Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

American Health Benefit Exchanges, or “Exchanges” are entities established under the Patient Protection and Affordable Care Act  1 (PPACA) through which qualified individuals and qualified employers can purchase health insurance coverage. Many individuals who enroll in qualified health plans (QHPs) through individual market Exchanges are eligible to receive a premium tax credit to reduce their costs for health insurance premiums and to receive reductions in required cost-sharing payments to reduce out-of-pocket expenses for health care services. The PPACA also established the risk adjustment program, which is intended to increase the workability of the PPACA regulatory changes in the individual and small group markets, both on and off Exchanges.

On January 20, 2017, the President issued an Executive Order which stated that, to the maximum extent permitted by law, the Secretary of HHS and heads of all other executive departments and agencies with authorities and responsibilities under the PPACA should exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the PPACA that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, health care providers, health insurers, patients, recipients of health care services, purchasers of health insurance, or makers of medical devices, products, or medications. In this proposed rule, we are proposing, within the limitations of the current statute, to reduce fiscal and regulatory burdens across different program areas, and to provide stakeholders with greater flexibility.

Over time, issuer exits and increasing insurance rates have threatened the stability of the individual and small group market Exchanges in many geographic areas. Unfortunately, Exchange plans are now almost entirely unaffordable for people who do not qualify for PPACA's advance payments of premium tax credits at enrollment. In the first half of 2018, 87 percent of Exchange enrollees received advance payments of the premium tax credit, with the amount covering 87 percent of the premium, on average. Sixteen percent of enrollees were enrolled in plans with zero premium after the application of premium tax credit, and another 19 percent of enrollees received a tax credit that covered at least 95 percent of the premium. 2

In previous rulemaking, we established provisions and parameters to implement many PPACA requirements and programs. In this proposed rule, we propose to amend these provisions and parameters, with a focus on maintaining a stable regulatory environment to provide issuers with greater predictability for upcoming plan years, while simultaneously enhancing the role of states in these programs and providing states with additional flexibilities, reducing unnecessary regulatory burdens on stakeholders, empowering consumers, and improving affordability.

Risk adjustment continues to be a core program in the individual and small group markets both on and off the Exchanges, and we propose recalibrated parameters for the HHS-operated risk adjustment methodology. We propose several changes related to the risk adjustment data validation program that are intended to ensure the integrity of the results of risk adjustment, and others intended to alleviate issuer burden associated with participating in risk adjustment data validation.

As we do every year in the HHS notice of benefit and payment parameters, we propose updated parameters applicable in the individual and small group markets. We propose the user fee rate for issuers participating on Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs) for 2020 to be 3.0 and 2.5 percent of premiums, respectively. These rates would be a decrease from past years, which would increase affordability for consumers. We propose to use a new premium measure to determine the rate of premium growth for purposes of calculating the premium adjustment percentage for 2020 and beyond, which is used to set the maximum annual limitation on cost sharing, the required contribution percentage used to determine eligibility for certain exemptions under section 5000A of the Internal Revenue Code (the Code), and the employer shared responsibility payment amounts under section 4980H(a) and (b) of the Code. We propose to update the maximum annual limitations on cost sharing for the 2020 benefit year, including those for cost-sharing reduction plan variations.

We also propose changes to the requirements regarding Navigators to reduce burden, increase flexibility, and enable Exchanges to more easily and cost-effectively operate their programs.

We are committed to promoting a consumer-driven health care system in which consumers are empowered to select and maintain health care coverage of their choosing. To this end, we propose to expand the QHP options available to consumers on the Exchange by requiring QHP issuers that provide coverage of certain abortion services in QHPs to provide otherwise identical QHP benefit coverage that omits coverage of such abortion services in a separate QHP, to the extent permissible under applicable state law.

We also propose a number of changes in this rule that are intended to reduce the burden for consumers by making it easier to enroll in affordable coverage through the Exchange. First, we propose to provide additional flexibility to those in need of a hardship exemption, which consumers apply for now through Exchanges, by expanding the types of hardship exemptions that consumers may claim for 2018 through the tax filing process. Second, we believe consumers should have greater flexibility in how they shop for coverage, including the avenues through which they enroll in QHPs. As such, we have been working to expand opportunities for individuals to directly enroll in Exchange coverage by enrolling through the websites of certain third parties, called direct enrollment entities, rather than having to visit HealthCare.gov . We propose several regulatory changes to streamline the regulatory requirements applicable to these direct enrollment entities. Third, we propose to create a special enrollment period for off-Exchange enrollees who experience a decrease in household income and are determined to be eligible for advance payments of the premium tax credit (APTC) by the Exchange. This would allow enrollees to enroll in a more affordable on-Exchange product when a consumer's household income decreases mid-year.

Currently, enrollees in plans offered through a Federally-facilitated Exchange or a State-based Exchange using the Federal platform can take action to re-enroll in their current plan, can take action to select a new plan, or can take no action and be re-enrolled in their current plan. Since the program's inception, these Exchanges have maintained an automatic re-enrollment process which generally continues enrollment for current enrollees who do not notify the Exchange of eligibility changes or take action to actively select the same or different plan. In the open enrollment period for 2019 coverage, 1.8 million people in states using the Federal platform  3 were automatically re-enrolled in coverage, including about 270,000 who were enrolled in a plan with zero premium after application of advance payments of the premium tax credit. 4 Automatic re-enrollment significantly reduces issuer administrative expenses and makes enrolling in health insurance more convenient for the consumer. While allowing auto-re-enrollment was designed to be consistent with broader industry practices, this market is arguably different, since most current enrollees receive significant government subsidies, making them potentially less sensitive to premiums and premium changes. For the first half of 2018, for example, 16 percent of enrollees were enrolled in a plan with zero premiums after application of advance payments of the premium tax credit, another 19 percent of enrollees paid a premium of less than 5 percent of the total plan premium after application of advance payments of the premium tax credit, and the average subsidized enrollee received a premium tax credit covering 87 percent of the total premium cost.

The practice of automatic re-enrollment in the Exchanges gives rise to several concerns. Some consumers who are automatically re-enrolled in their current plan may be shielded from changes to their coverage, which may result in consumers being less aware of their options from year to year. There is a concern that automatic re-enrollment eliminates an opportunity for consumers to update their coverage and premium tax credit eligibility as their personal circumstances change, potentially leading to eligibility errors, tax credit miscalculations, unrecoverable federal spending on the credits, and general consumer confusion.

We seek comment on the automatic re-enrollment processes and capabilities as well as additional policies or program measures that would reduce eligibility errors and potential government misspending for potential action in future rulemaking applicable not sooner than plan year 2021.

In addition, we believe increased transparency is a critical component of a consumer driven health care system, and are interested in ways to provide consumers with greater transparency with regards to their own health care data, QHP offerings on the FFEs, and the cost of health care services. In general, we encourage QHP issuers and Exchanges to undertake efforts to engage in consumer-friendly communication of their services to help consumers understand the value of services they would potentially obtain. We believe that when consumers have access to relevant, consumer-friendly information that is meaningful to them, they are empowered to make more informed decisions with regards to their care. This can have the effect of aligning with consumers' goals and preferences, promoting value and improving health outcomes.

Specifically, we are exploring ways to increase the interoperability of patient-mediated health care data across health care programs, including in coverage purchased through the Exchanges. We believe that providing data in an easily accessible manner through common technologies in a convenient, timely, and portable way is in the best interest of consumers and the health care system as a whole. This can prevent duplicative medical services, assist in supporting health care value through the prevention of fraud, waste, and abuse, reduce health care spending, and drive down the costs of health care for consumers. We expect to provide further information on these interoperability efforts, and an opportunity for public input, in the near future.

Additionally, in an effort to increase consumer transparency through access to information that may assist consumers in selecting a QHP offered through an Exchange and navigating their coverage, we are exploring opportunities to expand the transparency in coverage data collection. 5 Under section 1311(e)(3) of the PPACA, as implemented by 45 CFR 155.1040(a) and 156.220, QHP issuers must post and make available to the public, data related to transparency in coverage in plain language and submit this data to HHS, the Exchange, and the state insurance commissioner. 6 These standards provide greater transparency for consumers and may assist in the decision-making process. This resubmission of the information collections approved under the Paperwork Reduction Act package was posted at the Federal Register for 60-day public comment through December 24, 2018. Separate from the PRA submission, we seek comment on ways to further implement § 156.220(d), enrollee cost-sharing transparency, where a QHP issuer must make available the amount of enrollee cost sharing under the individual's plan or coverage for the furnishing of a specific item or service by a participating provider in a timely manner upon the request of the individual. We are particularly interested in input regarding what types of data would be most useful to improving consumers' abilities to make informed health care decisions, including decisions related to their coverage.

Finally, we are interested in ways to improve consumers' access to information about health care costs. We believe that consumers would benefit from a greater understanding of what their potential out-of-pocket costs would be for various services, based on which QHP they are enrolled in and which provider they see. We believe that such a policy would promote consumers' ability to shop for covered services, and to play a more active role in their health care. In particular, we are aware that it can be difficult for consumers to anticipate their financial responsibility when a QHP applies coinsurance, because consumers are largely unaware of the negotiated rate until they receive an explanation of benefits document after the provider renders the service. We are considering different options for disclosure of cost-sharing information, recognizing that cost is a significant factor in creating greater value in health care delivery. For example, we are considering whether to require issuers to disclose a consumer's anticipated costs for particular services upon request within a certain timeframe, or whether to require issuers to disclose anticipated costs for a set number of common coverage scenarios, similar to what they must currently disclose in the Summary of Benefits and Coverage (SBC).

To increase transparency for the individual and small group markets more generally, we are proposing to expand the collection of masked enrollee-level data from the External Data Gathering Environment (EDGE) servers, and to broaden the permissible uses of such data currently submitted for purposes of risk adjustment. We believe this proposal, if finalized, would increase understanding of these markets among HHS, researchers, and the general public, and therefore contribute to greater transparency.

We seek comments on whether there are any existing regulatory barriers that stand in the way of privately led efforts at pricing transparency, and ways that we can facilitate or support increased private innovation in pricing transparency. As part of our ongoing efforts to empower consumers in their health care decisions, we also seek comment on how we can promote transparency for consumers and value-based insurance design. We seek comment on ways that we can promote the offering and take-up of High Deductible Health Plans (HDHPs) that can be paired with Health Savings Accounts (HSAs), which can serve as an effective and tax-advantageous method for certain consumers to manage their health care expenditures. We are particularly interested in comments that address ways to increase the visibility of HSA-eligible HDHPs on HealthCare.gov .

In furtherance of the Administration's priority to reduce prescription drug costs and to align with the President's American Patients First blueprint, we propose a series of changes to the prescription drug benefits, to the extent permitted by applicable state law. These proposals include allowing issuers to adopt mid-year formulary changes to incentivize greater enrollee use of lower-cost generic drugs; allowing issuers to not count certain cost sharing toward the annual limitation on cost sharing if a consumer selects a brand drug when a medically appropriate generic drug is available; and allowing issuers to exclude drug manufacturer coupons from counting toward the annual limitation on cost sharing when a medically appropriate generic drug is available. We believe these proposals will support issuers' ability to lower the cost of coverage and generate cost savings while also ensuring efficient use of federal funds and sufficient coverage for people with diverse health needs.

Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new title XXVII to the Public Health Service Act (PHS Act) to establish various reforms to the group and individual health insurance markets, including a guaranteed renewability requirement in the individual, small group, and large group markets.

Subtitles A and C of title I of the PPACA reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act) relating to group health plans and health insurance issuers in the group and individual markets.

Section 1302 of the PPACA provides for the establishment of an essential health benefits (EHB) package that includes coverage of EHB (as defined by the Secretary), cost-sharing limits, and actuarial value requirements. The law directs that EHBs be equal in scope to the benefits provided under a typical employer plan, and that they cover at least the following 10 general categories: Ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

Section 1301(a)(1)(B) of the PPACA directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the PPACA, including coverage of the services described in section 1302(b) of the PPACA, adherence to the cost-sharing limits described in section 1302(c) of the PPACA, and meeting the actuarial value (AV) levels established in section 1302(d) of the PPACA. Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health insurance coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in sections 1302(c)(1) of the PPACA.

Section 1303 of the PPACA provides special rules for QHPs that offer abortion coverage in the individual market Exchanges. Under this section, QHP issuers may elect whether to provide coverage for abortion services through their QHPs offered on the Exchange. Section 1303 of the PPACA covers a variety of other requirements and provisions relating to QHP coverage of abortion services, including parameters for when federal funding is prohibited for abortion coverage, how QHPs shall ensure that no such federal funding is attributed to coverage of certain abortion services, provisions on non-preemption of certain state laws regarding abortion coverage, and provisions on non-preemption of federal conscience, nondiscrimination, and emergency services laws.

Since 1976, Congress has annually attached language, commonly known as the Hyde Amendment, to its annual Labor, Health and Human Services, Education, and Related Agencies appropriations legislation. 7 The Hyde Amendment as currently in effect permits federal funds to be used for abortions only in the limited cases of rape, incest, or if a woman suffers from a life-threatening physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, as certified by a physician (“Hyde abortion coverage”). The Hyde Amendment prohibits the use of federal funds for abortions or abortion coverage in instances beyond those limited circumstances (“non-Hyde abortion coverage” or “abortion coverage”).

Section 1311(d)(3)(B) of the PPACA permits a state, at its option, to require QHPs to cover benefits in addition to the EHB. This section also requires a state to make payments, either to the individual enrollee or to the issuer on behalf of the enrollee, to defray the cost of these additional state-required benefits.

Section 1302(d) of the PPACA describes the various levels of coverage based on AV. Consistent with section 1302(d)(2)(A) of the PPACA, AV is calculated based on the provision of EHB to a standard population. Section 1302(d)(3) of the PPACA directs the Secretary to develop guidelines that allow for de minimis variation in AV calculations.

Section 1311(b)(1)(B) of the PPACA directs that the Small Business Health Options Program assist qualified small employers in facilitating the enrollment of their employees in QHPs offered in the small group market. Sections 1312(f)(1) and (2) of the PPACA define qualified individuals and qualified employers. Under section 1312(f)(2)(B) of the PPACA, beginning in 2017, states have the option to allow issuers to offer QHPs in the large group market through an Exchange. 8

Section 1311(d)(4)(B) of the PPACA requires an Exchange to provide for the operation of a toll-free telephone hotline to respond to requests for assistance.

Sections 1311(d)(4)(K) and 1311(i) of the PPACA direct all Exchanges to establish a Navigator program.

Section 1311(c)(6)(C) of the PPACA establishes special enrollment periods and section 1311(c)(6)(D) of the PPACA establishes the monthly enrollment period for Indians, as defined by section 4 of the Indian Health Care Improvement Act.

Section 1312(c) of the Affordable Care Act generally requires a health insurance issuer to consider all enrollees in all health plans (except grandfathered health plans) offered by such issuer to be members of a single risk pool for each of its individual and small group markets. States have the option to merge the individual and small group market risk pools under section 1312(c)(3) of the Affordable Care Act.

Section 1312(e) of the PPACA directs the Secretary to establish procedures under which a state may permit agents and brokers to enroll qualified individuals and qualified employers in QHPs through an Exchange and to assist individuals in applying for premium tax credits and cost-sharing reductions for QHPs sold through an Exchange.

Section 1321(a) of the PPACA provides broad authority for the Secretary to establish standards and regulations to implement the statutory requirements related to Exchanges, QHPs and other components of title I of the PPACA. Section 1321(a)(1) of the PPACA directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the PPACA for, among other things, the establishment and operation of Exchanges.

Section 1311(c) of the PPACA provides the Secretary the authority to issue regulations to establish criteria for the certification of QHPs. Section 1311(e)(1) of the PPACA grants the Exchange the authority to certify a health plan as a QHP if the health plan meets the Secretary's requirements for certification issued under section 1311(c) of the PPACA, and the Exchange determines that making the plan available through the Exchange is in the interests of individuals and employers in the state.

Sections 1313 and 1321 of the PPACA provide the Secretary with the authority to oversee the financial integrity of State Exchanges, their compliance with HHS standards, and the efficient and non-discriminatory administration of State Exchange activities. Section 1321 of the PPACA provides for state flexibility in the operation and enforcement of Exchanges and related requirements.

When operating an FFE under section 1321(c)(1) of the PPACA, HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of the PPACA to collect and spend user fees. In addition, 31 U.S.C. 9701 permits a federal agency to establish a charge for a service provided by the agency. Office of Management and Budget (OMB) Circular A-25 Revised establishes federal policy regarding user fees and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the general public.

