adults alone or whether it involves children. This provision is unchanged from the current methodology.

Factor 4—Household size: We will continue the current methods for separating enrollees into rate cells by household size that states use to determine BHP enrollees' household income as a percentage of the FPL under § 600.320 (Determination of eligibility for and enrollment in a standard health plan). We will require separate rate cells for several specific household sizes. For each additional member above the largest specified size, we will publish instructions for how we would develop additional rate cells and calculate an appropriate payment rate based on data for the rate cell with the closest specified household size. We will publish separate rate cells for household sizes of 1 through 10. This finalized provision is unchanged from the current methodology.

Factor 5—Household Income: For households of each applicable size, we will continue the current methods for creating separate rate cells by income range, as a percentage of FPL. The PTC that a person would receive if enrolled in a QHP through an Exchange varies by household income, both in level and as a ratio to the FPL. Thus, separate rate cells will be used to calculate federal BHP payment rates to reflect different bands of income measured as a percentage of FPL. We will use the following income ranges, measured as a percentage of the FPL:

• 0 to 50 percent of the FPL.

• 51 to 100 percent of the FPL.

• 101 to 138 percent of the FPL. 8

• 139 to 150 percent of the FPL.

• 151 to 175 percent of the FPL.

• 176 to 200 percent of the FPL.

This provision is unchanged from the current methodology.

These rate cells will only be used to calculate the federal BHP payment amount. A state implementing a BHP will not be required to use these rate cells or any of the factors in these rate cells as part of the state payment to the standard health plans participating in the BHP or to help define BHP enrollees' covered benefits, premium costs, or out-of-pocket cost-sharing levels.

Consistent with the current methodology, we are finalizing our proposal to use averages to define federal payment rates, both for income ranges and age ranges (if applicable), rather than varying such rates to correspond to each individual BHP enrollee's age (if applicable) and income level. This approach will increase the administrative feasibility of making federal BHP payments and reduce the likelihood of inadvertently erroneous payments resulting from highly complex methodologies. This approach should not significantly change federal payment amounts, since within applicable ranges; the BHP-eligible population is distributed relatively evenly.

The number of factors contributing to rate cells, when combined, can result in over 350,000 rate cells, which can increase the complexity when generating quarterly payment amounts. In future years, and in the interest of administrative simplification, we will consider whether to combine or eliminate certain rate cells, once we are certain that the effect on payment would be insignificant.

To the extent possible, unless otherwise provided, we will continue to use data submitted to the federal government by QHP issuers seeking to offer coverage through the Exchange in the relevant BHP state to perform the calculations that determine federal BHP payment cell rates.

States operating an SBE in the individual market, however, must provide certain data, including premiums for second lowest cost silver plans, by geographic area, for CMS to calculate the federal BHP payment rates in those states. States operating BHPs interested in obtaining the applicable 2022 program year federal BHP payment rates for its state must submit such data accurately, completely, and as specified by CMS, by no later than October 15, 2021. If additional state data (that is, in addition to the second lowest cost silver plan premium data) are needed to determine the federal BHP payment rate, such data must be submitted in a timely manner, and in a format specified by us to support the development and timely release of annual BHP Payment Methodologies. The specifications for data collection to support the development of BHP payment rates are published in CMS guidance and are available in the Federal Policy Guidance section at https://www.medicaid.gov/federal-policy-Guidance/index.html under “State Report for Health Insurance Exchange Premiums.

States operating a BHP must submit enrollment data to us on a quarterly basis and should be technologically prepared to begin submitting data at the start of their BHP, starting with the beginning of the first program year. This differs from the enrollment estimates used to calculate the initial BHP payment, which states would generally submit to CMS 60 days before the start of the first quarter of the program start date. This requirement is necessary for us to implement the payment methodology that is tied to a quarterly reconciliation based on actual enrollment data.

We will continue the policy first adopted in the 2016 final BHP Payment Methodology that in states that have BHP enrollees who do not file federal tax returns (non-filers), the state must develop a methodology to determine the enrollees' household income and household size consistently with Marketplace requirements. 9 The state must submit this methodology to us at the time of their Blueprint submission. We reserve the right to approve or disapprove the state's methodology to determine household income and household size for non-filers if the household composition and/or household income resulting from application of the methodology are different from what typically would be expected to result if the individual or head of household in the family were to file a tax return. States currently operating a BHP that wish to change the methodology for non-filers must submit a revised Blueprint outlining the revisions to its methodology, consistent with § 600.125.

In addition, as the federal payments are determined quarterly and the enrollment data is required to be submitted by the states to us quarterly, the quarterly payment will be based on the characteristics of the enrollee at the beginning of the quarter (or their first month of enrollment in the BHP in each quarter). Thus, if an enrollee were to experience a change in county of residence, household income, household size, or other factors related to the BHP payment determination during the quarter, the payment for the quarter will be based on the data as of the beginning of the quarter (or their first month of enrollment in the BHP in the applicable quarter). Payments will still be made only for months that the person is enrolled in and eligible for the BHP. We do not anticipate that this will have a significant effect on the federal BHP payment. The states must maintain data that is consistent with CMS' verification requirements, including auditable records for each individual enrolled, indicating an eligibility determination and a determination of income and other criteria relevant to the payment methodology as of the beginning of each quarter.

Consistent with § 600.610 (Secretarial determination of BHP payment amount), the state is required to submit certain data in accordance with this notice. We require that this data be collected and validated by states operating a BHP, and that this data be submitted to CMS.

To calculate the estimated PTC that would be paid if BHP-eligible individuals enrolled in QHPs through an Exchange, we must calculate a RP because the PTC is based, in part, on the premiums for the applicable second lowest cost silver plan as explained in section III.D.5. of this final methodology, regarding the premium tax credit formula (PTCF). This method is unchanged from the current methodology except to update the reference years, and to provide additional methodological details to simplify calculations and to deal with potential ambiguities. Accordingly, for the purposes of calculating the BHP payment rates, the RP, in accordance with 26 U.S.C. 36B(b)(3)(C), is defined as the adjusted monthly premium for an applicable second lowest cost silver plan. The applicable second lowest cost silver plan is defined in 26 U.S.C. 36B(b)(3)(B) as the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides that is offered through the same Exchange. We will use the adjusted monthly premium for an applicable second lowest cost silver plan in the applicable program year (2022) as the RP (except in the case of a state that elects to use the prior plan year's premium as the basis for the federal BHP payment for 2022, as described in section III.E. of this final methodology).

The RP will be the premium applicable to non-tobacco users. This is consistent with the provision in 26 U.S.C. 36B(b)(3)(C) that bases the PTC on premiums that are adjusted for age alone, without regard to tobacco use, even for states that allow insurers to vary premiums based on tobacco use in accordance with 42 U.S.C. 300gg(a)(1)(A)(iv).

Consistent with the policy set forth in 26 CFR 1.36B-3(f)(6), to calculate the PTC for those enrolled in a QHP through an Exchange, we will not update the payment methodology, and subsequently the federal BHP payment rates, in the event that the second lowest cost silver plan used as the RP, or the lowest cost silver plan, changes (that is, terminates or closes enrollment during the year).

The applicable second lowest cost silver plan premium will be included in the BHP payment methodology by age range (if applicable), geographic area, and self-only or applicable category of family coverage obtained through the BHP.

We note that the choice of the second lowest cost silver plan for calculating BHP payments relies on several simplifying assumptions in its selection. For the purposes of determining the second lowest cost silver plan for calculating PTC for a person enrolled in a QHP through an Exchange, the applicable plan may differ for various reasons. For example, a different second lowest cost silver plan may apply to a family consisting of two adults, their child, and their niece than to a family with two adults and their children, because one or more QHPs in the family's geographic area might not offer family coverage that includes the niece. We believe that it would not be possible to replicate such variations for calculating the BHP payment and believe that in the aggregate, they will not result in a significant difference in the payment. Thus, we will use the second lowest cost silver plan available to any enrollee for a given age, geographic area, and coverage category.

This choice of RP relies on an assumption about enrollment in the Exchanges. In the payment methodologies for program years 2015 through 2019, we had assumed that all persons enrolled in the BHP would have elected to enroll in a silver level plan if they had instead enrolled in a QHP through an Exchange (and that the QHP premium would not be lower than the value of the PTC). In the November 2019 final BHP Payment Notice, we continued to use the second-lowest cost silver plan premium as the RP, but for the 2020 payments we changed the assumption about which metal tier plans enrollees would choose (see section III.D.6. on the MTSF in this final methodology). In the 2021 payment methodology, we continued to account for how enrollees may choose other metal tier plans by applying the MTSF. For the 2022 payment methodology, we will not continue to account for how enrollees may choose other metal tier plans by removing the MTSF as described in section III.D.6. of this final methodology.

We do not believe it is appropriate to adjust the payment for an assumption that some BHP enrollees would not have enrolled in QHPs for purposes of calculating the BHP payment rates, since section 1331(d)(3)(A)(ii) of the Patient Protection and Affordable Care Act requires the calculation of such rates as if the enrollee had enrolled in a QHP through an Exchange.

The applicable age bracket (if any) will be one dimension of each rate cell. We propose to assume a uniform distribution of ages and estimate the average premium amount within each rate cell. We believe that assuming a uniform distribution of ages within these ranges is a reasonable approach and would produce a reliable determination of the total monthly payment for BHP enrollees. We also believe this approach will avoid potential inaccuracies that could otherwise occur in relatively small payment cells if age distribution were measured by the number of persons eligible or enrolled.

We will use geographic areas based on the rating areas used in the Exchanges. We will define each geographic area so that the RP is the same throughout the geographic area. When the RP varies within a rating area, we will define geographic areas as aggregations of counties with the same RP. Although plans are allowed to serve geographic areas smaller than counties after obtaining our approval, no geographic area, for purposes of defining BHP payment rate cells, will be smaller than a county. We do not believe that this assumption will have a significant impact on federal payment levels and it would simplify both the calculation of BHP payment rates and the operation of the BHP.

Finally, in terms of the coverage category, federal payment rates only recognize self-only and two-adult coverage, with exceptions that account for children who are potentially eligible for the BHP. First, in states that set the upper income threshold for children's Medicaid and CHIP eligibility below 200 percent of FPL (based on modified adjusted gross income (MAGI)), children in households with incomes between that threshold and 200 percent of FPL would be potentially eligible for the BHP. Currently, the only states in this category are Idaho and North Dakota. 10 Second, the BHP will include lawfully present immigrant children with household incomes at or below 200 percent of FPL in states that have not exercised the option under sections 1903(v)(4)(A)(ii) and 2107(e)(1)(E) of the Act to qualify all otherwise eligible, lawfully present immigrant children for Medicaid and CHIP. States that fall within these exceptions will be identified based on their Medicaid and CHIP State Plans, and the rate cells will include appropriate categories of BHP family coverage for children. For example, Idaho's Medicaid and CHIP eligibility is limited to families with MAGI at or below 185 percent FPL. If Idaho implemented a BHP, Idaho children with household incomes between 185 and 200 percent could qualify. In other states, BHP eligibility will generally be restricted to adults, since children who are citizens or lawfully present immigrants and live in households with incomes at or below 200 percent of FPL will qualify for Medicaid or CHIP, and thus be ineligible for a BHP under section 1331(e)(1)(C) of the Patient Protection and Affordable Care Act, which limits a BHP to individuals who are ineligible for minimum essential coverage (as defined in 26 U.S.C. 5000A(f)).

The PAF considers the premium increases in other states that took effect after we discontinued payments to issuers for CSRs provided to enrollees in QHPs offered through Exchanges. Despite the discontinuance of federal payments for CSRs, QHP issuers are required to provide CSRs to eligible enrollees. As a result, many QHP issuers increased the silver-level plan premiums to account for those additional costs; adjustments and how those were applied (for example, to only silver-level plans or to all metal tier plans) varied across states. For the states operating BHPs in 2018, the increases in premiums were relatively minor, because the majority of enrollees eligible for CSRs (and all who were eligible for the largest CSRs) were enrolled in the BHP and not in QHPs on the Exchanges, and therefore issuers in BHP states did not significantly raise premiums to cover unpaid CSR costs.

In the Final Administrative Order, the 2019 final BHP Payment Notice, the 2020 final BHP Payment Notice, and the 2021 final BHP Payment Notice we incorporated the PAF into the BHP payment methodologies for 2018, 2019, 2020, and 2021 to capture the impact of how other states responded to us ceasing to pay CSRs. We will include the PAF in the 2022 payment methodology and to calculate it in the same manner as in the Final Administrative Order. In the event that an appropriation for CSRs for 2022 is made, we would determine whether and how to modify the PAF in the payment methodology.

Under the Final Administrative Order, we calculated the PAF by using information sought from QHP issuers in each state and the District of Columbia, and determined the premium adjustment that the responding QHP issuers made to each silver level plan in 2018 to account for the discontinuation of CSR payments to QHP issuers. Based on the data collected, we estimated the median adjustment for silver level QHPs nationwide (excluding those in the two BHP states). To the extent that QHP issuers made no adjustment (or the adjustment was zero), this would be counted as zero in determining the median adjustment made to all silver level QHPs nationwide. If the amount of the adjustment was unknown—or we determined that it should be excluded for methodological reasons (for example, the adjustment was negative, an outlier, or unreasonable)—then we did not count the adjustment towards determining the median adjustment. 11 The median adjustment for silver level QHPs is the nationwide median adjustment.

