The Community Eligibility Provision (CEP) is an option for eligible schools to offer no-cost meals to all enrolled students without collecting household applications. Authorized by the Healthy, Hunger-Free Kids Act of 2010 (HHFKA), CEP is a reimbursement alternative for eligible local educational agencies (LEAs) and schools participating in both the National School Lunch Program (NSLP) and School Breakfast Program (SBP). CEP aims to combat child hunger in high poverty areas, while reducing administrative burden and increasing program efficiency by using current, readily available data to offer school meals to all students at no cost. CEP eliminates the need for schools to collect household income applications by sharing eligibility data between specific Federal assistance programs; thus, reducing administrative burden for schools and families while intending to ensure that hunger is not a barrier to students' academic success.

To be eligible for CEP, an individual school, group of schools, or school district must meet or exceed the established identified student percentage (ISP) threshold in the school year prior to implementing CEP. The ISP is the percentage of enrolled students who are certified for free school meals without submitting a household application, such as those directly certified through Federal benefits programs like the Supplemental Nutrition Assistance Program (SNAP). For CEP, students who are certified for free meals without a household application are “identified students” (42 U.S.C. 1759a(a)(1)(F)(i); 7 CFR 245.9(f)(1)(ii)). 1 The ISP is calculated by dividing the total number of identified students by the total number of enrolled students:

The Energy Policy and Conservation Act, PubLic Law 94-163, as amended (“EPCA”), 1 authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317) Title III, Part B of EPCA  2 established the Energy Conservation Program for Consumer Products Other Than Automobiles, which sets forth a variety of provisions designed to improve energy efficiency. (42 U.S.C. 6281-6309) These products include dishwashers, the subject of this document. (42 U.S.C. 6292(a)(6))

The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).

The Federal testing requirements consist of test procedures that manufacturers of covered products must use as the basis for: (1) certifying to DOE that their products comply with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6295(s)), and (2) making other representations about the efficiency of those consumer products (42 U.S.C. 6293(c)). Similarly, DOE must use these test procedures to determine whether the products comply with relevant standards promulgated under EPCA. (42 U.S.C. 6295(s))

DOE is conducting this rulemaking to address a single specific issue and make minor corrections to the current test procedures that are required for certification of compliance with applicable energy conservation standards. This rulemaking does not satisfy the 7-year lookback requirement prescribed by EPCA.

DOE's currently applicable test procedure for dishwashers is prescribed in the Code of Federal Regulations (“CFR”) at 10 CFR part 430, subpart B, appendix C1 (“appendix C1”). Appendix C1 includes provisions for determining estimated annual energy use and per-cycle water consumption, among other metrics, and is currently required to demonstrate compliance with the energy conservation standards for dishwashers prescribed at 10 CFR 430.32(f). Section 2.10 of the currently applicable appendix C1 specifies the detergent type and dosage that must be used for testing. Specifically, section 2.10 specifies that Cascade with the Grease Fighting Power of Dawn must be used, and detergent dosage must be calculated based on the prewash (if any) and main wash fill water volumes. However, Cascade with the Grease Fighting Power of Dawn has been discontinued and has been replaced on the market with Cascade Complete Powder formulation.

On July 22, 2022, DOE published a final rule that amended the certification provisions for dishwashers (“July 2022 Certification Final Rule”), among other products. 87 FR 43952. In the July 2022 Certification Final Rule, DOE noted that, given that the then-currently specified Cascade with the Grease Fighting Power of Dawn detergent was no longer available on the market, DOE expected that manufacturers may need to (or already had to) switch to the new Cascade Complete Powder formulation to conduct testing according to the currently applicable appendix C1. Id. at 87 FR 43969. The July 2022 Certification Final Rule amended the dishwasher certification provisions to require that manufacturers indicate whether Cascade Complete Powder detergent was used in lieu of Cascade with the Grease Fighting Power of Dawn to conduct testing according to the currently applicable appendix C1. Id. at 87 FR 43969-43970. DOE stated that it was establishing this additional reporting requirement to ensure that any assessment or enforcement testing pursuant to 10 CFR 429.104 and 429.110, respectively, would be performed using the same detergent used by the manufacturer for certifying compliance with the energy conservation standards. Id.

In a final rule published on January 18, 2023, DOE amended the test procedures in appendix C1 (“January 2023 TP Final Rule”) to specify that Cascade Complete Powder detergent may alternately be used for testing dishwashers in conjunction with a new detergent dosing requirement that is based on the number of place settings, 3 among several other updates. 88 FR 3234, 3247-3248. DOE stated in the January 2023 TP Final Rule that permitting the optional use of the new detergent and dosing specified in the Association of Home Appliance Manufacturers (“AHAM”) standard, AHAM DW-1-2020, “Uniform Test Method for Measuring the Energy Consumption of Dishwashers,” would avoid the need for manufacturers to request test procedure waivers, given the lack of availability of the current detergent. Id. at 88 FR 3247. DOE also stated that by maintaining the use of the current detergent and dosing requirements, manufacturers would not be required to re-test currently certified dishwashers. Id. The effective date of amended appendix C1 was February 17, 2023, and the amended appendix C1 will be mandatory for product testing starting July 17, 2023.

In accordance with section 3(a) of 10 CFR part 430, subpart C, appendix A (“appendix A”), DOE notes that it is deviating from the provision in appendix A regarding the early assessment process in a test procedure rulemaking. Section 8(a) of appendix A states that DOE will follow an early assessment process similar to DOE's consideration of amended energy conservation standards and publish a notice in the Federal Register whenever DOE is considering initiation of a rulemaking to amend a test procedure. DOE is conducting this rulemaking to address a single specific issue rather than comply with the 7-year lookback requirement prescribed by EPCA. Furthermore, this proposal seeks to prevent manufacturers from needing to re-test and re-certify certain existing models after July 17, 2023. For these reasons, DOE finds it necessary and appropriate to deviate from the provision in appendix A regarding the early assessment process.

While the July 2022 Certification Final Rule amended the dishwasher certification provisions to require that manufacturers indicate whether Cascade Complete Powder detergent was used in lieu of Cascade with the Grease Fighting Power of Dawn to conduct testing according to the currently applicable appendix C1 (87 FR 43952, 43969-43970), it did not explicitly permit the use of Cascade Complete Powder detergent formulation with the dosage requirements specified in the currently applicable appendix C1 for units certified before July 17, 2023 ( i.e., the date on which testing according to the amended appendix C1 will be mandatory). Section 2.5 of the amended appendix C1 allows the use of Cascade with the Grease Fighting Power of Dawn detergent only with the dosage requirements of the currently applicable appendix C1 ( i.e., based on fill water volumes), or Cascade Complete Powder detergent only with the new detergent dosing requirement ( i.e., based on number of place settings). However, in specifying the new detergent dosing requirement for Cascade Complete Powder in appendix C1 in the January 2023 TP Final Rule, DOE did not intend to require manufacturers who have already certified dishwashers using the new Cascade Complete Powder in conjunction with the currently applicable detergent dosing requirement to re-test and re-certify using the new detergent dosing requirement.

DOE is therefore proposing in this NOPR to amend section 2.5 of appendix C1 to explicitly allow the use of Cascade Complete Powder detergent with either the dosage requirements specified in the currently applicable appendix C1 ( i.e., based on fill water volumes) or the amended appendix C1 ( i.e., based on number of place settings). This proposal seeks to prevent manufacturers that have used, or intend to use until July 17, 2023, Cascade Complete Powder detergent with the currently applicable detergent dosing based on fill water volumes rather than number of place settings from needing to re-test and re-certify.

DOE requests feedback on its proposal to amend appendix C1 to explicitly allow the use of Cascade Complete Powder detergent with either the currently applicable dosage requirements based on fill water volumes, as specified in section 2.5.1 of appendix C1 as amended, or the new dosage requirements based on number of place settings, as specified in section 2.5 of appendix C1 as amended, until July 17, 2023.

In conjunction with the proposed amendment to explicitly allow the use of the new Cascade Complete Powder detergent with the dosage method in the currently applicable appendix C1, DOE proposes to specify the applicable dates for each detergent formulation and dosing combination through instructions specified in the certification reporting provisions at 10 CFR 429.19(b)(3). DOE proposes to amend 10 CFR 429.19(b)(3)(vi) to specify in a new subsection (A) that before July 17, 2023, Cascade Complete Powder detergent may be used as the basis for certification in conjunction with either detergent dosing methods ( i.e., the currently applicable detergent dosing requirement based on fill water volumes, or the new detergent dosing requirement based on number of place settings); and Cascade with the Grease Fighting Power of Dawn detergent may be used as the basis for certification only in conjunction with the currently applicable detergent dosing based on fill water volumes.

DOE proposes to further specify in a new subsection (B) to 10 CFR 429.19(b)(3)(vi) that beginning July 17, 2023, Cascade Complete Powder detergent may be used as the basis for certification of newly certified basic models only in conjunction with the new detergent dosing method based on number of place settings; and Cascade with the Grease Fighting Power of Dawn detergent may be used as the basis for certification only in conjunction with the currently applicable detergent dosing based on fill water volumes. DOE also proposes to clarify that manufacturers may maintain basic model certifications made prior to July 17, 2023.

DOE seeks feedback on its proposal to add two subsections to the certification reporting provisions that specify the date when each detergent formulation and dosage method is applicable.

In addition to amending appendix C1 to specify the detergent formulation and dosage combinations that would be applicable until July 17, 2023, and including instructions to the reporting requirements at 10 CFR 429.19(b)(3), DOE is also proposing a product-specific enforcement provision for dishwashers. This proposal would provide greater certainty regarding how DOE would conduct any enforcement testing for any dishwashers certified in accordance with the currently applicable test procedure using the new Cascade Complete Powder detergent, as implicitly permitted by the July 2022 Certification Final Rule. Specifically, DOE is proposing to add a product-specific enforcement provision at 10 CFR 429.134(z)(2) explicitly specifying that DOE would perform any enforcement testing using the detergent dosing requirement that was used by the manufacturer for certifying compliance with the energy conservation standards. DOE notes that under the requirements specified at 10 CFR 429.106(b), DOE may request any information relevant to determining compliance and DOE would use this authority to request detergent dosage information from manufacturers, if required for the purposes of conducting enforcement testing.

DOE requests comments on its proposal to add a product-specific enforcement requirement for dishwashers to specify that DOE would perform any enforcement testing using the detergent dosing requirement that was used by the manufacturer for certifying compliance with the energy conservation standards, in accordance with the applicable test procedure and certification reporting requirements.

Executive Order (“E.O.”) 12866, “Regulatory Planning and Review,” as supplemented and reaffirmed by E.O. 13563, “Improving Regulation and Regulatory Review,” 76 FR 3821 (Jan. 21, 2011), requires agencies, to the extent permitted by law, to (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, to the extent practicable, the costs of cumulative regulations, among other things; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) specify performance objectives wherever feasible, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget (“OMB”) has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, this proposed regulatory action is consistent with these principles.

Section 6(a) of E.O. 12866 also requires agencies to submit “significant regulatory actions” to OIRA for review. OIRA has determined that this proposed regulatory action does not constitute a “significant regulatory action” under section 3(f) of E.O. 12866. Accordingly, this action was not submitted to OIRA for review under E.O. 12866.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis (“IRFA”) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's website: www.energy.gov/gc/office-general-counsel.

This NOPR proposes an update to the amended appendix C1 to remove uncertainty about dishwashers that may be currently certified under the currently applicable appendix C1 using the new detergent (as permitted by the July 2022 Certification Final Rule), and to prevent such dishwashers from having to be re-tested and re-certified after the February 17, 2023, effective date of the January 2023 TP Final Rule. The proposed amendments in this NOPR do not affect the scope or substance of the currently applicable or amended test procedure for dishwashers. Therefore, DOE initially concludes that the impacts of the amendments proposed in this NOPR would not have a “significant economic impact on a substantial number of small entities,” and that the preparation of an IRFA is not warranted. DOE will transmit the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b).

Manufacturers of dishwashers must certify to DOE that their products comply with any applicable energy conservation standards. To certify compliance, manufacturers must first obtain test data for their products according to the DOE test procedures, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including dishwashers. ( See generally 10 CFR part 429.) The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (“PRA”). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 35 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

DOE is not proposing to amend the certification or reporting requirements for dishwashers.

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.

In this NOPR, DOE proposes to add explicit enumeration of currently allowable testing options to the test procedure, certification reporting instructions, and a product-specific enforcement provision that would specify how DOE would conduct any enforcement testing of certain dishwasher models. DOE has determined that this proposed rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and DOE's implementing regulations at 10 CFR part 1021. Specifically, DOE has determined that adopting test procedures for measuring energy efficiency of consumer products and industrial equipment is consistent with activities identified in 10 CFR part 1021, appendix A to subpart D, A5 and A6. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (Aug. 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has determined that it would 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.

Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that executive agencies make every reasonable effort to ensure that the regulation (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments, and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at www.energy.gov/gc/office-general-counsel. DOE examined this proposed rule according to UMRA and its statement of policy and determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this proposed regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has reviewed this proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

The proposed regulatory action to amend an explicit enumeration of currently allowable testing options to the test procedure, certification reporting instructions, and a product-specific enforcement provision that would specify how DOE would conduct any enforcement testing of certain dishwasher models is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.

The following standard included in the proposed regulatory text was previously approved for incorporation by reference for the locations in which it appears in this proposed rule: AHAM DW-1-2020.

DOE will accept comments, data, and information regarding this proposed rule no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments using any of the methods described in the ADDRESSES section at the beginning of this document.

Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

(1) DOE requests feedback on its proposal to amend appendix C1 to explicitly allow the use of Cascade Complete Powder detergent with either the currently applicable dosage requirements based on fill water volumes, as specified in section 2.5.1 of appendix C1 as amended, or the new dosage requirements based on number of place settings, as specified in section 2.5 of appendix C1 as amended, until July 17, 2023.

(2) DOE seeks feedback on its proposal to add two subsections to the certification reporting provisions that specify the date when each detergent formulation and dosage method is applicable.

(3) DOE requests comments on its proposal to add a product-specific enforcement requirement for dishwashers to specify that DOE would perform any enforcement testing using the detergent dosing requirement that was used by the manufacturer for certifying compliance with the energy conservation standards, in accordance with the applicable test procedure and certification reporting requirements.

Submitting comments via www.regulations.gov. The www.regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

Do not submit to www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (“CBI”)). Comments submitted through www.regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section.

DOE processes submissions made through www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that www.regulations.gov provides after you have successfully uploaded your comment.

Submitting comments via email, hand delivery/courier, or postal mail. Comments and documents submitted via email, hand delivery/courier, or postal mail also will be posted to www.regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments.

Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via postal mail or hand delivery/courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No faxes will be accepted.

Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.

Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email two well-marked copies: one copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. DOE will make its own determination about the confidential status of the information and treat it according to its determination.

It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

The Secretary of Energy has approved publication of this Notice of proposed rulemaking and request for comment.

This document of the Department of Energy was signed on March 14, 2023, by Francisco Alejandro Moreno, Acting Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

For the reasons stated in the preamble, DOE proposes to amend parts 429 and 430 of chapter II of title 10, Code of Federal Regulations as set forth below:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2022-1296; Project Identifier MCAI-2022-00628-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Dan Rodina, Aerospace Engineer, Large Aircraft Section, FAA, International Validation Branch, 2200 South 216th St., Des Moines, WA 98198; telephone 206-231-3225; email dan.rodina@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA issued AD 2020-20-05, Amendment 39-21261 (85 FR 65197, October 15, 2020) (AD 2020-20-05), and AD 2022-09-16, Amendment 39-22036 (87 FR 31943, May 26, 2022) (AD 2022-09-16) for certain Model A318-111, -112, -121, and -122 airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, -133, -151N, and -153N airplanes; Model A320-211, -212, -214, -216, -231, -232, -233, -251N, -252N, -253N, -271N, -272N, and -273N airplanes; and Model -111, -112, -131, -211, -212, -213, -231, -232, -251N, -251NX, -252N, -252NX, -253N, -253NX, -271N, -271NX, -272N, and -272NX airplanes. AD 2020-20-05 and AD 2022-09-16 require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. The FAA issued AD 2020-20-05 and AD 2022-09-16 to address fatigue cracking, accidental damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane.

The FAA issued an NPRM to amend 14 CFR part 39 by adding an AD to supersede AD 2020-20-05 and AD 2022-09-16 that would apply to certain Airbus SAS Model A318-111, A318-112, A318-121, A318-122, A319-111, A319-112, A319-113, A319-114, A319-115, A319-131, A319-132, A319-133, A319-151N, A319-153N, A319-171N, A320-211, A320-212, A320-214, A320-215, A320-216, A320-231, A320-232, A320-233, A320-251N, A320-252N, A320-253N, A320-271N, A320-272N, A320-273N, A321-111, A321-112, A321-131, A321-211, A321-212, A321-213, A321-231, A321-232, A321-251N, A321-251NX, A321-252N, A321-252NX, A321-253N, A321-253NX, A321-271N, A321-271NX, A321-272N, and A321-272NX airplanes. The NPRM published in the Federal Register on October 20, 2022 (87 FR 63712) (the NPRM). The NPRM was prompted by an MCAI originated by EASA, which is the Technical Agent for the Member States of the European Union. EASA issued AD 2022-0085, dated May 12, 2022 (EASA AD 2022-0085), to correct an unsafe condition. The NPRM proposed to require the actions in AD 2022-09-16 in addition to revising the existing maintenance or inspection program, as applicable, to incorporate additional new or more restrictive airworthiness limitations.

Since the FAA issued the NPRM, EASA issued 2023-0008, dated January 16, 2023 (EASA AD 2023-0008), which affects EASA AD 2022-0085, dated May 12, 2022. EASA AD 2023-0008 states that new and/or more restrictive maintenance tasks have been published. EASA AD 2023-0008 applies to all Airbus A318-111, A318-112, A318-121, A318-122, A319-111, A319-112, A319-113, A319-114, A319-115, A319-131, A319-132, A319-133, A319-151N, A319-153N, A319-171N, A320-211, A320-212, A320-214, A320-215, A320-216, A320-231, A320-232, A320-233, A320-251N, A320-252N, A320-253N, A320-271N, A320-272N, A320-273N, A321-111, A321-112, A321-131, A321-211, A321-212, A321-213, A321-231, A321-232, A321-251N, A321-251NX, A321-252N, A321-252NX, A321-253N, A321-253NX, A321-271N, A321-271NX, A321-272N and A321-272NX airplanes. Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this proposed AD therefore does not include those airplanes in the applicability. Airplanes with an original airworthiness certificate or original export certificate of airworthiness issued after November 10, 2022, must comply with the airworthiness limitations specified as part of the approved type design and referenced on the type certificate data sheet; this proposed AD therefore does not include those airplanes in the applicability.

