This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order No. 932, as amended (7 CFR part 932), regulating the handling of olives grown in California. Part 932 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of producers and handlers of olives operating within the area of production.

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

On May 17, 2018 (83 FR 22831), the Agricultural Marketing Service published a final rule amending 7 CFR part 900, the general regulations for federal fruit, vegetable, and specialty crop marketing agreements and orders, to authorize the use of electronic means of communication for meetings and voting.

During a meeting on June 13, 2018, the Committee unanimously recommended adoption of modern communication methods to conduct Committee meetings, as outlined in the Federal Register final rule referenced above (83 FR 22831). On August 17, 2018, the Committee unanimously approved the recommended procedures for the use of communication technology. This rule establishes those procedures in a new § 932.136, Use of communication technology under Subpart B—Administrative Requirements.

The Order currently states that the Committee may only meet in assembled, in-person, meetings and that voting may only be conducted at meetings or via mail or telegraph. Such limitations present logistical problems for many Committee members since membership is widely distributed across California. Some members travel over 400 miles to attend a Committee meeting, thus resulting in lost work hours and increased costs for the Committee. Allowing the Committee to conduct meetings via electronic means of communication will likely result in increased member participation and productivity at a reduced cost, as well as greater potential for meeting quorum and voting requirements.

The Committee recommended that audio or audiovisual technology (AVT) that facilitates open communication and effectively assembles Committee members be used to conduct meetings by AVT or partial in-person meetings (meaning some members not present participate in an in-person meeting via technology). These meetings are subject to the same quorum and voting requirements currently in effect for in-person meetings under § 932.36. These requirements define a quorum as a majority of the 16-member Committee, of which at least half are producer members and half are handler members. Voting requirements state that a passing recommendation must receive a majority vote, with at least half of the voting members representing producers and half representing handlers. For recommendations regarding grade and size, a minimum of ten votes representing five producer and five handler members are necessary for approval. The requirements further state that issues to be voted on shall be explained accurately and fully, and that all votes cast will be confirmed through a roll call.

Regarding casting votes electronically, those votes are subject to the same requirements currently in effect for mail voting in § 932.36. These requirements state that advanced notice, as well as an accurate, full and identical description of the issues to be voted on, be given to all members. For a recommendation to pass, at least 14 affirmative votes representing seven producer and seven handler members are required.

The Committee recommended these changes to provide an opportunity to conduct meetings more efficiently and cost-effectively; use of audio and/or audiovisual communication technology will result in time and cost savings to the Committee and its members by allowing for meetings to be conducted with all or a portion of its membership attending by audio and/or AVT.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 1,100 producers of olives in the production area and two handlers subject to regulation under the Order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

Based on National Agricultural Statistics Service (NASS) information, the average price to producers for the 2017 crop year was $974.00 per ton, and total assessable volume for the 2017 crop year was 83,799 tons. Based on production, price paid to producers, and the total number of California olive producers, the average annual producer revenue is less than $750,000 ($974.00 times 83,799 tons equals $81,620,226, divided by 1,100 producers equals an average annual producer revenue of $74,200). Based on Committee data, both handlers may be classified as large entities under the SBA's definitions because their annual receipts are greater than $7,500,000.

This rule does not impose additional costs on handlers or producers of any size. Committee members are expected to see a reduction in their travel expenses and time lost from work to attend Committee meetings in person. Thus, this rule reduces the cost burden on both handlers and producers.

The Committee considered the alternative of making no changes to the regulations. However, it was determined that by taking no action, the Committee is unnecessarily limiting the participation of some members due to time constraints and travel considerations. Therefore, the Committee determined that recommending this change was in the best interest of the Committee, its members, and the industry.

Like all Committee meetings, the June 13, 2018, meeting was public and widely publicized throughout the production area. All entities, both large and small, were able to express their views on this issue and participate in Committee deliberations. Following the meeting, ballots along with the proposed procedures were sent to all Committee members on July 31, 2018, and the mail vote concluded on August 17, 2018. The proposal received unanimous support.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178 Vegetable Crops. No changes in those requirements are necessary because of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This rule imposes no additional reporting or recordkeeping requirements on either small or large California olive handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A proposed rule concerning this action was published in the Federal Register on November 16, 2018 (83 FR 57691). Copies of the proposed rule were provided to all olive producers and handlers. The proposal was also made available through the internet by USDA and the Office of Federal Register. A 30-day comment period ending December 17, 2018, was provided for interested persons to respond to the proposal.

One comment was received stating that all information communicated should be placed on the labels of jars of olives. After further review of the comment, it was determined to be outside the scope of this action. Accordingly, no changes will be made to the rule as proposed, based on the comment received.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule will tend to effectuate the declared policy of the Act.

For the reasons set forth in the preamble, 7 CFR part 932 is amended as follows:

On December 27, 2018 (83 FR 66585), the NRC published a direct final rule amending its regulations in part 72 of title 10 of the Code of Federal Regulations by revising the “List of approved spent fuel storage casks” to include Amendment No. 4 to Certificate of Compliance No. 1029 for the TN Americas LLC Standardized Advanced NUHOMS® Horizontal Modular Storage System. Amendment No. 4 revised the technical specifications of the certificate of compliance to: Clarify the applicability of unloading procedures and training modules relative to spent fuel pool availability; credit the use of the installed temperature monitoring system specified in lieu of performing daily visual vent inspections; establish dose rates on the front inlet bird screen and the door of the concrete storage module for the Advanced Horizontal Storage Module; modify the criteria for performing Advanced Horizontal Storage Module air vent visual inspections; identify the blocked vent time limitations for each of the 24PT1 and 24PT4 dry shielded canisters; and provide a new temperature rise value for the Advanced Horizontal Storage Module with a loaded 24PT4 dry shielded canister.

In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on March 12, 2019. As described more fully in the direct final rule, a significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. Because no significant adverse comments were received, the direct final rule will become effective as scheduled.

The Board is making the following corrections to the final rule that was published in the Federal Register on November 21, 2018 (83 FR 58724).

1. On page 58737, second column, line 25 from the top, “capital planning and position” is corrected to read “liquidity risk management and positions”; and

2. On page 58738, third column, line 28 from the top, “capital planning and position” is corrected to “governance and controls”.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A330-200, -200F, and -300 series airplanes. The NPRM published in the Federal Register on August 31, 2018 (83 FR 44510). The NPRM was prompted by a revision of the ALS, which provides new and more restrictive maintenance requirements and airworthiness limitations for airplane structures and systems. The NPRM proposed to require revising the existing maintenance or inspection program to incorporate new maintenance requirements and airworthiness limitations.

We are issuing this AD to address reduced airplane control due to the failure of system components.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0228, dated November 21, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330 and A340 series airplanes. The MCAI states:

The unsafe condition is reduced control of the airplane due to the failure of system components. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0788.

We gave the public the opportunity to participate in developing this final rule. The following presents the comment received on the NPRM and the FAA's response to each comment.

American Airlines (AAL) requested that we include Airbus A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Variation 6.1, dated January 16, 2018, as the appropriate source of service information. AAL indicated that the variation document increases the flight cycle life limitation of trimmable horizontal stabilizer (THS) actuator P/N 47172-540 from 10,000 flight cycles to 20,000 flight cycles. AAL also pointed out an alternative method of compliance (AMOC) for AD 2017-05-10 has been approved to allow the incorporation of the variation document into AAL's maintenance program (AMOC AIR-676-18-026R1, dated August 13, 2018).

We agree with the commenter's request for the reasons provided. We have revised paragraphs (g) and (h) of this AD to include Airbus A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Variation 6.1, dated January 16, 2018, as an appropriate source of service information.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

Airbus SAS has issued the following service information.

• A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Revision 06, dated September 18, 2017. This service information describes preventative maintenance requirements and associated airworthiness limitations applicable to aircraft systems susceptible to aging effects.

• A330 Airworthiness Limitations Section (ALS) Part 4, System Equipment Maintenance Requirements (SEMR), Variation 6.1, dated January 16, 2018. This service information describes preventative maintenance requirements and associated airworthiness limitations applicable to the THS actuator P/N 47172-540 and changes the flight cycle life limitation from 10,000 flight cycles to 20,000 flight cycles.

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

We estimate that this AD affects 104 airplanes of U.S. registry.

We have determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per workhour).

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 787 series airplanes. The NPRM published in the Federal Register on October 23, 2018 (83 FR 53404). The NPRM was prompted by a report of an uncommanded descent and turn that occurred after an inflight switch to the spare FMF. The NPRM proposed to require an inspection of the FMS to determine if certain OPS is installed and installation of new FMS OPS and a software check if necessary. For certain airplanes, it also proposed to require concurrent actions.

We are issuing this AD to address the retention of stale flight data in the spare FMF, which, if not addressed, could result in controlled flight into terrain or a mid-air collision.

We gave the public the opportunity to participate in developing this final rule. We have considered the comments received. Boeing, Delta Air Lines, and B McCann indicated their support for the NPRM.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We reviewed Boeing Alert Requirements Bulletin B787-81205-SB340038-00 RB, Issue 001, dated November 16, 2017. The service information describes procedures for installing FMS OPS Block Point 3B (BP3B) and performing a software check.