For each of the two BHP states, we determined the median premium adjustment for all silver level QHPs in that state, which we refer to as the state median adjustment. The PAF for each BHP state equaled one plus the nationwide median adjustment divided by one plus the state median adjustment for the BHP state. In other words,

To determine the PAF described above, we sought to collect QHP information from QHP issuers in each state and the District of Columbia to determine the premium adjustment those issuers made to each silver level plan offered through the Exchange in 2018 to account for the end of CSR payments. Specifically, we sought information showing the percentage change that QHP issuers made to the premium for each of their silver level plans to cover benefit expenditures associated with the CSRs, given the lack of CSR payments in 2018. This percentage change was a portion of the overall premium increase from 2017 to 2018.

According to our records, there were 1,233 silver-level QHPs operating on Exchanges in 2018. Of these 1,233 QHPs, 318 QHPs (25.8 percent) responded to our request for the percentage adjustment applied to silver-level QHP premiums in 2018 to account for the discontinuance of the CSRs. These 318 QHPs operated in 26 different states, with 10 of those states running SBEs (while we requested information only from QHP issuers in states serviced by an FFE, many of those issuers also had QHPs in states operating SBEs and submitted information for those states as well). Thirteen of these 318 QHPs were in New York (and none were in Minnesota). Excluding these 13 QHPs from the analysis, the nationwide median adjustment was 20.0 percent. Of the 13 QHPs in New York that responded, the state median adjustment was 1.0 percent. We believe that this is an appropriate adjustment for QHPs in Minnesota, as well, based on the observed changes in New York's QHP premiums in response to the discontinuance of CSR payments (and the operation of the BHP in that state) and our analysis of expected QHP premium adjustments for states with BHPs. We calculated the final PAF as (1 + 20%) ÷ (1 + 1%) (or 1.20/1.01), which results in a value of 1.188.

We are finalizing our proposal to continue to set the PAF to 1.188 for program year 2022. We believe that this value for the PAF continues to reasonably account for the increase in silver-level premiums experienced in non-BHP states that took effect after the discontinuance of the CSR payments. We believe that the impact of the increase in silver-level premiums in 2022 can reasonably be expected to be similar to that in 2018, because the discontinuation of CSR payments has not changed. Moreover, we believe that states and QHP issuers have not significantly changed the manner and degree to which they are increasing QHP silver-level premiums to account for the discontinuation of CSR payments since 2018, and we expect the same for 2022.

In addition, the percentage difference between the average second lowest-cost silver level QHP and the bronze-level QHP premiums has not changed significantly since 2018, and we do not expect a significant change for 2022. In 2018, the average second lowest-cost silver level QHP premium was 41.1 percent higher than the average lowest-cost bronze-level QHP premium ($481 and $341, respectively). In 2021, (the latest year for which premiums have been published), the difference is similar; the average second lowest-cost silver-level QHP premium is 37.8 percent higher than the average lowest-cost bronze-level QHP premium ($452 and $328, respectively). 12 In contrast, the average second lowest-cost silver-level QHP premium was only 23.8 percent higher than the average lowest-cost bronze-level QHP premium in 2017 ($359 and $290, respectively). 13 If there were a significant difference in the amounts that QHP issuers were increasing premiums for silver-level QHPs to account for the discontinuation of CSR payments over time, then we would expect the difference between the bronze-level and silver-level QHP premiums to change significantly over time, and that this would be apparent in comparing the lowest-cost bronze-level QHP premium to the second lowest-cost silver-level QHP premium.

We are finalizing our proposal to include the PHF in the methodology to account for the potential differences in the average health status between BHP enrollees and persons enrolled through the Exchanges. To the extent that BHP enrollees would have been enrolled through an Exchange in the absence of a BHP in a state, the exclusion of those BHP enrollees in the Exchange may affect the average health status of the overall population and the expected QHP premiums.

We currently do not believe that there is evidence that the BHP population would have better or poorer health status than the Exchange population. At this time, there continues to be a lack of data on the experience in the Exchanges that limits the ability to analyze the potential health differences between these groups of enrollees. More specifically, Exchanges have been in operation since 2014, and 2 states have operated BHPs since 2015, but data is not available to do the analysis necessary to determine if there are differences in the average health status between BHP and Exchange enrollees. In addition, differences in population health may vary across states. We also do not believe that sufficient data would be available to permit us to make a prospective adjustment to the PHF under § 600.610(c)(2) for the 2022 program year.

Given these analytic challenges and the limited data about Exchange coverage and the characteristics of BHP-eligible consumers, the PHF will be 1.00 for program year 2022.

In previous years BHP payment methodologies, we included an option for states to include a retrospective population health status adjustment. States will have same option for 2022 to include a retrospective population health status adjustment in the certified methodology, which is subject to our review and approval. This option is described further in section III.F. of this final methodology. Regardless of whether a state elects to include a retrospective population health status adjustment, we anticipate that, in future years, when additional data becomes available about Exchange coverage and the characteristics of BHP enrollees, we may propose a different PHF.

While the statute requires consideration of risk adjustment payments and reinsurance payments insofar as they would have affected the PTC that would have been provided to BHP-eligible individuals had they enrolled in QHPs, we are not requiring that a BHP's standard health plans receive such payments. As explained in the BHP final rule, BHP standard health plans are not included in the federally-operated risk adjustment program. 14 Further, standard health plans did not qualify for payments under the transitional reinsurance program established under section 1341 of the Patient Protection and Affordable Care Act for the years the program was operational (2014 through 2016). 15 To the extent that a state operating a BHP determines that, because of the distinctive risk profile of BHP-eligible consumers, BHP standard health plans should be included in mechanisms that share risk with other plans in the state's individual market, the state would need to use other methods for achieving this goal.

Household income is a significant determinant of the amount of the PTC that is provided for persons enrolled in a QHP through an Exchange. Accordingly, all BHP Payment Methodologies incorporate household income into the calculations of the payment rates through the use of income-based rate cells. We are finalizing our proposal to define household income in accordance with the definition of modified adjusted gross income in 26 U.S.C. 36B(d)(2)(B) and consistent with the definition in 45 CFR 155.300. Income will be measured relative to the FPL, which is updated periodically in the Federal Register by the Secretary under the authority of 42 U.S.C. 9902(2). Household size and income as a percentage of FPL will be used as factors in developing the rate cells. We are finalizing our proposal to use the following income ranges measured as a percentage of FPL:  16

• 0-50 percent.

• 51-100 percent.

• 101-138 percent.

• 139-150 percent.

• 151-175 percent.

• 176-200 percent.

We will assume a uniform income distribution for each federal BHP payment cell. We believe that assuming a uniform income distribution for the income ranges finalized will be reasonably accurate for the purposes of calculating the BHP payment and would avoid potential errors that could result if other sources of data were used to estimate the specific income distribution of persons who are eligible for or enrolled in the BHP within rate cells that may be relatively small.

Thus, when calculating the mean, or average, PTC for a rate cell, we will calculate the value of the PTC at each one percentage point interval of the income range for each federal BHP payment cell and then calculate the average of the PTC across all intervals. This calculation would rely on the PTC formula described in section III.D.5. of this final methodology.

As the APTC for persons enrolled in QHPs would be calculated based on their household income during the open enrollment period, and that income would be measured against the FPL at that time, we will adjust the FPL by multiplying the FPL by a projected increase in the CPI-U between the time that the BHP payment rates are calculated and the QHP open enrollment period, if the FPL is expected to be updated during that time. The projected increase in the CPI-U will be based on the intermediate inflation forecasts from the most recent Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare Trustees Reports. 17

In Equation 1 described in section III.A.1. of this final methodology, we will use the formula described in 26 U.S.C. 36B(b) to calculate the estimated PTC that would be paid on behalf of a person enrolled in a QHP on an Exchange as part of the BHP payment methodology. This formula is used to determine the contribution amount (the amount of premium that an individual or household theoretically would be required to pay for coverage in a QHP on an Exchange), which is based on (A) the household income; (B) the household income as a percentage of FPL for the family size; and (C) the schedule specified in 26 U.S.C. 36B(b)(3)(A) and shown below.

The difference between the contribution amount and the adjusted monthly premium (that is, the monthly premium adjusted for the age of the enrollee) for the applicable second lowest cost silver plan is the estimated amount of the PTC that would be provided for the enrollee.

The PTC amount provided for a person enrolled in a QHP through an Exchange is calculated in accordance with the methodology described in 26 U.S.C. 36B(b)(2). The amount is equal to the lesser of the premium for the plan in which the person or household enrolls, or the adjusted premium for the applicable second lowest cost silver plan minus the contribution amount.

The applicable percentage is defined in 26 U.S.C. 36B(b)(3)(A) and 26 CFR 1.36B-3(g) as the percentage that applies to a taxpayer's household income that is within an income tier specified in Table 1, increasing on a sliding scale in a linear manner from an initial premium percentage to a final premium percentage specified in Table 1. We are finalizing our proposal to continue to use applicable percentages to calculate the estimated PTC that would be paid on behalf of a person enrolled in a QHP on an Exchange as part of the BHP payment methodology as part of Equation 1.

As discussed in section I.C. of this final notice, we note that the ARP updated the applicable percentages of household income used to calculate the PTC that would be paid to an individual enrolled in a QHP on an Exchange for calendar years (CY) 2021 and 2022. The applicable percentages in Table 1 for CY 2022 will be effective for BHP program year 2022. Absent future legislation addressing applicable percentages, applicable percentages will be updated in future years in accordance with 26 U.S.C. 36B(b)(3)(A)(ii).

On the Exchange, if an enrollee chooses a QHP and the value of the APTC to which the enrollee is entitled is greater than the premium of the plan selected, then the APTC is reduced to be equal to the premium. This usually occurs when enrollees eligible for larger APTCs choose bronze-level QHPs, which typically have lower premiums on the Exchange than silver-level QHPs. Prior to 2018, we believed that the impact of these choices and plan selections on the amount of PTCs that the federal government paid was relatively small. During this time, most enrollees in income ranges up to 200 percent FPL chose silver-level QHPs, and in most cases where enrollees chose bronze-level QHPs, the premium was still more than the PTC. Based on our analysis of the percentage of persons with incomes below 200 percent FPL choosing bronze-level QHPs and the average reduction in the PTCs paid for those enrollees, we believe that the total PTCs paid for persons with incomes below 200 percent FPL were reduced by about 1 percent in 2017. Therefore, we did not seek to make an adjustment based on the effect of enrollees choosing non-silver-level QHPs in developing the BHP payment methodology applicable to program years prior to 2018. However, after the discontinuance of the CSR payments in October 2017, several changes occurred that increased the expected impact of enrollees' plan selection choices on the amount of PTC the government paid. These changes led to a larger percentage of individuals choosing bronze-level QHPs, and for those individuals who chose bronze-level QHPs, these changes also generally led to larger reductions in PTCs paid by the federal government per individual. The combination of more individuals with incomes below 200 percent of FPL choosing bronze-level QHPs and the reduction in PTCs had an impact on PTCs paid by the federal government for enrollees with incomes below 200 percent FPL.

Therefore, in the 2020 and 2021 payment methodology, we included an adjustment (the MTSF) in the BHP payment methodology to account for the effects of these choices. Section 1331(d)(3) of the Patient Protection and Affordable Care Act requires that the BHP payments to states be based on what would have been provided if such eligible individuals were allowed to enroll in QHPs, and we believed that it was appropriate to consider how individuals would have chosen different plans—including across different metal tiers—as part of the BHP payment methodology.

In the 2022 proposed Payment Notice, we proposed to include the MTSF in the payment methodology and calculate its value using the same approach as finalized in the 2020 final Payment Notice (84 FR 59543). As discussed above, since publication of the 2022 proposed Payment Notice, Congress passed the ARP, which, as discussed in section I.C. of this final notice, modifies the applicable percentages of household income used to calculate the amount of APTC taxpayers are eligible to have paid on their behalf for coverage purchased through an Exchange during taxable years 2021 and 2022. Also as discussed above, we believe that these changes are likely to significantly affect enrollees' plan choices starting in 2022. Most notably, individuals with incomes up to 150 percent of FPL will be able to purchase a silver-level plan with a $0 premium, and individuals with incomes between 150 percent and 200 percent of FPL will be able to purchase a silver-level plan at a lower premium than previously. Therefore, we believe that significantly more enrollees likely will choose to enroll in silver-level plans (and fewer in bronze-level plans) and the amount of PTC foregone therefore will be less than it was in previous years. Accordingly, the impact of the MTSF likely will be significantly less. Therefore, we are not finalizing our proposal to include the MTSF in the 2022 payment methodology.