The FAA is proposing this AD to address fatigue cracking, accidental damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane. You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2022-1296.

The FAA received a comment from The Air Line Pilots Association, International (ALPA), who supported the NPRM without change.

The FAA received additional comments from two commenters, including American Airlines and United Airlines. The following presents the comments received on the NPRM and the FAA's response to each comment.

American Airlines supported the NPRM, but also asserted that the proposed AD should have retained certain provisions of AD 2020-20-05.

American Airlines noted that the NPRM proposed to supersede both AD 2020-20-05 and AD 2022-09-16, but restated only the requirements of AD 2022-09-16. American noted that the Reason section of EASA AD 2022-0085 states that it retains the requirements of both EASA AD 2020-0036R1, dated June 24, 2020 (EASA AD 2020-0036R1) (which corresponds to FAA AD 2020-20-05) and EASA AD 2021-0140, dated June 14, 2021 (EASA AD 2021-0140) (which corresponds to FAA AD 2022-09-16). American Airlines stated that AD 2022-09-16 does not supersede but “is an extension to” AD 2020-20-05. American Airlines therefore requested that the proposed AD be revised to retain the requirements of AD 2020-20-05, until the new maintenance program revision required by paragraph (j) of the proposed AD is implemented.

Also, since the NPRM would have approved previous AMOCs for AD 2022-09-16 only, American Airlines recommended that the proposed AD state that AMOCs previously approved for AD 2020-20-05 also continue to be approved for this AD.

The FAA agrees with the requests. AD 2022-09-16 stated, in paragraph (j), that it terminates Task 531135-01-2, which is required, in part, by paragraph (i) of AD 2020-20-05. Therefore, not all requirements of AD 2020-20-05 were terminated by AD 2022-09-16. The FAA has determined that it is necessary to retain the requirements of paragraphs (i), (j), (k), and (l) of AD 2020-20-05, until the maintenance program revision required by paragraph (i) of AD 2020-20-05 is terminated by accomplishment of the requirements of paragraph (j) of this AD.

Therefore, the FAA has revised the proposed AD by restating the requirements of paragraphs (i), (j), (k), and (l) of AD 2020-20-05 in paragraphs (g), (h), (i), and (j) of this AD, and redesignating subsequent paragraphs accordingly. The FAA has also added paragraph (r)(1)(iii) in this proposed AD to extend previous AMOC approval for the requirements of paragraph (i) of AD 2020-20-05 that are retained in paragraph (g) of this proposed AD.

United Airlines requested that the proposed AD allow production concession, repair design approval sheet (RDAS), repair and design approval form (RDAF), and Airbus statement of Airworthiness Compliance (ASAC) as AMOCs if they include instructions for continued airworthiness (ICAs) for repairs to airworthiness limitation (ALI) areas as stated in Section 1, “Introduction,” of Airbus A318/A319/A320/A321 ALS Part 2, Revision 09, dated February 7, 2022 (which is referenced in EASA AD 2022-0085). The FAA does not agree that a change to this proposed AD is necessary. The provision in paragraph (r)(2) of this proposed AD addresses where service information specified in EASA AD 2022-0085 and EASA 2023-0008 refers to obtaining instructions from a manufacturer.

The FAA reviewed EASA AD 2022-0085 and EASA AD 2023-0008. This service information specifies new or more restrictive airworthiness limitations for airplane structures and safe life limits. These documents are distinct since one includes all damage tolerant airworthiness limitations items and the other revises certain damage tolerant airworthiness limitation items.

This proposed AD would also require EASA AD 2021-0140, which the Director of the Federal Register approved for incorporation by reference as of June 30, 2022 (87 FR 31943, May 26, 2022).

This proposed AD would also require EASA AD 2020-0036R1, which the Director of the Federal Register approved for incorporation by reference as of November 19, 2020 (85 FR 65197, October 15, 2020).

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 ADDRESSES .

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI described above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.

Certain changes described above expand the scope of the NPRM. As a result, it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.

This proposed AD would retain the requirements of AD 2020-20-05 and AD 2022-09-16. This proposed AD would also expand the applicability and require revising the existing maintenance or inspection program, as applicable, to incorporate additional new or more restrictive airworthiness limitations, which are specified in EASA AD 2022-0085 and EASA AD 2023-0008 described previously, as proposed for incorporation by reference. Any differences with EASA AD 2022-0085 and EASA AD 2023-0008 are identified as exceptions in the regulatory text of this AD.

This proposed AD would require revisions to certain operator maintenance documents to include new actions ( e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance (AMOC) according to paragraph (r)(1) of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to retain the IBR of EASA AD 2020-0036R1 and EASA AD 2021-0140 and incorporate EASA AD 2022-0085 and EASA AD 2023-0008 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2021-0140, EASA AD 2020-0036R1, EASA AD 2022-0085, and EASA AD 2023-0008 in their entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2020-0036R1, EASA AD 2021-0140, EASA AD 2022-0085, or EASA AD 2023-0008 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2020-0036R1, EASA AD 2021-0140, EASA AD 2022-0085, or EASA AD 2023-0008. Service information required by EASA AD 2020-0036R1, EASA AD 2021-0140, EASA AD 2022-0085, and EASA AD 2023-0008 for compliance will be available at regulations.gov by searching for and locating Docket No. FAA-2022-1296 after the FAA final rule is published.

The FAA's process of incorporating by reference MCAI ADs as the primary source of information for compliance with corresponding FAA ADs has been limited to certain MCAI ADs (primarily those with service bulletins as the primary source of information for accomplishing the actions required by the FAA AD). However, the FAA is now expanding the process to include MCAI ADs that require a change to airworthiness limitation documents, such as airworthiness limitation sections.

For these ADs that incorporate by reference an MCAI AD that changes airworthiness limitations, the FAA requirements are unchanged. Operators must revise the existing maintenance or inspection program, as applicable, to incorporate the information specified in the new airworthiness limitation document. The airworthiness limitations must be followed according to 14 CFR 91.403(c) and 91.409(e).

The previous format of the airworthiness limitation ADs included a paragraph that specified that no alternative actions ( e.g., inspections) or intervals may be used unless the actions and intervals are approved as an AMOC in accordance with the procedures specified in the AMOCs paragraph under “Additional FAA Provisions.” This new format includes a “New Provisions for Alternative Actions and Intervals” paragraph that does not specifically refer to AMOCs, but operators may still request an AMOC to use an alternative action or interval.

The FAA estimates that this proposed AD affects 1,864 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA estimates the total cost per operator for the retained actions from AD 2020-20-05 and AD 2022-09-16 to be $7,650 (90 work-hours × $85 per work-hour).

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate.

The FAA estimates the total cost per operator for the new proposed actions to be $7,650 (90 work-hours × $85 per work-hour).

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

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

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:

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

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

(3) Would 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 proposes to amend 14 CFR part 39 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify the VOR Federal airway route structure in the eastern United States to maintain the efficient flow of air traffic.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.

An electronic copy of this document may be downloaded through the internet at www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Operations office (see ADDRESSES section for address, phone number, and hours of operations). An informal docket may also be examined during normal business hours at the office of the Eastern Service Center, Federal Aviation Administration, Room 210, 1701 Columbia Avenue, College Park, GA, 30337.

Domestic VOR Federal airways are published in paragraph 6010(a) of FAA Order JO 7400.11G, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022 and effective September 15, 2022. These updates would be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the ADDRESSES section of this document.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action proposes to amend VOR Federal airways V-3, V-157, and V-579; and to remove V-578 in support of the FAA's VOR MON Program. The proposed changes facilitate the scheduled decommissioning of the following navigation aids: Alma, GA (AMG), VOR Tactical Air Navigational System (VORTAC), Cross City, FL (CTY), VORTAC, Gators, FL (GNV), VORTAC, and Vance, SC (VAN), VORTAC. The proposed changes are described as follows:

V-3: V-3 currently extends, in two parts: From Key West, FL, to Boston, MA; and From Presque Isle, ME, to Quebec, PQ, Canada. The FAA proposes to remove the route segment between the OWENS, SC, Fix and the Florence, SC (FLO), VORTAC. This segment is dependent on the Vance, SC (VAN), VORTAC which is scheduled to be decommissioned. As a result, the OWENS Fix would be redefined using the Allendale, SC (ALD), VOR 116°(T)/117°(M) radial in place of the current Vance 203° radial. In addition, NAV CANADA has cancelled the segment of V-3 that extends through Canadian airspace to Quebec. Consequently, the FAA proposes to replace the segment from Presque Isle to Quebec with a segment that extends from Presque Isle to a Fix on the U.S./Canadian border. The Fix would be defined by the intersection of Presque Isle 270°(T)/291°(M) and the Millinocket, ME 320°(T)/340°(M) radials. The words that exclude the airspace within Canada would be removed from the route description.

As amended, V-3 would consist of three parts: From Key West, FL, to the intersection of the Savannah, GA 028° and the Allendale, SC 116°(T)/117°(M) radials ( i.e., the OWENS Fix); From Florence, SC, to Boston, MA; and From Presque Isle, ME, to the intersection of the Presque Isle 270°(T)/291°(M) and the Millinocket, ME 320°(T)/340°(M) radials.

V-157: Airway V-157 consists of two parts: From Key West, FL, to Richmond, VA; and From Robbinsville, NJ, to Albany, NY. The FAA proposes to amend V-157 by removing the route segment between Waycross, GA and Florence, SC. As amended, V-157 would consist of three parts: From Key West, FL to Waycross, GA; From Florence, SC to Richmond, VA; and From Robbinsville, NJ to Albany, NY.

V-578: V-578 extends from Pecan, GA to Savannah, GA. The route is dependent upon the Alma, GA (AMG), VORTAC which is scheduled to be decommissioned. The route also includes the Tift Myers, GA (IFM), VOR, which is not operational. Without those navigation facilities, V-158 is no longer viable so the FAA proposes to remove the entire route.

V-579: V-579 extends from Lee County, FL to Vienna, GA. The route is dependent upon the Cross City, FL (CTY), VORTAC and the Gators, FL (GNV), VORTAC which are being decommissioned. The route also includes the Tift Myers, GA (IFM), VOR which is no longer operational. The FAA proposes to remove the segments from St. Petersburg, FL to Vienna, GA. As amended, V-579 would extend from Lee County, FL to St. Petersburg, FL.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace extending upward from 700 feet above the surface at Sandusky City Airport, Sandusky, MI, to support instrument flight rule operations at this airport.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it received on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or dely. The FAA may change this proposal in light of the comments it receives.

An electronic copy of this document may be downloaded through the internet at www.regulations.gov . Recently published rulemaking documents can also be accessed through the FAA's web page at www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address, phone number, and hours of operations). An informal docket may also be examined during normal business hours at the Federal Aviation Administration, Air Traffic Organization, Central Service Center, Operations Support Group, 10101 Hillwood Parkway, Fort Worth, TX 76177.

Class E airspace is published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. These updates would be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the ADDRESSES section of this document.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to 14 CFR part 71 by establishing Class E airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Sandusky City Airport, Sandusky, MI.

This action supports new public instrument procedures.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify the enroute structure as necessary to preserve the safe and efficient flow of air traffic within the NAS.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.

An electronic copy of this document may be downloaded through the internet at www.regulations.gov . Recently published rulemaking documents can also be accessed through the FAA's web page at www.faa.gov/air_traffic/publications/airspace_amendments/ .

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Operations office (see ADDRESSES section for address, phone number, and hours of operations). An informal docket may also be examined during normal business hours at the office of the Operations Support Group, Central Service Center, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177.

Jet Routes are published in paragraph 2004 and United States Area Navigation Routes (Q-routes) are published in paragraph 2006 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. These updates would be published in the next update to FAA Order JO 7400.11. That order is publicly available as listed in the ADDRESSES section of this document.

FAA Order JO 7400.11G lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

To support of the large amount of air traffic transiting the NAS between the west coast and the southeast United States, the FAA requires aircraft flying between the Phoenix, AZ, area and West Texas area to be on Jet Routes, including J-184, when flying above 18,000 feet mean sea level (MSL) or Flight Level 180 (FL180). This requirement ensures a safe, efficient flow of air traffic through the area, prevents air traffic bottlenecks, and keeps aircraft clear of the Air Traffic Control Airspace Areas (ATCAA), the White Sands Missile Range (WSMR), and the R-5107 restricted areas located south of WSMR that exist in the area.

During a periodic flight inspection of the Deming, NM, Very High Frequency (VHF) Omni-Directional Range (VOR)/Tactical Air Navigation (VORTAC) navigational aid (NAVAID) conducted June 3-4, 2021, the FAA identified the Deming VORTAC 274° radial was out of tolerance and not available for navigational purposes on Jet Route J-184. As a result of the out of tolerance signal coverage finding, the FAA published a Notice to Air Missions (NOTAM) indicating that the segment of J-184 from the Deming VORTAC 274° radial to the Buckeye, AZ, VORTAC was not available except to aircraft equipped with a suitable Area Navigation (RNAV) system with Global Positioning Service (GPS) capability. The FAA has been unable to overcome the Deming VORTAC 274° radial signal coverage issue since it was identified. The NOTAM requiring aircraft flying J-184 between the Deming and Buckeye VORTACs to be RNAV GPS equipped has remained in effect.

To address the requirement for aircraft flying J-184 between the Deming and Buckeye VORTACs to be RNAV GPS equipped, the FAA is planning to replace J-184 with a new RNAV route, Q-180, that would overlay the J-184 route of flight. The new Q-route would extend between the Buckeye, AZ, VORTAC located west of Phoenix, AZ, and the Newman, TX, VORTAC located in West Texas. The new Q-180 would mitigate the Deming VORTAC signal coverage issue, enable removal of the NOTAM requiring RNAV GPS equipage on J-184, and continue supporting the safe, efficient flow of air traffic equipped with RNAV capabilities between the Phoenix area and the West Texas area. Lastly, the new Q-route would support the FAA's Next Generation Air Transportation System (NextGen) efforts to modernize the NAS navigation system from ground-based to satellite-based.

The FAA is proposing an amendment to 14 CFR part 71 to revoke Jet Route J-184 and establish RNAV route Q-180 due to service limitations associated with signal coverage related issues on J-184. The proposed Air Traffic Service (ATS) route actions are described below.

J-184: J-184 currently extends between the Buckeye, AZ, VORTAC and the Newman, TX, VORTAC. The FAA proposes to remove the route in its entirety.

Q-180: Q-180 is a new RNAV route that would extend between the Buckeye, AZ, VORTAC and the Newman, TX, VORTAC NAVAIDs. This new Q-route would provide RNAV routing along the same route of flight as Jet Route J-184 and would retain flight safety and NAS efficiency for aircraft transiting between the Phoenix, AZ, and El Paso, TX, areas.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Semiconductors are essential components of electronic devices that enable telecommunications and grid infrastructure, run critical business and government information technology and operational technology systems, and are necessary to a vast array of products, from automobiles to fighter jets. Recognizing the criticality of supply chain security and resilience for semiconductors and related products, the President signed the Executive Order on America's Supply Chains   1 shortly after taking office in February 24, 2021. This Executive order, among other things, directed several Departments to undertake assessments of critical supply chains; several of the resulting reports address microelectronics and related subcomponent supply chains. 2 The resulting June 2021 White House Report on Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth   3 highlighted the insufficient domestic manufacturing capacity for semiconductors. The White House Report noted that the United States lacks advanced semiconductor manufacturing capabilities and is dependent on geographically concentrated and in some cases potentially unreliable sources of supply. It recommended dedicated funding to advance semiconductor manufacturing, and research and development to support critical manufacturing, industrial, and defense applications.

In August 2022, the Congress passed the CHIPS Act of 2022, 4 which amended Title XCIX of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, 15 U.S.C. 4651 et seq., also known as the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act. Together, these statutory provisions (collectively, the CHIPS Act or Act), establish a semiconductor incentives program (CHIPS Incentives Program) that will provide funding, including via grants, cooperative agreements, loans, loan guarantees, and other transactions, to support investments in the construction, expansion, and modernization of facilities in the United States for the fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment.

The CHIPS Incentives Program aims to strengthen the security and resilience of the semiconductor supply chain by mitigating gaps and vulnerabilities. It aims to ensure a supply of secure semiconductors essential for national security and to support critical manufacturing industries. It also aims to strengthen the resilience and leadership of the United States in semiconductor technology, which is vital to national security and future economic competitiveness of the United States.

The CHIPS Incentives Program is administered by the CHIPS Program Office (CPO) within the National Institute of Standards and Technology (NIST) of the United States Department of Commerce. CPO is separately issuing Notices of Funding Opportunity (NOFO) that lay out the procedures by which interested organizations may apply for CHIPS Incentives Program funds, and criteria under which applications will be evaluated.

To protect national security and the resiliency of supply chains, CHIPS Incentives Program funds may not be provided to a foreign entity of concern, such as an entity that is owned by, controlled by, or subject to the jurisdiction or direction of a country that is engaged in conduct that is detrimental to the national security of the United States. This proposed rule incudes a detailed explanation of what is meant by foreign entities of concern, as well as a definition of “owned by, controlled by, or subject to the jurisdiction or direction of.”

In further support of U.S. national security interests, CHIPS Incentives Program recipients (funding recipients) are required by the Act to enter into an agreement (required agreement) with the Department restricting engagement by the funding recipient or its affiliates in any significant transaction involving the material expansion of semiconductor manufacturing capacity in foreign countries of concern. In recognition that some potential applicants for CHIPS Incentives may have existing facilities in foreign countries of concern, and to minimize potential supply chain disruptions, the Act includes exceptions for certain transactions involving older (legacy) semiconductor manufacturing in a foreign country of concern.

A funding recipient must notify the Secretary of any planned significant transactions of the funding recipient or its affiliates involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern, including in cases where it believes the transaction is allowed under the exceptions in 15 U.S.C. 4652(a)(6)(C)(ii). Terms related to this notification requirement are defined in Subpart A of this rule. The Secretary will provide direct notice to the funding recipient that a review of a transaction is being conducted and, later, that the Secretary has reached an initial determination regarding whether the transaction is prohibited. Funding recipients may submit additional information or request that the initial determination be reconsidered, after which the Secretary will provide a final determination. In making determinations, the Secretary will consult with the Director of National Intelligence and the Secretary of Defense.

The Secretary will initiate review of transactions by funding recipients through self-reported notifications; the Secretary also may initiate a review of non-notified transactions, including based on information provided by other government agencies or information from other sources.

Failure by a funding recipient (or its affiliate) to comply with this restriction on semiconductor manufacturing capacity expansion in foreign countries of concern may result in recovery of the full amount of Federal financial assistance provided to the funding recipient (referred to in the Act as the “Expansion Clawback.”)

