The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include Docket No. FAA-2024-0224 and Project Identifier AD-2024-00055-T at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Anthony Caldejon, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3534; email: Anthony.V.Caldejon@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA has received a report of a missing nut and washer and of a migrated bolt in the aft rudder quadrant, which were discovered by an operator during a scheduled routine inspection in mid-December 2023. Boeing subsequently inspected all Model 737-8, -8200, and -9 airplanes in production and found one additional under-torqued nut at the same location. It was discovered that the required run-on and final torques had not been applied to the nut in production.

A disconnect between the aft rudder quadrant and the output rod (due to the bolt falling out) would result in loss of rudder control via the rudder pedals. Rudder surface position would then be based only on the rudder trim and yaw damper systems. The pilots would be able to slowly move the rudder surface by adjusting the rudder trim position but would be limited by the maximum rudder trim authority. In the event of a disconnect, and with the limited rudder trim authority, there would not be enough rudder control to counter an engine-out scenario during takeoff/climb out or to counter a high crosswind (above 20 kts) during landing. This condition, if not addressed, could result in the loss of continued safe flight and landing. The FAA is issuing this AD to address the unsafe condition on these products.

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

The FAA reviewed Boeing Multi Operator Message MOM-MOM-23-0993-01B, dated December 27, 2023. The service information specifies performing a one-time detailed visual inspection or remote video inspection of the aft rudder quadrant for any missing bolt, nut, or washer; any gap between the bolt/nut/washer and quadrant; and insufficient thread protrusion. The service information also specifies the following corrective actions if necessary: inspection of the bolt and nut for damage and replacement as needed; torque application; and a rudder travel test.

This AD requires accomplishing the actions specified in the service information described previously.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than 30 days, upon a finding of good cause.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because a disconnect between the aft rudder quadrant and the output rod would result in loss of rudder control via the rudder pedals and insufficient rudder control to counter an engine-out scenario during takeoff/climb out or to counter a high crosswind during landing, which could result in the loss of continued safe flight and landing. The corrective actions required by this AD must be accomplished within 30 days. This compliance time is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

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

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

The FAA estimates that this AD affects 482 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 on-condition actions that would be required based on the results of the inspection. The FAA has no way of determining the number of airplanes that might need these on-condition actions:

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

This final rule amends FDA's regulations to codify FDA's existing approach that former approved applications for biological products under the FD&C Act that have been deemed, pursuant to the Biologics Price Competition and Innovation Act of 2009 (BPCI Act), to be licenses for the biological products under the PHS Act can continue to incorporate by reference DS/DSI/DP information contained in a DMF if such information was referenced at the time the application was deemed to be a license, in order to avoid the risk of unnecessary disruptions and potential drug shortages for these products. This final rule also amends the regulations to reflect FDA's longstanding practices regarding the referencing of information contained in master files by biologics license applications (BLAs). The final rule codifies FDA's practice and policy that INDs for products that would be subject to licensure under the PHS Act may incorporate by reference any information in a master file. The final rule also amends the regulations to address the use of master files for the constituent parts of combination products licensed under the PHS Act.

Under this final rule, FDA is amending its regulations to address the use of master files by BLAs and INDs for products subject to licensure under the PHS Act. This final rule confirms that former approved applications for biological products in new drug applications (NDAs) under the FD&C Act that have been deemed, pursuant to the BPCI Act, to be licenses for the biological products under the PHS Act may continue relying on DMFs for information on DS/DSI/DP if such information in a master file was relied on at the time the application was deemed to be a license under the PHS Act. For BLAs outside the scope of the circumstances described in the preceding sentence, the final rule also codifies FDA's existing practice that BLAs may not rely on a master file for DS/DSI/DP information but may rely on a master file for other kinds of information. 1 This final rule also codifies FDA's practice that an IND for a product that would be subject to licensure as a BLA may incorporate by reference any information, including DS/DSI/DP information, contained in a master file. This final rule also provides that, while BLAs under the PHS Act may not incorporate by reference DS/DSI/DP information contained in master files for biological product constituent parts of combination products, they may do so for non-biological product constituent parts.

This final rule amends FDA's regulations, as part of FDA's implementation of the BPCI Act, as amended by the Further Consolidated Appropriations Act, 2020 (FCA). FDA's authority for this rule also derives from the biological product licensing provisions of the PHS Act and the provisions of the FD&C Act applicable to drugs; the FD&C Act provisions are applicable to biological products under the PHS Act.

By allowing certain BLAs to continue referencing a DMF for DS/DSI/DP information, FDA avoids imposing a potential new regulatory burden. Affected entities will incur minimal costs to read and understand the rule. FDA estimates that over 10 years at a discount rate of 7 percent, the final rule will generate annualized net cost savings ranging from $0.40 million to $5.19 million with a primary estimate of $2.80 million; at a discount rate of 3 percent, the final rule will generate annualized net cost savings ranging from $0.37 million to $5.17 million with a primary estimate of $2.77 million.

In the proposed rule, 2 FDA announced its intention to amend its regulations to address the use of master files by BLAs. Section 7002(b)(1) of the BPCI Act revised section 351(i) of the PHS Act (42 U.S.C. 262(i)), in part, to amend the definition of a “biological product” to include a “protein (except any chemically synthesized polypeptide).” Section 605 of the FCA Act (Pub. L. 116-94) later amended this definition to remove the parenthetical “(except any chemically synthesized polypeptide).”  3 Also, section 7002(e)(4) of the BPCI Act provided that, on March 23, 2020, an approved application for a biological product under section 505 of the FD&C Act (21 U.S.C. 355) “shall be deemed to be a license for the biological product under” section 351 of the PHS Act. 4 A number of products that were approved in NDAs under section 505 of the FD&C Act met the revised definition of a biological product and the applications for these products were deemed to be biologics license applications on March 23, 2020 (deemed BLAs). The proposed rule described FDA's interpretation of the “deemed to be a license” provision of the BPCI Act with respect to the use of master files by BLAs. 5

The preamble to the proposed rule described FDA's current regulatory framework and practices regarding the use of master files by BLAs and INDs. The proposed rule also described a mechanism to provide for continued use of DMFs referenced by deemed BLAs. The preamble to the proposed rule further noted that there are combination products approved in BLAs under the PHS Act and that the rationale described in the proposed rule for the Agency's proposed approach to BLAs also applied to the biological product constituent part(s) of such combination products. FDA sought comments on whether applications for combination products submitted in BLAs under the PHS Act should be permitted to incorporate by reference DS/DSI/DP information for any non-biological product constituent part (for example, the drug constituent part of an antibody-drug conjugate).

In this final rule, FDA is finalizing the approach described in the proposed rule with several changes. Based on comments received, FDA is adding provisions codifying the use of master files by BLAs under the PHS Act for combination products. In addition, FDA is making nonsubstantive changes to the structure of the codified language to improve its readability.

We received fewer than 30 comment letters on the proposed rule. Several comments generally support the proposed rule, in whole or in part. Several comments recommend revisions to, or disagree with, individual provisions in the proposed rule. Some comments address the use of master files for combination products in response to FDA's request for public comment in the preamble to the proposed rule.

We are issuing this final rule under section 7002(e) of the BPCI Act, as amended by section 607 of the FCA Act. FDA's authority for this final rule also derives from the biological product licensing provisions of the PHS Act and the provisions of the FD&C Act (21 U.S.C. 321, et seq. ) applicable to drugs. Under these provisions, FDA has the authority to issue regulations designed to ensure, among other things, that biological products are safe, pure, and potent and manufactured in accordance with current good manufacturing practice. FDA also has general authority to issue regulations for the efficient enforcement of the FD&C Act under section 701 of the FD&C Act, which is applicable to biological products pursuant to section 351(j) of the PHS Act.

We received fewer than 30 comment letters on the proposed rule by the close of the comment period, each addressing one or more issues. We received comments from industry, individuals, and a trade organization.

We describe and respond to the comments in section V.B below. We have numbered each comment topic to help distinguish between the issues raised in the comments. We have grouped similar comments together under the same number, and, in some cases, we have separated different issues discussed in the same comment for purposes of our responses. The number assigned to each comment topic is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.

In addition, FDA has restructured the codified language to address comments and for ease of reading. The paragraph numbers in the codified text and preamble of this final rule differ from those used in the proposed rule. Where applicable in this preamble, we identify the paragraphs as numbered in the proposed, as well as final, codified language. Although the codified language has been restructured for ease of reading into a new § 601.2(g), the separate paragraphs of this rule, applicable to certain deemed BLAs, to INDs for products that would be subject to licensure as a BLA, and to non-biological product constituent parts of combination products regulated under the PHS Act, each function independently to address specific circumstances and codify FDA's practices for those circumstances. In the event of a stay or invalidation of any paragraph of new § 601.2(g), those paragraphs that remain in effect would continue to function sensibly  6 to address their respective circumstances. For example, invalidation of § 601.2(g), which is specific to certain deemed BLAs, would have no effect on the provisions applicable to applications outside the scope of that paragraph.

We proposed that an application for a biological product submitted to FDA for licensure under section 351 of the PHS Act, licensed under section 351 of the PHS Act, or, except as provided in proposed § 601.2(h), deemed to be licensed under section 351 of the PHS Act, may not incorporate by reference DS/DSI/DP information contained in a master file (see proposed § 601.2(g)). We also proposed that amendments and supplements to these applications may not incorporate by reference such information contained in a master file.

FDA received several comments addressing this aspect of the proposed rule, some of which agree with the need for the provision and with FDA's rationale, and some of which disagree. Some of the comments that disagree propose that FDA permit BLAs more generally to incorporate by reference information on DS/DSI/DP contained in master files or permit this on a case-by-case basis. A few comments suggest that BLAs should be permitted to incorporate certain kinds of DS/DSI/DP information by reference or that BLAs for certain products should be permitted to incorporate by reference DS/DSI/DP information. For the reasons described below, we are not changing our approach in finalizing this proposal. However, because the final regulation also addresses combination products licensed in BLAs, final § 601.2(g)(1) (as well as final § 601.2(g)(3)) includes references to such applications. In addition, because § 601.2(g)(1) applies to a BLA regardless of submission type ( e.g., application for approval, licensed BLA, amendment, supplement), we have removed the reference to “amendments” and “supplements.”

(Comment 1) FDA received three comments disagreeing with FDA's proposed approach and suggesting that FDA instead permit BLAs more generally to incorporate by reference DS/DSI/DP information contained in master files on a case-by-case basis. One of these comments asserts that FDA's proposal is inconsistent with applying a risk-based approach to regulatory review of applications, and, in support of a case-by-case approach, specifically suggests that FDA permit BLAs to incorporate by reference this information when it does not increase risk to the patient.

(Response 1) FDA disagrees that its proposal is inconsistent with applying a risk-based approach and declines to revise its proposal to permit incorporation by reference of DS/DSI/DP information contained in a master file on a case-by-case basis.

FDA agrees that it is important to employ a science- and risk-based approach to its regulation of BLAs. Accordingly, FDA considers the establishment and function of a robust quality assurance program to be essential for evaluating, controlling, and mitigating product quality risks. The Agency has carefully considered the (generally) complex characteristics of most biological products and the risks to product quality inherent in the manufacture of these products. As stated in the preamble to the proposed rule, most biological products tend to have certain features ( e.g., amino acid sequence, glycosylation, folding, cellular phenotype) essential to their intended effect and can be very sensitive to changes to the manufacturing process. In addition, biological products isolated from biological sources may be complex heterogeneous mixtures. As a result of such characteristics, the manufacture of most biological products carries increased potential risk to product quality. As a scientific matter, for biological products, the Agency considers it to be generally impractical for the applicant to confirm DS/DSI/DP quality characteristics without complete knowledge of, and control over, all aspects of the manufacturing process, including the manufacturing process for the DS/DSI/DP. Absent such knowledge and control, the applicant generally cannot operate a quality assurance program that independently identifies, assesses, and mitigates quality risks, which is critical to assuring the quality of a biological product.

For biological products, FDA has found that the fragmentation of DS/DSI/DP information between a master file and a BLA results in a risk to quality that is very difficult to mitigate. Therefore, requiring DS/DSI/DP information to be submitted as part of the BLA, rather than incorporated by reference to a master file, is consistent with FDA's scientific assessment of the risks associated with this category of products and the need for BLA applicants to have direct knowledge of and control over the entire manufacturing process.

As we acknowledged in the preamble to the proposed rule, there may be some biological products for which referencing a DMF for DS/DSI/DP information presents somewhat less risk. However, FDA declines to adopt a case-by-case approach to BLAs incorporating by reference DS/DSI/DP information contained in master files. Given the complex characteristics of most biological products, the importance of the applicant's knowledge of and direct control over the manufacturing processes for biological products, and the advantages in administrative efficiency and predictability, the Agency is proceeding with an approach that draws a distinction between BLAs and NDAs with regard to the referencing of master files for DS/DSI/DP information, except for certain deemed BLAs (see section V.B.2).

(Comment 2) One comment suggests that it would be unfair to prohibit sponsors of applications for “biological products” from incorporating by reference DS/DSI/DP information contained in master files while permitting sponsors of applications for “drug products” to do so because it would create unequal starting points and incentives for product development.

(Response 2) FDA disagrees that it would be unfair to prohibit BLAs from incorporating by reference DS/DSI/DP information contained in master files while permitting applications under the FD&C Act to do so. FDA's longstanding practice of not permitting BLAs to incorporate by reference DS/DSI/DP information contained in master files is based on the differences in risk generally associated with products regulated under the PHS Act and products regulated under the FD&C Act, as described above and in the preamble to the proposed rule.

With regard to a difference in starting points and incentives, nothing in this rule prohibits an IND for a product that would be subject to licensure under section 351 of the PHS Act from incorporating by reference DS/DSI/DP information contained in a master file, in the same way that an IND can for a product that would be subject to approval under the FD&C Act. Therefore, the starting points for INDs for products that would be regulated under the PHS Act and products that would be regulated under the FD&C Act are the same in this regard. Furthermore, it should be noted that at the BLA stage the inability to incorporate by reference DS/DSI/DP information contained in a master file does not remove BLA applicants' incentives or ability to proceed with product development. An applicant who does not intend to manufacture all aspects of the product for licensure may, as stated in the preamble to the proposed rule, consider other types of cooperative manufacturing arrangements, while still assuming responsibility for meeting the applicable product and establishment standards. 7 These other arrangements would provide alternatives in cases where the incorporation by reference of a master file is not permitted.

(Comment 3) Two comments assert that BLAs should be permitted to incorporate by reference DS/DSI/DP information contained in master files because IND applications are permitted to do so.

(Response 3) FDA disagrees with these comments. FDA requires an applicant to be able to submit DS/DSI/DP information directly to the BLA because, at the time a BLA is submitted, FDA expects the sponsor to have knowledge of and direct control over the manufacturing process.

As described in the preamble to the proposed rule, INDs are permitted to incorporate by reference DS/DSI/DP information contained in master files for several reasons, including the following: exposure to the investigational product is limited to subjects enrolled in clinical trials, which are typically carried out in controlled settings; the sponsor and FDA can mitigate risk by closely monitoring patients in clinical trials to evaluate the safety of the investigational product; and permitting INDs to incorporate by reference DS/DSI/DP information contained in master files may facilitate product development because a sponsor might otherwise choose not to make the significant investment to manufacture the DS/DSI/DP for the product at the early, investigational stage. None of these situations apply at the time of BLA submission.

Because the rationale for permitting INDs to incorporate by reference DS/DSI/DP information contained in a master file does not apply at the BLA stage, FDA declines to change its approach and permit BLAs to incorporate such information by reference.

(Comment 4) One comment contends that BLAs should be permitted to incorporate by reference DS/DSI/DP information contained in master files because, if there are concerns with the safety of a product during the BLA review process, FDA can issue a complete response letter or request mandatory postmarketing studies and postmarketing surveillance.

(Response 4) Complete response letters are regulatory responses that convey deficiencies identified by FDA during the review and evaluation of an application. Postmarketing requirements, postmarketing commitments, and postmarketing surveillance are regulatory tools that can be used to assess and address potential product risks after the product is licensed. Complete response letters, postmarketing study commitments, and postmarketing surveillance are application-specific actions. For the reasons discussed above, FDA declines to take a case-by-case ( i.e., application-specific) approach to BLAs' incorporation by reference of DS/DSI/DP information contained in master files. Furthermore, complete response letters, postmarketing study commitments, and postmarketing surveillance are relevant only after the product has been developed and an application has been submitted to and reviewed and evaluated by the Agency. In contrast, given the importance of the applicant's knowledge of and direct control over the manufacturing processes for biological products, a clear rule that applies to all BLAs provides all applicants with administrative efficiency and predictability early in the development process about the Agency's expectations regarding the use of master files, allowing applicants to take these expectations into account in their product development plan and when preparing content to be submitted in the application.