For persons enrolled in a QHP through an Exchange who receive APTC, there will be an annual reconciliation following the end of the year to compare the APTC to the correct amount of PTC based on household circumstances shown on the federal income tax return. Any difference between the latter amounts and the APTC paid during the year would either be paid to the taxpayer (if too little APTC was paid) or charged to the taxpayer as additional tax (if too much APTC was paid, subject to any limitations in statute or regulation), as provided in 26 U.S.C. 36B(f).

Section 1331(e)(2) of the Patient Protection and Affordable Care Act specifies that an individual eligible for the BHP may not be treated as a “qualified individual” under section 1312 of the Patient Protection and Affordable Care Act who is eligible for enrollment in a QHP offered through an Exchange. We are defining “eligible” to mean anyone for whom the state agency or the Exchange assesses or determines, based on the single streamlined application or renewal form, as eligible for enrollment in the BHP. Because enrollment in a QHP is a requirement for individuals to receive APTC, individuals determined or assessed as eligible for a BHP are not eligible to receive APTC for coverage in the Exchange. Because they do not receive APTC, BHP enrollees, on whom the BHP payment methodology is generally based, are not subject to the same income reconciliation as Exchange consumers.

Nonetheless, there may still be differences between a BHP enrollee's household income reported at the beginning of the year and the actual household income over the year. These may include small changes (reflecting changes in hourly wage rates, hours worked per week, and other fluctuations in income during the year) and large changes (reflecting significant changes in employment status, hourly wage rates, or substantial fluctuations in income). There may also be changes in household composition. Thus, we believe that using unadjusted income as reported prior to the BHP program year may result in calculations of estimated PTC that are inconsistent with the actual household incomes of BHP enrollees during the year. Even if the BHP adjusts household income determinations and corresponding claims of federal payment amounts based on household reports during the year or data from third-party sources, such adjustments may not fully capture the effects of tax reconciliation that BHP enrollees would have experienced had they been enrolled in a QHP through an Exchange and received APTC.

Therefore, in accordance with current practice, we are finalizing our proposal to include in Equation 1 an adjustment, the IRF, that will account for the difference between calculating estimated PTC using: (a) Household income relative to FPL as determined at initial application and potentially revised mid-year under § 600.320, for purposes of determining BHP eligibility and claiming federal BHP payments; and (b) actual household income relative to FPL received during the plan year, as it would be reflected on individual federal income tax returns. This adjustment will seek prospectively to capture the average effect of income reconciliation aggregated across the BHP population had those BHP enrollees been subject to tax reconciliation after receiving APTC for coverage provided through QHPs. Consistent with the methodology used in past years, we will estimate reconciliation effects based on tax data for 2 years, reflecting income and tax unit composition changes over time among BHP-eligible individuals.

The OTA maintains a model that combines detailed tax and other data, including Exchange enrollment and PTC claimed, to project Exchange premiums, enrollment, and tax credits. For each enrollee, this model compares the APTC based on household income and family size estimated at the point of enrollment with the PTC based on household income and family size reported at the end of the tax year. The former reflects the determination using enrollee information furnished by the applicant and tax data furnished by the IRS. The latter would reflect the PTC eligibility based on information on the tax return, which would have been determined if the individual had not enrolled in the BHP. Consistent with prior years, we will use the ratio of the reconciled PTC to the initial estimation of PTC as the IRF in Equation (1) for estimating the PTC portion of the BHP payment rate.

For 2022, OTA previously estimated that the IRF for states that have implemented the Medicaid eligibility expansion to cover adults up to 133 percent of the FPL would be 99.01 percent. However, due to changes made by the ARP, OTA has revised its estimate for the IRF to be 100.63 percent. Specifically, section 9661 of the ARP specifies new applicable percentages of household income for the purposes of calculating the PTC for 2021 and 2022. This would lead to an increase in PTC, by reducing the household premium contribution. It also is anticipated to have an effect on the income reconciliation for persons enrolled in QHPs in the Exchanges, as evidenced by the revised estimate.

We believe that it is appropriate to distinguish between the IRF for Medicaid expansion states and non-Expansion states to remove data for those with incomes under 138 percent of FPL for Medicaid expansion states. This is the same approach that we finalized in the 2021 final BHP Payment Notice. For other factors used in the BHP payment methodology, it may not always be possible to separate the experiences between different types of states and there may not be meaningful differences between the experiences of such states. Therefore, we will set the value of the IRF for states that have expanded Medicaid equal to the value of the IRF for incomes between 138 and 200 percent of FPL and the value of the IRF for states that have not expanded Medicaid equal to the value of the IRF for incomes between 100 and 200 percent of FPL. This gives an IRF of 100.63 percent for states that have expanded Medicaid and 100.83 percent for states that have not expanded Medicaid for program year 2022.

We will use this value for the IRF in Equations (1) for calculating the PTC portion of the BHP payment rate.

In the interest of allowing states greater certainty in the total BHP federal payments for a given plan year, we have given states the option to have their final federal BHP payment rates calculated using a projected adjusted reference premium (that is, using premium data from the prior program year multiplied by the premium trend factor (PTF), as described in Equation (2b). We will require states to make their election to have their final federal BHP payment rates calculated using a projected adjusted reference premium by the later of (1) May 15 of the year preceding the applicable program year or (2) 60 days after the publication of the final notice. Therefore, because we are finalizing the 2022 payment methodology after May 15, 2021, states must inform CMS in writing of their election for the 2022 program year by 60 days after the publication of the final notice.

For Equation (2b), we will define the PTF, with minor changes in calculation sources and methods, as follows:

PTF: In the case of a state that would elect to use the 2021 premiums as the basis for determining the 2022 BHP payment, it would be appropriate to apply a factor that would account for the change in health care costs between the year of the premium data and the BHP program year. This factor would approximate the change in health care costs per enrollee, which would include, but not be limited to, changes in the price of health care services and changes in the utilization of health care services. This would provide an estimate of the adjusted monthly premium for the applicable second lowest cost silver plan that would be more accurate and reflective of health care costs in the BHP program year.

For the PTF we are finalizing our proposal to use the annual growth rate in private health insurance expenditures per enrollee from the National Health Expenditure (NHE) projections, developed by the Office of the Actuary in CMS ( https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected ). Based on these projections, we are finalizing our proposal that the PTF be 4.7 percent for BHP program year 2022.

We note that the increase in premiums for QHPs from 1 year to the next may differ from the PTF developed for the BHP funding methodology for several reasons. In particular, we note that the second lowest cost silver plan may be different from one year to the next. This may lead to the PTF being greater than or less than the actual change in the premium of the second lowest cost silver plan.

To determine whether the potential difference in health status between BHP enrollees and consumers in an Exchange would affect the PTC and risk adjustment payments that would have otherwise been made had BHP enrollees been enrolled in coverage through an Exchange, we will provide states implementing the BHP the option to propose and to implement, as part of the certified methodology, a retrospective adjustment to the federal BHP payments to reflect the actual value that would be assigned to the population health factor (or risk adjustment) based on data accumulated during that program year for each rate cell.

We acknowledge that there is uncertainty with respect to this factor due to the lack of available data to analyze potential health differences between the BHP and QHP populations, which is why, absent a state election, we will use a value for the PHF (see section III.D.3. of this final methodology) to determine a prospective payment rate which assumes no difference in the health status of BHP enrollees and QHP enrollees. There is considerable uncertainty regarding whether the BHP enrollees will pose a greater risk or a lesser risk compared to the QHP enrollees, how to best measure such risk, the potential effect such risk would have had on PTC, and risk adjustment that would have otherwise been made had BHP enrollees been enrolled in coverage through an Exchange. However, to the extent that a state would develop an approved protocol to collect data and effectively measure the relative risk and the effect on federal payments of PTCs and CSRs, we are finalizing our proposal to permit a retrospective adjustment that will measure the actual difference in risk between the two populations to be incorporated into the certified BHP payment methodology and used to adjust payments in the previous year.

For a state electing the option to implement a retrospective population health status adjustment as part of the BHP payment methodology applicable to the state, we are finalizing our proposal to require the state to submit a proposed protocol to CMS, which would be subject to approval by us and would be required to be certified by the Chief Actuary of CMS, in consultation with the OTA. We will apply the same protocol for the population health status adjustment as what is set forth in guidance in Considerations for Health Risk Adjustment in the Basic Health Program in Program Year 2015 ( http://www.medicaid.gov/Basic-Health-Program/Downloads/Risk-Adjustment-and-BHP-White-Paper.pdf ). We proposed to require a state to submit its proposed protocol for the 2022 program year by the later of August 1, 2021 or 60 days after the publication of this final notice. Because this final notice is being published within 60 days of August 1, 2021, we are finalizing that a state will be required to submit its proposed protocol for the 2022 program year by 60 days after the publication of this final notice. This submission will also need to include descriptions of how the state would collect the necessary data to determine the adjustment, including any contracting contingences that may be in place with participating standard health plan issuers. We will provide technical assistance to states as they develop their protocols, as requested. To implement the population health status adjustment, we must approve the state's protocol by December 31, 2021 for the 2022 program year. Finally, the state will be required to complete the population health status adjustment at the end of the program year based on the approved protocol. After the end of the program year, and once data is made available, we will review the state's findings, consistent with the approved protocol, and make any necessary adjustments to the state's federal BHP payment amounts. If we determine the federal BHP payments were less than they would have been using the final adjustment factor, we will apply the difference to the state's next quarterly BHP trust fund deposit. If we determine that the federal BHP payments were more than they would have been using the final reconciled factor, we will subtract the difference from the next quarterly BHP payment to the state.

Although the methodology's information collection requirements and burden had at one time been approved by the Office of Management and Budget (OMB) under control number 0938-1218 (CMS-10510), the approval was discontinued on August 31, 2017, since we adjusted our estimated number of respondents below the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq. ) threshold of ten or more respondents (only New York and Minnesota operate a BHP at this time). Since we continue to estimate fewer than ten respondents, the final 2022 methodology is not subject to the requirements of the PRA.

Section 1331 of the Patient Protection and Affordable Care Act (42 U.S.C. 18051) requires the Secretary to establish a BHP, and section 1331(d)(1) specifically provides that if the Secretary finds that a state meets the requirements of the program established under section 1331(a) of the Patient Protection and Affordable Care Act, the Secretary shall transfer to the state federal BHP payments described in section 1331(d)(3). This final methodology provides for the funding methodology to determine the federal BHP payment amounts required to implement these provisions for program year 2022.

We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (the Congressional Review Act) (5 U.S.C. 801 et seq. ).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) (Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). As noted in the BHP final rule, the BHP provides states the flexibility to establish an alternative coverage program for low-income individuals who would otherwise be eligible to purchase coverage on an Exchange. To date, two states have established a BHP, and we expect state participation to remain static as a result of this payment methodology. However, the final payment methodology for program year 2022 differs from the payment methodology for program year 2021 due to the removal of the MTSF, which would increase BHP payments, compared to the methodology for program year 2021. OMB Office of Information and Regulatory Affairs has determined this rulemaking is “economically significant” as measured by the $100 million threshold under Executive Order 12866, and hence also a major rule under the Congressional Review Act, 5 U.S.C. 804(2). Accordingly, we have prepared a RIA that, to the best of our ability, presents the costs and benefits of the rulemaking.

The aggregate economic impact of this payment methodology is estimated to be $1,114 million in transfers for CY 2022 (measured in real 2022 dollars), which would be an increase in federal payments to the state BHPs. For the purposes of this analysis, we have assumed that two states would implement BHPs in 2022. This assumption is based on the fact that two states have established a BHP to date, and we do not have any indication that additional states may implement the program. We also assumed there would be approximately 926,000 BHP enrollees in 2022. The size of the BHP depends on several factors, including the number of and which particular states choose to implement or continue a BHP, the level of QHP premiums, and the other coverage options for persons who would be eligible for the BHP. In particular, while we generally expect that many enrollees would have otherwise been enrolled in a QHP on the Exchange, some persons may have been eligible for Medicaid under a waiver or a state health coverage program. For those who would have enrolled in a QHP and thus would have received PTCs, the federal expenditures for the BHP would be expected to be more than offset by a reduction in federal expenditures for PTCs. For those who would have been enrolled in Medicaid, there would likely be a smaller offset in federal expenditures (to account for the federal share of Medicaid expenditures), and for those who would have been covered in non-federal programs or would have been uninsured, there likely would be an increase in federal expenditures.

Projected BHP enrollment and expenditures under the previous payment methodology were calculated using the most recent 2021 QHP premiums and state estimates for BHP enrollment. We projected enrollment for 2022 using the projected increase in the number of adults in the U.S. from 2021 to 2022 (0.4 percent), and we projected premiums using the NHE projection of premiums for private health insurance (4.7 percent). Prior to any changes made in the 2022 BHP payment methodology, federal BHP expenditures are projected to be $6,738 million in 2022. This projection serves as our baseline scenario when estimating the net impact of the 2022 final methodology on federal BHP expenditures.