The Act also prohibits funding recipients from knowingly engaging in any joint research or technology licensing effort with a foreign entity of concern that relates to a technology or product that raises national security concerns as determined by the Secretary and communicated to the funding recipient before engaging in such joint research or technology licensing. A funding recipient's required agreement will include a commitment that the funding recipient and its affiliates will not conduct prohibited joint research or technology licensing. Failure to comply with this restriction may also result in recovery of the full amount of Federal assistance (referred to in the Act as the “Technology Clawback.”)

This proposed rule defines terms used in the Act (including terms that will be used in required agreements with funding recipients), identifies the types of transactions that are prohibited under the Expansion Clawback and Technology Clawback sections of the Act, and provides a description of the process for notification of transactions to the Secretary.

This section provides background and explanation for the way that specific terms used in the Act relating to these prohibitions are defined. Some key terms used in the Expansion Clawback section of the Act are not defined in the Act; however, the definitions of these terms in the proposed rule will affect which business transactions are exceptions to the Expansion Clawback prohibition. The Department has carefully considered each of these terms and is proposing definitions in this proposed rule that are consistent with the intent of the overall CHIPS Incentives Program and the Act. This section discusses the definitions and factors considered in developing these definitions.

The Expansion Clawback section of the Act (15 U.S.C. 4652(a)(6)) states that funding recipients may not engage in any significant transaction involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern. Consistent with the Act, the proposed rule extends this prohibition to the funding recipient's affiliates, to ensure the purpose of the prohibition is not circumvented. The proposed rule defines terms such as “affiliate,” “significant transaction,” “material expansion,” and “semiconductor manufacturing.”

In addition, the Expansion Clawback section of the Act spells out exceptions to the prohibition on semiconductor manufacturing capacity expansions, which apply to existing facilities manufacturing legacy semiconductors and for significant transactions involving semiconductor manufacturing capacity expansion for new facilities producing legacy semiconductors that predominately serve the market of a foreign country of concern. The proposed rule defines key terms for these exceptions, including “legacy semiconductors,” “predominately serves the market,” and “existing facilities.”

The proposed rule defines “affiliate” to include the funding recipient's parent company or parent companies ( i.e., entities that directly or indirectly own a majority of the funding recipient's voting interest), the funding recipient's majority-owned subsidiaries, and entities that are majority owned by a parent company or any majority-owned subsidiary of a parent company. This proposed rule defines the term “significant transaction” to mean a transaction whose value exceeds $100,000, or series of transactions which in the aggregate during the applicable term of a required agreement are valued at $100,000 or more. This monetary value was chosen in order to provide a clear and quantitative standard that captures even modest expansions by funding recipients of semiconductor manufacturing capacity in foreign countries of concern.

The term “material expansion” is defined in the proposed regulations to include the construction of new facilities and the addition of new semiconductor manufacturing capacity and uses a quantitative measure of 5 percent of existing capacity to provide clear and predictable scoping. This definition is meant to allow for funding recipients that have existing facilities in a foreign country of concern to continue to operate and maintain their competitiveness by allowing for technological upgrades, as long as overall semiconductor manufacturing capacity is not increased by more than 5 percent.

“Semiconductor manufacturing” is proposed to be defined as semiconductor fabrication and/or packaging and includes both front-end fabrication as well as back-end manufacturing (assembly, testing, and packaging of semiconductors). The term “legacy semiconductor” is defined in the Act as it pertains to logic semiconductors, but not as it pertains to other types of semiconductors ( e.g., memory), or for packaging of semiconductors. With regard to memory semiconductors, the proposed definition was drafted to be harmonious with current export control levels. With regard to packaging, the proposed definition was drafted to exclude semiconductors packaged utilizing 3D integration, which is considered advanced packaging. In addition, the Act provides that semiconductors “critical to national security” are not considered legacy semiconductors, regardless of the production technology used. A list of these “semiconductors critical to national security,” as determined with input from the Secretary of Defense and the Director of National Intelligence, is included in this proposed rule.

The proposed rule defines “predominately serves the market” by referring to where the final products incorporating the legacy semiconductors are used or consumed. This definition is designed to ensure that exceptions under 15 U.S.C. 4652(a)(6)(C)(ii) are limited to legacy semiconductors that remain in the market of the country in which they are manufactured, rather than semiconductors that are incorporated into secondary products and for export and use internationally.

The proposed rule defines “existing facility,” as excluding facilities that undergo “significant renovations” after the required agreement. Therefore, transactions that significantly renovate an existing facility ( i.e., add an additional line or otherwise increase semiconductor manufacturing capacity by 10 percent or more) will not fall under the exception for existing facilities or equipment for manufacturing legacy semiconductors in 15 U.S.C. 4652(a)(6)(C)(ii)(I).

The second prohibition (the Technology Clawback section of the Act (15 U.S.C. 4652(a)(5)(C)) bans funding recipients from engaging in joint research or technology licensing efforts with foreign entities of concern that relate to a technology or product that raises national security concerns. The proposed rule extends this prohibition to the funding recipient's affiliates, to ensure the purpose of the prohibition is not circumvented. Definitions included in this proposed rule in this regard include “joint research,” “technology licensing” and “technology or product raising national security concerns.” This proposed rule defines “a technology or product that raises national security concerns” as (a) semiconductors critical to national security and (b) electronics-related products and technologies controlled by the Department in the Export Administration Regulations for national security or regional stability reasons.

The Department recognizes that some funding recipients may have pre-existing contracts or other arrangements which commit them to joint research or technology licensing with foreign entities of concern that relate to a technology or product that raises national security concerns. CPO invites comments from interested parties on the extent and nature of these pre-existing arrangements, the ability of funding recipients to abandon them with or without penalty, and the feasibility and impact of exempting joint research or technology licensing done pursuant to an agreement which predates this rule.

Statutory definitions of several terms, e.g., “person,” “foreign entity,” “foreign country of concern,” and “foreign entity of concern,” are incorporated into the regulations in subpart A, Definitions, §§ 231.101 through 231.124. The definitions of several terms, such as “person” are not expanded upon. “Foreign entity,” is defined per the statute and is understood to include not only an entity incorporated in a foreign country, but also to include any person owned by, controlled by, or subject to the jurisdiction or direction of a foreign entity, including any wholly owned U.S. subsidiaries. The term “foreign entity of concern” was defined in the Act with reference to specific categories of entities. However, with authority provided in the Act (15 U.S.C. 4651(8)(E)) the Secretary proposes to designate three additional categories of entities that are determined to be engaged in conduct detrimental to the national security or foreign policy of the United States: entities included on the Bureau of Industry and Security's Entity List, entities included on the Department of the Treasury's list of Non-Specially Designated Nationals (SDN) Chinese Military-Industrial Complex Companies (NS-CMIC List), and entities identified in the Federal Communications Commission's list of Equipment and Services Covered By section 2(a) of the Secure and Trusted Communications Networks Act of 2019 as providing covered equipment or services.

Finally, the proposed rule uses the term “funding recipient” rather than “covered entity.” A funding recipient in these proposed regulations is a subset of covered entities as defined in the Act at 15 U.S.C. 4651. Whereas covered entities in the Act are those eligible to apply for financial assistance from the Department, funding recipients are those that have been awarded and receive the financial assistance.

This subpart primarily tracks the statutory language contained in the Expansion Clawback and Technology Clawback sections of the Act. Additionally, this subpart provides that funding recipients are required to maintain records related to significant transactions in a manner consistent with the recordkeeping practices used in their ordinary course of business. This requirement applies to the 10-year duration of the required agreement and for a period of seven years after any significant transaction.

While this proposed rule sets out definitions and parameters for which types of transactions by funding recipients will be prohibited, and which types qualify for an exception, in accordance with the Act, funding recipients are required to notify the Secretary of any planned significant transaction involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern (including those that may meet the criteria of one of the exceptions). This subpart provides details on the process by which funding recipients shall notify the Secretary of planned significant transactions, the specific information regarding the transaction that must be included, and the way in which transactions will be considered by the Secretary, including potential mitigations. This subpart also describes the process for review of actions that may violate the prohibition on certain joint research or technology licensing, and the recovery of Federal funds in the case of violations.

In recognition of the fact that semiconductor and semiconductor manufacturing technology evolve and mature over time, the CHIPS Act requires the Secretary of Commerce to regularly assess which additional technology should be considered for inclusion in the meaning of the term “legacy semiconductor.” The Act requires the Secretary to identify additional semiconductor technology that will be considered “legacy” not later than August 9, 2024, and at least every two years thereafter for a period of eight years. This portion of the proposed rule tracks this requirement; given the rapid cadence of technology adoption and relatively limited duration of market relevance of memory technology nodes, the Secretary may decide to reevaluate the technologies that are considered “legacy semiconductors” in this regard on a more frequent basis. The Secretary will provide an opportunity for public input and comment for any proposed updates.

Lastly, this subpart notes that any false or fraudulent information or statements knowingly or willingly provided to the Secretary by funding recipients may result in fines and/or imprisonment in accordance with the False Statements Accountability Act of 1996.

This proposed rule does not contain policies with federalism implications as that term is defined in section 1(a) of Executive Order 13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).

The Office of Management and Budget (OMB) has determined that this proposed rule is significant as defined by Section 3(f)(1) for purposes of Executive Order 12866.

This notice of proposed rulemaking (NPRM) implements certain provisions of the CHIPS Act related to the clawback of funds provided under the CHIPS Incentives Program. The Act established a program in the Department to provide Federal financial assistance totaling $39 billion to incentivize investment in facilities and equipment in the United States for the fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors. Entities choosing to pursue funding through the CHIPS Incentives Program will undergo a rigorous application and selection process. The first Notice of Funding Opportunity (NOFO) for this Program seeks applications for funding projects for the construction, expansion, or modernization of commercial facilities for the front- and back-end fabrication of leading-edge, current-generation and mature-node semiconductors, and explains the requirements and expectations for funding applicants and recipients. Applications for funding are voluntary and are separate from this proposed rule. The costs of applying for funding are not considered here.

Among the conditions of funding, all funding recipients will be required to enter into an agreement with the Department prohibiting them from engaging in significant transactions involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern. In addition, funding recipients will be prohibited from engaging in joint research or technology licensing efforts with foreign entities of concern that relate to a technology or product that raises national security concerns. Violations of either of these prohibitions may result in recovery of up to the full amount of Federal funding provided. This proposed rule implements these prohibitions in the Act, called the “Expansion Clawback” and “Technology Clawback.” Because these prohibitions are an integral part of the CHIPS Incentives Program, the impact of this proposed rule is considered in conjunction with the broader impacts of the program as a whole.

CHIPS Incentives Program funding recipients constitute the sole population of entities potentially directly impacted by this proposed regulation. It is unknown exactly how many entities will seek and be granted funding or the specific amount of the awards. Business statistics on domestic semiconductor manufacturing provide some information about the number of U.S. businesses potentially affected by this rule. According to the most recent data available from the U.S. Census Bureau, in 2019, there were a total of 723 establishments in the United States involved in “semiconductor and related device manufacturing” (North American Industry Classification System (NAICS) 333413) and a total of 150 establishments involved in the manufacturing of machinery used to make semiconductors (NAICS 333242). 5 It is anticipated that only a fraction of such establishments are likely to apply for and receive funding through this program. Furthermore, only a few companies currently maintain productive capacity in foreign countries of concern and produce semiconductors that fall within the thresholds contemplated in the proposed regulation. 6 Therefore, only a small subset of establishments would potentially be subject to the prohibitions on expansion of manufacturing capacity and joint research and, in the case of violations, the potential clawback of funds.

The proposed rule would limit funding recipients' ability to invest in new semiconductor manufacturing capacity in countries of concern. This limitation is intended to ensure that Federal funding is used, as intended by the CHIPS Act, to incentivize investment in semiconductor facilities and equipment in the United States. At this time, it is unknown how the investments in countries of concern by those that are not funding recipients will be affected.

Although the provisions in this proposed rule would prohibit funding recipients from establishing most new manufacturing capacity in countries of concern, recipients with existing facilities in countries of concern would be able to continue current operations. The proposed rule would also allow recipients to upgrade technology at existing foreign facilities (in compliance with export controls) if overall production capacity is not increased. In addition, recipients could modestly expand capacity at existing facilities producing mature (legacy) technology. Finally, this proposed rule would allow recipients to make new investments in manufacturing capacity in countries of concerns in the limited circumstance in which such production of legacy-level semiconductors would “predominately serve the market of the foreign country of concern.” These provisions ensure minimal disruptions to revenues, for the foreseeable future, to firms that currently have productive capacity in countries of concern. It is estimated that less than ten firms may be impacted. 7

This regulatory impact analysis does not consider the private costs to funding recipients of limiting their investments in countries of concern. In pursuing program funding, applicants are expected to weigh the private costs and benefits of the conditions for funding outlined by the provisions in this proposed rule. CHIPS Incentives Program funding is intended to complement, not replace, private investment and other sources of funding. Using $39 billion in financial assistance, the CHIPS Incentives Program is designed to restore U.S. leadership in semiconductor manufacturing and innovation. Through the first funding opportunity, released February 28, 2023, the CHIPS Incentives Program aims to (1) to build at least two new large-scale cluster of leading-edge logic fabs, (2) to be home to multiple high-volume advanced packaging facilities, (3) to produce high-volume leading-edge dynamic random-access memory (DRAM) chips on economically competitive terms, and (4) to increase its production capacity for the current-generation and mature node chips that are most vital to U.S. economic and national security. To achieve these aims, the CHIPS Incentives Program funding awards are designed to catalyze private investment in the United States.

By restricting funding recipients' ability to invest in new semiconductor manufacturing capacity in countries of concern, the proposed rule would also likely catalyze investment outside countries of concern.

In particular, the demand for leading-edge, current, and mature semiconductors are estimated to increase significantly in the next decade, from approximately $600 billion per year in 2022 to approximately $1 trillion revenue per year within the next 10 years. 8 An increase in global productive capacity for a wide variety of semiconductors will be needed to supply the increased chip demand. The restriction on expanding manufacturing capacity in countries of concern is likely to increase the need for additional capacity to be built outside countries of concern.

Participants in the incentives program that violate the prohibitions face the potential “clawback” of Federal funding. For purposes of this analysis, any recovery of funding resulting from entities engaging in activities prohibited by this proposed regulation is considered to be a transfer of funds of an equal amount of the funding award (plus interest) back to the government. This recovery of funds could have negative implications for the award recipients' financial condition and, for public companies, could affect their stock valuation. The recovery of funds might also affect award recipients' willingness or ability to continue constructing semiconductor facilities and equipment in the United States.

The potential clawback of funds is designed to serve as a significant deterrent to violations. The Department, therefore, expects that few, if any, funding recipients will violate the prohibitions laid out in this proposed rule. Damage to corporate reputation resulting from violating an agreement with the U.S. government, while not readily quantifiable, would also be a significant deterrent to violations. Thus, the likelihood of violations that result in a recovery of funding is small and the impact of the transfer is expected to be minimal across all incentives program participants. Furthermore, even in the unlikely event that a violation occurs and clawbacks become necessary, the impacted chipmakers are highly unlikely to abandon their finished or ongoing investments in the United States.

Two reasons make this outcome unlikely: First, because of the high fixed costs associated with chip production, companies are likely to either continue producing in facilities that are already built or finish building ongoing investment projects. Second, semiconductor production capacity is only likely to be built with a high degree of confidence of customer demand, usually with advanced purchases of wafer capacity prior to completion of the facility construction. Abandoning a finished or ongoing project could jeopardize customer relationships and ongoing revenue. The incentives associated with CHIPS are expected to incentivize applicants to locate their productive capacity within the United States. Once those decisions are made, and projects are under-way, there would likely be significant costs to reverse such decisions.

This proposed rule establishes a notification requirement for funding recipients who are planning certain transactions in foreign countries of concern. This notification requirement applies to recipients pursuing transactions that would: (1) expand existing capacity for manufacture of legacy semiconductors; or (2) provide new capacity for legacy semiconductors that primarily serve the market of the foreign country of concern.

The Department estimates that there are not more than a handful of potential CHIPS Incentives Program applicants with existing facilities in foreign countries of concern that may seek to expand manufacturing capacity under the provisions of this proposed rule, and therefore expects few notifications. However, for purposes of this analysis, the Department has conservatively assumed a maximum of 10 notifications per year. The proposed notifications would require general information about planned transaction, such as the names, location and ownership of the parties involved; information about the manufacturing facility such as current and proposed semiconductor production technology to determine if it meets the “legacy” requirement; current and proposed manufacturing capacity to determine if the “existing facility” definition is met; and information about the markets or end users for the semiconductors to be manufactured in the case of new capacity. Because the funding recipients would have initiated and planned these transactions, the basic information required in the notification would be known and readily available, and the notification process itself is not expected to be burdensome. The Department estimates that it would take recipients two hours to provide each notification, or a total of 20 hours per year for all recipients.

Once received, notifications would be evaluated by the Department as to whether the transactions meet one of the permissible criteria. This analysis will be performed by Department staff, including an anticipated initial review and, if necessary, consultation with industry and technology experts, as well as with the funding recipient. As the number of notifications that will be submitted each year is expected to be small, the staffing requirements for review and analysis of the notifications is also expected to be small. Assuming conservatively 10 notifications per year, two senior analysts and two licensing officers/electronics engineers could handle notifications with a fraction of their annual time. The total estimated cost would be approximately $110,000 per year (10 notifications * 4 staff at a GS-14 salary ($137/hr)  9 * 20 hours each to review for each notification).

The Federal Government may also incur costs for monitoring and enforcement efforts. Because the program is designed to deter violations, we expect that enforcement actions will rarely be needed. In those cases where the Federal Government will ultimately need to take enforcement action, the government will incur additional costs; however, the extent of those costs is currently unknown. Moreover, investments in semiconductor manufacturing are widely monitored and reported in the trade press. New or expanded semiconductor manufacturing capacity requires installation of expensive capital equipment and several years to bring into operation. It is unlikely that such expansions would go unnoticed. Therefore, to the extent that monitoring is required, we would expect that the Government would incur limited costs. The Department requests comments from the public on the anticipated monitoring and enforcement costs.

The provisions in this proposed rule reinforce the benefits of the CHIPS Incentives Program by ensuring that funding goes toward increasing domestic manufacturing capacity and by discouraging investments in foreign countries of concern that would raise national security concerns. The domestic investments will advance U.S. economic and national security, enhance global supply chain resilience, and cement U.S. leadership in designing and building important semiconductor technologies. In particular, these investments will help address areas where the United States has fallen behind in semiconductor manufacturing. For example, although the United States remains a global leader in chip design and research and development (R&D), it has fallen behind in manufacturing and today accounts for only roughly 10 percent of commercial global production. 10

The CHIPS Incentives Program is expected to catalyze long-term economically sustainable growth in the domestic semiconductor industry in support of U.S. economic and national security. The Program is also expected to facilitate private investments in large-scale U.S.-based production and R&D, as well as throughout the supply chain, attracting both existing and new private investors to the U.S. semiconductor ecosystem and encouraging innovative approaches to funding industry growth. These are investments in facilities and equipment in the United States that would not occur otherwise.

