Agricultural Marketing Service
Food and Nutrition Service
Rural Business-Cooperative Service
Rural Utilities Service
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Food and Drug Administration
Health Resources and Services Administration
Coast Guard
Federal Emergency Management Agency
U.S. Customs and Border Protection
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
Ocean Energy Management Bureau
Justice Programs Office
Employee Benefits Security Administration
Employment and Training Administration
Occupational Safety and Health Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Great Lakes St. Lawrence Seaway Development Corporation
Maritime Administration
National Highway Traffic Safety Administration
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Agricultural Marketing Service, Department of Agriculture (USDA).
Final rule.
The Agricultural Marketing Service (AMS), Federal Grain Inspection Service (FGIS or Service) is amending its user fee regulations to establish standardized formulas the agency will use to calculate hourly and unit fees. The changes allow FGIS to charge reasonable fees sufficient to cover the costs of providing official services and re-establish a 3-to 6-month operating reserve, as required by the United States Grain Standards Act (USGSA). This final rule also makes specified conforming changes and minor technical changes to correct two typographical errors.
This final rule is effective February 5, 2025.
Denise Ruggles, Executive Program Analyst, USDA, AMS, FGIS, Telephone: 816-702-3897, Email:
This final rule supersedes the provisions of the interim final rule titled “Fees for Official Inspection and Weighing Services under the United Stated Grain Standards Act,” and all associated rulemakings, and amends FGIS's user fee regulations to establish new formulas to calculate hourly and unit fees. The new formulas, which are similar to the standardized formulas used in other AMS user-fee funded grading programs, amend the regulations at 7 CFR 800.71. The formulas will enable the agency to sustain operations and comply with the USGSA, which requires FGIS to charge fees sufficient to cover the costs of the official services it provides and to adjust fees annually in order to maintain an operating reserve of not less than 3 and not more than 6 months. Prospective customers can find FGIS's fee schedules posted on AMS's public website at:
An interim final rule concerning user fees for grain inspection and weighing services was published in the
FGIS received one comment to the proposed rule jointly submitted by two trade organizations. One of the trade organizations represents grain, feed, processing, exporting, and other grain handling companies who collectively operate over 8,000 facilities. The other trade association represents private and publicly owned companies and farmer-owned cooperatives that are involved in, and provide services to, the agri-bulk products international trading industry.
Two trade associations expressed support for the proposed rule fee formulas in a joint comment. Their comment urged FGIS to maintain transparency regarding the calculation data and to regularly share this information with industry stakeholders. By increasing the flow of information, the comment conveyed that stakeholders can collaborate more effectively with FGIS to discover additional solutions that meet current market rates and requirements. The comment reiterated, similar to feedback on FGIS's interim final rule that revised its user fees, that significant increases in fees paid by industry are unsustainable. Concern was expressed that there is too little transparency in the existing calculation process, which makes it “difficult for both the FGIS and [stakeholders] to budget and plan for services provided. User fees should be predictable and market-based to provide enough funding and properly reflect the work performed.” The comment also suggested that FGIS uncouple hourly fee calculations from the existing five-year rolling average calculation used for tonnage fees.
FGIS agrees with the comment. The formulas adopted in this final rule will ensure greater transparency regarding the calculation of hourly rates for industry participants, as well as help mitigate large, one-time increases. This final rule also separates the calculation of hourly rates from the five-year rolling average calculation for tonnage fees.
After consideration of all relevant material presented in the comment and other available information, FGIS has determined that it is appropriate to finalize the proposed rule, as published in the
In an interim rule published in the June 6, 2024, edition of the
This rule also makes certain conforming changes in 7 CFR part 800. Specifically, this rule restores references to §§ 800.71 and 800.72 that were amended by the interim rule. In order to implement revised fees for 2024, the interim rule replaced references to § 800.71, which was stayed, with references to a newly added temporary section, § 800.74. Because § 800.72(b)
This rule also corrects two typographical errors—a reference to 5 U.S.C. 6103 and a reference to Executive Order 10358—in the definition of
This rule is being issued in conformance with Executive Order 12866, “Regulatory Planning and Review,” Executive Order 13563, “Improving Regulation and Regulatory Review,” and Executive Order 14094, “Modernizing Regulatory Review.” Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means.
The Office of Management and Budget (OMB) has designated this rule as not significant under Executive Orders 12866, 13563, and 14094. Accordingly, OMB has not reviewed this rule under those orders. Since grain export volume can vary significantly from year to year, estimating the impact of future fee changes can be difficult. FGIS recognizes the need to provide predictability to the industry for inspection and weighing fees. The statutory requirement to maintain an operating reserve between 3 to 6 months of operating expenses ensures that FGIS can adequately cover its costs without imposing an undue burden on its customers.
FGIS regularly reviews its user-fee financed programs to determine whether the fees charged for performing official inspection and weighing services adequately cover the costs of providing those services. Due to limitations in the current regulations (7 CFR 800.71(b)(3)), which permit fee increases of no more than 5 percent per year, combined with four years of rate decreases, and noneconomic factors that led to the 2020-2023 period having highest inflation in more than 40 years,
This rule revises the formulas under which FGIS adjusts fees annually to ensure stability of the program. The rule will also ensure that FGIS complies with the USGSA, which requires the agency to charge fees sufficient to cover its costs and maintain a 3- to 6-month operating reserve. FGIS will continue to seek out cost-saving measures and implement appropriate changes to reduce its costs to provide alternatives to fee increases.
This rule is unlikely to have an annual effect of $200 million or more or adversely affect the economy. FGIS has operated at a net loss for five consecutive years, and even with the maximum fee increases permitted under the current regulations, the agency has been unable to reduce the deficits and rebuild the operating reserve. While FGIS's interim final rule, published previously in the
FGIS believes that the U.S. grain industry will be best served by revising the regulation at 7 CFR 800.71, which addresses the calculation of fees for official inspection and weighing services performed by FGIS in the U.S. and Canada. The industry is already familiar with the annual process for evaluating and updating fees and anticipates the changes in this rule. This rule allows FGIS to continue providing mandatory and voluntary grain inspection services that facilitate international and domestic trade. This rule also allows FGIS to adjust fees in the future in response to unforeseeable climate, logistical, and market conditions, and to maintain required operating reserves.
Under the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-12), FGIS has considered the economic impact of this final rule on small entities. Accordingly, FGIS has prepared this regulatory flexibility analysis. The purpose of the Regulatory Flexibility Act is to fit regulatory actions to the scale of businesses subject to such actions. This ensures that small businesses will not be unduly or disproportionately burdened.
The Small Business Administration (SBA) defines small businesses by their North American Industry Classification System Codes (NAICS). This final rule will affect customers of FGIS's official inspection and weighing services in the domestic and export grain markets (NAICS code 115114). Current guidance from the SBA provides a revenue cutoff at $34 million to differentiate large and small firms in this industry. Fees for the program which apply to this industry are provided on the FGIS website.
Under the USGSA, all grain exported from the United States must be officially inspected and weighed, with few exceptions. FGIS provides mandatory inspection and weighing services at 29 export facilities in the United States. Five delegated State agencies provide mandatory inspection and weighing services at 20 facilities. All of these facilities are owned by multinational corporations, large cooperatives, or public entities that do not meet the requirements for small entities established by the SBA.
The USGSA requires the registration of all persons engaged in the business of buying grain for sale in foreign commerce. In addition, those persons who handle, weigh, or transport grain for sale in foreign commerce must also register. The regulations found at 7 CFR 800.30 and 800.31 define a foreign commerce grain business as the business of regularly buying, handling, weighing, or transporting grain for sale in foreign commerce totaling 15,000 metric tons or more during the preceding or current calendar year. Currently, there are 174 businesses registered to export grain, most of which are not small businesses.
Although most exporters are not small businesses, most users of FGIS's official inspection and weighing services
FGIS identified a total of 31 large firms, as defined by the SBA firm size classification of receipts in excess of $34 million. FGIS also identified the total number of establishments affiliated with the 31 large firms to be 133. With a total number of establishments of 2,123, this means 1,990, or 94 percent, of the establishments that paid fees to FGIS over the 2019-2024 period are small businesses according to the SBA definition.
Table 1 shows that while only 6 percent of the firms are considered large, in total they have contributed the vast majority of the fees paid to the program. In each of the five previous years, and for the year 2024 to date, the 31 large firms paid between 86 and 90 percent of all FGIS fees, with an average of 89 percent. The remaining 1,990 establishments paid on average 11 percent of total fees.
The amendments to FGIS's user fee regulations will not change the relative burden of fees on small businesses. The provisions of this final rule will apply equally to all entities. In addition, use of standardized user-fee rate calculations will benefit all inspection applicants, regardless of size, as fees will more closely reflect the current costs of inspections, and the fee calculation process will be more transparent. Through its annual review, FGIS will be able to monitor the financial status of the grain inspection and weighing program to determine whether further adjustments are necessary. Finally, this final rule will not impose additional reporting, record keeping, or other compliance requirements on small entities. FGIS has not identified any other Federal rules which may duplicate, overlap, or conflict with this final rule.
This final rule has been reviewed under Executive Order 12988—Civil Justice Reform. It is not intended to have retroactive effect. Section 18 of the USGSA (7 U.S.C. 87g) provides that no State or subdivision thereof may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the USGSA. Otherwise, this final rule will not preempt any State or local laws, regulations, or policies unless they present an irreconcilable conflict with this final rule. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this final rule.
This final rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires agencies to consider whether their rulemaking actions would have Tribal implications. FGIS has determined that this final rule is unlikely to 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.
Pursuant to the Congressional Review Act (5 U.S.C. 801-808), the Office of Information and Regulatory Affairs designated this final rule as not a major rule, as defined by 5 U.S.C. 804(2).
USDA is committed to complying with the provisions of the E-Government Act (44 U.S.C. 3601-3616) by promoting the use of the internet and other information technologies to provide increased opportunities for citizen access to government information and services, and for other purposes.
This final rule will not impose any additional reporting or recordkeeping requirements on either small or large FGIS customers. In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), FGIS reports and forms are periodically reviewed to reduce information collection requirements and duplication.
Administrative practice and procedure, Conflict of interests, Exports, Freedom of information, Grains, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 800 as follows:
7 U.S.C. 71-87K.
(a)
(1)
(2)
(b)
(1)
(i)
(ii)
(2) [Reserved]
(c)
(1)
(2)
(3)
(4)
(i)
(ii)
(iii)
(5)
(6)
(d)
(1)
(2)
(e)
(f)
(1)
(2)
The revision reads as follows:
(b) In addition to a 2-hour minimum charge for service on Saturdays, Sundays, and holidays, an additional charge will be assessed when the revenue from the services in § 800.71(a)(1) does not equal or exceed what would have been collected at the applicable hourly rate. The additional charge will be the difference between the actual unit fee revenue and the hourly fee revenue. Hours accrued for travel and standby time shall apply in determining the hours for the minimum fee.
U.S. Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS).
Final rule.
On August 8, 2023, DHS issued an interim final rule which amended the regulations to authorize ICE to serve bond-related notices to obligors electronically. The rule allowed DHS to electronically serve demand and other immigration bond notices for delivery, order of supervision, or voluntary departure bonds to obligors who consent to electronic service. DHS is now issuing this final rule that introduces no substantive changes from the interim final rule.
The effective date of this final rule is January 6, 2025.
Sharon Hageman, Deputy Assistant Director, Office of Regulatory Affairs and Policy, U.S. Immigration and Customs Enforcement, Department of Homeland Security, 500 12th Street SW, Washington, DC 20536. Telephone 202-732-6960 (this is not a toll-free number).
The Department of Homeland Security (DHS) published an interim final rule (IFR) on August 8, 2023,
The Homeland Security Act of 2002, Public Law 107-296, section 102, 116 Stat. 2135 (Nov. 25, 2002), 6 U.S.C. 112, and the Immigration and Nationality Act of 1952 (INA), as amended, section 103(a)(1), 8 U.S.C. 1103(a)(1), charge the Secretary of DHS (the Secretary) with administration and enforcement of the immigration and naturalization laws. The Secretary promulgates this final rule under the broad authority to administer DHS, and the authorities provided under the Homeland Security Act of 2002, the immigration and nationality laws, and other delegated authority.
Over the past twenty years, Congress and the Executive Branch have promoted the use of electronic transactions and electronic records when feasible instead of relying solely upon in-person or paper transactions.
The Electronic Signatures in Global and National Commerce Act (E-SIGN Act), 15 U.S.C. 7001-7031, effective for most purposes on October 1, 2000, allows electronic records and signatures to be given the same effect as paper and ink documents.
The Secretary is charged with the administration and enforcement of laws relating to the immigration and naturalization of noncitizens and “shall . . . prescribe such forms of bond” as deemed necessary for carrying out the authority under the INA.
With respect to cash bonds, the Secretary delegated to the ICE Director the authority to “issue and execute detainers and warrants of arrest or removal, detain aliens, release aliens on bond and other appropriate conditions as provided by law. . . .”
ICE's mission is to protect America through criminal investigations and enforcing immigration laws to preserve national security and public safety.
Current regulations define personal service as personal delivery; delivery at a person's home or usual residence by leaving a copy with a person of suitable age and discretion; delivery at an attorney's or corporate office by leaving a copy with a person in charge; mailing a copy by certified or registered mail, return receipt requested, addressed to a person at his or her last known address; or notifying the party by electronic mail and posting the decision to the party's account with U.S. Citizenship and Immigration Services (USCIS) if so requested by the party. 8 CFR 103.8(a)(2);
When personal service is not required, the regulations allow routine service to be used.
An immigration bond is a formal written guarantee by an obligor (an individual, entity, or surety company) posted as security for the amount noted on the face of the immigration bond. The bond assures ICE that the obligor will perform the obligations for the type of bond indicated on Form I-352,
An immigration bond may be posted by a surety company or a cash bond obligor.
ICE approves and issues three different types of bonds.
•
•
•
Out of the 20,494 immigration bonds that ICE issued in 2023, 91 percent were delivery bonds, 9 percent were voluntary departure bonds, and fewer than 1 percent were order of supervision bonds.
To trigger an obligor's performance, ICE issues a demand notice, Form I-340,
If the noncitizen performs the conditions set forth in the bond, the bond will be cancelled. 8 CFR 103.6(c). ICE will send a demand notice to notify the obligor to deliver the noncitizen. 8 CFR 103.6(g). If the noncitizen substantially violates the conditions of the bond, the bond will be considered breached. 8 CFR 103.6(e).
Depending on the type of bond and action in accordance with the bond, ICE may issue certain bond notices. The IFR and this final rule currently apply to the following circumstances
1.
2.
3.
4.
In April 2023, ICE launched the Cash Electronic Bonds Online System (CeBONDS), a web-based system that provides the public an automated, secure online capability to verify bond information and post cash immigration bonds for detained noncitizens. CeBONDS also provides the capability for ICE to serve electronic notices to cash bond obligors who consent to receive bond notices electronically. CeBONDS has allowed obligors to initiate and process immigration bonds online without having to visit an ICE office in person, making the process more convenient for the public. Currently, the electronic service capability is being further developed and finalized, and the system has not electronically served bond notices to obligors yet.
On August 8, 2023, DHS published the IFR, which authorized ICE to serve bond-related notices electronically to obligors who consent to electronic delivery of service.
The IFR amended regulations to allow ICE to serve bond-related notices (such as Form I-340, Form I-391, Form 71-042, or Form I-323) electronically to obligors who consent to electronic delivery of service; these notices may pertain to delivery, order of supervision, or voluntary departure immigration bonds, such as bond breach or cancellations, and other immigration bond related notices. 8 CFR 103.6(g)-(h). As discussed in the comment and response sections below in this final rule, DHS has considered the input provided by commenters in response to the IFR. The changes from the IFR amend typographical errors, update terminology for accuracy, and restructure regulatory text for clarity and consistency in 8 CFR 103.6(g) and 8 CFR 103.6(h). This final rule introduces no substantive changes.
In this final rule, DHS is updating the terms “notice” and “notification,” “receipt” to “proof of service,” and “obligor” to “bond obligor.” DHS is updating “notification” to “notice,” to clarify the difference between the two. While the IFR used the terms “notification” and “notice” interchangeably, this final rule provides clarity and differentiation between the terms. “Notification” refers to the email that alerts the obligor to log into the CeBONDS system to view the bond notice. Notifications do not include any substantive or personal information. “Notice” refers to the forms related to bonds that are issued and served by ICE via CeBONDS. Opening the notice in the ICE bond system will constitute proof of service. Similarly, “receipt” is updated to “proof of service” which better describes when an obligor opens a notice in CeBONDS.
DHS received 37 public comments from a variety of persons and entities, including businesses, nonprofits, advocacy organizations, and individual members of the public. DHS reviewed all the public comments received in response to the IFR and addresses those comments in this final rule. Commenters primarily expressed concern about CeBONDS's technical issues, processing times, and potential implications on a noncitizen's liberty. DHS addresses these issues in more detail below. DHS reiterates that receiving bond-related notices electronically is entirely voluntary and ICE will continue to send notices by mail if ICE cannot confirm proof of service.
Several comments are concerned with technical issues related to posting bond payments electronically and concerns on whether the in-person payment option would remain available based on the promulgation of the IFR. The IFR and this final rule authorizes ICE to electronically serve immigration bond notices after a noncitizen has been released from custody following a bond payment by the obligor.
Some commenters requested additional time for the public to comment. DHS reviewed all the timely-filed public comments received in response to the IFR and addressed relevant comments in this final rule, grouped by subject. DHS received several comments on subjects unrelated to electronic bond notices that are outside the scope of the IFR. DHS has not individually responded to these comments but has summarized out of scope comments and provided a general response.
DHS believes the 30-day comment period was sufficient to allow for meaningful public input as evidenced by the 37 timely-filed public comments received. The IFR stated that “[c]omments providing the most assistance to DHS will reference a specific portion of the IFR, explain the reason for any recommended change, and include the data, information, or authority that supports the recommended change.” Commenters generally did not explain in their submissions what additional issues they would raise during a longer comment period or what issues would be deliberated during a public hearing after a longer comment period, but the number of comments—as well as their breadth—reflects an adequate consideration of issues during the comment period. Additionally, commenters primarily focused on the CeBONDS system, its capability and functionality, rather than the actual regulatory amendments on electronic service. In short, there is no indication that the comment period was insufficient.
Notably, the APA does not require a specific comment period length,
Prior to the deployment of CeBONDS in 2023, the Bond Management Information System/Web Version (BMIS Web)
In instances where the obligor fails to open a notice electronically after receiving the notification and the system cannot confirm electronic proof of service, the CeBONDS system will generate a new notice that will be sent via mail as required by the regulations. If the obligor's address (mailing or email) changes after posting a bond, the obligor must promptly update contact information in CeBONDS or submit Form I-333,
As noted in the IFR and in this final rule, an obligor must agree to receive bond related notices electronically.
If the obligor does not wish to post a bond or receive bond notices electronically, the obligor may still post the bond in-person at an ICE office and receive the notice by mail. In these instances, contact the nearest ICE office for guidance.
General service of electronic notifications or notices to the noncitizen is outside the scope of this rule as this rule specifically pertains to electronic service of bond notices to the obligors.
Commenters requested ICE inform the public about how it intends to track notifications and provide the public a meaningful chance to voice its preferences, to ensure related accountability from ICE. Commenters stated the IFR does not specify a timeline when ICE will reissue a bond notification via mail to the CeBONDS users who do not open the notification. Furthermore, the IFR does not state if ICE will take action pending someone's receipt of paper-based notifications. One commenter stated that DHS and ICE should provide clear procedures that ensure notifications to CeBONDS users and confirm receipt of notification prior to engaging in adverse actions towards the obligor and noncitizen. Another commenter suggested adding a checkbox to the confirmation message.
A commenter stated CeBONDS financially impacts obligors, as these events can determine whether ICE will return funds paid as bonds. If an obligor fails to receive timely notification of a breach, their opportunity to appeal the bond breach determination is limited, which may lead to the forfeiting of the bond amount.
If the obligor does not open the notice, a new notice will be sent via mail to the last known address.
To the extent that the commenters express concerns that the information about this timeline was not set forth in detail in the IFR, ICE did not provide a specific timeline for when it will reissue a bond notice via mail because ICE is continuously improving the system and implementing updates to better serve the public needs and improve communication. Therefore, as ICE seeks to implement various updates, this may impact the timeframe when a notice is mailed to the obligor. As technology improves, or related updates are made to CeBONDS, the information on the ICE website will also be updated for stakeholders' awareness. ICE notes, however, that the IFR specified that if ICE could not confirm proof of service of electronic notice, ICE would reissue the notices by an appropriate mailing method. 8 CFR 103.6(g)-(h). Additionally, as stated throughout this rule, if an obligor receives a notice electronically or by mail, and does not understand the content of the notice, the obligor can contact the nearest ICE office for guidance irrespective of how the notice was served.
There is no data to suggest that CeBONDS will result in an increase in bond breaches. DHS believes the use of electronic notices may improve notification delivery time because these specific bond notices cannot be lost through physical mail, and obligors will receive a notification immediately via electronic means. Furthermore, obligors have the option to print or view the notice in CeBONDS at any time. This may reduce the possibility that an obligor will not be able to appeal a bond breach determination in time, because there is less likelihood of potential delays or errors associated with electronic mail service which would otherwise lead to the forfeiting of the bond amount.
There is no data to suggest that CeBONDS will result in an increase in bond breaches. DHS believes the use of electronic service may improve delivery time because these specific bond notices cannot be lost through physical mail, and obligors will receive a notification immediately via electronic means. This benefit is expected to reduce the likelihood that an obligor will be unable to appeal a bond breach determination in time, which would otherwise lead to the forfeiting of the bond amount.
DHS appreciates the concerns raised by the commenters. The IFR and this final rule do not impact an individuals' ability to receive notices traditionally through the U.S. Postal Service, but rather authorizes ICE to issue bond-related notices to obligors electronically should obligors consent to receive them. That said, DHS believes that authorizing this electronic system will improve delivery time, thereby reducing the likelihood that an obligor will be unable to appeal a bond breach determination, which may lead to the forfeiting of the bond amount.
One commenter stated that ICE facilities require travel tickets for detained noncitizens before being released but if the noncitizen is not released on the scheduled day, the obligors would incur additional travel costs with having to travel to the ICE facility again and prolong the noncitizen's detention.
To the extent that the commenter references travel costs associated with the noncitizen's release, this comment pertains to the costs associated with posting a bond. It does not pertain to costs related to implementing this rule for electronic service of bond notices, which are applicable at later stages after the noncitizen has already been released on bond.
The IFR authorized ICE to serve bond-related notices electronically to obligors who consent to receiving those notices electronically. DHS only accounted for the impacts to create an online account and noted that there can be additional technology-related costs for obligors without access to the internet. Obligors who consent to electronic service of notices will receive those notices without charge.
Finally, DHS believes that authorizing electronic service will improve the timely delivery of notices, thereby reducing the likelihood that an obligor will be unable to appeal a bond breach determination, which may lead to the forfeiting of the bond amount.
For obligors who consent to electronic notifications, they will receive an alert to log into their CeBONDS account. No personal information is included in the notification, but it simply alerts the obligor to log into CeBONDS. Electronic notices are served to only obligors who consent to receive those notifications. As discussed in Section II., G.
If the obligor does not open the notice, then DHS cannot confirm proof of service of the notice. Therefore, a new notice will be sent via mail to the last known address.
Given the narrow regulatory framework for this rule and the safeguards in place, DHS does not believe that the rule pertaining to an alternate method of service would create any adverse impact on families. There is no data indicating that there is a correlation between adding another method of service and any negative effects to families. DHS is making no changes to its assessment of the impact of the regulation on families in this final rule.
DHS designed CeBONDS to alleviate various burdens on the public such as posting bonds at an ICE facility, provide bond information in real time, increase record keeping and tracking, and expediate delivery of immigration bond notices. CeBONDS serves as an additional alternative method for conducting transactions electronically to better serve the needs of obligors who face accessibility barriers and resource constraints and does not replace the current existing process for posting bonds and receiving notices.
The Coronavirus disease (COVID-19) pandemic prompted a shift in certain ICE business processes and highlighted the need to develop online capabilities to mitigate the risks associated with person-to-person contact, especially for those with vulnerable health risks. CeBONDS provides the public with the online capability to make requests for bond information, update contact information, upload necessary documents to verify eligibility to post the bond, post cash immigration bonds electronically for eligible detained noncitizens, and receive bond notices electronically.
Obligors who are concerned with accessibility or other factors continue to have the option to post bonds in-person and receive notices by mail. As elaborated in the sections below, DHS includes additional options and alternatives for those with limited means and accessibility. Any obligor who has a question about posting a bond in person can contact the nearest ICE office for guidance. ICE will continue to work with obligors who want to pay bonds at an ICE office and provide obligors assistance in-person. ICE offices have access to an ICE-wide 24/7 language services contract for interpretation (oral), translation (written), and transcription (audio to text).
Moreover, DHS has Department-wide policy directives to ensure nondiscrimination for individuals with disabilities served by DHS-conducted programs and activities. Consistent with the requirements of the Rehabilitation Act of 1973 and Department of Homeland Security Directives, CeBONDS was designed to be section 508 compliant. If the format of any material on its website or system interferes with an individual's ability to access the information due to an issue with accessibility caused by a disability as defined in the Rehabilitation Act, the user can contact the ICE Section 508 Coordinator for assistance.
Commenters stated the failure to provide translation into the languages of greatest frequency violates DHS's obligations to provide equal access to speakers of other languages and suggests DHS increase accessibility. Another commenter urged DHS to include a requirement that DHS examine the feasibility of translating the website into languages of greatest frequency and ensure that a mechanism exists for people with limited English proficiency to pay bonds in person.
Currently the CeBONDS landing page is available in English and Spanish.
DHS is striving to improve CeBONDS' accessibility for those with language barriers and limited resources by providing an alternative language on its website, instructions to select their preferred language through their web browser, and equipping the offices with language access programs to communicate with obligors.
Although not all ICE forms are translated into languages most frequently used,
Commenters stated the lack of payment options impedes equal access to pay bonds and creates a two-tiered system: obligors with financial resources who can post bonds quickly and obligors without resources that will experience delays, denials, and confusion. Another commenter stated the coronavirus pandemic highlighted the inequalities and differences in access to things society otherwise deemed ubiquitous, such as the internet and bank accounts.
Another commenter asserted that CeBONDS has associated higher fees than paying a bond with a money order.
Commenters stated their confusion in learning the components of bank wiring systems and routing numbers. To post bonds, obligors can use either Fedwire, a system for the electronic transfer of funds operated by the Federal Reserve Bank; or the Automated Clearing House (ACH), an electronic network of banks that allows the transfer of money from one account to the other.
Another commenter suggested CeBONDS accept other payment methods that do not require a bank account.
ICE will continue to work with obligors who walk into an ICE office to post bonds. Obligors who post bonds at an ICE office are not required to have access to banking services in order to post bonds on behalf of noncitizens. While cash is not accepted at an ICE office, obligors can post bonds using a cashier's check or money order which can be acquired without a bank account. Furthermore, money orders can be purchased in places other than financial entities. Nevertheless, this rule does not impact or change the current method of payment, process of payment, or acceptable forms of payment. This rule focuses on electronic service of bond notices to consenting obligors.
Obligors who prefer to post a bond using CeBONDS have the option to use either Fedwire or an ACH to post an immigration bond, both of which charge for the use of service, with fees ranging from $0.20 to $1.50 per transaction.
Obligors without access to banking services may use an immigration bond company to post a bond or work with community-based organizations across the country that assist with immigration bonds.
A commenter stated obligors with limited financial resources may rely on public libraries for computer and internet access to use CeBONDS. Another commenter indicated the struggles of the U.S. public library system and the movement to increase reliance on technology when technological access facilitated through public libraries is decreasing across the country is terribly timed.
One commenter requested clarification if the bond documents are electronic, how will obligors receive those notifications and documents without these resources? Commenters suggested DHS ensure bond payments be completed in person and require ICE to accept in-person payments.
DHS assessed the impacts to the affected populations, and considered whether bond obligors would face technology costs to utilize these services. There are a variety of means by which obligors can access internet services to receive electronic notifications, including the use of smart phones, personal computers, or community services that can provide those services. The cost of these are either low or no-cost, such as the use of libraries or free Wi-Fi services which are
The use of electronic service is voluntary. If the obligor does not open the notice in CeBONDS, a new notice will be sent via certified mail for demand notices and via ordinary mail for any other bond-related notice pertaining to this rule ICE does not expect this rule to prevent any obligors from paying immigration bonds.
Another commenter asserted that ICE developed a one-size-fits-all approach to an issue that should be tailored to the needs of those who pay (often thousands of dollars) to secure the liberty of those detained.
Some commenters described the impact of prolonged detention on the noncitizen's mental health, finances, and families without providing data. A commenter stated that noncitizens are losing large periods of their lives being detained in prison which makes it harder for the noncitizen to reintegrate into society. The commenter wrote that incarcerated individuals experience trauma from the prison system, other inmates, and the correctional officers, due to incredibly inhumane treatment.
Bond-related notices applicable to this rule are issued to the obligor months or years after the bond was posted and when the noncitizen is not in custody. Any correlation between the posting of bonds via CeBONDS and release dates, if applicable, is expected to be de minimis. Bond-related notices to which this rule applies are issued to obligors after the bond has been accepted by ICE and the noncitizen is not in custody. When the obligor starts the process of posting a bond, there has already been a custody determination. ICE will review the bond to confirm the bond matches the custody determination and verify nothing prevents the bond from being posted. Additionally, ICE must verify the funds have been transferred to ICE for the bond amount. The process to notify the detention facility after a bond is approved is the same for all bond posting methods (in-person, eBONDS, CeBONDS) and is not the type of notice that is encompassed under the regulations at 8 CFR 103.6(g)-(h).
If the obligor does not open the notice, a new notice will be sent via mail to the obligor's last known address.
CeBONDS is updated with information in real time during the bond posting process. Since CeBONDS was deployed, about 10,537 bonds have posted. Of those posted bonds, less than 1 percent, or 680 posted bonds, had release dates of 2 or more days after a bond was posted. More than 99 percent, or more than 9,850 posted bonds, had release dates within 2 days. Based on this information, there is little evidence that the use of CeBONDS results in “days or weeks” of delay. DHS will continue to make improvements to CeBONDS and other sites to decrease technical issues experienced.
DHS believes that the use of electronic notices could potentially improve notification delivery time because these specific bond notices cannot be lost through physical mail and service via electronic means is instantly effectuated. As described in Section II.G.,
Commenters expressed that obligors may not understand whether there is an option to pay in person and urge DHS and ICE to clarify, publicize, and enforce this option. Commenters stated that CeBONDS was deployed without notice or guidance to the public or proper training to ICE staff which has caused a multitude of problems. Commenters stated that detention centers are operating under arbitrary
Commenters stated that ICE employees are unfamiliar with the CeBONDS and unable to answer routine questions or provide crucial information such as where the bond request is being handled. One commenter stated ICE explained that bond requests were handled out of state, making it more difficult to obtain contact information, and suggested the commenter to wait until the next day, delaying release. Commenters stated the need to make several phone calls or emails to reach an ICE employee who was able to answer any bond-related questions.
Commenters requested all public facing materials and web content provide consistent guidance, explicitly state what factors are considered when determining if bonds can be paid in person, and allow obligors the option to pay bonds in person at ICE facilities.
Prior to the deployment and implementation of CeBONDS, all ICE staff at ICE offices processing bonds were provided training on the system.
CeBONDS provides an online capability for bond obligors to request bond information and post cash immigration bonds for detained noncitizens determined by the IJ or ICE to be eligible for release on bond. The process and procedures ICE officials utilize to verify an obligor's eligibility to post a bond, to approve the bond and payment, and to release the noncitizen from ICE custody are the same for bonds posted in CeBONDS, eBONDS, and walking into an ICE office.
The ICE website provides a video tutorial on using CeBONDS, a section on frequently asked questions, and categorically lists acceptable documents applicable to the obligor.
As listed on the ICE website, an obligor must provide at least one (1) document to ICE from the applicable category below.
ICE continues to allow obligors to post a bond in person at the appropriate ICE office. ICE will continue to work with obligors who want to pay bonds in person at an ICE office. DHS continues to work to improve the system and the process but makes no changes to the rule in response to these comments.
Commenters stated CeBONDS does not contain accurate, up-to-date information. One commenter experienced a delay for several days between Executive Office for Immigration Review (EOIR), a sub-agency of the DOJ, setting a bond and information being properly entered into CeBONDS. Failures by the CeBONDS system to contain accurate, up-to-date information has frustrated sponsors attempting to pay bonds for bond-eligible noncitizens who provided the necessary documentation, leading to the noncitizens' prolonged detention. Another commenter stated after uploading documents to CeBONDS, the commenter needed to provide additional copies because the ICE employee was unable to locate the documents in CeBONDS. Commenters stated CeBONDS lacks a real-time way to solve problems that forces obligors to engage with ICE agents for help, and request status updates and information. Other commenters experienced slow email responses from the general Helpdesk and slow response times from local ICE offices processing bonds. Other commenters stated the ICE Information Technology (IT) support staff are unable to respond or provide timely remedies for detained noncitizens.
Commenters stated CeBONDS is difficult and confusing to navigate regardless of English proficiency. Commenters stated that CeBONDS increases the complexity of paying bonds and using the system should not require obligors to be technologically savvy.
DHS has made various system updates to CeBONDS to improve functionality. Since CeBONDS deployed in April 2023, the system has not experienced any unscheduled system-wide outages, crashes, or failures. Furthermore, the number of customer-reported issues or incidents has substantially decreased. Comparably, from April to June 2023, there were 783 customer reported issues or incidents. That number was reduced by 62 percent or 487 reported issues or incidents from October to December of the same year.
CeBONDS does not contain information from EOIR. Once a request to post bond is received either via CeBONDS or in-person at an ICE office, the process for validating all the bond information is the same and is performed by an ICE official. An obligor can utilize the CeBONDS system's comment section to communicate (send comments or upload documents) in real time with ICE officials throughout the bond process.
CeBONDS payments are made via Fedwire or ACH. Depending on the time of day the payment is made, Fedwire payments are settled the same day and ACH payments typically settle 1 to 2 business days after they have been initiated. After the payment has been completed between the financial institutions, ICE can verify the payment. Next, the obligor will upload the payment receipt and bond contract and submit these documents. Thereafter, the obligor will receive correspondence via email and in their CeBONDS account that their request is under ICE review. Once the review and payment are confirmed, the obligor will receive an email and their CeBONDS account will reflect that the bond has been approved. When the noncitizen is released from custody, the obligor will receive correspondence via email and in their CeBONDS account that the noncitizen has been released from custody. At each step in the bond posting process, the actions from ICE and the obligor are both tracked in CeBONDS.
The system does not require anyone to be technologically savvy. ICE has provided a tutorial along with frequently asked questions on the
Another commenter stated that bond notices delivered by mail increases the assurance of noncitizens and obligors receive and sign all notices. Without evidence, the commenter stated paying bonds in-person can reduce the likelihood of fraud and increase noncitizens presence for court hearings.
Another commenter stated paying bonds in person facilitates an efficient process and alleviates stressful situations for noncitizens and obligors when dealing with immigration detention. The commenter continued that if ICE intended this electronic system provide organizations with a more convenient way to pay bonds, then it should honor its intention and maintain the option of in-person payments. This will ensure that the bond payment system is truly responsive to the needs of the community it serves and does not create unnecessary barriers for those grappling with challenging circumstances.
One commenter suggested that in-person bond payment would increase ICE funds because CeBONDS is too difficult to understand, and obligors do not have bank accounts or computers.
Commenters stated the IFR does not intend to refuse obligors from posting bonds in-person. However, commenters asserted this contradicts the practice at ICE facilities and information on the ICE website.
Commenters stated that ICE's informational web page fails to inform the public when ICE may accept an in-person bond payment. Commenters expressed that obligors may not know or understand if there is an option to pay in person and urges DHS and ICE to clarify, publicize, and enforce this option.
To assure the notice is opened by the obligor, CeBONDS will track the timestamp when the notice is viewed in the system. Viewing of the notice in the system constitutes when the obligor is served with the notice. At each step of this process, CeBONDS tracks the actions taken in the system and the actions of the obligor. Furthermore, the notice in CeBONDS is available to the obligor anytime the obligor logs into the system.
If the obligor does not open the notice, a new notice will be sent via ordinary or certified mail (depending on the notice) to the last known address.
The requirements of the obligor are not dependent on how the obligor posts bond (in-person or electronically). Therefore, obligors who post a bond as security for performance and fulfillment of the bonded noncitizen's obligations to the government are not impacted. The obligor still must comply with the requirements in the contract with ICE.
Regarding the comment about ICE funds increasing with in-person payment, there is no data to support this statement, and is irrelevant because the option of in-person payment is not removed by this rule. If electronic payment is unattainable, obligors can continue to use the in-person system.
Obligors can still pay bonds in person. The intent of the IFR and this final rule are to improve the service delivery of bond notices to obligors. It does not impact an individual's ability to pay in person. The rule authorizes ICE to serve bond-related notices to obligors who opt-in to receive those notices electronically.
From April 2023 to January 2024, 7,424 obligors paid bonds using CeBONDS or in-person. Forty percent of obligors (3,021) used CeBONDS and 60 percent (4,400) paid bonds in-person at an ICE facility. This highlights that the ability to pay in person remains an option. Any obligor who has a question about posting a bond in person can contact the nearest ICE office for guidance.
DHS developed this final rule after considering numerous statutes and executive orders related to rulemaking. The below sections summarize the analyses based on a number of these statutes or executive orders.
The Department has forgone the Administrative Procedure Act's (“APA”) delayed-effective-date procedure in implementing this rule because the APA's requirement for a 30-day delayed effective date applies to substantive rules,
Even if the 30-day delayed-effective-date requirement did apply, the Department would find good cause to make this rule effective sooner. 5 U.S.C. 553(d)(3). The IFR is already in effect and the changes in the final rule are merely clarifying or technical. None of the amendments implicate the justifications for the 30-day waiting period. The purpose of the waiting period is “to give affected parties time to adjust their behavior before the final rule takes effect.”
Executive Order 12866,
This final rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094. Accordingly, the rule has not been reviewed by the Office of Management and Budget.
DHS estimates the effects of the final rule relative to a baseline condition without the 2023 IFR.
As part of its mission to enforce U.S. immigration laws, ICE currently issues a wide range of notices, decisions, and other documents to entities such as, but not limited to, universities, businesses, noncitizens, courts, and employees. Prior to the IFR, the rules on service limited ICE to serving documents in person or by certified, registered, or regular mail. However, serving documents in this manner can take more time and be more costly compared to electronic methods of service. The final rule confirms the IFR in authorizing ICE to serve electronic bond-related notices and notifications to obligors who enroll in CeBONDS and eBONDS.
Currently, ICE uses certified mail for the service of demand notices issued on delivery bonds so that ICE can confirm the date upon which an obligor receives the demand notice. Since 2010, ICE has employed eBONDS, which is a web-based system used primarily by surety agents and ICE to facilitate the ICE immigration bond management process. This system was implemented to allow surety agents the option to post surety bonds electronically for noncitizens determined by ICE to be eligible for release on bond. Additionally, eBONDS was built with functionality that included the ability to serve electronic bond-related notifications to surety companies and their agents within eBONDS for those companies who opted-in to electronic service, but due to the regulatory requirements under 8 CFR 103.8(a)(1) and 103.8(a)(2) for personal and routine service (pre-IFR), that capability has not been implemented in eBONDS.
ICE estimates the economic effects of this final rule will be sustained indefinitely. ICE assumes a 10-year timeframe to outline, quantify, and monetize the costs and benefits of the rule, and to demonstrate its net effects. DHS expresses quantified impacts in 2023 dollars and uses discount rates of 3 and 7 percent, pursuant to Circular A-4.
With regard to bond-related notifications, ICE derived quantitative estimates of the costs that will be saved in ICE's operations, attributable to ICE serving the notifications electronically rather than through a non-electronic method. In order to calculate these estimates, this analysis assumes that full use of eBONDS and CeBONDS will entail that current obligors adopt electronic notifications as they become familiar with the changes presented in this final rule. Based on input from ICE subject matter experts, this analysis also assumes that all current bond obligors will adopt these services within the first year of publishing this rule to realize the benefits of electronic bond-related notifications and will elect to use these services sooner rather than later. While the analysis assumes that all bond obligors will utilize these systems, full adoption may ultimately depend on several factors, such as obligors being made aware of these changes, understanding the benefits of these provisions, and possessing the means to access the internet.
The final rule affects ICE officers and all bond obligors who post immigration bonds online using CeBONDS or eBONDS. Once ICE has the ability to serve electronic notifications to bond obligors, ICE will begin to serve all bond-related notices electronically to any obligor who chooses to post a bond electronically.
To account for these populations, ICE utilized its Bond Management Information System (BMIS) to collect and analyze data on surety companies and their agents that post bonds and data on individual obligors who post cash bonds. Using this information, ICE found that an average of 41,820 cash bonds were posted annually by obligors between fiscal years (FYs) 2018 and 2020. Additionally, ICE found that between FYs 2018 and 2020, a total of 15 agents and 11 surety companies posted ICE immigration bonds on behalf of surety bond obligors. Combined, these representatives posted bonds for an average 8,190 obligors. Table 2 displays this information below by fiscal year and category of bonds.
This section details the regulatory baseline for this final rule. The table below provides a summary of the anticipated changes to baseline conditions due to this final rule.
Currently, ICE uses routine service as defined by 8 CFR 103.8(a)(1) to serve breach notices, cancellation notices, and notices of bond breach reconsideration decisions. ICE performs the routine service by sending ordinary mail to the obligor's last known address. ICE also uses routine service to serve invoices and demand letters to surety companies and their agents, sending them either by ordinary mail, an alternative mailing method that allows ICE to track and confirm delivery, or email (with the co-obligors' consent).
Additionally, ICE uses personal service as defined by 8 CFR 103.8(a)(2)
To establish a baseline analysis for all bond-related notices, ICE calculated the average number of notices served by mail per year, of each type of immigration bond, based on data from fiscal year 2018 to 2020 (Table 4). ICE found the average number of all types of notices per year to be 45,358.
ICE anticipates that, in the absence of this rulemaking, the agency would continue to serve all bond-related notices using personal or routine service, at a cost to both the federal government and the recipients. ICE would still be required to process and serve notices manually, and bond obligors would continue to receive physical notifications via an authorized form of paper-based service.
This alternative electronic method of ICE's process for serving bond notices will introduce familiarization, technology, and opportunity costs to the affected populations.
In addition to those being directly regulated by the rule, a wide variety of other entities will likely choose to read the rule and incur familiarization costs. For example, surety companies and noncitizens may want to become familiar with the provisions of this rule. At approximately 18,250 words, ICE estimates the time to read the final rule is approximately 61 to 73 minutes per person, resulting in opportunity costs of time. Congruent with other DHS impact analyses, ICE assumes the average professional reads technical documents at a rate of 250 to 300 words per minute.
While the analysis assumes all bond obligors will utilize these systems, there are many factors which may impact the adoption of CeBONDS, such as awareness of the system and internet access. Given this, ICE provides an estimate for the number of people that will familiarize themselves with this rule based on expected users. To estimate this population, ICE utilized counts of bond obligors
Lastly, in order to determine the cost of new obligors entering the pool and creating new accounts over the time horizon, ICE utilized prior cash bond obligor population data from fiscal years 2018 to 2020 to project that an average of 41,820 new cash bond obligors will create accounts each year. This will equate to a total cost to the public of $3,086,316 over 10 years.
ICE also identified additional unquantified costs that will result from this final rule.
Table 5 summarizes the quantified impact of this final rule. The total monetized costs of the rule do not include the development and annual maintenance costs required to operate the CeBONDS system given that they are not tied to this this final rule, as discussed above. The 10-year costs of the final rule are approximately $4.63 million and $4.09 million (in 2023 dollars) at 3 and 7 percent discount rates, respectively, and include the opportunity costs of familiarization and setting up an online account.
This alternative method of ICE's process for serving bond-related notices and issuing electronic bond-related notifications is expected to reduce labor costs for the government by reducing the time needed to process these notices, and it will eventually significantly reduce, if not eliminate, the costs of material items such as postage and paper that would otherwise be incurred for notices that are physically mailed. As mentioned above, ICE calculates quantitative benefits based on the assumption that new obligors are incentivized toward adoption into the eBONDS and CeBONDS systems within the first year of publishing this final rule.
Table 7 summarizes the quantified cost savings of this final rule. The total monetized savings of the rule includes the average cost savings for ICE of replacing physically mailed notices (by certified, registered, or regular mail) with electronic bond-related notices in the CeBONDS system, as well as emailed notifications. In order to capture these cost savings over the time horizon of the analysis, ICE assumed a
This alternative method of ICE's process, serving bond-related notices electronically and issuing electronic bond-related notifications, is expected to increase efficiency, accessibility, expedited delivery, and reliability of bond notices to the obligor. These benefits are described in more detail below.
ICE also intends to expedite delivery of notifications. For example, when an obligor chooses to post a bond online and receive bond-related notifications electronically, the system is designed to notify the obligor immediately by email when a notice has been issued. ICE, in turn, will also be able to confirm immediately the date that the cash bond obligor opens and views the notice. In this way, recipients can receive notifications without being present at their physical mailing address as long as they have access to the internet.
Before proposing service of electronic bond-related notifications, ICE evaluated one alternative option that would affect the entities subject to the rule requirements, namely the no action alternative. The details of this option are described below, and Table 8 presents the unquantified costs and benefits for this alternative.
ICE considered a “no action” alternative under which ICE would continue to serve bond-related notices to obligors for immigration bonds using personal or routine service, at a cost to both the federal government and the recipients.
The opportunity costs associated with electing a “no action” alternative would be equivalent to the current average cost to ICE of sending physical notices by certified or first-class mail, which ICE estimated to be $573,470 per year. ICE would still be required to process and mail notices by hand, and bond obligors would continue to receive physical notifications. This alternative also means that ICE would not be acting in alignment with government-wide efforts to shift agencies' business processes and recordkeeping to a fully electronic environment as encouraged by statutes like the Government Paperwork Elimination Act,
The cost savings and benefits associated with this action involve the development, familiarization, technology, and opportunity costs associated with implementing this final rule. Absent the requirement to use the CeBONDS system, bond obligors would not face the potential costs associated with learning about the final rule, acquiring the necessary technological means to access the internet, or the expended time in creating an eBONDS or CeBONDS account.
Additionally, any preference by obligors either to maintain physical records or to receive nonelectronic mail notices has already been considered in the development of final rule. As part of the process of deciding to post a bond electronically with ICE, the obligor will be informed that bond notices will be served electronically, and the obligor must agree to receive them electronically as well as bond-related electronic notifications. If the obligor does not wish to post a bond electronically or receive bond notices and notifications electronically, the obligor may post the bond in person at an ICE office and receive notices and other bond-related information via another form of authorized paper-based service.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. However, a regulatory flexibility analysis is not required when a rule is exempt from notice-and-comment rulemaking; therefore, since this action is exempt under the APA, it is not subject to the regulatory flexibility analysis requirements.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, DHS wants to assist small entities in understanding this final rule so that they can better evaluate the effects on them and participate in the rulemaking. If the final rule would affect your small business, organization, or governmental jurisdiction, and you have questions concerning the provisions or options for compliance; please consult ICE using the contact information provided in the
This final rule is not a major rule as defined by 5 U.S.C. 804, also known as the “Congressional Review Act,” as enacted in section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, 110 Stat. 847, 868
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 Unfunded Mandates Reform 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 year. Though this final rule would not result in such an expenditure, DHS does discuss the effects of this rule elsewhere in this preamble.
All Departments are required to submit to OMB for review and approval any reporting or recordkeeping requirements inherent in a rule under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, 109 Stat. 163 (codified at 44 U.S.C. 3501
With respect to immigration bonds, regardless of using either eBONDS or CeBONDS, there would be no changes to the reporting burden for the existing collection of information associated with Form I-352,
A rule has implications for federalism under Executive Order 13132,
This final rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988,
DHS analyzed this final rule under Executive Order 13211,
The U.S. Department of Homeland Security Management Directive (MD) 023-01, Rev. 01 establishes procedures that DHS and its Components use to comply with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321-4375, and the Council on Environmental Quality (CEQ) regulations for implementing NEPA, 40 CFR parts 1500-1508.
CEQ regulations allow federal agencies to establish categories of actions, which do not individually or cumulatively have a significant effect on the human environment and, therefore, do not require an Environmental Assessment or Environmental Impact Statement. 40 CFR 1508.4. The DHS Categorical Exclusions are listed in IM 023-01-001-01 Rev. 01, Appendix A, Table 1.
For an action to be categorically excluded, MD 023-01 requires the action to satisfy each of the following three conditions:
(1) The entire action clearly fits within one or more of the Categorical Exclusions;
(2) The action is not a piece of a larger action; and
(3) No extraordinary circumstances exist that create the potential for a significant environmental effect. IM 023-01-001-01 Rev. 01 § V(B)(2)(a)-(c). If the action does not clearly meet all three conditions, DHS or the Component prepares an Environmental Assessment or Environmental Impact Statement, according to CEQ requirements, MD 023-01, and IM 023-01-001-01 Rev. 01.
ICE has analyzed this rule under MD 023-01 Rev. 01 and IM 023-01-001-01 Rev.01. ICE has made the determination that this rulemaking action is one of a category of actions, which does not individually or cumulatively have a significant effect on the human environment. This final rule clearly fits within the Categorical Exclusion found in IM 023-01-001-01 Rev. 01, Appendix A, Table 1, number A3(d): “Promulgation of rules . . . that interpret or amend an existing regulation without changing its environmental effect.” This final rule is not part of a larger action. This final rule presents no extraordinary circumstances creating the potential for significant environmental effects. Therefore, this final rule is categorically excluded from further NEPA review.
This final rule does not have tribal implications under Executive Order 13175,
This final rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630,
Executive Order 13045 requires agencies to consider the impacts of environmental health risk or safety risk that may disproportionately affect children. DHS has reviewed this final rule and determined that this final rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children. Therefore, DHS has not prepared a statement under this executive order.
The National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impracticable. Voluntary consensus standards are technical standards (
DHS has determined that this final rule action will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681).
Administrative practice and procedures, Authority delegations (government agencies), Fees, Freedom of Information, Immigration, Privacy, Reporting and recordkeeping requirements, Surety bonds.
Accordingly, DHS amends chapter I of title 8 of the Code of Federal Regulations as follows:
5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304, 1356, 1356b, 1372; 31 U.S.C. 9701; Pub. L. 107-296, 116 Stat. 2135 (6 U.S.C. 101
(g)
(h)
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace at Redfield, SD. This action due to the development of new public instrument procedures and to support instrument flight rule (IFR) operations.
Effective 0901 UTC, April 17, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
A copy of the Notice of Proposed Rulemaking (NPRM), all comments received, this final rule, and all background material may be viewed online at
FAA Order JO 7400.11J, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E airspace extending upward from 700 feet above the surface at Redfield Municipal Airport, Redfield, SD, to support IFR operations at this airport.
The FAA published an NPRM for Docket No. FAA-2023-2222 in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11J, dated July 31, 2024, and effective September 15, 2024. FAA Order JO 7400.11J is publicly available as listed in the
FAA Order JO 7400.11J lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
This amendment to 14 CFR part 71 establishes Class E airspace extending upward from 700 feet above the surface to within a 6.3-mile radius of Redfield Municipal Airport, Redfield, SD.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Redfield Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace at Ashley, ND. This action is due to the development of new public instrument procedures at Ashley Municipal Airport, Ashley, ND, and to support instrument flight rule (IFR) operations.
Effective 0901 UTC, April 17, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
A copy of the Notice of Proposed Rulemaking (NPRM), all comments received, this final rule, and all background material may be viewed online at
FAA Order JO 7400.11J, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E airspace extending upward from 700 feet above the surface at Ashley Municipal Airport, Ashley, ND, to support IFR operations at this airport.
The FAA published an NPRM for Docket No. FAA-2024-1710 in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11J, dated July 31, 2024, and effective September 15, 2024. FAA Order JO 7400.11J is publicly available as listed in the
FAA Order JO 7400.11J lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
This amendment to 14 CFR part 71 establishes Class E airspace extending upward from 700 feet above the surface to within a 7.2-mile radius of Ashley Municipal Airport, Ashley, ND.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 7.2-mile radius of Ashley Municipal Airport.
Bureau of Industry and Security, Department of Commerce.
Final rule.
In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 13 entities under 13 entries to the Entity List. These entries are listed on the Entity List under the destinations of Burma (1), China, People's Republic of (China) (11), and Pakistan (1). These entities have been determined by the U.S. Government to be acting contrary to the national security and/or foreign policy interests of the United States. This rule also amends the EAR by making certain editorial corrections and clarifications. BIS is making the corrections and clarifications in order to minimize confusion and not impede the free flow of commerce.
This rule is effective January 6, 2025.
Chair, End-User Review Committee, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email:
The Entity List (supplement no. 4 to part 744 of the EAR (15 CFR parts 730-774)) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States, pursuant to § 744.11(b) of the EAR. The EAR impose additional license requirements on and limit the availability of most license exceptions for exports, reexports, and transfers (in-country) when a listed entity is a party to the transaction. The license review policy for each listed entity is identified in the “License Review Policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant
The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and makes all decisions to remove or modify an entry by unanimous vote.
The ERC determined to add Telecom International Myanmar Company Limited, under the destination of Burma, to the Entity List. This addition is based on actions and activities that are contrary to the national security and foreign policy interests of the United States under § 744.11 of the EAR. Specifically, this entity is being added for providing surveillance services and financial support to Burma's military regime, enabling the regime to carry out human rights abuses through the tracking and identification of target individuals and groups. A license is required for the export, reexport and transfer (in-country) of all items subject to the EAR to this entity and license applications will be reviewed under a presumption of denial.
The ERC has determined to add Chengdu RML Technology Co., Ltd.; Chengdu Yaguang Electronics Co., Ltd.; Hefei Starwave Communication Technology Co., Ltd.; and Yaguang Technology Group Co., Ltd., all under the destination of China, to the Entity List. These entities are added for acquiring and attempting to acquire U.S.-origin items in support of China's military modernization. Specifically, Chengdu RML Technology Co., Ltd. has supplied the People's Liberation Army (PLA) with precision-guided missiles and satellite communication systems. Chengdu Yaguang Electronics Co., Ltd. and its parent company, Yaguang Technology Group Co., Ltd., have supplied the PLA and multiple Chinese parties on the Entity List with dual-use electronic components. Lastly, Hefei Starwave Communication Technology Co., Ltd. has supplied radio frequency/microwave products explicitly for military equipment application to the PLA and Chinese parties on the Entity List. These activities are contrary to the national security and foreign policy interests of the United States under § 744.11 of the EAR. These entities are added with a license requirement for the export, reexport and transfer (in-country) of all items subject to the EAR and a license review policy of a presumption of denial.
The ERC determined to add the following seven entities, all under the destination of China, to the Entity List: Chinese Academy of Sciences Changchun Institute of Optics, Fine Mechanics, and Physics; Ji Hua Laboratory; Nanjing Simite Optical Instruments Co., Ltd.; Peng Cheng Laboratory; Shanghai Institute of Optics and Fine Mechanics; Suzhou Ultranano Precision Optoelectronics Technology Co., Ltd.; and Wuhu Kewei Zhaofu Electronics Co., Ltd. These entities are being added for acquiring and attempting to acquire U.S.-origin items in support of China's military modernization. In addition, these entities have demonstrable ties to activities of concern, including hypersonic weapons development, design and modeling of vehicles in hypersonic flight, using proprietary software to model weapons design and damage; and otherwise supporting
Finally, the ERC determined to add Emerging Future Solutions Private Limited, under the destination of Pakistan, to the Entity List. This addition is made as a result of the entity's contributions to Pakistan's ballistic missile program. This activity is contrary to U.S. national security and foreign policy interests under § 744.11 of the EAR. This entity is added with a license requirement for the export, reexport and transfer (in-country) of all items subject to the EAR and a license application review policy of a presumption of denial.
For the reasons described above, this final rule adds the following 13 entities under 13 entries to the Entity List and includes, where appropriate, aliases:
• Telecom International Myanmar Company Limited
• Chengdu RML Technology Co., Ltd.,
• Chengdu Yaguang Electronics Co., Ltd.,
• Chinese Academy of Sciences Changchun Institute of Optics, Fine Mechanics, and Physics,
• Hefei Starwave Communication Technology Co., Ltd.,
• Ji Hua Laboratory,
• Nanjing Simite Optical Instruments Co., Ltd.,
• Peng Cheng Laboratory,
• Shanghai Institute of Optics and Fine Mechanics,
• Suzhou Ultranano Precision Optoelectronics Technology Co., Ltd.,
• Wuhu Kewei Zhaofu Electronics Co., Ltd.,
• Yaguang Technology Group Co., Ltd.
• Emerging Future Solutions Private Limited.
This final rule also corrects one spelling error and two punctuation errors in the addresses listed for the entry of Shenzhen Guowei Sensing Technology Co., Ltd. This entity was originally added to the Entity List on December 2, 2024, in a final rule published on December 5, 2024 (89 FR 96830).
For the changes being made in this final rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on January 6, 2025, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) before February 5, 2025. Any such items not actually exported, reexported, or transferred (in-country) before midnight, on February 5, 2025, require a license in accordance with this final rule.
On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. In particular, section 1753 of ECRA (50 U.S.C. 4812) authorizes the regulation of exports, reexports, and transfers (in-country) of items subject to U.S. jurisdiction. Further, section 1754(a)(1)-(16) of ECRA (50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, establishing and maintaining a list of foreign persons and end uses that are determined to be a threat to the national security and foreign policy of the United States pursuant to the policy set forth in section 1752(2)(A), and restricting exports, reexports, and in-country transfers of any controlled items to any foreign person or end-use so listed; apprising the public of changes in policy, regulations, and procedures; and any other action necessary to carry out ECRA that is not otherwise prohibited by law. Pursuant to section 1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a final rule without prior notice and comment.
1. This rule has been determined to be not significant for purposes of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.
4. Pursuant to section 1762 of the Export Control Reform Act of 2018, this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. While section 1762 of ECRA provides sufficient authority for such an exemption, this action is also independently exempt from these APA requirements because it involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)).
5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601,
Exports, Reporting and recordkeeping requirements, Terrorism.
Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:
50 U.S.C. 4801-4852; 50 U.S.C. 4601
The additions and revision read as follows:
Food and Drug Administration, HHS.
Availability of draft guidance.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Considerations for Complying With 21 CFR 211.110.” This guidance, when finalized, will describe considerations for complying with the requirements for ensuring batch uniformity and drug product integrity. In addition, this guidance discusses related quality considerations for drug products that are manufactured using advanced manufacturing. FDA is committed to supporting and enabling pharmaceutical innovation and modernization as part of the Agency's mission to protect and promote the public health. FDA encourages industry representatives and manufactures who are interested in using innovative control strategies to contact the Agency.
Submit either electronic or written comments on the draft guidance by April 7, 2025 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of this draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002; or Policy and Regulations Staff, HFV-6, Center for Veterinary Medicine, Food and Drug Administration, 7500 Standish Place, Rockville, MD 20855. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Brittany Avaritt, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 75, Rm. 6649, Silver Spring, MD 20993-0002, 240-402-5982; James Myers, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bld. 71, Rm. 7301, Silver Spring, MD 20993-002, 240-402-7911; or Kevin Rice, Center for Veterinary Medicine, Food and Drug Administration, 7500 Standish Place, Rockville, MD 20855, 240-402-0680.
FDA is announcing the availability of a draft guidance for industry entitled “Considerations for Complying with 21 CFR 211.110.” This guidance, when finalized, will describe considerations for complying with the requirements in § 211.110 (21 CFR 211.110) to ensure batch uniformity and drug product integrity. In addition, this guidance discusses related quality considerations for drug products that are manufactured using advanced manufacturing. It also discusses how manufacturers can incorporate process models into commercial manufacturing control strategies. This guidance applies to the manufacture of human drug products, including biological products, and animal drug products. This guidance does not apply to the manufacture of active ingredients.
To ensure batch uniformity and drug product integrity, the current good manufacturing practice (CGMP) regulations
All manufacturers, regardless of whether they are using advanced manufacturing, should apply a scientific- and risk-based approach to controlling processes and ensuring drug product quality. This approach should be based on robust product and process understanding. Advanced manufacturing (such as continuous manufacturing) generally lends itself to more extensive understanding and control of the manufacturing process; thus, it is generally suitable for implementing process models as part of the control strategy. FDA is aware of industry's interest in using in-process control strategies that rely solely on process models to satisfy the requirements of § 211.110. However, control strategies that rely solely on current process models would be insufficient to satisfy the requirements of § 211.110.
FDA is committed to supporting and enabling pharmaceutical innovation and modernization as part of the Agency's mission to protect and promote the public health. This guidance provides information on how process models can be paired with in-process material testing or process monitoring to meet current regulatory requirements. As the science supporting innovative in-process control tools and methods continues to develop, FDA anticipates that these scientific advancements can be leveraged to pursue in-process control strategies that increasingly rely on process models. FDA encourages industry representatives and manufacturers to discuss their proposed innovative control strategies with the Agency to help inform future policy development.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Considerations for Complying With
While this guidance contains no collection of information, it does refer to previously approved FDA collections of information. The previously approved collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in parts 210 and 211 relating to CGMP have been approved under OMB control number 0910-0139.
Persons with access to the internet may obtain an electronic version of the draft guidance at
Coast Guard, Department of Homeland Security (DHS).
Notification of enforcement of regulation.
The Coast Guard will enforce a security zone along the Potomac River, Anacostia River, and adjacent waters at Washington, DC, for the State Funeral for former President James Carter. This action is necessary to protect government officials, mitigate potential terrorist acts and incidents, and enhance public and maritime safety and security immediately before, during, and after this activity. During the enforcement period, entry into or remaining within the zone is prohibited unless authorized by the Captain of the Port or their designated representative.
The regulations in 33 CFR 165.508 will be enforced from 8 a.m., January 7, 2025, through 4 p.m., January 9, 2025, for the security zone location identified in 33 CFR 16.508(a)(6).
If you have questions about this notification of enforcement, call or email LCDR Kate Newkirk, U.S. Coast Guard Sector Maryland-National Capital Region, Waterways Management Division; telephone 410-576-2596, email
The Coast Guard will enforce regulations in 33 CFR 165.508 for the locations identified in paragraph (a)(6) from 8 a.m., January 7, 2025, through 4 p.m., January 9, 2025. This action is being taken to protect government officials, mitigate potential terrorist acts and incidents, and enhance public and maritime safety and security immediately before, during, and after this event. Our regulations for the Security Zone; Potomac River and Anacostia River, and adjacent waters at Washington, DC. The regulation at 33 CFR 165.508(a)(6) specifies the location for this security zone as an area that includes all navigable waters described in paragraphs (a)(1) through (3), which includes Zones 1, 2, and 3.
• Security Zone 1, paragraph (a)(1); all navigable waters of the Potomac River, from shoreline to shoreline, bounded to the north by the Francis Scott Key (US-29) Bridge, at mile 113, and bounded to the south by a line drawn from the Virginia shoreline at Ronald Reagan Washington National Airport at 38°51′21.3″ N, 077°02′00.0″ W, eastward across the Potomac River to the District of Columbia shoreline at Hains Point at position 38°51′24.3″ N, 077°01′19.8″ W, including the waters of the Boundary Channel, Pentagon Lagoon, Georgetown Channel Tidal Basin, and Roaches Run.
• Security Zone 2, paragraph (a)(2); all navigable waters of the Anacostia River, from shoreline to shoreline, bounded to the north by the John Philip Sousa (Pennsylvania Avenue) Bridge, at mile 2.9, and bounded to the south by a line drawn from the District of Columbia shoreline at Hains Point at position 38°51′24.3″ N, 077°01′19.8″ W, southward across the Anacostia River to the District of Columbia shoreline at Giesboro Point at position 38°50′52.4″ N, 077°01′10.9″ W, including the waters of the Washington Channel.
• Security Zone 3 paragraph (a)(3); all navigable waters of the Potomac River, from shoreline to shoreline, bounded to the north by a line drawn from the Virginia shoreline at Ronald Reagan Washington National Airport, at 38°51′21.3″ N, 077°02′00.0″ W, eastward across the Potomac River to the District of Columbia shoreline at Hains Point at position 38°51′24.3″ N, 077°01′19.8″ W, thence southward across the Anacostia River to the District of Columbia shoreline at Giesboro Point at position 38°50′52.4″ N, 077°01′10.9″ W, and bounded to the south by the Woodrow Wilson Memorial (I-95/I-495) Bridge, at mile 103.8.
During the enforcement period, as specified in § 165.508(b), entry into or remaining in these zones is prohibited unless authorized by the Coast Guard Captain of the Port Maryland-National Capital Region. Public vessels and vessels already at berth at the time of the security zone is implemented do not have to depart the security zone. All vessels underway within the security zone at the time the security zone is implemented are to depart the zone. To seek permission to transit the zone, the Captain of the Port Maryland-National Capital Region can be contacted at telephone number (410) 576-2525 or on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). Coast Guard vessels enforcing this zone can be contacted on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). The Coast Guard may be assisted by other Federal, state, or local law enforcement agencies in enforcing this regulation. If the Captain of the Port or his designated on-scene patrol personnel determines the security zone need not be enforced for the full duration stated in this notification, a Broadcast Notice to Mariners may be used to suspend enforcement and grant general permission to enter the security zone.
In addition to this notification of enforcement in the
Great Lakes St. Lawrence Seaway Development Corporation, Department of Transportation (DOT).
Final rule.
The Great Lakes St. Lawrence Seaway Development Corporation (GLS) and the St. Lawrence Seaway Management Corporation (SLSMC) of Canada, under international agreement, jointly publish and presently administer the St. Lawrence Seaway Tariff of Tolls in their respective jurisdictions. The Tariff sets forth the level of tolls assessed on all commodities and vessels transiting the facilities operated by the GLS and the SLSMC. The GLS is revising its regulations to reflect the fees and charges levied by the SLSMC in Canada starting in the 2025 navigation season, which are effective only in Canada.
This rule is effective on January 6, 2025
Carrie Mann Lavigne, Chief Counsel, Great Lakes St. Lawrence Seaway Development Corporation, 180 Andrews Street, Massena, New York 13662; (315) 764-3200.
The GLS and SLSMC of Canada, under international agreement, jointly publish and presently administer the St. Lawrence Seaway Tariff of Tolls (Schedule of Fees and Charges in Canada) in their respective jurisdictions.
The Tariff sets forth the level of tolls assessed on all commodities and vessels transiting the facilities operated by the GLS and the SLSMC. The GLS is revising 33 CFR 402.12, “Schedule of tolls”, to reflect the fees and charges levied by the SLSMC in Canada beginning in the 2025 navigation season. The GLS finds there is good cause to make the Tariff of Tolls effective on the date of publication to harmonize the effective dates on both sides of the border.
This regulation involves a foreign affairs function of the United States and therefore, Executive Order 12866 does not apply and evaluation under the Department of Transportation's Regulatory Policies and Procedures is not required.
The GLS certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The St. Lawrence Seaway Regulations and Rules primarily relate to commercial users of the Seaway, the vast majority of whom are foreign vessel operators. Therefore, any resulting costs will be borne mostly by foreign vessels.
This regulation does not require an environmental impact statement under the National Environmental Policy Act (49 U.S.C. 4321,
The Corporation has analyzed this rule under the principles and criteria in Executive Order 13132, dated August 4, 1999, and has determined that this rule does not have sufficient federalism implications to warrant a Federalism Assessment.
The Corporation has analyzed this rule under title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48) and determined that it does not impose unfunded mandates on State, local, and Tribal governments and the private sector requiring a written statement of economic and regulatory alternatives.
This regulation has been analyzed under the Paperwork Reduction Act of 1995 and does not contain new or modified information collection requirements subject to the Office of Management and Budget review.
Vessels, Waterways.
Accordingly, the Great Lakes St. Lawrence Seaway Development Corporation is amending 33 CFR part 402 as follows:
33 U.S.C. 983(a), 984(a)(4), and 988, as amended; 49 CFR 1.101.
Issued at Washington, DC, under authority delegated at 49 CFR 1.101. Great Lakes St. Lawrence Seaway Development Corporation.
Environmental Protection Agency (EPA).
Final rule.
EPA is issuing significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA) for certain chemical substances that were the subject of premanufacture notices (PMNs). The SNURs require persons to notify EPA at least 90 days before commencing manufacture (defined by statute to include import) or processing of any of these chemical substances for an activity that is designated as a significant new use in the SNUR. The required notification initiates EPA's evaluation of the use, under the conditions of use for that chemical substance, within the applicable review period. Persons may not commence manufacture or processing for the significant new use until they have submitted a Significant New Use Notice (SNUN), and EPA has conducted a review of the notice, made an appropriate determination on the notice, and has taken any risk management actions as are required as a result of that determination.
This rule is effective on March 7, 2025. For purposes of judicial review, this rule shall be promulgated at 1 p.m. (EST) on January 21, 2025.
The docket for this action, identified under docket identification (ID) number EPA-HQ-OPPT-2019-0530, is available online at
TSCA section 5(a)(2) (15 U.S.C. 2604(a)(2)) authorizes EPA to determine that a use of a chemical substance is a “significant new use.” EPA must make this determination by rule after considering all relevant factors, including the factors in TSCA section 5(a)(2) (see also the discussion in Unit II.).
EPA is finalizing SNURs under TSCA section 5(a)(2) for chemical substances that were the subject of PMNs P-16-541, P-17-299, P-18-172, P-19-99, P-19-118, and P-19-120. The SNURs require persons who intend to manufacture or process any of these chemical substances for an activity that is designated as a significant new use in the SNURs to notify EPA at least 90 days before commencing that activity.
Previously, in the
This action may apply to you if you manufacture (defined by statute to include import), process, or use the chemical substances addressed in this
• Manufacturers or processors of one or more subject chemical substances (NAICS codes 325 and 324110),
This action may also affect certain entities through pre-existing import certification and export notification requirements under TSCA. Chemical importers are subject to TSCA section 13 (15 U.S.C. 2612), the import provisions promulgated at 19 CFR 12.118 through 12.127 (see also 19 CFR 127.28), and the EPA policy in support of import certification at 40 CFR part 707, subpart B. Importers of chemical substances in bulk form, as part of a mixture, or as part of an article (if required by rule) must certify that the shipment of the chemical substance complies with all applicable rules and Orders under TSCA, including regulations issued under TSCA sections 5, 6, 7 and Title IV.
In addition, pursuant to 40 CFR 721.20, any persons who export or intend to export a chemical substance identified in this document are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)) (see 40 CFR 721.20), and must comply with the export notification requirements in 40 CFR part 707, subpart D.
EPA has evaluated the potential costs of establishing SNUN reporting requirements for potential manufacturers (including importers) and processors of the chemical substances included in these SNURs. This analysis, which is available in the docket, is briefly summarized here.
If a SNUN is submitted, costs are an estimated $45,000 per SNUN submission for large business submitters and $14,500 for small business submitters. These estimates include the cost to prepare and submit the SNUN (including registration for EPA's Central Data Exchange (CDX)), and the payment of a user fee. Businesses that submit a SNUN would be subject to either a $37,000 user fee required by 40 CFR 700.45(c)(2)(ii) and (d), or, if they are a small business as defined at 13 CFR 121.201, a reduced user fee of $6,480 (40 CFR 700.45(c)(1)(ii) and (d)) per fiscal year 2022. The costs of submission for SNUNs will not be incurred by any company unless a company decides to pursue a significant new use as defined in these SNURs. Additionally, these estimates reflect the costs and fees as they are known at the time of this rulemaking.
EPA has also evaluated the potential costs associated with the export notification requirements under TSCA section 12(b) and the implementing regulations at 40 CFR part 707, subpart D. For persons exporting a substance that is the subject of a SNUR, a one-time notice to EPA must be provided for the first export or intended export to a particular country. The total costs of export notification will vary by chemical, depending on the number of required notifications (
Unit II. of the proposed rule provides general information about SNURs, and additional information about EPA's new chemical program is available at
EPA is establishing certain significant new uses which have been claimed as CBI subject to Agency confidentiality regulations at 40 CFR part 2 and 40 CFR part 703. Absent a final determination or other disposition of the confidentiality claim under these regulations, EPA is required to keep this information confidential. EPA promulgated a procedure at 40 CFR 721.11 to deal with the situation where a specific significant new use is CBI.
Under these procedures a manufacturer or processor may request EPA to identify the confidential significant new use under the rule. The manufacturer or processor must show that it has a
Any use that EPA determines in the final rule was ongoing as of the date of publication of the proposal and did not cease prior to issuance of the final rule, will not be designated as a significant new use in the final rule. EPA has no information to suggest that any of the significant new uses identified in this rule meet those criteria.
As discussed in the
In the unlikely event that before a final rule becomes effective a person begins commercial manufacturing (including importing) or processing of the chemical substances for a use that is designated as a significant new use in that final rule, such a person would have to cease any such activity upon the effective date of the final rule. To resume their activities, these persons would have to first comply with all applicable SNUR notification requirements and wait until all TSCA prerequisites for the commencement of manufacture or processing have been satisfied.
Issuance of a SNUR for a chemical substance does not signify that the chemical substance is listed on the TSCA Chemical Substance Inventory (TSCA Inventory). Guidance on how to determine if a chemical substance is on the TSCA Inventory is available on the internet at
SNUNs must be submitted on EPA Form No. 7710-25, generated using e-PMN software, and submitted to the Agency in accordance with the procedures set forth in 40 CFR 720.40 and 721.25. E-PMN software is available electronically at
EPA recognizes that TSCA section 5 does not require development of any particular new information (
In the absence of a rule, TSCA order, or consent agreement under TSCA section 4 covering the chemical substance, persons are required only to submit information in their possession or control and to describe any other information known to or reasonably ascertainable by them (see 40 CFR 720.50). However, upon review of PMNs and SNUNs, the Agency has the authority to require appropriate testing. To assist with EPA's analysis of the SNUN, submitters are encouraged, but not required, to provide the potentially useful information identified for the chemical substance in Unit IV of the proposed rule.
EPA strongly encourages persons, before performing any testing, to consult with the Agency pertaining to protocol selection. Furthermore, pursuant to TSCA section 4(h), which pertains to reduction of testing in vertebrate animals, EPA encourages consultation with the Agency on the use of alternative test methods and strategies (also called New Approach Methodologies, or NAMs), if available, to generate the recommended test data. EPA encourages dialog with Agency representatives to help determine how best the submitter can meet both the data needs and the objective of TSCA section 4(h). For more information on alternative test methods and strategies to reduce vertebrate animal testing, visit
The potentially useful information described in Unit IV of the proposed rule may not be the only means of providing information to evaluate the chemical substance associated with the significant new uses. However, submitting a SNUN without any test data may increase the likelihood that EPA will take action under TSCA sections 5(e) or 5(f). EPA recommends that potential SNUN submitters contact EPA early enough so that they will be able to conduct the appropriate tests.
SNUN submitters should be aware that EPA will be better able to evaluate SNUNs which provide detailed information on the following:
• Human exposure and environmental release that may result from the significant new use of the chemical substances.
EPA received public comments from two identifying entities and two confidential entities pertaining to the SNURs that the Agency is finalizing with this rule. One comment was generally critical of the rule but did not identify specific changes or issues with the rule requirements; therefore, no response is required. Two of the comments identified ongoing uses of two different chemical substances in the proposed rule. As a result, EPA is issuing a modified final rule for those chemical substances that do not designate the ongoing uses as significant new uses. Specifically, for the chemical substance that was the subject of P-17-299, EPA will no longer designate as a
EPA designates December 6, 2019, as the cutoff date for determining whether the new use is ongoing. This designation is explained in more detail in Unit VI of the proposed rule.
In Unit IV. of the proposed rule, EPA provided the following information for each chemical substance subject to these SNURs:
• PMN number (the CFR citation assigned in the regulatory text section of this document).
• Chemical name (generic name, if the specific name is claimed as CBI).
• Chemical Abstracts Service Registry Number (CASRN) (if assigned for non-confidential chemical identities).
• Potentially useful information.
The regulatory text section specifies the activities designated as significant new uses. Certain new uses, including exceeding production volume limits and other uses designated in the proposed rules, may be claimed as CBI.
In addition, as discussed in Unit V.A. of the proposed rule, for the chemical substances that have undergone premanufacture review, EPA has identified certain conditions of use and other circumstances of use apart from those intended by the PMN submitter as significant new uses. All uses identified as significant new uses in this rule cannot occur without first going through a separate EPA review and determination process associated with a SNUN.
Additional information about these statutes and Executive orders can be found at
This action establishes SNURs for new chemical substances that were the subject of PMNs. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866 (58 FR 51735, October 4, 1993), as amended by Executive Order 14094 (88 FR 21879, April 11, 2023).
According to PRA, 44 U.S.C. 3501
The information collection requirements associated with SNURs have already been approved by OMB pursuant to the PRA under OMB control number 2070-0038 (EPA ICR No. 1188.13). This action does not impose any burden requiring additional OMB approval. If an entity were to submit a SNUN to the Agency, the annual burden is estimated to average between 30 and 170 hours per submission. This burden estimate includes the time needed to review instructions, search existing data sources, gather and maintain the data needed, and complete, review, and submit the required SNUN.
EPA always welcomes your feedback on the burden estimate. Send any comments about the accuracy of the burden estimate, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA (5 U.S.C. 601
A SNUR requires that any person who intends to engage in such activity in the future must first notify EPA by submitting a SNUN. Although some small entities may decide to pursue a significant new use in the future, EPA cannot presently determine how many, if any, there may be. However, EPA's experience to date is that, in response to the promulgation of SNURs covering over 1,000 chemicals, the Agency receives only a small number of notices per year. For example, the number of SNUNs received was 16 in Federal fiscal year (FY) FY2018, five in FY2019, seven in FY2020, 13 in FY2021, 11 in FY2022, and 15 in FY2023, and only a fraction of these submissions were from small businesses.
In addition, the Agency currently offers relief to qualifying small businesses by reducing the SNUN submission fee from $37,000 to 6,480. This lower fee reduces the total reporting and recordkeeping cost of submitting a SNUN to about $14,500 per SNUN submission for qualifying small firms. Therefore, the potential economic impacts of complying with these SNURs are not expected to be significant or adversely impact a substantial number of small entities. In a SNUR that published in the
This action does not contain an unfunded mandate of $100 million or more (in 1995 dollars) in any one year as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. Based on EPA's experience with proposing and finalizing SNURs, State, local, and Tribal governments have not been impacted by SNURs, and EPA does not have any reasons to believe that any State, local, or Tribal government will be impacted by these SNURs. In addition, the estimated costs of this action to the private sector do not exceed $183 million or more in any one year (the 1995 dollars are adjusted to 2023 dollars for inflation using the GDP implicit price deflator). The estimated
This action will not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it is not expected to have a substantial direct effect on 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, the requirements of Executive Order 13132 do not apply to this action.
This action will not have Tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because it is not expected to have substantial direct effects on Indian Tribes or significantly or uniquely affect the communities of Indian Tribal governments and does not involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of Executive Order 13175 do not apply to this action.
This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it does not concern an environmental health or safety risk. Since this action does not concern a human health risk, EPA's 2021 Policy on Children's Health also does not apply. Although the establishment of these SNURs do not address an existing children's environmental health concern because the chemical uses involved are not ongoing uses, SNURs require that persons notify EPA at least 90 days before commencing manufacture (defined by statute to include import) or processing of any of these chemical substances for an activity that is designated as a significant new use by this rule. This notification allows EPA to assess the intended uses to identify potential risks and take appropriate actions before the activities commence.
This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
This action does not involve any technical standards subject to NTTAA section 12(d) (15 U.S.C. 272 note).
This action does not concern human health or environmental conditions and therefore cannot be evaluated with respect to the potential for disproportionate impacts on non-white and low-income populations in accordance with Executive Order 12898 (59 FR 7629, February 16, 1994) and Executive Order 14096 (88 FR 25251, April 26, 2023). Although this action does not concern human health or environmental conditions, the premanufacture notifications required by these SNURs allow EPA to assess the intended uses to identify potential disproportionate risks and take appropriate actions before the activities commence.
This action is subject to the CRA (5 U.S.C. 801
Environmental protection, Reporting and recordkeeping requirements.
Environmental protection, Chemicals, Hazardous substances, Reporting and recordkeeping requirements.
Therefore, for the reasons stated in the preamble, 40 CFR chapter I is amended as follows:
7 U.S.C. 135
15 U.S.C. 2604, 2607, and 2625(c).
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii)
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(i)
(ii) [Reserved]
(b)
(1)
(2)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is updating the list of chemicals subject to toxic chemical release reporting under the Emergency Planning and Community Right-to-Know Act (EPCRA) and the Pollution Prevention Act (PPA). Specifically, this action updates the regulations to identify nine per- and polyfluoroalkyl substances (PFAS) that must be reported pursuant to the National Defense Authorization Act for Fiscal Year 2020 (FY2020 NDAA) enacted on December 20, 2019. As this action is being taken to conform the regulations to a Congressional legislative mandate, notice and comment rulemaking is unnecessary.
This final rule is effective February 5, 2025.
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2024-0044, is available at
Daniel R. Ruedy, Data Gathering, Management and Policy Division (7607M), Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (202) 564-7974; email address:
You may be potentially affected by this action if you manufacture, process, or otherwise use any of the PFAS listed in this rule, including but not limited to entities identified with the following North American Industry Classification System (NAICS) codes.
• Facilities included in the following NAICS manufacturing codes (corresponding to Standard Industrial Classification (SIC) codes 20 through 39): 311*, 312*, 313*, 314*, 315*, 316, 321, 322, 323*, 324, 325*, 326*, 327*, 331, 332, 333, 334*, 335*, 336, 337*, 339*, 111998*, 113310, 211130*, 212323*, 212390*, 488390*, 512230*, 512250*, 5131*, 516210*, 519290*, 541713*, 541715* or 811490*. *Exceptions and/or limitations exist for these NAICS codes.
• Facilities included in the following NAICS codes (corresponding to SIC codes other than SIC codes 20 through 39): 211130* (corresponds to SIC code 1321, Natural Gas Liquids, and SIC 2819, Industrial Inorganic Chemicals, Not Elsewhere Classified); or 212114, 212115, 212220, 212230, 212290*; or 2211*, 221210*, 221330 (limited to facilities that combust coal and/or oil for the purpose of generating power for distribution in commerce) (corresponds to SIC codes 4911, 4931, and 4939, Electric Utilities); or 424690, 424710 (corresponds to SIC code 5171, Petroleum Bulk Terminals and Plants); 425120 (limited to facilities previously classified in SIC code 5169, Chemicals and Allied Products, Not Elsewhere Classified); or 562112 (limited to facilities primarily engaged in solvent recovery services on a contract or fee basis (previously classified under SIC code 7389, Business Services, NEC)); or 562211*, 562212*, 562213*, 562219*, 562920 (limited to facilities regulated under the Resource Conservation and Recovery Act, subtitle C, 42 U.S.C. 6921
• Federal facilities.
A more detailed description of the types of facilities subject to reporting under EPCRA section 313 can be found at:
EPA is codifying the addition of the nine PFAS added to the EPCRA section 313 list of reportable chemicals (more commonly known as the Toxics Release Inventory (TRI)) since the last conforming rule pursuant to the FY2020 NDAA ((89 FR 43331; May 17, 2024) (FRL-9427.1-01-OCSPP)).
This action is issued under authority of EPCRA section 313 (42 U.S.C. 11001
The FY2020 NDAA was signed into law on December 20, 2019. Among other provisions, section 7321(c) identifies certain regulatory activities that automatically add PFAS or classes of PFAS to the EPCRA section 313 list of reportable chemicals. PFAS or classes of PFAS shall be added to the EPCRA
• Final Toxicity Value. The date on which the Administrator finalizes a toxicity value for the PFAS or class of PFAS;
• Significant New Use Rule. The date on which the Administrator makes a covered determination for the PFAS or class of PFAS;
• Addition to Existing Significant New Use Rule. The date on which the PFAS or class of PFAS is added to a list of substances covered by a covered determination;
• Addition as an Active Chemical Substance. The date on which the PFAS or class of PFAS to which a covered determination applies is:
(1) Added to the list published under section 8(b)(1) of the Toxic Substances Control Act (TSCA) (15 U.S.C. 2601
(2) Designated as an active chemical substance under TSCA section 8(b)(5)(B) on the list published under TSCA section 8(b)(1).
The FY2020 NDAA defines “covered determination” as a determination made by rule under TSCA section 5(a)(2) that a use of a PFAS or class of PFAS is a significant new use (except such a determination made in connection with a determination described in TSCA sections 5(a)(3)(B) or 5(a)(3)(C)).
Under FY2020 NDAA section 7321(e), EPA must review confidential business information (CBI) claims before PFAS are added to the list pursuant to FY2020 NDAA sections 7321(b)(1), (c)(1), or (d)(3) whose identities are subject to a claim of protection from disclosure under 5 U.S.C. 552(a), pursuant to 5 U.S.C. 552(b)(4). Under the FY2020 NDAA EPA must:
• Review a claim of protection from disclosure; and
• Require that person to reassert and substantiate or re-substantiate that claim in accordance with TSCA section 14(f) (15 U.S.C. 2613(f)).
In addition, if EPA determines that the chemical identity of a PFAS or class of PFAS qualifies for protection from disclosure, EPA must include the PFAS or class of PFAS on the TRI in a manner that does not disclose the protected information.
EPA has reviewed the above-listed criteria and found nine chemicals that meet the requirements of this part of the FY2020 NDAA and have an identity not claimed as CBI.
Under FY2020 NDAA section 7321(e), EPA must review CBI claims before PFAS with identities subject to a claim of protection from disclosure under 5 U.S.C. 552(a) (pursuant to 5 U.S.C. 552(b)(4)) are added to the list. The substance with the CASRN 3030471-22-5 met the criteria under FY2020 NDAA section 7321(c)(1)(A)(iii) but was subject to a claim of protection from disclosure under 5 U.S.C. 552(b)(4) at that time (
As established by the FY2020 NDAA, the addition of these PFAS to the EPCRA section 313 list of reportable chemicals is effective January 1 of the calendar year following any of the dates identified in FY2020 NDAA section 7321(c)(1)(A). Accordingly, these nine PFAS are reportable beginning with the 2025 reporting year (
Note that pursuant to the rule, entitled “Changes to Reporting Requirements for Per- and Polyfluoroalkyl Substances and to Supplier Notifications for Chemicals of Special Concern; Community Right-to-Know Toxic Chemical Release Reporting; Final Rule” (88 FR 74360, October 31, 2023 (FRL-8741-04-OCSPP)), all PFAS added to TRI pursuant to FY2020 NDAA sections 7321(b) and (c), are designated as chemicals of special concern (40 CFR 372.28), which also applies to the nine PFAS identified in this rulemaking. Chemicals of special concern are excluded from the de minimis exemption, may not be reported on a Form A (Alternate Threshold Certification Statement), and have limits related to reporting requirements. For more information on the addition of PFAS to the list of chemicals of special concern, see 40 CFR 372.28.
Section 553(b)(B) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that public notice and comment procedures are impracticable, unnecessary, or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment. EPA has determined that there is good cause for making this rule final without prior proposal and opportunity for comment because such notice and opportunity for comment is unnecessary. This action is being taken to comply with a mandate in an Act of Congress, in which Congress identified actions that automatically add these chemicals to the TRI. Thus, EPA has no discretion as to the outcome of this rule, which aligns the regulations with the self-effectuating changes provided by the FY2020 NDAA.
The following is a listing of the documents that are specifically referenced in this document. The docket includes these documents and other
Additional information about these statutes and Executive orders can be found at
This action is not a significant regulatory action as defined in Executive Order 12866 (58 FR 51735, October 4, 1993), as amended by Executive Order 14094 (88 FR 21879, April 11, 2023), and was therefore not subject to a requirement for Executive Order 12866 review.
This action does not impose any new information collection burden under the PRA, 44 U.S.C. 3501
Currently, the facilities subject to the reporting requirements under EPCRA section 313 and PPA section 6607 must use EPA Toxic Chemicals Release Inventory Form R (EPA Form 9350-1). The nine newly added PFAS are subject to the same reporting requirements as other chemicals of special concern and are excluded from certain burden-reduction reporting options (
Respondents may designate the specific chemical identity of a substance as a trade secret pursuant to EPCRA section 322 (42 U.S.C. 11042) and 40 CFR part 350. OMB has approved the reporting and recordkeeping requirements related to Form R, supplier notification, and petitions under OMB Control No. 2070-0212 (EPA Information Collection Request (ICR) No. 2613.04) and those related to trade secret designations under OMB Control No. 2050-0078 (EPA ICR No. 1428.12).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers relevant to EPA's regulations in 40 CFR are listed in 40 CFR part 9 and displayed on the information collection instruments (
This action is not subject to the RFA, 5 U.S.C. 601
This action does not contain any unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any State, local, or Tribal governments or the private sector.
This action does not have federalism implications, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it will not have substantial direct effects on 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.
This action does not have Tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000) because it will not have substantial direct effects on Tribal governments, on the relationship between the Federal government and the Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. It does not have substantial direct effects on Tribal governments because EPA does not anticipate that reporting of the PFAS added to the TRI list in this action will be conducted by Tribes, so this rulemaking is not expected to impose substantial direct compliance costs on Tribal governments.
This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it does not concern an environmental health or safety risk. Since this action does not concern human health, EPA's 2021 Policy on Children's Health also does not apply.
Although this action does not concern an environmental health or safety risk, this reporting rule will aid in collecting information regarding PFAS. This rule will be of use in identifying releases of PFAS to which children may be exposed. EPA believes that the information obtained as a result of this action could also be used by the public, government agencies and others to identify potential problems, set priorities, and take appropriate steps to reduce any potential human health or environmental risks related to PFAS, including those that may disproportionately affect children.
This action is not a significant energy action as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution or use of energy.
This rulemaking does not involve technical standards. As such, NTTAA section 12(d), 15 U.S.C. 272, does not apply to this action.
Executive Order 12898 (59 FR 7629, February 16, 1994) directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice a part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations (people of color) and low-income populations.
EPA believes that this type of action does not concern human health or environmental conditions and therefore cannot be evaluated with respect to potentially disproportionate and adverse effects on communities with environmental justice concerns. This action involves additions to reporting requirements that will not affect the level of protection provided to human health or the environment.
Although this action does not concern human health or environmental conditions, EPA may identify and address environmental justice concerns through information collected under TRI. The information obtained as a result of this rulemaking will lead to a better understanding of PFAS releases, which can help inform and tailor future EPA actions regarding PFAS. For example, EPA may identify and address environmental justice concerns as a result of the new PFAS information collected under this rule. The action will also better inform communities living near facilities that report to TRI, by providing them with information about PFAS releases and waste management practices occurring in their communities. Overall, EPA believes that the information obtained as a result of this action could be used by the public (including people of color, low-income populations and/or indigenous peoples) to inform their behavior as it relates to potential exposure to PFAS and by government agencies and others to identify potential problems, set priorities, and take appropriate steps to reduce any potential human health or environmental risks from PFAS.
This action is subject to the CRA, 5 U.S.C. 801
Environmental protection, Community right-to-know, Reporting and recordkeeping requirements, Toxic chemicals.
Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR part 372 as follows:
42 U.S.C. 11023 and 11048.
The additions read as follows:
(d) * * *
(e) * * *
Food and Nutrition Service (FNS), USDA.
Notice of Proposed Rulemaking; withdrawal.
This document informs the public that FNS is withdrawing the proposed rule titled, “Provisions to Improve the Supplemental Nutrition Assistance Program's Quality Control System,” that published in the
As of January 6, 2025, the proposed rule published on September 19, 2023, at 88 FR 64756, and its correction on December 19, 2023, at 88 FR 87725, are officially withdrawn.
SNAP, FNS, USDA, 1320 Braddock Place, Alexandria, VA 22314.
Catherine Buhrig, 703-305-2022, Food and Nutrition Service, 1320 Braddock Place, 5th Floor, Alexandria, Virginia 22314,
Upon further deliberation, FNS has decided to consider additional provisions to the proposed rule titled, “Provisions to Improve the Supplemental Nutrition Assistance Program's Quality Control System.” As such, FNS has decided to withdraw the proposed rule published in the
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes. This proposed AD was prompted by reports of engine-driven pump hydraulic pressure hoses for hydraulic systems number 1 and 2 chafing against the pylon in the aft equipment bay. This proposed AD would require an inspection of the engine-driven pump pressure hoses for any damage and minimum clearance between the engine-driven pump hydraulic pressure hose and case drain, suction pressure hose, and surrounding pylon structure; and corrective actions if necessary. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by February 20, 2025.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For Bombardier material identified in this proposed AD, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-2999; email
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
Joseph Catanzaro, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
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
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Joseph Catanzaro, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email
Transport Canada, which is the aviation authority for Canada, has issued Transport Canada AD CF-2024-07, dated February 21, 2024 (Transport Canada AD CF-2024-07) (also referred to as the MCAI), to correct an unsafe condition on certain Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes. The MCAI states that there have been reports of engine-driven pump hydraulic pressure hoses for hydraulic systems number 1, left-hand side (LHS), and number 2, right-hand side (RHS), chafing against the pylon in the aft equipment bay.
The FAA is proposing this AD to address the chafing of the hydraulic systems engine-driven pump hoses against the pylon, which may lead to hydraulic system leaks and failures and result in the loss of the affected hydraulic system. Loss of both hydraulic systems number 1 and 2 would substantially reduce the airplane's functional capabilities. You may examine the MCAI in the AD docket at
The FAA reviewed the following material issued by Bombardier:
• Service Bulletin 700-29-5502, dated November 29, 2023.
• Service Bulletin 700-29-6011, dated November 29, 2023.
• Service Bulletin 700-29-6502, dated November 29, 2023.
This material describes procedures for a borescope inspection for routing of hydraulic systems number 1 (LHS) and number 2 (RHS) engine-driven pump pressure hoses for any damage (including fouling or chafing) and for minimum clearance between the engine-driven pump hydraulic pressure hose and case drain, suction pressure hose, and surrounding pylon structure. Corrective actions include replacing and adjusting the pressure hoses. These documents are distinct since they apply to different airplane models. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI and material referenced above. The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require accomplishing the actions specified in the material already described.
Paragraph 1.A, “Effectivity” of Bombardier Service Bulletin 700-29-5502, dated November 29, 2023, inadvertently identifies “Model BD-700-1A10 aircraft,” instead of “Model BD-700-1A11 aircraft.” Paragraph (g)(1) of this proposed AD would require replacing the incorrect text with the correct text.
The FAA estimates that this AD, if adopted as proposed, would affect 36 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:
The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected operators.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by February 20, 2025.
None.
This AD applies to Bombardier, Inc., Model BD-700-1A10 and BD-700-1A11 airplanes, certificated in any category, serial numbers (S/Ns) 60001 through 60076 inclusive, 60083, 60087, and 60089.
Air Transport Association (ATA) of America Code 29, Hydraulic Power.
This AD was prompted by reports of engine-driven pump hydraulic pressure hoses for hydraulic systems number 1 and 2 chafing against the pylon in the aft equipment bay. The FAA is issuing this AD to address the chafing of the hydraulic systems engine-driven pump hydraulic pressure hoses for the hydraulic system against the pylon, which may lead to hydraulic system leaks and failures and result in the loss of the affected hydraulic system. Loss of both hydraulic systems number 1 and 2 would substantially reduce the airplane's functional capabilities.
Comply with this AD within the compliance times specified, unless already done.
Within 500 flight hours or 18 months, whichever occurs first after the effective date of this AD, do a borescope inspection of the routing of hydraulic systems number 1, left-hand side (LHS), and number 2, right-hand side (RHS), engine-driven pump pressure hoses over the length of the hoses for any damage and for minimum clearance between the engine-driven pump hydraulic pressure hose and case drain, suction pressure hose, and surrounding pylon structure, in accordance with Section 2.B. of the Accomplishment Instructions of the applicable service information identified in paragraph (g)(1) through (3) of this AD.
(1) For airplanes identified in Bombardier Service Bulletin 700-29-5502, dated November 29, 2023: Bombardier Service Bulletin 700-29-5502, dated November 29, 2023. Where paragraph 1.A. of Bombardier Service Bulletin 700-29-5502, dated November 29, 2023, identifies “Model BD-700-1A10 aircraft,” this AD requires replacing that text with “Model BD-700-1A11 aircraft.”
(2) For airplanes identified in Bombardier Service Bulletin 700-29-6011, dated November 29, 2023: Bombardier Service Bulletin 700-29-6011, dated November 29, 2023.
(3) For airplanes identified in Bombardier Service Bulletin 700-29-6502, dated November 29, 2023: Bombardier Service Bulletin 700-29-6502, dated November 29, 2023.
(1) If clearance is found to be less than 0.500 inch (12.70 mm) during the inspection required by paragraph (g) of this AD: Before further flight, adjust the applicable hose(s) to obtain minimum clearance between the engine-driven pump hydraulic pressure hose and case drain, suction pressure hose, and surrounding pylon structure, in accordance with Section 2.C. of the Accomplishment Instructions of the applicable service information identified in paragraphs (g)(1) through (3) of this AD.
(2) If any damage (including fouling or chafing) is found during the inspection required by paragraph (g) of this AD: Before further flight, replace all damaged pressure hoses, in accordance with Section 2.D. of the Accomplishment Instructions of the applicable service information identified in paragraphs (g)(1) through (3) of this AD.
The following provisions also apply to this AD:
(1)
(2)
For more information about this AD, contact Joseph Catanzaro, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; email
(1) The Director of the Federal Register approved the incorporation by reference of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Bombardier Service Bulletin 700-29-5502, dated November 29, 2023.
(ii) Bombardier Service Bulletin 700-29-6011, dated November 29, 2023.
(iii) Bombardier Service Bulletin 700-29-6502, dated November 29, 2023.
(3) For Bombardier material identified in this AD, contact Bombardier Business Aircraft Customer Response Center, 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-2999; email
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking; notice of hearing.
This document provides a notice of public hearing on proposed regulations regarding the Federal Income tax credit under the Inflation Reduction Act of 2022 for certain costs relating to qualified alternative fuel vehicle refueling property that is placed in service within a low-income community or within a non-urban census tract.
The public hearing on these proposed regulations is scheduled to be held on February 12, 2025, at 10 a.m. Eastern Time (ET). The IRS must receive speakers' outlines of topic to be discussed at the public hearing by January 10, 2025. If no outlines of testimony are received by January 10, 2025, the public hearing will be cancelled.
The public hearing is being held in the Auditorium, at the Internal Revenue Service Building, 1111 Constitution Avenue NW, Washington, DC. Due to security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present a valid photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. Participants may alternatively attend the public hearing by telephone.
Send an outline of topic submissions electronically via the eRulemaking Portal at
Concerning the proposed regulations, contact Kevin I. Babitz or Whitney E. Brady at (202) 317-6853 (not a toll-free number); concerning submissions of comments, the hearing and/or to be placed on the building access list to attend the public hearing, contact the Publications and Regulation Section at (202-317-6901) (not a toll-free number) or by email to
The subject of the public hearing is the notice of proposed rulemaking (REG-118269-23) that was published in the
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit an outline of the topics to be discussed and the time to be devoted to each topic by January 10, 2025.
A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing, and via the Federal eRulemaking Portal (
Individuals who want to testify in person at the public hearing must send an email to
Individuals who want to testify by telephone at the public hearing must send an email to
Individuals who want to attend the public hearing in person without testifying must also send an email to
Individuals who want to attend the public hearing by telephone without testifying must also send an email to
Hearings will be made accessible to people with disabilities. To request special assistance during a hearing please contact the Publications and Regulations Section of the Office of Associate Chief Counsel (Procedure and Administration) by sending an email to
Any questions regarding speaking at or attending a public hearing may also be emailed to
Office for Victims of Crime, Office of Justice Programs, Justice.
Withdrawal of proposed rule.
The Office of Justice Programs (“OJP”), a bureau of the Department of Justice and the component under which the Office for Victims of Crime (“OVC”) resides, is withdrawing a proposed rule that was published in the
As of January 6, 2025, the proposed rule that was published in the
Kathrina Peterson, Senior Policy Advisor, Office for Victims of Crime at (202) 616-3579 (please note that this is not a toll-free number).
The Victim Compensation Program is authorized by the Victims of Crime Act of 1984, 34 U.S.C. 20102, and supports an annual grant to each state and several territories to support their victim compensation programs. On February 5, 2024, the Office of Justice Programs (OJP) published a notice of proposed rulemaking (NPRM) in the
In light of the diversity and abundance of feedback received in response to the NPRM, OJP has identified the need for additional consideration of topics addressed in this rulemaking. Given the scope of comments and the limited time remaining in the current Administration, OJP has decided to withdraw the NPRM and terminate the rulemaking, leaving the existing Victim Compensation Program Guidelines in place, and ensuring that the agency can benefit from the latest information on these issues when exploring options with stakeholders in the future.
OJP does not intend to issue a final rule based on this published NPRM. Despite the decision not to move forward with the rule at this time, OJP and its component Office for Victims of Crime (OVC) are grateful for the effort, thought, and insights evident in the comments on the proposed rule, especially those provided by crime victims and survivors who shared their personal stories and perspectives. OJP and OVC will continue engaging with their stakeholders as they undertake the work of enhancing care and expanding access to compensation for all victims of crime. In the event OJP and OVC may ultimately conclude that a new rulemaking action would be appropriate, a new NPRM would be published in the
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by February 5, 2025 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and approval under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by February 5, 2025 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
HBIIP is intended to encourage a more comprehensive approach to marketing higher blends biofuels by sharing the costs related to building out biofuel-related infrastructure. To be eligible for this program, a project's sole purpose must be to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blend friendly status by sharing the costs related to the installation, and/or retrofitting, and/or otherwise upgrading of fuel storage, dispenser/pumps, related equipment, and infrastructure. An eligible project must conform to all applicable Federal, State and local regulatory requirements.
Rural Business-Cooperative Service, USDA.
Notice.
The Rural Business-Cooperative Service (RBCS or Agency), a Rural Development (RD) agency of the United States Department of Agriculture (USDA), is issuing this notice to invite applications for grants to provide technical assistance for passenger Rural Transportation (RT) systems under the Rural Business Development Grant (RBDG) program and the terms for such funding. Grant funds will provide technical assistance for RT systems including designated funds to provide technical assistance to RT systems operating within Tribal lands of Federally Recognized Native American Tribes (FRNAT) (collectively “Programs”). This notice is being issued in order to allow applicants sufficient time to leverage financing, prepare and submit their applications, and give the Agency time to process applications within fiscal year (FY) 2025. Based on FY 2024 appropriated funding, the Agency estimates that approximately $750,000 will be made available for FY 2025. Successful applications will be selected by the Agency for funding and subsequently awarded to the extent that funding may ultimately be made available through appropriations. All applicants are responsible for any expenses incurred in developing their applications.
Completed applications may be submitted in paper or electronic format and must be received in the USDA RD State Office no later than 4:30 p.m. (local time) on April 7, 2025, to be eligible for FY 2025 grant funding. Applications received after the deadline will be ineligible for funding.
This funding announcement will also be announced on
Cindy Mason at
For further information on submitting program applications under this notice, please contact the USDA RD office for the State in which the applicant is located. A list of USDA RD Office contacts is provided at the following link:
•
•
•
1.
2.
Section 736 of title VII of division B of the Consolidated Appropriations Act, 2024, designated funding for projects in Persistent Poverty counties. Persistent Poverty counties is defined in section 736 as “any county that has had 20 percent or more of its population living in poverty over the past 30 years, as measured by the 1990 and 2000 decennial censuses, and 2007-2011 American Community Survey 5-year average, or any territory or possession of the United States”. Section 736 expanded the eligible population in Persistent Poverty counties to include any county seat of such a persistent poverty county that had a population that does not exceed the authorized population limit by more than 10 percent, expanding the current 50,000 population limit to 55,000 for only county seats located in Persistent Poverty counties. Therefore, beneficiaries of technical assistance services located in Persistent Poverty County seats with populations up to 55,000 are eligible. Therefore, assuming the Appropriations Act for 2025 has similar language, applicants and/or beneficiaries located in persistent poverty county seats with populations up to 55,000 (per the 2020 Census) are eligible.
3.
4.
1.
For the funding for Technical Assistance for RT systems, applicants must be qualified national organizations with experience in providing technical assistance and training to rural communities nationwide for the purpose of improving passenger transportation services or facilities. To be considered “national,” RBCS requires a qualified organization to provide evidence that it can operate RT assistance programming nationwide. An entity can qualify if they can work in partnership with other entities to fulfill the national requirement as long as the applicant will have ultimate control of the grant administration. For the funding for RT systems to FRNATs, an entity can qualify if it can work in partnership with other entities to support all federally recognized Tribes, as long as the applicant will have ultimate control of the grant administration. There is not a requirement to use the grant funds in a multi-State area. Grants will be made to qualified national organizations for the provision of technical assistance and training to rural communities for the purpose of improving passenger transportation services or facilities.
For the FRNAT grant, which must benefit FRNATs, at least 75 percent of the benefits of the Project must be received by members of FRNATs.
2.
3.
1.
2.
(a) Environmental documentation in accordance with 7 CFR part 1970, “Environmental Policies and Procedures;”
(b) SF LLL, “Disclosure of Lobbying Activities;”
(c) RD 400-1, “Equal Opportunity Agreement;”
(d) RD 400-4, “Assurance Agreement;” and
(e) Letter providing Board authorization to obtain assistance.
Each application received in a USDA RD State Office will be reviewed to determine if it is consistent with the eligible purposes contained in section 310B(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(c)). Each selection scoring criterion outlined in 7 CFR 4280.435 must be addressed in the application. Failure to address any of the criteria will result in a zero-point score for that criterion and will impact the overall evaluation of the application. The regulation governing this program, 7 CFR part 4280, subpart E, is available at
All projects to receive technical assistance through these passenger transportation grant funds are to be identified when the applications are submitted to the USDA RD State Office. Multiple project applications must identify each individual project, indicate the amount of funding requested for each individual project, and address the criteria as stated above for each individual project.
3.
(a) At the time of application, each applicant must have an active registration in the System for Award Management (SAM) before submitting its application in accordance with 2 CFR part 25 (
(b) Applicant must maintain an active SAM registration, with current, accurate, and complete information, while it has an active Federal award or an application under consideration by a Federal awarding agency.
(c) Applicants must ensure they complete the Financial Assistance General Certifications and Representations in SAM.
(d) Applicants must provide a valid UEI in its application, unless determined exempt under 2 CFR 25.110 (
(e) The Agency will not make an award until the applicant has complied with all SAM requirements including providing the UEI. If an applicant has not fully complied with the requirements by the time the Agency is ready to make an award, the Agency may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant.
4.
(a)
(b)
The Agency will not solicit or consider scoring or eligibility information that is submitted after the application deadline. The Agency reserves the right to contact applicants to seek clarification information on materials contained in the submitted application.
The deadline date means that the completed application package must be received in the USDA RD State Office by the deadline date established above. If the due date falls on a Saturday, Sunday, or Federal holiday, the application is due the next business day. All application documents identified in this notice and in 7 CFR part 4280, subpart E, are required to be considered a complete application.
(c)
5.
6.
None of the funds made available may be used to enter into a contract, memorandum of understanding, or
(a) Any corporation that has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability.
(b) Any corporation that was convicted of a felony criminal violation under any Federal law within the preceding 24 months where the awarding agency is aware of the unpaid tax liability and/or conviction, unless a Federal agency has considered suspension or debarment of the corporation and has determined that further action is not necessary to protect the interests of the Government.
7.
There is no limit on the number of applications an applicant may submit under this announcement. There are no specific formats, specific limitations on number of pages, font size and type face, margins, paper size, number of copies, sequence, or assembly requirements. The component pieces of this application should contain original signatures on the original application.
All forms requiring signatures must include an original signature. If the applicant wishes to hand deliver its application, the addresses for these deliveries are in the
1.
2.
The Agency reserves the right to award additional discretionary points under 7 CFR 4280.435(k). Discretionary points may only be assigned to initial grants. Assignment of discretionary points must include a written justification. Permissible justifications include projects that meet special Secretary of Agriculture initiatives such as projects:
(a) Assisting rural communities recover economically through more and better market opportunities and through improved infrastructure. Applicants receive priority points if the project is located in or serving a rural community whose economic well-being ranks in the most distressed tier (distress score of 80 or higher) of the Distressed Communities Index using the Distressed Communities Look-Up Map available at
(b) Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects. Using the Social Vulnerability Index (SVI) Look-Up Map (available at
• The Project is located in or serving a community with score 0.75 or above on the SVI;
• The applicant is a federally recognized Tribe, including Tribal instrumentalities and entities that are wholly owned by Tribes; or
• Is a project where at least 50 percent of the project beneficiaries are members of federally recognized Tribes and non-Tribal applicants include a Tribal Resolution of Consent from the Tribe or Tribes that the applicant is proposing to serve.
• The application is from or benefiting a Rural Partner's Network's (RPN) community network. Currently RPN Networks exist in Alaska, Arizona, Georgia, Kentucky, Mississippi, Nevada, New Mexico, North Carolina, Puerto Rico, West Virginia and Wisconsin. Use the Community Look-Up map (available at
(c) Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities. Using the Disadvantaged Community and Energy Community Look-up Map (available at
• If a project is located in or serves a Disadvantaged Community as defined by the Climate and Economic Justice Screening Tool (CEJST), from the White House Council on Environmental Quality (CEQ),
• If the project is located in or serves an Energy Community as defined by the Inflation Reduction Act of 2022 (Pub. L. 117-169, “IRA”), and
• If applicants can demonstrate through a written narrative how the proposed climate-impact projects will improve the livelihoods of community residents and meet pollution mitigation or clean energy goals.
1.
2.
(a)
(1) All successful applicants will be notified by letter, which will include a Letter of Conditions, and a Letter of Intent to Meet Conditions. This letter is not an authorization to begin performance. If the applicant wishes to consider beginning performance prior to the grant being officially closed, all pre-award costs must be approved in writing and in advance by the Agency.
(2) Additional requirements that apply to grantees selected for this program can be found in 7 CFR part 4280, subpart E; the Grants and Agreements regulations applicable to USDA in 2 CFR part 400, which incorporates the Office of Management and Budget (OMB) regulations at 2 CFR part 200, and successor regulations. In addition, all recipients of Federal financial assistance are required to report information about first tier subawards and executive compensation (see 2 CFR part 170). You will be required to have the necessary processes and systems in place to comply with the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282) reporting requirements (see 2 CFR 170.200(b), unless you are exempt under 2 CFR 170.105).
(3) Program participants will be required to collect and maintain data provided by recipients on race, sex, and national origin and ensure recipients collect and maintain this data. Race and ethnicity data will be collected in accordance with OMB
(4) The following additional requirements apply to grantees selected for this program:
(i) Form RD 4280-2 “Rural Business-Cooperative Service Financial Assistance Agreement.”
(ii) Letter of Conditions.
(iii) Form RD 1940-1, “Request for Obligation of Funds.”
(iv) Form RD 1942-46, “Letter of Intent to Meet Conditions.”
(v) SF LLL, “Disclosure of Lobbying Activities,” if applicable.
(vi) Form SF 270, “Request for Advance or Reimbursement.”
(b)
3.
(a) A comparison of actual accomplishments to the objectives established for that period;
(b) Problems, delays, or adverse conditions, if any, which have affected or will affect attainment of overall Project objectives, prevent meeting time schedules or objectives, or preclude the attainment of Project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation;
(c) Objectives and timetable established for the next reporting period;
(d) Any special reporting requirements, such as jobs supported and created, businesses assisted, or Economic Development which results in improvements in median household incomes, and any other specific requirements, should be placed in the reporting section in the Letter of Conditions; and
(e) Within 120 days after the conclusion of the Project, the grantee will provide a final Project Evaluation Report. The last quarterly payment will be withheld until the final report is received and approved by the Agency. Even though the grantee may request reimbursement monthly, the last three months of reimbursements will be withheld until a final Project, Project Performance, and Financial Status Report are received and approved by the Agency.
For general questions about this announcement, please contact your USDA RD State Office provided in the
1.
2.
3.
4.
5.
(a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb
(b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws.
(c) A faith-based organization may not use direct Federal financial assistance from USDA to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by USDA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
6.
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at
(1)
(2)
(3)
USDA is an equal opportunity provider, employer, and lender.
Rural Utilities Service, USDA
Notice
The Rural Utilities Service (RUS or the Agency), a Rural Development (RD) agency of the United States Department of Agriculture (USDA), announces the acceptance of applications under the Distance Learning and Telemedicine (DLT) grant program for fiscal year (FY) 2025, subject to the availability of funding. This notice is being issued prior to passage of a FY 2025 Appropriations Act in order to allow applicants sufficient time to leverage financing, prepare and submit their applications, and give the Agency time to process applications within FY 2025. Based on FY 2024 appropriated funding, the Agency estimates that approximately $40 million will be available for FY 2025. Successful applications will be selected by the Agency for funding and subsequently awarded to the extent that funding may ultimately be made available through appropriations. All applicants are responsible for any expenses incurred in developing their applications.
Applications must be submitted through
All applications must be submitted electronically at
For inquiries regarding eligibility concerns, please contact program staff at
•
•
•
1.
2.
3.
4.
(a) The Agency will review, evaluate, and score applications received in response to this notice based on 7 CFR 1734.26. Awards under the DLT program will be made on a competitive basis using specific selection criteria provided in 7 CFR 1734.27. The Agency advises all interested parties that the applicant bears the full burden in preparing and submitting an application in response to this notice regardless of whether or not funding is appropriated for the DLT program in FY 2025.
(b) For this application window, applicants may, but are not required to, submit an application competing for residual Coronavirus Aid, Relief, and Economic Security Act funding (CARES) funds. An estimated $5 million is available to prevent, prepare for, and respond to coronavirus, domestically or internationally, for telemedicine and distance learning services in rural areas. Interested applicants are encouraged to identify specific ways in which their application addresses COVID-19.
To combat a key threat to economic prosperity, rural workforce and quality of life, the Agency is directed to set aside 20 percent of the total available funds for FY 2025 for projects that seek to reduce the morbidity and mortality associated with substance use disorder (including opioid misuse) in rural communities by strengthening the capacity to address prevention, treatment and/or recovery at the community level.
For this application window, applicants may, but are not required to, submit an application competing for CARES Act funding as detailed in section A(4)(b) of this notice.
The total appropriated amount minus the determined set aside amount will be available for all eligible projects. RUS may at its discretion, increase the total level of funding available in this funding round from any available source provided the awards meet the requirements of the statute which made the funding available to the Agency.
1.
(a) Applicants must have a Unique Entity Identifier (UEI) and an active registration that includes the Financial Assistance Representations and Certifications and has current information in the System for Award Management (SAM) at:
(b) Corporations that have been convicted of a federal felony within the past 24 months are not eligible. Any corporation that has been assessed to have any unpaid federal tax liability, for which all judicial and administrative remedies have been exhausted or have lapsed and is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, is not eligible for financial assistance.
(c) Applicants are required to provide evidence of their ability to contract with RUS to obtain the grant and comply with all applicable requirements, in accordance with 7 CFR 1734.4(a). It is incumbent on applicants to determine the appropriate entity to apply for the grant. Entities created by educational or medical institutions for the purpose of applying for and managing grants, such as university or hospital foundations, should not be applicants unless they can own and manage grant-funded equipment as required by the Grant Agreement and applicable regulations, including 2 CFR part 200. Accordingly, RUS will not transfer awards to another entity because the applicant has later determined that it cannot close the award, execute the standard Grant Agreement, which is publicly available, nor hold the grant assets in its name. Similarly, if there will be shared ownership of assets, this must be fully
2.
(a)
(b)
3.
(a) The Application Guide provides additional information regarding eligible and ineligible items for equipment and facilities.
(b) Grant applications that are written by vendors who are mentioned in the application as vendors to be used on the project to be funded by the DLT award are ineligible as a violation of the competition rules in 2 CFR 200.319. Such vendors are also prohibited from bidding on the project because of conflict of interest. Additionally, applicants must fully understand the procurement requirements of 2 CFR part 200, subpart D and 7 CFR part 1734 when compiling an application for submission and must avoid the use of predetermined equipment as a violation of the bidding requirements unless they have adequately demonstrated in the application that no other equipment is available for the intended purpose.
(c) Projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501
(d) If a DLT project proposes service on or over Tribal Lands and the applicant is non-Tribal, then a letter of consent is required from each Tribal Council with jurisdiction over the Tribal Lands included in the project. However, if a DLT project proposes infrastructure construction or deployment on or over Tribal Lands, then a Tribal Resolution is required from each Tribal Government with jurisdiction over the Tribal Lands included in the project.
1.
2.
(a)
(b)
(c)
3.
(a) At the time of application, each applicant must have an active registration in the SAM before submitting its application in accordance with 2 CFR part 25. To register in the SAM, entities will be required to obtain a UEI. Instructions for obtaining the UEI are available at
(b) Applicants must maintain an active SAM registration, with current, accurate and complete information, at all times during which it has an active federal award or an application under consideration by a federal awarding agency.
(c) Applicants must ensure they complete the Financial Assistance General Certifications and Representations in the SAM.
(d) Applicants must provide a valid UEI in its application, unless determined exempt under 2 CFR 25.110.
(e) The Agency will not make an award until the applicant has complied with all the SAM requirements including providing the UEI. If an applicant has not fully complied with the requirements by the time the Agency is ready to make an award, the Agency may determine that the applicant is not qualified to receive a federal award and use that determination as a basis for making a federal award to another applicant.
4.
(a)
(b)
(c)
The Agency will not solicit or consider new scoring information that is submitted after the application deadline. The Agency reserves the right to contact applicants to seek clarification on materials contained in the submitted application.
5.
6.
(a) Ineligible grant purposes are outlined in 7 CFR 1734.23. Applicants should exclude ineligible items and ineligible matching contributions from the budget. If an ineligible item or matching contribution is included in the budget, the item will be removed and may result in an application being deemed ineligible. See the Application Guide for more details on funding restrictions, matching contributions, a recommended budget format, and detailed budget compilation instructions.
(1) If an application includes both eligible and ineligible grant purposes on a single line of the application budget, and the cost of the ineligible item can be determined, the ineligible item will be removed from the approved budget. However, the entire line item will be deemed ineligible if the cost of the ineligible item cannot be determined.
(b) Hub sites located in non-rural areas are not eligible for grant assistance unless they are necessary to provide DLT services to rural residents at end user sites. See 7 CFR 1734.2(h).
(c) For the purposes of this NOFO, the cost of video conferencing platform licenses is considered an eligible cost if:
(1) The video conferencing platform is an integral component in a project delivering distance learning or telemedicine services to an end user through the use of eligible equipment;
(2) The cost does not exceed ten percent of the grant amount;
(3) The application demonstrates that the predominant use (50 percent or more) of the video conferencing platform will be for the distance learning or telemedicine project;
(4) The license is new and not a renewal of an existing license; and
(5) The number of licenses requested does not exceed the number of end-user devices requested in the application.
The duration of funding for video conferencing platform licenses is limited to three years from the date funds are made available.
(d) If an application includes multiple costs on a single line of the application budget, one of which is subject to a cost limitation, as outlined in 7 CFR 1734.21, the items that are not subject to the cost limitation will be deducted when calculating the cost limitation percentage. However, the entire line item will be applied against the cost limitation if each cost cannot be determined.
(e) Grantees may not subaward any part of a DLT grant without the express, prior written approval of RUS.
7.
(a) Applications will not be accepted via paper, fax or electronic mail.
(b) Submit the electronic application through
(c) For duplicate applications submitted through
(d)
1.
(a)
(1) The population size of each community where an end-user site is located, and
(2) Whether an end-user site lies within an urbanized area adjacent to a city or town having a population more than 50,000 inhabitants.
For non-fixed site projects and projects which contain non-fixed components, the rurality score will be based on the hub site.
Applicants should use 2020 census data from the census website (
(b)
(c)
(d)
(1)
(2)
(i) Projects proposing to serve rural communities with a Social Vulnerability Index (SVI) with a score of 0.75 or higher are eligible. For the purposes of this NOFO, Puerto Rico, Guam, America Samoa, the Northern Mariana Islands, Palau, the Marshall Islands, the Federated States of Micronesia, the U.S. Virgin Islands, and Hawaiian Census Tribal areas are considered Socially Vulnerable Communities. A GIS layer identifying the Socially Vulnerable Communities can be found using the DLT mapping tool available at:
(ii) Projects that enable and improve distance learning and telemedicine services on Tribal Lands. Tribal Lands will be identified in GIS layers included in the DLT mapping tool available at:
(iii) Projects proposed by a federally recognized Tribe, including Tribal instrumentalities and entities that are wholly owned by Tribes.
2.
The Agency evaluates grant applications in accordance with 7 CFR 1734.27(c). The Agency reserves the right to offer the applicant less than the grant funding requested.
1.
2.
(a) Executing a DLT Grant Agreement.
(b) Using Form SF 270, Request for Advance or Reimbursement, to request reimbursements (along with the submission of receipts for expenditures and any other documentation to support the request for reimbursement).
(c) Submitting an annual Project Performance Activity Report, no later than January 31st of the year following the year in which all or any portion of the grant is first advanced and continuing in subsequent years until completion of the project.
(d) Ensuring that records are maintained to document all activities and expenditures utilizing DLT grant funds and matching funds (receipts for expenditures are to be included in this documentation).
(e) Providing a final project performance report, no later than one hundred twenty (120) days after the expiration date, termination of the grant, the project completion, or the final disbursement of the grant by the grantee, whichever event occurs last.
(f) Complying with policies, guidance, and requirements as described in the following applicable Code of Federal Regulations, and any successor regulations:
(1) 2 CFR parts 200 and 400 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards).
(2) 2 CFR parts 417 and 180 (Government-wide Nonprocurement Debarment and Suspension).
(g) Complying with Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency. For information on limited English proficiency and agency-specific guidance, go to
(h) Accountability and Compliance with Civil Rights Laws. The regulation found at 7 CFR part 1901, subpart E contains policies and procedures for implementing the regulations of the Department of Agriculture issued pursuant to Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, Title IX, Section 504 of the Rehabilitation Act of 1973, Executive Order 13166, Executive Order 11246, and the Equal Credit Opportunity Act of 1974, as they relate to RD. Nothing herein shall be interpreted to prohibit preference to American Indians on Indian Reservations.
The policies contained in this subpart apply to recipients. As recipients of federal financial assistance, awardees are required to comply with the applicable federal, tribal, state, and local laws. Title VI of the Civil Rights Act of 1964 and Section 504 of the Rehabilitation Act prohibits discrimination by recipients of federal financial assistance. Recipients are required to adhere to specific outreach activities. These outreach activities include contacting community organizations and leaders that include minority leaders; advertising in local newspapers and other media throughout the entire service area; and including the nondiscrimination slogan, “This is an Equal Opportunity Program. Discrimination is prohibited by Federal Law,” in methods that may include, but not be limited to, advertisements, electronic media, public broadcasts, and printed materials, such as brochures and pamphlets.
By completing the Financial Assistance Representations and Certifications on
(i) Build America, Buy America Act (BABAA). With respect to any construction under the DLT project, Awardees that are Non-Federal Entities, defined pursuant to 2 CFR 200.1 as any State, local government, Indian tribe, Institution of Higher Education, or nonprofit organization, shall be governed by the requirements of Section 70914 of the Build America, Buy America Act (BABAA) within the Infrastructure Investment and Jobs Act (Pub. L. 117-58), and its implementing regulations at 2 CFR part 184. Any requests for waiver of these requirements must be submitted pursuant to USDA's guidance available online at
(j) Geospatial Data. Awardee, and any and all contracts entered into by the Awardee with respect to the Award, shall ensure that geospatial data required to be collected and provided to the agency, conforms with the requirements of USDA Department Regulation DR-3465-001 and the Geospatial Metadata Standards set forth in DM 3465-001, which can be obtained online at
3.
(a)
(b)
(1) Non-Federal Entities, which include recipients that are states, local governments, Indian tribes, institutions of higher education, or nonprofit organizations, shall provide RUS with an audit pursuant to 2 CFR part 200, subpart F (Audit Requirements). The recipient must follow subsection 2 CFR 200.502 in determining federal awards expended. All RUS loans impose an ongoing compliance requirement for the purpose of determining federal awards expended during a fiscal year. In addition, the recipient must include the value of new federal loans made along with any grant expenditures from all federal sources during the recipient's fiscal year. Therefore, the audit submission requirement for this program begins in the recipient's fiscal year that the loan is made and thereafter, based on the balance of federal loan(s) at the beginning of the audit period. All required audits must be submitted within the earlier of: (i) 30 calendar days after receipt of the auditor's report; or (ii) nine months after the end of the recipient's audit period.
(2) For all other entities, recipients shall provide RUS with an audit within 120 days after the as of audit date in accordance with 7 CFR part 1773. With respect to grant funds, the audit is required until all grant funds have been expended or rescinded. While an audit is required, recipients must also submit the reports on internal control; compliance with provisions of laws, regulations, contracts and grant agreements; and instances of fraud.
(c)
(1) If approved by the agency, first Tier Sub-Awards of $30,000 or more (unless they are exempt under 2 CFR part 170) must be reported by the recipient to
(2) The total compensation of the recipient's executives (the five most highly compensated executives) must be reported by the recipient (if the recipient meets the criteria under 2 CFR part 170) to
(3) If sub-awards are approved by the agency, the total compensation of the sub-recipient's executives (the five most highly compensated executives) must be reported by the sub-recipient (if the sub-recipient meets the criteria under 2 CFR part 170) to the recipient by the end of the month following the month in which the sub-award was made.
(d)
For general questions about this announcement, please contact the point of contact provided in the
(1)
(2)
(3)
(4)
(5)
(a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb
(b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws.
(c) A faith-based organization may not use direct Federal financial assistance from USDA to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by USDA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
(6)
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027,
(1)
(2)
(3)
USDA is an equal opportunity provider, employer, and lender.
Rural Utilities Service, USDA.
Notice.
The Rural Utilities Service (RUS or the Agency), a Rural Development agency of the United States Department of Agriculture (USDA), is announcing the extension and reopening of the Guarantees for Bonds and Notes Issued for Utility Infrastructure Purposes Program (the 313A Program) for Fiscal Year (FY) 2025 application window through January 31, 2025.
The application period for the funding opportunity published October 25, 2024 at 89 FR 85148 is reopened. Completed applications must be electronically received by RUS no later than 5 p.m. eastern time (ET) on January 31, 2025. Applicants intending to submit applications must have their applications received by the closing deadline.
Completed applications must be submitted electronically to Amy McWilliams, Branch Chief, Policy and Outreach Branch, Office of Customer Service and Technical Assistance, Electric Program, RUS at
Amy McWilliams, Branch Chief, Policy and Outreach Branch, Office of Customer Service and Technical Assistance, Electric Program, Rural Utilities Service, USDA, 1400 Independence Avenue SW, Mail Stop 1560, Room 4121-South, Washington, DC 20250-1560, by email at
The 313A Program guarantees loans to selected applicants and the proceeds of those loans are to be used for the purpose of making utility infrastructure loans and for refinancing bonds or notes issued for such purposes to a borrower that has at any time received, or is eligible to receive, a loan under the Rural Electrification Act of 1936, as amended. The FY 2025 funding opportunity for the 313A Program was announced by a Notice of Funding Opportunity (NOFO) published in the
With this notice, RUS is reopening the December 24, 2024, application deadline and extending it until 5 p.m. ET on January 31, 2025.
Civil Rights Cold Case Records Review Board.
Notice.
The Civil Rights Cold Case Records Review Board received 195 pages of records from the National Archives and Records Administration (NARA) related to seven civil rights cold case incidents to which the Review Board assigned the unique identifiers 2024-003-018, 2024-003-023, 2024-003-035, 2024-003-038, 2024-003-051, 2024-003-067, and 2024-003-068. NARA did not propose any postponements of disclosure. On December 20, 2024, the Review Board determined that the records should be publicly disclosed in the Civil Rights Cold Case Records Collection. By issuing this notice, the Review Board complies with section 7(c)(4) of the Civil Rights Cold Case Records Collection Act of 2018 that requires the Review Board to publish in the
Stephannie Oriabure, Chief of Staff, Civil Rights Cold Case Records Review Board, 1800 F Street NW, Washington, DC 20405, (771) 221-0014,
Sanofi US Services Inc. submitted a notification of proposed production activity to the FTZ Board (the Board) for its facilities in Ridgefield, New Jersey within FTZ 49. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on December 18, 2024.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished product is Beyfortus® (Nirsevimab)—dosage form vaccine (duty-free).
The proposed foreign-status materials/components include Beyfortus® (Nirsevimab monoclonal antibody active pharmaceutical ingredient)—unmixed and mixed drug substance (duty-free).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Diane Finver at
On February 16, 2023, in the U.S. District Court for the Southern District of Texas, Joel Alejandro Garza-Corona (“Garza-Corona”) was convicted of violating 18 U.S.C. 554(a). Specifically, Garza-Corona was convicted of smuggling 2,399 rounds of assorted ammunition from the United States to Mexico without the required authorization from the U.S. Department of Commerce. As a result of his conviction, the court sentenced him to 40 months in prison.
Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),
BIS received notice of Garza-Corona's conviction for violating 18 U.S.C. 554(a). As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Garza-Corona to make a written submission to BIS. 15 CFR 766.25.
Based upon my review of the record and consultations with BIS's Office of Exporter Services, including its Director, and the facts available to BIS, I have decided to deny Garza-Corona's export privileges under the Regulations for a period of eight years from the date of Garza-Corona's conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Garza-Corona had an interest at the time of his conviction.
Accordingly, it is hereby
A. Applying for, obtaining, or using any license, license exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or engaging in any other activity subject to the Regulations; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or from any other activity subject to the Regulations.
A. Export, reexport, or transfer (in-country) to or on behalf of the Denied Person any item subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted acquisition by the Denied Person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby the Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Denied Person of any item subject to the Regulations that has been exported from the United States;
D. Obtain from the Denied Person in the United States any item subject to the Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by the Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by the Denied Person if such service involves the use of any item subject to the Regulations that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
On September 6, 2023, in the U.S. District Court for the District of Maryland, Eric Nana Kofi Ampong-Coker (“Ampong-Coker”) was convicted of violating 50 U.S.C. 4819. Specifically, Ampong-Coker was convicted of knowingly and willfully attempting to export one (1) SCCY Industries LL.C., Model CPX-2 9mm handgun; one (1) Mossberg 9mm handgun; one (1) Smith & Wesson 9mm handgun; one (1) FIS Product, Model XD-9 9mm handgun; and one (1) Sarsilmaz (Sar Arms), 9mm
Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),
BIS received notice of Ampong-Coker's conviction for violating 50 U.S.C. 4819. As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Ampong-Coker to make a written submission to BIS. 15 CFR 766.25.
Based upon my review of the record and consultations with BIS's Office of Exporter Services, including its Director, and the facts available to BIS, I have decided to deny Ampong-Coker's export privileges under the Regulations for a period of 10 years from the date of Ampong-Coker's conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Ampong-Coker had an interest at the time of his conviction.
Accordingly, it is hereby
A. Applying for, obtaining, or using any license, license exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or engaging in any other activity subject to the Regulations; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or from any other activity subject to the Regulations.
A. Export, reexport, or transfer (in-country) to or on behalf of the Denied Person any item subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted acquisition by the Denied Person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby the Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Denied Person of any item subject to the Regulations that has been exported from the United States;
D. Obtain from the Denied Person in the United States any item subject to the Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by the Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by the Denied Person if such service involves the use of any item subject to the Regulations that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
On May 30, 2024, in the U.S. District Court for the Western District of Pennsylvania, Derby Clerfe (“Clerfe”) was convicted of violating 18 U.S.C. 371. Specifically, Clerfe pled guilty to conspiring with others to export from the United States to Haiti nine handguns without the required licenses and without filing Electronic Export Information in the Automated Export System. As a result of his conviction, the Court sentenced Clerfe to one year of probation.
Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),
BIS received notice of Clerfe's conviction for violating 18 U.S.C. 371. As provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”), BIS provided notice and opportunity for Clerfe to make a written submission to BIS. 15 CFR 766.25.
Based upon my review of the record and consultations with BIS's Office of Exporter Services, including its Director, and the facts available to BIS, I have decided to deny Clerfe's export privileges under the Regulations for a period of two years from the date of Clerfe's conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Clerfe had an interest at the time of his conviction.
Accordingly, it is hereby
A. Applying for, obtaining, or using any license, license exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or engaging in any other activity subject to the Regulations; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or from any other activity subject to the Regulations.
A. Export, reexport, or transfer (in-country) to or on behalf of the Denied Person any item subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted acquisition by the Denied Person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby the Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Denied Person of any item subject to the Regulations that has been exported from the United States;
D. Obtain from the Denied Person in the United States any item subject to the Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by the Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by the Denied Person if such service involves the use of any item subject to the Regulations that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
Issued this 31st day of December, 2024.
On June 11, 2024, in the U.S. District Court for the Eastern District of Pennsylvania, Daniel Ray Lane (“Lane”), was convicted of violating 18 U.S.C. 371 and the International Emergency Economic Powers Act (50 U.S.C 1701,
Pursuant to section 1760(e) of the Export Control Reform Act (“ECRA”),
BIS received notice of Lane's conviction for violating 18 U.S.C. 371 and IEEPA, and has provided notice and opportunity for Lane to make a written submission to BIS, as provided in section 766.25 of the Export Administration Regulations (“EAR” or the “Regulations”). 15 CFR 766.25.
Based upon my review of the record and consultations with BIS's Office of Exporter Services, including its Director, and the facts available to BIS, I have decided to deny Lane's export privileges under the Regulations for a period of 10 years from the date of Lane's conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Lane had an interest at the time of his conviction.
Accordingly, it is hereby
A. Applying for, obtaining, or using any license, license exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or engaging in any other activity subject to the Regulations; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the Regulations, or from any other activity subject to the Regulations.
A. Export, reexport, or transfer (in-country) to or on behalf of the Denied Person any item subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted acquisition by the Denied Person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby the Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Denied Person of any item subject to the Regulations that has been exported from the United States;
D. Obtain from the Denied Person in the United States any item subject to the Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by the Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by the Denied Person if such service involves the use of any item subject to the Regulations that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is amending its preliminary affirmative determination in the less-than-fair-value (LTFV) investigation of crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells), from Malaysia to correct two significant ministerial errors. The period of investigation (POI) is April 1, 2023, through March 31, 2024.