We also reviewed Boeing Service Bulletin B787-81205-SB340013-00, Issue 002, dated May 6, 2016. The service information describes procedures for installing FMS OPS Block Point 3 (BP3) and performing a software check. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 144 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2013-11-03, Amendment 39-17463 (78 FR 32353, May 30, 2013) (“AD 2013-11-03”). AD 2013-11-03 applied to certain Viking Air Limited Model CL-215-1A10 and CL-215-6B11 (CL-215T Variant) airplanes. The NPRM published in the Federal Register on August 2, 2018 (83 FR 37768). The NPRM was prompted by reports of a fractured wing lower rear spar cap and reinforcing strap and a report of cracking of the wing lower skin and rear spar. The NPRM proposed to require repetitive borescope inspections of the LH and RH wing lower skin and repetitive eddy current inspections of the LH and RH wing front and rear lower spar caps. We are issuing this AD to address cracked wing structure, which could result in failure of the wing.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2013-11R1, dated October 16, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Viking Air Limited Model CL-215-1A10 and CL-215-6B11 (CL-215T Variant) airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0638.

We gave the public the opportunity to participate in developing this final rule. The following presents the comment received on the NPRM and the FAA's response to that comment.

The commenter, Adam Geber, recommended using time-in-service hours instead of flight hours in the proposed AD. The commenter stated that maintenance hourly requirements are based on time-in-service rather than flight time, as defined in 14 CFR 1.1. The commenter further asserted that the term “flight hour” is not defined in 14 CFR 1.1, and that many 14 CFR part 91 regulations prescribe hourly maintenance requirements based on time-in-service, with no requirement to track flight time for maintenance purposes.

We disagree with the commenter's recommended changes, because flight hours, which are in current use and well understood in the aviation industry, are the most effective way of addressing the unsafe condition identified in this AD. Flight hours were used in the engineering evaluation for this AD, and the required actions of this AD are based on that evaluation. The use of flight hours in this AD is also in keeping with the previous related ADs, which use that measure for compliance times and inspection intervals. Additionally, since flight hours are used in this AD, operators are required to track them. AD requirements are not restricted by the definitions in 14 CFR 1.1 or the part 91 regulations quoted by commenter. We have not changed this AD in this regard.

We have revised references to the aircraft manufacturer name specified in AD 2013-11-03 throughout this final rule to identify the aircraft manufacturer name as published in the most recent type certificate data sheet (TCDS) for the affected models.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

Bombardier has issued Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016. This service information describes procedures for detecting cracks using repetitive borescope inspections of the LH and RH wing lower skin and repetitive eddy current inspections of the LH and RH wing front and rear lower spar caps. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 4 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 777-200, -200LR, -300, and -300ER series airplanes. The NPRM published in the Federal Register on July 6, 2018 (83 FR 31509). The NPRM was prompted by a report that showed a non-compliance exists on some in-service galley attendant seat fitting installations. The NPRM proposed to require modifications for galley mounted seat fittings.

We are issuing this AD to address non-compliant flight attendant seats, which could fail in a high-G crash and result in potential injury to flight attendants and consequent inability of the flight attendants to assist with passenger evacuation in a timely manner.

We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

Boeing indicated its support for the NPRM.

United Airlines recommended adding a statement to explain that if a reconfigured airplane's affected galley has been removed or replaced, and the associated manuals have been updated, then that airplane would not be affected by the AD.

We do not agree to add the statement. This AD applies to each airplane identified in the Effectivity section of Boeing Special Attention Service Bulletin 777-25-0649, Revision 1, dated October 6, 2017. However, for airplanes that have been modified, repaired, or altered so that accomplishment of that service information is affected, then under the provisions of paragraph (h) of this AD, we will consider requests for approval of an alternative method of compliance (AMOC). We have not changed this AD in this regard.

Gary Chan, a private citizen, requested that the FAA review the expected revision of Boeing Special Attention Service Bulletin 777-25-0649, Revision 1, dated October 6, 2017. The commenter noted that Zodiac Aerospace Service Bulletin 1016G-25-34, referenced in that Boeing service information, has been revised and it is expected that the Boeing service information will be updated accordingly. We infer that the commenter is also requesting that the FAA revise the NPRM to reference the updated service information.

We do not agree. We may not refer to any document that does not yet exist. In general terms, we are required by Office of the Federal Register (OFR) regulations for approval of materials “incorporated by reference,” as specified in 1 CFR 51.1(f), to either publish the service document contents as part of the actual AD language; or submit the service document to the OFR for approval as “referenced” material, in which case we may only refer to such material in the text of an AD. The AD may refer to the service document only if the OFR approved it for “incorporation by reference.” See 1 CFR part 51. We do not consider that delaying this action until release of the revised Boeing service information is warranted, since sufficient service information exists. However, under the provisions of paragraph (h) of this AD, we will consider requests for approval to use revised service information if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed the AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We reviewed Boeing Special Attention Service Bulletin 777-25-0649, Revision 1, dated October 6, 2017. This service information describes procedures for modifications for galley mounted seat fittings. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 50 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

According to the manufacturer, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all known costs in our cost estimate.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain PW PW4074, PW4074D, PW4077, PW4077D, PW4084D, PW4090, and PW4090-3 turbofan engines. The NPRM published in the Federal Register on October 10, 2018 (83 FR 50862). The NPRM was prompted by an in-flight failure of a 1st-stage LPC blade. The NPRM proposed to require initial and repetitive TAI inspections for cracks in certain 1st-stage LPC blades and removal of those blades that fail inspection. We are issuing this AD to address the unsafe condition on these products.

We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

PW and Japan Airlines (JAL) requested that we revise the Credit for Previous Actions paragraph of this AD to give credit for revisions of Pratt & Whitney Alert Service Bulletin (ASB) PW4G-112-A72-268, earlier than Revision No. 6, dated August 5, 2014. PW and JAL reason that TAI inspections performed using earlier revisions of the PW ASB meet the requirements of this AD.

We agree. We revised the Credit for Previous Actions paragraph of this AD to give credit for accomplishing the initial TAI inspection if operators used Pratt & Whitney ASB PW4G-112-A72-268, Revision No. 6, dated August 5, 2014, or earlier revisions, because this meets the intended safety requirements of this AD.

PW and JAL requested that we revise the Installation Prohibition paragraph to align with the wording in Table 1, Step 3, of Pratt & Whitney ASB PW4G-112-A72-268, Revision No. 7, dated September 6, 2018, which states, “All blades that have never been TAI inspected but have accumulated greater than 1,000 cycles must be inspected prior to December 31, 2027.” JAL reasoned that the intent of the Installation Prohibition is the same as the PW ASB.

JAL also requested that we define “install 1st-stage LPC blade” and clarify that the Installation Prohibition paragraph does not prohibit removing and reinstalling 1st-stage LPC blades for the purpose of relubrication.

We partially agree. We agree that the intent of the Installation Prohibition section in the NPRM was the same as the PW ASB. We also agree that 1st-stage LPC blades that are removed solely for relubrication do not need to be inspected before reinstallation because this AD intends to inspect 1st-stage LPC blades at every M-flange separation. We do not agree, however, to modify the Installation Prohibition paragraph as we have determined that this paragraph is unnecessary because the AD already requires the initial inspections at specific thresholds. These thresholds provide an acceptable level of safety. We removed the Installation Prohibition paragraph from this AD.

The Air Line Pilots Association, Boeing Company, and the National Transportation Safety Board expressed support for the NPRM as written.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

We reviewed Pratt & Whitney ASB PW4G-112-A72-268, Revision No. 7, dated September 6, 2018. The PW ASB describes procedures for performing 1st-stage LPC blade TAI inspections. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 120 engines installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these replacements:

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.

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

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

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

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

Background

Representative payees manage benefit payments for beneficiaries or recipients who are incapable, due to a mental or physical impairment, of managing their Social Security, Special Veterans Benefits, or Supplemental Security Income (SSI) payments, or of directing another person to manage those payments. Generally, if a beneficiary or recipient is under age 18, we will pay benefits to a representative payee; however, in certain situations, we make direct payments to a beneficiary under age 18 who shows the ability to manage the benefits. 1 In cases where the beneficiary or recipient is 18 years or older, we select a representative payee if we believe that payment of benefits through a representative payee, rather than direct payment to the beneficiary, will better serve the beneficiary's interest. A representative payee may be an organization, such as a social service agency, or a person, such as a parent, relative, or friend of the beneficiary. We require a representative payee to use benefits in the beneficiary's best interest and, with certain exceptions, to report expenditures to us to ensure the representative payee is using funds appropriately. 2

When a person or an organization requests to serve as a representative payee, we investigate the potential representative payee to help ensure that the person or organization will perform the duties of a representative payee responsibly. We look at factors such as the potential representative payee's relationship to the beneficiary, any past performance as a representative payee for other beneficiaries, and any criminal history.