The $39 billion of Federal funding is intended to serve as a catalyst to galvanize private, state, and local investment in the semiconductor industry. It is expected that this funding will lay the groundwork for long-term growth and economic sustainability in the domestic semiconductor industry and promote the secure and resilient supply chains on which the sector relies. The industry, it is anticipated, will then produce, at scale, leading-edge logic and memory chips critical to the national security and U.S. economic competitiveness. The funding is further expected to support current-generation and mature-node technologies essential for economic and national security. The funding is also expected to lead to development of a robust and skilled workforce and a diverse base of suppliers for semiconductor production. The funding will support research and development that is expected to drive innovation in design, materials, and processes that will accelerate the industries of the future. Further, it is anticipated that the funding will support the broader U.S. economy, creating good jobs accessible to all, and supporting and growing local economies and communities.

There is little flexibility for regulatory alternatives regarding the provisions implemented by this proposed regulation. The CHIPS Act clearly spells out the framework for administering the prohibitions on expansions of semiconductor manufacturing capacity in foreign countries of concern. The statute details the types of transactions that are not prohibited ( i.e., certain types of transactions involving legacy semiconductors), and lays out a notification requirement, a timeline for review, and the potential for mitigation. The statute also requires imposing the joint research and technology licensing prohibition.

The Act does allow for certain flexibility to determine which transactions qualify as “significant”, what is meant by “material expansion” of “semiconductor manufacturing capacity”, and what constitutes a “legacy semiconductor”. For example, the proposed definition of “significant transaction” includes a minimum threshold of $100,000, such that transactions involving lower monetary values would not be prohibited. Likewise, the proposed definition of “material expansion” refers to increases in capacity of at least 5 percent to identify expansions that would be prohibited. The proposed definition of “predominately serves the market” would allow for expansions where at least 85% of a facility's output by value serves a foreign market. The way in which these terms, and others, are defined thus will have an impact on which transactions may be permissible, which, in turn, could affect investment choices of funding recipients. The Department seeks comment on these proposed definitions and how the interpretation of terms in this proposed rule would impact industry members, including, in particular, those with existing facilities in a foreign country of concern.

This proposed rule, which implements the CHIPS Act's provisions for recovery of funding for violating the prohibitions on certain expansion of semiconductor manufacturing and certain joint research or technology licensing is expected to provide significant deterrence against potential violations and to reinforce CHIPS Act objectives to incentivize investment in semiconductor facilities and equipment in the United States. Together with the Act's infusion of funding into semiconductor manufacturing, the proposed rule is expected to provide substantial national security and economic benefits. As a result, the overall benefits of this proposed rule are expected to significantly outweigh any negative impact from the prohibitions on expansions of capacity in foreign countries of concern. The Department requests comments on any aspect of this impact assessment.

Pursuant to 5 U.S.C. 553(a)(2), the provisions of the Administrative Procedure Act requiring notice of proposed rulemaking and the opportunity for public participation are inapplicable to this proposed rule because this rule, which places certain limitations on funding recipients, relates to “public property, loans, grants, benefits, or contracts.”  11 However, because the Department is interested in receiving public input to help inform the actions within this rulemaking, this proposed rule includes a 60-day period for public comment.

The CHIPS Program Office seeks broad input from all interested stakeholders on this proposed rule, including information on limitations and procedures for funding recipients to notify the Secretary of any planned significant transactions that may be prohibited. Specifically, the CHIPS Program Office requests information regarding the definitions of “significant transaction,” “material expansion,” “semiconductor manufacturing,” “legacy semiconductors,” “predominately serves the market,” “a technology or product that raises national security concerns,” and “existing facilities.” Commenters are encouraged to address any of the specific definitions, any other parts of this proposed rule, or the proposed rule more generally. To properly submit comments on this rule, please follow the submission instructions in the ADDRESSES section above.

The Chief Counsel for Regulation has certified to the Chief Counsel for Advocacy of the Small Business Administration under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the proposed rule if adopted, would not have a significant economic impact on a substantial number of small entities as that term is defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA). A summary of the factual basis for this certification is below.

The first prohibition in this proposed rule (described in the Expansion Clawback section of the Act) applies to significant transactions involving the material expansion of semiconductor manufacturing capacity in foreign countries of concern (15 U.S.C. 4652(a)(6)(C)(i)). There are two industry sectors identified by their classification under the North American Industry Classification System (NAICS) that are potentially impacted: Semiconductor and related device manufacturing (NAICS 334413) and semiconductor machinery manufacturing (NAICS 333242). According to the most recent data from the Bureau of the Census ( 2019 SUSB Annual Data Tables by Establishment Industry, U.S. Census Bureau, February 2022), in 2019 there were a total of 723 establishments in the United States involved in “semiconductor and related device manufacturing” (NAICS 333413). Note that this industry category includes an unknown number of manufacturers of “related devices” such as solar cells, fuel cells and light emitting diodes that are not impacted by the prohibitions in this proposed rule. It is likely that many of the small entities in this NAICS fall into this “related devices” category, as semiconductor device manufacturing is a highly complex, highly capital-intensive industry beyond the technical and financial capability of most small businesses.

Of these 723 firms in the semiconductor and related devices NAICS segment, 655 (90 percent) were small businesses with fewer than 500 employees; over a third (251) had five or fewer employees. There were 68 establishments with 500 or more employees. Total employment in the sector was 97,617, of which larger establishments with 500 or more employees accounted for over 80 percent. The total number of establishments in 2019 involved in manufacturing the machinery that is used to make semiconductors (NAICS 333242) was 150, of which 125 had 500 or fewer employees.

While small entities may qualify for and receive incentive awards under the program (either individually or as part of a group), they are not likely to engage in the types of transactions that are addressed in this proposed rule. Specifically, they will not likely engage in any significant transaction involving the material expansion of semiconductor manufacturing capacity in foreign countries of concern (15 U.S.C. 4652(a)(6)(C)(i)). Of the entities chosen to receive CHIPS Incentives Program awards, the expansion prohibition only applies to those that either plan to expand an existing semiconductor manufacturing facility in a foreign country of concern or plan to establish such a facility in a country of concern. Technology upgrades of existing facilities (that do not expand semiconductor manufacturing capacity) are not affected, and there is an exception for semiconductor manufacturing capacity expansions of existing facilities involving manufacture of legacy semiconductors. To the extent that there are semiconductor manufacturers participating in the CHIPS program that are small businesses, they would likely fall into this “legacy semiconductor” category. Leading-edge semiconductor manufacturing targeted by this prohibition (because of its importance to national security) is an exceedingly complex and capital-intensive industry that is dominated by large multinational firms.

The second prohibition codified in this proposed rule (described in the Technology Clawback section of the Act) prevents award recipients from entering into joint research or technology licensing efforts with foreign entities of concern that relate to a technology or product that raises national security concerns (15 U.S.C. 4652(a)(5)(C)). This prohibition has been largely harmonized with existing oversight and restrictions on these types of transactions imposed by the Export Administration Regulations (15 CFR parts 730 through 744). Therefore, the (additional) economic impact of this prohibition will be negligible for both large and small entities.

Based on the above, the Department does not anticipate that this proposed rule will have a significant economic impact on a substantial number of small entities as that term is defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. As a result, an initial regulatory flexibility analysis is not required, and none has been prepared.

This proposed rule contains a new collection-of-information requirement subject to review and approval by OMB under the Paperwork Reduction Act. This rule creates new requirements by establishing a notification requirement for funding recipients that plan to engage in any significant transaction involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern that may be permitted if certain conditions are met. Public reporting burden for this notification is estimated to average 20 hours (10 respondents * 2 hours per response), including the time for reviewing instructions, searching existing data sources, gathering the data needed, and completing and reviewing the collection of information. The total estimated cost is $110,000 (10 notifications * 4 staff @GS-14 salary ($137/hr) * 20 hours each to review for each notification). The $137 per hour cost estimate for this information collection is consistent with the GS-scale salary data for a GS-14 step 5. The information requested in these notifications is related to business transactions that are being proposed or planned by funding recipients. Since it is the funding recipients themselves that are initiating these transactions, the information requested on them will be known to them and readily available.

We are soliciting comments from the public (as well as affected agencies) concerning our information collection and recordkeeping requirements. These comments will help us:

(1) Evaluate whether the information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility.

(2) Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used.

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses).

Comments on these or any other aspects of the collection of information can be submitted via www.regulations.gov.

This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) under section 48D of the Internal Revenue Code (Code).

Section 107(a) of the CHIPS Act of 2022 (CHIPS Act), enacted as Division A of Public Law 117-167, 136 Stat. 1366, 1393 (August 9, 2022), added section 48D to the Code to establish the advanced manufacturing investment credit (section 48D credit) as an investment credit for purposes of section 46 of the Code, which is a current year general business credit under section 38 of the Code.

The amount of the section 48D credit allowable to a taxpayer for any taxable year is generally an amount equal to 25 percent of the basis of any qualified property that is part of an eligible taxpayer's advanced manufacturing facility if the qualified property is placed in service during such taxable year and after December 31, 2022. See section 48D(a), and (b)(1) of the Code and section 107(f)(1) of the CHIPS Act. However, section 48D(e) provides that the section 48D credit does not apply to property the construction of which begins after December 31, 2026. In addition, in the case of any qualified property placed in service after December 31, 2022, but the construction of which began prior to January 1, 2023, the section 48D credit is available only to the extent of the basis of qualified property attributable to the construction, reconstruction, or erection after August 9, 2022 (the date of enactment of the CHIPS Act). See section 107(f)(1) of the CHIPS Act. In addition, the portion of the basis of any such property that is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2) of the Code) in determining the rehabilitation credit under section 47 is excluded from a taxpayer's qualified investment with respect to any advanced manufacturing facility for any taxable year.

For purposes of the section 48D credit, an “eligible taxpayer” is any taxpayer that (1) is not a foreign entity of concern (as defined in section 9901(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, as amended by section 103 of the CHIPS Act), and (2) has not made an applicable transaction (as defined in section 50(a) of the Code) during the taxable year. See section 48D(c).

Section 48D(b)(1) provides that the “qualified investment” with respect to any advanced manufacturing facility for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of an advanced manufacturing facility. Section 48D(b)(2) provides that for purposes of section 48D(b), the term “qualified property” means tangible property with respect to which depreciation (or amortization in lieu of depreciation) is allowable that is integral to the operation of the advanced manufacturing facility if (I) constructed, reconstructed, or erected by the taxpayer, or (II) acquired by the taxpayer, if the original use of such property commences with the taxpayer. Qualified property includes any building or its structural components satisfying such requirements unless the building or portion of the building is used for offices, administrative services, or other functions unrelated to manufacturing. Section 48D(b)(3) provides that the term “advanced manufacturing facility” means a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment.

Section 48D(d)(1) allows a taxpayer to elect to treat the section 48D credit determined for the taxpayer for a taxable year as a payment against the tax imposed by subtitle A of the Code (that is, treated as a payment of Federal income tax) equal to the amount of the credit rather than a credit against the taxpayer's Federal income tax liability for that taxable year (elective payment election). Section 48D(d)(2) provides special rules relating to an elective payment election made for (A) property held directly by a partnership (within the meaning of section 761(a) of the Code) or an S corporation (as defined in section 1361(a)(1) of the Code) in which the partnership or S corporation actually receives a payment rather than a credit, (B) the period during which an elective payment election can be made, (C) the timing of the elective payment, (D) appropriations for making elective payments to partnerships and S corporations, (E) authority of the Secretary of the Treasury or her delegate (Secretary) to require additional information or registration of taxpayers, and (F) repayment of an excessive elective payment, plus a penalty of an amount equal to 20 percent of such excessive payment. Section 48D(d)(3) provides that the section 48D credit is zero for a taxpayer making an elective payment election.

Section 48D(d)(4) provides that the elective payment election will not be treated as part of the income tax laws of any U.S. territory with a mirror code tax system (as defined in section 24(k) of the Code) unless the U.S. territory elects to have the elective payment election apply under its income tax laws. Under section 48D(d)(5), basis reduction and recapture rules similar to the rules of section 50(a) and (c) of the Code apply with respect to amounts treated as paid or actually received by a taxpayer under an elective payment election. Finally, section 48D(d)(6) authorizes the Secretary to issue regulations or other guidance determined to be necessary or appropriate to carry out the elective payment election provisions of section 48D(d), including (A) regulations or other guidance providing rules for determining a partner's distributive share of deemed tax-exempt income, and (B) guidance to ensure that the amount treated as a payment made or the payment received by a taxpayer is commensurate with the amount of the section 48D credit that generally would be otherwise allowable (determined without regard to section 38(c)).

Pursuant to section 107(c) of the CHIPS Act, payments made to a partnership or S corporation pursuant to the elective payment election, as well as amounts treated as payments against tax by taxpayers making an elective payment election, are exempt from reduction under any sequestration order issued under the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq. ) on or after December 31, 2022.

Section 107(b) of the CHIPS Act added new sections 50(a)(3) and (6)(D) and (E) to the Code to provide special recapture rules for certain expansions in connection with advanced manufacturing facilities. Under section 50(a)(3)(A), if there is an applicable transaction by an applicable taxpayer before the close of the 10-year period beginning on the date such taxpayer placed in service property that is eligible for the section 48D credit, then the taxpayer's Federal income tax liability under chapter 1 of the Code (chapter 1) for the taxable year in which such transaction occurs must be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any investment credit determined under section 46 that is attributable to the section 48D credit with respect to such property (applicable transaction recapture rule). Section 50(a)(3)(B) provides an exception to the applicable transaction recapture rule for an applicable taxpayer that demonstrates to the satisfaction of the Secretary that the applicable transaction has been ceased or abandoned within 45 days of a determination and notice by the Secretary. Section 50(a)(3)(C) authorizes the Secretary to issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of the applicable transaction recapture rule, including regulations or other guidance providing for recordkeeping requirements or information reporting for purposes of administering the requirements of section 50(a)(3).

As added to the Code by section 107(b)(2) of the CHIPS Act, section 50(a)(6)(D) provides that for purposes of section 50(a), the term “applicable transaction” means, with respect to any applicable taxpayer, any significant transaction (as determined by the Secretary, in coordination with the Secretary of Commerce and the Secretary of Defense) involving the material expansion of semiconductor manufacturing capacity of such applicable taxpayer in a foreign country of concern (as defined in section 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, as amended by section 103 of the CHIPS Act) other than certain transactions that primarily involve the expansion of manufacturing capacity for legacy semiconductors (as defined in section 9902(a)(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, as amended by section 103 of the CHIPS Act). As discussed in the Explanation of Provisions section of this preamble, the proposed regulations primarily apply long-established credit mechanics and procedures common to all investment tax credits (including the section 48D credit) previously set forth in regulations and subregulatory guidance and, consistent with statute, incorporate definitional concepts as determined by the Secretary of Commerce, which are provided in proposed 15 CFR part 231, as contained in the proposed rule, Preventing the Improper Use of CHIPS Act Funding, issued by the CHIPS Program Office, National Institute of Standards and Technology, Department of Commerce (Commerce Proposed Rule). The Commerce Proposed Rule provides guardrails to prevent the improper use of CHIPS Act funding overseen by the Department of Commerce.

Section 50(a)(6)(E) defines an “applicable taxpayer” for purposes of section 50(a) as any taxpayer who has been allowed a section 48D credit for any prior taxable year.

The proposed regulations provide rules for calculating the amount of a taxpayer's qualified investment pursuant to section 48D(b)(1), generally, and in the context of certain passthrough entities. Section 48D(b)(1) specifies that qualified investment “is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of an advanced manufacturing facility.” The statute is silent as to manner in which a taxpayer's basis in qualified property is allocated in the context of passthrough entities. The proposed regulations clarify that a partner's share of basis in the qualified property of a partnership is determined under the rules in § 1.46-3(f). Section 1.46-3(f) contains rules for determining a partner's share of the qualified basis of a partnership under the former investment tax credit provisions (former sections 46(a) (amount of investment credit) and (c) (qualified basis)). Under those regulations and consistent with section 48D(b)(1), a partner is treated as the taxpayer with respect to its share of the basis of the partnership's qualified property for calculating its qualified investment. A partner's share of the partnership's basis generally is determined in accordance with the ratio in which the partners divide the general profits of the partnership (that is, taxable income of the partnership as described in section 702(a)(8)).

The proposed regulations specify that an S corporation must apportion the basis of qualified property pro rata among its shareholders. A shareholder is treated as the taxpayer with respect to the shareholder's share of basis in the qualified property of the S corporation. The proposed regulations further specify that an estate or trust must apportion the basis of the estate or trust's qualified property among the estate or trust and its beneficiaries on the basis of the income of the estate or trust allocable to each for that taxable year. A beneficiary to which the basis of qualified property is apportioned is, for purposes of the section 48D credit, treated as the taxpayer with respect to the property. The proposed regulations are consistent with the rules for allocating basis with respect to an electing small business corporation and estates and trusts under § 1.48-5 and § 1.48-6, respectively, which contain rules for allocating basis for purposes of former sections 48(e) and (f), respectively. Comments are requested as to whether it would be helpful for the final regulations or other guidance to further address the manner in which a taxpayer's basis in qualified property is allocated in the context of passthrough entities.

Under section 48D(b)(5), “rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of section 48D(a).” The proposed regulations address a taxpayer's ability to make a qualified progress expenditure election, as provided in § 1.46-5, to increase its qualified investment by any qualified progress expenditures, made after December 31, 2022. Comments are requested as to whether it would be helpful for the final regulations or other guidance to expand or clarify a taxpayer's ability to claim a section 48D credit for qualified progress expenditures.

Section 48D(b)(4) excludes from qualified investment “that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).” The proposed regulations clarify that a taxpayer's qualified investment does not include the amount of any capital expenditures that meet the definition of a qualified rehabilitation expenditure.

Section 48D(b)(2)(B)(ii) excepts from the definition of qualified property “a building, or a portion of a building, used for offices, administrative services, or other functions unrelated to manufacturing.” The proposed regulations clarify that human resources or personnel services, payroll services, legal and accounting services, and procurement services; sales and distribution functions; and security services (not including cybersecurity operations) are among functions unrelated to manufacturing semiconductors or semiconductor manufacturing equipment.

Under section 48D(b)(2)(A)(iii)(II), the term “qualified property” means property acquired by the taxpayer if the original use of such property commences with the taxpayer. The proposed regulations define the term “original use” generally as the first use to which the property is put by any taxpayer in connection with a trade or business or for the production of income. In addition, the proposed regulations add rules related to the definition of “original use” for inventory.