The change in the PTCF percentages is the most significant change in the methodology from the proposed notice, and is prescribed in the ARP. To calculate the changes that result from these changes in the payment methodology, we compared the results before and after these changes using the BHP payment model, we maintain to calculate payments to states, with projections used to calculate impacts in 2022. We recalculated the BHP payments using the new PTCF percentages to calculate the impact of this change, and we estimate that this would increase BHP payments by $853 million in 2022 (as compared to using the previous PTCF percentages, as described in the proposed methodology). The new PTCF percentages can be found in Table 1 in section III.D.5 of this final notice. For the change in the methodology to remove the MTSF for benefit year 2022, the MTSF was calculated as having a value of 96.68 percent (as described previously). We recalculated the BHP payments excluding the MTSF from the formula, and we estimate this would increase BHP payments by $261 million in 2022 (as compared to the payments using a methodology including the MTSF factor). The projected BHP expenditures after these changes are $7,852 million, which is the sum of the prior estimate ($6,738 million) and the impacts of the changes to the methodology ($853 million and $261 million).

The provisions of this final methodology are designed to determine the amount of funds that will be transferred to states offering coverage through a BHP rather than to individuals eligible for federal financial assistance for coverage purchased on the Exchange. We are uncertain what the total federal BHP payment amounts to states will be as these amounts will vary from state to state due to the state-specific factors and conditions. For example, total federal BHP payment amounts may be greater in more populous states simply by virtue of the fact that they have a larger BHP-eligible population and total payment amounts are based on actual enrollment. Alternatively, total federal BHP payment amounts may be lower in states with a younger BHP-eligible population as the RP used to calculate the federal BHP payment will be lower relative to older BHP enrollees. While state composition will cause total federal BHP payment amounts to vary from state to state, we believe that the methodology, like the methodology used in 2021, accounts for these variations to ensure accurate BHP payment transfers are made to each state.

We considered several alternatives in developing the BHP payment methodology for 2022, and we discuss some of these alternatives below.

We considered alternatives as to how to calculate the PAF in the final methodology for 2022. The value for the PAF is 1.188, which is the same as was used for 2018, 2019, 2020, and 2021. We believe it would be difficult to obtain the updated information from QHP issuers comparable to what was used to develop the 2018 factor, because QHP issuers may not distinctly consider the impact of the discontinuance of CSR payments on the QHP premiums any longer. We do not have reason to believe that the value of the PAF would change significantly between program years 2018 and 2022. We are continuing to consider whether or not there are other methodologies or data sources we may be able to use to calculate the PAF.

We also considered alternatives as how to calculate the MTSF in the final methodology for 2022. Given the changes made to the determination of PTC for 2022 in the ARP, we are not including the MTSF in the 2022 payment methodology, as described in section III.D.6. of this final notice.

We also considered whether to continue to provide states the option to develop a protocol for a retrospective adjustment to the PHF as we did in previous payment methodologies. We believe that continuing to provide this option is appropriate and likely to improve the accuracy of the final payments.

We also considered whether to require the use of the program year premiums to develop the federal BHP payment rates, rather than allow the choice between the program year premiums and the prior year premiums trended forward. We believe that the payment rates can still be developed accurately using either the prior year QHP premiums or the current program year premiums and that it is appropriate to continue to provide the states these options.

Many of the factors in this final methodology are specified in statute; therefore, for these factors we are limited in the alternative approaches we could consider. We do have some choices in selecting the data sources used to determine the factors included in the methodology. Except for state-specific RPs and enrollment data, we will use national rather than state-specific data. This is due to the lack of currently available state-specific data needed to develop the majority of the factors included in the methodology. We believe the national data will produce sufficiently accurate determinations of payment rates. In addition, we believe that this approach will be less burdensome on states. In many cases, using state-specific data would necessitate additional requirements on the states to collect, validate, and report data to CMS. By using national data, we are able to collect data from other sources and limit the burden placed on the states. For RPs and enrollment data, we will use state-specific data rather than national data, as we believe state-specific data will produce more accurate determinations than national averages. Our responses to public comments on these alternative approaches are in section II of this final notice.

In accordance with OMB Circular A-4, Table 3 depicts an accounting statement summarizing the assessment of the transfers associated with these payment methodologies.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) (RFA) requires agencies to prepare a final regulatory flexibility analysis to describe the impact of the final rule on small entities, unless the head of the agency can certify that the rule will not have a significant economic impact on a substantial number of small entities. The RFA generally defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA); (2) a not-for-profit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000. Individuals and states are not included in the definition of a small entity.

Because this final methodology is focused solely on federal BHP payment rates to states, it does not contain provisions that would have a direct impact on hospitals, physicians, and other health care providers that are designated as small entities under the RFA. Accordingly, we have determined that the methodology, like the previous methodology and the final rule that established the BHP program, will not have a significant economic impact on a substantial number of small entities. Therefore, the Secretary has determined that this final rule will not have a significant economic impact on a substantial number of small entities.

Section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a methodology may have a significant economic impact on the operations of a substantial number of small rural hospitals. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. For the preceding reasons, we have determined that the methodology will not have a significant impact on a substantial number of small rural hospitals. Therefore, the Secretary has determined that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act (UMRA) of 2005 requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation, by state, local, or tribal governments, in the aggregate, or by the private sector. In 2021, that threshold was approximately $158 million. States have the option, but are not required, to establish a BHP. Further, the methodology would establish federal payment rates without requiring states to provide the Secretary with any data not already required by other provisions of the Patient Protection and Affordable Care Act or its implementing regulations. Thus, the final payment methodology does not mandate expenditures by state governments, local governments, or tribal governments.

Executive Order 13132 establishes certain requirements that an agency must meet when it issues a final rule that imposes substantial direct effects on states, preempts state law, or otherwise has federalism implications. The BHP is entirely optional for states, and if implemented in a state, provides access to a pool of funding that would not otherwise be available to the state. Accordingly, the requirements of Executive Order 13132 do not apply to this final methodology.

Overall, federal BHP payments are expected to increase by $1,114 million in 2022 as a result of the changes to the payment methodology. The analysis above, together with the remainder of this preamble, provides an RIA.

This final regulation is subject to the Congressional Review Act (5 U.S.C. 801 et seq. ) and has been transmitted to the Congress and the Comptroller General for review.

This is a summary of the Bureau's Order on Reconsideration, document DA 20-219, adopted on March 3, 2020, released on March 3, 2020, in CG Docket Nos. 10-51 and 03-123. The Bureau previous sought comment on a petition for reconsideration, published at 82 FR 33856, July 21, 2017, with a correction published at 82 FR 34471, July 25, 2017. The full text of document DA 20-219 is available for public inspection via the Commission's Electronic Comment Filing System (ECFS). To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov, or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY).

Incorporation by Reference: The Commission notified the Director of the Federal Register of the removal of the incorporation by reference to the RUE Profile from § 64.621(c) on May 5, 2020.

The Commission sent a copy of document DA 20-219 to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

Document DA 20-219 does not contain new or modified or proposed information collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. Therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4).

Document DA 20-219 does not require a Final Regulatory Flexibility Analysis, pursuant to the Regulatory Flexibility Act of 1980 as amended (RFA), 5 U.S.C. 601-612, as amended by Public Law 104-121. Document DA 20-219 will be sent to the Chief Counsel for Advocacy of the Small Business Administration.

Document DA 20-219 removes from the Commission's rules the Interoperability Profile for Relay User Equipment, draft-vrs-rue-dispatch-00 (2016) (RUE Profile). The RUE Profile provides technical specifications that define a standard interface between a relay user's equipment and the services offered by relay service providers. The document is available from IETF Secretariat, 5177 Brandin Court, Fremont, CA 94538, 510-492-4080, https://datatracker.ietf.org/doc/draft-vrs-rue-dispatch .

1. VRS, a form of telecommunications relay service (TRS), enables people with hearing or speech disabilities who use American Sign Language (ASL) to employ video equipment to communicate with voice telephone users. To ensure that consumers can communicate and port their service between VRS providers, the Commission requires VRS providers to ensure their services are interoperable and portable and has delegated rulemaking authority to the Bureau to adopt technical standards.

2. In response to a petition, the Bureau reconsiders its 2017 decision incorporating the RUE Profile and deletes the interoperability rule's reference to that standard. There are limited benefits to be gained from implementing the current version of the RUE Profile, which is undergoing review by a standards development organization, and at this time such limited benefits do not outweigh the costs of implementation.

3. Benefits. The need for a mandatory provider-to-device technical standard to ensure objective interoperability testing is not as critical as appeared to be the case when this proceeding began. In 2013, when the Commission delegated authority to the Bureau to adopt VRS technical standards, interoperability could not be assured due to the absence of any applicable standards, and there were disputes among providers over who was responsible for alleged failures of interoperability. More recently, however, the other technical standards adopted in 2017—the Provider Interoperability Profile and the xCard standard for porting consumer contact lists—appear to have been implemented successfully. Further, VRS providers now work together to ensure interoperability through an informal process in which engineers from each company collaborate on interoperability testing and information exchange. In addition, the MITRE Corporation has established a testing laboratory environment that enables effective testing of interoperability using provider-supplied user devices and software. In short, even though compliance with the RUE Profile has not been required to date, processes to implement the substance of the Commission's current interoperability and portability rules are in place and have produced positive results.

4. More fundamentally, the RUE Profile remains a work in progress, currently under consideration by a working group of the internet Engineering Task Force. No benefit can be gained by enforcing compliance with a technical standard that is not ready to be implemented.

5. Costs. Implementation of the RUE Profile at this time would require VRS providers to incur substantial costs. In addition, RUE Profile compliance may impose additional indirect costs that are difficult to quantify, including, e.g., costs caused by unforeseen technical problems and security issues arising out of consumer use of the VATRP, as well as potential opportunity costs due to the diversion of engineering and research resources from technical improvements that may offer greater benefit to consumers.

6. The Bureau will maintain this docket as an open proceeding, to allow for consideration of new or updated technical standards, including further consideration of provider-to-device standards, should they be submitted for consideration.

7. Pursuant to the authority contained in sections 4(i), 4(j), and 225 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), (j), 225, and §§ 0.141, 0.361, and 1.3 of the Commission's rules, 47 CFR 0.141, 0.361, 1.3, the petition for reconsideration filed by Sorenson Communications, LLC, is granted in part and dismissed in part.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows:

Congress delegated certain powers to regulate interstate commerce to the United States Department of Transportation (DOT or Department) in numerous pieces of legislation, most notably in section 6 of the Department of Transportation Act (DOT Act) (Pub. L. 89-670, 80 Stat. 931, 937, Oct. 15, 1966). Section 6 of the DOT Act transferred to the Department the authority of the former Interstate Commerce Commission (ICC) to regulate the qualifications and maximum hours of service of employees, the safety of operations, and the equipment of motor carriers in interstate commerce (80 Stat. 939). This authority, first granted to the ICC in the Motor Carrier Act of 1935 (Pub. L. 74-255, 49 Stat. 543, Aug. 9, 1935), now appears in 49 U.S.C. chapter 315. The regulations issued under this (and subsequently enacted) authority became known as the FMCSRs, codified at 49 CFR parts 350-399. The administrative powers to enforce chapter 315 (codified in 49 U.S.C. chapter 5) were also transferred from the ICC to the DOT in 1966, and assigned first to the Federal Highway Administration (FHWA) and then to FMCSA. The FMCSA Administrator has been delegated authority under 49 CFR 1.87 to carry out the motor carrier functions vested in the Secretary of Transportation.

Between 1984 and 1999, several statutes added to FHWA's authority. Various statutes authorize the enforcement of the FMCSRs, the Hazardous Materials Regulations, and the Commercial Regulations, and provide both civil and criminal penalties for violations of these requirements. These statutes include the Motor Carrier Safety Act of 1984 (Pub. L. 98-554, Title II, 98 Stat. 2832, Oct. 30, 1984), codified at 49 U.S.C. chapter 311, subchapter III; the Commercial Motor Vehicle Safety Act of 1986 (Pub. L. 99-570, Title XII, 100 Stat. 3207-170, Oct. 27, 1986), codified at 49 U.S.C. chapter 313; the Hazardous Materials Transportation Uniform Safety Act of 1990, as amended (Pub. L. 101-615, 104 Stat. 3244, Nov. 16, 1990), codified at 49 U.S.C. chapter 51; the Omnibus Transportation Employee Testing Act of 1991 (Pub. L. 102-143, Title V, 105 Stat. 917, 952, Oct. 28, 1991), codified at 49 U.S.C. 31306; and the ICC Termination Act of 1995 (Pub. L. 104-88, 109 Stat. 803, Dec. 29, 1995), codified at 49 U.S.C. chapters 131-149.

The Motor Carrier Safety Improvement Act of 1999 (Pub. L. 106-159, 113 Stat. 1748, Dec. 9, 1999) established FMCSA as a new operating administration within DOT, effective January 1, 2000. The motor carrier safety responsibilities previously assigned to both the ICC and FHWA are now assigned to FMCSA.

Congress expanded, modified, and amended FMCSA's authority in the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Pub. L. 107-56, 115 Stat. 272, Oct. 26, 2001); the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59, 119 Stat. 1144, Aug. 10, 2005); the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572, June 6, 2008); the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141, 126 Stat. 405, July 6, 2012); and the Fixing America's Surface Transportation Act (Pub. L. 114-94, 129 Stat. 1312, Dec. 4, 2015).