On April 13, 2018, the President signed into law the Strengthening Protections for Social Security Beneficiaries Act of 2018. 3 Section 202 of the law  4 codifies our current policy to conduct criminal background checks on representative payee applicants and to prohibit the selection of certain representative payee applicants who have a felony conviction of committing, attempting, or conspiring to commit certain crimes. 5 In addition, the new law requires that we conduct criminal background checks on all currently serving representative payees who do not meet one of the exceptions set out in the law, and continue to do so at least once every five years. 6

On October 11, 2018, we published a Notice of Proposed Rulemaking (NPRM) in the Federal Register . 7 In the NPRM, we proposed to codify the requirements of section 202 to conduct background checks on representative payee applicants and to prohibit those representative payee applicants and representative payees with the statutorily enumerated felony convictions  8 from serving as a representative payee. We also proposed to implement the requirement that we conduct criminal background checks on all currently serving representative payees who do not meet one of the exceptions established in the law, and that we will continue to do so at least once every five years. We are adopting the proposed changes as final rules without revision.

In response to the NPRM, we received 11 timely submitted comments that addressed issues within the scope of our proposed rules. The comments are available through the eRulemaking docket, available online at www.regulations.gov, and then navigating to this rulemaking docket, SSA-2015-0006.

Comment: Some commenters objected to the proposed rules in their entirety, stating that prohibiting individuals convicted of the specified felonies from being representative payees is discriminatory against these individuals based on their legal status as convicted felons. In a related concern, other commenters who objected to the proposed rule maintained that we should provide statistical data demonstrating that (1) felons exploited their role as representative payees, or (2) prohibiting a convicted felon from serving as a representative payee results in more protection for beneficiaries.

Response: We acknowledge the commenters' concerns regarding these prohibitions. However, these rules restate the statutory prohibitions enacted by Congress and signed into law by the President, and as such we do not have the discretion to adopt the commenters' suggestions.

Comment: Other commenters asked whether there was a statute of limitations on our review of past criminal convictions, indicating that a criminal conviction, even for one of the crimes specified in the proposed rule, should be disregarded after a long enough period of time has lapsed after the conviction. In this regard, commenters also asked which crimes will be included in our criminal background checks.

Response: The enacted statute and these final rules do not provide an exception based on how long in the past a criminal conviction for one of the prohibited felonies may have occurred. Our criminal background checks look for all convictions for the prohibited felonies in the background history of a representative payee applicant and existing representative payees. Regarding the issue of which crimes will be included in our criminal background checks: Both the statute and this regulation list the specific crimes that prohibit individuals from becoming representative payees. However, we consider and evaluate all available information when we evaluate the suitability of a representative payee applicant. Accordingly, if our criminal background checks reveal convictions for a crime other than the ones listed as a qualifying bar in the statute and in this regulation, we may consider those convictions when we determine whether an applicant will be a suitable representative payee. While the convictions listed in the statute and in this regulation result in prohibition from serving as a representative payee, unless specifically excepted, we will not consider other convictions to absolutely prohibit the representative payee applicant from being selected as a representative payee.

Comment: Other commenters questioned whether a conviction for a prohibited felony would bar a person from serving as a representative payee for elderly parents or grandparents, or what would happen if a beneficiary only has prospective representative payees barred by these rules.

Response: The enacted statute and these final rules do not provide an exception for a child or grandchild with a prohibited felony to serve as a representative payee for either a parent or grandparent. However, under the statute and our rules, if the child or grandchild is the custodial court-appointed guardian of the beneficiary, or has received a Presidential or gubernatorial pardon for the conviction, we would not consider the conviction an absolute bar to serving as the representative payee.

Comment: One commenter disagreed with our usage of the term “custody” and “custodial spouse” because individuals who live at home with family, or in a group home, should not be interpreted as being in the family's custody. This commenter made suggestions for alternate language.

Response: We acknowledge the commenter's concern regarding the terminology, particularly in common usage. However, our use of “custodial” directly reflects the enacted statutory language.

We consulted with OMB and determined that this final rule does not meet the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Thus, OMB did not formally review the final rule.

This final rule is not subject to the requirements of Executive Order 13771 because it is administrative in nature and results in no more than de minimis costs.

We certify that this final rule will not have a significant economic impact on a substantial number of small entities because it affects only individuals. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

These rules do not create any new or affect any existing collections and, therefore, do not require Office of Management and Budget approval under the Paperwork Reduction Act.

What is our authority to make rules and set procedures for determining whether a person is disabled under the statutory definition?

The Act authorizes us to make rules and regulations and to establish necessary and appropriate procedures to implement them. 9

For the reasons stated in the preamble, we amend 20 CFR chapter III, parts 404, 408, and 416 as set forth below:

I. Executive Summary

An interim final rule (IFR) was published in the Federal Register on September 29, 2017 (82 FR 45438-45461) that established TRICARE Select and other TRICARE reforms. This rule is required to implement or partially implement several sections of NDAA-17, including sections 701, 706, 715, 718, and 729. As a “housekeeping” matter, this rule also includes necessary changes to the TRICARE program to conform to new statutory specifications enacted in the National Defense Authorization Act for Fiscal Year 2018 (NDAA-18) over which the Department has no administrative discretion. The legal authority for this rule also includes chapter 55 of title 10, United States Code. In implementing section 701 and partially implementing several other sections of NDAA-17, this rule advances all four components of the Military Health System's quadruple aim of improved readiness, better care, better health, and lower cost. The aim of improved readiness is served by reinforcing the vital role of the TRICARE Prime health plan to refer patients, particularly those needing specialty care, to military medical treatment facilities (MTFs) in order to ensure that military health care providers maintain clinical currency and proficiency in their professional fields. The objective of better care is enhanced by a number of improvements in beneficiary access to health care services, including increased geographical coverage for the TRICARE Select provider network, reduced administrative hurdles for TRICARE Prime enrollees to obtain urgent care services and specialty care referrals, and promotion of high value services and medications. The goal of better health is advanced by expanding TRICARE coverage of preventive care services, treatment of obesity, high-value care, and telehealth. Finally, the aim of lower cost is furthered by refining cost-benefit assessments for TRICARE plan specifications that remain under DoD's discretion and adding flexibilities to incentivize high-value health care services.

The IFR regarding the establishment of TRICARE Select and other TRICARE reforms was published in the Federal Register on September 29, 2017. Online comments were received from eighty-nine individuals, medical affiliated organizations, and military and veterans associations via www.regulations.gov. We sincerely appreciated all comments. Specific matters raised by those comments are summarized below. We have carefully considered all public comments. Except as noted below, we reaffirm the policies and procedures incorporated in the IFR and incorporate the rationale presented in the preamble of the IFR into this final rule.

The rule implements the new law (section 701 of NDAA-17) that establishes TRICARE Select as a self-managed, PPO program. It allows TRICARE Select beneficiaries to use the TRICARE civilian provider network, with fixed copayments for most outpatient services compared to care from non-network providers, as well as MTFs when space is available. Similar to the long operating “TRICARE Extra” and “TRICARE Standard” plans, which TRICARE Select replaces, a major feature is that enrollees will not have restrictions on their freedom of choice with respect to health care providers. TRICARE Select is based primarily on 10 U.S.C. 1075 (as added by section 701 of NDAA-17) and 10 U.S.C. 1097. With respect to beneficiary cost sharing, the statute introduces a new split of beneficiaries into two groups: One group (which the rule refers to as “Group A”) consists of sponsors and their family members who first became affiliated with the military through enlistment or appointment before January 1, 2018, and the second group (referred to as “Group B”) who first became affiliated on or after January 1, 2018. In general, TRICARE Select beneficiary total out of pocket costs (taking into account enrollment fees and copayments) for Group B are higher than for Group A.

In addition to implementing the statutory specifications, the final rule also makes improvements for TRICARE Select Group A enrollees, compared to the features of the former TRICARE Extra plan. One such improvement is to convert the current cost-sharing requirement of 15% for active duty family members and 20% for retirees and their family members of the allowable charge for care from a network provider to a fixed dollar copayment calculated to approximately equal 15% or 20% of the average allowable charge for the category of care involved. Consistent with prevailing private sector health program practices, the fixed dollar copayment is more predictable for the patient and easier for the network health care provider to administer. The breakdown of categories of care (such as outpatient primary care visit, specialty care visit, emergency room visit, etc.) contained in the rule is the same as the categories now specified in the statute for Group B Select enrollees.

A second improvement in TRICARE Select (for both Group A and Group B) is additional preventive care services that previously were only offered to TRICARE Prime beneficiaries will now (under the authority of 10 U.S.C. 1097 and NDAA-17) also be covered for TRICARE Select enrollees when furnished by a network health care provider. These are services recommended by the United States Preventive Services Task Force and the Health Resources and Services Administration of the Department of Health and Human Services.

These improvements are based partly on the statutory provision (10 U.S.C. 1075(c)(2)) that Group A Select enrollee cost-sharing requirements are calculated as if TRICARE Extra were still being carried out by DoD. TRICARE Extra specifications are based on the underlying authority of 10 U.S.C. 1097, which allows DoD to adopt special rules for the PPO plan. This statute was the basis for the original set of rules for TRICARE Extra, which were adopted in 1995, and is the authority for these improved rules for TRICARE Select Group A, adopted as if TRICARE Extra were still being carried out by DoD.