Under section 48D(b)(2)(A)(iv) property must be “integral to the operation of the advanced manufacturing facility” to meet the definition of qualified property. The proposed regulations specify that property is integral to the manufacturing of semiconductors or semiconductor manufacturing equipment if it is used directly in the manufacturing operation and is essential to the completeness of the manufacturing operation. The proposed regulations further specify that property, including a building and its structural components, that constitutes a research or storage facility may qualify as integral to the operation of an advanced manufacturing facility if the property is used in connection with the manufacturing of semiconductors or semiconductor manufacturing equipment. Conversely, a research facility that does not manufacture any type of semiconductors or semiconductor manufacturing equipment does not qualify.

Section 48D(b)(3) provides that an advanced manufacturing facility must be a “facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment.” The proposed regulations explain that the determination of whether the primary purpose of a facility is manufacturing finished semiconductors or manufacturing finished semiconductor manufacturing equipment will be made based on all the facts and circumstances and list certain facts and circumstances relevant to this test. The proposed regulations make clear that a facility that manufactures, produces, grows, or extracts materials or chemicals that are supplied to an advanced manufacturing facility that manufactures semiconductors, or semiconductor manufacturing equipment, does not meet the primary purpose requirement.

The proposed regulations also define the terms “semiconductor manufacturing” or “manufacturing of semiconductors” and “manufacturing of semiconductor manufacturing equipment” for purposes of section 48D.

The Treasury Department and the IRS specifically request comments on the scope of the definition in proposed § 1.48-2(k) of the term “semiconductor.” Specifically, comments are requested as to whether this term, for purposes of the section 48D credit, should include semiconductive substances—materials with electronic properties controllable by the addition of, typically small, quantities of specific elements or dopants—on which an electronic device or system is manufactured, such as, but not limited to polysilicon and compound semiconductor wafers. If so, commenters are requested to explain in detail what principle, standard, or parameters could be incorporated in a definition of the term “semiconductor” so as to prevent extending the definition of that term to also include other materials and supplies used in the manufacture of finished semiconductors.

The proposed regulations provide guidance regarding the beginning of construction requirement for purposes of the effective date provision in section 107(f)(1) of the CHIPS Act, and the credit termination rule in section 48D(e). The proposed regulations specify that a taxpayer can establish that construction of a property has begun by meeting the Physical Work Test or the Five Percent Safe Harbor, as that test and safe harbor are described in the proposed regulation. The proposed regulations define what is considered the unit of property for purposes of determining the beginning of construction under section 48D(e). Solely for purposes of determining whether construction of a property has begun for purposes of section 48D and the section 48D regulations, multiple items of qualified property or advanced manufacturing facilities that are operated as part of a single advanced manufacturing facility project are treated as a single item of property. Whether multiple qualified properties or advanced manufacturing facilities are operated as part of a single advanced manufacturing facility project will depend on all the relevant facts and circumstances. Thus, whether the beginning of construction requirement is satisfied with respect to any item of property generally is determined based on the date construction of the item of property began, or the date construction of the single advanced manufacturing facility project that the item is part of began.

In addition, the proposed regulations further explain that under either the Physical Work Test or the Five Percent Safe Harbor, a taxpayer must meet the Continuity Requirement, as described in the proposed regulation, to establish the beginning of construction. For this requirement, a taxpayer must demonstrate that either continuous construction or continuous efforts have occurred. Whether a taxpayer meets the Continuity Requirement under either test is determined by all the relevant facts and circumstances. The IRS will closely scrutinize a unit of property and may determine that the beginning of construction is not satisfied with respect to property if a taxpayer does not meet the Continuity Requirement.

Finally, section 1 of Executive Order 14080 of August 25, 2022 (E.O. 14080), Implementation of the CHIPS Act of 2022 (87 FR 52847), states that the policy underlying the CHIPS Act (which established the section 48D credit) is, in part, to “make transformative investments to restore and advance our Nation's leadership in the research, development, and manufacturing of semiconductors” and to “bolster United States technology leadership; and reduce our dependence on critical technologies from China and other vulnerable or overly concentrated foreign supply chains.” In this regard, section 2 of E.O. 14080 directs, in part, that in implementing the CHIPS Act, as appropriate, and to the extent consistent with the law, the Treasury Department and the IRS prioritize, economic, sustainability, and national security needs, by building domestic manufacturing capacity that reduces reliance on vulnerable or overly concentrated foreign production for both leading-edge and mature microelectronics, and ensuring long-term United States leadership in the microelectronics sector. Given the critical national security and foreign policies of the United States that the section 48D credit, as part of the CHIPS Act, is intended to achieve, the Department of the Treasury and the IRS have determined that it is appropriate for the proposed regulations to provide an extended safe harbor for satisfying the Continuity Requirement in this unique case. Under the safe harbor provided in proposed § 1.48D-5(e)(6), a taxpayer is deemed to satisfy the Continuity Requirement provided the property is placed in service no more than 10 calendar years after the date that the Physical Work Test or the Five Percent Safe Harbor is first satisfied with respect to that item of property or the single advanced manufacturing facility project that the item of property is part of.

Section 48D(d)(2)(A)(i) provides that, in the case of a partnership or an S corporation that makes an election under section 48D(d)(1) (in such manner as the Secretary may provide) with respect to the section 48D credit, “the Secretary shall make a payment to such partnership or S corporation equal to the amount of such credit.” Comments are requested on any guidance needed to determine the extent to which, if any, other Code provisions that limit the amount of a credit to a taxpayer, such as section 469 (passive activity credits), section 49 (at-risk credit rules), and section 50, may be applied to limit the amount of the Secretary's payment to the partnership or S corporation pursuant to section 48D(d)(2)(A)(i)(I). Comments are also generally requested on the treatment of the Secretary's payment to the partnership or S corporation under the provisions of subchapters K and S of chapter 1, respectively.

Section 48D(d)(2)(E) provides that “as a condition of, and prior to, any amount being treated as a payment which is made by the taxpayer under [section 48D(d)(1)] or any payment being made pursuant to [section 48D(d)(2)(A)(i)(I)], the Secretary may require such information or registration as the Secretary deems necessary or appropriate for purposes of preventing duplication, fraud, improper payments or excessive payments under [section 48D].” The IRS intends to provide, through forms and instructions, the procedures for registration of properties for which an election under section 48D(d) will be made. Comments are requested on the registration requirements and other procedures for purposes of section 48D(d)(2)(E).

Section 48D(d)(2)(F)(i) provides that in the case of an elective payment election, that the Secretary determines constitutes an excessive payment, the tax imposed on such taxpayer by chapter 1 for the taxable year in which such determination is made will be increased by an amount equal to the sum of (I) the amount of such excessive payment, plus (II) an amount equal to 20 percent of such excessive payment. Section 48D(d)(2)(F)(iii) defines an excessive payment as “an amount equal to the excess of—(I) the amount treated as a payment under [section 48D(d)(1)], or the amount of the payment made pursuant to [section 48D(d)(2)(A)], . . . over (II) the amount of the credit which, without application of this subsection, would be otherwise allowable (determined without regard to section 38(c)) under [section 48D(a)] with respect to such property for such taxable year.” Comments are requested on any guidance needed with respect to the amount that “would be otherwise allowable” for purposes of section 48D(d)(2)(F)(iii)(II).

Section 48D(d)(5) provides that “rules similar to the rules of [sections 50(a) and (c)] shall apply with respect to—(A) any amount treated as a payment which is made by the taxpayer under [section 48D(d)(1)], and (B) any payment made pursuant to [section 48D(d)(2)(A)].” Comments are requested on the guidance necessary to clarify the rules that are similar to the rules of sections 50(a) (investment credit recapture in the case of dispositions, etc.) and (c) (basis adjustment to investment credit property) for purposes of section 48D(d)(5).

The statutory applicable transaction recapture rule in section 50(a)(3) is intended to dissuade an “applicable taxpayer” from engaging in an “applicable transaction” after property qualifying for a section 48D credit is placed in service.

Section 50(a)(6)(D) defines an applicable transaction to mean, with respect to any applicable taxpayer, any significant transaction (as determined by the Secretary, in coordination with the Secretary of Commerce and the Secretary of Defense) involving the material expansion of semiconductor manufacturing capacity of such applicable taxpayer in a foreign country of concern. The term “foreign country of concern” is defined in section 9901(a)(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, as amended by section 103 of the CHIPS Act, to mean a country that is a covered nation (as defined in section 4872(d) of title 10) and any country that the Secretary of Commerce, in consultation with the Secretary of Defense, the Secretary of State, and the Director of National Intelligence, determines to be engaged in conduct that is detrimental to the national security or foreign policy of the United States. The proposed regulations define a foreign country of concern consistent with the statute. Additionally, in coordination with the Secretary of Commerce and the Secretary of Defense and pursuant to the Secretary's authority under section 50(a)(6)(D)(i) to determine whether transactions are significant transactions, the proposed regulations define the term “significant transaction” to align and harmonize the scope of applicable transactions under section 50(a)(3) with the scope of prohibited expansion transactions within the meaning of proposed § 231.202 (relating to the Prohibition on Certain Expansion Transactions) as contained in the Commerce Proposed Rule. Accordingly, proposed § 1.50-2(b)(10) defines the term “significant transaction” consistent with proposed § 231.202 as contained in the Commerce Proposed Rule to include certain transactions engaged in by an applicable taxpayer or an applicable taxpayer's affiliates (within the meaning of proposed § 231.101 as contained in the Commerce Proposed Rule).

Section 50(a)(6)(E) defines an applicable taxpayer to mean “any taxpayer who has been allowed a credit under section 48D(a) for any prior taxable year.” The proposed regulations provide that an applicable taxpayer also includes (i) any member of an affiliated group under section 1504(a) of the Code, determined without regard to section 1504(b)(3) of the Code, that includes a taxpayer who has been allowed a credit under section 48D(a) for any prior taxable year, (ii) any taxpayer who has made an election under section 48D(d)(1), (iii) any partnership or S corporation that has made an election under section 48D(d)(2), and (iv) any partner in a partnership (directly or indirectly through one or more tiered partnerships) or shareholder in an S corporation for which the entity has made an election under section 48D(d)(2) with respect to a credit determined under section 48D(a)(1) for any taxable year prior to the taxable year in which such entity entered into an applicable transaction.

If an applicable taxpayer engages in an applicable transaction before the close of the 10-year period beginning on the date such taxpayer placed in service any property eligible for the section 48D credit, then the applicable taxpayer is subject to an increase in tax under chapter 1 for the taxable year in which the applicable transaction occurs, as provided in section 50(a)(3). The proposed regulations generally address the amount of recapture required pursuant to section 50(a)(3). For example, if a taxpayer claims a section 48D credit on property it owns directly and also claims a section 48D credit on property placed in service by a partnership in which it is a partner, and that taxpayer subsequently enters into an applicable transaction within 10 years of claiming those section 48D credits, then the proposed regulations require that the taxpayer recapture all the credits claimed (that is, credits for property owned directly and through its investment in the partnership). The proposed regulations provide for the same result if, instead of the taxpayer entering into the applicable transaction, the partnership enters into the applicable transaction. Comments are requested on the appropriate amount of recapture required in the context of partnerships and S corporations, including the appropriateness of the recapture results in the above examples.

As noted in the Background section of this preamble, section 50(a)(3)(C) authorizes the Secretary to issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of the applicable transaction recapture rule, including regulations or other guidance providing for recordkeeping requirements or information reporting for purposes of administering the requirements of section 50(a)(3). The Treasury Department and the IRS are considering proposing record retention and information reporting requirements for applicable taxpayers in addition to those required under current law such that the IRS would have sufficient knowledge regarding proposed applicable transactions and applicable transactions the taxpayer has engaged in. For example, record retention or information reporting requirements may require an applicable taxpayer to maintain records or file information with the IRS related to any proposed or planned significant transaction for a period not ending earlier than the applicable period of limitations under section 6501 of the Code on assessment and collection of tax under chapter 1 with respect to the applicable taxpayer's return filed for the taxable year that includes the close of the 10-year period beginning on the date such taxpayer placed in service investment credit property that is eligible for the section 48D credit.

Additionally, the Treasury Department and the IRS are considering information reporting requirements that would require notifying the IRS regarding any planned significant transactions of the applicable taxpayer involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern, including any transaction the applicable taxpayer considers to be eligible for an exception under section 50(a)(3) or proposed § 1.50-2. For example, such requirements may require the applicable taxpayer to report accurate and complete information relating to the applicable transaction, including: (i) the name, employer identification number, and other identifying information regarding the applicable taxpayer that is proposing or engaging in a planned applicable transaction, and all other parties to the applicable transaction; (ii) the name and location of any business in a foreign country of concern where semiconductor manufacturing capacity may be materially expanded by the applicable transaction; (iii) a brief description of the planned applicable transaction, including the specific semiconductor products currently manufactured, the current production technology node and semiconductor manufacturing capacity, as well as the specific semiconductor products proposed for manufacture, the proposed production technology node, and proposed semiconductor manufacturing capacity; (iv) if the planned applicable transaction involves the material expansion of semiconductor manufacturing capacity that produces legacy semiconductors for which the products will predominately serve the market of a foreign country of concern, documentation as to where the final products incorporating the legacy semiconductors are to be used or consumed including the percentage of semiconductor manufacturing capacity or percentage of sales revenue that will be accounted for by use or consumption of the final goods in the foreign country of concern, and (v) if applicable, a statement explaining how the planned significant transaction meets the requirements of an exception to the applicable transaction recapture rule that involve the material expansion of semiconductor manufacturing capacity in proposed § 1.50-2. The Treasury Department and the IRS request comments on the ability of applicable taxpayers to comply with such requirements and what specific procedures should be considered to ensure that the IRS has sufficient information to determine whether an applicable taxpayer engages in an applicable transaction within the meaning of section 50(a)(3) and proposed § 1.50-2.

These regulations (§§ 1.48D-1 through 1.48D-6, and § 1.50-2) are proposed to apply to taxable years ending on or after the date the Treasury decision adopting these regulations as final regulations are published in the Federal Register . Taxpayers may rely on these proposed regulations for property placed in service after December 31, 2022, in taxable years ending before the date the Treasury decision adopting these regulations as final regulations is published in the Federal Register , provided the taxpayers follow proposed §§ 1.48D-1 through 1.48D-6, and § 1.50-2 in their entirety and in a consistent manner.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit.

For purposes of the PRA, the reporting burden associated with the collection of information in proposed § 1.48D-6(a)(1) and (2) will be reflected in the Paperwork Reduction Act Submissions associated with Form 3468 (OMB control number 1545-0155). The reporting burden associated with the collection of information in proposed § 1.48D-6(c) will be reflected in the Paperwork Reduction Act Submissions associated with Form 15396 (OMB control number pending). The reporting burden associated with the collection of information proposed in § 1.50-2(a) will be reflected in the Paperwork Reduction Act Submissions associated with Form 4255 (OMB control number 1545-0166). The IRS anticipates providing an opportunity to comment on any revisions to the forms through subsequent notice in the Federal Register and on www.irs.gov/draftforms.

In accordance with the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities. Although the rules may affect small entities, data are not readily available about the number of taxpayers affected. The economic impact of these regulations is not likely to be significant, because these proposed regulations substantially incorporate statutory changes by the CHIPS Act in establishing section 48D and amending section 50(a) and assist taxpayers in understanding section 48D and the changes to section 50(a). The proposed regulations will also make it easier for taxpayers to comply with section 48D and the changes to section 50(a). Notwithstanding this certification, the Treasury Department and the IRS welcome comments on the impact of these regulations on small entities.

Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). This proposed rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

The Administrator of the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, has determined that this proposed rule is not a significant regulatory action, as that term is defined in section 3(f) of Executive Order 12866. Therefore, OIRA has not reviewed this proposed rule pursuant to section 6(a)(3)(A) of Executive Order 12866 and the April 11, 2018, Memorandum of Agreement between the Treasury Department and the Office of Management and Budget (OMB).

Before the proposed regulations are adopted as final regulations, consideration will be given to comments that are submitted timely to the IRS as prescribed in the preamble under the ADDRESSES section. The Treasury Department and the IRS request comments on all aspects of the proposed regulations. Any comments submitted will be made available at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written comments. Requests for a public hearing are encouraged to be made electronically. If a public hearing is scheduled, notice of the date and time for the public hearing will be published in the Federal Register . Announcement 2020-4, 2020-17 IRB 1, provides that until further notice, public hearings conducted by the IRS will be held telephonically. Any telephonic hearing will be made accessible to people requesting a reasonable accommodation.

Guidance cited in this preamble is published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of these proposed regulations is Jason P. Deirmenjian Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, the Treasury Department and the IRS propose to amend 26 CFR part 1 as follows:

The Department published a proposed amendment to prohibited transaction class exemption 84-14 (the Proposed QPAM Exemption Amendment) on July 27, 2022, with a 60-day comment period that was set to expire on September 26, 2022. 1 The Department received two letters requesting an extension of the comment period after the Department published the Proposed QPAM Exemption Amendment. 2 After carefully considering the extension request, the Department extended the initial comment period for an additional 15 days until October 11, 2022 in a Federal Register Notice published on September 9, 2022  3 and received 31 comment letters.

In that same Federal Register notice of September 9, 2022, the Department announced on its own motion that it would hold a virtual public hearing on November 17, 2022 (and if necessary, on November 18, 2022), to provide an opportunity for all interested parties to testify on material information and issues regarding the Proposed QPAM Amendment. 4 The Department received 13 requests to testify at the hearing. The notice also indicated the Department would: (1) reopen the public comment period from the hearing date until approximately 14 days after the Department publishes the hearing transcript on EBSA's website; and (2) publish a Federal Register notice announcing that it has posted the hearing transcript to EBSA's website and providing the date the reopened comment period closes.

The Department held the virtual public hearing on November 17, 2022 and reopened the comment period on the hearing date. 5 The reopened comment period in connection with the hearing closed on January 6, 2023, and the Department received 150 additional comments. The hearing transcript may be accessed here: https://www.dol.gov/agencies/ebsa/laws-and-regulations/ rules-and-regulations/public-comments/1210-ZA07 .

The Department understands that at least one interested party may have additional information to provide the Department that was not submitted by the comment deadline of January 6, 2023. Therefore, the Department is reopening the comment period to provide an opportunity for all interested parties to submit additional information. The Department encourages interested parties to submit comments on the proposed amendment before the additional reopened comment period closes on April 6, 2023. All written comments should be identified by Z-RIN 1210 ZA07 and sent to the Office of Exemption Determinations through the Federal eRulemaking Portal: https://www.regulations.gov at Docket ID number: EBSA-2022-0008. Please follow the instructions for submitting comments.