The specific regulations amended by this rule are based on the statutes detailed above. Generally, the legal authority for each of those provisions was explained when the requirement was originally adopted and is noted at the beginning of each part in title 49 of the Code of Federal Regulations.

The Administrative Procedure Act (APA) specifically provides exceptions to its notice and comment rulemaking procedures when an agency finds there is good cause to dispense with them, and incorporates the finding, and a brief statement of reasons therefore, in the rules issued (5 U.S.C. 553(b)(3)(B)). Good cause exists when an agency determines that notice and public comment procedures are impractical, unnecessary, or contrary to the public interest. The amendments made in this final rule primarily correct inadvertent errors and omissions, remove or update obsolete references, and make minor language changes to improve clarity and consistency. Some changes are statutorily mandated or relate to previous changes that were statutorily mandated. In accommodating those changes, the Agency is performing nondiscretionary, ministerial acts. Other changes merely align regulatory requirements with the underlying statutory authority. The technical amendments do not impose any material new requirements or increase compliance obligations. In addition, the amendments removing the word “on-site” from the definitions of Compliance review and Roadability review in § 385.3 recognize the technological advances that allow FMCSA to perform the same investigative functions remotely in some cases that it could perform previously only by in-person reviews of the motor carrier's files. The regulatory standards are not changing as a result of this minor procedural adjustment. Moreover, the APA provides an additional exception to its notice and comment rulemaking procedures for “rules of agency organization, procedure, or practice” (5 U.S.C. 553(b)(3)(A)). For these reasons, FMCSA finds good cause that notice and public comment on this final rule are unnecessary.

The amendment adding a separation of functions provision in new § 385.21 also concerns the APA exception for “rules of agency organization, procedure, or practice.” The amendment is, therefore, excepted from the notice and public comment requirements.

The APA also allows agencies to make rules effective immediately with good cause (5 U.S.C. 553(d)(3)), instead of requiring publication 30 days prior to the effective date. For the reasons already stated, FMCSA finds there is good cause for this rule to be effective immediately, except as noted in amendatory instruction 31, concerning the revised Medical Examination Report Form, MCSA-5875, in § 391.43(f).

The Agency is aware of the regulatory requirements concerning public participation in FMCSA rulemaking (49 U.S.C. 31136(g)). These requirements pertain to certain major rules, 1 but, because this final rule is not a major rule, they are not applicable.

This section-by-section analysis describes the changes to the regulatory text in numerical order.

FMCSA adds parts 380 and 384 to the definition of FMCSRs in § 381.110. Through this amendment, in conjunction with the following amendments to §§ 381.200, 381.300, and 381.400, FMCSA adds parts 380 and 384 to the list of parts and sections of the FMCSRs from which, pursuant to part 381, FMCSA may grant a waiver, an exemption, or an exemption for a pilot program. This change is in accordance with 49 U.S.C. 31136(e) and 49 U.S.C. 31315(a), (b), and (c), which provide for waivers and exemptions from regulations prescribed under 49 U.S.C. 31136 and chapter 313, and for pilot programs, respectively. As all regulations set forth in parts 380 and 384 were promulgated under that authority, this change merely aligns the regulatory requirements in part 381 with the authority set forth in those statutes. FMCSA also changes the punctuation for the list in the parenthetical text.

In § 381.200(d), FMCSA adds parts 380 and 384 to the FMCSRs from which entities and individuals can request waivers pursuant to part 381, subpart B. This change is authorized as stated above in section II.A.

In § 381.300(c), FMCSA adds parts 380 and 384 to the FMCSRs from which entities and individuals can request exemptions pursuant to part 381, subpart C. This change is authorized as stated above in section II.A.

In § 381.400(f), FMCSA adds parts 380 and 384 to the FMCSRs from which entities and individuals can request exemptions for pilot programs pursuant to part 381, subpart D. This change is authorized as stated above in section II.A.

In § 382.103(d)(1), FMCSA adds the word “only” after “comply” to clarify that drivers who perform only Federal Transit Administration (FTA)-regulated safety-sensitive functions are exempt from part 382, as are their employers. By contrast, FTA-regulated entities that employ drivers who also perform FMCSA-regulated safety-sensitive functions must comply with the relevant testing requirements of part 382. FMCSA makes this change, which reflects the purpose and intent of § 382.103(d)(1), as stated above, to improve clarity.

FMCSA inserts “non-DOT” before “return to duty” in paragraphs (b)(4)(i) and (ii) of § 382.121. Paragraph (a) provides that employees who self-admit alcohol misuse or controlled substances use to their employers are not subject to obtaining referral, evaluation, and treatment under parts 382 and 40. The changes in paragraph (b)(4) clarify that the “return to duty” (RTD) testing referenced is not the DOT testing required under parts 382 and 40. This clarification is intended to remind employers that, consistent with the purpose of this section, results of non-DOT RTD tests conducted in accordance with paragraph (b)(4) should not be reported to the Commercial Driver's License Drug and Alcohol Clearinghouse (Clearinghouse), an electronic database that contains driver-specific drug and alcohol program violation information. The changes also provide consistency with the reference in paragraph (b)(5) to “non-DOT follow-up testing.”

In § 382.123(b)(2), FMCSA corrects a reference to the Alcohol Testing Form (ATF) (the subject of paragraph (a)), instead of the Federal Drug Testing Custody and Control Form (CCF) (the subject of paragraph (b)). The heading of § 382.123(b) (“Identification information on the Federal Drug Testing Custody and Control Form (CCF)”) indicates this paragraph relates to the information required to be provided on the CCF.

Subpart G of part 382, beginning with § 382.701, provides requirements and procedures for implementation of the Clearinghouse. In § 382.701, FMCSA amends paragraph (d) by adding after the first use of the word “driver” the words “the employer employs or intends to hire or use.” The sentence now reads, in part, “No employer may allow a driver the employer employs or intends to hire or use to perform any safety-sensitive function if the results of a Clearinghouse query demonstrate that the driver has a verified positive, adulterated, or substituted controlled substances test result . . . .”

The purpose of the amendment is to align § 382.701(d) with 49 U.S.C. 31306a, which prohibits employers from using current and prospective employee-drivers to operate a commercial motor vehicle (CMV) if a query of the Clearinghouse shows the driver has violated the drug and alcohol testing program requirements and has not completed the return-to-duty process. In this regard, section 31306a(m)(5) defines “employer” as “a person or entity employing, or seeking to employ, 1 or more employees (including an individual who is self-employed) to be commercial motor vehicle operators.” As currently drafted, § 382.701(d) may imply that the prohibition against permitting a driver with unresolved drug and alcohol testing program violations to perform safety-sensitive functions applies to current, and not prospective, employee-drivers. This amendment makes clear that, consistent with the statute, the prohibition applies to employers of current and prospective drivers. In addition, the amendment conforms § 382.701(d) to § 382.301(a) (“Pre-employment testing”), which states, in part, “No employer shall allow a driver, who the employer intends to hire or use, to perform safety-sensitive functions unless the employer has received a controlled substances test result from the [Medical Review Officer (MRO)] or [Consortium/Third party Administrator (C/TPA)] indicating a verified negative test result for that driver.”

FMCSA amends three paragraphs of § 382.705(b). In paragraph (b)(3)(iii), FMCSA replaces the word “designated” with the phrase “authorized to act” for clarity. This clarifying change avoids potential confusion caused by use of the word “designate” elsewhere in the section. In paragraph (b)(6) of that same section, “designate” pertains to the designation of a C/TPA for Clearinghouse reporting purposes. By substituting “authorized to act” for “designate” in paragraph (b)(3)(iii), FMCSA makes clear that, as intended, the C/TPA must have been acting with actual authority as a service agent when the refusal occurred; whether the C/TPA is “designated” by the employer, as that term is used in paragraph (b)(6), when the refusal occurs, is not relevant.

In paragraphs (b)(3)(iv) and (b)(5)(vii), FMCSA adds “(if applicable)” to the end of each paragraph. This change clarifies that when reporting a “failure to appear” refusal under paragraph (b)(3) or an “actual knowledge” violation under paragraphs (b)(4) and (5), the requirement that employers submit documentation showing that the driver was provided with all the information reported to the Clearinghouse does not apply if the driver is registered in the Clearinghouse. Drivers who are registered in the Clearinghouse have electronic access to the information and documents referenced in paragraphs (b)(3) and (5), thereby making the employer's separate delivery of the documentation to the driver unnecessary.

In the heading of this section, FMCSA adds the word “certain” after the word “correcting” to reflect more accurately the limited scope of this section, which sets forth procedures drivers may use to request correction or removal of certain types of information about them that exists in the Clearinghouse. In the heading of paragraph (a), FMCSA replaces the word “inaccurately” with “incorrectly.” The Agency also makes clarifying changes to § 382.717(a)(1) to ensure that drivers understand the narrow basis for the correction or removal of their Clearinghouse records permitted under this section. These clarifications are consistent with the limited scope of § 382.717, as discussed in the preamble to the December 2016 final rule establishing the Clearinghouse requirements (81 FR 87686, 87715, Dec. 5, 2016), the Privacy Impact Assessment for the Clearinghouse, and the System of Records Notice for the Clearinghouse (84 FR 56521, 56526, Oct. 22, 2019). As explained collectively therein, the correction processes in § 382.717 apply only to administrative errors or an employer's failure to comply with documentation requirements for reporting certain test refusal and actual knowledge violations, as set forth in § 382.703, paragraphs (b)(3) and (5); drivers may not contest the accuracy of drug and alcohol program violation information, such as test results or refusals.

In § 382.725(c), FMCSA inserts the word “commercial” after “chief” in the second sentence for consistency with use of the term “chief commercial driver's licensing official” in that section. This amendment also helps to avoid confusion concerning the existing language, which may appear to introduce another category of licensing official.

In § 383.3(c), FMCSA corrects a typographical error by adding a missing “s” to the word “member,” in the phrase “member of the national guard on active duty,” to improve readability.

At the end of paragraph (1) in the definition of Commerce in § 383.5, FMCSA changes the conjunctive “and” to “or” to be consistent with the definition of Commerce in 49 U.S.C. 31301(2). This action updates language that has been in § 383.5 since FHWA amended the FMCSRs to implement the requirements of the Commercial Motor Vehicle Safety Act of 1986 on June 1, 1987 (52 FR 20574, 20587). Paragraph (2) of 49 U.S.C. 31301 provides that “commerce” means trade, traffic, and transportation in the United States between a place in a State and a place outside that State (including a place outside the United States); “or” in the United States that affects trade, traffic, and transportation between a place in a State and a place outside that State. This definition applies to 49 U.S.C. 31302 (“Commercial driver's license requirement”), including the definition of Commerce in § 383.5 of 49 CFR part 383 (“Commercial driver's license standards; requirements and penalties”). To ensure consistency with the applicable statutory authority, the conjunction “and” is replaced with “or” in § 383.5. The Agency changes the punctuation before the conjunction “or” from a comma to a semicolon. FMCSA adds a comma after the word “traffic” in paragraph (1) to have consistent punctuation with paragraph (2).

FMCSA adds an additional exclusion to entry (6) in Table 1 to § 383.51 (which is found in paragraph (b) of that section) to make clear there is no enforcement discretion regarding the period of disqualification for human trafficking offenses. FMCSA added the human trafficking disqualification in entry (10) of Table 1 in a final rule published July 23, 2019 (84 FR 35335, 35338). The addition requires the State to disqualify a commercial driver's license (CDL) holder for life for a human trafficking conviction. Entry (10) reflects the statutory mandate that prohibits an individual from operating a CMV for life if the individual uses a CMV in the commission of a felony involving an act or practice of severe forms of trafficking in persons, as defined and described in 22 U.S.C. 7102(11). As amended, entry (6) excludes both a felony described in paragraph (b)(9) of Table 1 (entry (9)) and a felony described in paragraph (b)(10) of Table 1 (entry (10)).

FMCSA updates the title of Figure 1 to § 383.91 from “VEHICLE GROUPS AS ESTABLISHED BY FHWA (SECTION 383.91)” to simply “VEHICLE GROUPS (SECTION 383.91).” This amendment eliminates the obsolete reference to FHWA, FMCSA's predecessor agency.

In § 384.401, FMCSA revises the cross-references to 23 U.S.C. 104(b) to reflect changes to 49 U.S.C. 31314(c), the statutory provision that provides the cross-references in § 384.401. Section 1404(j) of MAP-21 (Pub. L. 112-141, 126 Stat. 405, 559, July 6, 2012) revised 49 U.S.C. 31314(c), effective October 1, 2011. Section 384.401 is no longer consistent with the underlying statutory authority in 49 U.S.C. 31314(c). To conform § 384.401 to 49 U.S.C. 31314(c), FMCSA changes the cross-references in paragraphs (a) and (b) of § 384.401 from “each of sections 104(b)(1), (b)(3), and (b)(4) of title 23 U.S.C.” to “23 U.S.C. 104(b)(1) and (2).”