Under the IFR, the cost sharing rules applicable to TRICARE Select Group B are those specified in 10 U.S.C. 1075. For TRICARE Select Group A, in addition to the copayment rules noted above, consistent with 10 U.S.C. 1075, an enrollment fee of $150 per person or $300 per family will begin January 1, 2021, for most retiree families, with annual updates thereafter based on the cost of living adjustment (COLA) applied to retired pay. At the same time, the catastrophic cap will increase from $3,000 to $3,500 for these retiree families. These changes, however, will not apply to TRICARE Select Group A active duty families, survivors of members who died while on active duty, or disability retiree families; that is, no enrollment fee will be applicable to this group and the applicable catastrophic cap will continue to be $1,000 for active duty families as established under 10 U.S.C. 1079(b) and $3,000 for survivors of members who died while on active duty or disability retiree families as established under 10 U.S.C. 1086(b).

The Department received multiple comments expressing dissatisfaction with the TRICARE Select cost sharing, grandfathering, higher catastrophic caps, and how the increased fees were calculated. Many comments generally noted that fixed rates create a barrier to healthcare. It was expressed that service members and their families were promised free health care and that promise has been broken.

Response: We recognize the TRICARE Select cost shares and enrollment fees are higher than many expected. First, for Group B beneficiaries, the newly enacted out of pocket expenses are fixed by law (10 U.S.C. 1075), and the Department has implemented them without any modification.

Second, since the start of the TRICARE program in 1995, we've understood many people enroll in TRICARE Prime not because of a great desire to have their care managed by a primary care manager (PCM) or desire to undergo a referral and authorization process before receiving specialty care, but because of the simplicity of a known fixed copayment amount when seen by a network provider for care. This allows families to budget for their out-of-pocket costs versus paying a percentage of an unknown amount to be billed by the provider. We thought those not enrolled in TRICARE Prime would welcome this simplicity as well and do not perceive that a barrier to healthcare is created by establishing a fixed copayment that is generally comparable to an alternative specified percentage of allowable amounts for similar services. Therefore, because Congress mandated in NDAA-17 that TRICARE Select Group B beneficiaries have fixed copayment amounts for network care, the Department used existing authorities to calculate, to the extent practicable, TRICARE Select fixed copayments for network care also for Group A enrollees. When determined not to be practicable, as in the categories of inpatient admissions and inpatient skilled nursing/rehabilitation admissions, the calculated cost-sharing amounts are not converted to fixed dollar amounts.

While our goal is to provide at least 85% of TRICARE Select enrollees access to network providers, including those in non-PSAs, those using non-network providers will pay the same non-fixed cost shares ( i.e., percentage of allowed amounts), whether they are in Group A or B, the same as if they still had TRICARE Standard/Extra cost shares (a percentage of the Government allowed amount after satisfying the annual deductible amount).

According to law, on average, out-of-pocket expenses for Group A are not to be any more than what they would have been had we continued the previous TRICARE Standard/Extra cost shares (a percentage of the Government allowed amount). Similar to the copayment for TRICARE Prime, our HMO option, the TRICARE Select calculated copayment amounts do not have separate copayments for ancillary services such as laboratory or radiology associated with the encounter, or for the facility charge if the encounter is in a facility, e.g., a hospital outpatient department. Although some concern was expressed that the inclusion of ancillary services in calculating the fixed copayment for the basic service resulted in a higher fixed copayment than existed under TRICARE Standard/Extra, the slight increase in the calculated copay accounts for separate copayments under TRICARE Standard/Extra for both the basic service and the ancillary service. Now, when a TRICARE Select enrollee pays a copayment for an office visit, any ancillary or facility changes would be part of that fixed copayment amount and no other out of pocket expense is incurred by the beneficiary. Having carefully considered this issue, our conclusion is that the advantages of having a predictable, fixed copayment amount under both TRICARE Prime and TRICARE Select outweigh the concerns about including the ancillary services in the calculation.

Commenters also objected in general to TRICARE out of pocket cost increases, stating they were promised either free health care for life or objected to any future increases in their out of pocket expenses. We gratefully acknowledge the contributions to our Nation by those who have served in uniform as well as their family members. However, as a percentage of total health care costs, the beneficiary's cost share is substantially lower today than when the TRICARE program began more than 20 years ago. Additionally, while beneficiary desires and expectations are understandable, neither the law nor DoD policy ever promised free health care or the availability of TRICARE Prime in all areas. It can be fairly said that they have been promised a very good health care program, and in the context of health plans across the United States, this promise has been kept.

3. Provisions of the Final Rule: The final rule is consistent with the IFR.

A second major feature of the IFR, primarily based on 10 U.S.C. 1075a (also added by section 701 of NDAA-17), is the continuation of TRICARE Prime as a managed care, HMO-like program. It generally features use of MTFs and substantially reduced out-of-pocket costs for authorized care provided outside MTFs. Beneficiaries generally agree to use MTFs and designated civilian provider networks and to follow certain managed care rules and procedures. Like TRICARE Select, with respect to beneficiary cost sharing, the statute introduces a new split of beneficiaries into two groups (again referred to in the rule as Group A and Group B) based on the military sponsor's initial enlistment or appointment before January 1, 2018 (Group A), or on or after that date (Group B). Section 1075a mandated fixed copayments for specific categories of care received by Group B beneficiaries. However, Section 1075a only directed that the copayments for Group A should be calculated in accordance with other authority granted to the Department. At the time of issuance of the IFR, the copayments for Group A had not been calculated but it specified that Group A cost sharing could not exceed the amount for each category of care set for Group B in Section 1075a. The Department continued to have the authority to set the TRICARE Prime Group A copayments, and they were set to match those of the Group B TRICARE Prime enrollees mandated by law. As such, TRICARE Prime copayments for both Group A and Group B enrollees are the same. It's important to note active duty family members (Group A or B) enrolled in TRICARE Prime continue to enjoy a $0 out of pocket expense when authorized care is rendered by a TRICARE network provider.

The government received many comments expressing dissatisfaction with the authority, interpretation and methodology for copayment rates for grandfathered (Group A) beneficiaries. Among the comments was that Congress intended no change for grandfathered beneficiaries.

Response: With the addition of 10 U.S.C. 1075a by NDAA-17, Congress established specific out of pocket expenses for Group B beneficiaries enrolled in TRICARE Prime as of January 1, 2018. In addition to a difference in the amount of the copayments, Congress also created additional categories of visits for Group B enrollees. With respect to Group A beneficiaries enrolled in TRICARE Prime, Congress did not specify copayment amounts but rather directed the Department to calculate cost-sharing requirements under other existing authorities.

The IFR adopted for Group A beneficiaries enrolled in TRICARE Prime the same structure of categories of care that Congress adopted for Group B. In addition, it provided an overview of the authority and discretion of the Department for calculating the actual amount to be established as Group A cost sharing for each category of care. Consistent with that discretion under current statute and regulation, the Department determined the cost sharing for each category of care for Group A shall be the same amount as required for Group B under Section 1075a. The establishment of consistent copayments for all TRICARE Prime enrollees contributes to the effective and efficient administration of TRICARE, removes complexities in network provider billing for Prime enrollees, and simplifies the communication of program information to the public. In addition, it has been determined that the slight increase in fixed copayments for Group A are a reasonable and fair amount considering the overall rise in health care costs since initial establishment of the outpatient visit copayment first at $12 over twenty-three years ago in 1995. In addition, as noted in the preamble to the IFR, TRICARE Prime copays were originally intended to be updated every year or so to maintain “cost neutrality” compared to the TRICARE Standard program. But as things worked out, this is the first update in more than 20 years.

The Department is proud that TRICARE remains one of the most comprehensive health benefits available in this country at exceptionally low beneficiary cost—a benefit that is commensurate with the sacrifice of those whom it serves.

3. Provisions of the Final Rule: The final rule is consistent with the IFR.

A third significant change in the IFR is a set of improvements in standards for access to care. The TRICARE Select plan replaces TRICARE Standard as the generally available plan worldwide. Under TRICARE Select, enrolled beneficiaries can choose any TRICARE authorized provider for their healthcare, and they will enjoy known out of pocket costs if they choose providers within the TRICARE civilian network. The vast majority of TRICARE beneficiaries located in the United States will have access to TRICARE network providers (it is DoD's plan that at least 85% of the U.S. beneficiary population enrolled in TRICARE Select will have access to a preferred provider network upon implementation), similar to the old TRICARE Extra option, but with the benefit of predictable fixed dollar copayments. In cases in which a network provider is not available to a TRICARE Select enrollee, such as in remote locations where there are very few primary or specialty providers, enrollees will still have access to any TRICARE authorized provider, with cost sharing comparable to the old TRICARE Standard plan ( i.e., 25% for retired category beneficiaries).

A second IFR enhancement for access to care is that if a TRICARE Prime enrollee seeks to obtain an appointment for care from the managed care support contractor but is not offered an appointment within the applicable access time standards from a network provider, the enrollee will be authorized to receive care from any TRICARE authorized provider without incurring the additional fees associated with point-of-service care.

A third access to care improvement under the IFR is that the TRICARE Prime referral requirement may be waived for urgent care visits for Prime enrollees other than active duty members. This is similar to the former pilot program, which waived the referral requirement (other than for active duty members) for up to two urgent care visits per year. The specific number of urgent care visits without a referral will be determined annually prior to the beginning of the open season enrollment period. During plan year 2018, there is no limit to the number of urgent care visits that a Prime beneficiary (other than an active duty member) may receive without a referral from a PCM. The Department has no current plans to change that, but in order to evaluate the ongoing appropriateness of this policy, it remains a year-by-year determination.