All comments on the proposed amendment and requests to testify at the hearing are available to the public without charge online at https://www.regulations.gov at Docket ID number: EBSA-2022-0008 and https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-ZA07 . They also are available for public inspection in EBSA's Public Disclosure Room, U.S. Department of Labor, Room N-1513, 200 Constitution Avenue NW, Washington, DC 20210.

On November 11, 2022, the Kent Narrows Racing Association (KNRA) notified the Coast Guard that it will be conducting the Harford County Spring Nationals Inboard Hydroplane Race on May 13, 2023 and May 14, 2023 from 9 a.m. to 7 p.m. both days. The high-speed power boat racing event consists of approximately 60 participating racing boats—including composite and wood hull inboard hydroplanes—12 to 28 feet in length. The vessels will compete along a marked, approximately 1-mile long course located on the Bush River and Otter Point Creek, at Flying Point Park, between Perryman, MD and Edgewood, MD. Hazards from the power boat racing event include the risks of injury or death resulting from near or actual contact among participant vessels and waterway users if normal vessel traffic were to interfere with the event. The COTP, (Commander of the Coast Guard Sector Maryland-National Capital Region) has determined that potential hazards associated with the power boat races would be a safety concern for anyone intending to participate in this event and for vessels that operate within the specified waters of the Bush River and Otter Point Creek.

The purpose of this rulemaking is to protect event participants, non-participants, and transiting vessels before, during, and after the scheduled event. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70041.

The COTP is proposing to establish a special local regulations from 9 a.m. on May 13, 2023, through 7 p.m. on May 14, 2023. The regulations would be enforced from 9 a.m. to 7 p.m. on May 13, 2023 and from 9 a.m. to 7 p.m. on May 14, 2023. The regulated area would cover all navigable waters of the Bush River and Otter Point Creek, shoreline to shoreline, bounded to the north by a line drawn from the western shoreline of the Bush River at latitude 39°21′15″ N, longitude 076°14′39″ W and thence eastward to the eastern shoreline of the Bush River at latitude 39°27′03″ N, longitude 076°13′57″ W, and bounded to the south by the Amtrak Railroad Bridge, across the Bush River at mile 6.8, between Perryman, MD and Edgewood, MD. These boundaries are based on a detailed course map for the event which the Coast Guard received from the sponsor on March 7, 2023.

This proposed rule provides additional information about zones within the regulated area, their definitions, and the restrictions that would apply to mariners. These zones include “Race Area,” “Buffer Zone,” and “Spectator Area.”

The proposed duration of the special local regulation and size of the regulated area are intended to ensure the safety of life on these navigable waters before, during, and after the high-speed power boat racing event, which is scheduled to take place from 10 a.m. to 6 p.m. on May 13, 2023, and from 10 a.m. to 6 p.m. on May 14, 2023. The COTP, and the Coast Guard Event Patrol Commander (or “Event PATCOM,” a commissioned, warrant, or petty officer of the U.S. Coast Guard who has been so designated by the COTP) would 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 would 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 Harford County Spring Nationals participants and vessels already at berth, a vessel or person would be required to get permission from the COTP or Event PATCOM before entering the regulated area. Vessel operators would 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 would 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 a safe speed that minimizes wake. A person or vessel not registered with the event sponsor as a participant or assigned as official patrols would be considered a spectator. Official Patrols are any vessel assigned or approved by the COTP with a commissioned, warrant, or petty officer onboard 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 would be allowed to enter the regulated area or pass directly through the regulated area as instructed. Vessels would be required to operate at a safe speed, one that minimizes wake while within the regulated area in a manner and that would not endanger event participants or any other craft. A spectator vessel must not loiter within the navigable channel while present within the regulated area. Only participant vessels and official patrol vessels would be allowed to enter the race area. The Coast Guard would 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. The regulatory text we are proposing appears at the end of this document.

We developed this proposed 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 NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size and duration of the regulated area, which would impact a small designated area of the Bush River for a total of 20 enforcement hours. Although this regulated area extends across a large portion of the waterway, the rule would allow vessels and persons to seek permission to enter the regulated area, and vessel traffic able to do so safely would be able to transit the regulated area as instructed by the Event PATCOM. Such vessels must operate at a safe speed that minimized wake and not loiter within the navigable channel while within the regulated area. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the status of the regulated area.

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 certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the regulated area may be small entities, for the reasons stated in IV. A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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 proposed rule. If the proposed 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. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would 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 proposed 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 proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would 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. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

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 proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.

We have analyzed this proposed 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 made a preliminary determination 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 proposed 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 for 20 total enforcement hours. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov . To do so, go to https://www.regulations.gov, type USCG- 2023-0168 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 100 as follows:

North Carolina adopted 15 NCAC 02D .0540, Particulates from Fugitive Non-Process Dust Emission Sources (hereinafter Rule 02D .0540), in 1998 to regulate excess non-process fugitive dust emissions generated from activities associated with four specified source categories ( i.e., hot mix asphalt plants; mica or feldspar processing plants; sand, gravel, or crushed stone operations; and light weight aggregate processes). On November 10, 1999, EPA incorporated this particulate matter fugitive emission control regulation into the North Carolina SIP at Section .0500—Emission Control Standards under Subchapter 2D—Air Pollution Control Requirements of the North Carolina SIP. 1 See 64 FR 61213. Later, on January 31, 2008, North Carolina submitted amendments to EPA that would make the rule applicable to all fugitive dust emissions instead of only non-process fugitive dust emissions. See 84 FR 33850 (July 16, 2019). Additionally, 15 NCAC 02D .0540 was renamed Particulates from Fugitive Dust Emission Sources. Id. EPA approved the January 31, 2008, SIP submission on July 16, 2019. On September 10, 2021, NCDAQ submitted another revision to Rule 02D .0540 that includes several changes. 2 3 EPA is proposing to approve these changes because they are consistent with CAA requirements, including the requirement that they would not interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable CAA requirement. EPA's rationale for proposing approval is described in more detail in Section II of this notice of proposed rulemaking (NPRM).

The September 10, 2021, SIP submittal revises Rule 02D .0540 by modifying several definitions, clarifying its applicability requirements, adjusting the requirement for fugitive dust control plan submissions, and making minor language and formatting.

In the September 10, 2021, submission, two definitions in paragraph .0540(a) have been modified substantively. Other definitions have only minor, non-substantive language changes that do not alter the meaning of the rule as well as formatting changes. 4 All definitions have been reorganized in alphabetical order. The first definition with a substantive change is “Fugitive dust emissions.” This revised definition removes the phrase “from process operations” from the definition to better align the rule with the State's intent to make the rule applicable to all fugitive dust emissions at subject facilities. 5 The removal of this limiting language expands applicability to both process and non-process operations, thus increasing the rule's scope. The revision also substantively modifies the definition of “Substantive complaints.” This definition is revised to clarify what kind of physical evidence is necessary to constitute a substantive complaint and to clarify that verification is provided by NCDAQ. The revision now requires physical evidence “of excess fugitive dust emissions” and identifies NCDAQ as the verifying entity. EPA finds this change acceptable because it resolves ambiguity by clarifying what evidence is required to develop a substantive complaint.

Paragraph .0540(b) is revised with one substantive change and some minor non-substantive changes. The substantive change addresses the limitation that Rule .0540 does not apply to land disturbing activities generally. The revision cabins that limitation by narrowing the exemption to apply only to those land disturbing activities that are not required to obtain a permit pursuant to 15A NCAC 02Q or that are not subject to a requirement under 15A NCAC 02D. 6 Previously, even those land disturbing activities that did require a permit pursuant to 15 NCAC 02Q or were subject to a requirement pursuant to 15 NCAC 02D were exempt. EPA finds this change acceptable as the language is SIP strengthening since it narrows an exemption to Rule .0540. In addition to this substantive change, the revision includes some minor non-substantive changes to paragraph .0540(b), such as minor language choice modifications and changes to the formatting of rule titles.

Paragraphs .0540(c) and (d) are primarily revised with minor and non-substantive changes, primarily dealing with word choice, such as changing the word “under” to the phrase, “pursuant to.” One other minor change the revision makes is to add a cross-reference to “Paragraph (g)” in Paragraph .0540(d)(3). This cross-reference clarifies when the Director's approval of a fugitive dust control plan is complete and does not substantively change the requirements of the rule. One substantive change in the revision removes the word “non-process” from paragraph .0540(d) to increase the rule's scope by making it applicable to both process and non-process operations. Another substantive change removes the word “immediate” from Paragraph .0540(d)(1) with respect to the description of “measures” used to abate fugitive emissions. Previously, this subparagraph required that owners/operators of applicable sources submit a report to the Director that included what immediate measures could be used to abate fugitive emissions if a substantive complaint was filed. The change makes the term “measures” more inclusive as owners/operators will now need to include immediate and non-immediate measures in the report.

Paragraph .0540(e) is revised with two substantive changes. 7 The first change occurs at the beginning of paragraph .0540(e), which now mandates that the Director require the owner or operator of a facility subject to paragraph (c) of the rule to submit a fugitive dust control plan if either ambient air quality measurements or dispersion modeling shows excess fugitive dust emissions cause the ambient air quality standard for particulates to be exceeded, or if NCDAQ observes excess fugitive dust emissions beyond the property boundary. The previous version of paragraph (e) gave the Director the discretion to require such a plan. The revision is SIP strengthening as the Director's ability to require the submittal of a fugitive dust control plan is no longer discretionary. The second change removes the word “non-process” from paragraph .0540(e) to increase the rule's scope by making it applicable to both process and non-process operations. Paragraph .0540(e) also includes other minor changes to wording which do not alter the meaning of the provision.

Next, paragraph .0540(g), which identifies the findings that the Director must make to approve a fugitive dust control plan, includes several wording changes. Subparagraph (g)(2) currently requires a finding that the proposed schedule to implement the fugitive dust plan required in subparagraph (f)(3) will reduce fugitive emissions “in a timely manner.” The submittal revises this requirement by removing the phrase “in a timely manner.” EPA is proposing to approve this change because paragraph .0540(c) continues to prohibit visible emissions in excess of that allowed under paragraph (e) and because the phrase “in a timely manner” was discretionary and never defined. Paragraph (e) requires a dust control plan if ambient air quality measurements or dispersion modeling show a violation or potential violation of the ambient air quality standards for particulates or if NCDAQ observes excess fugitive dust emissions from the facility beyond the property boundary for six minutes in any one hour using Reference Method 22 in 40 CFR part 60, Appendix A-7. Pursuant to paragraph (g), the Director must approve the plan if, among other things, the methods used to control fugitive dust emissions prevent fugitive dust emissions from causing or contributing to a violation of the ambient air quality standards for particulates. Paragraph (g) also includes non-substantive wording changes.

EPA has preliminarily determined that the changes to the regulations above are consistent with CAA requirements, including the requirement that they would not interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable CAA requirement. Therefore, EPA is proposing approval of the changes to these regulations.

In this document, EPA is proposing to include in a final rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference 15A NCAC Subchapter 02D .0540, Particulates from Fugitive Dust Emission Sources, state effective on September 1, 2019, as discussed in sections I. and II. of this preamble. 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).

EPA is proposing to approve the September 10, 2021, SIP revision to incorporate various changes to Rule 02D .0540, Particulates from Fugitive Dust Emission Sources. EPA is proposing to approve these changes for the reasons discussed above.

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 they meet the criteria of the CAA. This action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed 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.

Authority: 42 U.S.C. 7401 et seq.

Throughout this document whenever “we,” “us,” or “our” is used, it is intended to refer to the EPA. This Supplementary Information section is arranged as follows:

Each state has a State Implementation Plan (SIP) containing the control measures and strategies to attain and maintain the national ambient air quality standards (NAAQS) established by the Environmental Protection Agency (EPA) for the criteria pollutants (carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, sulfur dioxide). The SIP contains such elements as air pollution control regulations, emission inventories, attainment demonstrations, and enforcement mechanisms.

Washington adopted a Smoke Management Plan as part of the Washington SIP to reduce emissions that contribute to visibility impairment. Wildfire has had a serious impact on Washington during the past decade with many large-scale wildfires impacting air quality. Prescribed fires  1 have been increasingly used as a land management tool to reduce the likelihood of catastrophic wildfires by reducing the buildup of unwanted fuels and strengthening an area's ecosystems. This controlled application of fire to wildland fuels, is done under specific environmental conditions and protocols that typically call for a prescribed fire to be confined to a predetermined area and limit the fire to an intensity and scale required to attain planned forestland management objectives. The State anticipates increasing the application of prescribed fire in response to the increasing threat of wildfires in Washington. The state intends to balance the need to increase the use of prescribed fire as a forest management tool while minimizing smoke impacts through the implementation of policies and processes outlined in Washington's Smoke Management Plan (SMP).

EPA first approved Washington's SMP into the Washington SIP in 1987 (52 FR 16243, May 4, 1987) as part of Washington's visibility protection plan. Washington updated and EPA approved the SMP in 1998 (1998 SMP) and 2003 respectively (68 FR 34821, June 11, 2003). In 2016, the Washington State Legislature provided funding to update the 1998 SMP and the Legislature made changes to statutes affecting the SMP in 2019 and 2021. After revising rules to reflect the updated legislation, Washington updated the SMP to reflect the statutory and regulatory changes. On August 10, 2022, following a state public comment process, the Washington State Department of Ecology (Ecology) submitted the updated SMP, including the statutes and regulations relied on in the Plan, to EPA for approval (2022 SMP).

Washington's SMP establishes a program to allow silvicultural burning on forestland while protecting air quality. Although Ecology is the primary delegated air quality agency for the state and submitted the Washington SMP to EPA for approval, Washington's Department of Natural Resources (DNR) has been and continues to be the state agency with the responsibility for regulating smoke from silvicultural burning on forestland. See Revised Code of Washington (RCW) 70A.15.5120 and RCW 70A.15.5130. The Washington SMP is therefore primarily implemented by DNR with assistance from Ecology.

DNR oversees prescribed silvicultural burning in Washington to improve fire dependent ecosystems, mitigate wildfire potential, decrease forest susceptibility to insects or disease, and otherwise enhance forest resiliency to fire. The purpose of the SMP is to coordinate and facilitate the statewide regulation of prescribed, silvicultural (forestland) burning on lands under the authority of DNR, and on unimproved, federally managed forestlands and participating tribal lands. The SMP applies to all persons, landowners, companies, state and Federal land management agencies, and others who conduct silvicultural burning in Washington State. The SMP does not apply to agricultural burning, outdoor burning that occurs on improved property, or tribal lands described in Section VI of this document.

For purposes of discussing the Washington SMP, prescribed fires fall into three main categories based on the size of the burn: “rule burns,” “small burns,” and “large burns.” The approval process for burns under the SMP  2 also varies based on whether the burn is a “multiple day burn” and whether the burn is conducted in an urban growth area.

“Rule burns” are generally no more than ten feet in diameter and are always limited to one fire at a time. They include burning of hand-built piles for recreational purposes, as well as fuels reduction, or other silvicultural purposes. Rule burns may also be restricted to no more than 4 feet in diameter depending on time of year and the county within which the burning occurs. 3 DNR has authority over rule burns, but no written permit or site-specific burn approval or decision is required under either the 1998 SMP or 2022 SMP for rule burns, provided the burns comply with minimum requirements for all burns listed in WAC 332-24-205  4 and the specific provisions for rule burns in WAC 332-24-211. No changes have been made to WAC 332-24-211, since EPA approved it into the Washington SIP in 2003. The “Scope” sections in both the 1998 SMP and 2022 SMP state that the SMP does not apply to burning done “by rule” (“rule burns”).

“Small burns” require site-specific written permits and are defined under the 2022 SMP as fires that will consume less than 100 tons of forest debris  5 in a 24-hour period. The size threshold is extended to 300 tons in “low-risk areas.” “Low risk areas” are generally remote areas and are defined by DNR using the criteria described in Appendix 10 of the 2022 SMP. Burners intending to conduct small burns are required to obtain a site-specific written permit. 6 DNR conditions such permits based on the proposed locations and may include specific instructions in the permits, such as limits on wind directions under which the burns may be conducted. Burners are required to follow all conditions in their burn permits. Prior to igniting a small burn, the burner must also call 1-800-323 BURN and follow the instructions that apply for the day and location of the burn being conducted. Burners cannot ignite small burns if an air quality episode is declared, or conditions of impaired air have been declared by Ecology or the local clean air authority as provided under RCW 70A.15.5140 and WAC 332-24-205(5). DNR may also suspend small burns on private and state lands due to high fire danger (Federal officials manage fire danger on Federal lands). In contrast to large burns, small burns conducted outside of urban growth areas do not require a site-specific burn decision just prior to the burn. Small burns within urban growth areas are not treated the same as other small burns but instead must undergo the same permitting process as large burns.

“Large burns” are defined as fires that will consume 100 tons or more in a 24-hour period (300 tons or more in low risk areas). Like small burns, large burns require site-specific permits; burners must follow all conditions in their burn permits; ignition is prohibited if an air quality episode is declared or conditions of impaired air have been declared by Ecology or the local clear air authority as provided under RCW 70A.15.5140 and WAC 332-24-205(5); and DNR may suspend large burns on private and state lands due to high fire danger (Federal officials manage fire danger on Federal lands). The distinction here from small burns outside of UGA's is that prior to igniting a large burn outside of UGA's, the burner must contact DNR directly and request authorization to ignite the large burn on a particular day. The SMP identifies eight specific burn approval criteria to be met before DNR decides whether ignition will be authorized for large burns (and small burns inside urban growth areas) and tasks DNR wildland fire management division managers with assessing the potential for smoke intrusions. To inform decisions, DNR utilizes numerous tools as well as site- and temporal-specific considerations, including, but not limited to, current and forecasted weather conditions, air quality, fuel moisture, firing techniques, and availability of suppression forces.

“Multiple day burns” are subject to the same approval criteria used to approve large burns, regardless of burn size. Additional information and actions are required from burners before DNR will approve a multiple day burn. Those additional requirements are in the SMP in the Approval Process for Multiple Day Burns section and include, but are not limited to, notifying DNR at least three months before the proposed start of the burn, providing a rationale for why the burn cannot be accomplished in single day increments, providing communication and public notification plans, obtaining spot forecasts for each day of the burn, identifying what monitoring resources will be utilized, and participating in daily coordination calls.

Although the 2022 SMP burn approval criteria prohibit authorizing burns that would cause an exceedance of air quality standards, DNR's goal as stated in the SMP is based on levels below the 35 µg/m 3 24-hour NAAQS for PM 2.5 . 7 This is a new element of the 2022 SMP. Under the 2022 SMP, DNR now considers exceeding a PM 2.5 level of 20.5 µg/m 3 (on a 3-hour rolling average) a smoke “intrusion” and unacceptable for purposes of the SMP. 8 The 2022 SMP sets forth new procedures to avoid, detect, and respond to smoke intrusions. These procedures include, but are not limited to:

• Incorporating consideration of potential intrusions when making burn decisions;

• Using available resources such as monitors and webcams to assess the level of smoke in potentially impacted communities;

• Reporting and documenting where and when smoke intrusions occur;

• Issuing health advisories as needed and collaborating with Ecology, Washington Department of Health, and local clean air authorities;

• Requiring burners to submit intrusion reports when DNR determines one has occurred; and

• Sharing all data and final intrusion reports with applicable partners and regulators, including Ecology, local clean air authorities, state and local health departments, and EPA.