FMCSA removes the word “on-site” from the definition of Compliance review in paragraph (1) of the definition of Reviews in § 385.3. This amendment recognizes the technological advances that allow FMCSA to perform the compliance review remotely in some cases. This amendment does not alter the Safety Fitness Rating Methodology (SFRM) in part 385, appendix B, nor does it eliminate the ability for FMCSA to conduct onsite examinations. From the point of view of the regulated entity, the same safety performance metrics are being evaluated, so there is no change. This amendment, however, clarifies that a safety investigator may, in some cases, perform all the investigative functions of the compliance review remotely when the motor carrier uploads its business records for review to FMCSA's online system and the investigator conducts subsequent discussions with motor carrier officials and employees remotely.

Further, FMCSA notes that this amendment also does not alter in any way the requirements of section 350 of the 2002 DOT Appropriations Act (Pub. L. 107-87, 115 Stat. 833, 864, Dec. 18, 2001 (49 U.S.C. 13902 note)), with which FMCSA will continue to comply, that certain compliance reviews under 49 CFR part 385, subpart B, as to Mexico-domiciled carriers, be conducted onsite.

FHWA first published the definition of Compliance review in 1988 (53 FR 50961, 50968, Dec. 19, 1988). The compliance review process at that time did not use a published methodology. In 1997, FHWA published the SFRM (62 FR 60035, Nov. 6, 1997) to codify a more objective safety rating process for the compliance review (62 FR 60037). Under the SFRM, safety investigators sample a carrier's records and document violations of acute regulations and patterns of violations of critical regulations to complete the compliance review (§ 385.9; appendix B to part 385). Section I (“Source of Data for Rating Methodology”) of appendix B to part 385 states that the sources of data for the compliance review's “in-depth examination of a motor carrier's operations” are “[d]ocuments such as those contained in driver qualification files, records of duty status, vehicle maintenance records, and other records.” The definition of Compliance review lists these records, along with other objective safety and transportation records, as examples of what a safety investigator would be reviewing during a compliance review. Until relatively recently, safety investigators had to visit the motor carrier's principal place of business to review these records. FMCSA is now able to ask carriers to upload their records to FMCSA's online system, making an “on-site” visit unnecessary in certain compliance reviews.

FMCSA also removes the word “on-site” from the definition of Roadability review in paragraph (4) of the definition of Reviews in § 385.3. FMCSA makes this amendment to provide consistency between the definitions of Compliance review and Roadability review. The roadability review program was modeled after FMCSA's compliance review program (71 FR 76796, 76798, Dec. 21, 2006). This amendment recognizes that the same technological advances that allow FMCSA to perform the compliance review remotely in some cases also allow FMCSA to perform the roadability review remotely in some cases.

In addition to the above amendments, FMCSA adds a missing apostrophe to the phrase “commercial driver's license” in the definition of Compliance review.

In new § 385.21, FMCSA adds a separation of functions provision that applies to the various administrative review proceedings under part 385. This amendment clarifies that FMCSA applies a separation of functions between Agency employees engaged in the performance of investigative or prosecutorial functions and those who participate or advise in the decision in administrative review proceedings under part 385. This new section merely codifies the separation of functions that has, in fact, been maintained in FMCSA since the Agency was created in 2000. FMCSA adopts language for this section that is consistent with DOT policy and the requirements for adjudications in 5 U.S.C. 554. It also is similar to the language in § 386.3, which is the separation of functions provision applicable to administrative reviews of proposed civil penalties.

FMCSA amends appendix B to part 385 to conform to a 2013 revision of the standard in § 383.37 from “knowingly” to “knows or should reasonably know” (78 FR 60226, 60227, 60231, Oct. 1, 2013). Specifically, FMCSA amends the entries for § 383.37(a) through (c) on the “List of Acute and Critical Regulations” found in Section VII of appendix B to part 385. In each of those entries, FMCSA deletes the word “knowingly” at the beginning of the sentence and makes minor modifications to the sentence to ensure that the appendix entries more closely follow the language of the regulatory text to which they refer ( e.g., by using the term “driver” instead of “employee” in all three entries and adding the term “CLP” and the acronym “CDL” in the entries for paragraphs (b) and (c)) and to better accommodate the phrase “knows or reasonably should have known” into the entries.

In §§ 390.5 (suspended) and 390.5T, FMCSA clarifies the meaning of Covered farm vehicle (CFV) to include combination vehicles, which are eligible for the CFV exemption, but not explicitly identified in the statutory definition in section 32934 of MAP-21 (Pub. L. 112-141, 126 Stat. 405, 830-31, July 6, 2012 (49 U.S.C. 31136 note)). The statutory definition does, however, explicitly include “articulated” vehicles. Combination vehicles are considered “articulated” because they combine a tractor with one or more trailers at one or more points of articulation ( e.g., for a single trailer, the point of articulation is the trailer kingpin that fits into the fifth wheel mounted on the chassis of the tractor behind the cab (or sleeper berth, if so equipped)). Because the terms “gross vehicle weight rating” and “gross vehicle weight” are universally applied to single-unit ( i.e., non-combination) vehicles, paragraphs (2)(i) and (ii) appear to conflict with the provision in section 32934(c)(1) explicitly allowing the CFV exemption for articulated (including combination) vehicles. Therefore, in paragraphs (2)(i) and (ii) of the definition, FMCSA adds the parallel phrases applicable to combination vehicles (“gross combination weight rating” and “gross combination weight”) to effectuate the intent of Congress expressed in section 32934(c)(1) to give operators of combination ( i.e., articulated) vehicles the benefit of the CFV exemption.

On January 17, 2017, FMCSA suspended certain regulations relating to the electronic Unified Registration System and delayed their effective date indefinitely (82 FR 5292). The suspended regulations were replaced by temporary provisions that contain the requirements in place on January 13, 2017. Section 390.5 was one of the sections suspended and § 390.5T, which is currently in effect, was added (82 FR 5311).

In § 391.41(b), FMCSA corrects the punctuation by changing the ending punctuation in paragraphs (b)(2)(ii) and (b)(4) and (b)(11) from periods to semicolons. In paragraph (b)(12)(i), the Agency changes the ending punctuation from a period to a semicolon and inserts the conjunction “or.” In paragraph (b)(12)(ii), the Agency changes the ending punctuation from a period to a semicolon and inserts the conjunction “and.” These changes make the punctuation in the section consistent and grammatically correct.

FMCSA amends three paragraphs of § 391.43. In paragraph (e), FMCSA removes the word “endocrinologist” from the first sentence because it is no longer relevant to the requirements of § 391.64, referenced in this paragraph. On September 19, 2018, FMCSA amended its physical qualification standards to allow individuals with stable insulin regimens and properly controlled insulin-treated diabetes mellitus to drive CMVs in interstate commerce if certain requirements are met (83 FR 47486). The rule also eliminated the diabetes grandfather provision under § 391.64(a) 1 year after the effective date of the rule on November 19, 2019 (83 FR 47521). Section 391.64(a) required an annual examination by an endocrinologist. Because § 391.64(a) was eliminated on November 19, 2019, the reference to the findings of the annual examination by an endocrinologist is obsolete.

In paragraph (f), FMCSA changes the Medical Examination Report Form, MCSA-5875, by removing the request for gender information on page 1 in Section 1, pertaining to the personal information provided by the driver, and removing “gender” on page 6 of the instructions to Section 1. FMCSA makes these changes because it is unnecessary to collect gender information on the form. In the medical examiner's attestation for both the Federal and State Medical Examiner Determination sections (pages 4 and 5 respectively), FMCSA adds a missing comma after “that” to correct punctuation. On page 6 in the instructions for Section 1 regarding the driver's personal information, FMCSA removes “Question:” prior to the question asking if a medical certificate has ever been denied or issued for less than two years because it is unnecessary. In the instructions for both the Federal and State Medical Examiner Determination sections (pages 8 and 9, respectively), FMCSA makes changes to the second sentence in the “Meets standards, but periodic monitoring is required” paragraph to correct grammar. FMCSA adds “for,” deletes the comma after “other,” and puts “other” in quotation marks. The sentences read, “Select the corresponding time frame that the driver is qualified for, and if selecting `other' specify the time frame.” FMCSA also makes minor formatting changes to correct errors and promote consistency in the style of bullet points and quotation and apostrophe marks, use of bolding and italics, and use of a forward slash instead of a comma. Use of the revised form will become effective 60 days after this rule is published to provide sufficient time for the public to make any necessary information technology changes.

In paragraph (g)(4), FMCSA makes minor edits for clarity concerning the reasons that a medical examiner may find that a determination should be delayed. Rather than a medical examiner finding that a determination should be delayed “pending the receipt of additional information,” the text makes clear that the delay may be in order “to receive additional information.” Similarly, rather than finding that a determination should be delayed “pending . . . the conduct of further examination,” the text makes clear that the delay may be in order “to conduct further examination.”

In § 391.64, FMCSA revises the section heading to remove references to a diabetes waiver study program. On September 19, 2018, FMCSA amended its physical qualification standards to allow individuals with stable insulin regimens and properly controlled insulin-treated diabetes mellitus to drive CMVs in interstate commerce if certain requirements are met (83 FR 47486). The rule also eliminated the diabetes grandfather provision under § 391.64(a) 1 year after the effective date of the rule on November 19, 2019 (83 FR 47521). Because § 391.64(a) was eliminated on November 19, 2019, the reference to the diabetes waiver study program in the section title is obsolete.

This final rule is not a significant regulatory action under section 3(f) of E.O. 12866 (58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory Review, and this final rule does not require an assessment of potential costs and benefits under section 6(a)(3) of E.O. 12866. Accordingly, the Office of Management and Budget has not reviewed it under that Order. In addition, this rule is not significant within the meaning of DOT regulations (49 CFR 5.13(a)). The amendments made in this final rule primarily correct inadvertent errors and omissions, remove or update obsolete references, and make minor language changes to improve clarity and consistency. Some changes are statutorily mandated or relate to previous changes that were statutorily mandated. In accommodating those changes, the Agency is performing nondiscretionary, ministerial acts. Other changes merely align regulatory requirements with the underlying statutory authority. Two changes relate to minor amendments to FMCSA's rules of practice or procedure. None of the changes in this final rule imposes material new requirements or increases compliance obligations; therefore, this final rule imposes no new costs and a full regulatory evaluation is unnecessary.

Pursuant to the Congressional Review Act (5 U.S.C. 801-808), the Office of Information and Regulatory Affairs designated this rule as not a “major rule,” as defined by 5 U.S.C. 804(2).

Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612), FMCSA is not required to complete a regulatory flexibility analysis because, as discussed earlier in the Legal Basis for the Rulemaking section, this action is not subject to notice and public comment under section 553(b) of the APA.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, Mar. 29, 1996), FMCSA wants to assist small entities in understanding this final rule so they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance; please consult the person listed under the FOR FURTHER INFORMATION CONTACT section of this final rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or Tribal government, in the aggregate, or by the private sector of $165 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2018 levels) or more in any 1 year. This final rule will not result in such an expenditure.

This final rule contains no new information collection requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under section 1(a) of E.O. 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” FMCSA has determined that this rule will not have substantial direct costs on or for States, nor will it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.

The Consolidated Appropriations Act, 2005 (Pub. L. 108-447, 118 Stat. 2809, 3268, Dec. 8, 2004 (5 U.S.C. 552a note)), requires the Agency to conduct a privacy impact assessment of a regulation that will affect the privacy of individuals. Because this rule does not require the collection of personally identifiable information, the Agency is not required to conduct a privacy impact assessment.

The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency that receives records contained in a system of records from a Federal agency for use in a matching program.

The E-Government Act of 2002 (Pub. L. 107-347, sec. 208, 116 Stat. 2899, 2921, Dec. 17, 2002), requires Federal agencies to conduct a privacy impact assessment for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology will collect, maintain, or disseminate information as a result of this rule. Accordingly, FMCSA has not conducted a privacy impact assessment.

This rule does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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.

FMCSA analyzed this rule for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680, Mar. 1, 2004), Appendix 2, paragraphs 6.b and c. These Categorical Exclusions address minor corrections and regulations concerning internal agency functions, organization, or personnel administration such as those found in this rulemaking. Therefore, preparation of an environmental assessment or environmental impact statement is not necessary.

In consideration of the foregoing, FMCSA amends 49 CFR chapter III as set forth below:

On October 20, 2020, NMFS published a proposed rule in the Federal Register (85 FR 66513) proposing to establish requirements to safeguard fishery observers and to establish pre-trip notification procedures for observer placement. The 30-day public comment period for the proposed rule closed on November 19, 2020.

The final rule is issued under the authority of the WCPFC Implementation Act (16 U.S.C. 6901 et seq. ), which authorizes the Secretary of Commerce, in consultation with the Secretary of State and the Secretary of the Department in which the United States Coast Guard is operating (currently the Department of Homeland Security), to promulgate such regulations as may be necessary to carry out the obligations of the United States under the Convention, including the decisions of the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (WCPFC or Commission). The WCPFC Implementation Act further provides that the Secretary of Commerce shall ensure consistency, to the extent practicable, of fishery management programs administered under the WCPFC Implementation Act and the Magnuson-Stevens Fishery Conservation and Management Act (MSA; 16 U.S.C. 1801 et seq. ), as well as other specific laws (see 16 U.S.C. 6905(b)). The Secretary of Commerce has delegated the authority to promulgate regulations under the WCPFC Implementation Act to NMFS. A map showing the boundaries of the area of application of the Convention (Convention Area), which comprises the majority of the WCPO, can be found on the WCPFC website at: www.wcpfc.int/doc/convention-area-map.