Applicable January 6, 2025.
Patrick Barton or Elizabeth Talbot Russ, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0012 or (202) 482-5516 respectively.
On December 4, 2024, Commerce published in the
The products covered by this investigation are solar cells from Malaysia. For a complete description of the scope of this investigation,
A ministerial error is defined as including errors “in addition, subtraction, or other arithmetic function, clerical error resulting from inaccurate copying, duplication, or the like, and any other similar type of unintentional error which {Commerce} considers ministerial.”
In the
We find that these errors meet the definition of “ministerial errors,” and that the corrections of the errors for Jinko Solar results in a change that is at least five absolute percentage points in, and not less than 25 percent of, the margin calculated for Jinko Solar in the
For a complete discussion of the alleged ministerial errors,
As a result of correcting the significant ministerial errors for Jinko Solar, Commerce determines the following estimated weighted-average dumping margins exist:
We intend to disclose the calculations performed for this amended preliminary determination to parties within five days after public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224.
The collection of cash deposits and suspension of liquidation will be revised according to the rates calculated in this amended preliminary determination, in accordance with section 733(d) of the Act. Because the amended rate for Jinko Solar and all other producers and/or exporters result in decreased cash deposit rates, the amended rates will be effective retroactively to December 4, 2024, the date of publication of the
In accordance with section 733(f) of the Act, we intend to notify the U.S. International Trade Commission of our amended preliminary determination.
This notice is issued and published pursuant to sections 733(d) and 777(i) of the Act, and 19 CFR 351.224(e).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) that revocation of the antidumping duty (AD) orders on raw flexible magnets from the People's Republic of China (China) and Taiwan, and revocation of the countervailing duty (CVD) order on raw flexible magnets from China would likely lead to the continuation or recurrence of dumping, countervailable subsidies, and material injury to an industry in the United States, Commerce is publishing a notice of continuation of the AD orders and the CVD order.
Applicable December 27, 2024.
Garry Kasparov, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1397.
On September 17, 2008, Commerce published in the
On December 27, 2024, the ITC published its determination, pursuant to sections 751(c) and 752(a) of the Act, that revocation of the
The products covered by the
Specifically excluded from the scope of these
All products meeting the physical description of subject merchandise that are not specifically excluded are within the scope of these
As a result of the determinations by Commerce and the ITC that revocation of the
The effective date of the continuation of the
This notice also serves as a final reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
These five-year (sunset) reviews and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act and published in accordance with section 777(i) of the Act, and 19 CFR 351.218(f)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA Regulations for Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico, notification is hereby given that NMFS has issued a Letter of Authorization (LOA) to LLOG Exploration Offshore, L.L.C. (LLOG) for the take of marine mammals incidental to geophysical survey activity in the Gulf of Mexico (GOM).
The LOA is effective from December 31, 2024 through April 19, 2026.
The LOA, LOA request, and supporting documentation are available online at:
Jenna Harlacher, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry operators”), in U.S. waters of the GOM over the course of 5 years (86 FR 5322, January 19, 2021). The rule was based on our findings that the total taking from the specified activities over the 5-year period will have a negligible impact on the affected species or stock(s) of marine mammals and will not have an unmitigable adverse impact on the availability of those species or stocks for subsistence uses, and became effective on April 19, 2021.
The regulations at 50 CFR 217.180
NMFS subsequently discovered that the 2021 rule was based on erroneous take estimates. We conducted another rulemaking using correct take estimates and other newly available and pertinent information relevant to the analyses supporting some of the findings in the 2021 final rule and the taking allowable under the regulations. We issued a final rule in April 2024, effective May 24, 2024 (89 FR 31488, April 24, 2024).
The 2024 final rule made no changes to the specified activities or the specified geographical region in which those activities would be conducted, nor to the original 5-year period of effectiveness. In consideration of the new information, the 2024 rule presented new analyses supporting affirmance of the negligible impact determinations for all species, and affirmed that the existing regulations, which contain mitigation, monitoring, and reporting requirements, are consistent with the “least practicable adverse impact” standard of the MMPA.
LLOG's new survey plans include conducting survey effort at multiple platform locations in the GOM. Survey effort could be conducted as Zero Offset, Offset, or Walkaway vertical seismic profile (VSP), Salt Proximity Survey, and/or Checkshot survey. Water depths at the locations where LLOG plans to conduct survey effort range from approximately 366 to 2,300 meters (m). LLOG plans to use either a 12-element, 2,400 cubic inch (in
LLOG currently has 7 active LOAs associated with similar survey activities as described above: 3 in zone 7, effective January 1, 2023 through December 31, 2024 (87 FR 78652, December 22, 2022), effective May 12, 2023 through December 31, 2024 (88 FR 31715, May 18, 2023), and effective March 1, 2022 through April 19, 2026 (89 FR 751, January 5, 2024); 2 in zone 5, effective September 21, 2023 through December 31, 2025 (88 FR 66409, September 27, 2023) and effective March 1, 2022 through April 19, 2026 (89 FR 14056, February 26, 2024); and 2 in zone 6, effective July 1, 2023 through July 5, 2025 (88 FR 41909, June 28, 2023) and effective September 16, 2024 through April 19, 2026 (89 FR 77475, September 23, 2024).
The purpose of the newly issued LOA is to combine all LLOG survey activities, including remaining survey activity associated with the seven existing LOAs as well as newly planned survey activity, under a single LOA. This newly issued LOA would reduce workload for both LLOG and NMFS and streamline reporting. The new activity includes additional areas not covered under any active LLOG survey LOAs. As such, the seven active LOAs will expire to coincide with this new LOA that covers all of LLOGs survey activity. All currently active LOAs issued to LLOG were superseded by this new LOA, and all survey activity covered under previously active LOAs is now covered under this LOA.
Consistent with the preamble to the final rule, the new survey effort proposed by LLOG in its LOA request was used to develop LOA-specific take estimates based on the acoustic exposure modeling results described in the preamble (89 FR 31488, April 24, 2024). In order to generate the appropriate take number for authorization, the following information was considered: (1) survey type; (2) location (by modeling zone
No VSP surveys were included in the modeled survey types, and use of existing proxies (
For the new survey activity, the seismic source array will be deployed in
The survey will take place over approximately 61 days total, including 19 days in zone 5, 19 days in zone 6, and 23 days in zone 7. The monthly distribution of survey days is not known in advance. Take estimates for each species are based on the month that produces the greatest value.
For the Rice's whale, take estimates based on the modeling yielded results that are not realistically likely to occur when considered in light of other relevant information concerning Rice's whale habitat preferences considered during the rulemaking process. NMFS' 2024 final rule provided detailed discussion regarding Rice's whale habitat (see,
Although Rice's whales may occur outside of the general depth range expected to provide suitable habitat, we expect that any such occurrence would be rare. LLOG's planned activities will occur in water depths of approximately 366 to 2,300 m in the central GOM. Although there is some minimal habitat depth overlap, the majority of LLOG's survey would occur in deeper water, and the modeling results indicate only 1 take of Rice's whale (even without considering whether there is overlap with Rice's whale habitat). Thus, NMFS does not expect there to be the reasonable potential for take of Rice's whale in association with this survey and, accordingly, does not authorize take of Rice's whale through the LOA.
Based on the results of our analysis here and in the other previously issued LOAs, NMFS has determined that the level of taking expected for the newly combined survey activities and authorized through the LOA is consistent with the findings made for the total taking allowable under the regulations. See table 1 in this notice and table 6 of the rule (89 FR 31488, April 24, 2024).
Under the GOM rule, NMFS may not authorize incidental take of marine mammals in an LOA if it will exceed “small numbers.” In short, when an acceptable estimate of the individual marine mammals taken is available, if the estimated number of individual animals taken is up to, but not greater than, one-third of the best available abundance estimate, NMFS will determine that the numbers of marine mammals taken of a species or stock are small (89 FR 31535, May 24, 2024). For more information please see NMFS' discussion of small numbers in the 2021 final rule (86 FR 5438, January 19, 2021).
The take numbers for authorization are determined as described above in the Summary of Request and Analysis section. In addition, we are adding the previously analyzed take from LLOG's 7 active LOAs. Subsequently, the total incidents of harassment for each species are multiplied by scalar ratios to produce a derived product that better reflects the number of individuals likely to be taken within a survey (as compared to the total number of instances of take), accounting for the likelihood that some individual marine mammals may be taken on more than 1 day (86 FR 5404, January 19, 2021; 89 FR 31535, May 24, 2024). The output of this scaling, where appropriate, is incorporated into adjusted total take estimates that are the basis for NMFS' small numbers determinations, as depicted in table 1.
This product is used by NMFS in making the necessary small numbers determinations through comparison with the best available abundance estimates (see discussion at 86 FR 5391, January 19, 2021). For this comparison, NMFS' approach is to use the maximum theoretical population, determined through review of current stock assessment reports (SAR;
Based on the analysis contained herein of LLOG's proposed survey activity described in its LOA application, the previous analysis from the 7 active LOAs, and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the affected species or stock sizes (
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued an LOA to LLOG authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
Office of National Marine Sanctuaries (ONMS), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice.
On June 13, 2014, NOAA published a final rule establishing the Sanctuary Nomination Process, allowing communities to submit nominations to NOAA for consideration as new national marine sanctuaries. The rule outlined the review process, national significance criteria, and management considerations that NOAA uses to evaluate nominations for inclusion in the inventory of areas that could eventually be considered for designation. The rule also states that NOAA will publish a
Applicable January 3, 2025.
Matt Brookhart, Eastern Regional Director, NOAA Office of National Marine Sanctuaries, 1315 East-West Highway, Silver Spring, Maryland 20910, and at
Matt Brookhart, Eastern Regional Director, NOAA Office of National Marine Sanctuaries,
The National Marine Sanctuaries Act (NMSA) (16 U.S.C. 1431
On June 13, 2014, NOAA issued a final rule that established the Sanctuary Nomination Process and finalized the national significance criteria and management considerations it will use to review new national marine sanctuary nominations (79 FR 33851). If NOAA determines a nomination adequately meets the final criteria and considerations, it may place that nomination in an inventory of areas to consider for designation as a national marine sanctuary. NOAA also stated that it would send a letter of notification to the nominator and publish a
NOAA is not designating any new national marine sanctuaries with this action. Any proposed designations of areas on the inventory would be conducted by NOAA as a separate process under the NMSA, Administrative Procedure Act (5 U.S.C. Subchapter II), National Environmental Policy Act (42 U.S.C. 4321
Conservation Law Foundation (CLF) nominated the Cashes Ledge area to be considered for designation as a national marine sanctuary on July 29, 2024. CLF identified a 766 mi
Based on information included in the nomination, including the comment letters submitted with the nomination, as well as NOAA's internal analysis, NOAA has determined that the nomination is responsive to the 11 national significance criteria and management considerations it uses to review nominations. Therefore, this notice serves to inform the public of the agency's decision to add the Cashes Ledge area to the inventory of successful nominations.
At this time, NOAA is not initiating a sanctuary designation process. In adding the Cashes Ledge area to the inventory, NOAA does not endorse or imply endorsement of any specific boundaries, regulations or management measures in the Cashes Ledge nomination. Should NOAA decide to initiate a sanctuary designation process for Cashes Ledge in the future, it would establish a highly public, multi-year process for exploring possibilities for sanctuary boundaries, regulations and programs in partnership with other Federal agencies, Tribal Nations, State governments, stakeholders and the public.
NOAA has concluded that the action of adding the Cashes Ledge area to the inventory of successful nominations will not have a significant effect, individually or cumulatively, on the human environment because this action is administrative in nature and does not designate or propose to designate any new national marine sanctuaries. NOAA has further determined that this action is not connected to a larger action, and does not involve extraordinary circumstances precluding the use of a categorical exclusion in accordance with NEPA (42 U.S.C. 4321
Consumer Financial Protection Bureau.
Supervisory Highlights.
The Consumer Financial Protection Bureau (CFPB) is issuing its thirty seventh edition of
This edition of
Jaclyn Sellers, Senior Counsel, at (202) 435-7449. If you require this document in an alternative electronic format, please contact
The Consumer Financial Protection Bureau's (CFPB) Supervision program assesses supervised institutions' compliance with Federal consumer financial law including unfair, deceptive, or abusive acts or practices (UDAAPs) prohibited by the Consumer Financial Protection Act of 2010 (the CFPA).
This edition of
The findings in this edition of
Supervision examined the deposit operations of supervised institutions to assess whether they engaged in any UDAAPs prohibited by the CFPA.
In recent examinations of depository institutions and service providers, Supervision continued to cite unfair acts or practices at institutions that charged consumers for unfair unanticipated overdraft fees, such as Authorize-Positive Settle-Negative (APSN) overdraft fees, during this time period.
Since the CFPB heightened its supervisory attention on overdraft and NSF fees in 2022, financial institutions have agreed to refund nearly $250 million to consumers—approximately $184 million in unfair unanticipated overdraft fees charged on transactions that were authorized when the consumer had sufficient funds, and approximately $66 million in unfair NSF fees charged on the same transaction that already incurred an NSF fee when it was previously declined. This $250 million reflects $240 million that the CFPB previously announced in October 2023 and April 2024, and an additional $10 million that financial institutions have agreed to refund since the period covered by those announcements.
Supervision continued to examine core processors in their capacity as service providers to large depository institutions. Core processors provide critical deposit, payment, and data processing services to many supervised institutions, and the system functionality that these entities develop drives many fee practices, including overdraft and NSF fee practices.
In examinations of core processors, examiners found that core processors had enhanced their core platforms during the review periods to enable client institutions to avoid assessing re-presentment NSF fees and APSN overdraft fees. However, examiners also found that the core processors configured their platforms so that the platforms would continue to assess the fees by default unless the client institutions took affirmative action to avoid assessing these fees. Examiners concluded that, in the offering and providing of core service platforms, core processors engaged in an unfair act or practice by assessing APSN overdraft fees and re-presentment NSF fees through their core platforms. An act or practice is unfair when: (1) it causes or is likely to cause substantial injury to consumers; (2) the injury is not reasonably avoidable by consumers; and (3) the injury is not outweighed by countervailing benefits to consumers or to competition.
The assessment of re-presentment NSF fees and APSN fees results in substantial injury to consumers. These fees also increased the risk of consumers incurring additional fees on subsequent transactions caused by the fees, which lowered consumers' account balances. The core processors caused these injuries because they were a predictable and foreseeable consequence of their core platforms' limitations and configuration. Where the platforms were configured to assess the fees by default, it was foreseeable to the core processors that their clients would fail to take affirmative action to cease charging these fees and thus continue to assess these fees. As with the fees themselves, the relevant system limitations and configurations were not reasonably avoidable by consumers and not outweighed by any countervailing benefits to consumers or competition.
In response to these findings, the core processors enhanced their core platforms to not only enable their client institutions to prevent the assessment of these fees but also to ensure that clients would not assess these fees by default if the clients did not take action to prevent their assessment.
Supervision has reviewed depository institutions' practices in processing automated clearinghouse (ACH) transactions to ensure that they are taking adequate steps to prevent the
The ACH network rules also generally limit the number of permissible re-presentments for a single transaction by limiting an ODFI and its clients to a maximum of two re-presentment attempts after the initial presentment is returned for insufficient funds. However, as the CFPB has previously observed, an ODFI's clients may, in an attempt to obtain payment from consumers, seek to improperly re-present transactions to circumvent this limit on the number of permissible representments.
Supervision found that depository institutions engaged in an unfair act or practice in their capacity as ODFIs by processing transactions for payment as initial presentments when the transactions were in fact re-presentments without taking steps to address indicia of inaccuracy. Examiners found that these institutions, in their capacity as ODFIs, did not monitor their originator clients' use of their ACH processing services to identify or prevent them from improperly re-presenting transactions. These depository institutions possessed information that strongly suggested that a percentage of ACH transactions that they processed as ODFIs were re-presented items that were improperly formatted and submitted by their originator clients as new transactions. These indicia included ACH entries reflecting transactions from the same payee, in the same amount, made close in time, which lacked indications that the transactions were recurring payments or otherwise reflected separate transactions.
By failing to monitor originators to identify and prevent improper re-presentment practices, these depository institutions caused or were likely to cause substantial injury to consumers in the form of NSF fees that could otherwise have been avoided. These fees would not have been assessed had the transaction been properly re-presented because the transaction would then either be identifiable as a re-presentment and the NSF fee would have been waived by the bank's core platform or would have not been submitted at all to the extent that the business client had already submitted the maximum number of re-presentment attempts. Although the supervised depository institutions, as ODFIs, did not actually assess these NSF fees, examiners found they caused the injury because the assessment of these fees was a probable and foreseeable consequence of their processing transactions for payment as initial presentments when the transactions were in fact re-presentments.
Even if a consumer's bank did not assess NSF fees, consumers still suffered injury in the form of improper debiting of funds. When an originator obtains payment for a previously returned transaction by submitting the transaction as initial presentment, rather than a re-presentment, without the consumer's authorization, the consumer suffers monetary harm by their account being debited without their authorization. These injuries were not reasonably avoidable and were also not outweighed by countervailing benefits to consumers or competition. In response to these findings, depository institutions implemented processes to prevent the origination of improper re-presentment transactions by their clients, including regularly monitoring and auditing ACH transactions to identify any re-presented items that are miscoded as initial presentments and any other indicia of inaccuracy.
Consumers frequently complain that they face challenges in stopping payment of preauthorized debit card transactions, which they have a right to do under the Electronic Fund Transfer Act (EFTA) and its implementing Regulation E.
Unlike other types of recurring payment transactions, depository institutions' core platforms generally do not offer the capability to stop payment of preauthorized debit card transactions. Regulation E recognizes that, in the case of a preauthorized debit made through a debit card network, a depository institution may not have the capability to block a preauthorized debit from being posted to the consumer's account given the manner in which preauthorized debit card transactions are processed.
Examiners concluded that these network operators engaged in an unfair act or practice by processing preauthorized debit card payments subject to consumer's valid stop payment requests due to the manner in which they operated their networks. By processing such transactions, the network operators caused substantial
Operators of networks that did not offer a stop payment service caused this injury because it was foreseeable to them that not offering such a capability in the network would result in network members lacking the capability to stop payment of the transactions and, by extension, consumers being charged for such transactions after they submit a valid stop payment order. Even where network operators offered a network-based stop payment capability, these operators still caused this injury to consumers, because, given that very few network members elected to use the capability, it was foreseeable to them that consumers would be charged for preauthorized debits that they are entitled to have stopped.
The substantial injury identified in these exams was not reasonably avoidable by consumers. When entering a recurring transaction, consumers have little reason to anticipate potential injury, and if they did, few means to avoid it. Consumers have a reasonable expectation that their issuing bank will comply with the requirements of Regulation E and stop payment if a valid request is entered. Consumers also have little to no control over which debit card networks their transactions are routed through, and no control over whether the network offers a stop payment service or whether their bank has voluntarily enrolled in such a service. Lastly, in considering countervailing benefits to consumers and competition from processing preauthorized debit card transactions subject to a consumer's valid stop payment request, Supervision found this practice to be injurious in its net effects.
In response to these findings, the network operators revised and implemented relevant network processes and capabilities to ensure that they cease to process preauthorized debit card payments routed through their networks that are subject to consumers' valid stop payment requests.
Entities—such as banks, loan servicers, and others (to which we refer herein collectively as furnishers)—that furnish information to consumer reporting companies (CRCs)
The FCRA requires furnishers to have reasonable procedures in place to respond to certain notifications they receive from CRCs related to information resulting from identity theft (
Examiners found that furnishers did not have reasonable procedures in place to respond to identity theft block request notifications from CRCs. Specifically, in recent reviews of installment loan furnishers, examiners identified that the furnishers did not have any procedures in place to respond to identity theft block request notifications received from CRCs. Consequently, the furnishers did not process the requests and repeatedly refurnished information that consumers asserted had resulted from identity theft and, thus, that should have been blocked. In response to these findings, furnishers are establishing and implementing procedures to respond to identity theft block request notifications received from CRCs.
After receiving notice of a dispute of the completeness or accuracy of any information from a CRC, furnishers are required to conduct a reasonable investigation with respect to the disputed information.
Examiners are continuing to find that furnishers are violating the FCRA duty to conduct reasonable investigations of indirect disputes.
In addition, examiners found that debt collector furnishers failed to reasonably investigate certain indirect disputes in circumstances in which the furnishers' agents responded to CRCs regarding the dispute without investigating any relevant information on their clients' systems of record despite the agents having access to those systems of record. Rather than reviewing their clients' records to which they had access to assess the accuracy of the disputed information, the furnishers' agents forwarded the disputes to the clients for investigation and, when the clients failed to respond, instructed CRCs to delete the related
Examiners are continuing to find
In reviews of student loan furnishers, examiners found that the furnishers relied solely on external procedures regarding the technical steps for creating and transmitting consumer reporting files, but maintained no internal policies or procedures with respect to complying with the applicable requirements of the FCRA and Regulation V. Examiners found that the furnishers' failure to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information furnished to CRCs contributed to multiple systemic accuracy issues identified at the furnishers, including, for example, continuing to report accounts that had been discharged in bankruptcy, reporting inaccurate term durations for certain loans, and reporting inaccurate special comment codes regarding the status of certain accounts.
• In reviews of installment loan furnishers, examiners found that furnishers lacked reasonable policies and procedures for identifying practices or activities that can compromise the accuracy or integrity of furnished information. Specifically, examiners found weaknesses in furnishers' policies and procedures with respect to considering feedback received from CRCs—resulting in the furnishers failing to identify that furnishing files were rejected by CRCs—and processing identity theft block requests received from CRCs. Deficiencies in the furnishers' internal controls regarding the accuracy and integrity of furnished information led to failures in identifying, and promptly remediating, accounts that were furnished inaccurately. Examiners also found that furnishers failed to design means of communication with CRCs to prevent erroneous association of information with the wrong consumers, which resulted in the furnishing of mismatched personal information for thousands of consumers.
In reviews of credit card furnishers, examiners found that the furnishers failed to maintain and implement reasonable written furnishing policies and procedures, including by failing to adequately provide for, among other things: the identification and handling of frivolous or irrelevant disputes, the replacement of dispute codes following resolution of disputes, and quality assurance with respect to the accuracy and integrity of information furnished to CRCs. Examiners also identified deficiencies in furnishers' policies and procedures for correcting information after determining it to be inaccurate, finding that, for example, such deficiencies allowed inaccuracies to persist for over a year on average before being remediated.
In response to these findings, furnishers are implementing and/or enhancing written policies and procedures to address the identified procedural deficiencies.
The short-term small dollar lending market continues to evolve, and as part of this market, the Buy Now, Pay Later market, where lenders advertise buying products over four payments, has expanded rapidly over the past few years. The paycheck advance market, where lenders tie funding amounts to accrued or estimated wages and those amounts are repayable on the next payday or withheld from the next paycheck, also has expanded rapidly in recent years. Firms sometimes market these products as “earned wage” products. Certain Buy Now, Pay Later firms and certain paycheck advance firms consented to CFPB's examination authority. Across these examinations, examiners identified a number of unfair, deceptive, or abusive acts or practices. In addition to the examinations giving rise to the findings discussed in this section, CFPB staff worked with certain State regulators on their examinations of Buy Now Pay Later firms.
Consumers who used Buy Now, Pay Later loans to purchase products or services frequently alleged that the merchants did not provide the items or services as agreed or communicated other disputes to the lender. Lenders engaged in unfair acts or practices by failing to timely resolve consumer disputes in which consumers alleged they were owed refunds for various reasons, such as where the delay was contrary to the dispute policy on its website regarding dispute resolution timelines. These delays were long, with hundreds of consumers deprived of funds for months at a time. Consumers incurred substantial injury in the form of deprivation of funds that should have been refunded in a timely manner. Additionally, consumers whose claims were denied may have been required to make full payments at unpredictable times after delayed investigations during which they were not permitted to make payments. The injuries were not reasonably avoidable as consumers lacked control over the dispute resolution process. The substantial injuries to consumers were not outweighed by any countervailing benefits to consumers or competition. In response to these findings, the Buy Now, Pay Later lenders refunded the amounts at issue and implemented monitoring to eliminate delayed resolutions.
Buy Now, Pay Later lenders worked with merchant partners to advertise their loans, and in certain instances, the merchant partner websites advertised incorrect loan costs or terms. The lenders exercised control and approval rights over these advertisements. Thus, the lenders engaged in a deceptive act or practice when its merchant partners ran advertisements on their behalf that included false representations. These advertisements misled or were likely to mislead reasonable consumers, and the deceptive representations were material because they related to the cost and terms of the loans as payment methods. In response to these findings, the lenders contacted the relevant merchants to ensure they updated their websites and refunded overcharges to customers. They also enhanced the marketing review process across merchant partners.
Buy Now, Pay Later lenders' payment platforms prevented consumers with loan balances below $1 from making payments. Subsequently, the lenders denied those consumers' loan applications on the basis that consumers had not paid those balances. The lenders engaged in an unfair act or practice by preventing consumers with loan balances below $1 from making
Examiners found that lenders designed consumer interfaces for paycheck advance products—sometimes marketed as “earned wage” products—to include statements and illustrations representing that if consumers paid tips, the tips would help specific numbers of customers and were a way to help other borrowers. In fact, lenders added tips to general revenues.
A representation, omission, act, or practice is deceptive when: (1) the representation, omission, act or practice misleads or is likely to mislead the consumer; (2) the consumer's interpretation of the representation, omission, act or practice is reasonable under the circumstances; and (3) the misleading representation, omission, act or practice is material.
An abusive act or practice: (1) materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or (2) takes unreasonable advantage of: a lack of understanding on the part of the consumer of the material risks, costs or conditions of the product or service; the ability of the consumer to protect the interest of the consumer in selecting or using a financial product or service; or the reasonable reliance by the consumer on a covered person to act in the interest of the consumer.
Examiners found that lenders engaged in deceptive acts and practices when they prevented paycheck advance product consumers from closing their loan accounts until they resolved pending debits, and continued debiting consumer deposit accounts, despite representations that accounts could be closed at any time and that lenders would not engage in collection activity. Lenders misled or were likely to mislead consumers through confusing and conflicting representations about how to close loan accounts and that consumers could cancel agreements and use of services at any time, the only consequences of nonpayment being placing loan accounts on hold. Consumers could reasonably interpret lenders' statements to mean that they could cancel agreements and services at any time, along with pending debits, and would not be blocked from closing their loan accounts until pending debits were processed. Lenders' representations were material because they were likely to affect consumer choice regarding whether to use the service in the first place and how they might employ funds differently if consumers understood debits continued after attempted account closure.
Examiners also found that lenders engaged in abusive acts or practices when they took unreasonable advantage of consumers' inability to protect their interests when they blocked consumers from closing their loan accounts and continued to attempt to debit their deposit accounts, despite statements that consumers could close their accounts any time and that lenders would not engage in collection activity. Consumers could not protect their interests in selecting or using paycheck advance products because they were blocked from closing their loan accounts and were subject to repeated debits, despite representations that they could close their loan accounts at any time and lenders would not take repayment actions against them. At account opening, lenders led consumers to believe they could close their accounts anytime and avoid repeated debits. But after attempting account closure, consumers were subject to repeated debits and potentially to third-party fees. Lenders gained unreasonable advantage by inducing consumers to take out paycheck advance products under false premises, gaining more loan accounts than they otherwise would have.
Examiners found that lenders engaged in unfair acts or practices when technology failures resulted in consumer having certain transfers blocked from linked deposit accounts to other personal accounts. Specifically, lenders offered a payment card linked to a particular deposit account in concert with the paycheck advance product, and during a specific time period, consumers who had not repaid the paycheck advances timely and had balances in these linked accounts were unable to access their funds in a timely manner. Lenders caused substantial injury because consumers were unable to access their funds in a timely manner and were denied access to funds. Other injury included time spent and trouble and aggravation caused when consumers tried to cure the problem. Consumers could not reasonably avoid or anticipate the injury because they were not warned of the error and could not resolve it themselves. The
Set forth below are select supervision program developments including final rules and orders that have been issued since the last edition of
On December 12, 2024, the CFPB issued a final rule related to overdraft lending.
On December 6, 2024, the CFPB published an order establishing supervisory authority over Google Payment Corp.
On November 21, 2024, the CFPB issued a final rule to establish authority over nonbank covered persons that are larger participants of a market for providing general-use digital consumer payment applications.
Consumer Product Safety Commission.
Notice of information collection; request for comment.
As required by the Paperwork Reduction Act of 1995, the Consumer Product Safety Commission (CPSC or Commission) requests comments on a request for approval from the Office of Management and Budget (OMB) for a new information collection. The proposed collection is a bathtub slip resistance study to support work on a voluntary Safety Standard for Bathtub and Shower Structure. Before CPSC can collect this information from the public, it must solicit public comment on this proposed collection of information and receive OMB approval. This notice describes the collection of information for which CPSC intends to seek OMB approval.
Submit comments on the collection of information by March 7, 2025.
You may submit comments, identified by Docket No. CPSC-2024-0045, within 60 days of publication of this notice by any of the following methods:
Cynthia Gillham, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; (301) 504-7791, or by email to:
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), before an agency submits a proposed collection of information to OMB for approval, it must first publish a document in the
• A title for the collection of information;
• A summary of the collection of information;
• A brief description of the need for the information and the proposed use of the information;
• A description of the likely respondents and proposed frequency of response to the collection of information;
• An estimate of the burden that will result from the collection of information; and
• Notice that comments may be submitted to the agency and OMB.
44 U.S.C. 3507(a)(1)(D). In accordance with this requirement, the Commission provides the following information:
CPSC requests that interested parties submit comments regarding this proposed information collection (see the
• Whether the proposed collection of information is necessary for the proper performance of CPSC's functions, including whether the information will have practical utility;
• The accuracy of CPSC's estimate of the burden of the proposed collection of information;
• Ways to enhance the quality, utility, and clarity of the information the Commission proposes to collect; and
• Ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques when appropriate, and other forms of information technology.
Defense Security Cooperation Agency, Department of Defense(DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-73, Policy Justification, and Sensitivity of Technology.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
* As defined in Section 47(6) of the Arms Export Control Act.
The Government of the Netherlands has requested to buy up to three hundred eighty-six (386) Hellfire Air-to-Ground Missiles, AGM-114R2. Also included is U.S. Army Aviation and Missile Command (AMCOM) Security Assistance Management Directorate (SAMD) technical assistance; Tactical Aviation and Ground Munitions (TAGM) Project Office technical assistance; non-standard books, publications, and other Hellfire publications; integration support; and other related elements of logistics and program support. The estimated total cost is $150 million.
This proposed sale will support the foreign policy goals and national security objectives of the United States (U.S.) by improving the security of a NATO Ally that is a force for political stability and economic progress in Europe.
The proposed sale will improve the Netherlands' capability to strengthen its homeland defense and deter regional threats. This will contribute to its military goals of updating capability while further enhancing interoperability with the U.S. and other allies. The Netherlands will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be Lockheed Martin Corporation in Orlando, FL. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor(s).
Implementation of this proposed sale will require U.S. Government or contractor representatives to travel to the Netherlands for program management reviews to support the program.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The AGM-114R2 Hellfire Missile is used against heavy and light armored targets, thin skinned vehicles, urban structures, bunkers, caves, and personnel. The missile is Inertial Measurement Unit (IMU) based, with a variable delay fuse, and improved safety and reliability.
2. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that the Government of the Netherlands can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to the Government of the Netherlands.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-23, Policy Justification, and Sensitivity of Technology.
(i)
(ii)
Funding Source: Foreign Military Financing and National Funds
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
*As defined in Section 47(6) of the Arms Export Control Act.
The Government of Croatia has requested to buy eight (8) UH-60M Black Hawk helicopters; nineteen (19) T700-GE 701D engines (16 installed, 3 spares); twenty (20) AN/ARC-231A RT-1987 very high frequency (VHF)/ultra high frequency (UHF)/Line of Sight (LOS) satellite communications (SATCOM) radios; ten (10) AN/AAR-57 Counter Missile Warning Systems (CMWS); twenty (20) H-764U Embedded Global Position Systems with Inertial Navigation (EGI) and Selective Availability Anti-Spoofing Module (SAASM) (or future replacement); and eighteen (18) M240H machine guns. Also included are: AN/ARC-231 RT-1808A (or future replacement) VHF/UHF/LOS SATCOM radios; APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; APX-123A Identification Friend or Foe (IFF) transponders (or future replacement); ARC-220 high frequency (HF) radio with KY-100M; VRC-100 ground stations; AN/PYQ-10 Simple Key Loader (SKL); KIV-77 Common Identification Friend or Foe (IFF) crypto applique computers; KY-100M; communications security (COMSEC) encryption devices AN/ARN-147(V) VHF Omni-Directional Range (VOR)/instrument landing system (ILS) receiver radio; AN/ARN-149(V) low frequency (LF)/automatic direction finder (ADF) radio receiver; AN/ARN-153 tactical air navigation system (TACAN) receiver-transmitter; AN/APN-209 radar altimeter; AN/ARC-210 radios; EBC-406HM emergency locator transmitter (ELT); Encrypted Aircraft Wireless Intercommunications Systems (EAWIS); Improved Heads-Up Display (IHUD); signal data converters for IHUD; signal data converters for heads-up display (HUD); forward-looking infrared (FLIR) with electro-optical and infrared (E.O./IR) capabilities; E.O./IR cabin monitoring systems; E.O./IR digital video recorder; AN/ARC-201D RT-1478D (or future replacement); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion & Extraction System (FRIES); External Rescue Hoist (ERH); rescue hoist equipment sets; Dual Patient Litter System (DPLS) Sets; Martin Baker palletized Crew Chief/Gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); Integrated Tow Plates Production Assets; universal software loading kits; 60k volt-ampere (VA) generator kits; instrument panel sets; external gun mount systems; Black Hawk Aircrew Trainer (BAT); Black Hawk Maintenance Trainer (BHMT-M); Black Hawk Avionics Trainer; Maintenance Blended Reconfigurable Avionics Trainer (MBRAT); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $500 million.
This proposed sale will support the foreign policy and national security of the U.S. by improving the security of a NATO Ally that continues to be an important force for political stability and economic progress in Europe.
The proposed sale will improve Croatia's capability to deter current and future threats and support coalition operations as well as promote interoperability with the U.S. and other NATO forces. Croatia will have no difficulty absorbing this equipment into its armed forces.
The principal contractor will be Lockheed Martin/Sikorsky, in Stratford, CT. There are no known offset agreements in connection with this potential sale.
Implementation of this proposed sale will require approximately fifteen (15) U.S. Government and/or fifteen (15) contractor representatives to travel to Croatia for an extended period for equipment de-processing/fielding,
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The UH-60M aircraft is a medium lift four bladed aircraft which includes two (2) T-701D engines. The aircraft has four (4) Multifunction Displays (MFD), which provides aircraft system, flight, mission, and communication management systems. The instrumentation panel includes four (4) Multifunction Displays (MFDs), two (2) Pilot and Co-Pilot Flight Director Panels, and two (2) Data Concentrator Units (DCUs). The Navigation System will have Embedded Global Positioning System (GPS)/Inertial Navigation System (INS) (EGIs), and two (2) Advanced Flight Control Computer Systems (AFCC), which provide 4 axis aircraft control:
a. The AN/ARC-201 very high frequency (VHF)—frequency modulation (FM) (VHF-FM) Single Channel Ground and Airborne Radio System (SINCGARS) is a reliable, field-proven voice and data communication system used with the UH-60. A non-communications security (COMSEC) export variant of this radio that meets these requirements will be provided.
b. AN/ARC-231 RT-1808A (or future replacement) VHF/UHF/LOS satellite communications (SATCOM) Radios. The AN/ARC-231 is a software-definable radio for military aircraft that provides two-way, multi-mode voice and data communications over a 30 Hz to 512 MHz frequency range. It covers both line-of-sight ultra-high frequency (UHF) and VHF bands with amplitude modulation (AM), FM, and SATCOM capabilities.
c. The AN/ARC-231A is a software-definable radio for military aircraft that provides two-way, multi-mode voice and data communications over a 30 Hz to 512 MHz frequency range. No designated exportable, non-COMSEC capable version is planned. The AN/ARC-231A supports both line-of-sight UHF and VHF bands with AM, FM, and SATCOM capabilities. It also includes embedded frequency agile modes, Electronic Counter-Countermeasures (ECCM), anti-jam waveforms including Have Quick and Single Channel Ground and Airborne Radio System (SINCGARS), Demand Assigned Multiple Access (DAMA), and Integrated Waveform (IW). It provides simultaneous, real-time participation in tactical voice and data communications networks. The RT-1987 will provide National Security Agency (NSA) Tactical Secure Voice Cryptographic Interoperability Specification (TSVCIS) 3.1.1 crypto modernization compliance. Operator selectable air traffic control channel spacing of 5, 8.33, 12.5, and 25 kHz steps, and other data link and secure communications features, provide battlefield interoperability.
d. The AN/ARC-210 is a family of radios for military aircraft that provides two-way, multi-mode voice and data communications over a 30 to 512+ MHz frequency range. It covers both UHF and VHF bands with AM, FM, and SATCOM capabilities. The ARC-210 radio also includes embedded anti-jam waveforms, including Have Quick and SINCGARS, and other data link and secure communications features, providing total battlefield interoperability and high-performance capabilities in the transfer of data, voice, and imagery. The software-programmable encryption is under the NSA Cryptographic Modernization Initiative.
e. The AN/ARC-220 High Frequency (HF) Airborne Communication System provides rotary-wing aircraft with advanced voice and data capabilities for short-and long-distance communications. The system is software programmable with a frequency range of 2.0000-29.9999 MHz, in 100 Hz steps and provides for providing embedded automatic Link establishment (ALE), serial tone data modem, text messaging, GPS position reporting, and anti-jam (ECCM) functions.
f. The AN/APX-123A (or future replacement) Identification Friend or Foe (IFF) Transponder is a space diversity transponder and is installed on various military platforms. When installed in conjunction with platform antennas and the remote-control unit (or other appropriate control unit), the transponder provides identification, altitude, and surveillance reporting in response to interrogations from airborne, ground-based, and surface interrogators. The transponder will be classified SECRET if MODE IV, MODE 5, or MODE S fill is installed in the equipment with a crypto device. This item contains sensitive technology.
g. The VRC-100 HF Communication System is the ground station version of the AN/ARC-220 for use in Aviation Operation Centers. It provides for advanced voice and data capabilities for short-and long-distance communications. The system is software programmable with a frequency range of 2.0000-29.9999 MHz in 100 Hz steps and provides embedded Automatic Link Establishment (ALE), serial tone data modem, text messaging, GPS position reporting, and anti-jam (ECCM) functions. The system is purchased with all required mounts, amplifiers, antennas, power supplies, and accessories.
h. The AN/PYQ-10 Simple Key Loader (SKL) is a ruggedized, portable, hand-held fill device for securely receiving, storing, and transferring data between compatible cryptographic and communications equipment. The AN/PYQ-10(C) Simple Key Loader (SKL) will contain the KOV-21 COMSEC card, which is a Controlled Cryptographic Item (CCI). Cryptographic functions are performed by an embedded KOV-21 card developed by the NSA.
i. The KIV-77 Identification Friend or Foe (IFF) Crypto Applique provides cryptographic and time-of-day services for a Combined Interrogator/Transponder (CIT) or individual interrogator or transponder Mark XIIA (Mode 4 and Mode 5) IFF system deployed to identify cooperative, friendly systems. The KIV-77 contains embedded security, and when keys are loaded is classified up to Secret.
j. The KY-100M is a self-contained terminal including COMSEC that provides for secure voice and data communications in tactical airborne and ground environments. It is an integral part of U.S. Forces' and Federal law enforcement agencies' networks and provides half-duplex, narrowband, and wideband communications. Its flexible interfaces increase compatibility with a wide range of voice, data, radio, and satellite equipment. The KY can support Tier 1 crypto.
k. The AN/APR-39C(V)1/4 Radar Warning System detects radar-based rangefinders, target designators, and beam rider systems targeting an aircraft or vehicle. The APR-39 is a detection component of the suite of countermeasures designed to increase survivability of current generation combat aircraft and specialized special operations aircraft against the threat posed by laser designated or guided weapons. This item contains sensitive technology.
l. The AN/AVR-2B Laser Warning Receiver detects laser rangefinders, target designators, and beam rider laser-aided systems targeting an aircraft or vehicle. The AVR-2B is a detection component of the suite of countermeasures designed to increase survivability of current generation combat aircraft and specialized special operations aircraft against the threat
m. The AAR-57 Common Missile Warning System (CMWS) is an integrated infrared (IR) countermeasures suite utilizing ultraviolet (UV) sensors to display accurate threat location and dispense countermeasures either automatically or under pilot or crew control to defeat incoming missile threats.
n. Embedded GPS/Inertial Navigation System INS (EGI) provides GPS and INS capabilities to the aircraft. The EGI will include Selective Availability Anti-Spoofing Module (SAASM) security modules to be used for secure GPS Precise Positioning Service (PPS) if required. The Embedded GPS/INS within the SAASM contains sensitive technology.
2. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that Croatia can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal are authorized for release and export to Croatia.
Chief Information Officer (CIO), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by March 7, 2025.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Office of the Department of Defense Chief Information Officer, 6000 Defense Pentagon, Washington, DC 20301-6000 ATTN: Mr. Rodney McCall, or call (703) 697-5936.
Washington Headquarters Services (WHS), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by March 7, 2025.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Washington Headquarters Services, the Director of Administration and Management, ATTN: Reginald Lucas, 4800 Mark Center Drive, Alexandria, VA 22350, Suite 03F09, (571) 372-7574, or email
The solicitation of feedback will target areas such as: Timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.
The Agency will only submit a collection for approval under this generic clearance if it meets the following conditions:
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are noncontroversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information is collected only to the extent necessary and is not retained;
• Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the agency;
• Information gathered will not be used for the purpose of substantially informing influential policy decisions; and
• Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.
Feedback collected under this generic clearance provides useful information, but it does not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential nonresponse bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by February 5, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Department of Defense (DoD).
60-day information collection notice.
In compliance with the
Consideration will be given to all comments received by March 7, 2025.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to OEPM, Voluntary Education, 4000 Pentagon, Room 3C1063 Washington, DC 20301-4000, Mark Phelan, (571) 372-5355.
The information reviewed is not the same for all the selected educational institutions. The basic information is associated with the review process is as follows:
(a) Recruiting, Marketing, and Advertising
The data examined in Recruiting, Marketing, & Advertising were focused on the content used to attract prospective Service members as students, and whether this content complied with the legal and ethical requirements in the MOU.
(b) Financial Matters
Financial Matters data pertain to the cost of attendance, pre and post-enrollment tools and processes, and the ease with which prospective Service members can access information. MOU compliance requires that Service members have easy access to clear and accurate information regarding financial aid options. This includes access to trained and qualified counseling staff who can provide accurate and up-to-date information regarding the costs of attending an institution, and recommendations regarding individual financial choices.
(c) Accreditation
To be able to sign a DoD MOU, all institutions must be accredited by a
(d) Post-graduate Opportunities
Information reviewed should include the unchanging degree plans and requirements needed, guidance available for professional opportunities upon completion of the degree program, and processes regarding readmission policies for Service members fulfilling military obligations while attending the institution.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-07, Policy Justification, and Sensitivity of Technology.
(i)
(ii)
Funding Source: National Funds
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
*As defined in Section 47(6) of the Arms Export Control Act.
The Government of India has requested to buy thirty-one (31) MQ-9B Sky Guardian aircraft; one hundred sixty-one (161) Embedded Global Positioning & Inertial Navigation Systems (EGIs); thirty-five (35) L3 Rio Grande Communications Intelligence Sensor Suites; one hundred seventy (170) AGM-114R Hellfire missiles; sixteen (16) M36E9 Hellfire Captive Air Training Missiles (CATM); three hundred ten (310) GBU-39B/B Laser Small Diameter Bombs (LSDB); and eight (8) GBU-39B/B LSDB Guided Test Vehicles (GTVs) with live fuzes. Also included are Certifiable Ground Control Stations; TPE-331-10-GD engines; M299 Hellfire missile launchers; KIV-77 cryptographic appliques and other Identification Friend or Foe (IFF) equipment; KOR-24A Small Tactical Terminals (STT); AN/SSQ-62F, AN/SSQ-53G, and AN/SSQ-36 sonobuoys; ADU-891/E Adapter Group Test Sets; Common Munitions Built-In-Test (BIT) Reprogramming Equipment (CMBRE); GBU-39B/B tactical training rounds, Weapons Load Crew Trainers, and Reliability Assessment Vehicles-Instrumented; Portable Pre-flight/Post-flight Equipment (P3E); CCM-700A encryption devices; KY-100M Narrowband/wideband terminals; KI-133 cryptographic units; AN/PYQ-10 Simple Key Loaders; Automatic Identification System (AIS) transponders; ROVER 6Si and TNR2x transceivers; MR6000 ultra high frequency (UHF) and very high frequency (VHF) radios; Selex SeaSpray Active Electronically Scanned Array (AESA) surveillance radars; HISAR-300 Radars; SNC 4500 Auto Electronic Surveillance Measures (ESM) Systems; SAGE 750 ESM systems; Due Regard Radars (DRR); MX-20 Electro-Optical Infrared (E.O.-IR) Laser Target Designators (LTDs); Ku-Band SATCOM GAASI Transportable Earth Stations (GATES); C-Band Line-of-Sight (LOS) Ground Data Terminals; AN/DPX-7 IFF transponders; Compact Multi-band Data Links (CMDL); initial spare and repair parts, consumables, accessories, and repair and return support; secure communications, precision navigation, and cryptographic equipment; munitions support and support equipment; testing and integration support and equipment; classified and unclassified software delivery and support; classified and unclassified publications and technical documentation; personnel training and training equipment; transportation support; warranties; studies and surveys; United States (U.S.) Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $3.99 billion.
This proposed sale will support the foreign policy and national security objectives of the U.S. by helping to strengthen the U.S.-Indian strategic relationship and to improve the security of a major defensive partner which continues to be an important force for political stability, peace, and economic progress in the Indo-Pacific and South Asia region.
The proposed sale will improve India's capability to meet current and future threats by enabling unmanned surveillance and reconnaissance patrols in sea lanes of operation. India has demonstrated a commitment to modernizing its military and will have no difficulty absorbing these articles and services into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region. The principal contractor will be General Atomics Aeronautical Systems, Poway, CA. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to India.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The MQ-9B Remotely Piloted Aircraft (RPA) is a weapons-ready aircraft designed for Medium-Altitude Long-Endurance (MALE); Intelligence, Surveillance, and Reconnaissance (ISR); Target Acquisition; and Strike Missions. The MQ-9B RPA is not a USAF program of record, but has close ties to, and builds upon, the proven success of the MQ-9A Reaper. The MQ-9B is a highly modular, easily configurable aircraft that contains the necessary hard points, power, and data connections to accommodate a variety of payloads and munitions to meet multiple missions—
a. The Honeywell TPE-331-10-GD is a turboprop engine with power output ranging from 429 to 1,230 kW.
b. The M-Code capable Embedded Global Positioning System/Inertial Navigation System (GPS/INS) (EGI), with an embedded GPS Precise Positioning Service (PPS) Receiver Application Module-Standard Electronic Module (GRAM-S/M), is a self-contained navigation system that provides acceleration, velocity, position, attitude, platform azimuth, magnetic and true heading, altitude, body angular rates, time tags, and coordinated universal time (UTC) synchronized time. The embedded GRAM-S/M enables access to both the encrypted P(Y) and M-Code signals, providing protection against active spoofing attacks, enhanced military exclusivity, integrity, and anti-jam.
c. The MX-20HD is a gyro-stabilized, multi-spectral, multi-field-of-view (FOV) Electro-Optical/Infrared (E.O./IR) targeting system. The system provides surveillance laser illumination and laser designation through use of an externally mounted turret sensor unit and internally mounted master control. Sensor video imagery is displayed in the aircraft in real time and may be recorded for subsequent analysis.
2. The Ground Control Station (GCS) can be either fixed or mobile. The fixed GCS is enclosed in a customer-specified shelter. It incorporates workstations that allow operators to control and monitor the aircraft, as well as record and exploit downlinked payload data. The mobile GCS allows operators to perform the same functions and is contained on a mobile trailer. Workstations in either GCS can be tailored to meet customer requirements.
3. L3 Rio Grande capabilities meet rigorous mission requirements for small, manned and unmanned intelligence, surveillance, and reconnaissance (ISR) platforms. Rio Grande intercepts, locates, monitors, and records communications signals using a common set of software applications. Rio Grande operates open architecture design, supports third-party special signals applications, real-time audio recording and playback, and a three-dimensional display of the area of interest.
4. The AGM-114R Hellfire is a missile equipped with a Semi-Active Laser (SAL) seeker that homes-in on the reflected light of a laser designator. The AGM-114R can be launched from higher altitudes than previous variants because of its enhanced guidance and navigation capabilities, which include a Height-of-Burst (HOB) proximity sensor. With its multi-purpose warhead, the missile can destroy hard, soft, and enclosed targets. The sale will include Captive Air Flight Training Missiles (CATM), which are inert devices used for training to handle Hellfire missiles.
5. The GBU-39B/B Laser Small Diameter Bomb (LSDB) All Up Round (AUR) is a 250-pound GPS and semi-active laser guided, small autonomous, day or night, adverse weather, conventional, air-to-ground precision glide weapon able to strike fixed and stationary, re-locatable, non-hardened targets from standoff ranges. The LSDB's laser guidance set enables the weapon to strike moving targets. It is intended to provide aircraft with an ability to carry a high number of bombs. Aircraft are able to carry four SDBs in place of one 2,000-pound bomb. The Guided Test Vehicle, Reliability Assessment Vehicle-Instrumented, Tactical Training Round (TTR), and Weapons Load Crew Trainer are LSDB configurations with telemetry kits or inert fills in place of the warhead and are used to test the LSDB weapon system or for flight and ground crew training.
6. The M299 launcher provides a mechanical and electrical interface between the Hellfire missile and aircraft.
7. The KIV-77 is a cryptographic applique for IFF. It can be loaded with Mode 5 classified elements.
8. The KOR-24A Small Tactical Terminal is a command, control, communications, and intelligence (C3I) system incorporating high-capacity, jam-resistant, digital communication links for exchange of near real-time tactical information, including both data and voice, among air, ground, and sea elements.
9. AN/SSQ-62F is a sixth-generation, Directional Command Active Sonobuoy System (DICASS) sonobuoy used for detecting and localizing submarines. The DICASS sonobuoy can provide both range and bearing to the target for accurate position fixing. Like the AN/SSQ-62E, the AN/SSQ-62F sonobuoy can support any of the four acoustic frequencies as selected via the Electronic Function Select.
10. AN/SSQ-53G is a sonobuoy which combines a passive directional and calibrated wide-band omni capability into a single multi-functional sonobuoy. It features both Electronic Function Select (EFS) for use prior to loading and launching and Command Function Select (CFS) to allow the operator to modify the sonobuoy's modes of operation after it has been deployed in the water.
11. AN/SSQ-36 is a sonobuoy which provides vertical temperature profiles for Anti-Submarine Warfare (ASW) applications to evaluate local effects of seawater temperature on sonar propagation and acoustic range prediction.
12. The Portable Pre-flight/Post-flight Equipment (P3E) is used by the ground crew at the MQ-9B operating sites to interface with the aircraft for performing maintenance functions. The P3E is a ruggedized computer assembly that interfaces directly with the aircraft via a cable and provides functionality for conducting pre and post-flight checks, and to establish the aircraft on the SATCOM datalink for handover to the flight crew in the Ground Control Station. The ADU-891 Adapter Group Test Set provides the physical and electrical interface between the Common Munitions Built-in-Test Reprogramming Equipment (CMBRE) and the missile.
13. Common Munitions Built-In-Test (BIT)/Reprogramming Equipment (CMBRE) is support equipment used to interface with weapon systems to initiate and report BIT results and upload and download flight software. CMBRE supports multiple munitions platforms with a range of applications that perform preflight checks, periodic maintenance checks, loading of Operational Flight Program (OFP) data, loading of munitions mission planning data, loading of Global Positioning System (GPS) cryptographic keys, and declassification of munitions memory.
14. The KY-100M is a cryptographic-modernized lightweight terminal for secure voice and data communications. The KY-100M provides wideband and narrowband half-duplex communication. Operating in tactical ground, marine, and airborne applications, the KY-100M enables secure communication with a broad range of radio and satellite equipment.
15. The KI-133 is used with a MQ-9B unique radio implementation, specifically using X Band. The KI-133 does not operate with a modem and is
16. The AN/PYQ-10 Simple Key Loader is a handheld device used for securely receiving, storing, and transferring data between compatible cryptographic and communications equipment.
17. The Automatic Identification System (AIS) transponder provides maritime patrol and Search and Rescue (SAR) aircraft with the ability to track and identify AIS-equipped vessels over a dedicated very high frequency (VHF) data link. AIS is a key component of any maritime ISR network and offers maritime authorities with the ability to better coordinate air and sea search, rescue, surveillance, and interdiction operations.
18. The L3Harris ROVER 6Si and TNR2x transceivers provide real-time, full-motion video (FMV) and other network data for situational awareness, targeting, battle damage assessment, surveillance, relay, convoy over-watch operations, and other situations where eyes-on-target are required. It provides expanded frequencies and additional processing resources from previous ROVER versions, allowing increased levels of collaboration and interoperability with numerous manned and unmanned airborne platforms.
19. The SAGE 750 Electronic Surveillance Measures (ESM) System is a UK-produced, digital electronic intelligence (ELINT) sensor which analyzes the electromagnetic spectrum to map the source of active emissions. Using highly accurate Direction Finding (DF) antennas, SAGE builds target locations and provides situational awareness, advance warning of threats, and the ability to cue other sensors.
20. The Selex SeaSpray is an Active Electronically Scanned Array (AESA) surveillance radar suitable for a range of capabilities from long-range search to small target detection.
21. HISAR-300 radar provides superior long range, real-time, high-resolution imaging and wide area search capability for overland and maritime surveillance missions, day or night and in all weather conditions.
22. The SNC 4500 Auto Electronic Surveillance Measures (ESM) System is a digital electronic intelligence (ELINT) sensor which analyzes the electromagnetic spectrum to map the source of active emissions. Using highly accurate Direction Finding (DF) antennas, the SNC 4500 builds target locations and provides situational awareness, advance warning of threats, and the ability to cue other sensors.
23. Due Regard Radar (DRR) is a collision avoidance air-to-air radar. DRR is a key component of GA-ASI's overall airborne Detect and Avoid System (DAAS) architecture for the MQ-9B. By tracking non-cooperative aircraft, DRR enables a collision avoidance capability onboard the RPA and allows the pilot to separate the aircraft from other air traffic in cooperation with Air Traffic Control (ATC).
24. The AN/DPX-7 is an Identification Friend or Foe (IFF) transponder used to identify and track aircraft, ships, and some ground forces to reduce friendly fire incidents.
25. The MR6000 ultra high frequency (UHF) and very high frequency radio (VHF) is a multi-band, portable, two-way communication radio.
26. The C-Band Line-of-Sight (LOS) Ground Data Terminals and Ku-Band SATCOM GA-ASI Transportable Earth Stations (GATES) provide command, control, and data acquisition for the MQ-9B.
27. The Compact Multi-band Data Link (CMDL) is a miniaturized, high-performance, wide-band data links operating in Ku, C, L, or S-band, with both analog and digital waveforms. It is interoperable with military and commercial products including Tactical Common Data Link (TCDL) terminals, the complete line of ROVER systems, and coded orthogonal frequency-division multiplexing (COFDM) receivers.
28. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
29. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
30. A determination has been made that India can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
31. All defense articles and services listed in this transmittal have been authorized for release and export to India.
Washington Headquarter Services (WHS), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by March 7, 2025.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to WHS Parking Management Office, Pentagon, Room 2D1039, 9000 Defense Pentagon,
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-07, Policy Justification, and Sensitivity of Technology.
(i)
(ii)
Funding Source: National Funds
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
* As defined in Section 47(6) of the Arms Export Control Act.
The Republic of Türkiye has requested to buy 40 new F-16 aircraft and to modernize 79 existing F-16 aircraft to V-Configuration. The request includes: thirty-two (32) F-16 C Block 70 aircraft; eight (8) F-16 D Block 70 aircraft; forty-eight (48) F110-GE-129D engines (40 installed, 8 spares); one hundred forty-nine (149) Improved Programmable Display Generators (iPDG) (40 installed, 10 spares, 99 for modernization program (79 installed, 20
This proposed sale will support the foreign policy goals and national security of the U.S. by improving the air capabilities and interoperability of a North Atlantic Treaty Organization (NATO) Ally that is a force for political and economic stability in Europe.
The proposed sale will allow Türkiye to expand and modernize its fleet of F-16 aircraft as older F-16 aircraft approach the end of their service life. These new and refurbished aircraft will provide Türkiye with a fleet of modernized multi-role combat aircraft to enable it to provide for the defense of its airspace, contribute to NATO missions to preserve regional security and defend NATO Allies, and maintain interoperability with U.S. and NATO forces. Türkiye has F-16 aircraft in its inventory and will have no difficulty absorbing these aircraft and services into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be Lockheed Martin, Greenville, SC. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Türkiye.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The F-16 Block 70 weapon system is a fourth generation single-engine supersonic all-weather multirole fighter aircraft and features advanced avionics and systems. It contains the General Electric F110-129D engine, AN/APG-83 radar, digital flight control system, embedded internal global navigation system, Joint Helmet Mounted Cueing Systems (JHMCS) II or Scorpion Hybrid Optical-based Inertial Tracker (HObIT) with Night Vision Device (NVD) compatibility, internal and external Electronic Warfare (EW) equipment,
(a) General Electric F110-GE-129D engines are afterburning turbofan jet engines that power the F-16.
(b) General Electric F110-GE-129D engine spare modules are kits made up of spare engine components including the following modules: inlet fan, core engine, fan drive turbine, augmenter duct and nozzle, and gear box.
(c) The Modular Mission Computer (MMC) 7000AHC is the central aircraft computer of the F-16. It serves as the hub for all aircraft subsystems and avionics data transfer.
(d) The Improved Programmable Display Generator (iPDG) and color multifunction displays utilize ruggedized commercial liquid crystal display technology that is designed to withstand the harsh environment found in modern fighter cockpits. The display generator is the fifth-generation graphics processor for the F-16. Through the use of state-of-the-art microprocessors and graphics engines, it provided orders of magnitude increases in throughput, memory, and graphics capabilities.
(e) The APG-83 Scalable Agile Beam Radar (SABR) is an Active Electronically Scanned Array (AESA) radar upgrade for the F-16. It includes higher processor power, higher transmission power, more sensitive receiver electronics, and Synthetic Aperture Radar (SAR), which creates higher-resolution ground maps from a greater distance than existing mechanically scanned array radars (
(f) The Embedded Global Positioning System/Inertial Navigation System (GPS/INS) (EGI) with Selective Availability Anti-Spoofing Module (SAASM)—or M-Code receiver when available—and Precise Positioning Service (PPS) is a self-contained navigation system that provides the following: acceleration, velocity, position, attitude, platform azimuth, magnetic and true heading, altitude, body angular rates, time tags, and coordinated universal time (UTC) synchronized time. SAASM or M-Code enables the GPS receiver access to the encrypted P(Y or M) signal, providing protection against active spoofing attacks.
(g) The Joint Helmet Mounted Cueing System II (JHMCS II) or Scorpion Hybrid Optical-based Inertial Tracker (HObIT) is a device used in aircraft to project information to the pilot's eyes and aids in tasks such as cueing weapons and aircraft sensors to air and ground targets. This system projects visual targeting and aircraft performance information on the back of the helmet's visor, enabling the pilot to monitor this information without interrupting their field of view through the cockpit canopy. This provides improvement for close combat targeting and engagement.
(h) The Integrated Electronic (EW) Warfare Suite provides passive radar warning, wide spectrum Radio Frequency (RF) jamming, and control and management of the entire EW system. This system is anticipated to be internal to the aircraft, although mounted pod variants are used in certain circumstances.
(i) The Advanced Identification Friend or Foe (AIFF) Combined Interrogator Transponder (CIT) is a system capable of transmitting and interrogating Mode V. Mode IV and Mode V anti-jam performance specifications, data, software source code, algorithms, and tempest plans or reports will not be offered, released, discussed, or demonstrated.
(j) The Multifunction Information Distribution System (MIDS) Joint Tactical Radio System (JTRS) is a four-channel software programmable radio for Link-16 digital voice communications and datalink, Tactical Air Navigation (TACAN), and advanced waveforms. Link-16 is a command, control, communications, and intelligence (C3I) system incorporating high-capacity and jam-resistant digital communication links for exchange of near real-time tactical information, including both data and voice, among air, ground, and sea elements.
2. The LAU-129 Guided Missile Launcher is capable of launching the AIM-9 family of missiles or AIM-120 AMRAAM. The LAU-129 launcher serves as the mechanical and electrical interface between missile and aircraft.
3. The Triple Missile Launcher Adapter (TMLA) carries three (3) missile launchers and missiles from a single standard wing pylon.
4. The M61 Vulcan Cannon is a six-barreled automatic 20mm cannon with a cyclic rate of fire from 2,500-6,000 shots per minute. This weapon is a hydraulically powered air-cooled Gatling gun used to damage and destroy aerial targets, suppress and incapacitate personnel targets, and damage and destroy moving and stationary light material targets.
5. The AN/AAQ-33 Sniper Advanced Targeting Pod (ATP) is a single, lightweight targeting pod for military aircraft that provides positive target identification, autonomous tracking, Global Positioning System (GPS) coordinate generation, and precise weapons guidance from extended standoff ranges. It incorporates a high-definition mid-wave forward-looking infrared (FLIR) dual-mode laser, visible-light High-Definition television (HDTV), laser spot tracker, video data link (VDL), and a digital data recorder.
6. The L3Harris ROVER 6i/6Si transceiver provides real-time full-motion video (FMV) and other network data for situational awareness, targeting, battle damage assessment, and surveillance for relay and convoy over-watch operations and other situations where eyes-on-target are required. This potential sale includes Tactical Network kits and Stinger MBI antennas. It provides expanded frequencies and additional processing resources from previous ROVER versions, allowing increased levels of collaboration and interoperability with numerous manned and unmanned airborne platforms.
7. The Infrared Search and Track (IRST) system detects and tracks threats that have infrared signatures at long ranges. It can act without emitting any radiation of its own and enables aircrews to detect adversaries before those adversaries see or sense them.
8. The AN/ARC-238 radio with HAVE QUICK II is a voice communications radio system that employs cryptographic technology. Other waveforms may be included as needed.
9. The AN/APX-126/127 Advanced Identification Friend or Foe (IFF) Combined Interrogator Transponder (CIT) is a system capable of transmitting and interrogating Mode 5. The AN/APX-127 is a form, fit, and function refresh of the AN/APX-126 and is the next generation to be produced.
10. The AN/ALE-47 Countermeasure Dispenser Set (CMDS) provides an integrated threat-adaptive computer-controlled capability for dispensing chaff, flares, and active radio frequency expendables. The AN/ALE-47 uses threat data received over the aircraft interfaces to assess the threat situation and determine a response.
11. The KY-58 is a secure voice module primarily used to encrypt radio communication to and from military aircraft and other tactical vehicles.
12. The KIV-78 is a cryptographic applique for IFF. It can be loaded with Mode 5 classified elements.
13. The AN/PYQ-10 Simple Key Loader is a handheld device used for securely receiving, storing, and transferring data between compatible cryptographic and communications equipment.
14. The Flight Mission Planning System (FMPS) is a multi-platform, PC-
15. The AIM-9X Block II Sidewinder Missile is a short-range air-to-air missile providing a high off-boresight seeker, enhanced countermeasure rejection capability, low drag/high angle of attack airframe, and the ability to integrate a Helmet Mounted Cueing System. This potential sale will include AIM-9X guidance section spares, Active Optical Target Detectors, Captive Air Training Missiles (CATM), and CATM guidance units.
16. The AIM-120C-8 Advanced Medium Range Air-to-Air Missile (AMRAAM) is a supersonic, air-launched, aerial intercept guided missile featuring digital technology and micro-miniature solid-state electronics. AMRAAM capabilities include look-down/shoot-down, multiple launches against multiple targets, resistance to electronic countermeasures, and interception of high- and low-flying and maneuvering targets. This potential sale will include Captive Air Training Missiles (CATM) as well as AMRAAM guidance section and control section spares.
17. The GBU-39 Small Diameter Bomb Increment 1 (SDB-I) is a 250-lb GPS-aided inertial navigation system with small autonomous, day or night, adverse weather, conventional, air-to-ground precision glide weapon capabilities able to strike fixed and stationary re-locatable non-hardened targets from standoff ranges. It is intended to provide aircraft with an ability to carry a high number of bombs. Aircraft are able to carry four SDBs in place of one 2,000-lb bomb. This potential sale includes SDB-I Guided Test Vehicles and GBU-39/B Tactical Training Rounds.
18. The AGM-88 High-Speed Anti-Radiation Missile (HARM) is a tactical air-to-surface missile designed to inhibit or destroy surface-to-air missile radars, early warning radars, and radar-directed air defense artillery systems. This potential sale includes HARM guidance section, control section, warhead, and rocket motor spares.
19. The AGM-88E Advanced Anti-Radiation Guided Missile (AARGM) weapon system is an air-to-ground missile intended for Suppression of Enemy Air Defenses (SEAD) and Destruction of Enemy Air Defenses (DEAD) missions. The AARGM provides suppression or destruction of enemy RADAR and denies the enemy the use of air defense systems, thereby improving the survivability of tactical aircraft. This potential sale will include CATMs as well as guidance section, control section, propulsion section, GPS cards, and warhead spares.
20. Joint Direct-Attack Munitions (JDAM) consist of a bomb body paired with a warhead-specific tail kit containing an Inertial Navigation System (INS)/Global Positioning System (GPS) guidance capability that converts unguided free-fall bombs into accurate, adverse weather “smart” munitions. The JDAM weapon can be delivered from modest standoff ranges at high or low altitudes against a variety of land and surface targets during the day or night. The JDAM is capable of receiving target coordinates via preplanned mission data from the delivery aircraft, by onboard aircraft sensors (
(a) The GBU-31 is a 2,000-pound JDAM consisting of a KMU-556 tail kit and BLU-109 or MK-84 bomb body.
(b) The GBU-31v3 is a 2,000-pound JDAM consisting of a KMU-557 tail kit and BLU-109 bomb body.
(c) The GBU-32 is a 1,000-pound JDAM consisting of a KMU-559 tail kit and BLU-110 or MK-83 bomb body.
(d) The GBU-54 Laser Joint Direct Attack Munition (LJDAM) is a 500-pound JDAM which incorporates all the capabilities of the JDAM guidance tail kit and adds a precision laser guidance set. The LJDAM gives the weapon system an optional semi-active laser guidance in addition to the INS/GPS guidance. This provides the optional capability to strike moving targets. The GBU-54 consists of a DSU-38 laser guidance set, KMU-572 tail kit, and MK-82 or BLU-111 bomb body.
(e) This potential sale includes inert bombs, which have no explosive fill and are used for integration testing.
21. The FMU-152 or FMU-139 Joint Programmable Fuze (JPF) is a multi-delay, multi-arm, and proximity sensor compatible with general purpose blast, frag, and hardened-target penetrator weapons. The JPF settings are cockpit selectable in flight when used with numerous precision-guided weapons.
22. The Common Munitions Built-In-Test/Reprogramming Equipment (CMBRE) is support equipment used to interface with weapon systems to initiate and report BIT results and to upload and download flight software. CMBRE supports multiple munitions platforms with a range of applications that perform preflight checks, periodic maintenance checks, loading of Operational Flight Program (OFP) data, loading of munitions mission planning data, loading of Global Positioning System (GPS) cryptographic keys, and declassification of munitions memory.
23. The Electronic Warfare Integrated Reprogramming Database (EWIRDB) is used by U.S. Government engineers in the reprogramming and creation of shareable Mission Data Files for the AN/ALQ-131 electronic countermeasures pod on the F-16 aircraft. The source product is not releasable to the customer.
24. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
25. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
26. A determination has been made that Türkiye can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
27. All defense articles and services listed in this transmittal have been authorized for release and export to Türkiye.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by March 7, 2025.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Office of the Under Secretary of Defense, Military Personnel Policy, 1500 Defense Pentagon, Washington, DC 20301-4000, Ronald Garner (703) 693-1059.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by February 5, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas,
This includes information, if available, about the nature of the assault, victim, alleged offender, investigative information, case outcomes in connection with the assault, and other information necessary to fulfill reporting requirements. Section 543 of Public Law 114-328, the NDAA for FY 2017, further directed the Secretary of Defense to include information on each claim of retaliation in connection with a report of sexual assault in the Armed Force made by or against a member of such Armed Force in the Annual Report on Sexual Assault in the Military. This includes the narrative description and nature of each complaint, information on the complainant and alleged retaliator, and summary and determination of the investigation. Section 536 of Public Law 116-92 of the NDAA for FY 2020 directs the Secretary to prescribe procedures under which a victim who files a restricted report on an incident of sexual assault may request, at any time, the return of any personal property of the victim obtained as part of the sexual assault forensic examination.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following Complaints and Compliance filings in EL Dockets:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
On December 13, 2024, the Turlock & Modesto Irrigation District submitted to the Federal Energy Regulatory Commission (Commission) a copy of its application for Clean Water Act section 401(a)(1) water quality certification filed with the California State Water Resources Control Board (Water Board), in conjunction with the above captioned project. The submittal also included a response from the Water Board stating that it received the application on the same day. Pursuant to section 5.23(b) of the Commission's regulations,
If the Water Board fails or refuses to act on the water quality certification request on or before the above date, then the certifying authority is deemed waived pursuant to section 401(a)(1) of the Clean Water Act, 33 U.S.C. 1341(a)(1).
On October 31, 2024, Rover Pipeline LLC (Rover), filed an application in Docket No. CP25-12-000 requesting a Certificate of Public Convenience and Necessity pursuant to section 7(c) of the Natural Gas Act to construct, own, and operate certain natural gas pipeline facilities necessary to expand its existing Bulger Compressor Station in Washington County, Pennsylvania. The proposed project is known as the Rover—Bulger Compressor Station and Harmon Creek Meter Station Expansion Project (Project).
On November 14, 2024, the Federal Energy Regulatory Commission (Commission or FERC) issued its Notice of Application for the Project. Among other things, that notice alerted agencies issuing Federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on a request for a Federal authorization within 90 days of the date of issuance of the Commission staff's environmental document for the Project.
This notice identifies Commission staff's intention to prepare an environmental assessment (EA) for the Project and the planned schedule for the completion of the environmental review.
Issuance of EA May 5, 2025
90-day Federal Authorization Decision Deadline
If a schedule change becomes necessary, additional notice will be provided so that the relevant agencies are kept informed of the Project's progress.
Rover proposes to construct, own, and operate certain facilities necessary to expand its existing Harmon Creek Receipt Meter Station and Bulger Compressor Station, within its existing Bulger Compressor Station in Washington County, Pennsylvania. The Rover-Bulger Compressor Station and Harmon Creek Meter Station Expansion Project would allow Rover to ensure delivery of Range Resources—Appalachia LLC's (Range) requested transportation quantities at the required pressures. According to Rover, the Project is designed to receive up to an additional 400,000 dekatherms of natural gas assets per day to Rover. Rover does not have the authority to construct facilities pursuant to blanket certificate authority under Part 157, Subpart F of the Commission's regulations, therefore, Rover was required to file an application under part 157 of the Commission's regulations.
On December 11, 2024, the Commission issued a
In order to receive notification of the issuance of the EA and to keep track of formal issuances and submittals in specific dockets, the Commission offers a free service called eSubscription. This service provides automatic notification of filings made to subscribed dockets, document summaries, and direct links to the documents. Go to
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Additional information about the Project is available from the Commission's Office of External Affairs at (866) 208-FERC or on the FERC website (
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
On December 13, 2024, the Turlock & Modesto Irrigation District submitted to the Federal Energy Regulatory Commission (Commission) a copy of its application for Clean Water Act section 401(a)(1) water quality certification filed with the California State Water Resources Control Board (Water Board), in conjunction with the above captioned project. The submittal also included a response from the Water Board stating that it received the application on the same day. Pursuant to section 5.23(b) of the Commission's regulations,
If the Water Board fails or refuses to act on the water quality certification request on or before the above date, then the certifying authority is deemed waived pursuant to section 401(a)(1) of the Clean Water Act, 33 U.S.C. 1341(a)(1).
Environmental Protection Agency (EPA).
Notice.
This notice announces the availability of EPA's interim registration review decisions for the following chemicals: 1,3-PAD, chlorothalonil, thiophanate-methy/carbendazim, and TCMTB.
Pursuant to 40 CFR 155.58(c), this notice announces the availability of EPA's interim or final registration review decisions for the pesticides shown in table 1. The interim registration review decisions are supported by rationales included in the docket established for each chemical.
EPA is conducting its registration review of the chemicals listed in table 1 of unit I pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) section 3(g) (7 U.S.C. 136a(g)) and the Procedural Regulations for Registration Review at 40 CFR part 155, subpart C. FIFRA section 3(g) provides, among other things, that pesticide registrations are to be reviewed every 15 years. Consistent with 40 CFR 155.57, in its final registration review decision, EPA will ultimately determine whether a pesticide continues to meet the registration standard in FIFRA section 3(c)(5) (7 U.S.C. 136a(c)(5)). As part of the registration review process, the Agency has completed interim registration review decisions for the pesticides in table 1 of unit I.
Prior to completing the interim review decisions in table 1 of unit I, EPA posted proposed interim decisions or proposed registration review decisions for these chemicals and invited the public to submit any comments or new information, consistent with 40 CFR 155.58(a). EPA considered and responded to any comments or information received during these public comment periods in the respective interim decision or final registration review decisions.
For additional background on the registration review program, see:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA or Agency) is announcing the availability of the final risk evaluation under the Toxic Substances Control Act (TSCA) for diisodecyl phthalate (DIDP). The purpose of risk evaluations under TSCA is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, without consideration of costs or non-risk factors, including unreasonable risk to potentially exposed or susceptible subpopulations identified as relevant to the risk evaluation by EPA, under the conditions of use. EPA used the best available science to prepare this final risk evaluation and determined, based on the weight of scientific evidence, that DIDP poses unreasonable risk to human health. Under TSCA, EPA must initiate risk management actions to address the unreasonable risk.
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2018-0435, is available online at
This action is directed to the public in general and may be of particular interest to those involved in the manufacture, processing, distribution, use, and disposal of DIDP, related industry trade organizations, non-governmental organizations with an interest in human and environmental health, State and local governments, Tribal Nations, and/or those interested in the assessment of risks involving chemical substances and mixtures regulated under TSCA. As such, the Agency has not attempted to describe all the specific entities that this action might apply to. If you need help determining applicability, consult the technical contact listed under
The Agency conducted this risk evaluation under TSCA section 6, 15 U.S.C. 2605, which requires that EPA conduct risk evaluations on chemical substances and identifies the minimum components EPA must include in all chemical substance risk evaluations. Each risk evaluation must be conducted consistent with the best available science, be based on the weight of the scientific evidence, and consider reasonably available information. 15 U.S.C. 2625(h), (i), and (k). See also the implementing procedural regulations at 40 CFR part 702.
EPA is announcing the availability of the final risk evaluation under TSCA for DIDP. The purpose of risk evaluations under TSCA is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, without consideration of costs or non-risk factors, including unreasonable risk to potentially exposed or susceptible subpopulations identified as relevant to the risk evaluation by EPA, under the conditions of use. EPA has used the best available science to prepare this final risk evaluation and based on the weight of scientific evidence, determined that DIDP poses unreasonable risk to human health. Upon a determination of unreasonable risk, EPA must initiate risk management action as required pursuant to TSCA section 6(a), 15 U.S.C 2605(a), to address the unreasonable risk.
DIDP is a common chemical name for the category of chemical substances that includes the following substances: 1,2- benzenedicarboxylic acid, 1,2-diisodecyl ester (CASRN 26761-40-0) and 1,2-benzenedicarboxylic acid, di-C9-11-branched alkyl esters, C10-rich (CASRN 68515-49-1). Both CASRNs contain mainly C10 dialkyl phthalate esters. DIDP is manufactured (including imported), processed, distributed, and disposed as part of industrial, commercial, and consumer conditions of use. DIDP is used primarily as a plasticizer to make flexible polyvinyl chloride (PVC). It is also used to make building and construction materials; automotive articles; and other commercial and consumer products including adhesives and sealants, paints and coatings, and electrical and electronic products. The production volume of DIDP has increased significantly over the past decade from between 100 and 250 million pounds in 2015 to between 100 million and 1 billion pounds in 2019.
In May 2019, EPA received a request to conduct a risk evaluation DIDP from ExxonMobil Chemical Company, Evonik Corporation, and Teknor Apex, through the American Chemistry Council's High Phthalates Panel (ACC HPP). In December 2019, EPA notified ACC HPP that the Agency had granted the manufacturer requested risk evaluation. See EPA-HQ-OPPT-2018-0435 (Ref. 1). In November 2020, EPA released the draft scope of the DIDP risk evaluation (Ref. 2) and, after considering public comments, issued the final problem formulation in August 2021 (Ref. 3). On February 29, 2024, EPA released a draft risk evaluation for public comment and peer review by the Science Advisory Committee on Chemicals (SACC). (Ref. 4). The draft documents and public comments are in docket ID number EPA-HQ-OPPT-2024-0073. A non-technical summary is also available (Ref. 5). Given the shared peer review and chemical similarities with DINP, a shared set of responses to peer review and public comments will be available in January 2025 when the final Diisononyl Phthalate (DINP) risk evaluation is released (Ref. 6).
EPA has determined that DIDP presents an unreasonable risk of injury to human health under the conditions of use. EPA did not identify risk of injury to the environment that would contribute to the unreasonable risk determination for DIDP. EPA has determined that the unreasonable risk to human health presented by DIDP is due to non-cancer effects (
Between release of the draft risk evaluation and finalization of the DIDP risk evaluation, EPA updated the risk determination to find that six COUs contribute to unreasonable risk of DIDP based on new information identified by EPA, information provided by public commenters, and recommendations of the SACC. These changes stem from consideration of 1) multiple factors impacting occupational exposure during spray application, 2) applicability of developmental effects to average adult workers, and 3) identification of DIDP-containing products that could be spray applied. The COUs that EPA identified as presenting unreasonable risk were for acute exposure scenarios in which unprotected female workers of reproductive age were to spray adhesives and sealants; paints and coatings; lacquers, stains, varnishes, and floor finishes; or penetrants and inspection fluids that contain DIDP, because doing so could create high concentrations of DIDP in mist that an unprotected worker could inhale. The human health hazard that EPA identified as having the strongest evidence to support this risk evaluation is developmental toxicity, which means that laboratory animals dosed with DIDP had litters where more rodent offspring died than was the case with the litters of rodents that were not dosed with DIDP. As the most sensitive health effects of concern relate to exposure of the developing fetus during gestation, the population to which this risk determination is most relevant is female workers of reproductive age.
Consistent with the statutory requirements of TSCA section 6(a), EPA will propose a risk management regulatory action to the extent necessary so that DIDP no longer presents an unreasonable risk. EPA expects to focus its risk management action on the conditions of use that significantly contribute to the unreasonable risk. However, it should be noted that, under TSCA section 6(a), EPA is not limited to regulating the specific activities found to drive unreasonable risk and may select from among a suite of risk management requirements in section 6(a) related to manufacture (including import), processing, distribution in commerce, commercial use, and disposal as part of its regulatory options to address the unreasonable risk. As a general example, EPA may regulate upstream activities (
For more information about the TSCA risk evaluation process for existing chemicals, go to
The following is a listing of the documents that are specifically referenced in this document. The docket includes these documents and other information considered by EPA, including documents that are referenced within the documents that are included in the docket, even if the referenced document is not physically located in the docket. For assistance in locating these other documents, please consult the person listed under
Environmental Protection Agency (EPA).
Notice of decision.
The Environmental Protection Agency (“EPA”) is providing notice of its decision granting the California Air Resources Board's (“CARB's”) request for an authorization of amendments to its small off-road engine (“SORE”) regulations. CARB's amendments covered by this authorization include those adopted by CARB in 2016 and 2021. EPA's decision was issued under the authority of section 209 of the Clean Air Act (“CAA” or “Act”).
Petitions for review must be filed by March 7, 2025.
EPA has established a docket for this action under Docket ID EPA-HQ-OAR-2023-0151. All documents relied upon in making this decision, including those submitted to EPA by CARB, are contained in the public docket. Publicly available docket materials are available either electronically through
EPA's Office of Transportation and Air Quality (“OTAQ”) maintains a web page that contains general information on its review of California waiver and authorization requests. Included on that page are links to prior waiver
Michael Olechiw, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, Michigan 48105. Telephone: 734-214-4297. Email:
On May 23, 2023, EPA published a
On December 19, 2024, I signed a Decision Document granting California an authorization pursuant to section 209(e)(2)(A) of the CAA, as amended, 42 U.S.C. 7543(e)(2)(A), for CARB's 2016 and 2021 amendments to CARB's SORE regulations (the “2016 SORE Amendments” and “2021 SORE Amendments” respectively).
CAA section 209(e)(1) permanently preempts any state, or political subdivision thereof, from adopting or attempting to enforce any standard or other requirement relating to the control of emissions for certain new nonroad engines or vehicles.
On July 20, 1994, EPA promulgated a rule (the 1994 rule) interpreting the three criteria set forth in CAA section 209(e)(2)(A) that EPA must consider before granting any California authorization request for nonroad engine or vehicle emission standards.
CARB determined that these standards and accompanying enforcement procedures do not cause California's standards, in the aggregate, to be less protective to public health and welfare than the applicable Federal standards. The administrative record, including information presented to me by parties opposing California's
CARB has demonstrated the existence of compelling and extraordinary conditions justifying the need for such State standards. The administrative record, including information presented to me by parties opposing California's authorization request, did not demonstrate that California does not need such State standards to meet compelling and extraordinary conditions. Thus, based on the record, I cannot deny the authorization based on section 209(e)(2)(A)(ii).
CARB has submitted information that its emission standards and test procedures are consistent with section 209(a), section 209(e)(1), and section 209(b)(1)(C) of the Act. The administrative record, including information presented to me by parties opposing California's authorization request, did not satisfy the burden of persuading EPA that the standards are not consistent with section 209. Thus, based on the record, I cannot deny the authorization based on section 209(e)(2)(A)(iii).
Accordingly, I hereby granted the authorization requested by California.
Section 307(b)(1) of the CAA governs judicial review of final actions by the EPA. Petitions for review must be filed by March 7, 2025.
As with past authorization decisions, this action is not a rule as defined by Executive Order 12866. Therefore, it is exempt from review by the Office of Management and Budget as required for rules and regulations by Executive Order 12866.
In addition, this action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a supporting regulatory flexibility analysis addressing the impact of this action on small business entities.
The Congressional Review Act, 5 U.S.C. 801
Environmental Protection Agency (EPA).
Notice of decision.
The Environmental Protection Agency (“EPA”) is providing notice of its decision granting the California Air Resources Board's (“CARB's”) request for a waiver of Clean Air Act preemption for its Advanced Clean Cars II (“ACC II”) regulations. EPA's decision was issued under the authority of the Clean Air Act (“CAA” or “Act”) section 209.
Petitions for review must be filed by March 7, 2025.
EPA has established a docket for this action under Docket ID EPA-HQ-OAR-2023-0292. All documents relied upon in making this decision, including those submitted to EPA by CARB, are contained in the public docket. Publicly available docket materials are available either electronically through
EPA's Office of Transportation and Air Quality (“OTAQ”) maintains a web page that contains general information on its review of California waiver and authorization requests. Included on that page are links to prior waiver
Michael Olechiw, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105. Telephone: 734-214-4297. Email:
On December 26, 2023, EPA published a
On December 17, 2024, I signed a Decision Document granting California a waiver of preemption pursuant to section 209(b) of the CAA, as amended, 42 U.S.C. 7543(b), for regulations applicable to new 2026 and subsequent model year (MY) California on-road light- and medium-duty vehicles, hereafter the Advanced Clean Cars II (“ACC II”) regulations.
Section 209(b) of the Act provides that the Administrator, after notice and opportunity for public hearing, shall waive Federal preemption for California to enforce new motor vehicle emission standards and accompanying enforcement procedures unless certain criteria are met. The criteria for denying such a waiver include consideration of whether California arbitrarily and capriciously determined that its standards are, in the aggregate, at least as protective of public health and welfare as the applicable Federal standards; whether California does not need such State standards to meet compelling and extraordinary conditions; and whether such State standards and accompanying enforcement procedures are not consistent with section 202(a) of the Act.
CARB determined that these standards and accompanying enforcement procedures do not cause California's standards, in the aggregate, to be less protective to public health and welfare than the applicable Federal standards. The administrative record, including information presented to me by parties opposing California's waiver, did not demonstrate that California arbitrarily or capriciously reached this protectiveness determination. Therefore, based on the record, I cannot find California's determination to be arbitrary and capricious under section 209(b)(1)(A).
CARB has demonstrated the existence of compelling and extraordinary conditions justifying the need for such State standards. The administrative record, including information presented to me by parties opposing California's waiver request, did not demonstrate that California does not need such State standards to meet compelling and extraordinary conditions. Thus, based on the record, I cannot deny the waiver based on section 209(b)(1)(B).
CARB has submitted information that its emission standards and test procedures are technologically feasible, present no inconsistency with Federal requirements, and are consistent with section 202(a) of the Act. The administrative record, including information presented to me by parties opposing California's waiver request, did not satisfy the burden of persuading EPA that the standards are not consistent with section 202(a). Thus, based on the record, I cannot deny the waiver based on section 209(b)(1)(C).
Accordingly, I hereby granted the waiver requested by California.
Section 307(b)(1) of the CAA governs judicial review of final actions by the EPA. Petitions for review must be filed by March 7, 2025.
As with past waiver decisions, this action is not a rule as defined by Executive Order 12866. Therefore, it is exempt from review by the Office of Management and Budget as required for rules and regulations by Executive Order 12866.
In addition, this action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a supporting regulatory flexibility analysis addressing the impact of this action on small business entities.
The Congressional Review Act, 5 U.S.C. 801
Environmental Protection Agency (EPA).
Notice of decision.
The Environmental Protection Agency (“EPA”) is providing notice of its decision to grant the California Air Resources Board's (“CARB”) request for a waiver of Clean Air Act (CAA) preemption for its Heavy-Duty Vehicle and Engine “Omnibus” Low NO
Petitions for review must be filed by March 7, 2025.
EPA has established a docket for this action under Docket ID EPA-HQ-OAR-2022-0332. All documents relied upon in making this decision, including those submitted to EPA by CARB, are contained in the public docket. Publicly available docket materials are available either electronically through
EPA's Office of Transportation and Air Quality (“OTAQ”) maintains a web page that contains general information on its review of California waiver and authorization requests. Included on that page are links to prior waiver
Brian Nelson, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, Michigan 48105. Telephone: 734-214-4278. Email:
On June 13, 2022, EPA published a
On December 17, 2024, I signed a Decision Document granting California a waiver of preemption pursuant to section 209(b) of the CAA, as amended, 42 U.S.C. 7543(b), for regulations applicable to new 2024 and subsequent model year (MY) California on-road heavy-duty vehicles and engines, hereafter the Omnibus Low NO
For the portions of the Omnibus Low NO
For the portions of the Omnibus Low NO
On July 20, 1994, EPA promulgated a rule interpreting the three criteria set forth in section 209(e)(2)(A) that EPA must consider before granting any California authorization request for nonroad engine or vehicle emission standards.
CARB determined that these standards and accompanying enforcement procedures do not cause California's standards, in the aggregate, to be less protective to public health and welfare than the applicable Federal standards. The administrative record, including information presented to me by parties opposing California's waiver, did not demonstrate that California arbitrarily or capriciously reached this protectiveness determination. Therefore, based on the record, I cannot find California's determination to be arbitrary and capricious under section 209(b)(1)(A) or section 209(e)(2)(A)(i).
CARB has demonstrated the existence of compelling and extraordinary conditions justifying the need for its own motor vehicle emission control
CARB has submitted information that its emission standards and test procedures are technologically feasible and present no inconsistency with Federal requirements and are, therefore, consistent with section 202(a) of the Act and are consistent with section 209 as required by section 209(e)(2)(A)(iii). The administrative record, including information presented to me by parties opposing California's waiver and authorization requests, did not satisfy the burden of persuading EPA that the standards are not technologically feasible within the available lead time, considering costs, or are otherwise inconsistent with section 202(a) (for onroad) or section 209 (for nonroad). Thus, based on the record, I cannot deny the waiver based on section 209(b)(1)(C) or section 209(e)(2)(A)(iii).
Accordingly, I hereby granted the waiver and authorization requested by California.
Section 307(b)(1) of the CAA govern judicial review of final actions by EPA. Petitions for review must be filed by March 7, 2025.
As with past waiver and authorization decisions, this action is not a rule as defined by Executive Order 12866. Therefore, it is exempt from review by the Office of Management and Budget as required for rules and regulations by Executive Order 12866.
In addition, this action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a supporting regulatory flexibility analysis addressing the impact of this action on small business entities.
The Congressional Review Act, 5 U.S.C. 801
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA or Agency) is announcing the extension of the review period for Confidential Business Information (CBI) claims for specific identities of all active chemical substances listed on the confidential portion of the Toxic Substances Control Act (TSCA) Inventory submitted to the EPA under TSCA. EPA has determined that a further extension of the statutory review period for the review of CBI claims under TSCA is necessary to allow the Agency to complete the required reviews under TSCA.
The review period is extended to February 19, 2026.
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2018-0320, is available online at
You may be affected by this action if you submitted a Notice of Activity Form A to EPA under TSCA section 8(b)(4) and 40 CFR part 710, subpart B and asserted any CBI claims concerning the specific identities of the chemical substances you reported. Persons who seek information on such submissions may also be affected by this action. 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:
• Manufacturers, importers, or processors of chemical substances (NAICS codes 325 and 324110),
If you have any questions regarding the applicability of this action to a particular entity, consult the technical contact person listed under
TSCA authorizes the extension of the Review Plan deadline in TSCA section 8(b)(4)(E)(ii)(I), 15 U.S.C. 2607(b)(4)(E)(ii)(I).
EPA is announcing to the public that it is further extending an Agency review deadline pursuant to the authority in TSCA section 8(b)(4)(E)(ii)(I), 15 U.S.C. 2607(b)(4)(E)(ii)(I). The additional time is necessary to complete the reviews given the volume of submissions that require review, information technology issues, insufficient resources and other legal and administrative delays that have affected the review process. EPA previously extended the review period by one year, to February 19, 2025 (89 FR 4605, January 24, 2024 (FRL-11655-01-OCSPP)). As discussed in that document, EPA has evaluated its progress toward completing the requirements for the Agency to review CBI substantiations outlined in the final rule titled “Procedures for Review of CBI Claims for the Identity of Chemicals in the TSCA Inventory” (Review Plan rule), (85 FR 13062, March 6, 2020 (FRL-10005-48)) and has concluded that a further one year extension will be necessary to complete the Review Plan reviews.
Pursuant to TSCA section 8(b), EPA finalized the Review Plan rule establishing,
Several issues and factors caused delays that prevented EPA from completing its review within the five-year period (and are going to prevent completion within the previous one-year extension). These issues are described in more detail in the document at 89 FR 4605-4606, but include a large universe of claims to review (more than 4,805 chemical substances in 5,787 often-complex submissions) and concurrent activities to update the public portion of the TSCA Inventory, consistent with the requirements of TSCA sections 8(b) and 14. Also, adapting and maintaining the Agency's information technology (IT) systems to complete these reviews has continued to contribute to delays in reviewing these CBI claims. The size (
These issues and factors together justify extending the review period deadline by a total of two years, consistent with TSCA section 8(b)(4)(E)(ii)(I).
Equal Employment Opportunity Commission.
Final notice of information collection—Uniform Guidelines on Employee Selection Procedures—extension without change.
In accordance with the Paperwork Reduction Act of 1995, the Equal Employment Opportunity Commission (EEOC or Commission) announces that it has submitted the information described below to the Office of Management and Budget (OMB) for a three-year extension without change.
Written comments on this notice must be submitted on or before February 5, 2025.
Written comments should be sent within 30 days of publication of this final notice to
Gary Hozempa, Senior Attorney, at (202) 921-2672 or
On October 29, 2024, the Commission published a 60-Day Notice informing the public of its intent to request an extension without change of the information collection requirements from the Office of Management and Budget (89 FR 85963 (October 29, 2024). Public comments were solicited. None were submitted as of the December 30, 2024 deadline for filing.
The only paperwork burden derives from this recordkeeping. Only
This burden assessment is based on an estimate of the number of job applications submitted to all employers in one year, including paper-based and electronic applications. The total number of job applications submitted every year to covered employers is estimated to be 1,850,752,956 based on an average of approximately 26 applications
Assuming that the required recordkeeping takes 30 seconds per record, and assuming a total of 1,850,752,956 paper and electronic applications per year (as calculated above), the resulting UGESP burden hours would be 15,422,941. Based on a wage rate of $22.94
For the Commission.
89 FR 105048.
Thursday, January 9, 2025, at 10:00 a.m.
The meeting was rescheduled for Tuesday, January 14, 2025, at 10:00 a.m.
Judith Ingram, Press Officer. Telephone: (202) 694-1220.
Federal Trade Commission.
Proposed consent agreement; request for comment.
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair or deceptive acts or practices. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before February 5, 2025.
Interested parties may file comments online or on paper by following the instructions in the Request for Comment part of the
Kristin Williams (202-326-2619), Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
Pursuant to section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule § 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of 30 days. The following Analysis to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained at
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before February 5, 2025. Write “accessiBe; File No. 222 3156” on your comment. Your comment—including your name and your State—will be placed on the public record of this proceeding, including, to the extent practicable, on the
Because of heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the
Because your comment will be placed on the publicly accessible website at
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule § 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record.
Visit the FTC website at
The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an agreement containing a consent order from accessiBe Inc. and accessiBe Ltd. (collectively, “accessiBe”).
The proposed consent order (“proposed order”) has been placed on the public record for 30 days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.
This matter involves accessiBe's marketing and sale of a web accessibility software plug in called accessWidget. accessiBe represented that accessWidget could make any website compliant with the Web Content Accessibility Guidelines (“WCAG”), a comprehensive set of technical criteria used to assess website accessibility. accessiBe advertised these claims on its website and social media, as well as in articles that were formatted as impartial and objective reviews on third-party websites. accessiBe also failed to disclose its material connections with the publishers of those third-party articles.
The proposed complaint alleges that accessWidget did not make all websites WCAG compliant, and that the company's claims were false, misleading, or unsubstantiated. The proposed complaint also alleges that formatting the third-party articles and reviews as independent opinions by impartial authors and publishers was false and misleading, and that accessiBe's failure to disclose its material connections with the publishers of those articles was deceptive.
The proposed order contains provisions designed to prevent accessiBe from engaging in these and similar acts and practices in the future. Provision I prohibits accessiBe from representing that its automated products, including accessWidget's artificial intelligence and other automated technology, can make any website WCAG compliant, or can ensure continued compliance with WCAG over time as web content changes, unless the company has competent and reliable evidence to support the representations. Provision II prohibits accessiBe from misrepresenting any fact material to consumers about any of the company's products or services, such as the value or total cost; any material restrictions, limitations, or conditions; or any material aspect of its performance, features, benefits, efficacy, nature, or central characteristics. Provision III prohibits accessiBe from misrepresenting that statements made in third-party reviews, articles, or blog posts about its automated products, including accessWidget's artificial intelligence and other automated technology, are independent opinions by impartial authors; that an endorser is an independent or ordinary user of the automated product; or that the endorser is an independent organization or is providing objective information.
Provision IV requires accessiBe to disclose clearly and conspicuously, and in close proximity to representations about its automated products, including accessWidget's artificial intelligence and other automated technology, any unexpected material connection that an endorser has to accessiBe, to the product or service, or to affiliated individuals or entities. Provision V requires accessiBe to disclose, in connection with representations that accessWidget or the company's other artificial intelligence or automated products correct accessibility barriers on a website, that such products or services will not correct barriers on third-party web domains or subdomains that may be part of the overall user experience, unless those domains also use the product. Such disclosure must be made clearly and conspicuously, and prior to the consumer incurring any financial obligation.
Provision VI requires accessiBe to pay the Commission $1,000,000 in monetary relief. Provision VII describes procedures and legal rights related to that payment. Provision VIII requires accessiBe to provide sufficient customer information to enable the Commission to efficiently administer consumer redress. Provisions IX through XIII are reporting and compliance provisions.
Provision IX mandates that accessiBe acknowledge receipt of the order, distribute the order to principals, officers, and certain employees and agents, and obtain signed acknowledgments from them. Provision X requires accessiBe to submit compliance reports to the Commission one year after the order's issuance and submit notifications when certain events occur. Under Provision XI, accessiBe must create certain records for 10 years and retain them for five years. Provision XII requires accessiBe to provide information or documents necessary for the Commission to monitor compliance with the order during the period of the order's effective dates. Finally, Provision XIII provides the order's effective dates, including that, with exceptions, the order will terminate in 20 years.
The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify the proposed order's terms in any way.
By direction of the Commission.
Today we vote to approve an administrative complaint and proposed consent order with accessiBe, which advertised its accessWidget as “the #1 fully automated ADA [Americans with Disabilities Act] and WCAG [Web Content Accessibility Guidelines] compliance solution,” “always ensuring compliance by rescanning and re-analyzing your website every 24 hours to remediate new content, widgets, pages, and anything else you may add.” The complaint alleges that accessiBe's automated solution fell far short of its promise and failed to correct many website accessibility issues.
I write separately to clarify my vote in favor of the count accusing accessiBe of misrepresenting its product's performance. Each subscription to accessWidget covers only one domain, but websites sometimes depend on subdomains or third-party domains for critical functionality, like making a reservation or processing a payment.
Federal Trade Commission.
Proposed consent agreement; request for comment.
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair methods of competition. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before February 5, 2025.
Interested parties may file comments online or on paper by following the instructions in the Request for Comment part of the
Erik Herron (202-326-3535), Bureau of Competition, Federal Trade Commission, 400 7th Street SW, Washington, DC 20024.
Pursuant to section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule § 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of 30 days. The following Analysis of Agreement Containing Consent Order to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC website at this web address:
The public is invited to submit comments on this document. For the Commission to consider your comment, we must receive it on or before February 5, 2025. Write “Planned Companies; File No. 241 0029” on your comment. Your comment—including your name and your State—will be placed on the public record of this proceeding, including, to the extent practicable, on the
Because of the agency's heightened security screening, postal mail addressed to the Commission will be delayed. We strongly encourage you to submit your comments online through the
Because your comment will be placed on the publicly accessible website at
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule § 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record.
Visit the FTC website at
The Federal Trade Commission (“Commission”) has accepted for public comment, subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) with Planned Building Services, Inc., Planned Lifestyle Services Inc., Planned Security Services, Inc., and Planned Technologies Services, Inc. (collectively and separately, “Planned” or “Respondents”). The proposed Decision and Order (“Order”), included in the Consent Agreement and subject to final Commission approval, is designed to remedy the anticompetitive effects that have resulted from Respondents' use of restrictive covenants in some of their contracts with building owners and managers that limit the ability of those building owners and managers to solicit or hire Respondents' employees (“No-Hire Agreements”). The term No-Hire Agreement refers to a term in an agreement between two or more companies that restricts, imposes conditions on, or otherwise limits a company's ability to solicit, recruit, or hire another company's employees, during employment or afterwards, directly or indirectly, including by imposing a fee or damages in connection with such conduct, or that otherwise inhibits competition between companies for each other's employees' services.
The Consent Agreement settles charges that Respondents have engaged in unfair methods of competition in violation of section 5 of the FTC Act, as amended, 15 U.S.C. 45, by entering into No-Hire Agreements with customers. Respondents' No-Hire Agreements constitute unreasonable restraints of trade that are unlawful under section 1 of the Sherman Act, 15 U.S.C. 1, and are thus unfair methods of competition in violation of section 5 of the FTC Act. Independent of the Sherman Act, Respondents' use of the No-Hire Agreements constitutes an unfair method of competition with a tendency or likelihood to harm competition, consumers, and employees in the building services industry, in violation of section 5.
The proposed Order has been placed on the public record for 30 days in order to receive comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the Consent Agreement and the comments received and will decide whether it should withdraw from the Consent Agreement
Respondents, Planned Building Services, Inc. (“PBS”), Planned Lifestyle Services Inc. (“PLS”), Planned Security Services, Inc. (“PSS”), and Planned Technologies Services, Inc. (“PTS”), are divisions of Planned Companies Holdings, Inc. Planned Companies Holdings, Inc., is a non-wholly owned, loosely controlled subsidiary of FirstService Corporation, a publicly traded Canadian company and one of the largest property management companies in North America. PBS provides cleaning and maintenance services at residential and commercial buildings; PLS provides doorperson and concierge services at residential buildings; PSS provides security guard services at residential and commercial buildings; and PTS provides technology related services. Respondents are headquartered in New Jersey and employ more than 3,000 building services workers, primarily in the Northeast and Mid-Atlantic, but also in the metro regions of Boston, the District of Columbia, Atlanta, San Francisco, and Florida. The complaint focuses on Respondents' conduct in New York and New Jersey.
The complaint alleges that Respondents sell building services to building owners and property management companies, primarily consisting of the labor of janitors, security guards, maintenance workers, and concierge desk workers who are directly employed by Respondents. These employees perform their work at residential and commercial buildings in various States, but predominantly in New York City and Northern New Jersey.
The complaint also alleges that Respondents and their building owner and property manager customers are direct competitors in labor markets for building services workers. These include the markets for workers to perform concierge, security, janitorial, maintenance, and related services.
As alleged in the complaint, Respondents use standard-form agreements with their customers that include No-Hire Agreements. The No-Hire Agreements restrict the ability of Respondents' customers to (1) directly hire workers employed by Respondents, and (2) indirectly hire workers employed by Respondents through a competing building services contractor after the competitor wins the customers' business away from Respondents. These restrictions apply during the term of Respondents' contracts and for six months thereafter. Earlier versions of the No-Hire Agreements applied not just to Respondents' employees staffed to provide services for a particular customer, but to all of Respondents' building services employees.
The complaint alleges that Respondents' No-Hire Agreements are facially anticompetitive because they are horizontal agreements among competitors not to compete. Respondents and their customer building owners and property managers are competitors for the labor of building services workers like Respondents' employees. The No-Hire Agreements are horizontal agreements that prohibit buildings and property management companies from hiring building services workers, thereby undermining competition for labor, reducing worker bargaining power, and suppressing wages. For these reasons, the complaint alleges that the No-Hire Agreements constitute unreasonable restraints of trade that are unlawful under section 1 of the Sherman Act, 15 U.S.C. 1, and are thus unfair methods of competition in violation of section 5 of the FTC Act, as amended, 15 U.S.C. 45.
Independent of the Sherman Act, the complaint alleges that Respondents' conduct constitutes an unfair method of competition with a tendency or likelihood to harm competition, consumers, and employees in the building services industry, in violation of section 5 of the FTC Act. According to the complaint, the No-Hire Agreements limit the ability of building owners and managers to hire Respondents' employees. This harms Respondents' employees because it limits their ability to negotiate for higher wages, better benefits, and improved working conditions. Employees may suffer further hardship if the building they work at brings services in-house because the No-Hire Agreements force them to leave their jobs in some circumstances. The complaint further alleges that the No-Hire Agreements harm building owners and managers because they may be foreclosed from bringing services in-house due to the prospect of losing long-serving workers with extensive, building-specific experience.
The proposed Order seeks to remedy Respondents' unfair methods of competition. Section II of the proposed Order prohibits Respondents from entering into, maintaining, or enforcing a No-Hire Agreement, or communicating to a customer or any other person that any Planned employee is subject to a No-Hire Agreement.
Paragraph III.A of the proposed Order requires Respondents to provide written notice to customers that are subject to No-Hire Agreements that (i) the restriction is null and void, and (ii) any customer or a subsequent building services contractor for a customer is no longer subject to the restrictions or penalties related to the No-Hire Agreements in Respondents' contracts.
Paragraph III.B of the proposed Order requires Respondents to provide written notice to employees who are subject to a No-Hire Agreement. Paragraph III.C requires that Respondents post clear and conspicuous notice that employees are not subject to No-Hire Agreements and may seek or accept a job with the building directly, or any company that wins the building's business.
Paragraphs IV.A and IV.B of the proposed Order provide a timeline according to which the obligations enumerated in Section III must be met. Paragraphs IV.C-E set forth Respondents' ongoing compliance obligations.
Other paragraphs contain standard provisions regarding compliance reports, requirements for Respondents to provide notice to the FTC of material changes to their business, and access for the FTC to documents and personnel. The term of the proposed Order is ten years.
The purpose of this analysis is to facilitate public comment on the Consent Agreement and proposed Order to aid the Commission in determining whether it should make the proposed Order final. This analysis is not an official interpretation of the proposed Order and does not modify its terms in any way.
By direction of the Commission.
Federal Acquisition Service (Q), General Services Administration (GSA).
Notice.
GSA is seeking applications to fill three (3) membership seats on the
GSA will consider complete applications that are received no later than 5 p.m. eastern standard time on Monday, January 20, 2025. Applications will be accepted via the application form online at
Applications will be accepted electronically. Please submit applications via
Michelle White, Designated Federal Officer (DFO), FSCAC, GSA, 703-489-4160,
GSA, in compliance with the FedRAMP Authorization Act of 2022, established the FSCAC, an advisory committee in accordance with the provisions of the Federal Advisory Committee Act, as amended (5 U.S.C. ch. 10). The Federal Risk and Authorization Management Program (FedRAMP) within GSA is responsible for providing a standardized, reusable approach to security assessment and authorization for cloud computing products and services that process unclassified information used by agencies.
The FSCAC will provide advice and recommendations to the Administrator of GSA, the FedRAMP Board, and agencies on technical, financial, programmatic, and operational matters regarding the secure adoption of cloud computing products and services. The FSCAC will ensure effective and ongoing coordination of agency adoption, use, authorization, monitoring, acquisition, and security of cloud computing products and services to enable agency mission and administrative priorities. The purposes of the Committee are:
• To examine the operations of FedRAMP and determine ways that authorization processes can continuously be improved, including the following:
○ Measures to increase agency reuse of FedRAMP authorizations.
○ Proposed actions that can be adopted to reduce the burden, confusion, and cost associated with FedRAMP authorizations for cloud service providers.
○ Measures to increase the number of FedRAMP authorizations for cloud computing products and services offered by small businesses concerns (as defined by section 3(a) of the Small Business Act (15 U.S.C. 632(a)).
○ Proposed actions that can be adopted to reduce the burden and cost of FedRAMP authorizations for agencies.
• Collect information and feedback on agency compliance with, and implementation of, FedRAMP requirements.
• Serve as a forum that facilitates communication and collaboration among the FedRAMP stakeholder community.
The FSCAC will meet no fewer than three (3) times a calendar year. Meetings shall occur as frequently as needed, called, and approved by the DFO. Meetings may be held virtually or in person. Members will serve without compensation and may be allowed travel expenses, including per diem, in accordance with 5 U.S.C. 5703.
The Committee shall be comprised of not more than 15 members who are qualified representatives from the public and private sectors, appointed by the Administrator, in consultation with the Director of OMB, as follows:
i. The GSA Administrator or the GSA Administrator's designee, who shall be the Chair of the Committee.
ii. At least one representative each from the Cybersecurity and Infrastructure Security Agency and the National Institute of Standards and Technology.
iii. At least two officials who serve as the Chief Information Security Officer within an agency, who shall be required to maintain such a position throughout the duration of their service on the Committee.
iv. At least one official serving as Chief Procurement Officer (or equivalent) in an agency, who shall be required to maintain such a position throughout the duration of their service on the Committee.
v. At least one individual representing an independent assessment organization.
vi. At least five representatives from unique businesses that primarily provide cloud computing services or products, including at least two representatives from a small business (as defined by section 3(a) of the Small Business Act (15 U.S.C. 632(a))).
vii. At least two other representatives from the Federal Government as the Administrator determines to be necessary to provide sufficient balance, insights, or expertise to the Committee.
Each member shall be appointed for a term of three (3) years, except the initial terms, which were staggered into one (1), two (2) or three (3) year terms to establish a rotation in which one third of the members are selected. No member shall be appointed for more than two (2) consecutive terms nor shall any member serve for more than six (6) consecutive years. GSA values opportunities to increase diversity, equity, inclusion and accessibility on its federal advisory committees.
Members will be designated as Regular Government Employees (RGEs) or Representative members as appropriate and consistent with Section 3616(d) of the FedRAMP Authorization Act of 2022. GSA's Office of General Counsel will assist the Designated Federal Officer (DFO) to determine the advisory committee member designations. Representatives are members selected to represent a specific point of view held by a particular group, organization, or association. Members who are full time or permanent part-time Federal civilian officers or employees shall be appointed to serve as Regular Government Employee (RGE) members. In accordance with OMB Final Guidance published in the
Applications are being accepted to fill the remaining term of one (1) vacant seat as an RGE member and to fill two (2) seats with upcoming expiring terms as Representative members.
One (1) seat for an official who serves as the Chief Information Security Officer within an agency, who shall be required to maintain such a position throughout the duration of their service on the Committee, will be appointed to serve for the remainder of the vacant term, scheduled to end on May 14, 2026.
One (1) seat for a representative of a unique business that primarily provides cloud computing products or services will be appointed for a three year term.
One (1) seat for a representative of an independent assessment service will be appointed for a three year term.
Applications for membership on the Committee will be accepted until 5 p.m. eastern standard time on Monday, January 20, 2025.
There are two parts to submitting an application. First, complete the information requested via this electronic form
Applications that do not include the completion of the above instructions will not be considered.
Letters of Recommendation may also be submitted if desired by the applicant; however, please note they may or may not have an impact on final appointments and are not required for an application to be considered.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or we) is announcing its determination that the Food Contact Notifications (FCNs) listed in this notice are no longer effective. Several manufacturers notified FDA in writing that they ceased producing, supplying, or using the listed food contact substances (FCSs) for their intended use in the United States. We are taking this action in accordance with the process set out in our regulations, by which FDA may determine that an FCN is no longer effective.
For access to the docket to read background documents or comments received go to
Lillian Mawby, Office of Food Chemical Safety, Dietary Supplements, and Innovation, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 301-796-4041 or Carrol Bascus, Office of Policy, Regulations and Information, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2378.
In the
Several manufacturers or suppliers notified FDA, through voluntary commitment letters (Ref. 1), that they have ceased producing, supplying, or using authorized FCSs for their intended food contact use in the United States. FDA received this information before issuing the final rule. After the final rule's effective date of May 21, 2024, consistent with § 170.105(a)(2)(ii)(A), we contacted the manufacturers or suppliers to inform them that their voluntary commitment letters demonstrate that they had ceased, and did not intend to resume in the future, producing, supplying, or using the subject FCSs for their intended food contact use. We provided the manufacturers or suppliers an opportunity to respond and did not receive any responses that disagreed with our findings. Therefore, in accordance with § 170.105(a)(2)(ii)(B), we determined that the FCNs are no longer effective based on abandonment. This notice constitutes the detailed summary of the basis for FDA's determination that these specific FCNs are no longer effective in accordance with § 170.105(b).
Tables 1 and 2 identify FCNs that are no longer effective, as well as the FCSs no longer authorized by these FCNs, as of the publication date of this notice. Based on the end of sales dates provided by the manufacturers for the FCSs listed in FCNs in table 1, we expect any existing stocks of these FCSs to have already been exhausted from the U.S. market. For the FCSs listed in the FCNs in table 2, we are providing a compliance date for existing stocks of products that were produced, supplied, or used by the manufacturer or supplier before January 6, 2025. Based on the information provided in the voluntary commitment letter from that manufacturer, we expect any existing stocks of these products to be exhausted by June 30, 2025. We have determined that providing a compliance date of June 30, 2025, to exhaust these existing stocks would be protective of public health. For this reason, in accordance with § 170.105(b) we are establishing a compliance date of June 30, 2025, for the use of FCSs listed in table 2 in food contact articles if the FCSs were produced, supplied, or used by the manufacturer or supplier before January 6, 2025.
To reflect these changes in status of the affected FCNs, we established an Inventory of Food Contact Notifications That are No Longer Effective on FDA's website. The Inventory may be viewed at
We also updated our Inventory of Effective Food Contact Notifications accordingly at
A food additive is deemed unsafe unless that substance and its use conform with a regulation issued under section 409 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 348) or there is an FCN submitted under section 409(h) of the FD&C Act that is effective (section 409(a) of the FD&C Act). An effective FCN is specific only to the intended use of the substance prepared by the manufacturer or supplier identified in the FCN (section 409(h)(1)(C)).
Our determination that an FCN is no longer effective does not preclude any manufacturers or suppliers from submitting a new FCN for the same FCS, including for the same intended use, after FDA has determined that an FCN is no longer effective, unless the intended use of the FCS is authorized by a food additive regulation or the subject of an issued threshold of regulation exemption, per 21 CFR 170.105(c).
We have determined under 21 CFR 25.32(m) 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.
The following references are on display at the Dockets Management Staff, (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500 and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they also are available electronically at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is requesting nominations for voting members to serve on the National Mammography Quality Assurance Advisory Committee in the Center for Devices and Radiological Health. Nominations will be accepted for current and upcoming vacancies effective February 1, 2025, with this notice. FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees and, therefore, encourages nominations of appropriately qualified candidates from these groups.
Nominations received on or before March 7, 2025, will be given first consideration for membership on the National Mammography Quality Assurance Advisory Committee. Nominations received after March 7, 2025, will be considered for nomination to the committee as later vacancies occur.
All nominations for membership should be submitted electronically by logging into the FDA Advisory Nomination Portal at
FDA is requesting nominations for voting members to fill upcoming vacancies on the National Mammography Quality Assurance Advisory Committee.
The National Mammography Quality Assurance Advisory Committee advises the Commissioner of Food and Drugs (the Commissioner) or designee on: (1) developing appropriate quality standards and regulations for mammography facilities; (2) developing appropriate standards and regulations
The committee consists of a core of 15 members, including the Chair. Members and the Chair are selected by the Commissioner or designee from among physicians, practitioners, and other health professionals, whose clinical practice, research specialization, or professional expertise includes a significant focus on mammography. Members will be invited to serve for overlapping terms of up to 4 years. Almost all members of this committee serve as Special Government Employees.
Any interested person may nominate one or more qualified persons for membership on the advisory committee. Self-nominations are also accepted. Nominations must include a current, complete résumé or curriculum vitae for each nominee, including current business address, telephone number, and email address if available, and a signed copy of the Acknowledgement and Consent form available at the FDA Advisory Nomination Portal (see
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. 1001
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
HRSA is publishing this notice of petitions received under the National Vaccine Injury Compensation Program (the Program), as required by the Public Health Service (PHS) Act, as amended. While the Secretary of HHS is named as the respondent in all proceedings brought by the filing of petitions for compensation under the Program, the United States Court of Federal Claims is charged by statute with responsibility for considering and acting upon the petitions.
For information about requirements for filing petitions, and the Program in general, contact Lisa L. Reyes, Clerk of Court, United States Court of Federal Claims, 717 Madison Place NW, Washington, DC 20005, (202) 357-6400. For information on HRSA's role in the Program, contact the Director, National Vaccine Injury Compensation Program, 5600 Fishers Lane, Room 8W-25A, Rockville, Maryland 20857; (301) 443-6593, or visit our website at:
The Program provides a system of no-fault compensation for certain individuals who have been injured by specified childhood vaccines. Subtitle 2 of title XXI of the PHS Act, 42 U.S.C. 300aa-10
A petition may be filed with respect to injuries, disabilities, illnesses, conditions, and deaths resulting from vaccines described in the Vaccine Injury Table (the Table) set forth at 42 CFR 100.3. This Table lists for each covered childhood vaccine the conditions that may lead to compensation and, for each condition, the time period for occurrence of the first symptom or manifestation of onset or of significant aggravation after vaccine administration. Compensation may also be awarded for conditions not listed in the Table and for conditions that are manifested outside the time periods specified in the Table, but only if the petitioner shows that the condition was caused by one of the listed vaccines.
Section 2112(b)(2) of the PHS Act, 42 U.S.C. 300aa-12(b)(2), requires that “[w]ithin 30 days after the Secretary receives service of any petition filed under section 2111 the Secretary shall publish notice of such petition in the
Section 2112(b)(2) also provides that the special master “shall afford all interested persons an opportunity to submit relevant, written information” relating to the following:
1. The existence of evidence “that there is not a preponderance of the evidence that the illness, disability, injury, condition, or death described in the petition is due to factors unrelated to the administration of the vaccine described in the petition,” and
2. Any allegation in a petition that the petitioner either:
a. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition not set forth in the Vaccine Injury Table but which was caused by” one of the vaccines referred to in the Table, or
b. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition set forth in the Vaccine Injury Table the first symptom or manifestation of the onset or significant aggravation of which did not occur within the time period set forth in the Table but which was caused by a vaccine” referred to in the Table.
In accordance with section 2112(b)(2), all interested persons may submit written information relevant to the issues described above in the case of the
Office of the Secretary, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed collection for public comment.
Comments on the ICR must be received on or before March 7, 2025.
Submit your comments to
When submitting comments or requesting information, please include the document identifier 0990-0481-60D and project title for reference, to Sherrette A. Funn, email:
Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
U.S. Customs and Border Protection, DHS.
General notice.
This document announces the implementation of the Commonwealth of the Northern Mariana Islands (CNMI) Economic Vitality & Security Travel Authorization Program (EVS-TAP). The CNMI EVS-TAP is a restricted sub-program of the Guam-CNMI Visa Waiver Program and allows prescreened nationals of the People's Republic of China to travel to the CNMI without a visa under specified conditions. In accordance with Department of Homeland Security regulations, DHS will begin implementation of the CNMI EVS-TAP requirements 45 days after publication of this notification of implementation in the
Implementation of the CNMI EVS-TAP requirements will begin as of February 20, 2024.
Neyda Yejo, Office of Field Operations, U.S. Customs and Border Protection, (202) 344-2373, or via email at
On January 18, 2024, the Department of Homeland Security (DHS), through U.S. Customs and Border Protection (CBP), published an interim final rule (IFR) in the
Although the IFR was effective on September 30, 2024, DHS incorporated a 60-day transition period to facilitate travelers adjusting to the new collection method.
DHS is now ready to implement CNMI EVS-TAP. Pursuant to 8 CFR 212.1(r)(11), this document provides notification that CBP is implementing the requirements of CNMI EVS-TAP set forth in 8 CFR 212.1(r) for certain PRC nationals as of February 20, 2024. At that time, eligible nationals from the PRC seeking to travel to the CNMI only for a period not to exceed 14 days without a visa under the CNMI EVS-TAP will be required to obtain an electronic travel authorization from CBP prior to embarking on such travel.
Federal Emergency Management Agency, Department of Homeland Security.
Notice of availability.
The Federal Emergency Management Agency (FEMA) is announcing availability of the final version of the Public Assistance Program and Policy Guide Version 5.0.
The policy will apply to incidents declared on or after January 6, 2025.
Robert Pesapane, Director, Public Assistance Division, Federal Emergency Management Agency,
This document announces the availability of Version 5.0 of the Public Assistance Program and Policy Guide (PAPPG). The PAPPG provides a comprehensive and streamlined guide for evaluating eligibility under the Public Assistance (PA) Program. It consolidates relevant policies into a single document, while also referencing external FEMA policies and resources to support stakeholders involved in the implementation of each step in the recovery process. The release of Version 5.0 reflects FEMA's continued commitment to improving access to the PA Program, reducing the documentation burden on our customers, and promoting timely recovery efforts. By integrating cost-effective hazard mitigation measures, Version 5.0 also helps facilitate resilient rebuilding in communities affected by disasters.
Version 5.0 is available in docket ID FEMA-2024-0010. For access to the docket go to
In Notice document 2024-30698, appearing on pages 105074 through 105089, in the issue of Thursday, December 26, 2024, make the following correction:
On page 105075, in the first column, in the
Fish and Wildlife Service, Interior.
Notice of availability; extension of public comment period.
We, the U.S. Fish and Wildlife Service (FWS), announce that we are extending the public comment period for a draft supplemental environmental impact statement (draft supplemental EIS) to consider the effects of a potential land exchange of certain lands owned by the King Cove Corporation with certain lands owned by the U.S. Government and located within the Izembek National Wildlife Refuge and Izembek Wilderness Area. If a land exchange is approved, King Cove Corporation would use the acquired land for a road corridor for noncommercial use. We invite comment on the draft supplemental EIS from the public and local, State, Tribal, and Federal agencies. Comments previously submitted need not be resubmitted, as they will be fully considered.
•
•
We will post all written comments on
Bobbie Jo Skibo, Project Leader, by telephone at 907-441-1539; by email at
On November 15, 2024 (89 FR 90306), we, the U.S. Fish and Wildlife Service (FWS), announced via the
The Izembek National Wildlife Refuge (417,533 acres (ac)) and the North Creek (8,452 ac) and Pavlof (1,447,264 ac) units of the Alaska Peninsula National Wildlife Refuge are located at the westernmost tip of the Alaska Peninsula. To the north of the Izembek Refuge is the Bering Sea; to the south is the Pacific Ocean. The Izembek Wilderness covers much of the Izembek National Wildlife Refuge and includes pristine streams, extensive wetlands, steep mountains, tundra, and sand dunes, and provides high scenic, wildlife, and scientific values, as well as opportunities for solitude and recreation. The Izembek National Wildlife Refuge includes the traditional homelands of the Unanga people.
The King Cove Corporation is an Alaska Native Village Corporation established under the Alaska Native Claims Settlement Act of 1971 (ANCSA; 43 U.S.C. 1601
In the Omnibus Public Land Management Act of 2009 (Pub. L. 111-11, title VI, subtitle E (herein referred to as the 2009 Act)), Congress directed FWS to prepare an EIS under NEPA and its implementing regulations (40 CFR parts 1500 through 1508) to evaluate the impacts of a proposed land exchange with the State of Alaska and the King Cove Corporation for the purpose of constructing a single-lane gravel road between the communities of King Cove and Cold Bay, Alaska. The 2009 Act required that the road “shall be used primarily for health and safety purposes (including access to and from the Cold Bay Airport) and only for noncommercial purposes,” with limited exceptions. The land exchange contemplated by the 2009 Act would have involved the conveyance of approximately 206 ac within the Izembek Wilderness portion of Izembek National Wildlife Refuge for the road corridor and approximately 1,600 ac of Federal land within the Alaska Maritime National Wildlife Refuge on Sitkinak Island. In exchange, FWS would have received approximately 43,093 ac of land owned by the State of Alaska and approximately 13,300 ac of land owned by the King Cove Corporation. These lands are located around Cold Bay and are adjacent to the North Creek Unit of the Alaska Peninsula National Wildlife Refuge.
In accordance with section 6402(b)(2)(B) of the 2009 Act, an EIS completed in 2013 (2013 EIS; February 6, 2013, 78 FR 8577) analyzed the proposed land exchange and the potential construction and operation of a road between the communities of King Cove and Cold Bay, Alaska, and, among other alternatives, evaluated a specific road corridor through the Izembek Refuge that was identified in consultation with the State of Alaska, the City of King Cove, and the Agdaagux Tribe of King Cove. In accordance with the 2009 Act, subsequent to the preparation of the 2013 EIS and in conjunction with the 2013 record of decision (2013 ROD; February 20, 2014, 79 FR 9759), Secretary of the Interior Sally Jewell decided not to enter a land exchange after determining that the proposed land exchange (including the construction of the proposed road) was not in the public interest.
On July 3, 2019, Secretary of the Interior David Bernhardt signed a memorandum titled “Findings and Conclusions Concerning a Proposed
On June 1, 2020, the District Court for the District of Alaska vacated the 2019 Exchange Agreement based on several legal defects in the decision. On appeal to the Ninth Circuit Court of Appeals, a three-judge appellate panel reversed the district court. However, an en banc panel of the Ninth Circuit then vacated the three-judge panel's decision and agreed to a new review. On March 14, 2023, Secretary of the Interior Deb Haaland issued a new decision memorandum withdrawing the Department from the 2019 Exchange Agreement. That decision memorandum identified as a procedural flaw the failure to consider the effects of the exchange on subsistence uses, and highlighted shortcomings in the record regarding NEPA and ESA analyses. In addition, the Secretary expressed significant policy concerns regarding the nonpublic manner in which the 2019 Exchange Agreement was accomplished, as well as the terms of the Exchange Agreement, which differed from the exchange evaluated in the 2013 EIS. In June 2023, the Ninth Circuit dismissed the lawsuit because the issue had become moot due to Secretary Haaland's decision memorandum.
On May 18, 2023 (88 FR 31813), we published a
While the authorities in the 2009 Act remain expired, the FWS has prepared a draft supplemental EIS to address a potential exchange under section 1302(h) of ANILCA. The FWS's draft supplemental EIS analysis assesses the potential impacts of a land exchange and road construction and use, allows for public participation, and integrates the NEPA analysis with an evaluation under ANILCA section 810. The FWS is also using and coordinating the NEPA process to help inform the Department's processes and analysis under section 106 of the National Historic Preservation Act (54 U.S.C. 306108), the ESA, ANILCA (including any land exchange's furtherance of the statute's conservation and subsistence purposes), ANCSA, the National Wildlife Refuge System Improvement Act of 1997 (16 U.S.C. 668dd), and the Wilderness Act of 1964 (16 U.S.C. 1131
You may submit written comments and materials concerning the draft supplemental EIS by one of the methods listed in
If you submit a comment via
The meaningful input of Alaska Native Tribes and Alaska Native Corporations is of critical importance to the supplemental EIS. Therefore, and as expressed in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” the Federal officials that have been delegated authority by the Secretary are committed to honoring the unique government-to-government political relationship that exists between the Federal Government and federally recognized Tribes. Consultation with Alaska Native Corporations is based on Pub. L. 108-199, div. H, sec. 161, January 23, 2004, 118 Stat. 452, as amended by Pub. L. 108-447, div. H, title V, sec. 518, December 8, 2004, 118 Stat. 3267, which provides that: “The Director of the Office of Management and Budget and all Federal agencies shall hereafter consult with Alaska Native corporations on the same basis as Indian Tribes under Executive Order No. 13175.” FWS will hold individual consultation meetings upon request. The Secretary of the Interior will consider Alaska Native Tribes' and Alaska Native Corporations' information, input, and recommendations, and address their concerns as much as practicable.
Bureau of Indian Affairs, Interior.
Notice.
The Department of the Interior (Department) gives notice that the group known as the Mattaponi Indian Tribe and Reservation has filed a documented petition for Federal acknowledgment as an American Indian Tribe with the Assistant Secretary—Indian Affairs. The Department seeks comment and evidence from the public on the petition.
Comments and evidence must be postmarked by May 6, 2025.
Copies of the narrative portion of the documented petition, as submitted by the petitioner (with any redactions appropriate under 25 CFR 83.21(b)), and other information are available at the Office of Federal Acknowledgement's (OFA) website:
Ms. Nikki Bass, OFA Director, Office of the Assistant Secretary—Indian Affairs, Department of the Interior, by phone: (202) 513-7650; or by email:
On July 31, 2015, the Department's revisions to 25 CFR part 83 became final and effective (80 FR 37861). A key goal of the revisions was to improve transparency through increased notice of petitions and providing improved public access to petitions. Today the Department informs the public that a complete documented petition has been submitted under the current regulations, that portions of that petition are publicly available on the website identified above for easy access, and that we are seeking public comment early in the process on this petition.
Under 25 CFR 83.22(b)(1), the OFA publishes notice that the following group has filed a documented petition for Federal acknowledgment as an American Indian Tribe to the Assistant Secretary—Indian Affairs: Mattaponi Indian Tribe and Reservation. The contact information for the petitioner is Mr. Mark T. Falling Start Custalow, 1314 Mattaponi Reservation Circle, West Point, Virginia 23181.
Also, under 25 CFR 83.22(b)(1), OFA publishes on its website the following:
i. The narrative portion of the documented petition, as submitted by the petitioner (with any redactions appropriate under 25 CFR 83.21(b));
ii. The name, location, and mailing address of the petitioner and other information to identify the entity;
iii. The date of receipt;
iv. The opportunity for individuals and entities to submit comments and evidence supporting or opposing the petitioner's request for acknowledgment within 120 days of the date of the website posting; and
v. The opportunity for individuals and entities to request to be kept informed of general actions regarding a specific petitioner.
The Department publishes this notice and request for comment in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by Department Manual part 209, chapter 8.
Bureau of Land Management, Interior.
Notice of new fees.
Pursuant to the Federal Lands Recreation Enhancement Act (FLREA), the Bureau of Land Management (BLM), Kremmling Field Office (KFO) and the Colorado River Valley Field Office (CRVFO) are establishing new Special Areas and new recreation fee areas (campgrounds, designated campsites, and day use fees) within the two Upper Colorado River (UCR) Special Recreation Management Areas (SRMAs) managed by the field offices.
New fees will take effect on July 7, 2025, unless the BLM publishes a
Documents concerning this fee change may be reviewed at the Kremmling Field Office, 2103 East Park Ave., Kremmling, CO 80459; at the Colorado River Valley Field Office, 2300 River Frontage Road, Silt, CO 81652; and online at:
Stephen Leonard, Field Manager, Kremmling Field Office at Kremmling Field Office, phone: (970) 724-3000, email:
Consistent with FLREA, the intent of recreation fees is to help protect natural resources, provide for public health and safety, and facilitate access to public lands and related waters, not to maximize fee revenue. Fees are a way of ensuring that those who actively use recreation opportunities make a greater, but reasonable, contribution toward protecting and enhancing those opportunities than those who do not utilize recreational opportunities.
FLREA directs the Secretary of the Interior to publish a 6-month advance notice in the
KFO will charge Standard Amenity fees of $10 per day per vehicle, $5 per day for individuals (motorcycle, bicycle, or walk-in), and $20 per day per high-capacity vehicle (carrying capacity greater than 15 passengers), and will offer a $50 day-use season pass (valid for all day-use sites) at Confluence Recreation Area, Gore Canyon Ranch Access, Inspiration Flats Recreation Area, Radium Warm Springs Recreation Area, and State Bridge Recreation Area/Piney Peak Access.
CRVFO will implement new Standard Amenity fees of $10 per day per vehicle, $5 per day for individuals (motorcycle, bicycle, or walk-in), and $20 per day per high-capacity vehicle (carrying capacity greater than 15 passengers), and will offer a $50 day-use season pass (valid for all day-use sites) at Two Bridges River Access, Catamount Recreation Site, Pinball Recreation Site, Cottonwood Island Recreation Site, Lyon's Gulch Recreation Site, and Dotsero Landing River Access.
KFO and CRVFO will implement an Expanded Amenity recreation fee of $25 for Single Campsites (up to 10 visitors, with the first two vehicles included in the campsite fee; additional vehicles will pay a day-use fee), and $75 for Group Campsites (up to 30 visitors, with the first two vehicles included in the campsite fee; additional vehicles will pay a day-use fee) at the following campground sites: Pumphouse Recreation Area Campground, Radium Recreation Area Campground, Radium Warm Springs Campground, Catamount
The Upper Colorado River SRMA Season Pass will apply to day-use sites in both field offices and will be adjusted from $20 per season to $50 per season. This
Under 16 U.S.C. 6802(g)(2)(A) and (C) of FLREA, developed campgrounds and rental cabins qualify as sites wherein visitors can be charged an “Expanded Amenity Recreation Fee.” Pursuant to FLREA and implementing regulations at 43 CFR subpart 2933, fees may be charged for overnight camping, rental of cabins, and group use reservations where specific amenities and services are provided. The required amenities are provided, or will be provided prior to fee implementation, at all the campgrounds identified in this notice as subject to an Expanded Amenity Recreation Fee. Specific visitor fees will be identified and posted at each campground or rental cabin.
Under 16 U.S.C. 6802(f)(4) of FLREA, all day-use sites in this notice qualify as areas wherein visitors can be charged a “Standard Amenity Recreation Fee”. Pursuant to FLREA and implementing regulations at 43 CFR part 2930 subpart 2933, fees may be charged for an area where there are significant opportunities for outdoor recreation and where fees can be efficiently collected, and that has substantial Federal investments and contains specific amenities and services. Specific visitor fees will be identified and posted at each day-use site.
In response to increasing recreation demands and visitation on the BLM lands, the KFO and CRVFO developed a combined recreation fee business plan to achieve consistency across the UCR SRMA administrative boundaries. Standard Amenity, Expanded Amenity, and Special Area ISRP fees are needed to maintain visitor facilities and visitor services, replace aging infrastructure, and improve access to recreational opportunities. The business plan explains: (1) consistency with the BLM recreation fee program policy; (2) the KFO and CRVFO recreation management direction for the UCR SRMAs; (3) the need for fee collection; (4) how the fees will be used in the area; (5) Resource Advisory Council (RAC) coordination; and (6) guidance on future fee increases. As analyzed in the business plan, the recreation use fees are consistent with other nearby Federal land management agency fees and are lower than the fees charged at privately owned campgrounds.
The BLM posted public notices of the proposed fees at each recreation site during the 2023 use season. The KFO and CRVFO will contact local governments and local special recreation permit holders who may be affected. Following FLREA guidelines, the BLM Northwest RAC recommended the proposed fee structure for approval on June 22, 2023. The RAC voted to recommend the proposed business plan, giving the BLM the discretion to raise the fees without returning to the RAC for approval within the following ranges: $10 to $15 for a normal vehicle; $5 to $10 for a bike, motorcycle, or walk-in; and $20 to $30 for a high-capacity vehicle, based on the 2023 consumer price index (CPI). Fees will initially be implemented at the lower proposed fee schedule. The CPI will be utilized in future years to increase fees as needed, with CPI escalation allowed for any inflationary adjustment above 2023 dollars.
A public comment period on the draft business plan, announced by news release, ran from October 7, 2024, through November 6, 2024. The Colorado State Director approved the final business plan on December 20, 2024.
Bureau of Ocean Energy Management, Interior.