For the reasons discussed above, FDA declines to take a case-by-case approach, and has concluded that the availability of complete response letters, postmarketing study commitments, and postmarketing surveillance does not provide a suitable alternative to FDA's approach, which is, among other things, intended to provide predictability regarding the use of master files for BLAs.

(Comment 5) One comment proposes that FDA permit BLAs to incorporate by reference certain kinds of DS/DSI/DP information contained in a master file, advocating for the ability of BLAs to reference DS/DSI/DP information that is not “highly product-specific.” As an example, the comment asserts that “drug product information” could be interpreted to encompass extensive aseptic processing information and, in certain circumstances, this information could be appropriately managed in a master file because elements of aseptic processing can cut across multiple products and very few elements of aseptic processing are drug product-specific. The comment also suggests that platform data to support viral clearance could be more appropriately captured once in a DMF instead of being repeated in multiple BLAs, thereby reducing burden on the Agency and sponsors.

(Response 5) FDA declines to change its approach in order to permit BLAs to incorporate by reference certain DS/DSI/DP information contained in a master file as suggested by the comment.

The comment uses, but does not explain what it means by, the term “highly product-specific information,” other than providing examples of information that the comment considers not to be “highly product-specific,” such as platform data to support viral clearance and aseptic processing information. It is unclear whether these examples would, in fact, be DS/DSI/DP information in the context of a particular BLA. FDA notes that an applicant may seek guidance from the relevant review division at the Agency if the applicant is unsure whether information in a master file constitutes DS/DSI/DP information in the context of a particular BLA.

Accordingly, FDA declines to change this provision to treat DS/DSI/DP information that is not “highly product-specific” different from any other kind of DS/DSI/DP information contained in master files.

(Comment 6) One comment largely agrees with FDA's proposal and the rationale provided to support it but expresses concern about its application to purely synthetic drug substance intermediates, asserting that the considerations articulated in the proposed rule are appropriate only for biological products. The comment notes that a chemically synthesized polypeptide does not meet the definition of a biological product under section 7002(b) of the BPCI Act, which amended, in part, the definition of a “biological product” in the PHS Act to include a “protein (except any chemically synthesized polypeptide).” The comment requests clarity on the use of DMFs for drug substance intermediates for chemically synthesized polypeptides. The comment contends that some biological products may integrate drug substance intermediates that are chemically synthesized polypeptides. The comment asserts that the potential risks to quality are less significant in such cases because, according to the comment, these chemically synthesized polypeptides are not technically biological products. The comment contends that, under such circumstances, reliance on a DMF may be appropriate, and proposes that FDA allow reliance on a DMF for a drug substance intermediate that is purely synthetic.

(Response 6) FDA notes that, after the comment period for the proposed rule closed, section 605 of the FCA Act further amended the definition of a “biological product” in section 351(i) of the PHS Act to remove the parenthetical exception for “any chemically synthesized polypeptide” from the statutory category of “protein.” Accordingly, the comment's assertion that BLAs should be permitted to reference a DMF for information about a drug substance intermediate that is a chemically synthesized polypeptide because a chemically synthesized polypeptide does not meet the definition of a biological product is no longer applicable.

In addition, the inclusion of chemically synthesized polypeptides into the definition of a biological product does not change our overall concerns and approach with respect to biological products. Because chemically synthesized polypeptides can present many of the same issues and concerns as do other biological products, FDA's approach should be the same. When manufacturing processes for chemically synthesized polypeptides are appropriately designed, manufacturers can control the amino acid sequence and modifications to amino acids; however, the manufacturing of chemically synthesized polypeptides may still present risks to quality. As stated in the preamble to the proposed rule, most biological products tend to be very sensitive to changes in their manufacturing process. For example, aspects of the manufacturing process ( e.g., temperature) can affect the folding of polypeptides. Therefore, even for chemically synthesized polypeptides, it is important for the applicant to have knowledge of and control over all aspects of the manufacturing process and to implement a robust quality assurance program. For this reason, the final rule requires that information about chemically synthesized drug substance intermediates be submitted directly to the application, rather than be incorporated by reference to a master file.

(Comment 7) One comment requests that BLAs for in vitro diagnostic (IVD) products, including those for licensed donor IVD screening tests, be excluded from the limitation on BLAs' incorporating by reference DS/DSI/DP information contained in master files, asserting that the reasons for limiting the use of master files for this kind of information in BLAs for therapeutic products do not apply to BLAs for IVDs.

(Response 7) FDA declines to exclude BLAs for IVD devices from the limitation on BLAs' use of master files for DS/DSI/DP information because such an exclusion is generally not necessary.

IVD devices subject to a BLA are intended for use in screening donated human cells, tissues, and cellular and tissue-based products (HCT/Ps) and donated blood in order to ensure the compatibility between donors and recipients and the absence of infectious agents. These assays are performed on samples collected from the HCT/P or blood donor.

Generally, the terms drug substance, drug substance intermediate, and drug product are not applicable to IVD devices. Therefore, the limitation in this rule on BLAs' use of master files for DS/DSI/DP information is not expected to affect BLAs for IVD devices. For this reason, the Agency considers it unnecessary to exclude BLAs for IVD devices from the scope of the rule's limitation on BLAs' use of master files for DS/DSI/DP information.

Final § 601.2(g)(2) (proposed § 601.2(h)) addresses applications that have been deemed to be BLAs pursuant to section 7002(e)(4) of the BPCI Act, as amended by the FCA Act. This paragraph provides that a deemed BLA can continue to incorporate by reference DS/DSI/DP information contained in a DMF if such information was referenced at the time the application was deemed to be a BLA. We received several comments on this provision, most of which agree with this provision and the rationale provided in the proposed rule. A few comments disagree and several request clarification regarding certain aspects of this paragraph. For the reasons given below, we decline to make the changes suggested by the comments and are, therefore, finalizing this requirement without substantive change.

(Comment 8) One comment requests clarification regarding proposed § 601.2(h). The comment requests that FDA explain whether all biological products approved in NDAs will be permitted to continue incorporating by reference DS/DSI/DP information contained in DMFs or whether it is only a specific subset of biological products, because the preamble to the proposed rule notes that it would allow “certain” biological products originally approved in an NDA under the FD&C Act to continue relying on a DMF for information on DS/DSI/DP after the NDA is deemed to be a license for the biological product.

(Response 8) As explained in the preamble to the proposed rule and described in proposed § 601.2(h), a deemed BLA that was relying on DS/DSI/DP information in a DMF at the time the application was deemed a BLA may continue to incorporate by reference that DS/DSI/DP information contained in that DMF. The reference in the preamble to the proposed rule to “certain” applications refers to deemed BLAs that incorporated by reference DS/DSI/DP information contained in a DMF at the time the application was deemed a BLA. These are the same applications specified in § 601.2(g)(2) in this final rule.

(Comment 9) One comment requests clarification regarding whether applications that reference DMF information may continue referencing the DMF if changes are made to the DMF.

(Response 9) The preamble to the proposed rule explains that the rule is not intended to limit or restrict the changes that may be made to any master file, including a DMF containing DS/DSI/DP information. Changes made to such a DMF, including changes to previously referenced DS/DSI/DP information, do not restrict the ability of a deemed BLA to continue to incorporate by reference the DS/DSI/DP information in that DMF for the same purpose for which it was incorporated by reference at the time the application was deemed to be a BLA. For example, consider a former NDA that incorporated by reference information contained in a DMF regarding the manufacture of its drug substance and that, after the application was deemed to be a BLA, continues to incorporate by reference that drug substance information. If the DMF holder subsequently modifies drug substance manufacturing (for example, by making changes to the analytical methods or purification process for the drug substance), the deemed BLA may continue to incorporate by reference this modified drug substance information, provided that the BLA applicant informs the Agency of the change in the BLA in accordance with § 601.12 (21 CFR 601.12). Alternatively, if the DMF holder adds information about manufacturing of drug product to the same DMF, FDA does not intend to permit the deemed BLA to incorporate by reference that new drug product information because it is not the type of information that was referenced by the former NDA at the time it was deemed to be a BLA.

(Comment 10) One comment requests further information on the circumstances in which submission of a supplement to a BLA would not be sufficient and the submission of a new BLA would be required.

(Response 10) FDA notes that a description of the kinds of changes that cannot be addressed through a supplement is outside the scope of this rule. The Agency has generally described its thinking on what constitutes a separate original application, amendment, or supplement. 8

(Comment 11) One comment suggests that deemed BLAs are best described as “expected to transition.”

(Response 11) The applications described in § 601.2(g)(2) in this final rule have already been deemed to be BLAs by operation of the statute (section 7002(e)(4) of the BPCI Act, as amended by section 607 of the FCA Act). Therefore, referring to deemed BLAs as “expected to transition” would be inaccurate.

(Comment 12) One comment suggests that FDA change proposed § 601.2(h) to state that any new BLAs will not be allowed to incorporate by reference DS/DSI/DP information contained in master files after March 23, 2020.

(Response 12) The Agency declines to make the suggested change. Except as noted in final § 601.2(g)(2) and (3), final § 601.2(g)(1) applies to all BLAs, whether new or existing. Therefore, the suggested change is not needed because, under the final codified, a new BLA may not incorporate by reference DS/DSI/DP information contained in any master file.

(Comment 13) One comment asserts that the BPCI Act was enacted to guarantee appropriate regulation of biological products to support public health and to ensure that only safe and effective products enter the market. The comment further maintains that the intent of the deemed BLA provision of section 7002(e)(4) of the BPCI Act is to ensure that scientific and technical complexities associated with the generally larger and typically more complex structure of biological products, as well as the processes by which such products are manufactured, are not overlooked. The comment asserts that it would therefore defeat the purpose of the BPCI Act to allow biological products initially approved in an NDA under the FD&C Act to continue to rely on a DMF for DS/DSI/DP information after the NDA is deemed to be a license for the biological product under the PHS Act. The comment recommends that deemed BLAs be regulated like other biological products with respect to use of master files.

(Response 13) FDA agrees that, in general, scientific and technical complexities associated with the typically more complex structures of biological products, as well as the processes by which such products are manufactured, must not be overlooked (see section V.B.1). However, with respect to deemed BLAs that previously, as former NDAs, referenced a DMF for DS/DSI/DP information at the time of the transition, FDA considered the intent underlying the BPCI Act and, as elaborated in the proposed rule, took into account the following considerations that are specific to such deemed BLAs: (1) these applications have already been approved, and the applicants have marketed the product, in certain instances for decades, without overt safety concerns; (2) the deemed BLAs that incorporate by reference DS/DSI/DP information comprise only a small subset of all BLAs and reference a very small number of DMFs; and (3) many of these BLA applicants have accumulated knowledge about the products and have been able to implement appropriate control strategies based on this product knowledge. In addition, prohibiting these deemed BLAs from continuing to incorporate by reference DS/DSI/DP information in these DMFs might have the effect of halting or curtailing production of these products, resulting in drug shortages. FDA interprets the applicable statutory provisions such that the transition was not meant to interrupt access to these products. Therefore, on balance, FDA believes that public health is best served by allowing the small number of deemed BLAs to continue referencing DS/DSI/DP information contained in DMFs on which they relied at the time of transition.

(Comment 14) One comment acknowledges that the general concern about fragmentation of DS/DSI/DP information associated with the use of DMFs is lessened for deemed BLAs by the existence of generally longstanding relationships between the deemed-BLA applicants and the DMF holders because the applicants may have accumulated knowledge about the quality of the DS/DSI/DP supplied by the DMF holder over an extended period. The comment agrees that this accumulated knowledge allows a deemed BLA applicant to implement a more robust control strategy to mitigate the risk to product quality posed by the applicant's limited knowledge of the manufacturing process described in the DMF. The comment questions how this approach would change if the contents of the DMF change or the holder of the DMF changes.

(Response 14) FDA does not consider that a change to the holder of the DMF or a change in previously referenced DS/DSI/DP information in the context of a DMF is inconsistent with the rationale for permitting deemed BLAs that previously referenced a master file for DS/DSI/DP information to continue referencing the DMF for the same type of information. The generally longstanding relationships between the deemed BLA applicant and the DMF holder, the knowledge accumulated by the deemed BLA applicant, and the knowledge accumulated by the DMF holder collectively provide some assurance about the quality of a product. When changes are made to a DMF, these assurances should continue to apply in most cases. In addition, the comparability studies required to demonstrate the safety, purity, and potency of post-change and pre-change material should provide further assurance of quality.

When the DMF remains the same but the DMF holder changes, the deemed BLA applicant's product and process knowledge still remains; the deemed BLA applicant will also have designed and implemented a control strategy that is independent of the identity of the holder of the DMF. These measures collectively should provide continued assurance of quality under such circumstances. Therefore, it is appropriate to permit deemed BLAs to continue to incorporate by reference the same type of DS/DSI/DP information contained in a DMF after a change in the content of the DMF or the holder of the DMF.

(Comment 15) One comment asserts that FDA's rationale for allowing deemed BLAs to continue incorporating by reference information on DS/DSI/DP contained in DMFs is insufficient because it is based on a small subset of the deemed BLAs and a very small number of DMFs.

(Response 15) This comment appears to misunderstand the set of deemed BLAs on which FDA's rationale is based. It is true that FDA's approach to deemed BLAs and their use of DMFs for DS/DSI/DP information applies to a small number of applications and DMFs. Deemed BLAs are a small subset of all BLAs, and deemed BLAs that reference a master file for DS/DSI/DP information are, in turn, a subset of all deemed BLAs. However, FDA's risk-based assessment of deemed BLAs' continued referencing of DMFs for DS/DSI/DP information is based on a consideration of the entire set of deemed BLAs that reference DMFs for such information, and it is only those deemed BLAs that will be able to continue referencing DS/DSI/DP information in a DMF. In other words, FDA considered the entire set of applications and DMFs that will be affected by final § 601.2(g)(2).

As elaborated in the preamble to the proposed rule, FDA considered the length of time these products have been marketed without being withdrawn or removed for reasons of safety or effectiveness; the acceptable quality of drug substances provided over decades through this incorporation by reference to DMFs; and the impact of disallowing use of DMFs for these deemed BLAs, which has the potential to curtail or halt production of some of these products, resulting in drug shortages with considerable negative impacts on public health. Based on these reasons, and the fact that there are a small number of deemed BLAs and a small number of master files referenced by these applications, the Agency has determined that it serves the public health best to permit these deemed BLAs to continue incorporating by reference the DS/DSI/DP information contained in this small set of master files.

(Comment 16) One comment proposes that a biosimilar product that references a deemed BLA that incorporates by reference DS/DSI/DP information contained in a master file should also be permitted to incorporate by reference the same information to assist in demonstrating biosimilarity.

(Response 16) FDA recognizes that an applicant might submit a BLA for a biosimilar or interchangeable biosimilar product to a reference product that is approved in a deemed BLA and is permitted under the exception in final § 601.2(g)(2) to continue incorporating by reference DS/DSI/DP information contained in a DMF. However, for the reasons outlined below, FDA declines to amend the proposed rule to also except such BLAs for biosimilar or interchangeable biosimilar products from final § 601.2(g)(1).

Consistent with FDA's longstanding practice for BLAs, and as codified in final § 601.2(g)(1), a BLA may not reference a master file for DS/DSI/DP information because a BLA applicant needs to demonstrate knowledge of and direct control over the manufacture of the drug product, which includes manufacture of the drug substance and drug substance intermediate. For reasons discussed above, FDA believes that the public health is best served by allowing a small number of deemed BLAs—those that, in former approved applications under section 505 of the FD&C Act, relied on DMFs for DS/DSI/DP information—to continue referencing that information after being deemed a BLA. However, these reasons, such as avoiding disruptions in existing supply chains for products with deemed BLAs, do not apply to new BLAs, including BLAs for products that are biosimilar to or biosimilar and interchangeable with reference products in such deemed BLAs. We continue to consider that an approach which draws a clear distinction between deemed BLAs and other BLAs with regard to the referencing of master files for DS/DSI/DP information is the most appropriate.

FDA notes that the lack of ability to reference a master file for DS/DSI/DP information should not preclude the development of a biosimilar or interchangeable biosimilar product to a reference product in a deemed BLA that is permitted to continue incorporating by reference DS/DSI/DP information from a DMF. For example, an application for licensure as a biosimilar typically will include data derived from comparative analytical studies between the proposed biosimilar and the reference product, which should be feasible even if the biosimilar or interchangeable biosimilar product application does not reference DS/DSI/DP information that is incorporated by reference by the deemed BLA for the reference product. Moreover, data derived from comparative clinical studies, among other things, often will be included as part of a demonstration of biosimilarity. In general, a biosimilar applicant should be able to conduct such studies regardless of whether the biosimilar applicant can reference the same DMF for DS/DSI/DP information as the reference product.

Furthermore, an applicant for a biosimilar or interchangeable biosimilar product that is not permitted to incorporate DS/DSI/DP information by reference to the DMF is not required to manufacture the DS/DSI/DP; as noted above and in the preamble to the proposed rule, alternatives are available, including the use of cooperative manufacturing arrangements that ensure that the licensee for the final product assumes responsibility for compliance with the applicable product and establishment standards.