Section 1321(d) of the PPACA provides that nothing in title I of the PPACA should be construed to preempt any state law that does not prevent the application of title I of the PPACA. Section 1311(k) of the PPACA specifies that Exchanges may not establish rules that conflict with or prevent the application of regulations issued by the Secretary.

Section 1343 of the PPACA establishes a permanent risk adjustment program to provide payments to health insurance issuers that attract higher-than average risk populations, such as those with chronic conditions, funded by payments from those that attract lower- than average risk populations, thereby reducing incentives for issuers to avoid higher-risk enrollees.

Section 1402 of the PPACA provides for, among other things, reductions in cost sharing for EHB for qualified low- and moderate-income enrollees in silver level health plans offered through the individual market Exchanges. This section also provides for reductions in cost sharing for Indians enrolled in QHPs at any metal level.

Section 5000A of the Code, as added by section 1501(b) of the PPACA requires individuals to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make an individual shared responsibility payment. Under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, the individual shared responsibility payment is reduced to $0, effective for months beginning after December 31, 2018. 9 Notwithstanding that reduction, certain exemptions are still relevant to determine whether individuals above the age of 30 qualify to enroll in catastrophic coverage under § 155.305(h).

The Protecting Affordable Coverage for Employees Act (Pub. L. 114-60, enacted on October 7, 2015) amended the definition of small employer in section 1304(b) of the PPACA and section 2791(e) of the PHS Act to mean, in connection with a group health plan for a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. It also amended these statutes to make conforming changes to the definition of large employer, and to provide that a state may treat as a small employer, for a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

In the July 15, 2011 Federal Register (76 FR 41929), we published a proposed rule outlining the framework for the premium stabilization programs. We implemented the premium stabilization programs in a final rule, published in the March 23, 2012 Federal Register (77 FR 17219) (Premium Stabilization Rule). In the December 7, 2012 Federal Register (77 FR 73117), we published a proposed rule outlining the benefit and payment parameters for the 2014 benefit year to expand the provisions related to the premium stabilization programs and set forth payment parameters in those programs (proposed 2014 Payment Notice). We published the 2014 Payment Notice final rule in the March 11, 2013 Federal Register (78 FR 15409). In the June 19, 2013 Federal Register (78 FR 37032), we proposed a modification to the HHS-operated methodology related to community rating states. In the October 30, 2013 Federal Register (78 FR 65046), we finalized the proposed modification to the HHS-operated methodology related to community rating states. We published a correcting amendment to the 2014 Payment Notice final rule in the November 6, 2013 Federal Register (78 FR 66653) to address how an enrollee's age for the risk score calculation would be determined under the HHS-operated risk adjustment methodology.

In the December 2, 2013 Federal Register (78 FR 72321), we published a proposed rule outlining the benefit and payment parameters for the 2015 benefit year to expand the provisions related to the premium stabilization programs, setting forth certain oversight provisions and establishing the payment parameters in those programs (proposed 2015 Payment Notice). We published the 2015 Payment Notice final rule in the March 11, 2014 Federal Register (79 FR 13743). In the May 27, 2014 Federal Register (79 FR 30240), the 2015 fiscal year sequestration rate for the risk adjustment program was announced.

In the November 26, 2014 Federal Register (79 FR 70673), we published a proposed rule outlining the benefit and payment parameters for the 2016 benefit year to expand the provisions related to the premium stabilization programs, setting forth certain oversight provisions and establishing the payment parameters in those programs (proposed 2016 Payment Notice). We published the 2016 Payment Notice final rule in the February 27, 2015 Federal Register (80 FR 10749).

In the December 2, 2015 Federal Register (80 FR 75487), we published a proposed rule outlining the benefit and payment parameters for the 2017 benefit year to expand the provisions related to the premium stabilization programs, setting forth certain oversight provisions and establishing the payment parameters in those programs (proposed 2017 Payment Notice). We published the 2017 Payment Notice final rule in the March 8, 2016 Federal Register (81 FR 12203).

In the September 6, 2016 Federal Register (81 FR 61455), we published a proposed rule outlining the benefit and payment parameters for the 2018 benefit year, and to further promote stable premiums in the individual and small group markets. We proposed updates to the risk adjustment methodology, new policies around the use of external data for recalibration of our risk adjustment models, and amendments to the risk adjustment data validation process (proposed 2018 Payment Notice). We published the 2018 Payment Notice final rule in the December 22, 2016 Federal Register (81 FR 94058).

In the November 2, 2017 Federal Register (82 FR 51042), we published a proposed rule outlining the benefit and payment parameters for the 2019 benefit year, and to further promote stable premiums in the individual and small group markets. We proposed updates to the risk adjustment methodology and amendments to the risk adjustment data validation process (proposed 2019 Payment Notice). We published the 2019 Payment Notice final rule in the April 17, 2018 Federal Register (83 FR 16930). We published a correction to the 2019 risk adjustment coefficients in the 2019 Payment Notice final rule in the May 11, 2018 Federal Register (83 FR 21925). On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i), we updated the 2019 benefit year final risk adjustment model coefficients to reflect an additional recalibration related to an update to the 2016 enrollee-level EDGE dataset. 11

In the July 30, 2018 Federal Register (83 FR 36456), we published a final rule that adopted the 2017 benefit year risk adjustment methodology as established in the final rules published in the March 23, 2012 (77 FR 17220 through 17252) and in the March 8, 2016 editions of the Federal Register (81 FR 12204 through 12352). This final rule set forth additional explanation of the rationale supporting use of statewide average premium in the HHS-operated risk adjustment state payment transfer formula for the 2017 benefit year, including the reasons why the program is operated in a budget-neutral manner. This final rule permitted HHS to resume 2017 benefit year risk adjustment payments and charges. HHS also provided guidance as to the operation of the HHS-operated risk adjustment program for the 2017 benefit year in light of publication of this final rule. 12

In the August 10, 2018 Federal Register (83 FR 39644), we published a proposed rule seeking comment on adopting the 2018 benefit year risk adjustment methodology in the final rules published in the March 23, 2012 (77 FR 17219) and in the December 22, 2016 editions of the Federal Register (81 FR 94058). The proposed rule set forth additional explanation of the rationale supporting use of statewide average premium in the HHS-operated risk adjustment state payment transfer formula for the 2018 benefit year, including the reasons why the program is operated in a budget-neutral manner. In the December 10, 2018 Federal Register (83 FR 63419), we issued a final rule adopting the 2018 benefit year HHS-operated risk adjustment methodology as established in the final rules published in the March 23, 2012 (77 FR 17219) and the December 22, 2016 (81 FR 94058) editions of the Federal Register . This final rule sets forth additional explanation of the rationale supporting use of statewide average premium in the HHS-operated risk adjustment state payment transfer formula for the 2018 benefit year, including the reasons why the program is operated in a budget-neutral manner.

In the June 19, 2013 Federal Register (78 FR 37031), we published a proposed rule that proposed certain program integrity standards related to Exchanges and the premium stabilization programs (proposed Program Integrity Rule). The provisions of that proposed rule were finalized in two rules, the “first Program Integrity Rule” published in the August 30, 2013 Federal Register (78 FR 54069) and the “second Program Integrity Rule” published in the October 30, 2013 Federal Register (78 FR 65045).

An interim final rule relating to the HIPAA health insurance reforms was published in the April 8, 1997 Federal Register (62 FR 16894). A proposed rule relating to the 2014 health insurance market rules was published in the November 26, 2012 Federal Register (77 FR 70584). A final rule implementing the health insurance market rules was published in the February 27, 2013 Federal Register (78 FR 13406) (2014 Market Rules).

A proposed rule relating to Exchanges and Insurance Market Standards for 2015 and Beyond was published in the March 21, 2014 Federal Register (79 FR 15808) (2015 Market Standards Proposed Rule). A final rule implementing the Exchange and Insurance Market Standards for 2015 and Beyond was published in the May 27, 2014 Federal Register (79 FR 30240) (2015 Market Standards Rule). The 2018 Payment Notice final rule in the December 22, 2016 Federal Register (81 FR 94058) provided additional guidance on guaranteed availability and guaranteed renewability. In the April 18, 2017 Market Stabilization final rule (82 FR 18346), we released further guidance related to guaranteed availability.

We published a request for comment relating to Exchanges in the August 3, 2010 Federal Register (75 FR 45584). We issued initial guidance to states on Exchanges on November 18, 2010. We proposed a rule in the July 15, 2011 Federal Register (76 FR 41865) to implement components of the Exchanges, and a rule in the August 17, 2011 Federal Register (76 FR 51201) regarding Exchange functions in the individual market and SHOP, eligibility determinations, and Exchange standards for employers. A final rule implementing components of the Exchanges and setting forth standards for eligibility for Exchanges was published in the March 27, 2012 Federal Register (77 FR 18309) (Exchange Establishment Rule).

We established additional standards for SHOP in the 2014 Payment Notice and in the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule, published in the March 11, 2013 Federal Register (78 FR 15541). The provisions established in the interim final rule were finalized in the second Program Integrity Rule. We also set forth standards related to Exchange user fees in the 2014 Payment Notice. We established an adjustment to the FFE user fee in the Coverage of Certain Preventive Services Under the Affordable Care Act final rule, published in the July 2, 2013 Federal Register (78 FR 39869) (Preventive Services Rule).

In a final rule published in the March 27, 2012 Federal Register (77 FR 18309), we established the original regulatory Navigator duties and training requirements. In a final rule published in the July 17, 2013 Federal Register (78 FR 42823), we established standards for Navigators and non-Navigator assistance personnel in FFEs and for non-Navigator assistance personnel funded through an Exchange establishment grant. This final rule also established a certified application counselor program for Exchanges and set standards for that program. In the 2017 Payment Notice final rule, published in the March 8, 2016 Federal Register (81 FR 12204), we expanded Navigator duties and training requirements. In the 2019 Payment Notice final rule, published in the April 17, 2018 Federal Register (83 FR 16930), we removed the requirements that each Exchange must have at least two Navigator entities; that one of these entities must be a community and consumer-focused nonprofit group; and that each Navigator entity must maintain a physical presence in the Exchange service area.

In an interim final rule, published in the May 11, 2016 Federal Register (81 FR 29146), we made amendments to the parameters of certain special enrollment periods (2016 Interim Final Rule). We finalized these in the 2018 Payment Notice final rule, published in the December 22, 2016 Federal Register (81 FR 94058). In the April 18, 2017 Market Stabilization final rule Federal Register (82 FR 18346), we amended standards relating to special enrollment periods and QHP certification. In the 2019 Payment Notice final rule, published in the April 17, 2018 Federal Register (83 FR 16930), we modified parameters around certain special enrollment periods.

In a final rule published in the March 27, 2012 Federal Register (2012 Exchange Establishment Rule), we codified the statutory provisions of section 1303 of the PPACA at § 156.280, including the accounting and notice requirements. 13 In the February 20, 2015 Federal Register , we published the HHS Notice of Benefit and Payment Parameters for 2016 (2016 Payment Notice). In that final rule, we clarified these requirements and established that states and state insurance commissioners are the entities primarily responsible for implementing and enforcing the provisions in section 1303 of the PPACA related to individual market QHP coverage of non-Hyde abortion services. 14 In the 2016 Payment Notice, we also established acceptable methods that a QHP offering non-Hyde abortion coverage on the Exchange may use to comply with these accounting and notice requirements. On October 6, 2017, we released a bulletin that again outlined these requirements in greater detail and set forth how they are to be enforced beginning in plan year 2018. 15 On November 9, 2018, we published the Patient Protection and Affordable Care Act; Exchange Program Integrity proposed rule in the Federal Register (83 FR 56015) that would require QHP issuers to issue separate bills for coverage of non-Hyde abortion, as well as noting the obligation of QHP issuers to maintain records of their compliance with the requirements of section 1303 of the PPACA and the related regulatory provisions and to make them available for audits, compliance reviews, and investigations of noncompliance.

On December 16, 2011, HHS released a bulletin  16 that outlined an intended regulatory approach for defining EHB, including a benchmark-based framework. A proposed rule relating to EHBs was published in the November 26, 2012 Federal Register (77 FR 70643). We established requirements relating to EHBs in the Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Final Rule, which was published in the February 25, 2013 Federal Register (78 FR 12833) (EHB Rule). In the 2019 Payment Notice, published in the April 17, 2018 Federal Register (83 FR 16930), we added § 156.111 to provide states with additional options from which to select an EHB-benchmark plan for plan years 2020 and beyond.

In the February 1, 2013 Federal Register (78 FR 7348), we published a proposed rule that designates other health benefits coverage as MEC and outlines substantive and procedural requirements that other types of coverage must fulfill to be recognized as MEC. The provisions were finalized in the July 1, 2013 Federal Register (78 FR 39494).

In the November 26, 2014 Federal Register (79 FR 70674), we published a proposed rule seeking comments on whether state high risk pools should be permanently designated as MEC or whether the designation should be time-limited. In the February 27, 2015 Federal Register (80 FR 10750), we designated state high risk pools established on or before November 26, 2014 as MEC.

HHS has consulted with stakeholders on policies related to the operation of Exchanges, including the SHOP, and the risk adjustment and risk adjustment data validation programs. We have held a number of listening sessions with consumers, providers, employers, health plans, and the actuarial community to gather public input. We have solicited input from state representatives on numerous topics, particularly essential health benefits, QHP certification, Exchange establishment, and risk adjustment. We consulted with stakeholders through regular meetings with the National Association of Insurance Commissioners (NAIC), regular contact with states through the Exchange Establishment grant and Exchange Blueprint approval processes, and meetings with Tribal leaders and representatives, health insurance issuers, trade groups, consumer advocates, employers, and other interested parties. We considered all public input we received as we developed the policies in this proposed rule.

The regulations outlined in this proposed rule would be codified in 45 CFR parts 146, 147, 148, 153, 155, and 156.

The proposed changes to 45 CFR parts 146, 147, and 148 would allow issuers, beginning with plan years on or after January 1, 2020, to update their prescription drug formularies by allowing certain mid-year formulary changes, subject to applicable state law, in an effort to optimize the use of new generic drugs as they become available.

The proposed changes to 45 CFR part 153 would recalibrate the risk adjustment models consistent with the methodology finalized for the 2019 benefit year and the incorporation of the blended most recent benefit years of MarketScan® and enrollee-level EDGE data that are available. The proposed regulations address high-cost risk pooling, where we are proposing to implement the same parameters that applied to the 2018 and 2019 benefit years to the 2020 benefit year and beyond. The proposals regarding part 153 also relate to the risk adjustment user fee for the 2020 benefit year and modifications to risk adjustment data validation requirements.

The proposed regulations in 45 CFR part 155 would provide more flexibility related to the training requirements for Navigators by streamlining 20 existing specific training topics into 4 broad categories. We also propose to provide more flexibility to FFE Navigators by making the provision of certain types of assistance, including post-enrollment assistance, permissible for FFE Navigators, not required. 17 We propose to amend and streamline our regulations related to direct enrollment. We propose to establish a new special enrollment period, at the option of the Exchange, for off-Exchange enrollees who experience a decrease in income and are newly determined to be eligible for APTC by the Exchange. We also propose to increase flexibility for individuals seeking the general hardship exemption by allowing them to alternatively claim the exemption on their federal income tax return for 2018 without obtaining an exemption certificate number from the Exchange. We propose several amendments to the definitions applicable to part 155.

The proposed regulations in 45 CFR part 156 set forth proposals related to cost sharing, including the premium adjustment percentage, the maximum annual limitation on cost sharing, and the reductions in the maximum annual limitation for cost-sharing plan variations for 2020. We propose to use a different premium measure for calculating the premium adjustment percentage for the 2020 benefit year and subsequent benefit years. As we do every year in the HHS notice of benefit and payment parameters, we propose to update the required contribution percentage, the maximum annual limitation on cost sharing, and the reduced maximum annual limitation on cost sharing based on the premium adjustment percentage. We propose to update the FFE and SBE-FP user fee rates for the 2020 benefit year for all issuers participating on the FFEs or SBE-FPs. The proposed regulations in part 156 also include policies to incentivize the use of generic drugs to direct consumers to more cost effective treatment options. In addition, the proposed regulation regarding part 156 includes changes related to direct enrollment.

Section 147.106 implements the guaranteed renewability requirements under the PPACA (applicable to non-grandfathered plans), and §§ 146.152 and 148.122 implement the guaranteed renewability requirements enacted by HIPAA (applicable to both grandfathered and non-grandfathered plans). We propose to make conforming amendments to §§ 146.152 and 148.122, consistent with the proposals in § 147.106 that are discussed below, to ensure consistency in the uniform modification rules to both grandfathered and non-grandfathered coverage. We seek comment on this approach.