In the 2022 SMP, DNR commits to reviewing the SMP every five years and revising the plan or procedures as necessary as a result of that review. The SMP specifies that plan revisions will adopt the same review procedures used for the original adoption. The EPA notes that any revision to the SMP would not be part of the Washington SIP unless submitted to and approved by the EPA as provided in 42 U.S.C. 7410.

As with its previous SMP, Washington's 2022 SMP submittal includes an extensive discussion of how the state implements its smoke management program as well as the statutes and regulations that apply to prescribed burning on forest land in Washington. Washington states that it revised its SMP to better regulate burning while reducing fuel loading, restore forest ecosystems, and reduce the risk of catastrophic wildfire while continuing to protect air quality. The revisions include changes to both the main body of the SMP as well as state statutes and regulations that apply to prescribed burning and are included in Appendix 7 of the submittal. 9

The bulk of revisions in the 2022 SMP are non-substantive from a SIP approvability perspective and include reorganizing the order of SMP sections and content; updating wording for consistency and more current vernacular; and updating citations to reflect recodification of applicable statutes and rules. Washington also revised the SMP to add or clarify recordkeeping, reporting, and notification requirements for prescribed fires that may later qualify as an “exceptional event” under 40 CFR 50.14. This is also a non-substantive change to Washington's SMP because EPA is not approving or disapproving this SMP as meeting the requirements of EPA's exceptional event guidance. 10

The 2022 SMP also contains several substantive revisions to the SMP. Those revisions affect burn decision timing, burn approval criteria, summer weekend burning, and burning in urban growth areas. Washington included in the submittal information to demonstrate that these revisions to the SMP will not interfere with any applicable requirement concerning attainment or reasonable further progress or any other applicable requirement of Title I of the CAA. See 42 U.S.C. 7410(l). The most relevant pollutants for Washington's analysis of visibility and interference with NAAQS attainment are PM 2.5 , PM 10 , and ozone due to the nature of prescribed fire emissions and because EPA revised the PM 2.5 and ozone NAAQS resulting in more stringent standards (78 FR 3085, January 15, 2013, and 80 FR 65292, October 26, 2015) since EPA last approved Washington's SMP. 11 The substantive changes to the 2022 SMP and the demonstration supporting the changes are discussed below.

Under the current approved 1998 SMP, “large burns” require that DNR issue a site-specific smoke management decision (permission to ignite) the morning of the day the fire is to be ignited. Under the 2022 SMP, if a burner submits a request to DNR by noon the “day prior” to the planned ignition, DNR must issue a decision by 4:00 p.m. that same day—about 15 hours earlier than what would be expected under the 1998 SMP. The result of this change is reliance on products, primarily meteorological forecasts and models that are produced earlier and, due to advances in science and technology, are more reliable than what would have been available when the 1998 SMP was created.

Washington's demonstration included a technical analysis  12 of forecast models used for day of versus day prior to ignition in the 2022 SMP. The technical analysis of the revised protocols shows no appreciable loss in forecast accuracy and indicates DNR would likely make the same operational burn decision regardless of whether the decision is rendered by 4:30 p.m. on the day prior to ignition or 8:00 a.m. on the day of ignition. The analysis also shows that, in the season when most burn decisions are made (fall), model runs the day prior to a burn have slightly smaller wind speed forecast errors than the day-of-burn model runs (wind speed is a significant factor for burn decisions). This lends confidence that a status-quo or better burn decision will be made.

In addition, this burn decision timing change is not a complete departure from the procedure under the 1998 SMP. Burners seeking day prior burn decision approval under the 2022 SMP must submit their request by noon the day prior to ignition. Failure to do so may result in a burn decision on the day of ignition, instead of by 4:30 p.m. on the day prior to ignition. Burners may still request a burn decision on the planned day of ignition.

More importantly, there are protections in the burn approval process in the 2022 SMP based on air quality on the morning of ignition. 13 Specifically, the 2022 SMP states that on the day of the burn “If the burn was approved, the Smoke Management Section will verify weather conditions have not changed so much as to result in a violation of the Approval Criteria, by 7:30 a.m. If weather conditions have unexpectedly changed burners will be notified and advised that they may have to extinguish, and therefore are advised to not burn that location.” This 2022 SMP weather verification requirement applies to large burns and all burns in urban growth areas, regardless of size.

For these reasons, including the technical demonstration supporting this change, we are proposing to find that attainment and maintenance of the NAAQS are unlikely to be affected by changes to the burn decision timing.

As under the 1998 SMP, the 2022 SMP has eight approval criteria. All eight were updated to include state or Federal air quality regulation citations, which improve clarity for both regulators and the regulated community as compared to the 1998 SMP, which did not include citations. There are no substantive changes to approval criteria 3, 4, 6, and 7. Washington revised approval criteria 2 to reflect the specific statutory language authorizing the condition and the corresponding citation. 14

The most substantive changes are to approval criteria 1, 5, and 8. Under the 1998 SMP, approval criteria 1 considered whether there was a likelihood of an “intrusion” of visible smoke, whereas under the 2022 SMP, this criterion was revised to the likelihood of an exceedance of state air quality standards, which include the NAAQS, based on the requirement in RCW 70A.15.5140. The 2022 SMP also includes a new requirement for DNR and burners to monitor for and address intrusions of smoke due to silvicultural burning above 22.5 ug/m3 of PM 2.5 , a level significantly below the 35 ug/m3 PM 2.5 NAAQS exceedance level. With this new requirement, combined with the revision to rely on the NAAQS exceedance level, criteria 1 is more protective in the 2022 SMP than the 1998 SMP. Approval criteria 5, previously a non-air quality specific reference to endangered species protections already in Washington State's Forest Practices Rule and Regulations, now prohibits burning in areas where Federal or State air quality standards are exceeded for any criteria pollutant, with limited exceptions for silvicultural burning to improve or maintain fire dependent ecosystems for rare plants or animals in specified areas. This is more protective than the existing criteria. Approval criteria 8 was revised by replacing language regarding smoke dispersion thresholds with criteria based on whether a declared stage of impaired air quality has been called or is likely to be called in the next 24 hours, based on coordination among DNR, Ecology, and local air agencies. 15 DNR still evaluates smoke dispersion under the 2022 SMP when assessing meteorological data, forecasting models, and permitting data to evaluate whether approval criteria 1, 2, and 3 have been met. 16 For these reasons, we are proposing to find that attainment and maintenance of the NAAQS are unlikely to be affected by the revisions to the eight approval criteria.

The 1998 SMP contains a statewide prohibition on large burns from midnight Thursday through midnight Sunday between June 15 and October 1 and on the holidays of July Fourth and Labor Day. This prohibition is commonly referred to as the “summer weekend burning prohibition.” The summer weekend burning prohibition only applies to large burns under the 1998 SMP. Moreover, all prescribed burns are, and will continue to be, severely limited for much of the period covered by the 1998 SMP summer weekend burning prohibition regardless of size. This is because prescribed burns during this period are frequently limited due to high occurrences of inconducive weather, fuel conditions, preparedness levels and other safety constraints. 17

Although the 2022 SMP does not retain the summer weekend burning prohibition, air quality protections are in place for the newly allowed burning because removing the prohibition only affects large burns, which require site-specific DNR smoke management decisions before ignition may occur. 18 The 2022 SMP requires DNR's smoke management decisions to be protective of air quality through the inclusion of the Approval Criteria for Large Burns and All Burns within UGAs. For these reasons, we are proposing to find that attainment and maintenance of the NAAQS are unlikely to be affected by removal of the summer weekend burning prohibition.

In 2019, the Washington State Legislature amended state law  19 to allow previously prohibited prescribed burning in urban growth areas. Unlike the summer weekend prohibition, the newly allowed burning is not burn size specific. The 2022 SMP includes allowances for prescribed “Urban Growth Area (UGA) Burns” and defines them as any “fire that takes place wholly or in part within a UGA as defined by the county.”  20 Regardless of consumable tonnage, urban growth area burns require a site-specific DNR smoke management decision, a documented test fire and a spot weather forecast. 21 This site-specific decision follows the same approval criteria used for making site-specific decisions for large burns. The criteria include requirements that approval to ignite be denied if there is a likelihood of an air quality standard exceedance, as well as other air quality considerations. 22 For these reasons, we are proposing to find that attainment and maintenance of the NAAQS are unlikely to be affected by the newly allowed urban growth area burning.

As discussed above, the 1998 SMP that is currently approved in the Washington SIP was approved as part of Washington's regional haze and visibility protection plan. 68 FR 34821 (June 11, 2003). EPA has recognized that prescribed fires conducted for the purpose of ecosystem health and public safety in accordance with basic smoke management practices are generally consistent with the goal of making reasonable progress toward natural visibility in mandatory class I areas because prescribed fires are most often conducted to improve ecosystem health and to reduce the risk of catastrophic wildfires, both of which can result in net beneficial impacts on visibility. 23 EPA proposes to find that none of the substantive changes to Washington's SMP discussed above interfere with reasonable progress towards natural visibility in mandatory class I areas, as laid out in Washington's regional haze and visibility SIP. As under the 1998 SMP, approval to burn will be denied if burning will not protect the public welfare, preserve visibility, protect scenic, aesthetic, historic, and cultural values, and prevent air pollution problems that interfere with the enjoyment of life, property, or cultural attractions or if burning will not comply with the Federal Clean Air Act regarding visibility protection of Federal Class I Areas.

We have reviewed the submitted SIP revisions and propose to find that the revisions meet the requirements of the CAA for approval. Based on our review of Washington's demonstration, we propose to conclude that the revisions to Washington's SIP will not interfere with any applicable requirement concerning attainment, reasonable further progress, or any other applicable requirement of the CAA. Under CAA section 110(k), EPA is proposing to approve, and incorporate by reference, into the Washington SIP at 40 CFR part 52, subpart WW the following statutes and regulations in Appendix 7 to the 2022 SMP that provide the authority for implementation and enforcement of the plan, as well as the permits that authorize burning under the 2022 SMP:

• RCW 52.12.103, Burning Permits—Issuance—Contents (state effective March 27, 1984);

• RCW 52.12.104, Burning Permits—Duties of permittee (state effective March 27, 1984);

• RCW 76.04.005, Definitions. (1) “Additional fire hazard” (5) “Department protected lands” (9) “Forest debris” (11) “Forestland” (12) “Forestland owner,” “owner of forestland,” “landowner,” or “owner” (13) “Forest material” (15) “Landowner operation” (18) “Participating landowner” (20) “Slash” (21) “Slash burning” (23) “Unimproved lands” (state effective July 24, 2015);

• RCW 76.04.205, Burning Permits—Civil Penalty (state effective July 25, 2021);

• RCW 70A.15.1030, Definitions. (21) “Silvicultural burning” (state effective June 11, 2020);

• RCW 70A.15.5000, Definition of “outdoor burning” (state effective July 26, 2020);

• RCW 70A.15.5010, (2) Outdoor burning—Fires prohibited—Exceptions (state effective June 11, 2020);

• RCW 70A.15.5020, Outdoor burning—Areas where prohibited—Exceptions—Use for management of storm or flood-related debris—Silvicultural burning, except (3) (state effective June 11, 2020);

• RCW 70A.15.5120, Burning permits for abating or prevention of forest fire hazards, management of ecosystems, instruction on silvicultural operations—Issuance—Fees (state effective June 11, 2020);

• RCW 70A.15.5130, Silvicultural forest burning—Reduce statewide emissions—Exemption—Monitoring program (state effective July 28, 2019);

• RCW 70A.15.5140, Burning permits for abating or prevention of forest fire hazards, management of ecosystems, instruction on silvicultural operations—Conditions for issuance and use of permits—Air quality standards to be met—Alternate methods to lessen forest debris (state effective June 11, 2020);

• RCW 70A.15.5150, Cooperation between department of natural resources and state, local, or regional air pollution authorities—Withholding of permits (state effective June 11, 2020);

• RCW 70A.15.5190, Outdoor burning allowed for managing storm or flood related debris (state effective June 11, 2020);

• WAC 332-24-201, Burning Permit Program—Requirements and Exceptions (state effective June 30, 1992);

• WAC 332-24-205, General rules—minimum requirements for all burning, except (13) (state effective November 22, 2019);

• WAC 332-24-211, Specific rules for small fires not requiring a written burning permit (solely for the purpose of establishing the size threshold for burns covered by the Smoke Management Plan) (state effective June 30, 1992);

• WAC 332-24-217, Burning permit—penalty (state effective June 30, 1992);

• WAC 332-24-221, Specific rules for burning that requires a written burning permit (state effective February 1, 2012).

In addition, the EPA is proposing to approve, but not incorporate by reference, into the Washington SIP at 40 CFR part 52, subpart WW the Department of Natural Resources Smoke Management Plan, state effective May 10, 2022 (including all Appendices to such plan), as such plan applies to silvicultural burning regulated by DNR.

We note that, as provided in 40 CFR 52.2476 of the Washington SIP, any variance or exception to the 2022 SMP granted by DNR or Ecology must be submitted by Washington for approval to EPA in accordance with the requirements for revising SIPs in 40 CFR 51.104 and any such variance or exception does not modify the requirements of the federally approved Washington SIP until approved by EPA as a SIP revision.

In this document, EPA is proposing to include in a final rule, regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the provisions described in Section IV of this preamble. EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov and at EPA Region 10 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed 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 proposed 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 Clean Air Act; and

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

The SIP is not approved to apply on any Indian reservation land in Washington except as specifically noted below and is also not approved to apply in any other area where the 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. Washington's SIP is approved to apply on non-trust land within the exterior boundaries of the Puyallup Indian Reservation, also known as the 1873 Survey Area. Under the Puyallup Tribe of Indians Settlement Act of 1989, 25 U.S.C. 1773, Congress explicitly provided state and local agencies in Washington authority over activities on non-trust lands within the 1873 Survey Area. Consistent with EPA policy, the EPA provided a consultation opportunity to potentially affected tribes in a letter dated May 24, 2022.

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

The Wisconsin Department of Natural Resources (WDNR) submitted a SIP revision on July 13, 2015, addressing infrastructure SIP requirements for the 2012 PM 2.5 NAAQS. EPA proposed approval of most elements of the submission on February 19, 2016 (81 FR 8460). The public comment period for our proposed rulemaking closed on March 21, 2016. EPA received two adverse comment letters.

One commenter stated that “Compounding the issue of insufficient monitoring is the fact that the WDNR does not require industrial facilities to provide and report their annual PM 2.5 emissions like they do for PM and PM 10 . Each facility is in the best position to know their actual emissions from the previous year, so not requiring a report at the end of the year makes it even more difficult to identify any violations. The information needed to make that assessment would need to be sought out independently for each facility in the entire state, which requires a great deal more work than reading a report and comparing it to the limit.” EPA agreed that 110(a)(2)(F) was not satisfied in the proposed rule.

Once the final approval of most elements and deferred action of element F was published, WDNR began the rule making process to update NR 400.03, 438, and 484.06(4) Wis. Adm. Code and establish PM 2.5 reporting requirements that satisfy the Federal Air Emissions Reporting Requirements (AERR) rule. WDNR held a public comment period on the revised rules from September 27, 2021, through November 5, 2021, and held a public hearing on October 29, 2021. Several adverse comments were received on the additional costs that would be incurred by sources to report annual emissions from units, operations and activities with de minimus emissions that are not required to be reported for permitting, and concerns with the specificity of the record-keeping requirements. As discussed further below, WDNR broadened language on record-keeping requirements and included exemptions for de minimus reporting requirements in the final rule submitted to EPA in response to comments received.

WDNR made submissions on July 13, 2015, August 8, 2016, and November 26, 2018, to address infrastructure SIP requirements for the 2012 PM 2.5 NAAQS  1 and EPA finalized approval of most elements for the 2012 PM 2.5 NAAQS on December 27, 2016 (81 FR 95043). Further, EPA proposed approval of most elements for the 2015 ozone NAAQS on September 30, 2020 (85 FR 61673). EPA did not take action on Wisconsin's satisfaction of the infrastructure requirements of CAA section 110(a)(2)(F) for the 2012 PM 2.5 or 2015 ozone NAAQS. This action addresses section 110(a)(2)(F), also referred to as “element F”, which pertains to stationary source monitoring and reporting requirements for the 2012 PM 2.5 and 2015 ozone NAAQS. Approving this element would lead to full approval of Wisconsin's 2012 PM 2.5 NAAQS infrastructure SIP.

On August 3, 2022, WDNR submitted to EPA Board Order AM-31-19 (Rule AM-31-19), effective in the Wisconsin Administrative Register on August 1, 2022. The submission addresses the identified reporting requirement deficiencies in NR 438 Wis. Adm. Code and updates administrative language in NR 400.03 and 484.06(4) Wis. Adm. Code.

To satisfy the AERR rule, major sources in nonattainment areas and sources with the potential to emit equal to or greater than 100 tons per year (tpy) of criteria air pollutants  2 or ammonia are required to report annual emissions, and sources with actual emissions of equal to or greater than 0.5 tpy of lead are required to report annual emissions of all criteria air pollutants and ammonia regardless of the magnitude of emissions. The revision of NR 438 ensures compliance with the AERR rule. More specifically, the revision adds the requirement that any source directly emitting PM 2.5 report annual emissions, and the reported particulate emissions (including PM 10 and PM 2.5 ) must distinguish between filterable and condensable particulate matter, 3 and include fugitive emissions. 4 While these reporting requirement thresholds, established based off the AERR rule, 5 are determined by the potential to emit, the revised rule 438 adds the annual reporting requirement of 5 tpy of actual emissions of primary PM 2.5 , adding to the existing actual emission reporting requirements for PM 10 , Carbon Monoxide, Lead, Ammonia, Nitrogen Oxides, Sulfur Dioxide, and Volatile Organic Carbons.

To address the comments received regarding emission reporting exemptions, NR 438.03(1)(am)3-4 have been created to list emission units, operations, or activities that have de minimus emissions and are therefore not required to be reported in the annual emissions inventory report. Further, NR 438.03(4) was revised based on comments received to broaden the required recordkeeping documents from specifically stated safety data sheets, technical data sheets, and lab testing results to records that include information on the composition and quantity of raw materials and waste, including continuous emissions monitoring data and audits, and results of stack or performance tests.

Updates to NR 400.03 and 484.06(4) were included to align with Federal emissions reporting terminology and the updated emissions inventory process. The update to NR 400.03 incorporates an acronym definition used in the revision of NR 438, while the update to NR 484.06 corrected citations amended in NR 438 to reflect EPA's updated emissions factor database.

Section 110(a)(2)(F) contains several requirements, each of which are described below.

States must establish a system to monitor emissions from stationary sources and submit periodic emissions reports. Each plan shall also require the installation, maintenance, and replacement of equipment, and the implementation of other necessary steps, by owners or operators of stationary sources to monitor emissions from such sources. The state plan shall also require periodic reports on the nature and amounts of emissions and emissions-related data from such sources, and correlation of such reports by each state agency with any emission limitations or standards established pursuant to this chapter. Lastly, the reports shall be available at reasonable times for public inspection.

WDNR requires regulated sources to submit various reports, dependent on applicable requirements and the type of permit issued, to the Bureau of Air Management Compliance Team. Basic authority for Wisconsin's Federally mandated Compliance Assurance Monitoring reporting structure is provided in Wis. Stats. 285.65. NR 438 and NR 439 set forth the minimum emissions reporting requirements that must be reported to EPA annually, and monitoring and testing requirements, respectively, for applicable facilities. Considering the proposed revisions to NR 438, EPA proposes that Wisconsin has met the infrastructure SIP requirements of section 110(a)(2)(F) with respect to the 2012 PM 2.5 and 2015 ozone NAAQS.

EPA is proposing to approve WDNR's request to incorporate by reference the revisions to NR 400.03, 484.06(4), and 438 contained in Rule AM-31-19 into Wisconsin's SIP in order to update the emission reporting requirements. Further, EPA is proposing to approve 110(a)(2)(F) of Wisconsin's infrastructure SIP submission, required under the 2012 PM 2.5 and 2015 ozone NAAQS, based on the updated rule submission. Approving this element would lead to full approval of Wisconsin's 2012 PM 2.5 infrastructure SIP.

In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference revisions to Wisconsin Administrative Code rules NR 400.03, NR 438, and NR 484.06(4) Table 4D Row (a), as published in the Wisconsin Register July 2022 No. 799, effective August 1, 2022, discussed in section I of this preamble. EPA has made, and will continue to make, these documents generally available through www.regulations.gov and at the EPA Region 5 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 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. Accordingly, 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).

In addition, 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 and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

This supplementary information section is arranged as follows:

On June 22, 2010, EPA published a new 1-hour primary SO 2 NAAQS of 75 parts per billion (ppb), which is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations does not exceed 75 ppb, as determined in accordance with appendix T of 40 CFR part 50. See 75 FR 35520, codified at 40 CFR 50.17(a)-(b). On August 5, 2013, EPA designated 29 areas of the country as nonattainment for the 2010 SO 2 NAAQS, including the Detroit area within the State of Michigan. See 78 FR 47191, codified at 40 CFR part 81, subpart C. These area designations became effective on October 4, 2013. Section 191 of the Clean Air Act (CAA) directs states to submit SIPs for areas designated as nonattainment for the SO 2 NAAQS to EPA within 18 months of the effective date of the designation, i.e., by no later than April 4, 2015, in this case. These SIPs were required to demonstrate that their respective areas will attain the NAAQS as expeditiously as practicable, but no later than 5 years from the effective date of designation, which was October 4, 2018.

For a number of nonattainment areas, including the Detroit area, EPA published an action on March 18, 2016 (effective April 18, 2016), finding that Michigan and other pertinent states had failed to submit the required SO 2 nonattainment plan by the submittal deadline (81 FR 14736). Michigan submitted an attainment plan for the Detroit SO 2 area on May 31, 2016, and submitted associated final enforceable measures on June 30, 2016. As part of its 2016 plan, Michigan imposed emission limits for U.S. Steel it concluded were necessary to bring the Detroit area into attainment via Michigan Administrative Code (MAC) 336.1430 (“Rule 430”). Michigan submitted Rule 430 to EPA as an enforceable limitation element for approval as part of its SO 2 plan. Subsequently, U.S. Steel challenged Rule 430 under state law in the Michigan Court of Claims. The decision invalidated Rule 430 on October 4, 2017. United States Steel Corp. v. Dept. of Environmental Quality, No. 16-000202-MZ, 2017 WL 5974195 (Mich. Ct. Cl. Oct. 4, 2017). Because the State's submitted attainment demonstration relied on a limitation that had become unenforceable and, therefore, could not meet the requirements of CAA sections 110 and 172, EPA could not fully approve Michigan's 2016 plan.

On March 19, 2021, EPA partially approved and partially disapproved Michigan's SO 2 plan as submitted in 2016 (86 FR 14827) (effective April 19, 2021). EPA approved the base-year emissions inventory and affirmed that the new source review (NSR) requirements for the area had previously been met on December 16, 2013 (78 FR 76064). EPA also approved the enforceable control measures for two facilities as SIP strengthening. At that time, EPA disapproved the attainment demonstration, as well as the requirements for meeting reasonable further progress (RFP) toward attainment of the NAAQS, reasonably available control measures and reasonably available control technology (RACM/RACT), and contingency measures. Additionally, EPA disapproved the plan's control measures for two facilities as not demonstrating attainment. EPA's March 19, 2021, partial disapproval started a sanctions clock which is permanently stopped only by meeting the conditions of EPA's regulations at 40 CFR 52.31(d).

On October 12, 2022, EPA promulgated a Federal Implementation Plan (FIP) for the Detroit SO 2 nonattainment area (87 FR 61514), which satisfied EPA's duty to promulgate a FIP for the area under CAA section 110(c) that resulted from the previous finding of failure to submit. However, it did not affect the sanctions clock started under CAA section 179 resulting from EPA's partial disapproval of the prior SIP, which would be permanently stopped only by meeting the conditions of EPA's regulations at 40 CFR 52.31(d)(5).

While EPA's FIP for the Detroit area meets the requirements for SO 2 nonattainment area plans, the FIP does not relieve Michigan of the requirement under Section 191 of the CAA to submit a plan that provides for attainment of the SO 2 NAAQS for the Detroit nonattainment area. On December 20, 2022, Michigan submitted a revised attainment plan for the Detroit SO 2 nonattainment area mirroring EPA's FIP in order to remedy Michigan's 2016 plan deficiencies specified in EPA's March 19, 2021 rulemaking. Michigan's December 20, 2022, plan depends, in part, on permits that have not yet been issued but will include limits and associated requirements for the U.S. Steel and Dearborn Industrial Generation (DIG) facilities that are no less stringent than those set forth in EPA's FIP, codified at 40 CFR 52.1189.

Under section 110(k)(4) of the CAA, EPA may conditionally approve a plan based on a commitment from the State to adopt specific enforceable measures within one year from the date of approval. EPA's October 28, 1992, memorandum, entitled “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (Act) Deadlines,” states that such commitments should include a formal request that EPA approve the commitment, be subject to public hearing pursuant of 40 CFR 51.102, and include a schedule for the adoption of the required measures. Therefore, Michigan included in its December 20, 2022, submittal, which was subject to public hearing, a request that EPA conditionally approve its revised plan for the Detroit area, conditional upon the issuance and submission for incorporation into the SIP of the NSR permits for the U.S. Steel and DIG facilities, as well as a commitment to submit the permits to EPA within one year of a conditional approval. On February 21, 2023, Michigan submitted a letter clarifying the schedule for the conditional approval, including Michigan's commitment to submit the necessary permits by April 30, 2024, and the schedule Michigan expects to follow to meet that commitment. Michigan's expected schedule includes ensuring all necessary permit applications are submitted by March 31, 2023, beginning the 240-day permit review process by April 1, 2023, issuing permits by December 1, 2023, and submitting permits to EPA by December 31, 2023. Michigan's expected date of submittal provides some cushion to ensure the State is able to meet its commitment to submit the permits by April 30, 2024, and EPA finds that Michigan's schedule is reasonable.

If EPA finalizes this conditional approval, the State must meet its commitment to submit the necessary permits by April 30, 2024. If the State fails to do so, the action will become a disapproval. In such case, EPA will notify the State by letter of the disapproval and subsequently publish a document in the Federal Register notifying the public that the conditional approval automatically converted to a disapproval.

If the State meets its commitment within the applicable time frame, the conditionally approved submission will remain a part of the SIP until EPA takes final action approving or disapproving the new submittal. If EPA disapproves the new submittal, Michigan's conditionally approved Detroit SO 2 plan will also be disapproved at that time. If EPA approves the submittal, Michigan's Detroit SO 2 plan will be fully approved in its entirety and replace the conditionally approved element in the SIP.

Under 40 CFR 52.31(d)(2)(ii), if the State has submitted a revised plan to correct the deficiency, and EPA proposes to conditionally approve the plan and issues an interim final determination that the revised plan corrects the deficiency, application of the new source offset sanction shall be stayed and application of the highway sanction shall be deferred. However, if the State does not meet its commitment and the plan is disapproved, the new source offset sanction shall reapply and the highway sanction shall apply on the date of proposed or final disapproval. In the Detroit SO 2 nonattainment area, the two-to-one new source offset sanction took effect on October 19, 2022 (18 months following the effective date of March 19, 2021, rulemaking that triggered the sanctions clock), and the highway funding sanction was scheduled to take effect on April 19, 2023 (6 months after the date of the offset sanctions), as the result of the March 19, 2021, partial disapproval.

The remainder of this action describes the requirements that SO 2 nonattainment plans must meet in order to obtain EPA approval, provides a review of Michigan's revised plan with respect to these requirements, and describes EPA's proposed conditional approval of the plan.

Nonattainment SIPs must meet the applicable requirements of the CAA, and specifically CAA sections 110, 172, 191 and 192. EPA's regulations governing nonattainment SIPs are set forth at 40 CFR part 51, with specific procedural requirements and control strategy requirements residing at subparts F and G, respectively. Soon after Congress enacted the 1990 Amendments to the CAA, EPA issued comprehensive guidance on SIPs, in a document entitled the “General Preamble for the Implementation of Title I of the CAA Amendments of 1990,” published at 57 FR 13498 (April 16, 1992) (General Preamble). Among other things, the General Preamble addressed SO 2 SIPs and fundamental principles for SIP control strategies. Id., at 13545-49, 13567-68. On April 23, 2014, EPA issued recommended guidance for meeting the statutory requirements in SO 2 SIPs, in a document entitled, “Guidance for 1-Hour SO 2 Nonattainment Area SIP Submissions,” available at https://www.epa.gov/sites/production/files/2016-06/documents/20140423guidance_nonattainment_sip.pdf . In this guidance EPA described the statutory requirements for a complete nonattainment area SIP, which includes: An accurate emissions inventory of current emissions for all sources of SO 2 within the nonattainment area; an attainment demonstration; demonstration of RFP; implementation of RACM (including RACT); NSR; emissions limitations and control measures as necessary to attain the NAAQS; and adequate contingency measures for the affected area. EPA already concluded in its March 19, 2021, rulemaking that Michigan has met the emissions inventory and NSR requirements.

In order for EPA to approve a SIP as meeting the requirements of CAA sections 110, 172 and 191-192 and EPA's regulations at 40 CFR part 51, the SIP for the affected area needs to demonstrate to EPA's satisfaction that each of the aforementioned requirements have been met. Under CAA sections 110(l) and 193, EPA may not approve a SIP that would interfere with any applicable requirement concerning NAAQS attainment and RFP, or any other applicable requirement, and no requirement in effect (or required to be adopted by an order, settlement, agreement, or plan in effect before November 15, 1990) in any area which is a nonattainment area for any air pollutant, may be modified in any manner unless it ensures equivalent or greater emission reductions of such air pollutant.

CAA section 172(c)(1) directs states with areas designated as nonattainment to demonstrate that the submitted plan provides for attainment of the NAAQS. 40 CFR part 51, subpart G, further delineates the control strategy requirements that SIPs must meet, and EPA has long required that all SIPs and control strategies reflect four fundamental principles of quantification, enforceability, replicability, and accountability. General Preamble at 13567-68. SO 2 attainment plans must consist of two components: (1) Emission limits and other control measures that ensure implementation of permanent, enforceable and necessary emission controls, and (2) a modeling analysis which meets the requirements of 40 CFR part 51, appendix W, which demonstrates that these emission limits and control measures provide for timely attainment of the primary SO 2 NAAQS as expeditiously as practicable, but by no later than the attainment date for the affected area. In all cases, the emission limits and control measures must be accompanied by appropriate methods and conditions to determine compliance with the respective emission limits and control measures and must be quantifiable ( i.e., a specific amount of emission reduction can be ascribed to the measures), fully enforceable (specifying clear, unambiguous and measurable requirements for which compliance can be practicably determined), replicable (the procedures for determining compliance are sufficiently specific and non-subjective so that two independent entities applying the procedures would obtain the same result), and accountable (source specific limits must be permanent and must reflect the assumptions used in the SIP demonstrations).

Preferred air quality models for use in regulatory applications are described in appendix A of EPA's Guideline on Air Quality Models (40 CFR part 51, appendix W). In 2005, EPA promulgated AERMOD as the Agency's preferred near-field dispersion modeling for a wide range of regulatory applications addressing stationary sources (for example in estimating SO 2 concentrations) in all types of terrain based on extensive developmental and performance evaluation. Supplemental guidance on modeling for purposes of demonstrating attainment of the SO 2 standard is provided in appendix A to the April 23, 2014, SO 2 nonattainment area SIP guidance document referenced above. Appendix A provides extensive guidance on the modeling domain, the source inputs, assorted types of meteorological data, and background concentrations. Consistency with the recommendations in this guidance is generally necessary for the attainment demonstration to offer adequately reliable assurance that the plan provides for attainment.

As stated previously, attainment demonstrations for the 2010 1-hour primary SO 2 NAAQS must demonstrate future attainment and maintenance of the NAAQS in the entire area designated as nonattainment ( i.e., not just at the violating monitor). This is demonstrated by using air quality dispersion modeling ( see appendix W to 40 CFR part 51) that shows that the mix of sources, enforceable control measures, and emission rates in an identified area will not lead to a violation of the SO 2 NAAQS. For a short-term ( i.e., 1-hour) standard, EPA believes that dispersion modeling, using allowable emissions and addressing stationary sources in the affected area (and in some cases those sources located outside the nonattainment area which may affect attainment in the area) is technically appropriate, efficient and effective in demonstrating attainment in nonattainment areas because it takes into consideration combinations of meteorological and emission source operating conditions that may contribute to peak ground-level concentrations of SO 2 .

The meteorological data used in the analysis should generally be processed with the most recent version of AERMET. Estimated concentrations should include ambient background concentrations, should follow the form of the standard, and should be calculated as described in section 2.6.1.2 of the August 23, 2010, clarification memo on “Applicability of Appendix W Modeling Guidance for the 1-hr SO 2 National Ambient Air Quality Standard” (U.S. EPA, 2010).

For a more in-depth discussion on the requirements of SO 2 nonattainment plans, including the use of longer-term average limits, see EPA's proposed FIP (87 FR 33095).

Michigan's plan for the Detroit nonattainment area mirrors EPA's promulgated FIP for the area. Therefore, Michigan's plan relies on the modeling analysis EPA used to support its FIP, which is attached as appendix B of Michigan's December 20, 2022, submittal, to demonstrate attainment of the 2010 SO 2 NAAQS in the Detroit area. A more in-depth discussion of the modeling analysis may be found in EPA's proposed FIP (87 FR 33095) and the associated technical support document, which is included in the docket for this action as appendix B of Michigan's December 20, 2022, submittal.

An important aspect of an attainment plan is that the emission limits that provide for attainment be quantifiable, fully enforceable, replicable, and accountable. See General Preamble at 13567-68. Michigan's attainment plan includes the same limits for the U.S. Steel, EES Coke, Cleveland-Cliffs Steel Corporation, DIG, Carmeuse Lime, and DTE Trenton Channel facilities that are included in EPA's FIP, and which are all shown below in Table 1. The plan also includes the same requirement that a 170-foot stack be constructed at U.S. Steel Boilerhouse 2 by November 14, 2024, as set forth in EPA's FIP. The FIP made all of these limits and requirements federally enforceable, via either incorporation of permits containing the limits and requirements into Michigan's SIP or inclusion in the FIP regulatory language, codified at 40 CFR 52.1189. As Michigan's plan cannot rely on the FIP regulatory language, the enforceability mechanisms of all the limits relied upon by Michigan's plan are described in the remainder of this section.

In preparing its 2016 plan, Michigan adopted Permit to Install 193-14A, governing the Carmeuse Lime SO 2 emissions, and Permit to Install 125-11C, governing the DTE Trenton Channel SO 2 emissions. These construction permit revisions were adopted by Michigan following established, appropriate public review procedures. The permit compliance dates were October 1, 2018 for Carmeuse Lime and January 1, 2017 for DTE Trenton Channel. Both of these permits were incorporated into Michigan's SIP as part of EPA's March 19, 2021, action partially approving and partially disapproving Michigan's SO 2 plan (86 FR 14827). DTE Trenton Channel has since permanently shut down as of June 19, 2022, under court order. 1 However, the DTE Trenton Channel permitted limit was included in the FIP analysis and included in Michigan's revised plan as a precautionary measure. The Carmeuse Lime and DTE Trenton Channel permits were incorporated into Michigan's SIP as part of EPA's March 19, 2021, action, so EPA is not proposing to re-incorporate them into 40 CFR part 52 in this action.

Emission limits and associated requirements for EES Coke and Cleveland-Cliffs Steel Corporation are contained in permits Permit to Install 51-08C, effective November 21, 2014, and Permit MI-ROP-A8640-2016a, modified January 19, 2017, respectively. These limits and associated monitoring requirements were also included in EPA's FIP, codified at 40 CFR 52.1189. The permit revisions were adopted by Michigan following established, appropriate public review procedures. EPA finds that these permit revisions provide for permanent enforceability and is proposing to incorporate these permits into Michigan's SIP in this action.

Michigan has committed to issue permits for the emission limits and associated construction, monitoring, recordkeeping, and reporting requirements for the U.S. Steel and DIG units, including the construction of a new 170-foot stack for U.S. Steel Boilerhouse 2 by November 14, 2024, that are no less stringent than those specified in 40 CFR 52. 1189. These enforceable requirements will be contained in permits or permit revisions that have not yet been issued, but that Michigan has committed to submit to EPA by April 30, 2024. While EPA cannot incorporate permits containing emission limits for the U.S. Steel and DIG unit limits into Michigan's SIP at this time, these limits were previously adopted into EPA's FIP and will continue to remain federally enforceable as part of the regulatory text of EPA's FIP, codified at 40 CFR 52.1189. Therefore, EPA is proposing to conditionally approve Michigan's plan, pending the issuance and timely submission of the appropriate permits to EPA for incorporation into the SIP.