Overall, we do not believe that an applicant for a proposed biosimilar or interchangeable biosimilar product would face a barrier to generating the data necessary to demonstrate the biosimilarity or interchangeability of its proposed product to a reference product that incorporates by reference DS/DSI/DP information in a DMF, even if the biosimilar applicant is not permitted to incorporate by reference that same DS/DSI/DP information. Therefore, FDA declines to modify this provision as suggested.

We note that the Agency has taken steps to help create a more competitive market for biological products, including encouraging the development of biosimilar products, and is working to implement additional measures to maximize clarity and efficiency in biosimilar development. 9 The Agency invites prospective applicants who seek advice relating to the development and review of a biosimilar or interchangeable biosimilar product, including advice on the feasibility of licensure under section 351(k) of the PHS Act for a particular product, to contact the Agency. For Center for Drug Evaluation and Research (CDER)-regulated products, you may contact CDER-Biologics Biosimilars Inquiries at CDER-BiologicsBiosimilarsInquiries@fda.hhs.gov; for Center for Biologics Evaluation and Research (CBER)-regulated products, you may contact CBER at industry.biologics@fda.hhs.gov.

Final § 601.2(g)(4) (proposed § 601.2(i)) codifies the Agency's practice of permitting BLAs to incorporate by reference information other than DS/DSI/DP information contained in master files, including in DMFs. Comments that address this proposed provision did not object to FDA's overall approach or the underlying rationale, and some focused on operational aspects of the provision. Therefore, we are finalizing § 601.2(g)(4) without substantive changes. Because this provision applies to a BLA regardless of submission type, we have removed the reference to amendments and supplements.

(Comment 17) Three comments request clarification or codification of the type of data and information that constitutes information other than DS/DSI/DP information that is contained in master files and can be leveraged by BLAs.

(Response 17) In the preamble to the proposed rule, we provided examples of the kinds of information that are not DS/DSI/DP information, including excipients, stabilizers, penetrants, container closure, and other materials. However, we decline to codify in this rule an exhaustive list of the specific types of information that are not DS/DSI/DP information and that can be included in a master file and incorporated by reference by a BLA. A potential applicant may seek additional guidance from the relevant review division if the applicant is unsure whether it is appropriate to incorporate by reference a particular type of information contained in a master file.

(Comment 18) One comment requests that FDA codify the tests and analyses that should be performed by the applicant when data or information is being incorporated by reference by the BLA.

(Response 18) FDA declines to codify the tests and analyses that the applicant should perform because these depend on, among other things, the nature of the data and information contained in the master file and incorporated by reference.

(Comment 19) One comment requests that FDA clarify whether proposed § 601.2(i) applies to master files held by contract manufacturing organizations (CMOs). The comment reasons that sponsors developing biological products frequently incorporate into BLAs information other than DS/DSI/DP ( e.g., for a fill or incorporation of a device, such as an autoinjector) by referencing a master file held by a CMO.

(Response 19) FDA clarifies that this final rule applies to all master files containing information that is being considered for incorporation by reference by a BLA, regardless of the ownership of the master file. Therefore, BLAs may incorporate by reference information (other than DS/DSI/DP information) that is contained in master files held by CMOs.

(Comment 20) One comment requests that FDA update the proposed rule to explicitly state that Type V DMFs can be used for certain non-product-specific equipment and facility information, including sterilization validation information, to support multiple NDAs/BLAs.

(Response 20) Final § 601.2(g)(4) codifies that BLAs may incorporate by reference information other than DS/DSI/DP information contained in master files. Information in Type V DMFs, like information in all master files, may be incorporated by reference by multiple applications, provided that the information is not DS/DSI/DP information. We do not consider it necessary to explicitly reference Type V DMFs in the codified language.

(Comment 21) One comment requests that FDA qualify proposed § 601.2(i) by adding that nothing in proposed § 601.2(g) limits or alters a license holder's ability to modify a product under §  601.12, nor is it intended to expand or reduce the changes allowed to a deemed BLA that incorporates by reference information contained in master files.

(Response 21) FDA declines to change proposed § 601.2(i) (final § 601.2(g)(4)) as the comment requests. As stated in the preamble to the proposed rule, this codification of current practice is not intended to alter an applicant's existing ability to modify a product under § 601.12. We further stated in the preamble to the proposed rule that the proposed rule is also not intended to expand or reduce the changes allowed to a deemed BLA that incorporates by reference information contained in master files.

The Agency recognized in the preamble for the proposed rule that there are combination products approved in BLAs. Although the proposed rule did not focus on combination products in BLAs, in the preamble, we stated our position that the rationale for the treatment of BLAs for biological products also applies to the biological product constituent part(s) of combination products licensed under the PHS Act ( i.e., BLAs should not be permitted to incorporate by reference DS/DSI/DP information contained in master files for a biological product constituent part of a combination product for the same reasons that BLAs for biological products should not be permitted to do so). 10 Additionally, the Agency specifically requested comments on whether BLAs should be permitted to incorporate by reference DS/DSI/DP information for any non-biological product constituent part of a combination product.

We received several comments disagreeing with our position that, since BLAs for biological products cannot incorporate by reference DS/DSI/DP information contained in a master file, then BLAs should also not be permitted to incorporate by reference such information for a biological product constituent part of a combination product. We also received comments both in support and not in support of permitting BLAs to incorporate by reference DS/DSI/DP information for the non-biological product constituent part(s) of a combination product. We did not receive any comments discussing whether BLAs should be able to reference master files for information other than DS/DSI/DP information for either the biological or non-biological product constituent parts of a combination product.

Based on our consideration of the comments regarding BLAs' incorporation by reference of information contained in master files for constituent parts of combination products, we are addressing combination products approved as BLAs under section 351 of the PHS Act in the final rule.

a. BLAs referencing a master file for DS/DSI/DP information for a biological product constituent part of a combination product: final § 601.2(g)(1) (proposed § 601.2(g)). We received several comments disagreeing with our position that BLAs will not be permitted to incorporate by reference DS/DSI/DP information contained in a master file for a biological product constituent part of a combination product.

(Comment 22) The comments disagreeing with FDA's proposal regarding biological product constituent parts of a combination product refer to the reasons that the commenters disagree with the Agency's rationale for not permitting BLAs generally to reference master files for DS/DSI/DP information but do not provide a reason for their disagreement that is specific to a biological product constituent part of a combination product.

(Response 22) The comments do not provide any reason why a BLA should be permitted to reference a master file for DS/DSI/DP information for a biological product constituent part of a combination product. Instead, the comments refer to the arguments they provide for why BLAs more generally should be permitted to incorporate by reference DS/DSI/DP information. In section V.B.1 of this preamble, we explain why we disagree with that position. None of the comments suggest that there is anything unique about a biological product constituent part of a combination product that warrants not extending the approach for BLAs to a biological product constituent part of a combination product in a BLA. Accordingly, we have modified final § 601.2(g)(1) to state that, except as provided, a BLA may not incorporate by reference DS/DSI/DP information contained in a master file, including for a biological product constituent part of a combination product.

b. BLAs referencing a master file for information other than DS/DSI/DP information for a constituent part of a combination product: final § 601.2(g)(4) (proposed § 601.2(i)). With regard to the referencing of a master file for information other than DS/DSI/DP information, we did not receive any comments objecting to BLAs' referencing this information for either a biological product constituent part or a non-biological product constituent part of a combination product. Therefore, FDA has decided that these BLAs, like all other BLAs, may incorporate by reference information other than DS/DSI/DP information contained in master files (see section V.B.3). Accordingly, final § 601.2(g)(4) covers the incorporation by reference of information contained in master files that is not DS/DSI/DP information by all BLAs, regardless of whether such information is incorporated by reference for the product or for a constituent part of a combination product.

c. BLAs referencing a master file for DS/DSI/DP information for a non-biological product constituent part of a combination product: final § 601.2(g)(3) (new). As discussed above, in the preamble of the proposed rule, the Agency specifically requested comments on whether applications for combination products submitted in BLAs should be permitted to incorporate by reference DS/DSI/DP information for any non-biological product constituent part of a combination product. FDA received numerous comments on this topic. Most of the comments support permitting BLAs to reference master files for DS/DSI/DP information with respect to the non-biological product constituent part(s) of a combination product, while a few comments are against such an approach. The comments we received helped inform our decision to clarify in this final rule that a BLA may incorporate by reference DS/DSI/DP information contained in any master file for any non-biological product constituent part of a combination product.

(Comment 23) Several comments support codifying in the final rule that BLAs are permitted to incorporate by reference DS/DSI/DP information contained in master files for the non-biological product constituent parts of combination products, but the comments do not provide a rationale. Another comment reasons that DMFs for drug products have been relied on for decades and enabling continued referencing of DS/DSI/DP information for the non-biological product constituent part(s) of a combination product in a BLA will allow further development of “superior treatments.” An additional comment suggests that permitting BLAs to reference a master file for DS/DSI/DP information for the non-biological product constituent part(s) of a combination product would enable biological product and small molecule manufacturers to collaborate more efficiently. Finally, one comment analogizes that, because a BLA would be permitted to incorporate any information from the device master file system for a medical device constituent part of a combination product, BLAs should also be able to reference DMFs for DS/DSI/DP information for drug constituent parts.

(Response 23) We agree that BLAs should be permitted to reference master files for DS/DSI/DP information with respect to the non-biological product constituent part(s) of combination products. As we explained in the preamble to the proposed rule, historically, the Agency has, as a scientific matter, expected applicants to submit information about DS/DSI/DP directly to the BLA for a biological product, rather than have the BLA incorporate it by reference to a master file. However, as a scientific matter, a similar expectation would not apply to applications for non-biological products regulated under the FD&C Act, which are permitted to incorporate by reference DS/DSI/DP information contained in a master file.

Much of the rationale for why a BLA is not permitted to reference a master file for DS/DSI/DP information does not apply in the case of a non-biological product constituent part of a combination product in a BLA. As we explained in the preamble to the proposed rule, the risk associated with the manufacture of biological products is generally significantly higher than that associated with the manufacture of products regulated under NDAs, which are often less complex. 11 This is because most biological products tend to have certain features ( e.g., amino acid sequence, glycosylation, folding, cellular phenotype) essential to their intended effect and can be very sensitive to changes to their manufacturing process, which makes them less amenable to characterization than small molecule chemical entities. While these considerations apply to biological product constituent parts of combination products, they generally do not apply to non-biological product constituent parts, which are often relatively simple, homogenous, and fully characterizable by extensive analytical testing. As such, the need for direct knowledge and control in the manufacturing of a non-biological product constituent part is generally mitigated by the ability to define the non-biological constituent part through analytical testing, and the risk associated with such manufacturing is generally lower than that associated with the manufacture of the biological product constituent part.

As two comments suggest, such an approach is consistent with how a non-biological product constituent part of a combination product, such as a drug constituent part, would be treated if it were a standalone product regulated under the FD&C Act. Additionally, we agree with the comment that permitting such referencing of information for non-biological product constituent part(s) could foster innovation by enabling more efficient collaboration between the manufacturer of the non-biological product constituent part and the manufacturer of the final product submitted in a BLA.

Accordingly, final § 601.2(g)(3) permits BLAs to incorporate by reference DS/DSI/DP information contained in a master file for the non-biological product constituent part(s) of a combination product.

(Comment 24) One comment does not support allowing BLAs to incorporate by reference DS/DSI/DP information for the non-biological product constituent part(s) of a combination product. The comment contends that the lack of knowledge and control over a drug constituent part for which a master file is referenced for DS/DSI/DP information introduces risk when that drug constituent part is combined with a biological product constituent part.

(Response 24) We understand that permitting a BLA to reference a master file for DS/DSI/DP information for a non-biological product constituent part, such as a drug constituent part, that is then combined with a biological product constituent part may introduce additional risk for the final combination product. However, the Agency considers it generally practical for the BLA applicant to confirm the DS/DSI/DP quality characteristics of the non-biological product constituent part through testing. This feasibility of testing and characterizing the non-biological product constituent part generally enables the BLA applicant to implement a robust control strategy for the final combination product that can mitigate the risks to quality arising from the applicant's lack of access to the DS/DSI/DP information for the non-biological product constituent part. Furthermore, the applicant would still be expected at the time of review of the BLA to have sufficient control strategies for the entire combination product, including an appropriate control strategy to mitigate the risk of the applicant not having access to the manufacturing information for the non-biological product constituent part.

(Comment 25) Another comment is concerned with non-biological product constituent parts categorically being permitted to reference a master file for DS/DSI/DP information because special controls may be necessary for drug constituent parts that are cytotoxic in nature, such as in the case of an antibody-drug conjugate combination product licensed in a BLA.

(Response 25) FDA acknowledges that the manufacture of cytotoxic drugs requires special expertise and controls to address the risks associated with the toxic nature of the drug, such as the implementation of special air-handling systems to reduce the risk of exposure to the cytotoxic drug by manufacturing personnel. We point out, however, that such controls to address toxicity-related risks differ from the controls that are discussed elsewhere throughout this rulemaking, which address the risks associated with the generally complex manufacturing of biological products. Permitting a BLA to incorporate by reference DS/DSI/DP information contained in a master file for a cytotoxic drug constituent part of a combination product does not increase the toxicity-related risks associated with either the manufacture of the cytotoxic drug constituent part or the manufacture of the combination product that contains the cytotoxic drug constituent part. Furthermore, the toxicity-related risks associated with the manufacture of a cytotoxic drug constituent part of a combination product licensed in a BLA are unlikely to differ significantly from the toxicity-related risks associated with the manufacture of cytotoxic drug products that are not constituent parts of combination products licensed in BLAs. Therefore, FDA declines to treat cytotoxic drug constituent parts differently from other non-biological product constituent parts and will permit BLAs to incorporate by reference DS/DSI/DP information contained in master files for cytotoxic drug constituent parts of combination products.

(Comment 26) One comment expresses concern that the BLA applicant would have a greater burden to establish a quality assurance program to mitigate the risk if the BLA incorporates by reference DS/DSI/DP information contained in a master file for the non-biological product constituent part of a combination product and this would be costlier and more complex than if the BLA is not permitted to rely on a master file for such information for the non-biological product constituent part.

(Response 26) To the extent that there is concern that an applicant would find it costlier and more complex to establish a quality assurance program to mitigate the risk associated with the use of a master file for DS/DSI/DP information for the non-biological product constituent part of a combination product than it would be to directly include such information in the BLA, we point out that FDA is not mandating the use of master files under such circumstances.

FDA proposed in § 601.2(j) of the proposed rule that INDs for products that would be subject to licensure under the PHS Act not be restricted from incorporating by reference any information, including DS/DSI/DP information, contained in a master file, including a DMF submitted under § 314.420 (21 CFR 314.420). Several comments support the proposed approach. However, a few comments disagree and recommend that, as is the case for BLAs, an IND for a product that would be subject to licensure under the PHS Act not be permitted to incorporate by reference DS/DSI/DP information.

(Comment 27) One comment disagrees with FDA's proposed approach of permitting INDs for products that would be subject to licensure under the PHS Act to incorporate by reference DS/DSI/DP information contained in a master file. The comment contends that the approach is unreasonable because, while exposure to the biological product is limited during the IND stage, the IND should still ensure that clinical trial subjects are not exposed to what the comment considers unreasonable harm should the IND incorporate by reference DS/DSI/DP information contained in a master file.

(Response 27) FDA agrees that it is important to ensure that clinical trial subjects are not exposed to an unreasonable risk of harm but disagrees with the comment's assessment of FDA's approach.

During early preclinical development for a new product, the primary goal of FDA and sponsors is to ensure that the product is reasonably safe for initial use in humans and to determine whether the test product exhibits pharmacological activity that justifies commercial development. When a product is identified as a viable candidate for further development, the sponsor then focuses on collecting the data and information necessary to establish that the product will not expose humans to unreasonable risks when used in limited, early-stage clinical studies.

Clinical trials permit the assessment of the safety and efficacy of investigational products from early drug development through the approval process and beyond. To ensure that clinical trial subjects are not exposed to unreasonable risk of harm, FDA has issued numerous regulations governing human subject protection and the conduct of clinical trials, including regulations regarding informed consent (part 50 (21 CFR part 50)) and institutional review boards, which also participate in the oversight of clinical trials (21 CFR part 56).

All subjects in clinical trials under an IND receive appropriate informed consent that discusses the known benefits and risks. With limited exceptions, investigators must obtain the informed consent of subjects (or their legally authorized representatives) in clinical trials under IND (§ 50.20). In seeking informed consent, certain information is provided to subjects, including a description of reasonably foreseeable risks and a description of benefits that may reasonably be expected (§ 50.25).