Throughout this rule we propose a number of changes related to policy for prescription drugs that aim to reduce the increases of prescription drug expenditures. Taken together, the proposals and discussions at §§ 146.152, 147.106, 148.122, 156.122, and 156.130 within this proposed rule are meant to offer a suite of changes toward that goal.

Section 147.106(e), implementing guaranteed renewability requirements, enacted by the PPACA, generally prohibits issuers from making modifications to health insurance coverage, other than at the time of yearly coverage renewal. In the 2016 Payment Notice, we expressed concerns about the impact on consumers of mid-year formulary changes. We noted that, under guaranteed renewability requirements and the definitions of “product” and “plan,” issuers generally may not make plan design changes, including changes to drug formularies, other than at the time of plan renewal. We also stated that certain mid-year changes to drug formularies related to the availability of drugs in the market may be necessary and appropriate. 18

At this time, we believe there are opportunities to increase the use of lower-cost prescription drugs, such as generics, especially as new generic-equivalent drugs become available on the market, by providing additional flexibility for issuers to make mid-year formulary changes, consistent with applicable state law. Therefore, we propose to add § 147.106(e)(5) to allow issuers in the individual, small group, and large group markets, beginning with plan years on or after January 1, 2020, to update their prescription drug formularies by allowing certain mid-year formulary changes, if permitted by applicable state law.

Specifically at § 147.106(e)(5), we propose allowing issuers, for plan years beginning on or after January 1, 2020, to make formulary changes during the plan year when a generic equivalent of a prescription drug becomes available on the market, within a reasonable time after that drug becomes available. We propose that the issuer be permitted to modify its plans' formularies to add the generic equivalent drug. At that time, the issuer also would be permitted to remove the equivalent brand drug(s) from the formulary or move the equivalent brand drug(s) to a different cost-sharing tier on the formulary. Any mid-year formulary changes would have to be consistent with the standards applicable to uniform modifications in paragraph (e)(2) or (e)(3).

Issuers, including issuers of grandfathered plans, also would be required to provide enrollees the option to request coverage for a brand drug that was removed from the formulary through the applicable coverage appeal process under § 147.136 or the drug exception request process under § 156.122(c).

Before removing a brand drug from the formulary or moving it to a different cost-sharing tier, a health insurance issuer would be required to notify all plan enrollees of the change in writing a minimum of 60 days prior to initiating the change. This would allow enrollees to begin working with their health care provider on any exception request processes before the change occurs. This notice would identify the name of the brand drug that is the subject of the change, disclose whether the brand drug would be removed from the formulary or placed on a different cost-sharing tier, provide the name of the generic equivalent that will be made available, specify the date the changes will become effective, and state that under the appeals processes outlined in § 147.136 or the exceptions processes outlined in § 156.122(c), enrollees and dependents may request and gain access to the brand drug when clinically appropriate and not otherwise covered by the health plan. We solicit comments on whether a different advance notice period would be more appropriate, such as 90 days or 120 days.

Issuers are not required to use a form notice, but must include certain information in the written notice itself. The specifics of the written notice requirements will be addressed through the PRA process. We recognize that issuers have complex contracting arrangements, that whether a brand drug or its generic equivalent is less costly is a complex question, and that certain states have generic substitution laws. 19 We also recognize that some consumers may have concerns about the impact this proposed change may have, given that consumers often purchase a plan based on the plans' prescription drug coverage. However, we believe these concerns may be alleviated given the addition made to the formulary of the generic equivalent, which would generally be more affordable.

We also believe that it is appropriate to permit this flexibility (subject to the uniform modification provision) to make mid-year changes to prescription drug coverage because prescription drugs are a unique benefit category for which this type of mid-year change is warranted. Generic equivalents of brand drugs already approved by the Food and Drug Administration, which contain the same active ingredients as those brand drugs and generally can readily be substituted for the brand drug, are approved for sale throughout the year. New alternatives to covered items and services other than prescription drugs typically do not become available during a given year with the same frequency as in the prescription drug market. While the rationale for this proposed policy related to prescription drugs could arguably be applied to allow similar flexibility for durable medical equipment (DME), we believe that the frequency of changes and potential impact on overall expenditures is greater for prescription drugs and would result in positive cost impacts for both consumers and issuers. 20 Nothing under this proposed policy would prevent states or federal agencies that establish standards for federal governmental plans, such as the U.S. Office of Personnel Management (OPM), including with respect to the Federal Employees Health Benefits Program from prohibiting or narrowing the circumstances under which issuers may make such mid-year formulary changes. We encourage issuers of multi-state plans to contact OPM for mid-year formulary change requirements. We also note that this proposal would not require health insurance issuers to avail themselves of this proposal.

We seek comment on all aspects of this proposal, including whether to limit it to individual and small group health insurance issuers. Large group issuers are generally not subject to the limitations on changes that can be made at the time of yearly coverage renewal under the uniform modification provisions, which provides them additional flexibility. If the rule is finalized as proposed, large group health insurance issuers, like issuers in the individual and small group markets, would only be permitted to make mid-year formulary changes that conform to the limitations on modifications under the uniform modification provisions, even though those limitations would continue not to apply to formulary or other changes made at the time of yearly coverage renewal. This would ensure that for any mid-year formulary changes, the product remains the same “product,” as defined in § 144.103 (which is based on the uniform modification standards) throughout the entire plan year.

We also propose changes to § 147.106(a) to reflect that paragraph (e) currently provides an exception to the general rule on guaranteed renewability. This is merely a technical correction, not a substantive change. We seek comment on these proposals related to prescription drug benefits and coverage.

Section 147.106 implements the guaranteed renewability requirements under the PPACA (applicable to non-grandfathered plans), and §§ 146.152 and 148.122 implement the guaranteed renewability requirements enacted by HIPAA (applicable to both grandfathered and non-grandfathered plans). We propose to make conforming amendments to §§ 146.152 and 148.122 consistent with the proposals in § 147.106 to ensure consistency in the uniform modification rules to both grandfathered and non-grandfathered coverage. 21 We seek comment on this approach.

We propose to make conforming amendments to §§ 146.152 and 148.122, consistent with the proposals in § 147.106 discussed above, to ensure consistency in the uniform modification rules to both grandfathered and non-grandfathered coverage. We seek comment on this approach.

In accordance with the OMB Report to Congress on the Joint Committee Reductions for Fiscal Year 2019, 22 both the transitional reinsurance program and permanent risk adjustment program are subject to the fiscal year 2019 sequestration. The federal government's 2019 fiscal year began October 1, 2018. Although the 2016 benefit year was the final year of the transitional reinsurance program, we will continue to make reinsurance payments in the 2019 fiscal year for close-out activities. Therefore, the risk adjustment and reinsurance programs will be sequestered at a rate of 6.2 percent for payments made from fiscal year 2019 resources (that is, funds collected during the 2019 fiscal year).

HHS, in coordination with the OMB, has determined that, under section 256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of 1985 (Pub. L. 99-177, enacted on December 12, 1985), as amended, and the underlying authority for the reinsurance and risk adjustment programs, the funds that are sequestered in fiscal year 2019 from the reinsurance and risk adjustment programs will become available for payment to issuers in fiscal year 2020 without further Congressional action. If Congress does not enact deficit reduction provisions that replace the Joint Committee reductions, these programs would be sequestered in future fiscal years, and any sequestered funding would become available in the fiscal year following that in which it was sequestered.

In subparts A, B, D, G, and H of part 153, we established standards for the administration of the risk adjustment program. The risk adjustment program is a permanent program created by section 1343 of the PPACA that transfers funds from lower-than-average risk, risk adjustment covered plans to higher-than-average risk, risk adjustment covered plans in the individual and small group markets (including merged markets), inside and outside the Exchanges. In accordance with § 153.310(a), a state that is approved or conditionally approved by the Secretary to operate an Exchange may establish a risk adjustment program, or have HHS do so on its behalf. HHS did not receive any requests from states to operate risk adjustment for the 2020 benefit year. Therefore, HHS will operate risk adjustment in every state and the District of Columbia for the 2020 benefit year.

The HHS risk adjustment models predict plan liability for an average enrollee based on that person's age, sex, and diagnoses (also referred to as hierarchical condition categories (HCCs)), producing a risk score. The current structure of these models is described in the 2019 Payment Notice. 23 The HHS risk adjustment methodology utilizes separate models for adults, children, and infants to account for cost differences in each age group. In the adult and child models, the relative risk assigned to an individual's age, sex, and diagnoses are added together to produce an individual risk score. Additionally, to calculate enrollee risk scores in the adult models, we added enrollment duration factors beginning with the 2017 benefit year, and prescription drug categories (RXCs) beginning with the 2018 benefit year. Infant risk scores are determined by inclusion in one of 25 mutually exclusive groups, based on the infant's maturity and the severity of diagnoses. If applicable, the risk score for adults, children, or infants is multiplied by a cost-sharing reduction adjustment that accounts for differences in induced demand at various levels of cost sharing.

The enrollment-weighted average risk score of all enrollees in a particular risk adjustment covered plan (also referred to as the plan liability risk score) within a geographic rating area is one of the inputs into the risk adjustment state payment transfer formula, which determines the payment or charge that an issuer will receive or be required to pay for that plan. Thus, the HHS risk adjustment models predict average group costs to account for risk across plans, in keeping with the Actuarial Standards Board's Actuarial Standards of Practice for risk classification.

We used the 3 most recent years of MarketScan® data available to recalibrate the 2016, 2017, and 2018 benefit year risk adjustment models. For the 2019 benefit year, we recalibrated the models using 2 years of MarketScan® data (2014 and 2015) with 2016 enrollee-level EDGE data. The 2019 benefit year was the first recalibration year in which enrollee-level EDGE data was used for this purpose. This approach used blended, or averaged, coefficients from 3 years of separately solved models to provide stability for the risk adjustment coefficients year-to-year, while reflecting the most recent years' claims experience available.

Similarly, for the 2020 benefit year, we propose to blend the 2 most recent years of enrollee-level EDGE data (2016 and 2017) with the most recent year of MarketScan® data (2017) that will be available. This approach would incorporate the most recent years' claims experience, and would reduce year-to-year changes to risk scores by keeping 1 year's data consistent for the 2019 and 2020 benefit years. It also would continue our efforts to recalibrate the risk adjustment models using actual data from issuers' individual and small group populations and transition from the MarketScan® commercial database that approximates individual and small group market populations. Beginning with the 2021 benefit year's recalibration, we expect to propose solely using enrollee-level EDGE data for model recalibration, and continuing to use the 3 most recent years' data available for the model recalibration to minimize volatility in risk scores, particularly for rare conditions with small sample sizes. We seek comment on our proposal to determine coefficients for the 2020 benefit year based on a blend of separately solved coefficients from the 2016 and 2017 benefit year enrollee-level EDGE data and the 2017 MarketScan® data.

Due to the timing of this proposed rule, we are unable to incorporate the 2017 MarketScan® data in the calculation of the proposed coefficients in this rule. Therefore, the coefficients listed below are based on the 2016 MarketScan® data and 2016 and 2017 benefit year enrollee-level EDGE data. We used the 2016 MarketScan® data for purposes of illustrating draft coefficients in this rule because our experience with MarketScan® data suggests that solved coefficients generally remain stable from year to year. Further, we were able to blend the one older year of MarketScan® data with the 2016 and 2017 enrollee-level EDGE data that would be used as part of the proposed 2020 benefit year recalibration. We therefore believe that the draft coefficients listed below provide a relatively close approximation of what could be anticipated from blending the 2016 and 2017 enrollee-level EDGE data with the 2017 MarketScan® dataset, once the 2017 MarketScan® dataset is available. If we finalize the recalibration proposal outlined herein and are unable to obtain the 2017 MarketScan® data in time for incorporation of coefficients in the final rule, consistent with 45 CFR 153.320(b)(1)(i), and as we have done for certain prior benefit years, 24 we would publish the final coefficients for the 2020 benefit year in guidance after the publication of the final rule.

We are not proposing to make changes to the categories included in the HHS risk adjustment models for the 2020 benefit year from those finalized in the 2019 benefit year models. That is, we propose to maintain the same age, sex, enrollment duration, HCC, RXC, and severity categories for the 2020 benefit year models as those used for the 2019 benefit year models. 25 However, we are proposing to make a pricing adjustment for one RXC coefficient for the 2020 benefit year adult models. We are cognizant that issuers might seek to influence provider prescribing patterns if a drug claim can trigger a large increase in an enrollee's risk score, and therefore, make the risk adjustment transfer results more favorable for the issuer. After reviewing the significant pricing changes in Hepatitis C drugs, 26 and consistent with our treatment of other RXCs where we constrain the RXC coefficient to the average cost of the drugs in the category, 27 we propose to make a pricing adjustment to the Hepatitis C RXC to mitigate overprescribing incentives in the 2020 benefit year adult models. For the RXC coefficients listed in Table 1 of this proposed rule, we constrained the Hepatitis C coefficient to the average expected costs of Hepatitis C drugs. This has the material effect of reducing the Hepatitis C RXC, and the RXC-HCC interaction coefficients. For the final 2020 benefit year Hepatitis C factors in the adult models, we propose to make an adjustment to the plan liability associated with Hepatitis C drugs to reflect future market pricing of Hepatitis C drugs before solving for the adult model coefficients; applying an adjustment to the plan liability would ensure that enrollees can continue to receive incremental credit for having both the RXC and HCC for Hepatitis C, and allow for differential plan liability across metal levels.

We seek comment on these proposals. We also seek comment on ways to better anticipate and more precisely adjust the drug categories in the HHS risk adjustment adult models for the rapidly changing drug prices, and the plan liability expenditures calculation in all of the HHS risk adjustment models for the rebates, discounts and price concessions that are passed through to the plans.

We note that for HCCs that have corresponding RXCs and RXC-HCC interaction factors in the proposed 2020 benefit year HHS risk adjustment models, we are observing year-to-year fluctuations in the risk score weights between the HCC, RXC, and RXC-HCC interaction factors. This fluctuation is mainly due to the collinearity between these factors, making the statistical models, and therefore the coefficients solved for these factors, sensitive to small changes in the data. Although the HCC, RXC and RXC-HCC interaction factors may have changed between the 2019 benefit year final models and the factors displayed in this rule, the sum of the factors have remained relatively stable between recalibration updates, except for the deliberate changes we propose above to mitigate overprescribing incentives for certain drugs.

HHS finalized a high-cost risk pool adjustment in the 2018 Payment Notice to account for the incorporation of risk associated with high-cost enrollees in the HHS risk adjustment models. Specifically, we finalized adjusting the models for high-cost enrollees beginning with the 2018 benefit year by excluding a percentage of costs above a certain threshold in the calculation of enrollee-level plan liability risk scores so that risk adjustment factors are calculated without the high-cost risk, since the average risk associated with HCCs and RXCs is better accounted for without the inclusion of the high-cost enrollees. In addition, to account for issuers' risk associated with the high-cost enrollees, issuers receive a percentage of costs above the threshold (coinsurance rate). We set the threshold and coinsurance rate at a level that would continue to incentivize issuers to control costs while improving the risk prediction of the HHS risk adjustment models. Issuers with high-cost enrollees receive a payment for the percentage of costs above the threshold in their respective transfers. Using claims data submitted to the EDGE servers by issuers of risk adjustment covered plans, we calculate the total amount of paid claims costs for high-cost enrollees based on the threshold and the coinsurance rate. We then calculate a charge as a percentage of the issuers' total premiums in the individual (including catastrophic and non-catastrophic plans and merged market plans) or small group markets, which is applied to the total transfer amount in each market, thus maintaining the balance of payments and charges within the HHS-operated risk adjustment program. We finalized a threshold of $1 million and a coinsurance rate of 60 percent across all states for the individual (including catastrophic and non-catastrophic plans and merged market plans) and small group markets for the 2018 and 2019 benefit years. 28 For the 2020 benefit year and beyond, we propose to maintain the same parameters that apply to the 2018 and 2019 benefit years, unless amended through notice and comment rulemaking for future benefit years. We believe the $1 million threshold and 60 percent coinsurance rate would result in total high-cost risk pool payments or charges nationally that are very small as a percentage of premiums for issuers, and would prevent states and issuers with very high-cost enrollees from bearing a disproportionate amount of unpredictable risk. Further, as noted previously in this proposed rule, these parameters are set at a level intended to continue to incentivize issuers to control costs while improving the risk prediction of the HHS risk adjustment models. Maintaining the same threshold and coinsurance rate from year to year would also help promote stability and predictability for issuers in rate setting. We seek comment on this proposal.

The factors resulting from the equally weighted blended factors from the 2016 MarketScan® data and the 2016 and 2017 enrollee-level EDGE data separately solved models, including the proposed constraints for the Hepatitis C RXC coefficient, are shown in Tables 1, 3, and 4. As detailed above, we used 2016 MarketScan® data for purposes of illustrating coefficients in this proposed rule because our experience with MarketScan® data suggests that solved coefficients generally remain stable year to year. We therefore believe that the draft factors listed below provide a relatively close approximation of what could be anticipated from blending the 2016 and 2017 enrollee-level EDGE data with the 2017 MarketScan® dataset, once the 2017 MarketScan® dataset becomes available. The adult, child, and infant models have been truncated to account for the high-cost enrollee pool payment parameters by removing 60 percent of costs above the $1 million threshold as proposed in this rule. Table 1 contains factors for each adult model, including the age-sex, HCCs, RXCs, RXC-HCC interactions, and enrollment duration coefficients.

Table 2 contains the HHS HCCs in the severity illness indicator variable. Table 3 contains the factors for each child model. Table 4 contains the factors for each infant model. Tables 5 and 6 contain the HCCs included in the infant model maturity and severity categories, respectively.

We propose to continue including an adjustment for the receipt of cost-sharing reductions in the risk adjustment models to account for increased plan liability due to increased utilization of health care services by enrollees receiving cost-sharing reductions in all 50 states and the District of Columbia. For the 2020 benefit year, to maintain stability and certainty for issuers, we are proposing to maintain the cost-sharing reduction factors finalized in the 2019 Payment Notice. 29 See Table 7. We seek comment on this proposal.

Consistent with the approach finalized in the 2017 Payment Notice, 30 we will continue to use cost-sharing reduction adjustment factors of 1.12 for all Massachusetts wrap-around plans in the risk adjustment plan liability risk score calculation, as all of Massachusetts' cost-sharing plan variations have actuarial values above 94 percent.

To evaluate risk adjustment model performance, we examined each model's R-squared statistic and predictive ratios. The R-squared statistic, which calculates the percentage of individual variation explained by a model, measures the predictive accuracy of the model overall. The predictive ratios measure the predictive accuracy of a model for different validation groups or subpopulations. The predictive ratio for each of the HHS risk adjustment models is the ratio of the weighted mean predicted plan liability for the model sample population to the weighted mean actual plan liability for the model sample population. The predictive ratio represents how well the model does on average at predicting plan liability for that subpopulation. A subpopulation that is predicted perfectly would have a predictive ratio of 1.0. For each of the HHS risk adjustment models, the R-squared statistic and the predictive ratios are in the range of published estimates for concurrent risk adjustment models. 31 Because we blended the coefficients from separately solved models based on 2016 MarketScan® data and 2016 and 2017 enrollee-level EDGE data in this proposed rule, we are publishing the R-squared statistic for each model separately to verify their statistical validity. The R-squared statistic for each model is shown in Table 8. We intend to publish updated R-squared statistics to reflect results from the blending of the 2017 MarketScan® and 2016 and 2017 benefit year enrollee-level EDGE datasets used to recalibrate the models for the 2020 benefit year if the proposal is finalized in the final rule.

A copy of the USAF's application and any supporting documents, as well as a list of the references cited in this document, may be obtained online at: www.fisheries.noaa.gov/permit/incidental-take-authorizations-under-marine-mammal-protection-act. In case of problems accessing these documents, please call the contact listed above (see FOR FURTHER INFORMATION CONTACT ).

This proposed rule would establish a framework under the authority of the MMPA (16 U.S.C. 1361 et seq. ) to allow for the authorization of take of marine mammals incidental to launching space launch vehicles, intercontinental ballistic and small missiles, and aircraft and helicopter operations at VAFB.

We received an application from the USAF requesting the five-year regulations and authorization to take marine mammals. Take would occur by Level B harassment incidental to launch noise and sonic booms. Please see “Background” below for definitions of harassment.

Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1371(a)(5)(A)) directs the Secretary of Commerce to allow, upon request, the incidental, but not intentional taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region for up to five years if, after notice and public comment, the agency makes certain findings and issues regulations that set forth permissible methods of taking pursuant to that activity and other means of effecting the “least practicable adverse impact” on the affected species or stocks and their habitat (see the discussion below in the “Proposed Mitigation” section), as well as monitoring and reporting requirements. Section 101(a)(5)(A) of the MMPA and the implementing regulations at 50 CFR part 216, subpart I, provide the legal basis for issuing this proposed rule containing five-year regulations, and for any subsequent LOAs. As directed by this legal authority, this proposed rule contains mitigation, monitoring, and reporting requirements.

Following is a summary of the major provisions of this proposed rule regarding space launch activities. These measures include:

• Required acoustic monitoring to measure the sound levels associated with the proposed activities.

• Required biological monitoring to record the presence of marine mammals during the proposed activities and to document responses to the proposed activities.

• Mitigation measures to minimize harassment of the most sensitive marine mammal species.

Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq. ) direct the Secretary of Commerce to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made and either regulations are issued or, if the taking is limited to harassment, a notice of a proposed authorization is provided to the public for review.

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.

The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.

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).

To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321 et seq. ) and NOAA Administrative Order (NAO) 216-6A, NMFS must evaluate our proposed action ( i.e., the promulgation of regulations and subsequent issuance of incidental take authorization) and alternatives with respect to potential impacts on the human environment.

This action is consistent with categories of activities identified in Categorical Exclusion B4 of the Companion Manual for NAO 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has preliminarily determined that the proposed action qualifies to be categorically excluded from further NEPA review.

Information in the USAF's application and this proposed rule collectively provide the environmental information related to proposed issuance of these regulations and subsequent incidental take authorization for public review and comment. We will review all comments submitted in response to this proposed rule prior to concluding our NEPA process or making a final decision on the request for incidental take authorization.

On August 10, 2018, NMFS received an application from the USAF, 30th Space Wing, requesting authorization for the take of six species of pinnipeds incidental to launch, aircraft, and helicopter operations from VAFB launch complexes. On December 4, 2018, NMFS received a supplement to the application from USAF that included a request to include activities associated with the recovery of Space Exploration Technologies (SpaceX) Falcon 9 First Stage rockets in VAFB's request. NMFS proposes regulations to govern the authorization of take incidental to these activities. On September 13, 2017 (83 FR 46483), we published a notice of receipt of the USAF's application in the Federal Register , requesting comments and information related to the request for thirty days. We received comments from the Marine Mammal Commission. The comments were considered in development of this proposed rule and are available online at: https://www.fisheries.noaa.gov/permit/incidental-take-authorizations-under-marine-mammal-protection-act.

The take of marine mammals incidental to activities related to the launching of space launch vehicles and missiles, and aircraft and helicopter operations at VAFB, have been previously authorized by NMFS via Letters of Authorization (LOA) issued under current incidental take regulations, which are effective from March 26, 2014 through March 26, 2019 (79 FR 10016). To date, we have issued nine LOAs to USAF for these activities, under the current and prior incidental take regulations.

VAFB contains 7 active missile launch facilities and 6 active space launch facilities and supports launch activities for the U.S. Air Force, Department of Defense, National Aeronautics and Space Administration, and commercial entities. It is the primary west coast launch facility for placing commercial, government and military satellites into polar orbit on unmanned launch vehicles, and for the testing and evaluation of intercontinental ballistic missiles (ICBMs) and sub-orbital target and interceptor missiles. In addition to the launching of rockets, certain rocket components are returned to VAFB for reuse, using in-air “boost-back” maneuvers and landings at the base. In addition to space vehicle and missile launch activities at VAFB, occasional helicopter and aircraft operations occur at VAFB that involve search-and-rescue, delivery of space vehicle components, launch mission support, security reconnaissance, and training flights. The use of unmanned aerial systems (UAS, also known as “drones”) also occurs at VAFB.

The USAF anticipates that no more than 110 rocket launches and 15 missile launches would occur in any year during the period of authorized activities (Table 1). This number of launches would represent an increase compared to historical launch activity at VAFB, but the USAF anticipates an increase in the number of launches in the near future and has based their estimate of planned rocket launches on this anticipated increase.

There are six species of marine mammals that may be affected by the USAF's proposed activities: California sea lion, Steller sea lion, northern fur seal, Guadalupe fur seal, northern elephant seal, and harbor seal. Hauled out pinnipeds may be disturbed by launch noises and/or sonic booms (overpressure of high-energy impulsive sound) from launch vehicles. Aircraft that are noisy and/or flying at low altitudes can also have the potential to disturb hauled out pinnipeds. Pinniped responses to these stimuli have been monitored at VAFB for the past 25 years.

The activities proposed by USAF would occur for five years, from March 2019 through March 2024. Activities would occur year-round throughout the period of validity for the proposed rule.

All launches and aircraft activities would occur at VAFB. The areas potentially affected by noise from these activities includes VAFB and the Northern Channel Islands (NCI). VAFB occupies approximately 99,100 acres of land and approximately 42 miles of coastline in central Santa Barbara County, California and is divided by the Santa Ynez River and State Highway 246 into two distinct parts: North Base and South Base. The NCI are considered part of the project area for the purposes of this proposed rule, as rocket launches and landings at VAFB may result in sonic booms that impact the NCI. The NCI are four islands (San Miguel, Santa Rosa, Santa Cruz, and Anacapa) located approximately 31 mi (50 km) south of Point Conception, which is located on the mainland approximately 4 mi (6.5 km) south of the southern border of VAFB. The closest part of the NCI (Harris Point on San Miguel Island) is located more than 30 nautical miles south-southeast of the nearest launch facility.

Rocket and missile launches occur from several locations on VAFB, on both North Base and South Base. Please refer to Figure 2 and Figure 3 in the USAF's application for a depiction of launch locations on VAFB. Rocket landings by SpaceX would occur at the landing area on VAFB referred to as Space Launch Complex (SLC) 4W, located on South Base, approximately 0.5 miles (mi) (0.8 kilometers (km)) inland from the Pacific Ocean. Although SLC-4W is the preferred landing location for the Falcon 9 First Stage, SpaceX has identified two contingency landing locations should it not be feasible to land the First Stage at SLC-4W. The first contingency landing location is on a barge located at least 27 nautical miles (nm) (50 km) offshore of VAFB. The second contingency landing location is on a barge within the Iridium Landing Area, an approximately 12,800 square mile (mi 2 ) (33,153 square kilometers (km 2 )) area located approximately 122 nm (225 km) southwest of San Nicolas Island (SNI) and 133 nm (245 km) southwest of San Clemente Island.

As described above, the USAF has requested incidental take regulations for its operations at VAFB, which include rocket and missile launches, rocket recovery activities, and aircraft and helicopter operations. VAFB is headquarters to the 30th Space Wing, the Air Force Space Command unit that operates VAFB and the Western Range. VAFB operates as a missile test base and aerospace center, supporting west coast space launch activities for the USAF, Department of Defense, National Aeronautics and Space Administration (NASA), and commercial contractors. VAFB is the main west coast launch facility for placing commercial, government, and military satellites into polar orbit on expendable (unmanned) launch vehicles, and for testing and evaluation of intercontinental ballistic missiles (ICBM) and sub-orbital target and interceptor missiles. In addition to space vehicle and missile launch activities at VAFB, helicopter and aircraft operations are undertaken for purposes such as search-and-rescue, delivery of space vehicle components, launch mission support, security reconnaissance, and training flights. From VAFB, space vehicles are launched into polar orbits on azimuths from 147 to 201 degrees, with sub-orbital flights to 281 degrees. Missile launches are directed west toward Kwajalein Atoll in the Pacific. This over-water sector, from 147 to 281 degrees, comprises the Western Range. Part of the Western Range encompasses the NCI.

There are currently six active facilities at VAFB used to launch satellites into polar orbit. One existing launch facility (TP-01), on north VAFB, has not been used in several years but is being reactivated. These facilities support launch programs for the Atlas V, Delta II, Delta IV, Falcon 9 and Minotaur rockets. Various booster and fuel packages can be configured to accommodate payloads of different sizes and weights.

Table 1 shows estimates of the numbers and sizes of rocket launches from VAFB during calendar years 2019 through 2024. The numbers of anticipated launches shown in Table 1 are higher than the historical number of launches that have occurred from VAFB, and are considered conservative estimates; the actual number of launches that occurs in these years may be lower. However, the USAF anticipates an increase in the number of launches by non-commercial entities from VAFB over the next 5 years and the numbers shown in Table 1 are based on this expectation. A large percentage of this anticipated increase will be comprised of smaller launch payloads and rockets than previously utilized at VAFB.

Rocket launches from VAFB have the potential to result in the harassment of pinnipeds that are hauled out of the water as a result of exposure to sound from launch noise (on VAFB) or as a result of exposure to sound from sonic booms (on the NCI only). Based on several years of monitoring data, harassment of marine mammals is unlikely to occur when the intensity of a sonic boom is below 1.0 pounds per square foot (psf) (see further discussion in the “estimated take” section below). The likelihood of a sonic boom with a measured psf above 1.0 impacting the NCI is dependent on the size of the rocket ( i.e., larger rockets are more likely to result in a sonic boom on the NCI than smaller rockets). The USAF estimated that 33 percent of large rockets, 25 percent of medium sized rockets, and 10 percent of small sized rockets would result in sonic booms on the NCI. The estimated numbers of sonic booms on the NCI per year from rocket launches is shown in Table 2; these numbers are based on the expected number of launches (Table 1) and the percentages described above.

Table 3 shows types of rockets that are anticipated for launch from VAFB over the next 5 years and the nearest locations of pinniped haulouts to the launch locations for those rockets. Other small rockets may also be launched from VAFB over the next 5 years but the exact specifications and launch locations for those rockets are unknown at this time.

As described above, launch facilities at VAFB support launch programs for rockets including the Atlas V, Delta II, Delta IV, Falcon 9, Minotaur, and Taurus rockets. Details on these vehicle types are described below.

The Atlas V vehicle is launched from Space Launch Complex-3E on south VAFB. This Space Launch Complex (SLC) is approximately 9.9 km (6.2 mi) from one of the main haulout areas on VAFB, known as North Rocky Point (see Figure 2 in the application), which encompasses several smaller haulouts. SLC-3E is approximately 11.1 km (6.9 mi) from the closest north VAFB haulout, known as the Spur Road haulout site (Figure 3 in the application) and 13.5 km (8.4 mi) from the next closest haulout, the nearby Purisima Point haulout site (Figure 3 in the application).

The Atlas V is a medium lift vehicle that can be flown in two series of configurations—the Atlas V400 series and the Atlas V500 series. Both series use the Standard Booster as the single body booster. The V400 series accommodates a 4.2 m (13.8 ft) payload fairing (a nose cone used to protect a spacecraft (launch vehicle payload) against the impact of dynamic pressure and aerodynamic heating during launch through an atmosphere) and as many as three solid rocket boosters. The V500 series accommodates a 5.4 m (17.7 ft) fairing and as many as five solid rocket boosters. The Atlas V400 series will lift as much as 7,800 kg (17,196 lbs) into geosynchronous transfer orbit or as much as 13,620 kg (30,027 lbs) into low earth orbit. The Atlas V500 series will lift as much as 8,700 kg (19,180 lbs) into geosynchronous transfer orbit or as much as 21,050 kg (46,407 lbs) into low earth orbit. The Atlas V consists of a common booster core (CBC) 3.8 m (12.5 ft) in diameter and 32.5 m (106.6 ft) high) powered by an RD180 engine that burns a liquid propellant fuel consisting of liquid oxygen and RP1 fuel (kerosene). The RD180 engine provides 840,000 lbs of thrust on liftoff. There is a Centaur upper stage (3.1 m (10.2 ft) in diameter and 12.7 m (41.7 ft) high) powered by a liquid oxygen and liquid hydrogen fuel.

The Delta IV is launched from SLC-6, which is 2.3 km (1.4 mi) north of the main harbor seal haulout site at North Rocky Point (see Figure 2 in the USAF application). The Delta IV family of launch vehicles consists of five launch vehicle configurations utilizing a CBC first stage (liquid fueled) and zero, two, or four strap on solid rocket GEMs. The Delta IV comes in four medium lift configurations and one heavy lift configuration consisting of multiple CBCs. The Delta IV can carry payloads from 4,210 to 13,130 kg (9,281 to 28,947 lbs) into geosynchronous transfer orbit.

The Falcon 9 is SpaceX's launch vehicle. The Falcon 9 is a two-stage rocket designed and manufactured by SpaceX for transport of satellites into orbit. The First Stage of the Falcon 9 is designed to be reusable, while the second stage is not reusable. The Falcon 9 First Stage is 12 ft (3.7 m) in diameter and 160 ft (48.8 m) in height, including the interstage that would remain attached during landing.

The Minotaur I is a four stage, all solid propellant ground launch vehicle and is launched from SLC-8 on south VAFB (Figure 2 in the USAF application), approximately 1.6 km (1 mi) from the North Rocky Point haulout site. The launch vehicle consists of modified Minuteman II Stage I and Stage II segments, mated with Pegasus upper stages (Orbital Sciences Corporation, 2006). The Minotaur is a small vehicle, approximately 19.2 m (63 ft) tall (Orbital Sciences Corporation 2006b), with approximately 215,000 lbs of thrust.

The standard Taurus is a small launch vehicle, at approximately 24.7 m (81 ft) tall and is launched in two different configurations (Defense Advanced Research Projects Agency (DARPA) and standard) with different first stages providing 500,000 or 400,000 lbs of thrust, respectively. The different vehicle configurations have different thrust characteristics, with the standard configuration providing less thrust than DARPA. The Taurus is launched from 576E on north VAFB, approximately 0.5 km (0.3 mi) from the Spur Road harbor seal haulout site and 2.3 km (1.4 mi) from the Purisima Point haulout site (see Figure 3 in the USAF application).

As described above, the Falcon 9 is a two-stage rocket designed and manufactured by SpaceX for transport of satellites into orbit. The First Stage of the Falcon 9 is designed to be reusable, while the second stage is not reusable. The proposed action includes up to twelve Falcon 9 First Stage recoveries per year. The Falcon 9 First Stage is recovered via an in-air boost-back maneuver and landings at VAFB or at a contingency landing location offshore. The Falcon 9 First Stage is the only rocket type that may be recovered via boost-back and landing as part of the proposed action.

After launch of the Falcon 9, the boost-back and landing sequence begins when the rocket's First Stage separates from the second stage and the Merlin engines of the First Stage cut off. After First Stage engine cutoff, rather than dropping the First Stage in the Pacific Ocean, exoatmospheric cold gas thrusters are triggered to flip the First Stage into position for retrograde burn. Three of the nine First Stage Merlin engines are restarted to conduct the retrograde burn in order to reduce the velocity of the First Stage and to place the First Stage in the correct angle to land. Once the First Stage is in position and approaching its landing target, the three engines cut off to end the boost-back burn. The First Stage then performs a controlled descent using atmospheric resistance to slow the stage down and guide it to the landing pad target. The First Stage is outfitted with grid fins that allow cross range corrections as needed. The landing legs on the First Stage then deploy in preparation for a final single engine burn that slow the First Stage to a velocity of zero before landing on the landing pad at SLC-4W.

During the First Stage's descent, a sonic boom would be generated when the First Stage reaches a rate of travel that exceeds the speed of sound. Sonic booms would occur in proximity to the landing area with the highest sound levels generated from sonic booms generally focused in the direction of the landing area, and may be heard during or briefly after the boost-back and landing, depending on the location of the receiver. Model results have indicated a boost-back and landing of the Falcon 9 First Stage at SLC-4W could produce sonic booms with overpressures that would potentially be as high as 8.5 psf at VAFB and potentially as high as 3.1 psf at the NCI (ManTech SRS Technologies, Inc, 2018). At the time of this proposed rule, only one recovery of the Falcon 9 First Stage, including the boost-back and landing of the Falcon 9 First Stage, had occurred at VAFB. Acoustic monitoring data from that event demonstrated that the sonic boom at the haulout nearest the landing location was measured at 1.78 psf and the maximum landing engine noise was estimated at 96.66 dB (ManTech SRS Technologies, Inc, 2018). Monitoring at the NCI was not required during this activity as sonic boom modeling prior to the activity indicated no sonic boom would impact the NCI (ManTech SRS Technologies, Inc, 2018).

As a contingency action to landing the Falcon 9 First Stage on the SLC-4W pad at VAFB, SpaceX may return the Falcon 9 First Stage booster to a barge in the Pacific Ocean. The barge is specifically designed to be used as a First Stage landing platform and would be located at least 27 nm (50 km) offshore of VAFB or within an area even further offshore called the Iridium Landing Area. These contingency landing locations would be used when landing at SLC-4W would not be feasible. The maneuvering and landing process described above for a pad landing would be the same for a barge landing. Sonic boom modeling indicates that landings that occur at either of the proposed contingency landing locations offshore would result in sonic booms below 1.0 psf at any pinniped haulouts, thus marine mammal harassment is not an expected outcome from landings at those contingency landing locations offshore.

Landing noise would be generated during each boost-back event. SpaceX proposes to use a three-engine burn during landing. This engine burn, lasting approximately 17 seconds, would generate noise between 70 and 110 decibels (dB) re 20 micro Pascals (µPa) (non-pulse, in-air noise) centered on SLC-4W. This landing noise event would be of short duration (approximately 17 seconds). Although, during a landing event at SLC-4W, landing noise between 70 and 90 dB would be expected to overlap pinniped haulout areas at and near Point Arguello and Purisima Point, no pinniped haulouts would experience landing noise of 90 dB or greater.

The boost-back and landing of the Falcon 9 First Stage occurs less than 10 minutes after the Falcon 9 launches from VAFB (USAF, 2018). Hauled out pinnipeds may respond to a sonic boom associated with a Falcon 9 First Stage boost-back and landing by alerting, moving or flushing to the water. However, any pinnipeds that respond to a Falcon 9 First Stage boost-back and landing by moving or flushing to the water are expected to be the same individuals that responded in such a way to the initial launch of the rocket, less than 10 minutes prior to the boost-back and landing. NMFS would consider those individual marine mammals to have been taken by the stimuli associated with the initial launch, and would therefore not consider them as taken again by the boost-back and landing less than 10 minutes later, as we do not consider an individual marine mammal to be taken given noise exposure more than once within a 24 hour period. We expect that individual marine mammals that do not respond to the stimuli associated with the launch of the rocket will also not respond to the stimuli associated with the boost-back and landing of the Falcon 9 First Stage less than 10 minutes later. Therefore, Falcon 9 First Stage recovery activities will not result in any additional marine mammals being taken, beyond those taken by the launch. As the potential for take resulting from the boost-back and landing of the Falcon 9 First Stage is so low as to be discountable, Falcon 9 First Stage recovery is not analyzed further in this document.

A variety of small missiles are launched from various facilities on north VAFB, including Minuteman III, an ICBM which is launched from underground silos. In addition, several types of interceptor and target vehicles are launched for the Missile Defense Agency (MDA). The MDA develops various systems and elements, including the Ballistic Missile Defense System (BMDS).

The BMDS test plans, including those involving tests from VAFB, are subject to constant change as the BMDS is being developed. It is difficult for the MDA to predict its launch schedule or number of launches over the next five years. However, due to test resource limitations, MDA does not envision conducting more than three missile tests per quarter (on average) over the next five years from VAFB, and none of the missiles would be larger than the Minuteman III. As described above, the USAF anticipates not more than 15 missile launches would occur in any year between 2019 through 2024.

LF-09 is the closest active missile launch facility to a haulout area, located about 0.5 km from Little Sal (see Figure 3 in the application). The trajectories of all missile launches are nearly due westward; thus, they do not cause sonic boom impacts on the NCI and therefore take of marine mammals on the NCI from missile launches is not an expected outcome of the specified activities.

The VAFB airfield, located on north VAFB, supports various aircraft operations. Aircraft operations include tower operations, such as take-offs and landings (training operations), and range operations such as overflights and flight tests. Over the past five years, an average of slightly more than 600 flights has occurred each year.

Fixed-wing aircraft use VAFB for various purposes, including delivering rocket or missile components, high-altitude launches of space vehicles and emergency landings. VAFB is also used for flight testing, evaluation of fixed-wing aircraft and training exercises, including touch and goes. Three approved routes are used that avoid established pinniped haulout sites. Aircraft flown through VAFB airspace and supported by 30th Space Wing include, but are not limited to: B-1 and B-2 bombers, F-15, F-16 and F-22 fighters, V/X-22s, and KC-135 tankers.

Helicopter operations also occur at VAFB, but the number of helicopter operations at VAFB has decreased considerably since 2008 when the deactivation of the VAFB helicopter squadron occurred. Other squadrons and units occasionally use VAFB for purposes such as transiting through the area, exercises and launch mission support. Emergency helicopter operations, including but not limited to search-and-rescue and wildfire containment actions, also occur occasionally.

Unmanned Aerial Systems (also known as “drone”) operations at VAFB represent a relatively new activity but may increase over the next five years. UAS operations may include either rotary or fixed wing aircraft. These are typically divided into as many as six classes which graduate in size from class 0 (which are often smaller than 5 inches in diameter and always weigh less than one pound) to Class 5 (which can be as large as a small piloted aircraft) (Table 5). UAs classes 0, 1, 2 and 3 can be used in almost any location, while classes 4 and 5 typically require a runway and for that reason would only be operated from the VAFB airfield.

Take of hauled out pinnipeds from aircraft operations may occur as a result of visual or auditory stimuli in limited instances where the aircraft operate at low altitudes near pinniped haulouts. While harassment of hauled out pinnipeds from Class 0, 1 or 2 UAS is unlikely to occur at altitudes of 200 feet and above (Erbe et al., 2017; Pomeroy et al., 2015; Sweeney et al., 2016; Sweeney and Gelatt, 2017), information on pinniped responses to larger UASs is not widely available. However, based on the specifications of Class 3, 4 and 5 UASs (Table 5), the likelihood of harassment resulting from overflights by UASs of that size would likely depend on several factors including noise signature and means of propulsion ( i.e., rocket propelled or engine propelled). Except for take-off and landing actions, a minimum altitude of 300 feet will be maintained for Class 0-2 UAS over all known marine mammal haulouts when marine mammals are present. Class 3 UAS will maintain a minimum altitude of 500 feet, except at take-off and landing. No Class 4 or 5 UAS will be flown below 1,000 feet over haulouts.

The USAF anticipates that take of marine mammals from aircraft operations would be minimal; however, to be conservative, the USAF has requested authorization for incidental take as a result of aircraft operations.

There are six marine mammal species with expected occurrence in the project area (including at VAFB, on the NCI, and in the waters surrounding VAFB and the NCI) that are expected to be affected by the specified activities. These are listed in Table 6. This section provides summary information regarding local occurrence of these species. We have reviewed USAF's species descriptions, including life history information, for accuracy and completeness and refer the reader to Section 3 of the USAF's application, as well as to NMFS' Stock Assessment Reports (SAR; https:// www.fisheries.noaa.gov/topic/population-assessments#marine-mammals ), rather than reprinting all of the information here. Additional general information about these species ( e.g., physical and behavioral descriptions) may be found on NMFS' website ( https://www.fisheries.noaa.gov/find-species ).

There are an additional 28 species of cetaceans with expected or possible occurrence in the project area. However, we have determined that the only potential stressors associated with the specified activities that could result in take of marine mammals ( i.e., launch noise, sonic booms and aircraft operations) only have the potential to result in harassment of marine mammals that are hauled out of the water. Therefore, we have concluded that the likelihood of the proposed activities resulting in the harassment of any cetacean to be so low as to be discountable. As we have concluded that the likelihood of any cetacean being taken incidentally as a result of USAF's proposed activities to be so low as to be discountable, cetaceans are not considered further in this proposed rule.

Table 6 lists all species with expected potential for occurrence in the vicinity of the project during the project timeframe that are likely to be affected by the specified activities, and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2018). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS's SARs). While no mortality is anticipated or proposed for authorization here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.

Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS's stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS's U.S. Pacific and Alaska SARs ( e.g., Carretta et al., 2018; Muto et al., 2018). All values presented in Table 6 are the most recent available at the time of publication and are available in the 2017 SARs (Carretta et al., 2018; Muto et al., 2018) and draft 2018 SARs (available online at: https://www.fisheries.noaa.gov/topic/population-assessments#marine-mammals ).

All species that could potentially occur in the proposed survey areas and that may be affected by the proposed activities are included in Table 6. As described below, all six species (with six managed stocks) temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur.

Harbor seals inhabit coastal and estuarine waters and shoreline areas of the northern hemisphere from temperate to polar regions. The eastern North Pacific subspecies is found from Baja California north to the Aleutian Islands and into the Bering Sea. Multiple lines of evidence support the existence of geographic structure among harbor seal populations from California to Alaska (Carretta et al., 2016). However, because stock boundaries are difficult to meaningfully draw from a biological perspective, three separate harbor seal stocks are recognized for management purposes along the west coast of the continental United States: (1) Washington inland waters, (2) Oregon and Washington coast, and (3) California (Carretta et al., 2016). In addition, harbor seals may occur in Mexican waters, but these animals are not considered part of the California stock. Only the California stock is considered in these proposed regulations due to the distribution of the stock and the geographic scope of the proposed activities. Although the need for stock boundaries for management is real and is supported by biological information, it should be noted that the exact placement of a boundary between California and Oregon for stock delineation purposes was largely a political/jurisdictional convenience (Carretta et al. 2015).

Pacific harbor seals are nonmigratory, with local movements associated with such factors as tides, weather, season, food availability, and reproduction (Scheffer and Slipp 1944, Fisher 1952, Bigg 1969, 1981, Hastings et al. 2004). In California, over 500 harbor seal haulout sites are widely distributed along the mainland and offshore islands, and include rocky shores, beaches and intertidal sandbars (Lowry et al. 2005). Harbor seals mate at sea and females give birth during the spring and summer, though the pupping season varies with latitude. Harbor seal pupping takes place at many locations and rookery size varies from a few pups to many hundreds of pups.

Harbor seals are the most common marine mammal inhabiting VAFB, congregating on multiple rocky haulout sites along the VAFB coastline. They are local to the area, rarely traveling more than 50 km from haulout sites (pers comm., M. Lowry, NMFS SWFSC, to J. Carduner, NMFS OPR). There are 12 harbor seal haulout sites on south VAFB; of these, 10 sites represent an almost continuous haulout area which is used by the same animals. Virtually all of the haulout sites at VAFB are used during low tides and are wave-washed or submerged during high tides. Additionally, the harbor seal is the only species that regularly hauls out near the VAFB harbor. The main harbor seal haulouts on VAFB are near Purisima Point and at Lion's Head (approximately 0.6 km south of Point Sal) on north VAFB and between the VAFB harbor north to South Rocky Point Beach on south VAFB (ManTech 2009) (see Figure 2 in the USAF's application).

Pups are generally present in the region from March through July (USAF, 2018). The best available information of harbor seal abundance on VAFB is USAF monthly survey data. Within the affected area on VAFB, a total of up to 332 adults and 34 pups have been recorded, at all haulouts combined, in monthly counts from 2013 to 2015 (ManTech 2015). The harbor seal population at VAFB has undergone an apparent decline in recent years (USAF, 2018). This decline has been attributed to a series of natural landslides at south VAFB, resulting in the abandonment of many haulout sites. These slides have also resulted in extensive down-current sediment deposition, making these sites accessible to coyotes, which are now regularly seen in the area. Some of the displaced seals have moved to other sites at south VAFB, while others likely have moved to Point Conception, about 6.5 km south of the southern boundary of VAFB (USAF, 2018).

Harbor seals also haul out, breed, and pup in isolated beaches and coves throughout the coasts of San Miguel Island (SMI), Santa Rosa Island (SRI), San Nicolas Island (SNI) and Santa Cruz Island (SCI) (Lowry, 2002). The best available information of harbor seal abundance on the NCI is NMFS aerial survey data from 2011-2015 (Lowry et al. , 2017). During aerial surveys conducted by NMFS from 2011-2015, a mean of 589 harbors seals was recorded at SMI, a mean of 181 was recorded at SCI, and a mean of 247 was recorded at SRI (Lowry et al. , 2017). On SMI, they occur along the north coast at Tyler Bight and from Crook Point to Cardwell Point. Additionally, they regularly breed on SMI. On Santa Cruz Island, they inhabit small coves and rocky ledges along much of the coast. Harbor seals are scattered throughout Santa Rosa Island and also are observed in small numbers on Anacapa Island.

California sea lions range from the Gulf of California north to the Gulf of Alaska, with breeding areas located in the Gulf of California, western Baja California, and southern California. Five genetically distinct geographic populations have been identified: (1) Pacific Temperate, (2) Pacific Subtropical, (3) Southern Gulf of California, (4) Central Gulf of California and (5) Northern Gulf of California (Schramm et al., 2009). Rookeries for the Pacific Temperate population are found within U.S. waters and just south of the U.S.-Mexico border, and animals belonging to this population may be found from the Gulf of Alaska to Mexican waters off Baja California. Animals belonging to other populations ( e.g., Pacific Subtropical) may range into U.S. waters during non-breeding periods. For management purposes, a stock of California sea lions comprising those animals at rookeries within the United States is defined ( i.e., the U.S. stock of California sea lions) (Carretta et al., 2017).

Beginning in January 2013, elevated strandings of California sea lion pups were observed in southern California, with live sea lion strandings nearly three times higher than the historical average. Findings to date indicate that a likely contributor to the large number of stranded, malnourished pups was a change in the availability of sea lion prey for nursing mothers, especially sardines. The Working Group on Marine Mammal Unusual Mortality Events determined that the ongoing stranding event meets the criteria for an Unusual Mortality Event (UME) and declared California sea lion strandings from 2013 through 2017 to be one continuous UME. The causes and mechanisms of this event remain under investigation. For more information on the UME, see: https://www.fisheries.noaa.gov/national/marine-life-distress/2013-2017-california-sea-lion-unusual-mortality-event-california.

Rookery sites in southern California are limited to SMI and the southerly Channel Islands of San Nicolas, Santa Barbara, and San Clemente (Carretta et al., 2015). Males establish breeding territories during May through July on both land and in the water. Females come ashore in mid-May and June where they give birth to a single pup approximately four to five days after arrival and will nurse pups for about a week before going on their first feeding trip. Adult and juvenile males will migrate as far north as British Columbia, Canada while females and pups remain in southern California waters in the non-breeding season. In warm water (El Niño) years, some females are found as far north as Washington and Oregon, presumably following prey.

The best available information on California sea lion abundance on VAFB is USAF monthly survey data. California sea lions are common offshore of VAFB and haul out on rocks and beaches along the coastline of VAFB. At south VAFB, California sea lions haul out on north Rocky Point, with numbers often peaking in spring. They have been reported at Point Arguello and Point Pedernales (both on south VAFB) in the past, although none have been noted there over the past several years. Individual sea lions have been noted hauled out throughout the VAFB coast; these were transient or stranded specimens. They regularly haul out on Lion Rock, north of VAFB and immediately south of Point Sal, and occasionally haul out on Point Conception, south of VAFB. In 2014, counts of California sea lions at haulouts on VAFB increased substantially, ranging from 47 to 416 during monthly counts. Despite their prevalence at haulout sites at VAFB, California sea lions rarely pup on the VAFB coastline (ManTech 2015); no pups were observed in 2013 or 2014 (ManTech 2015) and 1 pup was observed in 2015 (VAFB, unpub. data). Successful pupping has never been observed on VAFB; one possible explanation is that only California sea lions affected by domoic acid toxicity give birth at VAFB. These pups are either stillborn or very likely do not survive long (USAF, 2018).

Pupping occurs in large numbers on SMI at the rookeries found at Point Bennett on the west end of the island and at Cardwell Point on the east end of the island (Lowry 2002). Sea lions haul out at the west end of Santa Rosa Island at Ford Point and Carrington Point. A few California sea lions have been born on Santa Rosa Island, but no rookery has been established. On Santa Cruz Island, California sea lions haul out from Painted Cave almost to Fraser Point, on the west end. California sea lions also haul out at Gull Island, off the south shore near Punta Arena. Pupping appears to be increasing there. Sea lions also haul out near Potato Harbor, on the northeast end of Santa Cruz. California sea lions haul out by the hundreds on the south side of East Anacapa Island (Lowry et al., 2017).

The best available information on California sea lion abundance on the NCI is NMFS aerial survey data from 2011-2015 (Lowry et al., 2017). During aerial surveys from 2011-2015, a mean of 62,150 California sea lions were recorded at haulouts on SMI, a mean of 1322 was recorded at SCI and a mean of 944 was recorded at SRI (Lowry et al., 2017).

Northern elephant seals range in the eastern and central North Pacific Ocean, from as far north as Alaska and as far south as Mexico. They spend much of the year, generally about nine months, in the ocean. They spend much of their lives underwater, diving to depths of about 1,000 to 2,500 ft (330-800 m) for 20- to 30-minute intervals with only short breaks at the surface, and are rarely seen at sea for this reason. Northern elephant seals breed and give birth in California and Baja California (Mexico), primarily on offshore islands, from December to March (Stewart et al. 1994). Adults return to land between March and August to molt, with males returning later than females. Adults return to their feeding areas again between their spring/summer molting and their winter breeding seasons.

Populations of northern elephant seals in the U.S. and Mexico are derived from a few tens or hundreds of individuals surviving in Mexico after being nearly hunted to extinction (Stewart et al., 1994). Given the recent derivation of most rookeries, no genetic differentiation would be expected. Although movement and genetic exchange continues between rookeries, most elephant seals return to their natal rookeries when they start breeding (Huber et al., 1991). The California breeding population is now demographically isolated from the Baja California population and is considered to be a separate stock.

The best available information on northern elephant seal abundance on VAFB is USAF monthly survey data. Northern elephant seals haul out sporadically on rocks and beaches along the coastline of VAFB; monthly counts in 2013 and 2014 recorded between 0 and 191 elephant seals within the affected area (ManTech 2015). Northern elephant seal pupping at VAFB was documented for the first time in January 2017 with 18 pups born and weaned. In January 2018, a total of 25 pups were observed born and weaned. (USAF, 2018).

The best available information on northern elephant seal abundance on the NCI is NMFS aerial survey data from 2011-2015 (Lowry et al., 2017). Point Bennett on the west end of SMI is the primary northern elephant seal rookery in the NCI, with another rookery at Cardwell Point on the east end of SMI (Lowry 2002). They also pup and breed on Santa Rosa Island, mostly on the west end. Northern elephant seals are rarely seen on Santa Cruz and Anacapa Islands. During aerial surveys of the NCI conducted by NMFS from 2011-2015, a mean of 2,350 northern elephant seals was recorded at SMI, and a mean of 816 was recorded at SRI. None were observed at Santa Cruz Island (Lowry et al., 2017).

Steller sea lions are distributed mainly around the coasts to the outer continental shelf along the North Pacific rim from northern Hokkaido, Japan through the Kuril Islands and Okhotsk Sea, Aleutian Islands and central Bering Sea, southern coast of Alaska and south to California (Loughlin et al., 1984). The species as a whole was ESA-listed as threatened in 1990 (55 FR 49204, November 26, 1990). In 1997, the species was divided into western and eastern distinct population segments (DPS), with the western DPS reclassified as endangered under the ESA and the eastern DPS retaining its threatened listing (62 FR 24345, May 5, 2997). On October 23, 2013, NMFS found that the eastern DPS has recovered; as a result of the finding, NMFS removed the eastern DPS from ESA listing. Only the eastern DPS is considered in this proposed authorization due to its distribution and the geographic scope of the action.

Prior to 2012, there were no records of Steller sea lions observed at VAFB. In April and May 2012, Steller sea lions were observed hauled out at North Rocky Point on VAFB, representing the first time the species had been observed at VAFB during launch monitoring and monthly surveys conducted over the past two decades (MMCG and SAIC, 2013). The best available information on Steller sea lion abundance on VAFB is USAF monthly surveys. Since 2012, Steller sea lions have been observed frequently in routine monthly surveys, with as many as 16 individuals recorded. In 2017, the highest number observed at VAFB was 11, in July (CEMML, 2018). Steller sea lions once had two small rookeries on SMI, but these were abandoned after the 1982-1983 El Niño event (DeLong and Melin, 2000, Lowry, 2002); these rookeries were once the southernmost colonies of the eastern stock of this species. Due to their very limited numbers on the NCI, survey data for Steller sea lions on the NCI is not available, therefore the best available information on abundance on the NCI is anecdotal information from subject matter experts. In recent years, between two to four juvenile and adult males have been observed on a somewhat regular basis on San Miguel Island (pers. comm. Sharon Melin, NMFS Marine Mammal Center (MML), to J. Carduner, NMFS). Steller sea lions have not been observed on the other Channel Islands.

Northern fur seals occur from southern California north to the Bering Sea and west to the Okhotsk Sea and Honshu Island, Japan. Due to differing requirements during the annual reproductive season, adult males and females typically occur ashore at different, though overlapping, times. Adult males occur ashore and defend reproductive territories during a three month period from June through August, though some may be present until November (well after giving up their territories). Adult females are found ashore for as long as six months (June-November). After their respective times ashore, fur seals of both sexes spend the next seven to eight months at sea (Roppel, 1984). Peak pupping is in early July and pups are weaned at three to four months. Some juveniles are present year-round, but most juveniles and adults head for the open ocean and a pelagic existence until the next year. Northern fur seals exhibit high site fidelity to their natal rookeries. Two stocks of northern fur seals are recognized in U.S. waters: An eastern Pacific stock and a California stock (formerly referred to as the San Miguel Island stock). Only the California stock is considered in this proposed authorization due to its geographic distribution.

Northern fur seals have rookeries on SMI at Point Bennett and on Castle Rock. Comprehensive count data for northern fur seals on San Miguel Island are not available, therefore the best available information on northern fur seal abundance on the NCI comes from subject matter experts which indicates the population is at its maximum in summer (June-August) with an estimated 13,384 animals at SMI, with approximately half that number present in the fall (September and October) and approximately 50-200 animals present from November through May (pers. comm. Sharon Melin, NMFS MML, to J. Carduner, NMFS OPR). SMI is the only island in the NCI on which northern fur seals have been observed, and on SMI they only occur at the west end of the island and on Castle Rock (a small offshore rock on the northwest side of the island) (pers. comm. Sharon Melin, NMFS MML, to J. Carduner, NMFS OPR). Although the population at SMI was established by individuals from Alaska and Russian Islands during the late 1960s, most individuals currently found on SMI are considered resident to the island. No haulout or rookery sites exist for northern fur seals on the mainland coast. The only individuals that appear on mainland beaches are stranded animals.

Guadalupe fur seals are found along the west coast of the United States, with the majority of the population found on islands in Mexico. They were abundant prior to seal exploitation, when they were likely the most abundant pinniped species on the Channel Islands, but are considered uncommon in Southern California. They are typically found on shores with abundant large rocks, often at the base of large cliffs (Belcher and Lee, 2002). Increased strandings of Guadalupe fur seals started occurring along the entire coast of California in early 2015. This event was declared a marine mammal UME. Strandings were eight times higher than the historical average, peaking from April through June 2015, and have since lessened but continue at a rate that is well above average. Most stranded individuals have been weaned pups and juveniles (1-2 years old). For more information on this UME, see: https://www.fisheries.noaa.gov/national/marine-life-distress/2015-2018-guadalupe-fur-seal-unusual-mortality-event-california.

Comprehensive survey data on Guadalupe fur seals in the NCI is not readily available, therefore the best available information on Guadalupe fur seal abundance is from subject matter experts. On SMI, one to several male Guadalupe fur seals had been observed annually between 1969 and 2000 (DeLong and Melin, 2000) and juvenile animals of both sexes have been seen occasionally over the years (Stewart et al., 1987). The first adult female at San Miguel Island was seen in 1997. In June 1997, she gave birth to a pup in rocky habitat along the south side of the island and, over the next year, reared the pup to weaning age. This was apparently the first pup born in the Channel Islands in at least 150 years. Since 2008, individual adult females, subadult males, and between one and three pups have been observed annually on SMI. There are estimated to be approximately 20-25 individuals that have fidelity to San Miguel, mostly inhabiting the southwest and northwest ends of the island. A total of 14 pups have been born on the island since 2009, with no more than 3 born in any single season (pers. comm., S. Melin, NMFS MML, to J. Carduner, NMFS OPR). Thirteen individuals and two pups were observed in 2015 (NMFS 2016). No haulout or rookery sites exist for Guadalupe fur seals on the mainland coast, including VAFB. The only individuals that do appear on mainland beaches are stranded animals.

Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Current data indicate that not all marine mammal species have equal hearing capabilities ( e.g., Richardson et al., 1995; Wartzok and Ketten, 1999; Au and Hastings, 2008). To reflect this, Southall et al. (2007) recommended that marine mammals be divided into functional hearing groups based on directly measured or estimated hearing ranges on the basis of available behavioral response data, audiograms derived using auditory evoked potential techniques, anatomical modeling, and other data. Note that no direct measurements of hearing ability have been successfully completed for mysticetes ( i.e., low-frequency cetaceans). Subsequently, NMFS (2018) described generalized hearing ranges for these marine mammal hearing groups. Generalized hearing ranges were chosen based on the approximately 65 dB threshold from the normalized composite audiograms, with the exception for lower limits for low-frequency cetaceans where the lower bound was deemed to be biologically implausible and the lower bound from Southall et al. (2007) retained. The functional groups and the associated frequencies are indicated below (note that these frequency ranges correspond to the range for the composite group, with the entire range not necessarily reflecting the capabilities of every species within that group):

• Pinnipeds in water; Phocidae (true seals): Generalized hearing is estimated to occur between approximately 50 Hz to 86 kHz; and

• Pinnipeds in water; Otariidae (eared seals): Generalized hearing is estimated to occur between 60 Hz and 39 kHz.

The pinniped functional hearing group was modified from Southall et al. (2007) on the basis of data indicating that phocid species have consistently demonstrated an extended frequency range of hearing compared to otariids, especially in the higher frequency range (Hemilä et al., 2006; Kastelein et al., 2009; Reichmuth and Holt, 2013).

For more detail concerning these groups and associated frequency ranges, please see NMFS (2018) for a review of available information. Six species of marine mammal (four otariid and two phocid species) have the reasonable potential to co-occur with the proposed activities. Please refer to Table 6.

This section includes a summary and discussion of the ways that components of the specified activity may impact marine mammals and their habitat. The Estimated Take section later in this document includes a quantitative analysis of the number of individuals that are expected to be taken by this activity. The Negligible Impact Analysis and Determination section considers the content of this section, the Estimated Take section, and the Proposed Mitigation section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and how those impacts on individuals are likely to impact marine mammal species or stocks.

This section contains a brief technical background on sound, the characteristics of certain sound types, and on metrics used in this proposal inasmuch as the information is relevant to the specified activity and to a discussion of the potential effects of the specified activity on marine mammals found later in this document.

Sound travels in waves, the basic components of which are frequency, wavelength, velocity, and amplitude. Frequency is the number of pressure waves that pass by a reference point per unit of time and is measured in hertz (Hz) or cycles per second. Wavelength is the distance between two peaks or corresponding points of a sound wave (length of one cycle). Higher frequency sounds have shorter wavelengths than lower frequency sounds, and typically attenuate (decrease) more rapidly, except in certain cases in shallower water. Amplitude is the height of the sound pressure wave or the “loudness” of a sound and is typically described using the relative unit of the dB. A sound pressure level (SPL) in dB is described as the ratio between a measured pressure and a reference pressure and is a logarithmic unit that accounts for large variations in amplitude; therefore, a relatively small change in dB corresponds to large changes in sound pressure. The source level (SL) represents the SPL referenced at a distance of 1 m from the source while the received level is the SPL at the listener's position. Note that all airborne sound levels in this document are referenced to a pressure of 20 µPa.

Root mean square (rms) is the quadratic mean sound pressure over the duration of an impulse. Root mean square is calculated by squaring all of the sound amplitudes, averaging the squares, and then taking the square root of the average (Urick, 1983). Root mean square accounts for both positive and negative values; squaring the pressures makes all values positive so that they may be accounted for in the summation of pressure levels (Hastings and Popper, 2005). This measurement is often used in the context of discussing behavioral effects, in part because behavioral effects, which often result from auditory cues, may be better expressed through averaged units than by peak pressures.

Sound exposure level (SEL; represented as dB re 1 μPa 2 -s) represents the total energy contained within a pulse and considers both intensity and duration of exposure. Peak sound pressure (also referred to as zero-to-peak sound pressure or 0-p) is the maximum instantaneous sound pressure measurable in the water at a specified distance from the source and is represented in the same units as the rms sound pressure. Another common metric is peak-to-peak sound pressure (pk-pk), which is the algebraic difference between the peak positive and peak negative sound pressures. Peak-to-peak pressure is typically approximately 6 dB higher than peak pressure (Southall et al., 2007).

A-weighting is applied to instrument-measured sound levels in an effort to account for the relative loudness perceived by the human ear, as the ear is less sensitive to low audio frequencies, and is commonly used in measuring airborne noise. The relative sensitivity of pinnipeds listening in air to different frequencies is more-or-less similar to that of humans (Richardson et al. , 1995), so A-weighting may, as a first approximation, be relevant to pinnipeds listening to moderate-level sounds.

The sum of the various natural and anthropogenic sound sources at any given location and time—which comprise “ambient” or “background” sound—depends not only on the source levels (as determined by current weather conditions and levels of biological and human activity) but also on the ability of sound to propagate through the environment. In turn, sound propagation is dependent on the spatially and temporally varying properties of the water column and sea floor, and is frequency-dependent. As a result of the dependence on a large number of varying factors, ambient sound levels can be expected to vary widely over both coarse and fine spatial and temporal scales. Sound levels at a given frequency and location can vary by 10-20 dB from day to day (Richardson et al., 1995). The result is that, depending on the source type and its intensity, sound from a given activity may be a negligible addition to the local environment or could form a distinctive signal that may affect marine mammals. Details of source types are described in the following text.

Sounds are often considered to fall into one of two general types: Pulsed and non-pulsed (defined in the following). The distinction between these two sound types is important because they have differing potential to cause physical effects, particularly with regard to hearing ( e.g., Ward, 1997 in Southall et al., 2007). Please see Southall et al. (2007) for an in-depth discussion of these concepts.

Pulsed sound sources ( e.g., airguns, explosions, gunshots, sonic booms, impact pile driving) produce signals that are brief (typically considered to be less than one second), broadband, atonal transients (ANSI, 1986, 2005; Harris, 1998; NIOSH, 1998; ISO, 2003) and occur either as isolated events or repeated in some succession. Pulsed sounds are all characterized by a relatively rapid rise from ambient pressure to a maximal pressure value followed by a rapid decay period that may include a period of diminishing, oscillating maximal and minimal pressures, and generally have an increased capacity to induce physical injury as compared with sounds that lack these features.

Non-pulsed sounds can be tonal, narrowband, or broadBand, brief or prolonged, and may be either continuous or non-continuous (ANSI, 1995; NIOSH, 1998). Some of these non-pulsed sounds can be transient signals of short duration but without the essential properties of pulses ( e.g., rapid rise time). Examples of non-pulsed sounds include those produced by vessels, aircraft, machinery operations such as drilling or dredging, vibratory pile driving, and active sonar systems (such as those used by the U.S. Navy). The duration of such sounds, as received at a distance, can be greatly extended in a highly reverberant environment.

The effects of sounds on marine mammals are dependent on several factors, including the species, size, and behavior (feeding, nursing, resting, etc.) of the animal; the intensity and duration of the sound; and the sound propagation properties of the environment. Impacts to marine species can result from physiological and behavioral responses to both the type and strength of the acoustic signature (Viada et al., 2008). The type and severity of behavioral impacts are more difficult to define due to limited studies addressing the behavioral effects of sounds on marine mammals. Potential effects from impulsive sound sources can range in severity from effects such as behavioral disturbance or tactile perception to physical discomfort, slight injury of the internal organs and the auditory system, or mortality (Yelverton et al., 1973).

The effects of sounds from the proposed activities are expected to result in behavioral disturbance of marine mammals. Due to the expected sound levels of the activities proposed and the distance of the activity from marine mammal habitat, the effects of sounds from the proposed activities are not expected to result in temporary or permanent hearing impairment (TTS and PTS, respectively), non-auditory physical or physiological effects, or masking in marine mammals. Data from monitoring reports associated with authorizations issued by NMFS previously for similar activities in the same location as the planned activities (described further below) provides further support for the assertion that TTS, PTS, non-auditory physical or physiological effects, and masking are not likely to occur (USAF 2013b; SAIC 2012). Therefore, TTS, PTS, non-auditory physical or physiological effects, and masking are not discussed further in this section.

Disturbance includes a variety of effects, including subtle changes in behavior, more conspicuous changes in activities, and displacement. Behavioral responses to sound are highly variable and context-specific and reactions, if any, depend on species, state of maturity, experience, current activity, reproductive state, auditory sensitivity, time of day, and many other factors (Richardson et al., 1995; Wartzok et al., 2003; Southall et al., 2007).

Habituation can occur when an animal's response to a stimulus wanes with repeated exposure, usually in the absence of unpleasant associated events (Wartzok et al., 2003). Animals are most likely to habituate to sounds that are predictable and unvarying. The opposite process is sensitization, when an unpleasant experience leads to subsequent responses, often in the form of avoidance, at a lower level of exposure. Behavioral state may affect the type of response as well. For example, animals that are resting may show greater behavioral change in response to disturbing sound levels than animals that are highly motivated to remain in an area for feeding (Richardson et al., 1995; NRC, 2003; Wartzok et al., 2003).

Controlled experiments with captive marine mammals have shown pronounced behavioral reactions, including avoidance of loud underwater sound sources (Ridgway et al., 1997; Finneran et al., 2003). These may be of limited relevance to the proposed activities given that airborne sound, and not underwater sound, may result in harassment of marine mammals as a result of the proposed activities; however we present this information as background on the potential impacts of sound on marine mammals. Observed responses of wild marine mammals to loud pulsed sound sources (typically seismic guns or acoustic harassment devices) have been varied but often consist of avoidance behavior or other behavioral changes suggesting discomfort (Morton and Symonds, 2002; Thorson and Reyff, 2006; see also Gordon et al., 2004; Wartzok et al., 2003; Nowacek et al., 2007).

The onset of noise can result in temporary, short term changes in an animal's typical behavior and/or avoidance of the affected area. These behavioral changes may include: reduced/increased vocal activities; changing/cessation of certain behavioral activities (such as socializing or feeding); visible startle response or aggressive behavior; avoidance of areas where sound sources are located; and/or flight responses (Richardson et al., 1995).

The biological significance of many of these behavioral disturbances is difficult to predict, especially if the detected disturbances appear minor. However, the consequences of behavioral modification could potentially be biologically significant if the change affects growth, survival, or reproduction. The onset of behavioral disturbance from anthropogenic sound depends on both external factors (characteristics of sound sources and their paths) and the specific characteristics of the receiving animals (hearing, motivation, experience, demography) and is difficult to predict (Southall et al., 2007).

Marine mammals that occur in the project area could be exposed to airborne sounds that have the potential to result in behavioral harassment, depending on an animal's distance from the sound. Airborne sound could potentially affect pinnipeds that are hauled out. Most likely, airborne sound would cause behavioral responses similar to those discussed above in relation to underwater sound. For instance, anthropogenic sound could cause hauled out pinnipeds to exhibit changes in their normal behavior, such as temporarily abandoning their habitat. Hauled out pinnipeds may flush from a haulout into the water. Though pup abandonment could theoretically result from these reactions, site-specific monitoring data (described below) indicate that pup abandonment is not likely to occur as a result of the specified activity.

This section includes a discussion of the active acoustic sound sources associated with the USAF's proposed activity and the likelihood for these sources to result in harassment of marine mammals. Potential acoustic sources associated with the USAF's proposed activity include launch noise, sonic booms, and aircraft noise. Marine mammals on the NCI would be impacted only by sonic booms associated with the proposed activities ( i.e., launch noise and aircraft noise are not expected to impact marine mammals on the NCI), while marine mammals on VAFB would be impacted by launch noise, aircraft noise and sonic booms from Falcon 9 boost-backs and landings (however, as described above, sounds associated with Falcon 9 First Stage boost-backs and landings are not expected to result in additional take of marine mammals and are therefore not addressed here). Sounds produced by the proposed activities are expected to be impulsive, due to sonic booms, and non-pulse noise, due to aircraft sounds. All noises resulting from the USAF's proposed activities that may impact marine mammals are airborne.

Sonic booms may disturb pinnipeds that are hauled out of the water in the area of exposure, depending on the species exposed and the level of the sonic boom. The USAF has monitored pinniped responses to rocket launches on VAFB and the NCI during numerous launches over the past two decades. Observed reactions of pinnipeds at the NCI to sonic booms have ranged from no response to heads-up alerts, from startle responses to some movements on land, and from some movements into the water to very rare stampedes.

Data from launch monitoring reports by the USAF on the NCI have shown that pinniped reactions to sonic booms are correlated with the level of the sonic boom. Table 7 presents a summary of monitoring efforts at the NCI from 1999 to 2017 during which acoustic measurements were successfully recorded and during which pinnipeds were observed. Monitoring data has consistently shown that reactions among pinnipeds to sonic booms vary between species, with harbor seals typically responding at the highest rates, followed by California sea lions, with northern elephant seals and northern fur seals generally being much less responsive (Table 7). Because Steller sea lions and Guadalupe fur seals occur in the project area relatively infrequently, no data has been recorded on their reactions to sonic booms. At the NCI, harbor seals have been observed to respond at higher rates to sonic booms than other species present there (Table 7). California sea lions have also sometimes shown reactiveness to sonic booms, with pups sometimes reacting more than adults, (Table 7). Northern fur seals generally show little or no reaction. Northern elephant seals generally exhibit no reaction at all, except perhaps a heads-up response or some stirring, especially if sea lions in the same area or mingled with the elephant seals react strongly to the boom. Post-launch monitoring generally reveals a return to normal patterns within minutes up to an hour or two of each launch, regardless of species (SAIC 2012).

Monitoring data also show that reactions to sonic booms tend to be insignificant below 1.0 psf and that, even above 1.0 psf, only a portion of the animals present have reacted to the sonic boom depending on the species. Lower energy sonic booms (< 1.0 psf) have typically resulted in little to no behavioral responses, including head raising and briefly alerting but returning to normal behavior shortly after the stimulus (Table 7). More powerful sonic booms have sometimes resulted in some species of pinnipeds flushing from haulouts.

Monitoring data also suggests that, for those pinnipeds that flush from haulouts in response to sonic booms, the amount of time it takes those animals to begin returning to the haulout site and for numbers of animals to return to pre-launch levels is correlated with sonic boom levels. Pinnipeds may begin to return to the haulout site within 2-55 minutes of the launch disturbance, and the haulout site usually returned to pre-launch levels within 45-120 minutes. Monitoring data from launch of the Athena IKONOS rocket in 2012 showed harbor seals that flushed to the water on exposure to the sonic boom at SMI began to return to the haulout approximately 16-55 minutes post-launch (Thorson et al., 1999). Monitoring data from the launch of the Delta IV in 2012 showed harbor seals that flushed to the water at VAFB in response to the launch noise returned to the haulout approximately 30 minutes later (ManTech SRS Technologies, 2012).

Based on two decades of monitoring reports, pinniped responses to sonic booms range from no response, to head raises and movements in response to the stimuli, to flushing to the water. Injury and mortality are not expected to result from exposure to sonic booms and this is supported by two decades of monitoring reports which have shown no documented pinniped mortalities or serious associated with sonic booms, and no pup abandonment as a result of sonic booms. No sustained decreases in numbers of animals observed at haulouts have been observed after the stimulus. These findings came as a result of more than two decades of research by numerous qualified, independent researchers, from 1991 through 2018. These patterns are anticipated to continue.

Whereas sonic booms represent the primary source of noise on the NCI from the USAF's proposed activities, on VAFB the sound associated with launches represents the primary source of noise from the USAF's proposed activities. The operation of launch vehicle engines produces significant sound levels. Generally, noise is generated from three sources during launches: (1) Combustion noise from launch vehicle chambers; (2) jet noise generated by the interaction of the exhaust jet and the atmosphere; (3) combustion noise from the post-burning of combustion products. Launch noise levels are highly dependent on the type of first-stage booster and the fuel used to propel the vehicle.

Pre- and post-launch pinniped monitoring by marine mammal observers occurs at haulouts near launch sites. Pre- and post-launch data has shown that as many or more animals are typically hauled out after the launch than were present prior to the launch, unless rising tides, breakers or other disturbances are involved (SAIC 2012). When launches occurred during high tides at VAFB, no impacts have been recorded because virtually all haulout sites were submerged. As with sonic booms, observed reactions of pinnipeds at VAFB to launch noise has included startle responses and movements into the water. No pinniped mortalities and no pup abandonment have been documented as a result of launch noise. These patterns are anticipated to continue.

Available monitoring data on pinniped behavior during launches is more limited than pre- and post-launch data as marine mammal observers are not able to access pinniped haulouts near launch sites during launches due to safety concerns. Video monitoring of pinnipeds during launches is not always feasible due to launches occurring in darkness or poor visibility conditions but has been used successfully during a limited number of launches that occurred in daylight and with good visibility conditions. Data from the limited number of launches where video monitoring during launches was successful indicates that all harbor seals and California sea lions have flushed to the water during launches while 10 percent or less of northern elephant seals have flushed to the water during launch. However, it should be noted that available video monitoring data is very limited so it is difficult to draw broad conclusions on responses to launches based on the small sample sizes of available data ( i.e., there is only one launch for which video monitoring data is available for California sea lions). We also note that video monitoring during launches is typically conducted at haulouts on VAFB close to the launch location, thus the rate at which pinnipeds respond to launches at haulouts on VAFB that are further away from the launch location remain largely unknown, further complicating our ability to draw conclusions on pinniped response rates during launches.

To determine if harbor seals experience changes in their hearing sensitivity as a result of launch noise, ABR testing was previously conducted on 21 harbor seals during four Titan IV launches, one Taurus launch, and two Delta IV launches by the USAF in accordance with issued scientific research permits. Following standard ABR testing protocol, the ABR was measured from one ear of each seal using sterile, sub-dermal, stainless steel electrodes. A conventional electrode array was used, and low-level white noise was presented to the non-tested ear to reduce any electrical potentials generated by the non-tested ear. A computer was used to produce the click and an 8 kilohertz (kHz) tone burst stimuli, through standard audiometric headphones. Over 1,000 ABR waveforms were collected and averaged per trial. Initially the stimuli were presented at SPLs loud enough to obtain a clean reliable waveform, and then decreased in 10 dB steps until the response was no longer reliably observed. Once response was no longer reliably observed, the stimuli were then increased in 10 dB steps to the original SPL. By obtaining two ABR waveforms at each SPL, it was possible to quantify the variability in the measurements.

Good replicable responses were measured from most of the seals, with waveforms following the expected pattern of an increase in latency and decrease in amplitude of the peaks, as the stimulus level was lowered. One seal had substantial decreased acuity to the 8 kHz tone-burst stimuli prior to the launch. The cause of this hearing loss was unknown but was most likely congenital or from infection. Another seal had a great deal of variability in waveform latencies in response to identical stimuli. This animal moved repeatedly during testing, which may have reduced the sensitivity of the ABR testing on this animal for both the click and 8 kHz tone burst stimuli. Two of the seals were released after pre-launch testing but prior to the launch of the Titan IV B-34, as the launch was delayed for over five days, with five days being the maximum duration permitted to hold the seals for testing.

Detailed analysis of the changes in waveform latency and waveform replication of the ABR measurements for the 14 seals, showed no detectable changes in the seals' hearing sensitivity as a result of exposure to the launch noise. The delayed start (1.75 to 3.5 hr after the launches) for ABR testing allows for the possibility that the seals may have recovered from a temporary threshold shift (TTS) before testing began. However, it can be said with confidence that the post-launch tested animals did not have permanent hearing changes due to exposure to the launch noise from the Titan IV, Taurus, or Delta IV SLVs.

No sustained decreases in numbers of animals observed at haulouts have been observed after launches. No pup abandonment has been documented as a result of launch noise and no documented pinniped mortalities have been associated with launch noise on VAFB. These patterns are expected to continue.

The USAF does not monitor pinniped responses to aircraft and helicopter operations, including UAS operations, on VAFB. As described above, except for take-off and landing actions, a minimum altitude of 300 feet will be maintained for Class 0-2 UAS over all known marine mammal haulouts when marine mammals are present. Class 3 UAS will maintain a minimum altitude of 500 feet, except at take-off and landing. No Class 4 or 5 UAS will be flown below 1,000 feet over haulouts. The available literature indicates that harassment of hauled out pinnipeds, as a result of visual or auditory stimuli, from Class 0-2 UAS is unlikely to occur at altitudes of 300 feet and above (Erbe et al., 2017; Pomeroy et al., 2015; Sweeney et al., 2016; Sweeney and Gelatt, 2017). Information on pinniped responses to larger UASs, including Class 3 UASs, is not available. However, based on the specifications of Class 3 UASs (Table 5), the likelihood of marine mammal harassment resulting from overflights by UASs of that size would likely depend on several factors including noise signature and means of propulsion ( i.e., rocket propelled or engine propelled). The specifications for potential Class 3 UASs that would be used by USAF are not known at this time as this is a relatively new activity at VAFB and as UAS technology is changing rapidly it is difficult for the USAF to predict which types of UAS will be used between 2019 and 2024. While unlikely, it is possible that take of marine mammals could occur as a result of Class 3 UASs flown at 500 feet or above, depending on noise signature and means of propulsion of the UAS. In addition, occasional helicopter and aircraft operations involving search-and-rescue missions, delivery of space vehicle components, launch mission support, security reconnaissance, and training flights occur at VAFB and have the potential to result in harassment of hauled out pinnipeds. While monitoring data is not available, we anticipate that pinniped responses to aircraft and helicopter operations will be similar to those exhibited in response to sonic booms and launch noise ( i.e., some head raises, movements in response to the stimulus, and possibly flushing to the water).

Impacts on marine mammal habitat are part of the consideration in making a finding of negligible impact on the species and stocks of marine mammals. Habitat includes, but is not necessarily limited to, rookeries, mating grounds, feeding areas, and areas of similar significance. We do not anticipate that the proposed operations would result in any temporary or permanent effects on the habitats used by the marine mammals in the proposed area, including the food sources they use ( i.e. fish and invertebrates). While it is anticipated that the specified activity may result in marine mammals avoiding certain areas due to temporary ensonification, this impact to habitat is temporary and reversible and was considered in further detail earlier in this document, as behavioral modification. The main impact associated with the proposed activity will be temporarily elevated noise levels and the associated direct effects on marine mammals, previously discussed in this proposed rule.

This section provides an estimate of the number of incidental takes proposed for authorization through this proposed rule, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.

Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of 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).

Authorized takes would be by Level B harassment only, in the form of disruption of behavioral patterns for individual marine mammals resulting from exposure to sounds associated with the planned activities. Based on the nature of the activity, Level A harassment is neither anticipated nor proposed to be authorized.

As described previously, no mortality is anticipated or proposed to be authorized for this activity. Below we describe how the take is estimated.

Generally speaking, we estimate take by considering: (1) Acoustic thresholds above which NMFS believes the best available science indicates marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment; (2) the area that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and the number of days of activities. We note that while these basic factors can contribute to an initial prediction of takes, additional information that can qualitatively inform take estimates is also sometimes available ( e.g., previous monitoring results or average group size). Below, we describe the factors considered here in more detail and present the proposed take estimate.

Using the best available science, NMFS has developed acoustic thresholds that identify the received level of sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur PTS of some degree (equated to Level A harassment). Thresholds have also been developed identifying the received level of in-air sound above which exposed pinnipeds would likely be behaviorally harassed.

Level B Harassment for non-explosive sources —Though significantly driven by received level, the onset of behavioral disturbance from anthropogenic noise exposure is also informed to varying degrees by other factors related to the source ( e.g., frequency, predictability, duty cycle), the environment ( e.g., bathymetry), and the receiving animals (hearing, motivation, experience, demography, behavioral context) and can be difficult to predict (Southall et al., 2007, Ellison et al., 2012). Based on what the available science indicates and the practical need to use a threshold based on a factor that is both predictable and measurable for most activities, NMFS uses a generalized acoustic threshold based on received level to estimate the onset of behavioral harassment. For in-air sounds, NMFS predicts that harbor seals exposed above received levels of 90 dB re 20 μPa (rms) will be behaviorally harassed, and other pinnipeds will be harassed when exposed above 100 dB re 20 μPa (rms) (Table 8).

In the absence of site-specific data, NMFS typically relies on the acoustic criteria shown in Table 8 to estimate take as a result of exposure to airborne sound. However, in this case, more than 20 years of monitoring data exists on pinniped responses to the stimuli associated with the proposed activities in the particular geographic area of the proposed activities. Therefore, we consider these data to be the best available information in regard to estimating take of pinnipeds to stimuli associated with the proposed activities. These data suggest that pinniped responses to the stimuli associated with the proposed activities are dependent on species and intensity of the stimuli.

The data recorded by USAF at VAFB and the NCI over the past 20 years has shown that pinniped reactions to sonic booms and launch noise vary depending on the species, the intensity of the stimulus, and the location ( i.e., on VAFB or the NCI). At the NCI, harbor seals have tended to react more strongly to sonic booms than most other species, with California sea lions also appearing to be somewhat more sensitive to sonic booms than some other pinniped species (Table 7). Northern fur seals generally show little or no reaction, and northern elephant seals generally exhibit no reaction at all, except perhaps a heads-up response or some stirring, especially if sea lions in the same area mingled with the elephant seals react strongly to the boom (Table 7). No data is available on Steller sea lion or Guadalupe fur seal responses to sonic booms. There is less data available on pinniped responses during launches, but the available data indicates that all harbor seals and California sea lions have tended to flush to the water during launches while 10 percent or less of northern elephant seals have flushed to the water during launch.

The USAF is not able to predict the exact areas that will be impacted by noise associated with the specified activities, including sonic booms, launch noise and aircraft noise. Numerous launch locations are utilized on VAFB, each of which results in different parts of the base (and different haulouts) being ensonified by launch noise during launches. Different space launch vehicles have varying trajectories which result in different sonic boom “footprints”, which are likely to impact different areas on the NCI. In addition, rocket launches by private entities on VAFB are expected to increase over the next 5 years and the USAF is not able to predict the trajectories of these future rocket launch programs. Therefore, for the purposes of estimating take, we conservatively estimate that all haulouts on VAFB will be ensonified by launch noise during a rocket or missile launch. On the NCI, sonic booms from launches sometimes impact San Miguel Island (SMI) and occasionally Santa Rosa Island (SRI); Santa Cruz and Anacapa Islands are not expected to be impacted by sonic booms in excess of 1.0 psf (USAF, 2018) therefore only marine mammals on San Miguel and Santa Rosa Islands may potentially be taken by sonic booms. We estimate that, when a sonic boom impacts the NCI, 25 percent of pinniped haulouts on San Miguel and Santa Rosa Islands will be ensonified by a sonic boom above 1.0 psf. We consider this to be a conservative assumption based on sonic boom models which show that areas predicted to be impacted by a sonic boom with peak overpressures of 1.0 psf and above are typically limited to isolated parts of a single island, and sonic boom model results tend to overestimate actual recorded sonic booms on the NCI (pers. comm. R. Evans, USAF, to J. Carduner, NMFS OPR).

In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations. Data collected from marine mammal surveys, including monthly marine mammal surveys conducted by the USAF at VAFB as well as data collected by NMFS at NCI, represent the best available information on the occurrence of the six pinniped species expected to occur in the project area. Monthly marine mammal surveys at VAFB are conducted to document the abundance, distribution and status of pinnipeds at VAFB. When possible, these surveys are timed to coincide with the lowest afternoon tides of each month, when the greatest numbers of animals are usually hauled out. Data gathered during monthly surveys include: Species, number, general behavior, presence of pups, age class, gender, reactions to natural or human-caused disturbances, and environmental conditions. The quality and amount of information available on pinnipeds in the project area varies depending on species; some species are surveyed regularly at VAFB and the NCI ( e.g., California sea lion), while other species are surveyed less frequently ( e.g., northern fur seals and Guadalupe fur seals). However, the best available data was used to estimate take numbers. Take estimates for all species are shown in Table 13.

Harbor Seal —Pacific harbor seals are the most common marine mammal inhabiting VAFB, congregating on several rocky haulout sites along the VAFB coastline. They also haul out, breed, and pup in isolated beaches and coves throughout the coasts of the NCI. Data from VAFB monthly surveys for the three most recent years for which data is available (2015, 2016 and 2017) shows the mean number of harbor seals recorded on VAFB during those years was 255 (CEMML 2016, 2017, 2018). The USAF estimated the number of harbor seals that may be hauled out at VAFB during all months of the year from 2019-2024 to be 300; we think this is a reasonable estimate given the monthly survey data as described above and the fluctuations in harbor seal numbers observed on VAFB; therefore, take of harbor seals at VAFB was estimated based on a conservative estimate of 300 harbor seals hauled out during any month on VAFB. Take of harbor seals at the NCI was estimated based on the mean count totals from survey data collected on SMI, SRI, and Richardson Rock (located 10 km northwest of SMI), from 2011 to 2015 by the NMFS SWFSC (Lowry et al., 2017).

California sea lion— California sea lions are common offshore of VAFB and haul out on rocks and beaches along the coastline of VAFB where their numbers have been increasing in recent years, though pupping rarely occurs on the VAFB coastline. They haul out in large numbers on the NCI and rookeries exist on SMI. The data from monthly marine mammal surveys at VAFB from 2015, 2016 and 2017 shows a mean of 11 California sea lions recorded at VAFB (CEMML 2016, 2017, 2018). However, numbers of California sea lions appear to be increasing at VAFB, with a mean of 21 recorded during surveys in 2017 including 68 recorded in September 2017 (CEMML, 2018). The USAF estimated in their application that up to 125 California sea lions may be hauled out at VAFB during any month of the year; however, based on the monthly survey data, for the purposes of estimating take we conservatively estimate that up to 75 California sea lions may be hauled out during any month of the year. Take of California sea lions at the NCI was estimated based on the mean count totals from survey data collected on SMI, SRI, and Richardson Rock from 2011 to 2015 by the NMFS SWFSC (Lowry et al., 2017).

Steller Sea Lion —Steller sea lions occur in very small numbers at VAFB and on SMI. They do not currently have rookeries at VAFB or the NCI. Data from monthly marine mammal surveys at VAFB from 2015, 2016 and 2017 show a mean of 2.4 Steller sea lions recorded at VAFB (CEMML 2016, 2017, 2018). The USAF estimated the number of Steller sea lions that may be hauled out at VAFB during all months of the year from 2019-2024 to be 3. We consider this a reasonable estimate based on monthly survey data. Steller sea lions haul out in very small numbers on SMI, and comprehensive survey data for Steller sea lions in the NCI is not available. Take of Steller sea lions on the NCI was estimated based on subject matter expert input indicating that a maximum of 4 Steller sea lions have been observed on SMI at any time (pers. comm., S. Melin, NMFS Marine Mammal Laboratory (MML), to J. Carduner, NMFS OPR).

Northern elephant seal— Northern elephant seals haul out sporadically on rocks and beaches along the coastline of VAFB and at Point Conception and have rookeries on SMI and SRI and at one location at VAFB. Data from monthly marine mammal surveys at VAFB from 2015, 2016 and 2017 show a mean of 39.4 northern elephant seals recorded at VAFB (CEMML 2016, 2017, 2018). The USAF estimated the number of northern elephant seals that may be hauled out at VAFB during all months of the year from 2019-2024 to be 60. However, a mean of 76.3 northern elephant seals was recorded at VAFB in 2017 (CEMML, 2018), suggesting northern elephant seal numbers at VAFB may be increasing. For the purposes of estimating take on VAFB, we therefore conservatively estimate that the number of northern elephant seals that may be hauled out at VAFB during all months of the year from 2019-2024 to be 100. Take of northern elephant seals at the NCI was estimated based on the mean count totals from survey data collected on SMI, SRI, and Richardson Rock from 2011 to 2015 by the NMFS SWFSC (Lowry et al., 2017).

Northern fur seal— Northern fur seals have rookeries on SMI, the only island in the NCI on which they have been observed. No haulouts or rookeries exist for northern fur seals on the mainland coast, including VAFB, therefore no take of northern fur seals is expected at VAFB. Comprehensive survey data for northern fur seals in the project area is not available. Estimated take of northern fur seals was therefore based on subject matter expert input which indicated that from June through August, the population at SMI is at its maximum, with an estimated 13,384 animals at SMI (Carretta et al., 2015), with approximately 7,000 present from September through November, and approximately 125 present from November through May (pers. comm., S. Melin, NMFS Marine Mammal Laboratory (MML) to J. Carduner, NMFS OPR).

Guadalupe fur seal— There are estimated to be approximately 20-25 individual Guadalupe fur seals that have fidelity to San Miguel Island (pers. comm. S. Melin, NMFS MML, to J. Carduner, NMFS OPR). No haulouts or rookeries exist for Guadalupe fur seals on the mainland coast, including VAFB, therefore no take of Guadalupe fur seals is expected at VAFB. Survey data on Guadalupe fur seals in the project area is not available. Estimated take of Guadalupe fur seals was based on the maximum number of Guadalupe fur seals observed at any time on SMI (13) (pers. comm., J. LaBonte, ManTech SRS Technologies Inc., to J. Carduner, NMFS, Feb. 29, 2016); it was therefore conservatively assumed that 13 Guadalupe fur seals may be hauled out the NCI at any given time.

Here we describe how the information provided above is brought together to produce a quantitative take estimate.

NMFS currently uses a three-tiered scale to determine whether the response of a pinniped on land to stimuli rises to the level of behavioral harassment under the MMPA (Table 9). NMFS considers the behaviors that meet the definitions of both movements and flushes in Table 9 to qualify as behavioral harassment. Thus a pinniped on land is considered by NMFS to have been behaviorally harassed if it moves greater than two times its body length, or if the animal is already moving and changes direction and/or speed, or if the animal flushes from land into the water. Animals that become alert without such movements are not considered harassed. See Table 9 for a summary of the pinniped disturbance scale.

Take estimates were calculated separately for each stock in each year the proposed regulations would be valid (from 2019-2024), on both VAFB and the NCI, based on the number of animals assumed hauled out at each location that are expected to be behaviorally harassed by the stimuli associated with the specified activities ( i.e., launch, sonic boom, or aircraft noise). First, the number of hauled out animals per month was estimated at both VAFB and the NCI for each stock, based on survey data and subject matter expert input as described above. Then we estimated the number of hauled out animals per month that would be behaviorally harassed, by applying a correction factor to account for the likelihood that the animals would respond at a Level 2 or 3 response (Table 9). Those correction factors differ depending on the location ( i.e. VAFB or the NCI) and on the reactiveness of each species to the stimuli (Table 10), and are based on the best available information (in this case, several years of monitoring data on both VAFB and the NCI (Table 7)).

As described above, for pinnipeds on VAFB, we conservatively assumed that all pinnipeds at all haulouts would be impacted by launch noise. This is a conservative assumption, as some haulouts are separated by several miles from launch locations, and presumably pinnipeds at haulouts further from the launch location would not react at the same rates as those located near the launch. For pinnipeds on the NCI, as described above we conservatively assume that 25% of haulouts would be impacted by a sonic boom with a psf above 1.0, if such a sonic boom were to impact the NCI (not all launches result in sonic booms on the NCI). Thus, for pinnipeds on the NCI, an additional .25 correction factor was applied to the take estimate, to account for the fact that approximately 25 percent of haulouts on the NCI are expected to be impacted by a sonic boom with a psf above 1.0, if such a sonic boom were to impact the NCI, while for launches on VAFB, we conservatively assume all pinnipeds will be exposed to launch noise. Take was calculated monthly, as abundance estimates for some species vary on VAFB and the NCI depending on season.

The resulting numbers were then multiplied by the number of activities (sonic booms or launches) estimated to occur in a month, and then summed to get total numbers of each stock estimated to be taken at each location per year. The USAF provided estimates of rocket and missile launches anticipated per year (Table 1), and the number of sonic booms above 1.0 psf estimated to impact the NCI per year (Table 2). Thus for pinnipeds on VAFB, the number of launches estimated per year was used to estimate take in each year ( e.g., in 2023, the USAF expects 100 rocket and 15 missile launches will occur, thus 115 launches was used to estimate takes on VAFB in 2023). For pinnipeds on the NCI, the number of sonic booms above 1.0 psf estimated per year was used to estimate take in each year ( e.g., in 2023, the USAF expects 19 sonic booms above 1.0 to impact the NCI, thus 19 sonic booms was used to estimate takes on the NCI in 2023). Note that the proposed rule would only be valid for 3 months in the year 2024, thus the highest number of launches and sonic booms anticipated to occur in any single year during the period of validity for the proposed rule would be in 2023, despite the fact that more launches are anticipated to occur in calendar year 2024.

Monitoring data on pinniped responses to aircraft, helicopter and UAS related stimuli is not available. The USAF estimated that 3,000 instances of harbor seal harassment and 500 instances of California sea lion harassment would occur over the 5 years that the proposed regulations would be valid, thus we divided those numbers (3,000 instances of harbor seal harassment and 500 instances of California sea lion harassment) by 5 to estimate the numbers of take per year and we propose to authorize the numbers shown in Table 11.

The numbers of incidental take expected to occur on VAFB as a result of the specified activities is shown in Table 11. The numbers of incidental take expected to occur on the NCI as a result of the specified activities is shown in Table 12. The total numbers of incidental take expected to occur and proposed for authorization are shown in Table 13. The take estimates presented in Tables 11, 12 and 13 are based on the best available information on marine mammal populations in the project location and responses among marine mammals to the stimuli associated with the proposed activities and are considered conservative.