Call for information and nominations; request for comments.
This call for information and nominations (Call or notice) invites public comment on, and assesses interest in, possible commercial wind energy leasing on the Outer Continental Shelf (OCS) offshore Guam as part of planning for commercial leasing in the region. The Bureau of Ocean Energy Management (BOEM) will consider information received in response to this Call to determine whether to schedule a competitive lease sale or to issue a noncompetitive lease for any portion of the area described in this Call (Call Area). Those interested in providing comments or information regarding site conditions, resources, and multiple uses in close proximity to or within the Call Area should provide the information requested in section 8, “Requested Information from Interested or Affected Parties,” under the
Those interested in leasing within the Call Area for a commercial wind energy project should provide the information described in section 9, “Required Nomination Information.” BOEM may or may not offer a lease for a commercial offshore wind energy project within the Call Area after further consultations, public participation, and environmental analyses.
BOEM must receive your interest in or comments on commercial leasing within the Call Area no later than April 7, 2025. BOEM may not consider late submissions.
Please submit nomination information for commercial leasing as discussed in section 9, entitled, “Required Nomination Information,” electronically via email to
Please submit all other comments and information by either of the following two methods:
1.
2.
Treatment of confidential information is addressed in section 10 of this notice entitled, “Protection of Privileged, Personal, or Confidential Information.” BOEM will post all comments received on
Deanna Meier, Renewable Energy Specialist, BOEM, Pacific Region, Office of Strategic Resources, 760 Paseo Camarillo (CM 102), Camarillo, California 93010, (805) 384-6265 or
For information regarding qualification requirements to hold an OCS wind energy lease, contact Lakeisha Douglas, BOEM, Pacific Region, Office of Strategic Resources, at
This Call is published under subsection 8(p)(3) of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1337(p)(3), and its implementing regulations at 30 CFR 585.210 and 585.211.
The OCSLA requires BOEM to award leases competitively unless BOEM determines that there is no competitive interest (43 U.S.C. 1337(p)(3)). The primary purpose of this Call is to collect further information and feedback on industry interest, site conditions, resources, and ocean uses within, and surrounding, the Call Area.
An essential part of BOEM's renewable energy leasing process for Guam is working closely with Federal agencies, Indigenous Peoples, State and local governments, industry, and ocean users to identify areas that may be suitable for potential offshore wind development to provide electric power to Guam communities. BOEM has not yet determined which areas, if any, within the Call Area may be offered for lease. Your input is essential and will help BOEM determine areas that may be suitable for offshore wind energy development. There will also be multiple opportunities to provide feedback throughout the renewable energy planning and leasing process. A detailed description of the Call Area may be found below in section 6, “Description of Call Area.” For more information about BOEM's competitive and noncompetitive leasing processes, please see section 4, “BOEM's Planning and Leasing Process.”
The Energy Policy Act of 2005 amended OCSLA by adding subsection 8(p)(1)(C), which authorizes the Secretary of the Interior (Secretary) to grant leases, easements, and rights-of-way on the OCS for activities that are not otherwise authorized by law and that produce or support production, transportation, or transmission of energy from sources other than oil or gas, including renewable energy sources. Furthermore, under section 3(3) of OCSLA (43 U.S.C. 1332(3)), BOEM considers leasing the OCS for offshore wind development because “the Outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.”
The Secretary delegated these OCSLA authorities to the BOEM Director. On April 29, 2009, the Department of the Interior (Department) published regulations entitled, “Renewable Energy and Alternate Uses of Existing Facilities on the Outer Continental Shelf,”
Section 50251(b) of the Inflation Reduction Act of 2022 (IRA) expanded the definition of the OCS under OCSLA to include submerged lands within the exclusive economic zone adjacent to U.S. territories. The IRA directs the Secretary to issue calls for interest in offshore wind leasing off territorial coasts and authorizes wind lease sales in areas deemed feasible and of interest after the Secretary has consulted with the Territorial Governor. BOEM and the Government of Guam have initiated the first planning step in the BOEM renewable energy authorization process by establishing the BOEM Guam Intergovernmental Renewable Energy Task Force (Task Force) at the request of the Honorable Lourdes “Lou” Aflague Leon Guerrero, the Governor of Guam.
In a subsection entitled, “Offshore Wind for the Territories,” the IRA imposed several deadlines for wind energy leasing offshore the U.S. territories. Specifically, in Section 50251(b)(2), the IRA directs the Secretary to issue an initial Call for Information and Nominations no later than September 30, 2025. This Call meets the relevant requirements and deadline from the IRA.
On October 4, 2023, the Department amended its offshore renewable energy regulations to conform with the IRA. The regulation entitled, “Conformity with the Inflation Reduction Act for Renewable Energy on the Outer Continental Shelf”
Because Guam is a volcanically-formed island in the Pacific Ocean, it has a narrow coastal shelf with steep continental slopes, and thus the ocean deepens quickly from shore. As a result, the Call Area is in water depths too deep for traditional fixed bottom foundation designs, and offshore wind development in these areas will require floating technology and designs. On September 15, 2022, the Biden Administration announced the goal of deploying 15 GW of floating offshore wind power in the U.S. by 2035, building on the existing goal of 30 GW of total offshore wind energy by 2030. BOEM is committed to this ambitious goal by responsibly fostering the growth of offshore wind energy capacity and participating in collaborative, data-based planning to inform decisions involving shared ocean resources and the many users that depend on them. To this end, BOEM's five-year renewable energy leasing schedule includes a potential lease sale for a U.S. Territory in 2028.
Notably, upon release of this Call, BOEM intends to continue engagement with the Indigenous Peoples of Guam. Indigenous knowledge about the local environment and concerns of Indigenous Peoples about offshore wind project development constitute crucial information to be considered during the BOEM offshore wind planning and leasing process. BOEM appreciates the importance of coordinating its planning with other OCS users, regulators, and relevant Federal agencies including, but not limited to, the U.S. Fish and Wildlife Service, the National Park Service, the U.S. Army Corps of Engineers, the U.S. Coast Guard, the National Oceanic and Atmospheric Administration (NOAA), the Department of the Interior's Office of Insular Affairs, and the Department of Defense (DoD). BOEM also coordinates with and requests input from the Western Pacific Regional Fishery Management Council and Guam Sea Grant; both of these organizations consider Indigenous fishing practices. In addition, BOEM uses other information sources in its decision-making, such as data and information on the location of marine life and habitat areas, cultural resources, transportation links, fishing areas, and other human uses that must be considered when offshore energy or other infrastructure projects are proposed. In 2024, BOEM received a request from Guam's Governor to convene a regional intergovernmental renewable energy task force and begin the process of investigating offshore wind as an option for Guam. In response, BOEM established the BOEM Guam Intergovernmental Renewable Energy Task Force to facilitate coordination among relevant Federal agencies and Territorial and local governments throughout the leasing and planning process. The first Task Force meeting was held on September 11, 2024. Materials from the Task Force meeting are available on the BOEM website at:
The Task Force meeting was followed by a two-day BOEM/National Centers for Coastal Ocean Science (NCCOS) Data Workshop, which was held on September 12 and 13, 2024. Attendees from Federal, Territorial, and local agencies and non-governmental organizations provided data and insight on potential data gaps. Information about the NCCOS process can be found on the NOAA NCCOS website at:
Guam's electricity is provided entirely by the Guam Power Authority (GPA), a public utility company overseen by the Consolidated Commission on Utilities and regulated by the Guam Public Utilities Commission. In 2019, Guam Public Law 35-46 amended GPA's renewable energy portfolio standard goal to 100 percent by 2045. GPA included a pathway to 100 percent renewable energy by 2040 in its Clean Energy Master Plan, along with an interim goal of 50 percent renewable energy by 2030. Solar photovoltaic energy and energy storage system projects have paved the way for renewables and contributed toward achievement of GPA's renewable energy goals thus far.
Subsection 8(p)(3) of OCSLA states that “the Secretary shall issue a lease, easement, or right-of-way . . . on a competitive basis unless the Secretary determines after public notice of a proposed lease, easement, or right-of-way that there is no competitive interest.”
If BOEM determines both that competitive interest exists in acquiring a lease to develop offshore wind energy and that the areas within the Call Area are appropriate to lease, BOEM may hold one or more competitive lease sales for those areas. If BOEM holds a lease sale, all qualified bidders, including bidders that did not submit a nomination in response to this Call, will be able to participate in the lease sale.
BOEM reserves the right to refrain from offering for lease any areas that are nominated as a result of this Call and to modify nominated areas before offering them for lease.
BOEM will follow the steps required by 30 CFR 585.211 through 585.226 if it decides to proceed with the competitive leasing process after analyzing the responses to this Call. Those steps are:
(1) Area Identification: BOEM will identify areas for consideration for leasing. Those areas will constitute Wind Energy Areas (WEAs) and will be subject to environmental analysis in consultation with appropriate Federal agencies, Indigenous Peoples, Territorial and local governments, and other interested parties. Before finalizing the WEAs, BOEM may publish draft WEAs with a public comment period and a docket on
(2) Proposed Sale Notice (PSN): If BOEM decides to proceed with a competitive lease sale within the WEAs, BOEM will publish a PSN in the
(3) Final Sale Notice (FSN): After considering the comments on the PSN and completing its environmental analysis and consultations, if BOEM decides to proceed with a competitive lease sale, it will publish an FSN in the
(4) Bid Submission and Evaluation: Following the publication of the FSN in the
(5) Issuance of a Lease: Following identification of the winning bidder on a lease area, BOEM will notify that bidder and provide the lease documents for signature.
BOEM began discussions in 2024 with the Government of Guam and several Federal agencies (
BOEM defined the northern boundary of the Call Area as the area halfway between Guam and the nearby island of Rota. BOEM removed only a limited number of areas from the Call Area, including areas in which offshore wind
• Areas between the shoreline and 3 nautical miles from shore;
• Areas deeper than 2600 meters.
The Call Area is the area within which BOEM is seeking to identify one or more locations suitable for offshore wind development. It is not indicative of the area that may ultimately be developed. BOEM recognizes that the Call Area may include areas where future offshore wind energy development could conflict with existing ocean uses (
The Call Area consists of 2,114,344 acres located off the coast of Guam (see Figure 1). The map depicting the Call Area (Figure 1), a spreadsheet listing its specific OCS blocks, and an Esri shapefile are available for download on the BOEM website at:
The Call Area identifies broad portions of the OCS offshore Guam for further analysis. That analysis will include consideration of commercial nominations and public comments submitted in response to this Call so that potential use conflicts can be analyzed during the next step in the leasing process: the designation of specific WEAs (Area Identification). BOEM's analysis during Area Identification will evaluate the appropriateness of the Call Area for offshore wind energy development, balanced against potential ocean user conflicts.
BOEM will consider environmental information, consultations, public comments, and continued coordination with the BOEM Guam Intergovernmental Renewable Energy Task Force, which includes relevant Federal, Territorial, and local governments. If BOEM continues to proceed with the process, BOEM anticipates designating specific WEAs within the Call Area and developing lease terms and conditions to avoid, minimize, or mitigate potential impacts from leasing and site assessment activities. Starting with the Call and continuing through the subsequent stages in BOEM's leasing process, BOEM is committed to working with the following groups:
BOEM coordinated with staff from the Governor's office to plan the first Task Force meeting and to engage with Territorial and local agencies and Indigenous Peoples. BOEM coordinated
In September 2022, BOEM announced enhancements to its Area Identification process.
BOEM and NCCOS intend to use the suitability modeling methods that were previously applied to offshore wind energy siting efforts in the Gulf of Mexico, Gulf of Maine, Oregon, and Central Atlantic regions during Area Identification. NCCOS's spatial modeling approach provides a tool for identifying areas that are most suitable for offshore wind energy development, particularly when large areas of the OCS offshore a state or territory have potential for such development. Additionally, BOEM intends for this partnership and modeling approach to enhance transparency, improve engagement, and provide a consistent, reproducible methodology for understanding and deconflicting ocean space. As described in Section 3, BOEM and NCCOS held a Data Workshop in September 2024 to begin the process of gathering data and forming collaborations between multiple Federal, Territorial, and local agencies and non-governmental organizations to discuss data in the region.
DoD conducts offshore training and operations within portions of the Call Area. BOEM intends to refine the Call Area during the Area Identification process based on DoD's assessment of compatibility between commercial offshore wind energy development and DoD activities as described in the “Memorandum of Understanding Between the Department of Defense and the Department of the Interior Regarding Renewable Energy Development on the Outer Continental Shelf” signed in October 2024.
BOEM is currently working with DoD and will continue collaborating closely with DoD on Guam's offshore wind energy mission compatibility assessment. That assessment may identify areas incompatible for wind energy leasing, areas potentially incompatible with mitigation measures, and/or areas compatible with wind energy development. Potentially incompatible areas are those that will require site-specific mitigation to ensure that offshore wind energy facilities are compatible with DoD activities. These mitigation measures may include, among others: hold and save harmless agreements; mandatory coordination with DoD on specified activities; restrictions on electromagnetic emissions; and evacuation procedures from the lease area for safety reasons when notified by DoD. BOEM may remove from leasing consideration any OCS blocks identified as incompatible with DoD's activities in the compatibility assessment.
Local and Territorial agencies with associations with the Chamoru community are members of or have been invited to be a part of the Task Force. BOEM will continue to engage with members of these agencies and other local groups during the offshore wind planning process, including Area Identification. Some of the concerns identified are potential impacts on Indigenous fishing practices, traditional navigation and paddling, and land use associated with offshore wind projects; additionally, meeting fatigue and capacity issues were also cited as concerns. BOEM will engage further with these groups to identify additional concerns through outreach and ongoing studies in the region. BOEM has started engagement with the Indigenous Peoples of Guam and the Commonwealth of Northern Mariana Islands through the BOEM-funded study entitled, “Maritime Heritage of the U.S. Pacific Islands,” which will continue through 2027.
NMFS has broad responsibility in research and management of the marine environment, including management of sustainable fisheries, and conservation and recovery of protected resources. BOEM and the NMFS Pacific Island Regional Office (PIRO) will collaborate closely throughout the offshore wind planning process by partnering to close information gaps; engage with Indigenous, recreational and commercial fishers; and on data collection and sharing. PIRO will be an important partner in the NCCOS Area Identification process. After the Area Identification process, BOEM plans to conduct an Environmental Assessment under the National Environmental Policy Act (NEPA) prior to leasing. BOEM would also initiate the necessary consultations with NMFS under the Endangered Species Act and the Magnuson-Stevens Fishery Conservation and Management Act (MSA) regarding potential impacts.
The Western Pacific Regional Fishery Management Council (Council) is one of eight regional councils established by the MSA. The Council manages fisheries within the Exclusive Economic Zone (EEZ) off Hawai'i, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and eight remote islands. BOEM coordinates with the Council by providing status updates on offshore wind planning for Guam and will continue coordination throughout the planning and leasing process. The Council provides crucial feedback on managed fisheries and Indigenous Peoples' fishing in the region.
Feedback from interested or affected parties is essential to help BOEM identify areas that may be suitable for potential offshore wind development. Commenters should be as specific and detailed as possible to help BOEM understand and address the comments. Where applicable, spatial information should be submitted in a format compatible with Esri ArcGIS (Esri shapefile or Esri file geodatabase) in the WGS84 geographic coordinate system. BOEM requests comments regarding the following features, activities, mitigations, or concerns within or around the Call Area.
a. Information on geological, geophysical, and biological sea floor conditions (including bottom and shallow hazards and live bottom).
b. Information on protected species.
c. Information on other uses of the OCS in or near the Call Area, particularly with regard to vessel navigation. Additional information regarding recreational, commercial and Indigenous fisheries, including, but not limited to, the use of the areas, the fishing gear types used, seasonal use, and recommendations for reducing use conflicts.
d. Information on potential locations of unexploded ordnance (UXO); other historic dumping or disposal in the marine environment.
e. Information on current energy use, renewable energy goals and potential interest in offshore wind development on the OCS near islands surrounding Guam (
f. Information on renewable energy cost analyses or wind datasets that may be available. Relatedly, BOEM is providing funding to the National Renewable Energy Laboratory for work to inform the Levelized Cost of Energy for offshore wind off Guam that will include modeled wind speeds in and around the Call Area. BOEM welcomes additional information on these topics.
g. Information from the offshore wind energy industry on the considerations for offshore energy development in deep waters, including greater than 1,300 meter water depths, and in areas where the seafloor slope is greater than 10 degrees, with respect to mooring configurations and subsea transmission cables. Feedback on other development considerations in deep waters, such as available floating technology, transmission distance, water depth, seafloor conditions, and operations and maintenance feasibility and costs.
h. Information regarding the identification of historic properties or potential effects to historic properties from leasing, site assessment activities (including the installation of meteorological buoys), or commercial wind energy development in the Call Area. This includes potential offshore archaeological sites, cultural resources, or other historic properties within the areas described in this notice and onshore historic properties that could potentially be affected by renewable energy activities within the Call Area. This information will inform BOEM's review of future undertakings conducted pursuant to Section 106 of the National Historic Preservation Act (NHPA) and the NEPA.
i. Information relating to visual and scenic resources, including seascape, landscape, and ocean character aesthetics; visually sensitive areas along the coastline that are sensitive to changes in ocean views (
j. Information regarding the potential for interference with radar systems covering the Call Area, including, but not limited to, the use of surface and airborne radar systems for offshore search and rescue operations and environmental monitoring.
k. Information regarding locations and activities associated with potential, ongoing and future exploration of offshore sand resources, including nearshore resources and placement areas that may be impacted by a potential future lease area or possible electrical cable transmission routes.
l. Information on the constraints and advantages of possible electrical cable transmission routes, including onshore landing and interconnection points for cables connecting offshore wind energy facilities to the onshore electrical grid, and information regarding future demand for electricity in the region.
m. Information regarding the size and number of WEAs, taking into consideration the offshore wind energy goals of Guam. BOEM requests further information on what additional factors it should consider in determining the size and number of WEAs.
n. Information related to Indigenous Peoples in the region and interactions with potential offshore wind energy facilities, such as potential impacts to CHamoru cultural practices; lands; resources; ancestral lands; sacred sites, including sites that are submerged; and access to traditional areas of cultural or religious importance on federally managed lands and waters. BOEM will protect confidential information shared by Indigenous Peoples in response to this Call to the extent authorized by Federal law. Treatment of confidential information is addressed in section 10 of this notice entitled, “Protection of Privileged, Personal, or Confidential Information.”
o. Socioeconomic information for communities potentially affected by wind energy leasing in the Call Area, including community profiles, vulnerability and resiliency data, and information on environmental justice communities. BOEM also solicits comments on how best to meaningfully engage with these communities.
p. Information on coastal or onshore activities needed to support offshore wind energy development, such as port and transmission infrastructure, and associated potential impacts to recreation, scenic, cultural, historical, and natural resources relating to those activities.
q. Any other relevant information that you think BOEM should consider during its planning and decision-making process for the purpose of identifying areas to lease within the Call Area.
BOEM previously received information that its former practice of publishing the areas nominated by each qualified company in response to a Call may disincentivize entities from submitting nominations. Nominations and the accompanying rationale are extremely useful to help BOEM understand and model the commercial viability of portions of the OCS. Therefore, BOEM will not publish individual maps of each qualified company's nominations received in response to this Call. BOEM will publish a heatmap that shows an aggregated view of all the nominations and a list of the qualified companies that submitted nominations. Where applicable, qualified companies should submit spatial information in a format compatible with Esri ArcGIS (Esri shapefile or Esri file geodatabase) in the WGS84 geographic coordinate system.
If you wish to nominate one or more areas for a commercial wind energy lease within the Call Area, you must provide the following information for each nomination:
(a) The BOEM protraction name, number, and the specific whole or partial OCS blocks within the Call Area that you are interested in leasing. If your nomination includes one or more partial blocks, please describe those partial blocks in terms of sixteenths (
(b) A rationale describing why you selected the nominated areas. The more detailed the rationale provided, the more informative it will be to BOEM's process. BOEM is particularly interested in how factors like wind speed, water depth, seafloor slope, bottom type, and interconnection points factor into the nomination process.
(c) A description of your objectives and the facilities that you would use to achieve those objectives.
(d) A preliminary schedule of proposed activities, including those leading to commercial operations.
(e) Available and pertinent data and information concerning renewable energy resources and environmental conditions in each area that you wish to lease, including energy and resource data, and other information used to evaluate the area.
(f) Documentation demonstrating that you are legally, technically, and financially qualified to hold an OCS wind energy lease, as set forth in 30 CFR 585.107—585.108. Qualification materials should be developed in accordance with the guidelines available at
BOEM will protect privileged or confidential information that you submit when required by the Freedom of Information Act (FOIA). Exemption 4 of FOIA applies to trade secrets and commercial or financial information that is privileged or confidential. If you wish to protect the confidentiality of such information, clearly label it and request that BOEM treat it as confidential. BOEM will not disclose such information if BOEM determines under 30 CFR 585.114(b) that it qualifies for exemption from disclosure under FOIA. Please label privileged or confidential information “Contains Confidential Information” and consider submitting such information as a separate attachment.
BOEM will not treat as confidential any aggregate summaries of such information or comments not containing such privileged or confidential information. Information that is not labeled as privileged or confidential may be regarded by BOEM as suitable for public release.
BOEM encourages you not to submit anonymous comments. Please include your name and address as part of your comment. You should be aware that your entire comment, including your name, address, and any personally identifiable information (PII) included in your comment, may be made publicly available. All submissions from identified individuals, businesses, and organizations will be available for public viewing on
For BOEM to consider withholding your PII from disclosure, you must identify any information contained in your comments that, if released, would constitute a clearly unwarranted invasion of your personal privacy. You must also briefly describe any possible harmful consequences of the disclosure of information, such as embarrassment, injury, or other harm. Even if BOEM withholds your information in the context of this Call, your submission is subject to FOIA and, if your submission is requested under FOIA, your information will be withheld only if a determination is made that one of FOIA's exemptions to disclosure applies. Such a determination will be made in accordance with the Department's FOIA regulations and applicable law.
After consultation with the Secretary, BOEM is required to withhold the location, character, or ownership of historic resources if it determines that disclosure may, among other things, risk harm to the historic resources or impede the use of a traditional religious site by practitioners. Indigenous Peoples, communities, and organizations should designate information that falls under Section 304 of the NHPA as confidential.
Before deciding whether leases may be issued, BOEM will prepare an Environmental Assessment (EA) under NEPA (including public comment periods to determine the scope of the EA and to review and comment on the draft EA). The EA will analyze anticipated impacts from leasing within the WEAs and site characterization and assessment activities expected to occur after a lease is issued. Site characterization activities include geophysical, geotechnical, archaeological, and biological surveys, and site assessment activities, including the installation and operation of meteorological buoys. BOEM will also conduct appropriate consultations with Federal agencies, Territorial agencies, and local governments during preparation of the EA. These consultations include, but are not limited to, those required by the Coastal Zone Management Act, the Magnuson-Stevens Fishery Conservation and Management Act, the Endangered Species Act, and Section 106 of the NHPA.
Before BOEM allows any construction of a wind energy project in the Call Area, BOEM must approve a construction and operations plan (COP) submitted by a Lessee. Prior to the approval of a COP, BOEM will need to consider the potential environmental effects of the construction and operation of any wind energy facility under a separate, project-specific NEPA analysis. This analysis will include additional opportunities for public involvement and may result in the publication of an environmental impact statement.
U.S. International Trade Commission.
Notice.
Notice is hereby given that on December 20, 2024, the presiding administrative law judge (“ALJ”) issued an Initial Determination on Violation of Section 337. The ALJ also issued a Recommended Determination on remedy and bonding should a violation be found in the above-captioned investigation. The Commission is soliciting submissions on public interest issues raised by the recommended relief should the Commission find a violation. This notice is soliciting comments from the public and interested government agencies only.
Robert J. Needham, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708-5468. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
Section 337 of the Tariff Act of 1930 provides that, if the Commission finds a violation, it shall exclude the articles concerned from the United States unless, after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry. (19 U.S.C. 1337(d)(1)). A similar provision applies to cease and desist orders. (19 U.S.C. 1337(f)(1)).
The Commission is soliciting submissions on public interest issues raised by the recommended relief should the Commission find a violation, specifically: a limited exclusion order directed to certain video capable electronic devices, including computers, streaming devices, televisions, and components and modules thereof imported, sold for importation, and/or sold after importation by respondents Amazon.com, Inc. and Amazon.com Services LLC; and cease and desist orders directed to Amazon.com Inc. and Amazon.com Services LLC. Parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4).
The Commission is interested in further development of the record on the public interest in this investigation. Accordingly, members of the public and interested government agencies are invited to file submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the ALJ's Recommended Determination on Remedy and Bonding issued in this investigation on December 20, 2024. Comments should address whether issuance of the recommended remedial orders in this investigation, should the Commission find a violation, would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) explain how the articles potentially subject to the recommended remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the recommended orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the recommended orders within a commercially reasonable time; and
(v) explain how the recommended orders would impact consumers in the United States.
Written submissions must be filed no later than by close of business January 30, 2025.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. The Commission's paper filing requirements in 19 CFR 210.4(f) are currently waived. 85 FR 15798 (Mar. 19, 2020). Submissions should refer to the investigation number (“Inv. No. 337-TA-1380”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment by marking each document with a header indicating that the document contains confidential information. This marking will be deemed to satisfy the request procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) & 210.5(e)(2)). Documents for which confidential treatment by the Commission is properly sought will be treated accordingly. Any non-party wishing to submit comments containing confidential information must serve those comments on the parties to the investigation pursuant to the applicable Administrative Protective Order. A redacted non-confidential version of the document must also be filed simultaneously with any confidential filing and must be served in accordance with Commission Rule 210.4(f)(7)(ii)(A) (19 CFR 210.4(f)(7)(ii)(A)). All information, including confidential business information and documents for which confidential treatment is properly sought, submitted to the Commission for purposes of this investigation may be disclosed to and used: (i) by the Commission, its employees and Offices, and contract personnel (a) for developing or maintaining the records of this or a related proceeding, or (b) in internal investigations, audits, reviews, and evaluations relating to the programs, personnel, and operations of the Commission including under 5 U.S.C. appendix 3; or (ii) by U.S. Government employees and contract personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate nondisclosure agreements. All nonconfidential written submissions will be available for public inspection on EDIS.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
On December 31, 2024, the Department of Justice lodged a proposed Consent Decree in the civil action
The publication of this notice opens a period for public comment on the Settlement Agreement. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to Settlement Agreement among the United States and White's Diesel Performance, Inc., D.J. Ref. No. 90-5-2-1-12438. All comments must be submitted no later than thirty (30) days after the publication date of this notice. Comments may be submitted either by email or by mail:
Any comments submitted in writing may be filed in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the Consent Decree may be examined at and downloaded from this Justice Department website:
Employee Benefits Security Administration (EBSA), Department of Labor.
Notice.
The Department of Labor (the Department), in accordance with the Paperwork Reduction Act, provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Employee Benefits Security Administration (EBSA) is soliciting comments on the extension of the information collection requests (ICRs) contained in the documents described below. A copy of the ICRs may be obtained by contacting the office listed in the
Written comments must be submitted to the office shown in the
U.S. Department of Labor, Employee Benefits Security Administration, Office of Research and Analysis, Attention: PRA Officer, 200 Constitution Avenue NW, Room N-5718, Washington, DC 20210, or
This notice requests public comment on the Department's request for extension of the Office of Management and Budget's (OMB) approval of ICRs contained in the rules and prohibited transaction exemptions described below. This action is not related to any pending rulemakings and the Department is not proposing any changes to the existing ICRs at this time. An agency may not conduct or sponsor, and a person is not required to respond to, an information collection unless it displays a valid OMB control number. A summary of the ICRs and the burden estimates follows:
Section 701(f) of the Employee Retirement Income Security Act (ERISA) provides special enrollment rights to individuals who have previously declined health coverage offered to them to enroll in health coverage upon the occurrence of specified events, including when they lose other coverage, when employer contributions to the cost of other coverage cease, and when they marry, have a child or adopt a child (“special enrollment events”). Plans and issuers are required to provide for 30-day special enrollment periods following any of these events during which individuals who are eligible but not enrolled have a right to enroll without being denied enrollment or having to wait for a late enrollment opportunity (often called “open enrollment”).
A group health plan may require, as a pre-condition to having a special enrollment right to enroll in group health coverage after losing eligibility under other coverage, that an employee or beneficiary who declines coverage provide the plan a written statement declaring whether he or she is declining coverage because of having other coverage. Failure to provide such a written statement can then be treated as eliminating the individual's right to special enrollment upon losing eligibility for such other coverage. The regulations further establish that the right to special enroll can be denied in such circumstances only if employees are given notice of the requirement for a written statement and the consequences of failing to provide the
This information collection request covers the requirement in the implementing regulations under section 701(f) for a special enrollment notice. This information collection implements the disclosure obligation of a plan to inform all employees, at or before the time they are initially offered the opportunity to enroll in the plan, of the plan's special enrollment rules. The regulations require plans and their issuers to provide all employees with a notice describing their special enrollment rights, whether or not they enroll.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0101. The current approval is scheduled to expire on August 31, 2025.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA), codified as part 7 of title I of the Employee Retirement Security Act of 1974 (ERISA), was enacted to improve the portability and continuity of health care coverage for participants and beneficiaries of group health plans. HIPAA also added section 101(g) to ERISA, providing the Secretary of Labor (Secretary) with authority to require, by regulation, multiple employer welfare arrangements (MEWAs) as defined in section 3(40) of ERISA, that offer or provide coverage for medical benefits but which are not group health plans (non-plan MEWAs), to report annually for the purpose of determining compliance with part 7 requirements. While the statutory authority was directed at non-plan MEWAs, based on the authority in ERISA sections 101(g), 505, and 734, the Department of Labor (Department) in 2003 promulgated a regulation at 29 CFR 2520.101-2 that required the administrators of both plan MEWAs and non-plan MEWAs that offer or provide coverage for medical benefits, as well certain entities that claim not to be a MEWA solely due to the exception in section 3(40)(A)(i) of ERISA (referred to as “Entities Claiming Exception” or “ECEs”), to file the Form M-1 on an annual basis (Form M-1 annual report).
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (these are collectively known as the “Affordable Care Act” or “ACA”) amended section 101(g) of ERISA to require non-plan MEWAs that provide benefits consisting of medical care to register with the Secretary before operating in a State. In 2011, the Department amended the Form M-1 reporting regulations to enact the ACA required provisions by requiring all MEWAs (plan and non-plan MEWAs) that offer or provide coverage for medical benefits and ECEs to register with the Secretary upon occurrence of certain registration events, such as prior to operating in a State, in addition to continued reporting on an annual basis regarding compliance with part 7 of ERISA.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0116. The current approval is scheduled to expire on August 31, 2025.
Section 203A(a) of the Investment Advisers Act of 1940 (and the implementing SEC regulations) provides thresholds for when investment advisers must register with the SEC or with one or more states
To qualify as investment manager under ERISA, investment advisers that register with a state, rather than with the SEC, must satisfy ERISA's section 3(38) requirement to file a copy of the State registration with the Department by electronically registering through the Investment Adviser Registration Depository (IARD). This is a centralized electronic filing system operated by the SEC in conjunction with State securities regulation authorities. Because the IARD was established by the SEC and the states, and made mandatory for advisers required to file with SEC, and because all States permit filing through IARD even for advisers who do not file with SEC, the Department determined that use of the IARD would eliminate the duplication of filing paper copies of State registration forms with the Department and facilitate creation of a uniform and efficient “one-stop” filing system for state-registered filings by advisers who wished to meet the “investment manager” definition of ERISA section 3(38).
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0125. The current approval is scheduled to expire on August 31, 2025.
Section 521 of ERISA, 29 U.S.C. 1151, provides that the Secretary of Labor may issue ex parte cease and desist orders when it appears to the Secretary that the alleged conduct of a multiple employer welfare arrangement (MEWA) under section 3(40) of the Act, 29 U.S.C. 1002(40), is fraudulent, or creates an immediate danger to the public safety or welfare, or is causing or can be reasonably expected to cause significant, imminent, and irreparable public injury. Section 521(b) provides that a person that is adversely affected by the issuance of a cease and desist order may request an administrative hearing regarding the order. The Department has promulgated a final regulation that is the subject of this information collection request, which describes the procedures before an administrative law judge (ALJ) when a person seeks an administrative hearing for review of such an order.
Under section 2571.3 of the rule, the party that is subject to a cease and desist order issued under ERISA section 521
Section 2520.104-22 provides an exemption to the reporting and provision of part 1 of title I of ERISA for employee welfare benefit plans that provide exclusively apprenticeship and training benefits if the plan administrator meets the following requirements: (1) Files a notice with the Secretary that provides the name of the plan, the plan sponsor's Employer Identification Number, the plan administrator's name, and the name and location of an office or person from whom interested individuals can obtain certain info about courses offered by the plan; and (2) takes steps reasonably designed to ensure that the information required to be contained in the notice is disclosed to employees of employers contribution to the plan who may be eligible to enroll in any course of study sponsored or establish by the plan; (3) and makes the notice available to employees upon request.
Under 2520.14-23, the Department provides an alternative method of compliance with the reporting and disclosure of Title I of ERISA for unfunded or insured plan established for a select group of management of highly compensated employees (
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0153. The current approval is scheduled to expire on August 31, 2025.
In 2006, the Department promulgated a final class exemption, PTE 2006-16, which amended and replaced the exemptions previously provided under PTE 81-6 and PTE 82-63. The final exemption incorporates the exemptions into one renumbered exemption and expands the categories of exempted transactions to include securities lending to foreign banks and foreign broker-dealers that are domiciled in specified countries and to allow the use of additional forms of collateral, all subject to specified conditions outlined in the exemption.
Among other conditions, the class exemption requires a bank or broker-dealer that borrows securities from a plan to provide the lending fiduciary with its most recent audited financial statement and its most recent unaudited statement if the unaudited statement is more recent than the audited financial statement. The borrower must also represent, at the time the loan is negotiated, that there has been no material adverse change in its financial condition since the date of the most recent financial statement provided to the plan that has not been disclosed to the lending fiduciary. The exemption also requires the loan be made pursuant to a written loan agreement. Individual agreements are not required for each transaction; rather the compensation agreement may be made in the form of a master agreement covering a series of transactions.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0065. The current approval is scheduled to expire on October 31, 2025.
Prohibited Transaction Class Exemption (PTE) 88-59, which amended and replaced PTE 82-87, allows employee benefit plans to participate in several different types of residential mortgage financing transactions, provided certain conditions are met. The five categories of transactions permitted under the exemption are: (1) issuance of commitments for the provision of mortgage financing to purchasers of residential dwelling units; (2) receipt by a plan of a fee for the issuance of the commitments; (3) the actual making or purchase of a mortgage loan or participation interest therein pursuant to the commitment; (4) the direct making or purchase of an mortgage loan or participation interest therein without the precondition of a commitment; and (5) the sale, exchange or transfer of a mortgage loan or participation interest therein prior to the maturity date of the instrument, provided that the ownership interest sold, exchanged, or transferred represents the plan's entire interest in such investment.
Among other conditions, the exemption requires a plan to maintain for the duration of any loan made pursuant to this exemption all records necessary to determine whether conditions of the exemption have been met and to make such records available for examination on request by any trustee, investment manager, participant or beneficiary of the plan, or agents of the Department or the IRS.
The Department has received approval from OMB for this ICR under
Section 101(k)(1) of ERISA requires multiemployer plan administrators to furnish certain documents to any plan participant, beneficiary, employee representative, or any employer that has an obligation to contribute to the plan upon written request. The Department issued a final rule that implements the disclosure requirements of ERISA section 101(k) on March 2, 2010 (75 FR 9334). The documents that may be requested are: (1) A copy of any periodic actuarial report (including sensitivity testing) received by the plan for any plan year which has been in the plan's possession for at least 30 days; (2) a copy of any quarterly, semi-annual, or annual financial report prepared for the plan by any plan investment manager or advisor or other fiduciary that has been in the plan's possession for at least 30 days; and (3) a copy of any application filed with the Secretary of the Treasury requesting an extension under section 304 of ERISA (or section 431(d) of the Internal Revenue Code of 1986) and the determination of such Secretary pursuant to such application.
The information collection provisions of this final regulation are found in 29 CFR 2520.101-6(a), which requires multiemployer defined benefit and defined contribution pension plan administrators to furnish copies of certain actuarial and financial documents to plan participants, beneficiaries, employee representatives, and contributing employers upon request.
This information constitutes a third-party disclosure from the administrator to participants, beneficiaries, employee representatives, and contributing employers for purposes of the PRA. Pursuant to § 2520.101-6(d)(5), the documents required to be disclosed shall not contain any information that the plan administrator reasonably determines to be either: (i) Individually identifiable information regarding any plan participant, beneficiary, employee, fiduciary, or contributing employer, except that such limitation shall not apply to an investment manager or adviser, or with respect to any other person (other than an employee of the plan) preparing a financial report described in paragraph § 2520.101-6(c)(2); or (ii) proprietary information regarding the plan, any contributing employer, or entity providing services to the plan. The plan administrator must inform the requester if any such information is withheld.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0131. The current approval is scheduled to expire on October 31, 2025.
Pursuant to section 401(a) of the CSPIA, the Department of Labor (the Department) and HHS jointly promulgated the National Medical Support Notice Final Rule on December 27, 2000 (65 FR 82128) (NMSN Regulation). The NMSN Regulation simplifies the issuance and processing of medical child support orders; standardizes communication between State agencies, employers, and Plan Administrators; and creates a uniform and streamlined process for enforcement of medical child support to ensure that all eligible children receive the health care coverage to which they are entitled.
The NMSN Regulation, codified at 29 CFR 2590.609-2, includes a model National Medical Support Notice (NMSN) that is comprised of two parts: part A is a notice from the State agency to the employer, entitled: “Notice to Withhold for Health Care Coverage;” and part B is a notice from the employer to the Plan Administrator, entitled: “Medical Support Notice to Plan Administrator.” Both parts have detailed instructions informing the recipient to whom responses are due depending on varying circumstances. This ICR addresses the Plan Administrator's responsibilities under NMSN Regulation to complete part B of the NMSN, the “Plan Administrator Response,” pursuant to the CSPIA and section 609(a)(5)(C) of title I of ERISA.
The “Plan Administrator Response” in part B of the NMSN requires the Plan Administrator to provide information verifying whether the child is or will be receiving health care coverage from the group health plan. If enrollment has already occurred or can begin immediately, the Plan Administrator's response in part B serves as notice to the State agency, the participant (parent), the child, their non-participant parent or guardian and the employer that the child is or will begin receiving dependent health care coverage pursuant to the group health plan. When the child is eligible for more than one coverage option, the Administrator must first send the part B response to the State agency so that the agency may choose one option. The Plan Administrator must also use the part B response to notify all of the above-affected persons of any waiting period before enrollment of the child can occur.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0113. The current approval is scheduled to expire on November 30, 2025.
On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA), which includes the No Surprises Act, was signed into law. The No Surprises Act provides Federal protections against surprise billing and limits out-of-network cost sharing under many of the circumstances in which surprise bills arise most frequently. The CAA added provisions applicable to group health plans and health insurance issuers in the group and individual markets in a new part D of title XXVII of the Public Health Service Act (PHS Act) and also added new provisions to
Section 102 of the No Surprises Act added Code section 9816, ERISA section 716, and PHS Act section 2799A-1, which contain limitations on cost sharing and requirements for initial payments for emergency services and for nonemergency items and services furnished by nonparticipating providers at participating health care facilities. In addition, section 103 of the No Surprises Act amended Code section 9816, ERISA section 716, and PHS Act section 2799A-1 to establish a Federal independent dispute resolution (Federal IDR) process that nonparticipating providers or facilities and group health plans and health insurance issuers in the group and individual market may use following the end of an unsuccessful open negotiation period to determine the out-of-network rate for certain services. More specifically, the Federal IDR provisions may be used to determine the out-of-network rate for certain emergency services, nonemergency items and services furnished by nonparticipating providers at participating health care facilities, where an All-Payer Model Agreement or specified State law does not apply. Finally, section 105 of the No Surprises Act created Code section 9817, ERISA section 717, and PHS Act section 2799A-2 which contain limitations on cost sharing and requirements for initial payments for air ambulance services, and allow plans and issuers and providers of air ambulance services to access the Federal IDR process.
The Federal IDR process requires a number of disclosures from plans, issuers, FEHB carriers, and nonparticipating providers or nonparticipating emergency facilities. The Department has received approval from OMB for this ICR under OMB Control No. 1210-0169. The current approval is scheduled to expire on November 30, 2025.
The Department is particularly interested in comments that:
• Evaluate whether the collections of information are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the collections of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the ICR for OMB approval of the information collection; they will also become a matter of public record.
Employee Benefits Security Administration, Department of Labor.
Notice of exemption.
This document gives notice of an individual exemption from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974, as amended (ERISA or the Act). The exemption permits the Associated General Contractors of America, San Diego Chapter, Inc. (the Chapter) to lease certain improved real property (the Property) located in San Diego, California to the Associated General Contractors of America, San Diego Chapter, Inc. Apprenticeship and Training Fund (the Plan or the Applicant).
Mr. Frank Gonzalez, Office of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor, (202) 693-8553 (this is not a toll-free number).
The Plan requested an exemption pursuant to ERISA section 408(a) and supplemented the request with certain additional information (that is collectively, referred to as the “Application”).
Based on the Applicant's representations in the Application and the administrative record, the Department has determined to grant the Proposed Exemption. This exemption provides only the relief specified herein and does not provide relief from violations of any law other than the prohibited transaction provisions of ERISA.
As discussed below, the Department makes the requisite findings under ERISA section 408(a) based on the Applicant's adherence to all the exemption's conditions at all times. Accordingly, affected parties should be aware that the Applicant's adherence to all conditions incorporated in this exemption is necessary for the Department to grant the relief that the Applicant requested. Absent these conditions, the Department would not have granted this exemption.
1. As discussed in the Proposed Exemption, the Plan provides apprenticeship training for construction trade employees within five Southern California counties. The Plan is funded by participating employers (contributing approximately 90% of the Plan's annual funding) and the State of California (contributing approximately 10% of the Plan's annual funding). Apprentices do not contribute to the Plan. The Plan's most recent audited financial statements reflect that the Plan's total assets were $13,681,005 as of March 31, 2024.
2. The Plan's Board of Trustees (the Board) is comprised of six individual members (the Trustees) of participating construction trade employers. The Trustees make all of the Plan's administrative and investment decisions including decisions about the lease that is the subject of this exemption.
3. The Plan is sponsored by the Chapter, which is a trade organization founded in 1927 to promote the interests of employers in the construction industry located in San Diego, California. A Board of Directors comprised of construction trade employers manages the Chapter.
4. The Applicant represents that before October 1, 2020, the Plan leased three different properties from unrelated parties comprising 11,293 square feet that it used for administrative, educational, and training purposes. According to the Applicant, the facilities on these properties lacked adequate square footage and had outdated training technology, which resulted in increased costs and wasted resources for the Plan. In addition, one of the properties was located more than three miles from the other two properties.
5. On January 18, 2018, the Chapter and the Plan entered into a Memorandum of Understanding (MOU) documenting their shared interest in providing a “world class apprenticeship program” in a “modernized facility.” Following execution of the MOU, the Chapter acquired unimproved real property located at 10140 Riverford Road, Lakeside, California (the Parcel) from Lakeside Land Co., a California limited liability corporation (the LLC). The LLC is not a member of the Chapter, there are no common directors between the LLC and the Chapter, and no LLC directors are Plan Trustees. The LLC has neither contributed to nor participated in the Plan, nor does the LLC participate in the Plan's apprenticeship training programs.
6. In 2020, the Chapter constructed a high-ceiling training space on the Parcel comprising approximately 43,600 square feet (the Building). The Chapter's acquisition of the Parcel, and subsequent construction of the Building, was based on the Plan's intent expressed in the MOU to sign a 10-year lease to use both the Building once constructed and an unimproved exterior lot (the Property).
7. On April 25, 2019, the Plan Trustees acting on behalf of the Plan, caused the Plan to enter into an agreement with the Chapter to lease both a portion of the Building (once constructed) and an unimproved exterior lot located in the Parcel (the Lease), subject to the review and approval of both a qualified independent fiduciary (described below, the Independent Fiduciary) and the Department.
8. The Lease's term is for 10 years, under which the Plan holds a leasehold interest to occupy and use 90 percent of the Building's rentable space (39,115 square feet of the Building's total space of 43,600 square feet) and an unimproved exterior lot along with rights to use the Property's common areas. The Chapter utilizes the remaining 10 percent of the Building's rentable space and has no present plans to change the Building's space allocation.
9. The Plan's initial base rent under the Lease is $40,000 per month or approximately $1.02 per square foot (the Base Rent). This expense during a twelve (12) month period is about 3.5 percent of the Plan's total assets as reflected in the Plan's audited financial statements for accounting year ending March 31, 2024. The Base Rent is subject to annual increases that are discussed further below.
10. On May 17, 2019, the Plan engaged Cushman & Wakefield Western Inc. as the Independent Appraiser to determine the Property's fair market rental value. Trevor G. Chapman, a California licensed Certified General Real Estate Appraiser, who is an employee of the Independent Appraiser, performed the appraisal.
11. Mr. Chapman represents that the Independent Appraiser has no present or prospective interest in the Property that is subject to the Lease, and no personal interest with respect to the Plan and the Chapter. In addition, Mr. Chapman represents that the Independent Appraiser's annual gross revenues derived from parties in interest with respect to the Plan represented 0.37% of its gross revenues for the 2020 tax year. Furthermore, the Independent Appraiser's agreement with the Plan does not contain any provisions that provide for the Plan to: (1) directly or indirectly indemnify or reimburse the Independent Appraiser or any other party for any failure to adhere to their contractual obligations or to State or Federal laws applicable to the Independent Appraiser's work; or (2) waive any rights, claims or remedies of the Plan or its participants and beneficiaries under ERISA, the Code, or other Federal and State laws against the Independent Appraiser with respect to the transaction(s) that are the subject of the exemption.
12. Mr. Chapman inspected the Property on July 1, 2019, to collect primary and secondary data related to the Property, investigate the general trends in the regional economy and local area, analyzed rental data where appropriate, and reviewed (i) the cost estimates based upon submitted architects' plans, and (ii) the proposed Lease using generally accepted market-derived appropriate methods and procedures. In a written report (the Independent Appraisal Report) dated October 23, 2019, Mr. Chapman determined that the Property's fair market rental rate was $44,443 per month, which represented $1.14 per square foot of the Plan's rentable space.
13. According to the Independent Appraiser, the Lease is a triple net lease, which the Independent Appraiser notes is a type of commercial lease wherein the lessee is responsible for its pro rata share of expenses for common area maintenance, taxes, and insurance.
14. On October 27, 2019, the Plan Trustees retained the services of Prudent Fiduciary Services, LLC (PFS) of Los Angeles, California, to serve as the Plan's Independent Fiduciary with respect to the Lease. Specifically, Mr. Miguel Paredes, a principal with PFS, was appointed to undertake the duties and responsibilities on behalf of PFS in its role as the Plan's Independent Fiduciary to ensure that the Lease arrangement complied with ERISA.
15. The Independent Fiduciary represents that neither Mr. Paredes nor PFS had a pre-existing relationship with the Plan or the Chapter. The Independent Fiduciary also represents that for year 2019 Mr. Paredes and PFS expect to derive approximately 0.55 percent of their combined annual gross revenues from the Plan and parties in interest with respect to the Plan.
16. The Independent Fiduciary examined whether the Lease would be reasonable, prudent, and in the interest and protective of the Plan and its participants and beneficiaries. To perform this examination, the Independent Fiduciary: (a) reviewed various documents, such as the Independent Appraisal Report, trust agreements, IRS Forms 990, financial statements, written policies, guidelines, and procedures, lease agreements, applicable laws and guidance, and the Plan Trustees' meeting minutes; (b) interviewed and/or held discussions with representatives of the Plan; (c) conducted an in-person site visit to the Property; and (e) considered the Plan Trustees' decision-making process with respect to entering into the Lease.
17. In a report dated October 28, 2019 (the Independent Fiduciary Report), the Independent Fiduciary noted that the Property allows for onsite heavy equipment operator training, which was not an option in the Plan's former location due to space constraints. The new location also represents an upgrade in size and quality compared to the current property, which should translate into better training programs. The Independent Fiduciary stated that having the classrooms and apprenticeship/training offices in the same location as the Chapter offices potentially improves the operation and efficiency of the training programs because the Chapter's oversight and resources are nearby. The Independent Fiduciary also noted that the Plan and Chapter share an interest in providing high quality apprenticeship and continuing training education programs because the Plan would be better able to provide benefits to its participants and beneficiaries and the Chapter would be able to use the training programs to promote its membership.
18. The Independent Fiduciary reviewed the Independent Appraiser's specific qualifications, including his education, prior experience, and professional licenses, memberships, and affiliations. Based upon its review, the Independent Fiduciary determined that the Independent Appraiser possessed the appropriate training, experience, and facilities to provide a qualified appraisal report on behalf of the Trust Fund regarding the subject property.
19. The Independent Fiduciary next examined the Independent Appraiser's independence. The Independent Fiduciary represents that it did not find any relationship between Chapman or Cushman, or any affiliates, to the parties that would be engaging in the transaction contemplated by the Lease Agreement. The Independent Fiduciary's review also did not reveal any other information that would call into question the Independent Appraiser's independence.
20. The Independent Fiduciary next determined whether the payments from the Plan to the Chapter under the Lease would be reasonable. To perform this task, the Independent Fiduciary reviewed the methodology provided by the Independent Appraiser to calculate the fair market rent, which included comparing comparable rental properties, having discussions with local brokers, and testing the Independent Appraiser's conclusions through a return on cost analysis. The Independent Fiduciary adjusted the Lease's base rent of $1.02 per square foot upwards by $0.07 per square foot to account for the Plan's additional $2,579 monthly payments to a Capital Replacement Reserve Fund (the Reserve Fund), which is described in more detail below, and determined that even with the adjusted rate, the Lease's adjusted monthly rent of $1.09 per square foot is less than its appraised fair market value of $1.14 per square foot. Additionally, the Independent Fiduciary noted that leases in the Property's subject market are typically written on a triple net basis, which is consistent with the structure of the Lease. The Independent Fiduciary stated that it also reviewed the properties and key lease information used in the Independent Appraisal Report analysis of rental activity for comparable space in similar properties in the Property's subject market and found that the selected comparable properties were appropriate and reasonably similar. The Independent Fiduciary noted how other lease terms, such as rent escalation clauses, duration, and tenant improvement allowances contained in the comparable leases that the Independent Appraiser identified compared to those in the Lease. For the reasons set forth above, the Independent Fiduciary determined that the arrangements provided under the Lease are necessary for the operation of the Plan and that the compensation to be paid by the Plan to the Chapter is reasonable. It also determined that entering into the Lease was reasonable, prudent, and in the Plan's interest.
21. On July 28, 2020, the Independent Fiduciary issued an addendum and supplement to the Independent Fiduciary Report. In the addendum, the Independent Fiduciary agreed to perform the following additional duties on behalf of the Plan: (a) monitor the terms of this exemption on an ongoing basis and take all actions that are necessary and proper to enforce the Plan's rights under the Lease to protect the Plan's participants and beneficiaries; (b) review and approve the material
22. The exemption requires the Independent Fiduciary to engage a qualified independent appraiser to perform an independent appraisal of the Property following the beginning date of the Lease on a periodic basis as prudence requires to ensure the Plan does not pay more than fair market value rent under the Lease. The Independent Fiduciary must regularly evaluate the prudence of the Plan's continued participation in the Lease and ensure that its participation in the Lease remains in the interest and protective of the interests of the Plan's participants and beneficiaries. The Plan's ongoing participation in the Lease requires the ongoing approval and consent of the Independent Fiduciary. The Independent Fiduciary is responsible for selecting the independent appraiser, the frequency of appraisals, and the assessment of the reliability of the appraisals in determining fair market value rent. The Plan may continue to participate in the Lease during any period only to the extent the Independent Fiduciary has affirmatively determined that participation in the Lease remains in the interest and protective of the Plan and its participants and beneficiaries. The amounts that the Plan has paid or will continue to pay under the Lease may not exceed fair market value rent.
23. In the July 28, 2020, supplement to the Independent Fiduciary Report, the Independent Fiduciary stated that the Plan needed more space to comply with social distancing requirements and guidelines in the COVID-19 environment and to enable the Plan to offer sufficient classes in a manner compliant with State Division of Apprenticeship Standards Guidelines. In the supplement, the Independent Fiduciary confirmed that the Plan's entering into the Lease was reasonable, prudent, and in the interest of the Plan.
24. On October 1, 2020, the Plan moved into the Building under the terms of the Lease stating that it urgently needed larger space due to the then COVID-19 health pandemic. Subsequent to the Plan moving into the Building, the Independent Appraiser conducted another appraisal of the Property and determined that the Property's fair market monthly rental value was $46,938 as of October 1, 2020 and $48,890, as of October 1, 2021.
25. The Independent Fiduciary must ensure that the Lease is in the interest and protective of the Plan and its participants and beneficiaries, including with respect to any amendment or renewal of the Lease. Further, the Independent Fiduciary must take all necessary and proper steps to ensure that the Plan and its participants and beneficiaries are protected in connection with the Lease, which include approving any amendment or renewal thereof. Beginning on the day that the notice of exemption is published in the
In order to ensure that the Lease and its terms continue to be in the interest of Plan and its participants and beneficiaries, this exemption requires the Independent Fiduciary to provide prior written notice to the Department's Office of Exemption Determinations at least 60 days before the Lease is amended, modified, or extended, unless such delay would cause imminent harm to the Plan in which case the notice must be provided immediately. The notification must include a complete description of the amendment, modification, or extension, including all material terms.
The Independent Fiduciary while acting on the Plan's behalf with respect to the Lease, must not be directly or indirectly controlled by or through one or more intermediaries or under common control with either the Chapter, the Plan, or any related employers' members.
26. The Independent Fiduciary has not entered into and must not enter into any agreement or instrument that violates either ERISA section 410 or the Department's Regulations codified at § 2509.75-4; and has not entered and must not enter into any agreement, arrangement, or understanding that includes any provision that provides for the direct or indirect indemnification or reimbursement of the Independent Fiduciary by the Plan or other party for any failure to adhere to its contractual obligations or to State or Federal laws applicable the Independent Fiduciary`s work, or that waives any rights, claims, or remedies of the Plan under ERISA, state, or Federal law against the Independent Fiduciary with respect to the transaction(s) that are the subject of the exemption.
27. The Lease defines the formula to be used in determining annual increases to the Base Rent as follows:
Beginning on the date that is one (1) year after the Commencement Date [Lease's start date], and on each successive one-year anniversary thereof (each an ‘Adjustment Date’) throughout the [t]erm, the Base Rent shall be increased by the amount of increase in the CPI . . . [s]uch increase shall be calculated by multiplying the then-current Base Rent by a fraction, the numerator of which shall be the CPI for the Adjustment Date and the denominator of which shall be the CPI for the previous Adjustment Date (or the CPI for the Commencement Date in case of the adjustment for the first Adjustment Date). If there is no increase in CPI, or a decrease in CPI, the Base Rent shall remain unchanged.”
28. Notwithstanding the Lease's CPI Base Rent annual increases provision discussed above, and as further described below, the Independent Fiduciary must ensure that the total amount paid by the Plan in connection with the Lease does not exceed the fair market rental value.
29. In addition to the Base Rent, the Lease requires the Plan to pay certain operating expenses (the Operating Expenses).
30. The Lease requires both the Plan and the Chapter to make pro rata monthly payments to the Reserve Fund based on their space utilization. The Lease requires the Chapter to pay $136 per month for occupying 4,485 square feet while the Plan must pay $2,579 per month for occupying 39,115 square feet.
31. The Reserve Fund is intended to segregate payments for future replacement needs and its calculations are based on reasonable life expectancy
32. The Reserve Fund may only be used for the replacement of certain items (such as roofing, doors, frames and hardware, flooring, asphalt and concrete paving and resealing, fencing and gates, etc.) that are listed in the Lease's addendum. The Reserve Fund may not be used for any other purpose unless agreed to by both the Chapter and the Plan, subject to the Independent Fiduciary's approval.
33. Further, the Lease requires the Chapter to keep the Property, including interior and exterior walls, roof, and common areas, in good condition and repair except that the Plan is responsible for day-to-day maintenance and repairs to the interior of its allocated rented space to the extent such cost is attributable to causes beyond normal wear and tear. The Lease requires the Chapter to retain funds held in the Reserve Fund in a restricted account that may not be used for any purpose other than to fund the replacement of the items described above. Amounts paid by the Plan into the Reserve Fund constitute a portion of the Plan's overall consideration paid to the landlord, and once the amounts are paid into the Reserve Fund, the Plan has no legal right to such amounts beyond what is described in the Lease. The Lease's termination ends the Plan's right under the Lease.
34. Absent an administrative exemption, the Lease would violate ERISA section 406(a)(1)(A), which prohibits a fiduciary from causing a plan to enter into transaction involving a sale, exchange, or lease, of any property between a plan and a party in interest. The Chapter is a party in interest with respect to the Plan under ERISA section 3(14)(D) because it is an employee organization whose members are covered by the Plan. Therefore, the Lease would violate ERISA section 406(a)(1)(A).
35. Additionally, the Lease would violate ERISA section 406(a)(1)(D), which prohibits a fiduciary from causing the plan to enter into transaction involving the transfer to or use of any plan assets by or for the benefit of a party in interest of a plan. Because the Lease requires monthly cash payments from the Plan's assets to the Chapter, the payments would be considered a transfer of Plan assets to a party in interest in violation of ERISA section 406(a)(1)(D).
36. Finally, the Lease would violate ERISA section 406(b)(2), which prohibits a plan fiduciary from acting in its individual capacity or in any other capacity in a transaction involving the plan on behalf of a party (or representing a party) whose interests are adverse to the interests of the plan or its participants or beneficiaries. Because both the Trustees and the Board are comprised of individuals representing participating employers who are the Chapter's members, these individuals are involved on both sides of the Lease in violation of ERISA section 406(b)(2).
37. The Department notes that in addition to the protections described above, this exemption includes protective conditions that allows the Plan to retroactively lease the Property from the Chapter to utilize its office space, classroom space, and training facilities to continue carrying out the Plan's goal of providing apprenticeship training that is related to the construction trade.
38. In the Proposed Exemption, the Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to such notice, which comment period ended on September 5, 2024. The Department received one comment that was immediately
The complete application file (L-12006) is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210 reachable by telephone at (202) 693-8673. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, please refer to the notice of proposed exemption published on July 22, 2024, at 89 FR 59161.
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption under ERISA section 408(a) does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions of ERISA and/or the Code, including any prohibited transaction provisions to which the exemption does not apply and the general fiduciary responsibility provisions of ERISA section 404, which, among other things, require a fiduciary to discharge their duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with ERISA section 404(a)(1)(B);
(2) As required by ERISA section 408(a), the Department hereby finds that the exemption is (1) administratively feasible, (2) in the interests of the Plan and of its participants and beneficiaries, and (3) protective of the rights of the participants and beneficiaries of the plan;
(3) The exemption is supplemental to, and not in derogation of, any other ERISA provisions, including statutory or administrative exemptions and transitional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and
(4) The availability of this exemption is subject to the express condition that the material facts and representations contained in the Application are true and complete at all times, and that the Application accurately describes all material terms of the transaction which is the subject of the exemption.
Accordingly, after considering the entire record developed in connection with the Applicant's exemption application, the Department has determined to grant the following exemption under the authority of ERISA section 408(a) in accordance with the Department's exemption procedures regulation.
The restrictions of ERISA sections 406(a)(1)(A), (D), and 406(b)(2) shall not apply, effective October 1, 2020, to the leasing of office, classroom, and training facilities (the Lease) located on an improved parcel of real property (the Property) by the Associated General Contractors of America, San Diego Chapter, Inc. Apprenticeship and Training Fund (the Plan) from the Associated General Contractors of America, San Diego Chapter, Inc. (the Chapter) to provide construction trade apprenticeship training to Plan participants if the conditions set forth in section II are met at all times.
(a) The Plan has paid, and will continue to pay, no more than the fair market rental value in connection with the Lease;
(b) The Plan's participants do not contribute to the Plan;
(c) A qualified independent fiduciary (the Independent Fiduciary) represents the Plan's interests in all respects to the Lease, including by approving the Lease and, if warranted, any amendment to or renewal of the Lease. Additionally, the Independent Fiduciary, acting on the Plan's behalf with respect to the Lease:
(1) Must not be directly or indirectly controlled by or through one or more intermediaries, or under common control with either the Chapter, the Plan, or any related employers' members;
(2) Reviewed the Lease, including the terms and conditions, and determined that the Lease was reasonable and in the interest of and protective of the Plan and its participants and beneficiaries in accordance with ERISA's fiduciary duties of prudence and loyalty;
(3) Confirmed that the initial base rent did not exceed the current fair market rental value of the Property by reviewing an appraisal performed by a qualified independent appraiser (the Independent Appraiser) both when the Plan entered into the Lease, and when the Plan began occupying the Property;
(4) Determined in advance of the Plan's entering into the lease for the Property, that the Lease is reasonable, prudent, in the interest and protective of the Plan and its participants and beneficiaries in accordance with ERISA's fiduciary duties of prudence and loyalty;
(5) Must engage a qualified independent appraiser to perform an independent appraisal of the Property following the beginning date of the Lease on a periodic basis as prudence requires to ensure the Plan does not pay more than fair market value rent under the Lease. The Independent Fiduciary is responsible for the selection of the Independent Appraiser, the frequency of appraisals, and the assessment of the reliability of the appraisals in determining fair market value rent;
(6) Must regularly evaluate the prudence of the Plan's continued participation in the Lease and ensure that participation in the Lease remains in the interest and protective of the interests of the Plan's participants and beneficiaries;
(7) Must monitor the parties' compliance with the terms and conditions of the exemption and take all necessary and proper steps to ensure that the Plan and its participants and beneficiaries are completely protected throughout the Lease's term and any related transactions (including any renewal thereof);
(8) Must review and approve the Lease's operating expenses on an ongoing basis, including but not limited to ensuring that the Plan undergoes both an annual reconciliation for such accrued expenses and it exercises its audit rights when prudently needed.
(9) Must provide prior written notice to the Chapter of the Plan's intention to extend the Lease beyond its initial 10-year term;
(10) Has not entered into and must not enter into any agreement or instrument that violates either ERISA section 410 or the Department's Regulations codified at 29 CFR 2509.75-4;
(11) Has not entered into and must not enter into any agreement, arrangement, or understanding that includes any provision that provides for the Plan or other party to: (i) directly or indirectly indemnify or reimburse the Independent Fiduciary for any failure to
(d) The Plan's ongoing participation in the Lease requires the continuing approval and consent of the Independent Fiduciary, and the Plan may continue to participate in the Lease during any period only to the extent the Independent Fiduciary has affirmatively determined that participation in the Lease remains in the interest and protective of the Plan and its participants and beneficiaries;
(e) Any adjustments to the base rent under the Lease must be linked to the Consumer Price Index for All Urban Consumers for the San Diego, California area, as published by the Department's Bureau of Labor Statistics;
(f) Any renewal of the Lease's initial 10-year term must be made solely at the Plan's discretion subject to approval by the Independent Fiduciary and if the Lease is renewed, the Lease term must not exceed five-years;
(g) The Independent Appraiser must not have entered into, and must not enter into, any agreement, arrangement, or understanding that includes any provision that provides for the direct or indirect indemnification or reimbursement of the Independent Appraiser by the Plan or any other party for any failure to adhere to its contractual obligations or to State or Federal laws applicable to the Independent Appraiser's work, or that waives any rights, claims or remedies of the Plan or its participants and beneficiaries under ERISA, the Code, or other Federal and State laws against the Independent Appraiser with respect to the transaction(s) that are the subject of the exemption;
(h) The exemption does not cover any type of service that is otherwise covered under an administrative class exemption or a statutory exemption from ERISA's prohibited transaction provisions;
(i) Beginning on the day that the notice of exemption is published in the
(j) The terms and conditions of the Lease are at least as favorable to the Plan as those which the Plan could obtain in a comparable lease from an unrelated party in an arm's-length transaction;
(k) All of the material facts and representations provided by the Applicant and set forth in the Proposed Exemption are true and accurate; and
(l) Within 60 days after publication date of this notice of exemption in the
Signed at Washington, DC.
Employment and Training Administration, U.S. Department of Labor.
Notice.
Each year, the Department of Defense issues a Schedule of Remuneration used by states for UCX purposes. States use the schedule to determine Federal military wages for UCX “first claims” only when the Federal Claims Control Center (FCCC) responds to a request for information indicating that there is no Department of Labor copy of the Certificate of Release or Discharge from Active Duty, commonly known DD Form 214 (DD214) for an individual under the social security number provided. A response from the FCCC that indicates “no DD214 on file” will prompt the state to start the affidavit process and to use the attached schedule to calculate the Federal military wages for an unemployment insurance or UCX monetary determination.
The schedule applies to UCX “first claims” filed beginning with the first day of the first week that begins on or after January 1, 2025, pursuant to the UCX program regulations (see 20 CFR 614.12(c)). States must continue to use the 2024 schedule (or other appropriate schedule) for UCX “first claims” filed before the effective date of the revised schedule. Below is the 2025 Federal Schedule of Remuneration recently released by the Department of Defense.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Employment and Training Administration (ETA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before February 5, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Michael Howell by telephone at 202-693-6782, or by email at
This request fulfills Workforce Innovation and Opportunity Act (WIOA) reporting requirements regarding the collection of performance indicators described in sec. 116(b)(2)(A). Requirements for state level collection of this data for the programs contained in this collection are based on WIOA requirements.
As part of this ICR, the Department of Labor's (DOL) Employment and Training Administration (ETA) has made changes to the Participant Individual Record Layout (ETA-9172), (Program) Performance Report (ETA-9173-APPSHP) to facilitate State and grantee performance reporting. In particular, as part of DOL's effort to streamline program performance reporting for ETA grants with significant apprenticeship components as a primary goal of the program (Apprenticeship grants), DOL is adding the performance information collection requirements for Apprenticeship grants. DOL also is adding a new information collection requirement to this ICR: the Apprenticeship Outreach: Organization/Employer Record Layout. For additional substantive information about this ICR, see the related notice published in the
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Employment and Training Administration (ETA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before February 5, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Michael Howell by telephone at 202-693-6782, or by email at
The Workforce Innovation and Opportunity Act requires states to report on performance in core programs such as the Wagner-Peyser Act programs, the Adult, Dislocated Worker, and Youth programs, Adult Education and Family Literacy Act programs, and the Vocational Rehabilitation Act programs. This ICR contains the data to be collected for the measure states are to use to report on performance. For additional substantive information about this ICR, see the related notice published in the
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Occupational Safety and Health Administration, Labor.
Request for public comment.
OSHA solicits public comments concerning the proposal to extend the Office of Management and Budget's (OMB) approval of the information collection requirements specified in the Commercial Diving Operations Standard.
Comments must be submitted (postmarked, sent, or received) by March 7, 2025.
For further information on submitting comments, see the “Public Participation” heading in the section of this notice titled
Seleda Perryman, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, telephone (202) 693-2222.
The Department of Labor, as part of the continuing effort to reduce paperwork and respondent (
The information collection requirements specified in the Commercial Diving Operations (CDO) Standard for general industry helps protect workers from the adverse health effects that may result from their involvement in CDO, and provide access to these records by OSHA, the National Institute for Occupational Safety and Health, the affected workers, and designated representatives. The major information collection requirements of the CDO Standard include the following elements of the Standard.
Employers must test two specific types of equipment, including, respectively: The output of air compressor systems used to supply breathing air to divers for air purity every six months by means of samples taken at the connection to the distribution system; and breathing-gas hoses at least annually at one and one-half times their working pressure. Employers must mark each umbilical (
Employers must make any record required by the Subpart available, on request, for inspection and copying to an OSHA compliance officer or to a representative of the National Institute for Occupational Safety and Health (NIOSH). Employers are to provide workers, their designated representatives, and OSHA compliance officers with exposure and medical records generated under the Subpart in accordance with § 1910.1020 (“Access to worker exposure and medical records”); these records include safe practices manuals, depth-time profiles, diving records, DCS incident assessments, and hospitalization records. Additionally, employers must make equipment inspection and testing records available to workers and their designated representative on request.
Employers must retain these records for the following periods: Safe practices manuals, current document only; depth-time profiles, until completing the diving record or the DCS incident assessment; diving records, one year, except five years if a DCS incident occurred during the dive; DCS incident assessments, five years; hospitalization records, five years; and equipment inspections and testing records, current tag or log entry until the employer removes the equipment from service.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility, and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information, and transmission techniques.
OSHA is requesting that OMB extend the approval of the information collection requirements contained in the Commercial Diving Standard. The agency is requesting an adjustment decrease in the burden hours amount from 170,806 hours to 135,450 hours, a difference of 35,356 hours. This adjustment decrease is due decrease in the number of professional divers, going from 3,460 to 2,900 divers, which resulted in a corresponding decrease in the number of affected facilities.
OSHA will summarize the comments submitted in response to this notice and will include this summary in the request to OMB to extend the approval of the information collection requirements.
You may submit comments in response to this document as follows: (1) electronically at
Comments and submissions are posted without change at
Although all submissions are listed in the
Contact the OSHA Docket Office for information about materials not available through the website, and for assistance in using the internet to locate docket submissions.
James S. Frederick, Deputy Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
In accordance with the purposes of sections 29 and 182b of the Atomic Energy Act (42 U.S.C. 2039, 2232(b)), the Advisory Committee on Reactor Safeguards (ACRS) will hold meetings on February 5-7, 2025. The Committee will be conducting meetings that will include some Members being physically present at the headquarters of the U.S. Nuclear Regulatory Commission (NRC) while other Members participate remotely. Interested members of the public are encouraged to participate remotely in any open sessions via Microsoft (MS) Teams or via phone at 301-576-2978, passcode 103416569#. A more detailed agenda including the MSTeams link may be found at the ACRS public website at
[
[
Procedures for the conduct of and participation in ACRS meetings were published in the
An electronic copy of each presentation should be emailed to the cognizant ACRS staff at least one day before the meeting.
In accordance with subsection 10(d) of Public Law 92-463 and 5 U.S.C. 552b(c), certain portions of this meeting may be closed, as specifically noted above. Use of still, motion picture, and television cameras during the meeting may be limited to selected portions of the meeting as determined by the Chair. Electronic recordings will be permitted only during the open portions of the meeting.
ACRS meeting agendas, meeting transcripts, and letter reports are available through the NRC Public Document Room (PDR) at
For the Nuclear Regulatory Commission
Weeks of January 6, 13, 20, 27, and February 3, 10, 2025. The schedule for Commission meetings is subject to change on short notice. The NRC Commission Meeting Schedule can be found on the internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings or need this meeting notice or the transcript or other information from the public meetings in another format (
Public.
Members of the public may request to receive the information in these notices electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555, at 301-415-1969, or by email at
There are no meetings scheduled for the week of January 6, 2025.
There are no meetings scheduled for the week of January 20, 2025.
There are no meetings scheduled for the week of January 27, 2025.
There are no meetings scheduled for the week of February 10, 2025.
For more information or to verify the status of meetings, contact Wesley Held at 301-287-3591 or via email at
The NRC is holding the meetings under the authority of the Government in the Sunshine Act, 5 U.S.C. 552b.
Dated: January 2, 2025.
For the Nuclear Regulatory Commission.
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service ® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 18, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 19, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend its Price List to (1) extend a fee waiver for new firm application fees for applicants seeking only to obtain a bond trading license (“BTL”) for 2025; and (2) waive the BTL fee for 2025.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
All submissions should refer to file number SR-NYSE-2024-83 and should be submitted on or before January 27, 2025.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
FINRA is proposing to amend FINRA Rule 6897 (Consolidated Audit Trail Funding Fees) to establish fees for Industry Members
The fee rate for CAT Fee 2025-1 would be $0.000022 per executed equivalent share. CAT Executing Brokers will receive their first monthly invoice for CAT Fee 2025-1 in February 2025 calculated based on their transactions as CAT Executing Brokers for the Buyer (“CEBB”) and/or CAT Executing Brokers for the Seller (“CEBS”) in January 2025. CAT Fee 2025-1 is anticipated to be in place for six months, and is anticipated to recover approximately one-half of the costs set forth in the reasonably budgeted CAT costs for 2025. CAT LLC intends for CAT Fee 2025-1 to replace CAT Fee 2024-1 (which has a fee rate of $0.000035).
The proposed rule change, including FINRA's statement of the purpose of, and statutory basis for, the proposed rule change, is available on FINRA's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
FINRA is proposing to amend FINRA Rule 6897(b) (CAT Cost Recovery Fees) to implement a Consolidated Audit Trail (“CAT”) cost recovery fee designed to permit FINRA to recoup its designated portion of the reasonably budgeted CAT costs of the National Market System Plan Governing the Consolidated Audit Trail (the “CAT NMS Plan” or “Plan”) for the period of January 1, 2025 through December 31, 2025.
The proposed rule change, including FINRA's statement of the purpose of, and statutory basis for, the proposed rule change, is available on FINRA's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Options 9, Sections 13 and 15 to propose an increase to the position and exercise limits for iShares Bitcoin Trust ETF (“IBIT”).
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Options 9, Section 13, Position Limits, and Options 9, Section 15, Exercise Limits, to increase the position and exercise limits for options on IBIT from 25,000 to 250,000 contracts.
IBIT is an Exchange-Traded Fund (“ETF”) that holds bitcoin and is listed on The Nasdaq Stock Market LLC.
Per the Commission “rules regarding position and exercise limits are intended to prevent the establishment of options positions that can be used or might create incentives to manipulate or disrupt the underlying market so as to benefit the options positions.”
While the Exchange proposed an aggregated 25,000 contract position limit for IBIT options in its IBIT Approval Order, it nonetheless believed that evidence existed to support a much higher position limit. Specifically, the Commission has considered and reviewed the Exchange's analysis in its IBIT Approval Order that the exercisable risk associated with a position limit of 25,000 contracts represented only 0.4% of the outstanding shares of IBIT.
IBIT currently qualifies for a 250,000 contract position limit pursuant to the criteria in Options 9, Section 13(g), which requires that, for the most recent six-month period, trading volume for the underlying security be at least 100,000,000 shares.
Position limits, and exercise limits, are designed to limit the number of options contracts traded on the exchange in an underlying security that an investor, acting alone or in concert with others directly or indirectly, may control. These limits, which are described in ISE Options 9, Sections 13 and 15, are intended to address potential manipulative schemes and adverse market impacts surrounding the use of options, such as disrupting the market in the security underlying the options. Position and exercise limits must balance concerns regarding mitigating potential manipulation and the cost of inhibiting potential hedging activity that could be used for legitimate economic purposes. To achieve this balance, ISE proposes to increase IBIT's position and exercise limits from 25,000 to 250,000 contracts. ISE believes that 250,000 contracts is the appropriate position and exercise limit based on its analysis described below.
First, ISE considered IBIT's market capitalization and Average Daily Volume (“ADV”), and prospective position limit in relation to other securities. In measuring IBIT against other securities, ISE aggregated market capitalization and volume data for securities that have defined position limits utilizing data from The Options Clearing Corporations (“OCC”).
Based on the above table, if IBIT were compared to the 1,934 stocks that have position limits of 250,000 contracts to less than 500,000 contracts it would rank in the 88th percentile for market capitalization and the 99th percentile for ADV.
The Exchange also analyzed the position limits for IBIT by regressing the market capitalization figures and 90-day ADV of all non-ETF equities, against their respective position limit figures. From this regression, the Exchange was able to determine the implied coefficients to create a formulaic method for determining an appropriate position limit.
Based on the aforementioned analysis, the Exchange believes that the proposed 250,000 contracts for position and exercise limits is appropriate.
Second, ISE reviewed IBIT's data relative to the market capitalization of the entire bitcoin market in terms of exercise risk and availability of deliverables. As of November 25, 2024, there are 19,787,762 bitcoins in circulation.
Third, ISE reviewed the proposed position limit by comparing it to position limits for derivative products regulated by the Commodity Futures Trading Commission (“CFTC”). While the CFTC, through the relevant Designated Contract Markets, only regulates options positions based upon delta equivalents (creating a less stringent standard), ISE examined equivalent bitcoin futures position limits. In particular, ISE looked to the CME bitcoin futures contract
Fourth, ISE analyzed a position and exercise limit of 250,000 for IBIT against other options on ETFs with an underling commodity, namely SPDR Gold Shares (“GLD”), iShares Silver Trust (“SLV”), and ProShares Bitcoin ETF (“BITO”).
Fifth, ISE notes that IBIT is likely to trade in penny increments as of January 2, 2025, provided it is able to meet the applicable criteria.
The Exchange believes that IBIT options has demonstrated that it has more than sufficient liquidity to garner an increased position and exercise limit of 250,000 contracts. The Exchange believes that any concerns related to manipulation and protection of investors are mollified by the significant liquidity provision in IBIT. The Exchange states that, as a general principle, increases in active trading volume and deep liquidity of the underlying securities do not lead to manipulation and/or disruption.
The Exchange believes that increasing the position (and exercise) limits for IBIT options would lead to a more liquid and competitive market environment for IBIT options, which will benefit customers that trade these options. Further, the reporting requirement for such options would remain unchanged. Thus, the Exchange will still require that each member organization that maintains positions in impacted options on the same side of the market, for its own account or for the account of a customer, report certain information to the Exchange. This information includes, but would not be limited to, the options' positions, whether such positions are hedged and, if so, a description of the hedge(s). Market-Makers would continue to be exempt from this reporting requirement, however, the Exchange may access Market-Maker position information.
The Exchange also has no reason to believe that the growth in trading volume in IBIT will not continue. Rather, the Exchange expects continued options volume growth in IBIT as opportunities for investors to participate in the options markets increase and evolve. The Exchange believes that the current position and exercise limits in IBIT options are restrictive and will hamper the listed options markets from being able to compete fairly and effectively with the over-the-counter (“OTC”) markets. OTC transactions occur through bilateral agreements, the terms of which are not publicly disclosed to the marketplace. As such, OTC transactions do not contribute to the price discovery process on a public exchange or other lit markets. The Exchange believes that without the proposed changes to position and exercise limits for IBIT, market participants will find the 25,000 contract position limit an impediment to their business and investment objectives as well as an impediment to efficient pricing. As such, market participants may find the less transparent OTC markets a more attractive alternative to achieve their investment and hedging objectives, leading to a retreat from the listed options markets, where trades are subject to reporting requirements and daily surveillance.
The Exchange believes that the existing surveillance procedures and reporting requirements at the Exchange are capable of properly identifying disruptive and/or manipulative trading activity. The Exchange also represents that it has adequate surveillances in place to detect potential manipulation, as well as reviews in place to identify continued compliance with the Exchange's listing standards. These procedures monitor market activity via automated surveillance techniques to identify unusual activity in both options and the underlyings, as applicable. The Exchange also notes that large stock holdings must be disclosed to the Commission by way of Schedules 13D or 13G,
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes increasing the position (and exercise limits) for IBIT options from 25,000 to 250,000 contracts will remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest, because it will provide market participants with the ability to more effectively execute their trading and hedging activities. Also, increasing the position (and exercise) limits for IBIT options may allow Market-Makers to maintain their liquidity in these options in amounts commensurate with the continued high consumer demand in IBIT options market. The proposed higher position and exercise limit may also encourage other liquidity providers to continue to trade on the Exchange rather than shift their volume to OTC markets, which will enhance the process of price discovery conducted on the Exchange through increased order flow. The Exchange notes that a higher position and exercise limit would further allow institutional investors to utilize IBIT options for prudent risk management purposes.
In addition, the Exchange believes that the current liquidity in shares of and options on IBIT will mitigate concerns regarding potential manipulation of IBIT and/or disruption of IBIT upon increasing the position limit. ISE's proposed position and exercise limit of 250,000 contracts on IBIT options is appropriate given the market capitalization and ADV of IBIT and designed to prevent fraudulent and manipulative acts and practices. If IBIT were compared to the 1,934 stocks that have position limits of 250,000 contracts to less than 500,000 contracts it would rank in the 88th percentile for market capitalization and the 99th percentile for ADV.
Additionally, the regression model performed by ISE demonstrates that the proposed position limit is half of the modeled limit given the liquidity of IBIT. Comparing IBIT's data relative to the market capitalization of the entire bitcoin market in terms of exercise risk and availability of deliverables, the Exchange was able to conclude that if a position limit of 250,000 contracts were considered, the exercisable risk would represent 2.89%
Comparing a position limit of 250,000 for IBIT against other options on ETFs with an underling commodity, namely GLD, SLV and BITO, a position limit exercise in GLD represents 8.17% of the float of GLD, a position limit exercise in SLV represents 4.8% of the float of SLV, and a position limit exercise of BITO represents 23.22% of the float of BITO. In comparison, a 250,000 contract position limit in IBIT would represent 2.89% of the float of IBIT. Consequently, the 250,000 proposed IBIT options position limit is more conservative than the standard applied to GLD, SLV and BITO, and appropriate. Also, the Exchange notes that Cboe's proprietary CBTX and MBTX indices weight IBIT the highest (at 20%) in its index composition among the other ETFs that comprise the index.
ISE notes that IBIT is likely to trade in penny increments in January 2025, provided it is able to meet the applicable criteria.
Finally, as discussed above, the Exchange's surveillance and reporting safeguards continue to be designed to deter and detect possible manipulative behavior that might arise from increasing or eliminating position and exercise limits in certain classes. The Exchange believes that the current financial requirements imposed by the Exchange and by the Commission adequately address concerns regarding potentially large, unhedged positions in the options on the underlying securities, further promoting just and equitable principles of trading, the maintenance of a fair and orderly market, and the protection of investors.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange's proposal does not burden intra-market competition because all Members would be permitted to trade IBIT options pursuant to the proposed position and exercise limit of 250,000 contracts. The Exchange believes that the proposed rule change will also provide additional opportunities for market participants to continue to efficiently achieve their investment and trading objectives for equity options on the Exchange.
The Exchange does not believe that the proposed rule change will impose any burden on inter-market competition as the proposal is not competitive in nature. The Exchange expects that all option exchanges will adopt substantively similar proposals for adopting the additional position limit tiers, such that the Exchange's proposal would benefit competition. For these reasons, the Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were either solicited or received.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On October 1, 2024, the Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR-OCC-2024-014, pursuant to Section 19(b) of the Securities Exchange Act of 1934 (“Exchange Act”)
On November 21, 2024, pursuant to Section 19(b)(2) of the Exchange Act,
OCC is a central counterparty (“CCP”), which means that as part of its function as a clearing agency, it interposes itself as the buyer to every seller and the seller to every buyer for financial transactions. As the CCP for the listed options markets and for certain futures in the United States, OCC is exposed to the risk that one or more of its Clearing Members may fail to make a payment or to deliver securities. OCC addresses such risk exposure, in part, by requiring its Clearing Members to provide collateral, including margin collateral. Margin is the collateral that CCPs collect to cover potential changes in a member's positions over a set period of time. Typically, margin is designed to cover such exposures during normal market conditions, which means that margin collateral should be sufficient to cover exposures at least 99 out of 100 days.
As a collection of models, STANS is subject to assumptions and limitations that are incorporated into STANS as margin model parameters. For example, OCC has a price return model that employs bounds, or “control sets” that are implemented under either regular or high volatility settings, for certain parameters that are calculated daily based on current market data.
More specifically, OCC proposes to amend its existing Margin Policy to include material details regarding its high-volatility parameter control setting process.
Proposed additions to the Margin Policy describing OCC's exception process for setting high-volatility parameter controls include the following: (1) setting and reviewing regular and high-volatility parameter control settings; (2) monitoring the volatility of products being cleared and markets served, and establishing thresholds to escalate the results of such monitoring to senior decisionmakers; and (3) internal governance for implementing and terminating high-volatility parameter control settings. The three sets of changes to OCC's Margin Policy are described in further detail below.
STANS uses large-scale Monte Carlo simulations to calculate the margin requirements of OCC's Clearing Members. The methodology includes econometric models that incorporate a number of risk factors.
As part of its current practice, OCC applies high-volatility parameter control settings to constrain the GARCH parameters temporarily during periods of high market volatility. OCC's price return model uses upper and lower bounds for parameters calculated daily based on market data. OCC's high-volatility parameter control settings consist of parameters that are bounded differently than regular control settings. These high-volatility parameter control settings, when applied to GARCH parameters after their initial calibration, mitigate the reactivity of the model volatility forecast and, in turn, generally prevent significant overestimation of Clearing Members' margin requirements.
As part of the Proposed Rule Change, OCC proposes to amend its Margin Policy to describe the current exception process for setting and reviewing both regular and high-volatility parameter control settings. Specifically, the proposed addition to the Margin Policy would state that GARCH parameters may be temporarily constrained through the application of idiosyncratic or global control settings. The added language would state that OCC's Financial Risk Management team (“FRM”) maintains both regular and high-volatility parameter control sets, which it reviews on an at-least annual basis. FRM's review of the high-volatility parameter control sets assesses whether they effectively mitigate procyclicality while remaining appropriately risk-based. The new Margin Policy language would further state that OCC's Model Risk Working Group (“MRWG”) must approve any changes to the regular or high-volatility sets. The Proposed Rule Change would also provide further detail on the review of both regular and high-volatility parameter control sets.
As part of the Proposed Rule Change, OCC proposes to amend the Margin Calls and Adjustments section of the Margin Policy to include details about how OCC currently sets volatility controls. Specifically, the new Control Setting details would include information about OCC's current use of certain monitoring thresholds related to high market volatility, low market liquidity, and significant increases in position size or concentration (“CCA Monitoring Thresholds”).
OCC also proposes to amend the Margin Calls and Adjustments section to state that QRM shall perform a monthly sensitivity analysis of the margin model, but may review more frequently when CCA Monitoring Thresholds are breached.
These proposed changes to the Margin Policy describe current OCC processes that will remain unchanged.
As part of the Proposed Rule Change, OCC proposes to amend its Margin Policy to include details about its current internal governance process for implementing and terminating high-volatility parameter control settings. The new Margin Policy details would include descriptions of both idiosyncratic and global control settings, and the circumstances under which these settings may be used.
For example, for global control settings, FRM monitors market volatility on a daily basis, and escalates to the MRWG if a market volatility threshold is exceeded. As part of the escalation to the MRWG, FRM recommends whether global control settings should be applied to all risk factors or to a class of risk factors. MRWG approval is required for OCC to implement global control settings, and for OCC to revert back to regular control settings.
Meanwhile, for idiosyncratic control settings, FRM monitors securities against thresholds for idiosyncratic price moves.
The new language in the Margin Policy would also state that changes to the idiosyncratic thresholds require MRWG approval.
These proposed changes to the Margin Policy describe current OCC processes that will remain unchanged.
Section 19(b)(2)(C) of the Exchange Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to such organization.
The description of a proposed rule change, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding,
After carefully considering the Proposed Rule Change, the Commission finds that the Proposed Rule Change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to OCC. More specifically, the Commission finds that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Exchange Act
Section 17A(b)(3)(F) of the Exchange Act requires, among other things, that the rules of a clearing agency be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
OCC's high-volatility parameter control settings provide an exception handling process for OCC to correct for procyclicality effects on the GARCH model calculation that may unreasonably inflate Clearing Members' margin requirements during periods of high market volatility.
OCC's use of CCA Monitoring Thresholds to monitor for market volatility is also consistent with the safeguarding of securities and funds which are in OCC's custody or control or for which it is responsible. The CCA Monitoring Thresholds are set and used for FRM to detect both high market volatility generally and high volatility of individual risk factors. When FRM observes that any of these thresholds are exceeded, FRM determines whether or not to recommend that OCC's high-volatility parameter control settings be implemented—either to MRWG that global controls should be implemented for market-wide volatility, or to the FRM Officer that idiosyncratic controls should be implemented for idiosyncratic volatility. OCC's monitoring and proper setting of these thresholds helps to lower the chances of a Clearing Member default resulting from margin calls that are significantly higher than necessary to account for the risk presented by the Clearing Member's products, portfolio, or the market, and thus assures the safeguarding of Clearing Members' collateral from any loss charges to OCC's Clearing Fund.
The high-volatility parameter control setting practices described in the Proposed Rule Change are designed to ensure that Clearing Member margin requirements remain commensurate with market risk in circumstances when the margin model reacts unreasonably to high market volatility. Indeed, the confidential backtesting data that OCC provided to the Commission
For the foregoing reasons, the Proposed Rule Change is consistent with the requirements of Section 17A(b)(3)(F) of the Exchange Act.
Rule 17Ad-22(e)(2) under the Exchange Act requires that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to, as applicable, provide for governance arrangements that, among other things, specify clear and direct lines of responsibility.
OCC's amendments to its Margin Policy describe the the arrangements governing the implemention, modification, and termination of high-volatility parameter controls. Defining the MRWG, QRM, FRM, and FRM Officer's roles and responsibilities in these processes specifies clear and direct lines of responsibility. Specifically, the added language to the Margin Policy describes the role of FRM in monitoring for both market and idiosyncratic volatility. It also describes the FRM's direct line of responsibility to either the MRWG for global control settings or the FRM Officer for idiosyncratic control settings, as well as the roles of MRWG and the FRM Officer in approving the eventual reversion back to regular control settings.
For the foregoing reasons, the Proposed Rule Change is consistent with Rule 17Ad-22(e)(2) under the Exchange Act.
Rule 17Ad-22(e)(6) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to cover, if the covered clearing agency provides central counterparty services, its credit exposures to its participants by establishing a risk-based margin system that, among other things, (1) considers, and produces margin levels commensurate with, the risks and particular attributes of each relevant product, portfolio, and market
As described above, the high-volatility parameter control settings provide a necessary exception process allowing OCC to mitigate a limitation of its GARCH models that have demonstrated extreme sensitivity to sudden spikes in volatility. Such reactivity can produce instability, and in certain instances, over- or underestimation of margin
Accordingly, the Proposed Rule Change is consistent with Rule 17Ad-22(e)(6) under the Exchange Act.
On the basis of the foregoing, the Commission finds that the Proposed Rule Change is consistent with the requirements of the Exchange Act, and in particular, the requirements of Section 17A of the Exchange Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes a rule change to establish fees for Industry Members
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing with the Commission a proposed rule change to establish fees for Industry Members
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available at the principal office of the Exchange, and on the Commission's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its “Consolidated Audit Trail Funding Fees” fee schedule to establish the CAT Fee 2025-1 fee rate of $0.000022 per executed equivalent share.
The proposed rule change, including the Exchange's statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange's website at
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of North Carolina (FEMA-4827-DR), dated September 28, 2024.
Issued on December 20, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of North Carolina, dated September 28, 2024, is hereby amended to update the incident period for this disaster as beginning September 25, 2024 and continuing through December 18, 2024.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for the State of Georgia (FEMA-4821-DR), dated September 24, 2024.
Issued on December 26, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of Georgia, dated September 24, 2024, is hereby amended to extend the deadline for
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 3.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of North Carolina (FEMA-4827-DR), dated October 2, 2024.
Issued on December 20, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of North Carolina, dated October 2, 2024, is hereby amended to update the incident period for this disaster as beginning September 25, 2024 and continuing through December 18, 2024.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 11.
This is an amendment of the Presidential declaration of a major disaster for the State of Georgia (FEMA-4830-DR), dated September 30, 2024.
Issued on December 26, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of Georgia, dated September 30, 2024, is hereby amended to extend the deadline for filing applications for physical damages as a result of this disaster to February 7, 2025.
All other information in the original declaration remains unchanged.
Pursuant to the authority vested in the U.S. Secretary of State by the laws of the United States, including under the Foreign Missions Act, 22 U.S.C. 4301,
I determine that such exemption shall be provided to such foreign missions and international organizations on such terms and conditions as may be approved by the Office of Foreign Missions and that any state or local laws to the contrary are hereby preempted.
This action is necessary to protect the interests of the United States, including with respect to fulfilling its international and domestic legal obligations and ensuring similar exemptions for U.S. missions and mission members abroad, and to facilitate relations between the United States and foreign states and relations between the United States and international organizations.
The exemption from charges assessed by the Metropolitan Transportation Authority of New York for entry into its designated “Congestion Relief Zone” provided by this designation and determination shall apply to charges that have been or will be assessed against any foreign mission or international organization subject to this determination.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for 19 individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to continue to operate CMVs in interstate commerce.
Each group of renewed exemptions are applicable on the dates stated in the discussions below and will expire on the dates stated in the discussions below. Comments must be received on or before February 5, 2025.
You may submit comments identified by the Federal Docket Management System Docket No. FMCSA-2014-0215, Docket No. FMCSA-2015-0323, Docket No. FMCSA-2016-0008, Docket No. FMCSA-2018-0028, Docket No. FMCSA-2018-0053, Docket No. FMCSA-2018-0056, Docket No. FMCSA-2020-0050, Docket No. FMCSA-2022-0045, or Docket No. FMCSA-2022-0046 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2014-0215, Docket No. FMCSA-2015-0323, Docket No. FMCSA-2016-0008, Docket No. FMCSA-2018-0028, Docket No. FMCSA-2018-0053, Docket No. FMCSA-2018-0056, Docket No. FMCSA-2020-0050, Docket No. FMCSA-2022-0045, or Docket No. FMCSA-2022-0046), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption request. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes also allow the Agency to renew exemptions at the end of the 5-year period. However, FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the
The physical qualification standard for drivers regarding epilepsy found in 49 CFR 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
The 19 individuals listed in this notice have requested renewal of their exemptions from the epilepsy and seizure disorders prohibition in § 391.41(b)(8), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the 19 applicants has satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition. The 19 drivers in this notice remain in good standing with the Agency, have maintained their medical monitoring and have not exhibited any medical issues that would compromise their ability to safely operate a CMV during the previous 2-year exemption period. In addition, the Agency has reviewed each applicant's certified driving record from their State Driver's Licensing Agency (SDLA). The information obtained from each applicant's driving record provides the Agency with details regarding any moving violations or reported crash data, which demonstrates whether the driver has a safe driving history and is an indicator of future driving performance. If the driving record revealed a crash, FMCSA requested and reviewed the related police reports and other relevant documents, such as the citation and conviction information. These factors provide an adequate basis for predicting each driver's ability to continue to safely operate a CMV in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
In accordance with 49 U.S.C. 31136(e) and 31315(b), the following groups of drivers received renewed exemptions in the month of January and are discussed below.
As of January 1, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following 11 individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers:
The drivers were included in docket number FMCSA-2014-0215, FMCSA-2015-0323, FMCSA-2016-0008, FMCSA-2018-0028, FMCSA-2018-0053, FMCSA-2018-0056, FMCSA-2020-0050, or FMCSA-2022-0045. Their exemptions are applicable as of January 1, 2025 and will expire on January 1, 2027.
As of January 11, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), Dylan C. Hill (KS) has satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers.
This driver was included in docket number FMCSA-2016-0008. The exemption is applicable as of January 11, 2025 and will expire on January 11, 2027.
As of January 25, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following seven individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers:
The drivers were included in docket number FMCSA-2022-0046. Their exemptions are applicable as of January 25, 2025 and will expire on January 25, 2027.
The exemptions are extended subject to the following conditions: each driver must (1) remain seizure-free, maintain a stable treatment, and report to FMCSA within 24 hours if they experience a seizure during the 2-year exemption period; (2) submit to FMCSA annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) undergo an annual medical examination by a certified medical examiner, as defined by § 390.5T; (4) provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of their driver's qualification file if they are self-employed; (5) report to FMCSA the date, time, and location of any crashes, as defined in § 390.5T, within 7 days of the crash; (6) report to FMCSA any citations and convictions for disqualifying offenses under 49 CFR parts 383 and 391 to FMCSA within 7 days of the citation and conviction; and (7) submit to FMCSA annual certified driving records from their SDLA. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. In addition, the driver must meet all the applicable commercial driver's license testing requirements. Each exemption will be valid for 2 years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) the person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based on its evaluation of the 19 exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the epilepsy and seizure disorders prohibition in § 391.41(b)(8). In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for its review and approval and invites public comment. FMCSA requests approval to renew an ICR titled, “Financial Responsibility Motor Carriers, Freight Forwarders, and Brokers.” The purpose of this ICR is to provide registered motor carriers, property brokers, and freight forwarders a means of meeting financial responsibility filing requirements. This ICR sets forth the financial responsibility documentation requirements for motor carriers, freight forwarders, and brokers as a result of Agency jurisdictional statutes.
Comments on this notice must be received on or before March 7, 2025.
You may submit comments identified by Docket Number FMCSA-2024-0165 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation and Request for Comments” portion of the
Ana Alvarez, Financial Analyst, Office of Registration, Financial Responsibility Filings Division, DOT, FMCSA, 1200 New Jersey Avenue SE, West Building, 6th Floor, Washington, DC 20590-0001; (202) 366-0401;
All submissions must include the Agency name and docket number. For detailed instructions on submitting comments, see the Public Participation heading below. Note that all comments received will be posted without change to
If you submit a comment, please include the docket number for this notice (FMCSA-2024-0165), indicate the specific section of this document to which your comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
Comments received after the comment closing date will be included in the docket and will be considered to the extent practicable.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its regulatory process. DOT posts these comments, including any personal information the commenter provides, to
The Secretary of Transportation (Secretary) is authorized to register for-hire motor carriers of property and passengers under the provisions of 49 U.S.C. 13902, surface freight forwarders under the provisions of 49 U.S.C. 13903, and property brokers under the provisions of 49 U.S.C. 13904. These persons may conduct transportation services only if they are registered pursuant to 49 U.S.C. 13901. The Secretary has delegated authority pertaining to these registration requirements to the FMCSA (49 CFR 1.87) and the regulations implementing these requirements may be found at 49 CFR part 387. The registration remains valid only as long as these transportation entities maintain, on file with FMCSA, evidence of the required levels of financial responsibility pursuant to 49 U.S.C. 13906. FMCSA regulations governing the financial responsibility requirements for these entities are found at 49 CFR part 387. The information collected from these forms are summarized and displayed in the Licensing and Information system.
Forms BMC-91 and BMC-91X, titled “Motor Carrier Automobile Bodily Injury and Property Damage Liability Certificate of Insurance,” and Form
Form BMC-84, titled “Broker's or Freight Forwarder's Surety Bond Under 49 U.S.C. 13906,” and Form BMC-85, titled “Broker's or Freight Forwarder's Trust Fund Agreement Under 49 U.S.C. 13906 or Notice of Cancellation of the Agreement,” are filed by brokers or freight forwarders to comply with the requirement that they must have a $75,000 surety bond or trust fund agreement in effect before FMCSA will issue property broker or freight forwarder operating authority registration. Both forms are being revised due to the implementation of the Broker and Freight Forwarder Financial Responsibility Final Rule (88 FR 78656, Nov. 16, 2023). As originally published in 2023, the rule had two compliance dates, January 16, 2025, and January 16, 2026. In anticipation of the January 16, 2025, compliance date, a 60-day
Form BMC-35, titled “Notice of Cancellation Motor Carrier Insurance under 49 U.S.C. 13906,” Form BMC-36, titled “Motor Carrier and Broker's Surety Bonds under 49 U.S.C. 13906 Notice of Cancellation,” and Form BMC-85, titled “Broker's or Freight Forwarder's Trust Fund Agreement Under 49 U.S.C. 13906 or Notice of Cancellation of the Agreement,” can be used to cancel prior filings. Forms BMC-36 and BMC-85 are being revised due to the implementation of the Broker and Freight Forwarder Financial Responsibility Final Rule's extended compliance date of January 16, 2026.
Motor carriers can also apply to FMCSA to self-insure BI & PD and/or cargo liability in lieu of filing certificates of insurance with the FMCSA, as long as the carrier maintains a satisfactory safety rating (see § 387.309.) Form BMC-40 is the application used by carriers to apply for self-insurance authority.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for 25 individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these hard of hearing and deaf individuals to continue to operate CMVs in interstate commerce.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates provided below. Comments must be received on or before February 5, 2025.
You may submit comments identified by the Federal Docket Management System Docket No. FMCSA-2012-0154, Docket No. FMCSA-2013-0121, Docket No. FMCSA-2013-0124, Docket No. FMCSA-2014-0384, Docket No. FMCSA-2014-0386, Docket No. FMCSA-2015-0328, Docket No. FMCSA-2016-0002, Docket No. FMCSA-2017-0057, Docket No. FMCSA-2018-0135, Docket No. FMCSA-2018-0137, Docket No. FMCSA-2020-0028, Docket No. FMCSA-2022-0034; Docket No. FMCSA-2022-0035, Docket No. FMCSA-2022-0036, Docket No. FMCSA-2022-0037, or Docket No. FMCSA-2022-0038 using any of the following methods:
•
• In the keyword box and click “Search.” Next, sort the results by “Posted (Newer-Older),” choose the first notice listed, and click on the “Comment” button. Follow the online instructions for submitting comments.
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room W64-224, Washington, DC 20590-0001, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2012-0154, Docket No. FMCSA-2013-0121, Docket No. FMCSA-2013-0124, Docket No. FMCSA-2014-0384, Docket No. FMCSA-2014-0386, Docket No. FMCSA-2015-0328, Docket No. FMCSA-2016-0002, Docket No. FMCSA-2017-0057, Docket No. FMCSA-2018-0135, Docket No. FMCSA-2018-0137, Docket No. FMCSA-2020-0028, Docket No. FMCSA-2022-0034, Docket No. FMCSA-2022-0035, Docket No. FMCSA-2022-0036, Docket No. FMCSA-2022-0037, or Docket No. FMCSA-2022-0038), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption requests. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statutes also allow the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding hearing found in 49 CFR 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5—1951.
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, (35 FR 6458, 6463 (Apr. 22, 1970) and 36 FR 12857 (July 8, 1971), respectively).
The 25 individuals listed in this notice have requested renewal of their exemptions from the hearing standard in § 391.41(b)(11), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend 24 individuals' exemption for a renewable 2-year period and one individual's exemption for a renewable 1-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the 25 applicants has satisfied the renewal conditions for obtaining an exemption from the hearing requirement. The 25 drivers in this notice remain in good standing with the Agency. In addition, the Agency has reviewed each applicant's certified driving record from their State Driver's Licensing Agency (SDLA). The information obtained from each applicant's driving record provides the Agency with details regarding any moving violations or reported crash data, which demonstrates whether the driver has a safe driving history and is an indicator of future driving performance. If the driving record revealed a crash, FMCSA requested and reviewed the related police reports and other relevant documents, such as the citation and conviction information. These factors provide an adequate basis for predicting each driver's ability to continue to safely operate a CMV in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each of these drivers for a period of at most 2 years is likely to achieve a level of safety equal to that existing without the exemption.
In accordance with 49 U.S.C. 31136(e) and 31315(b), the following groups of drivers received renewed exemptions in the month of January and are discussed below.
As of January 15, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), Kevin Young has satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers.
The driver was included in docket number FMCSA-2022-0034. Their exemption is applicable as of January 15, 2025 and will expire on January 15, 2026.
As of January 15, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following 15 individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers:
The drivers were included in docket number FMCSA-2012-0154, FMCSA-2013-0121, FMCSA-2013-0124, FMCSA-2017-0057, FMCSA-2018-0137, FMCSA-2022-0035, FMCSA-2022-0036, or FMCSA-2022-0037. Their exemptions are applicable as of January 15, 2025 and will expire on January 15, 2027.
As of January 22, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following six individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers:
The drivers were included in docket number FMCSA-2015-0328 or FMCSA-2020-0028. Their exemptions are applicable as of January 22, 2025 and will expire on January 22, 2027.
As of January 30, 2025, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following three individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers:
Allen Carrasco (CA); Matthew Kaschalk (TN); and Erica Muhm (KY).
The drivers were included in docket number FMCSA-2022-0038. Their exemptions are applicable as of January 30, 2025 and will expire on January 30, 2027.
The exemptions are extended subject to the following conditions: each driver (1) must report to FMCSA any crashes as defined in § 390.5T, within 7 days of the crash; (2) must report to FMCSA any citations and convictions for disqualifying offenses under 49 CFR parts 383 and 391, within 7 days of the citation and conviction; (3) must submit to FMCSA annual certified driving records from their SDLA; and (4) is prohibited from operating a motorcoach or bus with passengers in interstate commerce. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 25 exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the hearing requirement in § 391.41(b)(11). In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to issue coastwise endorsement eligibility determinations for foreign-built vessels which will carry no more than twelve passengers for hire. A request for such a determination has been received by MARAD. By this notice, MARAD seeks comments from interested parties as to any effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. Information about the requestor's vessel, including a brief description of the proposed service, is listed below.
Submit comments on or before February 5, 2025.
You may submit comments identified by DOT Docket Number MARAD-2024-0163 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-461, Washington, DC 20590. Telephone: (202) 366-0903. Email:
As described in the application, the intended service of the vessel Open Seas is:
The complete application is available for review identified in the DOT docket as MARAD 2024-0163 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit the information you claim to be confidential commercial information by email to
In the event MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Maritime Administration (MARAD) invites public comments on our intention to request approval from the Office of Management and Budget (OMB) to renew an information collection in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 2133-0545 (Maritime Administration (MARAD) Jones Act Vessel Availability Determinations) is used to collect information about the availability of qualified Jones Act vessels. Since the last renewal, there was a reduction in the public burden for this collection. We are required to publish this notice in the
Comments must be submitted on or before March 10, 2025.
You may submit comments identified by Docket No. MARAD-2024-0168 through one of the following methods:
•
•
All comments received will be posted without change to
Lance Murray, 202-617-7792, Office of Cargo and Commercial Sealift, Maritime Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, Email:
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to issue coastwise endorsement eligibility determinations for foreign-built vessels which will carry no more than twelve passengers for hire. A request for such a determination has been received by MARAD. By this notice, MARAD seeks comments from interested parties as to any effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. Information about the requestor's vessel, including a brief description of the proposed service, is listed below.
Submit comments on or before February 5, 2025.
You may submit comments identified by DOT Docket Number MARAD-2024-0165 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-461, Washington, DC 20590. Telephone: (202) 366-0903. Email:
As described in the application, the intended service of the vessel Skydancer is:
The complete application is available for review identified in the DOT docket as MARAD 2024-0165 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit the information you claim to be confidential commercial information by email to
In the event MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to issue coastwise endorsement eligibility determinations for foreign-built vessels which will carry no more than twelve passengers for hire. A request for such a determination has been received by MARAD. By this notice, MARAD seeks comments from interested parties as to any effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. Information about the requestor's vessel, including a brief description of the proposed service, is listed below.
Submit comments on or before February 5, 2025.
You may submit comments identified by DOT Docket Number MARAD-2024-0164 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-461, Washington, DC 20590. Telephone: (202) 366-0903. Email:
As described in the application, the intended service of the vessel Yes Dear is:
The complete application is available for review identified in the DOT docket as MARAD 2024-0164 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit the information you claim to be confidential commercial information by email to
In the event MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to issue coastwise endorsement eligibility determinations for foreign-built vessels which will carry no more than twelve passengers for hire. A request for such a determination has been received by MARAD. By this notice, MARAD seeks comments from interested parties as to any effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. Information about the requestor's vessel, including a brief description of the proposed service, is listed below.
Submit comments on or before February 5, 2025.
You may submit comments identified by DOT Docket Number MARAD-2024-0167 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-461, Washington, DC 20590. Telephone: (202) 366-0903. Email:
As described in the application, the intended service of the vessel Regenero is:
The complete application is available for review identified in the DOT docket as MARAD 2024-0167 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit the information you claim to be confidential commercial information by email to
In the event MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to issue coastwise endorsement eligibility determinations for foreign-built vessels which will carry no more than twelve passengers for hire. A request for such a determination has been received by MARAD. By this notice, MARAD seeks comments from interested parties as to any effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. Information about the requestor's vessel, including a brief description of the proposed service, is listed below.
Submit comments on or before February 5, 2025.
You may submit comments identified by DOT Docket Number MARAD-2024-0166 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-461, Washington, DC 20590. Telephone: (202) 366-0903. Email:
As described in the application, the intended service of the vessel Serenity is:
The complete application is available for review identified in the DOT docket as MARAD 2024-0166 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit the information you claim to be confidential commercial information by email to
In the event MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Grant of petition.
Transamerica Tire Co. Ltd. (Transamerica) has determined that certain Transeagle ST tires manufactured by Shandong Yinbao Tyre (Yinbao) do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 119,
Jayton Lindley, Office of Vehicle Safety Compliance, the National Highway Traffic Safety Administration (NHTSA), telephone (325) 655-0547, email
Transamerica has determined that certain tires manufactured by Yinbao do not fully comply with paragraphs S6.5, specifically S6.5(b), of FMVSS No. 119,
Notice of receipt of Transamerica's petition was published with a 30-day public comment period in the
Approximately 9,551 Transeagle ST radial tires, sizes ST235/85R16, ST235/80R16, and ST225/90R16, manufactured between September 23, 2017, and August 10, 2019, were reported by the manufacturer.
Transamerica explains that the noncompliance is that the subject tires were inadvertently labeled with a Tire Identification Number (TIN) that contains an incorrect manufacturer's
For the tires that are the subject of this petition, what should be a 6 character manufacturer code contains an additional 7th character at the end of the labeled sequence, inadvertently producing a 14-character TIN instead of a 13-character TIN. Specifically, the subject tires were incorrectly marked with the code as “1BP TTFEFTL” whereas the manufacturer intended to mark the tires as follows:
Paragraphs S6.5 and S6.5(b) of FMVSS No. 119 include the requirements relevant to this petition. These requirements state that each tire shall be marked on one or both sidewalls with the TIN that meets the requirements of 49 CFR part 574. The TIN is comprised of 3 distinct codes totaling 13 characters. The first is the plant code, which uses 3 symbols, second is the manufacturer's code using exactly 6 symbols, and last is the date code, using 4 numbers to represent the week and year of production.
The following views and arguments presented in this section, “V. Summary of Transamerica's Petition,” are the views and arguments provided by Transamerica and do not reflect the views of the Agency.
On October 21, 2019, Transamerica received a letter from NHTSA explaining that NHTSA's Office of Vehicle Safety Compliance “has received information alleging that at least one of the tires manufactured by [Yinbao] and imported by [Transamerica] may not be in compliance with [FMVSS] No. 119.” Accordingly, the letter included a “photo showing a labeling failure on the tires branded Transeagle ST radial size 235/85R16.” Specifically, it is alleged that “[t]he tires appear to have an improper 14 character [TIN] instead of the 8-13
Upon the receipt of NHTSA's inquiry, Transamerica conducted an investigation to determine the validity of the allegations and the universe of tires affected by such noncompliance. Transamerica found that a total number of 9,551 tires branded Transeagle ST radial tires size ST235/85R16, ST235/80R16, and ST225/90R16 contained an incorrect manufacturer's code in their TIN labels molded on the sidewall of the tires.
Transamerica offers the following views and arguments in support of its petition:
1. Transamerica says that, except for the incorrect manufacturer's code, all other information labeled on the tires is correct, including the manufacturer's assigned identification mark (typically referred to as plant code) as well as the week and year of manufacture (typically referred to as date code), and that the Transeagle ST tires otherwise comply with all applicable standards.
2. Both Yinbao and Transamerica state that they are not aware of any crashes, injuries, customer complaints, or field reports in connection with this noncompliance.
3. Transamerica claims that the inaccurate manufacturer's code would not affect either their or a consumers' ability to identify the tires should they be recalled for a performance related noncompliance.
4. Transamerica states that they have taken measures to ensure that the tires can be registered correctly. There is a “Tire Registration” option on Transamerica's website where consumers can register their TIN and contact information. Transamerica has taken steps to ensure that the incorrect TINs with the additional characters can also be registered for any future recalls or warranty issues.
5. Transamerica has already corrected the molds at the applicable manufacturing plant, such that no additional tires were fabricated with the noncompliance. Transamerica stated that they will also improve their internal processes to prevent future TIN errors.
6. Transamerica states that NHTSA has previously granted petitions for inconsequential noncompliance where TIN information labels are incorrect or missing information and that granting this petition would be consistent with NHTSA's prior decisions on petitions involving tires labeled with inaccurate TIN information. Transamerica cites the following petitions:
Transamerica concludes by again contending that the subject noncompliance is inconsequential as it relates to motor vehicle safety and asking that its petition to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, be granted. Transamerica's complete petition and all supporting documents are available by logging onto the Federal Docket Management System (FDMS) website at:
In determining inconsequentiality of a noncompliance, NHTSA focuses on the safety risk to individuals who experience the type of event against which a recall would otherwise protect.
NHTSA has evaluated the merits of the inconsequential noncompliance petition submitted by Transamerica and grants the petitioner's request for an exemption from the notification and remedy requirements of 49 U.S.C. 30118 and 49 U.S.C. 30120 based on the following:
1. NHTSA believes, based on information provided by the manufacturer, that the tires otherwise meet the performance criteria of FMVSS No. 119 and that the subject labeling noncompliance likely has no effect on the operational safety and performance of the affected tires.
2. NHTSA agrees that the additional characters in the TIN do not affect the ability of the manufacturer or consumer to identify the affected tires in the event of a recall. The agency has also verified with the manufacturer that the affected tires with additional characters in the TIN may be registered. Transamerica has also ensured that any future safety related recalls will include the incorrectly marked TIN numbers if needed.
This grant exempts Transamerica from its obligations under 49 U.S.C. 30118 and 30120 to provide notification of, and a free remedy for, the noncompliance with FMVSS No. 119. However, erroneous TIN marking is also a violation of 49 CFR part 574. Grants of petitions for inconsequential noncompliance do not absolve entities subject to regulations other than the FMVSS from their obligations under those regulations. Although NHTSA has chosen not to do so in this instance, NHTSA may consider seeking civil penalties in the future for violations of part 574 by tire manufacturers and importers.
In consideration of the foregoing, NHTSA finds that Transamerica has met its burden of persuasion that the subject FMVSS No. 119 noncompliance in the affected tires is inconsequential to motor vehicle safety. Accordingly, Transamerica's petition is hereby granted and Transamerica is consequently exempted from the obligation of providing notification of, and a free remedy for, that noncompliance under 49 U.S.C. 30118 and 30120.
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, this decision only applies to the subject tires that Transamerica no longer controlled at the time it determined that the noncompliance existed. However, the granting of this petition does not relieve tire distributors and dealers of the prohibitions on the sale, offer for sale, or introduction or delivery for introduction into interstate commerce of the noncompliant tires under their control after Transamerica notified them that the subject noncompliance existed.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of availability.
This notice transmits the revised minimum performance measures that State Highway Safety Offices use in their triennial Highway Safety Plans.
Roadway deaths are unacceptable and preventable and State Highway Safety Office (SHSO) officials have a critical role in eliminating crashes that result in deaths and serious injuries. Performance management is a vital tool for States to use in developing and implementing their highway traffic safety programs. Performance measures increase transparency and can help improve program outcomes by providing a greater understanding of how safety issues are being addressed with highway safety grant funds. This notice sets forth the revised minimum performance measures that SHSO will use in their triennial Highway Safety Plans (3HSP) to develop and implement their programs.
The highway safety grant program statute
NHTSA first established minimum performance measures in coordination with the Governor's Highway Safety Association (GHSA) in 2008.
This year, NHTSA, in consultation with GHSA, undertook the first comprehensive update of the minimum performance measures since they were originally published in 2008. This notice contains a description of that process and the resulting updated minimum performance measures.
NHTSA, in consultation with GHSA, identified a diverse and representative list of stakeholders from NHTSA, SHSOs, and other organizations. This step was crucial to ensuring that the engagement process included perspectives from various sectors and individuals who could offer valuable insights into the performance measures. Additionally, an expert panel consisting of members of GHSA and NHTSA provided input and direction to the overall process. The expert panel regularly met to discuss feedback from the stakeholders and to help develop this framework.
Once stakeholders were identified, 57 listening sessions were held. There were 78 participants, comprised of representatives from NHTSA, GHSA, Federal Highway Administration (FHWA), National EMS Quality Alliance (NEMSQA), and additional State university research officials. Stakeholders shared their views on the effectiveness of the current core performance measures while suggesting opportunities for improvements.
On August 21, 2024, NHTSA hosted a virtual public listening session, allowing all interested parties to share their insights both orally and through written submissions to the online docket. A summary of the comments and NHTSA's responses are below. NHTSA used the results of the stakeholder and public listening sessions to develop this updated performance measure framework.
On August 21, 2024, NHTSA hosted a virtual public listening session, allowing all interested parties to share their insights both orally and through written submissions to the online docket. Several speakers delivered remarks during the session. A total of eighteen written comments representing seventeen organizations were submitted online by GHSA, the American Association of State Highway and Transportation Officials (AAHSTO), the American Association of Motor Vehicle Administrators (AAMVA), Center for Policing Equity, Coalition for Cyclist, Detroit Greenways Coalition, Driving School Associations of the Americas, Georgia Governor's Office of Highway Safety, Health by Design, Fines and Fees Justice Center, Idaho Office of Highway Safety, National Safety Council, The League of American Bicyclists, The Policing Project at New York University School of Law, Who Poo App, and a joint comment by Vera Institute of Justice, Color of Change, and Center for American Progress. Complete comments may be viewed at regulations.gov.
Several commenters
Many commenters submitted broad comments about the nature of NHTSA's performance measure program and how performance measures should be used. Several commenters
Many commenters
Healthy by Design argued that States should not be allowed to establish targets that anticipate an increase in fatalities. Conversely, AAMVA, the Georgia Governor's Office of Highway Safety, and GHSA all argued that the BIL's requirement for constant and improved performance has divorced performance targets from the data and has imposed penalties, such as increased oversight, on States that fail to meet their targets. AAMVA, AASHTO, and GHSA also argued that performance measures should be limited to areas where SHSOs have direct control over outcomes. As NHTSA has previously emphasized,
Some commenters suggested various combinations of required measures based on measures currently required by
Six commenters
Various commenters requested specific performance measures. The Georgia Governor's Office of Highway Safety recommended that NHTSA include performance measures for all nationally prioritized program areas. Both the Policing Project at New York University School of Law and the joint comment of Vera Institute of Justice, Color of Change, and the Center for American Progress recommended that NHTSA include performance measures specific to details of pursuit by law enforcement and traffic stops. Healthy by Design recommended that NHTSA consider adding a measure related to geographic location and post-crash care injury severity and treatment. The League of American Bicyclists and Vision Zero Network both recommended a performance measure related to observed speeding behavior. The Georgia Governor's Office of Highway Safety recommended a measure of “suspected: distracted driving crashes.” In this update of the performance measure framework, NHTSA was guided in large part by a desire to provide States with flexibility to implement programs in response to their unique safety problems, while also maintaining a discrete set of universal and strategic core performance measures that prioritize national-level issues that are addressed by States. As a result, NHTSA did not create performance measures at the level of detail requested by these commenters. However, States may choose to create these and other performance measures as a State-developed performance measure.
Four commenters
GHSA noted that if NHTSA opts to create a performance measure related to the grant program's statutory public participation and engagement requirements, that performance measure should be tied to the State's efforts to reach underrepresented communities, not how much funding those communities receive. The joint comment from Vera Institute of Justice, Color of Change, and the Center for American Progress recommended that NHTSA develop operational metrics of community engagement to assess level and type of engagement that went into the State's highway safety planning process. Section 402 places performance measures within the context of a State's safety levels.
AAMVA, AASHTO, and the Georgia Governor's Office of Highway Safety requested that NHTSA allow States to consider additional target-setting methods beyond the rolling average. The Georgia Governor's Office of Highway Safety and Idaho Office of Public Safety requested that States be allowed to choose whether to express a target in terms of annual totals, or a three-or five-year rolling average. Under the new framework, States have the flexibility to choose the time period that is most appropriate for their State provided the target covers the 3HSP period. See the “Additional Requirements” section for additional information. The Georgia Governor's Office of Highway Safety and Vision Zero Network argued that measures should be normalized by the appropriate denominator to show true progress (
In this document, NHTSA establishes an updated behavioral highway safety program-driven performance measure framework. This updated framework creates three categories of performance measures. Each of these categories are equally important and identifies required or recommended measures based on the State's program and the availability of standardized data. The three categories are:
(1) Universal core performance measures—measures required for all States. These universal core performance measures cover problem areas for which all recipients currently include countermeasure strategies.
(2) Strategic core performance measures—measures required for all States that have a corresponding countermeasure strategy in their 3HSP. These measures are required based on State-specific problem identification tied to countermeasure strategies.
(3) State-developed performance measures—additional measures developed by States based on their specific problem identification and tied to their countermeasure strategies.
As described in more detail, above, there was a general consensus among
The new performance management framework is described below. Note that this does not change the underlying performance plan and reporting requirements in NHTSA's Uniform Procedures for State Highway Safety Grant Programs (23 CFR part 1300). The highway safety grant program statute (23 U.S.C. 402(k)(4)(A)) requires States to submit performance measures to support State safety goals and for each countermeasure strategy for programming funds that a State includes in its 3HSP.
The
Next, States must select
Lastly, States will include
All performance measures must include a baseline documenting current safety levels, and a performance target that demonstrates constant or improved performance over the three-year period covered by the 3HSP with annual benchmarks to assist States in tracking performance.
A SHSO may express a target in terms of annual totals or three- or five-year rolling averages, depending on what is appropriate for their State. Below are examples of what this could look like using different time periods in the FY 2027-2029 3HSP.
For all fatality-based measures, FARS data will be used to determine if fatality-based targets are ultimately met. However, a SHSO may use State or FARS data to set the current safety level. And a SHSO may also use State data for the Performance Report section of the 3HSP and the Annual Report.
NHTSA encourages SHSOs to adopt a Safe System Approach and use robust
SHSOs should ensure that performance targets and measures are developed in cooperative partnerships based on data and objective information. The SHSO should use the most current available data to perform a trend analysis to help predict what is likely to happen. Using a data-driven decision process that accounts for the SHSO's programming and interventions helps maintain a focus on improvement. This approach helps make investment and policy decisions to achieve performance targets.
NHTSA acknowledges that States face many other considerations when setting performance targets. Each performance target must be treated individually instead of applying the same formula or giving a blanket statement about what factors were considered for the entire process. For example, suppose a primary seat belt law was recently enacted in your State. In that case, the State could expect to have a higher decrease in unbelted fatalities compared to other types of fatalities.
When setting targets, SHSOs should consider the following as part of their justification:
As a reminder, States are required to provide performance measures for every countermeasure strategy for programming funds in the 3HSP. Projects do not require specific performance measures but are instead associated with performance measures through their corresponding countermeasure strategy. This section provides context for when a State may need to submit a State-developed performance measure. For example, drugged or poly-substance impaired driving is listed as a State-developed performance measure because data is not consistently collected across States and territories, and State programs vary. NHTSA encourages States to look at ways to improve data collection related to drug impairment and testing. Suppose an SHSO includes a drug-impaired driving countermeasure strategy within the Impaired Driving program area. In that case, the State may not rely on the
Further, even for program areas and countermeasure strategies for which there is a
SHSOs will submit performance measures aligning with this framework beginning with the 3HSP due to NHTSA on July 1, 2026, covering fiscal years 2027, 2028 and 2029.
Issued in Washington, DC.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Grant of petition.
Gillig LLC, determined that certain model year (MY) 2013-2019 Gillig Low Floor buses do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 102,
Ahmad Barnes, Office of Vehicle Safety Compliance, the National Highway Traffic Safety Administration (NHTSA), (202) 366-7236.
Notice of receipt of Gillig's petition was published with a 30-day public comment period, on September 20, 2019, in the
Gillig says that Allison Transmission Inc., (ATI) conducted an audit at Gillig's headquarters and discovered the noncompliance. In support of its petition, Gillig explains that “the potentially noncompliant condition occurs as follows: when the ignition switch is in the ON position, the engine is stopped, the shift selector is in the `Forward' or `Reverse' position, and the start button is depressed, the starter cranks the engine, but the transmission does not engage because, according to ATI, the shifter is in an inhibited state.” Gillig describes the inhibited state, “in a condition with ignition on/engine off, even if the transmission gear selector is moved to Drive or Reverse, the transmission shifter does not broadcast anything but Neutral to the transmission control unit”. Gillig says that “with the engine running, the vehicle operator must perform four separate actions in a specific sequence to engage the transmission and move the vehicle under power, specifically: (a) place foot on brake (b) select neutral (c) select a gear, and (d) remove foot from foot brake.” Gillig says that “because the transmission controller defaults the transmission to neutral after an engine start, there is no risk of unintentional vehicle movement” and therefore the subject noncompliance is inconsequential to motor vehicle safety.
Gillig concluded that the subject noncompliance is inconsequential as it relates to motor vehicle safety and that its petition to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, should be granted.
In determining inconsequentiality of a noncompliance, NHTSA focuses on the safety risk to individuals who experience the type of event against which a recall would otherwise protect.
In evaluating the merits of the petition for inconsequentiality by Gillig, NHTSA has determined that this noncompliance is inconsequential to motor vehicle safety. Paragraph S3.1.3 of FMVSS No. 102 requires that the engine starter shall be inoperative while the transmission is in a forward or reverse position. In the subject vehicles, the starter is operational when a forward or reverse position is selected, which is noncompliant. Gillig contends that the subject vehicles are equipped with a shift controller interlock which is active when the propulsion system is on and prevents the vehicle from moving without the driver first performing a series of actions. The interlock prevents the forward or reverse gears from engaging until the transmission is first returned to its neutral position. Gillig also noted that the subject vehicles do not have a park position on the transmission selector which means the vehicles are likely to be started in either a forward or reverse gear. NHTSA agrees that subject Gillig vehicles shift interlock provides sufficient assurance of preventing unintended forward or rearward movement. More specifically, NHTSA agrees that because the transmission controller defaults the transmission to neutral after an engine start, there is no risk of unintentional vehicle movement. Consequently, the
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, this decision only applies to the subject buses that Gillig no longer controlled at the time it determined that the noncompliance existed. However, the granting of this petition does not relieve vehicle distributors and dealers of the prohibitions on the sale, offer for sale, or introduction or delivery for introduction into interstate commerce of the noncompliant buses under their control after Gillig notified them that the subject noncompliance existed.
Office of the Secretary of Transportation, U.S. Department of Transportation.
Notice.
The annual Combating Human Trafficking in Transportation Impact Award (the award) is a component of the Department of Transportation's (DOT) Transportation Leaders Against Human Trafficking initiative that seeks to raise awareness among transportation stakeholders about human trafficking and increase training and prevention to combat the crime. The award serves as a platform for transportation stakeholders to creatively develop impactful and innovative counter-trafficking tools, initiatives, campaigns, and technologies that can be shared with the broader community to help stop human trafficking. The award is open to individuals and entities, including non-governmental organizations, transportation industry associations, research institutions, and State and local government organizations. Entrants compete for a cash award of up to $50,000 to be awarded to the individual(s) or entity selected for creating the most impactful counter-trafficking initiative or technology.
Submissions will be accepted from January 6, 2025 through 11:59 p.m. PST/2:59 a.m. EST on March 7, 2025.
Additional information regarding the Department's counter-trafficking activities can be found at
Additional information regarding the Department's counter-trafficking activities can be found at
As many as 27.6 million men, women, and children are held against their will and trafficked into forced labor and commercial sex. Transportation figures prominently in human trafficking enterprises when traffickers move victims, which uniquely positions the industry to combat the crime.
The Combating Human Trafficking in Transportation Impact Award is looking for the best innovators to develop original, impactful, unique, and shareable human trafficking tools, initiatives, campaigns, and technologies that can help stop these heinous crimes in the transportation industry.
To be eligible to participate in the Combating Human Trafficking in Transportation Impact Award competition, private entities must be incorporated in and maintain a primary place of business in the United States, and individuals must be citizens or permanent residents of the United States. There is no charge to enter the competition.
The following additional rules apply:
1. Entrants shall submit a project to the competition under the rules promulgated by the Department in this Notice;
2. Entrants must indemnify, defend, and hold harmless the Federal Government from and against all third-party claims, actions, or proceedings of any kind and from any and all damages, liabilities, costs, and expenses relating to or arising from participant's submission or any breach or alleged breach of any of the representations, warranties, and covenants of participant hereunder. Entrants are financially responsible for claims made by a third party;
3. Entrants may not be a Federal entity, Federal employee acting within the scope of their employment, or a family member of a Federal Employee;
4. Entrants may not be an employee or family member of an employee of the U.S. Department of Transportation;
5. Entrants shall not be deemed ineligible because an individual used Federal facilities or consulted with Federal employees during a competition if the facilities and employees are made available to all individuals participating in the competition on an equitable basis;
6. The entries cannot have been submitted in the same or substantially similar form in any other previous Federally sponsored promotion or Federally sponsored competition;
7. Entrants previously awarded first place are not eligible to reenter for the same or substantially similar project;
8. Entries which, in the Department's sole discretion, are determined to be substantially similar to another entity's entry submitted to this competition may be disqualified;
9. The competition is subject to all applicable Federal laws and regulations. Participation constitutes the entrants' full and unconditional agreement to these rules and to the Secretary's decisions, which are final and binding
10. Entries must be original, be the work of the entrant and/or nominee and must not violate the rights of other parties. All entries remain the property of the entrant. Each entrant represents and warrants that:
• Entrant is the sole author and owner of the submission;
• The entry is not the subject of any actual or threatened litigation or claim;
• The entry does not and will not violate or infringe upon the intellectual property rights, privacy rights, publicity rights, or other legal rights of any third party; and
• The entry does not and will not contain any harmful computer code (sometimes referred to as “malware,” “viruses,” or, “worms”).
11. By submitting an entry in this competition, entrants agree to assume any and all risks and waive any claims against the Federal Government and its related entities (except in the case of willful misconduct) for any injury, death, damage, or loss of property, revenue or profits, whether direct, indirect, or consequential, arising from their participation in this competition, whether the injury, death, damage, or loss arises through negligence of otherwise. Provided, however, that by registering or submitting an entry, entrants and/or nominees do not waive claims against the Department arising out of the unauthorized use or disclosure by the agency of the intellectual property, trade secrets, or confidential information of the entrant;
12. The Secretary or the Secretary's designees have the right to request additional supporting documentation regarding the application from the entrants and/or nominees;
13. Each entrant grants to the Department, as well as other Federal agencies with which it partners, the right to use names, likeness, application materials, photographs, voices, opinions, and hometown and state for the Department's promotional purposes in any media, in perpetuity, worldwide, without further payment or consideration;
14. If selected, the entrant and/or nominee must provide written consent granting the Department and any parties acting on their behalf, a royalty-free, non-exclusive, irrevocable, worldwide license to display publicly and use for promotional purposes the entry (“demonstration license”). This demonstration license includes posting or linking to the entry on Department websites, including the Competition website, and partner websites, and inclusion of the entry in any other media, worldwide;
15. Applicants that are Federal grant recipients may not use Federal funds to develop submissions or to fund efforts in support of a submission;
16. Federal contractors may not use Federal funds from a contract to develop submissions or to fund efforts in support of a submission; and
17. The submission period begins on January 6, 2025. Submissions must be sent by 11:59 p.m. PST/2:59 a.m. EST on March 7, 2025. The timeliness of submissions will be determined by the time stamp of the Microsoft Form submission. Competition administrators assume no responsibility for lost or untimely submissions for any reason.
Applicants must submit entries using the following Microsoft Forms link:
Please ensure your submission package includes EACH of the following twelve elements:
Specify which transportation mode(s) the proposal will focus on.
The proposal title.
The name of the organization(s) being nominated, or the name(s) and title(s) of the individual(s) being nominated.
Include name, title, phone, email, website URL, and mailing address.
If the point of contact for the proposal is different, also specify their name, title, phone, and email.
Brief background regarding the submitting individual(s) or organization(s) that includes relevant counter-trafficking expertise.
If applicable, list the partners who will be engaged in proposal development and/or implementation, including a brief background for each.
You may submit supporting letters, which may be from subject matter experts or industry, and may address the technical merit of the concept, originality, impact, practicality, measurability and/or applicability. Proposals with letters of support should include an itemized list with the name, title, and organization for each letter.
A high-level description of the proposal including
A detailed synopsis of the proposal, including how efficacy will be measured and its anticipated impact.
A proposal description that presents a logical approach and workable solution to addressing the issue of human trafficking in the transportation industry. Include responses to the following questions: Is the concept unique? Are anticipated beneficiaries clearly identified? Were human trafficking survivors consulted in the proposal development and/or how will survivor input be included in implementation? Are anticipated resources and costs outlined in detail? Can the proposal be implemented in a way requiring a finite amount of resources (
The paper(s) and/or technologies, programs, video/audio files, and other related materials, describing the proposal and addressing the selection criteria. As applicable, this can include a description of success of a previous or similar proposal and/or documentation of impact. DOT may request additional
A statement of eligibility by private entities indicating that they are incorporated in and maintain a primary place of business in the United States, or a statement of eligibility by individuals indicating that they are citizens or permanent residents of the United States.
The Office of International Transportation and Trade (OITT) will initially review applications to determine that all required submission elements are included, and to determine compliance with eligibility requirements.
After the Initial Screening, OITT, with input from the relevant Operating Administrations, will judge entries based on the factors described below: technical merit, originality, impact, practicality, measurability, and applicability. The Secretary will make the final selection. The Department reserves the right to not award the prize if the selecting officials believe that no submission demonstrates sufficient potential for sufficient transformative impact. The following factors will be given consideration:
• Does the proposal present a clear understanding of the issue of human trafficking in the transportation industry and utilizes a trauma-informed, victim-centered approach?
• Does the proposal present a logical and workable solution and approach to addressing human trafficking in the transportation industry?
• Were survivors of human trafficking consulted in the development of the proposal concept and is survivor input outlined in the description of proposal implementation?
• Is the concept new or a variation of an existing idea?
• Does the concept possess and clearly describe its unique merits?
• Can the proposal make a significant impact and/or contribution to the fight against human trafficking in the transportation industry?
• Does the proposal clearly describe the breadth of impact?
• Does the submission clearly outline how the proposal will be measured?
• Will the proposal result in measurable improvements?
• Does the proposal clearly identify anticipated beneficiaries of the proposal?
• Does the proposal clearly outline anticipated resources and all costs to be incurred by executing the concept?
• Can the proposal be implemented in a way that requires a finite amount of resources (specifically, the submission has fixed costs, low or no marginal costs, and a clear path to implementation and scale beyond an initial investment)?
• Is the proposal national or can it be scaled nationally?