Furthermore, safety monitoring is not static and continues to apply as product development progresses. IND regulations in part 312 (21 CFR part 312) set forth safeguards that are designed to ensure such safety. Sponsors are expected to continue to ensure the safety of subjects and, as new safety information is identified, to take appropriate steps, which may include incorporating additional safety monitoring and updating the informed consent form. FDA has authority to place an investigation on clinical hold (§ 312.42) if it finds that human subjects are or would be exposed to an unreasonable and significant risk of illness or injury. IND regulations at § 312.56 state that a sponsor who determines that its investigational drug presents an unreasonable and significant risk to subjects must discontinue those investigations that present the risk.

As explained above and in the preamble to the proposed rule, exposure to the investigational product is limited at the IND stage because the product is only administered to subjects enrolled in clinical trials, which are typically carried out in controlled settings. The controlled nature of a clinical trial allows for close safety monitoring of these subjects, rapid identification of any safety issues that may arise, and implementation of corresponding mitigation strategies.

For these reasons, FDA considers that the existing safeguards available in the IND process are sufficient to ensure that subjects participating in clinical trials, including those for products that would ultimately be regulated under BLAs and for which the INDs incorporate by reference DS/DS/DP information contained in master files, are not exposed to unreasonable risk of harm.

(Comment 28) Another comment expresses concern that the sponsor of an IND for a product that would be subject to licensure under the PHS Act that incorporates DS/DSI/DP information by reference to a master file may not be able to develop the necessary knowledge and control over the manufacturing process when product development reaches the BLA stage. Therefore, the comment suggests setting a deadline during the development stage by which time the sponsor needs to demonstrate knowledge and control over the manufacturing process and can no longer incorporate by reference DS/DSI/DP information from a master file.

(Response 28) FDA notes that a deadline to develop the requisite knowledge and direct control is not necessary because the submission of the BLA effectively serves as a deadline. As noted in the preamble to the proposed rule, it has been FDA's practice to permit INDs for products that would be subject to licensure under the PHS Act to incorporate by reference DS/DSI/DP information contained in a master file. By later stages of development, however, FDA requires the sponsors to have knowledge of and direct control over the manufacturing process, and to be able to submit DS/DSI/DP information directly to the BLA. A sponsor can plan its product development to ensure that, at the time the BLA is submitted, the sponsor is able to meet these requirements.

(Comment 29) Several comments agree with the Agency's proposed approach with respect to INDs for products that would be subject to licensure under the PHS Act and the referencing of master files for information including DS/DSI/DP information. One comment suggests that allowing the referencing of DS/DSI/DP information at the IND stage could promote product development and proposes that this benefit be explicitly included in the corresponding codified section. Another comment advises that permitting INDs for products that would be subject to licensure under the PHS Act to reference master files for DS/DSI/DP information ensures that previous knowledge is leveraged.

(Response 29) We agree that not limiting the ability of INDs for products that would be subject to licensure under the PHS Act to reference a master file for DS/DSI/DP information may facilitate product development. As we explained in the preamble of the proposed rule, and as discussed above, without this option a sponsor might not choose to make the significant investment to manufacture the necessary DS/DSI/DP for a product at this early stage of development. However, we do not think it is necessary to add an explicit reference to the benefit of promoting product development to the codified language.

(Comment 30) One comment suggests that it would be helpful if the Agency defined the term “drug substance intermediate,” especially in reference to combination products.

(Response 30) FDA is not defining the term “drug substance intermediate” in this rule because such a definition would have implications beyond the scope of this rule. FDA will consider whether to provide a definition in rulemaking that has a broader scope since the term is used throughout the BLA regulations. 12

(Comment 31) One comment requests that FDA outline any plans for publication of guidances that more clearly articulate the Agency's current thinking on specific kinds of master files ( e.g., those containing information on autoinjectors, on fillers, or those owned by CMOs) that may be referenced in BLAs, to enable appropriate referencing of relevant master files, thereby promoting improved compliance and reducing the risk of delays in application reviews.

(Response 31) FDA will take this suggestion under consideration with respect to the development of future guidances. FDA annually publishes nonbinding lists of new and revised draft guidance documents that it plans to publish in the upcoming calendar year. In addition, a potential applicant may also seek additional guidance from the relevant review division if the applicant is unsure whether it is appropriate to incorporate by reference a particular type of information contained in a master file.

(Comment 32) One comment encourages FDA to undertake modifications to internal processes and training of staff and revise the DMF guidance to implement this rule. Specifically, the comment requests that FDA: (1) update its internal training procedures and relevant procedural documents to ensure that Agency reviewers consistently implement and apply proposed § 601.2(i) during application assessment; (2) update the DMF guidance to improve the format and layout of a DMF to avoid duplicating the content of DMFs across multiple applications and supplements; (3) explore potential technological solutions to permit cross-linking between BLAs and DMFs; and (4) incorporate the feedback provided in this comment into the revised draft guidance “Drug Master Files” (Ref. 5).

(Response 32) FDA agrees that consistency in the implementation of final § 601.2(g)(4) (proposed § 601.2(i)) is important. As with any regulation, FDA will work to ensure correct and consistent implementation of this rule.

Regarding the DMF guidance, we note that the revised draft guidance was issued on October 21, 2019, and reflects additional information to assist sponsors in improving the format of DMFs. Comments to guidance documents may be submitted at any time.

Regarding technological solutions to permit cross-referencing between BLAs and DMFs, FDA believes that its recent efforts in the area of electronic submissions of DMFs may address some of the concerns. 13 14

(Comment 33) One comment requests that there should also be provisions established that would notify applicants referencing a DMF when that DMF has been altered (without disclosing proprietary information). The comment notes that such notification would be beneficial to regulators and applicants who would be aware of any changes made by the DMF holder that may improve quality or safety of the final product.

(Response 33) The purpose of this rule is to clarify when BLAs and INDs for products subject to licensure under the PHS Act can use master files. The operation of a DMF, which is addressed under § 314.420, falls outside the scope of this rule; accordingly, FDA declines to address this issue in this rule.

(Comment 34) One comment observes that, if a DMF were reviewed prior to submission of an NDA or abbreviated new drug application (ANDA), it would allow companies, especially less established ones, to avoid any issues with referencing an incomplete DMF for their NDA or ANDA filing. Additionally, the comment suggests that FDA should consider eliminating assessment fees to encourage smaller biotech and pharmaceutical companies to develop biosimilars.

(Response 34) FDA declines to make changes to this final rule that would address these suggestions because the process for incorporating by reference information contained in master files, the timing of such referencing, and the fees related to assessment of DMFs are outside the scope of this rule.

(Comment 35) One comment notes, without suggesting any changes, that in the description of the proposed rule for proposed paragraph § 601.2(h), FDA should include information on the impact of the transition of an NDA to a BLA on exclusivity of the product.

(Response 35) Exclusivity considerations are outside the scope of this rule. We note that FDA has issued guidance that, in part, addresses FDA's current thinking about its interpretation of section 7002(e) of the BPCI Act and exclusivity. 15

(Comment 36) One comment requests that FDA approve stem cells as an alternative to surgery that can be covered by insurance; another comment relates to “pandemic flu” and acquired immunity.

(Response 36) These topics are outside the scope of this rule.

This final rule is effective 30 days after the date of publication in the Federal Register .

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801, Pub. L. 104-121), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Orders 12866, 13563, and 14094 direct us to assess all benefits, costs, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Rules are “significant” under Executive Order 12866 Section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of the Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.” OIRA has determined that this final rule is not a significant regulatory action under Executive Order 12866 Section 3(f)(1).

Because this rule is not likely to result in an annual effect on the economy of $100 million or more or meets other criteria specified in the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act, OIRA has determined that this rule does not fall within the scope of 5 U.S.C. 804(2).

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this rule does not impose new regulatory burden on small entities, other than administrative costs of reading and understanding the rule, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $177 million, using the most current (2022) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in an expenditure in any year that meets or exceeds this amount.

Allowing deemed BLAs for biological products to continue referencing DMFs for DS/DSI/DP information will generate net cost-saving benefits for the private and government sectors. Furthermore, the final rule will provide certainty, promote continuity, and help avoid potential disruptions in the supply of certain biological products that were approved in applications under section 505 of the FD&C Act and deemed, pursuant to section 7004(e) of the BPCI Act, to be licenses for the biological products under section 351 of the PHS Act.

By allowing certain BLAs to continue referencing a DMF for DS/DSI/DP information, FDA avoids imposing a potential new regulatory burden. Affected entities will incur minimal costs to read and understand the rule. FDA estimates that over 10 years at a discount rate of 7 percent, the final rule will generate annualized net cost savings ranging from $0.40 million to $5.19 million with a primary estimate of $2.80 million; at a discount rate of 3 percent, the final rule will generate annualized net cost savings ranging from $0.37 million to $5.17 million with a primary estimate of $2.77 million. Table 1 summarizes our estimate of the annualized costs and the annualized cost-saving benefits of the final rule.

We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. The full analysis of economic impacts is available in the docket for this final rule (Ref. 7) and at https://www.fda.gov/about-fda/economics-staff/regulatory-impact-analyses-ria .

We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. We have determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement is not required.

We have analyzed this rule in accordance with the principles set forth in Executive Order 13175. We have determined that the rule does not contain policies that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, we conclude that the rule does not contain policies that have tribal implications as defined in the Executive Order and, consequently, a tribal summary impact statement is not required.

The following references are on display at the Dockets Management Staff (see ADDRESSES ) and are available for viewing by interested persons between 9 a.m. and 4 p.m. Monday through Friday; they are also available electronically at https://www.regulations.gov/ . Although FDA verified the website addresses in this document, please note that websites are subject to change over time.

Therefore, under the Public Health Service Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 601 is amended as follows:

Section 513 of the Hawaiian Homelands Homeownership Act of 2000 (HHH Act), 1 Public Law 106-569, amended the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq. ) (NAHASDA) by adding to it a new “Title VIII—Housing Assistance for Native Hawaiians.” Title VIII of NAHASDA established the Native Hawaiian Housing Block Grant (NHHBG) program to provide block grant assistance for affordable housing for eligible Native Hawaiians, including rental assistance. 2

The NHHBG program must primarily benefit low-income Native Hawaiian families who are eligible to reside on the Hawaiian Home Lands. 25 U.S.C. 4222(a); 25 U.S.C. 4228(a)(2)(A). These families experience more significant housing challenges compared to Native Hawaiian households overall, including other Hawaii residents and Native Hawaiians already residing on the Hawaiian Home Lands.

On June 13, 2002, HUD published an interim rule (“interim rule”) adding new regulations at 24 CFR part 1006 to implement the NHHBG program. 67 FR 40773. HUD modeled the NHHBG regulations after the Indian Housing Block Grant (IHBG) regulations implemented at 24 CFR part 1000 because NAHASDA authorizes and applies overlapping requirements to both programs. 3

Section 701 of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015) (“BBA”), 28 U.S.C. 2461 note, substantially revised the prior provisions of the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990, Public Law 101-410 (the “Inflation Adjustment Act”), and substituted a different statutory formula for calculating inflation adjustments on an annual basis.

In accordance with the provisions of the BBA, on June 30, 2016 (81 FR 42491), the Department of Justice published an interim rule (“June 2016 interim rule”) to adjust for inflation the civil monetary penalties assessed or enforced by components of the Department after August 1, 2016, with respect to violations occurring after November 2, 2015, the date of enactment of the BBA. Readers may refer to the SUPPLEMENTARY INFORMATION (also known as the preamble) of the Department's June 2016 interim rule for additional background information regarding the statutory authority for adjustments of civil monetary penalty amounts to take account of inflation and the Department's past implementation of inflation adjustments. The June 2016 interim rule was finalized without change by the publication of a final rule on April 5, 2019 (84 FR 13525).

After the initial adjustments in 2016, the BBA also provides for agencies to adjust their civil penalties on January 15 of each year to account for inflation during the preceding year, rounded to the nearest dollar. Accordingly, on February 3, 2017 (82 FR 9131), and on January 29, 2018 (83 FR 3944), the Department published final rules pursuant to the BBA to make annual inflation adjustments in the civil monetary penalties assessed or enforced by components of the Department after those dates, with respect to violations occurring after November 2, 2015.

The Department has continued to promulgate rules adjusting the civil money penalties for inflation thereafter. Most recently, the Department published a final rule on January 30, 2023 (88 FR 5776), to adjust the civil money penalties to account for inflation occurring since 2022.

As required, the Department is publishing this final rule to adjust for 2024 the Department's current civil penalties. Under the statutory formula, the adjustments made by this rule are based on the Bureau of Labor Statistics' Consumer Price Index for October 2023. The OMB Memorandum for the Heads of Executive Departments and Agencies M-24-07 (Dec. 19, 2023) https://www.whitehouse.gov/wp-content/uploads/2023/12/M-24-07-Implementation-of-Penalty-Inflation-Adjustments-for-2024.pdf (last visited Dec. 21, 2023) instructs that the applicable inflation factor for this adjustment is 1.03241.

Accordingly, this rule adjusts the civil penalty amounts in 28 CFR 85.5 by applying the inflation factor of 1.03241 mechanically to each of the civil penalty amounts listed (rounded to the nearest dollar).

Example:

• In 2016, the Program Fraud Civil Remedies Act penalty was increased to $10,781 in accordance with the adjustment requirements of the BBA.

• For 2017, where the applicable inflation factor was 1.01636, the existing penalty of $10,781 was multiplied by 1.01636 and revised to $10,957.

• Similar adjustments have been made in the following years, through 2023, where the applicable inflation factor was 1.07745, and the existing penalty of $12,537 was multiplied by 1.07745 and revised to $13,508.

• For this final rule in 2024, where the applicable inflation factor is 1.03241, the existing penalty of $13,508 is multiplied by 1.03241 and rounded to the nearest dollar. The revised penalty is now $13,946.

This rule adjusts for inflation civil monetary penalties within the jurisdiction of the Department of Justice for purposes of the Inflation Adjustment Act, as amended. Other agencies are responsible for the inflation adjustments of certain other civil monetary penalties that the Department's litigating components bring suit to collect. The reader should consult the regulations of those other agencies for inflation adjustments to those penalties.

Under this rule, the adjusted civil penalty amounts for 2024 are applicable only to civil penalties assessed after February 12, 2024, with respect to violations occurring after November 2, 2015, the date of enactment of the BBA.

The penalty amounts set forth in the existing provisions of 28 CFR 85.5, and its accompanying table, are applicable to all covered civil penalties assessed after August 1, 2016, and on or before February 12, 2024, with respect to violations occurring after November 2, 2015.

The revised table in this rule lists the civil penalty amounts as adjusted in 2024, 2023, 2022, and 2021. For penalties assessed prior to the adjustment rule adopted in 2021, section 85.5(c) of this rule directs readers back to the 2020 version of the rule, as published in the Federal Register , which sets forth the adjusted civil penalty amounts for penalties assessed prior to the 2021 adjustments. 85 FR 37004 (June 19, 2020).

Civil penalties for violations occurring on or before November 2, 2015, and assessments made on or before August 1, 2016, will continue to be subject to the civil monetary penalty amounts set forth in the Department's regulations in 28 CFR parts 20, 22, 36, 68, 71, 76, and 85 as such regulations were in effect prior to August 1, 2016 (or as set forth by statute if the amount had not yet been adjusted by regulation prior to August 1, 2016). See Civil Monetary Penalties Inflation Adjustment, 83 FR 3944 (Jan. 29, 2018).

The BBA provides that, for each annual adjustment made after the initial adjustments of civil penalties in 2016, the head of an agency shall adjust the civil monetary penalties each year notwithstanding 5 U.S.C. 553. Accordingly, this rule is being issued as a final rule without prior notice and public comment, and without a delayed effective date.

Only those entities that are determined to have violated Federal law and regulations would be affected by the increase in the civil penalty amounts made by this rule. A Regulatory Flexibility Act analysis is not required for this rule because publication of a notice of proposed rulemaking was not required. See 5 U.S.C. 603(a).

This final rule has been drafted in accordance with Executive Order 12866, “Regulatory Planning and Review,” section 1(b), The Principles of Regulation, in accordance with Executive Order 13563, “Improving Regulation and Regulatory Review,” section 1, General Principles of Regulation, and in accordance with section 1(b), General Principles of Regulation; and Executive Order 14094, “Modernizing Regulatory Review”. Executive Orders 12866 and 13563 direct agencies, in certain circumstances, 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).

The Department of Justice has determined that this rule is not a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” section 3(f), and, accordingly, this rule has not been reviewed by the Office of Management and Budget. This final rule implements the BBA by making an across-the-board, mechanical adjustment of the civil penalty amounts in 28 CFR 85.5 to account for inflation since the adoption of the Department's final rule published on January 30, 2023 (88 FR 5776).

This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

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

This rule is not a major rule as defined by the Congressional Review Act, 5 U.S.C. 804.

Under rulemaking authority vested in the Attorney General in 5 U.S.C. 301; 28 U.S.C. 509, 510 and delegated to the Assistant Attorney General, Office of Legal Policy, by A.G. Order No. 5328-2022, and for the reasons set forth in the preamble, chapter I of title 28 of the Code of Federal Regulations is amended as follows:

The Coast Guard is issuing this temporary rule under authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. The Coast Guard did not receive final details for this event until January 30, 2024. It is impracticable to go through the full notice and comment rulemaking process because the Coast Guard must establish this safety zone by February 10, 2024, and lacks sufficient time to provide a reasonable comment period and to consider those comments before issuing the rule.

Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be contrary to public interest because action is necessary to protect personnel, vessels, and the marine environment from the potential safety hazards associated with the fireworks display off Treasure Island, CA on February 10, 2024.

The Coast Guard is issuing this rule under authority 46 U.S.C. 70034. The Captain of the Port (COTP) San Francisco has determined that potential hazards associated with the scheduled Fireworks Scattering display on February 10, 2024, will be a safety concern for anyone within a 400-foot radius of the fireworks display starting 30 minutes before the fireworks display is scheduled to commence and ending 30 minutes after the conclusion of the fireworks display. For this reason, this temporary safety zone is needed to protect personnel, vessels, and the marine environment in the navigable waters during the fireworks display.

This rule establishes a temporary safety zone from 10:30 a.m. until 11:35 a.m. on February 10, 2024, from 30 minutes prior to the start of the fireworks display, and until 30 minutes after the completion of the fireworks display. At 10:30 a.m., which is 30 minutes prior to the commencement of the 5-minute fireworks display, the safety zone will encompass the navigable waters around the fireworks vessel, from surface to bottom, within a circle formed by connecting all points 400-feet out from the coordinates at approximately 37°50′17.9″ N, 122°21′16.5″ W (NAD 83). The safety zone will terminate at 11:35 a.m. on February 10, 2024, or as announced via Marine Information Broadcast.

This regulation is necessary to keep persons and vessels away from the immediate vicinity of the fireworks scattering site. Except for persons or vessels authorized by the COTP or the COTP's designated representative, no person or vessel may enter or remain in a restricted area. A “designated representative” means a Coast Guard Patrol Commander, including a Coast Guard coxswain, petty officer, or other officer operating a Coast Guard vessel, or a Federal, State, or local officer designated by or assisting the COTP in the enforcement of the Safety Zone. This regulation is necessary to ensure the safety of participants, spectators, and transiting vessels.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the limited duration and narrowly tailored geographic area of the safety zone. Although this rule restrict access to the water encompassed by the safety zone, the effect of this rule will not be significant because local waterways users will be notified to ensure the safety zone will result in minimum impact. The vessels desiring to transit through or around the temporary safety zone may do so upon express permission from the COTP or the COTP's designated representative.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a temporary safety zone in the navigable waters surrounding the fireworks vessel within the San Francisco Bay off Treasure Island, CA. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

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

On July 17, 2023 (88 FR 45373), EPA published a Notice of Proposed Rulemaking (NPRM) for the State of Connecticut. The NPRM proposed approval of a revised definition in the SIP and the Title V Operating Permit Program for the State of Connecticut. On June 9, 2023, CT DEEP requested parallel processing of the revised definition of “severe non-attainment area for ozone” within the Regulations of Connecticut State Agencies (RCSA) 22a-174-1 for approval into the SIP and as a program revision to the State's Title V operating permitting program. Under the parallel processing procedure, EPA proposed approval of the revised definition before the State's final adoption of the definition. Connecticut subsequently adopted the revised definition which became effective on November 13, 2023. The formal revisions to the SIP and the Title V operating permitting program were submitted by Connecticut on November 30, 2023.

The rationale for EPA's proposed approval of the revised definition in the SIP and the Title V operating permitting program are explained in the NPRM and will not be restated here. EPA is proceeding with our final approval of the November 30, 2023 submitted revisions to the Connecticut SIP and Title V Operating Permit Program, consistent with the parallel processing provisions in 40 CFR part 51, Appendix V. EPA has reviewed Connecticut's adopted definition of “severe non-attainment area for ozone” contained in RCSA 22a-174-1, and it does not differ from the proposed regulation submitted as part of the parallel processing request on June 9, 2023. That is, CT DEEP adopted the revisions as they were proposed, i.e. no changes were made.

EPA received two comments during the comment period; both comments are supportive. As such, these comments do not require further response to finalize the action as proposed. Nevertheless, EPA is including these comments in the docket for this rule.

EPA is approving Connecticut's revised definition of “severe non-attainment area for ozone,” contained in RCSA 22a-174-1 as amended by the State of Connecticut on November 13, 2023, as a revision to the Connecticut SIP and Title V Operating Permit Program.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference the revised definition of “severe non-attainment area for ozone” within Connecticut's RCSA section 22a-174-1, Definitions, (106), as described in Section I of this preamble. Background and Purpose of this preamble and set forth below in the amendments to 40 CFR part 52. The EPA has made, and will continue to make, these documents generally available through https://www.regulations.gov and at the EPA Region 1 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the CAA, the Administrator is required to approve SIP and Title V submissions that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k) and 7661a(d); 40 CFR 52.02(a) and 70.4(e). Thus, in reviewing SIP and Title V submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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. 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.” 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.”

CT DEEP 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. 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.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 12, 2024. 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).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 180 through the Federal Register Office's e-CFR site at https://www.ecfr.gov/current/title-40/chapter-I/subchapter-E/part-180?toc=1.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2021-0781 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before April 12, 2024. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2021-0781, by one of the following methods:

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

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

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at https://www.epa.gov/dockets/where-send-comments-epa-dockets.

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

In the Federal Register of March 22, 2022 (87 FR 16133) (FRL-9410-11-OCSPP), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 1F8923) by Vestaron Corporation, 600 Park Offices Dr., Suite 117, Research Triangle Park, NC 27709. The petition requested that 40 CFR part 180 be amended by establishing an exemption from the requirement of a tolerance for residues of U1-AGTX-Ta1b-QA protein. That document referenced a summary of the petition prepared by the petitioner Vestaron Corporation, which is available in the docket, https://www.regulations.gov. EPA received one comment on the notice of filing. EPA's response to this comment is discussed in Unit VII.C.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” Additionally, FFDCA section 408(b)(2)(D) requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.”

EPA evaluated the available toxicological and exposure data on U1-AGTX-Ta1b-QA protein and considered their validity, completeness, and reliability, as well as the relationship of this information to human risk. A full explanation of the data upon which EPA relied and its risk assessment based on those data can be found within the document entitled “Human Health Risk Assessment in Support of the Registration of `Basin' End Use Product Containing the New Active Ingredient U1-AGTX-Ta1b-QA (8.5%) and Associated Petition to Establish a Permanent Tolerance Exemption” (Human Health Risk Assessment). This document, as well as other relevant information, is available in the docket for this action as described under ADDRESSES .

Available data have demonstrated that, with regard to humans, U1-AGTX-Ta1b-QA protein is not anticipated to be toxic or allergenic via any reasonably foreseeable route of exposure. U1-AGTX-Ta1b-QA protein is a modified form of agatoxin protein derived from the venom of the hobo spider ( Eratigena agrestis ) that is intended for control of insects and mites. In insects, the reported mode-of-action of U1-AGTX-Ta1b-QA is allosteric inhibition of a non-desensitizing nicotinic acetylcholine receptor, a neural receptor responsible for signal transduction and function. The U1-AGTX-Ta1b-QA protein binds to a non-signaling portion of the target (allosteric) site, altering the three-dimensional structure of the neural receptor. According to the Center of Disease Control ( https://www.cdc.gov/niosh/topics/spiders/types.html ), the venom, from which the active ingredient is derived, is not recognized as toxic to humans. Products formulated with U1AGTX-Ta1b-QA will be used for foliar applications to plants or as a dip/immersion for roots or cuttings.

Toxicological data provided by the petitioner indicate that U1-AGTX-Ta1b-QA has low acute toxicity via the oral, dermal, inhalation, route and it is not a dermal or eye irritant. This conclusion is further supported by the results of the 90-day oral toxicity study, prenatal development toxicity studies, and the absence of genotoxicity in a bacterial reverse mutation test. In addition, the protein sequence of U1-AGTX-Ta1b-QA does not show significant homology to known allergens and thus there is no indication of allergenic cross-reactivity.

Dietary exposure could occur if U1-AGTX-Ta1b-QA is used on crops used for food. However, any risks associated with dietary exposures are expected to be negligible due to the following hazard and exposure considerations: U1-AGTX-Ta1b-QA (1) has a low overall toxicity profile including low toxicity via the oral route of exposure; (2) does not exhibit protein homology to putative or known allergens; (3) does not show any prenatal developmental toxicity or genetic toxicity; and (4) as described, was derived from the venom of the hobo spider, which is not recognized as toxic to humans. In addition, food crops undergo a post-harvest washing process to remove soil and surface residues, which will therefore reduce the amounts of U1-AGTX-Ta1b-QA on the treated crops. Root dip and cutting immersions, specifically, are expected to result in negligible exposure of above-ground grown plant parts used for food since these applications occur prior to planting and residues are not expected to persist on the growing plant. Exposure through drinking water is expected to be negligible as U1-AGTX-Ta1b-QA, as a protein, is expected to be susceptible to biodegradation in the environment as well as water treatment processes.

Non-occupational exposure could occur if bystanders are present in areas treated with products containing U1-AGTX-Ta1b-QA protein. However, submitted data have shown that U1-AGTX-Ta1b-QA is expected to have low toxicity via the oral, dermal, and inhalation routes of exposure, is minimally irritating to the eyes and skin, and is not a dermal sensitizer; therefore, any risks from non-occupational exposure are expected to be negligible.

Based upon the evaluation in the Human Health Risk Assessment, which found no risk of concern from aggregate exposure to U1-AGTX-Ta1b-QA, EPA concludes that there is reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of U1-AGTX-Ta1b-QA. This includes all anticipated dietary exposures and all other exposures for which there is reliable information. In addition, because no threshold effects have been identified for infants and children, EPA determined that an additional Food Quality Protection Act (FQPA) safety factor is not necessary to protect infants and children from anticipated residues of U1-AGTX-Ta1b-QA.

An analytical method is not required for U1-AGTX-Ta1b-QA since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation based on a lack of adverse effects.

One comment was received during the public comment period for the notice of filing. The commentor provided general objections to EPA establishing exemptions from tolerance for pesticides but did not provide any specific or substantive objections to the petition to exempt U1-AGTX-Ta1b-QA protein. Based on its review of the data and other information submitted in support of the tolerance exemption petition (as described above in Unit III.A), EPA has determined that a tolerance exemption for U1-AGTX-Ta1b-QA protein is safe under the FFDCA. Therefore, EPA is establishing a tolerance exemption for residues of U1-AGTX-Ta1b-QA protein applied to food commodities.

Based on the conclusions detailed in Unit III.A., an exemption from the requirement of a tolerance is established for residues of U1-AGTX-Ta1b-QA protein in or on all food commodities when used in accordance with label directions and good agricultural practices.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

In FR Doc. 2023-24184 of November 16, 2023, the CY 2024 PFS final rule (88 FR 78818), there were technical errors that are identified and corrected in this correcting document. These corrections are applicable as if they had been included in the CY 2024 PFS final rule, which was effective January 1, 2024.

1. On page 78867, in the table titled “TABLE 11: CY 2024 Medicare Telehealth Services List” which continues through page 78871, we inadvertently omitted four rows of services.

2. On page 78876, second column, fourth full paragraph, line 2, we inadvertently omitted qualifying language before the reference to telehealth services and neglected to include a reference to further background information.

3. On page 78918, third column, second full paragraph, second sentence, we neglected to include a clarifying phrase.

4. On page 78920, first column, first full paragraph, we inadvertently omitted a clarifying phrase.

5. On page 78944, first column, first full paragraph we inadvertently included incorrect language in the final code descriptor for HCPCS code G0023.

6. On page 78949, first column, first full paragraph, we made a typographical error when finalizing limitations on PIN services.

7. On pages 78956 through 78957 in the table titled “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes,” the code descriptor listed for HCPCS code G0019 inadvertently was not updated to reflect the final code descriptors as stated in the preamble text.

8. On pages 78958 through 78959 in the table titled “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes,” the code descriptors listed for HCPCS codes G0022 and G0023 inadvertently were not updated to reflect the final code descriptors as stated in the preamble text.

9. On pages 78959 through 78960 in the table titled “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes,” the code descriptor listed for HCPCS code G0140 inadvertently was not updated to reflect the final code descriptor as stated in the preamble text.

10. On page 78975, we inadvertently omitted a sentence to restate the final policy we adopted for the inherent complexity add-on code (G2211).

11. On page 79075, third column, first full paragraph, line 19, two G-codes for PIN services were inadvertently omitted.

12. On page 79112 in the table titled, “TABLE 28: Final APP Reporting Requirements and Quality Performance Standard for Performance Year 2024 and Subsequent Performance Years”, we inadvertently included language regarding a MIPS Quality performance category score.

13. On page 79112 in the table titled, “TABLE 28: Final APP Reporting Requirements and Quality Performance Standard for Performance Year 2024 and Subsequent Performance Years”, we made a typographical error in identifying the APP measure.

14. On page 79113 in the table titled, “TABLE 29: Measures included in the APP Measure Set for Performance Year 2024 and Subsequent Performance Years”, we made a typographical error in identifying the Quality ID#: 321 for the Measure Type. We also inadvertently included a related incorrect footnote.

15. On page 79121, we inadvertently included language referencing Table 30: 40th Percentile MIPS Quality Performance Category Scores Using Current and Finalized Methodology.

16. On page 79121 in the table titled, “TABLE 30: 40th Percentile MIPS Quality Performance Category Scores Using Current and Finalized Methodology”, the last row of the table for Performance Year 2022 is incorrect due to a formatting error.

17. On page 79131, we made a typographical error in reference to 42 CFR part 414, subpart O.

18. On page 79144, we made a typographical error in the section reference to the Regulatory Impact Analysis in the CY 2024 PFS proposed rule.

19. On page 79172, there is an error in the description of the definition of ACO professional in section 1899(c)(1)(A) of the Act.

20. On page 79189, there are typographical errors in the references to Table numbers in the final rule.

21. On page 79240, we inadvertently included language that referenced Tables.

22. On page 79379, in the table titled “TABLE 60: Illustration of Point System and Associated Adjustments Comparison between the CY 2023 Performance Period/2025 MIPS Payment Year and the CY 2024 Performance Period/2026 MIPS Payment Year”, we made typographical errors in the MIPS Adjustment columns for the 2023 and 2024 Performance Periods.

23. On page 79437, in the table titled “TABLE 83: Summary of Quality Measure Inventory Finalized for the CY 2024 Performance Period”,

a. We made typographical errors in the # Measures heading titles.

b. We made typographical errors in the number of eCQM Specifications measures finalized for CY 2024.

24. On page 79467, there are two typographical errors in the table titled “TABLE 116: Calculation of the CY 2024 PFS Conversion Factor”.

25. On page 79506, there is a typographical error in the title of “TABLE 131: Description of MIPS Eligibility Status for CY 2023 Performance Period/2025 MIPS Payment Year Using CY 2023 PFS Final Rule Assumptions”.

26. On page 79506, there is a typographical error in two footnotes of the table titled “TABLE 131: Description of MIPS Eligibility Status for CY 2023 Performance Period/2025 MIPS Payment Year Using CY 2023 PFS Final Rule Assumptions”.

27. On page 79519, we made a typographical error in the reference to the MIPS payment year.

28. On page 79522, in the table titled “TABLE 143: Accounting Statement for Provisions for Medicare Shared Savings Program (CYs 2024-2033)”, there are typographical errors in the references to Table numbers.

1. On page 79538, at § 414.1405(b)(9)(iii), there is a typographical error in the reference to the MIPS payment year.

2. On page 79542, third column, lines 19, 23, and 26 contain typographical errors.

1. On page 79939 of APPENDIX 1: MIPS QUALITY MEASURES, TABLE D.45: One-Time Screening for Hepatitis C Virus (HCV) for all Patients includes incorrect language to be removed in the substantive changes row.

2. On page 80015 of APPENDIX 3: MVP INVENTORY, TABLE B.2: Optimal Care for Kidney Health MVP we inadvertently omitted language in the last paragraph of the Comments and Responses section.

3. On pages 80013, 80016, and 80026 of APPENDIX 3: MVP INVENTORY, corresponding to TABLE B.2: Optimal Care for Kidney Health MVP, TABLE B.3: Optimal Care for Patients with Episodic Neurological Conditions MVP, and TABLE B.6: Advancing Rheumatology Patient Care MVP, respectively, we included an incorrect collection type for measure Q130: Documentation of Current Medications in the Medical Record.