A fourth access to care improvement is adoption of the new statutory provision that a PCM who believes a referral to a specialty care network provider for outpatient care is medically necessary and appropriate need not obtain preauthorization from the TRICARE regional contractor. TRICARE regional contractor preauthorization is only required in this particular context with respect to a PCM's referral for inpatient hospitalization, inpatient care at a skilled nursing facility, inpatient care at a residential treatment center, or inpatient care at a rehabilitation facility.

It is important to note that the removal of the need for TRICARE Prime PCMs to get managed care support contractor preauthorization approval for referral to specialty care in NDAA-17 Section 701(c) [amending 10 U.S.C. 1095f] applies to the specialty consult itself but does not serve to preauthorize specific treatments, tests, or procedures that may be indicated by such consult. In other words, the treatment-specific preauthorization requirements separately set forth in the TRICARE Manuals still apply across the board. That change also applies only to referrals by a PCM to other network providers or within the network for covered services. Any referral to non-network specialty providers or services is not exempt from the preauthorization requirements. It is essential that the NDAA language concerning PCM referrals not be taken out of context and read too broadly—that language does not affect the longstanding and separate preauthorization requirements that apply to certain treatments/services/equipment generally.

To explain further, Section 701 restrictions on prior authorizations ( i.e., 10 U.S.C. 1095f(b) and (c)) only apply to TRICARE Prime enrollees. Thus, the IFR states in § 199.17(i): “All quality assurance, utilization review, and preauthorization requirements for the basic CHAMPUS program, as set forth in this part (see especially applicable provisions in §§ 199.4 and 199.15), are applicable to Prime and Select except as provided in this chapter.” The preauthorization requirements that are generally applicable under TRICARE independent of TRICARE Prime referrals, including those under the Pharmacy Benefits Program (under 10 U.S.C. 1074g and § 199.21), certain laboratory and other ancillary services, and durable medical equipment.

Therefore, TRICARE Select enrollees are also subject to all TRICARE Basic program preauthorization requirements even if the TRICARE Select enrollee seeks specialty care from a network provider. In sum, the preauthorization and referral requirements under TRICARE are an integral part of the program, were not entirely removed by NDAA-17, and can be complex in certain circumstances.

The government received many comments regarding the improved access to care and urgent care policy. Comments were received from beneficiaries who do not live near active military installations and expressed concerns about finding TRICARE authorized providers in their area or being discriminated against because the TRICARE Prime HMO option is not offered where they live. Other general concerns were expressed regarding inability to get timely scheduled appointments at MTFs. However, overall, comments were favorable about allowing unregulated urgent care visits.

Response: As to the issue of beneficiaries who do not live near military installations not being able to find TRICARE authorized providers, we believe those who enroll in TRICARE Select will have better access to care from network providers than previous TRICARE Standard beneficiaries. It is the Department's plan that the TRICARE contractors offer improved access to ensure that at least 85% of TRICARE Select enrollees in each region in the U.S. have access to networks of providers near where they live. Therefore, for the majority of TRICARE Select enrollees, they will enjoy access to network providers that will charge no more than the established TRICARE copayment or cost share and will file claims on their behalf. Otherwise, TRICARE Select enrollees who do not live near an established network of preferred providers may use any TRICARE authorized provider. Finally, as a self-managed plan, TRICARE Select enrollees may elect to seek care from any TRICARE authorized provider, whether network or network, and also enjoy space available care at military hospitals and clinics. Therefore, TRICARE Select enrollees will generally have greater access to care but in no case less access than TRICARE Standard beneficiaries have always enjoyed.

Several commenters claimed the Department discriminates against them because it does not offer the TRICARE Prime (HMO-like) option as they do not live near an active military installation. As noted in the IFR, the locations where TRICARE Prime will be offered will be determined by the Director, Defense Health Agency (DHA) and announced prior to the annual open season enrollment period. The final rule continues our principle that the purpose of TRICARE Prime is to support the medical readiness of the armed forces and the readiness of medical personnel in areas of one or more MTFs. The rule preserves the Department's discretion with respect to the locations where TRICARE Prime is offered.

As concerns the issue of timely appointments at MTFs, we are diligently working to improve beneficiary access and satisfaction with care at MTFs and to address the concerns raised with MTF same day care and scheduling MTF appointments. Regarding concerns about the quality of MTF care, all MTFs have avenues to address concerns from patients, and we urge beneficiaries to utilize the services of the Customer Service and/or Quality Officers to address specific health care concerns.

With respect to access to care standards for TRICARE Select enrollees, we did not specifically highlight this issue in the IFR because there was more focus on TRICARE Prime access standards. But the provisions of the IFR regarding the size, composition, and mix of providers being adequate to meet the needs of the enrolled population served apply to both TRICARE Prime and TRICARE Select enrollees. Because TRICARE Select is a self-managed plan where enrollees may choose to get care when and where they wish with no referrals, there are some differences between the TRICARE Prime and TRICARE Select plans regarding how those standards are implemented. But the access standards regarding availability of routine primary care, specialty care, urgent care, and emergency services are the same. As a means of monitoring implementation for TRICARE Select enrollees, their satisfaction with access to care will be surveyed and compared with those of high-performing health care systems in the United States.

4. Provisions of the Final Rule: The final rule is consistent with the IFR.

The IFR made a number of other improvements in TRICARE Prime and TRICARE Select based on provisions of sections 701(h), 706, 718, and 729 of NDAA-17. These involved high value services and medications, population-based health outcomes and focus more on preventive care, medical intervention programs, to address chronic diseases and other conditions and healthy lifestyle interventions, and telehealth services.

The IFR authorizes coverage under TRICARE Prime and TRICARE Select for medically necessary treatment by a network provider of obesity even if it is the sole or major condition treated.

The Department received several comments expressing dissatisfaction with how the Department plans to implement coverage for medically necessary treatment of obesity, even if it is the sole of major condition treated. Registered Dietitian Nutritionists (RDNs) recommended that the provision more specifically include RDNs in the treating of obesity as RDNs are experts in food and nutrition and may be more knowledgeable than other health practitioners in treating this nutrition-related disease through diet and behavior modification.

Response: Regarding the comment about a RDN's role in the treatment of obesity, the TRICARE regulation recognizes Registered Dietitians and Nutritionists as TRICARE authorized providers if they meet the required professional training and licensing requirements. If the otherwise qualified RDN provides medically necessary services in the treatment of obesity for an eligible beneficiary while under the supervision of a physician, the services will be covered as a TRICARE benefit. Nothing is required to be added by the final rule to authorize RDN services in the treatment of obesity.

3. Provisions of the Final Rule: The final rule is consistent with the interim final rule.

A fourth major change in the IFR is the implementation of the new statutory design for the health care enrollment system. Starting in calendar year 2018, beneficiaries other than active duty members and TRICARE-for-Life beneficiaries must elect to enroll in TRICARE Select or TRICARE Prime in order to be covered by the private sector care portion of TRICARE. While TRICARE-for-Life beneficiaries under the age of 65 are permitted to enroll in TRICARE Prime under limited circumstances, their failure to enroll will not affect their coverage by the private sector care portion of TRICARE. Enrollment will be done during an open season period prior to the beginning of each plan year, which operates with the calendar year. An enrollment choice will be effective for the plan year. As an exception to the open season enrollment rule, enrollment changes can be made during the plan year for certain qualifying events, such as a change in eligibility status, marriage, divorce, birth of a new family member, relocation, loss of other health insurance, or other events.

Eligible Prime or Select beneficiaries who do not enroll will no longer have private sector care coverage under the TRICARE program (including the TRICARE retail pharmacy and mail order pharmacy programs) until the next open enrollment season or they have a qualifying event except that they do not lose any statutory eligibility for space-available care in military medical treatment facilities. There is a limited grace period exception to this enrollment requirement for calendar year 2018, as provided in section 701(d)(3) of NDAA-17, to give beneficiaries another chance to adjust to this new requirement for annual enrollment. For the administrative convenience of beneficiaries, there are also procedures for automatic enrollment in TRICARE Prime or TRICARE Select for most active duty family members, and automatic renewal of enrollments of covered beneficiaries, subject to the opportunity to decline or cancel.

Due to a compressed implementation schedule that precluded an annual open season enrollment period in calendar year 2017 for existing TRICARE beneficiaries to elect or change their TRICARE coverage, the Department converted existing TRICARE Standard coverage to TRICARE Select coverage effective January 1, 2018. All other existing TRICARE coverages were renewed effective January 1, 2018. As noted previously, beneficiaries may elect to change their TRICARE coverage anytime during the limited grace period in calendar year 2018.

We received one public comment regarding the enrollment changes and open enrollment times. Instead of having to enroll in a TRICARE health plan, eligible beneficiaries simply would show their military identification card to any civilian provider, and then TRICARE would reimburse the provider. Or alternatively, the federal government should pay for the most expensive, lowest deductible plan offered by any insurance company, and charge retirees a reasonable percentage of the costs.

Response: Neither suggestion is feasible. First, the law requires a TRICARE enrollment system, with specified enrollment fees, for all TRICARE eligible beneficiaries except for TRICARE-for-Life beneficiaries ( i.e., those eligible for the Medicare wraparound coverage under 10 U.S.C. 1086(d)) and beneficiaries accessing space available care at MTFs. Under the required enrollment system, an eligible beneficiary is required to elect which option—TRICARE Prime or Select—to enroll in in order to be covered under the private sector health care benefit program. So, the proposed alternative is not consistent with the requirements of law. Second, the alternative of allowing the government to purchase a commercial insurance plan for beneficiaries also is not envisioned under the law. The law mandates TRICARE as the program, as administered through the TRICARE regulation, by which authorized beneficiaries obtain DoD coverage on their civilian health care claims.

3. Provisions of the Final Rule: The final rule is consistent with the IFR.

The IFR has several other noteworthy provisions. These included the continuation of benefits for TRICARE-for-Life beneficiaries, cost sharing levels for active duty family members, and TRICARE basic program benefits. Additionally, NDAA-17, section 701 directed Prime and Select beneficiary cost sharing be on a calendar year basis. In addition, a technical amendment enacted in NDAA-18, section 739(d), similarly directed that cost sharing of civilian health care by other beneficiaries also be on a calendar year basis.

The IFR adopted several changes to regulatory provisions applicable to the TRICARE Young Adult, TRICARE Reserve Select, TRICARE Retired Reserve, and TRICARE dental coverage.

Also, the IFR adopted several changes to regulatory provisions applicable to benefit coverage of medically necessary food and vitamins. Section 714 of NDAA-17 confirms long-standing TRICARE policy authorizing benefit coverage of medically necessary vitamins when prescribed for management of a covered disease or condition. In addition, while section 714 confirms long-standing TRICARE policy authorizing medical nutritional therapy coverage of medically necessary food and medical equipment/supplies necessary to administer such food when prescribed for dietary management of a covered disease or condition, the law also allows the medically necessary food benefit to include coverage of low protein modified foods. Consistent with this we also recognize the role of Nutritionists and Registered Dieticians in the appropriate planning for the use of medically necessary foods.

Regarding changes to the regulation provisions on medically necessary food, we received two comments from national medical associations that suggested that the statute covers “partial or exclusive” feeding while TRICARE policy issuance implementing the regulation continues to only cover foods that provide “primary source” of calories. Also, one commenter challenged the exclusion of over-the-counter formula that don't need prescriptions arguing that the language of the statute allows medical foods furnished “pursuant to prescription, order, or recommendation (as applicable)” of a qualified provider.

Response: The TRICARE Medically Necessary Food policy (TRICARE Policy Manual, Chapter 8, Section 7.2), as revised in implementation of the IFR, allows coverage of specifically formulated and processed food for the partial or exclusive feeding of an individual. Regarding the issue of over-the-counter formula, we note that the rule language is consistent with the statutory language in that one of the criteria for coverage of medically necessary food is a prescription, order, or recommendation of a TRICARE authorized provider. No revision in the final rule is required. However, the specific issue of coverage of over-the counter formula will be further reviewed to ensure TRICARE policy implementing the rule provides reasonable access to formula when qualifying as medically necessary food.

As noted, the IFR adopted several conforming changes to regulatory provisions applicable to general TRICARE administration reflecting transition from program administration on a fiscal year to a calendar year basis and creating a program plan year for enrollment and benefit coverage on a calendar year basis. Further review has identified the need to provide flexibility in the updating of certain prospective payment methodologies to more closely correspond with the pertinent program plan benefit year. In that regard, the IFR will be revised in the final rule to provide such flexibility in § 199.14(a)(1)(i)(D) for the update of the TRICARE Diagnostic Related Group (DRG) system.

3. Provisions of the Final Rule: The final rule is consistent with the interim final rule except for revision of the TRICARE DRG system updates in § 199.14(a)(1)(i)(D) transitioning such updates to the TRICARE program plan year.

The preamble to the IFR included tables recapping the new cost sharing requirements for beneficiaries as outlined in the summary of provisions of the IFR as the rates specifically related to calendar year 2018. At the time, the tables were incomplete in that certain requirements had not yet been determined. In addition, notice was given that all fees are subject to review and annual updating for future calendar years in accordance with law. The final rates for calendar year 2018 were published in the Federal Register on January 5, 2018, including the two official recap tables as Appendix A. The official tables are also available at www.health.mil/rates. In future years, a summary of changes in the TRICARE program (including updated rates) will be published in connection with the open season enrollment period. In view of the public notice of the official rates for calendar year 2018 and their availability on the www.health.mil/rate website, the recap tables are not included as background information for this final rule.

In addition, notice was given that all fees are subject to review and annual updating for future calendar years in accordance with law. Consistent with our previous implementation of law applicable to TRICARE Prime, we will utilize the overall annual COLA percentage increase under 10 U.S.C. 1401a(b)(2) when necessary to update the fixed dollar amounts in the tables for TRICARE Prime and TRICARE Select beginning calendar year 2019. This will permit maintaining uniform rates to facilitate efficiency and effectiveness in program administration.

2. Provisions of the Final Rule: The final rule is consistent with the IFR.

We received three comments that were beyond the scope of the IFR which included; opioid overdoses, dual basic allowance for housing for members in the same residence, and chiropractic benefits. Though not addressed in the final rule, these comments will be reviewed for action by appropriate DoD subject matter experts.

Certain provisions of the NDAA-18 amended or provided technical corrections to the provisions of the NDAA-17. Necessary revisions in the final rule based on these provisions are included to the extent the Department has no administrative discretion. The following provisions of NDAA-18 are noted.

(1) Section 701(a) and (b) of NDAA-18 amended 10 U.S.C. 1076d (TRS) and 1076e (TRR), respectively, to correct the unintentional deletion of space available access to care to MTFs by TRS and TRR enrollees. Section 199.24(a)(4)(iv) for TRS and § 199.25(a)(4)(iv) for TRR already include provisions for space available care at MTFs, when authorized, for enrollees. Therefore, no regulatory change is needed.

(2) Section 739(a) of NDAA-18 amended the definition of “TRICARE Standard” in 10 U.S.C. 1072(15) to correct the statutory authorities of “TRICARE Standard” to be section 1079(a) or 1086(a) of this title. The definition otherwise remains intact. The final rule makes a conforming change to the regulatory definition of “TRICARE Standard.”

(3) Section 739(b)(1)(A) of NDAA-18 amended 10 U.S.C. 1075(d) by adding at the end a new paragraph pertaining to TRICARE Select, providing that the cost-sharing requirements applicable to services not specifically addressed in the statue shall be established by the Secretary. The final rule (section 199.17(1)(1)(ii)) makes a conforming change to the regulation.

(4) Section 739(b)(1)(B) of NDAA-18 amended 10 U.S.C. 1075(d)(1) in the first column of the table pertaining to TRICARE Select cost sharing amounts by striking out: “Ambulance civilian network” and inserting “Ground ambulance civilian network.” Section 199.17(k)(2)(vi) included the Department's interpretation and implementation of the law as applying to ground ambulance services. NDAA-18 merely supports that interpretation. Therefore, no regulatory change is needed.

(5) Section 739(b)(2)(A) of NDAA-18 amended 10 U.S.C. 1075a(b) by adding a new paragraph providing that the cost-sharing requirements applicable to services not specifically addressed in the table set forth in the statute shall be established by the Secretary. We are making a conforming change to the regulation (§ 199.17(1)(2)(ii)).

(6) Section 739(b)(2)(B) of NDAA-18 amended 10 U.S.C. 1075a(b)(1) in the first column of the table pertaining to TRICARE Prime cost sharing amounts by striking out “Ambulance civilian network” and inserting “Ground ambulance civilian network.” Section 199.17(k)(2)(vi) included the Department's interpretation and implementation of the law as applying to ground ambulance services. NDAA-18 merely supports that interpretation. Therefore, no regulatory change is needed.

(7) Section 739(d)(1) and (2) of NDAA-18 amended 10 U.S.C. 1079(b) and 1086(b) respectively to reflect transition of deductibles, catastrophic caps, and program reimbursement limitations, as applicable, from fiscal year to calendar year for TRICARE beneficiaries not otherwise covered under the TRICARE Prime and Select programs. The IFR included this transition for consistency and ease of general TRICARE administration. The NDAA-18 amendments reflect congressional agreement through codification of the transition. Therefore, no regulatory change is needed.

(8) Section 739(e) of NDAA-18 amended 10 U.S.C. 1095f(b) by adding a new paragraph requiring TRICARE Prime enrollees to obtain preauthorization with respect to a referral for inpatient care at a residential treatment facility. Section 199.17(n)(2)(iv)(D) already included this language. Therefore, no regulatory change is needed.

(9) Section 739(f) of NDAA-18 amended 10 U.S.C. 1110b(c)(1) to clarify that an eligible beneficiary who enrolls in the TRICARE Young Adult (TYA) program will pay the TYA premium in lieu of either the otherwise applicable TRICARE Prime or Select premium. Section 199.26(a)(4)(ii) included the clarification regarding the applicable premium for a TRICARE Young Adult enrollee based on any option to purchase TRICARE Prime or Select program coverage. Therefore, no regulatory change is needed.

The following technical corrections are being made to the IFR by the final rule.

(1) In § 199.17(f)(4), the reference to “paragraph (f)(5)” is revised to read “paragraph (f)(4).”

(2) In § 199.17(n)(2)(vi), the reference to “paragraph (l)(1)(iv)” is revised to read “paragraph (l)(1)(iii).”

E.O. 13771 seeks to control costs associated with the government imposition of private expenditures required to comply with Federal regulation and to reduce regulations that impose such costs. This rule does not include government imposition of private expenditures required to comply with Federal regulation or requires regulations that impose such costs. Therefore, consistent with the analysis of transfer payments under OMB Circular A-4, this final rule does not involve regulatory costs subject to E.O. 13771.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. It has been determined that this rule is not a significant regulatory action. The rule does not: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a section of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in these Executive Orders.

Under the Congressional Review Act (CRA), a major rule may not take effect until at least 60 days after submission to Congress of a report regarding the rule. A major rule is one that would have an annual effect on the economy of $100 million or more or have certain other impacts. The final rule is not a major rule under the CRA.

The Regulatory Flexibility Act (RFA) requires that each Federal agency analyze options for regulatory relief of small business if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. This final rule is not an economically significant regulatory action, and it will not have a significant impact on a substantial number of small entities. Therefore, this final rule is not subject to the requirements of the RFA.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $140 million. This final rule will not mandate any requirements for state, local, or tribal governments or the private sector.

This rulemaking does not contain a “collection of information” requirement, and will not impose additional information collection requirements on the public under Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35).

This final rule has been examined for its impact under E.O. 13132, and it does not contain policies that have federalism implications that would have substantial direct effects on the States, on the relationship between the national Government and the States, or on the distribution of powers and responsibilities among the various levels of Government. Therefore, consultation with State and local officials is not required.

Accordingly, the interim final rule amending 32 CFR part 199 which was published at 82 FR 45438-45461 on September 29, 2017 is adopted as a final rule with the following changes:

On October 30, 2018, Pyrotecnico, Inc., of New Castle, PA, notified the Coast Guard that it will be conducting fireworks displays, sponsored by The Wharf DC, from 7 p.m. to 11:59 p.m. for various events from January 12, 2019, through December 31, 2019. The fireworks are to be launched from a barge in the Washington Channel, adjacent to The Wharf DC in Washington, DC. In response, on November 14, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Safety Zone for Fireworks Displays; Upper Potomac River, Washington Channel, DC” (83 FR 56768). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended December 14, 2018, we received 29 comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable and contrary to the public interest because immediate action is needed to mitigate the potential safety hazards associated with a fireworks display in this location.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port (COTP) Maryland-NCR has determined that potential hazards associated with the fireworks to be used in these displays will be a safety concern for anyone within a 200-foot radius of the fireworks barge. This rule is needed to ensure safety of vessels on the navigable waters within 200 feet of the fireworks barge on the Washington Channel before, during, and after the scheduled events.

As noted above, we received 29 public submissions to the docket responding to our NPRM published November 14, 2018. We thank all of the commenters for taking time to review the NPRM and submit comments regarding this action.

The majority of commenters expressed support for the rule but there were four issues presented.

The size of the safety zone is not effective and should be increased for public safety purposes.

The minimum safe distance from the fireworks barge used by the Coast Guard to determine the size of the safety zone is based on industry standards for outdoor aerial fireworks set by the National Fire Protection Association (NFPA). The NFPA standard for this fireworks display is 140 feet from the discharge site. At the request of the contracted fireworks company, Pyrotecnico, the Coast Guard is using 200 feet for the size of its safety zone, which is an increase of approximately 40 percent above the safe distance set by the NFPA.

The duration of the enforcement of the zone, from 7 p.m. until 11:59 p.m., is excessive and doesn't agree with the duration of a typical fireworks show.

Although these fireworks shows are typically of short duration, not all of these fireworks displays will be scheduled to occur at the same time of the evening throughout the year. The actual enforcement period used for each of these fireworks events is expected to be two hours. In developing the length of the safety zone enforcement period of five hours, the Coast Guard has taken care to avoid imposing restrictions on waterway usage longer than what is justified to ensure the safety of the public.

A barrier or sign, and other methods of notice, should be used to separate the zone from the rest of the waterway and its users.

The following forms of notice will be provided for each fireworks display. The fireworks barge that operates within the safety zone will have a sign affixed to the port and starboard side of the barge labeled “FIREWORKS—DANGER—STAY AWAY” to provide on-scene notice that the safety zone will be enforced on that day. Patrol vessels assigned by the COTP Maryland-National Capital Region will be present to monitor the fireworks display and enforce the safety zone. In addition, the COTP Maryland-National Capital Region will notify the public of the specific enforcement times of the safety zone by all appropriate means to affect the widest publicity among the affected segments of the public, including publishing a Notice of Enforcement in the Federal Register and an article in the Local Notice to Mariners. Broadcast Notice to Mariners will also be made for each of these events, to begin prior to that start of the scheduled event, and to continue to notify the public, until immediately after its completion.

Waterway users must be notified with ample time so that they have the ability to obtain the authorization required to transit the area of the safety zone.

Since the forms of notice stated previously will be provided in advance of each fireworks display, waterway users will have the time needed to request authorization to transit the area of the safety zone and make appropriate voyage plans.

There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a temporary safety zone in the Washington Channel from January 12, 2019, through December 31, 2019. The safety zone will cover all navigable waters of the Washington Channel within 200 feet of the fireworks barge. For each event, the barge will be located within an area bounded on the south by latitude 38°52′30″ W, and bounded on the north by the southern extent of the Francis Case (I-395) Memorial Bridge, located at Washington, DC. The safety zone will be enforced from 7 p.m. until 11:59 p.m. for each fireworks display scheduled from January 12, 2019, through December 31, 2019. The duration of the safety zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, duration, and time-of-day of the safety zone. Although vessel traffic will not be able to safely transit around this safety zone when being enforced, the impact would be for less than 5 hours during the evening when vessel traffic in Washington Channel is normally low. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

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

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

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

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

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will be in effect for the entire year, however, when activated, lasting less than 5 hours that prohibits entry within a portion of the Washington Channel. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

Due to technical errors and dropped amendments in editing, VA is correcting its final rule, VA Claims and Appeals Modernization, that published January 18, 2019, in the Federal Register at 84 FR 138.

In FR Rule Doc. No. 2018-28350, beginning on page 138 in the issue of January 18, 2019, make the following corrections.

1. On page 139, second column, third paragraph under “ B. Comments Concerning § 3.103—Procedural Due Process and Other Rights, ” in last sentence (line 21), remove “to § 3.103(d)(2)”.

2. On page 146, first column, in line 22, correct “§ 3.351(c)” to read “§ 3.151(c)”, and in line 24, correct “admistrative” to read “administrative”.

3. On page 168, second column, correct instruction 8 to read as follows:

“8. In § 3.114, remove the word “reopened” and add in its place the word “supplemental”.”

4. On page 169, first column, in the amendment to § 3.156, add introductory text, per instruction 11b, and correct the third sentence in paragraph (a) to read as follows:

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

On June 15, 2018 (83 FR 27936), the EPA published a Notice of Proposed Rulemaking (NPRM) for the State of Connecticut. The NPRM proposed approval of removing the requirement that a source would have to obtain a PSD permit solely due to its GHG emissions, commonly known as “Step 2” sources. The formal SIP revision was submitted by Connecticut on February 15, 2018. The rationale for the EPA's proposed action is explained in the NPRM and will not be restated here.

The EPA received four comments during the comment period. One comment supported the EPA's proposed action. Three comments discuss subjects outside the scope of this SIP action, do not explain (or provide a legal basis for) how the proposed action should differ in any way, and make no specific mention of the proposed action. As such, these three comments are not germane and do not require further response to finalize the action as proposed.

The EPA is approving Connecticut's removal from Connecticut's SIP of the requirement that sources must obtain a PSD permit based solely on a source's GHG emissions.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference revisions to RSCA Section 22a-174-3a(a)(1) entitled “Applicability,” RSCA Section 22a- 174-3a(j)(1) for when control technology applies, and RSCA Sections 22a-174-3a(k)(1) and (2) regarding applicability of GHGs for major stationary sources and major modifications, in the amendments to 40 CFR part 52 set forth below. All three state regulations were effective February 8, 2018. The EPA has made, and will continue to make, these documents generally available electronically through https://www.regulations.gov.

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

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

• This action is not an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

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

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

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

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

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

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

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 16, 2019. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

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

I. General Information A. Does this action apply to me?

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0530 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before April 16, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0530, by one of the following methods:

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

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

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

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

In the Federal Register of February 27, 2018 (83 FR 8408) (FRL-9972-17), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of pesticide petitions (PP 7F8595 and 7F8633) by Bayer CropScience LP2, T.W. Alexander Dr., Research Triangle Park, NC 27709. The petitions requested that 40 CFR part 180 be amended by establishing a tolerance for residues of the fungicide trifloxystrobin in or on flax, seed at 0.4 parts per million (ppm) (7F8595) and requested an amendment of the existing tolerance in or on grain, aspirated fractions from 5.0 ppm to 15 ppm (7F8633). That document referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket, http://www.regulations.gov. Comments were received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

Based upon review of the data supporting the petition, EPA has modified the commodity definitions and tolerance values. The reason for these changes are explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for trifloxystrobin including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with trifloxystobin follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

With repeated dosing, the liver is consistently the target organ for trifloxystrobin. Liver effects characterized by an increase in liver weights and an increased incidence of hepatocellular hypertrophy and/or hepatocellular necrosis were seen in rats, mice, and dogs. The effects of reduced body weights and food consumption were also found in the majority of the toxicity studies. Intestinal disturbances, as indicated by diarrhea and vomiting, were seen in dogs and rats at higher dose levels relative to those which caused liver and body weight effects. This finding was consistent with those produced by other members of the strobilurin class.