Up to three winning entries are expected to be announced. The first-place winner will receive up to a $50,000 cash prize. A plaque with the first-place winner(s) name and the date of the award will be on display at the U.S. Department of Transportation, and a display copy of the plaque(s) will be sent to the first-place award winner. Two additional plaques will be awarded to recognize the two runners up. At the Department's discretion, DOT may pay for invitational travel expenses to Washington, DC, for up to two individuals or representatives of the first-place winner and runners up, should selectees be invited to present their proposal(s) for DOT officials.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on December 31, 2024. See
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Sanctions Compliance, 202-622-2490 or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On December 31, 2024, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Comments must be received on or before March 7, 2025.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
Department of Veterans Affairs.
Notice of solicitation for nominations.
The Department of Veterans Affairs (VA), Advisory Committee on Former Prisoners of War (the Committee or FPOW), is seeking nominations of qualified candidates to be considered for appointment as a member of the Committee.
Nominations for membership on the Committee must be received no later than 5 p.m. EST on February 28, 2025. Packages received after this time will not be considered for the current membership cycle.
All nominations should be mailed to Outreach, Transition and Economic Development (OTED), Veterans Benefits Administration (VBA), Department of Veterans Affairs, 1800 G St., NW, Washington, DC 20006 or emailed to
Julian Wright, Designated Federal Officer (DFO), OTED, Department of Veterans Affairs, 1800 G St., NW Washington, DC 20006, or telephone (202) 302-8629.
In carrying out the duties set forth, the activities of the Committee include, but are not limited to:
(1) Advising the Secretary on how VA can assist and represent FPOWs', including recommendations regarding expanding services and benefits to FPOWs' and related policy. Administrative, legislative and/or regulatory actions;
(2) Advising the Secretary on incorporating lessons learned from current, and previous, successful family research and outreach efforts that measure the impact of provided care and benefits services on FPOWs;
(3) Advising the Secretary on collaborating with family support programs within VA and engaging with other VA and non-VA advisory committees focused on specific demographics of FPOWs;
(4) Advising the Secretary on working with interagency, intergovernmental, private/non-profit, community, and Veteran service organizations to identify and address gaps in services for FPOWs;
(5) Providing such reports as the Committee deems necessary, but not less than one report per year, to the Secretary, through the DFO/VBA to describe the Committee's activities, deliberations, and findings, which may include but are not limited to: 1) identification of current challenges and recommendations for remediation related to access to care and benefits services of FPOWs; and 2) identification of current best practices in care and benefits delivery to FPOWs, and the impact of such best practices.
(1) The administration of benefits for Veterans who are FPOWs, in the areas of compensation, health care, and rehabilitation.
(2) The use of VA care and benefits services by FPOWs, and possible adjustments to such care and benefits services;
(3) Factors that influence access to, quality of, and accountability for services and benefits for FPOWs.
VA is seeking nominations for Committee membership. The Committee is composed of up to 12 members and several ex-officio members. The members of the Committee are appointed by the Secretary of Veteran Affairs from the general public, from various sectors and organizations, including but not limited to:
(1) Veterans who are FPOWs
(2) Appropriate representatives of Veterans who are FPOWs
(3) Individuals who are recognized authorities in fields of pertinent to disabilities prevalent among FPOW, including authorities in epidemiology, mental health, nutrition, geriatrics, and internal medicine; and
(4) Appropriate representatives of disabled Veterans.
In accordance with the Committee Charter, the Secretary shall determine the number, terms of service, and pay and allowances of Committee members. The term of service for any member may not exceed three years. The Secretary may reappoint any Committee member
(1) A letter of nomination that clearly states the name and affiliation of the nominee, the basis for the nomination (
(2) The nominee's contact information, including name, mailing address, telephone numbers and email address;
(3) The nominee's resume or curriculum vitae; and
(4) A summary of the nominee's experience and qualifications relative to the membership considerations described above.
Individuals selected for appointment to the Committee shall be invited to serve a two-year term. Committee members will receive a stipend for attending Committee meetings, including per diem and reimbursement for eligible travel expenses incurred.
The Department makes every effort to ensure that the membership of its Federal advisory committees is fairly-balanced in terms of points of view represented. Every effort is made to ensure that a broad representation of geographic areas, gender, and racial and ethnic minority groups, and that the disabled are given consideration for membership. Appointments to this Committee shall be made without discrimination because of a person's race, color, religion, sex (including gender identity, transgender status, sexual orientation, and pregnancy), national origin, age, disability, or genetic information. Nominations must state that the nominee is willing to serve as a member of the Committee and appears to have no conflict of interest that would preclude membership. An ethics review is conducted for each selected nominee.
Office of the Assistant Secretary for Community Planning and Development, Department of Housing and Urban Development, HUD.
Final rule.
HUD's HOME Investment Partnerships Program (HOME program or HOME) provides formula grants to States and units of general local government to fund a wide range of activities to produce and maintain affordable rental and homeownership housing and provides tenant-based rental assistance for low-income and very low-income households. This final rule revises the current HOME regulations to update, simplify, or streamline requirements, better align the program with other Federal housing programs, and implement recent amendments to the HOME statute. This final rule also includes minor revisions to the regulations for the Community Development Block Grant and Section 8 Housing Choice Voucher Programs consistent with the implementation of the changes to the HOME program. This final rule follows the publication of a proposed rule on May 29, 2024, and takes into consideration the comments received in response to that proposed rule.
Effective February 5, 2025.
Virginia Sardone, Director, Office of Affordable Housing Programs, Office of Community Planning and Development, Department of Housing and Urban Development, 451 7th Street SW, Room 7160, Washington, DC 20410; telephone number (202) 708-2684 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit
The HOME program is authorized by title II of the Cranston-Gonzalez National Affordable Housing Act
The HOME program is the largest Federal block grant to States and local governments designed exclusively to create affordable housing for low-income households. Each year, the HOME program allocates approximately $1.5 billion among States and approximately 600 localities nationwide. In fiscal year 2023, PJs completed 6,848 rental housing units and 4,051 homebuyer units, assisted 2,717 low-income homeowners to repair their homes, and provided tenant-based rental assistance to 13,016 low-income households. HOME funds are most often used as gap financing for rental projects, particularly for projects that have been awarded Low-Income Housing Credits (LIHTC).
The HOME program is designed to reinforce several important values and principles of community development. First, the HOME program's flexibility empowers people and communities to design and implement strategies tailored to their own needs and priorities. Second, the HOME program's emphasis on consolidated planning expands and strengthens partnerships among all levels of government and the relationship with the private sector in the development of affordable housing. Third, the HOME program's technical assistance activities and set-aside for qualified Community Housing Development Organizations (CHDOs) help to build the capacity of, and partnerships, with these community-based nonprofit organizations. Fourth, the HOME program's requirement that PJs match 25 cents of every dollar in program funds helps mobilize community resources in support of affordable housing.
On May 29, 2024, HUD published the “HOME Investment Partnerships Program: Program Updates and Streamlining” proposed rule (the proposed rule) in the
The proposed rule also included changes made by the Housing Opportunity Through Modernization Act of 2016: Implementation of Sections 102, 103, and 104 final rule, published in the
See the proposed rule for a full description of all the HOME program proposed regulation changes associated with this rulemaking.
HUD reviewed and considered all public comments submitted in response to the proposed rule, which are summarized and addressed in the next section of this final rule. After considering the public comments received in response to the proposed rule, this final rule incorporates a majority of the proposed regulatory changes described in the proposed rule; however, in response to public comments received, HUD is making certain revisions to the HOME program regulations from those described in the proposed rule at this final rule stage. HUD is also making certain non-substantive revisions to the proposed regulatory text at this final rule stage.
In response to comments received during the proposed rule stage of this rulemaking, HUD is making the following revisions to the final rule:
HUD is making certain technical revisions in 24 CFR part 91 to replace the term “affordability period” with “period of affordability.” These revisions are consistent with the technical revision proposed in 24 CFR part 92 to make the same terminology replacement. Further, these revisions are consistent with public comments HUD received noting that these revisions are appropriate.
HUD is making certain technical revisions in 24 CFR part 92 to improve clarity and readability of certain language throughout the part. While HUD is not summarizing each of these technical changes because the changes are minor and non-substantive, a sampling of these revisions are described in the paragraphs that follow.
The Department received comments indicating that it had not fully revised all references from “downpayment assistance” to “homeownership assistance.” The Department is revising §§ 92.203(d), 92.209(c)(2)(iv), 92.250(b)(4), 92.251(c)(3), 92.254(b)(1)(ii), 92.300(a)(6)(i), 92.351(a)(1), 92.504(c)(1)(i), and 92.504(c)(2)(i) accordingly. The Department declined to revise certain references in the regulation that were specific to the downpayment provided by a homebuyer (
Commenters noted that there were a number of areas where the term “dwelling” had not been replaced by “housing.” Accordingly, the Department is revising §§ 92.219(a)(4), 92.254(a)(5)(ii)(A), and 92.258(a) to standardize the use of “housing.”
The Department noted several instances where it had not corrected the term “single-family” to read “single family.” Accordingly, the Department is revising §§ 92.220(a)(5)(ii), 92.254(a)(6), 92.504(c)(1)(i), and 92.504(c)(2)(i) to include the standardized term “single family.”
Several commenters noted that the Department failed to change all the references from “affordability period” to “period of affordability.” The Department has further revised the term for consistency in §§ 92.251(f), 92.252(d)(3), 92.254(a)(5)(ii)(B)(2), 92.258(c) and (d)(3), 92.359(f), and 92.508(c)(1) and (2).
The Department is also revising the first sentence of § 92.201(b)(3)(i) to clarify that States must require that State recipients use HOME funds in accordance with 24 CFR part 92. This is also stated in the written agreement section in § 92.504 and is a revision for consistency.
As explained in greater detail in the preamble describing the revisions in § 92.209, the rental assistance contract requirements in the HOME tenant-based rental assistance program are being revised to require that the PJ enter into a rental assistance contract with the owner and the tenant, either as separate agreements or a single tri-party agreement. The Department is therefore revising the definition of
A new paragraph (2)(ii)(C) was added under
In response to public comments received, HUD is making multiple changes to paragraph (8)(i) of the definition of community housing development organization in § 92.2. Paragraph (8)(i) of the CHDO definition describes board membership requirements to maintain accountability to low-income community residents. Many commenters were concerned that the language of the proposed rule would reduce the accountability of CHDO boards. As described further in the following paragraphs, HUD is addressing the concerns expressed in the comments by strengthening the accountability structures.
HUD is revising paragraph (8)(i) of the CHDO definition to add “low-income beneficiaries of HUD programs” as an explicitly named group of eligible board members to meet the accountability to low-income community residents board requirement. HUD recognizes that 42 U.S.C. 12704(6)(B) requires that a CHDO “maintain[], through significant representation on the organization's governing board and otherwise, accountability to low-income community residents and, to the extent practicable, low-income beneficiaries with regard to decisions on the design, siting, development, and management of
HUD is also revising paragraph (8)(i) of the CHDO definition to use the term “designees of nonprofit organizations” instead of “authorized representatives of nonprofit organizations.” This revision of the term “designee” is being made because of confusion expressed by commenters regarding when a person is considered an “authorized representative.” HUD recognizes that the inconsistent terminology is confusing and believes that using a consistent term to describe individuals representing “low-income neighborhood organizations” and the “nonprofit organizations” described in paragraph (8)(i) brings additional clarity to paragraph (8)(i) of the CHDO definition.
HUD is further revising paragraph (8)(i) of the CHDO definition to specifically reference the designees of nonprofit organizations in the community that address the housing or supportive service needs of “low-income residents or residents of low-income neighborhoods.” This revision is in response to commenters who stated that HUD had not sufficiently connected the term “nonprofit organizations” to low-income residents of the community in paragraph (8)(i) of the CHDO definition. The commenters urged HUD to use clearer language to show that individuals representing organizations serving low-income persons, even if those persons do not live in low-income neighborhoods, should be able to meet the requirement that the CHDO board is accountable to low-income community residents. HUD believes this revision will better enable designees that directly serve low-income residents to be CHDO board members. In response to significant comment from the public, the Department is revising paragraph (8)(i) to prohibit an organization from being considered a CHDO if its service area is the entire State. Though the Department had proposed removing this restriction from the current regulation to better enable rural PJs and states to use their CHDO set-aside funds, the public comments were quite clear that allowing an organization to have a statewide service area was not the solution to addressing the shortage of CHDOs with capacity in rural areas.
In response to public comments received, HUD is also making multiple changes to paragraph (9) of the definition of community housing development organization in § 92.2. These specific changes are described in the paragraphs that follow.
HUD is revising the introductory text of paragraph (9) of the CHDO definition to add “Federal Home Loan Bank Affordable Housing Program (12 U.S.C. 1430) funds” to the list of housing programs that demonstrate a CHDO's capacity to carry out a housing project. This change is made in response to public comments to provide clarity because these grant funds are frequently layered with HOME funds in housing development projects.
HUD is revising paragraph (9)(i) of the CHDO definition by changing the first sentence of the paragraph to require that a CHDO have “paid employees” with housing development experience who will work directly on the HOME-assisted project. HUD is making this revision in response to public comments that correctly noted that the way the proposed rule phrased this portion of paragraph (9)(i) of the CHDO definition allowed a CHDO to have no paid employees at all and still meet the capacity requirement. HUD's intent with the proposed rule was to allow volunteers to supplement the capacity of paid employees, not to allow a CHDO to meet the capacity requirements while having no paid employees. HUD is making a similar revision in the last sentence of paragraph (9)(i) of the CHDO definition to read as “key, paid staff of the organization” for the same reasons.
HUD is further revising paragraph (9)(i) of the CHDO definition to add an additional sentence to clarify that where the paid employees of a CHDO alone do not demonstrate capacity, that experience can be supplemented with volunteer board members or officers. For additional clarity, HUD is also making minor revisions to paragraph (9)(i) of the CHDO definition to more directly state the requirement that a volunteer board member or officer may not be compensated by or have their services donated by another organization.
In response to public comments received, HUD is making multiple changes from the proposed rule to the definition of CLT in § 92.2. These specific changes are described in the paragraphs that follow.
HUD is revising paragraph (1) of the CLT definition to read “[h]as as its primary purposes acquiring, developing, or holding land to provide housing that is permanently affordable to low-income persons.” Commenters noted that CLT ownership models vary nationwide and, while some CLTs do develop and maintain their properties, other CLTs acquire and hold properties as affordable housing in perpetuity but are not otherwise involved in maintenance or development work. HUD recognizes that its proposed definition was too narrow to consider many of these organizations as CLTs and is revising it accordingly. In addition, HUD's proposed rule stated that a CLT must have a primary purpose of serving both low- and moderate-income persons. After reviewing the comments and the various CLT models provided by commenters, HUD is revising the CLT definition to recognize that the primary purpose of a CLT participating in the HOME program must be to serve low-income persons. HUD is also making a similar change to remove “moderate-income” from paragraph (3) of the CLT definition.
In response to public comments received, HUD is making certain changes to the definition of homeownership in § 92.2. Public commenters noted that the Department had not changed the term “dwelling” in the definition of homeownership in § 92.2. After considering the best way to clarify the requirement, the Department determined that it would be easier to replace to term “1-4 unit dwelling or in a condominium unit” with the term “single family housing,” which is defined as “a one-to four- unit residence, condominium unit, cooperative unit, combination of manufactured housing and lot, or manufactured housing lot.” The final rule text is clearer and uses a common term that is also defined in the regulation. It also provides additional clarity for homeownership projects involving manufactured homes, which are more explicitly referenced in the definition of single family housing. HUD believes that this clarifying change is therefore also responsive to comments requesting that HUD clarify the treatment of manufactured homes in HOME homeownership projects.
HUD notes that in its review of the public comments, the Department identified significant confusion by some commenters about the time periods in the definition of CLT and homeownership in § 92.2 and the housing education and organizational support requirements in § 92.302. HUD is committed to better addressing the needs of CLTs and its revisions to the homeownership definition in § 92.2 clarify the intent of the definition and how it is meant to apply to HOME homeownership projects. The specific changes to the definition of
HUD is revising paragraph (1) of the definition of homeownership to further clarify the explanatory text to state that the land upon which housing is located may be owned in fee simple or through a ground lease if the housing was owned in fee simple. The paragraph was also revised to give a rule of construction so that PJs and homeowners understand that the minimum term of a ground lease is the lowest time period if more than one condition applies. For example, if a ground lease was part of a CLT-developed project, the minimum term for the ground lease to be considered homeownership is 50 years, but if that CLT-developed project was in an insular area, the minimum term for the ground lease to be considered homeownership would be 40 years because the minimum term for a ground lease to be considered homeownership in insular areas is 40 years (See § 92.2(1)(ii)).
HUD is further revising paragraph (1) of the definition of homeownership to remove the latter portion of the introductory text of paragraph (1) that addressed 99-year ground leases. Paragraph (1) is instead being revised to create a new paragraph (1)(i) to make clear that a 99-year ground lease is one of multiple options for ground lease length. The original paragraphs (1)(i), (1)(ii), and (1)(iii) are being redesignated as (1)(ii), (1)(iii), (1)(iv), respectively.
HUD is also making other minor, non-substantive revisions to the introductory text and paragraph (1) to the definition of homeownership to improve the readability of the text.
HUD is revising the definition of housing in § 92.2 to replace the term “dwellings” with “housing units.” Commenters noted that there were certain areas in the proposed rule where “dwelling” had not been replaced with the updated term. HUD is updating the housing definition to correct this issue.
HUD is revising the definition of
The Department intended to remove all American Dream Downpayment Initiative (ADDI) regulations as part of this rulemaking. Unfortunately, the Department inadvertently retained language in the definition of “State” that described deviations between the term “State” in the HOME program and in the ADDI program. The Department is revising the definition of “State” to remove all ADDI-related language in this final rule.
In response to the proposed rule, HUD received comments requesting that the Department specify the effective date of the regulatory changes associated with this final rule. To address these comments, HUD is revising § 92.3 to provide the applicable effective dates for the regulatory changes associated with this final rule instead of the applicable effective dates associated with the 2013 regulatory revisions. The header is being revised to describe the applicability of 2025 regulatory changes.
The introductory language of § 92.3 is being replaced by a provision explaining that the regulations in 24 CFR part 92 apply based on when an income determination is made or when the HOME funds for the project were committed. The provision goes on to explain that projects where the HOME funds were committed before a certain date may be subject to previous versions of these regulations. The provision also explains that the intent of § 92.3 is to provide instruction regarding which version of these regulations applies to which project based on when the funds were committed.
Paragraph § 92.3(a) is being replaced with a new paragraph (a). Paragraph (a) establishes the effective date for the 2025 final rule. The paragraph explains that the final rule is applicable to projects for which HOME funds are committed on or after February 5, 2025. The paragraph goes on to state that a PJ must perform income determinations in accordance with § 92.203 after February 5, 2025.
Paragraph § 92.3(b) is being revised to explain that while the effective date of the rule is 30 days after publication, PJs are permitted to continue to comply with the HOME regulations as they existed immediately before the effective date for commitments made up to one year after the rule's effective date. This allows PJs time to change their policies and procedures, forms, and systems, so that they can effectively implement the provisions of the final rule.
Paragraph (c) describes how the income regulations will be implemented for existing tenants and new projects that are coming online. This is because the income requirements of § 92.203 are applied to tenants of existing projects pursuant to their written agreements. The Department wants to clarify that for up to one year after the effective date of the rule, PJs may calculate income in accordance the income requirements that the PJs was implementing immediately prior to the publication of the final rule. This allows PJs to transition to determining income in accordance with the new requirements, as many income reexaminations may be underway when the rule becomes effective.
In some cases, PJs may wish to amend existing written agreements to take advantage of certain flexibilities or impose new requirements. While most of the rule may be applied immediately on the effective date, the Department is clarifying that certain provisions may not be implemented when a commitment has already been issued for a project. These relevant provisions are listed in § 92.3(d)(1) through (5).
Section 92.3(d)(1) explains that the written agreement cannot be revised to allow for certain predevelopment costs as well as certain project related soft costs currently contained in § 92.206(d)(2) to be reimbursed in accordance with the newly revised § 92.206(d)(1) if the HOME funds were committed to the project prior to the effective date of the final rule. Commitments were made after underwriting the project with assumptions that these costs were not going to be paid with HOME funds and the Department determined that the written agreements should not be amended to include those costs as payable from HOME when it was not the source that had already been identified to pay for the cost.
Similarly, § 92.3(d)(2) states that the new flexibility to obtain a higher maximum per-unit subsidy increase should only be included for projects where funds were committed to the project after the effective date of the final rule. While the Department fully supports green building requirements, the Department determined that projects with current commitments should not undergo additional underwriting and cost allocation. When a PJ committed HOME funds to projects before the effective date of the rule, they underwrote and sized the assistance based on the assumption that the maximum per-unit subsidy was the
Section 92.3(d)(3) states that the revised dollar thresholds for periods of affordability in § 92.252 and § 92.254 will not apply to projects where the PJs had already committed HOME funds. Similar to paragraphs (d)(1) and (2), a PJ already agreed with an owner on the applicable periods of affordability, just like they had agreed to a maximum per-unit subsidy, or which type of funds were used to pay which costs. To allow the owner and PJ the ability to reduce the period of affordability for a project that has already been agreed upon through amending the written agreement would be perverse and counter to the purposes of the Act.
Section 92.3(d)(4) states that the new tenant protection provisions cannot be imposed upon owners that are already under a current written agreement or tenants and owners under a current rental assistance contract or receiving security deposit assistance. Owners should have appropriate notice before imposing substantial changes in landlord-tenant relations. The HOME program provides development subsidies to owners to build affordable housing but does not provide ongoing operations assistance. Owners must consider the costs of compliance in determining whether to participate in the HOME program. This includes the costs of complying with tenant protections. Moreover, the Department received numerous comments indicating that imposing the tenant protections on current owners would amount to a regulatory taking. While the Department does not believe that this is the case and would strenuously object to any characterization of improving tenant protections as a form of taking or violation of an owner's due process rights, the Department does believe it is important to establish clear compliance requirements within the written agreement between the PJ and the owner, and to allow those requirements to remain consistent for the life of the agreement. To prevent potential litigation and loss of affordable housing, the Department is requiring that the new and revised tenant protections provided in § 92.253 only be effective for projects with commitments of up to one year after the effective date of the rule and not be applied to projects with commitments prior to the effective date of the rule.
Finally, § 92.3(d)(5) was added to state that the revisions to the role of CHDOs in owning, developing, and sponsoring affordable housing in § 92.300 only apply to projects where the PJ committed CHDO set-aside funds on or after the effective date of the final rule. The new flexibilities in § 92.300 should be used for new projects. If a PJ has already entered into an agreement with a CHDO to own, develop, or sponsor a project, then it is inappropriate for the PJ to amend the agreement and enter into an agreement with a new party because of the new flexibilities provided in § 92.300. The Department is expanding the way in which CHDOs can be involved in a HOME project but is not encouraging PJs to terminate or significantly restructure existing CHDO projects.
The Department also believes that it may be helpful to place the date and the triggering action into a chart to better assist PJs, owners, and the public in understanding when the 2025 final rule's requirements are applicable.
The Department is also revising the first sentence of § 92.201(b)(3)(i) to clarify that States must require State recipients use HOME funds in accordance with part 92. This is also stated in the written agreement section in § 92.504 and is a revision for consistency.
The Department is making a technical revision to the first sentence of § 92.203(a) to remove the dash between “income” and “eligible” to maintain consistent usage of the term. The Department is revising the “must” to a “may” in § 92.203(a)(1) in response to public comments recommending that HUD allow PJs to always retain the right to determine annual income in accordance with the process described in paragraphs (b)-(e). This change will allow PJs the choice of accepting the income determinations made in Federal or State project-based rental subsidy programs instead of requiring PJs to accept those determinations.
In response to public comments, the Department is revising the language in § 92.203(a) to create a new paragraph (a)(3) and redesignate the current paragraph (a)(3) as paragraph (a)(4). The new paragraph (a)(3) provides additional burden relief for PJs and owners by expanding a safe harbor that is currently located in § 92.203(b)(1)(iii). The current safe harbor in § 92.203(b)(1)(iii) is limited to government programs and not forms of public assistance, which is a broader term that encompasses tax credits and other forms of assistance that are not “programs.” The Department uses this broader term “public assistance” in the safe harbor provisions in 24 CFR 5.609(c)(3) for 1937 Act programs but does not use this term in the current HOME regulations. The current safe harbor in HOME regulations cannot be used for initial annual income and eligibility determinations, or in calculating annual income for a family in years 6, 12, and 18 of a HOME rental housing project's period of affordability. The safe harbor also cannot be used for individuals applying for or renewing tenant-based rental assistance.
Public commenters recommended that PJs be able to accept income determinations made under other forms of public assistance, including LIHTC income determinations for families living in tax credit units. The Department recognizes the utility in expanding the safe harbor to include other forms of government assistance and allowing its use for initial annual income determinations or annual income determinations made in years 6, 12, and 18 of a HOME rental housing project's period of affordability as well as for individuals entering into or renewing a new rental assistance contract for tenant-based rental assistance. Therefore, the Department is moving the safe harbor into paragraph (a) as a new paragraph (a)(3) to enable a PJ to use the information for initial annual income and subsequent income determinations for HOME rental housing tenants as well as for tenant-based rental assistance. The Department is also expanding the applicability of the safe harbor to include an annual income determination made under another form of Federal, State, or local public assistance. Accordingly, the Department is also removing § 92.203(b)(1)(iii) and revising the last sentence in paragraph (b)(1) to indicate that there are only two methods of determining income under paragraph (b)(1).
The Department provides several examples to enhance the public's understanding of the types of assistance that could be accepted under the new paragraph (a)(3). These examples include TANF, Medicaid, LIHTC, and local rental subsidy programs. These programs all calculate annual income but do not make the adjustments that are made in HUD programs that are subject to 24 CFR 5.611.
To obtain the relief of the safe harbor under new § 92.203(a)(3), the PJ must be able to obtain a statement that indicates the family size and income. This can be provided by an administrator of a Federal, State, or local form of public assistance, even if that administrator is not the administrator at the Federal or State level. The Department considered whether to allow, as the current safe harbor provision in § 92.203(b)(1)(iii) does, a government administrator to provide a PJ with a statement indicating that the family's income does not exceed the current dollar limit for very low-income or low-income families for the family size of the tenant. The Department decided against including this language.
The Department drafted this safe harbor partly in response to public comments requesting that the Department accept a statement made by an administrator of public assistance without further review of income documentation for the tenant. The Department agrees that it is possible to use a statement from a government administrator to determine income, though verification is left to PJ policies and procedures. However, the Department decided that if it was expanding the safe harbor to enable PJs to accept a statement, then the statement must contain a statement of family size and income and not just a statement that the family was below the applicable income limit for the family's size. This is especially true because, in many cases, the PJ must still calculate adjusted income in accordance with paragraph (f). To provide the maximum amount of burden relief to both the PJs and tenant, and best address the concerns of the commenter, the statement must have the family's annual income on it so that the PJ need only adjust the income (if applicable) from a known amount of annual income. Accordingly, the Department is also removing § 92.203(b)(1)(iii) and revising the last sentence in paragraph (b)(1) to indicate that there are only two methods of determining income under paragraph (b)(1).
The Department is requiring in the new § 92.203(a)(3) that the statement accepted by the PJ must be for an income determination made within the previous 12-month period. This aligns with how similar safe harbor provisions are used in other HUD programs, such as the safe harbor in 24 CFR 5.609(c)(3) that is used for certain programs governed under the U.S. Housing Act of 1937. The Department considered whether to provide a shorter period, such as the 6-month requirement under § 92.203(e)(2) for income determinations made prior to providing homeownership or tenant-based rental assistance to a family. However, after consideration of the comment and how to align this safe harbor with other safe harbors in HUD regulations, HUD has determined that 6 months is inappropriate. When a family applies to a PJ for assistance and the PJ determines the family's income, there is a reasonable expectation that this income examination is close in time to when the family will receive the HOME assistance from the PJ. When a person was determined income eligible with these other forms of public assistance, it may not be at the same time as when the PJ's tenant-based rental assistance program waiting list opens up for the public to apply or when a person is next up on an owner's waiting list. To establish a shorter period in which the income determination will remain valid for purposes of the new safe harbor would therefore disadvantage those families and PJs and so the Department chose to allow income determinations made within a 12-month period to qualify for purposes of the safe harbor at § 92.203(a)(3).
As part of the revisions made to lift and expand the safe harbor in § 92.203(a)(3), the Department is making conforming changes to paragraph (b)(2) and adding paragraph (b)(3) to explain that only families applying for homeownership activities must calculate income using 2 months of source documents. Before paragraph (a)(3) was added, both families applying for homeownership assistance and families applying for or receiving tenant-based rental assistance were required to solely use source documents. However, with the expansion of the safe harbor to tenants applying for, renewing, or for assisted families required to enter into a new rental assistance contract, the Department had to make conforming changes to explain how income is calculated for tenant-based rental assistance. The new paragraph (b)(3) does this by explaining that, for families applying for or receiving tenant-based rental assistance, the PJ may determine annual income in accordance with the new safe harbor provision or through the use of source documents. The paragraph also clarifies that income will be calculated at the times specified in § 92.209(e)(3), which provides explicit instructions on when income must be determined for a family applying for or receiving tenant-based rental assistance.
The Department received negative comments on § 92.203(e)(2). While the Department is declining to revise the six-month limit on when income is valid, the Department recognizes that the provision itself could be clearer. The Department is therefore clarifying that a PJ is not required to redetermine income for a family unless 6 months have elapsed since the PJ determined the family is income eligible. The term “re-examine” is confusing given that the provision is about determining a family's income eligibility in advance of being provided assistance. This is different than when income is reexamined for families living in a rental housing project or families entering into or renewing a rental assistance contract. As the Department is revising income reexamination provisions for small-scale rental housing and in the context of tenant-based rental assistance, the Department believes it is important to remain consistent and is therefore revising this provision as well.
Paragraph 92.203(e)(2) is also being clarified to explain that when the regulation refers to “HOME assistance,” the regulation means homeownership assistance and tenant-based rental assistance. In the HOME regulations, the term “HOME assistance” is used in a variety of contexts. The term means the assistance provided to a subrecipient, State recipient, or contractor to run all or a portion of a PJ's HOME program; the assistance provided to a developer, owner, or sponsor to develop a HOME rental or homeownership project; assistance provided to a family for tenant-based rental assistance; homeownership assistance provided to a family to purchase and/or rehabilitate a home; or assistance provided to a CHDO. The Department believed it was important to clarify which type of assistance is meant in the provision given the various ways in which the term is used. Paragraph (e)(2) was also revised with a clarifying edit to say that a family “is income eligible” instead of “qualifying as income eligible.” This is a non-substantive revision for readability.
The Department is revising § 92.203(f)(1)(ii) to remove two references to § 92.252(a)(2)(iii), which is being removed by this rulemaking. The Department is also revising § 92.203(f)(2) to make corresponding revisions now that PJs are given the option of accepting a public housing agency, owner, or rental subsidy provider's determination of the family's adjusted income under that program's rules instead of being required to do so under § 92.203(a)(1). This change is in response to public comments, as described earlier in this preamble.
In response to public comments, HUD is making certain changes to § 92.206(d) regarding related soft costs that may be considered eligible project costs. The Department proposed and received comments requesting that HUD allow environmental reviews or other environmental studies or assessments to be reimbursable costs incurred prior to the commitment of funds to a project. Commenters requested that the provision be expanded to also include environmental fees, which the Department agrees can be included in the provision. The comments urged the Department to also consider expanding the types of costs that would be allowed to be incurred to include “pre-development” and other related soft costs.
In response to the comments, HUD is making changes to paragraph (d)(1) to expand the project soft costs that may be incurred prior to a commitment. The final rule moves certain soft costs from paragraph (d)(2) into paragraph (d)(1), including costs to process and settle financing for the project, such as private lender origination fees, credit reports, fees for title evidence, legal fees, private appraisal fees, and fees for independent cost estimates. By moving these soft costs into paragraph (d)(1), HUD is allowing the costs to be paid so long as they were incurred no more than 24 months before the date of commitment and included in the written agreement committing the funds. Note that “legal fees” is a more expansive term than the current term “attorney's fees” and the Department is intentionally expanding the term to be more inclusive of the different legal costs that are associated with a project in response to public comment.
The Department determined that soft costs contained in the other provisions in paragraph (d) could not be moved into paragraph (d)(1) as there is no reasonable expectation that such costs would occur prior to commitment of HOME funds. Those provisions include building permits, which can only be obtained after completion of the HUD environmental review; fees for recordation and filing of legal documents, as recordation of documents related to an acquisition, rehabilitation, or new construction contract should occur after commitment of HOME funds; and building or developer fees, as those fees should not be earned or chargeable to the HOME grant for work performed prior to the environmental review and commitment of the HOME funds to a project.
In response to public comment, HUD is also revising § 92.206 to add “accounting fees”, “filing fees for zoning or planning review and approval”, and “other lender-required third-party reporting fees” to paragraph (d)(1). The Department added these fees, as recommended by the commenter, because the Department agrees that these fees, which are generally incurred prior to applying to a PJ for HOME assistance, are directly related to meeting underwriting and construction feasibility criteria that are required in the definition of § 92.2
The public comments indicated confusion over the proposed use of capacity building funds for CHDOs. The new § 92.208(c) describes how PJs may provide HOME assistance to CHDOs for operating costs under § 92.300(a). The paragraph is not intended to describe the use of capacity building funds, which is described in the previous paragraph at § 92.208(b). HUD inadvertently included reference to “capacity building costs” in the proposed § 92.208(c) and understands that this may have led to confusion for commenters. Consequently, HUD is removing the reference to “capacity building costs” in § 92.208(c) to eliminate this confusion.
The Department revised § 92.209(c)(3) to correct the term “tenant-based rental assistance” in the third sentence of the paragraph. The regulation had previously read “tenant-based assistance.” This is a non-substantive change.
The Department made several revisions to § 92.209(e) in response to public comment. The Department redesignated § 92.209(e) as § 92.209(e)(2) and revised the provision as described below. The Department also revised the header for paragraph (e) to describe the rental assistance contract more broadly and not just the term rental assistance contract. The Department then made four new subsections.
The first subsection, § 92.209(e)(1), defines the parties to the rental assistance contract, which is also the header for this provision. Based on public comment to specific solicitation of comment #10, the Department is requiring the PJ to have a rental assistance contract with both the owner and the tenant. This can take the form of a single tri-party agreement or two separate agreements. There is precedent for this model in HUD programs. In the Housing Choice Voucher program, the tenant has an agreement with the public housing agency where the tenant agrees to the rules of the program (See Form HUD-52646), and the owner has an agreement with the public housing where the owner agrees to the terms of the housing assistance payments agency (See Form HUD-52641). The Department also believes that this is the best method for the PJ to enforce HOME requirements on tenant and owner alike.
The Department revised the redesignated § 92.209(e)(2) to provide that a rental assistance contract does not need to start on the first day of the lease so long as the contract commences at the beginning of the first month in which tenant-based rental assistance is provided. The Department revised the provision to decouple the execution of the rental assistance contract from the tenant lease because with the imposition of the tenancy addendum, which must be executed and attached to the tenant lease, the need for the rental assistance contract to begin on the first day of the lease is significantly lessened. This is because the terms of the HOME tenant-based rental assistance tenancy addendum will control in the event of a conflict between the preexisting lease and the tenancy addendum, and therefore the risk that the lease would contain prohibited lease terms or would otherwise not comply with the HOME program requirements is eliminated. The Department is also revising this requirement in response to public comments that stated that it disadvantages families to require that the rental assistance contract begin on the first day of the lease because current very low-income tenants would have to break their lease to obtain rental assistance, which is not always possible. The Department does not wish to disadvantage tenants that are housing insecure or rent burdened by requiring they enter a new lease in order to receive tenant-based rental assistance under HOME.
The Department also revised the redesignated § 92.209(e)(2) to explain that a rental assistance contract can be amended subject to the availability of funds. This revision is made in response to a public commenter that requested HUD explain whether an amendment to a rental assistance contract would require a new income determination. The Department is drawing a distinction
The new § 92.209(e)(3) explains under what conditions a contract may be amended or renewed. The new § 92.209(e)(3)(i) explains that all parties must consent to an amendment to the rental assistance contract. The new § 92.209(e)(3)(i)(A) explains that a rental assistance contract may be amended because the lease between the family and owner has been amended or renewed, as long as the lease term or amount charged under the lease are the only terms of the contract being changed. The new § 92.209(e)(3)(i)(B) explains that amendments to the rental assistance contract may extend the original term of the rental assistance contract up to 24 months from the original date of execution, which is the maximum term allowable under § 92.209(e)(2). The new § 92.209(e)(3)(i)(C) also allows for the amendment of the rental assistance contract when a family is moving within the same building or development, but the parties to the lease, family size, and the number of bedrooms are all the same. With respect to § 92.209(e)(3)(i)(C), the Department believes these are reasonable restrictions on tenants and owners, as changes to the parties to a lease, family size, and the number of bedrooms in a unit are all significant enough such that allowing a PJ to amend an existing rental assistance contract is not appropriate, and the PJ should instead be required to enter into a new rental assistance contract with the family and owner.
The new § 92.209(e)(3)(ii) explains that, subject to the availability of HOME funds, a rental assistance contract may be renewed after the expiration of its initial term. The new § 92.209(e)(3)(iii) explains that in all other instances, the PJ must enter a new rental assistance contract with the family and owner in accordance with § 92.209(e). This includes when family size changes, when the family moves to a different address with a different owner, or when the number of bedrooms in the unit changes.
The Department explains the differences between when a new contract must be entered, when a contract can be amended, or when a contract can be renewed primarily to provide greater clarity in tenant-based rental assistance requirements as well as to explain when an income determination must be performed. The new paragraph (e)(4) whose header is “initial and subsequent income determinations” explains that a PJ must perform an income examination each time a new rental assistance contract is entered into (see § 92.209(e)(4)(i)) or renewed (see § 92.209(e)(4)(iii)). The Department believes that this change is appropriate because it permits PJs to amend current rental assistance contracts to extend their term to the maximum 24-month period without requiring additional income examination, providing burden relief to tenants receiving tenant-based rental assistance. The Department declines to extend this burden relief to new rental assistance contracts or renewals as material terms of the lease or the number of persons in the housing are changing (in the case of new rental assistance contracts) or the rental assistance contract is being extended for more than twenty-four months (in the case of renewals). In these situations, income should be redetermined because it factors so heavily into the sizing of the rental assistance.
The Department is adding a new § 92.209(e)(4)(iv) to explain that if a family is participating in a HOME lease-purchase program and receiving tenant-based rental assistance, then the family's income will only be determined at the time of execution of the lease purchase agreement. This is because the statute states that a family must be income-eligible at the time the lease-purchase agreement is signed,
The Department is revising § 92.209(g) to refer to § 92.253 instead of specific paragraphs within § 92.253. This is because § 92.253 has been revised to directly state its applicability to tenant-based rental assistance and the requirements of the HOME tenant-based rental assistance tenancy addendum. The Department is also revising § 92.209(h)(3)(ii) to better identify the Section 8 Housing Choice Voucher Program payment standard that may be used by a PJ, which is the payment standard established in 24 CFR 982.503(a) through (c) and not the exception payment standard established in 24 CFR 982.503(d). The exception payment standard is, by its nature, an exception to the rule and the Department has not allowed its use in HOME in the past. This change is therefore just a clarification of HUD's existing interpretation of the HOME and Section 8 regulations.
The Department also made clarifying revisions to § 92.209(j)(6) to use the language “[s]urety bonds, security deposit insurance, or instruments similar to surety bonds or security deposit insurance . . .” instead of the proposed phrasing of “[s]urety bonds or security deposit insurance and similar instruments . . . .” HUD believes that this revision improves the clarity and readability of the paragraph.
Consistent with changes made throughout the section, the Department is revising the last two sentences of paragraph (k) to reference paragraph (e) and making technical revisions. The current provision requires that a PJ enter into an agreement with either the owner or the family. The final rule will require that the PJ enter into an agreement with the owner and the family.
In response to public comment that suggested the Department was establishing an unreasonably high bar to evidence that a HOME project is no longer financially viable and able to obtain the relief in § 92.210, the Department has revised and reorganized § 92.210(a).
The first sentence in the paragraph remains unchanged from the proposed rule. Revised § 92.210(a)(1) now states that a project is not financially viable through the period of affordability if one of the conditions in § 92.210(a)(1)(i)-(iii) exists.
In response to public comments, the Department provides in § 92.210(a)(1)(i) that a project is no longer financially viable through the period of affordability if the project's operating costs exceed its operating revenue considering project reserves. The Department has revised this sentence to remove the term “significantly” and to make this and the other conditions listed in § 92.210(a)(1)(i)-(iii) be independent conditions. In § 92.210(a)(1)(ii), the Department is creating a new condition that the project is no longer financially viable through the period of affordability if an owner is
Lastly, if project reserves are insufficient to operate the project, then the Department also believes that the project is no longer financially viable through the period of affordability and is therefore making that a separate ground for relief under § 92.210(a)(1)(iii). The Department also revised § 92.210(a)(3) to clarify that HUD may approve the actions in § 92.210(b) and (c) to “strategically preserve the affordability of a rental project.” The Department had proposed to add the modifier “in preserving affordability” at the end of the sentence in the proposed rule but believes it is better for readability to move the language to describe the type of preservation action that is occurring for troubled housing rental housing projects under § 92.210. Similarly, the Department is revising § 92.210 to explain that the PJ may be permitted to reduce the “total” number of HOME-assisted units or change the designation of the units. This is a non-substantive clarifying change.
The Department revised § 92.212(b)(2) to clarify the provision. The provision, as proposed, had initially stated that, if a given year's appropriation were not timely, then a PJ may incur administrative and planning costs as of the earlier of the beginning of their program year or the date that HUD receives the PJ's consolidated plan. The provision then defined when an appropriation was not timely as when it occurs less than ninety days before a PJ's program year start date.
After further consideration, the Department decided that it is inappropriate to characterize appropriations as timely or not timely in a regulation. The Department also believed this language detracted from the overall clarity of the provision. Instead, the last sentence is being deleted and the first sentence is being revised to state that in any year in which an appropriation is less than 90 days from a PJ's program start date, the PJ may incur administrative and planning costs as of the earlier of the beginning of their program year or the date that HUD receives the PJ's consolidated plan. This is a clearer sentence that doesn't characterize the timeliness of appropriations and it aligns with the related final rule text in § 570.200(h)(3).
For certain paragraphs in § 92.214, HUD made clarifying revisions to use the language “[s]urety bonds, security deposit insurance, or instruments similar to surety bonds or security deposit insurance . . .” instead of the proposed phrasing of “[s]urety bonds or security deposit insurance and similar instruments . . . .” HUD believes that this revision improves the clarity and readability of the paragraph. In response to public comment, HUD also clarified that HOME rental housing project owners may not charge tenants fees for normal wear and tear.
HUD is revising § 92.219(a)(4) to replace the term “dwelling” with the term “housing.” HUD is making this revision to standardize the use of the term “housing” in part 92 and in response to commenters that noted that the Department failed to make this terminology replacement in the proposed rule. The Department also made technical revisions to § 92.221(b)(1) to remove a dash, add section symbols, and add the word “through” when citing §§ 92.218 through 92.221.
The Department is making conforming regulatory revisions to § 92.219(b)(2)(ii) and (iii) to remove the pinpoint citations to § 92.253(a)-(c) and (d)(2) and replace them with more general citations to the tenant protection provisions, as the provisions have moved and are now contained in the applicable tenancy addendum (HOME rental housing tenancy addendum, HOME TBRA tenancy addendum, and HOME security deposit assistance tenancy addendum). The Department also made non-substantive revisions to § 92.253(b)(2)(ii) for readability and to reduce confusion. The revised provision explains that the written agreement must impose and enumerate all requirements applicable to the project, including affordability requirements in §§ 92.252 or 92.254 (as applicable based on the type of project being carried out), any applicable tenant protections due to operation of a rental housing project (or lease-purchase project), any applicable property standards based on the type of project (
The Department received comments stating that a five percent increase in the maximum per-unit subsidy was insufficient to cover the associated costs with meeting nationally recognized green building standards. In response, the Department is increasing the percentage in the final rule up to ten percent in § 92.250(c). The Department understands that many commenters requested increases that were significantly higher, especially in the context of rehabilitation. The estimates provided by commenters ranged significantly from ten percent to well over twenty-five percent depending upon the market, the standard the project owner is attempting to meet, and whether the project was new construction or rehabilitation. The Department understands that rehabilitation of existing housing units and meeting significantly higher energy efficiency thresholds than what is required under section 212(e) of the Act can add significantly higher costs. However, the Department must balance the benefits from more sustainable, energy-efficient housing against the potential that fewer units will be created or fewer families served if the subsidy increased beyond ten percent. Given the level of annual appropriations that the HOME program receives, the Department believes it can only move to ten percent at this time but will reevaluate in the future.
In response to public comments on carbon monoxide and smoke detection, including comments received in response to specific solicitation of comment #3, which requested comment from the public on new requirements for smoke alarms, the Department is making revisions to § 92.251(a)(3)(vi), § 92.251(b)(1)(xi), § 92.251(c)(3), and § 92.251(f)(1)(iv).
First, the Department is adding the carbon monoxide requirement applicable to the Section 8 voucher program as a new requirement for the HOME program at § 92.251(a)(3)(vi)(A), § 92.251(b)(1)(xi)(A), and § 92.251(f)(1)(iv)(A), which HUD will more fully describe through a publication in the
Second, the Department is adding smoke detection requirements to § 92.251(a)(3)(vi)(B), § 92.251(b)(1)(xi)(B), and § 92.251(f)(1)(iv)(B). The Department is also revising § 92.251(c)(3) to reference the requirement in § 92.251(b)(1)(xi)(B). The revised smoke detection requirements are tailored to the type of HOME activity and work being performed, based on public comments and informed by implementation considerations.
For new construction projects under § 92.251(a)(3)(vi)(B)(
In response to HUD's consideration of public comments, the Department added § 92.251(a)(3)(vi)(B)(
The Department also added paragraph (a)(3)(vi)(B)(
The Department also added paragraph (a)(3)(vi)(B)(
Additionally, the Department considered requiring hardwired smoke detectors for rehabilitation projects but understood that rehabilitation projects may require different considerations. As a result, while the Department is adopting the same requirements from § 92.251(a)(3)(vi)(B) for § 92.251(b)(1)(xi)(B). In addition, the Department is also adding § 92.251(b)(1)(xi)(B)(4), which will allow a PJ to provide a written exception to an owner to allow the owner to install a smoke detector that uses 10-year non rechargeable, nonreplaceable primary batteries as long as the smoke detector is sealed, tamper-resistant, contains a means to silence the alarm, and otherwise complies with the requirements of this section. This relief may only be provided where the use of hardwired smoke detectors places an undue financial burden on the owner or is infeasible. It is the PJ's responsibility for making and documenting this determination for their records. The Department is declining to define the terms “undue financial burden” or “infeasible” because it believes that PJs should have the flexibility to develop their own standards and to make their own determinations based on the fact-specific circumstances.
For homeownership activities, the Department is revising § 92.251(c)(3) to require that housing acquired for homeownership meet the same carbon monoxide and smoke detection requirements required under § 92.251(b)(1)(xi). And, similar to the exception that the Department is allowing at § 92.251(b)(1)(xi)(B), the Department is allowing a PJ to provide a written exception to an owner to allow the owner to install a smoke detector that uses 10-year non rechargeable, nonreplaceable primary batteries as long as the smoke detector is sealed, tamper-resistant, contains a means to silence the alarm, and otherwise complies with the requirements of this section. The Department is also requiring that the same grounds which justify an exemption from being required to use hardwired smoke detectors,
Finally, as for the ongoing property standards for existing rental housing projects and the property standards for tenant-based rental assistance, the Department is creating new requirements in § 92.251(f)(1)(iv)(B), which will mandate that smoke detectors meet the standards in 24 CFR 5.703(b) and (d). These are the NSPIRE smoke detection standards that apply to the Section 8 program and elsewhere. The Department believes it is appropriate to treat existing rental housing and units with tenants receiving tenant-based rental assistance the same as those receiving Section 8 HCV assistance or project-based Section 8 assistance, as these programs are sufficiently similar.
For these existing rental housing units and units with tenants receiving tenant-based rental assistance, the inside area must include at least one battery-operated or hard-wired smoke detector, in proper working condition, on each level of the property. For the unit, there must be at least one battery-operated or hard-wired smoke detector, in proper working condition on each level of the unit, inside each bedroom, within 21 feet of any door to a bedroom measured along a path of travel, and where a smoke detector installed outside a bedroom is separated from an adjacent living area by a door, a smoke detector must also be installed on the living area side of the door. Additionally, if the unit is occupied by any hearing-
The Department is revising § 92.251(b)(1)(viii)(A), § 92.251(f)(3)(i)(B), and § 92.251(f)(4)(ii) in response to commenters that stated HUD should not restrict the acceptance of NSPIRE inspections to only those made under another HUD program. The Department understands that there are other projects using non-HUD funding, such as LIHTC projects, that may use inspections to the NSPIRE standards to demonstrate compliance with the requirements for those funding sources. The Department will allow a PJ to accept inspections to the NSPIRE standards or another alternative inspection standard HUD may establish through
In response to comment, the Department is revising § 92.251(c)(3)(ii)(C) and adding § 92.251(c)(3)(ii)(D) to give PJs the ability to provide homebuyers an extension of the six-month deadline for bringing a substandard homeownership unit into compliance with the PJ's property standards.
While the Department strongly encourages PJs to provide homeownership assistance to homebuyers purchasing housing that already meets their property standards, this is not always possible. Because there will be times where homebuyers wish to purchase properties that do not meet the PJ's property standards, the Department is revising its regulations to be flexible enough to allow PJs and homebuyers to bring a unit up to the PJ's property standards after purchase.
The Department continues to believe that six months is the appropriate amount of time to provide a homebuyer to comply with a PJ's property standards. However, every construction project is different, and each jurisdiction has local requirements for permitting. In the past, due to national emergencies or disasters, homebuyers have also been affected by materials shortages. Therefore, in light of the variety of factors that can affect even minor repairs needed to bring a unit up to a PJ's property standards, the Department's revisions to § 92.251(c)(3)(ii)(C) and addition of § 92.251(c)(3)(ii)(D) will allow PJs to provide homebuyers an extension lasting up to 12 months from the date of acquisition with HOME funds to bring their unit up to the PJ's property standards. If an extension is granted, the PJ must inspect the unit within 12 months of acquisition and determine that it meets the PJ's property standards.
In response to public comments requesting clear requirements for when a unit must be inspected under the new construction property standards and when a unit must be inspected under the PJ's rehabilitation standards, the Department is adding a new § 92.251(d) that explains that if a project includes both rehabilitation of housing units and either new construction or reconstruction of housing units, then the PJ must apply the rehabilitation standards to the housing units that are rehabilitated and the new construction requirements to housing that is either newly constructed or reconstructed.
The Department solicited comment on the correct sample size for HOME project inspections in specific solicitation #4 of the proposed rule. After considering the comments received in response to this solicitation, the Department developed a chart that will provide greater clarity on how many units must be inspected in a project based on the number of HOME-assisted units within the project. Accordingly, the Department is revising § 92.251(f)(3)(iii) to require that inspections be performed in accordance with the chart. The Department is also adding clarifying text to indicate that the PJ must inspect the inspectable areas for each building containing HOME-assisted units and not just the units themselves.
To determine the appropriate sample size for each project, the Department started with its minimum requirement that four units be inspected for all projects that have up to twenty units. This is because all units in small-scale housing (1-4 unit projects) must be inspected once every three years, and projects of a larger size should not be required to inspect fewer units than a small-scale housing project. This is counter to the statutory intent of the monitoring flexibilities provided for small-scale housing projects.
The Department has therefore adopted its proposal for a 20 percent sample for projects containing between twenty and one hundred and thirty HOME units. Then, in response to comments requesting that the Department provide burden relief similar to that provided in LIHTC or HUD programs subject to NSPIRE, the Department adopted the sampling method that it uses under NSPIRE for projects containing greater than one hundred and thirty units. The Department believes that this approach strikes the correct balance by providing burden relief for smaller and larger projects while still requiring an appropriate amount of unit inspections occur. It also provides a clearer standard for PJs because the unit sampling for the inspection is not required to be based on a statistically valid sample.
The Department is adding State and local requirements back into § 92.251(a)(3)(iii), which lists the various standards that housing must, where relevant, meet with respect to disaster mitigation. The Department believed it had provided clarifying technical revisions to this section, but did not mean to remove any additional requirements not contained in State and local codes or ordinances from the list of applicable standards. The Department also did not intend to change the meaning of that provision in any other way.
The Department is revising paragraph (a)(3)(iv) to make the requirement described in that paragraph more consistent with the requirements in § 92.504(c). Instead of requiring that a PJ ensure construction contracts and documents describe the work to be undertaken, the PJ must require this to be the case. This non-substantive change will increase clarity and will make the language in paragraph (a)(3)(iv) consistent with that of the monitoring requirements provided in the written agreement provisions in
The Department is revising § 92.251(a)(3)(vii) to state that the green building standards will be published through a
Similar to how the Department is revising § 92.251(a)(3)(iv) to make the requirements in this section more consistent with the requirements in § 92.504(c), the Department is also revising § 92.251(b)(2). Instead of requiring a PJ to “ensure” that construction meet the PJ's rehabilitation standards, the PJ must “require” this to be the case. This is already required in other regulations including the monitoring requirements provided in the written agreement provisions in § 92.504 and the cost principles contained in 2 CFR part 200, subpart E, and so is a non-substantive change made to increase clarity. § 92.251(b)(1)(vi) is being revised to align the language with the same language contained in § 92.251(a)(2)(iii).
In response to public comment, the Department has determined that the rent limits do not apply to Federal, State, or local rental assistance or subsidy payments and is revising the third sentence of § 92.252(a) accordingly. The Department also revised the first sentence of § 92.252(a)(1) to state that if a family is participating in a program where the person pays thirty percent of their monthly adjusted income or ten percent of their monthly income as a contribution to rent, then the maximum rent due from the family is the family's contribution under that program. Commenters requested clarity on whether an owner could accept the full contract rent for a tenant in a HOME-assisted rental housing unit that was also receiving Section 8 or other forms of rental assistance even if the tenant was low-income and governed by the High HOME Rent provisions of § 92.252(a)(1).
After careful consideration, the Department determined that the changes in the Housing and Economic Recovery Act of 2008 (HERA) (Pub. L. 110-289, 122 Stat. 2654, approved July 30, 2008) not only revised the Section 8 statute, but fundamentally changed the relationship between the two programs. It is clear from HERA that the HOME Rent Limits were not meant to apply to recipients of Section 8 assistance or similar recipients of rental assistance or living in subsidized units. Prior to the passage of HERA, the only way that the Secretary was permitted to increase the rent limits was provided by 42 U.S.C. 12745(a)(1)(A). After passage of HERA, HUD determined the Secretary could also make such determination based upon misalignment between HOME rent requirements and the rent requirements of Section 8 and other similar rental assistance or subsidy programs. The Secretary determined that this change is appropriate and promotes greater alignment between the HOME program and HUD's other rental assistance programs and is revising § 92.252(a)(1) and § 92.252(a)(2) accordingly. Where a family is participating in a program where the family pays as a contribution toward rent no more than thirty percent of the family's monthly adjusted income or ten percent of the family's monthly income, then the maximum rent due from the family is the family's contribution, regardless of whether the family is occupying a High or Low HOME Rent unit. Thus, under the HOME program as changed by HERA, the HOME-assisted rental housing project owner may now accept the rent due from the tenant and the assistance or subsidy payment made under the applicable assistance or subsidy program.
The Department is revising § 92.252(a)(2)(i) to clearly reference the fair market rent being described in § 92.252(a)(1)(i) and to revise the term “fair market value” to “fair market rent” to more accurately describe the rent. § 92.252(a)(2)(ii) is also being revised to more accurately state that the rent contribution of the family in a Low HOME rent unit is 30 percent of the family's adjusted income. This is not a substantive change from the proposed rule or the current regulatory text, but it is a more accurate description of the Low HOME rent applicable to a family.
In response to comments about aligning with LIHTC on income and rents, the Department is adding the statutory language contained in 42 U.S.C. 12745(a)(1)(B)(ii) into the new § 92.252(a)(2)(iii). The provision will state that if a HOME-assisted unit “is a LIHTC unit and has rents not greater than the gross rent for rent-restricted residential units as determined under section 42(g)(2) of title 26” then it shall be a Low HOME Rent unit.
The Department is revising § 92.252(a)(3)(i) and (ii) to add explicit reference to how the zero-bedroom fair market rent is determined. This rent is established under 24 CFR part 888. In revising the rent limits, the Department also realized the requirement in § 92.252(a)(3)(ii), which currently requires that SRO units without sanitary or food preparation facilities meet the occupancy requirements of Low HOME rent units, could be identified in plain language. Instead of referring to the occupancy requirements, the provision is being revised to explain that the units are to be occupied by very low-income tenants. This is a non-substantive change to provide a clearer regulation.
In response to public comments received, HUD is clarifying in § 92.252(b) that “cable and broadband” are not included in utility allowances. Commentors asked for clarity regarding whether broadband is a utility and whether tenants can be required to pay for cable and broadband as a condition of occupying a HOME-assisted rental housing unit. The Department agrees the regulation could be clearer and included language in § 92.252(b) to clarify that in addition to telephone, “cable and broadband” are not included in utility allowances.
Paragraph § 92.252(b) was also revised to add the term “applicable” when describing local public housing authority utility allowances. The Department understands multiple public housing authorities may serve a particular geographic location (
The Department is making a non-substantive change to replace the word “ensure” with “require” in § 92.252(c). This change better explains the requirement that PJs must not allow owners to charge tenants in excess of the rents in § 92.252.
The Department is revising the dollar thresholds that define the periods of affordability in § 92.252(d) in response to public comments. Commenters stated that the thresholds had not been adjusted for inflation and the increase in the cost of construction. The Department agrees that the thresholds have not been revised since 1991 and must be revised to account for the increase in costs.
Accordingly, the Department will revise the initial threshold for rehabilitation or acquisition of existing housing per-unit amount of HOME funds from $15,000 to $25,000. If the per-unit cost of rehabilitation and/or acquisition of existing housing is below $25,000, then the minimum period of affordability for each HOME-assisted housing unit is five years. The Department is revising the second threshold from $40,000 to $50,000. If the per-unit cost of rehabilitation and/or acquisition of existing housing is from $25,000 to $50,000, then the minimum period of affordability shall be ten years for each HOME-assisted rental housing unit. For rehabilitation and/or acquisition of existing housing, if the per-unit cost is over $50,000 for each HOME-assisted rental housing unit, then the minimum period of affordability is fifteen years.
While the Department is revising the dollar thresholds for the periods of affordability involving rehabilitation and/or acquisition, the Department has chosen to maintain the period of affordability for new construction and for rehabilitation involving refinancing. The Department believes that the useful life of the property or the longest feasible period of time is consistent with sound economics and the purposes of this Act is still twenty years for HOME rental housing projects involving new construction. Similarly, the Department believes that properties where rehabilitation involves refinancing should also continue to be subject to a period of affordability of fifteen years, as the refinancing and rehabilitation of the property to the PJ's rehabilitation standards should adequately extend its useful life to a period of fifteen years. If the rehabilitation and refinancing action cannot ensure that the property remains capable of operating as affordable housing for a period of fifteen years, then the project is not feasible or furthering the purposes of the Act.
The Department is revising the first sentence of § 92.252(g) and § 92.252(g)(3) to include reference to the new safe harbor in § 92.203(a)(3). This revision allows a PJ to use the safe harbor in § 92.203(a)(3) in the calculation of both initial and annual income determinations instead of using source documents, as required in § 92.203(b)(1)(i). The Department is also revising the first sentence of § 92.252(g) to reference income provisions for HOME tenant-based rental assistance tenants, which have been moved to § 92.203(b)(3) from § 92.203(b)(2).
The Department is revising § 92.252(g)(1) to provide a chart clarifying the alternative income reexamination cycle for small-scale rental projects that a PJ may permit. The Department is also revising § 92.252(g)(2) to specify that rental projects, including small-scale projects, must reexamine tenant income using source documentation every sixth year of the period of affordability.
The Department is revising § 92.252(h)(2)(i) for readability by striking “section 42” and instead stating that over-income tenants subject to the rent restrictions under section 42 of the Internal Revenue Code of 1986 must pay a rent that complies “with that section.” This is clearer and less wordy. The Department is adding a new paragraph § 92.252(h)(2)(iii) that will explain that rent limits do not apply to rental assistance or subsidy payments under any Federal, State, or local rental assistance or subsidy program. This is because when tenants become over-income in certain rental assistance programs, such as the Housing Choice Voucher program, the tenant still pays a percentage of their rent, such as thirty percent of their rent, up to the contract rent for the housing unit. This means that there may still be subsidy or assistance from the rental assistance provider until the tenant is paying the full contract rent. If owners were unable to accept this rent, then it would undermine the purposes of HERA, as explained earlier for High and Low HOME Rents. As such, the Department providing the same clarification it did in paragraph § 92.252(a), which is that the rent does not include the rental assistance provided by the rental assistance or subsidy provider.
Paragraph § 92.252(i) was revised similar to other provisions to state that surety bonds, security deposit insurance, or instruments similar to surety bonds and security deposit insurance may not be used in lieu of or in addition to a security deposit in HOME-assisted units. This is a clarifying change for readability and not a substantive change from the proposed rule.
The Department is making significant changes to its tenant protection provisions in response to public comment. Based on comments received as part of the specific solicitation of comment #10, the Department has chosen to create three tenancy addenda for the HOME program, one for each type of HOME rental activity (rental housing, tenant-based rental assistance, security deposit assistance only). The requirements for each addendum shall be provided in paragraphs (b)-(d) accordingly. The Department is also reorganizing the tenant protections regulations by removing the current security deposit and termination of tenancy provisions found in paragraphs (c) and (d) and instead placing them directly into the applicable tenancy addendum. The Department believes these changes allow HUD to tailor the protections to the form of assistance being received under the HOME program and should decrease any potential chilling effects that an addendum may have on private owners accepting tenants with HOME tenant-based rental or security deposit assistance.
The Department also believes reorganizing the tenant protections to include the security deposit requirements and termination of tenancy provisions into the applicable tenancy addenda for rental housing and tenant-based rental assistance is more legally supportable and consistent with other HUD programs. Section 42 U.S.C. 12755(a)(1) provides an explicit congressional delegation of authority to the Secretary to determine the terms and conditions of leases in the HOME program. Security deposit requirements and termination of tenancy provisions are material terms to a lease and other
Accordingly, the Department is revising paragraph § 92.253(a) by adding a “(1)” after lease contents and redesignating § 92.253(a)(1)-(4) as § 92.253(a)(1)(i)-(iv). Paragraph § 92.253(a)(1)(iv)(A) shall also be revised to require that a lease of a tenant in HOME rental housing include the HOME rental housing tenancy addendum described in § 92.253(b). Paragraph § 92.253(a)(1)(iv)(B) is being added and shall require that a lease of a tenant in HOME tenant-based rental assistance include the HOME tenant-based rental assistance tenancy addendum described in paragraph § 92.253(c).
A separate paragraph § 92.253(a)(2) is being added and shall provide the lease requirements for security deposit assistance only recipients. After reviewing the comments received as part of the solicitation of public comment, the Department determined that it was not appropriate to require that tenants and owners use the HOME tenant-based rental assistance tenancy addendum. Security deposit assistance is fundamentally different than other forms of assistance under the HOME program. It is a one-time form of assistance that is inherently short-term in nature. The assistance is primarily intended as a form of emergency assistance for families whose primary barrier to obtaining housing is the security deposit. Many times, this assistance is also paired with long-term assistance in other programs that comes with their own protections. The HOME tenant-based rental assistance tenancy addendum contemplates a contractual relationship between the PJ and the owner because of the updated rental assistance contract requirements contained in § 92.209(e). Security deposit assistance, in contrast, is of limited duration, lasting only the issuance of the initial assistance.
Instead of requiring the HOME tenant-based rental assistance tenancy addendum, the Department is requiring a security deposit assistance tenancy addendum. Paragraph § 92.253(a)(2) shall require a written lease between the tenant and the owner that is for a period of not less than 1 year, unless by mutual agreement between the tenant and the owner, a shorter period is specified. This mirrors the requirements for both rental housing and tenant-based rental assistance. Likewise, to determine that the HOME security deposit assistance tenancy addendum is included in the lease, the owner must also provide the PJ with a written lease before security deposit assistance is provided. This mirrors the new requirements for both rental housing and tenant-based rental assistance. Then, the paragraph requires that the lease contain the HOME security deposit assistance tenancy addendum in paragraph (d) of this section.
The Department received a significant amount of comment on its proposed tenant protections that represented a spectrum of participants in the HOME program including PJs, owners, CHDOs, tenant rights and advocacy organizations, fair housing and civil rights organizations, and associations. These comments ranged from unqualified support to complete opposition. The Department considered the comments and determined that the vast majority of its proposed text was appropriate for a rental housing tenancy addendum. However, based on public comment and the reorganization of the regulation, the Department did make a number of revisions since the proposed rule stage.
The introductory text in § 92.253(b) has been clarified to indicate that the tenancy addendum being described is the HOME “rental housing” tenancy addendum. The second sentence was also revised to include addenda from local affordable housing programs in addition to other Federal or State affordable housing programs. The Department did not intend to inadvertently exclude HOME-assisted tenants from receiving other forms of local affordable housing assistance and believes this revision is responsive to public comments that warned HUD not to create conflicts with local programs. Paragraph (b)(1)(ii)(A) is being revised to clarify that with respect to maintenance and repairs to a housing unit, the owner shall provide tenants with written expected timeframes for maintaining or repairing units as soon as practicable. A written record is more protective of a participating jurisdiction, owner, and tenant alike, as it provides each clear evidence of when work is expected to occur.
The Department is revising paragraph (b)(2)(i) because while it is true that a family may reside in the unit with a foster child, foster adult, or live-in aide, the family must still comply with all applicable occupancy requirements when living in HOME-assisted rental housing. The Department did not intend to preempt or override State or local occupancy laws or HUD's own occupancy restrictions in other programs whose assistance may be combined with HOME assistance, such as Section 8 project-based rental assistance. The Department notes that any reasonable accommodations must still be made in accordance with all applicable laws regarding nondiscrimination and accessibility. In § 92.253(b)(5), the owner is separately agreeing not to interfere with or retaliate against the tenant for asserting their rights, which include the right to request a reasonable accommodation for a live-in aide. In § 92.253(b)(8), the owner is also agreeing to operate HOME rental housing in accordance with all applicable nondiscrimination and equal opportunity requirements pursuant to § 92.350. As a result, the Department does not believe that this revision will negatively impact tenant protections. This revision was made in response to public comments that requested HUD reexamine the tenant protections to determine that they did not conflict with State or local law or with other Federal programs.
The Department is revising the term “dwelling” to “housing” in § 92.253(b)(2)(iii), (b)(2)(iii)(A), and (b)(2)(iii)(C). The Department is also revising § 92.253(b)(2)(iii)(C) in response to public comment urging HUD to require that owners provide tenants with written notice of the date, time, and purpose of the owner's entry if the owner must enter the housing without advance notification when there is reasonable cause to believe that an emergency requiring entry to the unit exists. The commenter was supportive of this approach and believed it would be protective for the tenant. The Department agrees and believes this provision will improve communication between owners and tenants of HOME-rental housing.
In response to public comment, the Department is revising § 92.253(b)(3)(i) to require that owners provide tenants with written accessible notice of the specific grounds for proposed adverse actions by the owner against the tenant before taking such actions. The
The Department is also revising § 92.253(b)(3)(ii) to more clearly state when tenants must be notified of changes in the ownership and management of the rental housing project. Paragraph § 92.253(b)(3)(ii)(A) will specify that an owner must notify tenants within 30 calendar days of the impending sale or foreclosure of a rental housing project. Paragraph § 92.253(b)(3)(ii)(B) specifies that owners must notify tenants within five business days of a change in ownership. These requirements were both in the proposed rule. The Department added as a new requirement that owners not only notify tenants within five business days of any changes in ownership but also any changes in property management companies managing the property as § 92.253(b)(3)(ii)(C). This change, being made to was in response to public comments that believed that such notification should include property managers and not just owners. Property managers have significant involvement in the operation of the property and are agents or employees acting on behalf of HOME rental housing owners. When an owner obtains a different property management company, it can have significant impacts on the daily life of tenants. The Department believes it is important to keep tenants informed in advance of such impacts and that this improved communication may help both owners and tenants. Similar additions are made to § 92.253(c)(3)(ii).
The Department is revising § 92.253(b)(4)(v) to narrow the instances in which a tenant must pay an owner's attorney fees or other legal costs as part of a court proceeding. In the proposed rule, the Department proposed language to allow payment of such costs if the tenant loses the court proceeding. In response to public comment stating that the Department should examine local and State laws to determine that the tenant protections in § 92.253 are not in conflict with such requirements, the Department determined that this provision may conflict with State or local laws that would not permit payment of attorney's fees or other legal costs, even if the tenant were to lose the matter. Moreover, as courts hearing landlord-tenant disputes are making findings of fact and law based on the individual circumstances of each case, it should be up to those courts to determine whether tenants should pay these costs. Therefore, the revised requirement will state that a tenant is only required to pay the owner's attorney fees or other legal costs if the tenant loses the court proceeding and the court orders the tenant to pay those costs.
The Department is significantly revising § 92.253(b)(5) to address a number of comments received about the effectiveness of the provisions in protecting tenants. First, the heading for the section is being revised to explicitly include “unreasonable interference” to be clear that unreasonable interference with the tenant's safety or peaceful enjoyment of their property is a subject of the provision and that the provision is not only prohibiting retaliation. Commenters reasonably believed that the section was only describing retaliation because the heading did not specify otherwise. Similarly, unreasonable interference is now being separately prohibited in § 92.253(b)(5)(i). The terminology is also being revised from the proposed rule to remove the term “comfort” and instead state “tenant's safety or peaceful enjoyment of a rental unit or the common areas of the rental housing project.” The Department recognizes that there is significant landlord-tenant case law on the term “peaceful enjoyment” and that it is a far more recognized term than “enjoyment.” The Department believes this change will improve the ability for courts to determine the meaning of the provision in relation to their jurisdictions and governing law. The revision to address common areas also reflects consistency with protections in § 92.253 that allow tenants reasonable access to and use of the common areas of the project (see § 92.253(b)(2)(iv)).
The Department then revised § 92.253(b)(5)(ii) to prohibit an owner from retaliating against a tenant for taking any action allowable under the lease and applicable law. The rule provides a variety of actions that a tenant may take under a lease and the Department believes that retaliating against a tenant for using any of these protections is a breach of the lease and of the owner's written agreement with the participating jurisdiction. Section 92.253(b)(5)(iii) provides a list of actions that evidence unreasonable interference or retaliation against a tenant. The Department stresses that this language is providing examples and that it is not a limited list. The actions taken are the same actions that were prohibited in the proposed rule, but the list has been redesignated § 92.253(b)(5)(iii)(A)-(E), and § 92.253(b)(5)(iii)(B) has been revised to add a parenthetical to give an example of what it means to be increasing obligations of a tenant in a manner that is not in accordance with 24 CFR part 92. The example given is of new or increased monetary obligations, such as the addition of new or increased fees. This is just an example of monetary obligations but nonmonetary obligations like new property rules could also be considered retaliatory acts under this regulation under the right circumstances.
In response to public comments requesting that the Department specify the consequences of unreasonably interfering with a tenant's safety or peaceful enjoyment or retaliating against a tenant for exercising a right under their lease or the law, the Department has added a new § 92.253(b)(5)(iv). This new provision explains that if an owner unreasonably interferes or retaliates against a tenant, then the owner is violating the lease, the HOME program requirements, and their written agreement with the participating jurisdiction. While the Department has no authority to require that a participating jurisdiction establish a grievance process, the participating jurisdiction is required to address any regulatory violations in accordance with the applicable provisions contained in § 92.504(a) and (c). This applicability is made clearer by adding explicit cross references.
The Department is also revising § 92.253(b)(5)(ii) of the proposed rule, which is being revised and redesignated as § 92.253(b)(6). The new § 92.253(b)(6) has a revised header that explains that the section is describing the exercise of rights under tenancy. The revised first sentence explains that the tenant can exercise any right of tenancy or protection under their lease and other applicable Federal, State, or local tenant protections. Then the Department redesignated § 92.253(b)(5)(ii)(A)(C) as § 92.253(b)(6)(i) through (iii) and revised § 92.253(b)(6)(ii) to also allow for a tenant to report lease violations in
The Department redesignated the proposed § 92.253(b)(6) and (7) as § 92.253(b)(7) and (8). In response to public comments, the Department also redesignated § 92.253(c) as § 92.253(b)(9). The same provision will also be included in § 92.253(c)(9). This provision, which provides the requirements for security deposits, should be contained in the tenancy addenda and not contained in a standalone regulation. As explained earlier in this preamble, the Department has clear authority to specify the terms and conditions of the lease under 42 U.S.C. 12755 and security deposits are a material term of the lease. Therefore, the Department is moving the security deposit provisions from a standalone section of the regulation and instead making the language a part of each HOME tenancy addendum. The Department is also revising § 92.253(b)(9) to state that “Surety bonds, security deposit insurance, and instruments similar to surety bonds or security deposit insurance may not be used in lieu of or in addition to a security deposit.” This is a non-substantive clarification of the text.
Similarly, one of the most important provisions of a lease concerns termination of tenancy. The Department understands how central these terms are to a lease and is also including termination of tenancy provisions in the lease addendum. Section 92.253(d)(1) of the proposed rule and all its contents are being redesignated as § 92.523(b)(10)(i)-(v) and being revised.
Section 92.253(b)(10)(i) is being revised from the proposed rule to clarify that good cause includes serious or repeated violation of the “material” terms and conditions of the lease. The Department adds the word “material” because good cause is a higher standard and minor lease violations, especially when easily curable or already cured, should not provide the basis for a termination of tenancy or refusal to renew tenancy in a HOME rental housing project. The Department still believes that serious or repeated violations of the material terms of the lease, such as nonpayment of rent or intentionally damaging the project, can form the basis of a termination of tenancy or refusal to renew.
Section 92.253(b)(10)(i) is also being revised to add a provision that states that an owner is permitted to terminate the tenancy of any tenant or household member or refuse to renew the lease of a tenant of rental housing assisted with HOME funds if the owner is permitted to do so pursuant to the provisions contained in 24 CFR part 5, subpart I; 24 CFR 882.511; or 24 CFR 982.310. This change is in response to public comments and to maintain consistency across HUD programs. Owners with tenants assisted under programs that are subject to these lease provisions must be allowed to terminate tenancy in accordance with the U.S. Housing Act of 1937 (42 U.S.C. 1437f) and the Department is allowing for a consistent approach for termination of tenancy under the HOME program for those assisted tenants.
Section 92.253(b)(10)(i)(A) is being revised from the proposed rule. The provision will state that refusal to purchase a HOME rental housing unit is not good cause to terminate a tenancy. The provision will provide an exception for when a family fails to purchase housing pursuant to a lease-purchase agreement. This was in response to public comment, which pointed out that owners must be able to sell units when the tenant fails to purchase the home in accordance with their lease-purchase agreement. The Department agrees and allows for this to be good cause to terminate a tenancy.
Section 92.253(b)(10)(i)(B) is being restructured to specify other good cause and then list each ground individually. This was done to improve readability of this section. Two grounds for good cause were added and one was significantly revised.
The first form of good cause being added to § 92.253(b)(10)(i)(B)(
The second form of good cause added to § 92.253(b)(10)(i)(B)(
One form of good cause was substantively revised since the proposed rule is contained in the newly redesignated § 92.253(b)(10)(i)(B)(
Section 92.253(d)(1)(i)(D) is being redesignated and revised as § 92.253(b)(10)(i)(C). The provision is also being revised directly in response to public comment. The public was concerned that the meaning of a record of conviction of a crime that bears directly on the tenant's continued tenancy was too vague to be an appropriate legal standard to apply to landlord-tenant relationships. The commenters believed that the Department should be more specific to ensure the regulation and protections are applied correctly. The Department agrees. Based on the public comment, the Department is revising the language to specify that the violations of applicable Federal, State, or local law must be for convictions of a crime that directly threatens the health, safety, or right to peaceful enjoyment of the premises by other tenants in the project. The Department continues to believe that termination of tenancy is a fact-specific matter and that it is impossible to provide an exhaustive list of all the grounds or considerations that one must consider prior to termination. Criminal convictions may impact continued tenancy but only to the extent that such convictions interfere with the rights of others who live in the project. Minor violations of law that do not impact people living in the housing should not form the basis for terminating tenancy or refusing to renew a lease in the HOME program.
Paragraph § 92.253(d)(1)(ii) is being redesignated as § 92.253(b)(10)(ii) and revised. The first and second sentence are revised to only provide 30 days' notice prior to termination of tenancy or refusal to renew, and to specify that the 30-day requirement does not apply to the statutory grounds for termination relating to tenants that are a direct threat to the safety of the tenants or employees of the housing or an imminent and serious threat to the property. The Department received overwhelmingly negative comments from the public on the negative effects of requiring a longer notice period before termination or refusal to renew. Some commenters explained the variation of eviction timeframes across the country. Others explained how adding an additional 30 days to the notice period impacted the average eviction process and the average owner in their jurisdiction. Organizations that represented owners and affordable housing managers described how these changes negatively impact the financial feasibility of current and future HOME projects. There were commenters who supported the change, and most indicated that it would better assist tenants in curing or preventing termination of tenancy. The Department also considered what it had done in other programs and the effort to make a consistent 30 day notice standard. On the whole, when the Department considered the potential negative ramifications and how the extension to 60 days was inconsistent with other Departmental efforts, the Department decided to withdraw the proposal to extend the notice period to 60 days and is revising the paragraph accordingly. Paragraphs § 92.253(d)(1)(iii) through (v) are redesignated as § 92.253(b)(10)(iii) through (v). Paragraph § 92.253(d)(1)(v) is also being revised to specify that an owner may not create a hostile living environment or refuse to provide a reasonable accommodation to cause a tenant to terminate their tenancy. The proposed rule had initially just stated that the owner cannot refuse to make a reasonable accommodation, but changes are now being made to cover situations where an owner refuses to permit a lawful reasonable accommodation with the intent of constructively evicting a person.
A new paragraph (c) is being added to § 92.253. This section will provide the tenancy addendum requirements for the HOME tenant-based rental assistance program. The opening paragraph mirrors the opening paragraph for § 92.253(b) and specifies that the terms of the HOME tenant-based rental assistance tenancy addendum shall prevail over any conflicting provisions of the lease. The terms and conditions of the written lease, the HOME tenant-based rental assistance tenancy addendum, the VAWA addendum listed in § 92.253(a), and any addendum required by another Federal, State, or local affordable housing program are the sole and entire agreement between the owner and the tenant and no prior or contemporaneous oral or written representation or agreement between the owner or tenant shall have legal effect. This is the same as the new rental housing requirements and provides sufficient protections to ensure that the owner does not later claim that the tenant agreed to something that would be prohibited under the tenant protections or applicable law. Paragraph § 92.253(c) also states that the HOME tenant-based rental assistance tenancy addendum shall terminate upon termination of the rental assistance contract. Initially, the Department had proposed that the lease terminate upon termination of the rental assistance contract but determined that it was best left to the owner and tenant as to when the lease shall terminate. Instead, the tenancy addendum shall terminate, as the tenant is no longer being assisted with HOME tenant-based rental assistance. Then the paragraph provides the same list of tenant protections contained in the HOME rental housing tenancy addendum paragraph (b) except for:
1. The provision in § 92.253(b)(1)(iii) which requires an owner to repair a life-threatening deficiency impacting the tenant, and requires, if the repairs cannot be completed on the day the life-threatening deficiency is identified, the owner to promptly relocate the tenant into housing that is decent, safe, sanitary, and in good repair and that provides the same or a greater level of accessibility, or other physically suitable lodging, at no additional cost to the tenant, until the repairs are completed. The Department recognizes that this type of provision may have a chilling effect on owner participation in the tenant-based rental assistance program and is removing the requirement. If participating jurisdictions wish to provide this requirement as part of the rental assistance contract, then they still retain discretion to do so.
2. Section 92.253(b)(2)(v) allowing tenants to organize, create tenant associations, convene meetings, distribute literature, and post information. This provision may have a chilling effect on owners and may deter participation in the tenant-based rental assistance program. Though the Department believes that tenants should have the right to organize tenant associations, rental assistance provided through HOME tenant-based rental assistance is not of the same durable nature as development subsidies provided to owners and developers producing HOME rental housing. Requiring that owners allow organizing activities when the participating jurisdiction has far fewer incentives to encourage owners to comply disadvantages tenants and participating jurisdictions who are already contending with source of income discrimination in many jurisdictions.
3. Paragraph § 92.253(c)(9)(iii) will permit tenants that are already in a lease
Other than the above-described protections, § 92.253(c)(1)-(9) is substantively the same as § 92.253(b)(1)-(9). The Department believes that this is appropriate. Recipients of tenant-based rental assistance should have substantively the same protections as tenants in HOME-assisted rental housing.
The Department did want to highlight that for the retaliation provision contained in § 92.253(c)(5)(iv), the Department understands that participating jurisdictions may have limited leverage to require that owners unreasonably interfering with or retaliating against individuals with HOME tenant-based rental assistance stop their actions. The participating jurisdiction must use their best judgment about how to address such circumstances, including balancing the needs of the tenant to the continued tenant-based rental assistance and the participating jurisdiction's obligation to enforce compliance with the owner's rental assistance contract with the participating jurisdiction. However, the Department is declining to remove this protection, as it is a meaningful and necessary tenant protection for all the reasons given in the proposed rule.
The termination of tenancy provisions that were contained in paragraph § 92.253(d)(2) are being revised and redesignated from the proposed rule to be included in § 92.253(c)(10). First, just as in the HOME rental housing termination provisions in § 92.253(b)(10)(i), the tenant-based rental assistance provisions are being included in a new paragraph § 92.253(c)(10)(i) that states that an owner may not terminate the tenancy of any tenant or household member or refuse to renew the lease of a tenant with tenant-based rental assistance, except for serious or repeated violation of the material terms and conditions of the lease; for violation of applicable Federal, State, or local law; for completion of the tenancy period for transitional housing or failure to follow any required transitional housing supportive services plan; or for other good cause. This mirrors the HOME rental housing section but does not include the additional specific grounds that allows owners to terminate the tenancy of any tenant or household member or refuse to renew the lease of a tenant of rental housing assisted with HOME funds if the owner is permitted to do so pursuant to the provisions contained in 24 CFR part 5, subpart I; 24 CFR 882.511; or 24 CFR 982.310. This is because the Department has determined that this is not applicable to the recipients of HOME tenant-based rental assistance, who would not be living in units receiving subsidy or assistance under the Section 8 program.
Similar to § 92.253(b)(10)(i)(A), § 92.253(c)(10)(i)(A) also states that an increase in the tenant's income or assets, the amount or type of income or assets the tenant possesses does not constitute good cause. The section also states that except in the case of a lease-purchase agreement, other good cause also does not include refusal of the tenant to purchase the housing. These protections are substantively the same as the HOME rental housing protections.
The provisions on good cause in § 92.253(c)(10)(i)(B) differ from the proposed rule in several respects. Section 92.253(d)(2)(i)(A) and (B) of the proposed rule are being redesignated as § 92.253(c)(10)(i)(B)(
The Department added a new ground for good cause in response to public comment. Section 92.253(c)(10)(i)(B)(
Section 92.253(d)(2)(ii) is being redesignated as § 92.253(c)(10)(ii) and revised to remove the 5-business day requirement for the owner to notify the participating jurisdiction that it has served a notice to vacate to a tenant. This is because the new tenant-based rental assistance rental assistance requirements require the owner and participating jurisdiction to have a rental assistance contract (see § 92.209(e)). Therefore, instead of requiring a time period in the regulation, the regulation will defer to the rental assistance contract or the participating jurisdiction's policies and procedures to govern the issuance of notice to the participating jurisdiction. The citation in the last sentence was also revised because of the redesignation of the paragraph.
Paragraphs § 92.253(d)(2)(iii) and (iv) are being redesignated as § 92.253(c)(10)(iii) and (iv) without change. Paragraph § 92.253(d) is being added to add security deposit assistance tenancy addendum requirements. The addendum shall prevail over conflicting terms of the lease. The terms and conditions of the written lease, the HOME security deposit assistance tenancy addendum, and any addendum required by another Federal, State, or
Paragraph § 92.253(e)(4) is being revised to specify that participating jurisdictions must not exclude an applicant with Federal, State, or local tenant-based rental assistance. The proposed rule did not prohibit discriminating against a person because they were receiving local rental assistance, just State and Federal tenant-based rental assistance. In response to comment and consistent with HUD's position that source of income discrimination must end, the Department is adding this prohibition to the tenant selection regulations.
Paragraph § 92.253(e)(5) is being revised to remove the requirement that HUD approve alternative waiting list procedures for small-scale housing projects. The Department believes that this is best left to participating jurisdictions. The Department reminds participating jurisdictions and owners that all Federal, State, and local nondiscrimination requirements, including the Violence Against Women Act (VAWA), continue to apply to tenant selection, and any approved waiting list procedures must comply with all applicable requirements.
Paragraph § 92.253(f) is being revised to require that the notification of an environmental, health, or safety hazard be in writing. The paragraph is also being revised to require that when an owner becomes aware of such hazards, the owner must notify both the participating jurisdiction and the tenants instead of just the tenants. This was requested by commenters and will allow tenants to find out as quickly as possible if a hazard is affecting their unit or project. The paragraph is also being revised to add a sentence to explain that when an owner or participating jurisdiction has notified the tenants, this satisfies the requirement for the other party.
The Department has determined that the Secretary may permit the period of affordability for a project to be terminated earlier than the time periods specified in § 92.252 under the circumstances described in detail below. The Department is revising § 92.254, which currently prohibits over-income in-place tenants from purchasing their units. This is in response to public comment requesting that in-place HOME tenants who are no longer income eligible be permitted to purchase their housing units, including when former tax credit projects are converting to homeownership housing units.
It is consistent with the statutory language of the Act, as well as the purposes of the Act, to allow in-place HOME tenants who have saved up for a downpayment to use that downpayment to purchase the unit that they are currently occupying. Developing stable homeownership models where tenants can live in a housing unit, work towards increasing their income from very-low income to moderate-income, and eventually purchase their unit is not only consistent with the intent of the drafter of the Act but in furtherance of it. As such, the Department is revising § 92.254(a)(3) to add a sentence s allowing HOME-assisted housing to be purchased by an in-place tenant pursuant to § 92.255 if the homebuyer's family was low-income at the time the homebuyer's family began occupying the HOME rental housing unit. This is similar to how families that entered into lease-purchase agreements may purchase their housing so long as they were income-eligible when they entered into their lease-purchase agreement. The Department believes this is in furtherance of the purposes of the Act and will increase homeownership opportunities for HOME-assisted tenants.
The Department is revising § 92.254(a)(3) to provide clearer language that explicitly authorizes a participating jurisdiction to assist a family even if the homeownership unit does not meet the property standards at acquisition, provided that the written agreement between the participating jurisdiction and the homebuyer requires the property to meet the standards within the period specified in § 92.251(c)(3)(ii) and funding is secured to complete the rehabilitation necessary to comply with the standards. This ensures consistency between the requirements in § 92.251(c)(3) and § 92.254.
The Department revised § 92.254(a)(4) in response to public comments. Commenters had objected to beginning the period of affordability upon project completion. For homeownership projects, project completion means that all necessary title transfer requirements and construction work have been performed; the project complies with the requirements of this part (including the property standards under § 92.251); the final drawdown of HOME funds has been disbursed for the project; and the project completion information has been entered into the disbursement and information system established by HUD.
The Department understands that requiring that a homebuyer's resale or recapture period only begin to run after the participating jurisdiction completes all the information in the disbursement and information system can disadvantage homebuyers, especially for multiple address projects where completion of the information in the disbursement and information system can only occur after all housing units in the project meet the requirements in 24 CFR part 92. The Department is changing the provision to instead require the period of affordability begin after execution of the instrument that requires recapture of the HOME investment or recordation of the resale restrictions against the property. The Department is further conditioning the execution of the instrument that requires recapture of the HOME investment or recordation of the resale restrictions against the property upon both meeting the property standards in § 92.251(c)(3) and the transfer of the property title to the homebuyer. The Department believes these are reasonable restrictions because the property must meet the property standards at the time of purchase, or within 6 months after purchase, if permitted by the participating jurisdiction (with the ability to extend up to 12 months after purchase). If the property does not meet the standards within the required time period under § 92.251(c)(3), then the participating jurisdiction would have to repay the investment, and the housing would not be a HOME-assisted homeownership
The Department revised the threshold for the periods of affordability in the table § 92.254(a)(4) consistent with the periods of affordability in § 92.252(d)(4). When the homeownership assistance provided on a per-unit basis is under $25,000, the period of affordability shall be for a minimum of 5 years. When the homeownership assistance is $25,000 to $50,000, then the minimum period of affordability shall be 10 years. If the amount of homeownership assistance is above $50,000, the minimum period of affordability shall be 15 years.
The Department believes that it is important to increase the thresholds for the periods of affordability for the reasons given earlier. The Department considered that since 1990, the House Price Index has increased by over 300%.
Consistent with § 92.504, the Department is revising the first sentence of § 92.254(a)(5)(ii)(A) to state that recapture provisions must “require” that the PJ recoups all or a portion of the HOME assistance to the homebuyers if the housing does not continue to be the principal residence of the family for the duration of the period of affordability. The Department states this as a requirement in other parts of the rule and is clarifying the provision here for consistency. A similar revision is made in § 92.254(g)(3).
The Department considered a variety of comments on its revisions to lease-purchase regulations in § 92.254(a)(7). After careful consideration of the challenges owners encounter when the family fails to purchase the property pursuant to the lease-purchase agreement, the Department is substantially revising § 92.254(a)(7). The Department is revising the introductory sentence of the provision to explain that acquisition, rehabilitation or new construction of housing to be sold to eligible low-income homebuyers for lease-purchase is allowable.
The next provision § 92.254(a)(7)(i) explains the statutory requirement of 42 U.S.C. 12745(b)(2)(B) that a homebuyer must qualify as a low-income family at the time the lease-purchase agreement is signed. The regulation is being revised to provide standalone requirements for lease-purchases within the section. As a result, HUD revised the regulation to clarify that the current regulation's requirements that income determinations be made based on the income of all people living in the homeownership unit are applicable to lease-purchases.
Paragraph § 92.254(a)(7)(ii) explains that the owner and homebuyer must execute a lease-purchase agreement prior to the family occupying the unit and that the lease-purchase program must require the family to purchase the housing within 36 months of the execution of the lease-purchase agreement. The provision also retains language from the proposed rule explaining that owners and homebuyers that have entered into a lease-purchase agreement are subject to the affordability requirements in the homeownership section unless the housing is not purchased within the timeframes described in § 92.254(a)(7) in accordance with the lease-purchase agreement.
The Department is adding § 92.254(a)(7)(iii) in response to public comments that requested that owners be able to sell units to an eligible homebuyer if the family that entered into the lease-purchase agreement fails to purchase the housing pursuant to the agreement. The new § 92.254(a)(7)(iii) provides that if the first homebuyer does not acquire the housing, then the owner may sell the housing to an eligible low-income homebuyer within 48 months of execution of the lease-purchase agreement. This provides owners 12 months from the expiration of a 36-month lease-purchase agreement to find another eligible low-income homebuyer and sell the homeownership unit. The regulation also permits the PJ to provide homeownership assistance to the next homebuyer identified for the unit but prohibits the owner from entering into another lease-purchase agreement for the housing.
The Department has concluded that owners should have another chance to sell the unit as a homeownership unit instead of being required to operate the housing as rental housing if the lease-purchase agreement fails to end in the sale of the housing. However, since the lease-purchase did not succeed the first time, the Department is prohibiting owners from using the lease-purchase model on a second attempt to sell the housing. The owner must default to the rules that apply in a typical homeownership development project.
Section 92.254(a)(7)(iv) has been amended accordingly to provide owners with additional time to sell the housing once it has failed to be sold through a lease-purchase agreement by allowing owners 48 months to complete the sale and transfer the title to an eligible low-income homebuyer (
The Department inadvertently omitted paragraph (a)(8) in the publication of the proposed rule. It was not the Department's intent to delete paragraph (a)(8), and the Department noted some confusion over the use of this provision in the public comments. In the final rule, the Department is retaining the language from § 92.254(a)(8) from the current rule without change.
In response to public comment explaining that it is very difficult to purchase housing with a right of first refusal, bring the property into compliance with the PJ's property standards, and resell it to an eligible homebuyer within 6 months, the Department is revising § 92.254(b)(1)(i) and § 92.254(b)(3)(ii) to allow PJs and CLTs with up to 12 months to sell the housing to the next eligible low-income homebuyer.
The Department is adding an additional clarifying sentence to § 92.254(b)(2)(v) to explain that while sales proceeds can be used to reimburse up to one-hundred percent of the administrative funds used by a PJ to preserve the affordability, any sales proceeds exceeding that amount shall be program income for the PJ.
In response to public comments requesting that CLTs or PJs be allowed to assist homebuyers when a CLT exercises a right of first refusal or preemptive purchase rights in accordance with § 92.254(b)(3), the Department is revising § 92.254(b)(3)(iv) to explicitly permit the PJ to provide homeownership assistance to the next eligible homebuyer. PJ always has the flexibility to assist a homebuyer through a homeownership assistance program, regardless of whether the unit the homebuyer wishes to purchase was originally purchased by another HOME-assisted homebuyer. Since the Department is revising § 92.254(b)(3)(iv) to explicitly permit PJs to assist the next homebuyer, the Department is also clarifying both § 92.254(b)(3)(iii) and (iv) to state that if a homebuyer is provided assistance by the PJ, the period of affordability shall be calculated in accordance with § 92.254(b)(1)(iii) and § 92.254(b)(1)(iv), and if no additional assistance is provided to the homebuyer, then the period of affordability shall be equal to remaining period of affordability on the property.
However, the Department does not believe the statute permits the PJ to award HOME funds to the CLT to provide homeownership assistance to the next eligible homebuyer. The statute specifically states that when HOME “funds provided in prior and subsequent appropriations acts that were or are used by community land trusts for the development of affordable homeownership housing pursuant to section 215(b) of such Act,” then the community land trusts could retain the right to purchase the housing without violating the period of affordability requirements contained in section 215(b)(3)(A). This type of relief was to allow for a unit to temporarily cease to be used as affordable housing, as long as the housing was rededicated to that purpose shortly thereafter. It did not establish a new eligible activity or new eligible costs but gave CLTs the ability to exercise their purchase rights without violating the affordability requirements and triggering repayment of the HOME investment by the PJ. As such, the Department is revising the regulation to allow the PJ to assist the next eligible homebuyer.
The Department received public comments requesting that in-place HOME tenants who are no longer income eligible still be permitted to purchase their housing units. While regulations currently do not permit over-income in-place tenants to purchase their units, the Department has determined that the Secretary may permit the period of affordability for a project to be terminated earlier under certain circumstances.
The Department believes that it is consistent with the purposes of the Act to allow in-place HOME tenants who have saved up for a downpayment to use that downpayment to purchase the unit that they are currently occupying. Developing stable homeownership models where tenants can live in a housing unit, work towards increasing their income from very-low income to moderate-income, and eventually purchase their unit is not only consistent with the intent of the Act but in furtherance of it.
As such, the Department is revising § 92.255(b) to state that if the tenant's family is no longer low-income at the time of the purchase, then the family may still purchase the home. The provision is also being revised to state that the family must occupy the housing as their principal residence in accordance with § 92.254(a)(3) and must agree to the imposition of resale restrictions on the housing, in accordance with § 92.254(a)(5), for the remaining period of affordability of the housing unit. By adding these requirements, it ensures that the intent of the Act is fulfilled because the family, which began their participation in the HOME program as low- or very low-income, must own and occupy the housing for the full period of affordability or be subject to the very same resale restrictions that all other income-eligible families must comply with in the event that the family sells or transfers the property within the housing's original period of affordability.
Paragraph § 92.255(c) is similarly revised to explain that though an in-place HOME tenant may purchase their unit even if the tenant's family is no longer low-income, additional HOME funds cannot be provided to assist that family because the family is not income eligible for homeownership assistance.
In the proposed rule, HUD proposed to revise the text of § 92.300. The Department is making further revisions to § 92.300(a)(2) to clarify that rental housing owned by a CHDO is rental housing if it is “leased” to low-income tenants. The Department had inadvertently removed necessary words from the provision in the proposed rule and is clarifying text. HUD also determined that it is necessary to further revise the text of § 92.300(a)(2) and (3) in order to clarify when a community housing development organization is
In response to public comments, HUD is also making additional changes to § 92.300(a)(3). HUD received public comments requesting that 92.300(a)(3) more clearly describe how a community housing development organization is intended to be in charge of the development process when it acts as a “developer” under that provision. The Department is adding a clarifying sentence that explains that the requirement that a CHDO be in charge of all aspects of the development must be evidenced by an enforceable written agreement between the CHDO and the other entities sharing responsibility in the development of the housing. The Department also provided examples of different types of written agreements that may meet the requirements, including joint venture agreements and master development agreements.
Additionally, multiple commenters questioned whether the Department's removal of the requirement that rental housing developed by a CHDO be owned by the CHDO during development and for the full period of the affordability would allow a loophole for CHDOs to sell CHDO developed units to for-profit organizations. The Department recognized that this provision could inadvertently be used for that purpose. As a result, the Department revised § 92.300(a)(3) to require that the housing be owned by a CHDO unless the PJ documents that that the CHDO no longer has the capacity to own and manage the housing for the full period of affordability and there are no other CHDOs with capacity to own and manage the project for the full period of affordability. If the PJ authorizes the transfer of the housing, then it may only be sold to a nonprofit. By requiring that the PJ attempt to find another CHDO to own the housing unless the PJ cannot identify a CHDO that is capable of owning and managing the housing in accordance with the requirements of part 92 for the full period of affordability, the regulation is more consistent with the purposes of the Act and the intent of the CHDO set-aside. It also provides adequate safeguards to ensure that the CHDO set-aside is not being used for the enrichment of private for-profit businesses.
The Department is withdrawing its proposed language for the first sentence of § 92.300(a)(4)(i), which would have barred wholly-owned for-profit CHDO subsidiaries from being considered a CHDO or valid CHDO subsidiary for purposes of meeting the CHDO project set-aside requirements. The Department recognizes that this is a model that CHDOs may be using and does not wish to reduce the ways CHDOs can participate in HOME projects.
Commenters welcomed changing the term “downpayment assistance” to “homeownership assistance” in § 92.300(a)(6)(i) and elsewhere. Many commenters noted that the new term is broader and could include assistance for closing costs and mortgage rate buy-downs. The Department believes that it in addition to changing the term “downpayment assistance” to “homeownership assistance,” it will also be helpful to revise § 92.300(a)(6)(i) to provide additional examples of the kinds of homeownership assistance that CHDOs can provide.
The Department is revising the reference to § 92.253(d) in § 92.353(c)(2)(ii)(A) to remove the pinpoint citation, as the termination of tenancy provisions are now contained in § 92.253(b)(10) and § 92.253(c)(10).
HUD is clarifying language in § 92.356(d)(1). The Department recognizes that there may be some confusion over what constitutes a “combination” of conflict of interest disclosure methods provided in the proposed rule. The Department is clarifying in the final rule that a disclosure of a conflict of interest is a combination of “at least two” of the communication methods provided in paragraph (d)(1).
The Department made revisions to § 92.504(c)(1)(v) and § 92.504(c)(2)(xii) to revise the written agreement requirements to require that for projects involving rental housing, tenant-based rental assistance, or security deposit assistance, the written agreement between the PJ and the State Recipient or Subrecipient, as applicable, must require that the HOME tenancy addendum that applies to the type of project is used for all HOME-assisted units or tenants. The Department is also making technical revisions to § 92.504(c)(3)(ii)(A) to revise the first sentence to read in the singular instead of the plural. This was done to be consistent with the rest of the surrounding provisions.
The Department is revising § 92.504(c)(3)(i) to add the requirement contained in § 92.206(d)(1) into the written agreement between the PJ and the owner of HOME rental housing. Paragraph § 92.206(d)(1) requires that if HOME funds will be reimbursing expenses that were incurred no more than twenty-four months before the date of the commitment, the written agreement must explicitly permit the use of the funds for those purposes.
The Department is making technical corrections to § 92.504(c)(3)(ii)(A) to read in the singular instead of the plural, consistent with how the rest of § 92.504(c)(3) is written. The Department is also adding a new sentence to the end of the paragraph that explicitly requires that the written agreement contain the option the PJ selected for calculating income in accordance with § 92.203(b)(1). This information should already have been included in the written agreement pursuant to § 92.203 but the Department is now including this language in the written agreement provisions for consistency.
The Department is making technical edits to § 92.504(c)(5)(i)(A) to add parenthesis around examples of allowable forms of assistance that a PJ may provide a homebuyer, homeowner, or tenant or owner receiving tenant-based rental assistance.
The Department made technical revisions to § 92.504(c)(5)(iii) to add the word “assistance” after “security deposit” to align with provisions in § 9.253(d) that describe security deposit assistance. The Department is also making a minor technical edit to § 92.504(c)(6)(i)(A) to add a comma after the regulatory citation to § 92.300(a)(2)-(5).
The Department is revising § 92.504(c)(6)(i)(B) in response to public comments questioning whether the Department was proposing to change the treatment of recaptured funds in CHDO homeownership projects. The Department is clarifying that PJs may permit CHDOs to retain recaptured funds for additional HOME projects pursuant to the written agreement. The Department is also adding a descriptive
The Department recognized that it permits CHDOs to provide homeownership assistance to families as part of HOME homeownership housing developed by the CHDO. This amount of assistance is limited to 10 percent of the overall amount of HOME funds provided to the project. The Department is adding § 92.504(c)(6)(i)(B)(
The Department revised § 92.505 to explain that 2 CFR 200.344 is applicable to HOME as provided in § 92.507. Originally, the Department had said that 2 CFR 200.344 was not applicable to HOME PJs, State recipients, and subrecipients but this is confusing because § 92.507 does make most of 2 CFR 200.344 applicable to them. By adding the caveat that 2 CFR 200.344 is not applicable, except as provided in § 92.507, this clarifies that it is applicable and that § 92.507 will explain how.
In the proposed rule, HUD proposed to revise § 92.507 in order to specify the procedures and actions that must be completed by a PJ and HUD to close out a grant. In this final rule, the Department is further revising § 92.507 for clarity and consistency with 2 CFR part 200. The Department is adding a second sentence to the introductory provision in § 92.507. This explains that the requirements of 2 CFR 200.344 apply to closeouts in the HOME program, with the exception where such requirements conflict with the requirements in § 92.507. The Department was concerned that its language was confusing because in various parts of § 92.507, such as in § 92.507(b)(10)(v) and (vi), the regulation requires that PJs comply with 2 CFR 200.344. By adding this sentence, the Department is clarifying that PJs must follow 2 CFR 200.344 unless it conflicts with the HOME regulations.
The Department is revising § 92.507(a)(1) to clarify that HUD will close out a grant after the period of performance has ended instead of when HUD determines that PJ has completed all required activities and closeout actions. HUD is not limiting its discretion here, given under separate legal authorities (including the Act, individual appropriations laws, and provisions within 2 CFR part 200) to close out a HOME grant. Additional clarification is also being added to specify that the PJ must complete all required activities and closeout activities for the grant, as required by HUD. The revised provision directly states the PJ's closeout responsibilities under the HOME program.
The Department is revising § 92.507(a)(2) to explain that to prepare for closeout, before the end of the budget period of the grant, the PJ shall review all eligible activities under the grant and reconcile its accounts by drawing funds down in a timely manner and refunding the proper accounts of any previously disbursed balances of unobligated cash paid in advance. This is clearer language that is more legally accurate than the proposed rule, which did not explain that these actions were to prepare for closeout, did not condition each provision on being taken during the budget period, and did not specify how refunds would be performed in sufficient detail.
The Department is redesignating § 92.507(a)(2)(ii) of the proposed rule by redesignating it as paragraph (a)(3) and by explaining that after the end of the grant budget period, no additional activities may be undertaken with that particular HOME grant and that there are no additional eligible costs incurred after the budget period. The provision also explains that unused funds shall be returned to the U.S. Treasury by HUD, and that the PJ must promptly refund any unused grant funds not authorized to be retained in accordance with HUD's instructions. These clarifications more directly state the requirements and the conditions without using problematic terminology like “recapture” which has a different statutory meaning in the HOME program than in appropriations law.
The Department is revising § 92.507(a)(4)(ii) in order to remove a reference to FAPIIS and instead add a reference to
The Department is revising § 92.507(b)(3) to remove the word “remaining” when characterizing the data to be entered into the computerized disbursement and information system established by HUD. This was for clarity. Similarly, the Department is revising both paragraph (b)(5) and (b)(10) to improve the grammatical structure of each provision by removing “the participating jurisdiction must.” This is because the lead-in sentence in § 92.507(b) already states that the PJ must take the following actions to close out a grant and therefore it is unnecessary to repeat the words in those provisions.
The Department is revising § 92.507(b)(10)(i) to specify that instead of cancelling the unused grant funds, those funds shall be returned to the U.S. Treasury. This is clearer language and more directly states the mechanics of what is occurring during closeout. Paragraph § 92.507(b)(10)(iv) and § 92.507(c)(6) are both being revised to include both a State and a consortium in the list of entities that qualify as a PJ. If a jurisdiction is not a PJ as a metropolitan city, urban county, State, consortium, or consortium member when it receives program income, recaptured funds, or repayments in accordance with § 92.503, then the funds are not subject to the requirements of 24 CFR part 92. The proposed rule inadvertently excluded States and consortia, both of which are types of PJs. The Department is also revising § 92.507(c)(8) to remove the parenthetical citation at the end because it was unnecessary and confusing.
The Department is making a technical revision to § 92.507(b)(10)(viii) to specify that the PJ's certification acknowledges that future monitoring by HUD will occur, “including” that findings of noncompliance may be taken into account by HUD as unsatisfactory performance of the PJ and in any risk-based assessment of any future grant
The Department also revised the reference to recordkeeping requirements in 2 CFR part 200 that are applicable to PJs to “2 CFR 200.345, as applicable.” The provision references applicable provisions in 2 CFR 200.337 through 2 CFR 200.345, as had been provided in the proposed rule, and therefore is a non-substantive change.
The Department is revising the first sentence to § 92.508(a)(3)(vii) to state that PJs must maintain records demonstrating that each rental housing project met the affordability and income targeting requirements of § 92.252 for the required period or met the requirements in § 92.255 for conversion to homeownership for in-place tenants. This aligns with changes made to § 92.254(a) and § 92.255(b) and provides a recordkeeping requirement that contemplates conversion of rental housing units to homeownership units for in-place tenants in accordance with § 92.255.
Consistent with changes made by the Department to other sections requiring that there be a minimum level of tenant protections for families receiving security deposit assistance, HUD is adding “security deposit assistance” to § 92.508(a)(3)(ix) to require that the PJ maintain records demonstrating that each family receiving such assistance had a lease that included a HOME security deposit assistance addendum in accordance with § 92.253(d).
In the proposed rule, HUD proposed to revise the introductory text of § 570.200(h). However, HUD's proposed revisions would have decoupled the effective date of a grant agreement from a grantee's program year start date and would have subjected many grantees to pre-award costs on an annual basis. After considering public comments, HUD has determined the need to maintain the connection between the grant agreement effective date and program year start dates to reserve pre-award costs to those incurred before a program year start date and, therefore, is retaining the existing introductory text to § 570.200(h). Instead, HUD is adding a new § 570.200(h)(3) to make the effective date of the grant agreement, in a year when an annual appropriation occurs less than ninety days before a grant recipient's program year start date, the earlier of either the program year start date or the date that the consolidated plan is received by HUD. This change better aligns CDBG with the new HOME program regulation at § 91.212(b)(2) and continues practices implemented through annual waivers.
Multiple commenters expressed general support for the regulatory proposals described in the proposed rule. Commenters stated that they support the regulatory proposals described in the proposed rule because they will simplify and align programs to create more affordable housing for persons needing housing assistance. One commenter stated that the proposed rule's changes would improve housing stability of low-income households. Another said it would promote program flexibility, HUD's mission, and clarity and alignment with other Federal programs. One commenter expressed support for the proposed rule because it will make the HOME program more accessible and user-friendly in rural places. One commenter stated that they support the proposed changes because they may lead to shorter waiting periods to receive housing. Another commenter stated that the proposed rule would help to more effectively use resources to narrow the racial homeownership and wealth gaps.
Commenters supported HUD's proposed changes to streamline HOME program requirements to align with the CDBG and Section 8 programs because the commenter believes it would ensure consistency with the implementation of changes to the HOME program.
One commenter urged HUD to explicitly address manufactured homes and manufactured home communities in the rule and guidance. The commenter's suggestions included explicitly clarifying that manufactured homes are a permissible HOME housing type, that manufactured housing titled as real property or personal property are eligible for HOME assistance, that permissible land tenure types include manufactured home on land that is owned by the homeowner or leased in manufactured home communities, that manufactured home communities are explicitly named as permissible for affordable housing preservation, that non-profit shared-equity cooperatives are explicitly named as being eligible for HOME funding as is the water and sewer infrastructure they own.
While the Department is not explicitly revising its regulations to change the definition of homeownership for manufactured homeowners, HUD notes that if manufactured home communities structure their ground leases or ownership in accordance with the HOME homeownership requirements, then purchasers may be eligible under the HOME regulations. When designing their HOME programs, participating jurisdictions are required to consider the housing needs within their jurisdiction, including the needs of those who own or wish to purchase a manufactured home.
Another commenter stated that, while supportive of some of the rule's proposed changes, the proposed rule would increase administrative burden and that this adds to other administrative costs from Section 3, BABA, and VAWA.
A commenter stated that HUD's rulemaking should seek to further streamline the HOME program and reduce regulatory and compliance burdens because these burdens detract from the value of limited resources provided to HOME-assisted projects.
Commenters supported legislative reform of modernization of the HOME program overall or particular statutory provisions. One commenter recommended that HUD continue to work with Congress to develop and pass legislation to reauthorize and further modernize the HOME program.
Several commenters requested technical assistance, guidance, or training on various topics in the regulation.
Commenters supported HUD's proposal to change the definition of “downpayment assistance” to “homeownership assistance.” Two commenters said this change would provide participating jurisdictions and HUD regional offices with the clarity needed to understand the full breadth of homeownership-related activities that are allowable using HOME funding in addition to downpayment assistance. One commenter said that this change would increase affordable housing supply by facilitating the use of HOME funds by developers to construct or rehabilitate owner-occupied housing. One commenter suggested that a clear assertion that HOME covers more than downpayment assistance alone will more easily allow affordable housing developers to use these funds to construct or rehabilitate more owner-occupied housing, adding more units to a dwindling affordable supply.
One commenter stated that HUD has several instances where the term “downpayment assistance” is used instead of “homeowner assistance” despite the noted substitution, which has resulted in confusion. The commenter noted the following instances of “downpayment assistance” appearing in several other locations within the text of the rule including §§ 92.203(d); 92.209(c)(2)(iv); 92.250(b)(4); § 92.251(c)(3); 92.300(a)(6)(i); 92.351(a)(1); 92.504(c)(1)(i); 92.504(c)(2)(i).
A commenter stated that they support the proposed change of replacing the term “dwelling” with “housing” for the HOME program, TBRA program, and income targeting for homeownership.
Commenters supported HUD's proposed definition of “period of affordability.” One commenter supported the consistent use of the term but noted that the old term persists in certain places in the regulation.
One commenter thanked the Department for streamlining the term single family while another commenter noted places where certain terminology was not corrected.
One commenter supported changing the language of the definition of “commitment” from “official” to “officials” And from “downpayment assistance” to homeownership assistance.
One commenter stated that HUD should consider revising paragraph (2)(i) of the definition of “commitment” in § 92.2 because requiring applicants to secure all project funding before receiving a commitment of HOME funds is overly burdensome, particularly for nonprofit developers. The commenter explained that this upfront secured funding requirement could result in fewer applications for HOME funding and should be removed. The commenter also suggested expanding the meaning
Under the current regulation, project related soft costs, which include architectural and engineering costs, may be reimbursed if they are incurred not more than 24 months before the date that HOME funds are committed to the project and the participating jurisdiction expressly permits HOME funds to be used to pay these costs in the written agreement committing the funds to the project. The proposed rule added the cost of environmental reviews and studies to this provision.
The Department received several comments on HUD's revision to § 92.206(d)(1) to allow HUD environmental review or other environmental studies or assessments to be reimbursable costs incurred prior to when funds were committed to a project. Those commenters urged the Department to consider expanding the types of costs that would be allowed to be incurred to include “pre-development” or other related soft costs. The Department agrees with the commenters and is expanding the project soft costs that may be incurred prior to a commitment to include costs to process and settle financing for the project, including private lender origination fees, credit reports, fees for title evidence, legal fees, private appraisal fees, and fees for independent cost estimates. These were all contained in paragraph (d)(2) but will now be deleted from paragraph (d)(2) and added to paragraph (d)(1). While the Department is moving these provisions to paragraph (d)(2), the Department determined that several provisions could not be moved because there is no reasonable expectation that they should occur prior to commitment. These provisions include obtaining building permits, which require HUD environmental review; fees for recordation and filing of legal documents, as recorded documents relating to an acquisition, rehabilitation, or new construction project should occur after commitment of HOME funds; and builders or developers fees, as those fees should not be earned and chargeable to the HOME grant for work performed prior to the environmental review and commitment of the HOME funds to the project.
Additionally, because of specific public comment, the Department also added “accounting fees”, “filing fees for zoning or planning review and approval”, and “other lender-required third-party reporting fees” to paragraph (d)(1). By moving or adding the soft costs into paragraph (d)(1), HUD is allowing the above-described costs to be paid as long as they were incurred no more than 24 months before the date of commitment, and they were included in the written agreement committing the funds.
Commenters urged HUD to lengthen the time between commitment and the start of construction from the current 12 months. One commenter proposed extending the timeframe to 24 months because of the extensive backlog of construction work and the loss of available and qualified contractors. Another commenter stated that HUD's 12-month timeline could be challenging if the construction cycle is tied to hard costs or providing additional guidance for circumstances in which the 12-month deadline is missed.
Many commenters supported the changes and stated that the proposed rule would create more opportunities for nonprofits to become CHDOs, expand the nonprofit affordable housing delivery system, expand the capacity of CHDOs, and make it easier for participating jurisdictions to use their CHDO set-aside funds. Other comments expressed concern about or opposition to HUD's proposed changes, particularly changes aimed at increasing eligible CHDOs in rural areas. One commenter stated that, despite having concerns about certain HUD proposals, it appreciates HUD's efforts to make CHDO designation easier to attain and retain particularly in areas with few or no CHDOs. Another commenter stated that while the commenter is supportive of the proposed changes that would create opportunities for organizations to participate in housing development and build their own capacity, HUD should consider additional policy safeguards to preserve the purpose of the set-aside and ensure that unintended consequences, such as bad actors meeting the letter of the requirements but “not the spirit of the designation,” do not outweigh the benefits. One commenter stated that it appreciates HUD's effort to expand options for meeting the low-income board requirement but does not believe it will make a significant difference in the number of organizations that will seek the CHDO designation. The commenter stated that meeting the 15 percent CHDO set-aside requirement will continue to be a challenge for many participating jurisdictions irrespective of the proposed changes.
One commenter suggested that HUD expand CHDO eligibility to affordable housing cooperative corporations because affordable housing cooperatives, including resident owned manufactured housing community cooperatives, meet the goals of CHDOs to advance resident and community engagement as cooperative boards are made up of their resident owners who govern and manage the cooperative. The commenter further explained that cooperatives would benefit from eligibility as CHDOs by gaining greater access to CHDO sponsors. The commenter stated that if affordable housing cooperatives are not granted status as CHDOs directly, then it is imperative that they are granted access to work with a CHDO nonprofit 501(c)(3) sponsor to access set-aside funds that can create lasting affordable housing.
One commenter recommended that the regulations relating to CHDOs align more closely with the community-based development organization regulations through the CDBG program.
Under the HCDA statute and CDBG regulations, community-based development organizations include local development corporations, which can be for-profit entities (See 42 U.S.C. 5305(a)(15)) and 24 CFR 570.204(c)(1)(iii)). Under NAHA, CHDOs must be nonprofit organizations (42 U.S.C. 12704(6)). Community-based development organizations can also perform economic development activities under the CDBG program, and thus the organizations will have more expansive purposes and scopes than CHDOs, which are required to have among their purposes the provision of affordable housing. The difference in eligible activities also means that community-based development organizations can have different types of representation on their boards, including businesses serving low-income communities (24 CFR 570.204(c)(1)(iv)). Thus, after a careful examination of the two sets of statutory and regulatory requirements, the Department has determined that no change to further align the definitions should be made at this time.
One commenter supported the change to the CHDO definition that clarifies the options for meeting the requirement that a CHDO must be exempt from taxation.
Commenters were broadly supportive of the proposed change narrowing the individuals who would count toward the one-third limitation on governing board membership from “any governmental entity” to “officials or employees of the participating jurisdiction or governmental entity that created the community housing development organization.” Commenters stated that the proposed change would provide more flexibility to nonprofit organizations in meeting the board requirements while maintaining the freedom from governmental control of CHDOs intended by statute. One commenter stated that the change would help CHDOs create boards with expertise in the field of affordable housing, while appropriately addressing conflict of interest considerations that may arise. Another commenter stated that the change will facilitate resource-sharing between CHDOs and governmental entities such as councils of governments, Tribal entities, and regional planning commissions in rural communities.
Commenters also supported the proposal to clarify that no governmental entity, not only the one that created the CHDO, may appoint more than one-third of the CHDO's board members, as well as the language clarifying that not only may the board members appointed by a government entity not appoint the remaining two-thirds of a CHDO's board members, the board members who are officials or employees of the governmental entity that created the CHDO may not appoint any of the remaining two-thirds board members.
One commenter recommended that HUD emphasize that the one-third public official restriction on board membership does not apply to all CHDOs, only those CHDOs that were created by a governmental entity. The commenter stated that this would involve promulgating a Notice clarifying the new and correct interpretation of this paragraph, and an intense training and communication plan to educate participating jurisdictions across the country.
A commenter questioned why HUD would require a CHDO to include elected officials on the CHDO board. The commenter stated that requiring CHDOs to include elected officials on the CHDO board would constitute a conflict of interest because elected officials approve the funding for HOME projects. The commenter stated that a CHDO would have to turn to neighboring communities to select elected officials for the CHDO board to avoid any conflict.
HUD Response: The commenter incorrectly believes that HUD is requiring CHDOs to include elected public officials on the CHDO governing board. HUD revised paragraph (5) of the
One commenter recommended that HUD allow volunteer members of planning or zoning commissions or other local advisory boards to serve as CHDO board members and not count against the public sector limit.
One commenter was supportive of changes to the CHDO board but also encouraged HUD to go further and fully address the “public officials” issue. The commenter disputed that there was a statutory basis for limiting participation of public officials or employees of governmental entities from being board members of CHDOs. The commenter believed that it was entirely at HUD's discretion whether to include this language in its regulations, or not, and how to interpret it.
Another commenter suggested that HUD could further reduce barriers to meeting low-income representation and public official requirements by counting only elected or appointed officials toward the public official limitation and permit civil service employees to serve on CHDO boards, subject to a conflict of interest policy.
Commenters suggested that HUD should revise the rule to state that if an appointed official or employee of a participating jurisdictions lives in a low-income community and is themselves low-income, they will be allowed to be counted toward the low-income representation on the board of the CHDO and not count as a public official. One commenter stated the regulation should explicitly state that this applies in rural areas or areas where significant low-income representation does not exist.
One commenter that is a State participating jurisdiction stated that it supports the proposal to narrow public officials to the participating jurisdiction but questioned what unit of government is considered the participating jurisdiction. The commenter asked whether all State employees would be considered part of the participating jurisdiction or whether the limitation would apply to the lead agency, the consolidated planning partners or the administrator of the HOME grant. The commenter recommended that the language be updated to apply the limitation only to employees of the entity that administers the HOME funding.
Several commenters supported the proposed change to expand the CHDO low-income board representation requirement under paragraph (8)(i) of the definition of
Multiple commenters asked that HUD clarify or provide examples in the final rule of the difference between a “designee” and an “authorized representative,” as used in paragraph (8)(i) of its proposals regarding nonprofit representatives on CHDO boards because the proposed rule implies a difference that is not explained. Another commenter noted that there is some ambiguity in the term “authorized representatives” in paragraph (8)(i) and encouraged HUD to broaden the scope of the language as it could be construed to mean only individuals who have legal authority to bind the nonprofit.
Many commenters stated that they support the proposals to permit authorized representatives of local non-profit organizations and members of low-income neighborhood organizations to meet the CHDO board requirements for low-income residents. One commenter stated that representatives from organizations who serve low-income persons, even when an organization's focus is on a topic other than housing, should count towards the low-income representation. Other commenters objected to the proposed rule's addition of “authorized representatives of nonprofit organizations” to the definition of CHDOs in § 92.2, citing concerns about accountability and connection of a CHDO board to the low-income neighborhood. One commenter stated that relaxing the requirement for direct community involvement on CHDO boards would dilute the intended impact of the designation as a means for maintaining accountability to low-income community residents because authorized representatives from nonprofit organizations are not required to reside in the neighborhood nor be low-income themselves. The commenter recommended that HUD remove the “authorized representative” option for meeting the CHDO board member eligibility requirement. Another commenter stated that the expanded definition is not community-centered and does not truly connect the governance of the CHDO to the community.
One commenter stated that although they were not firmly opposed to the change, they were concerned about the potential of the proposed changes to water down the representation of low-income people in CHDO governance, which is an important source of accountability. The commenter urged the Department to consider the possibility of layering using a tandem requirement to preserve the opportunities for low-income people to participate in this process.
Designees of nonprofit organizations that address the housing or supportive service needs of low-income community residents or residents of low-income neighborhoods may not always live in low-income neighborhoods or be low-income, but they directly serve those that are, including persons with disabilities, victims of domestic violence, homeless persons, people suffering from food insecurity, and victims of civil rights violations. Their participation strengthens the board of CHDOs because these organizations have deep ties to the community and the people they serve. Far from watering down the requirements for board members, the Department believes that this better enables CHDOs to retain subject matter experts that better understand the community being served by the CHDO.
One commenter stated that it was concerned about recruitment and retention of low-income residents for board membership and understands HUD's proposal to relax board member restrictions, but would appreciate further consideration/guidance toward instilling equity in board member criteria requirements because this impacts board member representativeness. The commenter stated that this relaxation may eventually have potentially negative effects on low-income tenants residing in the affordable housing development. The commenter further stated that a board that is technically allowed per HUD requirements may not be representative of the community it serves.
HUD has determined that the entities used as examples in this section each assist protected classes including persons with disabilities; survivors of domestic violence, dating violence, stalking, sexual assault, and human trafficking; and persons suffering from various forms of discrimination. By clarifying how FHIPs, Legal Aid organizations, and other civil rights organizations can count towards representation, HUD is advancing equity in CHDO board composition. Moreover, the Department believes that each hold a connection to the community and will make CHDOs more representative of the community and the needs of low-income residents within the community.
Commenters requested that HUD clarify in the final rule or supplemental guidance whether the list of community serving organizations included in the proposed rule is organizations from which authorized representatives can qualify for the low-income portion of the CHDO board is exhaustive or illustrative in nature. Some commenters urged HUD to be as expansive as possible in identifying the types of organizations included in this provision. Some commenters suggested other types of organizations that should be specifically listed in the regulation, including health and behavioral healthcare providers, healthcare organizations, food pantries, workforce development organizations, Native American- and Tribal-serving organizations, and faith-based organizations. Commenters stated that the inclusion of faith-based institutions could further HUD's goals of supporting CHDOs in rural areas. One commenter cited the historically significant relationship between faith-based organizations and housing development organizations, especially in rural areas.
One commenter recommended against the HOME program rule listing out specific organizations that meet the low-income representative requirement for CHDO boards. The commenter stated that if HUD wishes to include a specific list of organizations, then HUD should make sure the list explicitly states that the listed organizations are just examples of organizations that qualify to meet the low-income representative requirement for CHDO boards.
Commenters encouraged HUD to reduce the low-income board requirement below the current one-third or eliminate the low-income representation requirement altogether. One commenter stated that expanding low-income board eligibility to include “designees of low-income neighborhood organizations” will not increase nonprofit interest in becoming CHDOs because nonprofit organizations do not want to make significant changes to their board composition. One commenter who supported the proposed changes also recommended reducing the low-income board representation from
A commenter stated that in their rural service area there are no low-income neighborhood organizations and that one of their board members works at a nonprofit as the school district's homeless liaison and family support specialist. The commenter stated that because there are no low-income neighborhoods in the school district, the noted board member would not count toward the one-third low-income representation. The commenter suggested that HUD consider using tandem requirements to preserve the opportunities for low-income people to participate in this process. Another commenter with a rural service area suggested that the language in paragraph (8)(i) of § 92.2 be changed to “. . . authorized representatives of nonprofit organizations in the community that address the housing or supportive service needs of low-income residents of the CHDO's service area . . . .”
Another commenter also suggested that HUD reconsider the phrasing “residents of low-income neighborhoods” because it suggests that service organizations who are regional or whose clients are not defined by the clients' neighborhood of residence are not eligible. The commenter stated that agencies that are included in this criterion necessarily have regional footprints, and the residents they serve are defined by some income or other “need” characteristic, not the income level of the neighborhood in which the client lives.
The Department is also addressing the commenter's concerns by expanding the type of designees of nonprofit organizations to include nonprofit organizations that serve “low-income residents” instead of organizations serving “residents of low-income neighborhoods.” Therefore, in the example the commenter gave, if the person was a designee of a nonprofit organization that provided services to a low-income resident of the CHDO's community, then the person would be able to count towards the one-third board representation requirement in paragraph (8) of the definition of CHDO.
Commenters stated that HUD should consider individuals who are not low-income but have previous lived experience as a low-income person or a homeless person to qualify as a low-income community resident for the purposes of meeting the requirement for one-third low-income representation on the CHDO governing board. These commenters stated that the changes in circumstance, such as increases in income, do not eliminate such a board member's lived experience, which make them a valuable representative of the interests of low-income people and places.
Other commenters recommended that HUD revise the regulation to permit individuals who joined the board as a low-income community resident to retain that designation even if their income rises above the low-income level. Some commenters stated that HUD should provide a grace period in such cases because it is difficult for CHDOs to replace board members when their eligibility as a low-income representative unexpectedly ends. Similarly, a commenter suggested that if a board member moves or has their home address re-designated into a different census tract, HUD should allow a grace period not to exceed the lesser of their board term or five years
Some commenters supported the proposed change to allow the definition of the community to include the entire State because it would address challenges rural communities face in meeting the governing board and staff capacity requirements and increase the usage of CHDO set-aside funds in rural areas. One commenter stated that HUD's proposed rule would benefit rural organizations that have experienced negative impacts from the existing high standards in the definition of CHDO in HUD's regulations.
Many commenters raised concerns or strongly objected to expanding community to mean the entire State. These commenters believed it would weaken the connection of a CHDO to the low-income community being served. One commenter noted that the proposed change would disincentivize State participating jurisdictions from working to build the capacity of local groups, which is antithetical to the intent of the CHDO set-aside requirement. One commenter expressed concern regarding the change to allow Statewide CHDOs, particularly for very large and geographically diverse States such as California, and recommended HUD allow State participating jurisdictions the flexibility to evaluate the capacity of CHDOs to serve the entire State, especially rural and underserved areas of the State. Commenters stated that the proposed change went too far in permitting rural CHDOs to qualify based on board representation from the areas being served. Several commenters stated the proposed change would inappropriately characterize all rural areas as equal for purposes of low-income representation. One commenter stated that under the proposed regulation, a Statewide CHDO could develop a board with no low-income presence, accountability, or connection with the community served. Another commenter asked HUD to consider the tension between the need to drive more CHDO dollars to rural communities and the need to build capacity and provide opportunities for smaller rural-serving CHDOs when moving forward with the consideration of Statewide CHDOs.
Commenters stated that while they recognized the critical need for more CHDOs in rural areas, they were concerned that the proposed change would result in small community-based organizations having to compete for CHDO set-aside funds with large, high-capacity Statewide organizations. One commenter stated that small, rural CHDOs would be disadvantaged by their greater need for capacity building funding. Commenters stated that if HUD adopts the proposed change, it should also implement mechanisms to ensure that Statewide CHDOs consider local community input and priorities in the rural communities they serve and consider how to ensure smaller organizations are not wholly cut out from accessing CHDO resources.
Some commenters recommended that HUD allow CHDOs with Statewide service areas to be eligible as CHDOs but only award project dollars to CHDOs (located anywhere in the State) with at least three years of service to the community in which the project is located, as opposed to one year of service anywhere in the State.
Commenters noted that the regulations already allow for rural communities to be defined as a multi-county area. One such commenter stated that 42 U.S.C. 12704 prohibits participating jurisdictions from requiring such a CHDO with such a community to have board representation from each of its counties. The commenter stated that there is currently no regulatory barrier for a CHDO to claim as its community every county in a State with the exception of areas within a Metropolitan Statistical Area; the barrier that exists is participating jurisdictions' interpretation of “multi-county.” The commenter suggested that a better proposal would be for HUD to direct the most expansive interpretation of “multi-county”, and to allow individual Statewide participating jurisdictions to apply for waivers from the existing regulation to create Statewide CHDOs only if needed.
HUD appreciates commenter suggestions that if the proposal were to be adopted, the Department should impose mechanisms to help ensure that Statewide CHDOs consider local community input, require a longer history of serving a specific rural community, or mitigate the disadvantage that smaller rural CHDOs would have in comparison to Statewide organizations in competing for CHDO set-aside funds. However, the Department recognizes that the qualification of nonprofit organizations as CHDOs is already substantially regulated and believes that additional regulation would be counterproductive. Instead, HUD considers the adoption of other proposed changes to the CHDO definition in paragraphs (8) and (9) of § 92.2, to the developer and sponsor roles at § 92.300(a)(2) and (3), and the elimination of the proposed revision of
In response to the commenter that stated that 42 U.S.C. 12704 prohibits a participating jurisdiction from requiring a CHDO serving rural areas to have board representation from each of its counties, HUD notes that this interpretation of the Act is incorrect. The Act prohibits HUD, not participating jurisdictions, from requiring that an organization must have representation from each county in its service area to be designated as a CHDO. Because HOME is a block grant program, participating jurisdictions have discretion to establish requirements for their programs and select projects as they choose through requests for proposals or other legally permissible methods. Consequently, participating jurisdictions can establish their own requirements for designating or awarding funds to CHDOs that are more stringent and take into account these types of considerations.
Some commenters supported the proposed change in paragraph (9)(i) that would permit the capacity and experience of volunteers who will work directly on a HOME-assisted project and are officers or board members to be considered as part of demonstrated capacity. Commenters stated that the proposed change would make it easier for organizations to qualify as CHDOs.
One commenter suggested that HUD not limit volunteers to board members as they considered this limitation unnecessary. The commenter noted that if there are concerns about dependability or ongoing capacity, then the standard should be broadened to also include “contracted volunteers.”
Other commenters that supported the proposed change suggested that HUD consider imposing guardrails on volunteer capacity such as applying a limit on the period that the experience of a volunteer official or board member may be counted toward a CHDO's capacity. Some commenters recommended a three-year limit. One commenter stated that prolonged reliance on officials and board members will harm an organization when it comes to meeting development capacity requirements, especially because nonprofits have high staff turnover. The commenter stated that this will affect the ability of nonprofits to train new staff on HOME requirements and place the burden of such education on the participating jurisdiction.
One commenter stated that they had serious concerns about volunteers serving on a board in meeting the capacity requirements for an organization. The commenter stated they had these concerns because a volunteer will generally not dedicate the same time and effort as an employee. The commenter also stated that the proposed change would allow for people to create shell organizations that have a representative board who are also real estate professionals and have that qualify as a CHDO organization.
A commenter noted that the definition of CHDO in § 92.2(9) states that “the nonprofit organization must have employees or volunteers,” which appears to allow an organization with volunteers and no employees to be designated as a CHDO. The commenter requested that HUD clarify whether this language was intentional or unintentional. The commenter stated further that HUD could refine the language to add clarity on the relationship between “employees” and the nonprofit seeking CHDO designation.
Under the final rule, CHDOs must maintain paid staff that will manage the development process. CHDOs can also rely upon board members and officers of the organization with significant development experience because those board members and officers have more lasting ties to the organization than typical volunteers, who may only be volunteering for individual projects or for a limited time.
The Department is also declining to allow the use of a “contracted volunteer,” which is an amorphous term that could lead to abuse or indirect control of a CHDO by a for-profit entity, or lead to determining that an organization lacks the capacity when the person demonstrating capacity is not contracted for the full development cycle. Even if the volunteer is contracted for the amount of time overlaps with the development cycle for a particular project, the ties of contracted volunteer service are not nearly as strong or as binding as paid staff, board members, or officers. Typically, the consequences are far less significant if a contracted volunteer ends their volunteer term early, while volunteer board members and officers have terms of office, and the organization generally has mechanisms for replacement of former officers or board members written into their organizational documents to ensure proper governance.
Commenters stated that they support the proposed rule language that would broaden the requirement that an organization have demonstrated staff capacity for carrying out projects assisted with HOME funds to include housing projects funded with other Federal funds, LIHTC, or local and State affordable housing programs. One commenter expressed support because the proposed change would help small rural CHDOs meet organizational capacity requirements.
Commenters also requested that HUD explicitly include experience with the New Markets Tax Credits and Federal Home Loan Bank Affordable Housing Program.