Under 5 U.S.C. 553(b) of the Administrative Procedure Act (the APA), the agency is required to publish a notice of the proposed rule in the Federal Register before the provisions of a rule take effect. Similarly, section 1871(b)(1) of the Social Security Act (the Act) requires the Secretary to provide for notice of the proposed rule in the Federal Register and provide a period of not less than 60 days for public comment. In addition, section 553(d) of the APA and section 1871(e)(1)(B)(i) of the Act mandate a 30-day delay in effective date after issuance or publication of a rule. Sections 553(b)(B) and 553(d)(3) of the APA provide for exceptions from the APA notice and comment, and delay in effective date requirements. In cases in which these exceptions apply, sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act provide exceptions from the notice, 60-day comment period, and delay in effective date requirements of the Act as well. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act authorize an agency to dispense with normal notice and comment rulemaking procedures for good cause if the agency makes a finding that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and includes a statement of the finding and the reasons for it in the rule. In addition, section 553(d)(3) of the APA and section 1871(e)(1)(B)(ii) allow the agency to avoid the 30-day delay in effective date where such delay is contrary to the public interest and the agency includes in the rule a statement of the finding and the reasons for it.

In our view, this correcting document does not constitute a rulemaking that would be subject to these requirements. This document merely corrects technical errors in the CY 2024 PFS final rule. The corrections contained in this document are consistent with, and do not make substantive changes to, the policies and payment methodologies that were proposed, subject to notice and comment procedures, and adopted in the CY 2024 PFS final rule. As a result, the corrections made through this correcting document are intended to resolve inadvertent errors so that the rule accurately reflects the policies adopted in the final rule. Even if this were a rulemaking to which the notice and comment and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the CY 2024 PFS final rule or delaying the effective date of the corrections would be contrary to the public interest because it is in the public interest to ensure that the rule accurately reflects our policies as of the date they take effect. Further, such procedures would be unnecessary because we are not making any substantive revisions to the final rule, but rather, we are simply correcting the Federal Register document to reflect the policies that we previously proposed, received public comment on, and subsequently finalized in the final rule. For these reasons, we believe there is good cause to waive the requirements for notice and comment and delay in effective date.

In FR Doc. 2023-24184 of November 16, 2023 (88 FR 78818), make the following corrections:

1. On page 78867, the table titled “TABLE 11: CY 2024 Medicare Telehealth Services List”, the table is corrected to insert the following additional rows after the row for HCPCS code 0373T:

2. On page 78876, second column, fourth full paragraph,

a. Line 2, the phrase “telehealth services” is corrected to read “DSMT and therapy telehealth services”.

b. Line 6, the language “modifier `95.' ” is corrected to read “modifier `95.' For further background, we refer readers to pgs. 44-45, 80-81 of our FAQ available at https://www.cms.gov/files/document/medicare-telehealth-frequently-asked-questions-faqs-31720.pdf .”

3. On page 78918, third column, second full paragraph, second sentence that reads “If caregivers are trained in a group, practitioners would not bill individually for each caregiver”. is corrected to read: “If caregivers for the same beneficiary are trained in a group, practitioners would not bill individually for each caregiver”.

4. On page 78920, first column, first full paragraph, line 9, that reads “a median group size of five caregivers” is corrected to read “a median group size of caregivers for five beneficiaries”.

5. On page 78944, first column, first full paragraph for code G0023, lines 5 and 6, the phrase “certified peer specialist” is deleted.

6. On page 78949, first column, first full paragraph, line 3 that reads “services can be provided more than” is corrected to read “services cannot be provided more than”.

7. Beginning on page 78956, in the last row and continuing on page 78957, in the table titled, “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes”, the entry for HCPCS code G0019 is replaced in its entirety with the following:

8. Beginning on page 78958, in the second and third rows and continuing on page 78959, in the table titled, “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes”, the entries for HCPCS codes G0022 and G0023 are replaced in their entirety with the following:

9. Beginning on page 78959, in the last row and continuing on page 78960, in the table titled, “TABLE 14: CY 2024 Work RVUs for New, Revised, and Potentially Misvalued Codes”, the entry for HCPCS code G0140 is replaced in its entirety with the following:

10. On page 78975, first column, first full paragraph, line 26, the phrase that reads “this policy is implemented.” is corrected to read, “this policy is implemented. We are finalizing as proposed that payment will not be made for the inherent complexity add-on code (G2211) when billed with an O/O E/M service reported with modifier −25.”

11. On page 79075, third column, first full paragraph, line 19 that reads “G0022, G0023, and G0024 respectively” is corrected to read “G0022, G0023, G0024, G0140 and G0146, respectively.”

12. On page 79112, in the table titled, “TABLE 28: Final APP Reporting Requirements and Quality Performance Standard for Performance Year 2024 and Subsequent Performance Years”, second column, third row, second paragraph, lines 4 through 6, the phrase that reads “and receives a MIPS Quality performance category score under § 414.1380(b)(1)” is removed.

13. On page 79112, in the table titled “TABLE 28: Final APP Reporting Requirements and Quality Performance Standard for Performance Year 2024 and Subsequent Performance Years”, second column, third row, third paragraph, line 6, the phrase that reads “in the APP measure would” is corrected to read “in the APP measure set would”.

14. On page 79113, in the table titled “TABLE 29: Measures included in the APP Measure Set for Performance Year 2024 and Subsequent Performance Years”, sixth column, second row, the identifier “PRO-PM *” is corrected to read “Patient Engagement/Experience”. The related footnote “* Patient-reported outcome-based performance measure (PRO-PM) is a performance measure that is based on patient-reported outcome measure (PROM) data aggregated for an accountable healthcare entity.” is removed.

15. On page 79121, third column, lines 4 through 6, the sentence that reads “We note that Table 30 is same as Table 29 that was included in the CY 2024 PFS proposed rule (88 FR 52432).” is removed.

16. On page 79121, in the table titled “TABLE 30: 40th Percentile MIPS Quality Performance Category Scores Using Current and Finalized Methodology”, that reads:

17. On page 79131, second column, second full paragraph, first bullet, line 5 that reads “subpart Oat the individual, group,” is corrected to read “subpart O at the individual, group,”.

18. On page 79144, third column, line 23, the reference that reads “section VI.E.” is corrected to read “section VII.E.”.

19. On page 79172, third column, second full paragraph, lines 10 through 14, that reads “furnished by an ACO professional who is a physician (as defined in section 1861(r)(1)) of the Act), or a practitioner that is a PA, NP, CNS (as defined in section 1842(b)(18)(C)(i) of the Act).” is corrected to read “furnished by an ACO professional who is a physician.”

20. On page 79189:

a. The third column, first full paragraph, line 1 the phrase that reads “Tables 41 and 42” is corrected to read “Tables 42 and 43”.

b. The third column, first full paragraph, line 8, the phrase that reads “Tables 39 and 40” is corrected to read “Tables 40 and 41”.

21. On page 79240, the first column, first paragraph, lines 8 and 9 the phrase that reads “as displayed in Tables 46A and 46B” is deleted.

22. On page 79379, in the table titled “TABLE 60: Illustration of Point System and Associated Adjustments Comparison between the CY 2023 Performance Period/2025 MIPS Payment Year and the CY 2024 Performance Period/2026 MIPS Payment Year”:

a. Second column, fourth row, line 3 that reads “sliding scale ranges from 0 to 9% for scores from 75.00 to 100.00” is corrected to read “sliding scale ranges from greater than 0% to 9% for scores from 75.01 to 100.00.”; and

b. Fourth column, fourth row, line 3 that reads “linear sliding scale ranges from 0 to 9% for scores from 86.00 to 100.00” is corrected to read “linear sliding scale ranges from greater than 0% to 9% for scores from 75.01 to 100.00.”.

23. On page 79437, in the table titled “TABLE 83: Summary of Quality Measure Inventory Finalized for the CY 2024 Performance Period”, fifth column, row 4, that reads:

24. On page 79467, in the table titled “TABLE 116: Calculation of the CY 2024 PFS Conversion Factor”, that reads:

25. On page 79506, in the table titled “TABLE 131: Description of MIPS Eligibility Status for CY 2023 Performance Period/2025 MIPS Payment Year Using CY 2023 PFS Final Rule Assumptions”, the title of the table is corrected to read “TABLE 131: Description of MIPS Eligibility Status for CY 2024 Performance Period/2026 MIPS Payment Year Using CY 2023 PFS Final Rule Assumptions”.

26. On page 79506, in the table titled “TABLE 131: Description of MIPS Eligibility Status for CY 2023 Performance Period/2025 MIPS Payment Year Using CY 2023 PFS Final Rule Assumptions”, the first and second footnotes which read:

27. On page 79519, third column, first full paragraph, line 7, the phrase that reads “2025 MIPS payment year.” is corrected to read “2026 MIPS payment year.”

28. On page 79522, in the table titled “TABLE 143: Accounting Statement for Provisions for Medicare Shared Savings Program (CYs 2024-2033)”, fifth column, third and fourth full rows, the phrase that reads “Tables 120 through 123” is corrected to read “Tables 123 through 126”.

29. On page 79939 of APPENDIX 1: MIPS QUALITY MEASURES, TABLE D.45: One-Time Screening for Hepatitis C Virus (HCV) for all Patients, row 6, Substantive Change: in the section titled:

Updated denominator: Updated:

THERE ARE TWO SUBMISSION CRITERIA FOR THIS MEASURE:

First full paragraph, lines 6 through 8 that read: “For accountability reporting in the CMS MIPS program, the rate for submission criteria 2 is used for performance, however, both performance rates must be submitted.” is to be removed.

30. On page 80015 of APPENDIX 3: MVP INVENTORY, TABLE B.2: Optimal Care for Kidney Health MVP language in the last paragraph of the Comments and Responses section should read: “After consideration of public comments, we are finalizing the Optimal Care for Kidney Health MVP with modifications in Table B.2 for the CY 2024 performance period/2026 MIPS payment year and future years.”

31. On pages 80013, 80016, and 80026 of APPENDIX 3: MVP INVENTORY, corresponding to TABLE B.2: Optimal Care for Kidney Health MVP, TABLE B.3: Optimal Care for Patients with Episodic Neurological Conditions MVP, and TABLE B.6: Advancing Rheumatology Patient Care MVP, respectively, the Collection Type for measure Q130 is corrected by removing “Medicare Part B Claims Measure Specifications” and reads “eCQM Specifications, MIPS CQMs Specifications)”.

For the reasons set forth in the preamble, CMS corrects 42 CFR parts 414 and 424 by making the following correcting amendments:

I. Statutory Authority

This final rule is published in accordance with section 455(f) of the Social Security Act (the Act) (42 U.S.C. 655(f)). Section 455(f) of the Act requires the Secretary to issue regulations governing the grants to Tribes and Tribal organizations operating child support programs.

This final rule is also published under the authority granted to the Secretary of Health and Human Services by section 1102 of the Act (42 U.S.C. 1302). Section 1102 of the Act authorizes the Secretary to publish regulations, not inconsistent with the Act, as may be necessary for the efficient administration of the functions with which the Secretary is responsible under the Act.

Since the inception of the Tribal child support program, OCSS has conducted numerous face-to-face and virtual Tribal Consultations and listening sessions to discuss the longstanding issue of the non-Federal share requirement and the cost sharing rates.

In fact, even before drafting regulations to implement direct funding for Tribal Child Support Enforcement Programs, OCSS conducted a series of Tribal consultations during which OCSS received many questions about how funding levels would be set. The notice of proposed rulemaking (NPRM), published in August 2000, indicated that “if the Secretary determines based on experience and consultation with Tribes that the 80/20 match rate is disruptive to the program and imposes hardship to Tribes, the regulations will be revised accordingly” (65 FR 50823).

Since then, Tribal leaders and Tribal child support directors have submitted oral and written feedback, testimony, and blanket waiver requests describing the barriers they face in meeting the non-Federal share requirement and requesting relief by modifying, suspending, or eliminating the requirement.

Most recently, on April 6, 2023, OCSS held a Tribal Consultation for the NPRM issued on April 21, 2023 (88 FR 24526). Several Tribal leaders or their designees provided oral testimony about the difficulties Tribes and Tribal organizations face in meeting the non-Federal share requirement and the adverse impacts. For example, meeting the non-Federal share forces Tribal child support programs to cut staff, limit services, defer systems or equipment purchases, and compete with other Tribal programs for scarce Tribal funds and resources. They specifically mentioned the importance of Tribal monies to support self-governance functions like public safety, health, and natural resources. Oftentimes, Tribe-Tribes and Tribal organizations must underfund critical self-governance functions and services to meet the non-Federal share. They indicated that Tribal Nations have limited ways to increase revenue, are more susceptible to losses and economic downturns, and do not have the same taxing authorities as state governments. Many discussed the administrative burden of documenting, tracking, and reporting on non-Federal share contributions and how dedicating staff time and resources to that makes their child support programs less efficient and effective. They thought the non-Federal share waiver provision was overly restrictive and unnecessary since the non-Federal share was not imposed by Congress in section 455(f) the Social Security Act but by OCSS through regulation despite the objections of Tribes. They also thought that revising the non-Federal share waiver requirement was not an adequate, long-term solution, especially because that would not remove the financial barrier that prevents prospective Tribes from administering a child support program and places existing Tribal child support programs at risk of closing. All the oral and written testimony supported the elimination of the non-Federal share requirement because it will create stability, promote growth, and ensure Tribal families and communities have access to Tribal child support program services. It also reaffirms the government-to-government relationship between Indian Tribes and the Federal Government. The April 6, 2023, Tribal Consultation Session Summary Report is available on the OCSS website, https://www.acf.hhs.gov/css.

The NPRM issued on April 21, 2023, includes a discussion on prior Tribal Consultations and OCSS listening sessions on the non-Federal share requirement (88 FR 24527). These consultations and sessions demonstrate that Tribes and Tribal organizations have consistently and repeatedly objected to the non-Federal share requirement and expressed the hardship and harm it causes.

In the 2000 NPRM for the Tribal Child Support Enforcement Programs, OCSS estimated that within 3 years, 150 Tribes and Tribal organizations would operate a child support program (65 FR 50801). As one commenter pointed out, the expansion of the Tribal child support program has fallen significantly short of those earlier projections. To date, few Tribes and Tribal organizations operate child support programs, although funding was authorized 19 years ago. Out of the 574 federally recognized Tribes, only 60 operate Tribal child support programs despite the flexible eligibility requirements to receive program funding. 1

Eliminating the non-Federal share requirement, including the 90/10 and 80/20 cost sharing rates, removes a significant financial barrier for current and prospective Tribal child support programs. Many Tribes and Tribal organizations face systemic, historical, and ongoing issues that impact their ability to meet the non-Federal share. 2 For example, some Tribes have high rates of unemployment and families living below the poverty level, have limited and vulnerable Tribal enterprises that generate revenue, are in rural, communities that have faced disinvestment, are exposed to greater environmental threats, and lack robust economies. One comment indicated that many Tribes are shut out of the opportunity to provide federally funded child support services precisely because of long-term problems like high unemployment rates, limited economic development, a subsistence economy remote from employment centers, and no tax base. The non-Federal share requirement not only discourages prospective Tribes, it also increases the risk of current Tribal child support programs shutting down.

Several Tribal commenters expressed their fears of being forced to shut down their Tribal child support programs if the non-Federal share is not eliminated. In fact, in fiscal year (FY) 2017, a Tribe had to shut down their child support program because they were unable to meet the non-Federal share of program expenditures, indicating that the requirement is a barrier for any Tribe to be successful.

Additionally, the current economic conditions in Tribal Nations have made their situations even more precarious. Several Tribal commenters indicated that their enterprises and revenues have not fully returned to pre-pandemic levels, and they are still dealing with other issues like the opioid epidemic and natural disasters that require Tribal resources and funds to mitigate. Yet, the non-Federal share requirement forces Tribal child support programs to compete with other Tribal departments and programs to obtain limited Tribal government funding.

The elimination of the non-Federal share requirement will enable Tribal child support programs to grow and expand. Meeting the non-Federal share has disproportionately and negatively driven programmatic and fiscal decisions. As one commenter mentioned, it forces Tribes and Tribal organizations to make decisions to meet the non-Federal share instead of meeting the needs of their Tribal families and communities. Many commenters indicated that their Tribal child support programs had to defer paying for required security assessments to access the Federal Parent Locator Service (FPLS), which helps in locating noncustodial parents and their assets. They also indicated that the non-Federal share requirement made their programs less efficient and effective because they had no funds or time to spend on wraparound services, employment referrals for noncustodial parents, robust outreach, intensive case management, fatherhood programs, and parenting initiatives.

The National Association of Tribal Child Support Directors included the results of their 2022 survey in their comments. Out of the 46 respondents, the survey found that if the non-Federal share were eliminated 63 percent expected to have more time to focus on efforts to increase service quality, 50 percent would be interested in offering a fatherhood program, and 67 percent would be interested in expanding outreach.