This final rule implements specific provisions of Conservation and Management Measure (CMM) 2017-03, “Conservation and Management Measure for WCPFC Regional Programme Observers,” as well as establishes pre-trip notification procedures for observer placement. The preamble to the proposed rule provides background information, including information on the Convention and the Commission, the provisions that are being implemented in this rule, and the basis for the regulations, which is not repeated here.

The specific elements of the final rule are detailed below.

This final rule implements specific requirements for vessel owners and operators to help ensure the safety of WCPFC observers. 1 CMM 2017-03 describes requirements for vessel owners and operators specifically related to vessel operations, notification, search and rescue procedures, and investigations in the event of death, injury, serious illness, missing overboard, or harassment of a WCPFC observer.

NMFS is not promulgating additional regulations in the event of death, loss or serious injury as they would be duplicative of U.S. Coast Guard regulations on marine casualties and investigations at 46 CFR part 4.

Under the final rule, vessel owners and operators are required to notify the designated authorities as specified by the Regional Administrator at https://www.fisheries.noaa.gov/pacific-islands/commercial-fishing/western-and-central-pacific-longline-and-purse-seine-vessels in the event of serious illness, assault, intimidation, threats, interference, or harassment of a WCPFC observer. NMFS has created a website that provides specific contact information of the designated authorities, including emails and phone numbers. At this time, NMFS has identified the observer provider and NOAA Office of Law Enforcement Pacific Islands Division Duty Officer as contacts in the event of serious assault, intimidation, threats, interference or harassment of a WCPFC observer, and the NOAA Office of Law Enforcement in the event of serious illness. Any changes or updates to these contacts will be posted on the website. Owners and operators are required to immediately notify the contacts of the situation and the status and location of the observer.

NMFS does not maintain a 24-hour hotline to handle search and rescue or urgent law enforcement response. Thus, in emergency situations that need an immediate response, vessel owners and operators are encouraged to contact the nearest U.S. Coast Guard Rescue Coordination Center (RCC) that can help coordinate with the closest Search and Rescue (SAR) facility in the area of the vessel: https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Response-Policy-CG-5R/Office-of-Incident-Management-Preparedness-CG-5RI/US-Coast-Guard-Office-of-Search-and-Rescue-CG-SAR/RCC-Numbers/.

In addition, under the final rule, the vessel owner or operator would be required to follow certain procedures in the event of serious illness, assault, intimidation, threats, interference or harassment of a WCPFC observer. The rule would require that, in these cases, the owner or operator of the fishing vessel must: (1) Immediately cease fishing operations; (2) take all reasonable actions to care for the observer and provide any medical treatment available and possible on board the vessel; (3) where directed by the observer provider, if not already directed by the appropriate U.S. Government contact, facilitate the disembarkation and transport of the observer to a medical facility equipped to provide the required care, as soon as practicable; and (4) cooperate fully in any official investigations into the cause of the illness or incident.

As stated above, the final rule specifies that the owner or operator of the fishing vessel must “immediately cease fishing operations” in the event of serious illness, assault, intimidation, threats, interference or harassment of a WCPFC observer. NMFS anticipates that there may be circumstances where “immediately cease” could allow for gear to be retrieved and NMFS does not encourage abandoning fishing gear. Although the owner or operator of a vessel is required to immediately cease fishing operations, this rule would not prohibit reasonable steps to recover gear and catch, if appropriate under the circumstances.

To facilitate the placement of WCPFC observers on U.S. purse seine vessels when departing from American Samoa, this final rule requires U.S. purse seine vessel owners and operators to submit notifications to NMFS at least five business days before expected departure. The notification must include the name of the vessel, name of the operator of the vessel, telephone number or email at which the owner or operator may be contacted, and intended departure date.

As stated in the preamble to the proposed rule, after reviewing the current administrative process for observer placements, NMFS believes such notifications are needed to facilitate observer placement for trips departing from American Samoa.

NMFS notes that a variety of factors may influence a vessel's departure date, including the availability of an observer. Pursuant to the South Pacific Tuna Treaty (SPTT) and through a separate contractual agreement between the American Tunaboat Association (ATA) and the Pacific Islands Forum Fisheries Agency (FFA), U.S. purse seine vessels carry observers deployed by the FFA Observer Program. FFA observers are authorized WCPFC observers and are nationals of Pacific Island countries. Currently, NMFS coordinates with FFA and places WCPFC observers on U.S. purse seine vessels departing from American Samoa. As such, NMFS cannot guarantee that an observer will be placed within five business days of a request. Similarly, an observer may be placed earlier than five business days from intended departure ( e.g., an observer on board the vessel decides to continue on board for another trip), in which case the vessel may leave port earlier than the intended departure date specified in the notification. NMFS is clarifying in this final rule that the departure date submitted in the notification is the vessel owner or operator's intended departure date and not necessarily the date the vessel actually leaves port.

In the proposed rule, NMFS also proposed a pre-trip notification requirement of five business days prior to expected departure for vessels requesting a cross-endorsed observer. 2 This requirement would have applied to vessels of any gear type requesting a cross-endorsed observer though to-date only U.S. purse seine vessels have used cross-endorsed observers. NMFS has reviewed its existing processes for cross-endorsed observer requests, including a pre-trip notification requirement of at least five days prior to vessel departure at 50 CFR 216.24(b)(8)(iv)(A) for requests for cross-endorsed observers in the eastern Pacific Ocean (EPO), which became effective on September 18, 2020 (85 FR 58297; September 18, 2020). As the requirements for the EPO for requesting a cross-endorsed observer also apply to those purse seine vessels in the WCPO requesting a cross-endorsed observer, NMFS has decided not to implement the cross-endorsed observer notification requirements specified in the proposed rule.

NMFS received two comment letters on the proposed rule. Below, NMFS summarizes the matters raised in each of the individual comment letters, grouping similar comments together, and provides a response to each of these matters.

Comment 1: One commenter provided a general statement of support for the proposed rule so that observers would be protected when carrying out their duties. Another commenter provided a statement of support for NMFS to implement CMM 2017-03 and to protect observer health and safety.

Response: NMFS acknowledges the comments.

Comment 2: One commenter noted that CMM 2017-03 and the proposed regulatory language outline requirements for vessel owners or operators to follow in the event that an observer is seriously ill and requirements for vessel owners and operators to follow in the event of assault, intimidation, threats or harassment, but that the proposed rule's preamble erroneously characterized the requirements as being the same for the two types of events. The commenter requested that the final rule correct this misstatement and clarify that the regulatory language of the proposed rule and the provisions of CMM 2017-03 are what NMFS is promulgating.

Response: NMFS agrees that CMM 2017-03 describes specific requirements in the event that an observer is seriously ill and specific requirements in the event that an observer has been assaulted, intimidated, threatened or harassed. Although NMFS described the processes as similar in the proposed rule's preamble, the proposed regulatory text clearly differentiated between the events, in accordance with the language in CMM 2017-03. NMFS clarifies here that in the event of serious illness, the owner and operator of the fishing vessel must: (1) Immediately cease fishing operations, (2) take all reasonable action to care for the observer and provide any medical treatment available and possible aboard the vessel; (3) where directed by the observer provider, if not already directed by the appropriate U.S. Government contact, facilitate the disembarkation and transport of the observer to a medical facility equipped to provide the required care, as soon as practicable, and (4) cooperate fully in any official investigation as to the cause of the illness. Additionally, in the event that an observer has been assaulted, intimidated, threatened or harassed, the owner and operator of the fishing vessel must: (1) Immediately take action to preserve the safety of the observer and mitigate and resolve the situation on board; (2) if the observer or the observer provider indicate that they wish to be removed from the vessel, facilitate the safe disembarkation of the observer in a manner and place, as agreed by the observer provider and a U.S. Government contact, that facilitates access to any needed medical treatment; and (3) cooperate fully in any official investigations into the incident.

Comment 3: One commenter requested that NMFS clarify that the observer safety protocols applicable to where an observer has been assaulted, intimidated, threatened, or harassed are triggered only where the vessel owner or operator either: (1) Has firsthand knowledge that the observer was assaulted, intimidated, threatened, or harassed ( i.e., saw or overhead the problem); or (2) where the vessel owner or operator has been presented with objective evidence from the observer or others clearly showing that the observer has been assaulted, intimidated, threatened, or harassed. The commenter stated that a response to mere allegations of harassment could result in costly ramifications if they are unjustified. The commenter noted that the proposed rule calculated the potential foregone opportunity for purse seine vessels as high as the revenue from a trip at $1.4 million dollars, and asserted that the costs were disproportionate compared to other fisheries being regulated under the same rule. The commenter stated that these clarifications are necessary to ensure that vessel owners and operators are afforded appropriate due process protections and that compliance costs and penalties are fairly applied. The commenter stated that without amendment or clarification by NMFS, the proposed rule could subject vessel owners or operators to penalties for not immediately knowing that one of the conditions triggering a set of duties has occurred. Although the commenter stated that NMFS would likely not impose penalties for not taking quick enough action where delay primarily was attributable to neither the vessel owner nor operator knowing about the observer's illness or other issues, the commenter requested that NMFS clarify that the respective duties to act are triggered when either the vessel owner or operator knows of the observer's condition triggering the duties.

Response: CMM 2017-03 does not qualify that these protocols are only triggered if vessel owners and operators have firsthand knowledge or have an evidentiary standard. Moreover, as discussed in the RIR, NMFS projects that these incidents will occur infrequently. Thus, NMFS does not believe it appropriate to limit the protocols accordingly.

Under the regulations at 50 CFR 300.43(a)(3), purse seine vessels operating under the SPTT, which includes most purse seine vessels fishing within the Convention Area, are required to disembark observers at the point and time notified by the FFA to the U.S. Government. This requirement is already in place and is not limited to observer safety-related events. NMFS also notes that similar observer safety protocol requirements to this rule are also already in place for vessels operating in the EPO under regulations at 50 CFR 300.29 so vessels operating in the EPO are already subject to them.

The intent of this rulemaking is protect observer safety and not necessarily to pre-judge the outcome of any investigation. NMFS disagrees with the statement that the proposed text does not afford due process protections. The rule will encourage owners and operators of U.S. purse seine vessels to take affirmative steps to train their crews and to prevent acts of harassment against observers. Under CMM 2017-03, the United States has the responsibility under the CMM to investigate any alleged incidents.

Moreover, NMFS believes the rule would not have disproportionate effects on purse seine vessels, but rather would affect all vessels equally in proportion to their individual trip costs.

Comment 4: One commenter stated that they opposed the proposed change to require purse seine vessels to provide pre-trip notifications and requests for observers because the scope of the requirement is not clear. The commenter stated that the preamble described reasons for the need for pre-trip notification for trips departing from American Samoa, but did not feel that the preamble identified specific shortcomings or deficiencies to the current process that justified the new requirement. The commenter noted that purse seine vessels cannot depart unless an observer is onboard, and did not feel there was sufficient explanation as to why the pre-trip notification requirement applies to when requesting a cross-endorsed observer and when departing from ports other than American Samoa. The commenter stated that they believed that the pre-trip notification requirement of five business days prior to trip departure would restrict operational flexibility and would result in larger costs to purse seine vessels than what are described in the proposed rule. The commenter requested that the pre-trip notification period be shortened to 48 hours if NMFS believes there is a real need for the requirement. Finally, the commenter requested confirmation that the pre-trip notification requirement does not apply to owners and operators of purse seine vessels picking up observers at ports other than American Samoa if they are not seeking a cross-endorsed observer.

Response: NMFS confirms that the pre-trip notification requirements apply to purse seine vessels requesting a WCPFC observer and departing from American Samoa and the requirements do not apply to vessels picking up observers at ports other than American Samoa. As discussed above, NMFS has also re-evaluated the need for pre-trip notification for vessels requesting placement of a cross-endorsed observer regardless of port of departure, and decided not to implement this requirement in this final rule because a similar requirement for cross-endorsed observer requests has already been implemented at 50 CFR 216.24(a)(8)(iv).

NMFS continues to believe that the notification prior to a trip is necessary for purse seine trips departing from American Samoa and requesting a WCPFC observer.

NMFS facilitates entry into American Samoa for WCPFC observers being placed on purse seine vessels. If adequate pre-trip notification is not given, entry into American Samoa may be delayed and this could delay placement of the observer and therefore vessel departure. As the placement of WCPFC observers on purse seine vessels is provided currently by FFA, vessel owners and operators have an incentive to ensure that adequate notice is given to ensure that observers can travel to the port of departure. Given that these observers are nationals from other countries, NMFS assists with obtaining the necessary entry permits into American Samoa. NMFS commits significant resources facilitating the deployment of these observers in Pago Pago. The requirements in this final rule formalize an informal process that is already in place.