Commenters made suggestions regarding other individuals whose experience should be counted toward a CHDO's capacity. Commenters recommended that the final rule permit
The Department does allow the use of a consultant in the first year that a CHDO is provided HOME funds; paragraph (9)(i) reads as follows: “[f]or its first year of funding as a community housing development organization, an organization may satisfy [the capacity] requirement through a contract with a consultant who has housing development experience to train appropriate key paid staff of the organization.” The Department believes that it is appropriate to retain this provision but is adding clarification that the staff that are to be trained must be paid staff, as per the Department's earlier comment response on the importance of paid staff in demonstrating capacity to develop HOME projects.
One commenter who supported the flexibility provided to CHDOs in the proposed rule stated that the changes do not allow resident-owned communities to qualify as CHDOs. The commenter stated that such communities cannot meet the 501(c)(3) status and demonstrated capacity requirements, even though they fully meet the intent of CHDOs. The commenter stated that resident-owned manufactured housing communities are owned by predominantly low-income community members organized to govern and preserve their communities and have flourished for 40 years due to a system of professional technical assistance, training, and ongoing business coaching. The commenter urged HUD to support capacity building systems for resident-owned communities and other eligible manufactured housing communities.
Several commenters expressed support for HUD's proposed definition of the term “community land trust” with many commenters noting that the proposed definition allows for flexibility in the composition of the organizational board and governance of community land trusts across the country. One commenter specifically noted that the proposed definition does not specify the structure of the community land trust's governing board yet retains the nonprofit purpose, the centrality of land, the lasting affordability, and codifies the preemptive purchase rights of community land trusts to prevent the loss of units to the open market.
Two commenters support the elevation of the term “community land trust” to the definition section of the regulation noting that the placement makes it clear that the definition applies throughout the HOME program.
Two commenters noted the importance of community land trusts to the affordable housing market noting that community land trusts help families bridge the gap between rental housing and homeownership, benefit residents of color in communities facing displacement, increase resilience against climate extremes, pass lower property taxes through to the project or end user, and are a dedicated partner for local government funding for affordable housing. Several commenters also stated that the proposed definition will enable more community land trusts to participate in the HOME program, while two commenters noted that rural community land trusts in particular would be encouraged to participate in the HOME program. Two commenters also added that the proposed changes would allow community land trusts to fully realize the benefits of the HOME program and the right to a preemptive purchase option provided in 2016.
Several commenters expressed concern about or opposition to HUD's proposed definition of community land trust.
One commenter asked if HUD's proposal regarding community land trusts would violate other HUD requirements, including the environmental review process requirement that prevents proposed projects from being built too close to other low-income housing.
Two commenters objected to the proposed definition noting that HUD should add the phrase “membership or community-governed” to the definition to reflect the community governance structure inherent in community land trusts. The commenters added that HUD should address the underlying concerns about participating jurisdictions' difficulty determining the legitimacy of the governing models through education.
Moreover, community land trust governance structures vary from State to State, based upon State laws and local models. In the materials that various commenters provided and in the State laws that were reviewed in the preparation of the proposed rule text, the board requirements and best practices varied significantly. Given the wide variety of community land trust models operating over a significant period of time throughout the nation, the Department does not wish to inadvertently narrow the definition or eliminate consideration of an organization that would have met the intent of the drafters of the Act or the Consolidated Appropriations Act, 2016.
The Department is committed to making it easier for participating jurisdictions to support CHDOs and better implement statutory provisions that enable community land trusts to participate in the HOME program.
Another commentor objected to HUD's proposed definition of community land trust as too restrictive, stating that the proposed definition could disqualify many community land trusts from using the additional tools that the revised rule would provide. The commenter stated that the use of the phrase “development and maintenance” would exclude community land trusts that carry out non-development activities such as land acquisition and noted that few community land trusts provide maintenance services, which are generally the responsibility of the owner. The commenter suggested replacing the phrase “development and maintenance” with the word “provision,” as in “the provision of housing that is permanently affordable to low- and moderate-income persons,” thereby aligning the proposed community land trust definition with the HOME definition of a CHDO as “[having] among its purposes, the provision of decent housing.”
One commenter stated that HUD should consider amending the community land trust board requirements to allow flexibility for new community land trusts with small portfolios of homes that do not have sufficient lessees to comply with the requirements.
One commenter stated there is an internal conflict between the proposed definition of a “community land trust” in § 92.2 and the proposed housing education and organization support language at § 92.302(b)(3)(i). Specifically, the commenter stated there is a conflict between the language of the proposed community land trust definition, which allows a combination of a deed restrictions and a preemptive purchase right at a formula price in lieu of a ground lease, and § 92.302(b)(3)(i), which is limited to community land trusts that retain title and convey it via a “long-term ground lease.” The commenter noted there is no easy solution because allowing non-ground lease approaches may inadvertently expand the definition of a community land trust in a manner HUD may not have anticipated.
The Consolidated Appropriations Act, 2016, which for the first time permitted community land trusts to exercise preemptive purchase rights for HOME-assisted homeownership units, required that HUD establish a revised definition of community land trust for this purpose that did not limit program participation to the narrower definition of community land trusts that solely enforce restrictions through a ground lease, as is required for housing education and organizational support funds under NAHA. The proposed definition of community land trust in § 92.2 is reflective of how community land trusts enforce restrictions nationwide, including in the HOME program. The requirements of homeownership in § 92.2, as revised, still apply, as do the period of affordability requirements in § 92.254. The Department understands that there are different dates and different definitions for related requirements and will provide additional implementation guidance on the definitions of community land trust in § 92.2 and § 92.302, how to meet the requirements for homeownership, and preserving affordability when a community land trust exercises a purchase right.
The Department will continue to use the definition of community land trust established in the Act and promulgated at § 92.302(b)(3)(i) should the Department receive funds for housing education and organizational support in the future. The Department is moving forward with the separate regulatory definition of community land trust in § 92.2 for those community land trusts that will be eligible to exercise preemptive purchase rights pursuant to the Consolidated Appropriations Act, 2016, as codified in § 92.254(b)(3).
Several commenters expressed concern or opposition to the proposed regulatory definition that would, in part, require community land trust housing and related improvements to be affordable for at least 30-years. Two commenters noted that community land trusts typically impose ground leases of 90-plus years and are concerned about the reduced 30-year ground lease included in the community land trust definition. One commenter recommended that HUD increase the ground lease for community land trusts to 90-plus years. The commenter stated that it dilutes the mission of community land trusts to reduce the ground lease to 30 years. The commenter stated that the community land trust movement internationally is focused on permanent-affordability with 98- and 99-year ground leases or land use restrictions. In support of their comments, the commenter included additional information regarding community land trusts, including the: (1) Grounded Solutions Network, 2011 Model Ground Lease & Commentary (2018); (2) National League of Cities, Community Land Trusts: A Guide for Local Governments (2021); and (3) Burlington Associates in Community Development, Frequently Asked Questions about Community Land Trusts (2007). Another commenter stated that community land trust ground leases typically restrict resale of a home to an income eligible buyer at an affordable price for 99 years, and typically require that the buyer enter into a new 99-year ground lease upon purchase. The commenter referred HUD to Grounded Solutions Network Model Declaration of Affordability Covenants and Model Ground Lease (Article 10).
One commenter stated that there is an internal conflict within the definitions of a “community land trust” and “homeownership.” The commenter noted that the definition of community land trust includes organizations that provide ground leases of at least 30 years while the definition of homeownership requires that community land trust ground leases be for at least 50 years. The commenter stated that these definitions could allow organizations to qualify as a community land trust by offering ground leases of only 30 years but make said community land trusts ineligible to receive HOME funds unless the HOME-assisted units were accompanied by 50-year ground leases.
The Department understands that community land trust models throughout the country often impose a 90 or 99-plus-year ground lease. Because the definition of community land trust at § 92.2 only establishes a minimum ground lease term for the purposes of determining an organization's eligibility to hold or exercise a preemptive purchase right on a HOME-assisted unit without violating the Act and requiring repayment of the HOME investment, community land trusts imposing longer ground lease terms are still permitted.
The Department also acknowledges that it is using different minimum terms for ground leases in the definition of community land trust and the definition of homeownership in § 92.2. The definition of homeownership at § 92.2 defines homeownership under a community land trust as fee simple ownership of a dwelling, or equivalent form of ownership approved by HUD, on land with a ground lease that meets one of the requirements in § 92.2. Under this definition, if a ground lease is provided by a community land trust and is not in an insular area, the minimum required ground lease for the unit to be considered a homeownership unit under the HOME program is 50 years. As noted above, the definition of community land trust only requires that an organization impose a minimum 30-year ground lease for the organization to be considered a community land trust for purposes of exercising a right of first refusal to preserve affordability under § 92.254(b). The Department understands that this establishes a higher threshold for the term of a ground lease to be considered homeownership under the HOME program than it does for an organization providing that ground lease to be
One commenter opposed the use of governments subsidies for homeownership projects under the community land trusts model. The commenter stated that government subsidies for community land trusts should be reserved for affordable rental housing. The commenter also stated that downpayment assistance is a better method for building financial security and generational wealth through homeownership because community land trusts are closer to rental housing than homeownership. The commenter submitted a study conducted by the National League of Cities comparing the results of community land trust and downpayment assistance models. The commenter supported greater use of the HUD's 203(k) Loan Program to create accessory dwelling units and tax exemptions to encourage homeownership.
One commenter recommended requiring participating jurisdictions to remove barriers to manufactured home homebuyers and homeowners to access HOME programs regardless of the manufactured home being on owned-land, leased-land, Tribal land, or in manufactured home communities. The commenter also specifically urged HUD to ensure that HOME-funded manufactured home communities offer homeowners a standard, long-term lease with predictable rent provisions that support affordable “home-only” financing, notice of sale and opportunity to purchase the community, and require that projects with HOME funding for 30 years or more include shared-equity affordability provisions of resident-owned communities and rent limitations. The commenter urged HUD to issue guidance and education for participating jurisdictions, subrecipients, and developers.
One commenter suggested that to ensure eligibility status for affordable housing cooperatives, HUD should consider revising its definition of homeownership to include housing cooperative members as homeowners directly. The commenter explained that designating co-op member-owners as homeowners will grant additional flexibility to participating jurisdictions, creating another tool to be utilized to create affordable homeownership for low-income households and to reduce persistent wealth inequities.
Commenters supported HUD's proposed definition of “period of affordability.” One commenter noted that distinguishing between the Federal period of affordability and any participating jurisdiction-imposed additional period will be useful and follows a similar model to the LIHTC compliance period. One commenter noted that it was an important clarification that addressed confusion about whether this term applied to time periods beyond 20 years.
One commenter stated they supported the proposal because it would clarify that this term is different from an extended period of affordability or an additional compliance period. The commenter explained that this clarification would permit States and localities to continue to prioritize long-term affordability.
Commenters stated that they oppose changing the definition of program income to include the phrase “at any time.” The commenters stated that this change would extend the participating jurisdiction's monitoring obligations, potentially in perpetuity, which would strain limited participating jurisdiction resources.
One commenter opposed HUD's proposal to clarify that program income is gross income received “at any time” by the participating jurisdiction, State recipient, or subrecipient. The commenter stated that defining program income as going beyond the period of affordability or the closeout of the grant puts an administrative burden on participating jurisdictions, subrecipients, and developers. The commenter recommended that HUD limit repayment of program income to either the duration of the period of affordability for housing supported by HOME funds or to the closeout of the grant.
Two commenters suggested limiting repayment of program income to the duration of the period of affordability for homes supported by HOME funds or at the close out of the grant in order to ease the administrative burden on participating jurisdictions, subrecipients and developers. One of these commenters asked that HUD provide more clarity to participating jurisdictions and program participants on how any final changes would be operationalized if HUD determines to move forward on this question.
One commenter stated that it supports applying new construction standards in § 92.251 to newly constructed units within reconstruction projects. However, the commenter noted that some projects involve reconstruction of some units and rehabilitation of others. The commenter objected to applying new construction standards to these rehabilitated units, noting that it would not be a prudent use of resources. The commenter opposed the revised definition of “reconstruction” but supported applying new construction standards in § 92.251 to newly constructed units within reconstruction projects.
Commenters stated that they support the proposal to amend the definition of “single family housing” to refer to units.
One commenter supported the proposed new definition of “small-scale housing” because it would reduce administrative burden and would, according to the commenter, benefit areas with little development like small rural towns and Tribal areas because smaller projects that are not 30-50 units cannot attract LIHTC or other program investors and become financially infeasible.
One commenter stated their support for the addition of the definition of “small-scale housing” because it could help spur development in rural communities.
One commenter suggested that HUD consider expanding the definition of “small-scale housing” to apply to rental projects with up to 10 units (rather than 4) to allow the benefits of HUD's proposed streamlined procedures to apply to projects with up to 10 units, which would be especially helpful in rural areas. One commenter stated that for compliance monitoring, further clarification on the definition of “small-scale housing” and the applicability to both the rental housing projects and homeownership funded projects is requested. That same commenter believed that as written, it is unclear whether scattered-site rental housing projects would be considered small-scale housing or not.
One commenter stated that HUD's proposed definition of “small-scale housing” to mean 1-4 units is not in line with the housing industry's use of the term. The commenter recommended that HUD revise the definition of “small-scale housing” to be more consistent with the industry's definition.
The Department did note that there is confusion over whether small-scale projects must all be on contiguous sites or be single family housing. While the Department is not revising the definition of “small-scale housing,” the Department is clarifying in this preamble and will clarify again in guidance that small-scale housing projects can be on either contiguous sites or scattered sites and still constitute small-scale housing projects
One commenter does not support the removal of a subrecipient's ability to acquire and temporarily own standard housing, as subrecipients are often partners in locating and purchasing housing.
A commenter stated that the proposed update to the definition of “subrecipient” is helpful because this updated definition allows HOME funds to be more readily used with rental housing based on the program's own income determination guidelines for eligibility.
One commenter pointed out that the proposed rule does not address eligibility of Tribes nor adds new mentions of Tribes even though the definition of CHDO in § 92.2 includes Tribes in the definition of “governmental entity” in paragraph (5). The commenter requested that HUD add clarifying language through the proposed regulations to clarify that Tribes are eligible, including Indian Tribes, Indian Housing authorities, and Tribally Designated Housing Entities as defined at 25 U.S.C. 4103(22), and requested that HUD clarify that these entities may be project owners anywhere that the terms are not synonymous with State recipient. The commenter suggested such changes in § 92.2 Definitions, State recipient; § 92.2 Definitions, Subrecipient; §§ 92.220(a)(1)(iii)(A) and 92.220(a)(1)(iii)(B) regarding matching funds provided by an Indian Tribe, Indian Housing Authority, or Tribally Designated Housing Entity.
Below-market interest rate loans originated by Tribally Designated Housing Entities and Indian Tribes that are legally constituted as corporations are already eligible as match under the current regulation. HUD will clarify this in guidance.
One commenter requested that HUD clarify which provisions are applicable to all HOME-funded developments and which changes are applicable only to properties that received commitments of HOME funds after the effective date of the final rule. Another commenter requested that HUD provide phased implementation and permit permissive compliance for a set period of time before mandating required compliance, to allow participating jurisdictions time to update information systems, inform partners and ensure proper policies and procedures are in place. One commenter said that because the changes in the rule will require a significant effort to educate stakeholders and ensure a smooth transition to the new regulatory framework, HUD should dedicate adequate technical assistance resources to this effort. Another commenter stated that HUD should expand training for participating jurisdictions and HUD field officials on implementation of this rule to ensure uniform application, particularly for homeownership projects, because of uncertainty about interpretation of HOME regulations among participating jurisdictions.
One commenter suggested that one way to target funding to rural CHDOs would be to increase the awards for State-wide participating jurisdictions via a change to HUD's formula allocation regulations. Instead of measuring the number of families living in poverty, which as an absolute measure disadvantages rural areas, the commenter said the metric could instead measure either the percentage of families living in poverty or the percentage of counties in a State that are designated as Persistent Poverty Counties. The commenter stated that either of these approaches would be consistent with the statute, which directs that the formula reflects “poverty, and the relative fiscal incapacity of the jurisdiction to carry out housing activities eligible under section 12742 of this title without Federal assistance.” Another commenter also noted that the HOME program does not proportionately serve rural areas because the smallest and least-resourced places must compete for the balance of State funds, while larger communities receive guaranteed funding.
Commenters stated that they support the proposed changes to income determination for HOME because participating jurisdictions can use income determinations made by other Federal agencies.
Commenters said they support reducing the frequency of income determinations. One commenter asked for clarification if the proposed change to income recertification from annual to every two years applied to Federally funded projects such as housing developed with LIHTC. Another commenter supported the proposal and encouraged HUD to consider triennial income recertifications for all HOME programs, not just small-scale housing, because it would help families experience the intended benefits of the program, help families build wealth, and not inadvertently punish them for increasing their income.
For HOME-assisted rental housing, HUD expanded an income safe harbor which permits a participating jurisdiction to rely upon the income determination conducted under the rules of another form of public assistance for HOME-assisted rental units where Federal funds overlap. This safe harbor significantly reduces instances of when the annual income of a family must be calculated in HOME-assisted units that are also assisted with Federal or State project based rental subsidy programs, developed with LIHTC, or occupied by a family that receives Federal tenant-based rental assistance or another form of public assistance such as SNAP or TANF. This means that if the HOME-assisted unit or a family is applying for or occupying an assisted unit that is covered by any of these safe harbors, then a participating jurisdiction may apply these flexibilities to all income determinations performed, including at initial occupancy and subsequent income determinations during the HOME period of affordability. HUD is also clarifying in § 92.252(g)(3) that an owner is not required to examine source documents under § 92.203(b)(1)(i) if the participating jurisdiction is accepting an annual income determination pursuant to § 92.203(a)(1), § 92.203(a)(2), or § 92.203(a)(3).
For HOME tenant-based rental assistance, the income determination is aligned with the term of the rental assistance contract, which can have a term of up to 24 months. HUD declines to apply a triennial income determination to HOME tenant-based rental assistance programs because it could not be implemented given the 24-month statutory limitation on the term of the rental assistance contract. HUD considered many scenarios that would trigger a new income examination and how reliant participating jurisdictions are on calculation of adjusted income in determining the amount of assistance for a tenant receiving tenant-based rental assistance and believes that tying the income examination to the rental assistance contract is the best policy. HUD also believes that reducing the frequency of income determinations in HOME-assisted rental units and aligning income determination to the terms of the tenant-based rental assistance contract will encourage families to increase income without fear of losing their assistance or ability to occupy an assisted unit.
One commenter objected to requiring participating jurisdictions to use the income determinations made by owners and program administrators in Federal and State project-based rental assistance programs, including both the Section 8 project-based voucher and project-based rental assistance programs. The commenter believes that requiring the use of the income determinations is too strong of a stance and that HUD should provide participating jurisdictions with discretion to choose whether to accept an income determination made under a Federal or State project-based rental assistance program. In the commenter's experience monitoring personnel, they have determined that program administrators may overlook income sources or fail to properly verify income and assets.
One commenter suggested that HUD remove the 2 month source of income documentation requirement in § 92.203(b)(1)(i) and (b)(2) and instead follow the HUD 4350.3 Chapter 5 requirement for all HOME activities which considers circumstances when 2 months of documentation are not available, allows for third party verification, and would allow participating jurisdictions to establish a uniform income review process across HOME and HTF.
Moreover, HUD disagrees that adopting the income documentation and verification procedures in Chapter 5 of HUD Handbook 4350.3 would establish a uniform income review process across all HOME and the Housing Trust Fund activities. The requirements explained in Chapter 5 of HUD Handbook 4350.3, including the mandatory use of source documents for a period beyond 2 months and the required use of the Enterprise Income Verification (EIV) System, are more burdensome than HOME's current income requirements. Under the HOTMA regulations in 24 CFR 5.609, annual reexaminations must consider all income made in the previous 12 months (See 24 CFR 5.609(c)). HOME regulations at § 92.203(b)(1)(ii) only require an examination of 2 months of income to project the prevailing rate of income for the upcoming 12 months. This is a less burdensome process than what is required in 24 CFR 5.609. HUD's Technical Guide for Determining Income and Allowances for the HOME program (income guidebook), which will be updated to provide guidance related to this Final Rule, already provides participating jurisdictions with the flexibility to establish their own verification procedures or to implement verification procedures consistent with the Housing Choice Voucher Program.
A commenter stated that the policy should be extremely clear that a certification by another Federal assistance provider is sufficient to document income eligibility and no additional documentation would be needed outside of a certification to the owner or participating jurisdiction.
Other commenters stated that HUD should expand HOME reciprocity with other Federal agency programs and harmonize income eligibility standards. The commenters requested that HUD engage in reciprocity with the USDA Rural Home Development 502 Direct Mortgage program in a manner similar to how it honored income eligibility under its Self-Help Opportunity Program (SHOP). Specifically, the commenter urged that HUD adopt the USDA Rural Development 502 Direct mortgage program's “income banding” approach to eligibility that the commenter said has been beneficial in rural areas around the country and was a direct response to the lack of access for broad swaths of persistent poverty areas of the country.
To accomplish this, HUD is broadening an existing income safe harbor in § 92.203(b)(1)(iii) which permits a participating jurisdiction to determine the annual income of a family by obtaining a written statement from the administrator of a government program under which the family receives benefits, and which examines each year the annual income of the family. The expansion of this safe harbor includes additional forms of public assistance provided under other Federal agencies such as Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Medicaid, as well as LIHTC income determinations for families living in tax credit units. This means that instead of calculating the annual income of a family, a participating jurisdiction may rely on the annual income determination made by the administrators of those programs or forms of public assistance without having to take additional steps to verify the income calculation or determination.
To implement this new safe harbor provision, the participating jurisdiction must obtain a written statement from the administrator of the assistance which contains the amount of annual income and household composition (
With respect to granting reciprocity with the United States Department of Agriculture's (USDA) “income banding” approach for determining income eligibility for the Rural HOME Development 502 Direct Mortgage program, HUD declines to adopt this approach of determining income eligibility for HOME-assisted homeownership programs. HUD has determined that the USDA's method for defining a low-income family is not compatible with HOME's program definition of a low-income family. Under the HOME program, a low-income family means a family whose annual incomes do not exceed 80 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes. An individual does
A commenter stated that for owner-occupied rehabilitation and homeownership assistance for new construction, it is unclear if the income certification before loan closing can remain valid for 12 months now or if the rule is still limited to 6 months.
Another commenter stated that, for new construction, developers should be able to confirm that buyers are eligible to purchase the unit more than 6 months out because of the potential for construction delays. Two commenters recommended that this rule revise the regulations found at § 92.203(e)(2) to indicate that the participating jurisdiction is not required to re-examine the family's income at the time the HOME assistance is provided unless 24 months has elapsed since the homebuyer was determined to be income-qualified at the start of program participation. These commenters also recommended revising the regulations to state that at re-examination, the participant's income should be considered eligible so long as their income has not grown to the point of exceeding the low-income threshold by more than 10 percent.
HUD understands the complexity of homeownership programs and how it can vary by locality. HUD permits an income determination to be valid for six months for homeownership activities to account for this complexity and delays in property settlement. The Department has determined that permitting the income determinations to remain valid for six months is consistent with the Act but that providing a longer time period for homeownership activities creates a more tenuous standard, as prospective homebuyers may already have relatively higher incomes than other low-income participants in the HOME program.
The commenter's recommendation that families be considered eligible if their annual income has not exceeded the low-income threshold by more than 10 percent, is not statutorily permissible (see 42 U.S.C. 12744(2)). HUD declines to revise the income regulations to permit families to exceed the HOME income limits and still be considered eligible low-income families.
One commenter stated that the HOME method of income determination, which counts the income of all household members with some exclusions, does not account for multi-generational households where some family members do not contribute financially. The commenter explained that this method leads to an inflated household income calculation that does not reflect the financial burdens or capacities of families. The commenter recommended that HUD revise its regulations to allow household members who are not immediate family (which the commenter defined as anyone other than parents, siblings, spouses, and children) to be excluded from the income eligibility calculation.
The definition of family
One commenter supported efforts to ensure that tenants are able to receive the benefits of energy efficiency cost savings but requested that HUD eliminate or streamline any obligations on participating jurisdictions to monitor and ensure compliance with this benefit because monitoring would be difficult at best.
One commenter supported conveyance of a financial benefit to tenants through the design of HOME utility allowances which would exclude energy efficient features from the model. The commenter explained that the benefit should go to residents because building owners will receive benefits by virtue of decreased energy costs and use in common areas and building systems.
One commenter opposed HUD attempting to include any benefit produced by the use of energy efficiency upgrades. The commenter pointed out that if energy efficiency upgrades result in returns to the project, financial benefits could flow to the participating jurisdiction if the HOME loan requires “cash flow” payments. The same commenter also stated that it would be better if developers and owners invested in long-term benefits instead of focusing on decreased costs and updating utility allowances for all tenants.
A few commenters supported allowing the owner to recalculate the utility allowance based on the energy efficiency upgrades so that the owner can benefit from a lower utility allowance deduction from the HOME rent. One of these commenters cautioned HUD against reducing an owner's incentives for undertaking energy efficiency upgrades. One commenter noted that it will be important to ensure that utility allowances are not prematurely lowered before energy savings are realized, which would cause financial harm to economically vulnerable tenants.
Two commenters stated that the cash benefit or discount to tenants would be difficult for owners to implement. One commenter noted that including revenues generated as a result of enhanced efficiency as income to the tenant would also place an administrative burden on the owner, the tenant, as well as on the monitoring participating jurisdictions for a likely small change per month.
Many commenters agreed that HUD should permit projects to maintain the same utility allowance following energy efficient upgrades. One commenter stated that this would allow the tenant to realize the benefit of decreased utility costs and allow the owner to benefit by making them eligible to access tax credits when pursuing energy efficiency upgrades. Other commenters indicated that utility allowances often do not reflect actual costs of utilities paid for by tenants because there is significant variation among units that are the same type, therefore, increasing rent based on imprecise estimates of theoretical cost savings would make HOME-assisted housing less affordable for tenants after energy efficiency upgrades are made.
One commenter said utility allowances should only be updated if there is a risk that utility costs will rise, say, due to electrification of heating. This commenter also said that owners also need to benefit from green construction in order to incentivize them to do the work, and they need green projects to be financially viable. The commenter suggested that one approach may be to rely on the addition to the project subsidy, along with other tax incentives, and Federal and local funding to incentivize owners toward green construction.
The Department is adopting a change that will allow participating jurisdictions to use either the HUD Utility Schedule Model, the utility allowance established by the local public housing authority (PHA), or another method approved by HUD as their maximum monthly allowances in the final rule. The Department believes that this added flexibility will allow participating jurisdictions to select methods that are most appropriate for the project, and which can adequately incentivize owners to perform energy efficiency upgrades on their projects.
One commenter recommended that HUD permit owners pursuing energy-efficiency retrofits or other energy-saving measures to pursue the process outlined for RAD conversions in prior HUD notices since owners are not incentivized to pursue energy efficiency measures that would reduce tenant costs when tenants who pay their own utilities and rent are calculated for a utility allowance. The commenter suggested permitting owners to submit the engineering study contemplated by the RAD guidance, along with a request for rent adjustment so that the utility allowance could be conservatively reset and suggested that HUD should grant waivers to facilitate this approach.
Two commenters recommended aligning requirements for utility discounts and rebates for HOME assisted projects and income and utility allowance requirements with other Federal programs, to the greatest extent possible. One of these commenters noted that the utility allowance could be difficult to enforce if it becomes mandated and instead recommend that the utility allowance be preserved for to tenants up to the net credit on the allowance. In addition, one commenter also urged HUD to consider July 2022 guidance published by the Office of Multifamily Housing on the treatment of solar credits in utility allowance and annual income calculations to facilitate conveyance of financial benefit to residents and to exclude such benefits from HOME income determinations.
Commenters stated that HUD should exclude this financial benefit, even when regularly recurring, from HOME income determinations. One commenter expressed concern that including the financial benefits from reduced costs resulting from investment in energy efficiency upgrades as income could cause some tenants to become over-income. The commenter explained that this unforeseen income could result in extended negative impacts on the rents charged and compliance of the HOME-assisted units.
Two commenters opposed any addition of further income requirements and stated that HOTMA has simplified the income eligibility process, and that any further requirements would prove cumbersome, especially given that so many HOME projects also receive Section 8 assistance.
Another commenter opposed the use of discount and rebate allowances for income determinations because saved resources are not typically given back to tenants. The commenter also said that if discounts and rebates were to be treated as recurring income, HUD would need to clarify how this income would be documented and to which tax standard the income would be subject. The commenter was also concerned about HUD issuing a single rebate formula for a nationwide implementation and about the fact that carve outs for HOME rebates is not aligned with other HUD programs.
One commenter recommended that HUD clarify that small-scale wind and solar facilities are supply sources, not energy efficient upgrades, because they do not reduce the energy demands of the building/unit. One commenter stated that it is exploring energy efficiency benchmarking opportunities and would welcome the opportunity to share its findings.
One commenter believed HUD was requesting comment on whether requiring HOME-assisted units to meet a higher energy efficiency standard will negatively impact the affordability of the housing. This commenter strongly urged HUD to consider a broader definition of “affordability,” which it argues is incomplete in that it has historically been limited to the market-rate price of a home and upfront costs like downpayment requirements. Instead, this commenter said, housing affordability must also include the costs associated with staying in the home long-term, which can include heating and cooling. The commenter argued that energy costs disproportionately impact low-income homes and that costs related to energy-efficiency improvements are often mitigated in the first few years. The commenter ultimately suggested HUD examine a formulaic approach to determining affordability that includes downpayment costs, monthly mortgage payments, and monthly utility expenses and regard with skepticism comments that make hyperbolic claims about price increases caused by energy efficiency, green building, or resilience requirements.
A commenter stated that, in paragraph (a)(2) of § 92.205, the commenter opposes HUD explicitly tying the use of HOME funds for acquisition of vacant land to the definition of “commitment,” specifically as it relates to uses of the program to support land banking. The commenter stated that the use of HOME funds for land banking leads to the creation of affordable housing units and increases affordability but just on a slightly longer timeline than other uses. The commenter noted that in many places there are no other funding sources for land banking and enabling partnerships between units of local governments and nonprofit affordable housing developers to take advantage of opportunities to purchase at lower prices is a flexible, efficient use of very limited funding to ensure not only production pipelines but also affordability.
Commenters expressed concerns that HUD's clarification regarding demolition could lead to overly strict interpretations requiring a one-to- one rebuild following demolition.
Some commenters were also concerned that HUD's clarification regarding acquisition of vacant land could lead to overly strict interpretations that require affordable housing on each acquired and aggregated parcel. These commenters suggested adding language to § 92.205(a)(2) to permit the acquisition of vacant land or demolition of structures on parcels adjoining or contiguous to a project that will provide affordable housing, so long as those activities are in furtherance of strengthening property values and promoting public health and safety of future residents as part of a cohesive affordable housing development plan. Another commenter said that permitting acquisition of vacant land or demolition of structures on adjoining or contiguous parcels will enable more affordable housing. Another commenter noted that so long as these activities will further neighborhood stabilization, the nature of vacancy and demolition continues to align with the purpose of the HOME program.
The Department also notes that the HOME program is subject to one-for-one replacement requirements. Please see earlier comment responses on the statutory requirement that HOME funds be used to construct affordable housing.
One commenter stated that common delays caused by issues such as securing financing, public entitlement, site assembly, and other requirements make the proposed rule's commitment deadline of 12 months for the acquisition of vacant land or demolition work unreasonable, especially for nonprofit developers. These challenges led the commenter to recommend that HUD extend the 12-month requirement or establish separate deadlines for vacancy and demolition work.
A commenter stated that they disagree with the proposed change in wording from “[i]f a participating jurisdiction does not complete a project within 4 years of the date of commitment of funds, the project is considered to be terminated . . .” to “[i]f project completion, as defined in § 92.2, does not occur within 4 years of the date of commitment of funds for a specific local project, the project is considered to be terminated . . . .” The commenter explained that a participating jurisdiction should not have to repay HOME funds for multi-address activities where some houses were completed and sold to eligible families since the units that were completed and sold in a timely fashion are HOME-assisted units. The commenter requested HUD provide additional guidance on multi-address activities.
One commenter stated that a four-year deadline to complete the project from the commitment of HUD funds is reasonable.
One commenter supported the clarification that acquisition through a ground lease is an eligible HOME cost and sought clarification on whether the costs are limited to those eligible under 2 CFR 200.465.
Commenters stated that they support the proposal to allow property insurance during project development as an eligible HOME soft cost. Commenters stated that they support the proposal to permit the costs associated with conducting environmental assessments and reviews as costs eligible for reimbursement with HOME funds. One commenter explained that time and costs associated with environmental reviews of sites proposed for development often stall or restrict execution of affordable housing projects, and that HUD's proposal, while not a total solution, would advantage programs, especially those providing downpayment assistance.
A commenter suggested that oversight-related fees for environmental assessments should qualify for this reimbursement as well, as they can be substantial and cited one example of $96,000 for a 14-unit project. One commenter stated that they support the clarifications made at § 92.906(d)(1) regarding ensuring that developers can be reimbursed for environmental assessments or reviews on successfully awarded HOME projects.
A commenter stated that they do not support the proposed requirement that the costs for conducting environmental assessments and reviews are only eligible for reimbursement with HOME funds when expressly permitted in the written agreement. The commenter stated that conducting environmental assessments and reviews are consistent requirements and therefore the reimbursement should be automatically approved.
One commenter stated that participating jurisdictions and other participants do not understand that only the costs expressly listed in § 92.206(d)(1) may be reimbursed with HOME funds notwithstanding that they were incurred up to 24 months prior to the commitment of HOME funds. The commenter recommended that HUD address this issue with additional education or clearer regulatory language.
One commenter stated HUD should consider whether it is appropriate to permit predevelopment costs otherwise allowed under § 92.206(d)(2) to be reimbursed with HOME funds in the same manner as predevelopment costs otherwise allowed under § 92.206(d)(1). The commenter noted that it is common for developers to have incurred various predevelopment legal/accounting costs, filing fees for planning/zoning reviews, appraisals and other lender-required third-party reports, etc. prior to the commitment of HOME funds (and often as a predicate for meeting the conditions for commitment). The commenter believed that most of those costs would be “anchored” in § 92.206(d)(2) and that HUD should consider whether it is appropriate to allow predevelopment costs otherwise allowed by § 92.206(d)(2) to be reimbursed with HOME funds in the same manner as other pre-commitment predevelopment costs identified in § 92.206(d)(1).
One commenter requested that HUD delineate other holding and interim costs during development that the other parts of industry regularly characterize as soft costs with specific focus on property assessments and taxes, as well as utilities, groundskeeping, and security costs. The commenter stated that this clarification is necessary because these types of costs are not eligible for coverage once the project is ready for lease-up.
One commenter stated HUD should clarify when participating jurisdiction overhead and staff costs remain eligible for reimbursement even when incurred prior to commitment under § 92.206(d)(6) because the rule does not explicitly identify these as eligible costs.
One commenter suggested expanding HOME's eligible costs so that developing and rehabilitating garage structures would be an eligible cost for the HOME program. The commenter stated that garages provide secure places to maintain personal property, like vehicles and mowers, and also support higher densities in urban neighborhoods through the creation of Accessory Dwelling Units (ADUs).
One commenter stated that given the addition of new requirements, including BABA and VAWA, and the reduction in recent years of entitlement funding, the limit on only spending 10 percent on administration and planning costs is not sufficient to meet obligations in running compliant programs.
One commenter stated that HOME applicants often drop out of the process prior to closing, which means grantees are unable to recover the extensive staff time invested in considering or processing applications. The commenter recommended that HUD allow reimbursement of program costs if the grantee can demonstrate they acted in earnest to achieve the national objective. This could include demonstration of standard program deliverables, including inspection reports, work-write ups, bid packages and construction contract materials.
A commenter noted that State participating jurisdictions often develop rules regarding eligible administrative and project costs forcing many small cities and counties to exit the program because costs cannot be reimbursed fully. The commenter believes that not allowing costs for work specifications, needed inspections, and title insurance to be charged to successful HOME beneficiaries unfairly limits compensation for program delivery in homebuyer and home rehabilitation programs.
The commenter stated that HUD should increase support for administrative and activity delivery costs because participating jurisdictions, State recipients, or local recipients require grantees to provide additional funding from general funds to cover cost overruns that stem from these categories. The commenter suggested an increase in allowable administrative costs to 12 percent if a State recipient contractor or subrecipient is utilized. The commenter suggested allowing project delivery cost reimbursement housing rehabilitation, homebuyer assistance, and ADU programs.
Commenters supported the proposed rule revisions to correct a drafting error that created an unintended barrier to using CHDO operating expense and capacity building funding to assist nonprofit organizations seeking CHDO designation to meet the demonstrated capacity requirements.
One commenter recommended adding the requirement described in § 92.300(e) of the existing rule, that a participating jurisdiction may only provide operating expense assistance under § 92.208 to a CHDO if the participating jurisdiction expects to commit CHDO set-aside funds to the CHDO for a project within 24 months, to § 92.208. The commenter believed this to ensured that the limitation is not overlooked. A commenter asked that HUD clarify the consequences of providing operating funds to a CHDO that does not receive CHDO set-aside funding for a project within 24 months and recommended that HUD not require repayment of the operating assistance funds if the CHDO has made good faith efforts to qualify for project funding. Another commenter recommended providing examples of good faith efforts in sub-regulatory guidance and two commenters provided potential examples of good faith efforts.
One commenter stated that CHDOs receiving capacity building funds should receive more time because developing affordable housing for low-income persons is complex and difficult. Other commenters recommended extending the time period for organizations receiving operating expense funds to secure project-related set aside funds from 24 months to 36 months. Some commenters noted that a 36-month timeline would align CHDO TA with other Federal programs, such as the CDFI Fund, which requires that organizations receiving TA awards become certified as a CDFI within three years of receiving their TA award. A commenter also suggested that the longer timeframe would align with the needs of low-income communities, recognizing the unique challenges and longer timelines that are often faced in those areas.
In response to the query about the consequences of a CHDO that received operating assistance not receiving a commitment of project funding, in most cases repayment is not required but the participating jurisdiction must cease providing operating assistance to the organization when it determines that it will not be committing funds to the organization for a HOME project.
One commenter stated that CHDOs experiencing employee turnover should have access to CHDO operating funds under § 92.208(a).
A commenter supported the proposed changes but urged HUD to remove the language at § 92.300(b) that restricts capacity building funding only to participating jurisdictions within the first 24 months of participation in the HOME program as there are many participating jurisdictions that have not identified a sufficient number of capable CHDOs and struggle to use their CHDO set-aside each year.
Commenters urged HUD to provide technical assistance to help CHDOs build and maintain capacity, particularly in rural areas. A commenter that is an organization that serves persons with disabilities and has previously sought CHDO designation requested that HUD provide technical assistance to existing community-serving organizations that wish to or that are becoming CHDOs. One commenter urged HUD to use capacity building money in non-entitlement communities because it would provide needed funding to nonprofit organizations in those communities to address their affordable housing needs.
One commenter asked HUD to clarify § 92.209 by stating that the rental assistance contract is the one under which HOME funds are committed to the activity, not the agreement between the tenant, landlord, and participating jurisdiction/State recipient.
If a participating jurisdiction is using a contractor to provide tenant-based rental assistance, then there will also be at least two commitments, one committing the funds to the contractor to administer the participating jurisdiction's tenant-based rental assistance program; and the other being the rental assistance contract between the Contractor (as agent of the participating jurisdiction) and the owner and tenant assisted by the tenant-based rental assistance.
One commenter expressed support for HUD's outline in the proposed rule of the parameters within which a tenant may become a homeowner through the lease-purchase process and said that easing lease-purchase in the HOME program would provide a much-needed path toward homeownership for low- to moderate-income homebuyers. The commenter reasoned that allowing a homebuyer-tenant to contribute their TBRA toward a down payment will facilitate rent-to-own processes for HOME-assisted households. According to the commenter, if HUD's proposal were finalized, both participating jurisdictions and potential homebuyers could determine that all or some of the tenant's contribution to rent could be set aside for closing costs or a down payment and solidify terms through the lease-purchase agreement.
Several commenters stated that they support reducing the frequency of income determinations by requiring income redetermination only at TBRA contract renewal instead of an annual determination. Commenters stated that reducing the frequency of income determinations was prudent and would lessen the impact on tenants and reduce administrative burden on participating jurisdictions. One commenter noted that longer recertification periods would allow families to build wealth without immediately having to pay higher rent and utility payments. The commenter was grateful HUD was building off its Bridging the Wealth Gap plan but encouraged the Department to implement longer recertification periods such as triennial income recertifications as proposed in the Bridging the Wealth Gap plan.
One commenter noted that, as written, the rule may still require income determinations annually because leases expire annually. The commenter suggested clarifying that income reexamination is not required for amendments to the rental assistance contract during the original term of the contract as project costs may change during the term.
The Department is also adding language in a new paragraph (4) that explains when initial and subsequent income determinations are required. Income determinations will be required before a participating jurisdiction enters into an initial or new rental assistance contract with the family, and at contract renewal. Participating jurisdictions will not be required to reexamine a family's income if the rental assistance contract is amended. The Department believes this will address the commenters' concerns by establishing a clear framework for reducing income reexaminations in tenant-based rental assistance.
Commenters stated that HOME TBRA should require income eligibility screening only at new admission and not require it afterwards,
Commenters also suggested that HOME TBRA do not have a lease
The Act requires income targeting for HOME tenant-based rental assistance to be based on income at the time of occupancy or at the time funds are invested, whichever is later.
One commenter asked HUD to remove the requirement in § 92.209(e) that the rental assistance contract begin on the first day of the term of the lease because it imposes a hardship on households that receive TBRA in the rental housing they currently occupy, but where they were unassisted at the time of lease execution. The commenter explained that HUD allows for the lease term to expire during the term of assistance, so long as no HOME assistance is provided when an active lease is not in place and that an existing lease may be amended to include the required tenant protections after the lease term begins, so the lease effective date should be immaterial to the HOME assistance start date, so long as all other requirements are achieved.
Several commenters stated that they support the proposed change to the TBRA requirements to allow participating jurisdictions to establish hardship policies that permit an exception to the minimum rent requirement for families with little or no income.
Several commenters supported providing a tenancy addendum for recipients of HOME tenant-based rental assistance. One commenter stated the proposed tenant protections are a positive step towards protecting low-income renters in subsidized units and that they hoped to see the protections expanded to other HUD programs. Another commenter supported the expanded tenant protections and stated that many of the protections already exist in State law and local ordinances. Another commenter said that even though the commenter is unaware of any jurisdictions that use HOME funds to provide TBRA, there is no reason why TBRA should operate differently than the Housing Choice Voucher program, which provides tenant protections.
One commenter stated that a universal HOME tenancy addendum would ensure compliance with Violence Against Women Act (VAWA) requirements and other Federal tenant rights and reduce the burden on participating jurisdictions to develop their own addenda or review individual leases. The commenter cautioned HUD must ensure that the universal HOME tenancy addendum does not conflict with any lease provisions or addenda required by other Federal programs, and should avoid conflict with applicable State or local laws to the maximum extent possible. One commenter urged HUD to extend the full range of tenant protections to those receiving HOME TBRA and noted its appreciation for extending these protections to persons with disabilities. The commenter appreciated HUD seeking to minimize owner retaliation for reasonable accommodation requests but notes that HUD enforcement of the regulation is required in order to prevent such retaliation.
Specifically, HUD is making even greater distinctions between the addenda for rental housing in which the owner has accepted HOME funding for the project and tenant-based rental assistance, as well as between ongoing tenant-based rental assistance and only security deposit assistance. This final rule also better aligns HOME tenancy provisions with those applicable to Housing Choice Vouchers and project-based vouchers to maintain consistency across the programs.
HUD declines to include VAWA protections applicable to HOME projects in the HOME-specific tenancy addenda established by this rule because the Department is undertaking separate rulemaking to implement the expanded VAWA protections across HUD programs. The HOME-specific protections in these addenda must be
One commenter supported HUD's proposal to expand tenant protections for households receiving TBRA assistance in theory but was concerned that doing so may provide a disincentive for owners of rental housing to participate in the program. While the commenter acknowledged the benefits of extending tenant protections, especially in jurisdictions without many protections for tenants, an expansion of requirements would likely deter available units from being accessed. The commenter recommended providing an option for participating jurisdictions to exempt the new requirements for households that receive TBRA security deposit assistance only, as well as an option for participating jurisdictions to exempt 1-4 family and attached rental dwellings if it is a deterrent for owners in their jurisdiction.
Several commenters stated that requiring a tenancy addendum on TBRA leases would likely limit the housing supply because fewer landlords would accept tenants with HOME TBRA, especially in places where the expanded protections exceed existing law. One of the commenters recommended that HUD specially reach out to all participating jurisdictions to obtain input on the impact of these proposed changes.
One commenter stated that the additional requirements limit the units that are available to tenants for landlords that refuse the additional protections as part of the lease. The commenter explained that where demand exceeds supply the additional requirements limit the units available for rent. Additionally, the commenter said that State and local laws already provide tenant protections and the HOME program should not limit tenants' access to existing available units for rent by adding duplicative regulations and requirements. Another commenter also said the proposed changes would risk decreasing program use and create difficulties finding available units. This commenter said LIHTC units have been lost due to qualified contract provisions that have caused a housing shortage for low-income communities.
One commenter stated that the proposed tenant protection provisions would undermine the operational and financial well-being of participating rental properties and would interfere with existing State and local tenant protection laws without any evidence supporting the effectiveness of the proposed provisions. Another commenter stated that the proposed tenant protection provisions would make it more difficult for local courts to interpret lease agreements.
Tenant protections under State laws vary widely and HUD does not agree with commenters that it should defer to individual State laws that may not always provide sufficient tenant protections for families receiving HOME tenant-based rental assistance. Many State laws do not afford the minimum set of tenant protections provided under the current HOME regulations. After careful consideration of the comments received as part of this rulemaking, the Department has determined that it should not rely upon State laws and should promulgate the tenant protections provided in § 92.253(c) as a
One commenter stated HUD should not require a tenancy addendum on security deposit-only HOME clients, as this scenario typically includes TBRA or Housing Choice Voucher or VASH vouchers, which already occur and have an entity monitoring the landlord-tenant relationship for compliance.
To promote robust enforcement, a commenter suggested that HUD should consider elaborating on the participating jurisdiction's obligations upon receiving the lease or revision via final rule or accompanying guidance. The commenter explained that tenants would benefit if the participating jurisdiction was obligated to notify them of proposed lease revisions and if tenants had the right to submit comments regarding those revisions. The commenter also suggested that HUD could also play a role in compliance monitoring if HUD performed audits of the leases and revisions that are submitted. The commenter further suggested that HUD should also require that leases disclose any other Federal housing subsidies that are attached to the unit and the property, as well as a statement that if a property or unit has multiple subsidies, the most restrictive tenant protections apply.
Several commenters stated that the rental assistance contract should be executed by an owner to ensure that the owner is compliant with all applicable HOME TBRA requirements, particularly given that the regulatory requirements apply to the owner of the project. One commenter noted that agreements with project owners are common practice. Another commenter noted that it already requires the owner to be party to the rental assistance contract and agrees that it is necessary to ensure tenant protections are enforced. Another commenter stated that they have often experienced instances where tenants sign the agreement but as an owner the commenter did not see the agreement until after execution, which doesn't allow the owner to know up front what is expected of them.
One commenter stated that a tri-party rental assistance contract ensures that the owner and tenant have a clear understanding of, and agree to, the program requirements, however the commenter noted that a tri-party contract may be a disincentive to small-scale rental owners' participation in the program. Another commenter noted that while it believes the rental assistance contract should be executed by the owner, it does support triparty contracts as an option.
Two commenters stated that HUD should permit participating jurisdictions to choose whether owners should be included on the rental assistance contract, as is currently permitted in the regulations, although one commenter noted that requiring owners to be on the contract may result in owners electing not to participate in the program. The commenter also encouraged HUD to survey participating jurisdictions to see how many currently include owners on the contract and whether they support requiring the HOME tenancy addendum.
One commenter stated that the tenant protections should be required to be in the tenant's lease in whatever method is appropriate. Another commenter said that even though the commenter is unaware of any jurisdictions that use HOME funds to provide TBRA, there is no reason why TBRA should operate differently than the Housing Choice Voucher program, which requires a tenancy addendum.
One commenter stated that the proposed changes would risk adding an unnecessary layer of oversight and would create a link between participating jurisdictions and owners that would risk property damage concerns and tri-party contract disputes. The commenter also said that since States or subrecipients could also have assistance contracts and/or rental assistance contracts used as emergency solutions, having a requirement to issue contracts with owner signatures would add additional administrative burden. The commenter suggested that HUD leave the regulation in its current form.
One commenter stated that participating jurisdictions can always require that the HOME-assisted tenant's lease contain the HOME tenancy addendum and that the owner follow all applicable TBRA requirements either by including that requirement in a participating jurisdiction/owner contract or in a tri-party contract. The commenter is not aware of any data indicating the proposed change would benefit residents and may, in fact, deter owners from participating in HOME TBRA programs.
In contrast to the comment that requiring a rental assistance contract to be executed by the owner will lead to more contractual disputes, the Department believes the final rule provides clearer rights for tenants in contract disputes, especially those related to property damage. By eliminating normal wear and tear as grounds for an adverse action, and by tying charges for property damage to the tenant's intentional or negligent acts, the HOME tenant-based rental assistance tenancy addendum provides significantly greater clarity on permissible charges. The Department agrees with the commenter who stated that the rental assistance contract is the best vehicle that the participating jurisdiction has to enforce the tenant protections contained in the HOME tenant-based rental assistance tenancy addendum and also believes that this will provide greater clarity in the event of contractual disputes.
Some commenters supported the additional flexibility for troubled HOME-assisted rental projects. A commenter stated that they support HUD's efforts to improve the effectiveness, specificity, and clarity of participating jurisdiction's authority to preserve affordable housing prior to foreclosure or similar events. Two commenters supported the changes in § 92.210(a) and (c), including allowing HUD to consider physical condition and financial viability when preserving HOME-assisted units at risk of failure or foreclosure. One commenter stated that this change would be a critical update providing clarity on this issue, as past interpretations have too narrowly focused on the financial viability of the property. Commenters stated that they support the proposed change to allow units to float-up from 50 percent of area median income to 80 percent of area median income if a project lacks sufficient income to cover operating expenses.
Commenters supported the flexibility in assisting troubled HOME-assisted rental housing projects and recommended HUD provide more clarity on what constitutes “significant” where the rule states “a HOME-assisted rental project is no longer financially viable if its operating costs significantly exceed its operating revenue.” A commenter asked HUD to evaluate “a project's current or future ability to maintain affordability” and asked that HUD detail the expected process and timeline when making a request to HUD regarding troubled HOME-assisted rental housing. The commenter also stated that HUD should allow HOME funds to be used to restructure debt for troubled HOME-assisted projects.
A commenter supported the flexibility to consider financial viability or the physical condition of housing when preserving HOME-assisted units at risk of failure or foreclosure. The commenter noted the importance of recognizing that physical changes can significantly impact a project's preservation, including deferred maintenance due to unanticipated financial limitations or unforeseen capital needs. The commenter stated that this change would improve collaboration between participating jurisdictions and property owners to identify troubled properties and preserve them.
HUD agrees that this flexibility will enhance collaboration between participating jurisdictions and property owners, enabling the early identification of troubled properties and improving preservation efforts. HUD thanks the commenters and concurs that strong partnerships with participating jurisdictions are vital in reducing the number of troubled projects in the HOME rental portfolio. While projects do not deteriorate overnight, early identification, thorough analysis, and
One commenter understood that unforeseen events can affect projects but encouraged HUD to allow participating jurisdictions to request additional HOME funds to preserve as many units as possible or reduce the number of HOME-assisted units to ensure the safety and health of families. The commenter was concerned that “deferred maintenance” or “unforeseen capital needs” can be considered as factors that impact the long-term affordability or physical viability of projects and recommended that in these cases, 92.210(c) not apply and that HUD do as much as it can to preserve the units, including enforcing inspections regularly and providing additional resources to participating jurisdictions.
HUD agrees that regular inspections are essential for identifying potential issues early and will continue to emphasize their importance through monitoring and technical assistance to prevent deferred maintenance and protect long-term affordability. HUD remains committed to working with participating jurisdictions and property owners to maintain the viability of HOME-assisted projects while ensuring the safety and health of residents.
One commenter supported process streamlining of troubled HOME-assisted rental projects.
Two commenters supported the proposed change authorizing pre-award costs instead of requiring HUD to issue a waiver in each fiscal year in which Congressional appropriations are not timely.
A commenter opposed the prohibition against providing HOME funds to support rental units that will receive subsidies through the Faircloth-to-RAD program. The commenter stated that Faircloth-to-RAD units are considered assisted under section 9 of the 1937 Act which, though HOME cannot fund, the ultimate intent for Faircloth-to-RAD units is for such assistance to be provided through section 8 of the 1937 Act, and as HOME-assisted rental units may also be assisted under section 8.
42 U.S.C. 12745(d)(4) & (5) prohibits HOME funds from being used to provide assistance authorized under section 9 of the U.S. Housing Act (42 U.S.C. 1437g) or to carry out capital and management activities under the Capital Fund. The HOME rule at § 92.213 states that HOME-assisted housing units may not receive Operating Fund or Capital Fund assistance under section 9 of the 1937 Act (42 U.S.C. 1437g) during the HOME period of affordability. Because the public housing units in a Faircloth-to-RAD transaction are being constructed as public housing units under section 9 of the U.S. Housing Act (42 U.S.C. 1437g), and because the units must receive Public Housing Operating and Capital Funds in order to convert the assistance into a Housing Assistance Payments Contract when the units are converted, HOME assistance cannot be provided to develop the units. After conversion to Section 8 project-based rental assistance or project-based vouchers, HOME funds can be used to assist the development if there are any remaining expenses. Pursuant to § 92.213(c), HOME funds can also be used for non-public housing units if any are being constructed on the same site as the Faircloth-to-RAD units.
One commenter suggested HUD amend § 92.214(b)(4) to state “With the permission of the participating jurisdiction, rental project owners may charge. . .” The commenter stated this language clarifies a participating jurisdiction's responsibilities with respect to permissible fees.
One commenter stated that HUD should clarify whether owners may charge late fees and insufficient funds fees, which are common in the industry. The commenter noted HUD has informally indicated such fees are not meant to be prohibited under the current language of § 92.214(b)(1).
Another commenter urged HUD to further clarify prohibited activities and fees in § 92.214 including “normal wear and tear.” The commenter also asked HUD to address predatory fees such as a trip fee in conjunction with a lock-out and requested that HUD require owners to have a free rent payment method to address the fees often required when tenants pay online or with a credit card. The commenter stated that any fees which are not optional, such as
With respect to the comment that HUD require owners to have a free rent payment method to address the fees often required when tenants pay online or with a credit card, charging fees associated with online payments and using credit cards is a normal and customary business practice in many markets and as such HUD declines to adopt the commenter's suggestion. However, participating jurisdictions should encourage owners to ensure free rent payment methods are available to low-income families and may restrict the types of fees charged for paying rent through the written agreement with the rental housing project owner, as per § 92.504(c)(3)(x).
While the Department understands that one commenter believes that any fees that are not optional, such as mandatory renter's insurance, should be required to be included in the gross rent calculation, HUD is declining to adopt the commenter's recommendation. Fees are not utility costs and are not included in the gross rent determination. Mandatory fees may be permissible when commercially reasonable. The Department is not going to create a compliance standard where the owner must reduce the rent charged to a tenant by the monthly cost of mandatory fees. Instead, the Department is providing participating jurisdictions discretion to restrict fees through the written agreement. The Department also notes that mandatory renter's insurance is a commercially reasonable practice in the rental market.
Finally, one commenter questioned whether bulk cable/phone/internet providers are allowable fees. When such fees are not customarily charged within the participating jurisdiction's local rental market, such fees must be prohibited.
One commenter questioned what a reasonable application fee is, what can be used to calculate a reasonable application fee. In terms of reasonable application fees, the commenter provided HUD the example that in their State's LIHTC Program, the owner can only charge the actual costs of processing an application credit/criminal background and cannot inflate application fees.
One commenter requested that HUD align the definition of area median income for the HOME program with the definition contained in the Native American Housing Assistance and Self-Determination Act (NAHASDA) to facilitate leveraging NAHASDA funds with HOME funds and Tribes' use of HOME funds, and to reduce burden caused by two different methodologies for income for projects that utilize both NAHASDA and HOME funds. The commenter stated that HUD's interpretation seems to be that the median income of an Indian Area is the NAHASDA definition, and that this should be implemented for instances where HOME funding is used in an Indian Area. In support, the commenter referenced section 214 of the Cranston-Gonzalez National Affordable Housing Act (NAHA) (42 U.S.C. 12744); statutory language in NAHASDA at 25 U.S.C. 4103(14), and the definition of “median income” in paragraph (15); the definition of “Indian area” in NAHASDA,; the definition of “median income for an Indian area” in HUD's Indian Housing Block Grant (IHBG) regulations that implement NAHASDA; published guidance containing median incomes for Indian Areas;
25 U.S.C. 4103(14) defines low-income families as follows: “LOW-INCOME FAMILY—The term 'low-income family' means a family whose income does not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may, for purposes of this paragraph, establish income ceilings higher or lower than 80 percent of the median for the area on the basis of the findings of the Secretary or the agency that such variations are necessary because of prevailing levels of construction costs or unusually high or low family incomes.”
One commenter recommended that HUD address the failures of its income limit calculations in the HOME program and beyond, noting that “state floors” meant to prevent the effects of concentrated poverty do not work in places with severely depressed economies and high levels of poverty. The commenter stated that families in such places are not able to qualify for assistance under HUD programs despite very low incomes with respect to cost of living because the median family income limits in their communities are so low. The commenter said they are pursuing a legislative change to create a “national floor” and that a HUD January 2024 Notice proposing the idea of a “national minimum income limit” shows that HUD could immediately implement changes to address this existing inequality.
HUD acknowledges the commenters' concerns that HUD's methodology for calculating income limits used by the HOME Program should be reexamined. In a January 10, 2024,
A commenter requested that HUD clarify that the requirements in § 92.221(b) would be applicable only to carryover amounts going forward from the applicable date of the adoption of the rule otherwise participating jurisdictions would have to have records beyond the current recordkeeping period of documentation.
Several commenters supported the increase of HOME subsidy limits. Two commenters stated that HOME subsidy limits should be increased because of the increase in the cost of labor and materials.
Generally, commenters stated that they support the proposal of establishing the HOME maximum subsidy limits in accordance with section 212(e) of NAHA. Several commenters stated support for HUD's clarification that the statutory limit in Section 212(e) of NAHA is a floor and not a cap of the subsidy amount, and for revising § 92.250 so that the section refers to the statutory requirements in order to avoid the need to waive or change the HOME regulations to align with section 212(e) in the future. Two commenters supported HUD's proposal to publish the methodology for determining the new maximum per-unit subsidy limits through a future notice published in the
Several commenters supported HUD's proposal to adopt the Section 234 limits and increase the housing cost percentage from 240 percent to 270 percent in the maximum per-unit subsidy methodology. One commenter said this would permit more flexibility for the commenter's members and other stakeholders looking to maximize their usability of HOME funds ahead of HUD's release of the proposed methodology. One commenter said the resulting increase will be essential for communities where land and building costs are exceptionally high, and that the additional financing might also make the creation of smaller-scale properties unable to obtain LIHTC financially feasible. Another commenter stated that until a new methodology is finalized, HUD should establish the maximum per-unit subsidy limit as 270 percent of the section 234 limitations, educate stakeholders, and consider waivers or high-cost percentage exceptions. Another commenter noted its appreciation that HUD increased the Section 234 limitations to 270 percent while it designs new limits as this will allow more flexibility and affordable
Several commenters also recommended that in developing its new methodology HUD consider the specific cost implications of rehabilitation, rural communities, single family housing and multifamily properties, fluctuating construction costs, as well as operating costs, property insurance costs, income limits, administrative costs, and impacts to a developer's revenue stream.
One commenter opposed the proposed change that the HOME subsidy limit must be determined at the time of underwriting and recommended that the HOME subsidy limit be determined at the time of project completion. The commenter stated that their recommended approach is appropriate because: (1) the HOME subsidy limits are published once a year, giving the participating jurisdiction plenty of time to adjust subsidy layering, if needed; (2) projects may take more than a year to complete and, with inflation, the HOME subsidy limits can significantly increase, allowing participating jurisdictions more HOME funds to complete the substantial renovations; and (3) while the maximum per-unit HOME subsidy limit is often not reached, it is the times when a particularly substandard home is renovated that more HOME funds being available allows participating jurisdictions to make the necessary substantial repairs.
Commenters overwhelmingly supported HUD's proposal to permit participating jurisdictions to provide additional subsidy in excess of the maximum per-unit subsidy limits at § 92.250(a) for HOME projects that meet a green building standard. Several commenters indicated that the increased subsidy could help to defer upfront costs and assist with meeting their sustainability and housing goals, and they encouraged HUD to include mitigation and resilience improvements in the permissible standards. However, commenters also reminded HUD to consider that the application of green building standards is different for rehabilitation and new construction projects. One commenter noted that due to project construction timelines, any new green building requirements should be applicable based on date of commitment of HOME funds rather than grant year.
Commenters opposed any mandatory green building requirements as a condition of receiving HOME funds. These commenters stated that green building standards should be voluntary given reductions in HOME appropriations and increased costs of construction over time. One of these commenters also suggested that requiring green building could result in fewer HOME units produced and decreased interest from contractors and developers in participating in the HOME program.
Commenters offered additional policy suggestions and shared concerns for HUD's consideration. One commenter recommended that the rule allow participating jurisdictions to exempt the amount of HOME funds spent on green and resilient building measures from the calculation of the total HOME subsidy for the purpose of determining the minimum HOME period of affordability in accordance with § 92.252(e). Two other commenters stated that HUD should consider Build America, Buy America (BABA) requirements in determining any increases in maximum per-unit subsidy related to green building standards because BABA may result in increased costs from sourcing green building materials.
HUD notes that BABA is beyond the scope of this rulemaking. Until additional guidance is provided about how BABA will apply to HOME and other HUD programs, HUD cannot determine the effect of BABA compliance on the green building incentive or overall compliance with the HOME final rule.
Commenters were divided over whether HUD should specify green and resilient building standards and which standards HUD should permit. Several commenters suggested that HUD should allow participating jurisdictions a range of choices by prescribing a wide variety of qualifying standards to account for differences in the availability of resources, costs of certification, and unique State and local needs based on population and geographic location. Alternatively, two commenters recommended against a HUD-prescribed list and instead suggested that HUD establish a broad definition of green and energy efficient measures that would qualify as a green building standard to allow for maximum flexibility. Furthermore, commenters recommended that HUD allow the increased HOME subsidy if the project meets State and local green standards and requirements. One commenter stated that HUD should review best practices that increase the feasibility of the developer to adhere to green standards while bringing down energy costs for the consumer.
Commenters that support a HUD-prescribed list recommended that HUD establish green and resilient building standards that are consistent with the national certifications required by other Federal or HUD-assisted programs to promote alignment, limit disruption or confusion, and ease administrative burden, given that these standards are well known by many participating jurisdictions and their developers. One commenter noted that these standards are included by States in their qualified allocation plans (QAPs) for low-income housing tax credits. Another commenter suggested that HUD collaborate with other Federal agencies such as the Department of Energy, Department of Health and Human Services, and the Environmental Protection Agency to create such a list or consider allowing the use of other agency's Green Building Standards. The specific Federal programs suggested for alignment by commenters include the following:
1. HUD's Green and Resilient Retrofit Program (GRRP), which permits DOE Zero Energy Ready Home; Zero Energy Ready Multifamily; National Green Building Standard—Silver, Gold, or Emerald; LEED V4.1; Enterprise Green Communities Plus, Greenpoint Gold or Platinum; Earthcraft Gold or Platinum; Passive House; International Living Institute; Well Building Standard; RELi; or FORTIFIED Silver or Gold.
2. The Environmental Protection Agency's Greenhouse Gas Reduction Fund program.
3. The Department of Energy's Section 45L Tax Credits for Zero Energy Ready Homes, which also includes Energy Star requirements.
Irrespective of alignment with other HUD or Federal programs, commenters recommended that the following certifications, standards, codes, or thresholds be used to determine compliance for the purposes of increased HOME subsidy:
1. CALGreen (California Green Building Standards Code—Part 11, Title 24, California Code of Regulations).
2. GreenPoint Rated (GPR) Certified or 75+ points.
3. International Green Construction Code (IgCC), which the commenter indicates will allow for coordination with the statutory HOME energy efficiency requirements for new construction projects. A commenter also notes that Appendix M of the 2024 IgCC provides options for residential compliance with the National Green Building Standard (ICC 700) and Appendix K aligns IgCC requirements with core elements of versions 4.0 and 4.1 of the LEED rating system.
4. Home Energy Rating System (HERS) Index threshold specifically for homeownership projects, for example requiring a HERS rating of 50 or lower to qualify as meeting the green building standard.
5. Earth Advantage.
6. Energy Rating Index (ERI) thresholds, for example requiring that homes achieve an ERI of 60 or lower.
7. ENERGY STAR, and specifically ENERGY STAR Multifamily New Construction National Program Requirements Version 1.1.
8. Enterprise Green Communities, and specifically Enterprise Green Communities Plus.
9. National Green Building Standard (NGBS Green).
10. Passive House.
11. US Green Building Council's LEED, and specifically LEED Silver (50+ points) or LEED Net Zero.
12. Zero Energy Ready Homes.
Two commenters urged HUD to prioritize electrification as an essential measure for reducing greenhouse gas emissions and improving indoor air quality, and therefore, the health and safety of the occupants. Both commenters suggested that the HOME rule should require that new construction and substantial rehabilitation projects be all electric, and that HUD prevent the use of HOME funds in new fossil fuel connections. However, one commenter suggested that an exception may be necessary in cold weather climates to allow for fossil fuel backup sources.
Although several commenters support HUD's proposal to permit an increase in the maximum per unit subsidy by five percent for meeting a green building standard, the majority of commenters indicated that five percent is insufficient to cover the increased costs of constructing or rehabilitating affordable housing to a green standard including the costs associated with obtaining a certification. Two commenters asserted that the proposed five percent increase is insufficient even to cover the increased costs of meeting the HOME statutory energy efficiency requirements as updated by FR-6271-N-03. Meanwhile, other commenters indicated that they could not determine whether a five percent increase would cover increased costs of construction or provide any incentive for green building without knowing which standards would be required to access the benefit. One commenter recommended that HUD request funding to establish a competitive Green Building pilot program in conjunction with the HOME program to gather data on costs associated with various green building standards.
Several commenters also expressed concern that the proposed policy to permit an increase of the maximum per-unit subsidy would be ineffective at any level to incentivize green building because participating jurisdictions lack the additional HOME funds needed to provide the benefit. Specifically, commenters noted that HOME projects are often not awarded the full amount of the current maximum per unit subsidy, particularly homeownership projects. In addition, one commenter suggested that providing additional funding to HOME projects would be a more effective means of incentivizing owners to meet green building standards rather than allowing participating jurisdictions to exceed the maximum per-unit subsidy by five percent.
Of the commenters who supported a 5 percent increase, several indicated that 5 percent would only be sufficient to cover the increased costs of meeting certain basic standards. These commenters indicated that 5 percent is not sufficient to cover the higher costs of more rigorous green and resilient building standards and that the 5 percent increase would not incentivize the type of wraparound measures necessary to achieve meaningful energy and cost savings. Commenters who suggested a greater increase in the maximum per unit subsidy limit proposed a wide variety of alternatives. Commenters stated that the appropriate amount would be closer to 10, 15, 20, or even 30 percent of the maximum per unit subsidy given the wide range of costs associated with different green building standards and the varying costs of acquiring certifications based on location. One commenter indicated that all residential buildings in California are required to meet CALGreen, so the additional costs of building to green standards are already reflected in the costs of residential construction in the State. However, this commenter also recommends allowing an increase of 20 percent in the maximum per unit subsidy, which in States like California where green building compliance is required, the additional HOME investment will help to mitigate the current high cost of construction and make assisted projects less reliant on other highly competitive funding sources. In addition, two commenters stated that an increase up to 30 percent would support green building by covering the increased upfront costs of supplies while lowering the rents required to be charged at the project.
One commenter noted that meeting green building standards for new construction is fundamentally different than for rehabilitation projects and the commenter estimated that an increase of 25 percent of subsidy would be required for rehabilitation projects to achieve a green building standard beyond the State energy code. However, the commenter expressed concerns with permitting a significant increase in maximum per unit subsidy due to the impact on production and instead suggested that HUD provide a 10 percent increase for rehabilitation projects in States with ambitious green building standards, as determined by HUD. The commenter stated that this proposal could increase the number of HOME-assisted rehabilitation projects in areas where green building standards are already required.
Rather than permitting a specific percentage increase in the maximum per unit subsidy limits, several commenters supported permitting participating jurisdictions to exceed the limits by actual additional construction costs of green building measures for the project. One of these commenters suggested that the rule should permit project owners to apply for the amount above the maximum per unit subsidy needed for a rehabilitation project, and that the participating jurisdictions should provide the largest awards to proposed projects with the highest energy and cost savings potential, therefore prioritizing rehabilitation of the most inefficient housing. Other commenters recommended that the rule permit a participating jurisdiction to determine the percentage increase because needs and costs vary geographically.
Many commenters also suggested that HUD implement a tiered approach to providing an increased HOME subsidy to account for the varying nationally recognized standards, with more aggressive standards equating to larger incentives based on the relative level of value-added above-code efficiency in terms of both energy savings and energy cost savings and resilience in the project. One commenter remarked that increased subsidy levels designed to cover the higher costs of advanced standards would be a sufficient incentive in projects that would not otherwise have been designed to meet green building standards. However, the commenter also noted that there is not always an additional cost to meet green building standards, particularly for standard level green certifications and that the cost differential is likely to diminish over time as developers become more familiar with green building standards, so an increased HOME subsidy will eventually become a true incentive to build greener housing.
Two commenters suggested that a tiered approach be tied to Energy Rating Index (ERI) thresholds with the largest subsidy available for net zero design and/or the installation of solar in assisted projects. Other commenters suggested that HUD allow a lower increase, from 2 to 5 percent for base green building certifications such as ENERGY STAR and a 10 percent increase for buildings that achieve higher certifications consistent with the recent National Definition of a Zero Emissions Building, such as Enterprise Green Communities Plus, the forthcoming LEED Zero Carbon, ENERGY STAR NextGen, and/or the Department of Energy's Zero Energy Ready Homes combined with specific required criteria or additional requirements to make them zero emissions. Another commenter suggested that to create an incentive, HUD should implement a range of increased subsidy rather than a set percentage using a formula based on criteria such as disparities between State code and HUD requirements, the extent of green building rating systems and any subsidies offered at the State or local level. The commenter recommended that the further “behind” a State is in adopting the most recent International Energy and Conservation Code (IECC) and American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) codes, the higher the base subsidy should be. A different commenter stated that HUD should implement an “up to or higher” standard, which could be provided through a waiver process based on taking into account the type of activity and technology deployed.
Commenters anticipated that homeownership projects would be the most affected by cost increases related to energy efficiency requirements and green building standards. Commenters agreed that large multifamily rental development projects are the most likely to benefit from any permitted increase in maximum per unit subsidy. However, a commenter stated that data they analyzed showed that the amount of HOME funds awarded even to rental projects depends largely on the participating jurisdiction's policies rather than on local conditions (
One commenter suggested that in addition to increasing Green Building standards, HUD should consider how the HOME program can incentivize or require increased disability-related accessibility standards. For example, the commenter suggested that the HOME program could adopt the Universal Design criteria which is currently in the HUD Section 811 Capital Advance application.
One commenter provided general support for all the changes to HOME property standards to include energy efficiency, carbon monoxide detectors, incorporate green building standards and include NSPIRE changes.
Commenters supported the proposal to codify the statutory HOME energy efficiency requirements in the HOME regulations. One commenter recommended HUD update the reference from section 109 of NAHA to HUD's recent minimum energy standards determination (FR-6271-N-03) to streamline requirements across programs and minimize confusion about the requirements.
A commenter agreed with HUD's proposal that the rule should be clear that the ASHRAE Standard 90.1-2019 (for high-rise multifamily) and the 2021 Energy Conservation Code (for single-family and low-rise multifamily) apply to all new construction under HOME, including alternative compliance pathways such as specified green building certifications and future HUD-developed standards. The commenter recommended that HUD go further and apply the standards to major rehabilitations under HOME, arguing that rehabilitated homes can and should meet the same standards as new construction. Additionally, the commenter said that HUD should consider setting higher minimum standards for HOME new construction and major rehabilitation that require certifications consistent with the Department of Energy's National Definition of a Zero Emissions Building.
One commenter noted that low-income households are more likely to experience higher utility costs, and that energy efficiency means residents do not need to choose between paying utilities, rent, or putting food on the table and responds to climate instability. The commenter noted the importance of energy standards being codified in accordance with section 109 of NAHA, including any revisions adopted by HUD and USDA and encouraged the use of HUD funding to implement these requirements.
One commenter stated that the energy efficiency standards would require monitoring to ensure that HUD's energy efficiency goals are being met. The commenter stated that HUD could ensure the goals are met by tracking developer use of inspections and assessments. The commenter stated that HUD could require these assessments since the proposed rule allows for reimbursements of environmental assessments.
One commenter stated that HUD's proposal to have projects meet high energy efficiency standards was beneficial but could go further by further eliminating new fossil fuel hookups.
Multiple commenters stated that they support the proposed alignment in the HOME program of permitting the use of inspections from other programs or sources.
Commenters stated that HUD should clarify the specifics of the applicability of NSPIRE to various HOME-eligible activities. One of these commenters noted that it is unclear how NSPIRE applies differently among homebuyer activity, homeowner rehabilitation activity, rental new construction activity and rental rehabilitation activity. The commenter requested that the final rule address the as-applied differences between these activities. One commenter cautioned that applying new physical condition standards such as the NSPIRE program to old properties is problematic because they were built under very different code and standard requirements.
Under the Effective Date section of the NSPIRE Final Rule, HUD clarified that “[p]articipants and owners subject to these regulations are subject to the Code of Federal Regulations as it exists on the publication date of this rule and are not subject to the regulatory changes being made by this rule on July 1, 2023, until October 1, 2023.” HUD has since delayed the compliance date for implementing NSPIRE inspection standards and requirements until October 1, 2025,
While one commenter was supportive of the changes made to accept inspections under other HUD programs, they noted that the success of the policy will depend upon effective implementation and coordination among the various entities involved in the project and urged HUD to take steps to ensure that all entities involved are committing to inspection standards that prevent issues in units from going undetected for extended periods. In addition, one commenter requested that HUD clarify whether a participating jurisdiction must be a party to the contract for an inspector conducting the inspection in satisfaction of another funding source's requirements. Another commenter asked which entity is responsible for ensuring that inspections are conducted in compliance with HOME requirements and stated that they wished to avoid conflicts between states and local jurisdictions.
The participating jurisdiction is not required to be a party to the contract of an inspector that is inspecting on behalf of another program but may enter into contracts with inspectors to perform the on-site inspection of units under the HOME program. The Department is not
Two commenters stated that the proposal to allow a participating jurisdiction to “[a]ccept a determination made under another HUD program . . .” should be expanded to also include rental inspections made for tax credit programs. One of these commenters stated that tax credit programs, while not HUD programs, are by far the most frequent and prominent other funding source for affordable housing. The commenter requested that HUD revise the proposed language in § 92.251 to allow participating jurisdictions to accept inspections made by any other funding source when the other funding source's inspection requirements equal or exceed HUD's requirements. One commenter noted that the language of the proposed rule states that HUD may accept the determination of “another HUD program,” which could limit HUD's ability to accept the determination of programs outside of HUD that engage in similar determinations. The commenter stated they were especially confused because the informational portion of the comment session made it seem as though HUD “may accept the determination of another funder in accordance with [§ ]92.251 every three years thereafter.”
One commenter suggested that the flexibility of accepting physical inspections performed by other HUD programs using the Housing Quality Standards and NSPIRE standards for tenant-based rental assistance units should operate in a slightly different manner. The commenter recommended extending the timeframe for when the other inspection has occurred from 3 months to 12 months because requiring duplicative inspections annually can cause unnecessary delays in getting families housed.
One commenter stated that they support HUD's proposal to accept physical inspections performed by other HUD programs that were completed using Housing Quality Standards, or eventually, NSPIRE. Another commenter asked whether inspections conducted under NSPIRE replace inspections conducted under previous standards such as the Uniform Physical Condition Standards (UPCS) or Housing Quality Standards.
One commenter supported HUD's proposal to provide administrative relief by better aligning HOME inspection standards with the standards of other funding sources. The commenter supported allowing participating jurisdictions to accept NSPIRE inspections conducted under another funding source, in lieu of the final completion inspections for rehabilitation projects as well as ongoing inspections of rental projects and housing occupied by tenant-based rental assistance tenants because it would reduce participating jurisdictions' administrative burden and reduce the impact on owners and tenants of having multiple project inspections due to layered Federal funding.
One commenter believed HUD's proposal allowed participating jurisdictions to accept NSPIRE inspections of rehabilitation projects performed for other funding sources instead of final and ongoing periodic inspections. The commenter also believed that this allowed the use of LIHTC inspections. The commenter stated that it recommends that HUD still provide participating jurisdictions the option of performing final and ongoing inspections to prevent delays in inspection.
One commenter stated that HUD should allow State participating jurisdictions to inspect all their HOME properties in accordance with either local codes or a national standard as determined by HUD and that if a State participating jurisdiction chooses to use the national uniform standard, participating jurisdictions should still require owners to certify that they meet local codes but should not be required to inspect the property in accordance with the local code.
Many commenters expressed general support for requiring the installation of carbon monoxide detectors in HOME projects. One commenter went further, stating that carbon monoxide alarms should also be accessible for people with hearing loss.
Many commenters also conveyed concerns about imposing strict requirements for the installation of hard-wired carbon monoxide detectors. One commenter requested that the rule provide an exception be made for those housing units where a gas line or similar hazard is not present. Another commenter only supports requiring hard-wired alarms in HOME-funded new construction. One commenter supports a requirement for a 10-year battery-powered carbon monoxide detector in rehabilitation and homebuyer acquisition projects and in units occupied by tenants receiving HOME tenant based rental assistance. However, for homebuyer acquisition and tenant-based rental assistance projects, the commenter requested that the installation of a carbon monoxide detector be permitted as an eligible HOME cost. This commenter expressed concern that requiring a seller or landlord to pay for the cost of installation of carbon monoxide detectors may reduce the available housing stock for these types of activities. Furthermore, this commenter and another were not in favor of requiring a HOME-assisted homebuyer to pay these costs. Other commenters also requested that HUD make additional HOME funding available for the costs of installing carbon monoxide detectors.
Another commenter stated that they do not support the proposal because carbon monoxide detectors are already required by the International Housing Code, and they view any additional HOME requirements for carbon monoxide detectors as overreach.
One commenter emphasized that any HOME requirements for carbon monoxide detectors should align with other HUD programs.
A different commenter noted that some State regulations require a smoke alarm in every unit room that also contain carbon monoxide detection. Consequently, the commenter suggests that the rule defer to applicable State and local laws for carbon monoxide detection standards.
Most commenters support the proposal to allow homebuyer acquisition projects to meet HOME property standards within six months after the assisted homebuyer purchases the unit because such a change would expand homebuyers' purchasing options and simplify the pre-purchase period. One commenter reasoned that this change would provide more choices for homebuyers and provide access to bank foreclosures, and that this change would prove advantageous for buyers because of risks for buyers to cover out-of-pocket repairs before closing. Furthermore, commenters noted that sellers would often not consider offers that included contingencies regarding property standards, which made HOME-assisted homebuyers less competitive in the private market. In addition, one commenter indicated that the proposal would align HOME with other funding sources before closing. Furthermore, commenters noted that sellers would often not consider offers that included contingencies regarding property standards, which made HOME-assisted homebuyers less competitive in the private market. In addition, one commenter indicated that the proposal would align HOME with other funding sources.
Several commenters suggested that the proposed six-month timeframe would be insufficient time for many homebuyers to complete the necessary rehabilitation. As reasons for this statement, one commenter cited supply chain issues, Build America, Buy America requirements, contractor availability, and green certifications requirements. Commenters proposed allowing longer periods, such as 9, 12, or 18 months after acquisition, to bring a property to standard. Allowing for reasonable extensions or phased rehabilitation plans based on property conditions and local market dynamics could alleviate some of the pressure on participating jurisdictions while maintaining housing quality standards.
One commenter stated that they do not support the proposed revision due to concerns around enforcement and the possibility that the participating jurisdiction may be required to foreclose on the property or allow the homeowner to live in substandard conditions. Another commenter supportive of the proposal expressed similar concerns about the difficulty of monitoring the six-month deadline to rehabilitate housing and meet homebuyer acquisition property standards. One commenter opposed the proposal, recommending instead that the requirement should align with a local jurisdiction's certificate of occupancy requirements. This commenter agreed with the previous commenter that it may not be practicable for a participating jurisdiction to enforce property inspection requirements on a homeowner after title transfer.
Several commenters requested clarification of the proposed policy. Specifically, two commenters requested that HUD clarify what evidence a homebuyer must provide to demonstrate that “funds are secured for rehabilitation.” One of these commenters suggested that HUD consider a letter provided by a mortgage lender or a bank statement as evidence of sufficient funds.
One commenter requested that the Department clarify in the regulation at § 92.251(c) the consequences of failure to meet the property standards requirements within six months after title transfer in a homeownership program.
Two commenters requested HUD provide guidance on the inspections required to ensure that the housing met property standards after a HOME-assisted homebuyer purchases the unit and completes the required rehabilitation. One of these commenters requested that HUD provide a sample template inspection form for jurisdictions that operate downpayment assistance programs to standardize practices.
One commenter requested HUD provide for an exemption for HUD Code manufactured housing from all proposed requirements that deal with construction and safety standards. The commenter is concerned that HUD's proposal would impose new construction requirements on all housing structures utilized under the HOME program. For manufactured homes, the commenter believed this would result in conflicts with the Manufactured Home Construction and Safety Standards (the HUD Code) resulting in the inability to utilize manufactured housing for projects funded by the program. The goals of the new construction requirements may make sense for other forms of housing that are not subject to national construction standards administered by HUD. However, the commenter believed they are not necessary for manufactured homes, which as noted, already are subject to such standards.
One commenter encouraged HUD to recognize the International Code Council/Modular Building Institute standards for off-site construction in order to facilitate their expanded use and encourage efficient design and construction that addresses housing affordability and availability, sustainability, workforce availability, and supply chain disruptions.
One commenter is not supportive of the financial oversight requirements applying to rental projects with 10 or more HOME-assisted units. While the commenter understands that it can always adopt more restrictive requirements, the reality is that financial oversight is an invaluable tool in understanding how properties are performing, as well as early indications of financial distress and/or properties having surplus beyond what was originally underwritten. The commenter uses financial oversight during annual rent increase requests to verify it is reasonable for HOME-funded projects which more than likely have a blend of LIHTC, HOME, Housing Trust Fund (HTF), and/or local resources.
One commenter also suggested that HUD should ensure that energy efficiency considerations are addressed for off-site built housing like manufactured homes. The commenter noted that HUD should consider the Environmental Protection Agency's EnergyStar v.3 standard or the Department of Energy's Zero Energy Ready standard for manufactured homes as a minimum for any activities related to the purchase of new manufactured housing with HOME funds.
Another commenter recommended allowing States to accept ongoing inspection reports from local government inspections that review compliance with local codes during construction of a HOME-assisted project. The commenter believed that HUD should only require the final inspection be conducted by the State participating jurisdiction before completing the project in the IDIS, instead of requiring frequent State participating jurisdiction inspections during construction. The commenter explained that this would avoid unnecessary burden, especially for larger States where it can take several hours to commute to a project's location.
Another commenter stated that HUD should create a process to accept either State or local rental inspections in lieu of HUD required inspections.
One commenter said that the changes being proposed to the small-scale development compliance requirements, such as requiring inspections every three years, should be extended to larger-scale developments as well.
One commenter stated that HOME's Housing Quality Standards, especially the requirement to address all health and safety hazards, impose significant challenges on low-income homeowners who cannot afford critical repairs due to limited equity or reluctance to encumber properties. The commenter stated that these issues cause HOME applicants to drop out of the process, which often means that grantees cannot recover the extensive staff time invested in considering or processing applications. The commenter recommended that HUD remove the Housing Quality Standards (HQS) requirements for single-family rehabilitation projects. One commenter stated HUD should expand grant funding available to cover critical repairs, such as roofs, plumbing, and electrical systems, which are often unaddressed due to limited equity, hesitation of homeowners to participate in the program, and concerns about encumbering their property with debt vs income. The commenter noted that HUD could expand the range of available grants to mirror CDBG programs.
One commenter requested that HUD only require participating jurisdictions to ensure that homebuyer housing is free of immediate life and safety issues rather than imposing extensive property standards. The commenter stated that this may create a more reasonable option for income eligible buyers and private sellers instead of financing additional rehabilitation costs, which may put debt-to-income ratios too high.
One commenter suggested that the Department align HOME rehabilitation requirements with the rehabilitation requirements under the CDBG program.
Commenters generally expressed support for requiring the installation of smoke alarms in the interest of promoting safety. In addition, only a few commenters stated their support for the specific proposal to require NFPA 72 smoke alarms in HOME-assisted projects. Of those commenters, one indicated support of the proposal for all types of HOME-assisted projects (
Most commenters expressed concerns about the specific proposal to require the installation of NFPA 72-compliant smoke alarms. Their primary concerns are costs, availability of such smoke alarms, and feasibility in projects that do not involve new construction or rehabilitation. Specifically, commenters were unclear how compliant smoke alarms would be paid for in homebuyer programs and speculated the proposal could increase administrative burden and cost in many jurisdictions where homeownership assistance programs are often oversubscribed and financially stretched. Many commenters were also concerned that installation would be challenging and cost-prohibitive in the rehabilitation of older housing. One of these commenters stated that adoption of the NFPA 72 standard would cause their participating jurisdiction to discontinue use of HOME funds for rehabilitation projects.
To address concerns about costs, one commenter proposed that smoke alarm requirements should be encouraged but not required. Other commenters suggested that the rule not require smoke alarms to be hard-wired. One commenter, however, supported hard-wired smoke alarms only in HOME-funded new construction projects. Two other commenters agreed that HUD should differentiate requirements for new construction and rehabilitation projects. The first commenter suggested that the rule require 10-year battery-powered smoke alarms in rehabilitation, homebuyer acquisition, and HOME tenant based rental assistance projects. However, this commenter's recommendation for homebuyer and TBRA projects was contingent on the HOME rule allowing the installation of alarms as an eligible HOME cost.
Other commenters disagreed that eliminating the requirement for hard-wired smoke alarms would address cost concerns. They stated that compliant battery-operated smoke alarms can also be significantly more expensive and harder to find than more widely available models. One commenter suggested that 10-year non-rechargeable, non-replaceable batteries pose the risk of increased replacement costs due to uncertainty about future safety codes after initial battery life has expired. In addition, one commenter indicated that these smoke alarms may require training for the tenant or homeowner to use this system and creates additional expense for homeowners and rental housing owners to replace and maintain.
One commenter urged HUD to assess the availability and cost of NFPA 72 smoke alarms before imposing such a requirement on HOME projects.
Several commenters requested that HUD make additional funds available to cover the costs of meeting any new smoke detector requirements. One commenter stated that national standards must not disadvantage rural places or low-income people, so Federal funds should be provided to cover the cost of any new Federal standards.
Commenters who expressed concern about imposing NFPA 72 requirements on homebuyer acquisition projects stated that the proposal would reduce single family homeownership opportunities because it would be difficult for HOME-assisted homebuyers to negotiate specialized smoke detector requests during the purchase and sales of existing units on the market with private owners. For this reason, one commenter noted that such a policy would reinforce its decision to decline to offer homebuyer assistance independently of HOME-assisted new construction or rehabilitation projects. Another commenter suggested that even if the cost of smoke detector installation was permitted as an eligible HOME cost, low-income homebuyers cannot afford to use their downpayment assistance for this purpose due to the high cost of housing. A third commenter suggested that if a household requires a specialized smoke detector, it should either be requested at the time of construction as a reasonable accommodation or should be installed by the homeowner after purchase. However, commenters also expressed concerns about requiring the assisted family to pay for upgrades after purchase, the ability of participating jurisdictions to enforce smoke alarm requirements after closing, and the additional program costs of additional post-closing inspections.
Several commenters noted that current building codes in some States and local jurisdictions already require compliance with NFPA 72 smoke alarm standards for single and multifamily buildings. Consequently, a number of commenters urged HUD to defer to State and local code requirements for smoke alarms. Commenters explained that State building codes facilitate choice and therefore flexibility based on the conditions of the project.
One commenter advised against solely applying NFPA 72 because these requirements do not align with the Consolidated Appropriations Acts of 2021 and 2023 which require all public housing to meet or exceed the requirements of Chapters 9 and 11 of the 2018 International Fire Code and that smoke alarms are installed in Federally assisted housing in accordance with the International Code Council or NFPA and NFPA 72. The commenter urged HUD to reference the smoke alarms requirements outlined in the International Building Code, International Residential Code, and International Fire Code which the commenter stated are industry-leading national voluntary consensus standards, are widely used by government agencies across the nation, and trigger NFPA 72 smoke alarm installation requirements. The commenter stated that implementation of the hearing impairment requirements will be difficult because they are not referenced in the international codes and the technology is limited in availability. The commenter noted that the international codes require smoke alarms be hardwired with battery backup unless it is a first-time install and that the allowance to install seal tamper resistant non-replaceable 10-year battery operated alarms are intended to be limited to existing buildings that do not currently contain hardwired alarms and that it is unclear whether these alarms would comply with NFPA 72 for hearing impairment.
Several commenters asked for clarification of the proposed policy. One commenter asked how the proposal would apply (f) in HOME-assisted properties with floating HOME units. Other commenters asked HUD to clarify monitoring and compliance requirements, especially after resale for homebuyer activities.
Specific solicitation of comment #4: The Department specifically seeks public comment on the proposal to require that a participating jurisdiction inspect at least 20 percent of the HOME assisted units during its ongoing on-site inspections of rental housing.
Many commenters supported the proposal to require participating jurisdictions to inspect at least 20 percent of the HOME-assisted units. One commenter agreed that the current HOME rule requirement that participating jurisdictions inspect a “statistically valid” sample of units is challenging for participating jurisdictions that lack software capabilities to develop such a sample. In addition, one commenter in support of the proposal also recommended that HUD require that each inspection include accessible units and evaluate the accessibility of common areas.
Many commenters also opposed the proposal, their primary concern being that an inspection of 20 percent of the HOME-assisted units will result in a large sample size, particularly in large projects, and will place an undue burden on residents, project owners, property managers, and participating jurisdictions. In response, several commenters requested that HUD provide additional administrative funds because the proposal would require additional staff time and costs.
One commenter noted that, for properties with a limited number of HOME units, it will be difficult to avoid inspecting the same units each year. Another commenter maintained that current requirements are sufficient for
Several commenters proposed reducing the sample size for larger projects. Two commenters stated that the proposed sampling method differs from the requirements of other funding sources, including LIHTC, and recommended that HUD instead align the HOME and LIHTC program requirements. One of these commenters suggested using the LIHTC standard of the lesser of 20 percent or an amount on a chart included in the LIHTC regulation 1.42-5 for larger projects to lessen the burden for participating jurisdictions.
One commenter proposed 20 percent of units in projects with 5-50 units and 10 percent in projects with 50 or more units. Similarly, a different commenter recommended 15 percent of HOME-assisted units in projects with 20-30 units, and 10 percent for projects with more than 30 HOME assisted units.
One commenter suggested that 10 percent of HOME-assisted units be inspected in all HOME projects, regardless of the total number of units in the project with a minimum of one unit per building.
One commenter proposed that developers with multiple properties containing between one and four HOME units should be required to inspect 20 percent of the HOME-assisted units across their portfolio every three years.
Several commenters expressed confusion or requested clarification about the proposed requirements. One commenter stated that the proposed rule is unclear about how the sample size requirement relates to the requirements for timing of HOME onsite inspections. The commenter asked whether annual inspections that, in sum, surpass 20 percent of HOME-assisted units over three years, but do not in a single year, would satisfy the proposed requirement. Another commenter stated that they thought the 20 percent inspection sample size was the existing requirement. And a commenter also stated that no additional inspections should be added to the regulations at all because they are administratively burdensome.
A different commenter requested that HUD clarify whether both HOME and non-HOME units would be required to be included in the inspection sample. The commenter suggests that inspection requirements apply only to HOME-assisted units and that HUD should allow inspection of voucher units without affordability agreements to qualify as inspection and monitoring for HOME. In its final rule, we ask HUD to mandate agreement disbursement for documentation of HOME properties.
One commenter urged HUD to adopt the most recent International Property Maintenance Code as the basis for on-site inspections of rental homes to promote standardization of requirements.
One commenter asked HUD to publish the components that will be included in a required inspection.
One commenter also asked whether the sixth year of affordability is measured by the individual tenant's occupancy date or the date of the project completion date and how the six-year period of affordability will be affected if ownership changes during that period. The commenter expressed confusion between the current six-year period of affordability and the period of affordability outlined in HOTMA, so they asked HUD to provide occupant variance probabilities and to incorporate said variances into the final rule. The commenter also supported participating jurisdictions making the final determination of period of affordability based on variance probability guidance from HUD in the final rule.
The Department is also clarifying that the six-year schedule in this Final Rule is the same as the six-year schedule in the HOTMA Final Rule, and that the requirements are consistent with one another. HUD does not believe it necessary to calculate occupant variance probabilities (within the six-year period of period of affordability) as requested by a commenter or to reexamine HUD's methodology for verifying units remain affordable and occupied by low-income families during the period of affordability.
HUD received a broad range of responses to this solicitation on the appropriate periods of affordability to impose on HOME-assisted projects. Commenters recommended that HUD leave the existing regulations intact, increase the dollar thresholds for existing periods of affordability, eliminate the longer period of affordability for new construction of rental housing, align HOME requirements with other housing program requirements, establish longer periods of affordability, establish different periods for homeownership activities, or allow participating jurisdictions to determine their own periods of affordability.
Some commenters stated that the current length and amount criteria for period of affordability is appropriate and can remain as currently written.
Numerous commenters stated that the length of the current periods of affordability are appropriate but recommended that HUD adjust the dollar thresholds to reflect the significant increase in the cost of land and construction since the current thresholds were established in December 1991. Two commenters who supported the length of current periods of affordability recommended that HUD adjust the existing dollar thresholds to reflect the cumulative change in the Consumer Price Index (CPI) since that time. One of these commenters noted that the existing $15,000 threshold between the 5-year and 10-year periods would be nearly $35,000 if adjusted by the CPI.
Several commenters cited increased costs of rehabilitation since 1991 and stated that HUD should adopt alternative dollar thresholds. Commenters recommended thresholds of between $20,000, and $125,000 for a 5-year period of affordability and between $50,000 and $250,000 for the 15-year period of affordability. One commenter who supported higher dollar thresholds also recommended that HUD adopt a 25-year period of affordability for new construction. One commenter suggested a period of affordability of 20 years for a HOME investment of less than $1,000,000 and 50 years for a HOME investment of more than $1,000,000.
A commenter recommended eliminating the 20-year requirement for new construction projects and applying the per-unit subsidy-based periods of 5-, 10-, or 15-year to all units irrespective of the activity undertaken. The commenter stated that a gut rehabilitation project has a 15-year period of affordability and new construction has a 20-year period of affordability, although there is essentially no difference in housing quality of these two project types. Another commenter advocated eliminating the 20-years period of affordability for new construction to allow for the reinvestment of HOME funds after 15 years.
One commenter stated that periods of affordability are critical to ensuring that the investment of Federal funds has an impact on housing availability and affordability over time, but also make project underwriting at the time of funding and ongoing maintenance of the financial and physical health of the property more challenging. The commenter stated that the affordability restrictions in HOME are a barrier to HOME-assisted rental housing development in high-cost areas, given the need to layer financing from multiple sources. The commenter suggested aligning HOME periods of affordability with the 15-year credit compliance period of the Low-Income Housing Tax Credit (LIHTC) to enable preservation of existing affordable housing through recapitalization. Another commenter recommended that HUD align the HOME period of affordability 30-year LIHTC extended use period to allow cities to track period of affordability more easily among various affordable housing project types. One commenter stated HUD should align its periods of affordability with the minimum 55-year period frequently used in affordable housing programs in California.
Several commenters stated that HUD should impose longer periods of affordability. One commenter supported a period of affordability up to 40 years and encouraged HUD to consider mandatory periods coterminous with the compliance requirements of the superior funding source as long as they exceed 30 years.
One commenter requested that HUD require HOME periods of affordability to be the greater of (1) the longest period of affordability of any other public assistance program supporting the assisted housing or (2) 10 years for a per-unit HOME investment of under $15,000, 15 years for a per-unit investment between $15,000 and $40,000, 20 years for a per-unit investment of more than $40,000 or any unit involving refinancing of existing debt, and 30 years for any unit involving new construction. The commenter also recommended that HUD consider incentivizing permanent or 99-year periods of affordability by increasing the maximum per-unit HOME subsidy limit in exchange for a commitment to permanent affordability. Another commenter supported lengthening the HOME periods of affordability but urged HUD to reduce long-term compliance requirements to ease administrative burden.
Other commenters opposed longer periods of affordability. One commenter said that cash flow challenges are already an obstacle to rental housing development in rural areas, and extending periods of affordability would increase the difficulty of cash-flowing potential projects in those areas further limiting already constrained new unit production. The commenter emphasized that impact on project viability in rural areas should be a prime factor when HUD contemplates changes, including changes to the periods of affordability. Another commenter said that although it requires a 30-year or 40-year affordability terms on multifamily development projects, it does not recommend extending the HOME periods due to the prohibition on investing additional HOME funds in a project during the period of affordability. The commenter opposed extending HOME periods of affordability beyond the life of the HOME-funded improvements. A commenter opposed any extensions to the periods, and especially the 15-year period applicable when HOME funds are used to refinance existing debt, due to increased liability and decreased flexibility and recommended that the period begin when a building is put into service not when it is entered into IDIS.
One commenter stated that the period of affordability is too long based on the funding provided and recommended that HOME allow participating jurisdictions to set the period of affordability. The commenter noted that this change would provide flexibility in various housing markets, where needs can vary significantly.
One commenter recommended different periods of affordability for rental and homeowner activities. The commenter stated that a longer period of affordability is a deterrent for single family homeowner programs. The commenter also urged HUD to investigate ways to update the periods of affordability to take into account scenario planning for varying annual appropriations, how long tenants stay in a HOME unit, and the average cost of repairs and how long repairs last.
Commenters supported proposed changes that resulted in more flexible policies with respect to rent and utility allowances. Other commenters worded their support differently and stated that they supported the proposed alignment of the HOME program with the rent limits from other programs involved in a project.
One commenter supported the elimination of the requirement for participating jurisdictions to submit marketing plans to HUD for HOME-assisted units not being leased up within 6 months of project completion. The commenter explained that it, as a participating jurisdiction, works with owners and managers to ensure lease up is timely but would not be the best equipped party to create a marketing plan.
Commenters stated that they supported the proposal to permit housing developers to allow an owner of a HOME-assisted unit to charge the permissible Housing Choice Voucher (HCV), project-based voucher, or project-based rental assistance rent instead of the maximum HOME rent because it would increase the financial viability of developments.
One commenter stated that housing developed for persons at or below 30 percent area median income often includes eight or more government funding sources, each with separate inspection and reporting requirements.
Several commenters supported only applying the rent limits to the amounts paid by the tenants in HOME projects. One commenter also supported the removal of rent subsidy from the rent calculation.
One commenter sought clarification on the HOME rent limits and stated that it would not support rent limits being only applied to the tenant portion of rent. The commenter wished for the rent limits to apply to the overall amount received by the owner.
Another commenter supported the proposed change as it considerably simplifies compliance for voucher holders. The commenter recommended that the changes should remove the “project-based” language and the requirement that the “very low-income family pays as a contribution toward rent not more than 30 percent of the family's adjusted income” from § 92.252(b)(2)(ii) because the PHA or subsidy provider should be determining what the household must contribute to rent under their program.
Commenters stated that HUD should permit an owner to receive rent determined by a local government rental assistance or subsidy program in addition to the allowance of receipt of rent determined by a PHA or another Federal or State rental assistance or subsidy program. The commenter recommended HUD amend the proposed language in § 92.252(a) from “rent limits do not apply to any payment provided under a Federal or State rental assistance or subsidy program . . .” to “rent limits do not apply to any payment provided under a Federal, State, or local government rental assistance or subsidy program.”
Commenters also proposed amending the language of § 92.252(a)(2)(ii) to say, “[T]he rent contribution of the family is not more than 30 percent of the family's gross income,” similar to recent HOTMA changes implemented for rental assistance programs, in order to align more closely with the intent to streamline housing programs and assistance.
A commenter supported the alignment of project- and tenant-based subsidized rents and Low and High HOME units in § 92.252 but stated that High HOME rent units still face an issue when tenants paying their share of the rent under the subsidy program have a tenant rent that exceeds the otherwise applicable HOME limit. The commenter urged HUD to allow the collection of the
One commenter expressed support for the change to allow owners to charge rents that exceed the HOME rent limits for units occupied by tenants with tenant-based vouchers (in alignment with changes made to the Section 8 programs and HERA), but was concerned about how this will impact underwriting financial feasibility at the time of application and possible unintended consequences.
Another commenter stated that HUD should align HOME rent limits with the Section 8 programs for PBVs. The commenter stated that they support this approach because, from an underwriting perspective, it is important to not over-subsidize units, and it is easier to underwrite higher rents when they are guaranteed PBVs.
A commenter stated that, as long as the unit is receiving at least one dollar in subsidy, the HOME program should not impose any restrictions on gross rent or the tenant portion of rent for households receiving PBVs, housing choice vouchers (HCV), or Veterans Affairs Supporting Housing (VASH) vouchers. The commenter stated that this approach aligns with the LIHTC program requirements.
A commenter stated that for projects that have both PBVs and HOME funds, it will be more difficult for PJs to regulate the HOME rent limit being applied to the tenant portion of the rent.
One commenter recommended that HUD specifically state in the final rule that the HOME rent limits
One commenter expressed concern that allowing owners to charge rents that exceed the HOME rents for units occupied by tenants with vouchers might inadvertently incentivize owners to rent
One commenter expressed support for the proposed language in § 92.252(b) that would allow use of the HUD Utility Schedule Model (HUSM), public housing authority utility allowance, or other method approved by HUD, reasoning that HUD should allow more options because: there are difficulties in getting detailed utility data in rural areas; more options would be consistent with other HUD program requirements; and, if options remain limited, Indian Tribes and Indian Housing Authorities may operate rental assistance programs with their own conflicting rules. The commenter explained that the public housing authority utility allowance would be easier to administer for less-experienced project owners with small projects and portfolios. The commenter also encouraged HUD to allow HUSM as an option for all HOME-assisted rental units rather than just units with specified rental assistance programs. Furthermore, the commenter requested that both telephone
Another commenter supported the proposed exceptions for HOME projects with Section 8 Project Based Voucher (PBV) and HUD-VASH but noted that utility allowances determined by local public housing authorities are almost always either significantly higher or lower than other models, which ends up being inequitable for tenants or unfair for owners.
The Department has noted the commenter's concern about inequities in utility allowances determined by public housing authorities but has seen no data demonstrating that price differences as drastic or prevalent as described exist. Furthermore, if a participating jurisdiction finds the utility allowance determined by its local PHA unsuitable, it is now able to choose a more suitable model (the HUD Utility Schedule Model or another method approved by HUD) for its project.
One commenter supported the use of the PHA utility allowance in all HOME-assisted rental projects because a standardized utility allowance allows for better compliance monitoring. In addition, the commenter stated that, to make compliance significantly easier, a participating jurisdiction should still be able to establish the effective date of the utility allowance to align with revisions to the HOME rents.
One commenter recommended that HUD create a pathway for compliance for rental subsidy programs that include the household's contribution to utilities as part of their rental contribution and that HUD move the language at § 92.252(b)(2)(ii) out of paragraph (b) so that rent can go up to the maximum allowed under the Federal or State rental subsidy.
One commenter supported the increase in the minimum number of days required from 30 to 60 for a rent increase.
One commenter suggested that the proposed regulatory text at § 92.252(g)(2) be revised to list “rental” rather than “multifamily”.
One commenter stated that the proposed § 92.252(h)(2)(i) should allow tenants of HOME-assisted projects with multiple sources of funding to pay the rent amount required under any of the programs' requirements, not just LIHTC.
Commenters predominantly supported permitting all HOME-assisted projects to use the local public housing authority's utility allowance, noting that the change would make the process simpler, more effective, provide greater flexibility to participating jurisdictions and developers, and align HUD's process and operations with programs like HTF and LIHTC.
In expressing their support, many commenters included addendums or clarifications they suggested be made to this proposed policy. One commenter advised HUD to clarify that using the housing authority-established utility allowance is not a requirement for all units, and that a participating jurisdiction may work with the property owner to determine whether the public housing authority or a property-specific utility allowance is more appropriate. This commenter, as well as another otherwise-supportive commenter, advocated for the use of alternative energy models to provide flexibility for projects with different energy use profiles, with the public housing authority's utility allowance serving as the baseline option to reduce soft costs and provide clear alignment with other funding programs.
One commenter recommended that HUD clarify the utility rates for communities not served by a local public housing authority. Commenters noted that grantees are confused when State agencies require different utility allowances than local participating jurisdictions and recommended that HUD allow participating jurisdictions to coordinate program funding.
Another commenter recommended HUD clarify which utility allowance should be used where more than one housing authority has PBVs in a development layered with HOME units. In the absence of PBVs, the commenter stated that the participating jurisdiction needs to have authority to determine the most applicable housing authority utility allowance. If HUD does not leave this decision to participating jurisdictions, the commenter suggested that HUD adopt a rule stating that the applicable public housing authority utility allowance is the smallest unit of government. The commenter also recommended that HUD allow participating jurisdictions to establish rules in areas without applicable housing authorities preventing developments from using a housing authority's utility allowance.
One commenter supported the inclusion of public housing authority utility allowance but stated that HUD should provide technical assistance to ensure allowances are updated in a timely manner.
One commenter supported mirroring State agency requirements for utility allowance use on LIHTC properties.
Two commenters did not support permitting all HOME-assisted projects to use the local housing authority's utility allowance. The first commenter stated that using utility information specific to a property is in the best interests of all parties and suggested that HUD use gathered data to ensure that tenants will not be harmed with higher rents caused by less accurate utility allowances (in the case that the local housing authority's utility allowance be permitted for all HOME-assisted projects). The second commenter supported no change to the current method, as HUD has generally expressed flexibility on the rule in the past, which the commenter found helpful when other funding sources have different utility allowances.
One commenter was conflicted about whether aligning HOME-assisted units with PBVs and/or HUD-VASH Vouchers should apply universally to all HOME-assisted units, explaining that while public housing authority rates could be more cost- and time-effective for nonprofits, they are often higher than those found with individual analysis by a developer using the HUSM at the time of application.
Several commenters supported the changes to monitoring compliance in
Another commenter supported HUD's proposed changes and believes the benefits of reducing the burden for owners of small-scale housing outweigh the possible public benefit loss of reduced compliance requirements.
Several commenters supported a three-year property inspection for small-scale HOME-assisted projects. One commenter supported inspecting small-scale housing every three years instead of using a risk-based schedule for small-scale housing inspections. One commenter supported the proposal to allow participating jurisdictions to adopt customized inspection schedule for small-scale housing where health and safety deficiencies have been identified and corrected.
One commenter stated that the streamlined inspection procedures for small-scale rental projects would not likely assist emerging developers, but would assist existing affordable housing developers acquire, rehabilitate, or build new small-scale units.
One commenter objected to HUD's changes to property inspection requirements for small-scale rental housing. The commenter explained that small-scale projects already struggled to maintain compliance with physical condition requirements, that this was exacerbated by the pandemic and the shortage of qualified property managers in their State. The commenter believed that reducing the frequency of inspections will lead to the rapid deterioration of units and to ongoing compliance challenges.
Several commenters supported the proposed changes to tenant selection procedures in small-scale rental housing. Commenters specifically supported permitting participating jurisdictions to establish policies to identify tenants when vacancies occur in small-scale housing. One commenter believed that HUD's proposed update allowing participating jurisdictions to create alternative waiting list procedures would empower participating jurisdictions to create and enact policies aligned with their respective programs and more responsive to owner and tenant needs. One commenter stated that they support HUD's proposed changes to the alternative waiting list requirements because they would reduce the length of turnover of units from one renter to the next.
One commenter stated the requirement to get pre-written HUD approval of alternative procedures for a written waiting list for small-scale housing would hamper small-scale housing. The commenter recommended that HUD publish in a manner viewable by all participating jurisdictions and a list of previously approved alternative tenant selection procedures, as well as grant participating jurisdictions presumptive approval if they implement one of the previously approved methods for small-scale housing. Another commenter similarly requested clarification or examples of acceptable alternatives to written tenant waitlists.
Several commenters supported permitting streamlined or less frequent procedures for small-scale rental housing projects (one to four total units) for reexamination of annual income. One commenter supported the changes HUD made to reduce the burden but believed that HUD should make income recertifications more flexible.
One commenter suggested conducting income determinations only upon unit turnover to reduce administrative burden and impact on tenants. The commenter also suggested requiring that 100 percent of beneficiary households have incomes at or below 60 percent of area median income at initial lease up, which is what the City of Madison and State of Wisconsin require, to address concerns regarding benefitting households over 80 percent of area median income.
One commenter was critical of the small-scale and scattered site housing models. The commenter said that the new rules would make it challenging to produce small-scale and scattered site housing. The commenter believed that enforcing the period of affordability and monitoring requirements on these owners causes additional administrative burden to participating jurisdictions. The commenter also thought that this was encouraging an inefficient use of scare program resources. The commenter encouraged HUD to review financial and commercial viability of the scattered site approach for housing fulfillment, given these concerns.
Two commenters stated they were concerned about the small-scale housing inspections and monitoring because small-scale housing providers often have less oversight experience or ability. One of these commenters stated that this lack of experience may unintentionally decrease the frequency and quality of inspections.
Other commenters who expressed concerns about the adequacy of monitoring and inspections under this proposal mistakenly assume that owners, not participating jurisdictions conduct physical inspections and monitoring. HUD is not changing the requirement that the participating jurisdiction engage in onsite monitoring and review of small-scale projects, it is just changing how this monitoring is performed to reduce the burden on participating jurisdictions and owners. HUD believes that this final rule appropriately balances burden reduction and compliance for small-scale housing projects.
One commenter believed that the small-scale changes were not helpful. The commenter was not supportive of using HOME funds for small-scale rental housing projects, believed that CDBG funding was more attractive because it entailed fewer requirements, and believed that owners of small-scale rental housing had no interest in complying with HOME requirements. In the commenter's experience, when the commenter did provide CDBG funds to owners of small-scale housing projects, it was difficult to obtain required documentation, including tenant rents, ethnicity, and income. The commenter also believed that the small-scale housing project requirements did not streamline requirements for the development small-scale housing but only improved how the ongoing requirements are monitored.
Another commenter expressed concerns about enabling increased owner-occupied HOME-assisted rental unit creation, as the commenter's experience is that low-income homebuyers who are immediately made the owners of HOME-assisted rental units have a very high failure rate when it comes to compliance with HUD regulations. The commenter said that the administrative burden on such homeowners would still be too high even despite the lowering of barriers in this proposed rule and the commenter does not support a system that sets its neighbors up to fail. Further, the commenter said that a newly rehabilitated or constructed duplex or triplex would better serve their communities as either individual homeownership units or as properly administered affordable rental units.
One commenter supported HUD's changes but noted that leading challenges of applying HOME towards small-scale housing include high costs in providing gap financing in rural areas and a lack of training. The commenter
Another commenter said that the reduction or streamlining of regulatory requirements such as inspections and wait lists would make it more attractive to use HOME funding, but compliance would still remain more onerous than the commenter's city-funded program. The commenter explained that their city offers a rental rehabilitation loan program for properties with seven or fewer units where landlords are required only to preserve 50 percent of units for occupants earning at or less than 60 percent of area median income through a 10-year loan term; but that HOME's compliance requirements make it undesirable to utilize HOME for such programs.
Another commenter urged HUD to consider how private market financing conflicts with HOME requirements, especially for condominium development which have early pre-sale requirements from Fannie Mae and Freddie Mac that conflict with HOME's requirement to recheck income after six months.
One commenter stated that the Uniform Federal Accessibility Standards (UFAS) requirements for small-scale housing have made it virtually impossible to fund small rehabilitation developments. The commenter supported more waivers or modified requirements for small rehabilitation developments.
A recipient must provide for reasonable accommodations that may be necessary for individuals with disabilities. A recipient's obligations under Section 504 cannot be waived. Such requirements ensure that individuals with disabilities are able to participate in, and are not denied the benefits of, such programs or activities. As a reminder, recipients may also be subject to additional accessibility requirements under the Fair Housing Act, and title II of the Americans with Disabilities Act (ADA).
One commenter suggested that, to lower the cost of the production of affordable housing and encourage more supply while still protecting the environment, HUD should change its regulations governing the three project/activity types in this paragraph. They are currently governed under 24 CFR 58.35(a) but should be governed under 24 CFR 58.35(b). The commenter stated that this change would still ensure that reasonable impacts were examined before project commencement, while lowering the burdens and costs to re-entering dilapidated housing stock back onto the market. The commenter also supported retaining limited historic preservation protections, explaining that such limited protections would reduce the delays incumbent in current historic preservation compliance, while retaining State Historic Preservation Officer notification. The commenter suggested that flexibility for waiting periods to run concurrently with participating jurisdictions and HUD review should be explored.
The commenter stated that to lower the cost of the production of affordable housing and encourage more supply while still protecting the environment, HUD should expand the scale of projects that can qualify as categorically excluded. The commenter reasoned that increasing the current categorical exclusion to individual actions on between 5 and 15 scattered site dwelling units or housing units will lower costs, burdens, and speed the delivery of units, while still examining all environmental impacts.
Lastly, the commenter recommended that HUD should use this existing authority to include HOME funds deployed for small (one-four unit) residential projects via nonprofit affordable housing developers as an exception criterion35. The commenter explained that this would allow the nonprofits to work with their local governments, who act as the responsible entity, for speedier resolutions of all existing environmental review processes.
One commenter stated that participating jurisdictions stated that the need to regularly inspect all units in small-scale housing every three years is a major expense. The commenter
One commenter believed that the current financial oversight requirements are inadequate and that not performing financial oversight on small-scale rental housing ignores an invaluable tool in understanding how properties are performing. The commenter believed that such oversight detects signs of financial distress or over subsidization and assists in the rent setting process and other processes involved in LIHTC, HOME, HTF, and local resources.
Commenters supported the tenant addendum changes. One commenter stated that outlining the required elements of the HOME lease addendum in the affirmative is much more effective and provides clarity for all parties. Some commenters expressed broad support for the proposed expansion of tenant rights and protections provisions. Another commenter supported HUD's proposed changes to § 92.253(a)-(b) and the proposed addition of paragraph (c), which the commenter stated would simplify TBRA and improve TBRA for tenants, landlords, and participating jurisdictions.
Another commenter strongly supported the proposed requirement of a HOME lease addendum. The commenter suggested that HUD should consider providing additional means of enforcement. For example, the commenter suggested that tenants should have the right to access a grievance procedure, which would permit tenants to request an information conference with the owner when their rights are violated. The commenter further suggested that tenants should be able to appeal the owner's decision to the participating jurisdiction, and they should also have an explicit avenue to bring a complaint to HUD.
One commenter requested that HUD develop a HOME addendum template that contains all of the HOME program requirements in a single addendum. Another commenter supported the tenancy addendum requirement but stated that it should not be a requirement until there is a HUD HOME tenancy addendum that can be used on all rental housing projects.
One commenter generally opposed the proposed tenant protections to the HOME program. The commenter explained that apartment owners and managers already are subject to a myriad of tenant protection and fair housing statutes, regulations, administrative policies, and case law from all levels of government. The commenter further explained that this existing framework provides balanced protections for both tenants and landlords. Specifically, the commenter points out that the proposed mandatory HOME lease addendum would impose a set of one-size-fits-all tenant protections for HOME-assisted rental housing and HOME tenant-based rental assistance (TBRA) recipients.
One commenter preferred that lease addendum and protections be left to State landlord-tenant law but did not strongly oppose the use of a Federal addendum for purposes of consistency and reducing participating jurisdiction burden. Another commenter stated that HUD should not engage in tenant protection rulemaking because State and local regulations are sufficient.
One commenter stated that tenant protections will increase a tenant's ability to locate and sustain units that are affordable and that tenant protections should be included in a tenant's lease agreement. However, that commenter was also concerned that since the HOME funds they used made up a small percentage of the total cost of the project and resulted in a limited number of HOME-assisted units (usually 5-10), a HOME-specific lease addendum would be impractical to implement.
One commenter supported the proposal (under § 92.253(a)) to require owners to attach VAWA and HOME addenda to the lease, as this would help ensure that owners, tenants, and eviction court judges clearly understand tenant rights and owner obligations. However, this commenter suggested simplifying the addendum by drafting an addendum that cites to HOME regulations for additional detail.
HUD's HOME tenancy addenda will include the tenant protections listed in the HOME regulations. HUD maintains that the tenant protections it is including in the HOME tenancy addenda represent a minimum standard that is based in a thorough analysis of Federal, State, and local laws. Before proposing these protections, HUD examined State and local landlord-tenant laws and protections and the requirements of other Federal programs that serve the same tenants and are frequently combined with the HOME program (such as the Section 8 programs). Through this analysis and comment from the public, HUD is confident that the inclusion of the tenant protections contained in the HOME tenancy addenda are consistent with the intent of the drafters of the Act.
The Department understands some commenters' desire to formalize a
The Department also recognizes that some commenters have significant concerns about the one-size-fits-all nature of tenancy addenda and the potential for adding new HOME tenant protections to other Federal, State, and local requirements. The Department did its best to address the commenters' concerns by aligning certain tenant protection provisions with other Federal programs (most notably the Section 8 programs) and tailoring each tenancy addendum to the type of HOME program (
In response to commenters that stated that the Department should not require tenant protections for HOME because the HOME funding may only be a small portion of the overall financing or fund only a few housing units, the Department understands the concerns, but this does not diminish the need to guarantee tenants of HOME rental housing projects a baseline level of tenant protections, as intended under the Act. Some participating jurisdictions provide HOME funds to projects that require only a small amount of funding to move forward. Others provide much more significant amount of funding and fund much larger HOME projects. Tenants should receive the same protections regardless of the decisions made by the participating jurisdiction on how much funding to provide to a particular rental housing project. The Act did not specify that tenant protections were to be based upon the level of HOME funds and the Department is declining to draw such distinctions or only require a reduced set of protections for HOME simply because some participating jurisdictions may use HOME funds to fund fewer units in larger rental projects.
The Department considered one commenter's request that the HOME tenancy addenda should cite to the appropriate regulations and be as simple as possible. However, the Department intends to create tenancy addenda that do not require a tenant or owner to look up HUD regulations in order to know what they are agreeing to and shall provide a standalone tenancy addendum for HOME rental housing, tenant-based rental assistance, and security deposit assistance only.
Commenters said that the rule infringes on property rights by circumventing the established legal process for eviction, denying housing providers due process rights, and creating an imbalance in tenant-landlord relations by making nonpayment of rent a protected class. Commenters also called on HUD to be fair and not overreach.
In recognition of the concerns that the commenter raises, the Department is requiring that the new and revised tenant protections only apply prospectively (See § 92.3). This will allow owners of HOME rental housing to knowingly agree to the new tenant protections before accepting the HOME funds for a project. This will allow the same for owners entering into a rental assistance contract with participating jurisdictions. The Department believes that this meaningfully addresses any legal concerns that the commenter had, even though the Department disagrees with the assertion that imposing such protections upon existing owners would violate their rights.
One commenter stated that the components in the rule related to lease contents are generally reasonable, but that the requirement that the owner provide the participating jurisdiction with a copy of the written lease before it is executed and once revised is unclear and potentially troublesome. The commenter recommended that HUD reconsider this requirement because it could be burdensome and lack an understandable review process. The commenter noted that if HUD proceeded with the requirements, to avoid significant confusion and delays, HUD should clarify that a participating jurisdiction would not be required to review or approve individual leases and that a model lease would be sufficient.
Commenters expressed strong support for the requirements to provide essential information to tenants, including those in proposed § 92.253(a) regarding (1) accessible means to contact owners, managers, and participating jurisdictions; (2) accessible notice specifying the grounds for any adverse action; and (3) that owners provide 30 days advance notice of an impending
One commenter recommended deleting the requirement in § 92.253(a)(2) that leases include the participating jurisdiction's contact information to avoid tenants calling participating jurisdictions. If HUD keeps the requirement the commenter recommended moving it to a new § 92.253(b)(8) so that contact information would be included in the HOME tenancy addendum. Another commenter supported the requirement for tenant leases to contain more than one method to communicate directly with the owner or property manager but stated that as a participating jurisdiction, it does not feel that review prior to lease execution or revision is necessary. Additionally, owners must ensure effective communication with persons with disabilities, including, for example those with hearing, visual, speech, or disabilities consistent with Section 504 and the ADA, as applicable.
The Department has noted the concerns of participating jurisdictions and owners who do not believe that it is appropriate to provide contact information but strongly disagrees. When tenants have clear ways to communicate with the participating jurisdiction that is monitoring the HOME rental housing owner or that is assisting them with tenant-based rental assistance, it empowers them to be able to assert their rights or protections, and better enables participating jurisdictions to learn about potential compliance problems.
One commenter supported HUD's proposed changes requiring owners to provide tenants with the expected timeframe for maintenance and/or repair work, prohibiting owners from charging tenants for normal wear and tear, and requiring owners to prompt relocate tenants to decent, safe, and sanitary housing, or to suitable lodging when there is a life-threatening deficiency that can't be repaired the same day—at no cost to the tenant.
One commenter suggested that HUD should require that the owner “provide expected time frames for maintaining or repairing units” in writing in § 92.253(b)(1)(ii)(A). The commenter explained that this encourages transparency between the owner and tenant and provides the tenant with the information needed to hold owners accountable in case of delayed maintenance.
One commenter recommended, for HUD's proposed regulatory text in § 92.253(b)(1)(ii)(C), that HUD provide text enabling a tenant to bring a challenge to the participating jurisdiction regarding any charges the tenant believes are unwarranted and requested sub-regulatory guidance regarding such proceedings.
One commenter supported HUD's proposal in § 92.253(b)(1)(iii) to require owners to temporarily relocate tenants, at the owner's expense, in the situations involving a life-threatening emergency because this clarifies owners' existing duty to provide decent, safe, and sanitary housing for tenants. The commenter expressed concern that “life” was too high a bar to achieve HUD's purpose for the change stated in the preamble of the proposed rule, “to prevent HOME tenants from remaining in housing that poses a threat to their physical safety and from being subjected to additional costs as a result of physical housing conditions outside their control.” The commenter explained that many housing conditions pose serious but not life-threatening threats to occupants' physical safety, including mold, infestation, and lead-based paint. The commenter also noted that occupants remaining in the home during remediation of emergencies or adverse conditions may not be safe. The commenter suggested extending the relocation requirement to cover all conditions and repair activities that “pose a threat to the health and safety of the tenant household.” Another commenter stated that the requirement that owners temporarily relocate tenants at the owner's expense should apply to all conditions that pose an immediate threat to the health and safety of the tenant household.
One commenter recommended that HUD should modify the standard at which an owner must relocate a tenant in § 92.253(b)(1)(iii) to reflect more commonly used standards. Specifically, HUD should require that an owner relocate the tenant when “maintenance or repairs are necessary to ensure the habitability of the housing unit”—rather than when the unit's physical condition creates “a life-threatening deficiency.”
One commenter supported the new tenant protections except for the notice to enter requirement which it believed should be 24 hours, not 2 days. The commenter stated that 2 days' notice to enter is longer than what many States and HUD programs require and that it may be too long in non-emergency situations where time is still of the essence. One commenter suggested that HUD should strengthen the written statement requirement in § 92.253(b)(2)(iii)(A) by requiring the written statement to include the date and time, as well as the purpose of the owner's entry. The commenter further suggested that HUD should require that the owner deliver the written statement to the tenant, not simply the “dwelling unit,” to ensure that the tenant actually received the statement. The commenter stated that it would also encourage accountability and transparency on the owner's behalf.
One commenter supported HUD's proposed changes requiring at least two days' notice before entering a tenant's unit for normal business, but anytime without advanced notice if there is a reasonable belief that there is an emergency.
One commenter suggested that for emergency entries in § 92.253(b)(2)(iii)(B), HUD should require that the owner provide the tenant with a notice similar to the notice required in § 92.253(b)(2)(iii)(C).
HUD is requiring owners to provide the tenant a written statement specifying the date, time, and purpose of entry when the tenant is not present in the unit but declines to require this notice under all circumstances. This notice is not always necessary, especially if the original notice was already delivered and the tenant is present in the unit when the owner or their agent enters the unit to perform the repairs. The Department does agree that a project owner that enters a unit in the case of emergency should provide the tenant with a written notice of entry upon entering the unit. HUD is revising § 92.253(b)(2)(iii)(C) to require an owner to provide the tenant a written statement specifying the date, time, and purpose of entry after entering the unit in the case of emergency. HUD is also adding similar language to the HOME tenant-based rental assistance tenancy addendum in § 92.253(c)(2)(iii)(2).
HUD disagrees that an owner should be required to serve notice directly to the tenant instead of to the unit. Requiring an owner to locate a tenant to serve notice of entry to the unit is not customary and could cause undue delays to project owners attempting to perform emergency repairs.
One commenter supported HUD's proposal to require HOME-assisted tenants to have reasonable access to, and use of, common areas and to prohibit having separate elevators or amenities that are only available to non-assisted tenants, which furthers HUD's commitment to fair housing and equity.
Commenters supported HUD's proposal in § 92.253(b)(2)(v) to explicitly state that tenants have the right to organize, create tenant associations, convene meetings, and
One commenter supported the proposed requirement for owners to provide written notice to tenants for any adverse actions. Another commenter recommended that the notice required prior to an owner carrying out an adverse action in § 92.253(b)(3)(i) specify that the notice be two-weeks advanced notice. The commenter also recommended that the final rule provide for a tenant's ability to bring to the participating jurisdiction a challenge of any adverse action the tenant believes is unwarranted and requested sub-regulatory guidance for such proceedings.
The Department disagrees with the commenter that two weeks' notice should be required prior to any adverse action. This time period is too long, especially when the adverse action is one that may require more immediate correction. HUD also disagrees that the participating jurisdiction must have a formal process for adjudicating any tenant challenges to an owner's adverse action. NAHA does not require a grievance progress for participating jurisdictions to settle disputes between tenants and owners. Participating jurisdictions must determine what is best for monitoring and enforcing compliance with the new tenant protections requirements. Some may wish to establish grievance procedures, while others may choose to perform risk-based monitoring or take other preventative measures to address landlord-tenant disputes in their HOME programs.
A commenter suggested that for tenants whose income and medical expenses were high, the expenses (including rent, fines, or damage) should be prorated based on benefit income, taking into account medical spend downs. The commenter believed that this would reduce the number of people that would have to choose between paying housing expenses or paying healthcare expenses.
One commenter supported the proposed requirement for owners to provide written notice to tenants within 5 business days of any change in ownership (including foreclosure) and at least 30 days' notice before a sale or foreclosure. One commenter also supported the delivery of a 5-day notice for ownership or management company change.
Commenters asked HUD to amend § 92.253(b)(3)(ii) to require an owner to provide a 60-day notice of intent to sell property or foreclosure of property. The commenters stated that 60 days' notice was appropriate given the burdens of finding new housing and moving.
The Department believes that 60 days' notice may be too long and may not always be reasonable or possible. The Department would note that when there is a change in ownership in HOME
A commenter suggested that HUD add clarifying language to § 92.253(b)(4)(iii) specifying that the liability for action or failure to act is only in connection with the lease. The commenter suggested revisions to HUD's proposed language, “(iii) The tenant may hold the owner or the owner's agents legally responsible for any action or failure to act in connection with the lease, whether intentional or negligent.”
One commenter supported the addition of anti-retaliation provisions in § 92.253. Another commenter supported the addition of specific language to the regulations prohibiting owners from retaliating against tenants who exercise their rights, by decreasing services, interfering with a tenant's right to privacy, and/or harassing households or their guests.
One commenter supported the non-exhaustive list of tenants' rights protected by a right against retaliation in § 92.253(b)(5). However, the commenter stated that, as currently written, the prohibition against retaliation provision is ineffective. The commenter said that the actions described in the prohibition against retaliation are independently prohibited as unjust interference, regardless of retaliatory motive. The commenter also stated that the rule fails to specify consequences for retaliation. The commenter suggested that HUD adopt a mechanism similar to that used by States and municipalities to discourage retaliation, and state in regulation that (1) no termination or non-renewal of a lease or alteration of a term or condition of the lease is valid if taken in retaliation for the exercise of a legal right by the tenant or member of the tenant's household, and (2) any such adverse action taken within a specified period of time (the commenter suggested 12 months) of the exercise of a legal right will be presumed to have been taken in retaliation unless the owner proves that the action was taken solely for a non-retaliatory purpose. Another commenter expressed a similar objection to the protection against retaliation in § 92.253(b)(5), stating that it is ineffective as currently written and should specify consequences for violations.
One commenter suggested that HUD should revise § 92.253(b)(5) to more clearly convey that subsection (i) includes examples of owner interference or retaliation and that subsection (ii) includes examples of tenant rights. To better reflect commonly used terms, the commenter recommended that HUD should replace “comfort, safety, or enjoyment” with “right to peaceful enjoyment.”
One commenter recommended adding “refusal to renew a tenant lease agreement” and “increase rental amount in renewal or otherwise initiate a termination of tenancy” as protections against retaliation in 92.253(b)(5)(i), either by addition or explicit reference to 92.253(d)(1)(i)-(v).
The Department considered changes to shift burden or create presumptions that certain actions were interference or retaliation based upon the time in which they occurred in relation to the protected acts that the Department had initially linked to the retaliation provisions. The Department also considered stating that refusal to renew or termination of tenancy would not be effective if it was to retaliate or interfere with a tenant. However, after the Department specified consequences relating to the written agreement, and made examples of rights that a tenant could take free from retaliation or interference into explicit rights in the tenancy addendum, the Department believed these further revisions would be unnecessary and add undue complexity to the regulation. The Department will consider guidance on how to determine that an action is retaliation in response to a protected act by a tenant or household member in the future.
The Department also agrees with the commenter that recommended that both “refusal to renew a tenant lease agreement” and “increase rental amount in renewal or otherwise initiate a termination of tenancy” should be examples of retaliation or unreasonable interference. Section 92.253(b)(5)(iii)(A) states that “[r]ecovery of, or attempt to recover, possession of the housing unit in a manner that is not in accordance with paragraph (b)(10) of this section” is an action evidencing retaliation or unreasonable interference. HUD is also adding similar language to the HOME tenant-based rental assistance tenancy addendum in § 92.253(c)(5)(iii)(A). Paragraphs § 92.253(b)(10) and § 92.253(c)(10) provide both the termination of tenancy and refusal to renew lease provisions. The Department has also revised § 92.253(b)(5)(iii)(B) and § 92.253(c)(5)(iii)(B) to state that “[d]ecreasing services to the housing
One commenter stated that the HOME tenancy addendum should provide notice to the tenant that there are income restrictions for occupancy and the tenant is required to re-certify and document changes in their household income. The commenter stated that the regulations allow a lease to state that the rent may change if the household income exceeds the income limit at the time of re-certification.
One commenter suggested that HUD should include the security deposit protections in the HOME tenancy addendum.
One commenter supported the proposed changes to the HOME rule requiring security deposits to be no greater than two months' rent and refundable. One commenter supported imposing a maximum on security deposits but stated that two months of rent is an insurmountable barrier to tenancy and suggested HUD limit security deposits to no more than 1 month's rent. The commenter stated that if HUD does not change the limit, it should require the option of paying any amount over one month's rent monthly installments. Another commenter also recommended that HUD should limit security deposits to the equivalent of one-month's rent, not two months' rent. This commenter asserted that of the States that have enacted limits on security deposit amounts, the majority have opted for a one-month limit over a two-month limit. The commenter provided citations for 14 States that had enacted one-month security deposit limits and three States that had enacted one and one half-month security deposit limits.
HUD also recognizes that a number of States have different, more stringent security deposit requirements that require that the security deposit be less than the maximum security proposed in § 92.253(c). A lease for a HOME tenant must comply with State and local landlord-tenant law, and where State landlord-tenant laws are more restrictive than HUD requirements, then the owner must follow the more restrictive requirements. Therefore, in those States or localities where landlord-tenant law requires the security deposit be less than two month's rent, the owner may only charge the maximum amount allowable under the applicable law.
Many commenters supported HUD's proposal to prohibit the use of surety bonds and security deposit insurance. The commenters supported HUD's reasoning that these tools disadvantage tenants without any material benefit for landlords. One commenter noted that surety bonds can be costly to both tenants and housing providers. Another commenter believed the use of surety bonds or security deposit insurance in lieu of security deposits don't meet the intent of the National Affordable Housing Act (NAHA) and aren't treated as security deposits under-State statutes.
Other commenters opposed the proposed rule's prohibition of surety bonds or security deposit insurance in lieu of a security deposit. One commenter believed it would be cost-prohibitive for potential renters of HOME-assisted rental housing. The commenter explained that the use of a surety bond or security deposit insurance can be a more affordable option for low-income renters who may not be able to pay up to the allowable two-months' rent in advance as security deposit.
Another commenter asked HUD to remove the prohibition in § 92.209(j)(6) on surety bonds or security deposit insurance and similar instruments in lieu of or in addition to a security deposit because it may deter landlords from renting to TBRA tenants. The commenter also pointed to the possibility that a TBRA tenant could receive assistance in a unit they already occupy and for which a security bond was already purchased. The commenter recommended that HUD only prohibit the use of HOME funds for surety bonds or security deposit insurance as an ineligible fee as proposed in § 92.214(a)(10). Another commenter also stated that a property owner should not be allowed to require a tenant to pay for security deposit insurance but that the regulations should not prohibit property owners from informing the tenant about the availability of third-party insurance coverage.