Eliminating the non-Federal share will help to ensure that Tribal Nations can offer culturally appropriate and affirming child support services to their communities. Native American children in Tribal areas with child support programs are in great need of child support, especially since 53 percent of Native American children in these areas lived in single-parent families. 3 According to data from the 2015 American Community Survey, nearly one-third of Native Americans living in Tribal areas with a child support program lived below the poverty line in 2015 (that year, the poverty line for a family of three was $20,090). 4 This poverty rate was more than twice the poverty rate for Americans in general (15 percent). Particularly stark was the poverty rate among Native American children living in these areas, which was 40 percent. 5

In FY 2022, Tribal child support programs collected $51 million in child support payments, and 97 percent went to families. 6 These child support payments help to reduce the need for other supportive services such as Temporary Assistance for Needy Families (TANF). Additionally, Tribal child support programs offer unique services like non-cash support, parenting classes that reflect Tribal culture and traditions, and intensive and family-centered case management. A Tribal commenter who is receiving child support services stated, “My Tribal IV-D program treated me as a person, not just a child support case number.” The commenter also indicated that when the state was unable to locate her child's father, the Tribal child support program found him and established and enforced a child support order, which resulted in the receipt of regular child support payments. Tribal child support directors have indicated that many Tribal parents have had similar experiences and value the Tribal child support services they receive.

The elimination of the non-Federal share will also ensure that state child support programs continue to receive assistance from Tribal child support programs to enforce state child support orders and collect child support payments in intergovernmental cases in accordance with 45 CFR 309.120(a). For example, when a Tribal child support program receives a request for assistance from a state, they register the state child support order in Tribal court and enforce it. Then, the tribe collects the child support payment from the noncustodial parent and sends it to the state in accordance with 45 CFR 309.115(d). Without this assistance from Tribal child support programs, states are, for the most part, unable to collect child support payments in these intergovernmental cases because they lack jurisdiction to enforce their child support orders in Tribal Nations. In FY 2022, Tribal child support programs collected and sent $10 million in child support payments to states, other tribes, and countries. 7 Comments from five states acknowledged the importance of Tribal child support programs, reiterated the difficulties they face in meeting the non-Federal share requirement, and supported the elimination.

Eliminating the non-Federal share promotes equity and honors Tribal sovereignty and the trust relationship between the Federal Government and Tribal Nations. This regulation also aligns with President Biden's Executive order on Reforming Federal Funding and Support for Tribal Nations to Better Embrace Our Trust Responsibilities and Promote the Next Era of Tribal Self-Determination, Executive Order 14112, 88 FR 86021 (December 6, 2023). As set out by the 1977 Senate report of the American Indian Policy Review Commission, “The purpose behind the trust is and always has been to insure the survival and welfare of Indian Tribes and people. This includes an obligation to provide those services required to protect and enhance Indian lands, resources, and self-government and also includes those economic and social programs which are necessary to raise the standard of living and social well-being of the Indian people to a level comparable to the non-Indian society.”  8 As several commenters mentioned, Tribal governments have substantially less funds and revenue generating options than state governments. Yet the needs and disparities are greater in Tribal communities. For example, they continue to face inequalities and structural barriers that limit their opportunities, negatively impact their well-being and economic mobility, and contribute to their higher rates of poverty. 9 Instead of competing, these programs and services should collaborate to use both Federal and Tribal funds efficiently and effectively to improve the economic and social well-being of Tribal children, families, and communities. Therefore, eliminating the requirement reduces the competition for scarce resources and makes the Tribal child support program funding more equitable and obtainable for Tribal Nations. As one state commenter indicated, it helps put Tribes on more equal footing with state child support programs.

From the start, the Tribal child support program regulations recognized and honored Tribal sovereignty and attempted to convey flexibilities in Tribal child support programs as stated in the NPRM published in 2000 (65 FR 50805). The 2000 NPRM stated that the regulation recognizes the government-to-government relationship by supporting Tribe's right to exercise self-determination and decide whether or not to operate a Tribal child support program (65 FR 50805). Many commenters to this final rule also recognized and reiterated the importance of exercising Tribal sovereignty by operating a Tribal child support program. Child support services help Tribal communities promote parental responsibility, so children receive support from both parents even when they live in separate households. Tribes and Tribal organizations exercising their sovereignty to operate their own child support programs is, in fact, what Congress intended when it authorized funding under Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (Pub. L. 104-193).

Eliminating the non-Federal share requirement helps to achieve this and to ensure the sustainability and expansion of the program by providing the adequate and appropriate Federal financial participation. This is important because many Federal programs that assist Tribal Nations and promote Tribal sovereignty are underfunded, according to the 2018 U.S. Commission on Civil Rights report on Federal funding for Native Americans. 10 Additionally, this rule honors and reflects the trust relationship and doctrine, which requires the Federal Government to support Tribal self-government and economic prosperity. 11 And it also fulfills the 2000 NPRM directive that indicated “if the Secretary determines based on experience and consultation with Tribes that the 80/20 match rate is disruptive to the program and imposes hardship to Tribes, the regulations will be revised accordingly” (65 FR 50823).

Nevertheless, OCSS considered whether a change in policy might negatively impact Tribal child support programs, which have structured their operations based on the existing matching requirement and determined that any potential negative impact is far outweighed by the benefit of not using scarce Tribal funds for the non-Federal share.

In the NPRM published in 2000, OCSS considered several different funding approaches that controlled costs, including performance-based funding, funding based on cost per child to operate the program, capping certain costs, and state-cost based funding (65 FR 50823). OCSS engaged in extensive deliberations over the issue of funding for Tribal child support programs. After careful consideration of the advantages and disadvantages of each cost control funding approach, ultimately, the Secretary proposed open-ended funding with a Tribal match (65 FR 50823). The NPRM proposed that Tribes and Tribal organizations provide a 10 percent match during the start-up period and first 3 years of operating a Tribal child support program, with the match increasing to 20 percent thereafter (65 FR 50823). The NPRM also included a waiver provision allowing the Secretary to waive the non-Federal share for Tribes and Tribal organizations that lacked sufficient resources and met certain specific criteria (65 FR 50823).

The Tribal Child Support Enforcement Program final rule was promulgated on March 30, 2004 (hereinafter final rule) and included revisions to the cost sharing provision for start-up funding and the non-Federal share waiver provisions at 45 CFR 309.130(e) (69 FR 16638 and 16646). In the final rule, OCSS indicated that it received numerous comments from Tribes objecting to the cost sharing requirement. In response, OCSS again expressed concern regarding the control of costs in the Tribal child support program, stating that “unlike other Tribal grant programs, the funding for Tribal IV-D programs is not sum certain grants,” meaning a specified and set amount of funds (69 FR 16667). OCSS further stated that the cost sharing requirement was maintained after determining “that a non-Federal share in expenditures is necessary, based on the principle that better programs and better management result when local resources are invested” (69 FR 16667). However, in response to comments, the match requirement was changed to allow 100 percent funding during the start-up period, not to exceed 2 years, and, capped at $500,000 per 45 CFR 309.130(c)(1). OCSS noted that the non-Federal match for start-up costs was eliminated in recognition that “Tribes just beginning title IV-D child support enforcement may have very limited funds for this activity” (69 FR 16646).

The 2004 final rule also revised the non-Federal share waiver provisions and made them more prescriptive and restrictive (69 FR 16646). For example, OCSS noted that denied waiver requests were not subject to administrative appeal (69 FR 16646). The regulation at 45 CFR 309.130(e) permits, under certain circumstances, a temporary waiver of part or all of the non-Federal share of program expenditures. This provision includes the following two types of temporary waiver requests that a Tribe or Tribal organization may submit for consideration: “anticipated temporary waiver request” and “emergency waiver request.” Both waiver requests must be submitted in accordance with the procedures specified in 45 CFR 309.130(e)(2) through (4). These procedures require the submission of extensive information and documentation to demonstrate the temporary lack of resources and justify the waiver request.

Under 45 CFR 309.130(e)(1)(i), when Tribes or Tribal organizations anticipate that they will be temporarily unable to contribute part or all of the required non-Federal share of program funding, they must submit an anticipated temporary waiver request. The anticipated waiver, due no later than 60 days before the start of the funding period, is more restrictive because untimely or incomplete requests will not be considered, in accordance with 45 CFR 309.130(e)(1)(i). Many Tribal child support programs have been denied anticipated waivers because of untimely or incomplete requests. An untimely anticipated waiver request means a Tribe submitted the request after the deadline of August 1 pursuant to 45 CFR 309.130(e)(1)(i). An incomplete anticipated waiver request means a Tribe did not include all the information required by 45 CFR 309.130(e)(2) through (4), such as portions of the Tribal budget sufficient to demonstrate the extent of the funding shortfall and uncommitted funds.

Under 45 CFR 309.130(e)(1)(ii), after the start of the funding period, if an emergency situation occurs, such as a hurricane or flood, that warrants a waiver of the non-Federal share of program expenditures, Tribes or Tribal organizations may submit an emergency waiver request.

Although OCSS previously determined during drafting of the Tribal Child Support Enforcement Program regulations that a non-Federal match was important to ensure “better programs and better management” (69 FR 16667), it has now reconsidered that conclusion after seeing the Tribal child support program in practice during the past two decades. Based on its experience, OCSS now concludes that its oversight tools are sufficient, without the non-Federal share match, to monitor use of funds for IV-D expenditures and consider cost containment. Tribes and Tribal organizations show in their budget submissions and communications with OCSS that they are engaged in operating successful programs and using Federal funds properly, efficiently, and effectively, in accordance with 45 CFR 309.60(b). A non-Federal share is also not necessary to ensure Tribal investment in the program. Tribes and Tribal organizations are inherently invested in operating a child support program because they can exercise their Tribal sovereignty and incorporate their Tribal traditions and customs. Most importantly, they are invested in the Tribal members who staff their programs and the Tribal families and children who benefit from child support services. They will continue to provide Tribal resources, such as Tribal buildings and courts, to ensure their programs are successful and efficient.

The Tribal child support program regulations provide OCSS with sufficient authority to control costs and monitor compliance without the non-Federal share requirement. The primary method for evaluating and ensuring allowable and appropriate costs is through the budget submission, review, and approval process. The regulation at 45 CFR 309.15(c) requires Tribal child support programs to submit a budget to receive Title IV-D funding to administer their child support programs. Budgets must include the detailed information specified in 45 CFR 309.130(b) and OCSS guidance, such as quarterly estimate of expenditures, narrative justification for each cost category, and copies of contracts (see Tribal Child Support Budget Toolbox and OCSS PIQT-21-01). OCSS and Office of Grants Management (OGM) review Tribal budget submissions for compliance with 45 CFR parts 309, 310, and 75 and other applicable Federal laws. During the review of Tribal budgets, OCSS and OGM examine the estimates of program expenditures, determine whether the budget narratives and documentation justify costs, and approve allowable costs charged to the Title IV-D grant. OCSS reviews the entire budget in detail to ensure the costs are reasonable and necessary given the caseload size and other demographic and geographic factors. OCSS compares contract costs to industry standards and similar contracts from other child support programs. For questionable costs, OCSS works with the Tribe to obtain additional information or revise or remove those costs when warranted. For example, OCSS determined that a Tribe's contract costs for information technology development were higher than the industry standard and worked with the Tribe to secure a reduction in the costs before approving the contract.

OCSS must approve a Tribe's budget before OGM issues a notice of grant award, which provides OCSS with direct oversight over Tribal expenditures before Tribal child support programs drawdown and use Title IV-D funds at the start of the fiscal year. After OCSS approves a Tribe's budget, a Tribe may request additional funds by submitting the information specified in 45 CFR 309.130(f)(1). If the increase in funds impacts the Tribal IV-D plan, the Tribe must also submit a plan amendment in accordance with 45 CFR 309.130(f)(2). A Tribe must provide the required information and documentation and the costs must comply with the Federal regulations before OCSS approves the request for an increase in funds. This ensures that increases in approved Tribal budgets are reasonable, necessary, allowable, and allocable. Additionally, OCSS uses a variety of methods to provide technical assistance and assess needs so that Tribal child support programs comply with the program regulations, uniform grant requirements, and cost principles. These methods include conducting training, national webinars, conference workshops, regional meetings, and site visits. As a result, the overall Tribal child support program expenditures of existing Tribes are not expected to rise substantially beyond normal cost increases due to factors like inflation, filling vacancies, or upgrading equipment and systems.

Even with the elimination of the non-Federal share, OCSS does not expect that every federally recognized Tribe or Tribal organization will request funding to operate a Tribal child support program, meaning that OCSS expects only a modest and gradual increase in program expenditures. Prospective Tribes and Tribal organizations may not have the required administrative capacity or infrastructure to operate a child support program. For example, they may not have 100 children under the age of majority, as referenced in 45 CFR 309.10(a). Although they may request a waiver of this requirement (45 CFR 309.10(c)), the waiver must demonstrate that their prospective Tribal child support program will be cost effective (45 CFR 309.10(c)(1)(iii)). Additionally, prospective Tribes and Tribal organizations may not want to comply with the extensive requirements and procedures required to receive funding (45 CFR 309.65). A Tribal court can hear child support cases without the Tribe administering a child support program. Administering a Tribal child support program and working with parents on such a vulnerable and sensitive subject is complex and demanding. As previously mentioned, instead of operating their own Tribal child support program, they may jointly operate a program or may receive child support services from an existing Tribal child support program.

As a policy alternative to eliminating the non-Federal share, OCSS considered revising the non-Federal share waiver requirements to make waivers easier to request and receive. In fact, the non-Federal share waiver requirements proposed in the 2000 NPRM were less restrictive and burdensome than the requirements in the 2004 final rule under 45 CFR 309.130(e) (65 FR 50837). Only one commenter suggested this policy alternative. Reducing the burden and criteria for requesting non-Federal share waivers does not change the fact that they are temporary and must be requested each time a Tribe needs one. The underlying issues that make meeting the non-Federal share difficult or impossible for Tribes and Tribal organizations are persistent, intractable, and systemic such as high rates of unemployment, little or no economic development, or lack of or a decline in revenue. As one commenter pointed out, Tribal communities have been historically underserved, marginalized, or subject to discrimination or systemic disadvantage. These issues not only hinder current Tribal child support programs from meeting the non-Federal share and potentially shutting down, but they also prevent prospective Tribes from even applying for funding. Therefore, OCSS does not think revising the non-Federal share waiver requirements would increase Tribal participation or reduce the risks of program closures as much as eliminating the requirement entirely. Nor would it reduce the administrative burden associated with tracking and reporting on non-Federal share contributions and submitting waiver requests. Most importantly, revising the non-Federal share waiver provision recognizes the need to implement the 2000 NPRM directive for the Secretary to revise the regulations when the 80/20 match rate is disruptive to the program and imposes hardship to Tribes (65 FR 50823). Accordingly, the time has come to revise the regulation. The overwhelming majority of commenters agreed with this decision.

In 1996, Congress was compelled to pass PRWORA and authorize direct funding of Tribes and Tribal organizations for operating child support programs. And now, OCSS issues this final rule that eliminates the non-Federal share requirement, helping to ensure that new Tribal child support programs are established, and current ones continue to operate and thrive, as Congress intended. As a result, more Tribal communities will receive child support services that reflect and affirm their Tribal cultures and traditions, increase family economic well-being, and help lift Tribal families out of poverty.

The following is a summary of the regulatory provisions included in the final rule and, where appropriate, how these provisions differ from what was initially included in the NPRM. The NPRM was published in the Federal Register on April 21, 2023 (88 FR 24526 through 24535). The comment period ended June 20, 2023. OCSS received 51 sets of comments from 48 entities as follows: 28 Tribes, 5 Tribal child support programs, 5 states, 5 organizations, and 5 individuals. Three Tribes submitted 2 sets of comments. Comments were posted on www.regulations.gov.

Overwhelmingly, the comments received on the NPRM supported the elimination of the non-Federal share requirement for Tribal child support programs. Several commenters indicated that they had no objections to the regulatory revisions, as discussed below, resulting from the elimination of the non-Federal share. Only one comment disagreed with the elimination and recommended allocating funds by the size of the Tribal child support program or revising the non-Federal share waiver provision instead.

In § 309.15(a)(2)(iii), OCSS proposed removing the language “; and either:” at the end of that provision and inserting a period in its place. Section 309.15(a)(2)(iv) requires the initial application for funding to include a statement that the Tribe or Tribal organization has or will have the non-Federal share of program expenditures available. Section 309.15(a)(2)(v) permits a request for a waiver of the non-Federal share in accordance with § 309.130(e). OCSS proposed removing § 309.15(a)(2)(iv) and (v) due to the elimination of the non-Federal share. There were no objections to the proposed regulatory amendments.

Section 309.45(g) indicates that disapproval of start-up funding, a request for waiver of the 100-child rule, and a request for waiver of the non-Federal Tribal share is not subject to administrative appeal. OCSS proposed amending § 309.45(g) by removing “, and a request for waiver of the non-Federal Tribal share.” Revised paragraph (g) will read as follows: “Disapproval of start-up funding and a request for waiver of the 100-child rule is not subject to administrative appeal.” There were no objections to the proposed regulatory amendments.