As stated above, this rule does not guarantee that a WCPFC observer will be placed on board a purse seine vessel within five business days of a notification being submitted. Similarly, as the commenter noted there may be circumstances in which a WCPFC observer is already in American Samoa and fewer than five days may be needed for an observer to be placed on a purse seine vessel in those circumstances. NMFS acknowledges that there may be times where observer placement could occur more quickly. In this final rule NMFS has changed the regulatory text so that the date that must be provided in the notification is the intended date and not necessarily the date the vessel leaves port.

NMFS does not believe that the pre-trip notification requirement would restrict operational flexibility for purse seine vessels.

This final rule includes four changes to the regulatory text from the proposed rule. NMFS has removed the regulatory text requiring pre-trip notification requests for cross-endorsed observers, as well as the definition of WCPFC-IATTC cross-endorsed observer associated with that requirement. NMFS has also changed the timing of the pre-trip notification requirement at 50 CFR 300.215(d)(2) for purse seine vessels departing from American Samoa such that the notification must be submitted at least five business days before the vessel owner's or operator's intended departure date rather than the actual departure date. NMFS has made editorial changes to correctly spell the WCPFC Regional Observer Programme in 50 CFR 300.215(f). NMFS also added paragraph (aaa) in 50 CFR 300.222 prohibiting the failure to provide pre-trip notification.

The Administrator, Pacific Islands Region, NMFS, has determined that this final rule is consistent with the WCPFC Implementation Act and other applicable laws.

NMFS determined that this action is consistent to the maximum extent practicable with the enforceable policies of the approved coastal management program of American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, and the State of Hawaii. NMFS submitted determinations to Hawaii and each of the Territories on March 16, 2020, for review by the responsible state and territorial agencies under section 307 of the CZMA. Hawaii replied by letter dated March 19, 2020, stating that, because the proposed rule is outside of the jurisdiction of the Hawaii Coastal Zone Management Program's enforceable policies, it would not be responding to the consistency determination. The CNMI replied by letter dated May 12, 2020, stating that based on the information provided, it has determined that the action will be undertaken in a manner that is consistent to the maximum extent practicable with the enforceable policies of the CNMI's coastal management program. Guam replied by letter dated May 27, 2020, stating that based on the information provided, it has determined that the action will be consistent with the enforceable policies of Guam's Coastal Management Program. No response was received from American Samoa, and thus, concurrence with the respective consistency determinations is presumed (15 CFR 930.41).

This final rule has been determined to be not significant for purposes of Executive Order 12866.

A final regulatory flexibility analysis (FRFA) was prepared, as required by section 604 of the RFA. The FRFA incorporates the initial regulatory flexibility analysis (IRFA) prepared for the proposed rule. The analysis in the IRFA is not repeated here in its entirety. A description of the action, why it is being considered, and the legal basis for this action are contained in the SUMMARY section and this SUPPLEMENTARY INFORMATION section of the preamble of this final rule. The FRFA analysis follows: Significant Issues Raised by Public Comments in Response to the IRFA

See comment three and response by NMFS above for matters raised regarding the IRFA, which pertains to potential disproportionate burden for purse seine vessels.

For RFA purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 114111) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide.

This final rule would apply to owners and operators of U.S. commercial fishing vessels that fish for highly migratory species (HMS) in the Convention Area that: (1) Carry a WCPFC Observer or (2) purse seine for HMS in the Convention Area. This includes vessels in the purse seine, longline, and albacore troll fleets. The estimated number of affected fishing vessels is as follows based on the number of vessels on the WCPFC Record of Fishing Vessels as of March 2, 2021: 20 Purse seine vessels, 154 longline vessels, and 27 albacore troll vessels. Thus, the total estimated number of commercial fishing vessels that would be subject to the rule is 201. The purse seine vessels operating in the Convention Area generally land in American Samoa and other ports in Pacific Islands, the longline vessels operating in the Convention Area generally land in American Samoa and Hawaii, and the albacore troll vessels operating in the Convention Area generally land their catch in California, Oregon, Washington, or Canada.

Based on (limited) financial information about the affected fishing fleets, and using individual vessels as proxies for individual businesses, NMFS believes that all the affected fish harvesting businesses in all the fleets, except the purse seine fleet, are small entities as defined by the RFA; that is, they are independently owned and operated and not dominant in their fields of operation, and have annual receipts of no more than $11.0 million. Within the purse seine fleet, analysis of average revenue, by vessel, for 2017-2019 reveals that average fleet revenue was $8,212,000 (NMFS unpublished data combined with price data from https://www.ffa.int/node/425 and https://www.wcpfc.int/node/46580 accessed on July 27, 2020); however, 14 participating vessels qualified as small entities with their average of the most recent three years of vessel revenue for which data is available of less than $11 million. Within the Hawaii based longline fleet, an average of 146 vessels recorded landings during 2017-2019 with a average vessel revenue of approximately $828,000 per vessel (estimate calculated using data from the 2019 Pelagic Fishery Ecosystem Plan Stock Assessment and Fishery Evaluation Report and Annual Reports of the Hawaii Longline Fishery). For the American Samoa based longline fleet, an average of 15 vessels recorded landings during 2017-2019 with average vessel revenue of approximately $339,000 per vessel (estimate calculated using data from the 2019 Pelagic Fishery Ecosystem Plan Stock Assessment and Fishery Evaluation Report and Annual Reports of the American Samoa Longline Fishery). None of the other potentially directly regulated fishing sectors had total fishery revenue of all vessels combined that exceeded the small entity threshold.

The reporting, recordkeeping and other compliance requirements of this final rule are described earlier in the preamble. The classes of small entities subject to the requirements and the expected costs of complying with the requirements are described above in the Classification section of this final rule.

As described in the Paperwork Reduction Act (PRA) subsection below, this final rule contains a revised collection-of-information requirement subject to review and approval by the Office of Management and Budget (OMB) under the PRA.

Fulfillment of the requirements under the final rule is not expected to require any professional skills that affected vessel owners and operators do not already possess.

(1) Reporting requirements when carrying a WCPFC observer: This requirement is part of a proposed collection of information subject to approval by OMB under the PRA. It would apply to about 195 small business entities, (derived from subtracting the six vessels that do not qualify as small business entities from 201, the number of fishing vessels affected by this rule as estimated from vessels with WCPFC area endorsements). Complying would require that owners and operators of purse seine, longline and troll vessels to contact NMFS in the event of serious illness, assault, intimidation, threats, interference, or harassment of a WCPFC observer. NMFS estimates the cost of compliance as the cost of a five minute phone call though the cost of compliance could vary depending on the directions given by NMFS. NMFS cannot project how many calls would occur, but from 2015-2019, NOAA Office of Law Enforcement charged a total of six cases of harassment against purse seine and longline vessels in the Pacific Islands Region. Thus, NMFS expects events of serious illness, assault, intimidation, threats, interference, or harassment of a WCPFC observer to occur very rarely (average of one per year) and thus the cost of reporting to be very small. The Commission has indefinitely deferred implementation of placing WCPFC observers on troll vessels, and for the foreseeable future, NMFS does not believe that this requirement would add any new compliance costs for troll vessels. If the Commission were to change its position on placing WCPFC observers on troll vessels, troll operators may incur compliance costs similar to those described above. Fulfillment of this requirement is not expected to require any professional skills that the vessel owners and operators do not already possess.

(2) Requirement to ensure observer safety: This requirement is outside of the proposed collection of information under the PRA. In the event of serious illness, assault, intimidation, threats, interference or harassment of a WCPFC observer, the proposed rule would require the owner or operator of the fishing vessel to: (1) Immediately cease fishing operations; (2) take all reasonable actions to care for the observer and provide any medical treatment available and possible on board the vessel; (3) where directed by the observer provider, if not already directed by the appropriate U.S. Government contact, facilitate the disembarkation and transport of the observer to a medical facility equipped to provide the required care, as soon as practicable; and (4) cooperate fully in any official investigations into the cause of the illness. NMFS cannot project how often this would occur, but anticipates these events to occur rarely. As mentioned above, NOAA Office of Law Enforcement has charged six cases of harassment against purse seine and longline vessels over 2015-2019 in the Pacific Islands Region, which equates to approximately one per year. If such an event does occur, the impacts could vary depending on when the event occurs and what foregone opportunity is lost. For illustrative purposes, the average gross revenue of a U.S. purse seine fishing trip from 2017-2019 was a little under $1.4 million per trip (calculated by multiplying Bangkok fish prices by average catch per trip using NMFS data) so if an event occurred near the start of a fishing trip, the vessel could potentially forgo much of that revenue along with any trip costs already incurred. For U.S. longline vessels the average gross revenue from 2017-2019 (calculated using nominal revenue and trip information from the 2019 Pelagic Fishery Ecosystem Plan Stock Assessment and Fishery Evaluation Report) was around $664,000 per Hawaii-based deep-set trip, $64,000 per Hawaii-based shallow-set trip, and $39,000 per American Samoa-based trip so if an event occurred near the start of a fishing trip, the vessel could potentially forgo much of that revenue along with any trip costs already incurred.

(3) Notification requesting a WCPFC Observer: This requirement is part of a proposed collection of information subject to approval by OMB under the PRA. It would apply to about 199 small business entities. Vessels are already required to provide notification prior to trip departure if they intend to transship at sea, and this proposed requirement would expand notification requirements to purse seine vessels requesting a WCPFC observer and departing from American Samoa.

The proposed requirement may result in compliance costs for purse seine vessels requesting a WCPFC observer when departing from American Samoa. It is estimated that each notification would require 1 minute of labor and about $1 in communication costs. The value of the required labor is estimated to be $24.42 per hour. The estimated cost of compliance is less than $2 per notification. The number of requests and notifications cannot be predicted with any certainty, but for the purpose of this analysis, each purse seine vessel is expected to make 3.57 requests or notifications per year related to WCPFC observers (estimate based on the average number of trips per year from 2016-2020 divided by 20, the number of expected potential respondents). The estimated cost of compliance is therefore expected to be $4.96 for a vessel that makes 3.57 pre-trip notifications per year.

NMFS has not identified any Federal regulations that conflict with these regulations. NMFS has identified several Federal regulations that overlap with the final rule:

As mentioned above, the U.S. Coast Guard has regulations at 46 CFR part 4 relating to marine casualties. This final rule implements the requirements of CMM 2017-03 that are not marine casualties covered by the existing U.S. Coast Guard regulations.

IATTC adopted Resolution C 18-07 on Observer Safety, and NMFS published a final rule on May 18, 2020 (85 FR 29666) related to actions required in the event of loss of life, serious illness or injury and assault, intimidation, threats or harassment to observers on vessels that are on fishing trips in the IATTC Area. The regulations in this final rule and the regulations applicable to the IATTC Area would apply to WCPFC observers that are on vessels that are fishing in the IATTC Area, such as WCPFC observers that are also cross-endorsed observers. In this case, there would be overlapping regulations, but NMFS has ensured consistency in the protocols and in the contacts required in the event of serious illness, assault, intimidation, threats or harassment such that both requirements for notification would be satisfied with one notification.

NMFS has not been able to identify any alternatives that would minimize any significant economic impact of the final rule on small entities. NMFS rejected the alternative of taking no action at all because it would be inconsistent with the United States' obligations under the Convention. As a Contracting Party to the Convention, the United States is required to implement the decisions of the WCPFC. Consequently, NMFS has limited discretion as to how to implement those decisions.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. NMFS has prepared a small entity compliance guide for this rule, and will send copies of the appropriate guide to holders of permits in the relevant fisheries. The guide and this final rule also will be available via the Federal e-rulemaking Portal, at www.regulations.gov (search for ID NOAA-NMFS-2020-0125) and by request from NMFS PIRO (see ADDRESSES ).

This final rule contains a collection-of-information requirement subject to review and approval by OMB under the PRA. This rule changes the existing requirements for the collection of information 0648-0649, “Transshipment Requirements Under the WCPFC,” and requires reporting in the event of serious illness, assault, intimidation, threats, interference, or harassment of a WCPFC observer as well as pre-trip notifications for purse seine vessels requesting a purse seine observer and departing from American Samoa. Public reporting burden for reporting events of serious illness, assault, intimidation, threats, or harassment of a WCPFC observer is estimated to be 5 minutes per response, and public reporting burden for purse seine vessels requesting a purse seine observer and departing from American Samoa is estimated to average 1 minute per response, including the time for reviewing instructions searching existing data sources, gathering and maitnaing the data needed and completing and reviewing the collection of information.

At the proposed rule stage, NMFS had considered revising Control Number 0648-0214, “Pacific Islands Region Logbook Family of Forms” to include the observer safety collection of information requirements for longline vessels. NMFS now believes that it makes more sense to include the observer safety collection of information requirements for all gear types in Control Number 0648-0649, “Transshipment Requirements Under the WCPFC”, so the 0648-0214 collection will not be revised.

We invite the general public and other Federal agencies to comment on proposed and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Written comments and recommendations for this information collection should be submitted at the following website www.reginfo.gov/public/do/PRAMain . Find this particular information collection by using the search function and entering either the title of the collection or the OMB Control Number 0648-0649.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

For the reasons set out in the preamble, 50 CFR part 300 is amended as follows: