I. Background

The U.S. Office of Government Ethics (OGE) published a proposed rule in the Federal Register , 87 FR 23769 (Apr. 21, 2022), proposing to amend both 5 CFR part 2634, Executive Branch, Financial Disclosure, Qualified Trusts, and Certificates of Divesture, and 5 CFR part 2635, Standards of Ethical Conduct for Employees of the Executive Branch, to establish a framework to govern an executive branch employee's acceptance of both payments for legal expenses through a Legal Expense Fund (LEF) and pro bono legal services for matters arising in connection with the employee's past or current official position, the employee's prior position on a campaign of a candidate for President or Vice President, or the employee's prior position on a Presidential Transition Team.

Before proposing the Legal Expense Fund rule, OGE sought public input through an advance notice of proposed rulemaking (ANPRM), see Notice and Request for Comments: Legal Expense Fund Regulation, 84 FR 15146 (Apr. 15, 2019), and at two public meetings, see Announcement of Public Meeting: Legal Expense Fund Regulation, 84 FR 50791 (Sept. 26, 2019). In addition to seeking public input, OGE consulted with executive branch ethics officials and with the Department of Justice and the Office of Personnel Management pursuant to section 201(a) of Executive Order 12674, as modified by Executive Order 12731, and the authorities contained in 5 U.S.C. 13122.

The proposed rule provided a 60-day comment period, which ended on June 21, 2022. OGE received 6,916 timely and responsive comments, which were submitted by six organizations and 6,910 individuals. After carefully considering the comments and the input provided before and in response to the proposed rule's publication, and making appropriate modifications, OGE is publishing this final rule. The rationale for the rule can be found in the preamble to the proposed rule at: https://www.govinfo.gov/content/pkg/FR-2022-04-21/pdf/2022-08130.pdf.

This rule will be effective 180 days after publication to allow OGE to implement procedures, provide training, and publish guidance regarding this new ethics program. It will also allow agencies to consider staffing needs and their own internal procedures.

OGE received nearly 7,000 comments from both organizations and individuals. The comments are publically posted on OGE's website and can be found at this address: https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/417908CAB842A8128525887E004D262C. Many of the commenters provided feedback on several different sections of the proposed rule. OGE has reviewed and considered each comment submitted; comments are discussed below in the context of the particular subparts or sections to which they pertain. OGE is not discussing comments that were either generally supportive of the regulation or generally critical of the regulation; however, OGE weighed both support and criticism when considering any possible changes in response to other comments. In addition, OGE does not specifically discuss comments that address issues outside the scope of the regulation.

OGE received 6,907 comments from individuals that all asked OGE to take the following actions: (1) make compliance with the regulation mandatory; (2) require employee beneficiaries to recuse from particular matters involving donors to their legal expense funds for five years; (3) remove a particular example; and (4) allow nonprofits to hire outside pro bono counsel. OGE addresses each of these comments below in the applicable section, and portions of the regulation were revised to address the concerns raised.

In the proposed rule, OGE specifically solicited comments on: (1) whether multi-beneficiary trusts should be permitted; (2) whether 501(c)(3) and 501(c)(4) organizations should be permitted to make donations to legal expense funds; and (3) whether 501(c)(3) and 501(c)(4) organizations may hire attorneys outside their organization to provide free or reduced cost legal services for employees. The weight of the comments supported single-beneficiary trusts and opposed allowing 501(c)(4) organizations to donate to legal expense funds or pay for outside legal representation. Although commenters were more divided on the question of allowing 501(c)(3) organizations to donate to legal expense funds and to pay for outside legal representation, the weight of the comments favored allowing such organizations to do both. As discussed in more detail in the relevant sections below, the rule has been revised to permit 501(c)(3) organizations to donate to legal expense funds and pay for outside legal services.

Finally, OGE, in adopting this final rule, has corrected a few typographical errors and made a few other minor clarifying revisions to the rule as proposed.

Several comments from individuals encouraged OGE to expand the regulation to cover employees of the legislative and judicial branches. Pursuant to 5 U.S.C. 13122(b)(1), OGE only is permitted to draft regulations that apply to executive branch employees. The Ethics in Government Act designated a supervising ethics office for each branch of government and, within the legislative branch, separate offices for the House and Senate. See 5 U.S.C. 13101(18). Each supervising ethics office is responsible for promulgating ethics rules that apply to the employees of that branch or congressional body.

One commenter asked that OGE amend the definition of “covered relationship” in § 2635.502(b)(1) to include the trustee and donors of a legal expense fund established under subpart J of part 2635 and the provider of any pro bono legal services to employees. OGE first notes that the relationship between an employee beneficiary and their trustee is a “contractual . . . relationship that involves other than a routine consumer transaction” and thus would already be covered by § 2635.502(b)(1)(i). Second, OGE has amended the regulation to reflect that the legal expense fund recusal is not a “covered relationship” recusal under § 2635.502. Instead, OGE is requiring employee beneficiaries to abide by a mandatory two-year recusal from matters affecting any trustee, donor of legal expense payments, or provider of pro bono services. OGE does not want to create confusion as to whether the § 2635.502 recusals or the more stringent legal expense fund recusals apply, so OGE is electing not to include these relationships as covered relationships under § 2635.502.

Several individual commenters suggested that OGE ban all legal expense funds. OGE has determined that this approach would significantly limit access to legal services for all but the wealthiest executive branch employees. While OGE historically has provided guidance to help ensure that executive branch employees who may receive distributions from an LEF are in compliance with existing ethics laws and rules, OGE believes that the proposed regulation, which creates much more robust limitations on the acceptance of payments for legal expenses and imposes significant transparency requirements, is the preferred and appropriate course.

Two organizations commented that the rule was vague about which funds must be routed through a legal expense fund and suggested that items such as pre-paid legal service plans, credit cards, or “private borrowing from family members and close friends” are covered by subpart J. OGE first notes that routine market arrangements, such as a pre-paid service plan or the use of a credit card, are not gifts as defined in subpart B and therefore would not be required to be routed through a legal expense fund. Second, OGE notes that if, for example, an employee received a below market rate loan from a family member or close friend, it would qualify under the personal relationship exception at § 2635.204(b), and the employee could accept the loan under that subpart B exception rather than subpart J. OGE included the provision at § 2635.1002(b) specifically to address circumstances such as “private borrowing from family members or close friends,” as raised by the commenter. Accordingly, OGE believes the regulation is sufficiently clear about which legal expense payments must be accepted using subpart J.

Several individual commenters suggested making contributions from legal expense funds taxable income. The Internal Revenue Service makes determinations about what income is taxable, and such a determination is outside of OGE's jurisdiction.

Several commenters asked that OGE address the political pressure that can be applied by withholding funds from employee witnesses. In response to OGE's ANPRM, numerous organizations and individuals expressed the desire for legal expense funds to be structured only as trusts with single beneficiaries to guard against such pressure. See May 22, 2019 Public Hearing Transcript, https://www.oge.gov/web/OGE.nsf/0/DB24D09F28472B82852585B6005A2206/$FILE/Transcript.pdf; Written Comments to ANPRM, https://www.oge.gov/web/OGE.nsf/0/FE8D43CE6A038852852585B6005A2293/$FILE/ANPRM%20Legal%20Expense%20Fund%20Regulation%20-%20Written%20Comments.pdf. The commenters noted that, unlike legal expense funds with multiple beneficiaries, trustees of single-beneficiary trusts have a fiduciary duty to the sole beneficiary. The structure of trusts with single beneficiaries, in the words of one commenter, “provides the best protection for public servants, who can be certain that distributions will not be withheld or disbursed according to political pressures.” Accordingly, OGE is electing to require that legal expense funds be trusts with a single beneficiary.

OGE received one comment from an organization in support of the existing penalties in the regulation, including the penalties for impermissible donations. Several comments from individuals requested stricter penalties, including imprisonment, for noncompliance with the regulation. OGE believes the remedies in the regulation strike the appropriate balance for noncompliance. Section 1007(h) requires the fund to return impermissible donations and requires the beneficiary to forfeit the ability to accept donations and make distributions if a quarterly report is late. In addition, OGE has reserved both the right to prohibit the fund from either accepting donations or making distributions and the right to terminate the trust if there is significant noncompliance. Finally, while violation of the substantive requirements of a regulation cannot be criminal, the criminal penalties for knowingly making a false statement to the government will apply to the documents and reports filed pursuant to this regulation.

One commenter asked that § 2635.1002 explicitly state that referring to an employee's official position in a legal expense fund solicitation does not violate subpart G. OGE did not adopt this suggestion, because an employee could reference their position in a way that would violate subpart G—in fact, § 2635.1002(c)(3) specifically requires that employees comply with subpart G in soliciting donations. However, OGE is adding language to § 2635.1002(c)(3) to clarify that the mere reference of the employee's official position in a solicitation does not in itself violate subpart G.

Two organizations objected to the regulation's scope being restricted to those legal matters arising in connection with the employee's past or current official position, calling it a disparate burden on employment law litigation. Payments for legal services that arise out of an executive branch employee's federal employment or service on a campaign raise more significant appearance and misuse concerns than payments for purely personal legal services. Numerous stakeholders, from public interest organizations to U.S. Senators, have noted that legal expense funds previously established to defray the costs of legal expenses connected to government service have created heightened concern. Specifically, stakeholders have expressed concerns about the potential for donors to influence employees' official actions or witness statements, the difficulty of screening for prohibited donors, and the lack of transparency for legal expense donations to those in federal service. OGE has addressed this heightened appearance concern by specifically regulating payments for legal expenses arising out of an employee's past or current official position, limiting who may donate to employee legal expense funds, and requiring public disclosure of such donations.

Moreover, OGE is specifically directed by E.O. 12674 (as modified by E.O. 12731) to promulgate regulations addressing fundamental ethics principles such as prohibiting the use of public office for private gain and avoiding actions that create the appearance of a violation of a law or regulation. This directive supports regulating only legal expense payments connected to government service, as receipt of such payments for legal expenses could be viewed as using a public position for personal gain or creating the appearance of violating a law or regulation.

One organization commented that the regulation as drafted would not address the concerns about potential corruption raised by Senators in their letter to the Director (Letter from Senator Margaret Hassan et. al., Aug. 2, 2018, https://www.hassan.senate.gov/imo/media/doc/RoundsPatriotFundLetterSIGNED.180802.pdf ). In that letter, the Senators specifically raised concerns about transparency and funds with multiple beneficiaries, which make screening donations difficult and could allow the trustee to prioritize certain employee beneficiaries.

When drafting the proposed regulation, OGE addressed the Senators' concerns about multiple beneficiaries by prohibiting executive branch employees from accepting payments for legal expenses from an LEF that has multiple beneficiaries. In addition, to promote transparency, the proposed regulation requires both that the trust document be made publicly available, and that all payments of $250 or more be reported quarterly and posted publicly on OGE's website. The proposed regulation also limits the amount a single donor can donate and prohibits donations from businesses and lobbyists. Finally, the proposed rule requires that any existing legal expense fund not structured as required by subpart J come into compliance within 90 calendar days of the rule going into effect, or use of the fund to pay legal expenses will violate the Standards of Conduct.

Two organizations and 6,907 commenters objected to the language in § 2635.1002(b)(2), stating that legal expense fund payments and pro bono services that otherwise qualify for a subpart B gift exception or exclusion are not covered by this subpart (and thus are not subject to the trust, quarterly reporting, and transparency requirements). Many commenters stated that this language made the regulation optional, and the two organizations requested that subpart J be the exclusive means for accepting legal expense fund payments. One organization characterized the provision as “allow[ing] executive branch officials to continue relying on the gift rule exclusions and exceptions they have historically cited to justify legal expense funds.”

Compliance with the requirements of subpart J is mandatory. Importantly, this regulation specifically clarifies that payments for legal expenses arising from an employee's past or current official position are given because of the employee's official position, and thus may not be accepted unless the employee complies with the gift rules. Accordingly, any gift of legal expenses or pro bono services arising out of an employee's past or current official position must comply with all the requirements of subpart J or conform to a narrow, pre-existing subpart B exception. Executive branch officials will not be able to rely on the historical interpretation that legal expenses could be excluded from the gift regulations under subpart B by determining that such expenses are not given because of their official position.

The only two subpart B exceptions likely to be used in practice are § 2635.204(b), which requires a determination that the donation is clearly motivated by a family relationship or personal friendship; and § 2635.204(c), which allows employees to accept free or discounted legal services from an established employee organization, such as a union or an employee welfare organization. Maintaining these two narrow exceptions would allow less well-connected employees to accept help with legal expenses from, for example, their spouse, their parents, or their union.

Several individuals requested that the regulation cap donations from family and friends at the same amount as everyone else. Such donations—which, by definition, must be given under circumstances that make clear that the gift is motivated by a family relationship or close personal friendship—are much less likely to raise appearance concerns. Accordingly, OGE is declining to make this change.

One organization and 6,907 individuals commented that the requirement that employees recuse from particular matters affecting donors for one year was too short, and requested that employees recuse from such matters for five years instead. A second organization asked for the recusal period to apply through the lifetime of the legal expense fund, and then recommended instituting different lengths of time for the recusal depending on the amount of money donated ( e.g., one-year recusal for under $5,000, four-year recusal for over $5,000). Individual commenters suggested recusal periods ranging from two to ten years. One organization also objected to use of the § 2635.502 impartiality standard because it relies on the reasonable person standard and because an agency can authorize an employee to participate notwithstanding impartiality concerns. In response to these comments, OGE is revising the regulation as follows: Employee beneficiaries will have a two-year recusal for donors donating $250 or more in a calendar year, starting from the time of each donor's most recent donation. Further, this recusal will be mandatory, with no written authorization option.

Two organizations also asked for the recusal to apply to both particular matters involving specific parties and particular matters of general applicability. OGE declines to adopt this proposal; recusals will be required only for particular matters involving specific parties. If recusals were extended to particular matters of general applicability, as proposed by the commenters, it would make legal expense funds unworkable for employees at the many agencies whose missions affect large and diverse sectors of the public. In addition, identifying which particular matter of general applicability would affect each donor to a trust would be extremely difficult.

OGE further notes that donors are limited to individuals, political parties, and 501(c)(3) organizations; for these donors, OGE believes that particular matters involving specific parties present the primary impartiality risk. Although 501(c)(3) organizations often work on policy issues that would be considered particular matters of general applicability, they typically do not have a financial interest in those particular matters of general applicability ( see OGE DAEOgram DO-06-002 (Jan. 19, 2006), discussing OLC's conclusion that a nonprofit organization does not have a financial interest in a particular matter on which it spends funds to advocate its policy position solely because of those expenditures). As a result, OGE does not believe a mandatory recusal for particular matters of general applicability is appropriate.

One commenter recommended that OGE require employee beneficiaries to certify in writing that they have notified their pro bono attorney of their financial reporting obligations, if any, and that the attorney has agreed to provide them with documentation of any services provided each year so that they may properly report any gifts. In response, OGE notes that § 2635.1009 explicitly reminds financial disclosure filers that pro bono services must be reported as gifts on their financial disclosure forms and, per § 2634.602(a), filers must certify that the financial disclosure reports are true and correct. Requiring further certification would create inconsistency and unnecessary redundancy in the gift reporting requirement for financial disclosure filers, and therefore OGE is not requiring such certification.

OGE received one comment that OGE should modify § 2635.1003 to emphasize that “arising in connection with an employee's past or current official position” does not cover assisting individuals with presidential nominations for Senate-confirmed positions. Because the concept of “official position” is regularly employed throughout the Standards, OGE does not believe such a change to the regulation is necessary. For example, if an executive branch employee assisted a nominee in the course of their official duties or in the course of their duties on the Presidential Transition Team, and a legal issue arose as a result of their official work or work for the transition team, that employee could establish a legal expense fund pursuant to subpart J. If, however, before an individual's executive branch employment, that individual assisted a nominee in the individual's personal capacity, then the legal issues would not arise from the individual's official position and the individual could not utilize subpart J to establish a legal expense fund. In addition, executive branch employees in Senate-confirmed positions would not be permitted to establish legal expense funds to defray the costs associated with the nomination and confirmation process, because those costs are expenses that do not arise from that employee's official executive branch position.

One organization also requested that OGE treat contingency fee arrangements like pro bono arrangements, requiring pre-approval by agency ethics officials. The organization was primarily concerned with contingency fees being paid by third parties. Although OGE understands the concern, OGE does not believe that differentiating between contingency fees and other fee structures is appropriate, as OGE considers a contingency fee structure to be a regular market arrangement and not a gift. Payments by third parties for any legal services arrangement—contingency fees or any other fee structure—must comply with subpart J or an applicable exception or exclusion in subpart B.

One organization and 6,907 individuals commented that the example to the definition of “arising in connection with the employee's past or current official position,” was offensive. The example illustrates that a military officer accused of sexual harassment off duty would be required to follow the subpart J requirements should that officer wish to accept payments for legal expenses from anyone other than family, close friends, or qualifying employee organizations, because the officer's after-work conduct is subject to the Uniform Code of Military Justice and thus arises out of the officer's official position. Several other individual commenters expressed opposition to the idea that employees accused of bad behavior would be able to fundraise for their defense. OGE has revised the example in the final rule. OGE would like to highlight, however, that nothing in this regulation should be construed as restricting an employee's access to a legal defense based on the nature of the allegations giving rise to the need for a defense fund.

Two organizations objected to the definition of “ pro bono legal services” in proposed § 2635.1003 as too vague, specifically noting that there is ambiguity about whether the definition is limited to direct, representational legal services (not extending to, for example, amicus briefs). OGE intends the regulatory definition of pro bono legal services to mean direct, representational services. OGE will provide further guidance on this issue as needed.

OGE received several comments asking to broaden the definition of “whistleblower” beyond employees making protected reports or disclosures under the Whistleblower Protection Act (5 U.S.C. 2302(b)(8)) and the listed related statutes. OGE believes that a clear, objective definition of the term “whistleblower” is appropriate. In addition, OGE does not want the definition to be overbroad because of the public interest in transparency in this area and thus declines to broaden the definition of “whistleblower.”

Two organizations objected to the requirement for a trust structure as unduly burdensome for public employees. Three organizations commented that they strongly supported the trust structure as drafted. OGE weighed these comments, as well as prior comments on this issue, in choosing to require the use of single-beneficiary trusts in drafting the final regulation. In addition, one organization commented that OGE was not taking into account the burden of seeking approval for every pro bono representation, and that the overall administrative burden of the regulation would outweigh any plausible benefit to employees.

OGE understands the concerns of the commenters objecting to the trust structure, and weighed the additional burden of establishing a trust on employees when drafting the proposed rule. However, a number of factors support a trust requirement. First, trusts offer the benefit of having a fiduciary act on behalf of a single employee and therefore in that employee's interest. Second, requiring a trust is consistent with the Legal Expense Fund regulations governing House and Senate employees. Third, the trust requirement creates a uniform system for approval for every executive branch employee, which ensures that each employee is treated equally and also eases the review burden for agency ethics officials. Finally, the feedback OGE received in interagency consultations, as well as the majority of the comments received in the public comment period and in the public hearings and meetings held by OGE in advance of drafting the proposed regulation, strongly support the trust structure being mandatory for legal expense funds.

Furthermore, in order to address the concerns raised by those objecting to the trust requirement and to reduce the burden on employee beneficiaries, OGE intends to issue guidance on, and provide sample trust clauses that would meet, the requirements of the regulation. In addition, OGE has provided other means for less wealthy or well-connected employees to access legal services. For example, the new § 2635.204(c)(2)(iv) creates a specific gift exception for assistance offered by pre- existing employee organizations, which would permit employees to accept assistance with legal fees from organizations such as unions. OGE also notes that the requirements for accepting pro bono services under subpart J are significantly less burdensome than setting up a trust.

One commenter asked that the prohibitions on the trustee position be expanded to include prohibited sources (as defined in § 2635.203(d)), employees of lobbyists, all relatives of the beneficiary, and an employee or agent of the beneficiary or any other person prohibited by this section. OGE believes that the proposed additions are overly broad. First, OGE does not believe that a blanket prohibition on any individual already serving as employee or agent of the beneficiary ( e.g., an employee's personal attorney) is needed to adequately guard against potential conflicts of interest. OGE further notes that the proposed term “relative” is broad; instead, OGE specifically prohibited spouses, parents, and children for clarity. In addition, OGE notes that agency ethics officials emphasized in listening sessions following the ANPRM that in large agencies, almost all companies (and correspondingly, their employees) are considered prohibited sources. Furthermore, the proposed restrictions would prohibit an attorney working at any law firm where other attorneys perform lobbying work from serving as a trustee. Adding the proposed restrictions would greatly limit the pool of people available to serve as trustees, which could create additional barriers to access for lower-level employees. Accordingly, OGE is not going to adopt the proposed restrictions.

One commenter commended OGE's careful consideration of anonymous whistleblowers and the particular risks they face within the proposed structure. One organization raised concerns that anonymous whistleblowers working for intelligence agencies may risk having their identities revealed if OGE contacts the agency to establish procedures for handling classified documents. OGE has coordinated with intelligence agencies and has confirmed that existing policies at these agencies can be adapted to handle any LEF documents with classified information. All classified information will remain at the agency. Moreover, anonymous whistleblower LEF documents likely will not contain any classified information since the employee's name and position will not be included. In the unlikely event OGE would need to review a document with classified information, an OGE employee with a security clearance will review the document in secure agency spaces, consistent with the current practice for other ethics documents containing classified information.

OGE received several comments from individuals objecting to “self-reporting” of legal expense funds. OGE understands the concern, but notes that because OGE only has the authority to regulate executive branch employees, it is necessarily the employee beneficiary's responsibility to properly report a legal expense fund.

OGE received one comment that § 2635.1004(e)(1) is superfluous and should be deleted in light of § 2635.1004(f) because both provisions discuss the requirement that an employee beneficiary file their legal expense trust fund document with their agency. Section 2635.1004(e)(1) outlines the steps employees must take after accepting contributions to their legal expense fund, which include filing the legal expense fund trust document with their agency and receiving approval. Section 2635.1004(f) specifies which employees need to file with their agency and which need to file with OGE. Because paragraph (e) identifies which actions an employee must take to accept contributions and paragraph (f) specifies where the employee must file, OGE disagrees that § 2635.1004(e)(1) is superfluous and declines to change the regulation.

One organization proposed mandating that additional documents be sent to reviewing officials for approval, specifically: the trust agreement, written procedures for compliance with applicable ethics requirements, and a certification that the trustee meets the eligibility requirements, which would include the trustee's name, business address, employer, and relationship to beneficiary. The organization further proposed that there be no redactions of the documents other than fee schedules and sensitive personal information such as personal addresses, the names of minor children, and account numbers.

OGE notes that providing the trust agreement to the reviewing official is already mandated by § 2635.1004(f). Further, § 2635.1004(g) indicates that the reviewing official should review “information regarding the trustee” along with the trust document, in order to ascertain that the trustee meets the requirements of § 2635.1003. Accordingly, OGE does not believe a separate trustee certification is needed. In addition, OGE is electing not to adopt the proposal as OGE believes that “written procedures for compliance with applicable ethics requirements” is vague and could cause confusion—agency ethics officials can advise on compliance with legal expense fund requirements just as they do with other ethics requirements. Finally, OGE is adding a note in this section clarifying that only sensitive personal information such as fee schedules, personal addresses, and account numbers will be redacted.

Two organizations objected to agency officials serving as the approval authority for employee legal expense funds on the grounds that the agency is often a party opponent in federal employment litigation, which would create an incentive to withhold or delay approval. OGE understands this concern, and notes that all employees seeking legal expense funds may appeal agency denials to OGE. To more fully address this issue, OGE has broadened the existing legal expense fund appeal process to include an appeal right if the legal expense fund is not approved within the required 30-day timeline. However, OGE notes that given the need for conflicts screening, agencies should still be the initial review authority for most legal expense funds due to their knowledge of agency-specific conflicts.

In addition, one commenter proposed expanding the list of employees for whom OGE would conduct a second-level review of legal expense funds to include agency heads and leaders of certain component entities whose financial disclosure reports OGE does not review. OGE believes that uniformity across the executive branch ethics program is appropriate in this case and defers to the authority in 5 U.S.C. 13103 in identifying which senior positions require an elevated level of review. Accordingly, OGE declines to adopt the commenter's proposal.

One commenter noted that the proposed regulation did not clearly indicate the process for review for a Designated Agency Ethics Official's (DAEO) legal expense fund or specify the process for subordinate ethics officials. OGE has amended the regulation to clarify that OGE would conduct the initial review of a DAEO's legal expense fund. Legal expense funds of subordinate ethics officials will follow the same process as other employees and be reviewed by the DAEO.

One organization commented that whistleblowers should have access to a standardized trust document to use rather than having to seek an individualized prior approval of their trust. State trust laws vary and are subject to change. Therefore, OGE cannot create a standardized trust document that would reliably satisfy all states' trust laws. It is the responsibility of the beneficiary and trustee to ensure the trust complies with applicable state law. However, OGE will issue guidance that provides trust clauses that will comply with subpart J.

One organization asked that the legal expense fund documents be available on OGE's website as “searchable, sortable, and downloadable.” OGE intends to have the records sortable by name of employee beneficiary, agency, position, and type of document. This is similar to the search capability for financial disclosure reports, which are also publicly available on OGE's website. In addition, OGE anticipates that the number of legal expense trust funds will be relatively low. Accordingly, anyone seeking information about legal expense fund donations should be able to quickly locate the information they need using the search capability available.

One organization requested more specific requirements for donors and the trustee when screening donations. Specifically, the organization requested that each donor supply their employer and state of residence, confirm they meet the eligibility requirements, and acknowledge that the information the donor submits is subject to 18 U.S.C. 1001. They asked that the trustee consult with the beneficiary and agency ethics official during the review and that the trustee interview every donor giving more than $1,000.

Although § 2635.1005 does not specifically address the information the trustee is required to collect from donors, it does state the trustee must provide the beneficiary with the information to complete their quarterly reports and public financial disclosure statements. As a result, the trustee is required to collect the name and employer for every donor and if the beneficiary is a public financial disclosure filer, the donor's city and state of residence. To create reporting consistency for all beneficiaries, OGE is revising § 2635.1007(a)(1) to require the reporting of the donor's city and state of residence. Because the donor information is being provided to the trust, rather than the government directly, OGE is not requiring an acknowledgement that 18 U.S.C. 1001 applies. The trustee is a fiduciary and as a result, OGE believes a trustee's duty of care will require them to consult with the beneficiary and agency ethics officials, as necessary, to determine if a donation is permissible. Finally, OGE believes an interview requirement is too great an administrative and cost burden to place on the trust as the trustee should be able to ascertain whether or not the donation is prohibited without interviewing the donor.

OGE received no comments regarding this section.

One individual commenter noted that the scope of acceptable donors to legal expense funds is different from the scope of individuals and entities that can provide pro bono legal services and suggested both have the same restrictions. OGE created more specific requirements for donors of in-kind pro bono services because of the nature of legal service providers. Many pro bono donors are law firms or legal service organizations, which are not individuals and would thus be precluded from donating pro bono legal services if the requirements were identical. Instead, only solo legal practitioners would be able to provide pro bono legal services, severely limiting employees' access to such services. For these reasons, OGE is electing to provide executive branch employees the opportunity to access pro bono legal services within the existing limitations of the regulation. These limitations include, importantly, prohibiting pro bono donations from attorneys or organizations substantially affected by the performance or nonperformance of an employee's official duties.

OGE requested comments regarding whether 501(c)(3) and 501(c)(4) organizations should be permitted to donate to legal expense funds. OGE received three comments from organizations expressing opposition to allowing 501(c)(4) organizations to donate. OGE also received comments from two organizations expressing opposition to allowing 501(c)(3) organizations to donate, with one allowing for the possibility of permitting donations with certain restrictions on the type of 501(c)(3) organizations that can donate.

OGE believes it is appropriate to allow 501(c)(3) organizations to donate to legal expense funds and has revised the regulation to permit such donations. 501(c)(3) organizations are tax-exempt charitable organizations that are restricted from lobbying activities and have other safeguards built into the requirements of the Internal Revenue Code. OGE is further requiring that the donating 501(c)(3) organization be established for two years before the donation in order to prevent donations from entities created specifically to circumvent these regulations. 501(c)(4) organizations may participate in lobbying activities, and as a result, OGE believes these organizations pose a greater risk of impartiality concerns. Accordingly, OGE is electing not to allow 501(c)(4) organizations to donate. In addition, OGE notes that an employee beneficiary will have a mandatory recusal from particular matters involving specific parties for any 501(c)(3) organization making a donation ( see § 2635.1002) to protect against impartiality concerns.

OGE received many comments arguing for a lower cap on donations, including comments suggesting the cap match the campaign finance donation limit. One organization commented that there should be no cap on donations. The $10,000 proposed donation cap in the regulation is consistent with the donation cap for U.S. Senate legal expense funds. The cap in the regulation also balances the high cost of legal services with preventing employees from relying on a single source or small number of sources to fund the employee's legal expenses.

OGE received several comments from individuals asking OGE to prohibit donations from foreign governments and corporations. The regulation prohibits foreign governments from donating, and OGE has, in addition, amended the regulation to prohibit foreign nationals from donating to legal expense funds, serving as trustees, and providing pro bono legal services. The regulation also prohibits donations from any entities that are not registered 501(c)(3) organizations or political parties. For the purposes of this regulation, “political parties” include the distinct legal entities within national parties and party committees.

Two organizations commented that they oppose the requirement to disclose the terms of representation and funding sources for most employees in quarterly reports, stating that the information is privileged and confidential, that it would require employees to report confidential billing statements with attorney work product, and that the proposed rule, as written, improperly invades the privileged attorney-client relationship. One of the two organizations argued in the alternative that the vagueness of the reporting requirements would “trick” unwary clients into disclosing privileged and confidential information. This organization further stated that the reporting would be onerous and strategically disadvantage federal employees who need legal representation. In contrast, a separate organization strongly supported the quarterly reporting model as drafted. OGE also received many comments from individuals supporting the idea of transparency generally and the specific public reporting requirements in the proposed regulation. Several individual commenters requested additional disclosures including: disclosing all donations, disclosing the relationship between the donor and beneficiary, and disclosing whether the donor does business with the beneficiary's agency. OGE weighed this strong support for transparency when considering any possible changes in response to commenters seeking less transparency.

OGE believes that the required quarterly reporting is necessary for transparency and does not impede on attorney-client privilege or unduly discourage representation of federal employees. The regulation requires that the beneficiary report distributions of $250 or more from the fund. Section 2635.1007 requires that the employee beneficiary disclose the payee, date of distribution, amount, and “purpose” of the distribution. The required purpose can be as broad as “legal services” and the employee beneficiary is in no way compelled to, and in fact should not, report confidential attorney-client information. OGE notes specifically that the beneficiary is not required to report the terms of the representation or the billing rates of the staff involved. Moreover, OGE intends to provide more specific guidance regarding quarterly reporting requirements. Although OGE acknowledges that there may be some strategic disadvantages to any disclosure requirements, OGE is balancing that concern with the need for transparency, which most commenters emphasized was crucial to this process.

OGE also is balancing the privacy interests of the donors and beneficiaries with the need for transparency. OGE believes the additional information requested by some individual commenters, such as the relationship between the beneficiary and donor, encroaches too much on the privacy of the donors and the beneficiary. In addition, the information required aligns with the disclosure requirements for U.S. House of Representatives legal expense funds.

One of the organizations also commented that the proposed reporting system would deter attorneys from representing federal employees. As noted above, OGE believes that the reporting requirements are very general and not unduly onerous.

Two organizations commented that placing the quarterly reporting information into a searchable, sortable database makes that information available to attorneys of party opponents, and stated that the information is privileged. OGE reiterates that no privileged information is required to be disclosed under § 2635.1007, and information such as whether the client is on a flat or fixed rate or the numbers of hours worked is not required by the form. Any hypothetical strategic disadvantage to the employee beneficiary is outweighed by the employee beneficiary being able to access funds for legal services.

One organization requested that the trustee disclose violations of the regulations (which OGE takes to mean impermissible donors or expense payments) and the corrective action taken, or in the alternative, declare that there have been no known violations. OGE does not have the statutory authority to require reporting by the trustee; all required reporting is from the employee beneficiary. In addition, the regulation contemplates the identification and return of impermissible donations as part of the proper functioning of the regulation, not as a per se violation. The beneficiary reports all donations received of $250 or more and all distributions of $250 or more on quarterly reports. These reports will be reviewed by agency ethics officials, and in some cases OGE, to ensure compliance with the regulation. It is possible that a trustee or beneficiary may not promptly identify an impermissible donation: this is the reason for agency review. In those cases, the agency ethics official will direct the employee to return the donation. OGE believes agency review of the quarterly reports and the fiduciary duty owed to the beneficiary are sufficient incentives for the trustee to act with care in carrying out their responsibilities.

One organization commented that they were concerned that the information required in quarterly reports about donors could provide clues as to the identity of an anonymous whistleblower and asked that anonymous whistleblowers be permitted to file reports a year after the normal deadline. OGE understands this concern, which is why reports filed by anonymous whistleblowers are not publicly posted like other reports. However, OGE believes the quarterly reporting requirements are important to ensure compliance with the regulation and to provide the information necessary for the employee and OGE to manage any required recusals. OGE believes the regulation strikes the proper balance between the risk to the whistleblower and OGE's required oversight of the ethics program. As a result, the regulation's quarterly reporting requirements apply to all beneficiaries of legal expense funds.

OGE requested comments regarding how and when the 501(c)(3) organization to which excess funds are donated should be designated. OGE received two comments from organizations supporting the idea that the trustee designate the organization, with one in favor of designating the organization at the time of termination of the trust. One individual commenter asked that the designation of the organization be at the time of formation to provide more information to donors to the fund. The commenter also objected to not returning the unspent donations to the donors. In addition, one organizational commenter requested that the 501(c)(3) organization not have ties to the trustee.

OGE has revised § 2635.1008 to exclude 501(c)(3) organizations that have ties to the trustee, but is not changing the time of designation. The regulation's timing in designating the 501(c)(3) organization is similar to that for legal expense funds established pursuant to the U.S. House of Representatives legal expense fund regulations, and the small number of comments weigh in favor of not changing the time of designation. The individual commenter was dubious of the difficulty in returning unspent funds to individual donors, given that the regulation requires the return of impermissible donations. In practice, however, it is challenging to return unspent donations to individual donors at the end of the life of a fund because the trustee would have to apportion the remaining funds among all of the donors to the fund, which could result in returning insignificant amounts to many individual donors. OGE believes a donation of the remaining amount to an approved 501(c)(3) organization reduces the administrative burden on the trust and does not create additional conflicts issues. However, OGE has amended the regulation to allow the return of unspent funds to individual donors if practicable.

OGE received one comment requesting mandatory termination of legal expense funds to prevent beneficiaries from having legal expense funds that continue to spend funds after the legal matter has ended, i.e., “zombie funds.” OGE has revised the rule and adopted a mandatory termination within 90 days of conclusion of the legal matter or within 90 days of the last expenditure made in relation to the legal matter for which it was created, whichever is later.

OGE received three comments from organizations regarding the restrictions on individuals and entities that provide pro bono legal services. One organization supported this section of the proposed regulation as drafted, stating that it contained adequate protections against conflicts of interest. One organization suggested that OGE adopt the definition of prohibited source found in § 2635.203(d) and disallow all prohibited sources from providing pro bono legal services. One organization suggested that OGE revise the language of the rule to more clearly state that any individuals providing pro bono legal services may not be substantially affected by the performance or nonperformance of an employee's official duties.

OGE declines to adopt the suggestion to bar the acceptance of pro bono services from prohibited sources as defined in § 2635.203(d). In preparing to draft the proposed rule, OGE solicited input from agency ethics officials. Several agency ethics officials from large agencies told OGE that if the traditional “prohibited source” definition was applied to pro bono services, the employees at their agencies would likely never be able to accept pro bono assistance with legal expenses because of the breadth of the agency portfolio.

OGE also notes that barring acceptance of pro bono services from firms registered as lobbyists and foreign agents would make it very difficult for employees to retain law firm services at all; this is particularly true for employees who live and work in the Washington, DC Metro Area. Accordingly, OGE has elected to permit employees to accept pro bono services from individual attorneys who are not lobbyists, foreign nationals, or foreign agents, and from organizations (law firms and other legal entities) that do not have interests that may be substantially affected by the performance or nonperformance of an employee's official duties. OGE recognizes the concerns related to lobbyists and registered foreign agents providing gifts, which is why individual attorneys providing pro bono services cannot be lobbyists, foreign nationals, or foreign agents.

In addition, OGE has revised the regulation to more clearly address the two-step pro bono donor analysis. First, the individual attorney providing legal services cannot be a lobbyist, foreign agent, or foreign national, nor have interests substantially affected by the performance or nonperformance of the employee's official duties. Second, the organization or entity employing the attorney ( e.g., a law firm, legal services organization, or 501(c)(3) hiring outside counsel) may not have interests that may be substantially affected by the performance or nonperformance of the employee's official duties. OGE believes the regulation as written strikes the proper balance between conflicts of interest concerns and allowing access to pro bono services in practice for all federal employees.

OGE solicited comments regarding whether 501(c)(3) and 501(c)(4) organizations should be permitted to pay for legal services for an executive branch employee. OGE received a comment from 6,905 individuals that nonprofit charities should be on equal footing with law firms in the ability to provide legal services. OGE also received comments from three organizations that supported the idea that 501(c)(3) organizations should be able to pay for outside counsel to provide legal services to executive branch employees, with some limitations. The limitations proposed include: (1) that the organization not have conflicting interests; (2) that the organization be in operation for at least two or three years; and (3) that the organization's focus be on government integrity, whistleblower protections, federal employment law, or fraud, waste, and abuse in the government. OGE received one comment from an organization objecting to the idea that both 501(c)(3) organizations and 501(c)(4) organizations could be able to pay for outside counsel to provide legal services. OGE received two comments from organizations objecting to, and no comments in support of, allowing 501(c)(4) organizations to provide pro bono legal services or pay for legal services for executive branch employees.

OGE notes that § 2635.1009(a)(2) of the proposed regulation had allowed both law firms and 501(c)(3) organizations to provide in kind pro bono legal services to an employee, so long as the entity providing services did not “have interests that may be substantially affected by the performance or nonperformance of an employee's official duties.” This provision allowed a 501(c)(3) organization to provide legal services using the organization's own employees, but it did not permit any entity to hire an outside lawyer or law firm to provide those services.

Following the review of the comments, OGE also believes it is appropriate to allow 501(c)(3) organizations to pay an outside lawyer or law firm to provide an employee legal services. As discussed above, 501(c)(3)s are tax-exempt charitable organizations that are restricted from lobbying activities and have other safeguards due to the requirements of the Internal Revenue Code. Because 501(c)(4) organizations do not have similar safeguards in place and do not have the same restrictions on lobbying activity, OGE is declining to allow 501(c)(4) organizations to pay an outside lawyer or law firm to provide an employee legal services.

OGE has revised the regulation to include a provision permitting 501(c)(3) organizations to hire outside counsel to represent executive branch employees for legal matters arising in connection with the employee's past or current official position, the employee's prior position on a campaign, or the employee's prior position on a Presidential Transition Team. Any 501(c)(3) organization seeking to hire outside counsel will be required to have been established for two years before paying for an employee's legal services to protect against the creation of an entity in order to circumvent these regulations. The 501(c)(3) organization will also need to meet the requirements of § 2635.1009(a).

There is heightened concern about impartiality in pro bono legal arrangements and in any circumstance when a third party is paying for an employee's legal fees. As a result, the employee will have a mandatory recusal from particular matters involving specific parties involving the attorney(s) and legal services organization representing the employee in a legal matter. The employee will also have a mandatory recusal from particular matters involving specific parties involving any 501(c)(3) organization paying for the employee's legal fees during the representation and for two years after the representation has concluded.

OGE received comments from two organizations concerned that seeking approval from the agency for receipt of pro bono service when the agency is the opposing party in the legal matter would deter some employees from seeking pro bono legal services. The ethics system in the executive branch is decentralized; thus, the agencies are in the best position to know which individuals, 501(c)(3) organizations, and law firms have business before the agency and could create a conflict of interest. As a result, the review process rests with agencies. To address the concern expressed by the commenters, however, OGE has revised the regulation to permit employees engaged in legal matters when the agency is the opposing party to appeal to OGE when an agency determines that a pro bono service provider is prohibited, or when an agency fails to make such a determination within 30 days. OGE believes this change strikes a balance between ensuring prohibited donors are not providing legal services to employees while ensuring every employee entitled to assistance with legal services can access those services.

OGE received a comment from an organization that is concerned that legal services providers could be paid by third parties for legal services and the employee and/or the legal services provider would then characterize those services as pro bono. The commenter requested an amendment to the regulation requiring a certification by the legal services provider and the employee that no third party is paying for the legal services. In response to the commenter's concern, OGE is adding a certification to the quarterly report where the employee will attest that the information is true, complete, and correct to the best of their knowledge. In addition, any employee who files an OGE Form 278e or 450 financial disclosure statement must disclose the receipt of pro bono services or legal services paid for by a non-relative third party as a gift on their annual financial disclosure report, which the employee must similarly certify is true, complete, and correct to the best of their knowledge. Both disclosure statements are subject to the civil and criminal penalties for either failure to disclose or false disclosure.

Two organizations requested clarification on whether contingency fees are provided for less than “market value” as that term is defined in § 2635.203(c). OGE considers contingency fees to be a regular market arrangement, and does not consider a contingency fee arrangement on its face to be less than the cost a member of the general public would reasonably expect to incur. Accordingly, contingency fee arrangements are not pro bono legal services as defined in § 2635.1003.

OGE received no comments regarding § 2635.204(n): Exception for Legal Expense Funds and Pro Bono Legal Services and § 2635.204(c): Discounts and Similar Benefits in subpart B.

OGE is implementing a new exception at 5 CFR 2635.204(c)(2)(iv) to clarify that employees may properly accept opportunities and benefits offered by a previously established employee organization, when eligibility is based on the employee's status as an agency employee. As discussed in the preamble to the proposed rule ( see 87 FR 23773), the proposed exception is limited to “established” employee organizations, such as employee welfare groups for Federal employees, because the purpose of this exception is to allow employees to accept opportunities and benefits from pre-existing employee organizations with a general mission of providing assistance to agency employees, rather than from organizations established as a response to a specific investigation or established to help a specific employee. As the preamble to the proposed rule clarifies, the word “established” does not mean an employee organization must be established before this regulation goes into effect; rather, it means that the organization should have been established before the need for assistance arises—in the case of an LEF, before a legal matter arises.

OGE received no comments regarding § 2634.907: Report contents.

As Director of the Office of Government Ethics, I certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this final rule will not have a significant economic impact on a substantial number of small entities because it primarily affects current Federal executive branch employees.

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies because this regulation creates information collection requirements that require approval of the Office of Management and Budget. The information collection requirements imposed by the proposed regulation are directed at beneficiaries of legal expense funds, who are current executive branch employees. Although the requirements are directed at employee beneficiaries, OGE anticipates that the legal expense fund trustees will prepare most or all of the fund documentation and reporting.

In fulfilling the regulatory requirements, employee beneficiaries must first submit a trust document for approval by their employing agency, and in some cases by OGE. Employee beneficiaries must also submit quarterly and termination reports regarding the funds collected and disbursed by the legal expense fund. The employee beneficiaries will in turn collect information from (1) donors who contribute to the legal expense fund for the payment of legal expenses and (2) payees who receive payments distributed from the legal expense fund. Together, this information collection is titled “OGE Legal Expense Fund Information Collection.”

OGE plans to seek Paperwork Reduction Act approval of this new information collection. The purposes of the OGE Legal Expense Fund Information Collection include, but are not limited to, obtaining information relevant to a conflict-of-interest determination and disclosing on the OGE website information submitted pursuant to 5 CFR part 2635, subpart J. The authority for this information collection is addressed in the SUPPLEMENTARY INFORMATION section.

OGE estimates that there will be approximately three new legal expense funds filed each year. It is anticipated that there may be an average of five legal expense fund trusts in existence each year. Each trust is anticipated to have approximately 20 donors, whose reporting requirements are tied to the frequency with which they donate, and approximately two payees, who will submit information each time they receive a distribution.

The following table estimates the total annual burden resulting from the OGE Legal Expense Fund Information Collection will be approximately 129.2 hours.

These estimates are based in part on OGE's knowledge of several legal expense funds that have been established for Executive branch employees, as well as OGE's consultation with the U.S. House of Representatives and the U.S. Senate regarding the legal expense funds that they oversee.

Shortly after publication of this rule, OGE plans to submit this new information collection to the Office of Management and Budget (OMB) for approval under the Paperwork Reduction Act. OMB is required to make a decision concerning the collection of information requirements contained in this rule between 30 and 60 days after publication of this document in the Federal Register . Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. Public comments can be submitted on OMB's website: Reginfo.gov .

For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. chapter 25, subchapter II), this final rule will not significantly or uniquely affect small businesses and will not result in increased expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (as adjusted for inflation) in any one year.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select the regulatory approaches that maximize net benefits (including economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated as a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, this rule has been reviewed by the Office of Management and Budget.

Currently, executive branch employees may accept gifts to pay for legal expenses from others directly and can also establish funds to accept donations for such expenses, as long as the employee remains in compliance with the gift restrictions in subparts B and C of the Standards of Conduct and the criminal conflict of interest statutes. See, e.g., OGE Legal Advisory LA-18-11 (Sept. 12, 2018); OGE Legal Advisory LA-17-10 (Sept. 28, 2017). In other words, there are currently costs for employees who establish an LEF in order to ensure compliance with ethics rules even in the absence of OGE's new framework in subpart J, but compliance can be difficult and confusing as the current rules do not address these types of gifts specifically. OGE's role is currently limited to providing a legal expense fund trust template or to providing technical assistance to help ensure that executive branch employees who may receive distributions from an LEF will be in compliance with existing ethics laws and rules.

Based on OGE's current experience under the status quo, it is estimated that approximately five executive branch employees may seek to establish or maintain an LEF annually. The new framework will consist of the following activities: establishment of the LEF trust; submission of trust documentation for agency review and approval; review and approval by OGE (when applicable); LEF trustee soliciting and accepting donations; LEF trustee screening donations to ensure the donor is permissible; LEF trustee overseeing distributions from the trust for the employee's legal expenses; preparing quarterly reports of contributions to and distributions from the LEF; submission of quarterly reports for agency review; review by OGE (when applicable); preparation of trust termination reports and/or employment termination reports; submission of those reports for agency review and OGE review (when applicable); and communications regarding all of the above. OGE estimates that the annual time burden for all of the above is 100 hours. Using an estimated rate $340 per hour for the services of a professional trust administrator or private representative, the estimated annual cost burden is $34,000. See Clio, Legal Trends Report 65 (2021), https://www.clio.com/resources/legal-trends/2021-report/read-online/ (calculating an average hourly rate of $332 for trust lawyers nationally). However, OGE estimates that the annual time burden under the status quo, if an employee establishes a legal expense fund that needs to comply with existing ethics rules, is 75 hours with an annual cost burden of $25,500. Thus, the net increase from the status quo is approximately $8,500 per fund. The estimate of 75 hours is based, in part, on the estimated time burden for OGE's qualified trust program. See 84 FR 67743. That number was reduced because the status quo does not require review and approval of trusts or submission of reports to agencies and OGE. Under the status quo, a significant time burden exists because the lack of a detailed framework requires additional research by employee representatives, consultation with agency ethics officials and OGE, and a more detailed review of each legal expense fund donor in the absence of an enumerated list of permissible donors. The additional 25-hour estimate is based on the specific submissions required by 5 CFR part 2635, subpart J. Specifically, submission of documents establishing an LEF trust, quarterly reports, and termination reports; review by agencies and OGE of those submissions; and corresponding communications will increase the cost burden in comparison to the status quo. The burden on legal expense fund donors specifically is unchanged because they would need to provide the same level of information under the status quo.

The benefits from implementing this new regulatory structure are significant. Employees' acceptance of payments for legal expenses relating to their official duties has triggered concern from outside groups, Congress, and the media regarding appearance of corruption, corruption issues, and a desire for transparency. Creating this regulation will provide a framework for screening for conflicts of interest and transparency, which will serve to protect both the agency and the employee. Further, the regulation will provide clarity to executive branch employees by articulating the process for establishing an LEF and the requirements for maintaining one, including: donation caps, the process for review and approval of LEF trust documents, the definition of prohibited donors, and the submission of quarterly, publicly available reports. As a result of these requirements, as well as the increased public reporting requirements, the public will have increased confidence in the decision-making of executive branch employees who accept gifts of legal expenses consistent with the new proposed subpart J.

As Director of the Office of Government Ethics, I have reviewed this final rule in light of section 3 of Executive Order 12988, Civil Justice Reform, and certify that it meets the applicable standards provided therein.

The Office of Government Ethics has evaluated this final rule under the criteria set forth in Executive Order 13175 and determined that tribal consultation is not required as this proposed rule has no 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.

For the reasons set forth in the preamble, the U.S. Office of Government Ethics amends 5 CFR parts 2634 and 2635 as follows:

A final rule published in the Federal Register on February 28, 2022 (87 FR 10930) removed substances from the National List following the procedures detailed in the Organic Foods Production Act of 1990 (OFPA) (7 U.S.C. 6501-6524). Removing these substances implements recommendations from the National Organic Standards Board and effectively prohibits their use in organic production.

One change discussed in the final rule was removing nonorganic whey protein concentrate from the National List. While the rule discussed this change and the justification, the rule's instructions for changing the regulation did not include the removal. This document corrects this by removing the entry for whey protein concentrate at 7 CFR 205.606(x). As discussed in the final rule, use of nonorganic whey protein concentrate in organic products is prohibited after March 15, 2024.

For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 205 as follows:

The ReConnect Program was authorized by the Consolidated Appropriations Act, 2018 (Pub. L. 115-141), which directed the program to be conducted under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq). The ReConnect Program provides loans, grants, and loan/grant combinations to facilitate broadband deployment in rural areas. In facilitating the expansion of broadband services and infrastructure, the program fuels long-term rural economic development and opportunities across rural America.

The final rule that published January 30, 2023, (88 FR 5724), included a 60-day comment period that ended on March 31, 2023. The intent of the changes outlined in the final rule was to remove outdated requirements and ensure that the requirements in the regulation are clear, accurate as presented, and in compliance with Federal reporting requirements. The Agency received comments from 3 respondents. Respondents included one telecommunications company and two industry associations The following are the comments received and the Agency's responses:

Comment: Cimarron Telephone Company, LLC stated that the requirement to have a Tribal Resolution of Support be part of the ReConnect Program application may deter some potential applicants from the program. The respondent also states that this could lessen the amount of rural Americans receiving any service or lessen the chance that current services would be upgraded. The respondent offered examples they personally experienced that lead them to encourage the Agency to change this requirement. The respondent recommends requiring the resolution to be submitted within 120 days of the applicant being selected for an award.

Agency response: The Agency appreciates the comments provided by the respondent; however, it is a priority of this Administration that tribal sovereignty be respected by not imposing federal projects over tribal lands without their consent.

Comment: NCTA—The internet and Telephone Association expressed appreciation for the work done by the Agency to streamline the requirements of the ReConnect Program. They also praised the Agency for its clarification of the Buy America requirements. The respondent also encourages the Agency to allow awardees to continue to use their parent entity's consolidated audit after an award is made, if applicable.

Agency response: The Agency appreciates the comments provided by the respondent.

Comment: NTCA—The Rural Broadband Association expressed concern about the impact of the Build America, Buy America Act on non-Federal entities who receive ReConnect Program funding. Additionally, the respondent offered data indicating that there would be strain on the supply chains which produce needed equipment for those non-Federal entities required to comply with the law. The respondent feels that there are two standards, depending on what type of organization your entity is, and that by treating all entities the same would make it easier for all companies to comply with the Build America, Buy America Act.

Agency response: The Agency appreciates the comments provided by the respondent; however, the entity status for compliance with the Build America, Buy America Act is set in statute, whereas the RUS Buy American requirement applies to all entities also by statute. As such, the requested change is beyond the control of the agency.

No change to the rulemaking is necessary. The RUS appreciates comments from interested parties. The Agency confirms the final rule without change.

The Federal Election Campaign Act, 52 U.S.C. 30101-30145 (“FECA”), states that “[n]o person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.” 52 U.S.C. 30122. The Commission has implemented this provision at 11 CFR 110.4, which states that no person may “[k]nowingly help or assist any person in making a contribution in the name of another.” 11 CFR 110.4(b)(1)(iii).

On April 6, 2018, the United States District Court for the District of Utah issued a memorandum decision and order holding that the Commission's regulation at 11 CFR 110.4(b)(1)(iii) was invalid, enjoining the Commission from enforcing that provision, and ordering the Commission to strike the provision from the Code of Federal Regulations. 1 FEC v. Swallow ( Swallow I ), 304 F. Supp. 3d 1113 (D. Utah 2018); FEC v. Swallow ( Swallow II ), No. 2:15-CV-00439 (D. Utah Sept. 20, 2018) (Westlaw) (order granting partial final judgment). To conform its regulation to the court orders in Swallow I and II, the Commission is removing 11 CFR 110.4(b)(1)(iii) and renumbering paragraph (b)(1)(iv) as paragraph (b)(1)(iii). The Commission is accepting comments on this revision and any comments received may be addressed in a subsequent rulemaking document.

The Commission is taking this action without advance notice and comment because it falls under the “good cause” exception of the Administrative Procedure Act (“APA”), 5 U.S.C. 553(b)(B). The revisions are necessary to conform the Commission's regulations to the court's orders. Because this action does not involve any Commission discretion or policy judgments, notice and comment are unnecessary. 5 U.S.C. 553(b)(B), (d)(3). Moreover, because this interim final rule is exempt from the APA's notice and comment procedure under 5 U.S.C. 553(b), the Commission is not required to conduct a regulatory flexibility analysis under 5 U.S.C. 603 or 604. See 5 U.S.C. 601(2), 604(a).

For the reasons set out in the preamble, the Federal Election Commission amends 11 CFR chapter I as follows:

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, and certain Model 737-8 and -9 airplanes. The NPRM published in the Federal Register on November 30, 2022 (87 FR 73507). The NPRM was prompted by reports from Boeing of uncommanded escape slide deployments in the passenger compartment while the airplane was on the ground, caused by too much tension in the inflation cable (introduced during packing of the slide) and the movement of the escape slide assembly in the escape slide compartment during normal airplane operations. The escape slide is used in the door-mounted escape system of the forward and aft entry doors, and the forward and aft galley service doors on the affected airplanes. In the NPRM, the FAA proposed to require inspecting all escape slide assemblies to identify affected parts, and applicable on-condition actions. The FAA is issuing this AD to address inflation of the escape slide while it is in the escape slide compartment, which could result in injury to passengers and crew during normal operation, or impede an emergency evacuation by rendering the exit unusable.

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

The FAA received additional comments from Aviation Partners Boeing, AIRDO, Singapore Airlines (SIA), American Airlines (AAL), Southwest Airlines (SWA), and an individual. The following presents the comments received on the NPRM and the FAA's response to each comment.

Aviation Partners Boeing stated that the installation of winglets per Supplemental Type Certificate STC ST00830SE does not affect the accomplishment of the actions in the proposed AD.

The FAA agrees with the commenter that the installation of STC ST00830SE does not affect the ability to accomplish the actions required by this AD. The FAA has not changed this AD in this regard.

AIRDO, SIA, and SWA requested the proposed AD be revised to allow using maintenance records in lieu of inspecting the part number of the escape slide assembly as required by the service information specified in paragraph (g) of the proposed AD. SWA noted that escape slides are time limited parts and can easily be identified by a maintenance records review. AIRDO added that the escape slide is controlled by the operator's maintenance system, so it will be easier to use a maintenance record to identify the part number.

The FAA agrees to allow for a maintenance record review to determine the part number of the escape slide assembly, provided the part number can be conclusively determined from the records review. The FAA has added paragraph (h)(3) of this AD to allow a records review in lieu of an inspection.

AAL suggested adding a parts prohibition paragraph to the proposed AD. AAL noted that the proposed AD, Boeing Special Attention Requirements Bulletin 737-25-1855 RB, Revision 1, dated April 13, 2022, and Boeing Special Attention Requirements Bulletin 737-25-1866 RB, Revision 1, dated April 11, 2022, do not explicitly prohibit the installation of slide P/N 5A3307-7 after the actions have been accomplished. AAL requested that the FAA add a paragraph prohibiting the installation of an escape slide part number (P/N) 5A3307-7 after the actions in paragraph (g) of the proposed AD have been accomplished.

The FAA agrees to clarify. 14 CFR 39.7 specifies that once an AD is issued, no person may operate a product to which the AD applies except in accordance with the requirements of that AD. Further, 14 CFR 39.9 imposes a continuing obligation to maintain compliance with an AD by establishing a separate violation for each time an aircraft is operated that fails to meet AD requirements. Thus, operators have an ongoing obligation to ensure that the AD-mandated configuration is maintained. The FAA has not changed this AD as a result of the request.

SIA requested Boeing Information Notice 737-25-1855 IN 01, dated April 22, 2022, to be referenced along with Boeing Special Attention Requirements Bulletin 737-25-1855 RB, Revision 1, dated April 13, 2022. SIA noted that Boeing Information Notice 737-25-1855 IN 01, dated April 22, 2022, changed the weight and balance information to “none.”

The FAA disagrees with the commenter's request. The weight and balance information is only contained in Boeing Special Attention Service Bulletin 737-25-1855, Revision 1, dated April 13, 2022, and is not required for compliance with this AD. Additionally, the information in Boeing Information Notice 737-25-1855 IN 01, dated April 22, 2022, is not necessary to address the unsafe condition or comply with this AD. The FAA has not changed this AD regarding this issue.

An individual requested the FAA require inspecting other aircraft of similar type design. The individual expressed concern that an emergency evacuation would render the exit unusable.

The FAA agrees to clarify. An emergency evacuation slide is often designed for a particular aircraft. In this case, the escape slide assembly in question is a unique installation to the 737, and the same design does not exist on other aircraft. Therefore, no change to this AD is necessary.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Boeing Special Attention Requirements Bulletin 737-25-1855 RB, Revision 1, dated April 13, 2022, and Boeing Special Attention Requirements Bulletin 737-25-1866 RB, Revision 1, dated April 11, 2022. This service information specifies procedures for inspecting all escape slide assemblies to identify affected parts, and applicable on-condition actions. The on-condition actions include replacing any escape slide assembly having part number (P/N) 5A3307-7 with a new assembly having P/N 5A3307-9 or P/N 5A3307-701 (an escape slide assembly having P/N 5A3307-701 is one on which a firing cable retention modification has been done and the assembly has been reidentified). These documents are distinct since they apply to different airplane models.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in ADDRESSES .

The FAA estimates that this AD affects 2,502 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2022-02-01, Amendment 39-21898 (87 FR 2316, January 14, 2022), (AD 2022-02-01). AD 2022-02-01 applied to Sikorsky Aircraft Corporation Model S-92A helicopters with a swashplate assembly part number (P/N) 92104-15011-042 or P/N 92104-15011-043 that had accumulated 1,600 or more total hours TIS, installed. The NPRM published in the Federal Register on January 17, 2023 (88 FR 2558). The NPRM was prompted by a notification of an in-service crack in a swashplate assembly inner ring. The crack, discovered during a routine inspection, extended between the uniball bore and near the right-hand trunnion to servo attach bolt hole. In the NPRM, the FAA proposed to continue to require, for swashplate assemblies that have accumulated 1,600 or more total hours TIS, a certain recurring visual inspection and replacing the swashplate assembly if cracks are found. In the NPRM, the FAA proposed to require accomplishing an FPI or ECI depending on accrued flight time or suspicion of cracks. In the NPRM, the FAA also proposed to expand the visual inspections required by AD 2022-02-01 and revise the applicability statement of AD 2022-02-01.

The FAA received a comment from one commenter, Sikorsky Aircraft Corporation. The following presents the comment received on the NPRM and the FAA's response to the comment.

Sikorsky Aircraft Corporation requested the FAA change paragraph (f) of the AD to state, “Comply with this AD within the compliance times specified, unless already accomplished by Alert Service Bulletin. Repetitive inspections incorporated into Sikorsky S-92 [Aircraft Maintenance Manual] (AMM), Chapter 5, demonstrate compliance with the repetitive inspections of this Airworthiness Directive.” Sikorsky Aircraft Corporation stated that it has issued two alert service bulletins (ASBs) that introduce both a one-time inspection and recurrent inspections for the existing part-numbered stationary swashplate assemblies. In addition, Sikorsky Aircraft Corporation stated that the recurrent inspections have been incorporated into the Sikorsky S-92 AMM, Chapter 5 inspection requirements; and that the introduction of this rule makes these inspections mandatory and the original equipment manufacturer (OEM) agrees. However, Sikorsky Aircraft Corporation stated that from the operator perspective, there may be some confusion as to compliance with the AD. Since the ASBs and Chapter 5 are in place, Sikorsky Aircraft Corporation stated that it may be helpful to add language in the text of the AD explaining that the AD is not introducing a new action if the operator is already following the OEM instructions, which may prevent operators from unnecessarily repeating inspections with which the operator already complied. Lastly, Sikorsky Aircraft Corporation stated that operators who incorporate repetitive inspections into their maintenance programs, in this case the OEM Chapter 5, are demonstrating compliance with the repetitive inspections of this AD.

The FAA disagrees. After reviewing the S-92 AMM tasks, the FAA has determined that the technical content from Sikorsky S-92 Helicopter Alert Service Bulletin ASB 92-62-009, Basic Issue, dated February 6, 2019 (ASB 92-62-009), and Sikorsky S-92 Helicopter Alert Service Bulletin ASB 92-62-010, Basic Issue, dated January 26, 2022 (92-62-010) are not completely incorporated into the AMM tasks. The visual inspection instructions from ASB 92-62-009 are not included in these tasks, and the accomplishment instructions from ASB 92-62-010 have some elements that are missing from some of the AMM tasks. Accordingly, the FAA has determined that the accomplishment instructions of ASB 92-62-009 and ASB 92-62-010 must be done to correct the unsafe condition. In addition, paragraph (f) of the AD specifies to “comply with this AD . . . unless already done.” Therefore, if some of the actions required by this AD are already done, only the remaining required actions of this AD must be accomplished in order to comply with this AD.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed ASB 92-62-010, which specifies a visual inspection of the swashplate assembly to determine if there are any cracks and initiates a 50-hour recurring visual inspection. If cracks are found, ASB 92-62-010 specifies replacing the swashplate assembly. Dependent on accrued flight time or suspicion of cracks, an FPI or ECI is performed. ASB 92-62-010 also specifies returning the swashplate assembly, uniball bearing, trunnions, and all attachment hardware to Sikorsky for investigation if cracks are found.

This AD also requires ASB 92-62-009, which the Director of the Federal Register approved for incorporation by reference as of February 18, 2022 (87 FR 2316, January 14, 2022).

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The applicability statement in this AD does not identify airframe serial numbers, whereas the effectivity of ASB 92-62-010 does. This AD affects all swashplate assemblies P/N 92104-15011-042 and P/N 92104-15011-043 regardless of delivery date, whereas the effectivity of ASB 92-62-010 is for those part-numbered swashplate assemblies delivered as of January 26, 2022 (the issuance date of ASB 92-62-010). ASB 92-62-009 specifies a one-time visual inspection of the swashplate assembly; this AD requires a recurring visual inspection of the swashplate assembly to determine if any crack, nick, dent, or scratch develops over time. This AD does not require returning parts to or contacting Sikorsky, while ASB 92-62-009 and ASB 92-62-010 specify performing those actions.

The FAA estimates that this AD affects 89 helicopters of U.S. registry. The FAA estimates the following costs to comply with this AD. Labor costs are estimated at $85 per work-hour.

Visually inspecting a swashplate assembly takes about 1.0 work-hour, for an estimated cost of $85 per helicopter and $7,565 for the U.S. fleet, per inspection cycle.

Performing an ECI or FPI takes about 8.0 work-hours, for an estimated cost of $680 per helicopter and $60,520 for the U.S. fleet, per inspection cycle.

Replacing the swashplate assembly, if required, takes about 16 work-hours and parts cost about $389,720, for an estimated cost of $391,080 per helicopter.

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

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

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

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

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

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

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

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

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 787-8, 787-9, and 787-10 airplanes. The NPRM published in the Federal Register on December 13, 2022 (87 FR 76158). The NPRM was prompted by reports of a loss of water pressure during flight and water leaks that affected multiple pieces of electronic equipment. In the NPRM, the FAA proposed to require a detailed visual inspection of all door 1 and door 3 lavatory and galley potable water systems for any missing or incorrectly installed clamshell couplings, and applicable on-condition actions. The FAA is issuing this AD to address incorrectly installed or missing lavatory and galley clamshell couplings that could lead to water leaks and water migration to critical flight equipment, which may affect the continued safe flight and landing of the airplane.

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

The FAA received additional comments from four commenters, including American Airlines (AAL), Boeing, Turkish Technic, and All Nippon Airways. The following presents the comments received on the NPRM and the FAA's response to each comment.

AAL, Boeing, and All Nippon Airways requested that the applicability of the proposed AD be changed to include only airplanes listed in the effectivity of Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, which does not include undelivered airplanes. The commenters stated that Boeing has taken several steps to prevent missing or misinstalled lavatory and galley clamshell couplings on airplanes not listed in the effectivity of the Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022. A request for discrepancy check (RDC) was issued to inspect all stored airplanes as outlined in Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, at the same door 1 and 3 locations. For future production airplanes, Quality Assurance (QA) verification of clamshell coupling installations has been added for lavatories (11/18/2019) and galleys (7/22/2022). As an alternative, if the proposed AD includes undelivered airplanes, All Nippon Airways requested that the compliance time be changed to 180 days after the date of issuance of the original standard certificate of airworthiness or the original export certificate of airworthiness.

The FAA agrees with the request to change the applicability to include only airplanes listed in the effectivity of Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, for the reasons provided by the commenters. Paragraph (c) of this AD has been changed.

AAL commented that the actions of the proposed AD do not sufficiently address the unsafe condition nor do they prevent reoccurrence when future maintenance is accomplished on the clamshell. AAL noted that the leaks are the result of improper installation by individual operators and not a design failure, according to the manufacturer, who has not recommended replacement of the couplings on the majority of the fleet. AAL asserted that the maintenance manual currently provides extensive details on proper installation of the coupling, and that an incorrectly installed coupling is not a latent failure, and is detectable prior to operation of the aircraft. AAL observed that the same couplings are installed on their Model 737 and 777 fleet with a high level of reliability and no recorded installation errors in the previous 12 months.

The FAA partially agrees with the assertions of the commenter. As specified in the NPRM, this AD does not provide a long-term solution to fully address the unsafe condition, but is intended to be interim action that will adequately address leak events until an appropriate design change is developed and additional AD action is proposed. Part of the interim solution is updating the lavatory and galley Fleet Team Digest for missing or incorrectly installed couplings. In addition, maintenance procedures have been updated to correct errors and add tasks directing maintenance in areas where couplings are installed to return the area to its normal condition, which will include inspecting couplings for proper installation prior to leaving the area. Although the commenter asserts that incorrectly installed couplings are detectable, there have been several cases of a loss of water pressure during flight, as well as water leaks, discovered after landing, that caused water to migrate into the forward electronic equipment (EE) bay and affect multiple pieces of EE. The inspections or improved strapped coupling installations have not been completed on all affected airplanes yet, so the unsafe condition still exists within the fleet. This AD will ensure that all couplings are inspected per the updated maintenance procedures and will ensure the safety of the entire fleet. The FAA has therefore determined that this AD is necessary to address the unsafe condition. The FAA has not changed this AD with regard to this comment.

Boeing has issued Multi-Operator Message MOM-MOM-21-0554-01B, dated December 14, 2021 (for lavatory inspections), and MOM-MOM-22-0229-01B, dated April 29, 2022 (for galley inspections). Turkish Technic asserted that the MOMs will address the unsafe condition identified in the proposed AD. The commenter reported that it had performed the actions specified in the MOMs, and subsequently Boeing issued Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, which indicates that no further action is necessary after accomplishment of the actions in the MOMs. The commenter considered the actions in the MOMs to satisfactorily complete the proposed requirements, and requested that the proposed AD be revised to add the MOMs as an alternative to Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, or alternatively, to provide credit for inspections previously complied as per the MOMs.

The FAA agrees that inspections completed as specified in the MOMs address the unsafe condition. A paragraph has been added to this AD to provide credit for accomplishing the MOMs prior to the effective date of this AD.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022. This service information specifies procedures for a detailed visual inspection of all door 1 and door 3 lavatory and galley potable water systems for any missing or incorrectly installed clamshell couplings, and applicable on-condition actions. On-condition actions include installing clamshell couplings, doing a leak test, and performing corrective actions until the leak test is passed.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in ADDRESSES .

The FAA considers this AD an interim action. If a final action is later identified, the FAA might consider further rulemaking.

The FAA estimates that this AD affects 134 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

Authority for This Rulemaking

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 modifies the Air Traffic Service (ATS) routes as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System (NAS).

The FAA published a notice of proposed rulemaking for Docket No. FAA-2022-1558 in the Federal Register (87 FR 76594; December 15, 2022), amending VOR Federal airways V-169, V-170, and V-430, and RNAV route T-331; and establishing RNAV route T-475 due to the planned decommissioning of the VOR portion of the Devils Lake, ND, VOR/DME NAVAID. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.

Subsequent to the NPRM, the FAA published a rule for Docket No. FAA-2023-0501 in the Federal Register (88 FR 30896; May 15, 2023), amending RNAV route T-331 by updating the Squaw Valley, CA, VOR/DME route point with its new name, the Palisades, CA, VOR/DME. That editorial amendment, effective August 10, 2023, does not affect the route alignment or structure and is included in this rule.

VOR Federal airways are published in paragraph 6010(a) and United States Area Navigation Routes (T-routes) are published in paragraph 6011 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 amends the current version of that order, FAA Order JO 7400.11G, dated August 19, 2022, and effective September 15, 2022. FAA Order JO 7400.11G is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

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

This action amends 14 CFR part 71 by amending VOR Federal airways V-169, V-170, and V-430, and RNAV route T-331; and establishing RNAV route T-475 due to the planned decommissioning of the Devils Lake, ND, VOR. The ATS route actions are described below.

V-169: V-169 currently extends between the Tobe, CO, VOR/DME and the Devils Lake, ND, VOR/DME. The route segment between the Bismarck, ND, VOR/DME and the Devils Lake, ND, VOR/DME is removed. As amended, the airway extends between the Tobe VOR/DME and the Bismarck VOR/DME.

V-170: V-170 currently extends between the Devils Lake, ND, VOR/DME and the Sioux Falls, SD, VOR/Tactical Air Navigation (VORTAC); between the Rochester, MN, VOR/DME and the Salem, MI, VORTAC; and between the Slate Run, PA, VORTAC and the intersection of the Andrews, MD, VORTAC 060° and Baltimore, MD, VORTAC 165° radials (POLLA Fix). The airspace within R-5802 is excluded when active. The airway segment between the Devils Lake, ND, VOR/DME and the Jamestown, SD, VOR/DME is removed. As amended, the airway extends between the Jamestown VOR/DME and the Sioux Falls VORTAC; between the Rochester VOR/DME and the Salem VORTAC, and between the Slate Run VORTAC and the POLLA Fix. The R-5802 exclusion language remains unchanged.

V-430: V-430 currently extends between the Cut Bank, MT, VOR/DME and the Escanaba, MI, VOR/DME. The airway segment between the Minot, ND, VOR/DME and the Grand Forks, ND, VOR/DME is removed. As amended, the airway extends between the Cut Bank VOR/DME and the Minot VOR/DME, and between the Grand Forks VOR/DME and the Escanaba VOR/DME.

T-331: T-331 currently extends between the FRAME, CA, Fix and the FONIA, ND, Fix. The route is extended eastward from the FONIA Fix to the MECNU, MN, Fix located near the western shore of Lake Superior and the United States/Canada border. The T-331 extension overlies the current V-430 airway between the FIONA Fix and the Duluth, MN, VORTAC to provide an RNAV route alternative for the V-430 airway segment removed as noted previously. From the Duluth VORTAC, T-331 overlies VOR Federal airway V-13 to the MECNU Fix. The full route description is listed in the amendments to part 71 as set forth below.

T-475: T-475 is a new RNAV route that extends between the Bismarck, ND, VOR/DME and the GICHI, ND, waypoint (WP) located near the Devils Lake, ND, VOR/DME. The new route overlies the current V-169 airway and serves as a RNAV route alternative for the V-169 airway segment removed as noted previously. The full route description is listed in the amendments to part 71 as set forth below.

The NAVAID radials listed in the VOR Federal airway descriptions below are unchanged and stated in degrees True north.

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

The FAA has determined that this action of amending VOR Federal airways V-169, V-170, and V-430, and RNAV route T-331; and establishing RNAV route T-475 due to the planned decommissioning of the VOR portion of the Devils Lake, ND, VOR/DME NAVAID, qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points); paragraph 5-6.5b, which categorically excludes from further environmental impact review actions regarding establishment of jet routes and Federal airways (see 14 CFR 71.15, Designation of jet routes and VOR Federal airways); operation of civil aircraft in a defense area, or to, within, or out of the United States through a designated Air Defense Identification Zone (ADIZ) (14 CFR part 99, Security Control of Air Traffic); authorizations for operation of moored balloons, moored kites, amateur rockets, and unmanned free balloons (see 14 CFR part 101, Moored Balloons, Kites, Amateur Rockets and Unmanned Free Balloons); and, authorizations of parachute jumping and inspection of parachute equipment (see 14 CFR part 105, Parachute Operations); paragraph 5-6.5i, which categorically excludes from further environment impact review the establishment of new or revised air traffic control procedures conducted at 3,000 feet or more above ground level (AGL); procedures conducted below 3,000 feet AGL that do not cause traffic to be routinely routed over noise sensitive areas; modifications to currently approved procedures conducted below 3,000 feet AGL that do not significantly increase noise over noise sensitive areas; and increases in minimum altitudes and landing minima. For modifications to air traffic procedures at or above 3,000 feet AGL, the Noise Screening Tool (NST) or other FAA-approved environmental screening methodology should be applied; and paragraph 5-6.5k, which categorically excludes from further environmental impact review the publication of existing air traffic control procedures that do not essentially change existing tracks, create new tracks, change altitude, or change concentration of aircraft on these tracks. As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. The FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

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

History

The FAA published a final rule in the Federal Register (88 FR 18241, March 28, 2023) for Doc. No. FAA-2022-1161, amending Class D airspace, Class E surface area, and Class E airspace extending upward from 700 feet above the surface of the Greenville, Spartanburg, and Greer, SC areas. This action removes the airport name (Greenville-Spartanburg International Airport) from the first line of the E2 descriptor for Greenville-Spartanburg International Airport. The header will now read ASO SC E2 Greer, SC. In addition, this action replaces the reference to Greenville-Spartanburg International Airport with the term Greer in the airspace descriptions.

Class D and Class E airspace designations are published in Paragraphs 5000, 6002, and 6005 of FAA Order JO 7400.11G dated August 19, 2022, and effective September 15, 2022, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will subsequently be published in FAA Order JO 7400.11G.

Accordingly, pursuant to the authority delegated to me, the amendment of Class D airspace and Class E surface airspace published in the Federal Register of March 28, 2023 (88 FR 18241) for Doc. No. FAA-2022-1161, is corrected as follows:

On March 28, 2023, we published the NPP in the Federal Register (88 FR 18280) with a Docket ID of [ED-2023-OSERS-0001]. We are correcting the NPP to reflect the correct Docket ID [ED-2023-OSERS-0057].

Other than correcting the Docket ID, all other information in the NPP remain the same.

In FR Doc. 2023-06417, appearing on page 18280 of the Federal Register of March 28, 2023 (88 FR 18280), we make the following correction:

On page 18280, in the first column, below the heading “34 CFR Chapter III”, remove “[Docket ID ED-2023-OSERS-0001]” and add, in its place, “[Docket ID ED-2023-OSERS-0057]”.

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

On March 3, 2023, the EPA proposed to approve a revision  1 to the California SIP concerning the provisions for CFF for the 2015 ozone NAAQS in the Coachella Valley, Sacramento Metro, San Joaquin Valley, South Coast, Ventura County, and West Mojave Desert NAAs. 2 In our March 3, 2023 proposed rulemaking, we provided background information on the 2015 ozone standards, area designations in California, and classifications for the 2015 ozone NAAQS.

The proposed rulemaking describes the SIP revision the California Air Resources Board (CARB) submitted to the EPA to fulfill the CFF requirements under section 182(c)(4) and section 246 of the CAA that apply to the Coachella Valley, Sacramento Metro, San Joaquin Valley, South Coast, Ventura County, and West Mojave Desert NAAs. The proposed rulemaking explains that for Serious, Severe, and Extreme nonattainment areas with 1980 populations greater than 250,000, a minimum specified percentage of all new covered fleet vehicles in model year 1998 and thereafter, purchased by each covered fleet operator in each covered area, must be clean-fuel vehicles and must use clean alternative fuels when operating in the covered area. The proposed rulemaking also explains that section 182(c)(4)(B) of the CAA allows states to opt out of the Federal CFF Program by submitting a SIP revision consisting of a program or programs that will result in equivalent or greater long-term reductions in ozone precursors. Lastly, the proposed rulemaking notes that in 1994, CARB submitted a SIP revision to the EPA to opt out of the Federal CFF Program and included a demonstration that California's LEV program achieves emissions reductions at least as large as would be achieved by the Federal program. The EPA approved the California SIP revision to opt out of the CFF Program effective September 27, 1999. 3

In this action we are approving CARB's certification that the State's LEV program meets the CFF requirements for the 2015 ozone NAAQS for the Coachella Valley, Sacramento Metro, San Joaquin Valley, South Coast, Ventura County, and West Mojave Desert NAAs. Please refer to our proposed rulemaking for more information concerning the background for this action and for a more detailed discussion of the rationale for approval.

The EPA's proposed action provided a 30-day public comment period. During this period, the EPA received one comment from a private individual and four anonymous comments related to the rulemaking. All five comments were supportive of our proposed action and do not require a response. The full text of these comments is available for viewing in the docket for this rulemaking.

No comments were submitted that change our assessment of the multi-district certification as described in our proposed action. Therefore, as authorized in sections 182(c)(4) and 246 of the CAA, the EPA is approving the revision to the California SIP concerning the provisions for CFF for the 2015 ozone NAAQS in the Coachella Valley, Sacramento Metro, San Joaquin Valley, South Coast, Ventura County, and West Mojave Desert NAAs.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act 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 Clean Air Act. 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); and

• 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.

In addition, the SIP is not approved to apply on any Indian reservation land or 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 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).

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. The EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

The State did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

This action is subject to the Congressional Review Act, and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 24, 2023. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, the Environmental Protection Agency amends part 52, chapter I, title 40 of the Code of Federal Regulations as follows:

I. Background

DoD published a proposed rule in the Federal Register at 87 FR 77053 on December 16, 2022, to amend the DFARS to provide payment instructions for certain contracts based on the type of item acquired and the type of payment. Two respondents submitted comments in response to the proposed rule.

DoD reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments is provided, as follows:

Language in the clause at DFARS 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions, is changed for clarity. The term “subcontractor progress payments” is changed to “subcontract financing” in the clauses at DFARS 252.232-7002, paragraph (d), and 252.232-7018, Progress Payments—Multiple Lots, paragraph (b)(4).

Comment: One respondent inquired about the set of data that underlies the proposed rule and whether such data adequately supports the proposed rule.

Response: Such data has not been published for public comment, but it was gathered in the normal course of compiling operational statistics relating to the manual entry of payment instructions in DoD payment systems. This rule standardizes payment instructions and therefore eliminates the need for such manual entry. This in turn eliminates the possibility of both data-entry errors and application of incorrect payment instructions.

Comment: One respondent inquired whether paragraph (a) of the clause at DFARS 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions, requires separate submission of foreign military sales (FMS) progress payment requests combined with U.S. sales progress payment requests, or rather that the clause requires submission of FMS progress payment requests separate from U.S. ones.

Response: The intent is for FMS progress payment requests to be submitted separately from U.S. sales progress payment requests. The language in the clause at DFARS 252.232-7002 has been clarified in the final rule.

Comment: One respondent inquired whether the prescription for the clause at DFARS 252.232-70XX, Progress Payments—Multiple Lots, should explicitly limit application of the clause to fixed price contracts.

Response: In accordance with Federal Acquisition Regulation 32.500(a), only fixed-price contracts may provide for progress payments. The prescription limits application of the clause at DFARS 252.232-7018 to contracts that provide for progress payments. DoD therefore declines the suggested change as unnecessary.

Comment: One respondent recommends changing the term “subcontractor progress payments” to “subcontract financing” in the clauses at DFARS 252.232-7002(d) and 252.232-70XX(b)(4) to better align with relevant language in the Federal Acquisition Regulation.

Response: In the final rule, the term “subcontractor progress payments” is changed to “subcontract financing” in the clauses at DFARS 252.232-7002, paragraph (d), and 252.232-7018, paragraph (b)(4).

This rule clarifies payment instructions for certain contracts based on the type of item acquired and the type of payment by amending DFARS 252.204-7006, Billing Instructions—Cost Vouchers, and 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions. Application of these clauses to contracts at or below the SAT and to commercial services, commercial products, and COTS items is unchanged. This final rule adds a new clause at 252.232-7018, Progress Payments—Multiple Lots. DoD will apply this clause to solicitations and contracts at or below the SAT and will not apply the clause to commercial services or commercial products, including COTS items.

Currently, payment instructions are being entered manually into DoD's payment systems due to a lack of clarity in the DFARS regarding payment instructions. This rule clarifies the payment instruction language in the DFARS. The clarifications in this rule will reduce data errors and inoperability problems throughout DoD's business processes created by manual entry of payment instructions in the payment systems, as well as reducing the cost of data entry.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

As required by the Congressional Review Act (5 U.S.C. 801-808) before an interim or final rule takes effect, DoD will submit a copy of the interim or final rule with the form, Submission of Federal Rules under the Congressional Review Act, to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register . The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.

A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The purpose of this rule is to provide clarifications on payment instructions for certain contracts based on the type of item acquired and the type of payment. DoD has found that the payment instructions often are not inserted when required and that payment instructions, if inserted, are often not appropriate for the contracts in question. An analysis of the issue showed that the appropriate accounting treatment for payments can be derived from the type of item acquired and the type of payment. In addition, the analysis highlighted the need to establish procedures for structuring progress payment requests for contracts with multiple production lots. The clarifications in this rule will promote consistency with generally accepted accounting principles and reduce data errors created by manual entry of payment instructions in the payment systems.

No public comments were received in response to the initial regulatory flexibility analysis.

The rule will apply to all small entities that will be awarded cost-reimbursement, time-and-material, or labor-hour contracts. However, the rule requires negligible additional effort by contractors, including small entities, because it simply clarifies the identification and use of payment information elements in payment requests. According to data from the Federal Procurement Data System for fiscal years 2020 through 2022, approximately 6,800 cost-reimbursement, time-and-material, and labor-hour contracts (0.01% percent of all awards) are awarded to approximately 1,100 small businesses (3 percent of all awardees) each year. This rule also applies to contracts that use multiple accounting classifications or that involve progress payments for multiple production lots. DoD cannot accurately quantify the number of contracts subject to the multiple-lot progress payments clause, but such contracts are likely few in number.

The rule does not contain any new reporting, recordkeeping, or other compliance requirements for small entities.

There are no known, significant, alternative approaches to the rule that would meet the objectives of the rule.

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this rule regarding new DFARS clause 252.232-7018, Progress Payments—Multiple Lots. However, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved under Office of Management and Budget (OMB) Control Number 9000-0010, titled Progress Payments, SF 1443. The rule affects information collection requirements in DFARS 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions, currently approved under OMB Control Number 0704-0321, titled “DFARS Part 232, Contract Financing, and the Clause at 252.232-7002, Progress Payments for Foreign Military Sales Acquisition.” The impact, however, is negligible because the changed reporting requirement is not anticipated to increase the estimate of total burden hours; rather the requirement to submit separate payment requests by rate is merely replaced by a requirement to submit separate payment requests for FMS and U.S. line items in the contract.

Therefore, 48 CFR parts 204, 232, and 252 are amended as follows:

I. Background

DoD is amending the DFARS to implement section 842 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263), which amends 10 U.S.C. 4022(f)(2) to permit the award of a follow-on production contract without the use of competitive procedures, even if explicit notification was not listed within the request for proposal for the prototype project transaction. This revision modifies the criteria required to award a follow-on production contract without the use of competitive procedures at DFARS 206.001-70(a), which requires other transaction solicitations and agreements to include provisions for a follow-on contract in order to qualify for an exception to competition requirements.

The statutory revision to the criteria does not implement new requirements; instead it removes one of the requirements. The statutes and regulations that implement DoD's other transactions authority permit DoD to provide, in the agreement, for the award of a follow-on production contract to a participant in the prototype project. Agreements made under DoD's other transactions authority are not subject to the Federal Acquisition Regulation (FAR) or DFARS; however, the award of a follow-on production contract resulting from such an other transaction agreement is subject to these acquisition regulations.

DoD issued a final rule for DFARS case 2019-D031 (87 FR 10989) on February 28, 2022, to implement section 815 of the NDAA for FY 2016 (Pub. L. 114-92), which modified the criteria required to exempt from competition certain follow-on production contracts at DFARS 206.001-70(a)(1) and (2).

This final rule removes from DFARS 206.001-70(a)(1) the other transaction solicitation requirement and clarifies that an other transaction agreement is still statutorily required (10 U.S.C. 4022(f)(1)) to provide for the award of a follow-on production contract in order for a contracting officer to award the follow-on production contract without obtaining competition. DFARS 206.001-70(a)(2) is revised to require documentation from the agreements officer for the other transaction agreement that, where applicable for the prototype project, the threshold at 10 U.S.C. 4022(a)(2)(C) and the requirements at 10 U.S.C. 4022(f)(2)(A) and (B) have been met. These and additional revisions in 206.001-70(a) are intended to ensure an accurate interpretation of the statutory requirements of 10 U.S.C. 4022 that are subject to the DFARS.

The statute that applies to the publication of the FAR is 41 U.S.C. 1707, Publication of Proposed Regulations. Subsection (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because DoD is removing a requirement that is no longer mandated by statute and that affects only the internal operating procedures of DoD.

This rule does not impose any new requirements on contracts at or below the simplified acquisition threshold, for commercial services, or for commercial products, including commercially available off-the-shelf items.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

As required by the Congressional Review Act (5 U.S.C. 801-808) before an interim or final rule takes effect, DoD will submit a copy of the interim or final rule with the form, Submission of Federal Rules Under the Congressional Review Act, to the U.S. Senate, the U.S. House of Representatives, and to the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register . The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require publication for public comment.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR part 206 is amended as follows:

I. Background

DoD published a proposed rule in the Federal Register at 87 FR 65507 on October 28, 2022, to amend the DFARS to refine the management of undefinitized contract actions (UCAs). This final rule implements recommendations regarding management of undefinitized contract actions (UCAs) as addressed in the DoD Inspector General Audit of Military Department Management of Undefinitized Contract Actions (Report No. DODIG-2020-084). Three respondents submitted public comments in response to the proposed rule.

DoD reviewed the public comments in the development of the final rule. No changes are made to the final rule in response to the public comments. A discussion of the comments is provided, as follows:

Comment: Several respondents remarked that aspects of the definition of “qualified proposal” in the context of UCAs appear open to interpretation, and the resulting subjectivity could result in unwarranted detrimental treatment of contractors. Some respondents suggested DoD should change the DFARS to provide additional details regarding what comprises a qualifying proposal or otherwise require contracting officers to undertake a dialogue to assist contractors developing and submitting qualifying proposals.

Response: The term “qualified proposal,” defined at DFARS 217.7401, was not proposed for revision in this rule, and the definition is based on statute now found at 10 U.S.C. 3377(b)(2). This rule does not conceptually change the term or its usage, and the comment is therefore outside the scope of this rule.

Comment: Several respondents commented on the language regarding contract risk factors at 215.404-71-3(d)(2)(i). Several respondents stated that this rule would limit the contracting officer's discretion and flexibility to review and assign risk factors that consider the circumstances of a particular UCA. One respondent noted that current language at DFARS 215.404-71-3(d)(2)(i) already instructs the contracting officer to consider the extent to which costs have been incurred prior to definitization rendering unnecessary the language this rule adds at DFARS 215.404-71-3(d)(2)(i), including any resulting updates to DD Form 1547, Record of Weighted Guidelines. One respondent suggested modifying DFARS 217.7404-6, Allowable Profit, to specify cost-risk factors, including “inflation and baseline fluidity, and reduced negotiating strength with suppliers and vendors in a UCA environment.” Some respondents disagreed with the assumption reflected in the DFARS that a contractor's cost risk declines during the period of a UCA, therefore warranting a fee reduction based on lower risk.

Response: This rule is intended to incentivize both parties to definitize UCAs timely. The additional language in this rule at DFARS 215.404-71-3(d)(2)(i) provides contracting officers with flexibility and clarity to properly consider and assign fees to the relevant portions based upon their differing risk profiles, and DoD declines to remove the additional language from the final rule. Regarding the comment centering on stating factors that affect cost risk, at least some of the factors or considerations the respondent listed are effectively reflected at DFARS 215.404-71-3(d)(1), and the contracting officer would already consider them when ascribing contract risk. The comment regarding contract risk declining over the course of a UCA speaks to DFARS language not proposed for revision in this rule; rather, the change in this rule provides guidance to contracting officers when completing DD Form 1547, Record of Weighted Guidelines, without conceptually changing the language regarding declining contract risk. DoD declines to revise this language in the final rule.

Comment: Several respondents remarked that the 5 percent maximum withhold specified under this rule, used to protect the Government's interest where a qualifying proposal is not submitted timely, would encourage a 5 percent withhold arbitrarily or as a matter of course without considering either extenuating circumstances or a lesser withholding percentage. Similarly, one respondent noted that the documentation requirement at DFARS 217.7404-3(b)(2) would encourage a 5 percent withhold as a matter of course. One respondent stated that applying a withhold where a qualifying proposal is not submitted timely would cause additional delay, counter to the intent of the rule. Additionally, one respondent indicated that the 5 percent withhold is unnecessary in light of existing remedies.

Response: In accordance with DFARS language existing prior to this rule, contracting officers have discretion whether to withhold or take other appropriate action, where a qualifying proposal is not submitted timely. This rule does not change the discretionary nature either of such withholding or taking other appropriate action. This discretion allows for consideration of extenuating circumstances as appropriate. Additionally, the rule emphasizes that the withhold can be applied in a broad variety of contract financing situations.

Comment: Several respondents requested DoD withdraw this rule in its entirety as, for example, unnecessary to encourage submission of qualifying proposals.

Response: DoD declines to withdraw the rule because doing so would preclude implementing updates to management of UCAs per the DoDIG report.

Comment: Several respondents remarked that circumstances outside the control of contractors often contribute to delays in submitting qualifying proposals and in negotiation of the final price, rendering aspects of this rule one-sided or punitive. For example, some respondents noted that delays in submitting qualified proposals are sometimes caused by the prime contractor awaiting cost or pricing details from subcontractors. In this context, one respondent suggested changing the DFARS in the final rule to require explicit agreement by the contractor both to the definitization schedule and to the risk assessment negotiated in the price negotiation memorandum. Some respondents suggested DoD should consider minimizing Government-driven changes affecting contract definitization by disallowing changes to work statements or specifications after the parties initially enter into the UCA and before the contract is definitized.

Response: The contracting officer has discretion under this rule to consider extenuating circumstances surrounding a particular UCA, including delays caused by awaiting data from subcontractors, when developing a defintization schedule or before taking appropriate action such as a withhold. The nature of a UCA, which is inherently subject to some uncertainty, works against the suggestion to disallow changes to the work statement, and DoD therefore declines the suggestion. Further, the parties can bilaterally address scope changes that might necessitate revision to the proposal submission date.

Comment: One respondent suggested deleting the reference to documenting the contractor's past performance evaluation as an appropriate action under DFARS 217.7404-3(b)(1) where a qualifying proposal is not submitted timely. One respondent suggested DoD should provide an appellate process to challenge past performance evaluations that the contractor believes are inaccurate.

Response: DoD declines to delete the reference in this rule to documenting the contractor's past performance evaluation. This rule does not change the DFARS to compel documenting past performance information in this context but rather lists such documentation as an example of possible appropriate actions. Further, although this case adds a reference to documenting past performance information, the possibility of using this method as an appropriate action existed prior to this rule. Additionally, the suggestion to develop in this rule an appellate process to challenge past performance evaluations is outside the scope of this rule.

Comment: Several respondents suggested that DoD should address underlying causes of UCAs, such as insufficient Government staffing or delayed acquisition planning. Similarly, some respondents stated that DoD should further specify in the DFARS proper or appropriate use of UCAs.

Response: DoD declines the suggestions because they are outside the scope of the rule.

No other changes are made to the final rule.

This rule amends the clause at DFARS 252.217-7027, Contract Definitization. However, this rule does not impose any new requirements on contracts at or below the SAT or for commercial services or commercial products, including COTS items. The clause will continue to not apply to acquisitions at or below the SAT and to acquisitions of commercial services and commercial products, including COTS items.

The final rule will incentivize contractors to submit qualifying proposals according to the contract definitization schedule to avoid the withholding of an amount of up to 5 percent of all subsequent financing requests. DoD contracting officers will be required to consider applying separate and differing contract risk factors to costs incurred and estimated costs to complete, when completing the DD Form 1547, Record of Weighted Guidelines. Contracting officers will also be required to document the contract file to show justification for withholding or not withholding a portion of financing payment, when the qualifying proposal was not submitted according to the contract definitization schedule.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

As required by the Congressional Review Act (5 U.S.C. 801-808) before an interim or final rule takes effect, DoD will submit a copy of the interim or final rule with the form, Submission of Federal Rules under the Congressional Review Act, to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the Congressional Review Act cannot take effect until 60 days after it is published in the Federal Register . The Office of Information and Regulatory Affairs has determined that this rule is not a major rule as defined by 5 U.S.C. 804.

A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) as recommended by the DoD Inspector General Audit of Military Department Management of Undefinitized Contract Actions (Report No. DODIG-2020-084) to refine the management of undefinitized contract actions. This report recommends changes to the DFARS to encourage contractors to provide timely qualifying proposals, including the possibility of the Government withholding a percentage of payments yet to be paid under an undefinitized contract action until it receives a qualifying proposal from the contractor.

This rule incentivizes contractors to submit qualifying proposals in accordance with the contract definitization schedule; and, notwithstanding FAR 52.216-26, Payments of Allowable Costs Before Definitization, allows contracting officers to withhold an amount necessary to protect the interests of the Government, not to exceed 5 percent of all subsequent financing requests, or take other appropriate actions if a qualifying proposal is not submitted in accordance with the contract definitization schedule. Contracting officers will document in the contract file the justification for withholding or not withholding payments if the qualifying proposal was not submitted in accordance with the contract definitization schedule. This rule clarifies that, when considering the reduced cost risks associated with allowable incurred costs on an undefinitized contract action, it is appropriate to apply separate and differing contract risk factors for allowable incurred costs and estimated costs to complete when documenting the contract risk sections of DD Form 1547, Record of Weighted Guidelines.

DoD received no public comments in response to the initial regulatory flexibility analysis.

This rule will likely affect small entities that will be awarded undefinitized contract actions. Data was obtained from the Procurement Business Intelligence Service (PBIS) for all contracts and modifications containing DFARS clause 252.217-7027, Contract Definitization. Data from PBIS revealed DoD awarded 2,162 contracts to 971 small businesses from fiscal year 2019 through fiscal year 2021, which averages out to 324 small businesses per year. Therefore, this rule may apply to approximately 324 unique small entities.

The rule does not impose any new reporting, recordkeeping, or compliance requirements.

DoD did not identify any significant alternatives that would minimize or reduce the significant economic impact on small entities, because this rule is not expected to have a significant impact on small entities.

This rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR parts 215, 217, and 252 are amended as follows:

The South Atlantic snapper-grouper fishery includes red snapper and is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The South Atlantic Fishery Management Council (Council) prepared the FMP, and the FMP is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

For South Atlantic red snapper, the commercial AM requires the sector to close when commercial landings reach or are projected to reach the commercial ACL. The recreational AM is the length of the recreational season, with NMFS projecting the season length based on catch rate estimates from previous years.

The commercial ACL is 124,815 lb (56,615 kg), round weight, and in 2022, NMFS closed the commercial sector on August 31 as a result of the commercial ACL being projected to be met (87 FR 52859, August 30, 2022). The recreational ACL is 29,656 fish, and NMFS has determined that recreational landings are expected to reach the recreational ACL in a 2-day season.

The commercial season for South Atlantic red snapper begins each year on the second Monday in July and closes when the commercial ACL is reached or is projected to be reached. Accordingly, the 2023 commercial season opens on July 10, 2023, and will remain open until 12:01 a.m., local time, on January 1, 2024, unless the commercial ACL is reached or projected to be reached prior to this date. During the commercial fishing season, the commercial trip limit is 75 lb (34 kg), gutted weight. NMFS will monitor commercial landings during the open season, and if commercial landings reach or are projected to reach the commercial ACL, then NMFS will file a notification with the Office of the Federal Register to close the commercial sector for red snapper for the remainder of the fishing year.

The recreational season for South Atlantic red snapper begins on the second Friday in July. Accordingly, the 2023 recreational red snapper season opens at 12:01 a.m., local time, on July 14, 2023, and closes at 12:01 a.m., local time, on July 16, 2023. During the recreational season, the recreational bag limit is one red snapper per person, per day. After the closure of the recreational sector, the bag and possession limits for red snapper are zero.

There is not a red snapper minimum or maximum size limit for the commercial and recreational sectors during the open seasons.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 622.183(b)(5)(i) and 622.193(y), which were issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule establishing the red snapper ACLs and AMs has already been subject to notice and comment, and all that remains is to notify the public of the respective commercial and recreational fishing seasons.

In addition, providing prior notice and an opportunity for public comment is contrary to the public interest because the seasons begin in early July and announcing the length of the fishing seasons now allows each sector to prepare for the upcoming harvest, provides opportunity to for-hire fishing vessels to book trips that could increase their revenues and profits, and gives the South Atlantic states the time needed to prepare for their respective data collection needs for the season.

Atlantic HMS fisheries, including BFT fisheries, are managed under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ). The 2006 Consolidated Atlantic HMS Fishery Management Plan (2006 Consolidated HMS FMP) and its amendments are implemented by regulations at 50 CFR part 635. Section 635.27 divides the U.S. BFT quota, recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and as implemented by the United States, among the various domestic fishing categories per the allocations established in the 2006 Consolidated HMS FMP and its amendments. Section 635.23 specifies the retention limit provisions for Atlantic Tunas General category permitted vessels and HMS Charter/Headboat permitted vessels, including regarding RFDs.

Specific information regarding RFDs, request for comments, and the current U.S. quota and General category subquotas, was provided in the preamble to the proposed rule (88 FR 13771, March 6, 2023) and is not repeated here.

As described in the proposed rule, NMFS is undertaking this rulemaking to address and avoid repetition of certain issues that affected the General category BFT fishery in previous years and could recur without additional action. Those issues include the shortened time to fish under the General category subquotas that occurs when the quota is filled quickly, and the increased numbers of BFT that are landed but not sold to dealers because of market gluts. Because the use of RFDs in 2022 succeeded in extending fishing opportunities through a greater portion of the relevant General Category time periods and the fishing season overall, consistent with management objectives for the fishery, NMFS proposed an RFD schedule for parts of the 2023 and 2024 fishing years.

The comment period for the proposed rule closed on April 5, 2023. NMFS received 43 written comments, including comments from commercial and recreational fishermen, Atlantic tunas dealers, and the general public as well as oral comments at a public hearing held by webinar. The comments received and responses to those comments are summarized below in the Response to Comments section.

After considering public comments on the proposed rule in light of the management goals of this action, NMFS is finalizing an RFD schedule for the June through August, September, and October through November 2023 time periods and is not finalizing an RFD schedule for the December 2023 or January through March 2024 time periods. Setting an RFD schedule for July through November, with the ability to waive scheduled RFDs, should slow the rate of landings and provide available quota throughout a greater portion of the General category time periods while providing reasonable fishing opportunities, including some fishing tournament opportunities, for all General category participants.

Specifically, NMFS sets RFDs on the following days: all Tuesdays, Fridays, and Saturdays from July 1 through November 30, 2023. On an RFD, vessels permitted in the Atlantic Tunas General category are prohibited from fishing for (including catch-and-release and tag-and-release fishing), possessing, retaining, landing, or selling BFT (§ 635.23(a)(2)). RFDs also apply to HMS Charter/Headboat permitted vessels to preclude fishing commercially under General category restrictions and retention limits on those days, but do not preclude such vessels from recreational fishing activity under applicable Angling category regulations and size classes, and they may participate in catch-and-release and tag-and-release fishing (§ 635.23(c)(2)).

NMFS may waive previously scheduled RFDs under certain circumstances. Consistent with § 635.23(a)(4), NMFS may waive an RFD by adjusting the daily BFT retention limit from zero up to five on specified RFDs, after considering the inseason adjustment determination criteria at § 635.27(a)(7). Considerations include, among other things, review of dealer reports, daily landing trends, and the availability of BFT on fishing grounds. NMFS will announce any such waiver by filing a retention limit adjustment with the Office of the Federal Register for publication. NMFS also may waive previously designated RFDs effective upon closure of the General category fishery so that persons aboard vessels permitted in the General category may conduct only catch-and-release or tag-and-release fishing for BFT under § 635.26(a). NMFS will not modify the previously scheduled RFDs during the fishing year in other ways (such as changing an RFD from one date to another, or adding RFDs) other than waiving designated RFDs based on the circumstances described above.

All written comments can be found at www.regulations.gov by searching for NOAA-NMFS-2023-0016. NMFS received 43 written comments from General category fishermen, Charter/Headboat fishermen, tournament operators, Atlantic tunas dealers, and others from the general public, as well as oral comments at a public hearing. Below, NMFS summarizes and responds to all comments made specifically on the proposed rule during the comment period.

Comment 1: Most commenters supporting RFDs noted that RFDs should lengthen the General category season.

Response: NMFS agrees that RFDs should lengthen the General category season within the General category time periods and the season overall. The primary objective of this action is to slow the harvest rate of BFT in order to extend General category fishing opportunities through a greater portion of the General category time periods.

Comment 2: Some commenters opposed to RFDs expressed concern that the proposed rule seemed to be economic in nature and would negatively impact General category participants. These commenters suggested that NMFS no longer use RFDs as a management tool to manage the BFT fisheries.

Response: While NMFS considered economic factors in developing the proposed rule for this action, the primary purpose of the action is not economic in nature. Rather, the rule is designed to extend General category fishing opportunities through a greater portion of the General category time periods. RFDs provide a pre-scheduled, consistent approach to slow landings across the fishery. After considering all relevant information, NMFS concluded that the use of RFDs is likely to extend the period of time that the fishery remains open resulting in more fishing opportunities later into General category time periods.

Comment 3: NMFS received comments noting that the BFT stock is healthy and therefore, this action is unwarranted. Additionally, commenters suggested that NMFS negotiate for more BFT quota at ICCAT. Some commenters suggested that NMFS modify existing subquota allocations. NMFS also received some comments supporting the proposed rule noting this action would assist with the conservation and protection of bluefin tuna. One commenter noted that BFT are an endangered species and protection of the species should be a priority of the Agency.

Response: NMFS disagrees that this action is “unwarranted” and further notes that BFT are not an endangered species. The purpose of this action, consistent with the objectives of the 2006 Consolidated HMS FMP and its amendments and other applicable laws, is to extend, to the extent practicable, General category fishing opportunities throughout the General category time periods, as was intended when the time period subquotas were adopted. RFDs are an effective effort control that can assist with that purpose.

Regarding the status of BFT, the western Atlantic BFT stock is assessed by ICCAT, and the most recent assessment was conducted in 2021. Domestically, following the 2017 stock assessment, NMFS determined that the overfished status for BFT is unknown and that the stock is not subject to overfishing. This stock status remains in effect. NMFS published a temporary rule in 2022 (87 FR 33049, June 1, 2022), that increased the baseline U.S. BFT quota to 1,316.14 mt (not including the 25 mt ICCAT allocated to the United States to account for bycatch of BFT in pelagic longline fisheries in the Northeast Distant Gear Restricted Area), as codified at § 635.27(a), consistent with Recommendation 21-07 adopted by ICCAT at the November 2021 annual meeting. ICCAT Recommendation 22-10 maintained the U.S. BFT quota as specified above. Further information on the BFT stock assessment and stock status can be found in that temporary rule and associated Environmental Assessment. This action helps manage the BFT fisheries within that available U.S. quota and category subquotas as established in existing regulations.

NMFS is not considering modifications of the General category time period subquotas in this action. Amendment 13 to the 2006 Consolidated HMS FMP (86 FR 27686, May 21, 2021) proposed modifications to the BFT category quotas which were further detailed in the Amendment 13 Final Environmental Impact Statement published on May 13, 2022 (87 FR 29310). As discussed in the final rule for Amendment 13 (87 FR 59966; October 3, 2022), NMFS determined that the current structure of the fishery provides equitable fishing opportunities and decided against modifying the General category subquota percentages. NMFS notes, that Amendment 13, among other things, eliminated the Purse Seine category and proportionally reallocated Purse Seine category quota to all of the other bluefin quota categories, including the General and Angling categories, resulting in an increase to the General category and Angling category quota and subquotas. For more information on the Amendment 13 quota allocations, please check the Amendment 13 compliance guide found on the NOAA Fisheries website.

Comment 4: NMFS received comments supporting the proposed July through November Tuesday, Friday, and Saturday schedule of RFDs as well as comments suggesting alternative days. Some of the commenters supporting the proposed scheduled specifically noted that they are in support of not adding Sunday as an RFD because adding Sunday would have negative impacts on those fishermen that work other jobs full-time during the week and supplement their income with weekend fishing trips. Other commenters suggested a weekly schedule of consecutive RFDs on Friday, Saturday, and Sunday noting that effort and landings rates traditionally are higher on the weekend. One commenter suggested a weekly schedule of Thursday, Friday, and Saturday.

Response: NMFS' proposed schedule of RFDs was based on a review of average daily catch rate data for recent years, a review of past years' RFD schedules (including the 2021 and 2022 RFD schedules) and how they worked to extend the use of the General category quota, and input from members of the HMS Advisory Panel, General category participants, and Atlantic tunas dealers. The Tuesday, Friday, and Saturday RFD schedule allows for two-consecutive-day periods twice each week (Sunday-Monday; Wednesday-Thursday) for General category permitted vessels, and Charter/Headboat permitted vessels with a commercial sale endorsement, to fish for and sell BFT. NMFS believes that two-consecutive-day periods twice each week allows for some commercial fishing activity to occur each weekend ( i.e., Sundays) while also providing opportunity throughout the week to move BFT products through the market. NMFS acknowledges that Sunday is a high catch and landing day. As some commenters noted, fully restricting the weekend by adding an RFD on Sunday could have negative unintended impacts for those who could only commercially fish on the weekends. Furthermore, further restricting the weekend by adding Sunday may push those high catch rates to another open day. Additionally, if NMFS set RFDs for the entire weekend, as suggested by some commenters, or for three consecutive days, as suggested by other commenters, NMFS is concerned the schedule would not allow adequate time for fish products to move through the market and could continue the recent trend of BFT being landed by General category participants but not sold. Based on input received during the public comment period for this action and an analysis of daily landings rates, NMFS is setting the RFD schedule to be every Tuesday, Friday, and Saturday from July 1 through November 30, 2023.

Comment 5: Some commenters suggested starting RFDs on June 1 instead of July 1.

Response: NMFS disagrees that RFDs should start on June 1 because catch and landings rates are generally slow at the beginning of June, and there is no need to further reduce catch and landings rates at that time. Catch and landing rates usually begin to substantially increase around July 1. NMFS believes that this schedule of RFDs should increase the likelihood of pacing General category landings to extend fishing opportunities through a greater portion of the time periods.

Comment 6: NMFS received comments both supporting and opposing 4 RFDs per week. Some of those in support noted that adding an additional RFD could better assist with slowing the catch, keeping the fishery open, and market gluts and some specifically noted that 3 RFDs per week have not been effective at extending the General category time periods. Others in support suggested that NMFS set RFDs on Tuesday, Friday, Saturday, and Sunday noting that weekends are high effort days. One commenter suggested a schedule of Wednesday, Friday, Saturday, and Sunday and another suggested Friday, Saturday, Sunday, and Monday.

Commenters opposed to 4 RFDs per week noted that having only 3 open days per week would be too much of an economic burden for commercial fishermen. Another expressed concerns that an additional RFD would create safety-at-sea conflicts due to more effort on open days to harvest the General category quota and subquotas. Some suggested setting 4 RFDs per week for June through November, while another suggested 4 RFDs per week specifically for September through November. NMFS also received comments suggesting NMFS set 5 RFDs per week.

Response: Although NMFS requested comment on the potential setting of 4 RFDs per week from July through November, NMFS is not setting 4 RFDs or 5 RFDs per week during these time periods through this action. NMFS acknowledges that although 4 RFDs per week from July through November might lengthen the General category season within the time periods, it would also limit commercial fishing participants to 3 or fewer fishable days per week depending on the weather, thus decreasing fishing opportunities, which would conflict directly with the objective of this rulemaking. Similarly, potentially decreasing fishing opportunities via a schedule of 5 RFDs per week would be contrary to the objective of this rulemaking. NMFS may consider 4 RFDs per week in the future, if appropriate.

Comment 7: Most commenters did not support implementing RFDs for the December 2023 and January through March 2024 time periods, noting that the unpredictable weather during those periods in combination with RFDs could result in safety-at-sea issues and potentially limit commercial fishermen from landing the relevant subquotas. One commenter suggested that NMFS implement RFDs year-round.

Response: Based on the public comments received, NMFS is not finalizing longer RFDs for the December 2023 and January through March 2024 time periods. NMFS recognizes that the weather during those periods is unpredictable and may limit participation such that setting RFDs in those periods may not be necessary. For the same reasons, NMFS does not support the use of year-round RFDs at this time. NMFS may consider RFDs for the December and January through March time periods in the future, if appropriate.

Comment 8: One commenter noted that RFDs would have a negative impact on fishing tournaments and suggested that NMFS maintain the proposed RFD schedule, i.e., Tuesday, Friday, and Saturday RFDs beginning July 1, 2023. The commenter noted that many fishing tournaments have established their dates based around the proposed schedule and that any modifications to the RFD schedule could have additional negative economic impacts on BFT tournament operations and local communities.

Response: NMFS acknowledges that RFDs that occur on a tournament date may negatively affect BFT fishing at those tournaments since some tournament participants are General category permit holders and are prohibited from fishing for BFT on RFDs. However, on an RFD, General category permit holders may still participate in non-BFT fishing during the tournament and may land sharks (if they also hold a shark endorsement), swordfish, billfish, and/or bigeye, albacore, yellowfin, and skipjack tunas recreationally as otherwise allowed. Additionally, on an RFD, Charter/Headboat-permitted vessels may participate recreationally in HMS fishing tournaments, including for BFT, under the applicable Angling category restrictions and size class limits. Under the current regulations, tournament operators are required to register their tournament with NMFS at least four weeks prior to the start of the tournament. Given past scheduled tournaments from July through November and the tournaments that have registered already for this year, NMFS anticipates or has been notified of several fishing tournaments that will likely include BFT. Should a tournament change its dates of operation, NMFS encourages tournament operators to contact NMFS to update the dates for which their tournament is registered. NMFS does not plan to waive RFDs specifically and solely to accommodate tournaments as doing so could eliminate the benefits of RFDs by allowing General category and Charter/Headboat permitted vessels with a commercial sale endorsement the opportunity to land and sell commercial size BFT on those scheduled RFD dates. NMFS will closely monitor BFT landings and catch rates and, based on that information, NMFS will consider waiving RFDs if BFT landings and catches indicate that such action is warranted, after taking into consideration the inseason adjustment determination criteria at § 635.27(a)(7). This would include, among other things, review of dealer reports, daily landing trends, and the availability of BFT on fishing grounds. NMFS could waive an RFD by adjusting the daily retention limits by filing such an adjustment in the Federal Register , under § 635.23(a)(4).

Comment 9: NMFS received some comments expressing concern that increasing the General category retention limit from the default of 1 fish to 3 fish to begin the June through August time period is unwarranted. Some commenters suggested that NMFS increase the retention limit to 3 fish to begin the June through August time period and subsequently decrease the retention limit from 3 fish to 1 fish when landings rates begin to increase. One commenter requested that NMFS maintain the default of 1 fish during the summer and increase the retention limit to 2 or 3 fish during the fall to correspond with RFDs. One commenter suggested that NMFS increase the retention limit to 2 fish instead of 3 fish to begin the June the August time period.

Response: This action focuses on implementing RFDs, as currently authorized in the regulations, to slow the rate of General category landings, prevent early closures, and extend fishing opportunities through a greater portion of the 2023 General category time periods. NMFS will continue to use retention limits, RFDs, and other available management tools to manage the BFT fisheries, within the available BFT quota and established subquotas. In recent years, because the rate of landings and overall fishing effort in the General category is typically slow in early June, NMFS has regularly set the daily retention limit for the beginning of the June through August period at 3 fish, following consideration of the relevant criteria provided under § 635.27(a)(7), including supporting scientific data collection. NMFS monitors the landings closely, and, as appropriate, NMFS then typically reduces the limit to the 1-fish default level to ensure fishing opportunities in all respective time-periods and to ensure that the available quota is not exceeded. Any change in the retention limit considers the relevant criteria and includes consideration of the catch rates associated with the various authorized gear types ( e.g., harpoon, rod and reel). Throughout the season, NMFS monitors landings and catch rates and will close the fishery or modify retention limits as appropriate to ensure the quotas are not exceeded. NMFS will continue to monitor and evaluate the effectiveness of all these management measures in the context of current conditions to determine whether other actions are necessary.

Comment 10: NMFS received comments suggesting mandatory fish handling guidelines ( e.g., ice requirement) and better enforcement of safety gear requirements for commercial fishing vessels noting that a number of vessels do not have the correct safety gear and do not properly handle BFT for sale.

Response: This comment is outside of the scope of this action. NMFS notes that guidance for the commercial fishing industry regarding seafood handling can be found under the Seafood Hazard Analysis and Critical Control Point (HACCP) and the Food and Drug Administration (FDA) Food Safety Modernization Act. Additionally, provisions regarding commercial fishing vessel safety can be found under the Coast Guard regulations in 46 CFR part 28.

Comment 11: One commenter suggested going to a tag system to address safety gear concerns.

Response: It is unclear if the commenter is talking about a landing tag system or the tag-and-release program. However, this comment is outside of the scope of this action. NMFS notes that interested vessel operators can participate in a tag-and-release program where NMFS-issued conventional tags, reporting cards, and detailed instructions for their use may be obtained from the NMFS Cooperative Tagging Center ((800) 437-3936 or https://www.fisheries.noaa.gov/southeast/atlantic-highly-migratory-species/cooperative-tagging-program ). Additionally, NMFS requires dealers to affix a dealer tag to all BFT purchased or received from a U.S. vessel immediately upon offloading the BFT.

NMFS is issuing this rule pursuant to 304(c) of the Magnuson-Stevens Act. The NMFS Assistant Administrator has determined that this temporary rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, ATCA, and other applicable law.

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

This temporary rule contains no information collection requirements under the Paperwork Reduction Act of 1995.

A Final Regulatory Flexibility Analysis (FRFA) was prepared for this rule. The FRFA incorporates the initial regulatory flexibility analysis (IRFA), a summary of the significant issues raised by the public comments in response to the IRFA, our responses to those comments and a summary of the analyses completed to support the action. The FRFA is provided below.

Section 604(a)(1) of the Regulatory Flexibility Act (RFA) requires agencies to state the need for and objective of the final action. The objective of this temporary rulemaking is to set a schedule of RFDs for the 2023 fishing year that should slow the rate of General category landings to extend fishing opportunities through a greater portion of the General category time periods (similar to the 2022 RFD schedule).

Section 604(a)(2) of the RFA requires a summary of significant issues raised by the public in response to the IRFA, a summary of the agency's assessment of such issues, and a statement of any changes made as a result of the comments. As described above, during the public comment period, NMFS received comments both in support of and opposed to establishing RFDs for 2023 and part of 2024 year. No comments specifically referenced the IRFA, although some comments raised a variety of economic concerns including whether RFDs would affect the market (see comments 2, 6, 8), whether RFDs would affect some parts of the fishery more than others (see comment 6), and whether RFDs would negatively affect tournaments (see comment 8). NMFS' responses to those comments are summarized above. After careful consideration of all the comments received, NMFS is not finalizing an RFD schedule for the December 2023 or January through March 2024 time periods.

Section 604(a)(3) of the RFA requires the response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the temporary rule as a result of the SBA comments. NMFS did not receive any comments from the Chief Counsel for Advocacy of the SBA on the proposed rule.

Section 604(a)(4) of the RFA requires agencies to provide descriptions of, and where feasible, an estimate of the number of small entities to which the rule would apply. NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (North American Industrial Classification System (NAICS) 11411) for RFA compliance purposes. The Small Business Administration (SBA) has established size standards for all other major industry sectors in the United States, including the scenic and sightseeing transportation (water) sector (NAICS code 487210), which includes for-hire (charter/party boat) fishing entities. The SBA has defined a small entity under the scenic and sightseeing transportation (water) sector as one with average annual receipts (revenue) of less than $14.0 million. NMFS considers all HMS permit holders, both commercial and for-hire, to be small entities because they had average annual receipts of less than their respective sector's standard of $11 million and $14 million. The 2021 total ex-vessel annual revenue for the BFT fishery was $11.8 million. Since a small business is defined as having annual receipts not in excess of $11.0 million, each individual BFT permit holder would fall within the small entity definition. The numbers of relevant annual Atlantic Tunas or Atlantic HMS permits as of October 2022 are as follows: 2,630 General category permit holders and 4,175 HMS Charter/Headboat permit holders, of which 1,873 hold HMS Charter/Headboat permits with a commercial sale endorsement.

Section 604(a)(5) of the RFA requires agencies to describe any new reporting, record-keeping, and other compliance requirements. This temporary rule does not contain any new collection of information, reporting, or record-keeping requirements. This temporary rule would set a schedule of RFDs for July 1 through November 30, 2023 as an effort control for the General category.

Section 604(a)(6) of the RFA, requires agencies to describe the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the temporary rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

This temporary rule does not change the U.S. Atlantic BFT quotas or implement any new management measures not previously considered under the 2006 Consolidated HMS FMP and its amendments. This temporary rule will instead set a schedule of RFDs for the General category for 2023. Under the regulations, when a General category subquota is reached or projected to be reached during a General category time period, NMFS closes the General category fishery. Retaining, possessing, or landing BFT under that quota category is prohibited on and after the effective date and time of a closure notice for that category, for the remainder of the fishing year, until the opening of the subsequent time period or until such date as specified. In recent years, these closures, if needed, have generally occurred toward the end of a time period. According to communications with dealers and fishermen, several of the high-volume Atlantic tunas dealers in 2019, 2020, and 2022 were limiting their purchases of BFT and buying no or very few BFT (such as harpooned fish only) on certain days during the beginning portion of the June through August time period in order to extend the available quota until later in the time period given market considerations. However, while these actions may have prevented large numbers of BFT from entering the market at the same time and may have lengthened the time before any particular time period was closed, because these actions were not pre-scheduled or consistently implemented across the fishery, there were negative impacts experienced by some General category and Charter/Headboat permitted fishermen, who could not find buyers for their BFT. As a result, a number of BFT that normally would have been sold were not, and opportunities may not have been equitably distributed among all permitted vessels. In 2021, NMFS set pre-scheduled RFDs for the General category fishery on certain days (Tuesdays, Fridays, and Saturdays) from September through November to increase the likelihood of pacing General category landings to extend fishing opportunities through a greater portion of the time periods. In 2022, NMFS again set RFDs for the General category fishery on every Tuesday, Friday, and Saturday from July 1 through November 30.

Table 1 shows the General category closure dates by time period for 2018 through 2022. The General category remained open for the entire duration of the June through August time period in 2018 and 2020, and of the December time period in 2018 and 2019. The October through November time period tends to close the earliest of any time period, and NMFS often receives requests to reopen that time period. Following the consideration of numerous factors ( i.e., daily landings rates, weather conditions, available quota, etc. ), NMFS reopened the October through November time period in 2018 and 2020. In 2021, NMFS set RFDs for the September through November time periods, resulting in the General category fishing extending late into September and through the end of October through November time period. In 2022, NMFS set RFDs for the June through November time periods, with the first RFD established on July 1. Closure dates for 2022 were February 11, August 10, September 19, October 24, and December 10, respectively, for each time period. NMFS believes that the relatively early closure dates in 2022 were due in part to high daily landings rates when the time periods were open in the summer and fall. Based on a review of average daily landings rates, without the use of RFDs, NMFS likely would have needed to close the June through November time periods much earlier if the RFDs were not in place. These high landings rates continued into December 2022, resulting in that time period closing after 10 days, much earlier than in 2018 through 2021. The use of RFDs in 2022 from June through November paced the landings as much as possible and extended the fishing opportunities for the June through November time periods.

Table 2 shows the average ex-vessel price per pound of BFT during each General category time period for 2018 through 2022 adjusted to real 2022 dollars using the Gross Domestic Product (GDP) deflator. Ex-vessel price per pound was lower for the September time period, with an average (2018 through 2022) of $6.71, and varied over the summer and fall period, with averages of $7.04 for the June through August time period and $7.09 for the October through November time period. In 2022, the average price per pound was higher for the January through March time period compared to the average price per pound during that time period in 2021. In most time periods, the 2022 average price per pound was also higher than the 2020 average price per pound. NMFS believes that this increase in average price was in part due to the use of RFDs in 2022.

Table 3 shows the number and total weight of BFT that were landed but not sold by fishermen fishing under the General category quota for 2018 through 2022. The number and weight of unsold BFT increased from 2018 through 2022 with a peak in 2020 (143 BFT and 25.8 mt) in part due to the COVID-19 pandemic, and substantial decrease in 2021 (from 143 to 12 BFT and 25.8 mt to 2.0 mt), followed by an increase in 2022 (48 BFT and 9.1 mt). NMFS believes this increase is in part due to an influx of domestically caught BFT entering the market at one time resulting in dealers limiting their purchases of BFT leading to General category participants. This situation resulted in unprecedented high landings days in several time periods and BFT fishermen having a difficult time finding buyers for landed BFT.

After considering public comment, NMFS is setting a schedule of RFDs for the 2023 fishing year that would specify days on which General category quota fishing and sales will not occur. Specifically, the schedule allows for two-consecutive-day periods twice each week for BFT product to move through the market while also allowing some commercial fishing activity to occur each weekend ( i.e., Sundays). Because this schedule of RFDs applies to all participants equally, NMFS anticipates that this schedule would extend fishing opportunities through a greater proportion of the time periods in which they apply by spreading fishing effort out over time, similar to the 2022 fishing season. Further, to the extent that the ex-vessel revenue of a BFT sold by a General or HMS Charter/Headboat permitted vessel (with a commercial endorsement) may be higher when a lower volume of domestically-caught BFT is on the market at one time, the use of RFDs may result in some increase in BFT price, and the value of the General category subquotas could increase, similar to that of 2022. Thus, although NMFS anticipates that the same overall amount of the General category quota would be landed as well as the same amount of BFT landed per vessel, there may be positive impacts to the General category and Charter/Headboat (commercial) BFT fishery because using RFDs may more equitably distribute opportunities across all permitted vessels for longer durations within the time periods.

If NMFS does not implement a schedule, without any other changes, it is possible that the General category could have fewer open days later in the fishing season when ex-vessel prices tend to be higher (Table 1) as observed in 2018 through 2022. Additionally, without RFDs the trends of increasing numbers of unsold BFT (Table 3) and decreasing ex-vessel prices (Table 2) from 2018 through 2020 could continue. If those trends were to continue, all active General category permit holders could experience negative economic impacts similar to 2019, 2020, and 2022 where dealers were limiting their purchases of BFT and buying no or very few BFT on certain days in order to extend the available quota.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rule. As part of this rulemaking process, NMFS has prepared a booklet summarizing fishery information and regulations for Atlantic BFT General category RFDs for the 2023 fishing year. That booklet notice serves as the small entity compliance guide. Copies of the compliance guide are available from NMFS (see ADDRESSES ).