Section 309.75(e) describes the requirements for a Tribe and Tribal organization that intends to charge an application fee or recover costs in excess of the fee. Collected fees and recovered costs are considered program income and deducted from total allowable costs in accordance with 45 CFR 309.75(e)(4) and 75.307(e)(1). Due to the proposed elimination of the non-Federal share requirement, we proposed revising § 309.75(e) and modified the proposed language in the NPRM, requiring Tribal child support programs to provide that charging fees and recovering costs will not be permitted. We also proposed removing paragraphs (e)(1) through (4). There were no objections to the proposed regulatory amendments.

Section 309.85(a)(6) requires a Tribe or Tribal organization to maintain records on any fees charged and collected, if applicable. As previously stated, collected fees and recovered costs are considered program income and deducted from total allowable costs in accordance with 45 CFR 309.75(e)(4) and 75.307(e)(1). Due to the proposed elimination of the non-Federal share requirement, we proposed removing § 309.85(a)(6) and redesignating § 309.85(a)(7) to § 309.85(a)(6). There were no objections to the proposed regulatory amendments.

In § 309.130(b)(2)(iii), we proposed removing the language “and for funding under § 309.65(a) either:” at the end of that provision and replacing it with a period. Section 309.130(b)(2)(iv) requires the annual Tribal budget submissions to include a statement certifying that the Tribe or Tribal organization has or will have the non-Federal share of program expenditures. Section 309.130(b)(2)(v) permits a request for a waiver of the non-Federal share in accordance with paragraph (e) of the section. We proposed removing § 309.130(b)(2)(iv) and (v) due to the elimination of the non-Federal share requirement.

Section 309.130(c) describes the Federal share of program expenditures for start-up funding and for initial and ongoing grant funding to administer a Tribal child support program. We proposed amending § 309.130(c)(2) by removing “during a 3-year period,” replacing “90” with “100”, and adding “and thereafter” following “made during that period.” We proposed amending § 309.130(c)(3) by removing § 309.130(c)(3)(i), redesignating paragraph (c)(3)(ii) to paragraph (c)(3), and replacing “90” with “100”. We proposed these revisions to indicate that the Federal share of program expenditures will be 100 percent due to the elimination of the non-Federal share requirement.

Section 309.130(d) describes the requirements for the non-Federal share of program expenditures. We proposed removing § 309.130(d) due to the elimination of the non-Federal share requirement.

Section 309.130(e) describes the requirements for permitting a temporary waiver of part or all of the non-Federal share of program expenditures. We proposed removing § 309.130(e) due to the elimination of the non-Federal share requirement.

Section 309.130(f) describes the requirements for requesting increases in the approved Tribal budget and § 309.130(f)(3) addresses how budget increases impact the non-Federal share. We proposed redesignating § 309.130(f) to § 309.130(d) and removing § 309.130(f)(3).

Section 309.130(g) describes how to obtain Federal funds and § 309.130(h) requires compliance with the uniform administrative requirements and cost principles. We proposed redesignating § 309.130(g) and (h) to § 309.130(e) and (f), respectively.

The overwhelming majority of comments supported the elimination of the non-Federal share requirement. Only one comment disagreed with the elimination and recommended allocating funds by the size of the Tribal child support program or revising the non-Federal share waiver provision instead.

Section 309.155(c) prohibits a Tribe or Tribal organization from using Federal IV-D funds for any expenditures that have been reimbursed by fees or costs collected, including any fee collected from a state. We proposed removing § 309.155(c) and redesignating § 309.155(d), (e), (f), and (g) to § 309.155(c), (d), (e), and (f), respectively. There were no objections to the proposed regulatory amendments.

Section 309.170(b)(8) requires a Tribe or Tribal organization to provide annual information and statistics on the total amount of fees and costs recovered. We proposed removing § 309.170(b)(8) and redesignating § 309.170(b)(9) to § 309.170(b)(8). There were no objections to the proposed regulatory amendments.

Section 310.10(c) requires the Model Tribal IV-D System to record and report any fees collected, either directly or by interfacing with state or Tribal financial management and expenditure information. Although we proposed removing § 310.10(c) and redesignating § 310.10(d), (e), (f), (g), and (h) to § 310.10(c), (d), (e), (f), and (g), respectively, OCSS has reconsidered these amendments, despite not receiving any objections to them. After further consideration, OCSS has decided it is necessary to maintain the Model Tribal Systems (MTS) requirements described in § 310.10(c) because a Tribal child support program may collect fees to assist a state child support program in an intergovernmental case. If so, they would need to record and report any fees collected along with expenditure information as per § 310.10(c). Because we are retaining § 310.10(c), we also no longer need to redesignate the other subsections.

Section 310.20(a) describes the conditions that must be met for Federal financial participation for Computerized Tribal IV-D Systems. We proposed replacing “90” with “100” for installation of the Model Tribal IV-D System.

Comment 1: The majority of commenters indicated that they had no objections to the regulatory revisions proposed in 45 CFR 309.15, 309.45, 309.75, 309.85, 309.155, 309.170, and 310.20.

Response 1: Based on the overwhelming support for the elimination of the non-Federal share of program expenditure requirement for Tribal child support programs, including the 90/10 and 80/20 cost sharing rates, OCSS agrees that the relief should be provided.

For the reasons described in the proposed rule and above, OCSS revises 45 CFR 309.15, 309.45, 309.75, 309.83, 309.155, 309.170, and 310.20 as proposed.

Comment 2: Overwhelmingly, Tribes, Tribal child support programs, states, organizations, and individuals who submitted comments were unequivocal in their support of the proposed elimination of the non-Federal share requirement.

Most commenters indicated that the non-Federal share limits growth, causes disruptions, creates instability, and imposes hardships for Tribal child support programs.

Many Tribal commenters stated that meeting the non-Federal share forced their Tribal child support program to reduce services, cut travel and training, and forgo hiring staff, modernizing, digitizing, accessing FPLS, and participating in the Federal Tax Refund Offset Program (FTRO). Several Tribal commenters also indicated that these forced cuts and reductions made their programs less efficient and effective. For example, one Tribal commenter indicated that their program was unable to afford their non-Federal share to access enforcement remedies like FPLS and FTRO to locate noncustodial parents and to offset Federal tax returns for overdue support.

Many commenters indicated that Tribes had limited resources. Several Tribal commenters described how meeting the non-Federal share diverted their limited Tribal funds from essential self-governance services and functions for the elderly, youth, Tribal courts, public safety, natural resources, natural disasters, and crisis mitigation like the opioid crisis and coronavirus disease pandemic. Some Tribal commenters also stated that it forced Tribal programs to compete for those limited funds and make difficult decisions about how to allocate resources to address the needs and issues of Tribal members and which programs to underfund. Two commenters indicated how Tribal governments do not have taxing authorities like state governments.

Some Tribal commenters stated that finding, tracking, calculating, and documenting non-Federal share contributions was time consuming and that their efforts could be better used on providing needed child support services to families, such as parenting classes and fatherhood programs. Some Tribal commenters also indicated that the non-Federal share waiver requirements were burdensome and impossible to meet. And two Tribal commenters stated that Congress did not impose the non-Federal share requirement in the authorizing legislation.

One Tribal commenter indicated that they may have to shut down their Tribal child support program if OCSS does not eliminate the non-Federal share requirement. And two commenters mentioned how one Tribe had to close their program because of the difficulty with providing the non-Federal share.

Many commenters indicated that the elimination of non-Federal share would be beneficial for Tribal child support programs. Several commenters specified that they would increase child support services, update their systems, and fill vacancies. Several commenters also stated that the elimination would help to ensure that existing programs continue operating and new ones are established, creating stability and growth. Additionally, several commenters emphasized the importance of Tribes and Tribal organizations exercising their Tribal sovereignty by administering a child support program.

One commenter stated that the elimination promotes equity by removing a substantial financial burden for Tribal communities that have been historically underserved, marginalized, or subject to discrimination or systemic disadvantage. Two commenters indicated that it honors the trust relationship the Federal Government has with Tribal Nations. And another two commenters stated that it would reduce bureaucratic barriers faced by Tribes and Tribal organizations.

One commenter agreed that OCSS still has sufficient oversight and cost containment tools without the non-Federal share requirement. Another commenter indicated that many Tribes and Tribal organizations will continue to invest in their programs by contributing Tribal facilities and using Tribal members as staff. Many commenters indicated how Tribes and Tribal organizations are invested in their children, helping noncustodial and custodial parents support them financially and emotionally.

A few Tribal commenters indicated that the elimination demonstrates that OCSS is listening to Tribes and Tribal organizations.

Many commenters expressed the need for child support services in Tribal communities to help lift Tribal families and children out of poverty.

Response 2: Based on the overwhelming support for the proposed elimination of the non-Federal share requirement, for the reasons described in the NPRM and by the majority of commenters, OCSS agrees that the non-Federal share requirement should be eliminated for Tribal child support programs.

Comment 3: One individual opposed the elimination of the non-Federal share requirement without replacing with another cost containment mechanism. The commenter thought OCSS could not reasonably expect to apply the level of oversight or impartiality to fiscally manage a program where an unlimited amount of money can be requested without financial participation by grantees. The commenter indicated that cost sharing ensures a grantee considers cost-to-benefit proposition and that the principle has never been questioned for states and is a solid principle for Tribes. In lieu of cost sharing, the commenter recommended allocating funds by the size of the Tribal program based upon historical caseload data. The commenter also recommended revising the non-Federal share waiver provision. The commenter indicated that Tribes are not all in the same financial position and some have limited resources while others are thriving.

Response 3: OCSS disagrees. As discussed previously, the Tribal child support program regulations provide OCSS with sufficient authority to control costs and monitor compliance without the non-Federal share requirement. Unlike state child support programs, Tribal child support programs must submit a budget to receive Title IV-D funding in accordance with 45 CFR 309.15(c). Budgets must include the detailed information specified in 45 CFR 309.130(b) and OCSS guidance, such as quarterly estimate of expenditures, narrative justification for each cost category, and copies of contracts (see Tribal Child Support Budget Toolbox and OCSS PIQT-21-01). OCSS and OGM review Tribal budget submissions for compliance with 45 CFR parts 309, 310, and 75 and other applicable Federal laws. During the review of Tribal budgets, OCSS and OGM examine the estimates of program expenditures, and determine whether the budget narratives and documentation justify costs. Many factors impact a Tribe's caseload. For example, some Tribal child support programs receive cases transferred from a state child support program, others do not and must conduct intensive outreach to get parents to apply for services, a few Tribal child support programs receive referrals from the Tribal TANF programs, and at least one Tribal child support program provides services to other Tribes. Several Tribal child support programs have parents who do not live locally and reaching them is costly. As indicated by the feedback from Tribes and Tribal organizations, meeting the non-Federal share has limited their ability of conduct outreach to increase their caseloads. Therefore, using historical data is problematic and may not be a valid predictor for prospective Tribes and Tribal organizations since they have unique characteristics, histories, and relationships with their states.

Additionally, OCSS considered but decided against capping certain costs for Tribal child support programs in the 2000 NPRM (65 FR 50823). OCSS also disagrees with that option now. Capping costs limits Tribes and Tribal organizations to self-govern, grow their program as they determine, and innovate to meet the evolving needs and circumstances of Tribal parents and children.

Comment 4: Several commenters indicated that they had no objections to the regulatory revisions proposed in § 310.10.

Response 4: Although commenters indicated that they had no objection to the regulatory revisions proposed in § 310.10, OCSS has decided not to revise 45 CFR 310.10 as originally proposed in the Notice of Proposed Rulemaking. Specifically, OCSS has determined, as noted above, it is necessary to maintain the Model Tribal Systems (MTS) requirements described in § 310.10(c) because a Tribal child support program may collect fees to assist a state child support program in an intergovernmental case. If so, they would need to record and report any fees collected along with expenditure information as per § 310.10(c). And, because we are retaining § 310.10(c), we no longer need to redesignate the other paragraphs.

Under the Paperwork Reduction Act (Pub. L. 104-13), all Departments are required to submit to the Office of Management and Budget (OMB) for review and approval any reporting or recordkeeping requirements inherent in a proposed or final rule. For this final rule, Tribal child support programs that charge fees and recover costs must submit a plan amendment, providing that charging fees and recovering costs will not be permitted. Only three Tribal programs report data on the collection of fees and recovered costs. The description and total estimated burden on the “Tribal Child Support Enforcement Direct Funding Request” (OMB #0907-0218) is described in the chart below.

In accordance 45 CFR 309.35(d), after approval of the original Tribal IV-D program application, all relevant changes required by new Federal statutes, rules, regulations, and Department interpretations are required to be submitted so that the Secretary may determine whether the plan continues to meet Federal requirements and policies.

The Secretary certifies that, under 5 U.S.C. 605(b), as enacted by the Regulatory Flexibility Act (Pub. L. 96-354), this rule will not result in a significant impact on a substantial number of small entities. The primary impact is on Tribal governments. Tribal governments are not considered small entities under the Regulatory Flexibility Act.

The Congressional Review Act (CRA) allows Congress to review major rules issued by Federal agencies before the rules take effect (see 5 U.S.C. 801(a)). The CRA defines a “major rule” as one that has resulted, or is likely to result, in (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, or innovation, or on the ability of United States-based enterprises to compete with foreign based enterprises in domestic and export markets (see 5 U.S.C. Chapter 8). Based on our estimates of the impact of this rule, the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) has designated this rule as `not major' under the CRA.

Executive Orders 12866, as amended by Executive Order 14094, 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule meets the standards of Executive Order 12866, as amended by Executive Order 14094, and Executive Order 13563 because it creates equity, promotes predictability, and reduces burdens and hardships for Tribal child support programs. The non-Federal share requirement limits growth, causes disruptions, and creates instability. Eliminating it encourages expansion of services and enforcement remedies, removes a financial barrier for prospective Tribes and Tribal organizations, prevents closure of existing Tribal child support programs, and provides a permanent solution to longstanding problems. This will ensure Tribal families receive child support services that reflect and affirm their cultures and traditions and that promote parental responsibility and increase disposable family income and financial stability.

Executive Order 12866, as reaffirmed by E.O. 13563 and E.O. 14094, provides that OIRA at OMB will review all significant rules. Section 3(f) of E.O. 12866, as modified by 14094, defines “a significant regulatory action” as an action that is likely to result in a rule (1) having an annual effect on the economy of $200 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, and Tribal governments or communities; (2) creating serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities, or the principles set forth in the Executive order. OIRA has determined that this final rule is significant, and it was accordingly reviewed by OMB.

Based upon the increase in program expenditures from existing Tribal child support programs and the modest growth of new programs due to the elimination of the non-Federal share, we anticipate that the costs associated with this rule will be the following: FY 2025 $17.2M; FY 2026 $19M; FY 2027 $26.4M; FY 2028 34.3M; and FY 2029 $42.6M.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an annual expenditure by state, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation). That threshold level is currently approximately $164 million. This rule does not impose any mandates on State, local, or Tribal governments, or the private sector, that will result in an annual expenditure of $164 million or more.

Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a proposed policy or regulation may affect family well-being. If the agency's determination is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. We certify that we have assessed this proposed rule's impact on the well-being of families. The purpose of the Tribal child support program is to strengthen the financial and social stability of families. This rule eliminates the burden and hardships imposed by the non-Federal share requirement for Tribal child support programs, which limits growth, causes disruptions, and creates instability. Eliminating it encourages expansion of services and enforcement remedies, removes a financial barrier for prospective Tribes and Tribal organizations, and prevents closure of existing Tribal child support programs. The proposed rule will have a positive effect on family well-being. It will ensure Tribal families receive child support services that reflect and affirm their cultures and traditions and that promote parental responsibility and increase disposable family income and financial stability.

Executive Order 13132 prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This rule does not have federalism impact as defined in the Executive order.

Jeff Hild, Acting Assistant Secretary of the Administration for Children and Families, approved this document on January 18, 2024.

For the reasons discussed in the preamble, the Department of Health and Human Services amends 45 CFR chapter III as set forth below:

Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.111. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102 and final 2024 allocations were published on December 21, 2023 (88 FR 88266).

The final rule implementing amendment 5 to the Summer Flounder FMP, as published in the Federal Register on December 17, 1993 (58 FR 65936), provided a mechanism for transferring summer flounder commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can transfer or combine summer flounder commercial quota under § 648.102(c)(2). The Regional Administrator is required to consider three criteria in the evaluation of requests for quota transfers or combinations: (1) the transfers or combinations would not preclude the overall annual quota from being fully harvested; (2) the transfers address an unforeseen variation or contingency in the fishery; and (3) the transfers are consistent with the objectives of the FMP and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The Regional Administrator has determined these three criteria have been met for the transfer approved in this notification.

North Carolina is transferring 14,280 pounds (lb; 6,477 kilograms (kg)) to Virginia through a mutual agreement between the states. This transfer was requested to repay landings made by an out-of-state permitted vessel under a safe harbor agreement. The revised summer flounder quotas for 2024 are North Carolina, 2,398,163 lb (1,087,788 kg), and Virginia, 1,887,987 lb (856,376 kg).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.102(c)(2)(i) through (iv), which was issued pursuant to section 304(b), and is exempted from review under Executive Order 12866.