The Department recognizes that commenters are requesting flexibility to accept these instruments, which are generally insurance instruments, in lieu of security deposits and not just as a substitute form of security deposit. To that end, some commenters described allowing the owner to waive the security deposit requirement entirely in exchange for a surety bond or security deposit insurance. Beyond the legal barriers the Department identified, the Department also believes that at each phase of the process, surety bonds and security deposit insurance can pose a risk to both tenants and owners. Tenants must pay a nonrefundable fee or premium and are still liable under State landlord-tenant law and the lease contract for damages that are not covered by the issuer. The owner must submit a claim through a claims process and there is a risk of nonpayment or delayed payment that is significantly higher than if the owner itself held the security deposit in a bank account. Finally, the payment by the issuer of the surety bond or security deposit insurance is reliant upon the sufficiency of the overall fund itself. If the fund's underwriting standards or fund management are insufficient to enable the issuer to pay claims on the instruments it issued, then the owner will still be required to press their claim against the tenant.
While the Department strenuously objects to the use of these instruments in the HOME program, it also recognizes the commenter's concern that there may be some tenants that are already in a lease and are seeking to obtain tenant-based rental assistance. The Department believes that these instances will be rare but has added language to the HOME tenant-based rental assistance tenancy addendum provisions to hold landlords and tenants harmless if the tenant is already leasing the unit from the owner at the time that the HOME tenant-based rental assistance is provided. The Department is doing this because it does not wish to create unnecessary barriers to obtaining tenant-based rental assistance, especially when a tenant has already fulfilled whatever security deposit requirements the owner had set forth under the lease, before the participating jurisdiction provided the tenant-based rental assistance.
As a result of the above, the Department will be moving forward with language barring the use of surety bonds and security deposit insurance in § 92.253(b)(9) and (c)(9). The Department considered tenants that would be receiving tenant-based rental assistance after the beginning of their lease and has revised § 92.253(c)(9) to address the commenter's concerns.
One commenter supported the proposed changes to the HOME rule requiring that if charges are made against the tenant's security deposit, owners must list all items charged and their cost, and promptly refund the security deposit to the tenant at move-out, less any documented charges made.
Another commenter recommended that HUD's final rule should enable a tenant to bring to a participating jurisdiction a challenge to any damage claims made by an owner and/or amounts charged against a tenant's security deposit refund. The commenter suggested that a tenant could use this challenge process if an owner does not refund all or a portion of a security deposit within two weeks. The commenter noted that sub-regulatory guidance regarding any such proceedings would be helpful.
The Department understands the desire to require participating jurisdictions to decide disputes between owners and tenants, especially when the participating jurisdiction has an agreement with the owner. However, it is up to the participating jurisdiction to determine how best to enforce compliance with the tenant protections provisions and the provisions of the lease addenda. While many participating jurisdictions may wish to inject themselves in disputes such as those over property damage and returning security deposits, there will be many other participating jurisdictions that only respond when the tenant alleges a violation of the HOME requirements and will leave more commonplace landlord-tenant disputes to the courts. The Department defers to participating jurisdictions to choose what is best for their jurisdictions but reminds them that they must demonstrate that they monitored and enforced the tenant protection requirements.
One commenter emphasized that the proposed changes do not address situations where eviction is necessary due to violence or other lease violations that may endanger other residents or the integrity of the property—situations that the commenter stated the housing provider should have the ability to take appropriate legal action against.
One commenter questioned whether nonpayment of rent qualified as a “serious violation of the lease.” The commenter believed that because the Department further specified the grounds for termination of tenancy or refusal to renew, the omission of nonpayment of rent as a ground for eviction could be interpreted as HUD stating that it is not grounds to take those actions. The commenter was certain it was not HUD's intention to exclude nonpayment of rent as grounds for termination or refusal to renew but believed that one could interpret the new regulations to exclude this as grounds due to its omission.
One commenter supported HUD's proposed changes that clarify “other good cause” may not include a tenant's assets or the type of income or assets.
One commenter objected to the proposed change. The commenter stated that this was an example of a conflict with the Section 8 program. The commenter noted that if a PHA terminates the Housing Assistance Payment for a tenant who becomes over-income, in accordance with existing HUD regulations, “the lease automatically terminates”. However, neither being over-income nor the termination of a rental assistance contract are allowable reasons for the termination of a tenancy under the proposed regulations for a HOME-assisted unit. The commenter questioned whether HUD defines “governmental entity” as including PHAs, and whether a PHA termination represents “an order from a governmental entity.” The commenter requested clarity on how to apply the requirements where a PHA terminates assistance because the tenant is over-income or over the asset limitation in 24 CFR 5.618.
There is no HOME statutory requirement to limit a family's assets or to remove a family from the HOME program if the family's net family assets exceed a threshold. HUD solicited public comment on whether HUD should impose asset limitations in the proposed rule to align with other programs. However, after due consideration and examination of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701
One commenter supported HUD's proposed changes that clarify “other good cause” may include when a tenant unreasonably refuses to provide the owner access to the unit for repairs.
One commenter suggested that in § 92.253(d)(1)(i) HUD should amend the rule by adding “material” to clarify that good cause exists for serious or repeated violations of the material terms of the lease.
Alternatively, the commenter suggested HUD put landlords on notice that nuisance ordinances may violate Federal civil rights law and recommended the following potential language: Other good cause may include when a tenant creates a documented nuisance under applicable State or local law or when a tenant unreasonably refuses to provide the owner access to the unit to allow the owner to repair the unit, but only when termination or refusal to renew a tenancy would be consistent with Federal civil rights law, such as the Fair Housing Act.
One commenter supported HUD's proposed changes that clarify “other good cause” may include a tenant creating a documented nuisance under applicable State or local law. Some commenters expressed concern with the language at § 92.253(d)(1)(i)(B) and asked HUD to remove it as a basis for good cause, stating that it is their experience that alleged nuisances are often disability related.
Commenters recommended that HUD not use the term “nuisance” in § 92.253(d)(1)(i)(B) and (C) because States and local governments have laws that target residents responsible for alleged nuisance activity, including calls to emergency services or noise disturbances related to domestic violence, with penalties such as fines and evictions. One commenter stated that these policies stand in opposition to HUD's efforts to protect tenants against unjustified evictions, and that HUD should instead establish a “good cause” for eviction that requires an actual, substantial, and imminent threat to the health and safety of, and right to peaceful enjoyment of the premises by, others.
The Department has removed from this final rule the use of nuisance as grounds for termination of tenancy or refusal to renew. The Department agrees that this ground has been the subject of significant fair housing and civil rights abuses and has led to the denial of necessary housing for survivors of domestic violence, dating violence, sexual assault, or stalking. The Department does not wish to perpetuate this cycle of discrimination through the
The Department already required that all terminations or refusals to renew are in accordance with all applicable Federal, State, and local laws and believes its revisions have addressed the commenter's concerns.
One commenter expressed concerns about the “good cause” definition, at proposed § 92.253(d)(1)(i)(A), stating that the language provides no provision for when a homebuyer fails to purchase a housing unit in a lease-purchase project. The commenter stated that this creates a loophole where after the failure of a lease-purchase agreement, a developer of property specifically for homeownership becomes locked into the long-term ownership and management of a HOME-assisted rental unit because the Department is not allowing this failure to be good cause to terminate the tenancy. The commenter recommended that a “business or economic reason” clause be added to the proposed “good cause” definition.
The Department is declining to consider a business or economic reason as adequate grounds for termination of tenancy for the HOME rental housing tenancy addendum. In the proposed rule, HUD proposed that it would be good cause to terminate a tenancy when an owner intends to withdraw the unit from the rental market to occupy the unit; allow an owner's family member to occupy the unit; or demolish or substantially rehabilitate the unit. This language is being maintained in this final rule and will allow owners to terminate for certain specific business or economic reasons. However, the Department was concerned that providing the more general grounds that the commenter requested would be too broad and could have unintended consequences.
Commenters stated that the preamble for § 92.253(d)(1)(i)(D) discusses how the crime for which there has been a conviction is a crime “during the tenancy period” and that good cause cannot be based on a violation “that occurred prior to tenancy.” However, the commenter pointed out that these are not explicit in the regulatory text and urged HUD to explicitly state in the final rule that the record of conviction be of a crime that took place during a person's tenancy and not prior to tenancy. The commenter also urged HUD to specify in the final rule that for “good cause” the conviction must have a direct bearing on the tenant's continued occupancy and pose an actual, substantial, and imminent threat to the health and safety of, and peaceful enjoyment of the premises by, others. The commenter repeated these suggestions as applied to the proposed TBRA provisions in § 92.253(d)(2)(i)(B).
One commenter added that HUD should consider limiting this provision to convictions by a tenant, household member, current guest, or other person under the tenant's control. The commenter further suggested that HUD should consider adding a definition of “crime that bears directly on the tenant's continued tenancy” or, alternatively, provide examples in sub-regulatory guidance accompanying the final rule. The commenter stated that the standard in the proposed rule is vague and could result in owners evicting for pretextual reasons and for criminal activity that does not pose a real threat to the health and safety of others.
One commenter noted that the preamble states there must be a record of conviction for a crime “during the tenancy period” to justify termination of tenancy or refusal to renew a lease, but the text of the rule is not as explicit, and the commenter recommended HUD make the final rule text as clear as the preamble discussion.
The Department is declining to specify the time period of the conviction of the crime in the regulation itself. There may be times, such as when a person moves into a unit during a family's ongoing tenancy, where tying the conviction to the family's initial occupancy may be inappropriate. However, the Department maintains, as it stated in the proposed rule, that for tenants that have already been screened by the owner—
“good cause based on a violation of applicable Federal, State, or local law cannot be based on a violation that occurred prior to tenancy, a violation that does not have a direct bearing on a tenant's continued tenancy, or a basis other than a record of conviction. An owner may consider any mitigating circumstances relevant to whether the tenant will commit further violations of the lease or applicable Federal, State, or local law.”
One commenter supported HUD's proposal that an owner shall not use a record or arrest, parole or probation, or current indictment to establish a violation of law.
Some commenters expressed opposition to the proposed language in § 92.253(d)(1)(i)(D) that would require that establishment of good cause for violation of law to be predicated on the conviction of a crime. One commenter explained that this lease renewal requirement is an excessively high standard because a criminal conviction requires a “beyond a reasonable doubt” evidentiary standard. The commenter suggested that the rule should require a more reasonable “preponderance of the evidence” standard. Additionally, the commenter suggested that the proposed rule specify the types of criminal activity that would qualify as affecting the safety of persons or property, as it does not consider the potential risks to tenant and staff safety in cases where an arrest or current indictment is due to violent actions of the tenant.
The commenter also noted that the proposed rule requires “that an owner shall not use a record of arrest, parole or probation, or current indictment to
One commenter opposed the proposed changes to § 92.253(c) and (d), citing that many of the changes would create conflicts with existing HUD regulations because they go beyond what other HUD programs require and create conflict with the Housing Choice Voucher program.
One commenter stated that the proposed changes to the current termination of tenancy regulations should match more closely the Housing Choice Voucher program's termination of tenancy regulations to avoid conflicting interpretations. The commenter cites to examples where language mirrors section 8 regulations but is silent as to definitions of key terms. The commenter also stated that the requirement that “good cause” be established by conviction of a crime at the proposed § 92.253(d)(1)(i)(D) conflicts with treatment of criminal convictions under section 8 regulations, which allow for termination of tenancy for criminal activity regardless of conviction. The commenter also wanted clarification about whether signs of repeated drug activity on the premises through objectively verifiable contacts by emergency services were sufficient to constitute good cause to evict or if such activity must be coupled with a conviction because it constituted criminal activity in the jurisdiction.
The commenter also explains that where a household member is engaged in criminal activity in the Section 8 program, the requirements of 24 CFR 982.310(h)(2) permit an owner to require a tenant to exclude a household member in order to continue to reside in the assisted unit, where that household member has participated in or been culpable for action or failure to act that warrants termination. The commenter believes that the HOME rule conflicts with the Section 8 rule because it requires that a civil court proceeding is instituted against the household member to remove them from the unit.
Some commenters supported the proposed change in § 92.253(d)(1)(ii) that would require owners to provide 60 days notice to tenants before termination of tenancy or refusal to renew instead of 30 days notice before termination of tenancy or refusal to renew. One commenter stated that HUD should amend 92.253(d)(1)(ii) and 92.253(d)(2)(ii) to require a 60-day notice of intent to terminate tenancy and/or not renew (both rental housing and TBRA should get 60-day notice). Another commenter suggested extending the 30-day eviction notice period for TBRA to 60 days to allow time for finding a suitable housing alternative.
One commenter explained that this would help tenants avoid eviction by providing sufficient time to dispute or cure lease violations and, where tenants are unable to do so, 60 days notice would provide better opportunity for those tenants to find new affordable housing and avoid being rendered homeless. One commenter suggested that HUD should clarify that the tenant has the right to cure a lease violation during the notice period in 92.253(d)(1)(ii). The commenter explained that allowing tenants to cure evictions in that time period promotes clarity in the law, and also prevents needless evictions.
One commenter noted that while a 60-day notice could provide better tenant protections, a concern would be if an industry norm of reciprocated notice periods pushed landlords to extend these expanded 60-day timeline for tenants to notify landlords beyond HOME supported units.
Some commenters opposed the provisions in the proposed rule that would extend the current requirement of a 30-day notice before a termination of tenancy to 60 days. Commenters expressed concern that the extension of the 30-day notice to a 60-day notice would conflict with local or State laws that vary widely on timing and requirements for eviction. A commenter stated that when a State has a 30-day notice in place for non-HOME tenants, administering and determining evictions in mixed-income communities will become difficult and may unintentionally cause confusion and inequity. The commenter recommended that HUD not institute a 60-day notice requirement and maintain the current 30-day notice requirement.
Other commenters also expressed concern with the extension of the notice period, contending that many housing providers cannot sustain the financial burden of nonpayment for an extended period of time and that the 30-day timeframe already leads to loss of income, increased operational costs, unsustainable balances for tenants, and disruptive delays. One commenter stated that the proposed 60-day notice of lease termination provision is particularly onerous and does not provide financially distressed tenants with the financial support that they need. Another commenter noted that owners should have access to timely recourse in the event of continued and ongoing lease violations and there are risks to housing providers, property operations, and maintenance when landlords are unable to collect rent revenue for extended periods and that HUD should not further extend the
Commenters opposed increasing the notice of termination of tenancy to 60 days for nonpayment of rent because it adds challenges to owners and current and prospective tenants. The commenters explained that increasing the timeline for nonpayment of rent to 60 days increases the financial burden on owners who need rent to sustain property operations. The commenter further explained that enforcement of a longer notice period may incentivize owners to file for evictions sooner due to the slow pace of the court process and the costs it will incur.
One commenter emphasized that its members are affordable housing providers; they are not in the “eviction business” as they are sometimes “branded,” and a 60-day notice period would lead to a significant departure of some great housing providers from participation in the HOME program. This commenter further stated that its member housing providers often face noncommunication from tenants who are unable to pay their rent and argued that HUD needed to be fair and require tenants to communicate with landlords when they can't pay their rent and make their best efforts to make timely partial payments as possible. The commenter also stated that housing providers are facing 60-120 days of nonpayment and uncollected rent in the millions, which leads to decreased operating budgets and fewer households assisted. Additionally, the commenter said that eviction cases can last several months.
Another commenter objected to the eviction period extension from 30 days to 60 days, stating that it finds that statistically the longer someone is permitted to stay in a unit without paying rent, the longer they will stay without paying rent. The commenter said that it is more likely that the month's rent will be just another month's rent that goes unpaid to the landlord and decreases the cash available for that landlord to pay its bills or maintain the property. The commenter also stated that anything longer than a 30-day eviction notice would not benefit tenants because it could increase exposure to harmful conditions and increase owners' scrutiny of tenants' background records relative to past-owed amounts to landlords, bad landlord references, and credit issues.
One commenter requested HUD explain what a participating jurisdiction is required to do once they receive an owner's notice to vacate in accordance with the proposed § 92.253(d). For example, the commenter suggested that the final rule could clarify that, once collected, the participating jurisdiction should make the information available to HUD for compliance review.
A commenter stated that many States have a rule of a 7-day “pay or quit” for an eviction based on non-payment of rent. The commenter asked for additional clarity on how to manage the 7-day notice requirement in States with the proposed requirement of providing an accessible notice to vacate at least 30 days prior to termination.
If an owner is in a State where the notice requirements are less stringent (
One commenter suggested that the provision should also clearly state that the landlord may terminate their tenancy or not renew their lease for failure to provide satisfactory documentation.
One commenter stated that HUD should have a right to renew clause for all tenants unless the tenants have violated the terms of their agreement. The commenter stated that HUD should require a landlord to provide 180 days advanced notice of their decision not to renew and said notice must offer a written explanation of the good cause for non-renewal. The commenter recommended that good cause be defined as follows: (1) the tenant has not accepted the renewal offer in writing within the time allowed; (2) the tenants who accepted the renewal offer, along with any replacement tenants acceptable to the landlord, have not returned a signed lease to the landlord within 10 days of receipt; (3) the landlord can demonstrate a lease violation; (4) the owner or a member of the owner's immediate family is going to occupy the unit for a succeeding term; or (5) the landlord will no longer be renting the property out.
The good cause requirements in the HOME program are statutory. In HOME, the tenant has the right to renew unless the owner has good cause to refuse to renew or terminate the tenancy.
The Department is declining to describe in this final rule whether a tenant's failure to accept a lease renewal offer or failing to execute a lease would constitute good cause to refuse to renew the tenants lease because in each case, the tenant has not renewed the lease. The Act requires that only serious or repeated lease violations be good cause. The Department is further defining the types of lease violations that should constitute good cause as “material” as the Department does not believe that frivolous or inconsequential lease violations should constitute good cause. As such, the Department believes the commenter's language that “the landlord can demonstrate a lease violation” is not legally acceptable under the Act and is declining to adopt it. The Department does allow for owners of units occupied by tenants receiving tenant-based rental assistance to terminate a tenancy or refuse to renew if the owner wishes to occupy the unit, allow family to occupy the unit, or take the property off the market. The Department had proposed those as appropriate grounds for termination of tenancy or refusal to renew the lease in the proposed rule in § 92.253(d) and is maintaining those grounds in the redesignated § 92.253(c)(10)(i)(B)(
One commenter recommended that any deviations between the two sets of protections be clearly stated. One commenter opposed the addition of § 92.253(d)(2) because, according to the commenter, these standards should already apply more broadly and not just for TBRA clients. Additionally, the commenter stated that the word “reasonable” would be too subjective and not allow for standardization of tenant selection across the program.
This commenter also asserted that TBRA contracts should continue to be executed by the owner and support tri-party rental assistance contracts where the owner, tenant, and participating jurisdiction all sign, as an option. This method would ensure the lease contains the HOME tenancy addendum and that the owner follows applicable TBRA requirements.
The Department is declining in this final rule to define reasonable or to remove its usage in HUD regulations. Reasonable is a commonly used and understood term and is not too subjective. There is a body of caselaw and jurisprudence surrounding what is and is not reasonable under certain circumstances and HUD declines to further specify what reasonableness is in tenant selection. The Department also declines in this final rule to apply the termination of tenancy provisions applicable to tenant-based rental assistance to HOME rental housing tenants. The termination provisions for tenant-based rental assistance contain certain provisions that only apply to owners of private rental housing and not HOME rental housing projects, such as termination of tenancy so that the owner may move into their unit (See § 92.253(c)(10)(i)(B)(
The Department agrees with the commenter on the benefits of tri-party rental assistance contracts but is providing participating jurisdictions with the option of entering into tri-party rental assistance contracts or into separate agreements with the owner and the tenant. This is because HOME is a block grant program, and participating jurisdictions should have discretion in how they bind owners and tenants to the requirements of their tenant-based rental assistance program.
One commenter supported HUD's proposal to prohibit owners from performing “constructive evictions” (aka “self-help” evictions”), such as locking a tenant out of their unit or stopping service on their utilities. One commenter supported requiring owners to provide tenants with uninterrupted utility service to “counteract a disturbing trend of so-called ‘self-help’ evictions”, whereby owners use their control of utilities to force tenants to end their tenancy.
One commenter opposed the revisions to § 92.253(d)(2)(i)(E) because the commenter believes tenants should have the ability to request termination if the rental assistance contract ends, but the landlord should not have the discretion to do so. The commenter also suggested adding tenant liens as a prohibited action in § 92.253(d)(1)(v). The commenter urged HUD to further indicate how confidential tenant information is handled.
The Department is declining to enumerate in this final rule specific measures projects owners must take to ensure tenant information is handled confidentially. Participating jurisdictions and owners should take reasonable measures to prevent unauthorized access to confidential information by persons without a need to know, (
A commenter stated that a previous bankruptcy should not be treated as equivalent to a previous eviction when a person is applying for low-income housing. The commenter also recommended that, prior to charging an application processing fee, properties must inform persons applying for housing that a previous bankruptcy disqualifies them from housing at the property, if applicable.
One commenter suggested that HUD prohibit the use of explicit credit score and criminal history requirements, as well as limit the “look-back” period for eviction records to one year from the date of application.
Owners should be aware that screening based on credit score and criminal history can have a disparate impact against protected classes in violation of the Fair Housing Act
With regard to § 92.253(e)(6), one commenter suggested that HUD should require that the written notification to reject applicants describe the grounds for rejection with sufficient specificity that a person can prepare an appeal of the housing provider's decision. The commenter stated that any supporting materials, such as a consumer report, must be provided to the tenant. The commenter further stated that these additional requirements align with HUD's recent fair housing guidance on tenant screening.
One commenter supported the change to add language requiring a participating jurisdiction to notify owners and tenants of any environmental, health, or safety hazards affecting the project, a unit, or tenants, and provide them with a summary of the nature, date, and scope of the hazard.
One commenter urged HUD to include in the final rule, in § 92.253(f), a requirement that where an owner has actual knowledge of an environmental, health or safety hazard, the owner must inform tenants (in addition to the
One commenter expressed concern regarding the proposed language at § 92.253(f) requiring both a participating jurisdiction and an owner to notify the other party if one party has “actual knowledge of an environmental, health, or safety hazard affecting a project, unit, or HOME tenants.” The commenter noted that it is unclear what HUD intends “environmental, health, or safety hazards” to mean and expressed concern about the lack of any defining language to guide participating jurisdictions' and owners' actions to comply. The commenter stated that without definitions, several interpretations are possible. The commenter also noted concerns about the burden of paperwork and compliance monitoring on participating jurisdictions, their partners, and their staff.
One commenter expressed concerns about the potential for litigation and increased costs for nonprofit affordable housing developers and operators. The commenter expressed concerns about the provision of the proposed rule requiring “secure and confidential” storage of the personal records of applicants and residents and how HUD will monitor and enforce this requirement. The commenter stated that the costs for information technology staff or software packages would be burdensome, particularly for smaller organizations or organizations in rural areas that do not already have that capacity. The commenter also questioned whether HUD intended to require a certain information security standard, and, if so, at what cost. The commenter also stated that the vague nature of proposed language in the lease addendum section could expose owners to frivolous lawsuits and be difficult to comply with. The commenter recommended further clarification and definitions regarding words like “unreasonably” or “reasonable” to avoid compliance issues, unnecessary litigation, or uneven application across participating jurisdictions.
One commenter stated that the proposed language does not account for possible conflicts between local, State and other regulatory schemes and the protections in the proposed rule. Commenters recommended that HUD add language clarifying that the protections in the rule are not exhaustive and that they do not preempt participating jurisdictions, States or local governments from requiring other tenant protections.
The Department agrees with the commenter that these requirements do not preempt a participating jurisdiction, State, or local government from providing additional protections. The Department has revised § 92.253(b)(6) and § 92.253(c)(6) to explicitly state that tenants may assert any protection under their lease and any applicable Federal, State, or local tenant protections. Where State or local landlord-tenant laws are more restrictive than HUD requirements, then the owner must follow the more restrictive requirements.
One commenter stated that downpayment assistance programs are vital for low-income households to be able to purchase homes.
HUD received several comments on the HOME homeownership value limits, with many commentors stating that the limits are too low and that the data and process for calculating them should be updated to reduce burden on participating jurisdictions and increase options for homebuyers. One commenter noted that by limiting the value to 95 percent of area median home prices, families at or below 80 percent of area median income struggle to access homeownership in the community of their choosing.
Some commentors pointed out that the value limits disproportionally impact rural communities or concentrate opportunities in minority communities while limiting opportunities in predominately white neighborhoods. One commenter stated the 95 percent HOME price limit hinders developers and homebuyers from accessing high opportunity neighborhoods. Another commenter agreed that the limitation creates a barrier for both developers looking to meet housing demand and homebuyers wanting to live in communities of their choice. The commenter said that the home price limit has long been an impediment to fair housing but given unprecedented home prices it is now an insurmountable obstacle.
Several commentors suggested that HUD revert to using the FHA 203(b) Single Family Mortgage Market data. Commenters suggested the data from FHA 203(b) better supports rural communities as it is more dynamic than the current numbers and offers a higher national floor. Additionally, the commenters noted that there is precedent for this practice as HUD used 203(b) data as the basis for the 95 percent of median home price calculation ahead of its 2013 rulemaking.
One commentor stated that the homeownership value limit has been a problem for years, particularly in rural areas, because it is too low to enable the construction of new units or the acquisition-rehab of homeownership units for affordable sale. The commenter noted that HUD cited statutory restrictions against changing the limit but argued that there is significant room for HUD to make regulatory changes. For example, the commenter said that the statute is silent on how HUD should determine the median purchase price for an area, and, in fact, in 2013 HUD changed the source of the median home purchase price data from the FHA Single Family Mortgage Limits (203(b) limits) to the current source.
One commentor stated that the limits are too low to cover repairs to older homes or meet the needs of larger families due to a lack of flexibility in rural areas to account for high costs from limited local contractor availability and infrastructure.
A commentor stated that giving local participating jurisdictions a chance to calculate their own price limits is well-intentioned but of limited use. Another commenter stated that participating jurisdictions struggle with cost and capacity issues while attempting to establish their own limits. Commenters recommended that HUD build out its regulations to further limit the effect of the HOME homeownership value limits as much as possible.
Another commentor argued that homeownership value limits were not needed as other quantitative controls exist in the form of income limits and affordability limits but acknowledged that HUD is still statutorily required to provide them.
One commentor suggested that HUD use an alternative maximum sales price allowed to align with certain State programs that use 90 percent of the IRS annually published Average Area and Nationwide Area Average Purchase Prices.
Commentors acknowledged congressional action, or new legislation would be needed to eliminate the 95 percent limit, with one commentator suggesting that it be replaced with a 110 percent limit or a percentage established by the Secretary.
The Department understands the unique challenges rural communities face using the HUD published homeownership value limits and has begun taking steps to assist those communities. In 2024, HUD made a major revision to the homeownership value limit methodology outlined in section 92.254(a)(2)(iii) of the July 2013 Final Rule. For existing housing, HUD is now using the greater (rather than the lesser) of the State non-metropolitan and U.S. non-metropolitan media sales values as the minimum value in which the limit is calculated. This change will substitute more local, State-level data for national-level data.
One commenter stated that the period of affordability for homebuyer projects should be measured by the assisted-homebuyer's acquisition of the unit, not the project completion date. This is because the current rule is administratively burdensome, leads to unintentional noncompliance by participating jurisdictions, and confuses assisted buyers. The commenter noted that parties never know when the period of affordability ends because none of the parties knows for certain when the project is marked complete in the Integrated Disbursement and Information System (IDIS), which leaves participating jurisdictions confused. The commenter noted there is often unintentional compliance because participating jurisdictions need some time, if even only a few days, to review and compile final financial information needed to complete a project in IDIS, which means that project completion cannot be achieved on the same day an assisted buyer purchases the unit.
One commenter noted that the period of affordability is a problem in multi-address homeownership projects
Commenters suggested that HUD change the data that it uses to calculate the homeownership limit to make the data more accurate or timely, with one commentor even suggesting that HUD remove the value limits if more accurate data couldn't be used. One commentor recommended HUD incorporate an adjustment factor or inflation factor to make limits more current. Another commentor suggested using data that excludes investor-purchased homes and only includes owner-occupied sales, as investor purchases can skew data thereby undermining affordability goals. The commenter also suggested replacing the limit with a HOME Subsidy Limit focused on the “appropriateness of the amount of assistance” by participating jurisdictions to address concerns around the prudent use of funds without restricting homebuyers' choices in neighborhood or home.
Several commentors expressed support and appreciation for providing resale formulas. Commenters stated that the formulas would improve consistency and fairness to homebuyers while resolving the frustrations felt by participating jurisdictions as they develop provisions or rely on inconsistent guidance. Commenters also expressed appreciation for retaining the ability to submit their own resale formulas for HUD approval, with one commentor asking HUD to provide more detail on the HUD approval process for submitting their own formulas. A commenter encouraged HUD to work with Congress to amend the relevant statutory language to better facilitate the homebuyer resale provision process.
One commenter stated that a “reasonable range of low-income buyers”, “capital improvement”, and how to value a capital improvement are not explained and are open to interpretation. A commenter suggested that HUD provide a definition of “fair return on investment” in precise percentage terms and recommended that HUD, or the participating jurisdiction, be responsible for providing down payment assistance to ensure the sale price provides an ROI that meets the definition.
One commenter, that does not use the resale option in its program, stated that a HOME-assisted buyer who sells their home wouldn't receive much of a return using HUD's four proposed formulas. The commenter noted that the benefit of homeownership is wealth building through the appreciation of home value and equity.
A commenter stated that they support the proposed changes to the HOME recapture language clarifying that the recapture amount is the direct assistance to the homebuyer that enabled the homebuyer to purchase the unit.
A commenter stated that the HOME program should set a rent cap on ADUs where a homebuyer is purchasing a multi-unit property with HOME assistance. The commenter stated that this would prevent the misuse of HOME funds. The commenter also stated that real estate tax exemptions should be provided to homebuyers who are operating within an ADU rent cap limit. The commenter stated that these suggestions would help increase community support for ADU projects and benefit the wider community while offering a modest boost to homeowners.
One commenter expressed concerns that neither participating jurisdictions nor program participants fully understand that rights of first refusal and other preemptive rights are not acceptable beyond those permitted to a participating jurisdiction and a community land trust. The commenter noted that some developers seek to retain rights of first refusal, particularly in the case of homeownership units under recapture provisions, and the repurchase price prevents buyers from realizing any appreciation otherwise attributable to the owner. The commenter noted that HUD should make clear that only participating jurisdictions and community land trusts are permitted by statute to exercise rights of first refusal.
Two commenters expressed concerns regarding the proposed requirement in § 92.254(b)(1)(i) that would require a participating jurisdiction to resell a home acquired by the participating jurisdiction through preemptive rights to an eligible low-income homebuyer within 6 months. Both commenters recommended that HUD extend the deadline for the participating jurisdiction to resell a home acquired through preemptive rights to 12 months instead of 6 months. Several commenters expressed concern that the proposed § 92.254(b)(3)(i) would require community land trusts that acquire HOME-assisted housing through preemptive rights to resell the housing to an eligible homebuyer within 6 months. These commenters stated that HUD should raise the 6-month resale requirement to 9 or 12 months, which several commenters noted would align with the current regulation or proposed revisions in § 92.254(a)(3). One commenter noted that HUD may want to measure compliance with any established resale date against the date of a ratified sales contract. The commenter also suggested that HUD could establish provisions that would extend the period of affordability by the period the community land trust is in possession of the property prior to transferring it to another buyer. Another commenter stated that establishing a minimum deadline of no less than 12 months for both community land trusts and participating jurisdictions to complete the sale of a property would allow community land trusts, which often have limited resources a reasonable amount of time to bring the housing to an appropriate standard and identify an appropriate buyer.
One commenter found the language on preserving affordability of housing assisted with HOME funds in § 92.254(b) confusing and suggested reversing sections (1) and (2) such that the proposed language would begin by stating how the participating jurisdiction may acquire the housing by using additional HOME funds, followed by the requirements for selling the housing.
One commenter supported the inclusion of community land trusts' right to exercise preemptive purchase rights while several commenters expressed concern or opposition to HUD's proposed language codifying the amendments to NAHA in the Consolidated Appropriations Act, 2016 (Pub. L. 114-113) that community land trusts may hold and exercise purchase options, rights of first refusal, or other preemptive rights to purchase housing to preserve affordability, including but not limited to the right to purchase the housing in lieu of foreclosure.
One commenter expressed broad concerns about the proposed language in § 92.254(b)(3) stating that it was unclear what would happen should a community land trust be unable to purchase a home prior to foreclosure, find an eligible household within 6 months, and the participating jurisdiction cannot provide additional HOME funds to assist the unit. The commenter noted that proposed language would create barriers for the community land trust, the participating jurisdiction because the unit would likely be sold on the private market, and the participating jurisdiction may be required to repay the HOME funds. The commenter stated it would welcome additional guidance from HUD.
Further, even if a community land trust may not assist the next homebuyer using HOME funds, the participating jurisdiction is permitted to provide additional HOME assistance directly to the next homebuyer should a community land trust exercise its preemptive purchase rights to preserve the affordability of the unit. HUD thanks the commenter that believed that a participating jurisdiction is prohibited from directly assisting the next homebuyer. This was not HUD's intent, and to address any confusion, HUD is adding clarifying language to § 92.254(b)(3)(iv) to state that a participating jurisdiction may provide direct assistance to the next homebuyer of a unit preserved by a community land trust through preemptive purchase rights.
Two commenters encouraged HUD to evaluate whether preemptive purchase rights could be made available to a wider range of organizations or affordable housing models. One commenter stated that they believed Congress meant to apply preemptive rights broadly to non-profit organizations whose purpose and goal is to preserve affordable homeownership opportunities, including shared equity/long-term affordability homeownership programs and not just to community land trusts. The commenter noted that many participating jurisdictions do not have the capacity or desire to expend time and resources to repurchase properties and should be permitted to allow nonprofit developers to use a preemptive purchase option or to assign the participating jurisdiction's preemptive purchase options to nonprofit developers to ensure long-term affordability. The commenter also states that limiting preemptive rights to participating jurisdictions and community land trusts only in the case of foreclosure is too limiting, particularly if HUD and Congress' goal is for HOME-assisted housing to fulfill the required period of affordability. The commenter states that the homeowner is unnecessarily burdened by these restrictions because they are responsible for finding and qualifying a subsequent, eligible homebuyer. The commenter suggests that eligibility for using preemptive purchase options should be determined based on the intent of the nonprofit developer to exercise the right for the purpose of preserving affordability and reselling to another eligible homebuyer, not whether the nonprofit formerly owned the land after the initial sale or acquired both land and improvements through exercise of the preemptive purchase right.
The Department disagrees with the commenter's statement that participating jurisdictions do not have the capacity or resources to exercise preemptive rights. HUD clarified in § 92.254 (b)(2) that participating jurisdictions may use additional HOME funds for certain eligible costs. Specifically, a participating jurisdiction may use additional HOME funds in accordance with § 92.254(b)(2) to obtain ownership of the housing, undertake any necessary rehabilitation, hold the housing pending sale to another homebuyer, and assist an eligible homebuyer in purchasing the unit. Consequently, a participating jurisdiction that chooses to exercise preemptive rights should have the resources necessary to preserve affordable housing.
Further, a participating jurisdiction is not permitted to assign its preemptive rights to a developer to exercise in response to a termination event, or in the case of a right of first refusal should a developer wish to acquire a HOME-assisted unit at resale. The commenter incorrectly states that homeowners' seeking to sell the HOME-assisted unit during the period of affordability are responsible for identifying and qualifying another eligible low-income homebuyer. While a homebuyer unit under a resale provision must be sold to another low-income buyer at a price that provides the seller with a fair return on investment, the homeowner is not responsible for identifying the next buyer or determining whether the buyer is income eligible. The participating jurisdiction is responsible for overseeing the subsequent sale of a homebuyer unit under resale and ensuring that all HOME requirements are met. Homebuyer units under a recapture provision must be sold on the open market with any recaptured funds returned to the participating jurisdiction to use for other eligible activities in accordance with HOME requirements.
One commenter stated that the proposed requirement at § 92.254(b)(3)(iii) that the period of affordability for the eligible buyer must be equal to the remaining period of affordability of the former homeowner will inadvertently bar a community land trust from requiring a new 99-year affordability restrictions upon resale of
Several commenters expressed concern or opposition to the proposed language at § 92.254(b)(3)(iv) that states that a participating jurisdiction may not provide additional HOME funds to a community land trust to obtain ownership, rehabilitate the housing, own/hold the housing pending sale to the next homebuyer, or provide down payment assistance to the next eligible homebuyer.
A commenter questioned why HUD would prohibit community land trusts from providing additional HOME funds to rehabilitate units acquired through their right of first refusal or from assisting buyers of such units because a property may need renovations or upgrades to comply with codes between owners. Several commenters expressed concern or opposition to the proposed language at § 92.254(b)(3)(iv) that states that a participating jurisdiction may not provide additional HOME funds to a community land trust to obtain ownership, rehabilitate the housing, own/hold the housing pending sale to the next homebuyer, or provide down payment assistance to the next eligible homebuyer. A commenter questioned why HUD would prohibit community land trusts from providing additional HOME funds to rehabilitate units acquired through the next eligible homebuyer.
Two commenters questioned why participating jurisdictions may use additional HOME funds to obtain ownership, rehabilitate, hold the housing pending resale, or provide downpayment assistance, yet a community land trust is not. Both commenters questioned the policy rationale behind this distinction, and one commenter stated that this prohibition runs counter to the regulatory definition's purpose of enshrining the preemptive right to purchase,
One commenter expressed concern regarding the proposed restrictions on community land trusts that would prevent community land trusts from obtaining ownership through a preemptive purchase option. The commenter argued that disallowing the use of HOME funds undercuts the benefit to a community land trust of having a preemptive purchase option at all, and as a result of this restriction participating jurisdictions would not support community land trusts' purchase option since exercising their own would allow them to apply additional funding to the HOME-assisted project, and that the restriction places the burden of rehabilitation and management on a community land trust without providing additional resources to do so responsibly. The commenter said that it is essential that a community land trust exercising the preemptive purchase option be able to access HOME funds to rehab a home in preparation for a new homebuyer and recommended that community land trusts be able to use HOME funds for the same purposes as participating jurisdictions.
One commenter stated that the proposed language creates ambiguity regarding assistance to subsequent homebuyers purchasing property in a community land trust. The commenter stated that the language is unclear on whether the term “to the Community Land Trust” modifies each of the following listed elements in § 92.254(b)(3)(iv) or only applies to the “to obtain ownership” element. The commenter stated that the lack of clarity led to confusion on whether it could provide homeownership assistance directly to a subsequent buyer of a home in a community land trust where it had provided assistance to a previous buyer and the prior period of affordability was still applicable. The commenter suggested that HUD could address the issue by updating the proposed definition to the following: “The participating jurisdiction may not provide additional HOME funds to the Community Land Trust to obtain ownership, to rehabilitate the housing, to own/hold the housing pending resale to the next homebuyer, or to provide homeownership assistance to the next eligible homebuyer.” One commenter asked for clarification on the preemption of providing HOME funds to community land trusts for ownership, rehab, holds pending resale, or downpayment under proposed § 92.254(b)(3)(iv). The commenter also sought clarification on the misalignment with § 92.254(a)(9)(ii) that permits additional HOME funds if it meets the maximum-per-unit subsidy cap. One commenter explained that community land trusts require an enforcement mechanism due to their structure and purpose to provide permanent affordability, requiring financially sound operators to adhere to covenant enforcement and to retain sufficient resources to execute the right of first refusal. The commenter further explained that because of these additional measures, HUD should consider if participating jurisdictions should perform underwriting similar to that of a robust organization to cover these mechanisms, perhaps using the multifamily requirements as a template. The commenter stated that this could better ensure a sound operational foundation for the organization during the duration of the period of affordability.
While the Continuing Appropriations Act, 2016 (Pub. L. 114-113) permitted community land trusts to exercise preemptive rights to preserve the affordability of housing, a community land trust is not required to exercise such options and may instead notify the participating jurisdiction that action is required to preserve the HOME-assisted unit. The participating jurisdiction may invest additional HOME funds in accordance with § 92.254(b)(1) and (2) to acquire, rehabilitate, hold the housing pending sale, and assist an eligible homebuyer to purchase the unit. The total amount of HOME funds invested, (
A community land trust that chooses to exercise its preemptive rights under § 92.254(b)(3) may use existing organizational resources or other funding sources to acquire, rehabilitate, hold the unit pending sale to another eligible homebuyer, and assist the next eligible homebuyer. The Department is adding clarifying language to § 92.254(b)(3)(iv) that a participating jurisdiction may provide direct assistance to an eligible homebuyer of a unit preserved by a community land trust through preemptive rights. The Department agrees with the commenter that the original proposed language in § 92.254(b)(3)(iv) was not clear about whether a participating jurisdiction could directly assist the subsequent buyer should a community land trust take action to preserve the affordability of the unit. The Department is also clarifying the period of affordability applicable to any homeownership assistance provided by the participating jurisdiction to the next eligible homebuyer.
While the Department agrees with the commenter that community land trusts that exercise preemptive rights under § 92.254(b)(3) should have sufficient resources to execute these rights and resell the unit to an eligible homebuyer, the Department is not requiring a participating jurisdiction to underwrite the community land trust. The participating jurisdiction may choose to exercise its own preemptive rights in lieu of the community land trust should the community land trust not have the financial resources needed.
One commenter recommended HUD extend the lease purchase completion deadline from 36 months to 5 years because they believe local experience suggests that the model is more effective when a client has more time from the date of offer and is offered homebuyer education. One commenter requested that the proposed § 92.254(a)(7) enable a second chance at a successful lease-purchase agreement if an initial lease-purchase on the property fails. One commenter stated that if a lease-purchase fails, the developer is locked into a lengthy cycle of rental administration, closing off much-needed affordable inventory for homeownership.
One commenter expressed support for HUD's clarification that participating jurisdictions may provide HOME funds to nonprofit lending institutions as a contractor or subrecipient. The commenter stated this would allow nonprofit lenders to provide HOME homeownership assistance alongside first mortgage financing and thereby strengthen the nonprofit delivery system's ability to meet affordable homeownership needs.
Several commenters voiced support for the changes to § 92.254(g)(1) that revise the homebuyer underwriting standards. Some commenters praised the simplified focus on evaluating the projected overall after-purchase debt of a family, while others were concerned that families could be subjected to foreclosure if monthly expenses are not properly evaluated. Other commenters suggested HUD instead follow the standards provided by Qualified Mortgages or Community Development Financial Institutions while a few commentors disagreed with HUD's clarification on providing a single amount of assistance to all homebuyers.
Some commenters noted that the existing structure in which each participating jurisdiction develops their own underwriting standards can create confusion and inconsistencies and suggested that HUD standardize and align with existing mortgage products to help address the issue. These commenters suggested HUD consider establishing a safe harbor if the underwriting of the first mortgage meets the standards of a Qualified Mortgage as defined by the Consumer Financial Protection Bureau (CFPB). Two commentors suggested HUD defer to the underwriting standards of a certified Community Development Financial Institution (CDFI) as CDFIs have experience underwriting loans to low- and moderate-income borrowers.
Two commenters noted that HUD correctly identified that the current regulation excludes households that have overall debt and monthly expenses that exceed a participating jurisdiction's underwriting standards but demonstrate an ability to sustain a mortgage through other indicators and argued that rigid ratios for housing expense and total debt is reflective of an outdated practice. The commenters stated that the current requirements can prevent a buyer from buying their preferred home in their location of choice because they favor borrowers with strong credit ratings, high down payments and cash reserves, and other factors. The commenters supported HUD's proposal to eliminate the requirement that a participating jurisdiction evaluate monthly expenses, to establish a standard to determine the maximum amount of direct HOME assistance, and to prohibit participating jurisdictions from providing a single, fixed amount of assistance to every homebuyer receiving assistance but asked HUD to provide additional guidance to participating jurisdictions as it finalizes this rulemaking and implements the requirements. One commenter agreed with some changes that would eliminate the need to evaluate both the housing debt and overall debt of the family in favor of evaluating overall debt of the family projected after purchase, but this commenter expressed concerns with the proposed rule's elimination of the requirement that participating jurisdictions evaluate the monthly expenses of the family. The commenter stated that the lender cannot see if a family can afford a loan if they are not doing their due diligence. The commenter recommended that HUD interpret the rule's language that “the standards must evaluate the... financial resources to sustain housing” as requiring robust evaluations to ensure that the overall financial health of the family is still assured prior to home purchase.
Two commenters stated that they do not support HUD's proposal to eliminate the requirement that participating jurisdictions evaluate a family's debt during underwriting. One commenter explained that debt evaluation prevents a family from purchasing a home that is over their income capacity and from putting the family at risk of foreclosure. Another commenter stated that this proposed change is counterintuitive to protecting families from financial distress, jeopardizing the investment of HOME funds due to foreclosure, short sale, or other issues.
Several commenters stated they do not support the proposed change to § 92.254(g)(1) of explicitly stating that a participating jurisdiction may not provide a single, fixed amount of assistance to every homebuyer receiving assistance in the participating jurisdiction's homebuyer program. Two commenters expressed concerns that tailoring the amount of assistance to each homebuyer is difficult and could be seen as arbitrary. Other commenters stated that tailoring assistance may result in a higher subsidy amount to a higher income buyers or buyers purchasing more expensive homes.
One commenter stated that HUD should base appropriateness of assistance on the local housing market through methods such as percent of median home value. Another commenter supported HUD's attempt to add clarity by stating that a participating jurisdiction establishes a standard to determine the maximum amount of assistance per family by market area but believes that by establishing a cap, a participating jurisdiction should be considered compliant. The commenter also recommended basing the appropriateness of the assistance on the local housing market and using a percentage of the median home value.
The Department also disagrees with establishing the appropriateness of assistance based on a set percentage of median home value or the local housing market. Participating jurisdictions must perform the necessary underwriting to determine whether it is possible to assist the family, and how much assistance the family requires in order to be able to maintain sustainable
One commenter stated that HUD should clarify whether it is appropriate to allow non-HOME resale restrictions to be imposed by non-participating jurisdiction State or local government programs that are funded by HOME. The commenter noted this clarification is needed because participating jurisdictions have declined to provide homebuyer assistance to low-income buyers from local density bonus programs because the housing was deed restricted in a resale-like manner by non-HOME State or local programs.
One commenter stated that it is important that when States and localities use funds for down payment assistance for affordable first-time home purchase, that these programs do not inadvertently exclude manufactured homes. The commenter noted that personal property manufactured home loans have distinctive attributes that can sometimes result in down payment assistance programs not reaching these homebuyers. The commenter referenced 2003 guidance and requested that HUD updated the program to consider any changes to the regulations would negatively impact manufactured housing homeownership opportunities. The commenter also stated that since manufactured home purchases and financing can be sold differently than site-built home purchases, it is important that States and localities conduct appropriate outreach to these channels, to ensure manufactured homebuyers have the same access to these down payment programs.
One commenter stated that while the purchase, rehabilitation, and development of manufactured homes and manufactured home communities are statutorily eligible uses of HOME funds, HOME is not being used to preserve and improve manufactured home communities as affordable housing and homebuyers and homeowners are routinely denied access to HOME-funded programs, even though they are some of the lowest-income homeowners in America and play a crucial role in the inventory of affordable housing. One commenter stated HUD should engage in outreach to States and localities to ensure that their HOME-funded downpayment assistance programs do not exclude manufactured homes. The commenter stated that this unintentional exclusion has persisted for some time often because manufactured homes are ordered in a different manner, and it is imperative to address the issue.
The commenter pointed to regulatory barriers that prevent HOME funds from being used for resident acquisition of manufactured home communities and stated that HOME funds for acquisition need to be implemented through an entity that can meet strict timeframes and work with manufactured home communities owners, that HOME funds should be used to reduce the cost of debt for acquisition, and that HOME funds should be used by participating jurisdictions to make equity grants in CDFIs to specifically finance resident purchases of manufactured home communities.
One commenter also suggested that HUD take further steps to encourage participating jurisdictions to make HOME funding available in their communities for affordable homeownership construction, rehabilitation, and repair by promoting guidance for best practices by participating jurisdictions.
Several commenters supported the extension to 12 months. Commenters stated that they support the proposed extension for the sale of a homebuyer unit acquired, rehabilitated, or constructed with HOME funds to 12 months because 9 months is an insufficient amount of time. One commenter stated that less than 12 months is an unreasonable time period due to market volatility and because small cities do not have the capacity to become landlords or to repay HUD for HOME funds when a property does not sell or convert to a rental unit. In addition, the commenter recommended that HUD remove the requirement for renting all together so that participating jurisdictions have time to sell the home. Another commenter stated that the three additional months would give potential homeowners more time to comply with requirements such as homebuyer counseling and income qualifications. One commenter explained that they support the change because, currently, it takes longer to find income eligible buyers given higher sales prices and interest rates. Some commenters said the extension would add flexibility to the program and one commenter stated it would make it more attractive to use HOME in such projects. One commenter stated that the added time may incentivize some participating jurisdictions to add or expand homeownership programs using HOME funds.
One commenter, in expressing support for the extension to a 12-month deadline, stated that this change would especially benefit new construction and enable the local governments who encounter hurdles or delays to close the deal by providing an additional 3 months.
One commenter supported extending the deadline from 9 to 12 months but warned that developers and non-profits building owner-occupied housing lack rental property management experience and warned of the risks and deterrent effects of this misalignment. The commenter suggested requiring homebuyer projects to convert to a lease-to-purchase model instead of rental.
One commenter noted that having an additional three months to sell HOME-assisted homeownership units may increase the use of HOME funds for homeownership programs for some participating jurisdictions, but high interest rates likely have more of an impact on the success of the program in most markets.
One commenter stated that because of the current economy the time to sell a home should be extended to 15 to 20 months.
One commenter stated the requirement should be at least 12 months because of volatility in the housing market. The commenter suggested that a participating jurisdiction and owner can provide a mutually agreeable plan to obtain occupancy no later than an additional 6 months (total of 18 months) from the completion of construction if there is no sale at 12 months.
One commenter stated they support increasing the number of months before converting a homeowner unit that hasn't sold to rental housing from 9 months to 12 months but would prefer that HUD eliminate the provision altogether.
One commenter said that they do not have challenges closing on homebuyer units within the existing timeline but understand that other markets may not be similarly situated and that the shrinking pool of available Federal funding utilized as mortgages is leading to extremely long waiting periods for homebuyers. The commenter doubted whether extending the deadline would meaningfully impact the proportion of HOME funding used to support homeownership programs because the sales deadline is only one very small part of the barriers in the HOME regulations and laws. Rather, the commenter cites the primary reason for the decline in uses of HOME for homeownership is decision-making at the participating jurisdiction level that prioritizes rental uses for HOME funds over homeownership uses as well as shrinking appropriations and a national proportion of HOME set aside for CHDOs that has not exceeded 20 percent since 2015. The commenter recommended that HUD use its authority to ease barriers in HUD regulations, such as raising the Homeownership Value Limits and to work with homeownership advocates to identify ways to incentivize the use of the HOME program for homeownership activities.
One commenter stated that the extension of the proposed sales deadline to 12 months is appreciated, but the requirements for homeownership housing using HOME funds do not specify how a home that has been leased under the provision can subsequently be sold to an eligible homebuyer. The commenter stated that this has led to participating jurisdictions concluding that selling the home as originally intended is not allowed or that it can only be sold via the lease-purchase provisions of the regulations. The commenter recommended that HUD clarify how a home leased under § 92.254(a)(3) can be sold to an eligible buyer within 12 months of a tenant voluntarily moving out of the rented home or after being legally evicted for cause. The commenter also recommended that HUD issue clear guidance on this matter for participating jurisdictions.
One commenter said that HOME funds are currently unable to assist in areas of homeownership opportunities because of increasing home prices and recommended HUD allow higher per-unit subsidies and after rehabilitation values and sales prices to increase such opportunities. The commenter also supported a rehabilitation per unit subsidy limit that incorporates new construction and requested HUD provide an example of a proposed resale formula in its final rule.
HUD has published examples of each of the four resales models on HUD.gov, and will provide training, technical assistance, and publish updated guidance to support the implementation of the new resale models.
Commenters stated that HUD should make an exception to the current requirement that a tenant must qualify as low-income at the time of purchase of a HOME unit. One commenter encouraged HUD to consider regulatory changes that would provide more flexibility in income determination in the event of a purchase by an in-place tenants. Other commenters stated that if HOME units were originally developed using LIHTCs, then in-place LIHTC tenants that originally income qualified for both HOME and LIHTC should be able to purchase the units as in-place tenants without need for income recertification. In many cases, the commenters specifically cited to lease-purchase programs but the lease-purchase arrangements they were describing were not lease-purchases as defined under the HOME program but actually purchase of rental housing units by in-place tenants.
Another commenter stated that homeownership is inadvertently disincentivized due to these existing regulations, and urged HUD to consider regulatory changes that would provide more flexibility in income determination in the event of a lease purchase agreement. The commenter noted that in § 92.254(a)(7), current regulations state that “HOME funds may be used to assist homebuyers through lease-purchase programs for existing housing and for housing to be constructed.” The commenter explained that during the rental period, the HOME rules defer to the LIHTC qualification standards for whether a renter is eligible to rent a HOME-assisted unit. The commenter further explained that LIHTC qualification standards require an initial qualification of the tenant at the time of lease, but if the tenant household income increases over the LIHTC and/or HOME maximum, the tenant is still qualified to live in the unit and is not displaced. However, the commenter pointed out that since HUD's adoption of the 2013 HOME final rule, many participating jurisdictions are requiring a tenant to re-qualify under the homeownership rules at the time of the sales transaction once they are eligible to purchase their single family home at the end of the LIHTC compliance period. The commenter stated that if the tenant exceeds 80 percent of area median income at the time of requalifying, they are disqualified from purchasing the HOME-assisted unit.
The Department understands that there is a lot of confusion about what rules control when HOME units are designated in a LIHTC project. The Department is correcting the commenter because HOME rules do not “defer” to the LIHTC qualification standards. HOME tenants must be income eligible under the HOME program at initial occupancy. The commenter is correct that an owner may not refuse to renew a tenant's lease because the tenant has become over-income, as this is not good cause under the Act.
A commenter requested additional clarity as to whether the proposals relating to CHDOs only applied to CHDOs in rural areas or if they are applicable to all CHDOs.
Commenters supported these changes. One commenter stated that the proposed revisions to the required role of the CHDO as owner, developer, or sponsor of housing at § 92.300, when combined with the proposed changes to the CHDO definition at § 92.2, would enable more community-based housing organizations to qualify as CHDOs and access the CHDO set-side.
A commenter stated that they support the proposed change that allows CHDOs serving as rental housing sponsors to convey a project to a non-profit organization at a predetermined time after completion of the project.
Several commenters supported the proposed change to sponsorship in § 92.300(a)(4) that would allow a CHDO (or its subsidiary) sponsoring a project to be the “managing general partner” rather than the “sole general partner,” or the “managing member” rather than the “sole managing member” of a limited partnership.
One commenter opposed the proposed changes regarding all three CHDO roles and stated they will have the unintended consequence of reducing CHDO requirements and allowing non-CHDOs to fully benefit from a CHDO designation while not being held accountable to CHDO standards. The commenter stated that for the CHDO owner, developer, and sponsor projects, many non-CHDO for-profit and non-profit developers document their relationships with CHDOs in a way that gives them an appearance of decision-making authority they do not actually have. For sponsorship projects, the commenter recommended that the regulations permit two CHDOs with service areas covering the same geography be permitted to be owners of the general partner entity.
HUD also notes that under the sponsorship provisions of the current HOME regulations, two CHDOs that work in the same area are permitted to be the partners of the ownership entity, as long as one of the CHDOs is in charge of the project.
Commenters asked HUD to consider permitting alternative funding structures with HOME funds for LIHTC projects, for example, allowing the participating jurisdiction to lend or grant the HOME funds to a CHDO which in turn would have an agreement to loan or contribute the HOME funds to the project.
Commenters stated that they support the proposed change to eliminate the requirement that HOME-assisted rental projects must be owned by the CHDO during the period of affordability. Commenters stated that allowing conveyance of the CHDO-developed or -sponsored project to eligible private nonprofits would create an additional opportunity for long-term preservation and ongoing operation of existing properties. Some commenters stated that permitting a transfer of ownership to a non-CHDO when necessary to maintain compliance with HOME program requirements will help preserve HOME-assisted stock of affordable housing and preserve HOME affordability requirements.
Commenters questioned why the same ability was not extended to projects under the CHDO ownership role and advocated that HUD make that change in the final rule. One commenter said that the same difficulties HUD cites with respect to housing that is “developed” and “sponsored” by CHDOs, also applies to housing owned by CHDOs and urged HUD to consider eliminating the requirement that the project be owned by a CHDO throughout the period of affordability at § 92.300(a)(2) in addition to paragraphs (a)(3) and (a)(4).
Commenters stated that they support the proposal to eliminate the requirement that HOME-assisted rental projects must be owned by the CHDO during the period of affordability. Several commenters requested that HUD issue sub-regulatory guidance on how to affect such a transfer. Another commenter recommended that the final rule explicitly state that ownership transfers are permitted when necessary to sustain a CHDO project and maintain compliance with HOME affordability requirements and requested HUD issue sub-regulatory guidance to facilitate such transfers.
One commenter stated that when such transfers occur, the regulation should permit the participating jurisdiction to impose alternative affordability restrictions at the time of transfer, if the transfer is for the purpose of refinancing the property under the LIHTC program.
Two commenters opposed the proposed changes that would permit transfer of CHDO set-aside projects to entities that are not CHDOs. One commenter recommended that HUD grant hardship exceptions rather than changing the regulations, stating that the change would allow for a CHDO-
A commenter requested additional clarity on whether CHDOs are required to maintain ownership of rental housing for the full term of affordability.
A commenter asked for additional clarity regarding whether a CHDO is always required to be the sole owner or if it is permitted for CHDOs to have partners that are co-owners.
Commenters supported HUD's proposed changes to § 92.300(a)(3) to permit the CHDO to share responsibilities in the development process, provided that the CHDO remains in charge of these responsibilities. Several commenters recommended that HUD better describe the sharing of responsibilities when the CHDO acts as developers in § 92.300(a)(2), by stating that it means “partnering, contracting, or procuring services from other entities.” These commenters requested that HUD include “project management” in the list of responsibilities that may be shared or contracted.
A commenter supported the proposed change to sponsorship of rental housing in § 92.300(a)(4)(i) that would allow a sponsored CHDO's limited partnership or limited liability company to be removed “for cause” as the managing general partner or managing member, provided that the CHDO must be replaced by another CHDO. The commenter recommended HUD issue sub-regulatory guidance to facilitate transfers necessary to sustain CHDO projects.
One commenter noted that only 10 percent of the funds awarded to a CHDO for development of housing may be used for downpayment assistance, which is in high demand. The commenter urged HUD to increase the 10 percent threshold and coordinate with Congressional partners, where appropriate, to allow greater flexibility in the 10 percent ceiling.
One commenter recommended that HUD encourage participating jurisdictions to allow CHDOs to retain proceeds from the sale of housing developed, owned, or sponsored by the CHDO, as permitted under § 92.300(a)(6)(ii).
One commenter urged HUD to issue clarification on the registration requirements for CHDOs in a format that can be shared with organizations because many nonprofits struggle to understand and meet the requirements. The commenter pointed to the CHDO toolkit checklist as an example of clear guidance and urged HUD to align HUD guidance with the checklist.
Commenters stated that HUD should remove the current requirement that ties CHDO certification to a HOME-funded project and make certification independent of project-based funding as well as allow certification to be valid for three years. The commenters stated that participating jurisdictions could certify a CHDO for three years and then use a simpler “desktop certification” process to confirm the organization is still eligible whenever funding is requested. A commenter expressed disappointment that the proposed rule does not address the administrative burden of CHDO certification and stated that CHDOs should be certified periodically instead of on a project-by-project basis.
The requirement that qualification as a CHDO be examined each time a CHDO is funded was included in the Consolidated Appropriation Acts and the 2013 HOME final rule to address the prevalence of participating jurisdictions providing CHDO set-aside funds to organizations that lacked adequate development capacity to successfully complete projects. This lack of due diligence by participating jurisdictions resulted in significant numbers of incomplete and failed projects, which took several years to resolve through repayments by participating jurisdictions to their HOME accounts. In addition to questions of capacity, examining a CHDO's qualifications before committing CHDO set-aside funds ensures that a CHDO meets requirements related to the governing board and other provisions, which will also prevent noncompliance. HUD is unable to make this change based on the provisions of the Act but also believes that the regulation is critical to ensuring HOME compliance and successful completion of projects.
One commenter believed that HUD should not revise paragraph (a)(4) to require that wholly owned subsidiaries of CHDOs be nonprofit organizations.
One commenter recommended that HUD add a subparagraph (a)(8) to implement explicit oversight requirements allowing participating jurisdictions to evaluate the CHDO's ongoing participation in the project as required under (2)-(6).
A commenter requested clarification on the provision allowing up to 20 percent of the minimum CHDO set-aside to be committed to organizations that meet all but the capacity requirement.
Commenters stated that before redesignating uncommitted CHDO funds as non-CHDO funds, HUD should require a participating jurisdiction to demonstrate that it took all available actions to use the funds for CHDO-eligible projects. One commenter recommended that HUD require participating jurisdictions to document that it completed a specific set of actions, including: (1) provide the full five percent of CHDO operating funds under § 92.208; (2) provide the full amount of capacity building funding under § 92.300(b); and (3) implement “revolving CHDO fund” policies, sometimes known as “CHDO proceeds” policies, to make their CHDO program as attractive and additive to capacity building growth, as possible.
The requirement in 42 U.S.C. 12771(b) states that if any CHDO funds “remain uninvested for a period of 24 months, then the Secretary shall deduct such funds from the line of credit in the participating jurisdiction's HOME Investment Trust Fund and make such funds available by direct reallocation . . . .” By statute, HUD is required to recapture and reallocate any funds that are not committed to projects developed, sponsored, or owned by CHDOs within 24 months.
The requirement in 42 U.S.C. 12742 was suspended by section 233 of Division G of the Consolidated Appropriations Act, 2019 (Pub. L. 116-6). Specifically, section 233 of Public Law 116-6 stated, “[s]ection 231(b) of such Act shall not apply to any uninvested funds that otherwise were deducted or would be deducted from the line of credit in the participating jurisdiction's HOME Investment Trust Fund in 2018, 2019, 2020, or 2021 under that section.” The 2020, 2021, 2022, 2023, and 2024 appropriations acts added 2022, 2023, 2024, 2025, and 2026 respectively, to the years covered by the suspension.
Additionally, section 242 of Division K of the Consolidated Appropriations Act, 2017 (Pub. L. 115-31) suspended the 24-month commitment deadline requirement set forth in Section 218(g) of NAHA (42 U.S.C. 12748(g)). Section 242 of Public Law 115-31 stated that “Section 218(g) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12748(g)) shall not apply with respect to the right of a jurisdiction to draw funds from its HOME Investment Trust Fund that otherwise expired or would expire in 2016, 2017, 2018, or 2019 under that section.” The 2018, 2019, 2020, 2021, 2022, 2023, and 2024 appropriations acts added 2020, 2021, 2022, 2023, 2024, 2025, and 2026 respectively, to the years covered by the suspension.
The combined effect of the suspension of the 2-year commitment deadline at Section 218(g) of NAHA and the suspension of the 24-month CHDO reservation requirement at Section 231(b) of NAHA means that HUD will no longer deobligate a participating jurisdiction's CHDO set-aside funds that remain uncommitted to CHDO projects after 24 months of HUD obligating the participating jurisdiction's grant, or HOME funds that become uncommitted from a CHDO project after the 24-month deadline. Instead, a participating jurisdiction may continue to accumulate those funds for CHDO set-aside projects or may request HUD allow the funds to be used for non-CHDO projects consistent with its guidance.
One commenter recommended that HUD create and maintain a publicly available annual list of organizations certified as CHDOs with the information already submitted to participating jurisdictions. The commenter noted that it is currently challenging for researchers, intermediaries, capacity building organizations, and others to research trends among CHDOs, target non-governmental capacity building resources to CHDOs, and evaluate the extent to which the CHDO Program is meeting its goals. A commenter stated that HUD should create, maintain, and make publicly available on its website the organizations certified as CHDOs based on already available information.
A commenter requested additional clarity regarding how participating jurisdictions can use granted funds for the CHDO and how oversight will be conducted regarding this issue.
Two commenters recommended that HUD expand the range of activities eligible for the CHDO set-aside (
Another commenter suggested that HUD permit participating jurisdictions to use CHDO set-aside funds to rehabilitate homes for existing low-income owner-occupants. The commenter explained that in areas without CHDOs, owner-occupied repair would be a low-barrier entry point for local nonprofit organizations to become CHDOs. The commenter stated that the ability of these nonprofits to move to administratively more difficult and costlier work, like new construction, is limited by their ability to grow their capacity.
A commenter stated that HUD should eliminate the CHDO set-aside requirement and permit participating jurisdictions, whether in rural or urban areas, to exercise discretion in the amount of HOME funds they will award
One commenter supported an increase in CHDO set asides for homeownership, not just rentals, as the current 10 percent leaves participating jurisdictions unable to assist CHDOs.
The Department does not have the discretion to consider tenant-based rental assistance or homeowner rehabilitation activities to be eligible for the CHDO set-aside, even if they are administered by a CHDO. The participating jurisdiction must enter into a subrecipient agreement with the CHDO to perform those projects. The Department cannot eliminate or reduce the percentage of HOME funds that are set-aside nor require that an additional amount be set-aside beyond that which is required in the Act.
One commenter requested HUD permit reliance on a single part 58 Environmental Review by multiple participating jurisdictions funding a project. For example, if a city and county are both providing HOME funds to a project and one of the jurisdictions completes a part 58 Environmental Review, HUD should allow the other jurisdiction to rely on this review for its determination and notification.
One commenter recommended that HUD add language to § 92.352 that would expressly permit upcoming guidance from HUD's Office of Environment and Energy regarding the Fiscal Responsibility Act of 2023 to be followed. The commenter recommended adding a paragraph (b)(4) that would read, “(4) HUD or the jurisdiction may utilize a Categorical Exclusion and environmental review from other Federal agencies under the Fiscal Responsibility Act of 2023 and implementing regulations adopted by The Council on Environmental Quality (CEQ) and guidance from HUD's Office of Environment and Energy, when issued.”
A commenter stated that they support the proposed change to the conflict of interest requirements.
A commenter stated that they support the proposed removal of the requirement that participating jurisdictions enter HOME project completion within 120 days of the final project draw because the four-year project completion is already in place to ensure compliance.
One commenter stated that HUD should create a narrow exception to the standard full review process for any use of program income. Specifically, the commenter proposed HUD streamline review for instances where there is no construction of a new unit and the participating jurisdiction, State, or local recipient is in good standing. This streamlining would allow HOME funds to recycle more rapidly and therefore support more low-income families.
One commenter stated that § 92.503(c) refers to a participating jurisdiction allowing a CHDO to retain recaptured funds, which contradicts provisions in § 92.504(c)(3)(ii)(B) that require CHDOs to return recaptured funds. The commenter noted that this issue could be fixed by replacing “. . .unless the participating jurisdiction permits the State recipient, subrecipient, or CHDO to retain . . .” with “. . .unless the participating jurisdiction permits the State recipient or subrecipient to retain . . .”
One commenter cited to the written agreement provisions in § 92.504 and stated that participating jurisdictions should be permitted to require subrecipients, include members of a consortium to establish and comply with their own requirements, including income determinations, underwriting and subsidy layering, rehabilitation standards, refinancing guidelines, homebuyer program policies, and affordability requirements. The commenter stated that this change is important because the subrecipient or consortium member may be serving a different area or population where the participating jurisdiction's requirements may not be appropriate.
A commenter stated that they support the proposed change that would allow participating jurisdictions to correct a deficiency in a HUD finding by taking a reduction in a HOME grant equal to the amount of HOME expenditures that were not in compliance with HOME requirements. Another commenter stated support for HUD's clarification on sanctions, in which HUD may permit a voluntary grant reduction in a participating jurisdiction's HOME grants, as long as the participating jurisdiction chooses which grant to reduce.
Specific solicitation of comment #1: The Department specifically solicits public comment about any additional changes it should consider, within statutory constraints, that will improve CHDO availability and capacity in rural areas.
Commenters stated that CHDO rules should allow mutual self-help housing to be CHDO-eligible under the definition of owner, sponsor, or developer. The commenters stated that the proposed rule is not clear on whether a nonprofit can operate a USDA Rural Development Section 523 mutual self-help housing program as a CHDO, but the rule should allow this as CHDO eligible. Commenters recommended providing targeted technical assistance to CHDOs in rural areas hoping to access HOME CHDO set-aside funds.
One commenter further suggested that HUD should explicitly allow families to qualify for HOME funding based on the low-income limits of the USDA's Section 502 Homeownership Direct Loan Program, when the HOME project is either constructed via Section 523 Mutual Self-Help Housing or sold via the USDA Section 502 Loan Program.
One commenter stated that rural CHDOs often require targeted and specific technical assistance to succeed in competitive funding cycles and can benefit from local partnerships and business relationships and urged HUD to consider what existing regulations may limit those partnerships and rectify the barriers. One commenter recommended provision of targeted technical assistance around HOME underwriting requirements such as pro-forma development to support rural CHDOs applying for competitively awarded State HOME funds. A commenter also suggested that HUD provide participating jurisdictions with training on how to proactively award CHDO capacity building funds, such as when they see multiple unawarded funding applications from a rural CHDO.
HUD also appreciates the suggestion to expand eligible activities for rural CHDOs to include the rehabilitation of owner-occupied homes and USDA Section 523 mutual self-help housing. While these activities support rural housing initiatives, the entities involved do not develop, own, or sponsor housing investments, which does not align with the statutory intent for a CHDO under HOME. The statute requires CHDOs to develop, sponsor, or own housing as a core requirement for participating in the HOME program.
One commenter recommended that HUD factor in a county's median income rather than median incomes of counties State-wide and that the county's median income be considered in CHDO board representation requirements of low-income residents or organizations.
HUD is declining to make this change because the current regulation faithfully implements the statute and introducing different standards for what constitutes low-income into the program will create confusion and potential noncompliance.
One commenter wants participating jurisdictions to make concerted efforts to remove barriers for nonprofit organizations in rural communities and encouraged HUD to examine barriers that maybe inadvertently be caused by participating jurisdiction policy and determine whether the barriers are disproportionately impacting rural areas.
A commenter stated that they do not support changing the effective date of the grant agreement to the date HUD executes the grant agreement. The commenter noted that this change would require them to front costs because HUD has timely executed grant agreements on only two occasions in the last twelve funding cycles.
Commenters stated HUD should commission a study every three to five years on the universe of nonprofit organizations that could potentially become CHDOs, and the research could evaluate trends in CHDO certification, financial health, production, and organizational needs.
One commenter encouraged HUD to consider metrics to measure the needs of rural and Tribal communities, and to encourage States to use HOME funds for projects that meet those identified needs.
A commenter stated that HUD should increase funding allocations to HAP budgets to cover increased rents because of the expected increase of rent charged to PBVs and HCVs. The commenter
One commenter stated that HUD's current lead paint regulations are out-of-date given higher construction costs and extended requirements. The commenter recommended that the ranges that determine intervention level be updated to the following: (1) Lead-safe work practices less than $20,000; (2) interim controls between $20,001 and $50,000; and (3) abatement for more than $50,000.
Commenters expressed frustration over the limited Buy America, Build America (BABA) waiver availability and increased cost incurred due to sourcing domestic materials. Commenters stated that the lack of guidance from HUD on BABA compliance has further compounded challenges for developers and contractors, hindering their ability to provide feedback and navigate problems. A commenter stated that HUD should clarify the impact of BABA on the green building standards because the impact is unclear at this time.
One commenter recommended that HUD should consider creating a “risk-lowering pilot program for nonprofit affordable housing developers.” The commenter suggested that the pilot program it suggests might offer a preapproval for nonprofits that enables those organization to bid for HOME funding with no or low environmental review process-based risk. The commenter stated that in the program it suggests that a limited number of nonprofits could enter an agreement with HUD that guarantees HUD reimbursed costs for environmental reviews for unsuccessful applicants. The commenter noted that the pilot program could be designed in a way that it would not cover overhead costs of the nonprofit but only cover the hard costs of specialists. The commenter stated that this design would lower the risk of high pre-development costs being lost. The commenter suggested that this pilot program could be targeted at CHDOs already partnering with HUD or else be based on nonprofit operating budgets, geographic targeting, or other community characteristics, such as persistent poverty counties.
One commenter asked HUD to provide waivers to Habitat for Humanity chapters so that participating jurisdictions can assist more with following HOME guidelines.
Another commenter stated that opportunities for HUD loans for people with disabilities and those who may have medical needs should be explored in every State and territory and that HUD must support those who wish to rehabilitate homes in regard to accessibility. The commenter emphasized the need for access to universally designed housing for people with disabilities.
One commenter recommended that HUD issue a separate advance notice of proposed rulemaking (ANPR) regarding how the Consolidated Plan could be improved and simplified. The commenter stated that the ANPR should consider improvements to the Annual Action Plan (AAP) and Consolidated Annual Performance and Evaluation Report (CAPER) with a special focus on reducing redundancies across planning documents. The commenter also urged HUD to facilitate greater consistency among local HUD offices in how Consolidated Plans and related planning regulations and guidance are interpreted.
A commenter said HUD should help communities develop non-discriminatory language and potential administrative rules so that many in the LIHTC system can access HCVs and adopt inclusive low-income energy assistance standards. Generally, the commenter said HUD should incentivize renting through HCVs and assisting communities by incorporating sources of income discrimination.
One commenter suggested that HUD should provide guidance to participating jurisdictions on maximum unit counts. For example, the commenter stated in one State, there is a 56-unit maximum rule for HOME funds, and that maximum makes HOME projects ineligible for utilizing four percent tax credits. Additionally, the commenter explained that anything less than a 100-unit maximum creates additional barriers to building integrated, inclusive housing communities for people with and without disabilities (
One commenter stated HUD should integrate healthy home inspection requirements into environmental assessments as well as cover them under the eligible cost framework. The commenter recommended that HUD use the healthy homes standard under 42 U.S.C. 711, the Maternal, Infant, and Early Childhood Home Visit Program. The commenter stated this standard is useful because it focuses on those most at risk from poor indoor air quality and would capture the health effects on a significant number of residents in public housing.
One commenter asked if HUD has considered changing the requirement from the fair market rent to rent reasonableness.
Consistent with the requirements of the Administrative Procedure Act, HUD has carefully responded to all public comments received in response to its notice of proposed rulemaking and acted within its statutorily delegated authority in the promulgation of regulations that are consistent with the Act. Nonetheless, if any provision of this final rule, or any provision of 24 CFR part 92, is held to be invalid or unenforceable as applied to any action, that provision should be construed so as to continue to give the maximum effect to the provision permitted by law. If such holding is that the provision of this part is invalid and unenforceable in all circumstances, then HUD views each provision as severable from the remainder of this part and a finding that a provision is invalid should not affect the remaining provisions. Additionally, if a provision should be held to be invalid or unenforceable, HUD would have its predecessor provision, the equivalent provision in effect prior to this rulemaking, come back into effect. As this rulemaking is comprehensive and concerns all aspects of the HOME program, the Department recognizes the need to maintain the regulations to the maximum effect, if permissible, and to sever them as necessary if a court challenge prevails. This provides stability for participating jurisdictions, which must rely upon regulations for all activities, regardless of litigation or court orders affecting certain provisions or for certain activities.
Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made regarding whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. Executive Order 14094 (Modernizing Regulatory Review) amends section 3(f) of Executive Order 12866, among other things. Updating the HOME program regulation is consistent with the objectives of Executive Order 13563 to reduce burden, as well as the goal of modifying and streamlining regulations that are outmoded and ineffective.
This final rule revises the HOME program regulations, which were first promulgated in 1991, and have not been significantly updated since 2013. This final rule: revises CHDO qualification requirements for community-based non-profit housing organizations to access CHDO set-aside funds to own, develop, and sponsor affordable housing; revises HOME rent requirements to implement statutory changes made to the U.S. Housing Act of 1937 by section 2835(a)(2) of HERA; facilitates the use of HOME funds for small one-to-four-unit rental projects; incentivizes inclusion of ambitious Green Building standards in new construction, reconstruction, and rehabilitation projects; and expands flexibilities for community land trusts to participate in the HOME program. The final rule also provides enhanced flexibility in TBRA programs; strengthens and expands tenant protections; and clarifies the resale requirements for homeownership housing. The final rule also includes
HUD prepared a regulatory impact analysis (RIA) that addresses the costs and benefits of the final rule. HUD's RIA is part of the docket file for this rule at
As described in the RIA, HUD anticipates that the economic impact of the final rule will be almost entirely within the HOME program. In other words, the changes to the HOME program will affect what participating jurisdictions do with the HOME funds they receive from HUD and how projects that accept this funding source operate. Many of the policy adjustments will only have a practical impact if participating jurisdictions choose to respond to the policy adjustments by altering how they use HOME funds. HUD strongly encourages the public to view the docket file.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
A Finding of No Significant Impact (FONSI) with respect to the environment was made, at the proposed rule stage, in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI remains applicable to this final rule and is available through the docket file at
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has Federalism implications if the rule either: (i) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This final rule does not have Federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive Order.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This final rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of the UMRA.
The information collection requirements contained in this final rule have been approved by OMB in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned the OMB control number 2506-0171. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.
The final rule would change the annual income determination requirement for households assisted with HOME TBRA from annual to when a new rental assistance contract must be executed, which can be as long as 2 years, which reduces the burden hours. The final rule includes a new provision in 24 CFR 92.250 to increase the maximum subsidy limit allowed for HOME projects based on whether the project shall meet a more comprehensive property standard that includes Green Building criteria, which would lead to a slight increase in burden for participating jurisdictions with qualified projects. The final rule would amend 24 CFR 92.252 to eliminate the requirement that a participating jurisdiction must submit to HUD a marketing plan for any HOME-assisted rental units that have not achieved initial occupancy within six months of project completion in IDIS, which would reduce the reporting burden on participating jurisdictions with unoccupied HOME-assisted rental units. The final rule adds paragraph (g)(1) to 24 CFR 92.252 to permit an owner of small-scale housing to re-examine annual income every three years, rather than annually, therefore reducing burden for income determination. The tenancy lease addendum, described in 24 CFR 92.253, replaces multiple, separate functions, and results in a decrease in paperwork burden. The changes in 24 CFR 92.300 to define the qualifications for a CHDO result in increased applications and certification, which may lead to an increase of paperwork burden. Overall, the final rule results in a net decrease of burden by 28,852 total estimated annual burden hours.
The burden of the information collections in this final rule is estimated as follows:
Aged, Grant programs—housing and community development, Homeless, Individuals with disabilities, Low and moderate income housing, Reporting and recordkeeping requirements.
Administrative practice and procedure; Low and moderate income housing; Manufactured homes; Rent subsidies; Reporting and recordkeeping requirements.
Administrative practice and procedure; American Samoa; Community development block grants; Grant programs—education; Grant programs—housing and community development; Guam; Indians; Loan programs—housing and community development; Low and moderate income housing; Northern Mariana Islands; Pacific Islands Trust Territory; Puerto Rico; Reporting and recordkeeping requirements; Student aid; Virgin Islands.
Grant programs—housing and community development; Grant programs—Indians; Indians; Public housing; Rent subsidies; Reporting and recordkeeping requirements.
For the reasons stated in the preamble, HUD amends 24 CFR parts 91, 92, 570, and 982 as follows:
42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388, 12701-12711, 12741-12756, and 12901-12912.
42 U.S.C. 3535(d) and 12701-12839; 12 U.S.C. 1701x.
The additions and revisions read as follows:
(2) * * *
(ii) * * *
(C) If the participating jurisdiction (or State recipient or subrecipient) is providing HOME funds to a family to acquire single family housing for homeownership that does not meet the participating jurisdiction's property standards, as described in § 92.251(c)(3), then the commitment must meet the requirements of this paragraph (2)(ii)(C). The participating jurisdiction (or State recipient or subrecipient) and the family must have executed a written agreement under which HOME assistance will be provided for the purchase of the single family housing. The written agreement will require the property to meet the standards in accordance with § 92.251(c)(3) and will require the property title to be transferred to the family within six months of the agreement date.
(4) Is tax exempt as follows:
(i) The private nonprofit organization has a tax exemption ruling from the Internal Revenue Service under section 501(c)(3) or (4) of the Internal Revenue Code of 1986 (26 CFR 1.501(c)(3)-1 or 1.501(c)(4)-1));
(ii) The private nonprofit organization is a subordinate organization that has been included in its 501(c)(3) or (4) central organization's group exemption letter by the Internal Revenue Service; or
(iii) The private nonprofit organization is wholly owned by the community housing development organization, as defined in this part, and is disregarded as an entity separate from its owner organization for Federal tax purposes.
(5) Is not a governmental entity (including the participating jurisdiction, other jurisdiction, Indian Tribe, public housing authority, Indian housing authority, housing finance agency, or redevelopment authority) and is not controlled by a governmental entity. An organization that is created by a governmental entity may qualify as a community housing development organization; however, no more than one-third of the board members of the organization may be officials or employees of the participating jurisdiction or governmental entity that created the community housing development organization. Further, no governmental entity may have the right to appoint more than one-third of the organization's board members. The board members appointed by a governmental entity and the board members that are officials or employees of the participating jurisdiction or governmental entity that created the organization may not appoint any of the remaining two-thirds of the board members. The officers or employees of a governmental entity may not be officers or employees of a community housing development organization;
(8) * * *
(i) Maintaining at least one-third of its governing board's membership for residents of low-income neighborhoods, low-income beneficiaries of HUD programs, other low-income community residents, designees of low-income neighborhood organizations, or designees of nonprofit organizations in the community that address the housing or supportive service needs of low-income residents or residents of low-income neighborhoods, including homeless providers, Fair Housing Initiatives Program providers, Legal Aid, disability rights organizations, and victim service providers. For urban areas, “community” may be a neighborhood or neighborhoods, city, county, or metropolitan area; for rural areas, it may be a neighborhood or neighborhoods, town, village, county, or multi-county area (but not the entire State); and
(9) Has a demonstrated capacity for carrying out housing projects assisted with Federal funds, Low-Income Housing Credits (26 U.S.C. 42), Federal Home Loan Bank Affordable Housing Program (12 U.S.C. 1430) funds, or local and State affordable housing funds.
(i) To satisfy this requirement and demonstrate capacity as a developer of a HOME-assisted project, the nonprofit organization must have paid employees with housing development experience who will work directly on the HOME-assisted project. Where the paid employees of the organization do not demonstrate capacity to develop a HOME-assisted project alone, the experience of paid employees may be supplemented by board members or officers of the organization that are volunteers. If a nonprofit organization is demonstrating capacity using a volunteer board member's or officer's experience, the volunteer may not be compensated by or have their services donated by another organization. For its first year of funding as a community housing development organization, an organization may satisfy this requirement through a contract with a consultant who has housing development experience to train appropriate key, paid staff of the organization;
(ii) An organization that will own housing must demonstrate capacity to act as owner of a project and meet the requirements of § 92.300(a)(2);
(iii) An organization that will sponsor housing must demonstrate capacity as a developer or capacity to act as owner, as described in paragraphs (9)(i) and (ii) of this definition; and
(1) Has as its primary purposes acquiring, developing, or holding land to provide housing that is permanently affordable to low-income persons;
(2) Is not sponsored or controlled by a for-profit organization;
(3) Uses a lease, covenant, agreement, or other enforceable mechanisms to require housing and related improvements on land held by the community land trust to be affordable to low-income persons for at least 30 years; and
(4) Retains a right of first refusal or preemptive right to purchase the housing and related improvements on land held by the community land trust to maintain long-term affordability.
(1) The land upon which the housing is located may be owned in fee simple or the homeowner may have a ground lease for the lowest of the following time periods, as applicable:
(i) For housing, the ground lease must be for 99 years or more;
(ii) For housing located in an insular area, the ground lease must be 40 years or more;
(iii) For housing located on Indian trust or restricted Indian lands or a
(iv) For manufactured housing, the ground lease must be for a period at least equal to the applicable period of affordability in § 92.254.
(2) Gross income from the use or rental of real property, owned by the participating jurisdiction or State recipient that was acquired, rehabilitated, or constructed, with HOME funds or matching contributions, less costs incidental to generation of the income.
(3) Payments and repayments on grants, loans (
This part applies to projects based on when an income determination is made or when the HOME funds for the project were committed, as applicable. Projects where the HOME funds were committed before a certain date may be subject to previous versions of this part. This section provides instruction regarding which version of this part applies.
(a)
(b)
(c)
(d)
(1)
(2) Requesting an increase in maximum per-unit subsidy in accordance with § 92.250(c) is only permitted for projects if the participating jurisdiction committed the HOME funds for the project on or after February 5, 2025.
(3) Use of the revised dollar thresholds for the periods of affordability in §§ 92.252 and 92.254 is only permitted for projects if the participating jurisdiction committed the HOME funds for the project on or after February 5, 2025.
(4) Tenant protections provided in § 92.253, including the tenancy addenda requirements in § 92.253(b) through (d), apply for rental housing projects if the participating jurisdiction committed the HOME funds for the project, entered into the rental assistance contract, or entered into an agreement to provide security deposit assistance on or after February 5, 2025.
(5) The revisions to the roles of community housing development organizations in owning, developing, and sponsoring affordable housing in § 92.300 only apply if the participating jurisdiction committed the community housing development organization set-aside funds for the project on or after February 5, 2025.
(e) The following table summarizes the information provided in this section:
(a) A consortium of geographically contiguous units of general local government is a unit of general local government for purposes of this part if the requirements of this section are met. A unit of general local government separated by a body of water that is only accessible by the public through a permanent means other than a connecting road, bridge, railway, or highway may be considered geographically contiguous if the consortium demonstrates that the unit of general local government separated by the body of water is part of the same housing market and local commuting area as one or more members of the consortium. A local commuting area is the geographic area that encompasses neighborhoods where people live and are reasonably expected to routinely travel back and forth to a common employment hub, population center, or worksite.
(d) If the representative unit of general local government distributes HOME funds to member units of general local government, the representative unit is responsible for applying to the member units of general local government the same requirements as are applicable to subrecipients, including the written agreement requirements in § 92.504(c)(2).
(g) If a consortium changes its representative unit of general local government but retains the same membership, the consortium shall still be considered the same unit of general local government for purposes of this part. If the representative unit of general local government changes and the composition of the consortium changes, either by adding or removing individual members, then the consortium shall be a new unit of general local government for purposes of this part and shall be required to comply with all applicable consolidated plan requirements in 24 CFR part 91.
The addition reads as follows:
(a) * * *
(2) * * * A participating jurisdiction may not commit HOME funds to a project outside its jurisdiction and within the boundaries of a contiguous local jurisdiction until it has secured the financial contribution of the jurisdiction in which the project is located.
The revisions and additions read as follows:
(a)
(3) If a family is applying, renewing, or entering into a new rental assistance contract for tenant-based rental assistance pursuant to § 92.209, or applying for or living in a HOME-assisted rental unit in accordance with § 92.252, and the family is assisted by a form of Federal, State, or local public assistance (
(b)
(1) * * *
(ii) Obtain from the family a written statement or, where needed due to disability, a statement in another format, of the amount of the family's annual income and family size, along with a certification that the information is complete and accurate. The certification must state that the family will provide source documents upon request. If there is evidence that a tenant's statement and certification provided in accordance with this paragraph (b)(1)(ii) failed to completely and accurately state information about the family's size or income, a tenant's income must be re-examined in accordance with paragraph (b)(1)(i) of this section.
(2) For families applying for HOME homeownership activities (
(3) For families applying for or receiving tenant-based rental assistance, the participating jurisdiction may determine annual income for the family in accordance with either paragraph (a)(3) or (b)(1)(i) of this section, as applicable. Income must be calculated at the times described in § 92.209(e)(3).
(c)
(d)
(e) * * *
(2) The participating jurisdiction is not required to redetermine the family's income eligibility at the time the HOME assistance (
(f) * * *
(2) If a unit is assisted by a Federal or State project-based rental subsidy program, then a participating jurisdiction may accept the public housing agency, owner, or rental subsidy provider's determination of the family's adjusted income under that program's rules.
The revisions and addition read as follows:
(a) * * *
(2) Acquisition of vacant land or demolition may only be undertaken for a project that will provide affordable housing and meets the requirements for a specific local project in paragraph (2)(i) of the definition of “commitment” in § 92.2.
(b) * * *
(3) The participating jurisdiction must establish the terms of assistance, subject to the requirements of this part.
(e) * * *
(2) If project completion, as defined in § 92.2, does not occur within 4 years of the date of commitment of funds for a specific local project, the project is considered to be terminated, and the participating jurisdiction must repay all funds invested in the project to the participating jurisdiction's HOME Investment Trust Fund in accordance with § 92.503(b). * * *
The revisions read as follows:
(b) * * *
(2) * * *
(ii) Require a review of management practices to demonstrate that disinvestment in the property has not occurred, that the long-term needs of the project can be met, and that the feasibility of serving the targeted population over the minimum period of affordability of 15 years can be demonstrated;
(c)
(d) * * *
(1) Architectural, engineering, or related professional services required to prepare plans, drawings, specifications, work write-ups; for HUD environmental reviews or other environmental studies, assessments, or fees; and for certain costs to process and settle the financing for a project, such as private lender origination fees, credit reports, fees for title evidence, legal fees, accounting fees, filing fees for zoning or planning review and approval, private appraisal fees, fees for independent cost estimates, and other lender required third-party reporting fees. The costs may
(2) Fees for recordation and filing of legal documents, building permits, and builders or developers fees.
(8) Cost of property insurance during development.
(c) An organization that meets the definition of “community housing development organization” in § 92.2, except for the requirements in paragraph (9) of the definition, may receive HOME funds for operating expenses in accordance with paragraph (a) of this section in order to develop demonstrated capacity and qualify as a community housing development organization.
The revisions and addition read as follows:
(c) * * *
(2) * * *
(iv)
(3)
(e)
(2)
(3)
(A) Because the lease between the family and owner has been amended or renewed, if the lease term or amount charged under the lease are the only terms of the contract being changed.
(B) To extend its term up to 24 months from the original date of execution.
(C) When a tenant changes units within the same building or development if the parties to the lease, the family size, and the number of bedrooms in the housing remain the same.
(ii) Subject to the availability of HOME funds, a rental assistance contract may be renewed after the expiration of its initial term.
(iii) In all other instances, the participating jurisdiction must enter into a new rental assistance contract with the family and the owner in accordance with this paragraph (e).
(4)
(ii) When a rental assistance contract is amended, the participating jurisdiction will not be required to perform a new income examination in accordance with § 92.203.
(iii) Before a rental assistance contract is renewed, the participating jurisdiction must determine that the family is income eligible in accordance with § 92.203.
(iv) If a family is participating in a HOME lease-purchase program and receiving tenant-based rental assistance, then the participating jurisdiction is only required to determine the family's income at the time that the family enters into the lease-purchase agreement and does not need to engage in further income examination during the term of the lease-purchase agreement.
(g)
(h) * * *
(2) The participating jurisdiction must establish a minimum tenant contribution to rent, except that the participating jurisdiction may establish conditions in its written policies under which a tenant would be relieved of all or a portion of the minimum contribution due to financial hardship.
(3) * * *
(ii) The Section 8 Housing Choice Voucher Program payment standard as determined in accordance with 24 CFR 982.503(a) through (c).
(i)
(j) * * *
(5) Paragraphs (b), (c), (d), (f), (g), and (i) of this section are applicable when HOME funds are provided for security deposit assistance, except that income determinations pursuant to paragraph (c)(1) of this section and inspections pursuant to paragraph (i) of this section are required only at the time the security deposit assistance is provided.
(6) Surety bonds, security deposit insurance, or instruments similar to surety bonds or security deposit insurance may not be used in lieu of or in addition to a security deposit in units occupied by tenants receiving tenant-based rental assistance.
(k)
(a) The provisions of this section apply only to an existing HOME-assisted rental project that, within the HOME period of affordability, is no longer financially viable or its physical viability has substantively deteriorated due to unforeseen circumstances.
(1) For purposes of this section, a HOME-assisted rental project is no longer financially viable through the period of affordability if:
(i) The project's operating costs exceed its operating revenue, considering project reserves;
(ii) The owner is unable to pay for necessary capital repair costs or ongoing expenses for the project; or
(iii) The project reserves are insufficient to be able to operate the project.
(2) For purposes of this section, physical viability means a project's current or future ability to maintain affordability based on the physical characteristics and factors of the project's site and improvements.
(3) HUD may approve the actions described in paragraphs (b) and (c) of this section to strategically preserve the affordability of a rental project after consideration of market needs, available resources, and the likelihood of the long-term physical and financial viability of the project.
(b) Notwithstanding § 92.214, a participating jurisdiction may request and HUD may permit, pursuant to a written memorandum of agreement, a participating jurisdiction to invest additional HOME funds in the existing HOME-assisted rental project. The total HOME funding for the project (original investment plus additional investment) must be necessary to improve the physical and financial viability of the project and may not exceed the per-unit subsidy limit in § 92.250(a) in effect at the time of the additional investment. The use of HOME funds may include, but is not limited to, rehabilitation of the HOME units and recapitalization of project reserves for the HOME units (to fund capital costs). If additional HOME funds are invested, HUD may impose additional conditions, including requiring the participating jurisdiction to extend the period of affordability, increase the number of HOME-assisted units, and change the number or designation of Low HOME rent and High HOME rent units.
(c) HUD may, through written approval, permit the participating jurisdiction to reduce the total number of HOME-assisted units or change the designation of units from Low HOME rent units to High HOME rent units where there are more than the minimum number of Low HOME rent units in the project. In determining whether to permit a reduction in the number of HOME-assisted units, HUD will take into account the required period of affordability and the amount of HOME assistance provided to the project.
The revision reads as follows:
(b)
(2) In any year in which an appropriation has not been enacted 90 days before a participating jurisdiction's program year start date, a participating jurisdiction may incur eligible administrative and planning costs as of the beginning of its program year or the date that HUD receives its consolidated plan describing the HOME allocation to which the costs will be charged, whichever is earlier.
(a) * * *
(6) Provide assistance (other than tenant-based rental assistance, assistance to a homebuyer to acquire housing previously assisted with HOME funds, assistance permitted under § 92.210, or assistance to preserve affordability of homeownership housing in accordance with § 92.254(b)) to a project previously assisted with HOME funds during the period of affordability. However, additional HOME funds may be committed to a project for up to one year after project completion (see § 92.502), but the amount of HOME funds in the project may not exceed the maximum per-unit subsidy amount established under § 92.250 at the time of underwriting;
(7) Pay for the acquisition of property owned by the participating jurisdiction, unless such property is acquired by the participating jurisdiction in anticipation of carrying out a HOME project;
(8) Pay delinquent taxes, fees, or charges on properties to be assisted with HOME funds;
(9) Pay for any cost that is not eligible under §§ 92.206 through 92.209; or
(10) Pay for surety bonds, security deposit insurance, or instruments similar to surety bonds or security deposit insurance, in lieu of or in addition to a security deposit in units occupied by tenants receiving tenant-based rental assistance (including assistance in paying security deposits).
(b) * * *
(3) The participating jurisdiction must prohibit project owners from charging for:
(i) Surety bonds, security deposit insurance, or instruments similar to surety bonds or security deposit insurance, in lieu of or in addition to a security deposit in units;
(ii) Fees that are not customarily charged in rental housing (
(iii) Fees to inspect units or correct deficiencies in the property condition of units or common areas of the project that were not caused by the tenant or are only due to normal wear and tear.
(4) Rental project owners may charge:
(i) Reasonable application fees to prospective tenants;
(ii) Parking fees to tenants only if such fees are customary for rental housing projects in the neighborhood; and
(iii) Fees for services such as bus transportation or meals, as long as the services are voluntary and fees are charged for services provided.
The revisions read as follows:
(b) * * *
(2) * * *
(ii) The participating jurisdiction must execute, with the owner of the housing (or, if the participating jurisdiction is the owner, with the manager or developer), a written agreement that imposes and enumerates all of the requirements applicable to the project, including affordability requirements in § 92.252 or § 92.254; tenant protection requirements in § 92.253; property standards requirements in § 92.251; and income determination requirements in § 92.203. * * *
(iii) A participating jurisdiction must establish a procedure to monitor HOME match-eligible housing to ensure continued compliance with the requirements of § 92.203 (Income determinations), § 92.252 (Qualification as affordable housing: Rental housing), § 92.253 (Tenant protections), and § 92.254 (Qualification as affordable housing: Homeownership). * * *
(b)
(1) To apply an excess matching contribution to a future fiscal year's match liability, the participating jurisdiction must have documentation, at the time of application, demonstrating the matching contribution complied with the matching requirements at §§ 92.218 through 92.221 at the time it was made. Documentation must include project records of the type and amount of the matching contribution.
(2) A participating jurisdiction must maintain the records in paragraph (b)(1) of this section for five years from the date of application of the excess matching contribution to the liability.
The revisions and addition read as follows:
(a)
(b) * * *
(3) * * *
(i) An underwriting analysis of the homeowner's ability to repay the HOME-funded rehabilitation loan is required only if the loan is an amortizing loan; and
(c) A participating jurisdiction may exceed the per-unit dollar limits described in paragraph (a) of this section by up to 10 percent if the project meets one of the green building standards identified by HUD and published in the
The revisions and additions read as follows:
(a) * * *
(2)
(3)
(i)
(ii)
(iii)
(iv)
(v)
(A) The location of the new construction makes installation of broadband infrastructure infeasible; or
(B) The cost of installing the infrastructure would result in a fundamental alteration in the nature of its program or activity or in an undue financial burden.
(vi)
(B)
(
(
(
(
(
(
(
(
(vii)
(b) * * *
(1) * * *
(vi)
(viii)
(A) The participating jurisdiction may accept a determination in satisfaction of another funding source's requirements that, upon the completion of the rehabilitation, the HOME-assisted project and units are decent, safe, sanitary, and in good repair in an inspection conducted under the National Standards for the Condition of HUD housing (24 CFR part 5, subpart G) or an alternative inspection standard, which HUD may establish through
(B) If a participating jurisdiction is accepting a determination pursuant to paragraph (b)(1)(viii)(A) of this section, then the participating jurisdiction must document the determination in accordance with § 92.508(a)(3)(iv) and is not required to perform a HOME inspection of the project and units for compliance with 24 CFR 5.703.
(xi)
(B)
(
(
(
(
(
(
(
(
(
(xii)
(3)
(c) * * *
(1) Existing housing that is acquired with HOME assistance for rental housing, and that was newly constructed or rehabilitated less than 12 months before the date of commitment of HOME funds, must meet the property standards for new construction in paragraph (a) or rehabilitation in paragraph (b) of this section, as applicable. * * *
(3) Existing housing that is acquired for homeownership using homeownership assistance must be decent, safe, sanitary, and in good repair. The participating jurisdiction must establish standards to determine that the housing is decent, safe, sanitary, and in good repair. At minimum, the standards must provide that the housing meets all applicable State and local housing quality standards and code requirements, and the housing does not contain the specific deficiencies established by HUD based on the applicable standards in 24 CFR 5.703 and published in the
(i) The participating jurisdiction must inspect the housing and document compliance with this paragraph (c)(3) based upon an inspection that is conducted no earlier than 90 days before the commitment of HOME assistance. If the housing does not meet these standards, the housing must be rehabilitated to meet the standards of this paragraph (c)(3) before the acquisition, except as provided in paragraph (c)(3)(ii) of this section.
(ii) If the housing is not rehabilitated to meet the standards in this paragraph (c)(3) before acquisition, then the housing may still be acquired if all of the following conditions are satisfied:
(A) The written agreement between the participating jurisdiction and the homebuyer requires the property to meet the standards within 6 months of acquisition with HOME assistance;
(B) Funding is secured to complete the rehabilitation necessary to comply with the standards; and
(C) Unless an extension is provided pursuant to paragraph (c)(3)(ii)(D) of this section, the participating jurisdiction conducts a final inspection within six months after acquisition and determines that the property meets the standards.
(D) The participating jurisdiction may provide the homebuyer with an extension of up to 12 months from acquisition to meet the standards. If the participating jurisdiction provides an extension, the participating jurisdiction must amend the written agreement to reflect the extension and conduct a final inspection within 12 months of acquisition and determine that the property meets the standards.
(iii) All inspections performed by the participating jurisdiction must be conducted in accordance with the participating jurisdiction's inspection procedures.
(d)
(f)
(1) * * *
(i)
(iv)
(B)
(3)
(i)
(A) Perform an on-site inspection in accordance with the participating jurisdiction's inspection procedures to determine compliance with the property standards; or
(B) Accept a determination made within the past 12 months in satisfaction of another funding source's requirements, that the HOME-assisted project and units are decent, safe, sanitary, and in good repair in an inspection conducted under the National Standards for the Condition of HUD housing (24 CFR part 5, subpart G) or an alternative inspection standard, which HUD may establish through
(ii)
(iii)
(iv)
(4)
(i) An annual on-site inspection in accordance with its inspection procedures for annual inspections to determine the housing meets the property standards in paragraph (f)(1) of this section; or
(ii) An inspection conducted within the past 3 months in satisfaction of another funding source's requirements under the National Standards for the Condition of HUD housing (24 CFR part 5, subpart G) or an alternative inspection standard, which HUD may establish through
(5)
(i)
(ii)
(g)
The HOME-assisted units in a rental housing project must be occupied by households that are eligible as low-income families and must meet the requirements of this section to qualify as affordable housing. If the housing is not occupied by eligible tenants within six months following the date of project
(a)
(1)
(i) The fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111; or
(ii) 30 percent of the adjusted income of a family whose annual income equals 65 percent of the median income for the area, as determined by HUD.
(2)
(i) The rent does not exceed 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD. If the rent determined under this paragraph is higher than the fair market rent under paragraph (a)(1)(i) of this section, then the maximum rent for units under this paragraph is the fair market rent under paragraph (a)(1)(i);
(ii) The rent contribution of the family is not more than 30 percent of the family's adjusted income; or
(iii) The unit is a LIHTC unit and has rents not greater than the gross rent for rent-restricted residential units as determined under 26 U.S.C. 42(g)(2).
(3)
(ii) For SRO units that have no sanitary or food preparation facilities or only one of the two, the rent limit is 75 percent of the zero-bedroom fair market rent as established by HUD under 24 CFR part 888. The project must be occupied by very low-income tenants.
(b)
(c)
(d)
(1) The affordability requirements, including the applicable rent limits, period of affordability, and income requirements:
(i) Apply without regard to the term of any loan or mortgage, repayment of the HOME investment, or the transfer of ownership;
(ii) Must be imposed by a deed or use restriction, lien on real property, a covenant running with the land, a recorded agreement restricting the use of the property, or other mechanisms approved by HUD in writing, under which the participating jurisdiction has the right to require specific performance (except that the participating jurisdiction may provide that the affordability requirements may terminate upon foreclosure or transfer in lieu of foreclosure); and
(iii) Must be recorded in accordance with State recordation laws.
(2) The participating jurisdiction may use purchase options, rights of first refusal, or other preemptive rights to purchase the housing before foreclosure or deed in lieu of foreclosure in order to preserve affordability.
(3) The affordability restrictions shall be revived according to the original terms if, during the original period of affordability, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the project or property.
(4) The termination of the affordability requirements on the project does not terminate the participating jurisdiction's repayment obligation under § 92.503(b).
(e)
(2) The participating jurisdiction must provide project owners with information on updated HOME rent limits so that rents may be adjusted (not to exceed the rent limits in paragraph (a) of this section) in accordance with the written agreement between the participating jurisdiction and the owner. Owners must annually provide the participating jurisdiction with information on rents and occupancy of HOME-assisted units to demonstrate compliance with this section. The participating jurisdiction must review rents for compliance and approve or disapprove them every year.
(3) Any increase in rents for HOME-assisted units is subject to the provisions of outstanding leases, and in any event, the owner must provide tenants of those units not less than 60 days prior written notice before implementing any increase in rents.
(f)
(2) HUD may adjust the HOME rent limits for a project, only if HUD finds that an adjustment is necessary to support the continued financial viability of the project and only by an amount that HUD determines is necessary to maintain continued financial viability of the project. HUD expects that this authority will be used sparingly.
(g)
(1) A participating jurisdiction may permit an owner of small-scale housing to re-examine each tenant's annual income in accordance with the chart in this paragraph (g)(1), instead of annually, during the period of affordability.
(2) A participating jurisdiction that permits an owner of a rental project (including small-scale housing projects) with a period of affordability of ten years or more to re-examine a tenant's annual income through a statement and certification in accordance with § 92.203(b)(1)(ii), must require the owner to re-examine the income of each tenant, in accordance with § 92.203(b)(1)(i), at minimum, every sixth year during the period of affordability; and,
(3) If the participating jurisdiction accepts an annual income determination pursuant to § 92.203(a)(1), (2), or (3), an owner is not required to re-examine a tenant's annual income in accordance with § 92.203(b) for HOME.
(h)
(2) A tenant who no longer qualifies as low-income must pay a rent amount equal to the lesser of the amount payable by the tenant under State or local law or 30 percent of the family's adjusted income, except that:
(i) A tenant of a HOME-assisted unit subject to rent restrictions under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42) must pay a rent amount that complies with that section;
(ii) A tenant in a HOME-assisted unit designated as floating pursuant to paragraph (j) of this section shall pay a rent amount no greater than the fair market rent for comparable, unassisted units in the neighborhood; and
(iii) The rent limits do not apply to any rental assistance or subsidy payment provided under a Federal, State, or local rental assistance or subsidy program.
(i)
(j)
(k)
(l)
(a)
(i) More than one convenient and accessible method to communicate directly with the owner or the property management staff, including in person, by telephone, email, or through a web portal;
(ii) The participating jurisdiction's contact information for the HOME program;
(iii) The VAWA lease term/addendum required under § 92.359(e), except as otherwise provided by § 92.359(b); and
(iv)(A) For rental housing, the HOME rental housing tenancy addendum described in paragraph (b) of this section;
(B) For tenant-based rental assistance, the HOME tenant-based rental assistance tenancy addendum described in paragraph (c) of this section.
(2) For tenants receiving security deposit assistance only, there must be a written lease between the tenant and the owner that is for a period of not less than 1 year, unless by mutual agreement between the tenant and the owner, a shorter period is specified. The owner must provide the participating jurisdiction with a copy of the written lease before security deposit assistance is provided. The lease shall contain the HOME security deposit assistance tenancy addendum in paragraph (d) of this section.
(b)
(1)
(ii) With respect to maintenance and repairs to a housing unit, the owner shall:
(A) Provide tenants with written expected time frames for maintaining or repairing units as soon as practicable;
(B) Professionally maintain and repair units and the common areas of the project in accordance with the participating jurisdiction's property standards as soon as practicable; and
(C) Not charge a tenant for normal wear and tear or damage to the unit or common areas of a project unless due to negligence, recklessness, or intentional acts by the tenant.
(iii) If the owner is required to repair a life-threatening deficiency impacting the tenant, and the repairs cannot be completed on the day the life-threatening deficiency is identified, the tenant shall promptly be relocated into housing that is decent, safe, sanitary, and in good repair and that provides the same or a greater level of accessibility, or other physically suitable lodging, at no additional cost to the tenant, until the repairs are completed and where it may be necessary, reasonable accommodations must continue to be provided during the relocation;
(iv) The owner shall provide tenants with continued, uninterrupted utility service in projects with owner-controlled utility services unless the interruption is not within the control of the owner (
(2)
(ii) Except for shared housing, the tenant's household shall have the right to exclusive use and occupancy of the leased unit;
(iii) The owner may only enter the housing unit:
(A) When the owner provides reasonable advance notification to the tenant and enters during reasonable hours for the purpose of performing routine inspections and maintenance, for making improvement or repairs, or to show the housing unit for re-leasing. A written statement specifying the purpose of the owner's entry delivered to the housing unit at least 2 days before such entry is reasonable advance notification;
(B) At any time without advance notification when there is reasonable cause to believe that an emergency requiring entry to the unit exists; and
(C) The owner shall provide the tenant a written statement specifying the date, time, and purpose of entry if the tenant and all adult members of the household are absent from the housing unit at the time of entry or if the owner is entering the housing unit pursuant to paragraph (b)(2)(iii)(B) of this section.
(iv) The tenant's household shall have reasonable access to and use of the common areas of the project;
(v) Tenants shall be able to organize, create tenant associations, convene meetings, distribute literature, and post information; and
(vi) A tenant may not be required to accept supportive services that are offered unless the tenant is living in transitional housing and such supportive services are required in
(3)
(ii) An owner must notify tenants about changes affecting property ownership and management as follows:
(A) 30 calendar days before a sale or foreclosure, tenants must be notified of the impending sale or foreclosure of the property;
(B) Within 5 business days of any changes of ownership, tenants must be notified of the change in ownership;
(C) Within 5 business days of any change in the property management company managing the property, tenants must be notified of the change in management company; and
(iii) The owner may not institute a lawsuit against the tenant without providing notice to the tenant.
(4)
(ii) The owner may not take, hold, or sell personal property of a household member without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the unit. The owner may dispose of this personal property in accordance with State law;
(iii) The tenant may hold the owner or the owner's agents legally responsible for any action or failure to act, whether intentional or negligent;
(iv) In any legal proceedings involving tenant and owner, the owner and tenant agree that the tenant shall be able to exercise the tenant's right to:
(A) Obtain independent legal representation in any legal proceedings in connection with the lease, including in any non-binding arbitration or alternative dispute resolution process;
(B) Have a trial by jury where such right is available to a tenant under Federal, State, or local law; and
(C) Appeal, or to otherwise challenge in court, a court decision in connection with the lease where such right is available to the tenant under Federal, State, or local law;
(v) The tenant may only be required to pay the owner's attorney's fees or other legal costs if the tenant loses in a court proceeding between the owner and the tenant and the court so orders.
(5)
(ii) An owner may not retaliate against a tenant for taking any action allowable under the lease and applicable law.
(iii) Actions that evidence unreasonable interference or retaliation against a tenant include actions taken for the purpose of causing the housing to become vacant or otherwise, including but not limited to:
(A) Recovery of, or attempt to recover, possession of the housing unit in a manner that is not in accordance with paragraph (b)(10) of this section;
(B) Decreasing services to the housing unit (
(C) Interfering with a tenant's right to privacy under applicable State or local law;
(D) Harassing a household or their lawful guests; and
(E) Refusing to honor the terms of the lease.
(iv) If an owner unreasonably interferes or retaliates against a tenant, then this shall constitute a material breach under the lease, a violation of HOME program requirements, and a breach of the written agreement between the owner and the participating jurisdiction. A tenant may use evidence of such unreasonable interference or retaliation in a court of law, and the participating jurisdiction must take reasonable actions to address any violation in accordance with the participating jurisdiction's responsibilities under § 92.504(a) and (c).
(6)
(i) Reporting inadequate housing conditions of the housing unit or project to the owner, the participating jurisdiction, code enforcement officials, or HUD;
(ii) Reporting lease violations and requesting enforcement of the written lease or any protections guaranteed under this part; and
(iii) Requesting or obtaining enforcement of any applicable protections under Federal, State, or local law.
(7)
(8)
(9)
(10)
(A) Other good cause does not include a change in the tenant's income or assets or the amount or type of income or assets the tenant possesses. Good cause does not include refusal of the tenant to purchase the housing unless the tenant is refusing to purchase the housing pursuant to their lease-purchase agreement.
(B) Other good cause includes:
(
(
(
(
(
(C) An owner may establish good cause for a violation of an applicable Federal, State, or local law through a record of conviction of a crime that directly threatens the health, safety, or right to peaceful enjoyment of the premises by other tenants in the project. The owner shall not use a record of arrest, parole or probation, or current indictment to establish such a violation.
(ii) To terminate or refuse to renew tenancy, the owner must serve written notice upon the tenant specifying the grounds for the action at least 30 days before the termination of tenancy and provide a copy of the notice to vacate to the participating jurisdiction within 5 business days of issuing notice to the tenant. The minimum 30-day period is not required if the termination of tenancy or refusal to renew is due to a direct threat to the safety of the tenants or employees of the housing or an imminent and serious threat to the property and the termination of tenancy or refusal to renew is in accordance with the requirements of § 92.253(b)(10)(iii).
(iii) The termination of tenancy or refusal to renew must be in accordance with Federal, State, local law, and the requirements of this part, including but not limited to requirements regarding fair housing, nondiscrimination, and VAWA;
(iv) An owner may not terminate the tenancy or evict the tenant or household members without instituting a civil court proceeding in which the tenant or household member has the opportunity to present a defense, or before a court decision on the rights of the parties; and
(v) An owner may not perform a constructive eviction such as locking a tenant out of their unit or stopping service on utilities servicing the tenant's unit. An owner may not create a hostile living environment or refuse to provide a reasonable accommodation in order to cause a tenant to terminate their tenancy in a HOME-assisted unit.
(c)
(1)
(ii) With respect to maintenance and repairs to a housing unit, the owner shall:
(A) Provide the tenant with written expected time frames for maintaining or repairing units as soon as practicable;
(B) Professionally maintain and repair units in accordance with the participating jurisdiction's property standards as soon as practicable; and
(C) Not charge the tenant for normal wear and tear or damage to the unit or common areas of the property unless due to negligence, recklessness, or intentional acts by the tenant.
(iii) The owner shall provide the tenant with continued, uninterrupted utility service in a property with owner-controlled utility services unless the interruption is not within the control of the owner (
(2)
(ii) Except for shared housing, the tenant's household shall have the right to exclusive use and occupancy of the leased unit;
(iii) The owner may only enter the housing unit:
(A) When the owner provides reasonable advance notification to the tenant and enters during reasonable hours for the purpose of performing routine inspections and maintenance, for making improvement or repairs, or to show the housing unit for re-leasing. A written statement specifying the purpose of the owner's entry delivered to the housing unit at least 2 days before such entry is reasonable advance notification;
(B) At any time without advance notification when there is reasonable cause to believe that an emergency requiring entry to the unit exists; and
(C) The owner shall provide the tenant a written statement specifying the date, time, and purpose of entry if the tenant and all adult members of the household are absent from the housing unit at the time of entry or if the owner is entering the housing unit pursuant to paragraph (c)(2)(iii)(B) of this section;
(iv) The tenant's household shall have reasonable access to and use of the common areas of the property; and
(v) A tenant may not be required to accept supportive services that are offered unless the tenant is living in transitional housing and such supportive services are required in connection with the transitional housing.
(3)
(ii) An owner must notify the tenant about changes affecting property ownership and management as follows:
(A) Thirty (30) calendar days before a sale or foreclosure, tenants must be
(B) Within 5 business days of any changes of ownership, tenants must be notified of the change in ownership;
(C) Within 5 business days of any change in the property management company managing the property, tenants must be notified of the change in management company; and
(iii) The owner may not institute a lawsuit against the tenant without providing notice to the tenant.
(4)
(ii) The owner may not take, hold, or sell personal property of a household member without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the unit. The owner may dispose of this personal property in accordance with State law;
(iii) The tenant may hold the owner or the owner's agents legally responsible for any action or failure to act, whether intentional or negligent;
(iv) In any legal proceedings involving tenant and owner, the owner and tenant agree that the tenant shall be able to exercise the tenant's right to:
(A) Obtain independent legal representation in any legal proceedings in connection with the lease, including in any non-binding arbitration or alternative dispute resolution process;
(B) Have a trial by jury where such right is available to a tenant under Federal, State, or local law; and
(C) Appeal, or to otherwise challenge in court, a court decision in connection with the lease where such right is available to the tenant under Federal, State, or local law;
(v) The tenant may only be required to pay the owner's attorney's fees or other legal costs if the tenant loses in a court proceeding between the owner and the tenant and the court so orders.
(5)
(ii) An owner may not retaliate against a tenant for taking any action allowable under the lease and applicable law.
(iii) Actions that evidence unreasonable interference or retaliation against a tenant include actions taken for the purpose of causing the housing to become vacant or otherwise, including but not limited to:
(A) Recovery of, or attempt to recover, possession of the housing unit in a manner that is not in accordance with paragraph (c)(10) of this section;
(B) Decreasing services to the housing unit (
(C) Interfering with a tenant's right to privacy under applicable State or local law;
(D) Harassing a household or their lawful guests; and
(E) Refusing to honor the terms of the lease.
(iv) If an owner unreasonably interferes or retaliates against a tenant, then this shall constitute a material breach under the lease, a violation of HOME program requirements, and a breach of the written agreement between the owner and the participating jurisdiction. A tenant may use evidence of such unreasonable interference or retaliation in a court of law, and the participating jurisdiction must take reasonable actions to address any violation in accordance with the participating jurisdiction's responsibilities under § 92.504(a) and (c).
(6)
(i) Reporting inadequate housing conditions of the housing unit or property to the owner, the participating jurisdiction, code enforcement officials, or HUD;
(ii) Reporting lease violations and requesting enforcement of the written lease or any protections guaranteed under this part; and
(iii) Requesting or obtaining enforcement of any applicable protections under Federal, State, or local law.
(7)
(8)
(9)
(ii) For tenants that are already under a lease and have already fulfilled the security deposit requirements under the lease before entering into a rental assistance contract to receive tenant-based rental assistance, the provisions of paragraph (c)(9)(i) of this section do not apply.
(10)
(A) Other good cause does not include a change in the tenant's income or assets or the amount or type of income or assets the tenant possesses. Good cause does not include refusal of the tenant to purchase the housing unless the tenant is refusing to purchase the housing pursuant to their lease-purchase agreement.
(B) Good cause includes:
(
(
(
(
(
(
(
(
(ii) To terminate or refuse to renew tenancy, the owner must serve a written notice to vacate upon the tenant specifying the grounds for the action at least 30 days before the termination of tenancy and provide a copy of the notice to vacate to the participating jurisdiction in accordance with the rental assistance contract or the participating jurisdiction's policies and procedures. The minimum 30-day period is not required if the termination of tenancy or refusal to renew is due to a direct threat to the safety of the tenants or employees of the housing or an imminent and serious threat to the property and the termination of tenancy or refusal to renew is in accordance with the requirements of § 92.253(c)(10)(iii).
(iii) The termination of tenancy or refusal to renew must be in accordance with Federal, State, local law, and the requirements of this part, including but not limited to requirements regarding fair housing, nondiscrimination, and VAWA.
(iv) An owner may not perform a constructive eviction such as locking a tenant out of their unit or stopping service on utilities servicing the tenant's unit. An owner may not create a hostile living environment or refuse to provide a reasonable accommodation in order to cause a tenant to terminate their tenancy in a HOME-assisted unit.
(d)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(e)
(1) Limit the housing to very low-income and low-income families;
(2) Are reasonably related to the applicants' ability to perform the obligations of the lease (
(3) Limit eligibility or give a preference to a particular segment of the population if permitted in its written agreement with the participating jurisdiction (and only if the limitation or preference is described in the participating jurisdiction's consolidated plan).
(i) Any limitation or preference must not violate nondiscrimination requirements in § 92.350. A limitation or preference does not violate nondiscrimination requirements if the housing also receives funding from a Federal program that limits eligibility to a particular segment of the population (
(ii) If a project does not receive funding from a Federal program that limits eligibility to a particular segment of the population, the project may have a limitation or preference for persons with disabilities who need services offered at a project only if:
(A) The limitation or preference is limited to the population of families (including individuals) with disabilities that significantly interfere with their ability to obtain and maintain housing;
(B) Such families will not be able to obtain or maintain themselves in housing without appropriate supportive services; and
(C) The families must not be required to accept the services offered at the project. The owner may advertise the project as offering various supportive services, including a description of the specific supportive services available. The project must be open to all eligible persons with disabilities.
(4) Do not exclude an applicant with Federal, State, or local tenant-based rental assistance, such as an applicant with a voucher under the Housing Choice Voucher Program (24 CFR part 982) or an applicant participating in a HOME tenant-based rental assistance
(5) Except for small-scale housing, provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable. The participating jurisdiction may establish alternative procedures to a written waiting list for the selection of tenants in small-scale housing;
(6) Give prompt written notification to any rejected applicant of the grounds for any rejection;
(7) Comply with the VAWA requirements prescribed in § 92.359; and
(8) Comply with the nondiscrimination requirements prescribed in § 92.350.
(f)
The revisions and additions read as follows:
(a) * * *
(2) * * *
(iii) If a participating jurisdiction intends to use HOME funds for homebuyer assistance or for the rehabilitation of owner-occupied single family properties, the participating jurisdiction must use the HOME affordable homeownership limits provided by HUD for newly constructed housing and for existing housing.
(A) HUD will provide limits for affordable newly constructed housing based on 95 percent of the median purchase price for the area using Federal Housing Administration (FHA) single family mortgage program data for newly constructed housing, with a minimum limit based on 95 percent of the U.S. median purchase price for new construction for nonmetropolitan areas.
(B) HUD will provide limits for affordable existing housing based on 95 percent of the median area purchase price for the area using FHA single family mortgage program data for existing housing and other appropriate data that are available Nation-wide for purchase of existing housing, with a minimum limit based on 95 percent of the State-wide nonmetropolitan area median area purchase price using this data.
(iv) In lieu of the limits provided by HUD, the participating jurisdiction may determine 95 percent of the median area purchase price for single family housing in the jurisdiction annually, as follows:
(A) The participating jurisdiction must set forth the limits for single family housing of one, two, three, and four units, for the jurisdiction. The participating jurisdiction may determine separate limits for existing housing and newly constructed housing.
(B) For the limits on housing located outside of metropolitan areas, a State may aggregate sales data from more than one county if the counties are contiguous and similarly situated.
(C) The participating jurisdiction must include the following information in the annual action plan of the Consolidated Plan submitted to HUD for review and must update the information in each action plan.
(
(
(
(
(
(3) The housing must be acquired by a homebuyer whose family qualifies as a low-income family, and the housing must be the principal residence of the family throughout the period described in paragraph (a)(4) of this section. If there is no ratified sales contract with an eligible homebuyer for the housing within 12 months of the date of completion of construction or rehabilitation, the housing must be rented to an eligible tenant as affordable rental housing and must comply with the requirements in § 92.252, including the period of affordability in § 92.252(d). In determining the income eligibility of the family, the participating jurisdiction must include the income of all persons living in the housing. The homebuyer must receive housing counseling. If housing is being purchased by an in-place tenant pursuant to § 92.255, then the housing may be acquired if the homebuyer's family was low-income at the time the homebuyer's family began occupying the HOME rental housing unit. If the housing does not meet the participating jurisdiction's property standards in § 92.251 at the time of acquisition, then the housing may still be acquired if the written agreement between the participating jurisdiction and the homebuyer requires the property to meet the standards within the period specified in § 92.251(c)(3)(ii) and funding is secured to complete the rehabilitation necessary to comply with the standards.
(4)
(5) * * *
(i)
(A) Permissible methods of determining fair return and the resale price include but are not limited to the following:
(
(
(
(
(B) Except as provided in paragraph (a)(5)(i)(C) of this section, deed or use restrictions, a recorded agreement restricting the use of the property, liens on real property, covenants running with the land, or other similar mechanisms approved by HUD in writing must be used to impose the resale requirements.
(C) The affordability restrictions may terminate upon occurrence of any of the following termination events: foreclosure, transfer in lieu of foreclosure, or assignment of an FHA-insured mortgage to HUD. If the owner of record before the termination event obtains an ownership interest in the property after the termination event, then the affordability restrictions shall be revived under the same terms prior to the termination event, including a minimum period of affordability equal to the terminated period of affordability.
(D) Certain housing may be presumed to meet the resale restrictions (
(ii)
(B) The following options for recapture requirements are acceptable to HUD. The participating jurisdiction may adopt, modify, or develop its own recapture requirements for HUD approval. In establishing its recapture requirements, the participating jurisdiction is subject to the limitation that when the recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, the amount recaptured cannot exceed the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than HOME funds) and any closing costs.
(
(
(
(
(
(6)
(7)
(i) The homebuyer must qualify as a low-income family at the time of signing the lease-purchase agreement. In determining the income eligibility of the family, the participating jurisdiction must include the income of all persons living in the housing. If a family is also receiving HOME tenant-based rental assistance, the participating jurisdiction is not required to reexamine the family's income during the term of the lease-purchase agreement.
(ii) The owner and homebuyer must execute a lease-purchase agreement under an existing lease-purchase program prior to occupancy of the unit. The lease-purchase agreement must require the purchase of the housing within 36 months of execution. Owners and homebuyers that have entered into a lease-purchase agreement pursuant to the requirements in this paragraph are
(iii) If the first homebuyer does not acquire the housing in accordance with the lease-purchase agreement, the owner must sell the housing to another eligible low-income homebuyer within 48 months from the execution of the original lease-purchase agreement. The next homebuyer is eligible for homeownership assistance from the participating jurisdiction. The owner is not permitted to sell the unit through another lease-purchase agreement. When the next homebuyer purchases the housing, the homebuyer shall be subject to the affordability requirements in this section.
(iv) If the owner is unable to sell the unit within 48 months from the execution of the lease-purchase agreement, the housing is subject to the requirements for affordable rental housing in § 92.252.
(8)
(b)
(1) The participating jurisdiction may exercise purchase options, rights of first refusal, or other preemptive rights to obtain ownership of the housing before foreclosure to preserve affordability, subject to the following requirements:
(i) The housing must be sold to an eligible homebuyer in accordance with paragraph (a)(3) of this section within 12 months of the date the participating jurisdiction obtains ownership;
(ii) The period of affordability for the eligible homebuyer must be equal to the remaining period of affordability of the former homeowner unless additional HOME funds are used to directly assist the eligible homebuyer (
(iii) If the participating jurisdiction directly assists the eligible homebuyer with additional HOME funds, then the period of affordability must be recalculated in accordance with the table in § 92.254(a)(4) based on the total amount of additional HOME funds invested. The additional investment must be treated as a new project; and
(iv) The total HOME funds for a project (original investment plus additional investment) must not exceed the per-unit subsidy limit in § 92.250(a) in effect at the time of the additional investment, subject to HUD approval.
(2) The participating jurisdiction may use additional HOME funds for the following costs:
(i) The cost for the participating jurisdiction to obtain ownership of the HOME-assisted housing through a purchase option, right of first refusal, or other preemptive right before foreclosure or at the foreclosure sale. This cost must be treated as an amendment to the original project. The foreclosure costs to acquire housing with a HOME loan in default is an eligible cost; however, HOME funds may not be used to repay a loan made with HOME funds.
(ii) The cost of the participating jurisdiction to undertake any necessary rehabilitation for the housing acquired. This includes the rehabilitation required for the housing to meet applicable property standards in § 92.251. This cost must be treated as an amendment to the original project.
(iii) The cost to the participating jurisdiction of owning the housing pending resale to another homebuyer. This cost must be treated as an amendment to the original project.
(iv) The cost to assist an eligible homebuyer in purchasing the housing. This cost must be treated as a cost for a new project and not as an amendment to the original project.
(v) As an alternative to charging costs to the HOME program under § 92.206, the participating jurisdiction may charge the costs to the HOME program under § 92.207 as a reasonable administrative cost of its HOME program. To the extent administrative funds are used, they may be reimbursed, in whole or in part, when the housing is sold to a new eligible homebuyer. If the housing is sold for more than the amount of administrative funds that the participating jurisdiction expended to preserve the affordability, then the excess sale proceeds shall be program income.
(3) The participating jurisdiction may permit the Community Land Trust, as defined in § 92.2, that originally developed the HOME-assisted housing, to exercise a purchase option, right of first refusal, or other preemptive right to obtain ownership of the housing to preserve affordability, including but not limited to the right to purchase the housing in lieu of foreclosure, under the following conditions:
(i) The Community Land Trust obtains ownership of the housing, subject to existing HOME affordability restrictions;
(ii) The housing must be resold to an eligible homebuyer in accordance with paragraph (a)(3) of this section within 12 months;
(iii) The period of affordability for the eligible homebuyer is equal to the remaining period of affordability of the former homeowner, unless the participating jurisdiction provides additional HOME funds to directly assist the eligible homebuyer in accordance with subparagraph (b)(3)(iv) below (
(iv) The participating jurisdiction may not provide additional HOME funds to the Community Land Trust to obtain ownership, rehabilitate the housing, own/hold the housing pending resale to the next homebuyer, or provide homeownership assistance to the next eligible homebuyer. The participating jurisdiction may provide homeownership assistance to the next eligible homebuyer and the period of affordability shall be based upon the homeownership assistance provided to the homebuyer, in accordance with subparagraphs (b)(1)(iii) and (b)(1)(iv) of this section.
(f)
(g) * * *
(1) Underwriting standards for homeownership assistance to determine the amount of assistance necessary to achieve sustainable homeownership. These standards must evaluate the projected overall debt of the family after the purchase of the housing, the maximum amount that a participating jurisdiction may provide a family, the appropriateness of the amount of assistance, assets available to a family to acquire the housing, and financial resources to sustain homeownership. A participating jurisdiction may not provide a single, fixed amount of assistance to each homebuyer that participates in the participating jurisdiction's homebuyer program;
(3) Refinancing loans to which HOME loans are subordinated to require that the terms of the new loan are reasonable.
(a) During a HOME-assisted rental unit's period of affordability, the participating jurisdiction may permit an owner to sell or otherwise convey a HOME-assisted rental unit to an existing tenant in accordance with the requirements of § 92.254. However, refusal by the tenant to purchase the housing does not constitute good cause for termination of tenancy or failure to renew the lease. The participating jurisdiction may not permit the use of a lease-purchase program under this section.
(b) If no additional HOME funds are used to enable the tenants to become homeowners, the homeownership units are subject to a period of affordability equal to the remaining period of affordability if the units continued as rental units. The participating jurisdiction must impose resale requirements that comply with § 92.254(a) for the required period of affordability. The period of affordability and resale restrictions must be applied to the property regardless of the income of the family at purchase. If the tenant's family is no longer low-income at the time of the purchase, then the family must occupy the housing as a principal residence in accordance with § 92.254(a)(3) and must agree to the imposition of resale restrictions on the housing, in accordance with § 92.254(a)(5), for the period of affordability specified in this paragraph (b).
(c) If additional HOME funds are used to directly assist the tenants to become homeowners, the period of affordability is the remaining period of affordability if the unit had remained a rental unit or the required period under § 92.254(a)(4) for the amount of direct homeownership assistance provided, whichever is longer. No additional HOME funds may be provided to an in-place tenant to become a homebuyer if the tenant's family is no longer low-income at the time of the purchase.
The revisions read as follows:
(a) * * *
(2) Rental housing is “owned” by the community housing development organization if the community housing development organization is the owner in fee simple absolute of rental housing (or has a long term ground lease running for the full period of affordability in § 92.252) leased to low-income families in accordance with § 92.252. If the housing is to be rehabilitated or constructed, the community housing development organization hires and oversees the developer that rehabilitates or constructs the housing. The community housing development organization must oversee or hire and contract with an experienced project manager to oversee all aspects of the development, including obtaining zoning, securing non-HOME financing, selecting a developer or general contractor, overseeing the progress of the work, and determining the reasonableness of costs. The community housing development organization must own the rental housing during development and for a period at least equal to the period of affordability in § 92.252. If the CHDO acquires housing that meets the property standards in § 92.251, the CHDO must own the rental housing for a period at least equal to the period of affordability in § 92.252.
(3) Rental housing is “developed” by the community housing development organization if the community housing development organization is the owner in fee simple absolute (or has a long term ground lease running for the full period of affordability in § 92.252) and the developer of new housing that will be constructed or existing substandard housing that will be rehabilitated for rent to low-income families in accordance with § 92.252. To be the “developer,” the community housing development organization may share developer responsibilities with another entity but must be in charge of all aspects of the development process, including selecting the site, obtaining permit approvals and all project financing, selecting architects, engineers, and general contractors, overseeing project progress, and determining the reasonableness of costs. The requirement that a community housing development organization is in charge of all aspects of the development process must be enforceable through a written agreement (
(4) Rental housing is “sponsored” by the community housing development organization if it is rental housing “owned” or “developed” in accordance with paragraph (a)(2) or (3) of this section, as applicable, by a subsidiary of a community housing development organization, a limited partnership of which the community housing development organization or its subsidiary is the managing general partner, or a limited liability company
(i) The subsidiary of the community housing development organization may be a for-profit or nonprofit organization and must be wholly owned by the community housing development organization. If the limited partnership or limited liability company agreement permits the community housing development organization or its subsidiary to be removed as the managing general partner or managing member, the agreement must provide that the removal must be for cause and that the community housing development organization must be replaced with another community housing development organization.
(ii) The HOME funds must be provided by the participating jurisdiction directly to the entity that owns the project.
(5) HOME-assisted rental housing is also “sponsored” by a community housing development organization if the community housing development organization “developed” the rental housing project in accordance with paragraph (a)(3) of this section and agrees to convey the project to an identified private nonprofit organization at a predetermined time after completion of the project. Sponsored rental housing, as provided in this paragraph (a)(5), is subject to the following requirements:
(6) * * *
(i) To be the “developer,” the community housing development organization may share the developer role with another entity but must be in charge of all aspects of the development process, including selecting the site, obtaining permit approvals and all project financing, selecting architects, engineers, and general contractors, overseeing project progress, determining the reasonableness of costs, identifying eligible homebuyers, and overseeing the sale of homeownership units. The community housing development organization may provide direct homeownership assistance (
(ii) * * *
(A) While proceeds retained by the community housing development organization are not subject to the requirements of this part, the participating jurisdiction must specify in the written agreement with the community housing development organization whether the proceeds are to be used for HOME-eligible activities or other housing activities to benefit low-income families.
(7) The participating jurisdiction must determine the form of assistance (
(b) * * * If during the first 24 months of its participation in the HOME Program a participating jurisdiction cannot identify a sufficient number of capable community housing development organizations, up to 20 percent of the minimum community housing development organization set aside specified in paragraph (a) of this section (but not more than $150,000 during the 24 month period) may be committed to an organization that meets the definition of “community housing development organization” in § 92.2, except for the requirements in paragraph (9) of the definition, in order to develop demonstrated capacity and qualify as a community housing development organization in the jurisdiction.
(f) The participating jurisdiction must ensure that a community housing development organization does not receive HOME funding for any fiscal year in an amount that provides more than $50,000 or 50 percent of the community housing development organization's total operating expenses in that fiscal year, whichever is greater. * * *
HUD is authorized to provide education and organizational support assistance, in conjunction with HOME funds made available to community housing development organizations in accordance with section 233 of the Act.
(a) HUD will issue a publication in the
(b) Notwithstanding the definition of “community land trust” in § 92.2, HUD may provide housing education and organizational support assistance under this section to a community land trust only if the following requirements are met:
(1) The community land trust meets the definition of a “community housing development organization” at § 92.2, except for the requirements in paragraphs (9) and (10) of the definition.
(2) The community land trust is established to complete the activities in paragraph (b)(3) of this section.
(3) The community land trust:
(i) Acquires land to hold in perpetuity and primarily for conveyance under long-term ground leases;
(ii) Transfers ownership of any structural improvements located on such leased land to the lessees; and
(iii) Retains a preemptive option to purchase any such structural improvement at a price determined by formula that is designed to ensure that the improvement remains affordable to low- and moderate-income families in perpetuity;
(4) The community land trust's corporate membership is open to residents of a particular geographic area, as specified in the organization's bylaws; and
(5) The board of directors:
(i) Includes a majority of members who are elected by the corporate membership; and
(ii) Is composed of equal numbers of lessees pursuant to paragraph (b)(2)(ii), members who are not lessees, and any other category of persons described in the organization's bylaws.
The revision reads as follows:
(c) * * *
(2) * * *
(ii) * * *
(C) For purposes of the URA, the person meets the definition of “persons not displaced” as defined in 49 CFR 24.2; or
The revisions and additions read as follows:
(d) * * *
(1) A disclosure of the nature of the conflict, accompanied by an assurance that there has been public disclosure of the conflict (public disclosure is considered a combination of at least two of the following: publication on the recipient's website, including social media; electronic mailings; media advertisements; public service announcements; and display in public areas such as libraries, grocery store bulletin boards, and neighborhood centers), evidence of the public disclosure, and a description of how the public disclosure was made; and
(e) * * *
(2) Whether an opportunity was provided for open competitive bidding or negotiation;
The addition reads as follows:
(a) * * *
(5) Any HOME funds available for reallocation as a result of any reductions under 24 CFR 92.551 or 92.552.
(c) * * *
(2) * * *
(ii) The statute or local ordinance requires repayments from its own affordable housing trust fund to be made to the local account;
The revisions read as follows:
(b)
(d) * * *
(1) Complete project completion information must be entered into the disbursement and information system, or otherwise provided to HUD.
(2) Additional HOME funds may be committed to a project up to one year after project completion, but the amount of HOME funds in the project may not exceed the maximum per-unit subsidy amount established under § 92.250 at the time of underwriting.
The revisions and republication read as follows:
(b)
(c)
(1)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(3)
(i)
(ii)
(A) If an owner is undertaking a rental project, the agreement must establish the initial rents, the procedures for rent increases pursuant to § 92.252(e)(2), the number of HOME units, the size of the HOME units, the designation of the HOME units as fixed or floating, and include the requirement that the owner provide the address (
(B) If the owner is undertaking a homeownership project for sale to homebuyers in accordance with § 92.254(a), the agreement must set forth the resale or recapture requirements that must be imposed on the housing, the
(iii)
(iv)
(v)
(A) The agreement must specify the owner's affirmative marketing responsibilities as enumerated by the participating jurisdiction in accordance with § 92.351.
(B) The Federal and nondiscrimination requirements in § 92.350.
(C) Any displacement, relocation, and acquisition requirements imposed by the participating jurisdiction consistent with § 92.353.
(D) The labor requirements in § 92.354.
(E) The conflict of interest provisions prescribed in § 92.356(f).
(F) If HOME funds are being provided to develop rental housing, the agreement must set forth all obligations the participating jurisdiction imposes on the owner in order to meet the VAWA requirements under § 92.359, including the owner's notice obligations and owner obligations under the emergency transfer plan.
(vi)
(vii)
(viii)
(ix)
(x)
(4)
(i)
(ii)
(iii)
(5)
(i) For homebuyers, the agreement must contain the requirements in § 92.254(a), the value of the property, principal residence, lease-purchase, if applicable, and the resale or recapture provisions.
(A) The agreement must specify the amount of HOME funds, the form of assistance, (
(B) For existing housing that is acquired for homeownership, the agreement must require the participating jurisdiction to inspect the housing to determine that the project meets the property standards in § 92.251 and require compliance with the requirements in § 92.251(c)(3).
(ii) For homeowners, the agreement must contain the requirements in § 92.254(b) and specify the amount and form of HOME assistance, rehabilitation work to be undertaken, date for completion, and property standards to be met.
(iii) For tenants or owners receiving payments under a HOME tenant-based rental assistance program, the rental assistance contract or the security deposit assistance contract must meet the requirements in § 92.209 and applicable requirements in § 92.253.
(6)
(i)
(A)
(B)
(
(C)
(
(
(
(
(ii)
(iii)
(7)
The requirements of 2 CFR part 200 apply to participating jurisdictions, State recipients, and subrecipients receiving HOME funds, except for the following provisions: §§ 200.306, 200.307, 200.308 (not applicable to participating jurisdictions), 200.311 (except as provided in § 92.257), 200.312, 200.328, 200.330, 200.334, 200.335, and 200.344 (except as provided in § 92.507). * * *
This section specifies the procedure and actions that must be completed by a participating jurisdiction and HUD to closeout a grant. The requirements of 2 CFR 200.344 apply to closeouts, except to the extent that such requirements conflict with the following:
(a)
(2) To prepare for closeout, before the end of the budget period of the grant, the participating jurisdiction shall. review all eligible activities under the grant and reconcile its accounts as follows:
(i) For any eligible costs incurred under the grant and not yet drawn down from the U.S. Treasury account, the grantee must draw down those funds in a timely manner.
(ii) The participating jurisdiction must promptly refund to the proper accounts any previously disbursed balances of unobligated cash paid in advance. All such refunds must be completed prior to submission of the information and reports required in paragraph (b) of this section.
(3) At the end of the grant budget period, no additional eligible activities may be undertaken by the participating jurisdiction using the grant funds and no additional eligible costs incurred after the budget period may be submitted by the participating jurisdiction. Unused funds remaining on the grant will be returned to the U.S. Treasury by HUD. The participating jurisdiction must promptly refund any unused grant funds not authorized to be retained, consistent with HUD's instructions.
(4) HUD will initiate closeout actions in the computerized disbursement and information system when the participating jurisdiction has met the requirements established in paragraph (b) of this section.
(i) If the participating jurisdiction does not submit and enter all required data, information, and reports or complete the actions described in paragraph (b) of this section, HUD will proceed to close out the grant with the information available within one year of the period of performance end date.
(ii) HUD may report the participating jurisdiction's material failure to comply with the terms and conditions of the award or requirements or the requirements of this section in
(5) A participating jurisdiction may request, and HUD may provide an extension of the period of performance or closeout deadlines provided good cause is demonstrated.
(b)
(1) Submit a complete and final Federal Financial Report for the grant to HUD within 120 days of the end date of the period of performance, as indicated in the grant agreement;
(2) Demonstrate that it has fulfilled all programmatic and administrative requirements for the project (
(3) Enter all data for activities in the computerized disbursement and information system established by HUD, within one year from the end of the period of performance, as required by the grant agreement;
(4) Demonstrate that all HOME-assisted units are occupied by eligible occupants by entering accurate beneficiary data in the computerized disbursement and information system established by HUD, within one year from the end of the period of performance, as required by the grant agreement;
(5) Comply with the requirements in 2 CFR 200.313(e) for the disposition of any equipment acquired under one or more HOME grants, that is no longer needed for the HOME program, or for other activities previously supported by a Federal agency;
(6) Resolve and close all HOME monitoring findings for the grant (if applicable);
(7) Resolve and close all OIG audit findings for the grant (if applicable);
(8) Resolve and close all Single Audit findings for the grant (if applicable);
(9) Carry out all other responsibilities under the grant agreement and applicable laws and regulations satisfactorily; and
(10) Complete a closeout certification prepared by HUD. The certification shall identify the grant being closed out and include provisions with respect to the following:
(i) Identification of any unused grant funds that were returned to the U.S. Treasury by HUD;
(ii) Compliance with the recordkeeping requirements in § 92.508, including maintaining program, project, financial, program administration, community housing development organization records, records concerning other Federal requirements, and such other records as necessary to carry out responsibilities for the grant by the participating jurisdiction, its State recipients, and subrecipients;
(iii) Monitoring and enforcement of the requirements for all HOME-assisted units set forth in this part for the period specified in the HOME written agreement with the property owner;
(iv) Compliance with use of program income, recaptured funds, and repayments in accordance with § 92.503. If the jurisdiction is not a participating jurisdiction (as a State, metropolitan city, urban county, consortium, or consortium member) when it receives funds, the funds are not subject to the requirements of this part;
(v) All actions required in 2 CFR 200.344 applicable to the grant have been taken by the participating jurisdiction;
(vi) All actions required in 2 CFR 200.344 applicable to the participating jurisdiction's subrecipients have been taken;
(vii) Other provisions appropriate to any special circumstances of the grant closeout, in modification of or in addition to the obligations in paragraphs (c)(1) and (2) of this section;
(viii) Acknowledge future monitoring by HUD, including that findings of noncompliance may be taken into account by HUD as unsatisfactory performance of the participating jurisdiction and in any risk-based assessment of a future grant award under this part; and
(ix) Unless otherwise provided in a closeout certification, the Consolidated Plan will remain in effect after closeout until the expiration of the program year covered by the most recent Consolidated Plan.
(c)
(1) The right of HUD to disallow costs and recover funds on the basis of a later audit or other review. HUD must make any cost disallowance determination and notify the participating jurisdiction within the record retention period;
(2) Compliance with the requirements in § 92.508;
(3) Compliance with the requirements in § 92.509;
(4) Records retention as required in 2 CFR 200.345, as applicable;
(5) Monitoring and enforcement of the requirements for all HOME-assisted units set forth in this part for the period of affordability specified in the HOME written agreement with the property owner;
(6) Compliance with use of program income, recaptured funds, and repayments in accordance with § 92.503. If the jurisdiction is not a participating jurisdiction (as a metropolitan city, urban county, State, consortium, or consortium member) when it receives funds, the funds are not subject to the requirements of this part;
(7) Compliance with the requirement in 2 CFR 200.345(a)(2) that the participating jurisdiction return any funds due as a result of a later refund, corrections, or other transactions including final indirect cost rate adjustments; and
(8) Compliance with the audit requirements at 2 CFR part 200, subpart F).
The revisions and additions read as follows:
(a) * * *
(2) * * *
(ix) * * * If the participating jurisdiction will apply excess matching contribution to a future fiscal year's liability, records demonstrating compliance with the matching requirements of §§ 92.218 through 92.221 for the excess amount applied, as described in § 92.221(b)(1), must be provided at the time of application and maintained for five years from the date of application.
(3) * * *
(iii) Records demonstrating that each rental housing or homeownership project meets the minimum per-unit subsidy amount of § 92.205(c), the maximum per-unit subsidy amount in accordance with the requirement in § 92.250(a), the subsidy layering and underwriting evaluation adopted in accordance with § 92.250(b), and, if applicable, compliance with a green building standard established by HUD in accordance with the requirements in § 92.250(c).
(vi) Records demonstrating that each tenant-based rental assistance project meets the written tenant selection policies and criteria of § 92.209(c), including any targeting requirements, the rent reasonableness requirements of § 92.209(f), the maximum subsidy provisions of § 92.209(h), housing standards of § 92.209(i) (including property inspection reports), security deposit requirements of § 92.209(j), and calculation of the HOME subsidy.
(vii) Records demonstrating that each rental housing project met the affordability and income targeting requirements of § 92.252 for the required period or met the requirements in § 92.255 for conversion to homeownership for in-place tenants. * * *
(ix) Records demonstrating that each lease for a tenant receiving tenant-based rental assistance, security deposit assistance, and for an assisted rental housing unit complies with the applicable tenant and participant protections of § 92.253. Records must be kept for each family.
(c) * * *
(3) A participating jurisdiction may request HUD reduce grant payments by an amount equal to the amount of expenditures that did not comply with the requirements of this part. The amount of a reduction may be for the entire grant amount.
(a) * * *
(2) * * *
(v) Reduce grant amounts paid to the participating jurisdiction by an amount equal to the amount of any expenditures that did not comply with the requirements of this part. The amount of a reduction may be for the entire grant amount;
(vi) Revoke a jurisdiction's designation as a participating jurisdiction; and
(vii) Terminate the assistance in whole or in part in accordance with 2 CFR 200.340.
12 U.S.C. 1701x, 1701 x-1; 42 U.S.C. 3535(d) and 5301-5320.
(h) * * *
(3) In a Federal fiscal year when an annual appropriation is signed into law less than 90 days before a grant recipient's program year start date, the effective date of the grant agreement will be the earlier of the recipient's program year start date or the date that the Consolidated Plan incorporating the recipient's allocation amount for the Federal fiscal year is received by HUD.
42 U.S.C. 1437f and 3535(d).
(c) * * *
(2)
(i) Reasonable rent; and
(ii) The payment standard established by the PHA for the unit size involved.
(3)
(i) Reasonable rent; and
(ii) The payment standard established by the PHA for the unit size involved.
Office for Civil Rights (OCR), Office of the Secretary, Department of Health and Human Services.
Notice of proposed rulemaking; notice of Tribal consultation.
The Department of Health and Human Services (HHS or “Department”) is issuing this notice of proposed rulemaking (NPRM) to solicit comment on its proposal to modify the Security Standards for the Protection of Electronic Protected Health Information (“Security Rule”) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act). The proposed modifications would revise existing standards to better protect the confidentiality, integrity, and availability of electronic protected health information (ePHI). The proposals in this NPRM would increase the cybersecurity for ePHI by revising the Security Rule to address: changes in the environment in which health care is provided; significant increases in breaches and cyberattacks; common deficiencies the Office for Civil Rights has observed in investigations into Security Rule compliance by covered entities and their business associates (collectively, “regulated entities”); other cybersecurity guidelines, best practices, methodologies, procedures, and processes; and court decisions that affect enforcement of the Security Rule.
You may submit comments, identified by RIN Number 0945-AA22, by any of the following methods. Please do not submit duplicate comments.
•
•
Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted.
Marissa Gordon-Nguyen at (202) 240-3110 or (800) 537-7697 (TDD), or by email at
The discussion below includes an Executive Summary, a description of relevant statutory and regulatory authority and history, the justification for this proposed regulation, a section-by-section description of the proposed modifications, and a regulatory impact analysis and other required regulatory analyses. The Department solicits public comment on all aspects of the proposed rule. The Department requests that persons commenting on the provisions of the proposed rule label their discussion of any particular provision or topic with a citation to the section of the proposed rule being addressed and identify the particular request for comment being addressed, if applicable.
In this notice of proposed rulemaking (NPRM), the Department of Health and Human Services (HHS or “Department”) proposes modifications to the Security Standards for the Protection of Electronic Protected Health Information (“Security Rule”), issued pursuant to section 262(a) of the Administrative Simplification provisions of title II, subtitle F, of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
The Security Rule was initially published in 2003 and most recently revised in 2013.
As discussed in greater detail below, in recent years, there has been an alarming growth in the number of breaches affecting 500 or more individuals reported to the Department, the overall number of individuals affected by such breaches, and the rampant escalation of cyberattacks using hacking and ransomware. The Department is concerned by the increasing numbers of breaches and other cybersecurity incidents experienced by regulated entities. We
In recognition of those potential harms and the health care sector's importance to the economy and security of the U.S., the President has designated “Healthcare and Public Health” as a critical infrastructure sector
In further recognition of these concerns, States have promulgated or are in the process of promulgating regulations that would require the adoption of certain standards or measures for the protection of sensitive information, such as PHI.
Under its statutory authority to administer and enforce the HIPAA Rules, the Department modifies the HIPAA Rules as needed, but does not modify a standard or implementation specification more than once every 12 months.
• Significant changes in technology.
• Changes in breach trends and cyberattacks.
• HHS' Office for Civil Rights' (OCR's) enforcement experience.
• Other guidelines, best practices, methodologies, procedures, and processes for protecting ePHI.
• Court decisions that affect enforcement of the Security Rule.
The effective date of a final rule would be 60 days after publication.
While we recognize that we are proposing to substantially revise the regulatory text, the Department believes that most of the existing Security Rule's obligations for regulated entities would not be substantially changed by the proposed modifications. Instead, the proposed modifications would explicitly codify those activities that are critical to protecting the security of ePHI as requirements and provide greater detail for such requirements in the regulatory text. For example, regulated entities are already required to conduct an accurate and thorough risk analysis. While not specified in the regulatory text of the Security Rule, an accurate and thorough risk analysis requires a regulated entity to perform an inventory of its technology assets, determine how ePHI moves through its information systems, and identify the locations within its information systems (or components thereof) where ePHI may be created, received, maintained, or transmitted. Applying such an approach protects ePHI across all phases of the data lifecycle consistent with the purpose of the Security Rule. The proposals to require a regulated entity to inventory its technology assets and map the movement of ePHI through its information systems would illuminate considerations to be included in the regulated entity's risk analysis.
As another example, implementing a mechanism to encrypt ePHI is an addressable implementation specification under the standard for access control at 45 CFR 164.312(a)(2)(iv). Under the existing Security Rule, a regulated entity must assess whether encryption is a reasonable and appropriate safeguard in its environment, when analyzed with reference to its likely contribution to protecting ePHI, and implement encryption if reasonable and appropriate.
Thus, most of the modifications we are proposing would provide regulated entities with greater clarity and specificity regarding how to fulfill their obligations and the Department's expectations.
Accordingly, we do not believe that the proposed rule would pose unique implementation challenges that would justify an extended compliance period (
To help reduce administrative burdens on regulated entities, the Department proposes to add a provision at 45 CFR 164.318 affording regulated entities a transition period (beyond the 180-day compliance period) to modify business associate contracts (herein referred to as “business associate agreements”) or other written arrangements
The Department seeks comment on the proposed compliance period and transition period.
As used in this preamble, the following terms and abbreviations have the meanings noted below.
In 1996, Congress enacted HIPAA
Congress recognized that the development of a health information system that enabled the electronic transmission of IIHI as required by HIPAA would pose risks to the privacy of confidential health information and viewed individual privacy, confidentiality, and data security as critical to support the shift from a paper-based recordkeeping system for health information to a digital one.
Congress applied the Administrative Simplification provisions directly to three types of persons referred to in regulation as covered entities: health plans, health care clearinghouses, and health care providers who transmit information electronically in connection with a transaction for which HHS has adopted a standard.
HIPAA required the Secretary to adopt uniform standards “to enable health information to be exchanged electronically.”
• The technical capabilities of record systems used to maintain health information.
• The costs of security measures.
• Training for persons who have access to health information.
• The value of audit trails in computerized record systems.
• The needs and capabilities of small health care providers and rural health care providers.
Congress contemplated that the Department's rulemaking authorities under HIPAA would not be static. In fact, Congress specifically built in a mechanism to adapt such regulations as technology and health care evolve, directing the Secretary to review and adopt modifications to the Administrative Simplification standards, including the security standards, as determined appropriate, but not more frequently than once every 12 months.
On February 17, 2009, Congress enacted the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act), part of the American Recovery and Reinvestment Act of 2009 (ARRA),
The HITECH Act's security requirements focused on safeguarding an individual's health information while allowing covered entities to rapidly adopt new technologies to improve the quality and efficiency of patient care.
In enacting the HITECH Act, Congress affirmed that the existing HIPAA Rules were to remain in effect to the extent that they are consistent with the HITECH Act and directed the Secretary to revise the HIPAA Rules as necessary for consistency with the HITECH Act.
In 2021, the HITECH Act was amended to require the HHS Secretary to further encourage regulated entities to bolster their cybersecurity practices.
The Security Rule requires regulated entities to implement administrative, physical, and technical safeguards to
The Administrative Simplification provisions of HIPAA instructed the Secretary to adopt several standards concerning electronic transmission of health information, including those for the security of health information.
In support of developing the national standards mandated under HIPAA's Administrative Simplification provisions, the Secretary, with significant input from the health care industry, defined a set of principles for guiding choices for the standards to be adopted by the Secretary.
In describing its general approach to the 1998 Proposed Rule, the Department defined the security standard as a set of requirements with implementation features that covered entities must include in their operations to assure the security of individuals' ePHI.
The 1998 Proposed Rule included four categories of requirements that a covered entity would have to address to safeguard the confidentiality, integrity, and availability of ePHI. They were as follows:
• Administrative procedures.
• Physical safeguards.
• Technical security services.
• Technical mechanisms.
The implementation specifications described some of the requirements in greater detail, based on our determination regarding the level of instruction necessary to implement such requirements.
The proposed standard did not address the extent to which a covered entity should implement the specifications.
The Department issued the final Security Rule
The Department reiterated the purposes and guiding principles it articulated in the 1998 Proposed Rule and repeated that the protection of the privacy of information depends in large part on the existence of security measures to protect that information.
Provisions of the 2003 Final Rule did not mirror the 1998 Proposed Rule; rather, the Department finalized only certain changes. The Department noted, for example, that to maintain consistency with the use of terms as they appear in the statute and other previously released HIPAA Rules (
According to the Department, the comments received in response to the 1998 Proposed Rule overwhelmingly validated its basic assumptions that the covered entities were so varied in terms of installed technology, size, resources, and relative risk, that it would be impossible to dictate a specific solution or set of solutions that would be usable by all covered entities.
We also recognized that entities could minimize risk through their security practices, but likely could never completely eliminate all risk. In the preamble to the 2003 Final Rule, the Department acknowledged that there is no such thing as a totally secure system that carries no risks to security.
In the 2003 Final Rule, the Department introduced the concept of “addressable” implementation specifications, which it distinguished from “required” implementation specifications. The goal was to provide covered entities with even more flexibility.
On October 7, 2003, the Secretary delegated authority for administering and enforcing the Security Rule to the Administrator of the Centers for Medicare & Medicaid Services (CMS).
Following the enactment of the HITECH Act, the Department issued an NPRM, entitled “Modifications to the HIPAA Privacy, Security, and Enforcement Rules Under the Health Information Technology for Economic and Clinical Health [HITECH] Act” (“2010 Proposed Rule”),
In 2013, the Department issued the final rule “Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical Health [HITECH] Act and the Genetic Information Nondiscrimination Act, and Other Modifications to the HIPAA Rules” (“2013 Omnibus Rule”),
For example, the Department modified the Security Rule to implement the HITECH Act's provisions that extended direct liability for compliance with the Security Rule to business associates.
The Department also adopted technical revisions to 45 CFR 164.306(e) to clarify that regulated entities must review and modify security measures as needed to ensure reasonable and appropriate protection of ePHI, and update documentation of security measures accordingly.
Finally, because the HITECH Act made business associates directly liable for compliance with the Security Rule, the 2013 Omnibus Rule modified the Security Rule to clarify that a covered entity is not required to obtain satisfactory assurance from a business associate that is a subcontractor that the subcontractor will appropriately safeguard its ePHI. Rather, the business
HIPAA and the HIPAA Rules promote access to high-quality and effective health care by establishing standards for the security of ePHI. The standards, when implemented appropriately by regulated entities, protect the confidentiality, integrity, and availability of individuals' health information. Such protections promote the electronic transmission of PHI through a national health information system. To ensure access to high-quality health care services, regulated entities must assure their customers (
As discussed above, the Security Rule carefully balances the benefits of safeguarding against security risks with the burdens of implementing protective measures by permitting regulated entities to consider several factors, including costs and available technology for preventing and mitigating security risks,
For example, the Security Rule requires that a regulated entity implement policies and procedures to limit physical access to its electronic information systems and the facilities in which they are housed, while ensuring that users who are authorized to access such information systems and facilities are permitted to do so.
Since the Security Rule's promulgation in 2003, the environment in which health care is provided and in which regulated entities operate has changed significantly, including transformative changes in how regulated entities create, receive, maintain, and transmit ePHI. For example, as of 2021, almost 80 percent of physician offices and 96 percent of hospitals had adopted certified EHRs.
Experts repeatedly have expressed concern regarding the state of cybersecurity in the health care industry.
Despite advancements in technology, including health IT, the core requirements of the Security Rule remain relevant and applicable today. In fact, they serve as a foundation for more recently promulgated cybersecurity guidelines, best practices, processes, and procedures. Security management, regular monitoring and review of information system activity, information access management, security awareness and training, contingency planning, encryption, and authentication all continue to be represented in the most well-known cybersecurity frameworks, including the NIST's Cybersecurity Framework,
While these concepts remain highly relevant and applicable, the Department has concerns regarding the sufficiency of the security measures implemented by regulated entities. OCR's experience investigating allegations of Security Rule violations, reports received by OCR of breaches of unsecured PHI, and the results of the audits conducted by OCR in 2016-2017 demonstrate that regulated entities are not consistently complying with the Security Rule's requirements.
And the Department is not alone in its concerns. NCVHS serves as the Department's advisory body for HIPAA.
Given the importance of strong security measures, the changed environment and operations for health care, uncertainty expressed by regulated entities regarding their compliance obligations, deficiencies identified by OCR in its investigations of regulated entities, and the recommendations of NCVHS, we believe that it is necessary and appropriate for the Department to propose modifications to clarify and strengthen the Security Rule.
A primary purpose of HIPAA's Administrative Simplification provisions
As discussed above, the Security Rule, as amended by the HITECH Act, specifically requires regulated entities to maintain reasonable and appropriate administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of ePHI; to protect against any reasonably anticipated threats or hazards to the security or integrity of ePHI and unauthorized uses or disclosures of ePHI; and ensure compliance with the Administrative Simplification provisions by officers and workforce members of regulated entities.
It is reasonable to anticipate that regulated entities will need to protect ePHI against cyberattacks and unauthorized uses and disclosures of ePHI by their workforce members. Experts estimate the costs to the U.S. from cyberattacks on health care facilities to be significant.
On the surface, the harms that result from a breach of ePHI or a cyberattack on a regulated entity's electronic information systems, as discussed above, are not significantly different than those that would result from a breach of information in another sector. However, the reality is, as discussed above, that the implications of such harms are far greater in the health care sector because of their potential to adversely affect an individual's health or quality of life, or even to cost an individual their life.
According to a Cybersecurity & Infrastructure Security Agency (CISA) statistical analysis of the effects of a hypothetical cyberattack on a model hospital, a hospital's relative performance will suffer amidst a cyberattack.
Cyberattacks can divert both human and machine resources, leading to process slowdowns, cancelled procedures, delayed hospital or unit lockdowns and transfers, increases in wait times for individuals, both increases and decreases in staff utilization, and a decrease in a health care provider's capacity.
In another example, a ransomware attack on an academic level 1 trauma center caused it to go without access to its EHR for 25 days,
These serious incidents and resulting effects demonstrate the importance of planning and preparing for a potential
The effects of a cyberattack are not limited to the regulated entity that experiences it and the individuals whose ePHI is compromised. Surveys conducted by various organizations representing health care providers indicate that an overwhelming majority of health care providers in the U.S. were affected by a ransomware attack on a large health care clearinghouse.
As discussed above, several industry organizations have published and maintained compilations of voluntary standards, guidelines, best practices, methodologies, procedures, and processes for protecting the security of sensitive and confidential information, including PHI. Additionally, certain Federal health programs now either require or recommend the adoption of specific criteria that are intended to protect the confidentiality, integrity, and availability of ePHI. For example, the Health IT Certification Program maintained by the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology (ASTP/ONC)
Additionally, as discussed above, several organizations have published and maintained compilations of voluntary standards, guidelines, best practices, methodologies, procedures, and processes for protecting the security of sensitive and confidential information, including PHI. These compilations and the State regulations discussed above range from granular
A major distinguishing factor between the content of the Security Rule and these compilations and regulations is the Security Rule's scope. The compilations and regulations are designed to protect various types of data and information systems broadly. In comparison, a defining quality of the Security Rule's requirements is that they focus specifically on the protection of ePHI and the information systems that create, receive, maintain, or transmit ePHI. Thus, while the foundational elements of various cybersecurity compilations and State regulations and the Security Rule may be the same, the Security Rule alone addresses the application of those elements to ePHI and all of the components of information systems that create, receive, maintain, or transmit ePHI. Thus, while the standards of the Security Rule generally align with those of other cybersecurity standards, frameworks, best practices, guidelines, processes, and procedures, the specific implementation specifications of the Security Rule reflect the particular sensitivities of the health care industry, particularly small and rural health care providers, in a way that is necessary to ultimately improve the efficiency and effectiveness of the health care system and avoid imposing unreasonable compliance burdens on regulated entities.
The health care sector has undergone a dramatic transformation over the last 24 years, and particularly in the past 10 years, spurred at least in part by the Department's implementation of HIPAA, the HITECH Act, and the Cures Act. The industry has shifted from one that generally relied upon a system of paper-based recordkeeping and siloed devices to one that depends on interconnected information systems to maintain and exchange patient records, conduct research, run health care provider facility management systems, and provide patient care.
Not only is PHI increasingly maintained and transmitted electronically, but treatment is also increasingly provided electronically. The coronavirus disease 2019 (COVID-19) pandemic led to a dramatic increase in the use of telemedicine.
It is not only the ePHI maintained in EHRs and other electronic recordkeeping systems that faces security risks. Medical equipment and devices are increasingly connected through one or more networks, which means that any issues affecting the network likely will affect the medical equipment and devices.
Cybercriminals may use—or target—technology assets, such as software or medical devices used for treating individuals. For example, in 2021, a cyberattack on cloud-based systems supplied by a particular company compromised the ePHI of more than 200,000 individuals and affected the software for linear accelerators used in radiotherapy, leading to disruptions to cancer treatment.
According to researchers at Brown University, medical devices are a prime target for cybercriminals. In fact, they believe, “More than just technically feasible, the widespread takedown of medical devices is an imminent threat.”
And then there are digital health applications. When an application is deployed by a covered entity, an application developer may be a business associate and subject to the Security Rule. An application developer may also meet the HIPAA Rules' definition of “health care provider”
EHRs, networked medical devices, and applications are only the beginning. Artificial intelligence (AI) in health care, particularly for diagnosis and treatment, is in the nascent stages of development, but many are eager to test its promise.
While the promise of these new technologies is exciting, they come with increased risks and vulnerabilities to ePHI and the information systems that create, receive, maintain, or transmit it. As noted by Executive Order (E.O.) 14110, “[AI] must be safe and secure. Meeting this goal requires [. . .] addressing AI systems' most pressing security risks—including with respect to biotechnology, cybersecurity, critical infrastructure, and other national security dangers—while navigating AI's opacity and complexity.”
While the health care industry has generally shifted from paper record-keeping and non-interoperable electronic devices to an interconnected electronic health care system, it has led to an increasing vulnerability to breaches of unsecured PHI resulting from unauthorized uses and disclosures and cyberattacks. According to an article published by the American Hospital Association Center for Health Innovation, “Health care organizations are particularly vulnerable and targeted by cyberattacks because they possess so much information of high monetary and intelligence value to cyber thieves and nation-state actors.”
Between 2018 and 2023, the number of breaches of unsecured PHI reported to the Department grew at an alarming rate (100 percent increase), as did the number of individuals affected by such breaches (950 percent increase).
In 2023, the Federal Bureau of Investigation's internet Crime Complaint Center received almost 250 reports of ransomware affecting the Healthcare and Public Health sector, the most of any of the 16 identified infrastructure sectors.
Many people, including regulated entities, inaccurately believe that only large regulated entities that maintain electronic records about millions of individuals are likely to face a cyberattack, and thus that it is less important for smaller regulated entities to invest resources in cybersecurity.
As explained in a recent national security memorandum, cybercriminals are targeting critical infrastructure (
External actors are not the only, or even the greatest, threat to the security of ePHI. According to a recent study, insiders were the second leading cause of breaches in the health care sector in 2023, exceeded only by “miscellaneous errors,” such as misdelivery.
Emergencies or other occurrences can affect the security of ePHI without an intentional act. For example, in 2024, CrowdStrike released a defective update for its software on computers running Microsoft Windows.
Despite the proliferation of cybersecurity standards, guidelines, best practices, methodologies, procedures, and processes and the documented increase in unauthorized uses and disclosures of ePHI, many regulated entities have been slow to strengthen their security measures to protect ePHI and their information systems that create, receive, maintain, or transmit it in this new environment.
In addition, many regulated entities fail to invest adequate resources in cybersecurity. Far too many regulated entities do not view cybersecurity as a necessary component of their operations that allows them to fulfill their health care missions. Anecdotal evidence suggests that senior management often lacks awareness of cybersecurity, including both threats and methods for protecting against such threats.
The security of ePHI also is at risk because, despite our explanation of the Security Rule's structure in 2003,
Recent enforcement actions provide evidence that the results of the 2016-2017 audits were not isolated cases. In 2023, OCR entered into seven resolution agreements with regulated entities after investigations indicated that they had potentially violated the Security Rule, constituting almost half of the total resolution agreements OCR entered into that year.
As another example, an OCR investigation of a large health care system found indications of multiple potential violations of the Security Rule, including failures by the regulated entity to conduct a risk analysis, monitor and safeguard its electronic information systems, and implement policies and procedures to record and examine activity in its electronic information systems containing ePHI.
Despite the long-standing nature of the Security Rule and the proliferation of guidance documents from NIST, the Department, CISA, FTC, and others, regulated entities continue to fail to implement reasonable and appropriate security measures as required by the Security Rule.
As another example, based on OCR's investigation experience, some regulated entities are not developing and implementing compliant response plans for security incidents, including those that are breaches of unsecured ePHI under the Breach Notification Rule. Section 164.308(a)(6)(i) establishes the standard that requires regulated entities to implement policies and procedures to address security incidents, while 45 CFR 164.308(a)(6)(ii) includes the implementation specifications for that standard. This requirement, included in the 2003 Final Rule, aligns with the NIST Cybersecurity Framework version 2.0 requirement for incident management.
We are also concerned that recent caselaw has not accurately set forth the steps regulated entities must take to adequately protect the confidentiality, integrity, and availability of ePHI, as required by the statute. Specifically, in the
Several technical safeguards currently require regulated entities to implement a “mechanism” as part of complying with the associated standard. Given that written policies and procedures alone are insufficient to protect ePHI, and the misinterpretation of what it means to implement a mechanism also could lead to inadequate protection of ePHI, the Department believes that the Security Rule must be revised, consistent with its statutory mandate, as discussed in greater detail above.
By requiring that regulated entities maintain reasonable and appropriate safeguards to protect against reasonably anticipated threats or hazards or unauthorized uses or disclosures of ePHI, Congress clearly anticipated that the administrative, physical, and technical safeguards implemented to protect the security of ePHI would need to change in response to changes in the environment in which health care is provided.
By design, the Security Rule sets a national floor for the security measures that regulated entities are required to implement to protect the confidentiality, integrity, and availability of ePHI. In 2003, the Department opted to frame the standards in terms that were as generic as possible and in a manner that enabled the standards to be met through various approaches or technologies to ensure that regulated entities had the flexibility to determine how best to protect the confidentiality, integrity, and availability of ePHI based on their specific circumstances.
Changes to the health care environment and the operations of regulated entities have increased the importance of implementing strong security measures to protect ePHI and the information systems that create, receive, maintain, or transmit it. While we recognize the burdens posed by such implementation on regulated entities, there is also a clearly documented increase in the number of breaches of unsecured PHI and instances of cybercriminals accessing ePHI without authorization at regulated entities. The changes to the health care environment, including the increase in breaches and cyberattacks, and operations of regulated entities have made it increasingly likely that unauthorized persons will seek to obtain ePHI and disrupt the U.S. health care system. Additionally, the clearly documented failure of regulated entities to fully implement the policies and procedures required by the Security Rule and apply the required security measures throughout their operations has caused the Department to question whether the existing Security Rule should be revised to clarify and strengthen the obligations of regulated entities and revisit our
The Department is not alone in believing that the Security Rule should be strengthened to address concerns about whether -regulated entities are sufficiently protecting the confidentiality, integrity, and availability of ePHI. An inquiry conducted by NCVHS between July 2021 and September 2023 reached the same conclusion.
• Eliminate from the addressable implementation specifications the choice not to implement a specification or alternative, and instead require regulated entities to implement the specification or adopt a documented reasonable alternative.
• Include specific minimum cybersecurity hygiene requirements that are reflective of modern industry best practices, including designation of a qualified information security official, elimination of default passwords, adoption of MFA, institution of offline backups, installation of critical patches within a reasonable time, and transparency of impact and vulnerability disclosures.
• Require that regulated entities implement a security program and that they implement standard minimum security controls.
• Require that regulated entities adopt a risk-based approach in their security program.
• Require that regulated entities perform a risk analysis in a manner that conforms with guidance from NIST and CISA.
• Define compensating controls more specifically and provide a wider range of examples that apply to a greater variety of types of entities.
• Reinforce the need for regulated entities to account for AI systems and data within their risk analysis for all and any new technology.
• Establish a consistent floor for cyber incident reporting and harmonize such requirements with incident reporting provisions applicable to health care critical infrastructure actors and health care Federal contractors.
The Department, in drafting this NPRM, relied on the recommendations of NCVHS, OCR's enforcement experience, news reports, and our assessment of the environment. Consistent with NCVHS' recommendation to revisit the Security Rule's classification of some implementation specifications as “addressable,” the Department also believes that it is appropriate to revisit our decision regarding the amount of flexibility regulated entities have in determining reasonable and appropriate safeguards, as described above. Based on OCR's experience in investigations and audits, we believe that regulated entities would benefit from greater specificity in the Security Rule. The Department has provided extensive guidance on questions to consider when adopting and implementing security measures and ways to comply with the Security Rule,
The Security Rule's fundamental flexibility and scalability generally would remain should the proposals in this NPRM be adopted. However, we are proposing to reduce that flexibility to better strengthen protections and address the changed nature of the environment in which health care is provided. The Department is also proposing in this NPRM to strengthen the Security Rule by providing greater clarity regarding the nature of its flexibility and scalability and the Department's expectations, as requested by regulated entities and other stakeholders. In fact, in response to a request for information published in 2022,
Under the proposal, regulated entities would retain the ability to determine the security measures that are reasonable and appropriate to fulfill the required standards and implementation specifications, taking into consideration the factors listed at proposed 45 CFR 164.306(b)(2). In fact, the NPRM, if adopted as proposed, would add to the rule's flexibility and scalability by adding a new factor for regulated entities to consider when determining the reasonable and appropriate security measures.
Additionally, if modifications are adopted as proposed, the Security Rule would remain flexible and scalable by retaining broad standards with which regulated entities could comply in a variety of ways. In 2003, the 13 implementation specifications that the Security Rule requires were considered so basic that no covered entity could effectively protect ePHI without implementing them.
We acknowledged in 2003 and again acknowledge here that “there is no such thing as a totally secure system that carries no risks to security.”
The statute requires that we consider the “needs and capabilities of small health care providers and rural health care providers (as such providers are defined by the Secretary).”
We continue to believe that it is just as important for small and rural health care providers to implement strong security measures as it is for larger health care providers and other categories of regulated entities. According to experts, “Cybercriminals go after small businesses, especially those in the healthcare industry,
Patients and communities have a critical need for health care providers, including rural hospitals and other rural health care providers, to be resilient and remain operational, which depends in part on the cybersecurity of their electronic information systems. For rural health care providers, especially hospitals, a breach can significantly affect an entire community.
While the Security Rule generally continues to accomplish a primary goal of HIPAA,
HIPAA requires the Secretary to adopt standards that have been developed, adopted, or modified by a standard setting organization accredited by ANSI, except in certain circumstances.
The statutory definition of the term “standard” applies only to standards for electronic transactions and data elements for such transactions that are appropriate for: (1) the financial and administrative transactions described in the statute; and (2) other financial and administrative transactions consistent with the goals of improving the operation of the health care system and reducing administrative costs, as determined appropriate by the Secretary.
As discussed above, in both 1998 and 2003, the Department determined that no comprehensive, scalable, and technology-neutral set of standards exists, and accordingly, we proposed and adopted a new standard.
However, because we believe it is appropriate for us to consider modifying the Security Rule at this time for the reasons discussed above, we must again consider whether an ANSI-accredited standards setting organization has developed, adopted, or modified a standard relating to the security of ePHI. The Department continues to believe that any standard must be comprehensive, rather than piecemeal, as recommended by the ANSI Healthcare Informatics Standards Board.
We are not aware of any standard setting organizations that are accredited by ANSI that have issued standards for the security of ePHI, let alone standards that are sufficiently comprehensive, flexible, scalable, and technology-neutral to enable regulated entities to take into account the HIPAA factors. For example, NIST has issued numerous publications addressing health care cybersecurity that are considered by NIST to be guidance, rather than standards. In fact, NIST is ANSI-accredited for only one standard.
Additionally, in 2021, Congress amended the HITECH Act to require the Secretary to consider whether a regulated entity has adequately demonstrated that it had in place recognized security practices for a certain period of time.
The Department has consulted with and relied on the recommendations of NCVHS in the formulation of this proposed rule
This section contains a description of the proposed amendments to the Security Rule and the Department's rationale for its proposals. As part of this rationale, we often include a discussion of best practices contained in previously published guidance documents issued by the Department, NIST, and other Federal agencies. We request comment on previously published guidance documents that are not discussed herein that were issued by the Department or other Federal agencies and contain best practices but may be relevant or applicable to regulated entities, including the names of and citations for such guidance documents. We do not propose to adopt referenced best practices as the standard or implementation specifications unless otherwise specified in the proposed regulatory text. Rather, we include such discussion to provide regulated entities with context for the aforementioned proposals. We recognize that regulated entities are of varying types and sizes and may be concerned that requiring the adoption of such best practices might not be appropriate for all. However, we request comment on whether we should require implementation of certain aspects of a particular guidance document. If so, please explain which aspect(s) we should require, the rationale, and information about the burden of implementing such aspect(s).
Electronic media are used by many health care organizations to process, transmit, and maintain ePHI. As defined by the Security Rule, the term “electronic media”
The Department revised the definition of “electronic media” in 2013 by replacing the term “electronic storage media” with “electronic storage material” in recognition that there may be storage material other than “media” that houses electronic data in the future.
Since 2013, the role technology plays in the storage and transmission of information has changed, as have the types of media used to store and transmit such information. For example, traditional landlines
The Department proposes to modify the definition of “electronic media” as follows. First, the Department proposes to revise paragraph (1) of the definition to clarify that electronic media includes not only media on which data may be recorded, but also media on which data may be maintained or processed.
Generally, data is either at rest, in transit, or in process (
The Department also proposes to revise paragraph (1) to clarify and update terminology used in a non-exhaustive list of examples of electronic storage material. Additionally, to ensure that the definition includes future technology, the Department proposes to add to the list of examples “any other form of digital memory or storage” on which data may be recorded, maintained, or processed.
As discussed above, traditional landlines and fax machines are rapidly being replaced with electronic communication technologies and mobile technologies that use electronic media. The Security Rule applies when a regulated entity uses such electronic communication technologies. Therefore, regulated entities using telephone systems and fax equipment that transmit ePHI need to apply the Security Rule safeguards to those technologies.
We also propose to make a technical correction to paragraph (2) of the definition, consistent with a revision made in the 2013 Omnibus Rule to paragraph (1).
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether the proposed modifications accurately capture current use of electronic media.
b. Whether the proposed modifications allow for future technological innovation.
c. Whether there are other types of electronic storage material that the Department should include in the non-exhaustive list of examples.
d. Whether there are other types of transmission media that the Department should include in the non-exhaustive list of examples.
Section 164.304 includes definitions for key regulatory terms in the Security Rule. The Department proposes to add ten new defined terms and to modify the definitions of fifteen existing terms. The proposed new regulatory terms would be: Deploy, Implement, Electronic information system, Multi-factor authentication, Relevant electronic information system, Risk, Technical controls, Technology asset, Threat, and Vulnerability. The definitions we propose to modify are for the following terms: Access, Administrative safeguards, Authentication, Availability, Confidentiality, Information system, Malicious software, Password, Physical safeguards, Security or Security measures, Security incident, Technical safeguards, User, and Workstation. Generally, the Department is proposing to add or modify regulatory terms that would either clarify how regulated entities should apply the standards and implementation specifications or modernize the rule to better account for changes in the environment in which health care is provided.
The Security Rule defines the term “access” as the ability or means necessary to perform a set of activities describing how a user may interact with a system resource.
The term “access” defines the scope of some key regulatory provisions in the Security Rule. For example, whether a person meets the definition of a “user” is determined based on whether their access to information or a component of the regulated entity's information system is authorized.
The current definition is expansive but not fully representative of how users could interact with information today. As discussed above, users create, receive, maintain, and transmit information in more ways now than they did ten years ago. Thus, the Department believes that it is critical for the Department to consider modifying the definition of this term to adequately reflect the current electronic environment.
The Department proposes to expand the list of activities that should be considered under the term by adding the activities of “deleting” and “transmitting.” The Department also proposes to replace “system resource” with “component of an information system” to rely on an already defined term, “information system.” The proposed modification would clarify that the term includes any and all components of an information system and an information system as a whole. Additionally, the Department believes that a component of an information system better describes how the term access applies today because it is inclusive of hardware, software, and people, as opposed to only the inherent capabilities that contribute to performance, such as system memory and hard disk space.
Administrative safeguards are administrative actions, policies, and procedures to manage the selection, development, implementation, and maintenance (including reviewing and modifying) of security measures to protect ePHI.
In addition, the existing definition of “administrative safeguards” does not expressly relate the administrative actions to the policies and procedures addressing the activities covered by the definition, nor does it make clear that the policies and procedures are in addition to the administrative actions. The same is true for the definitions of physical and technical safeguards. Further, the definition of “administrative safeguards” does not expressly mention managing updates and modifications to safeguards.
To address the minor inconsistencies between the definitions of the safeguards and to ensure that each safeguard is afforded an equal weight of importance, the Department proposes similar but minor changes across the definitions. The Department proposes to add the word “related” to the definition here, and below to add the words “and related” when necessary, to more clearly connect the components that make up safeguards. In the case of administrative safeguards, the Department's proposal relates administrative actions to administrative policies and procedures. The Department believes that this change would reduce confusion and improve clarity about compliance obligations. We are proposing a similar change to the definitions of physical safeguards and technical safeguards below. Additionally, we are proposing to clarify that maintenance includes updating and modifying with respect to administrative safeguards.
The Security Rule defines authentication as corroboration that a person is the one claimed. By limiting the definition of authentication to persons, the current definition neglects to acknowledge the importance to the security of ePHI of authenticating technology assets that are components of a regulated entity's electronic information systems that create, receive, maintain, or transmit ePHI or that otherwise affect the confidentiality, integrity, or availability of ePHI, or that the regulated entity intends to connect to such electronic information systems.
To modernize the definition of authentication to reflect best practices in cybersecurity today, the Department proposes to clarify the definition to mean corroboration that either a person or technology asset is the one they are claiming to be. The modified definition would also improve readability with minor changes in wording. The Department believes as proposed, the revised definition would more accurately reflect the role played by technology assets in electronic information systems today. For example, a covered health care provider permits individuals to access their own PHI using an application that connects to the software that runs the covered health care provider's patient portal. Not only must the individual be authenticated as a user, but the application must be authenticated such that the covered entity's software can verify that the application is what it claims to be. In another example, a portable technology asset for retrieving and storing PHI in the cloud must be authenticated before retrieving data from cloud storage.
“Availability” is defined in the Security Rule as the property that data or information is accessible and usable upon demand by an authorized person. Although not intended, the current definition could be read to limit the scope of availability only to authorized persons. And yet, it is equally important to ensure that authorized technology assets, such as connected medical devices, software, and workstations,
Given the increased connectivity of the health care environment, the Department proposes to clarify the definition of availability by specifying that availability means the property that data or information is accessible and usable upon demand by not only an authorized person, but also an authorized technology asset. In so doing, the Department is not changing the meaning of availability, but rather clarifying its scope.
Similar to the definition of availability, the definition of the term “confidentiality” could be read as limited to the property that data or information is not made available or disclosed to unauthorized persons or processes. Read that way, the definition does not reflect today's health care environment in which data and information may be accessed through any component of an interconnected electronic information system.
The Department proposes to clarify the definition of confidentiality to specify that it means the property that data or information is not made available or disclosed to unauthorized persons, technology assets, or processes.
The Security Rule directs regulated entities to implement technical policies and procedures and assumes that such implementation requires the installation and configuration of technical safeguards.
Therefore, the Department believes it is necessary to add definitions that distinguish between implementation of the administrative and technical safeguards by separately describing how regulated entities can comply with requirements to implement technical safeguards and install technical solutions.
The Department proposes to define the term “deploy” to identify a specific type of “implementation.” We believe that the new term and definition would help to better describe the compliance obligations for implementation specifications related to the use of technology for securing the confidentiality, integrity, or availability of ePHI. As proposed, the definition would require a regulated entity to ensure that technology is in place, configured for use, and actually in use and operational throughout the regulated entity. The Department's proposed use of the term helps illustrate its purpose and utility in clarifying that policies and procedures, while necessary, are insufficient to meet requirements for technical safeguards.
For example, the Department is proposing to create a new requirement for regulated entities to verify that business associates have deployed technical safeguards—that is, the technology is configured and operational, not only addressed in policies and procedures.
The Department proposes to define the term “implement” to clarify that a safeguard must be put into place and be in effect throughout the enterprise, as opposed to only some components of a regulated entity's relevant information systems (
For example, a regulated entity's administrative policy requiring it to take action to prevent infections from malicious software is not implemented until it is applied throughout the enterprise, meaning that the entity has ensured that anti-malware protections have been put into place on all relevant electronic information systems that create, receive, maintain, or transmit ePHI or that otherwise affect the confidentiality, integrity, or availability of ePHI throughout the enterprise.
Similarly, to operationalize such a policy, the regulated entity must deploy technology assets and/or technical controls to block such software according to its technical policies and
The current Security Rule includes explicit requirements for regulated entities to protect electronic information systems by implementing policies and procedures to limit physical access to such systems
The Department proposes to add a definition of “electronic information system” to better distinguish the concept from the broader category of an information system. Accordingly, the Department would limit the definition to an interconnected set of electronic information resources under the same direct management control that shares common functionality. Under this proposal, an electronic information system generally would include technology assets, such as hardware, software, electronic media, data, and information.
As discussed above, the Department seeks to clarify the scope of an information system, as compared to an electronic information system. We believe that it would be beneficial to align the common elements of these terms and clarify the relationship between them, given their importance to compliance with requirements of the Security Rule. Additionally, the changes in the environment, such as the shift to cloud-based computing, may raise questions regarding the Department's interpretation of “direct management control.”
Accordingly, the Department proposes to modify the definition of “information system,” to clarify that an information system “generally”, not just “normally,” includes hardware, software, data, communications, and people. The Department believes this proposed modification, combined with the existing broad reference to “resources,” more accurately reflects the typical components of an information system and the full extent of resources that are addressed by the Security Rule. We also propose to remove “applications” from the list of technology assets that are generally included in an information system because applications are a type of software, making the inclusion of applications redundant. This proposed modification would not alter our interpretation that an information system includes applications.
We use this opportunity to affirm that a technology asset may be included as part of the information systems of multiple regulated entities where such regulated entities all have direct management control over the technology asset. For example, both a health care provider and a cloud-based EHR vendor have direct management control over the ePHI in the cloud-based EHR. Accordingly, such ePHI generally is part of both the information system of the health care provider and of the cloud-based EHR vendor. Additionally, the EHR that is used to create, receive, maintain, or transmit ePHI, regardless of whether it is accessed using software installed on the health care provider's workstation(s) or an internet browser, generally is also part of the information system of both entities because both the health care provider and the vendor have direct management control over the EHR.
Persons seeking unauthorized access to data and information are increasingly sophisticated. Their methods of attempting to gain such access can take many forms and result in a wide array of harms, as discussed above. One of the methods they use is through the introduction of malicious software (also referred to as malware) into an electronic information system. As the sophistication of bad actors has increased, so has the variety of types of malicious software that they use to access electronic information systems. The Security Rule defines malicious software but limits it to software designed to damage or disrupt a system. The regulatory text provides only one example of malicious software in regulatory text—a virus.
The Department proposes to replace the current definition of malicious software with one that would be consistent with how cybersecurity experts define the term today.
The Security Rule includes several technical safeguard provisions that require regulated entities to identify and authenticate persons accessing information and systems to protect ePHI. Section 164.312(a)(2)(1) includes the standard that requires a regulated entity to implement technical policies and procedures that limit access to ePHI to only those persons or software programs that have been granted access rights, while 45 CFR 164.312(d)(2), the standard for person or entity authentication, requires a regulated entity to implement procedures to verify that a person seeking access to ePHI is the one claimed.
Historically, regulated entities relied on combinations of usernames and passwords to identify users and authenticate users to the system. We recognize that such combinations are insufficient to secure sensitive information and that more sophisticated mechanisms for doing so have been developed. As a best practice for managing cyber threats, most cybersecurity frameworks, including those discussed above, recommend that organizations adopt solutions that rely on multiple factors to identify and authenticate users. For example, the HHS 405(d) Program's “Health Industry Cybersecurity Practices: Managing Threats and Protecting Patients”
The Department proposes to define the term “Multi-factor authentication” to provide regulated entities with a specific level of authentication for accessing relevant electronic information systems.
• Information known by the user, including but not limited to a password or personal identification number (PIN).
• Item possessed by the user, including but not limited to a token or a smart identification card.
• Personal characteristic of the user, including but not limited to fingerprint, facial recognition, gait, typing cadence, or other biometric or behavioral characteristics.
MFA relies on the user presenting at least two factors. Authentication that relies on multiple instances of the same factor, such as requiring a password and PIN, is not MFA because both factors are “something you know.”
The Department proposes that the personal characteristics that could be used as factors would include both physical characteristics, such as fingerprints or facial identifiers, and behavioral characteristics, such as a user's gait or typing cadence.
The Security Rule currently defines “password” as confidential authentication information composed of a string of characters.
The Department proposes to add examples to the definition to further clarify what constitutes a character, and adds “such as letters, numbers, spaces, and other symbols” to the existing definition. The Department believes that regulatory examples would provide necessary context for regulated entities that deploy safeguards involving passwords.
“Physical safeguards” encompass the physical measures, policies, and procedures that protect a regulated entity's electronic information systems and related buildings and equipment from natural and environmental hazards, and unauthorized intrusion. As discussed within the definition of administrative safeguards, the Department believes that it is necessary to reduce minor inconsistences in language between the definitions of the types of safeguards. Additionally, the definition of physical safeguards relies on an undefined term (“buildings”), despite the existence of a defined term (“facilities”) that has an equivalent meaning.
The Department proposes to clarify that the policies and procedures referred to in the definition are those that specifically are related to physical measures, and to replace “buildings” with “facilities” because facility is a defined term under the Security Rule and has an equivalent meaning.
The Security Rule requires a regulated entity to ensure the confidentiality, integrity, and availability of all of the ePHI it creates, receives, maintains, or transmits.
The Department proposes to add and define the term “relevant electronic information system” to mean an electronic information system that creates, receives, maintains, or transmits ePHI or that otherwise affects the confidentiality, integrity, or availability of ePHI. We believe that distinguishing between a relevant electronic information system and an electronic information system, as proposed, would further clarify the scope of regulated entities' compliance obligations, including the obligation of regulated entities to understand the relationship between their various electronic information systems and the confidentiality, integrity, and availability of ePHI.
The Department believes it is important to clarify that the requirements of the Security Rule do not only apply to electronic information systems that create, receive, maintain, or transmit ePHI. After all, cybercriminals may be able to access ePHI by leveraging vulnerabilities in some electronic information systems that do not themselves create, receive, maintain, or transmit ePHI where such information systems are connected to or otherwise affect electronic information systems that do create, receive, maintain, or transmit ePHI. For example, while a payment processing system used in a covered entity's food and beverage outlets or gift shops may not create, receive, maintain, or transmit ePHI, it may affect the confidentiality, integrity, or availability of ePHI in certain circumstances, such as where such systems are connected to the same network as servers that contain ePHI.
An electronic information system would also fit the category of “otherwise affecting” if it contains information that relates to an electronic information system that creates, receives, maintains, or transmits ePHI or to another electronic information system that otherwise affects the confidentiality, integrity, or availability of ePHI. For example, a compromised electronic information system used to provide administrative functions, such as user authentication or management of storage area network infrastructure, that does not contain ePHI may allow unauthorized access to ePHI (affecting the confidentiality of ePHI) or disruption of storage configuration data (affecting the integrity and availability of ePHI). An electronic information system that is not connected to a covered health care provider's EHR but that maintains user IDs and passwords for the EHR also may not create, receive, maintain, or transmit ePHI; however, the confidentiality, integrity, or availability of the ePHI in the EHR would be affected if an unauthorized person gained access to that electronic information system. And the same is true for an electronic information system that contains the decryption keys for a regulated entity's encryption algorithms. Thus, it is important that administrative, physical, and technical safeguards be implemented not only for electronic information systems that create, receive, maintain, or transmit ePHI, but also for electronic information systems that otherwise affect the confidentiality, integrity, or availability of ePHI.
The Security Rule does not currently include a definition for the term “risk.” The Department considered defining it when it first promulgated the final rule in 2003, but declined to do so because it determined that the term was commonly understood.
One of the ways NIST defines the term is as “a measure of the extent to which an entity is threatened by a potential circumstance or event, and typically a function of: (i) the adverse impacts that would arise if the circumstance or event occurs; and (ii) the likelihood of occurrence.”
The Department proposes to define “risk” as the extent to which the confidentiality, integrity, or availability of ePHI is threatened by a potential circumstance or event. The Department believes that defining the term would clarify several existing and proposed provisions of the Security Rule, such as the factors regulated entities must consider when determining the security measures they will implement
The Security Rule defines “security or security measures” as encompassing all of the administrative, physical, and technical safeguards in an information system.
The rule also defines “security incident” as the attempted or successful unauthorized access, use, disclosure, modification, or destruction of information or interference with system operations in an information system. The existing definition does not make clear that a security incident may result from two types of behaviors—those related to attempted or successful but unauthorized access, use, disclosure, modification, or destruction of information in an information system, and those that are related to the attempted or successful unauthorized interference with system operations in an information system. In other words, a security incident may directly touch upon information in a system or interfere with the operations of the system itself. The Department believes that it is necessary to clearly convey the distinct types of incidents to regulated entities to ensure that regulated entities implement and deploy safeguards that address both concerns.
The Department proposes to modify the definition of “security or security measures” to clarify that security or security measures may not only exist in information systems but may also be applied to information systems.
The Department proposes to reorganize the definition of “security incident” into two numbered paragraphs to delineate the two separate categories of security incidents. We also propose to clarify that in both instances, the definition applies when the described action affects an information system and regardless of whether an attempt to affect the information in the system or interfere with system operations is successful or not.
Throughout the technical safeguards provisions in 45 CFR 164.312, the Department directs regulated entities to implement technical policies and procedures. The court in
The Department proposes to add and define the term “technical controls” to help regulated entities better understand what we mean by technical safeguards for purposes of complying with the Security Rule. We propose to define technical controls as technical mechanisms contained in the hardware, software, or firmware components of an electronic information system that are primarily implemented and executed by the electronic information system to protect it and the data within the electronic information system. The Department believes that adding this term would better convey the expectation that a regulated entity is
The current definition of “technical safeguards” includes the technology and policy and procedures for its use that protect ePHI and control access to it.
The Department proposes to modify the definition of “technical safeguards” to expressly include “technical controls.” We also propose to add language that would clarify that the technology, technical controls, and related policies and procedures in this category govern the use of the technology to protect and control access to ePHI. The proposed changes also would improve the consistency of language across the safeguard provisions and rule.
Throughout the Security Rule, standards and implementation specifications list the components of electronic information systems to which its requirements apply. Based on the Department's enforcement experience, we believe that it would be beneficial to more clearly distinguish between the requirements that apply to all components of an electronic information system and those that only apply to certain components. Additionally, we believe it would be beneficial to distinguish between requirements that apply specifically to each particular component of an electronic information system and those that apply to the electronic information system as a whole.
The Department proposes to define the term “technology asset” to mean the components of an electronic information system, including but not limited to hardware, software, electronic media, information, and data. In so doing, we would clarify which Security Rule requirements apply to all of the components of electronic information systems as opposed to those that apply only to certain components, and which requirements apply to each particular components and which apply to the entire electronic information system.
For example, understanding the risks and vulnerabilities to a regulated entity's ePHI requires a thorough understanding of the components of its electronic information systems, the electronic information systems themselves, how they are connected, and how ePHI moves through those systems. Thus, by requiring a regulated entity to conduct an inventory of its technology assets and to create a network map of its electronic information systems, we clarify that a regulated entity is obligated to consider not only its electronic information systems as a whole, but also the components within those electronic information systems and their functions.
Addressing threats to the confidentiality, integrity, and availability of ePHI is a key function of the Security Rule, but the rule does not define “threat.” The concept of threat also underlies the Department's proposed definition of “risk” defined above and forms the basis of a key proposed implementation specification associated with the standard for risk analysis.
The Department proposes to define the term “threat” to mean any circumstance or event with the potential to adversely affect the confidentiality, integrity, or availability of ePHI. This proposal is similar to NIST's varying definitions of threat, edited to apply specifically to health care and the type of information addressed by the Security Rule.
The Department first defined the term “person” in the HIPAA Rules as part of the 2003 “Civil Money Penalties: Procedures for Investigations, Imposition of Penalties, and Hearings” interim final rule to distinguish a “natural person” who could testify in the context of administrative proceedings from an “entity” (defined therein as a “legal person”) on whose behalf a person would testify.
The Department proposes to clarify the definition of “User” by removing the reference to an entity.
The term “vulnerability” is currently not defined in the Security Rule.
The Department previously explained that although some cyberattacks may be sophisticated and exploit previously unknown vulnerabilities (
The Department proposes to define vulnerability by adopting substantially the same definition as NIST (a “weakness in an information system, system security procedures, internal controls, or implementation that could be exploited or triggered by a threat source”)
The Department currently defines the term “workstation” to mean an electronic computing device and provides the examples of technology that dominated the health care environment in 2003 and 2013, such as a laptop, desktop computer, and other device that performs similar functions, and electronic media stored in its immediate environment.
In recognition of this changed environment, the Department proposes to modify the definition of workstation to provide additional examples of what constitutes a workstation. Specifically, we propose to add the examples of a server, virtual device, and a mobile device such as a smart phone or tablet. Virtual devices could include a virtual medical device, virtual server, or virtual desktop computer. The proposed definition also would clarify that technology properly considered as a “workstation” is not limited to the proposed regulatory examples.
The Department requests comment on all the foregoing proposed definitions, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether any of the proposed definitions would be problematic for regulated entities or result in unintended adverse consequences. If so, please explain.
b. Whether the Department should consider an alternative definition for any terms the Department proposes to define in the rule. If the answer is yes, please propose such an alternative definition and a reference or supporting rationale.
c. Whether the Department should define any additional terms within the rule. If the answer is yes, please propose such additional terms and definitions, along with any reference or supporting rationale.
d. With respect to the definitions of “information system” and “electronic information system,” the extent of a covered entity's direct management control over applications in cloud computing environments, such as a cloud-based EHR system.
e. With respect to the definitions of “information system” and “electronic information system,” the extent of a business associate's direct management control over applications in cloud computing environments, where the business associate is the cloud service provider.
f. Whether defining the term “technical controls” and adding it to the definition of “technical safeguards” would more clearly explain the requirements of 45 CFR 164.312.
g. Whether defining “implement” and “deploy” as we propose would more clearly explain the differences between what is expected of regulated entities with respect to administrative and physical safeguards and technical safeguards. To the extent that the proposals would not clarify the differences, please provide alternative solutions.
Section 164.306 applies to regulated entities and includes the general rules for security standards. Generally, paragraph (a) codifies HIPAA statutory requirements for safeguarding ePHI.
• Ensure the confidentiality, integrity, and availability of all ePHI the regulated entity creates, receives, maintains, or transmits.
• Protect against reasonably anticipated threats or hazards to the security or integrity of such information.
• Protect against any reasonably anticipated uses or disclosures of such information not permitted by the Privacy Rule.
• Ensure that workforce members comply with the Security Rule.
Paragraph (b) of this section permits regulated entities to determine the most
Section 164.306(c) requires regulated entities to comply with the administrative, physical, and technical safeguard standards in sections 45 CFR 164.308, 164.310, and 164.312 respectively, and with standards for organizational requirements and policies, procedures, and documentation requirements in sections 45 CFR 164.314 and 164.316. This provision is followed by paragraph (d), which explains that regulated entities are required to implement a specific implementation specification if described as “required.” If the implementation specification is described as “addressable,” regulated entities are required to implement the implementation specification if it is reasonable and appropriate to do so; or, if it is not reasonable and appropriate, document why and implement an equivalent alternative measure.
Finally, the maintenance provision at 45 CFR 164.306(e) requires regulated entities to review and modify security measures implemented under the Security Rule as needed to continue providing reasonable and appropriate protection of ePHI. It also requires regulated entities to update documentation of such security measures in accordance with the requirements for documentation at 45 CFR 164.316(b)(2)(iii).
We believe that we can improve consistency in language between this section and other Security Rule provisions and better align this section with statutory terms and intent. For example, we are concerned that regulated entities are misinterpreting 45 CFR 164.306(a) to apply the requirements of the Security Rule to only some ePHI, rather than all ePHI. This interpretation could lead to inadequate protection of ePHI and relevant electronic information systems.
Flexibility and scalability are among the Security Rule's defining characteristics, and we intend to preserve those elements to the extent possible. However, we believe that in this era of increased reliance on technology, more sophisticated cyber capabilities, and increasing cyberattacks, it is critical for regulated entities to implement and deploy strong security measures to protect ePHI and related information systems. We are concerned that regulated entities have focused their attention primarily on the cost of security measures, rather than considering the reasonableness and appropriateness of security measures in the context of all of the listed factors, including the probability and criticality of potential risks to ePHI.
The Department has explained in regulation and guidance the difference between required and addressable implementation specifications. The meaning of “required” is clear. Regarding “addressable,” we previously explained that its purpose is to provide regulated entities flexibility with respect to implementation compliance.
In 2022, NCVHS recommended that the Department eliminate the choice to not implement a specification or alternative, and instead require that regulated entities implement the specification or adopt a documented reasonable alternative.
We share NCVHS' concerns and believe that we must squarely confront the problem of regulated entities treating addressable implementation specifications as optional. Relatedly, we also believe that we must consider modifying the Security Rule to set an acceptable minimum level of security specifications. Circumstances have changed sufficiently since 2003 such that we now believe that good cyber hygiene requires regulated entities to implement more than the implementation specifications that we originally mandated.
We also believe that the current maintenance requirement in 45 CFR 164.306(e) would benefit from increased specificity in light of the dramatic transformation of the health IT environment discussed above. For example, providing the frequency with which regulated entities must review and update their security measures would improve the security of ePHI and regulated entities' compliance with the Security Rule. The Security Rule's maintenance requirement would be further strengthened by requiring regulated entities to test their security measures to verify their sufficiency, and by clarifying the Department's expectations regarding documentation. Regulated entities' lack of documentation about how they implement security measures makes it difficult for them to know what security measures they have in fact implemented and to demonstrate compliance with the requirements of the Security Rule. Finally, the maintenance requirement in 45 CFR 164.306(e) is not included in or designated as a Security Rule standard, although it explicitly references the overarching documentation requirements in 45 CFR 164.316(b)(2)(iii). Thus, there is overlap between the two sections that may be causing confusion regarding the obligations of regulated entities to maintain security measures.
The Department proposes to expand the introductory language to the general requirements provision at 45 CFR 164.306(a) to clarify the extent to which the general requirements apply to the obligations of regulated entities with respect to ePHI that they create, receive, maintain, or transmit.
Under the proposal, the Department would clarify that the general requirements apply to “all” ePHI. Additionally, the Department proposes to move language from paragraph (a)(1) to paragraph (a) to further emphasize that regulated entities must apply the requirements of the Security Rule to protect all of the ePHI they create, receive, maintain, or transmit. We also propose to clarify that “each” regulated entity would be required to apply the obligations in paragraphs (a)(1) through (4) to all ePHI it creates, receives, maintains, or transmits. The Department believes that this proposal would stress to regulated entities that each and every covered entity and business associate would be responsible for ensuring it meets Security Rule requirements with respect to all ePHI.
The Department believes this proposed change would also help address issues raised by current interpretations of the Security Rule that suggest that its plain wording may not require regulated entities to fully implement each security measure to protect all ePHI. Thus, the Department's proposed language would clarify that a security measure must be implemented such that it protects the security of all ePHI and all information systems that affect the confidentiality, integrity, and availability of ePHI.
Additionally, the Department proposes to modify the general requirements of paragraph (a)(2) to require each regulated entity to protect against any reasonably anticipated threats or hazards to the confidentiality, integrity, or availability of all ePHI, instead of to the security or integrity of ePHI. We believe that this proposal would better align this requirement with the general requirement at 45 CFR 164.306(a)(1), and confidentiality, integrity, and availability are generally considered the three basic elements of security.
Additionally, the Department proposes a minor change to paragraph (a)(3) to refer specifically to ePHI, rather than using a more general term. We believe that both proposals would constitute technical revisions and that neither would alter the meaning of 45 CFR 164.306(a)(2) or (3), respectively.
Finally, the Department proposes to modify paragraph (a)(4) so that each regulated entity would be required to ensure that its workforce complies not only with the Security Rule, but also all administrative, physical, and technical safeguards implemented in accordance with this subpart.
These proposals would better align the language of the general requirements in paragraph (a) of 45 CFR 164.306 with the statute
The Department's proposals generally retain the flexible approach described in paragraph (b). As discussed above, the Security Rule carefully balances the benefits of safeguarding against risks to security and the burdens of implementing protective measures by, for example, enabling regulated entities to take into account specified factors when determining how to implement security measures in a manner that complies with the Security Rule. To acknowledge the rapid evolution of technology and increasing threats, the Department proposes to clarify
The Department also proposes to add a new element to the list of factors that regulated entities must take into account when deciding whether a particular security measure (
The Department proposes at 45 CFR 164.306(b)(2)(v) to require a regulated entity to take into account how effectively its application of a particular security measure to achieve compliance with a standard and its associated implementation specifications would support its resiliency in the face of an event that adversely affects the entity. According to NIST, “information system resilience” addresses how well information systems “continue to (i) operate under adverse conditions or stress, even if in a degraded or debilitated state, while maintaining essential operational capabilities; and (ii) recover to an effective operational posture in a time frame consistent with mission needs.”
The Department proposes this new requirement to better enable regulated entities to ensure the confidentiality, integrity, and availability of all ePHI that they create, receive, maintain, or transmit. The general rules require regulated entities to not only prevent threats and hazards to the confidentiality and integrity of ePHI, but also to ensure the availability of ePHI, even during a security incident that has the potential to severely hinder the ability of a regulated entity to provide health care or to bring it to a standstill. This new factor would require a regulated entity to consider whether a particular approach to complying with a standard and the associated implementation specifications can help it recover from an emergency or other occurrence, in addition to maintaining operations throughout the event. The Department proposes this factor to complement its proposals to strengthen the standards for security incident procedures
The factors contemplate that regulated entities will regularly evaluate the security measures they have applied to comply with the standards and implementation specifications based on the technology available and known risks and vulnerabilities at the time of the evaluation. The Department expects that when the existing factors are considered with the factor proposed in this NPRM, a regulated entity would be required to consider whether a specific technical control has become sufficiently ubiquitous such that choosing not to adopt it would be unreasonable.
To address the Department's concerns regarding the apparent misunderstanding by regulated entities of “addressable,” we propose to modify 45 CFR 164.306(c) and (d) by collapsing the separate paragraphs into one paragraph (c) to address both standards and implementation specifications and to remove the distinction between “addressable” and “required” implementation specifications. Instead, proposed paragraph (c), if adopted, would require regulated entities to comply with both the standards and implementation specifications. The Department believes that eliminating the distinction would make clear to regulated entities what has always been a requirement—that the Security Rule sets a floor for cybersecurity protections and that its flexibility is in allowing them to choose the manner in which they meet the standards and implementation specifications, not whether they meet them. The proposed change also would be consistent with NCVHS' recommendation to require regulated entities to meet certain minimum cybersecurity hygiene requirements.
The Department acknowledges that proposing to remove the addressability distinction is a change from the approach adopted in the 2003 Final Rule. At that time, we explained that the decision to include addressable implementation specifications was made to provide additional flexibility to
The Department also proposes to delete the maintenance provision at 45 CFR 164.306(e). Instead, as discussed in greater detail below, we propose to clearly delineate maintenance implementation specifications for specific standards, when applicable. We believe this approach would clarify how maintenance requirements relate to specific security measures and would remove any ambiguity about the need for regulated entities to regularly review, test, and modify measures as reasonable and appropriate. We further discuss maintenance provisions below for each safeguard.
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether removing the distinction between required and addressable implementation specifications would result in unintended negative consequences for regulated entities. If so, please explain and provide a recommendation for how the Department should clarify how regulated entities are required to implement the security measures described in the proposed rule.
b. Whether the Department should include other factors in 45 CFR 164.306(b) for regulated entities to consider when selecting the security measures that they will implement to meet the requirements of the Security Rule. If so, please explain.
c. Whether the factor proposed by the Department at proposed 45 CFR 164.306(b)(2)(v) would help regulated entities identify reasonable and appropriate security measures.
d. Whether the Department's proposals sufficiently clarify that a regulated entity is expected to modify its security measures in response to changes in the environment in which health care is provided, including, but not limited to, the adoption of new technology, the evolution of existing technology, and the emergence of new threats.
e. Whether the proposals sufficiently take into account the needs and capabilities of small health care providers and rural health care providers, as required by the statute. If not, please explain and include a recommendation for ways that the Department could better account for such needs and capabilities while adequately ensuring the confidentiality, integrity, and availability of ePHI that they create, receive, maintain, or transmit. The recommendations should also take into consideration the effect of the actions taken by small and rural health care providers on the ePHI that is created, received, maintained, or transmitted by other regulated entities with whom small and rural health care providers interact.
Section 164.308 of title 45 CFR contains the administrative safeguards that a regulated entity must implement, consistent with the general requirements described in 45 CFR 164.306. All of the standards and implementation specifications found in the Administrative Safeguards section refer to administrative functions, such as policies and procedures that must be in place for the management and execution of security measures.
Section 164.308(a) contains most of the standards and associated implementation specifications that are categorized as administrative safeguards. The standards for administrative safeguards are as follows:
• Security management process.
• Assigned security responsibility.
• Workforce security.
• Information access management.
• Security awareness and training.
• Security incident procedures.
• Contingency plan.
• Evaluation.
The standard for security management process at 45 CFR 164.308(a)(1)(i) requires regulated entities to implement policies and procedures to prevent, detect, contain, and correct security violations. The Security Rule directs regulated entities as to how they are to comply with the standard for security management process through four implementation specifications. Section 164.308(a)(1)(ii)(A) requires regulated entities to conduct a risk analysis that accurately and thoroughly assesses potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI they hold. The implementation specification for risk management at 45 CFR 164.308(a)(1)(ii)(B) requires regulated entities to implement measures to reduce risks and vulnerabilities, such as those identified in the risk analysis, to a reasonable and appropriate level. Under 45 CFR 164.308(a)(1)(ii)(C), regulated entities are required to apply appropriate sanctions against workforce members who fail to comply with applicable security policies and procedures, while the implementation specification for information system activity review at 45 CFR 164.308(a)(1)(ii)(D) requires regulated entities to implement procedures to regularly review information system activity records.
The standard for assigned security responsibility at 45 CFR 164.308(a)(2) requires regulated entities to identify a security official who is responsible for the development and implementation of the policies and procedures that are required by this section. There are no implementation specifications associated with this standard.
Section 164.308(a)(3)(i) contains the standard for workforce security and requires regulated entities to implement policies and procedures to ensure that their workforce members have appropriate access to ePHI, which includes preventing workforce members who do not have authorized access from
Under 45 CFR 164.308(a)(4)(i), the standard for information access management, a regulated entity is required to implement policies and procedures for authorizing access to ePHI in a manner that is consistent with the requirements of the Privacy Rule, that is, only when such access is appropriate based on the user or recipient's role (
Section 164.308(a)(5)(i) contains the standard for security awareness and training. This standard requires a regulated entity to implement a security awareness and training program for all workforce members, including management. There are four associated implementation specifications that address the need for regulated entities to implement the following:
• Periodic security updates.
• Procedures for guarding against, detecting, and reporting malicious software.
• Procedures for monitoring log-in attempts and reporting discrepancies.
• Procedures for creating, changing, and safeguarding passwords.
The standard for security incident procedures at 45 CFR 164.308(a)(6)(i) requires a regulated entity to implement policies and procedures to address security incidents. The one implementation specification associated with this standard, 45 CFR 164.308(a)(6)(ii), requires regulated entities to identify and respond to suspected or known security incidents; to mitigate, to the extent practicable, harmful effects of security incidents that are known to the regulated entity; and to document security incidents and their outcomes.
Under the standard for contingency planning at 45 CFR 164.308(a)(7)(i), a regulated entity is required to establish, and implement as needed, policies and procedures for responding to an emergency or other occurrence that damages systems that contain ePHI. The standard includes five implementation specifications at 45 CFR 164.308(a)(7)(ii). The first, paragraph (a)(7)(ii)(A), requires a regulated entity to establish and implement procedures to create and maintain exact copies of ePHI that are retrievable.
The standard for evaluation at 45 CFR 164.308(a)(8) requires a regulated entity to periodically perform a technical and nontechnical evaluation that establishes the extent to which the regulated entity's security policies and procedures meet the requirements of the Security Rule. The initial evaluation is to be based upon the standards implemented under the Security Rule, while subsequent evaluations are to be conducted in response to environmental or operational changes affecting the security of ePHI.
Section 164.308(b) contains the administrative safeguards that apply to the relationships between regulated entities. Specifically, 45 CFR 164.308(b)(1) permits a covered entity to engage a business associate to create, receive, maintain, or transmit ePHI on the covered entity's behalf when it obtains satisfactory assurances (consistent with the organizational requirements for business associate agreements or other arrangements in 45 CFR 164.314(a)) that the business associate will appropriately safeguard the ePHI. Similarly, under 45 CFR 164.308(b)(2), a business associate may retain a subcontractor to create, receive, maintain, or transmit ePHI on its behalf if the business associate obtains satisfactory assurances through a business associate agreement or other arrangement that the subcontractor will appropriately safeguard the information. Section 164.308(b)(3) requires that the contract or other arrangement be in writing.
The Security Rule administrative standards are comprehensive, but our experience has demonstrated that they have been misunderstood by some regulated entities, especially regarding how compliance with the standards and implementation specifications must be integrated with the general requirements in 45 CFR 164.306, including the requirement in 45 CFR 164.306(e) that a regulated entity must review and modify security measures. Section 164.306 does not explicitly reference specific security measures, and we are concerned that recent caselaw has highlighted conditions that may cause regulated entities to misinterpret regulatory text that connects the maintenance provision at 45 CFR 164.306(e) with the documentation requirements in 45 CFR 164.316 and the administrative safeguards. Through OCR's educational and enforcement efforts, we also have observed inadequacies in compliance with security management processes. For example, some regulated entities have
In addition, since the Security Rule was issued in 2003 and revised in 2013, newer, more protective security technology has become widely available to regulated entities, and best practices for securing electronic information have evolved. NIST has published numerous guides, including its recent Cybersecurity Framework 2.0, providing resources for establishing and implementing policies and practices to better manage cybersecurity risks.
Because business associates are directly liable for compliance with the Security Rule, in our 2013 Security Rule revisions we did not require covered entities to implement any additional safeguards to ensure that their business associate is in fact in compliance.
Throughout this section, the Department proposes to add explicit maintenance requirements to certain standards to address concerns that regulated entities may be misinterpreting the regulatory text that connects the maintenance provision at 45 CFR 164.306(e) with the administrative safeguards. These proposals would clarify that a regulated entity is required to maintain certain security measures, and that where a regulated entity is required to maintain a particular security measure, it is required to review and test such measure on a specified cadence, and to modify the measure as reasonable and appropriate. Testing of particular security measures, such as technical controls or policies and procedures, would include verifying that the security measures work as designed and that workforce members know how to implement them. For example, written policies and procedures can be tested through various methods including, but not limited to: simulating security events that mimic real-world attacks to assess how effectively employees follow incident response and security procedures; conducting knowledge assessments after training on policies and procedures; and reviewing system logs and access records to evaluate whether policies and procedures governing access to ePHI are being followed. We would expect a regulated entity to take the results of the required tests into consideration when determining whether it is reasonable and appropriate to modify its security measures, as well as the actions that would be expected of a regulated entity that is similarly situated based on the results of such tests.
We also propose to modify certain administrative safeguards to clarify the obligations of a regulated entity to ensure the confidentiality, integrity, and availability of ePHI by securing its relevant electronic information systems—that is, its electronic information systems that create, receive, maintain, or transmit ePHI and those that otherwise affect its confidentiality, integrity, or availability—and the technology assets in its relevant electronic information systems.
The Department proposes to modify the general language at 45 CFR 164.308(a) to clarify the connection between the general rules for security standards at 45 CFR 164.306, the standards for policies and procedures and documentation requirements at 45 CFR 164.316, and the standards for the administrative safeguards under 45 CFR 164.308(a). We also propose to clarify that regulated entities would be required to implement all of the administrative safeguards of the Security Rule to protect the confidentiality, integrity, or availability of all ePHI that they create, receive, maintain, or transmit. Thus, when read together, proposed 45 CFR 164.308(a) and 164.316(a) would require that a regulated entity implement and document, in writing, its implementation of the administrative safeguards required by the Security Rule. These requirements set the baseline for administrative safeguards. Nothing in this NPRM would prevent a regulated entity from implementing additional administrative safeguards, provided that those additional safeguards do not conflict with any requirements in the Security Rule.
The proposed changes are discussed in greater detail below.
We propose to modify 45 CFR 164.308(a)(1) by elevating to standard-level status the existing implementation specifications for the standard for security management process at 45 CFR 164.308(a)(1)(ii)(A) through (D), and deleting the existing standard. Doing so would highlight the importance of these elements and permit us to add implementation specifications that detail our expectations for compliance with those elements. We believe that providing more specificity in our requirements would help regulated entities better understand their compliance responsibilities for
In place of the existing standard for security management process, we propose a standard at 45 CFR 164.308(a)(1)(i) that would require a regulated entity to conduct and maintain an accurate and thorough written technology asset inventory and a network map of its electronic information systems and all technology assets that may affect the confidentiality, integrity, or availability of ePHI. The inventory forms the foundation for a fulsome and accurate risk analysis. A regulated entity must identify its information systems that create, receive, maintain, or transmit ePHI and all technology assets, as we propose to define them in 45 CFR 164.304, that may affect ePHI in such information systems in order to secure them. Regulated entities cannot understand the risks to the confidentiality, integrity, and availability of their ePHI without a complete understanding of these assets. We believe that this proposal would clarify compliance expectations and provide increased protections for the confidentiality, integrity, and availability of ePHI. Consistent with practices previously highlighted in guidance, regulated entities would be required by this proposal to conduct and maintain an accurate and thorough written inventory of technology assets.
The standard would also require each regulated entity to determine the movement of ePHI through, into, and out of its information systems and to describe such movement in a network map. A regulated entity's network map would reflect where its technology assets are, for example, physically located at the regulated entity's worksite, or accessed through the cloud. As another example, a covered entity might determine that ePHI is created, received, maintained, or transmitted by one or more offshore business associates (
This proposed standard aligns with the Department's enhanced CPG for Asset Inventory, which requires that a regulated entity identify assets to more rapidly detect and respond to potential risks and vulnerabilities,
In 2003, the Department elected not to require regulated entities to conduct an inventory because we believed that regulated entities would understand that such an inventory is a vital component of the risk analysis, making it redundant of other requirements of the Security Rule.
Understanding one's environment—particularly how ePHI is created and enters an organization, how ePHI flows through an organization, and how ePHI leaves an organization—is crucial to understanding the risks ePHI is exposed to throughout an organization.
The proposed standard would be accompanied by three implementation specifications. Under the proposed implementation specification for inventory at proposed 45 CFR 164.308(a)(1)(ii)(A), the regulated entity would be required to establish a written inventory that contains the regulated entity's technology assets. Technology assets are components of an electronic information system, including but not limited to hardware, software, electronic media, information, and data. The written inventory would be required to include technology assets that create, receive, maintain, or transmit ePHI and those that do not but that may affect the confidentiality, integrity, or availability of ePHI.
The proposed implementation specification for network map at proposed 45 CFR 164.308(a)(1)(ii)(B) would require a regulated entity to develop a network map that illustrates the movement of ePHI throughout its electronic information systems, including but not limited to how ePHI enters and exits such information systems, and is accessed from outside of such information systems.
Under the proposed implementation specification for maintenance at proposed 45 CFR 164.308(a)(1)(ii)(C), a regulated entity would be required to review and update the written inventory of technology assets and the network map in the following circumstances: (1) on an ongoing basis, but at least once every 12 months; and (2) when there is a change in the regulated entity's environment or operations that may affect ePHI. Such a change in the
The proposed standard is consistent with the NIST Cybersecurity Framework Identify function, Asset Management (ID.AM) category, which describes inventorying hardware and software and mapping communication and data flows to create and maintain an asset inventory that can be used in a risk analysis process. For example, the Cybersecurity Framework recommends that when creating an asset inventory, organizations should include all of the following, as applicable:
• Hardware assets that comprise physical elements, including electronic devices and media, that make up an organization's networks and systems. This may include mobile devices, servers, peripherals (
• Software assets that are programs and applications that run on an organization's electronic devices. Well-known software assets include anti-malicious software tools, operating systems, databases, email, administrative and financial records systems, electronic medical/health record systems, and clinical decision support tools, including those that rely on AI. Though lesser known, there are other programs important to IT operations and security such as backup solutions, and other administrative tools that also should be included in an organization's inventory.
• Data assets that include ePHI that an organization creates, receives, maintains, or transmits on its network, electronic devices, and media. How ePHI is used and flows through an organization is important to consider as an organization conducts its risk analysis.
Where multiple persons have control over a technology asset, all persons that have control should include the asset in both their technology asset inventories and on their network maps. For example, where a covered entity contracts with a cloud-based EHR vendor, both the covered entity and the EHR vendor have control over the ePHI in the EHR. Thus, the ePHI in the EHR and the EHR should be included in the technology asset inventories and network maps of both the covered entity and the cloud-based EHR vendor. Where the technology assets are controlled entirely by another person, such as the servers controlled by a cloud-based provider of data backup services, the technology assets would not be considered part of a health care provider's electronic information systems, and therefore would not have to be included in its technology asset inventory. However, the data backup provider would have to be included in the health care provider's network map.
When creating or maintaining a technology asset inventory that can aid in identifying risks to ePHI, regulated entities should consider their technology assets that may not create, receive, maintain or transmit ePHI, but that may affect technology assets that do so.
The risks and deficiencies OCR has observed in its enforcement experience persuades us that we must consider adding an express requirement for a regulated entity to conduct an accurate and thorough written inventory of its technology assets and create a network map.
After a regulated entity conducts a written inventory of its technology assets and creates its network map, it is critical for it to identify the potential risks and vulnerabilities to its ePHI. Conducting a risk analysis is necessary to adequately protect the confidentiality, integrity, and availability of ePHI because it provides the basis for determining the manner in which the regulated entity will comply with and carry out the other standards and implementation specifications in the Security Rule.
• Have you identified all the ePHI that you create, receive, maintain, or transmit?
• What are the external sources of ePHI? For example, do vendors or consultants create, receive, maintain, or transmit ePHI?
• What are the human, natural, and environmental threats to information systems that contain ePHI?
• What are the risks posed by legacy devices, including any risks that would be posed by replacing legacy devices with new ones?
There are numerous methods of performing a risk analysis, and there is no single method or “best practice” that guarantees compliance with the Security Rule.
• Prepare for the assessment by conducting a technology asset inventory.
• Identify reasonably anticipated threats. The list of threat events and threat sources should include reasonably anticipated and probable human and natural incidents that can negatively affect the regulated entity's ability to protect ePHI. The information gathered for the technology asset inventory should be used to identify reasonably anticipated threats to ePHI.
• Identify potential vulnerabilities and predisposing conditions. For any of the various threats identified above to result in a significant risk, each needs a vulnerability or predisposing condition that can be exploited. While it is necessary to review threats and vulnerabilities as unique elements, they are often considered at the same time. Organizations should consider a given loss scenario and evaluate both, such as what threat sources might initiate which threat events or what vulnerabilities or predisposing conditions those threat sources might exploit to cause an adverse effect. From this, the regulated entity should develop a list of vulnerabilities (
• Determine the likelihood that a threat would exploit a vulnerability. For each threat event/threat source identified, a regulated entity should consider: the likelihood that the threat would occur and the likelihood that an occurred threat would exploit an identified vulnerability and result in an adverse effect. A regulated entity might consider assigning a likelihood value (
• Determine the impact of a threat exploiting a vulnerability. As with likelihood determination, a regulated entity may choose to express this effect in qualitative terms or use any other scale that the entity chooses. When selecting an impact rating, the regulated entity may consider how the threat event can affect the loss or degradation of the confidentiality, integrity, or availability of ePHI. Some tangible impacts can be measured quantitatively in terms of lost revenue, the cost of repairing the system, or the level of effort required to correct problems caused by a successful threat action. Other impacts cannot be measured in specific units (
• Determine the level of risk to ePHI while considering the information gathered and determinations made during the previous steps. The level of risk is determined by analyzing the values assigned to the overall likelihood of threat occurrence and the resulting impact of threat occurrence.
• Document the risk assessment results. Once the risk assessment has been completed as described above, the results of the risk assessment should be documented. Principally, the regulated entity should document all threat/vulnerability pairs (
The Department has also published guidance that explains the differences between a risk analysis and a gap analysis, and the use of both in an entity's risk management program.
Other NIST guidance on conducting risk assessments explains that the result of a risk analysis is a determination of risk posed to the regulated entity's ePHI and related information systems.
The Department believes that determinations of risk level and criticality may vary based on the specific type of regulated entity and the regulated entity's specific circumstances. For example, a health care provider must consider the higher levels of risks to physical and technical security that are created by regular entry and exit of individuals seeking health care and other members of the public into its facilities, creating potentially numerous avenues for access to ePHI through technology assets; in contrast, a health plan that generally does not permit physical entry by individuals into its office building may determine that the risks to ePHI from physical entry by individuals or other members of the public is low because its workforce members do not generally physically interact with the public. As another example, a vulnerability permitting unauthenticated remote code execution on a device connected to a regulated entity's relevant electronic information systems would likely constitute either a high or critical risk. However, should such a device not have the ability to connect to the network, the risk might be low or moderate because the likelihood of triggering a network vulnerability on a non-networked device is low, even though the impact of such trigger might be high. Thus, it is essential that a regulated entity consider its specific circumstances when assessing the criticality of a risk and to address such risks in a manner that is appropriate to its specific facts and circumstances.
Despite our having made available an abundance of free and widely-publicized guidance tools, OCR unfortunately has learned through its compliance and enforcement activities that regulated entities often do not perform compliant risk analyses. As discussed above, in 2016 and 2017, the Department conducted audits of 166 covered entities and 41 business associates for their compliance with selected provisions of the HIPAA Rules.
• Identify and assess the risks to all of the ePHI in their possession or even develop and implement policies and procedures for conducting a risk analysis.
• Identify threats and vulnerabilities to consider their potential likelihoods and effects, and to rate the risk to ePHI.
• Review and periodically update a risk analysis in response to changes in the environment and/or operations, security incidents, or occurrence of a significant event.
• Conduct risk analyses consistent with policies and procedures.
Failing to document any efforts to develop, maintain, and update policies and procedures for conducting risk analyses was common. For example, health care providers commonly submitted documentation of some security activities performed by a third-party security vendor, without submitting documentation of any risk analysis that served as the basis of such activities.
The responsibility to maintain an appropriate risk analysis rests with the regulated entity. Accordingly, it is essential that regulated entities understand and comply with risk analysis requirements to appropriately safeguard PHI.
Numerous OCR investigations reflect the failure of regulated entities to develop and implement holistic risk analysis programs. For example, OCR's investigation of a health system in the aftermath of a ransomware attack found evidence of potential failures to: conduct a compliant risk analysis to determine the potential risks and vulnerabilities to ePHI in its systems; implement a contingency plan to respond to emergencies, like a ransomware attack, that damage systems that contain ePHI; and implement policies and procedures to allow only authorized users access to ePHI.
In another recently concluded investigation involving a large medical center, the covered entity reported that over a seven-month period, one of its employees inappropriately accessed the ePHI of more than 12,000 patients and then sold certain patient information to an identity theft ring.
In another case, the OCR settled a ransomware cyberattack investigation with a business associate.
Given the compliance deficiencies that OCR regularly sees—those cited as examples and what OCR has observed more broadly—we believe that stronger requirements coupled with greater specificity regarding the components of a risk analysis would help and encourage regulated entities to appropriately perform such activities. Accordingly, the Department proposes to elevate the requirement to conduct a risk analysis from an implementation specification at 45 CFR 164.308(a)(1)(ii)(A) to a standard at proposed 45 CFR 164.308(a)(2)(i). Under the proposal, and consistent with NCVHS' recommendations,
The Department proposes eight implementation specifications for the risk analysis standard, consistent with previously issued guidance described above. The proposed implementation specification for a written assessment at proposed paragraph (a)(2)(ii)(A) would require the regulated entity, at a minimum, to perform and document all of the following:
• Review the technology asset inventory and the network map to identify where ePHI may be created, received, maintained, or transmitted within its information systems.
• Identify all reasonably anticipated threats to the confidentiality, integrity, and availability of ePHI that it creates, receives, maintains, or transmits.
• Identify potential vulnerabilities and predisposing conditions to the regulated entity's relevant electronic information systems—that is, its electronic information systems that create, receive, maintain, or transmit ePHI or that otherwise affect the confidentiality, integrity, or availability of ePHI.
• Create an assessment and documentation of the security measures it uses to ensure that the measures protect the confidentiality, integrity, and availability of the ePHI created, received, maintained, or transmitted by the regulated entity.
• Make a reasonable determination of the likelihood that each identified threat would exploit the identified vulnerabilities.
• Make a reasonable determination of the potential impact of each identified threat should it successfully exploit the identified vulnerabilities.
• Create an assessment of risk level for each identified threat and vulnerability.
• Create an assessment of risks to ePHI posed by entering into or continuing a business associate agreement or other written arrangement with any prospective or current business associate, respectively, based on the written verification obtained from the prospective or current business associate.
Under the proposed implementation specification for maintenance at proposed 45 CFR 164.308(a)(2)(ii)(B), a regulated entity additionally would be required to review, verify, and update the written assessment on an ongoing basis, but in any event no less frequently than at least once every 12 months, and in response to a change in the regulated entity's environment or operations that may affect ePHI. As discussed above, a change in the regulated entity's environment or operations that may affect ePHI would include, but would not be limited to, the adoption of new technology assets; the upgrading, updating, or patching of technology assets; newly recognized threats to the confidentiality, integrity, or availability of ePHI; a sale, transfer, merger, or consolidation of all or part of the regulated entity with another person; a security incident that affects the confidentiality, integrity, or availability of ePHI; and relevant changes in Federal, State, Tribal, or territorial law.
The Department proposes to redesignate the existing evaluation standard at 45 CFR 164.308(a)(8) as 45 CFR 164.308(a)(3)(i) and to revise the redesignated evaluation standard to require the technical and nontechnical evaluation(s) to be in writing and performed to determine whether change in the regulated entity's environment or operations may affect the confidentiality, integrity, or availability of ePHI. Evaluating the effects of a potential change on a regulated entity's environment or operations, including the effects on the confidentiality, integrity, and availability of ePHI, is a critical step in the change control process. An evaluation serves a similar purpose to a risk analysis. However, while a risk analysis looks at the entirety of a regulated entity's enterprise regularly and in response to a change in the regulated entity's environment or operations, an evaluation looks at a specific change that a regulated entity intends to make before the change is made. Thus, this proposal, if adopted, would ensure that a regulated entity proactively considers whether any risks or vulnerabilities to ePHI or its relevant electronic information systems will be introduced by changes it intends to make to its environment or operations and responds by implementing appropriate safeguards in a timely fashion.
We also propose to delete the requirement that the evaluation be performed “based initially on the standards implemented under this rule” because an evaluation is performed to assess the effect(s) of a planned change on the environment, which can be observed when those effects are compared to the environment reflected in the risk analysis. Additionally, the Department proposes to add two implementation specifications at
A change in the regulated entity's environment or operations would include, but would not be limited to, the adoption of new technology assets; the upgrading, updating, or patching of technology assets; newly recognized threats to the confidentiality, integrity, or availability of ePHI; a sale, transfer, merger or consolidation of all or part of the regulated entity with another person; a security incident that affects the confidentiality, integrity, or availability of ePHI; and relevant changes in Federal, State, Tribal, and territorial law.
NIST guidance provides descriptions of key activities and sample questions that would help regulated entities meet this evaluation standard.
• Determine whether internal or external evaluation is most appropriate. Which staff has the technical experience and expertise to evaluate the systems? If an outside vendor is used, what factors should be considered when selecting the vendor, such as credentials and experience?
• Develop standards and measurements for reviewing all standards and implementation specifications of the Security Rule. Have management, operational, and technical issues been considered? Do the elements of each evaluation procedure (
• Conduct an evaluation. Has the process been formally communicated to those who have been assigned roles and responsibilities in the evaluation process? Has the organization explored the use of automated tools to support the process?
• Document results, including: each evaluation finding and remediation options, recommendations, and decisions; known gaps between identified risks, mitigating security controls, and any acceptance of risk, including justification; developed security program priorities and established targets for continuous improvement; use of evaluation results to inform security changes to protect ePHI; communication of evaluation results, metrics, and/or measurements to relevant organizational personnel.
• Repeat evaluations periodically. Establish the frequency of evaluations, repeating evaluations when environmental and operational changes that affect the security of ePHI are made (
Despite the existing standard and the availability of guidance, many regulated entities do not evaluate how changes in their environment, such as a merger or acquisition or implementation of new technology, may affect the security of ePHI. In some instances, regulated entities assert that they have done so, but have no documentation of the purported evaluation. The Department believes that this proposal, if adopted, would clarify our expectations for implementing these safeguards.
As described in Department guidance, regulated entities can defend themselves from common cyberattacks, but hackers continue to target the health care industry in search of ways to access valuable ePHI.
Risk management processes that are compliant with the Security Rule include identifying and mitigating risks and vulnerabilities that unpatched software poses to an organization's ePHI. Mitigation activities could include installing patches if patches are available and patching is reasonable and appropriate. In situations where patches are not available (
Although older applications or devices may no longer be supported with patches for new vulnerabilities, regulated entities must still take appropriate action if a newly discovered vulnerability affects an older application or device. If an obsolete, unsupported system cannot be upgraded or replaced, additional safeguards should be implemented or existing safeguards enhanced to mitigate known vulnerabilities until upgrade or replacement can occur (
Patches can be applied to software and firmware on all types of devices—telephones, computers, servers, routers, and more. Installation of vendor-recommended patches is typically a routine process. However, regulated entities should be prepared if issues arise as a result of applying patches. Software and hardware are often interconnected and dependent on the functionality and output of other information systems or components of other information systems. When certain changes are made, including the installation of a patch, software dependent on the changed application may not perform as expected because settings or data may be affected. Thus, in complex environments, patch management plays a crucial role in the safe and correct implementation of these changes.
Consistent with previously issued guidance, the discussion above, and recommendations from NCVHS,
The Department proposes six implementation specifications at proposed 45 CFR 164.308(a)(4)(ii) that would be associated with the proposed standard for patch management. The proposed implementation specification for policies and procedures at proposed paragraph (a)(4)(ii)(A) would require a regulated entity to establish written policies and procedures for identifying, prioritizing, acquiring, installing, evaluating, and verifying the timely installation of patches, updates, and upgrades throughout its electronic information systems that create, receive, maintain, or transmit ePHI or that otherwise affect the confidentiality, integrity, or availability of ePHI. Under the proposed implementation specification for maintenance at proposed paragraph (a)(4)(ii)(B), a regulated entity would be required to review its patch management written policies and procedures at least once every 12 months and modify them as reasonable and appropriate based on that review. The proposed implementation specification for application at proposed paragraph (a)(4)(ii)(C) would require a regulated entity to patch, update, and upgrade the configurations of its relevant electronic information systems in accordance with its written policies and procedures and based on the results of: the regulated entity's risk analysis that would be required by proposed 45 CFR 164.308(a)(2), the vulnerability scans that would be required under proposed 45 CFR 164.312(h)(2)(i), the monitoring of authoritative sources that would be required under proposed 45 CFR 164.312(h)(2)(ii), and penetration tests proposed at 45 CFR 164.312(h)(2)(iii). The proposal would require that such actions be taken within a reasonable and appropriate period of time, except to the extent that an exception in proposed paragraph (h)(2)(ii)(D) applies. Specifically, a reasonable and appropriate period of time to patch, update, or upgrade the configuration of a relevant electronic information system would be within 15 calendar days of identifying the need to address a critical risk where a patch, update, or upgrade is available; or, where a patch, update, or upgrade is not available, within 15 calendar days of a patch, update, or upgrade becoming available. The proposal would require that, within 30 calendar days of identifying the need to address a high risk,
For the proposed exceptions to apply, we propose in proposed paragraph (a)(4)(ii)(D) that a regulated entity would be required to document that an exception applies and that all other applicable conditions are met. The first proposed exception in proposed 45 CFR 164.308(a)(4)(ii)(D)(
In proposed paragraph (a)(4)(ii)(E), the Department proposes to require a regulated entity document in real-time the existence of the applicable exception and to implement reasonable and appropriate compensating controls. Similarly, in proposed paragraph (a)(4)(ii)(F), we propose that, where an exception applies, a regulated entity would be required to implement reasonable and appropriate security measures as compensating controls to address the identified risk according to the timeliness requirements in proposed 45 CFR 164.308(a)(5)(ii)(D) until such time as a patch, update, or upgrade that does not adversely affect the confidentiality, integrity, or availability of ePHI becomes available.
This proposed standard aligns with the Department's enhanced CPG for Cybersecurity Mitigation by quickly requiring a regulated entity to prioritize and mitigate vulnerabilities discovered by vulnerability scanning and penetration testing.
The Department proposes to elevate the implementation specification for risk management to a standard at proposed 45 CFR 164.308(a)(5)(i). This proposed standard would require a regulated entity to establish and implement a plan for reducing the risks identified through its risk analysis activities. Specifically, it would require a regulated entity to implement security measures sufficient to reduce risks and vulnerabilities to all ePHI to a reasonable and appropriate level. What would constitute a reasonable and appropriate level depends on the regulated entity's specific circumstances, including but not limited to its size, needs and capabilities, risk profile, the ability of security measures to reduce or eliminate a particular identified risk or vulnerability, and the ubiquity of such security measures. We also propose four implementation specifications that would require regulated entities to engage in activities that are consistent with previously issued guidance described below.
Under the proposed implementation specification for planning at proposed paragraph (a)(5)(ii)(A), a regulated entity would be required to establish and implement a written risk management plan for reducing risks to all ePHI, including, but not limited to, those risks identified by the regulated entity's risk analysis,
The Department previously issued guidance on risk management, including links to NIST resources, that is consistent with what we propose in this NPRM.
Under this proposed standard, the regulated entity would be required to reduce the risks to its ePHI to a level that is reasonable and appropriate for its specific circumstances. Ultimately, the regulated entity's risk assessment processes should inform its decisions about the manner in which it will implement security measures to comply with the Security Rule's standards and implementation specifications.
As stated by NIST, “the documentation and retention of risk assessment and risk management activities” is “important for future risk management efforts.”
Consistent with other proposals to elevate certain critical implementation specifications to standards, we propose to elevate the implementation specification for sanction policy at 45 CFR 164.308(a)(ii)(C) to a standard for sanction policy at proposed 45 CFR 164.308(a)(6)(i). We propose this standard because applying appropriate sanctions against workforce members who fail to comply with security requirements, and thus imperil the
Specifically, under the proposed implementation specification for policies and procedures at proposed 45 CFR 164.308(a)(6)(ii)(A), a regulated entity would be required to establish written policies and procedures for sanctioning workforce members who fail to comply with the regulated entity's security policies and procedures. The proposed implementation specification for modifications at paragraph (a)(6)(ii)(B) would require a regulated entity to review its written sanctions policies and procedures at least once every 12 months, and, based on that review, modify such policies and procedures as reasonable and appropriate. The proposed implementation specification for application at proposed paragraph (a)(6)(ii)(C) would direct a regulated entity to apply appropriate sanctions against workforce members who fail to comply with such security policies and procedures and to document when it sanctions a workforce member and the circumstances in which it applies such sanctions.
The policy choices represented in this NPRM are informed by the compliance challenges OCR has observed through its enforcement activities. These challenges demonstrate that regulated entities would benefit from greater precision and clarity about their legal obligations in the proposed standard. Additionally, according to a recent survey of IT and IT security practitioners in healthcare, careless users were the top cause of data loss and exfiltration, while accidental loss was the second highest cause. Thirty-one percent of respondents indicated that the data loss or exfiltration was caused by a failure of workforce members to follow organizational policies.
Sanction policies that are appropriately applied can improve a regulated entity's general compliance with the HIPAA Rules. Imposing consequences on workforce members who violate a regulated entity's policies and procedures implemented as required by the Security Rule or the HIPAA Rules generally can be effective in creating a culture of HIPAA compliance and improved cybersecurity. Knowledge that there is a negative consequence to noncompliance enhances the likelihood of compliance.
Regulated entities have the flexibility to implement the standard in a manner consistent with numerous factors, including but not limited to their size, degree of risk, and environment. The HIPAA Rules do not require regulated entities to impose any specific penalty for any particular violation, nor do they require regulated entities to implement any particular methodology for sanctioning workforce members. Rather, in any particular case, each regulated entity must determine the type, cause, and severity of sanctions imposed based upon its policies and the relative severity of the violation.
• Documenting or implementing sanction policies pursuant to a formal process.
• Requiring workforce members to affirmatively acknowledge that a violation of the organization's HIPAA policies or procedures may result in sanctions.
• Documenting the sanction process, including the personnel involved, the procedural steps, the time-period, the reason for the sanction(s), and the final outcome of an investigation.
• Creating sanctions that are “appropriate to the nature of the violation.”
• Creating sanctions that “vary depending on factors such as the severity of the violation, whether the violation was intentional or unintentional, and whether the violation indicated a pattern or practice of improper use or disclosure of [PHI].”
• Creating sanctions that “range from a warning to termination.”
• Providing examples “of potential violations of policy and procedures.”
Generally, it is important for a regulated entity to consider whether its sanction policies align with its general disciplinary policies, and how the individuals or departments involved in the sanction processes can work in concert, when appropriate. Regulated entities may also want to consider how sanction policies can be fairly and consistently applied throughout the organization, to all workforce members, including management.
As described in previously issued HHS guidance, review of activity in its relevant electronic information systems and their components, including workstations,
Detecting and preventing data leakage initiated by malicious authorized users is a significant challenge.
Regulated entities should regularly review activity in their relevant electronic information systems (including the components of such systems) for potential concerns and consider ways to automate such reviews.
Department and NIST guidance advise regulated entities to consider many questions when establishing their policies and procedures for reviewing activity in their relevant electronic information systems review.
• What logs or reports are generated by the information systems?
• Is there a policy that establishes what reviews will be conducted?
• Are there corresponding procedures that describe the specifics of the reviews?
• Who is responsible for the overall process and results?
• How often will review results be analyzed?
• Where will audit information reside (
Compliance challenges observed through OCR's enforcement activities suggest that regulated entities would benefit from an expanded standard to provide more details on compliance expectations. Investigations of reported breaches of unsecured PHI discussed above as examples of risk analysis failures also identified a potential failure by the regulated entities to conduct appropriate information system activity review.
Similarly, a business associate experienced an intrusion into its systems that it failed to notice for over 20 months. Eventually, the ePHI of more than 200,000 individuals associated with several covered entities was encrypted in a ransomware cyberattack.
Consistent with previously issued guidance and based on OCR's enforcement experience, the Department proposes to elevate the existing implementation specification for information system activity review to a standard and to redesignate it as proposed 45 CFR 164.308(a)(7)(i). The purpose of the proposal is to impose specific requirements on a regulated entity to review the activity occurring in its relevant electronic information systems, including the activity occurring in the components of such systems. By virtue of these proposed requirements, we would specify actions that a regulated entity is required to take to ensure that only appropriate users access ePHI and that it responds quickly to any suspicious activity in its relevant electronic information systems, including in components thereof, such as workstations that connect to or otherwise access its relevant electronic information systems. We also propose to revise the language to provide regulated entities with additional direction regarding their review of suspicious activities. The proposed standard, if adopted, would require a regulated entity to implement written policies and procedures for regularly reviewing
The Department proposes five implementation specifications for the proposed standard for information system activity review. The proposed implementation specification for policies and procedures at proposed 45 CFR 164.308(a)(7)(ii)(A) would require a regulated entity to establish written policies and procedures for retaining and reviewing records of activity in the regulated entity's relevant electronic information systems by persons and technology assets. Such written policies and procedures should require review of activity in the regulated entity's relevant electronic information systems as a whole, as well as the system's components, including but not limited to any workstations. They should also include information on the frequency for reviewing such records. The frequency of review may vary based on the specific type of record being reviewed and the information it contains. According to the proposed implementation specification for scope at proposed 45 CFR 164.308(a)(7)(ii)(B), records of activity in the regulated entity's relevant electronic information systems by persons and technology assets would include, but would not be limited to, audit trails, event logs, firewall logs, system logs, data backup logs, access reports, anti-malware logs, and security incident tracking reports. The proposed implementation specification for records review at proposed 45 CFR 164.308(a)(7)(ii)(C) would require a regulated entity to review records of activity in its relevant electronic information systems by persons and technology assets as often as reasonable and appropriate for the type of report or log. They would also be required to document such review. A proposed implementation specification for record retention at proposed 45 CFR 164.308(a)(7)(ii)(D) would require a regulated entity to retain records of activity in its relevant electronic information systems by persons and technology assets. Under the proposal, the regulated entity would be required to retain such records for an amount of time that is reasonable and appropriate for the specific type of report or log. For example, it may be reasonable and appropriate to retain audit trails for a different amount of time than security incident tracking reports because of the type of information they contain and their purpose. The proposed implementation specification for response at proposed 45 CFR 164.308(a)(7)(ii)(E) would require a regulated entity to respond to a suspected or known security incident identified during the review of activity in its relevant electronic information systems, including any components thereof, such as workstations, in accordance with the regulated entity's security incident plan.
Consider a large regulated entity that may have thousands of workforce members accessing various networks and relevant electronic information systems, generating large amounts of log and audit data. Given the size, complexity, and capabilities of entities of such size, a reasonable and appropriate process for reviewing activity may include the adoption of an automated solution that performs rules-based enterprise log aggregation and analysis to identify anomalous or suspicious patterns of behavior in the regulated entity's relevant electronic information systems and the components thereof, including but not limited to workstations, in real-time and sends alerts of potential security incidents to a workforce member or team for further review and action. By contrast, for a small regulated entity, it might be reasonable and appropriate to have designated staff that manually review log files and audit trails multiple times per week.
The Department proposes to redesignate the standard for assigned security responsibility at 45 CFR 164.308(a)(2) as proposed 45 CFR 164.308(a)(8). OCR's enforcement experience demonstrates that, in practice, many regulated entities follow informal policies and procedures that are not documented, and have not documented the identification of the Security Official in writing.
Based on OCR's enforcement experience, and consistent with existing guidance, we propose to modify the standard to specify that a regulated entity must identify in writing the Security Official who is responsible for the establishment and implementation of the policies and procedures, whether written or otherwise, and deployment of technical controls. These proposals are consistent with our general intention in this NPRM to propose to clarify that policies and procedures required by the Security Rule should be reduced to writing and to distinguish between the implementation of written policies and procedures and the deployment of technical controls.
As we previously explained in guidance,
NIST guidance urges the regulated entity to select a workforce member who is able to assess the effectiveness of security to serve as the point of contact for security policy, implementation, and monitoring.
The purpose of the workforce security standard is to ensure that workforce members only have access to ePHI that they need to perform their assigned functions and are prevented from accessing ePHI that they are not authorized to access to perform such functions. The proposed changes to the standard and implementation specifications would clarify the actions required of a regulated entity to assure such limits.
Individuals have been harmed in the past by the failure of regulated entities to comply with the Security Rule requirements for workforce security. For example, a former employee of a large covered entity was able to access their former worksite and workstation using still-active credentials for more than a week after their employment was terminated.
Moreover, this proposal is consistent with guidance issued by HHS and NIST for implementing this standard and associated implementation specifications. For example, in guidance issued in 2005, we explained that regulated entities must identify workforce members who need access to ePHI to carry out their duties.
NIST guidance provides descriptions of key activities and sample questions for regulated entities implementing this implementation specification.
NIST also recommends establishing criteria and procedures for hiring and assigning tasks and ensuring that these requirements are included as part of the personnel hiring process.
We issued guidance in 2017 addressing termination procedures.
Guidance that we issued in 2019 further explains that “security is a dynamic process.”
NIST guidance provides additional descriptions of key activities and sample questions for regulated entities to consider when implementing this standard and associated implementation specifications.
However, regulated entities often do not establish or implement written procedures, nor, even in instances where they have established or implemented them, have they done so in an appropriate fashion to protect ePHI from improper access by current or former workforce members.
Consistent with the guidance described above and other proposals in this NPRM, the Department proposes to redesignate the workforce security standard at 45 CFR 164.308(a)(3)(i) as proposed 45 CFR 164.308(a)(9)(i), to add a paragraph heading to clarify the organization of the regulatory text, and to modify the regulatory text clarify that a regulated entity must implement written policies and procedures ensuring that workforce members have appropriate access to ePHI and to relevant electronic information systems. The regulated entity must also implement written policies and procedures preventing workforce members from accessing ePHI and relevant electronic information systems if they are not authorized to do so. The modifications we propose to the implementation specification for authorization and/or supervision would clarify that a regulated entity is required to establish and implement written procedures for the authorization and/or supervision of workforce members who access ePHI or relevant electronic information systems or who work in facilities where ePHI or relevant electronic information systems might be accessed.
The purpose of the standard for information access management is to protect ePHI by reducing the risk that other persons or technology assets may access the information for their own reasons. Existing HHS guidance explains that restricting access to only those persons and entities with a need for access is a basic tenet of security.
OCR's enforcement experience demonstrates that many regulated entities have not adequately implemented this standard. Thus, we believe it is necessary to consider strengthening the requirement. For example, on one occasion, a large covered entity's failure to implement its written policies and procedures to ensure that employees only had access to ePHI that they had proper authorization or authority to access enabled an employee to access the ePHI of more than 24,000 individuals.
To ensure that regulated entities implement recommendations and best practices for securing ePHI, we propose to require in the standard for information access management and associated implementation specifications that a regulated entity must establish and implement written policies and procedures for authorizing access to ePHI and relevant electronic information systems that are consistent with the Privacy Rule. The Department also proposes to redesignate the standard at 45 CFR 164.308(a)(4)(i) as proposed 45 CFR 164.308(a)(10)(i) and to add a paragraph heading to clarify the organization of the regulatory text. Additionally, the Department proposes to modify three of the associated existing implementation specifications and to add three new implementation specifications as follows.
Specifically, the Department proposes to redesignate the implementation specification for isolating health care clearinghouse functions as proposed 45 CFR 164.308(a)(10)(ii)(A) and to modify it to require a health care clearinghouse that is part of a larger organization to establish and implement written policies and procedures that protect the ePHI and relevant electronic information systems of the clearinghouse from unauthorized access by the larger organization.
The existing implementation specification for isolating health care clearinghouse functions only applies in the situation where a health care clearinghouse is part of a larger organization. This would remain true under the proposal to revise this implementation specification, if adopted. In these situations, the health care clearinghouse is responsible for protecting the ePHI that it is creating, receiving, maintaining, and transmitting. As discussed in NIST guidance, if a health care clearinghouse is part of a larger organization, the clearinghouse must implement policies and procedures that protect the ePHI of the clearinghouse from unauthorized access by the larger organization.
We also propose to redesignate the implementation specification for access authorization as proposed 45 CFR 164.308(a)(10)(ii)(B) and to modify it to emphasize that a regulated entity must establish and implement written policies and procedures for granting and revising access to ePHI and the regulated entity's relevant electronic information systems as necessary and appropriate for each prospective user and technology asset to carry out their assigned function(s) (
The existing implementation specification for access authorization calls for the regulated entity to implement policies and procedures for granting access to ePHI, for example, through components of its information system.
• Decide and document procedures for how access to ePHI would be granted to workforce members within the organization.
• Select the basis for restricting access to ePHI. Select an access control method (
• Decide and document how access to ePHI would be granted for privileged functions.
• Ensure that there is a list of personnel with authority to approve user requests to access ePHI and systems with ePHI.
• Identify authorized users with access to ePHI, including data owners and data custodians.
• Consider whether multiple access control methods are needed to protect ePHI according to the results of the risk assessment.
• Determine whether direct access to ePHI would ever be appropriate for individuals external to the organization (
Other questions that a regulated entity should consider when establishing such policies and procedures include: Have appropriate authorization and clearance procedures, as specified in the standard for workforce security,
The Department proposes three additional implementation specifications for authentication management, maintenance, and network segmentation. These specifications clarify the Department's expectations for compliance and are consistent with NIST guidance. We believe that the proposed additions would assist regulated entities in their efforts to prevent or mitigate attacks by malicious internal and external actors. For the implementation specification on authentication management at proposed 45 CFR 164.308(a)(10)(ii)(C), we propose to require a regulated entity to establish and implement written policies and procedures for verifying the identities of users and technology assets before accessing the regulated entity's relevant electronic information systems, including written policies and procedures for implementing MFA technical controls.
Finally, to address the Department's general concerns regarding the ongoing failure of many regulated entities to regularly review and revise their policies and procedures, the proposed implementation specification for maintenance at proposed 45 CFR
A covered entity's workforce is its frontline not only in patient care and patient service, but also in safeguarding the privacy and security of PHI.
An organization's training program should be an ongoing, evolving process and flexible enough to educate workforce members on new cybersecurity threats and how to respond to them. As such, regulated entities should consider how often to train workforce members on security issues, given the risks and threats to their enterprises, and how often to send security updates to their workforce members. Many regulated entities have determined that twice-annual training and monthly security updates are necessary, given their risks analyses.
Regulated entities should apply security updates and reminders to quickly communicate new and emerging cybersecurity threats to workforce members such as new social engineering ploys (
HHS has issued many types of training materials on securing PHI.
To ensure security awareness training compliance, a regulated entity needs to regularly educate its workforce members on the evolving technological threats to ePHI, how to use the technology that the regulated entity has adopted and implemented, and the specific procedures workforce members must follow to ensure that the ePHI remains protected. Additionally, while many educational programs for clinicians provide general training on the HIPAA Rules, the curriculums vary widely. Without providing its own training on the Security Rule, a regulated entity cannot ensure that the training its workforce received elsewhere meets the required standards.
Given the failure of regulated entities to implement the security awareness and training standard and consistent with existing guidance, the Department proposes to provide more detailed requirements for security awareness training. Specifically, the Department proposes to rename and redesignate the standard for security awareness and training at 45 CFR 164.308(a)(5)(i) as the standard for security awareness training at proposed 45 CFR 164.308(a)(11)(i) and to add a paragraph heading to clarify the organization of the regulatory text. The proposed standard would require a regulated entity to implement security awareness training for all workforce members on protection of ePHI and information systems as necessary and appropriate for the members of the workforce to carry out their assigned function(s) (
We propose four implementation specifications for the proposed security awareness training standard. The proposed implementation specification for training at 45 CFR 164.308(a)(11)(ii)(A) would require a regulated entity to establish and implement security awareness training for all workforce members that addresses the following:
• The written policies and procedures required by the Security Rule, as necessary and appropriate for the workforce members to carry out their assigned functions.
• Guarding against, detecting, and reporting suspected or known security incidents, including but not limited to malicious software and social engineering.
• The written policies and procedures for accessing the regulated entity's electronic information systems, including, but not limited to, safeguarding passwords, setting unique passwords of sufficient strength to ensure the confidentiality, integrity, and availability of ePHI, and establishing limitations on sharing passwords. Consistent with the recommendation from NCVHS, such policies and procedures should ensure that the regulated entity does not employ default passwords and should prevent workforce members from sharing of credentials.
The Department proposes to replace the implementation specification for periodic security updates
Additionally, the Department proposes at proposed 45 CFR 164.308(a)(11)(ii)(C) an implementation specification for ongoing education. This would require a regulated entity to provide its workforce members with ongoing reminders of their security responsibilities and notice of relevant threats, including but not limited to, new and emerging malicious software and social engineering. Lastly, we propose a new implementation specification for documentation at proposed 45 CFR 164.308(a)(11)(ii)(D) that would require a regulated entity to document that it has provided training and ongoing reminders to its workforce members.
Addressing security incidents is an integral part of an overall security program. While a regulated entity will never be able to prevent all security incidents, implementing the Security Rule standards would reduce the amount and negative consequences of security incidents it encounters. Even regulated entities with detailed security policies and procedures and advanced technology may experience security incidents, but through sufficient planning and continued monitoring generally can mitigate the negative effects of such incidents on regulated entities, and, ultimately, individuals. The security incident procedures standard is intended to help ensure that a regulated entity conducts such planning and monitoring to allow it to mitigate such negative effects.
The Department has also provided guidance that a regulated entity can use to devise its security incident plans. The policies and procedures a regulated entity establishes to prepare for and respond to security incidents can pay dividends with faster recovery times and reduced compromises of ePHI.
NIST also offers guidance for addressing security incidents.
• Determine the goals of an incident response.
• Develop and deploy an incident response team or other reasonable and appropriate response mechanism.
• Develop and implement policy and procedures to respond to and report security incidents.
• Incorporate post-incident analysis into updates and revisions.
NIST has also issued comprehensive guidelines for incident handling, particularly for analyzing incident related data and determining the appropriate response to each incident.
Despite this existing guidance, OCR's enforcement experience indicates that many regulated entities have not met the existing standard, so we believe that additional specificity regarding their obligations and liability for incident response is warranted. Accordingly, the Department proposes to redesignate the standard for security incident procedures as 45 CFR 164.308(a)(12)(i), to add a paragraph heading to clarify the organization of the regulatory text, and to modify the regulatory text to clarify that a regulated entity would be required to implement written policies and procedures to “respond to,” rather than “address,” security incidents. Additionally, we propose to clarify expectations by adding an implementation specification for planning and testing at proposed 45 CFR 164.308(a)(12)(ii)(A)(
Internal reporting is an essential component of security incident procedures.
The proposal to require a regulated entity to establish written security incident response plans and procedures for how it will respond to suspected or known security incidents would align with the enhanced CPG for Third Party Incident Reporting because it would address the procedures for how and when a business associate would report to a covered entity or another business associate known or suspected security incidents, as required by proposed 45 CFR 164.314(a)(2)(i)(C).
Under proposed 45 CFR 164.308(a)(12)(ii)(A)(
This proposal, if finalized, would include requirements that align with the Department's essential CPG for Basic Incident Planning and Preparedness to have effective responses to and recovery from security incidents.
Additionally, the Department proposes to redesignate the implementation specification for response and reporting at 45 CFR 164.308(a)(6)(ii) as 45 CFR 164.308(a)(12)(ii)(B) and to rename it “Response.” We also propose to modify the existing implementation specification by separating it into two paragraphs: one at paragraph (a)(12)(ii)(B)(
The purpose of any contingency plan is to allow an organization to return to its daily operations as quickly as possible after an unforeseen event.
The Department and NIST have issued extensive guidance on contingency planning, including detailed descriptions of key activities, sample questions for regulated entities to consider when standing up a contingency plan, and information on how the results of the risk analysis feed into contingency plans.
To address these inadequacies in compliance and to protect the confidentiality, integrity, and availability of ePHI, the Department proposes to redesignate the standard for a contingency plan at 45 CFR 164.308(a)(7)(i) as proposed 45 CFR 164.308(a)(13)(i), to add a paragraph heading to clarify the organization of the regulatory text, and to modify the regulatory text to clarify it. The modified standard, as proposed, would require a regulated entity to establish (and implement as needed) a written contingency plan, consisting of written policies and procedures for responding to an emergency or other occurrence, including, but not limited to, fire, vandalism, system failure, natural disaster, or security incident, that adversely affects relevant electronic information systems.
The Department proposes a new implementation specification for criticality analysis at proposed 45 CFR 164.308(a)(13)(ii)(A). This would require a regulated entity to perform and document an assessment of the relative criticality of its relevant electronic information systems and technology assets in its relevant electronic information systems. The proposal would not limit this analysis to electronic information systems that create, receive, maintain, or transmit ePHI because other electronic information systems and/or technology assets may be crucial to ensuring the confidentiality, integrity, or availability of ePHI, providing patient care, and supporting other business needs. A prioritized list of specific relevant electronic information systems and technology assets in those electronic information systems would help a regulated entity to determine their criticality and the order of restoration.
Under this proposal, the implementation specification for establishing and implementing a data backup plan would be redesignated as proposed 45 CFR 164.308(a)(13)(ii)(B) and renamed “Data backups.” It would also be modified to clarify that the procedures to create and maintain exact retrievable copies of ePHI must be in writing, and to also require such procedures to include verifying that the ePHI has been copied accurately. For example, the ability to access ePHI from a remote location in the event of a total failure should be reflected in the procedures specified for data backups.
The proposed implementation specification for backing up information systems at proposed paragraph (a)(13)(ii)(C) would require a regulated entity to establish and implement written procedures to create and maintain backups of its relevant electronic information systems, including verifying the success of such backups. Establishing such procedures would ensure that the ePHI in relevant electronic information systems is both protected and available.
Additionally, the Department proposes to redesignate the implementation specification for disaster recovering planning as paragraph (a)(13)(ii)(D). We propose to clarify that a regulated entity would be required to establish (and implement as needed) written procedures to restore both its critical relevant electronic information systems and data within 72 hours of the loss, and to restore the loss of other relevant electronic information systems and data in accordance with its criticality analysis.
The Department proposes to clarify the implementation specification for emergency mode operation planning, redesignated as proposed 45 CFR 164.308(a)(13)(ii)(E), by clarifying that procedures must be written. We also propose to redesignate the implementation specification for testing and revision procedures as paragraph (a)(13)(ii)(F) and to clarify that procedures for testing and revising of the required contingency plans must be established in writing. We propose to require a regulated entity to review and implement its procedures for testing contingency plans at least once every 12 months, to document the results of such tests, and to modify those plans as reasonable and appropriate based on the results of those tests.
The final standard we propose under 45 CFR 164.308(a) is a new standard for compliance audits at proposed 45 CFR 164.308(a)(14). For this proposed standard, the Department proposes to require regulated entities to perform and document an audit of their compliance with each standard and implementation specification of the Security Rule at least once every 12 months.
While the Security Rule does not currently require regulated entities to conduct internal or third-party compliance audits, such activities are important components of a robust cybersecurity program. The Government Accountability Office has published guidance on conducting cybersecurity performance audits for Federal agencies.
Vendor management and identification of risks in a supply chain are essential to controlling the introduction of new threats and risks to a regulated entity.
The Security Rule requires a regulated entity to protect the confidentiality, integrity, and availability of all ePHI that it creates, receives, maintains, or transmits.
This proposed new requirement that a regulated entity obtain written verification from its business associates that they have deployed technical safeguards combined with the existing requirement to obtain written satisfactory assurances that they safeguard ePHI, aligns with the Department's essential CPG for Vendor/Supplier Cybersecurity Requirements.
Based on the OCR's investigations and enforcement experience, we believe that some regulated entities are not aware that they retain compliance responsibility for implementing requirements of the Security Rule, even when they have delegated the functions of designated security official to a business associate. Therefore, the Department proposes a new standard for delegation to a business associate at proposed 45 CFR 164.308(b)(3). The proposed standard would clarify that a regulated entity may permit a business associate to serve as its designated security official.
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular. For any proposed timeframe that a commenter believes is not appropriate, we request comment and explanation on a more appropriate timeframe.
a. Whether the Department should require a regulated entity to implement any additional administrative safeguards. If so, please explain.
b. Whether the Department should not require a regulated entity to implement any of the existing or proposed standards for implementation specifications. If so, please explain.
c. Whether there are additional implementation specifications that should be adopted for any of the standards for administrative safeguards.
d. Whether the Department should provide any exceptions to the administrative safeguards or related implementation specifications. If so, please explain when and why any exceptions should apply.
e. Whether once every 12 months is the appropriate frequency between reviews of policies, procedures, and other activities required by the other standards for administrative safeguards.
f. Whether there are any special considerations for business associates and business associate agreements that the Department should be aware of with respect to administrative safeguards.
g. Whether there are any requirements for business associates and business associate agreements that the Department should include in administrative safeguards that it did not propose.
h. Whether the Department should require covered entities to report to their business associates (or business associates to their subcontractors) the activation of the covered entities' (or business associates') contingency plans. If so, please explain the appropriate circumstances of and the appropriate amount of time for such notification.
i. Whether once every 12 months is an appropriate length of time in which a covered entity must verify and document that a business associate has deployed technical safeguards pursuant to the requirements.
j. Whether the Department should require covered entities to obtain satisfactory assurances and verify that a business associate has implemented physical or other safeguards in addition to deploying technical safeguards before permitting it to create, receive, maintain, or transmit ePHI on its behalf.
k. Whether on an ongoing basis, but at least once every 12 months and when there is a change to a regulated entity's environment or operations that affects ePHI, is the appropriate frequency for updating the technology asset inventory and network map?
l. Whether on an ongoing basis, but at least once every 12 months and when there is a change to the regulated entity's environment or operations that affects ePHI, is the appropriate frequency for performing a risk analysis?
m. Whether there are additional events for which the Department should require a regulated entity to update its risk analysis. If so, please explain.
n. Whether the Department should include or exclude any specific circumstances from its explanation of environmental or operational changes when determining whether review or update of the written inventory of technology assets and network map or review of the risk analysis written assessment is warranted.
o. Whether the proposed requirement in the standard for evaluation, to perform a written technical and nontechnical evaluation within a reasonable period of time before making a change in the regulated entity's environment or operations pursuant to the requirements, is sufficiently clear. If not, how should the Department clarify it? For example, should the Department require a specific amount of time, and if so, what length of time?
p. Whether at least once every 12 months is the appropriate frequency for reviewing and updating written policies and procedures for patch management, sanctions policies and procedures information system activity review, workforce security, and information access management.
q. Whether as reasonable and appropriate in response to changes in the risk analysis, but at least once every 12 months, is the appropriate frequency for reviews of a regulated entity's written risk management plan.
r. Whether the proposed frequency for security awareness training is appropriate.
s. Whether the proposed substance of the security awareness training is appropriate, and any recommendations for additional required content.
t. Whether the proposed timelines for applying patches, updates, and upgrades are appropriate.
u. Whether the Department should set a time limit for applying patches, updates, and upgrades to configurations of relevant electronic information systems to address moderate and low risks. If so, please explain and provide a recommendation.
v. Whether the amount of time regulated entities currently retain records of information system activity varies by the type of record, and for how long such records are retained.
w. Whether the Department should specify the length of time for which records of information system activity should be retained. If so, please explain.
x. Whether the Department should require that a regulated entity notify other regulated entities of the termination of a workforce member's access to ePHI in less than 24 hours after the workforce member's termination. If so, please explain what would be an appropriate period of time (
y. Whether at least once every 12 months is the appropriate frequency for testing security incident response plans, documenting the results, and revising such plans.
z. Whether it is reasonable and appropriate to require that regulated entities restore loss of critical relevant electronic information systems and data in 72 hours or less.
aa. Whether the Department should require a regulated entity to restore all of its relevant electronic information systems and data within 72 hours?
bb. Whether the Department should require some regulated entities to restore their relevant electronic information systems and data in less than 72 hours? If so, please explain.
cc. Whether at least once every 12 months is the appropriate frequency for the testing of contingency plans?
dd. Whether annual auditing of a regulated entity's compliance with the Security Rule is appropriate.
ee. Whether the Department should specify the level of detail or standard required for the annual compliance audit. If so, please explain.
ff. Whether the Department should require a regulated entity to obtain written verification of their business associates' implementation of the administrative and physical safeguards that are required by the Security Rule, in addition to the proposed requirement to obtain verification of implementation of the technical safeguards. If so, please explain.
gg. Whether there are other requirements for which the Department should require that the person performing them have a specific level or type of expertise. If so, please explain.
A person with physical access to electronic media or a regulated entity's electronic information systems that create, receive, maintain, or transmit or that otherwise affect the confidentiality, integrity, and availability of ePHI might have the opportunity to change the configurations of its relevant electronic information systems, install malicious software or otherwise adversely affect technology assets in its relevant
Section 164.310 includes the four standards with which a regulated entity must comply to physically secure relevant electronic information systems and the premises where they are located. These standards require regulated entities to implement physical safeguards for facility access controls, workstation use, workstation security, and device and media controls in a manner that conforms with 45 CFR 164.306(c), the general compliance provision for the security standards.
As discussed above in greater detail, physical safeguards encompass the physical measures, and related policies and procedures, to protect relevant electronic information systems and related buildings and equipment from natural and environmental hazards, and unauthorized intrusion.
The standard for facility access controls at 45 CFR 164.310(a)(1) requires a regulated entity to implement policies and procedures that limit physical access to electronic information systems and facilities that contain those systems. Section 164.310(a)(1) also requires a regulated entity to ensure its policies and procedures allow persons who are properly authorized to access its facilities.
Under 45 CFR 164.310(a)(2), a regulated entity must implement the standard for facility access controls in accordance with four implementation specifications. The implementation specification for contingency operations addresses the establishment (and implementation as needed) of procedures that allow for facility access in support of the restoration of lost data under a disaster recovery plan and emergency mode operations.
Section 164.310(b) requires a regulated entity to implement policies and procedures specifying proper workstation functions, the manner in which those functions are to be performed, and the physical attributes of the environment for where specific workstations or classes of workstation used for accessing ePHI.
Device and media controls can help regulated entities respond to and recover from security incidents and breaches.
The Department has concerns regarding the effectiveness of the language used in the physical safeguards in 45 CFR 164.310 for the same reasons discussed in the context of 45 CFR 164.306 and 164.316. For example, while 45 CFR 164.310 contemplates that a regulated entity must implement the standards and implementation specifications required under 45 CFR 164.310 in accordance with the general documentation and maintenance requirements found in 45 CFR 164.306 and 164.316, at least one court has stated that compliance obligations are limited to the plain words of regulatory text and that a requirement to “implement” does not mean that a requirement must be in place throughout the regulated entity's enterprise.
The Department believes that the current Security Rule provides a clear path for regulated entities to protect the confidentiality, integrity, and availability of ePHI. However, as discussed above, we also believe recent caselaw has created confusion about the steps regulated entities must take to adequately protect the confidentiality, integrity, and availability of ePHI, as required by the statute. Further, the conditions highlighted by caselaw may also cause regulated entities to misinterpret the regulatory text that connects the current maintenance requirement at 45 CFR 164.306(e), the documentation requirement at 45 CFR 164.316, and the requirement to implement physical safeguards. For example, regulated entities may be confused about how 45 CFR 164.316 requires a regulated entity to document the policies and procedures for specific physical safeguard in 45 CFR 164.310 (or across any other safeguard). In this case, the regulated entity also might not apply the implementation specifications to retain, make available, and review documentation of how it has operationalized the physical safeguard. Failing to connect these provisions would lead to inadequate protection of ePHI and/or an inability to demonstrate compliance with the Security Rule.
Our experience enforcing the Security Rule provides examples of the types of breaches that can occur because of absent or insufficient physical safeguards:
• An investigation of a large health system indicated potential failures to implement policies and procedures and facility access controls to limit physical access to the electronic information systems housed within a large data support center. While the health system did have video surveillance, the investigation found indications that laptops were stored in an interior room that was unlocked and the facility did not have an alarm system.
• A large university hospital experienced a breach of unsecured PHI when it lost an unencrypted flash drive and unencrypted laptop. The Department's investigation found that the covered entity may have failed to use device and media controls, which might have prevented the loss of these devices.
Given the increased portability of devices, media, workstations, and information systems, such components may often be located outside of a regulated entity's physical location. For example, OCR has investigated several incidents involving portable electronic media and mobile workstations that were removed from the regulated entity's physical environment and subsequently lost. As a result, the Department believes that we should more broadly construe the physical environment where ePHI is stored and accessed because it is essential that regulated entities have policies and procedures in place to address the portability of components of their information systems, as well as the ability of workforce members to access such information systems offsite using portable workstations.
Additionally, the standard for device and media controls at 45 CFR 164.310(d)(1) applies only to devices and media, rather than all technology assets that may be components of a regulated entity's relevant electronic information systems. The Department is concerned that a regulated entity may have other types of technology assets that may either create, receive, maintain, or transmit ePHI or otherwise affect its confidentiality, integrity, or availability and that can be removed from, brought to, or moved within its facilities. The confidentiality, integrity, or availability of the regulated entity's ePHI could be negatively affected in the absence of written policies and procedures governing the movement of such technology assets.
Finally, we believe that it is important to address several issues in the standards and implementation specifications for the physical safeguards that are also addressed in other proposals: addressing the Department's expectations regarding implementation specifications;
The Department proposes to retain the four standards that comprise the Security Rule's physical safeguards required by 45 CFR 164.306 and codified in 45 CFR 164.310. However, we propose several modifications to 45 CFR 164.310 to address the issues identified above.
The Department proposes to expand the introductory language at 45 CFR
Consistent with the proposals to revise the general requirements in 45 CFR 164.306(c) and (d), the Department proposes to remove any distinction between addressable and required implementation specifications in this section such that all specifications would be required. Also consistent with changes proposed elsewhere in this NPRM, the Department proposes to modify all four physical safeguard standards to require that the requisite policies and procedures be in writing
The Department proposes to modify the standard for facility access controls at 45 CFR 164.310(a)(1) to clarify that the policies and procedures required by this standard must be in writing and address physical access to all of a regulated entity's relevant electronic information systems and the facility or facilities in which these systems are housed and to add a paragraph to clarify the organization of the regulatory text. The Department also proposes to modify the implementation specifications associated with the standard for facility access controls. Specifically, we propose to modify the implementation specifications for contingency operations, facility security plan, and access control and validation procedures at 45 CFR 164.310(a)(2)(i) through (iii) to clarify that we expect a regulated entity to not only establish and implement policies and procedures, but also that we expect them to be in writing.
The Department's proposal would also require that the procedures for contingency operations proposed at 45 CFR 164.310(a)(2)(i) support the regulated entity's contingency plan, instead of the current requirement specifying that the procedures support the restoration of lost data under the disaster recovery plan and emergency mode operations plan in the event of an emergency.
In the implementation specification for maintenance records, the Department proposes at 45 CFR 164.310(a)(2)(iv), to change the provision heading to “Physical maintenance records” and to add security cameras to the list of examples of physical security components about which a regulated entity is required to implement written policies and procedures to document repairs and modifications. Both proposals are consistent with and recognize the evolution of the role that technology plays in managing and granting physical access to facilities.
Consistent with our proposals to add maintenance requirements where we believe it is necessary for regulated entities to review, test, and modify their security measures on a particular cadence, we also propose to add an implementation specification for maintenance at proposed 45 CFR 164.310(a)(2)(v). The maintenance provision would require that, for each facility, a regulated entity review and test its written policies and procedures at least once every 12 months, and to modify those policies and procedures as reasonable and appropriate based on that review.
Further, in the standards for workstation use and workstation security at 45 CFR 164.310(b) (redesignated as proposed 45 CFR 164.310(b)(1) and (c), respectively), the Department proposes several changes that would recognize the increasingly mobile nature of ePHI and workstations that connect to the information systems of regulated entities. The purpose of these proposals is to ensure that regulated entities properly consider physical safeguards for all workstations, including those that are mobile, and not only those that are located in regulated entities' facilities. The Department also proposes to modify both standards to clarify the organization of the regulatory text. The Department proposes to modify the standard for workstation use to clarify that policies and procedures established by a regulated entity to govern the use of workstations be in writing and address all workstations that access ePHI or the regulated entity's relevant electronic information systems. These proposed changes are consistent with the Department's longstanding expectations and other proposals in this NPRM described above. In 45 CFR 164.310(b)(2)(i)(C), the Department proposes to require a regulated entity to establish and implement written policies and procedures that, among other things, specify the physical attributes of workstation surroundings, including the removal of workstations from a facility and the movement of workstations within and outside of a facility. This proposal is consistent with
Relatedly, the Department proposes to modify the standard for workstation security at 45 CFR 164.310(c) to require a regulated entity to implement physical safeguards for workstations that access ePHI or relevant electronic information systems to comply with its written policies and procedures for workstation use. This proposal would also make clear that such physical safeguards must be modified in response to any modifications to the written policies and procedures for workstation use. As part of their policies and procedures for workstation security, the Department encourages regulated entities to consider, among other things, whether there are workstations located in public areas or other areas that are more vulnerable to theft, unauthorized use, or unauthorized viewing; whether such devices should be relocated; the physical security controls for workstations that are in use (
The Department proposes to modify the standard at 45 CFR 164.310(d)(1) by changing the heading to “Technology asset controls” from “Device and media controls,” and replacing “hardware and electronic media” in 45 CFR 164.310(d)(1) and (2) with “technology assets.” We believe that this modification would more accurately capture the various categories of components of a regulated entity's relevant electronic information systems that may be received in, removed from, or moved within a facility and that also affect the confidentiality, integrity, or availability of ePHI. Thus, we believe that this modification would provide regulated entities with a clearer understanding of their compliance obligations with respect to the physical safeguards that should be implemented to protect ePHI when technology assets are received by, removed from, or moved within a facility. While we are not proposing other significant changes to 45 CFR 164.310(d)(1) at this time, we remind regulated entities to consider the appropriateness of the policies and procedures they have implemented with respect to the movement of technology assets that maintain ePHI into and out of their facilities and the movement of these items within their facilities. The processes a regulated entity chooses to implement to govern the movement of technology assets may vary based on the type of technology asset.
The Department also proposes to modify the standard at 45 CFR 164.310(d)(1) to clarify the organization of regulatory text and to clarify its longstanding expectations that policies and procedures must be in writing and to replace “contain” with “maintain,” consistent with terminology used throughout the HIPAA Rules. The Department believes that having written policies for the disposal of ePHI and the technology assets on which it is stored and for the removal of ePHI from electronic media such that the ePHI cannot be recovered continues to be important to ensuring the physical safety of ePHI. Improper disposal of technology assets puts the ePHI stored in or on such assets at risk for a potential breach, and as discussed elsewhere, data breaches can result in substantial costs to regulated entities and the individuals affected by the breach. We also propose in the related implementation specifications at 45 CFR 164.310(d)(2)(i) and (ii) to require that written policies and procedures for disposal of ePHI and sanitization of electronic media be tied to current standards for sanitizing electronic media before the media are made available for re-use.
We have previously explained in guidance that a regulated entity should consider all of the following as part of its risk analysis:
• Disposal of hardware and software, and the documentation of such disposal.
• Destruction of ePHI in such a manner that it cannot be recreated.
• Secure removal of ePHI that was previously stored on hardware or electronic media such that it cannot be accessed and reused.
• The identification of all removable media and their use (
• The removal of all ePHI from reusable media before the media are reused.
Our guidance describes these considerations in greater detail. For example, regulated entities should consider how to address the replacement of technology assets, including devices and media.
The Department proposes to remove the implementation specifications for accountability and data backup and storage at 45 CFR 164.310(d)(2)(iii) and (iv). We believe that the accountability provisions would be subsumed and replaced by the proposed standard for technology asset inventory at proposed 45 CFR 164.308(a)(1)(i). Thus, when the proposed new standard and implementation specifications are read together, the written policies and procedures that govern the receipt and removal of technology assets that maintain ePHI into and out of a facility, and the movement of these assets within the facility, should include tracking relevant information in the technology asset inventory. Similarly, we are proposing to delete the specification for data backup and storage because it is redundant to the administrative safeguard on data backups at proposed 45 CFR 164.308(a)(13)(ii)(B).
As referenced above, in place of the implementation specifications we are proposing to delete, the Department proposes a new implementation specification at proposed 45 CFR 164.310(d)(2)(iii) that would require a regulated entity to review and test the written policies and procedures related to the implementation specifications for technology assets at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate. Such environmental or operational changes may range from new and emerging threats to the confidentiality, integrity, or availability of ePHI (
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether every 12 months is an appropriate frequency for review of a regulated entity's written policies and procedures for physical safeguards. If not, please explain.
b. Whether the written policies and procedures for physical safeguards should be reviewed at different intervals, based on the specific standard or implementation specification. If so, please explain.
c. Whether the Department should include additional examples in regulatory text at proposed 45 CFR 164.310(a)(2)(iv) of physical components of a facility related to security for which there should be written policies and procedures to document repairs and modifications.
d. Whether the standard at proposed 45 CFR 164.310(d)(1) and its associated implementation specifications at paragraph (d)(2) should apply to technology assets that do not maintain ePHI, but do access the regulated entity's relevant electronic information systems.
Section 164.312 includes five standards for technical safeguards, which are the requirements concerning the implementation of technology and technical policies and procedures to protect the confidentiality, integrity, and availability of ePHI and related information systems. A regulated entity must comply with the standards for technical safeguards in accordance with 45 CFR 164.306(c), the provision that describes the general rules for the security standards.
Under 45 CFR 164.312(a)(1), a regulated entity is required to establish policies and procedures for electronic information systems to allow access only to those persons or software programs that have been granted access rights as specified in 45 CFR 164.308(a)(4). Regulated entities may comply with this standard by implementing a combination of access control methods and technical controls, consistent with the implementation specifications for this standard. The Security Rule does not identify a specific access control method or technology to implement. Regardless of the technology or information system used, access controls should be appropriate for the workforce member's role and/or function.
The implementation specifications that provide instructions for satisfying the access control standard are found at 45 CFR 164.312(a)(2). Two are required and two are addressable.
Under the implementation specification for emergency access procedures, a regulated entity is required to establish procedures, such as documented operational practices and instructions to workforce members, for obtaining access to necessary ePHI during an emergency and to implement such procedures as needed.
The implementation specification for automatic logoff associated with the standard for access control addresses the need for a regulated entity to, when reasonable and appropriate, implement electronic procedures that terminate an electronic session after a period of inactivity.
The implementation specification under the standard for access control addresses encryption and decryption and requires regulated entities, when it is reasonable and appropriate, to implement a mechanism to encrypt and decrypt ePHI.
The standard for audit controls requires a regulated entity to implement hardware, software, and/or procedural mechanisms that record and examine activity in electronic information systems that contain or use ePHI. Most electronic information systems provide some level of audit controls with a reporting method, such as audit reports.
Section 164.312(c)(1), the standard for integrity, requires a regulated entity to implement policies and procedures to protect ePHI from improper alteration or destruction. The integrity of data can be compromised by both technical and non-technical sources. Workforce members or business associates may make accidental or intentional changes that improperly alter or destroy ePHI. Data can also be altered or destroyed without human intervention, such as by electronic media errors or failures.
Section 164.312(c)(2) contains the addressable implementation specification for the integrity standard that requires a regulated entity, when reasonable and appropriate, to implement electronic mechanisms to corroborate that ePHI has not been altered or destroyed in an unauthorized manner. To determine which electronic mechanisms should be implemented to ensure the integrity of ePHI, a regulated entity must consider the various risks to the integrity of ePHI identified during the risk analysis. Once a regulated entity has identified risks to the integrity of its data, it must identify security measures that will reduce the risks.
The standard for person or entity authentication at 45 CFR 164.312(d) requires a regulated entity to establish policies and procedures for verifying that a person seeking access to ePHI is the one claimed. This standard addresses technical controls for ensuring access is allowed only to those persons or software programs that have been granted access rights under the administrative safeguard for information access management at 45 CFR 164.308(a)(4). This standard has no implementation specifications.
Under the standard for transmission security at 45 CFR 164.312(e)(1), a regulated entity is required to implement technical security measures to guard against unauthorized access to ePHI when transmitted electronically, such as through the internet. A regulated entity must identify the available and appropriate means to protect ePHI as it is transmitted, select appropriate solutions, and document its decisions.
The two addressable implementation specifications for the transmission security standards are under 45 CFR 164.312(e)(2). The implementation specification for integrity controls requires a regulated entity, when it is reasonable and appropriate, to implement security measures to ensure that electronically transmitted ePHI is not improperly modified without detection until the ePHI has been disposed.
While the intention of 45 CFR 164.312 is for regulated entities to develop and put into place technical controls, the Department is aware that regulated entities have not always achieved the degree of protection for ePHI that we intended. Absent a definition of “implement,” some regulated entities might interpret the term to mean something other than implementing technical controls to ensure the confidentiality, integrity, and availability of ePHI. This misinterpretation may leave ePHI partially unprotected because regulated entities may not implement safeguards throughout their enterprise. As discussed above with respect to both the administrative and physical safeguards, the Department is also concerned that regulated entities are not making the connection between the maintenance requirement at 45 CFR 164.306(d) and the requirement to implement technical safeguards, and therefore, are not reviewing or updating their policies and procedures for technical safeguards. Additionally, the Department believes that regulated entities may not be recognizing that their obligations under the Security Rule to protect ePHI are not limited to protecting electronic information systems that create, receive, maintain, or transmit ePHI, but necessarily include other electronic information systems that affect the confidentiality, integrity, or availability of ePHI.
While the Security Rule relies on a flexible and scalable approach to compliance, the health care industry's shift to a digital environment has substantially increased both the risk to ePHI and the prevalence of technological solutions for addressing those risks. Additionally, the cost of such solutions has, in many cases, decreased over time, as is often the case with technology. For example, when the original Security Rule was published, tools to encrypt ePHI had limited availability, were more costly, and were not user-friendly, particularly for small health care providers.
Based on its own investigations and compliance reviews, news reports, and published studies, the Department is aware that many regulated entities have failed to implement adequate technical controls, or, in some cases, any technical controls. For example:
• A large health system that operates in multiple States experienced a massive data breach resulting from a hacking incident. OCR's investigation found indications of potential failures to sufficiently monitor its activity in its information systems that was insufficient to protect against a cyberattack, implement an authentication process to safeguard its ePHI, and have security measures in place to protect ePHI from unauthorized access when it was being transmitted electronically.
• A Rhode Island nonprofit health system experienced a data breach resulting from the theft of a laptop. OCR's investigation found indications of potential failures to encrypt ePHI, despite the entity's determination to implement encryption, and a lack of device and media controls.
• At a large covered entity, workforce members used their log-in credentials to access medical records maintained in the entity's EHR without a job-related purpose.
• At another covered entity, the potential failure to implement hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use ePHI, among other things, enabled a workforce member to sell the ePHI of more than 12,000 individuals.
Some investigations have found indications that regulated entities may implement technical controls that address some, but not all, users of and technology assets in a relevant electronic information system, such as software, hardware, and persons involved in the development, configuration, and implementation of technical controls.
Beyond the health care sector, threat actors have been able to gain access to networks by compromising user accounts and taking advantage of insufficient network segregation. For example, the 2014 Home Depot breach involved the compromise of a third-party vendor's username and password to enter Home Depot's network, which allowed hackers to obtain elevated rights to navigate to self-checkout point-of-sale system.
Finally, consistent with the concerns expressed above about the implications of recent caselaw and the uncertainty it might cause among regulated entities assessing whether they have adequately protected their ePHI, the Department is concerned that the existing Security Rule may not provide sufficient instruction to regulated entities about
The Department retains the requirements for technical safeguards generally and proposes additions and modifications to the existing standards and implementation specifications.
The Department proposes to expand the primary provision at 45 CFR 164.312 to clarify that regulated entities as a general matter must implement and document the implementation of technical safeguards adopted for compliance with the Security Rule. This proposal would clarify that the requirement to implement and document technical safeguards would apply to all technical safeguards, including technical controls, implemented by a regulated entity to protect the confidentiality, integrity, and availability of all ePHI it creates, receives, maintains, or transmits.
As noted above, the current provision at 45 CFR 164.312 does not reference the documentation requirements in 45 CFR 164.316. Therefore, for clarity, we propose to explicitly require in 45 CFR 164.312 that documentation of technical safeguards conforms to the requirements in 45 CFR 164.316. This proposed change would clarify that a regulated entity must document the policies and procedures required to comply with this rule and how entities considered the flexibility factors in 45 CFR 164.306(b). It would also clarify that a regulated entity must document each action, activity, and assessment required by the Security Rule. The Department considers the documentation requirements and other provisions of 45 CFR 164.316 to apply to all of the safeguards, including the technical safeguards, and this proposal is intended to remove any potential uncertainty among regulated entities. Additionally, we propose to add maintenance requirements separately to the implementation specifications for particular technical safeguards in 45 CFR 164.312, as discussed below and consistent with our proposals to add similar requirements to particular administrative and physical safeguards.
Additionally, as discussed above, the Department proposes to remove the distinction between required and addressable implementation specifications and make all implementation specifications required, with specific, limited exceptions. Also as discussed above, we propose to modify certain standards and implementation specifications to clarify that the technical safeguards apply to ensure the confidentiality, integrity, and availability of ePHI, which requires a regulated entity to implement the technical safeguards in or on all relevant electronic information systems. These proposals are discussed in greater detail below.
The Department proposes to clarify the standard for access control at 45 CFR 164.312(a)(1) by requiring a regulated entity to deploy technical controls in relevant electronic information systems to allow access only to those users and technology assets that have been granted access rights. This proposed modification would ensure that a regulated entity deploys technical controls, rather than solely ensuring that it implements technical policies and procedures, consistent with our proposals to define “deploy” and “implement.”
Access controls are one of the key mechanisms by which a regulated entity protects ePHI. Such technical controls ensure that access to the regulated entity's electronic information systems is limited to only users and technology assets that have been granted access rights under the policies and procedures adopted in accordance with the standard for information access management under 45 CFR 164.308.
We also propose at 45 CFR 164.312(a)(1) to add a paragraph heading to clarify the organization of the regulatory text.
The Department proposes to modify the existing implementation specifications under the standard for access control and to add five new implementation specifications. Additionally, we propose to redesignate the implementation specification for encryption and decryption as a standard.
We propose to modify the implementation specification for unique user identification at 45 CFR 164.312(a)(2)(i) by renaming the implementation specification as “Unique identification” and adding a requirement to assign a unique identifier for tracking each technology asset. These proposed modifications would clarify for regulated entities that the purpose of this requirement is to enable a regulated entity to identify and track unauthorized activity in its relevant electronic information systems. Such unauthorized activity may include activity by unauthorized persons or technology assets. It may also include activity by persons who are authorized to access the regulated entity's relevant information systems but who access ePHI that they do not need to access for their job or function.
The Department also proposes to expand the types of identifiers a regulated entity may assign to users and technology assets beyond names to include numbers and/or other identifiers and to clarify that a unique identifier must be assigned to each user and technology asset in the regulated entity's relevant electronic information systems. This proposed modification would better meet the goals of this implementation specification by requiring a regulated entity to be able to discern and track activities among all users and technology assets, regardless of whether that user or technology asset is a person, hardware, software program, or device. The proposed implementation specification for unique identification aligns with the Department's essential CPG for Unique Credentials, which calls for regulated entities to use unique credentials to
Additionally, we propose to add an implementation specification at proposed 45 CFR 164.312(a)(2)(ii) for administrative and increased access privileges. Access controls should enable an authorized user to access the minimum necessary information needed to perform their job functions.
The proposed implementation specification would require a regulated entity to separate the unique user identities required by the implementation specification for unique user identification based on the type of access privileges used by a specific unique user. For example, the adoption of health IT that is certified through the ONC Health IT Certification Program as having the technical capability to establish user permissions for accessing, and performing actions with, electronic health information based on unique identifiers may contribute to a regulated entity's compliance with the proposed new implementation specification for administrative and increased access privileges, should the proposal be finalized.
Additionally, the Department proposes to redesignate the implementation specification for emergency access procedures at 45 CFR 164.312(a)(2)(ii) as proposed 45 CFR 164.312(a)(2)(iii) and to modify it to require a regulated entity to establish both written procedures and technical procedures for obtaining necessary ePHI during an emergency and to implement them as needed. For example, we note that the adoption of health IT that is certified through the ONC Health IT Certification Program as having the technical capability to permit an identified set of users to access electronic health information during an emergency may contribute to a regulated entity's compliance with the proposed implementation specification for emergency access procedures, should the proposal be finalized.
Under the Department's proposal, the implementation specification for automatic logoff at 45 CFR 164.312(a)(2)(iii) would be redesignated as proposed 45 CFR 164.312(a)(2)(iv) and modified to require a regulated entity to deploy technical controls that terminate an electronic session after a period of inactivity. Deploying a mechanism to automatically terminate an electronic session after a period of inactivity reduces the risk of unauthorized access when a user forgets or is unable to terminate their session.
The Department proposes that the period of inactivity be both predetermined and reasonable and appropriate. When determining the length of the period of inactivity, a regulated entity should consider the access privileges of a given user or technology asset, the system(s) being accessed, the environment in which the system access occurs, and other appropriate factors in determining a reasonable and appropriate time of inactivity before session termination. For example, in an emergency setting, a user may not have time to manually log out of a system. User identities with administrative and other high-level access that present a greater risk to the confidentiality, integrity, and availability of ePHI should have appropriately shorter periods of inactivity because of the increased risk. While many applications have configuration settings for automatic logoff,
Additionally, we propose to add an implementation specification for log-in attempts at proposed 45 CFR 164.312(a)(2)(v). The proposal would require a regulated entity to deploy technical controls that disable or suspend the access of a user or technology asset to relevant electronic information systems after a certain number of unsuccessful authentication attempts. Although incorrectly keying in a known password by the intended user may occur infrequently, a repeated and persistent failure is a strong indication of an attempt at unauthorized access. For example, brute force attacks are attempts to gain unauthorized access by guessing the password many times in a row.
The proposal would require a regulated entity to determine the number of unsuccessful authentication attempts that would trigger disabling or suspending access to relevant electronic information system. The number should
Consistent with NCVHS' recommendation and existing guidance, the Department also proposes to add an implementation specification for network segmentation at 45 CFR 164.312(a)(2)(vi) that would require a regulated entity to deploy technical controls to segment its relevant electronic information systems in a reasonable and appropriate manner.
The proposed implementation specification for data controls at proposed 45 CFR 164.312(a)(2)(vii) would require a regulated entity to deploy technical controls to allow access to ePHI based on the regulated entity's policies and procedures for granting users and technology assets access relevant electronic information systems as specified in proposed 45 CFR 164.308(a)(10). This implementation specification would require a regulated entity to have in place technical controls that distinguish between users and technology assets, that are permitted to access the regulated entity's relevant electronic information systems and those that are not permitted to do so and would require that the controls permit or disallow access accordingly.
Properly deployed network-based solutions can limit the ability of a hacker to gain access to an organization's network or impede the ability of a hacker already in the network from accessing other electronic information systems—especially systems containing sensitive data.
Additionally, we propose to add an implementation specification for maintenance at proposed 45 CFR 164.312(a)(2)(viii). Under this proposal, a regulated entity would be expressly required to review and test the effectiveness of the procedures and technical controls required by the implementation specifications associated with the standard for access control at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate.
Encryption can reduce the risks and costs of unauthorized access to ePHI.
As the use of mobile computing devices (
Because the prevalence of encryption solutions has increased, as has their affordability and the role they play in protecting information, including ePHI, the Department believes it is appropriate to consider requiring encryption and elevating it from an implementation specification to a standard to increase its visibility and prominence. Based on this and consistent with NCVHS' recommendation, the Department proposes to redesignate the implementation specification for encryption and decryption at 45 CFR 164.312(a)(2)(iv) as a standard at proposed 45 CFR 164.312(b)(1).
Under the proposal, a regulated entity would need to ensure that an encryption solution that it adopts meets prevailing cryptographic standards prior to using it. The Department uses the phrase “prevailing cryptographic standards” to refer to widely accepted standards for encryption and decryption that are recommended by authoritative sources and that ensure the confidentiality, integrity, and availability of ePHI at the time the regulated entity performs its risk analysis and establishes or modifies its risk management plan. The Department would expect a regulated entity to deploy updated encryption solutions as prevailing cryptographic standards evolve, consistent with both of the proposed requirements discussed above: (1) to review, verify, and update its risk analysis in response to changes in its environment that may affect ePHI; and (2) to review and modify, as reasonable and appropriate, its risk management plan in response to changes in its risk analysis. Thus, a regulated entity using an encryption algorithm that is known to be insecure would not be in compliance with the proposed requirement to deploy an encryption algorithm that meets prevailing cryptographic standards. We are not proposing to define prevailing cryptographic standards in regulatory text at this time.
The Department proposes to add one implementation specification for the proposed standard for encryption and decryption. Specifically, proposed 45 CFR 164.312(b)(2) would require regulated entities to encrypt all ePHI at rest and in transit, with limited exceptions.
• Each exception applies only to the ePHI directly affected by the circumstances described in the specific exception.
• Each exception applies only to the extent that the regulated entity documents its understanding that the exception applies to the scenario in which the regulated entity relies upon the exception and why or how the exception applies, and that any additional applicable conditions are met.
The first proposed exception at proposed 45 CFR 164.312(b)(3)(i) would apply to a technology asset currently used by a regulated entity that does not support encryption according to prevailing cryptographic standards. Because the requirements for encryption under the Security Rule today are addressable, a regulated entity may be in compliance with the encryption requirement without actual encryption of ePHI if encryption is not reasonable and appropriate, provided that the entity meets certain conditions. Additionally, technology assets in use today may rely on cryptographic standards that are no longer accepted industry practice. The Department recognizes that it may take some time for a regulated entity to adopt compliant technology assets. Thus, we propose this exception for such technology assets that do not support encryption consistent with prevailing cryptographic standards in limited circumstances. Specifically, to meet this exception, a regulated entity would be required to establish a written plan to migrate ePHI to technology assets that support encryption consistent with prevailing cryptographic standards and to implement such plan. The regulated entity would be required to establish and implement the written plan within
The second proposed exception at proposed 45 CFR 164.312(b)(3)(ii) would be available for ePHI transmitted in response to an individual request, pursuant to 45 CFR 164.524, to receive their ePHI in an unencrypted manner. Unencrypted manners for an individual to receive their ePHI may include some types of text messaging, instant messaging, and other applications on a smartphone or another computing device that are capable of making an access request and receiving ePHI.
Under the right of access, an individual who is the subject of PHI has the right to inspect and request a copy of PHI about them in a designated record set, subject to certain exceptions. A regulated entity is required to provide such access in the form and format requested by the individual, if it is readily producible in such form and format. Thus, if an individual requests that the regulated entity provide them access in a manner that does not support encryption, a regulated entity is generally required to do so if it does not jeopardize the security of the regulated entity's information systems. For the exception to apply, a regulated entity would be required to have informed the individual of the risks associated with the transmission, receipt, and storage of unencrypted ePHI when the individual requests unencrypted access and to document that the individual has been informed of such risks.
Consistent with the information blocking regulations, the information provided by regulated entities that are also actors must: focus on any current privacy and/or security risks posed by the technology or the third-party developer of the technology; be factually accurate, unbiased, objective, and not unfair or deceptive; and be provided in a non-discriminatory manner.
We are not proposing to require that the documentation be in any particular form or format. Rather, the required information could be on a standard form, chart note, or checkbox, as examples. The Department does not propose to apply this exception to ePHI transmitted in other forms or formats, such as on a CD or other physical device used to maintain and transmit ePHI. The proposal would not absolve a regulated entity from compliance with other applicable laws or regulations, including the information blocking regulations.
We recognize that emergencies or other occurrences may render it infeasible to encrypt ePHI. Thus, the third proposed exception at 45 CFR 164.312(b)(3)(iii) would apply to certain circumstances in which encryption is infeasible. Such circumstances would be limited to when there is emergency or other occurrence that adversely affects a regulated entity's relevant electronic information systems. For the proposed exception to apply, a regulated entity would be required to implement reasonable and appropriate compensating controls in accordance with and determined by its contingency plan.
The fourth proposed set of exceptions at proposed 45 CFR 164.312(b)(3)(iv) would be for ePHI that is created, received, maintained, or transmitted by a medical device (
We recognize that, to comply with this proposal, some regulated entities may incur costs for replacing legacy medical devices (
Finally, we propose an exception, proposed 45 CFR 164.312(b)(3)(iv)(C), that would be available for a device authorized by the FDA for marketing pursuant to a submission received on or after March 29, 2023, where the device is supported by its manufacturer. We understand that the FDA considers security during the review of medical device marketing submissions, including those for software that is approved as a medical device, and works with device manufacturers to ensure that appropriate cybersecurity protections are built into such devices, pursuant to FDA's authority under the Consolidated Appropriations Act, 2023.
Where a proposed exception applies to the proposed encryption requirement, the Department also proposes to require that a regulated entity implement alternative measures and compensating controls. Specifically, we propose at proposed 45 CFR 164.312(b)(4)(i) to require a regulated entity to document the existence of an applicable exception and implement reasonable and appropriate compensating controls. Under the proposal, we would require documentation to occur in real-time, meaning when the criteria for the exception exist and at the time compensating controls are implemented. For example, a regulated entity disclosing ePHI to an individual by unencrypted email in accordance with the right of access would be required to document in accordance with the proposed 45 CFR 164.312(b)(4)(i) that: (1) before the disclosure, the individual has requested to receive ePHI by unencrypted email or unencrypted messaging technology; and (2) before the disclosure, the regulated entity informed the individual of the risks associated with transmission of unencrypted ePHI. The exception would not apply where such individual requests to receive access to their ePHI pursuant to 45 CFR 164.524 via email or messaging technologies implemented by the covered entity.
At proposed 45 CFR 164.312(b)(4)(i), the Department proposes to require that where a proposed exception applies, a regulated entity would also be required to implement an alternative measure or measures that are reasonable and appropriate compensating controls under proposed 45 CFR 164.312(b)(4)(ii). Compensating controls would be implemented in the place of encryption to protect ePHI from unauthorized access.
Proposed paragraph (b)(4)(ii)(A) would require that if the regulated entity has determined that an exception applies, it must secure ePHI by implementing reasonable and appropriate compensating controls that are reviewed and approved by the regulated entity's designated Security Official. Because exceptions are a departure from the Security Rule framework, the Department proposes to ensure appropriate focus and review by the Security Official of the controls chosen to compensate for the absence of encryption.
With respect to the exception at proposed 45 CFR 164.312(b)(3)(iv)(C), the Department proposes at paragraph (b)(4)(ii)(B) to presume that a regulated entity had implemented reasonable and appropriate compensating controls where the regulated entity has deployed the security measures prescribed and as instructed by the FDA-authorized label for the device. This would include any updates, including patches recommended or required by the manufacturer of the device. The proposed language recognizes that while the device's label may not specifically require deployment of an encryption solution, it may provide for a specific compensating control and the manner in which that control is to be implemented. While not required, a regulated entity would be permitted to implement additional alternative security measures and compensating controls in accordance with best practices and/or its risk analysis.
Finally, at proposed paragraph (b)(4)(ii)(C), the Department proposes to require that the regulated entity's Security Official review and document the implementation and effectiveness of the compensating controls during any period in which such compensating controls are in use to continue securing ePHI and relevant electronic
We also propose to add an implementation specification for maintenance at proposed 45 CFR 164.312(b)(5). Under this proposal, a regulated entity would be expressly required to review and test the effectiveness of the technical controls required by the standard for encryption at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate. This proposal is consistent with others in this NPRM that would require regulated entities to maintain specified administrative, physical, and technical safeguards.
The Department believes that the failure to configure technical controls appropriately and to establish and maintain secure baselines for relevant electronic information systems and technology assets in its relevant electronic information systems presents an opportunity for cyberattack and compromise of ePHI.
The Department proposes five implementation specifications for the proposed standard for configuration management.
We propose a new implementation specification for software removal at proposed 45 CFR 164.312(c)(2)(ii) to require a regulated entity to remove extraneous software from the regulated entity's relevant electronic information systems. Software is extraneous if it is unnecessary for the regulated entity's operations. It can be a target for attack, and older applications may no longer be supported with patches for new vulnerabilities.
The proposed implementation specification for configuration at proposed 45 CFR 164.312(c)(2)(iii) would require a regulated entity to configure and secure operating systems and software in a manner consistent with the regulated entity's risk analysis. Generally, a regulated entity's risk analysis should guide its implementation of appropriate technical controls to reduce the risk to ePHI.
Under the proposed implementation specification for network ports at proposed 45 CFR 164.312(c)(2)(iv), a regulated entity would be required to disable network ports in accordance with the regulated entity's risk analysis.
Lastly, the proposed implementation specification for maintenance at proposed 45 CFR 164.312(c)(2)(v) would expressly require a regulated entity to review and test the effectiveness of the technical controls required by the other implementation specifications associated with the standard for configuration management at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate.
Audit controls are crucial technical safeguards that are useful for recording and examining activity in electronic information systems, especially when determining whether a security violation occurred.
Accordingly, the Department proposes to redesignate the standard for audit controls at 45 CFR 164.312(b) as proposed 45 CFR 164.312(d)(1), rename it as the standard for audit trail and system log controls, and to add a paragraph heading to clarify the organization of the regulatory text. We also propose to modify it to require a regulated entity to deploy either or both technology assets and technical controls that record and identify activity in the regulated entity's relevant electronic information systems. The proposal would replace “procedural mechanisms” with “technical controls,” to match the general focus on technical controls in 45 CFR 164.312 and would recognize that a regulated entity may be able to meet the requirements of the standard by deploying either or both technology assets (
The Department proposes four implementation specifications under this proposed standard that are intended to improve the effectiveness of audit controls deployed by a regulated entity. The proposed implementation specification for monitoring and identifying activity at proposed 45 CFR 164.312(d)(2)(i) would require a regulated entity to deploy technology assets and/or technical controls that monitor in real-time (
A regulated entity would be required, under the proposed implementation specification for recording activity at proposed 45 CFR 164.312(d)(2)(ii), to deploy technology assets and/or technical controls that record in real-time all activity in the regulated entity's relevant electronic information systems.
We also propose to add an implementation specification for maintenance at proposed 45 CFR 164.312(d)(2)(iv). Under this proposal, a regulated entity would be expressly required to review and test the effectiveness of the technology assets and/or technical controls required by the respective implementation specifications of this section at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate.
Improper alteration or destruction of ePHI, even unintentionally, can result in clinical quality problems, including patient safety issues, for a covered entity.
The current standard for integrity at 45 CFR 164.312(c)(1) requires implementation of policies and procedures, rather than actual deployment of technical controls, to ensure integrity of ePHI. To improve the effectiveness of this standard, the Department proposes to redesignate it as proposed 45 CFR 164.312(e) and modify it for clarity. Under the proposal, a regulated entity would be required to deploy technical controls to protect ePHI from improper alteration or destruction when at rest and in transit and to review and test the effectiveness of such technical controls at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate. For example, the adoption of health IT that is certified through the ONC Health IT Certification Program as having the technical capability to verify that the electronically exchanged health information contained within the health IT has not been altered, using a hashing algorithm that meets certain requirements, may contribute to a regulated entity's compliance with the proposed standard for integrity.
Authentication ensures that a person is in fact who they claim to be before being allowed access to ePHI by providing proof of identity.
The Department proposes four implementation specifications under this standard. Consistent with NCVHS' recommendation to eliminate the use of default passwords, the proposed implementation specification for information access management policies at proposed 45 CFR 164.312(f)(2)(i) would require a regulated entity to deploy technical controls in accordance with its information access management policies and procedures, including technical controls that require users to adopt unique passwords.
In addition to proposing the elimination of default passwords, the Department proposes a specific requirement for a regulated entity to deploy MFA in the implementation specification for MFA at proposed 45 CFR 164.312(f)(2)(ii). We propose to expressly require MFA, as recommended by NCVHS, because it increases security by ensuring that a compromise of a single credential does not allow access to unauthorized users.
This proposed implementation specification generally is consistent with ASTP/ONC's “Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability” (HTI-2) NPRM's proposed revisions to the MFA criterion requiring certified health IT to support authentication, through multiple elements, of the user's identity, according to today's standards such as those recommended by NIST, and enable user to configure, enable, and disable the MFA capabilities.
Under proposed 45 CFR 164.312(f)(2)(ii)(B), a regulated entity would be required to deploy MFA for any action that would change a user's privileges to the regulated entity's relevant electronic information systems in a manner that would alter the user's ability to affect the confidentiality, integrity, or availability of ePHI. These modified privileges may provide a user with a level of access inconsistent with a regulated entity's policies and procedures and increase the risk to ePHI by affording a user who does not need to have access to certain systems or information the opportunity to remove security measures deployed to protect ePHI. Because a user may affect the confidentiality, integrity, or availability of ePHI by accessing a relevant electronic information system, a regulated entity would be expected to
Similar to the proposed standard for encryption, the Department proposes three exceptions at proposed 45 CFR 164.312(f)(2)(iii) to the proposed specific requirement to implement MFA. The first proposed exception at proposed 45 CFR 164.312(f)(2)(iii)(A) would be for a technology asset that does not support MFA but is currently in use by a regulated entity. Because the requirements for authentication under the existing Security Rule today do not expressly refer to MFA, a regulated entity that is not using MFA to meet the requirement to authenticate user identities may argue that it is in compliance with the authentication standard without using MFA. The Department recognizes that it may take some time for a regulated entity to adopt compliant software or hardware, and thus we propose an exception where such software or hardware does not support MFA. To meet this exception, a regulated entity would be required to establish a written plan to migrate ePHI to technology assets that supports MFA and to actually migrate the ePHI to such technology assets in accordance with the written plan. Accordingly, a regulated entity would be required to establish the plan, implement the plan, and actually migrate ePHI to technology assets that supports MFA within a reasonable and appropriate period of time. For example, it would not be reasonable and appropriate for a regulated entity to establish a plan to migrate to a new practice management system that supports MFA and fail to take any steps to perform the migration for an entire year. Applying the standard flexibly and at scale, a reasonable and appropriate timeframe for a system with 5,000 users may be different than one for a solo practitioner; however, both entities would be expected to progress to completion.
We recognize that emergencies or other occurrences may render it infeasible for a regulated entity to use MFA, so we propose a second exception for when MFA is infeasible during an emergency or other occurrence that adversely affects the regulated entity's relevant electronic information systems or the confidentiality, integrity, or availability of ePHI.
At proposed 45 CFR 164.312(f)(2)(iii)(C), we propose three exceptions that would be for a technology asset in use that is a device within the meaning of section 201(h) of the Food, Drug, and Cosmetic Act that has been authorized for marketing by the FDA. The first would be for a device authorized by the FDA for marketing pursuant to a submission received before March 29, 2023, while the second would be for a device authorized by the FDA for marketing pursuant to a submission received on or after March 29, 2023, that is no longer supported by its manufacturer. In both cases, the exception would only apply where, the regulated entity has deployed any updates or patches required or recommended by the manufacturer of the device. Similar to our proposal for exceptions to encryption at proposed 45 CFR 164.312(b)(3)(iv)(A) and (B), we recognize that some regulated entities may incur costs of replacing legacy devices because of the limitations on the proposed exception to MFA where a device was submitted to the FDA for authorization before March 29, 2023 or a device submitted for authorization on or after that date that is no longer supported by its manufacturer.
The third proposed exception to MFA at 45 CFR 164.312(f)(2)(iii)(C)(
Where a proposed exception would apply to the proposed MFA requirement, the Department proposes to require that a regulated entity implement alternative measures and compensating controls.
The proposed requirements for reasonable and appropriate compensating controls are explained under proposed 45 CFR 164.312(f)(2)(iv)(B). Compensating controls are implemented in the place of MFA to protect ePHI.
The Department proposes at proposed 45 CFR 164.312(f)(2)(iv)(B)(
With respect to the exception at proposed 45 CFR 164.312(f)(2)(iii)(C)(
Additionally, the Department proposes at 45 CFR 164.312(f)(2)(iv)(B)(
As an example of how proposed 45 CFR 164.312(f)(2)(iii) would operate in concert with proposed 45 CFR 164.312(f)(2)(iv), a regulated entity experiencing an emergency that adversely affects a relevant electronic information system and renders MFA infeasible would be required to document the following:
• The regulated entity has experienced an emergency that has adversely affected a relevant electronic information system, including the nature of the emergency and the specific circumstances that adversely affected the specific electronic information system.
• MFA has been rendered infeasible with respect to the specific relevant electronic information system adversely affected by the emergency.
• The regulated entity has put in place reasonable and appropriate compensating controls in accordance with the regulated entity's emergency access procedures and contingency plan.
As part of its documentation, a regulated entity would need to include the controls that have been deployed, a record of the fact that the compensating controls are in use, and a record indicating that the compensating controls have been reviewed and approved by the regulated entity's Security Official. Proposed 45 CFR 164.312(f)(2)(iv)(B)(
Last, we propose to add an implementation specification for maintenance at proposed 45 CFR 164.312(f)(2)(v). Under this proposal, a regulated entity would be expressly required to review and test the effectiveness of the technical controls required by this standard at least once every 12 months or in response to
Transmission security protects against the interception of ePHI in the communications networks used by regulated entities to transmit ePHI.
Consistent with our proposals to require that regulated entities maintain their technical controls, we also propose to require a regulated entity to review and test the effectiveness of its technical controls for guarding against unauthorized access to ePHI that is being transmitted over an electronic communications network. We propose that such review and testing occur at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify such technical controls as reasonable and appropriate.
The Department also proposes to remove the implementation specification for integrity controls at 45 CFR 164.312(e)(2)(i) because these requirements are incorporated in the standard for integrity at proposed 45 CFR 164.312(e), discussed above. A regulated entity would continue to be required to review the current methods used to transmit ePHI and then deploy appropriate solutions to protect ePHI from improper alteration or destruction.
Hackers can penetrate a regulated entity's network and gain access to ePHI by exploiting publicly known vulnerabilities.
• Subscribing to CISA alerts
• Subscribing to alerts from the HHS Health Sector Cybersecurity Coordination Center.
• Participating in an information sharing and analysis center (ISAC) or information sharing and analysis organization (ISAO).
• Implementing a vulnerability management program that includes using a vulnerability scanner to detect vulnerabilities such as obsolete software and missing patches.
• Periodically conducting penetration tests to identify weaknesses that could be exploited by an attacker.
Additionally, CISA has compiled a database of free cybersecurity services and tools, some provided directly by CISA and others provided by private and public sector organizations.
To address the potential for a bad actor to exploit publicly known vulnerabilities, and consistent with NCVHS' recommendation, the Department proposes to add a new standard for vulnerability management at 45 CFR 164.312(h)(1).
To implement this proposed standard, we propose four implementation specifications. Proposed 45 CFR 164.312(h)(2)(i)(A) would require a regulated entity to conduct automated scans of the regulated entity's relevant electronic information systems, including all of the components of such relevant electronic information systems (
Relatedly, proposed 45 CFR 164.312(h)(2)(i)(B) would add an implementation specification for maintenance of the technology assets that conduct the required automated vulnerability scans. Under this proposal, a regulated entity would be expressly required to review and test the effectiveness of the technology asset(s) that conducts the automated vulnerability scans that would be required by the proposed implementation specification at proposed 45 CFR 164.312(h)(2)(i)(A) at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate.
Identification of a known vulnerability in a relevant electronic information system or a component thereof is a necessary precursor for a regulated entity to take action to mitigate the vulnerability. A 2019 study on vulnerability and patch management found that 48 percent of respondents reported that their organizations had at least one breach in the preceding two years. Of those, 60 percent said that the breaches could have occurred because an available patch for a known vulnerability had not been applied.
Accordingly, the Department also proposes a new implementation specification for monitoring at proposed 45 CFR 164.312(h)(2)(ii) to require that a regulated entity monitor authoritative sources for known vulnerabilities on an ongoing basis and take action to remediate identified vulnerabilities in accordance with the regulated entity's patch management program.
The proposed implementation specification for penetration testing at 45 CFR 164.312(h)(2)(iii) would require a regulated entity to conduct periodic testing of the regulated entity's relevant electronic information systems for vulnerabilities, commonly referred to as penetration testing. Penetration tests identify vulnerabilities in the security features of an application, system, or network by mimicking real-world attacks
Lastly, we are proposing a new implementation specification for patch and update installation at 45 CFR 164.312(h)(2)(iv) to require a regulated entity to configure and implement technical controls to install software patches and critical updates in a timely manner in accordance with the regulated entity's patch management program.
The proposed standard for patch management, discussed above, would work in tandem with the proposed standard for vulnerability management to ensure that regulated entities substantially reduce the risk to ePHI from known vulnerabilities.
The Security Rule requires regulated entities to regularly create copies of ePHI to ensure that it can be restored in the event of a loss or disruption.
The Department proposes four new implementation specifications for the data backup and recovery standard. The first, 45 CFR 164.312(i)(2)(i), would require a regulated entity to create copies of ePHI in a manner that ensures that such copies are no more than 48 hours older than the ePHI maintained in the regulated entity's relevant electronic information systems and in accordance with the policies and procedures required by proposed 45 CFR 164.308(a)(13)(ii)(B). The second, 45 CFR 164.312(i)(2)(ii), would require a regulated entity to deploy technical controls that, in real-time, monitor, and alert workforce members about, any failures and error conditions of the backups required by the first implementation specification. The third, 45 CFR 164.312(i)(2)(iii), would require a regulated entity to deploy technical controls that record the success, failure, and any error conditions of backups required. The fourth, 45 CFR 164.312(i)(2)(iv), would require a regulated entity to test the effectiveness of its backups and document the results at least monthly. Specifically, a regulated entity would be required to restore a representative sample of backed up ePHI (after the ePHI is backed up as required by paragraph (i)(2)(i)) and document the results of such test restorations at least monthly. Such tests should include verifying regulated entity's ability to access ePHI from a remote location.
These activities are included in NIST guidance for Security Rule compliance,
The Department also proposes to add a new standard for backup and recovery of relevant electronic information systems at proposed 45 CFR 164.312(j). This proposed standard would require a regulated entity to deploy technical controls to create and maintain backups of relevant electronic information systems. It would also require a regulated entity to review and test the effectiveness of such technical controls at least once every six months or in response to environmental or operational changes, whichever is more frequent, and modify them as reasonable and appropriate. The Department would not require a regulated entity to test every relevant electronic information system; rather, the requirement to test the effectiveness of the controls would permit a regulated entity to review the relevant log files and to test a representative sample of the backup of its relevant electronic information systems.
This proposed standard would reduce potential gaps in the data that needs to be backed up and recovered, to ensure that regulated entities address compliance across relevant electronic information systems. It is crucial to a regulated entity's recovery from an emergency or other occurrence, including a security incident, that adversely affects its relevant electronic information systems to create and maintain backups of such information systems that comprise the infrastructure that maintains and supports the confidentiality, integrity, and availability of ePHI. The Department would expect that the extent of this activity would be affected by the size and complexity of the relevant electronic information systems used by a regulated entity. It is also consistent with NIST guidance, which directs regulated entities to consider whether backups or images of operating systems, devices, software, and configuration files necessary to support the
The Department requests comments on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether there are additional technical safeguards that the Department should require regulated entities to implement.
b. Whether there are additional implementation specifications that should be adopted for any of the proposed or existing technical safeguards.
c. Whether the Department should extend the standard for encryption and decryption and associated implementation specifications to require encryption of all relevant electronic information systems.
d. Whether there should be exceptions to any of the proposed or existing technical safeguards or related implementation specifications, in addition to those proposed for encryption and decryption and MFA. For example, are there any proposed or existing standards or implementation specifications with which small or rural regulated entities would have substantial difficulty complying? If so, please explain the type of regulated entities that would be adversely affected by the requirement, the nature of the compliance difficulty, and any alternative or compensating measures that such entities are implementing now or could implement in the event of such requirement to address the risk to ePHI posed by the specific standard or implementation specification.
e. Whether the exceptions the Department has proposed to the standard for encryption or decryption are appropriate. If not, please explain.
f. Data about the frequency and number of requests regulated entities receive pursuant to the individual right of access at 45 CFR 164.524 where an individual requests that the regulated entity transmit to the individual or a third party a copy of the individual's ePHI via unencrypted email or other unencrypted messaging technologies. Please confirm that these are requests made pursuant to the individual right of access, rather than other types of communications, such as appointment reminders or requests made pursuant to a valid authorization.
g. Whether the Department should provide any additional exceptions to standard for encryption or decryption. If so, please explain.
h. Whether there are additional criteria or parameters for encryption that regulated entities would find helpful. If yes, please explain and provide examples.
i. Whether the Department should require review of compensating controls implemented to comply with an exception to the encryption and decryption standard more frequently than once every 12 months where there are no environmental or operational changes.
j. With respect to the exception to the standard for encryption and decryption for certain requests made pursuant to the individual right of access, whether there are forms and formats the Department should include or exclude from the exception (
k. Resources that regulated entities have identified to help inform individuals about the risks associated with the unencrypted transmission of ePHI, and whether the Department should compile and publish a list of such resources.
l. Whether the Department should define in regulation or guidance what constitutes a prevailing cryptographic standard. If so, please explain.
m. Whether the Department should specify the deployment of a particular form or manner of encryption, such as the use of particular algorithms, protocols, or compliance standards. If so, please explain.
n. Whether the Department should specify how much time regulated entities have to implement encryption for technology assets that do not support encryption. If so, please explain.
o. Whether the Department should provide more detailed requirements for network segmentation, such as the type(s) of technologies that should be segmented and how to determine whether certain technologies should be segmented. If so, please explain.
p. Whether the exceptions the Department has proposed to the implementation specification for MFA are appropriate. If not, please explain.
q. Whether the Department should provide additional exceptions to the implementation specification for MFA. If so, please explain.
r. Whether the Department should require a regulated entity to review its compensating controls adopted to comply with the exceptions to the implementation specification for MFA more frequently than once every 12 months.
s. The costs and burdens for regulated entities to implement MFA.
t. Whether the Department should require regulated entities to deploy an endpoint detection and response (EDR), security information and event management (SIEM), or other specific solution.
u. Whether once every six months is the appropriate frequency for the automated vulnerability scans required under the implementation specification for vulnerability management. If not, please explain.
v. Whether the Department should define in regulation or guidance what constitutes an authoritative source of known vulnerabilities. If so, please explain.
w. Whether once every 12 months is the appropriate frequency for the penetration testing required under the implementation specification for vulnerability management. If not, please explain.
x. For regulated entities that have conducted penetration tests, the amount of time and costs of such tests.
The first standard in 45 CFR 164.314 contains the requirements for business associate agreements and other arrangements. The associated implementation specifications at 45 CFR 164.314(a)(2) require that a business associate agreement include provisions compelling a business associate to do all of the following: (1) comply with the requirements of the Security Rule;
Under 45 CFR 164.314(a)(2)(ii), a covered entity that is a governmental entity is in compliance with the requirements of this section if it has in place an arrangement with a business associate that is also a governmental entity where the arrangement meets the
Additionally, 45 CFR 164.314(a)(2)(iii) requires that a business associate and its subcontractor enter into a business associate agreement that meets the same requirements as those that apply to a business associate agreement between a covered entity and business associate.
As described above, a business associate agreement must include a provision that requires a business associate to report to the covered entity any known security incident. The term “security incident” includes both attempted and successful unauthorized events in an information system.
Depending on the size of the regulated entity, the number of security incidents it experiences may vary, ranging from the occasional incident experienced by a small regulated entity to more than 1,000 per hour for a large regulated entity.
Additionally, as discussed above, regulated entities are required to establish, and implement as needed, a contingency plan
In recent years, there has been an increase in the number and types of emergencies or other occurrences that cause damage to systems that contain ePHI and may require a regulated entity to activate its contingency plan. For example, we have experienced an increase in extreme weather events over the last 40 years as a result of the changing climate.
When considered altogether, these developments mean that a regulated entity is more likely to experience an emergency or other occurrence that damages systems that contain ePHI than it was in either 2003
To address these risk trends and deficiencies in protections, the Department proposes to add an implementation specification at proposed 45 CFR 164.314(a)(2)(i)(D) that would require a business associate agreement to include a provision for a business associate to report to the covered entity activation of its contingency plan that would be required under 45 CFR 164.308(a)(13) without unreasonable delay, but no later than 24 hours after activation.
As discussed above, the Department proposes to require a regulated entity to activate its contingency plan to respond to an emergency or other occurrence that adversely affects relevant electronic information systems.
For example, a business associate may not be required to notify a covered entity within a certain time after a relevant electronic information system receives a basic internet command such as a ping,
The proposal itself would only require that the business associate notify the covered entity of its activation of the contingency plan; it does not include any specific requirements with respect to the form, content, or manner of the notice. Instead, we propose to permit the covered entity and business associate to negotiate such terms and include them in their business associate agreement if they so choose.
We recognize that when such an emergency or other occurrence transpires, the focus of the affected regulated entity must be on activating its contingency plan and restoring access to ePHI and the affected relevant electronic information systems. Similarly, when the contingency plan activation is in response to a successful security incident,
This proposed requirement to provide notice without unreasonable delay, but no later than 24 hours after a
Additionally, the Department proposes conforming changes to the references of 45 CFR 164.308(b) throughout 45 CFR 164.314 consistent with proposals made to modify 45 CFR 164.308(b). The Department does not intend these to be substantive changes, but rather an alignment with the proposed structural modifications in 45 CFR 164.308(b).
As discussed above, the Department proposes to remove the term “required” from the implementation specification at 45 CFR 164.314(a)(2) consistent with its proposal to eliminate the distinction between addressable and required implementation specifications. We also propose a few miscellaneous non-substantive corrections to update citations in the standard at 45 CFR 164.314(a)(1)(i) and (a)(2)(iii). We do not believe that these technical amendments would add or change any regulatory, recordkeeping, or reporting requirements, nor would they change the Department's interpretation of any regulation.
The second standard in 45 CFR 164.314 requires that, except when ePHI disclosed to a plan sponsor is summary health information
• Implement reasonable and appropriate administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of the ePHI that it creates, receives, maintains, or transmits on behalf of the group health plan.
• Ensure that the separation between the group health plan and plan sponsor required by the Privacy Rule at 45 CFR 164.504(f)(2)(iii)
• Ensure that any agent to whom it provides ePHI, agrees to implement reasonable and appropriate security measures to protect the information.
• Report to the group health plan any security incident of which it becomes aware.
Plan sponsors are not directly liable for compliance with the Security Rule because they are not regulated entities,
Plan sponsors may perform certain functions that are integrally related to, or similar to, the administrative functions of group health plans, and in carrying out these functions, need access to ePHI held by the group health plan. For example, plan sponsors may perform plan administration functions on behalf of the group health plan which are specified in plan documents. The increase in cybercrime and other emergencies adversely affecting electronic information systems is not limited to regulated entities or to the health care sector; plan sponsors are experiencing similar increases in events that require the activation of contingency plans.
Additionally, the Department believes that prompt notification by a plan sponsor to the group health plan that the ability of the plan sponsor or the group health plan to access ePHI or relevant electronic information systems may be affected by a security incident is important for the same reasons discussed above in 45 CFR 164.314(a). This lack of prompt notification delays a group health plan from responding and protecting its ePHI and relevant electronic information systems accordingly.
The Department proposes to modify the implementation specifications at 45 CFR 164.314(b)(2)(i) through (iii) to address concerns that group health plans may not recognize that reasonable and appropriate safeguarding of ePHI requires the implementation of security measures that are the same as, or at least equivalent to, the security measures in the Security Rule. First, we propose to rename the implementation specifications as “Safeguard implementation,” “Separation,” and
The security measures we are proposing in this NPRM are consistent with the CISA Cross-Sector CPGs,
Additionally, the Department proposes to rename the implementation specification at 45 CFR 164.314(b)(2)(iv) as “Security incident awareness.”
Similar to the discussion above, the Department proposes to add a new implementation specification for contingency plan activation at proposed 45 CFR 164.314(b)(2)(v) that would require plan documents to include a provision requiring a plan sponsor to report to the group health plan without unreasonable delay, but no later than 24 hours after activation of its contingency plan.
Similarly, as discussed above, we propose to permit the group health plan and plan sponsor to negotiate the form, content, or manner of the notice and include them in their plan documents if they so choose.
The Department believes that requiring a plan sponsor to provide prompt notice to the group health plan when the plan sponsor activates its contingency plan would enable group health plans and plan sponsors to maintain individuals' confidence in their commitment to protecting the confidentiality, integrity, and availability of ePHI.
Additionally, consistent with our proposal to revise 45 CFR 164.306, the Department proposes to remove the term “required” from the implementation specification at 45 CFR 164.314(b)(2) consistent with our overall proposal to eliminate the distinction between “required” and “addressable” implementation specifications. However, a regulated entity would still be required to comply with all standards and implementation specifications as applicable to its situation, as proposed in 45 CFR 164.306(c).
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. How group health plans currently ensure that plan sponsors implement reasonable and appropriate administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of ePHI.
b. Whether it is appropriate for group health plans to require plan sponsors to implement the administrative, physical, and technical safeguards of the Security Rule. If not, please explain and provide alternatives for how the Department should ensure the confidentiality, integrity, and availability of ePHI when it is disclosed to plan sponsors.
c. Whether business associates currently notify covered entities (or subcontractors notify business associates) upon activation of their contingency plans, and if so, the manner and timing of such notice.
d. Whether plan sponsors currently notify group health plans upon activation of their contingency plans, and if so, the manner and timing of such notice.
e. Whether it would be appropriate to require a business associate to notify a covered entity (or a subcontractor to notify a business associate) within 24 hours of activating its contingency plan. If not, please explain why and what would be an appropriate amount of time for such notification.
f. Whether it would be appropriate to require a plan sponsor to notify a group health plan within 24 hours of activating its contingency plan. If not, please explain why and what would be an appropriate amount of time for such notification.
g. The manner, timing, frequency, and process used by business associates to report security incidents to a covered entity (or subcontractors to business associates).
h. The manner, timing, frequency, and process used by a plan sponsor to report security incidents to a group health plan.
Section 164.316(a) requires a regulated entity to implement reasonable and appropriate policies and procedures that comply with the Security Rule, taking into account the size, complexity, and capabilities of the regulated entity;
The standard and implementation specifications for documentation are in 45 CFR 164.316(b). Paragraph (b)(1) requires a regulated entity to maintain the policies and procedures it implements to comply with the Security Rule in written form. Additionally, where the Security Rule requires an action, activity, or assessment to be documented, the regulated entity must maintain a written record of the action, activity, or assessment. In both cases, the written record may be electronic. Paragraph (b)(2) includes the current implementation specifications for the documentation standard. Such documentation must be retained for the later of either: (1) six years from its creation, or (2) the date it was last effective. Additionally, it must be available to those responsible for implementing the documented policies and procedures. Finally, regulated entities must periodically review their documentation and update it as needed in response to environmental or operational changes affecting the security of ePHI.
Although this section currently addresses policies and procedures and documentation, it does not require or include standards to govern how regulated entities must implement, maintain, and document implementation of all security measures. Implementing, maintaining, and documenting implementation of all security measures is important to ensure that regulated entities make well-reasoned decisions about implementing the requirements of this rule. Just as the Department believes that it is necessary to consider expanding the definition of “security measures” to better reflect that security measures should be multi-layered, we also believe that it is necessary to consider providing a more complete instruction concerning how regulated entities must implement, maintain, and document their implementation of the required security measures.
Additionally, OCR's own experience in investigations and audits leads us to believe that many regulated entities may not be documenting their security measures or their implementation of those measures.
Additionally, based on OCR's enforcement experience, the Department believes that regulated entities may not be periodically reviewing and updating their documentation when they modify their security measures in response to environmental or operational changes affecting the security of their ePHI. Given the constant evolution of technology and the everchanging behavior of cybercriminals in response to technological evolution, the Department believes that regular review of cybersecurity-related security measures is essential for protecting the confidentiality, integrity, and availability of ePHI and relevant electronic information systems.
As discussed above, the Department has proposed to revise other provisions of the Security Rule to clarify the differences between administrative and technical safeguards and between policies and procedures on the one hand and technical controls on the other hand. We have also proposed to revise other provisions of the Security Rule to clarify that a regulated entity is required to implement and maintain its administrative, physical, and technical safeguards, including its policies and procedures. These proposals clarify that such maintenance requires the review, testing, and modification of the regulated entity's security measures on a regular cadence, meaning that the regulated entity's security measures can be modified at any time. Given these proposals, the Department believes that we must also propose to revise 45 CFR 164.316 to delete the standard for policies and procedures and to modify the Security Rule's documentation requirements. Accordingly, the Department proposes to rename this section as “Documentation Requirements” and to redesignate the documentation standard as paragraph (a). We also propose to require that a regulated entity document how it considered the factors in 45 CFR 164.306(b) in the development of its written policies and procedures.
We also propose to modify the documentation standard to clarify that all required written documentation may be in electronic form. Additionally, we propose to modify the standard's two paragraphs. Specifically, the Department proposes at proposed 45 CFR 164.316(a)(1) to require that a regulated entity document the policies and procedures it has implemented to comply with the Security Rule, and as part of that documentation, explain how it considered the factors at 45 CFR 164.306(b) in the development of its policies and procedures. Relatedly, we also propose to modify 45 CFR 164.316(a)(2) to require a regulated entity to document all of the actions, activities, and assessments required by the Security Rule. The Department believes that both proposals would help to address two common problems observed in Security Rule investigations: a failure by the regulated entity to document its policies and procedures and a failure to document actions, activities, and assessments taken to comply with the Security Rule. Without such documentation, it is challenging for a regulated entity to assess and ensure its own compliance. Accordingly, we believe that our proposals to require a regulated entity to document its implementation of the Security Rule requirements would aid both the regulated entity and the Department.
Consistent with our proposal to redesignate the documentation standard as 45 CFR 164.316(a), we propose to redesignate the implementation specifications for documentation time limits, availability, and updates as proposed at 45 CFR 164.316(b)(1) through (3), respectively. Under proposed 45 CFR 164.316(b)(3), the Department proposes to require a regulated entity to update its documentation at least once every 12 months and within a reasonable and appropriate period of time after a security measure is modified.
As discussed above and consistent with the proposed changes to 45 CFR 164.306, the Department is proposing to remove the term “required” from 45 CFR 164.316(b)(1) through (3).
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following consideration in particular:
a. Whether it would be appropriate to require regulated entities to review and update documentation for security measures at least once every 12 months. If not, please explain.
b. Whether it is clear that 45 CFR 164.316 provides regulated entities with directions on when and how they are to document all security measures across all safeguard requirements. If not, please explain.
c. Whether it is feasible for regulated entities to document all of the actions, activities, and assessments required by the Security Rule as proposed at 45 CFR 164.316(a)(2). If not, please explain.
Section 164.318 established the compliance dates for the initial implementation of the security standards for health plans, health care clearinghouses, and health care providers in 2005 and 2006.
The Department proposes to remove the information in 45 CFR 164.318 and replace the language with provisions for transitioning to the revised Security Rule, should the proposals included in this NPRM be adopted.
The Department understands that regulated entities may be concerned with the anticipated administrative burden and cost of revising their business associate agreements or other written arrangements to comply with a revised Security Rule. For example, a regulated entity would need to update its business associate agreements to add a provision specifying that the business associate will report to the covered entity
The Department's authority to provide a transition period is expressed in 45 CFR 160.104(c), which allows the Secretary to establish the compliance date for any modified standard or implementation specification, considering the extent of the modification and the time needed to comply with the modification.
Given these considerations, to allow regulated entities enough time to update thousands of existing business associate agreements or other written arrangements, the Department proposes to provide additional time to update the contracts required by 45 CFR 164.314(a)(1).
Specifically, the Department proposes to add new transition provisions under 45 CFR 164.318 to allow regulated entities to continue to operate under certain existing business associate agreements or other written arrangements until the earlier of: (1) the date such contract or other arrangement either is renewed on or after the compliance date of the final rule; or (2) a year after the effective date of the final rule. The additional transition period would be available to regulated entities if both of the following conditions are met: (1) prior to the publication date of the final rule, the covered entity or business associate had an existing business associate agreement or other written arrangement with a business associate or subcontractor, respectively, that complied with the Security Rule prior to the effective date of a final rule revising the Security Rule; and (2) such contract or arrangement would not be renewed or modified between the effective date and the compliance date of the final rule.
Under the proposed transition provisions, a business associate would be permitted to create, receive, maintain, or transmit ePHI pursuant to an existing business associate agreement or other written arrangement with another regulated entity that does not require the regulated entity to obtain satisfactory assurances that meet the requirements of the revised Security Rule for up to one year after the revised Security Rule becomes effective, assuming that a final Security Rule is published; and that the agreement is compliant with the Security Rule at the time the final rule is published and that it is not renewed or modified between the effective and compliance dates.
During the transition period, the Department proposes to allow a business associate to create, receive, maintain, or transmit ePHI pursuant to a business associate agreement or other written arrangement with another regulated entity without including in the agreement that the business associate will: (1) comply with the revised Security Rule;
Additionally, the Department intends that, in cases where a contract renews automatically without any change in terms or other action by the parties (also known as “evergreen contracts”), such contracts would be eligible for the extension if they automatically renew between the effective and compliance dates. Thus, regulated entities with an evergreen contract will be deemed to be in compliance with the Security Rule's requirements for business associate agreements or other written arrangements and such deemed compliance would not terminate when these contracts automatically renew. These transition provisions would apply to written contracts or other written arrangements as specified above.
These transition provisions would apply only to the requirement to amend contracts or other arrangements with business associates, and they would not affect any other compliance obligations under the Security Rule. For example, beginning on the compliance date of the final rule, assuming a final rule is published and that it is finalized as proposed, a business associate would be required to implement and document its implementation of the administrative, physical, and technical safeguards required by a revised Security Rule, except with respect to 45 CFR 164.308(b) and 164.314(a), even if the business associate's contract with the covered entity
Given the possibility of a similar burden on group health plans and plan sponsors to update plan documents by the compliance date, the Department is considering, but not proposing, a similar transition provision for plan documents. We are not proposing such provisions at this time because, unlike business associates, plan sponsors do not have independent obligations under the Security Rule. Instead, the obligations of plan sponsors are based entirely on the content of the plan documents. Accordingly, if the plan documents are not updated, plan sponsors are not obligated to comply with the requirements of the Security Rule because they are not regulated entities.
In particular, the Department is considering, but not proposing at this time, adding a new paragraph (d) introductory text under 45 CFR 164.318, with the heading “Standard: Effect of prior plan documents for group health plans,” stating that notwithstanding any other provisions of the subpart, a group health plan may allow a plan sponsor to create, receive, maintain, or transmit electronic protected health information pursuant to a written plan document with such group health plan that does not comply with § 164.314(b), only in accordance with paragraph (d)(1). The Department is also considering adding a new paragraph (d)(1) under 45 CFR 164.318, with the heading “Implementation specification: Plan documents for group health plans,” stating that the requirements of paragraph (b) apply to the plan document between a group health plan and a plan sponsor in the same manner as such requirements apply to written contracts or other arrangements between a covered entity and a business associate.
Similarly, the Department is considering, but not proposing at this time, adding a new paragraph (d)(2) under 45 CFR 164.318, with the heading “Group health plan responsibilities,” stating that nothing in the section shall alter the requirements of a group health plan or plan sponsor to comply with the applicable provisions of the part other than § 164.314(b).
The Department requests comment on the foregoing proposals, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether the Department's proposal to provide regulated entities with additional time to revise business associate agreements or other written contracts is appropriate. If not, please explain.
b. Whether the Department should also provide group health plans and plan sponsors additional time to revise plan documents by adding a transition provision to grandfather certain existing plan documents for a specified period of time.
c. Whether the Department should consider additional constraints or specificity for a new paragraph (d) to allow group health plans more time to comply with the Security Rule requirements for plan documents.
The Department intends that, if any provisions of this subpart, including the provisions of this NPRM, if finalized, were held to be invalid or unenforceable facially, or as applied to any person, plaintiff, or stayed pending further judicial or agency action, such provision shall be severable from other provisions of this subpart, and from other rules and regulations currently in effect, and not affect the remainder of this subpart. It is also our intent that, unless such provision shall be held to be utterly invalid or unenforceable, it shall be construed to give the provision maximum effect to the provision permitted by law, including in the application of the provision to other persons not similarly situated or to other dissimilar circumstances from those where the provision may be held to be invalid or unenforceable.
The provisions of this subpart, including the proposals of this NPRM, are intended to operate independently of each other, even if multiple provisions serve the same or similar general purpose(s) or policy goal(s). Where a provision is necessarily dependent on another, the context generally makes that clear, such as by cross-reference to a particular standard, requirement, or implementation specification. Where a provision that is dependent on one that is stayed or held invalid or unenforceable, as described in the preceding paragraph, is included in paragraph or section within 45 CFR part 160 or 164, we intend that other provisions of such paragraph(s) or section(s) that operate independently of said provision would remain in effect.
The Department intends the individual standards in 45 CFR 164.308, 164.310, 164.312, 164.314, and 164.316 to apply separately to govern how a regulated entity must protect the security of all ePHI it creates, receives,
For example, the standard for risk analysis proposed in 45 CFR 164.308(a)(2) would protect ePHI from risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI, while the modified standard for workforce security proposed in 45 CFR 164.308(a)(9) would protect ePHI from inappropriate access by a regulated entity's workforce. An invalidated standard for workforce security would not render the entire rule unworkable because a regulated entity could still meet the requirement to conduct the risk analysis without regard to whether the entity meets the requirements included in the standard for workforce security. Similarly, were a court to invalidate the Department's proposal in 45 CFR 164.310(a)(1) requiring that implemented policies and procedures to limit physical access to relevant electronic information systems and the facility or facilities in which they are housed be in writing, a regulated entity could still meet a requirement to implement the policies and procedures. Similar considerations apply to the proposal for written policies and procedures in proposed 45 CFR 164.316(a), and to proposals that are deemed inapplicable to certain persons or circumstances.
Further, the Department believes it is necessary to clarify how regulated entities would continue to apply implementation specifications in the event a court invalidates or deems inapplicable a governing standard over a specific implementation specification, or if a court invalidates or deems inapplicable one or several implementation specifications without taking adverse action on the governing standard. The Department does not interpret that this severability proposal, if finalized, would apply to implementation specifications in the same manner as it would apply to standards. Because the implementation specifications are regulatory instructions on how a regulated entity is to comply with a particular standard, if any standard is stricken, all implementation specifications underneath are similarly stricken. Conversely, the Department does not intend for the overarching standard to be affected by a court's decision to invalidate or make a determination of non-applicability to particular person or circumstance all implementation specifications under a particular standard. The Security Rule would still retain its flexible and scalable approach, and, therefore, a regulated entity could use any reasonable and appropriate security measure to implement the standard consistent with 45 CFR 164.306(b), even if all implementation specifications under the standard are stricken.
If a court invalidates or deems inapplicable less than all implementation specifications under a specific standard (
The Department believes that each definition is independent of all other definitions.
This list of examples is not intended to be exhaustive. The absence from this list of any particular provision should not be construed to mean that the Department considers that provision to be not severable from other parts of the rule.
To ensure that our intent for severability of provisions is clear in the CFR, the Department proposes to add a section on severability at 45 CFR 164.320. Proposed 45 CFR 164.320 would state our intent that if any provision of this subpart is held to be invalid or unenforceable, it shall be construed to give maximum effect to the provision permitted by law unless the holding shall be one of utter invalidity or unenforceability, in which case the provision shall be severable from this subpart and shall not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other dissimilar circumstances.
The Department requests comment on the foregoing proposal, including any benefits, drawbacks, or unintended consequences.
Technology is constantly evolving, able to perform increasingly complex tasks, including those with the potential to improve health care and communication between individuals and care providers. These new and evolved technologies will continue to transform health care in a variety of ways, including providing regulated entities with new tools for faster and more accurate diagnoses, effective treatments, and more efficient administration.
As a regulated entity considers the application of new technologies or the use of existing tools in innovative ways, it also must consider whether these technologies create, receive, maintain, or transmit ePHI, and, if so, how to secure them. The Security Rule was designed to be technology-neutral for this very reason and continues to provide the foundation for ensuring the confidentiality, integrity, and availability of all ePHI as technology changes.
Before implementing new and emerging technologies, a regulated entity must conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI.
Several Federal agencies have considered the potential benefits and drawbacks of quantum information science,
However, the increase in computational capability threatens the security of asymmetric cryptography,
NCVHS examined these security issues and provided recommendations to the Department for applying the safeguards of the HIPAA Rules to potential quantum computing threats. Specifically, NCVHS declared that incorporation of recent Administration guidance for Federal agencies “on vulnerable cryptographic systems is necessary to strengthen the Technical Safeguards within the Security Rule.”
The Department encourages regulated entities to incorporate these activities as part of their ongoing risk management programs. For example, the steps presented in the joint guidance—surveying the environment for potential risks and vulnerabilities that endanger ePHI, identifying workforce members with responsibility for addressing them, inventorying quantum-vulnerable systems, including that inventory in its risk analysis and risk management, and working with technology vendors to ensure their readiness—are all activities that already are required by the administrative safeguards of the Security Rule.
We believe these obligations would be clarified by the proposals in this NPRM. For example, the Department proposes to require that a regulated entity not only conduct an accurate assessment of potential risks and vulnerabilities to the confidentiality, integrity, and availability of the ePHI it creates, receives, maintains, or transmits, but would add an express requirement that the assessment be comprehensive and in writing. We also propose to specify that the required assessment include, among other things, identification of all reasonably anticipated threats and potential vulnerabilities and predisposing conditions, making a reasonable determination and documentation of the likelihood that each identified threat will exploit the identified vulnerabilities, and performing a written assessment of the risk level for each identified threat and vulnerability. Under the NPRM, a regulated entity would be expected to, as part of the risk analysis, consider whether quantum computing poses a reasonably anticipated threat to the confidentiality, integrity, or availability of its ePHI and whether there is a vulnerability or predisposing condition that corresponds to that threat, and to document those considerations; make a reasonable determination and document the likelihood that the threat will exploit the identified vulnerabilities; and assign a risk level to the identified threat and vulnerability.
Section 238(g) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 defined AI to include the following:
• Any artificial system that performs tasks under varying and unpredictable circumstances without significant human oversight, or that can learn from experience and improve performance when exposed to data sets.
• An artificial system developed in computer software, physical hardware, or other context that solves tasks requiring human-like perception,
• An artificial system designed to think or act like a human, including cognitive architectures and neural networks.
• A set of techniques, including machine learning, that is designed to approximate a cognitive task.
• An artificial system designed to act rationally, including an intelligent software agent or embodied robot that achieves goals using perception, planning, reasoning, learning, communicating, decision making, and acting.
AI requires enormous amounts of data to develop, but it also has enormous potential benefits. The Department has previously stated that these “technologies have the potential to drive innovation, increase market competition, and vastly improve care for patients and populations.”
• Image acquisition and processing
• Early disease detection
• More accurate diagnosis, prognosis, and risk assessment
• Identification of new patterns in human physiology and disease progression
• Development of personalized diagnostics
• Therapeutic treatment response monitoring
For example, clinicians are using AI to distill large volumes of EHR information about a complex patient into a summarized note that they can use to consider diagnoses and treatment. AI also has been used for aid in the detection of diabetic retinopathy, screening for breast and lung cancer, and classification of skin conditions.
Unfortunately, AI can also be used to harm individuals, both intentionally and unintentionally. Bad actors are using generative AI to threaten the privacy and security of ePHI more effectively through phishing and other social engineering. As explained by NCVHS, “AI tools can create mass scale [cyberattacks] that are highly effective and major threats to ePHI.”
After assessing current and potential AI threats, NCVHS recommended that the Department clarify how the HIPAA Rules apply to AI.
The Security Rule requires a regulated entity to conduct repeated risk analyses that consider any changes to its environment or operations, such as updates or changes in technology or clinical administration, and to apply all reasonable updated protections to safeguard ePHI.
Additionally, the Department proposes to require that regulated entities monitor authoritative sources for known vulnerabilities and to remediate such vulnerabilities in accordance with their patch management program. We also propose to require that patches, updates, and upgrades that address critical and high risks be applied promptly. Together, these proposals would support the rapid response to vulnerabilities that will be necessary as AI becomes more prevalent. Thus, the Department believes that the adoption of the cybersecurity best practices proposed in this NPRM is an important first step to ensuring that AI tools are deployed by regulated entities in a manner that protects the confidentiality, integrity, and availability of ePHI.
Research on VR and AR technologies is widespread and has produced numerous applications in the health care fields. Such technologies are being used in medical education and patient care, including AR-assisted surgeries, VR-based pain management therapies, and immersive patient education tools.
However, as with quantum computing and AI, VR and AR technologies raise new privacy and security concerns. VR and AR involve the use of diverse technologies and the collection of a wide array of sensitive information, including comprehensive biometric data.
These cybersecurity risks, such as hacking, social engineering, malicious software, and ransomware, can be mitigated through holistic risk analysis and risk management, consistent with the Security Rule administrative standards in 45 CFR 164.308. In addition, patch management,
We believe the proposals in this NPRM to clarify these safeguards would substantially improve the ability of regulated entities to address these cybersecurity risks. For example, the Department proposes to require that a regulated entity obtains from a business associate written verification that the business associate has deployed the technical safeguards required by the Security Rule, including a written analysis of the business associate's information systems from a person with
Many regulated entities are piloting innovative technologies. Such entities generally have separate departments that research, develop, test, and deploy such technologies.
The Department requests comment on the foregoing discussion of how the Security Rule protects ePHI used in new and developing technologies, including any benefits, drawbacks, or unintended consequences. We also request comment on the following considerations in particular:
a. Whether the Department's understanding of how the Security Rule applies to new technologies involving ePHI is not comprehensive and if so, what issues should also be considered.
b. Whether there are technologies that currently or in the future may harm the security and privacy of ePHI in ways that the Security Rule could not mitigate without modification, and if so, what modifications would be required.
c. Whether there are additional policy or technical tools that the Department may use to address the security of ePHI in new technologies.
The Department of Health and Human Services (HHS or “Department”) has examined the effects of this proposed rule under Executive Order (E.O.) 12866, Regulatory Planning and Review,
The RFA requires us to analyze regulatory options that would minimize any significant effect of a rule on small entities. As discussed in greater detail below, this analysis concludes, and the Secretary certifies, that the notice of proposed rulemaking (NPRM), if adopted, would not result in a significant economic effect on a substantial number of small entities.
The UMRA (section 202(a)) generally requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “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 1 year.”
This proposed rule, if adopted, would impose mandates that would result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $183 million in any one year. The impact analysis in this proposed rule addresses such effects both qualitatively and quantitatively. Each covered entity and business associate (collectively, “regulated entity”), including government entities that meet the definition of covered entity (
The Department believes that pursuant to Subtitle E of the Small Business Regulatory Enforcement
The Justification for this Rulemaking and Summary of Proposed Rule Provisions section at the beginning of this preamble contain a summary of this rule and describe the reasons it is needed. We present a detailed analysis below.
The Department identified ten categories of quantifiable costs arising from these proposals that would apply to all regulated entities: (1) conducting a Security Rule compliance audit; (2) obtaining written verification from their business associates or subcontractors that the business associates or subcontractors, respectively, have conducted the required verification of compliance with technical safeguards; (3) notifying other regulated entities when workforce members' access to ePHI is terminated; (4) completing network segmentation; (5) disabling ports and removing extraneous software; (6) deploying MFA; (7) deploying penetration testing; (8) updating policies and procedures; (9) updating workforce training programs; and (10) revising business associate agreements. Additionally, group health plans would be required to update plan documents to require health plan sponsors' compliance with the administrative, physical, and technical safeguards according to the Security Rule and notification of group health plans when health plan sponsors activate their contingency plan. Business associates would have additional obligations to verify compliance with technical safeguards and provide it in writing to covered entities (and subcontractors to business associates) and to notify covered entities upon activation of their contingency plans. Finally, although plan sponsors are not directly subject to the HIPAA Rules, by virtue of the plan document requirements, the Department estimates that certain group health plan sponsors (
The Department estimates that the first-year costs attributable to this proposed rule total approximately $9 billion. These costs are associated with regulated entities and health plan sponsors engaging in the regulatory actions described above. For years two through five, estimated annual costs of approximately $6 billion are attributable to costs of recurring compliance activities. Table 1 reports the present value and annualized estimates of the costs of this proposed rule covering a 5-year time horizon. Using a 2 percent discount rate, the Department estimates that this proposed rule would result in annualized costs of $6.8 billion for regulated entities and health plan sponsors combined.
As a result of the proposed changes in this NPRM, the enhanced security posture of regulated entities would likely reduce the number of breaches of ePHI and mitigate the effects of breaches that nonetheless occur. The Department has partially quantified these effects and presents them in a break-even analysis. The break-even analysis estimates that if the proposed changes in the NPRM reduce the number of individuals affected by breaches by 7 to 16 percent, the revised Security Rule would pay for itself. Alternatively, the same cost savings may be achieved by lowering the cost per affected individual's ePHI by 7 percent ($35) to 16 percent ($82), respectively.
The changes to the Security Rule would likely result in important benefits and some costs that the Department is unable to fully quantify at this time. As explained further below, unquantified benefits include reductions in reputational, financial, and legal harm from breaches of individuals' ePHI, reductions in disruptions to health care delivery, increased confidence among parties to health care business transactions, and improved quality of health care.
The Department also recognizes that there may be some costs that are not readily quantifiable, notably, actions that regulated entities may take to comply with existing requirements more fully as a result of proposed clarifications. For example, this would include completing a technology asset inventory, which is a baseline expectation for the existing requirement of conducting a risk assessment; documenting completion of existing requirements; adding more specificity to the required contingency plan, such as designating staff roles with specific responsibilities when a contingency occurs; testing safeguards as part of reviewing and updating policies and procedures and technical controls; and deploying encryption for ePHI in a more concerted manner (including documenting provision of notification in response to individuals' access requests for transmission of ePHI in an unencrypted manner and has been informed of the risks associated with the transmission, receipt, and storage of unencrypted ePHI). These activities are specified in the NPRM, but they would be more in the nature of clarifications to and increased specificity of existing requirements. Because the degree of additional effort by regulated entities to meet these requirements would be dependent on multiple factors and likely to be highly variable, the additional cost is difficult to quantify.
We acknowledge that there may be a small burden associated with documenting that an individual was informed of the risks of unencrypted transmission of ePHI; however, we believe there are few requests that fall into this category. Because we do not have a basis to make an estimate, we have requested data on potential burdens associated with this proposed exception to the proposed standard for encryption in the preamble discussion of 45 CFR 164.312.
The cost of complying with the exceptions to encryption and MFA for medical devices authorized by the U.S. Food & Drug Administration for marketing may depend in part on the extent to which a regulated entity relies on legacy devices because the regulated entity may be required to adopt compensating controls. New devices are likely to have encryption and MFA built into them, not requiring compensating controls. The Department is unable to estimate the range of costs to adopt compensating controls for legacy devices because there is no reliable data to accurately assess the extent to which legacy devices are used in the United States.
The Security Rule, in conjunction with the Privacy and Breach Notification Rules, protects the privacy and security of individuals' PHI, that is, individually identifiable health information (IIHI). The Security Rule's protections are limited to ePHI, while the Privacy and Breach Notification Rules protect both electronic and non-electronic PHI. The Security Rule establishes standards to protect individuals' ePHI and requires reasonable and appropriate administrative, physical, and technical safeguards. The Security Rule specifies a series of administrative, physical, and technical security requirements that must be performed or implemented for regulated entities to safeguard ePHI. Specifically, entities regulated by the Security Rule must: (1) ensure the confidentiality, integrity, and availability of all ePHI they create, receive, maintain, or transmit; (2) protect against reasonably anticipated threats to the security and integrity of the information; (3) protect against reasonably anticipated impermissible uses or disclosures; and (4) ensure compliance by their workforce. A major goal of the Security Rule is protecting the security of individuals' health information while allowing for the development of a health information system to improve the efficiency and effectiveness of the health care system.
The Administrative Simplification provisions of HIPAA (title II) provide the Secretary of HHS with the authority to publish standards for the privacy and security of health information. The Department first proposed standards for the security of ePHI on August 12, 1998, and published a final rule on February 20, 2003. The Department modified the Security Rule in 2013. Recently, as the preamble to this NPRM discusses, changes in the health care environment and insufficient compliance by regulated entities with the existing Security Rule require the modifications proposed here.
For purposes of this Regulatory Impact Analysis (RIA), the proposed rule adopts the list of covered entities (with an updated count) and certain cost assumptions identified in the Department's Information Collection Request (ICR) associated with the HIPAA Privacy Rule to Support Reproductive Health Care Privacy (“2024 ICR”).
The Department quantitatively analyzes and monetizes the effect that this proposed rule would have on the actions of regulated entities to: conduct a Security Rule compliance audit; provide or obtain verification of business associates' compliance with technical safeguards; notify other regulated entities when workforce members' access to ePHI is altered or terminated; notify covered entities or business associates, as applicable, upon activation of a contingency plan; complete network segmentation; disable unused ports and remove extraneous software; deploy MFA and penetration testing; update health plan documents; update policies and procedures; update workforce training; and revise business associate agreements. The Department also quantitatively analyzes the effects on group health plan sponsors for ensuring that safeguards for their relevant electronic information systems meet Security Rule standards and notifying group health plans upon activation of the plan sponsors' contingency plans.
Additionally, the Department quantitatively analyzes the benefits of the proposed modifications to regulated entities due to an expected reduction in costs of remediation of breaches and risk of breaches by regulated entities.
The Department analyzes the remaining benefits and costs qualitatively because many of the proposed modifications are clarifications of existing requirements and predicting other concrete actions that such a diverse scope of regulated entities might take in response to this rule is inherently uncertain.
The Department bases its assumptions for calculating estimated costs and benefits on several publicly available datasets, including data from the U.S. Census Bureau (“Census”), the U.S. Department of Labor's (DOL) Bureau of Labor Statistics, the Small Business Administration (SBA), and the Department's Centers for Medicare &
Implementing the proposals likely would require regulated entities to engage workforce members or consultants for certain activities. The Department assumes that an information security analyst would perform most of the activities proposed in the NPRM, consistent with the existing Security Rule requirements. The Department expects that a computer and information systems manager would revise policies and procedures, a training and development specialist would revise the necessary workforce training, a lawyer would revise business associate agreements, and a compensation and benefits manager would revise health plan documents for plan sponsors. To the extent that these assumptions affect the Department's estimate of costs, the Department solicits comment on its assumptions, particularly assumptions in which the Department identifies the level of workforce member (
The Department
The changes proposed in this NPRM would apply to covered entities (
According to Census data,
There were 56,289 community pharmacies, including 19,261 pharmacy and drug store firms, operating in the U.S. in 2023.
The Department also estimated the percentage of rural and urban health care providers by matching health care provider data from CMS,
The Department adopts the estimate of approximately 1,000,000 business associates (including subcontractors) as stated in the 2024 ICR and the 2013 “Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical Health [HITECH] Act and the Genetic Information Nondiscrimination Act, and Other Modifications to the HIPAA Rules” final rule.
The Department welcomes comments on the number or type(s) of regulated entities that would be affected by the proposals in this proposed rule and the extent to which they may experience costs or other burdens not already accounted for in the cost estimates. The Department also requests comment on the number of health plan documents that would need to be revised, if any. The Department additionally requests detailed comment on any situations, other than those identified here, in which covered entities or business associates would be affected by the proposals in this rulemaking.
Within this NPRM, the Department is for the first time including estimates of health plan sponsors' potential costs of compliance with specific
The number of individuals potentially affected by the proposed changes to the Security Rule includes most of the United States population (approximately 337 million), specifically those who have received any health care in the past seven years and whose ePHI is likely created, received, maintained, or transmitted by a regulated entity. Statistics about the number of individuals affected by breaches of PHI provide insight into known instances where safeguards were breached, although the effects of the Security Rule extend farther than that, to all ePHI. Data from the 2022 Annual Report to Congress on Breaches of Unsecured Protected Health Information for Calendar Year 2022
The Department has reported HIPAA/HITECH breach data annually since 2009. Table 5 shows the data as reported to Congress for the past five years. We relied on this data, combined with breach cost data from industry sources, to analyze the potential savings of the NPRM.
Below, the Department provides the basis for its estimated quantifiable costs resulting from the proposed changes to specific provisions of the Security Rule. Many of the estimates are based on assumptions formed through OCR's experience with compliance and enforcement and accounts from stakeholders. For each cost, the Department provides its main estimate, as well as additional high and low estimates for some costs to account for any uncertainty in the compliance approach of regulated entities.
All estimates in this section are based on subject matter expertise. The Department requests information or data points from commenters to further refine its estimates and assumptions.
The Department estimates that all regulated entities would need to conduct a Security Rule Compliance Audit because this would be a new requirement under proposed 45 CFR 164.308(a)(14). Although some regulated entities have mistakenly conducted such an audit in lieu of a risk analysis, the Department believes that costs for the compliance audit as a separate requirement should be attributed to the proposed changes in the NPRM. Further, because this would be an annual requirement, the Department is including this as a recurring cost. The Department estimates that regulated entities would need an average of 2 hours of labor by an information systems analyst to conduct the compliance audit, based on the assumption that regulated entities have already documented Security Rule compliance activities as currently required. This would result in total estimated costs of $437,205,288 [= 1,822,600 regulated entities × 2 hours × $119.94]. The respective low and high estimates would be 0.25 and 2.5 hours of information systems analyst labor, resulting in respective total estimated costs of $54,650,6611 [= 1,822,600 regulated entities × 0.25 hours × $119.94] and $546,506,610 [= 1,822,600 regulated entities × 2.5 hours × $119.94].
For proposed 45 CFR 164.308(b), the Department estimates that business associates that handle ePHI would need to spend an average of 2 hours (with a low estimate of 0.25 hours and high estimate of 2.5 hours) analyzing how their cybersecurity measures comply with the proposed requirements for technical safeguards and producing a verification report for covered entities at the hourly wage rate of an information security analyst. This estimate assumes that business associates have already documented existing safeguards, policies, and procedures, so that the costs attributable to the new requirement are incremental and would total approximately $239,880,000 [1 million business associates × 2 hours × $119.94], with a low estimate of $29,985,000 [1 million business associates × 0.25 hours × $119.94] and high estimate of $299,850,000 [1 million business associates × 2.5 hours × $119.94].
Under 45 CFR 164.308(b), the Department further estimates that each covered entity would need to spend an average of 30 minutes (with 15 minutes as a low estimate and 90 minutes as a high estimate) requesting and obtaining compliance reports from its business associates about their deployment of technical safeguards required by the Security Rule at the hourly wage of an information security analyst. This assumes that in most instances, business associates would produce the required verification for covered entities without being prompted by a request because they would be required to do so by the Security Rule, as proposed in the NPRM. It further assumes that covered entities have readily available means of contacting business associates, such as via email, and that the contact could be a single email draft sent in a batch. The average time burden per entity depends on verification frequency, likely influenced by entities' average number of business associates and how frequently entities change business associates. The low estimate assumes that entities verify less frequently, whereas the high estimate assumes entities verify more frequently. At the wage rate of an information security analyst, this would result in estimated total costs for covered entities of $49,331,322 [= 822,600 covered entities × 0.5 hours × $119.94], with a low estimate of $24,665,661 [= 822,600 covered entities × 0.25 hours × $119.94] and high estimate of $147,993,966 [= 822,600 covered entities × 1.5 hours × $119.94].
The proposed requirement to obtain verification of compliance with technical safeguards also would apply to business associates with respect to their subcontractors. However, we believe that a much smaller number of business associates rely on subcontractors compared to the number of covered entities that rely on business associates to conduct activities on their behalf. Thus, we estimate that, on average, business associates would need 5 minutes annually to obtain verification from their subcontractors that the subcontractors have complied with technical safeguards as required by the Security Rule. The estimate includes only the time needed for business associates to send a mass email to subcontractors because we have already addressed the burden on business associates of producing the verification in the previous section and that estimate includes burdens on subcontractors. The high estimate for this activity would be an average of 15 minutes per business associate, and a low estimate would be for business associates to 2 minutes on this activity. At the wage rate of an information security analyst, this would add estimated total costs for business associates of $9,995,000 [= 1,000,000 business associates × 0.083 hours × $119.94], with a high estimate of $29,985,000 [= 1,000,000 business associates × .25 hours × $119.94].
The Department estimates that regulated entities are likely to incur additional costs to implement a process to notify other regulated entities when a workforce member's access to ePHI is terminated or changed under proposed 45 CFR 164.308(a)(9)(ii). This estimate assumes that notifications will take an average of 1 hour annually per regulated entity. This results in new estimated costs totaling $84,021,860 [= 1,822,600 regulated entities × 1 hour × $46.10].
The Department estimates that, on average, regulated entities would have an information security analyst spend 1.5 hours deploying MFA, as specifically required under proposed 45 CFR 164.312(f)(2)(ii). This would be a one-time, first-year burden that includes an average of 30 minutes for a regulated entity to select an MFA solution that allows them to meet the requirements of the proposal without creating workflow disruptions or delays. This estimate would vary depending on how prevalent MFA is in the industry when and if the requirements of the NPRM are finalized. As a widely accepted information security practice, the Department believes that many large entities have already deployed MFA and the costs range from zero to only a few dollars per user. The low estimate would be 01 hours on average (assuming that many entities already have some form of MFA), and the high estimate would be 1.75 hours (assuming that few entities have MFA). At the loaded wage rate of an information security analyst, the total estimated cost would be $327,903,966 [= 1,822,600 regulated entities × 1.5 hours × $119.94], with a low estimated total of $218,602,644 [= 1,822,600 regulated entities × 1 hour × $119.94] and a high estimated total of $382,554,627 [= 1,822,600 regulated entities × 1.75 hours × $119.94]. The Department applies this cost in the first year only because minimal additional labor is needed to maintain this safeguard once it has been deployed.
The Department believes that most large regulated entities and many medium-sized regulated entities have segmented their information networks to some degree; however, additional actions may be needed to more fully protect ePHI as required under proposed 45 CFR 164.312(a)(2)(vi). Further, small entities may not have been aware of the importance of segmenting networks or taken steps to segment their networks. The Department estimates that each regulated entity would spend an average of 4.5 hours to set up network segmentation in the first year of compliance with a final rule (with a low estimate of 4 hours and a high estimate of 5 hours) at the hourly wage of an information security analyst. The Department further assumes that in the following years, the burden to maintain the segmented network would be minimal and incorporated into the maintenance requirements. The total first year estimated cost of the network segmentation requirement would be $983,711,898 [= 1,822,600 regulated entities × 4.5 hours × $119.94] with a low estimated total of $874,410,576 [= 1,822,600 regulated entities × 4 hours ×
The Department believes that large regulated entities have already disabled unused network ports and removed extraneous software as part of existing configuration requirements. However, the Department believes that small and medium-sized regulated entities are less likely to have performed these actions and thus would incur a new burden to implement these aspects of configuration management proposed at 45 CFR 164.312(c)(2)(ii) and (iv). The Department estimates that 629,796 establishments are owned by small and medium-sized covered entities,
The Department estimates that each regulated entity would spend an average of 3 hours conducting penetration testing (with a low estimate of 2 hours and a high estimate of 10 hours) at the hourly wage of an information security analyst. The Department expects that there might be a high degree of variability between entities depending on their size and technological sophistication. Large entities have more endpoints to test, and thus have greater exposure. The Department also believes there is room for significant variability in the effort that regulated entities may apply to this activity. At the wage rate of an information security analyst, this would result in estimated total annual costs for regulated entities of $655,807,932 [= 1,822,600 regulated entities × 3 hours × $119.94], with a low estimated total of $437,205,288 [= 1,822,600 regulated entities × 2 hours × $119.94] and high estimated total of $2,186,026,440 [= 1,822,600 regulated entities × 10 hours × $119.94].
The Department estimates that business associates would need to notify other regulated entities in the event that they activate their contingency plan once business associate agreements are revised according to proposed 45 CFR 164.314(a)(2)(i)(D). The Department believes this is unlikely to occur more frequently than once per year and that the time to do so would be minimal because the proposed requirement does not specify the means or scope of such notification. The Department estimates that business associates would need an average of 30 minutes (with 15 minutes as a low estimate and 45 minutes as a high estimate) to report to other regulated entities, as applicable, when their contingency plan is activated at the wage rate of an information security analyst for a total annual cost of $59,970,000 [= 1,000,000 business associates × 0.5 hours × $119.94], with a low estimated total of $29,985,000[= 1,000,000 business associates × 0.25 hours × $119.94] and high estimated total of $89,955,000 [= 1,000,000 business associates × 0.75 hours × $119.94].
The Department estimates that health care insurers and third-party administrators would need to revise health plan documents to reflect that health plan sponsors that receive ePHI (that is not limited to summary health information or disenrollment information) are protecting ePHI with the administrative, physical, and technical safeguards detailed in the Security Rule, as proposed. These 6,162 entities collectively would be responsible for updating approximately 742,411 health plan documents at the wage rate of a compensation and benefits manager. The Department's estimate assumes that on average each plan document requires 30 minutes to update for a total estimated cost of $53,876,766 [1742,411 × 0.5 hours × $145.14]. The Department has attributed these costs solely to health plans and not health plan sponsors because the health plan is the regulated entity.
The Department anticipates that regulated entities would need to develop new or modified policies and procedures for the proposed new requirements to obtain or provide verification of business associates' compliance with the Security Rule's requirements for technical safeguards, conducting a Security Rule compliance audit, and reporting the activation of a contingency plan, as well as other proposed changes, depending on the regulated entities' existing policies and procedures. The Department estimates that the costs associated with developing such policies and procedures would be the labor of a computer and information systems manager for an average of 3.5 hours (with 2.5 hours as a low estimate and 6 hours as a high estimate, depending on the number of entities with written policies and procedures, and their degree of specificity). This would result in total annual costs of $1,108,432,416 [= 1,822,600 regulated entities × 3.5 hours × $173.76], with a low estimated total of $791,737,440 [= 1,822,600 regulated entities × 2.5 hours × $173.76] and high estimated total of $1,900,169,856 [= 1,822,600 regulated entities × 6 hours × $173.76]. The existing rule requires updates to policies and procedures in response to environmental or operational changes affecting the security of the ePHI, and as a result, the Department is estimating additional costs for new policies related to this proposed rule as an incremental increase.
The Department anticipates that regulated entities would be able to incorporate new content into existing Security Rule training programs and that the costs associated with doing so would be attributed to the labor of a training specialist for an estimated 2 hours for total annual costs of $252,247,840 [= 1,822,600 regulated entities × 2 hours × $69.20]. The low estimate for this activity is $126,123,920 [= 1,822,600 regulated entities × 1 hour × $69.20], and the high estimate is $378,371,760 [= 1,822,600 regulated entities × 3 hours × $69.20]. Many of the changes in the NPRM require the
The NPRM proposes to provide a transition period in proposed 45 CFR 164.318 for regulated entities to revise business associate agreements to comply with the proposed changes to the requirements of the Security Rule. The proposed transition period would allow regulated entities to revise existing agreements by the earlier of the contract renewal date that falls after the compliance date of a final rule, or within one year of the rule's effective date. For a large share of existing agreements, this would allow regulated entities to complete the revisions on a rolling basis according to the dates they are renewed. The Department estimates that 1,822,600
Proposed 45 CFR 164.314(b)(2) would mandate that group health plan documents require their health plan sponsors who receive ePHI that is not limited to summary health information or enrollment or disenrollment information to deploy the administrative, physical, and technical safeguards for ePHI required by the Security Rule and notify their group health plans upon activation of the plan sponsors' contingency plan. Currently, plan documents must require such health plan sponsors to have safeguards in place, but not necessarily the safeguards specified in the Security Rule.
Most compliance activities would be performed by a workforce member at the hourly wage rate of an information security analyst ($119.94), while documentation of maintenance would be performed at the rate of a management analyst ($111.08) and notification of termination or change of workforce members' access to ePHI would be performed by an office administrative assistant ($46.10). This would result in estimated total first year costs for health plan sponsors of $4,658,781,219 as shown in detail in table 7.
The Department summarizes in tables 6 and 7 the estimated costs that regulated entities (approximately $4,655 million) and plan sponsors (approximately $4,659 million), respectively, would experience in the first year of implementing the proposed regulatory changes. The Department anticipates that these costs would be for the following activities: conducting a Security Rule compliance audit; obtaining verification of business associates' and subcontractors' compliance with technical safeguards; providing verification of business associates' compliance with technical safeguards; providing notification of termination or change of workforce members' access to ePHI; deploying MFA and penetration testing; segmenting networks; disabling unused ports; removing extraneous software; notifying covered entities or business associates, as applicable, upon activation of a contingency plan; and updating health plan documents, policies and procedures, workforce training, and business associate agreements. These costs would also include health plan sponsors deploying safeguards for their relevant electronic information systems to meet Security Rule standards and notifying group health plans upon activation of a plan sponsor's contingency plan.
The Department presents the estimated cost of health plan sponsors' compliance with the proposed new requirements in table 7 below.
Together, regulated entities' and affected health plan sponsors' estimated first year costs of compliance with the proposals in the NPRM would be approximately 9,314 million (or $9 billion).
The covered entities that are operated by the Department would be affected by the changes in a similar manner to other covered entities, and such costs have been factored into the estimates above. The Department has not identified other costs to the Department related to the changes in the NPRM. A reduction in the number of large breaches (affecting 500 or more individuals per incident) would benefit the Department by enabling it to focus its resources on a smaller number of breach investigations, and potentially resolve such investigations more quickly.
A key goal of strengthening the cybersecurity posture of regulated entities is to reduce the number and severity of security incidents, including breaches of ePHI. The Department believes that compliance with the proposed changes, which align with industry guidelines and best practices, would benefit regulated entities by reducing the cost of breaches. Although the costs of implementing the proposed cybersecurity measures would be significant, the costs of responding to breaches of ePHI are much higher. According to industry data, the average cost of a health care breach in 2023 rose to $10.93 million, the highest among all industries studied,
The Department also analyzed the potential cost savings of proposals that
A fundamental benefit of the proposed rule would be to decrease the effects of breaches on individuals who are the subjects of ePHI, namely patients and health plan members. Breaches of ePHI may cause harm to individuals in many ways, including loss of reputation and personal dignity and financial and medical fraud, which may result in false debts, impaired credit, and even health threats from misuse of health insurance credentials by another individual. “[H]ealthcare data, which includes medical histories and personal identification, can last a lifetime. The information collected can be used for ransom, to commit tax frauds, to provide supporting disability documentation, to send fake bills to insurance providers, to obtain healthcare, prescription drugs, medical treatment, and to obtain government benefits like Medicare and Medicaid.”
Breaches of ePHI maintained by health care systems can also pose a threat to the medical well-being of affected individuals. Cyberattacks on health care organizations can include the deployment of malware that compromises the function of both internal and external medical devices. Such software can alter the dosages of sensitive medicines or shut down devices while they are in use, thus affecting patient care.
Cyberattacks on relevant electronic information systems also hinder the efficiency of hospitals and limit the quality of care provided to patients. Breaches of relevant electronic information systems negatively affect the routine functions of health care organizations. They can affect the availability of ePHI and relevant electronic information systems and redirect critical resources from patient care to addressing the cybersecurity attack. A 2020 cyberattack on a large covered entity disrupted communication and clinician access to medical records, including to individualized chemotherapy plan templates and tools for communicating during treatment preparation and delivery.
Similar to the effects of breaches of ePHI on individuals, health care organizations and facilities also experience reputational and financial impacts because of cybersecurity attacks. Hospitals can lose the community's trust and be subject to lawsuits from individuals whose data was compromised.
Key inputs to the estimation of costs of this proposed rule include the numbers of regulated entities and health plan sponsors. The Department has not previously quantified the costs of Security Rule compliance for health plan sponsors because the existing requirements are for plan documents to require such sponsors to implement administrative, physical, and technical safeguards, but not necessarily to comply with the specific requirements of the Security Rule. Therefore, the proposed requirement to comply with the proposed changes to the Security Rule, along with the number of affected plan sponsors (approximately 740,000), results in a significant increase in overall cost estimates compared to the existing rule. The benefits of improved security for ePHI accrue to individuals, regulated entities, and health plan sponsors and are significant. The Department has discussed the benefits above.
The Department seeks to reduce the risk and mitigate the effects of breaches of ePHI and related information systems through the proposals included in this NPRM. Because the frequency and magnitude of cybersecurity events are inherently difficult to predict, we chose to conduct a break-even analysis in lieu of a cost savings analysis. The Department solicits comments with any information and data on the incidence and negative consequences of cybersecurity breaches.
The
The high baseline used 669 breaches and a total of 71 million individuals affected, and the low baseline used 440 breaches and 29 million individuals affected.
For each data point, the Department calculated the number of breaches or affected individuals by which the affected universe would have to decrease for the proposed rule to fully offset the annualized costs of regulated entities.
The analysis in table 9 suggests that this NPRM would break even (cost savings would match monetized costs incurred) if the number of affected individuals is reduced by approximately 4.5 million. In years with a high incidence of breaches, this would be a reduction of approximately 7 percent, and in low-incidence years this would be a decrease of 16.4 percent. Thus, if the proposed changes in the NPRM reduce the number of affected individuals by 7 to 16 percent, the rule would pay for itself. Alternatively, the same cost savings may be achieved by lowering the cost per affected individual's ePHI by 7 percent ($35) and 16 percent ($82), respectively.
Table 10 analyzes the potential cost savings for regulated entities based on the annual number of large breaches of ePHI and the cost per breach, as shown below.
In table 10, the Department assumes that the average cost per breach in industry reports ($11.1 million, calculated as the average of the three highest values in table 9, adjusted for inflation) refers to large breaches of ePHI . The analysis in table 10 suggests that the NPRM would break even if the annual number of large breaches is reduced by approximately 202. In high-incidence years, this would be a reduction of approximately 30 percent, and in low-incidence years, this would be a decrease of 59 percent. Alternatively, the same cost savings may be achieved by lowering the cost per breach by 30 percent ($3.4 million) and 9 percent ($6.6 million), respectively.
The Department welcomes public comment on any benefits or drawbacks of the following alternatives it considered, but did not propose, while developing this proposed rule. We also request comment on whether the Department should reconsider any of the alternatives considered, and if so, why.
We considered not proposing revisions to the Security Rule. However, the Department believes that not revising the Security Rule would result in continued increases in both the number and size of breaches. Such increases would result in an exponential increase in costs as shown in table 8 above. If the modifications to the Security Rule result in even modest improvements to the security of ePHI, the reduction in the number and/or size of breaches would reduce the overall costs associated with breaches, including the costs of mitigating harm resulting from such breaches.
The Department considered proposing a separate standard for regulated entities to secure email transmissions. In the Department's Cybersecurity Performance Goals,
The Department is aware of the threat that email poses to the information systems of regulated entities and to the confidentiality, integrity, and availability of ePHI.
Additionally, the Department considered whether to heighten the existing expectation
Consistent with the requirement that the Secretary adopt security standards that take into account the needs and capabilities of small health care providers and rural health care providers,
The Department also considered proposing to permit small and rural health care providers to adopt alternate compensating controls, in lieu of the specified implementation specifications, to meet certain standards. After careful consideration, the Department concluded that it potentially could be just as costly to identify and adopt compensating controls that are reasonable and appropriate for small and rural health care practices. Small and rural health care providers would likely need to either hire personnel or contract with cybersecurity experts to identify potential compensating controls that would meet the relevant standard and provide implementation support. Accordingly, the Department declines to put forward such proposals at this time.
The Department considered the requirements of the Federal Information Security Modernization Act (FISMA)
The Department considered proposing additional modifications to the definition of “information system.” The Security Rule currently defines the term “information system” as an interconnected set of information resources under the same direct management control that shares common functionality and includes hardware, software, information, data, applications, communications, and people.
We also considered proposing to adopt the definition of “information system” in the Paperwork Reduction Act of 1995 (PRA) and the current operative version of OMB Circular A-130.
We do not believe that either of the alternative definitions considered would have generated a quantifiable change in costs because the alternatives would be clarifications to existing requirements and would not have changed the scope of the Security Rule's applicability.
The Department considered proposing an exception to the MFA authentication requirement that would permit regulated entities in the future to adopt other technologies, in lieu of MFA, that might offer a more secure method of authenticating user identity.
While the Department acknowledges that technology will continue to evolve, we are unable to predict when and whether future technology will address identity verification and exceed the level of protection offered by MFA. This uncertainty renders us unable to articulate requirements specific enough to justify a purposeful exception. Because of the uncertainty surrounding new technologies, we are also unable to estimate costs of adopting this alternative. Our current view is that proposing and codifying such an exception would be premature, but we will revisit the proposed specific requirement for MFA, if adopted, and reconsider the need for an exception should a more secure technology emerge.
The Department considered requiring regulated entities to comply with all of the proposals in this NPRM by the compliance date, rather than proposing transition provisions for existing business associate agreements or other contractual arrangements. Had the Department taken that approach, we would have proposed that regulated entities update all existing business associate agreements by the proposed compliance date to comply with all applicable proposed requirements in this NPRM. While the Department believes that many of the proposals in this NPRM are consistent with the Security Rule as it currently exists, we are also concerned that too many regulated entities are not currently compliant with the Security Rule. Given the demonstrable increase in breaches, we believe that it is more important for regulated entities to first improve their cybersecurity posture by coming into compliance with all applicable proposed requirements in this NPRM, if adopted. Upon doing so, the Department anticipates that regulated entities will be better positioned to evaluate their contractual needs and to modify existing business associate agreements. For this reason, the Department has proposed the transition provisions in proposed 45 CFR 164.318. Not allowing for a transition period could have an opportunity cost whereby regulated entities spend their limited time revising business associate agreements instead of enhancing their cybersecurity posture. The Department believes that this could result in duplicative costs because some regulated entities may identify the need for additional changes to business associate agreements after they have fully evaluated their changed cybersecurity needs. The Department estimates that small regulated entities may be more likely to experience that outcome without a transition period, and thus the alternative of no transition period would cause a potential one-time increase in costs of $278,332,891 [(1,822,600 regulated entities × .9) × 1 hour × $169.68 lawyer hourly wage].
Relatedly, the Department considered proposing similar transition provisions for group health plans and plan sponsors that would provide these entities with additional time to update plan documents to align with new proposed requirements in this NPRM, if adopted. However, the Department believes that affected plans and plan sponsors would be able to complete any necessary updates by the proposed compliance date. The Department believes that updating plan documents is not as complex a task as evaluating potential new contractual needs to meet business associate obligations. Additionally, plan sponsors do not have Security Rule obligations independent of plan documents, and thus would not be obligated to implement the requirements proposed in this NPRM absent updates to the plan documents. The result of a transition period for updating plan documents would be merely to delay compliance with the changed Security Rule requirements, and therefore, delay improvements to their cybersecurity posture, not to reduce costs. Accordingly, we are not proposing such transition provisions in this NPRM.
The Department has examined the economic implications of this proposed rule as required by the RFA. If a rule has a significant economic impact on a substantial number of small entities, the RFA requires agencies to analyze regulatory options that would reduce the economic effect of the rule on small entities. As discussed in greater detail below, this analysis concludes, and the Secretary proposes to certify, that the proposed rule, if finalized, would not
For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. The Act defines “small entities” as (1) a proprietary firm meeting the size standards of the SBA, (2) a nonprofit organization that is not dominant in its field, and (3) a small government jurisdiction of less than 50,000 population. The Department has determined that roughly 90 percent or more of all health care providers meet the SBA size standard for a small business as shown in table 4 or are a nonprofit organization. Therefore, the Department estimates that there would be 740,348 small entities affected by the proposals in this proposed rule.
With respect to health insurers, the SBA size standard is a maximum of $47 million in annual receipts, and for pharmacy benefits and clearinghouses it is $45.5 million.
With respect to business associates, they provide a wide range of services for covered entities, including computer infrastructure, clearinghouse activities, leased office equipment, and professional services, such as legal, accounting, business planning, and marketing. The SBA size thresholds for these industries ranges from $15.5 million for lawyers to $47 million for clearinghouses.
For the reasons stated below, the Department does not expect that the cost of compliance would be significant for small entities. Nor does the Department expect that the cost of compliance would fall disproportionately on small entities. Although many of the regulated entities affected by the proposals in this proposed rule are small entities, they would not bear a disproportionate cost burden compared to the other entities subject to the rule. The projected total costs are discussed in detail in the RIA. The Department does not view this as a substantial burden because the result of the changes would be annualized costs per regulated entity of approximately $1,235 [= $2.3 billion
More than 5 percent of the small covered entities listed under the NAICS codes in table 4 are one-establishment firms with fewer than five employees,
Among the NAICS codes for health care providers, the small firms with the lowest revenues are one-establishment HMO [Health Maintenance Organization] Medical Centers (NAICS 621491) with fewer than five employees, which had an estimated average yearly revenue in 2021 of $108,000. Residential Intellectual and Developmental Disability Facilities (NAICS 623210) had the second lowest revenues for one-establishment firms with fewer than five employees, with $180,000. Offices of Mental Health Practitioners (NAICS 621330) have the third lowest revenues for one-establishment firms with fewer than five employees, with $189,000. Thus, the Department believes that almost all regulated entities have annual revenues that exceed these amounts.
The Department acknowledges that there may be very small firms—namely firms without employees—whose revenues are below $41,167. We believe that such firms would comply with the regulation by purchasing services from software and web-hosting companies whose costs may increase as a result of the proposed changes. Such software and web-hosting companies would be business associates, and thus costs to them are already accounted for. We believe that, to the extent that these business associates decide to recover their minor cost increases by raising the prices of the services sold to non-employer firms, these incremental costs passed through to their small-firm customers would be negligible because they will be spread among many non-employer firms.
The Department has separately analyzed the effects of the NPRM on health plan sponsors and does not view the projected costs as a significant burden because the proposed changes would result in annualized costs per plan sponsor of approximately $6,133 [=$4,552,995,816/742,411 health plan sponsors]. The quantified impact of $6,133 per health plan sponsor would only apply to those sponsors whose annual revenue is $204,433 or less.
Accordingly, the Department believes that this proposed rule, if adopted, would be unlikely to affect a substantial
HIPAA requires the Department to consider the needs and capabilities of small and rural health care providers.
Because rural health care providers are more likely to be small businesses, they would be affected in a manner similar to small entities, as demonstrated in the Small Entity Analysis above. Likewise, to the extent that Tribal health care providers are in rural areas, which many are,
Rural health care providers and other regulated entities can avail themselves of grants and incentives to improve broadband access and adoption of health IT.
Cybersecurity is as essential for small and rural health care providers and their business associates, as it is for large and urban regulated entities. The seamless flow of data and increased connectivity means that threats to one health care provider do not affect only that one health care provider, regardless of size or location. The effects on patient care may be greater in rural environments where fewer alternatives exist if care is delayed or denied as a result of a cyberattack or malfunction.
As required by E.O. 13132 on Federalism,
The federalism implications of the Security Rule were also assessed as required by E.O. 13132 and published as part of the preambles to the final rules on February 20, 2003
A requirement, standard, or implementation specification adopted in accordance with HIPAA and the HIPAA Rules supersedes any contrary provision of State law, subject to certain exceptions.
The proposed modifications to the Security Rule would further the Congressional intent to improve the Medicare and Medicaid programs by the development of health information systems that are private and secure. The Department's proposals promote the safety, efficiency, and effectiveness of the health care system by refining the security standards established by Congress and implemented in the 2003 and 2013 Final Rules. The statute contemplated that the security measures adopted by all regulated entities, including State and local governments, would evolve over time in accordance with the security risks they face, and the NPRM proposals are in the nature of enhancing these existing requirements. Thus, the Department does not believe that the rule would impose substantial direct compliance costs on State and local governments that are not required by statute.
The Department anticipates that the most significant direct costs on State and local governments would be for conducting a Security Rule compliance audit; notifying covered entities or business associates, as applicable, upon activation of a contingency plan; notifying covered entities of changes or termination of workforce members' access to ePHI; deploying MFA; removing extraneous software; and penetration testing; providing or obtaining verification of business associates' compliance with technical safeguards; updating health plan documents; updating policies and procedures; and updating workforce training. However, the costs involved can be attributed to the statutory requirements of the Administrative Simplification provisions of HIPAA and would be similar in kind to those borne by non-government-operated regulated entities, which the proposed RIA above addresses in detail.
In considering the principles in and requirements of E.O. 13132, the Department believes that these proposed modifications to the Security Rule would not significantly affect the rights, roles, and responsibilities of the States and requests comment on this analysis.
Section 654 of the Treasury and General Government Appropriations Act of 1999
Under the PRA,
1. Whether the information collection is necessary and useful to carry out the proper functions of the agency.
2. The accuracy of the agency's estimate of the information collection burden.
3. The quality, utility, and clarity of the information to be collected.
4. Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
The PRA requires consideration of the time, effort, and financial resources necessary to meet the information collection requirements referenced in this section. The Department solicits public comments on its assumptions and burden estimates in this NPRM as summarized below.
In this RIA, the Department proposes to revise certain information collection requirements associated with this NPRM and, as such, would revise the information collection last prepared in 2024 and approved under OMB control #0945-0003.
The estimated annual labor burden presented by the regulatory modifications is 77,067,552 burden hours at a first-year cost of $9,314,106,174. These figures, respectively, represent the sum of 37,781,637 new burden hours at a cost of $4,655,324,954 for compliance by regulated entities and 39,285,915 new burden hours at a cost of $4,658,781,219 for compliance by health plan sponsors.
The overall total burden for respondents to comply with the information collection requirements of all of the HIPAA Privacy, Security, and Breach Notification Rules, including new burdens presented by proposed program changes, is estimated to be 925,144,023 burden hours at a cost of $109,085,104,674, plus $163,499,411 in capital costs for a total estimated annual burden of $109,248,604,085, after the effective date of the final rule. This estimate is based on a total of 1,202,562,864 responses for a total of 2,565,011 respondents. The total burden for the HIPAA Rules, including the changes proposed in this NPRM, would result in a decrease of 28,838,213 burden hours and a cost increase of $1,911,898,144, in comparison to the baseline in the ICR associated with the 2024 Privacy Rule to Support Reproductive Health Care Privacy.
Details describing the burden analysis for the proposals associated with this RIA are presented below and explained further in the ICR associated with the NPRM.
Below is a summary of the significant program changes and adjustments proposed since the approved 2024 ICR; because the ICR addresses regulatory burdens associated with the full suite of HIPAA Rules, the changes and adjustments include updated data and estimates for some provisions of the HIPAA Rules that are not affected by this proposed rule. These program changes and adjustments form the bases for the burden estimates presented in the ICR associated with this NPRM.
(1) Updating the number of covered entities.
(2) Updating hourly wage rates.
(3) Adjusting downward the number of estimated requests for an exception to Federal preemption of State law to the prior baseline of 1 request per year.
(4) Adjusting downward the estimated hourly burden for regulated entities to report security incidents (not breaches) from 20 hours per monthly report to 10 hours per monthly report.
(5) Updating the number of research disclosures.
In addition to the adjustments above, the Department proposes to add new annual estimated burdens as a result of program changes, as follows:
(1) A burden of 2 hours for each regulated entity to conduct a Security Rule compliance audit.
(2) A burden of 2 hours for each business associate (including each subcontractor) to provide verification of compliance with technical safeguards.
(3) A burden of .5 hours for each covered entity to obtain verification of business associates' compliance with technical safeguards.
(4) A burden of .083 hours for each business associate to obtain verification of subcontractors' compliance with technical safeguards.
(5) A burden of 1 hour for each regulated entity to provide notification to other regulated entities of workforce members' termination of access to ePHI.
(6) A burden of 1.5 hours for each regulated entity to deploy MFA.
(7) A burden of 4.5 hours for each regulated entity to perform network segmentation.
(8) A burden of .5 hours for approximately 76.56 percent of regulated entities to disable unused ports and remove extraneous software.
(9) A burden of 3 hours for each regulated entity to conduct penetration testing.
(10) A burden of .5 hours for each regulated entity to notify covered entities or business associates, as applicable, upon activation of a contingency plan.
(11) A burden of .5 hours for each insurer and third-party administrator to update health plan documents.
(12) A burden of 2 hours for each regulated entity to update the content of its cybersecurity awareness and Security Rule training program.
(13) A burden of 3.5 hours for each regulated entity to update its policies and procedures.
(14) A burden of 1 hour for each regulated entity to update business associate agreements.
(15) A burden of 52.92 hours for each health plan sponsor to modify safeguards for its relevant electronic information systems to meet Security Rule standards.
Administrative practice and procedure, Computer technology, Electronic information system, Electronic transactions, Employer benefit plan, Group health plan, Health, Health care, Health facilities, Health insurance, Health professions, Health records, Hospitals, Investigations, Medicaid, Medical Research, Medicare, Penalties, Preemption, Privacy, Public health, Reporting and recordkeeping requirements, Security.
Administrative practice and procedure, Computer technology, Drug abuse, Electronic information system, Electronic transactions, Employer benefit plan, Group health plan, Health, Health care, Health facilities, Health insurance, Health professions, Health records, Hospitals, Medicaid, Medical research, Medicare, Privacy, Public health, Reporting and recordkeeping requirements, Security.
For the reasons stated in the preamble, the Department of Health and Human Services proposes to amend 45 CFR subtitle A, subchapter C, parts 160 and 164 as set forth below:
42 U.S.C. 1302(a); 42 U.S.C. 1320d-1320d-9; sec. 264, Pub. L. 104-191, 110 Stat. 2033-2034 (42 U.S.C. 1320d-2 (note)); 5 U.S.C. 552; secs. 13400-13424, Pub. L. 111-5, 123 Stat. 258-279; and sec. 1104 of Pub. L. 111-148, 124 Stat. 146-154.
(1) Electronic storage material on which data may be recorded, maintained, or processed. This includes, but is not limited to, hard drives,
(2) Transmission media used to exchange information already in electronic storage material. Transmission media includes, but is not limited to, the internet, extranet or intranet, leased lines, dial-up lines, private and public networks, and the physical movement of removable/transportable electronic storage material.
42 U.S.C. 1302(a); 42 U.S.C. 1320d-1320d-9; sec. 264, Pub. L. 104-191, 110 Stat. 2033-2034 (42 U.S.C. 1320d-2(note)); and secs. 13400-13424, Pub. L. 111-5, 123 Stat. 258-279.
42 U.S.C. 1320d-2 and 1320d-4; 42 U.S.C. 17931.
A covered entity or business associate must comply with the applicable standards, implementation specifications, and requirements of this subpart with respect to electronic protected health information of a covered entity.
As used in this subpart, the following terms have the following meanings:
(1) Information known by the user, including but not limited to a password or personal identification number (PIN).
(2) Item possessed by the user, including but not limited to a token or a smart identification card.
(3) Personal characteristic of the user, including but not limited to fingerprint, facial recognition, gait, typing cadence, or other biometric or behavioral characteristics.
(1) The attempted or successful unauthorized access, use, disclosure, modification, or destruction of information in an information system.
(2) The attempted or successful unauthorized interference with system operations in an information system.
(a)
(1) Ensure the confidentiality, integrity, and availability of the electronic protected health information.
(2) Protect against any reasonably anticipated threats or hazards to the confidentiality, integrity, or availability of the electronic protected health information.
(3) Protect against any reasonably anticipated uses or disclosures of the electronic protected health information that are not permitted or required under subpart E of this part.
(4) Ensure compliance by its workforce with this subpart and all administrative, physical, and technical safeguards implemented in accordance with this subpart.
(b)
(2) In deciding which security measures to use, a covered entity or business associate must take into account all of the following factors:
(i) The size, complexity, and capabilities of the covered entity or business associate.
(ii) The covered entity's or the business associate's technical infrastructure, hardware, and software security capabilities.
(iii) The costs of security measures.
(iv) The probability and criticality of potential risks to electronic protected health information.
(v) The effectiveness of the security measure in supporting the resiliency of the covered entity or business associate.
(c)
(a) A covered entity or business associate must, in accordance with §§ 164.306 and 164.316, implement all of the following administrative safeguards to protect the confidentiality, integrity, and availability of all electronic protected health information that it creates, receives, maintains, or transmits:
(1)
(ii)
(B)
(C)
(
(
(2)
(ii)
(
(
(
(
(
(
(
(
(B)
(3)
(ii)
(B)
(4)
(ii)
(B)
(C)
(
(
(
(D)
(
(
(E)
(F)
(5)
(ii)
(B)
(C)
(D)
(6)
(ii)
(B)
(C)
(7)
(ii)
(B)
(C)
(D)
(E)
(F)
(8)
(9)
(ii)
(B)
(C)
(
(D)
(
(E)
(10)
(ii)
(B)
(C)
(D)
(E)
(F)
(11)
(ii)
(
(
(
(B)
(
(
(
(C)
(D)
(12)
(ii)
(
(
(B)
(
(
(
(
(13)
(ii)
(B)
(C)
(D)
(
(E)
(F)
(
(14)
(b)(1)
(B) A covered entity is not required to obtain such satisfactory assurances or verification from a business associate that is a subcontractor.
(ii) A business associate may permit a business associate that is a subcontractor to create, receive, maintain, or transmit electronic protected health information on its behalf only if the business associate obtains satisfactory assurances, in accordance with § 164.314(a), that the subcontractor will comply with the requirements of this subpart and verifies that the business associate that is a subcontractor has deployed technical safeguards in accordance with the requirements of § 164.312.
(2)
(ii)
(A) A written analysis of the business associate's relevant electronic information systems by a person with appropriate knowledge of and experience with generally accepted cybersecurity principles and methods for ensuring the confidentiality, integrity, and availability of electronic protected health information to verify compliance with each standard and implementation specification in § 164.312.
(B) A written certification that the analysis has been performed and is accurate by a person who has the authority to act on behalf of the business associate.
(3)
(ii) A covered entity or business associate that delegates actions, activities, or assessments required by this subpart to a business associate remains liable for compliance with all applicable provisions of this subpart.
Each covered entity and business associate must, in accordance with §§ 164.306 and 164.316, implement all of the following physical safeguards to protect the confidentiality, integrity, and availability of all electronic protected health information that it creates, receives, maintains, or transmits:
(a)
(2)
(ii)
(iii)
(iv)
(v)
(b)
(2)
(A) The functions for which a workstation may be used.
(B) The manner in which a workstation may be used to perform those functions.
(C) The physical attributes of the surroundings of a specific workstation or class of workstation that can access electronic protected health information, including the removal of such workstations from a facility and the movement of such workstations within and outside of a facility.
(ii)
(c)
(d)
(2)
(ii)
(iii)
Each covered entity or business associate must, in accordance with §§ 164.306 and 164.316, implement all of the following technical safeguards, including technical controls, to protect the confidentiality, integrity, and availability of all electronic protected health information that it creates, receives, maintains, or transmits:
(a)
(2)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(b)
(2)
(3)
(i) The technology asset in use does not support encryption of the electronic protected health information consistent with prevailing cryptographic standards, and the covered entity or business associate establishes and implements a written plan to migrate electronic protected health information to a technology asset that supports encryption consistent with prevailing cryptographic standards within a reasonable and appropriate period of time.
(ii) An individual requests pursuant to § 164.524 to receive their electronic protected health information in an unencrypted manner and has been informed of the risks associated with the transmission, receipt, and storage of unencrypted electronic protected health information. This exception does not apply where such individual will receive their electronic protected health information pursuant to § 164.524 and the technology used by the individual to receive the electronic protected health information is controlled by the covered entity or its business associate.
(iii) During an emergency or other occurrence that adversely affects the covered entity's or business associate's relevant electronic information systems in which encryption is infeasible, and the covered entity or business associate implements reasonable and appropriate compensating controls in accordance with and determined by the covered entity's or business associate's contingency plan under § 164.308(a)(13).
(iv) The technology asset in use is a device under section 201(h) of the Food, Drug, and Cosmetic Act, 21 U.S.C. 321(h) that has been authorized for marketing by the Food and Drug Administration, as follows:
(A) Pursuant to a submission received before March 29, 2023, provided that the covered entity or business associate deploys in a timely manner any updates or patches required or recommended by the manufacturer of the device.
(B) Pursuant to a submission received on or after March 29, 2023, where the device is no longer supported by its manufacturer, provided that the covered entity or business associate has deployed any updates or patches required or recommended by the manufacturer of the device.
(C) Pursuant to a submission received on or after March 29, 2023, where the device is supported by its manufacturer.
(4)
(ii)
(B) To the extent that a covered entity or business associate determines that an exception at paragraph (b)(3)(iv)(C) of this section applies, the covered entity or business associate shall be presumed to have implemented reasonable and appropriate compensating controls where the covered entity or business associate has deployed the security measures prescribed and as instructed by the authorized label for the device, including any updates or patches recommended or required by the manufacturer of the device.
(C) To the extent that a covered entity or business associate is implementing compensating controls under this paragraph (b)(4)(ii), the implementation and effectiveness of compensating controls must be reviewed, documented, and signed by the designated Security Official at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, to continue securing electronic protected health information and relevant electronic information systems.
(5)
(c)
(2)
(ii)
(iii)
(iv)
(v)
(d)
(2)
(ii)
(iii)
(iv)
(A) Electronic protected health information.
(B) Relevant electronic information systems and the information therein.
(v)
(e)
(f)
(2)
(ii)
(B) Deploy multi-factor authentication for any action that would change a user's privileges to the covered entity's or business associate's relevant electronic information systems in a manner that would alter the user's ability to affect the confidentiality, integrity, or availability of electronic protected health information.
(iii)
(A) The technology asset in use does not support multi-factor authentication, and the covered entity or business associate establishes and implements a written plan to migrate electronic protected health information to a technology asset that supports multi-factor authentication within a reasonable and appropriate period of time.
(B) During an emergency or other occurrence that adversely affects the covered entity's or business associate's relevant electronic information systems or the confidentiality, integrity, or availability of electronic protected health information in which multi-factor authentication is infeasible and the covered entity or business associate implements reasonable and appropriate compensating controls in accordance with its emergency access procedures under paragraph (a)(2)(iii) of this section and the covered entity's or business associate's contingency plan under § 164.308(a)(13).
(C) The technology asset in use is a device under section 201(h) of the Food, Drug, and Cosmetic Act, 21 U.S.C. 321(h) that has been authorized for marketing by the Food and Drug Administration, as follows:
(
(
(
(iv)
(B)
(
(
(v)
(g)
(h)
(2)
(B) Review and test the effectiveness of the technology asset(s) that conducts the automated vulnerability scans required by paragraph (h)(2)(i)(A) of this section at least once every 12 months or in response to environmental or operational changes, whichever is more frequent, and modify as reasonable and appropriate.
(ii)
(iii)
(A) A qualified person is a person with appropriate knowledge of and experience with generally accepted cybersecurity principles and methods for ensuring the confidentiality, integrity, and availability of electronic protected health information.
(B) Penetration testing must be performed at least once every 12 months or in accordance with the covered entity's or business associate's risk analysis required by § 164.308(a)(2), whichever is more frequent.
(iv)
(i)
(2)
(ii)
(iii)
(iv)
(j)
(a)(1)
(2)
(A) Comply with the applicable requirements of this subpart.
(B) In accordance with § 164.308(b)(1)(ii), ensure that any subcontractors that create, receive, maintain, or transmit electronic protected health information on behalf of the business associate agree to comply with the applicable requirements of this subpart by entering into a contract or other arrangement that complies with this section.
(C) Report to the covered entity any security incident of which it becomes aware, including breaches of unsecured electronic protected health information as required by § 164.410.
(D) Report to the covered entity activation of its contingency plan under § 164.308(a)(13) without unreasonable
(ii)
(iii)
(b)(1)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(a)
(1) Document the policies and procedures required to comply with this subpart and how the covered entity or business associate considered the factors at § 164.306(b) in the development of such policies and procedures.
(2) Document each action, activity, or assessment required by this subpart.
(b)
(2)
(3)
(a)
(b)
(i) Prior to [DATE OF PUBLICATION OF THE FINAL RULE IN THE
(ii) The contract or other arrangement is not renewed or modified from [DATE 60 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE
(2)
(i) The date such contract or other arrangement is renewed on or after [DATE 240 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE
(ii) [DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE
(c)
If any provision of this subpart is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, or stayed pending further agency action, it shall be construed so as to give it maximum effect permitted by law, unless such holding shall be one of utter invalidity or unenforceability, in which event such provision shall be severable from this subpart and shall not affect the remainder thereof or the application of such provision to other persons not similarly situated or to other dissimilar circumstances.