In the rabbit developmental toxicity study, an increase in the incidence of fused sternabrae was seen at a dose (500 mg/kg/day) 10 times higher than the maternal LOAEL (50 mg/kg/day). No developmental toxicity was seen at the limit dose (1,000 mg/kg) in the rat developmental toxicity study, but decreased body weight and food consumption was found in the maternal animals at 100 mg/kg/day or above. In the rat reproduction study, both parent and offspring showed decreases in body weight during lactation at similar dose levels (55.3 mg/kg/day). Therefore, there is no evidence of a qualitative or quantitative increase in sensitivity in the fetuses and pups of the developmental and reproduction studies, respectively. Trifloxystrobin was determined not to be carcinogenic in mice or rats following long-term dietary administration. Mutagenicity testing was positive in Chinese Hamster V79 cells at cytotoxic dose levels but negative in the remaining mutagenicity studies.

Trifloxystrobin was not neurotoxic in the acute neurotoxicity study, nor in any of the repeated dose studies in the available data. The requirement for a subchronic neurotoxicity study was waived because there is no evidence of neurotoxicity in the existing trifloxystrobin database or that of other strobilurin pesticides, and there are no neurotoxicity concerns for trifloxystrobin. However, a subchronic inhalation toxicity study is required for trifloxystrobin at this time.

Specific information on the studies received and the nature of the adverse effects caused by trifloxystrobin as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “ Trifloxystrobin. Human Health Risk Assessment for the Proposed New Use on Flax Seed and Increase of Established Tolerance on Aspirated Grain Fractions ” on pages 28-30 in docket ID number EPA-HQ-OPP-2017-0530.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for trifloxystrobin used for human risk assessment is shown in Table 1 of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to trifloxystrobin, EPA considered exposure under the petitioned-for tolerances as well as all existing trifloxystrobin tolerances in 40 CFR 180.555. EPA assessed dietary exposures from trifloxystrobin in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Such effects were identified for trifloxystrobin. In estimating acute dietary exposure, EPA used food consumption information from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA conducted an unrefined acute dietary assessment assuming tolerance-level residues for all crop commodities, with DEEM default processing factors. For ruminant and swine liver, and meat byproducts, a correction factor of 3x was applied to the tolerance to account for contribution of Metabolite L7a in these commodities (not applicable to kidney). All other livestock commodities used tolerance-level residues.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA conducted a partially refined chronic (food and drinking water) dietary assessment assuming average field trial residues for selected crops (subgroup 4-16A and 4-16B; subgroup 5-16; subgroup 13-07F; subgroups 19A and 19B; subgroups 22A and 22B; oranges; apples, and rice); all other crop commodities used tolerance-level residues. Percent crop treated (PCT) data were incorporated where available. Empirical and DEEM default processing factors were used. To account for contribution of Metabolite L7a, a 3x correction factor was applied to ruminant and swine liver, and meat byproducts (not applicable to kidney). All other livestock commodities used tolerance-level residues.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that trifloxystrobin does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and PCT information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The following average percent crop treated estimates were used in the chronic dietary risk assessment for the following crops for which trifloxystrobin is currently registered: Almonds: 5%, apples: 25%, apricots: 10%, artichokes: 25%, cantaloupes: 5%, carrots: 2.5%, celery: 20%, cherries: 25%, corn: <2.5%, cucumbers: <2.5%, dry beans/peas: <1%, grapefruit: 30%, grapes: 25%, hazelnuts: 65%, nectarines: 5%, oranges: 5%, peaches: <2.5%, peanuts: 5%, pears: 10%, pecans: 15%, peppers: 5%, pistachios: 10%, plums/prunes: <2.5%, potatoes: <1%, pumpkins: 5%, rice: 15%, soybeans: <2.5%, squash: <2.5%, strawberries: 5%, sugar beets: 5%, sweet corn: <2.5%, tangerines: 5%; tomatoes: <2.5%, walnuts: <2.5%, watermelons: 5%. 100% CT was assumed for the remaining commodities.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for trifloxystrobin in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of trifloxystrobin. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Pesticide in Water Calculator (PWC), the estimated drinking water concentrations (EDWCs) of trifloxystrobin for acute exposures are estimated to be 41 parts per billion (ppb) for surface water and 631 ppb for ground water; and for chronic exposures are estimated to be 28 ppb for surface water and 356 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the acute dietary risk assessment, the water concentration value of 631 ppb was used to assess the contribution to drinking water. For the chronic dietary risk assessment, the water concentration of value 356 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Trifloxystrobin is currently registered for the following uses that could result in residential exposures: Turf and ornamentals. EPA assessed residential exposure using the following assumptions: Residential handler exposure and risk estimates from trifloxystrobin registrations were previously re-assessed in 2014 to reflect updates to the Agency's 2012 Residential SOPs along with policy changes for body weight assumptions. Since the 2014 assessment, it has been determined that all trifloxystrobin product labels with potential residential use sites require that handlers wear specific clothing ( e.g., long sleeve shirt/long pants) and use personal protective equipment (PPE). Therefore, EPA has made the assumption that trifloxystrobin products are not for homeowner use, and has not conducted a quantitative residential handler assessment at this time. Based upon the residential uses, adults and children performing physical post-application activities on turf ( e.g., golfing, mowing) or ornamentals ( e.g., activities in or around gardens or trees) may be exposed via dermal exposure to trifloxystrobin residues and children 1 to <2 years old may also be exposed via incidental oral post-application exposure to trifloxystrobin from treated turf. A dermal assessment was not conducted because an adverse systemic dermal hazard was not identified for trifloxystrobin. Therefore, the quantitative exposure/risk assessment for residential post-application exposures is based on incidental oral exposures from physical activities on turf ( i.e., for children 1 to <2 years old).

Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/standard-operating-procedures-residential-pesticide.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found trifloxystrobin to share a common mechanism of toxicity with any other substances, and trifloxystrobin does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that trifloxystrobin does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. There is no increased quantitative or qualitative susceptibility to trifloxystrobin in the developing or young animals as indicated by the results of the developmental studies in rat and rabbits and the 2-generation reproduction study in rats.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x for all routes of exposure other than inhalation. The FQPA SF of 10x has been retained for inhalation endpoints only to account for the lack of the subchronic inhalation toxicity study for trifloxystrobin at this time. This decision is based on the following findings:

i. The toxicity database for trifloxystrobin is complete with the exception of a subchronic inhalation toxicity study.

ii. There is no indication that trifloxystrobin is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that trifloxystrobin results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. The exposure databases are complete, and the exposure assessments will not underestimate the potential dietary (food and drinking water) or non-dietary exposures for infants and children from the use of trifloxystrobin. The chronic dietary food exposure assessment was partially refined based on average residues and PCT for some crops and conservative ground water drinking water modeling estimates. The dietary drinking water assessment utilizes water concentration values generated by models and associated modeling parameters which are designed to provide conservative, health protective, high-end estimates of water concentrations, and are not likely to be exceeded. In addition, the residential post-application assessment is based upon the residential SOPs employing surrogate study data, as well as the use of a chemical-specific turf transferable residue study. The Residential SOPs are based upon reasonable “worst-case” assumptions and are not expected to underestimate risk. These data are reliable and are not expected to underestimate risk to adults or children.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to trifloxystrobin will occupy 3.4% of the aPAD for females 13-49 years old, the only population group of concern.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to trifloxystrobin from food and water will utilize 58% of the cPAD for all infants less than 1 year old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of trifloxystrobin is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Trifloxystrobin is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to trifloxystrobin.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in an aggregate MOE of 120 for children 1 to less than 2 years old. Because EPA's level of concern for trifloxystrobin is a MOE of 100 or below, this MOE is not of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

An intermediate-term adverse effect was identified; however, trifloxystrobin is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for trifloxystrobin.

5. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, trifloxystrobin is not expected to pose a cancer risk to humans.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to trifloxystrobin residues.

Adequate enforcement methodology (gas chromatography method with nitrogen phosphorus detection (GC/NPD)) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for trifloxystrobin in or on flax seed or aspirated grain fractions.

Two comments were received to the Notice of Filing. One appeared to be related to the Department of Energy and stated in part that “any environmentalist policy that would drive up the cost of energy, food, or other essential needs in the name of protecting nature must be rejected.” This comment is not relevant to this action. A second comment stated in part “Do not allow this toxic pesticide to be used anywhere in the world. Nobody needs this toxic chemical unleashed.”

Although the Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops, the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) authorizes EPA to establish tolerances when it determines that the tolerance is safe. Upon consideration of the validity, completeness, and reliability of the available data as well as other factors the FFDCA requires EPA to consider, EPA has determined that these trifloxystrobin tolerances are safe. The commenter has provided no information supporting a contrary conclusion.

The Agency is establishing the tolerance value on flax seed as requested but with the addition of a significant figure based on current practice and establishing a tolerance on grain, aspirated fractions using the commodity definition that is consistent with common commodity vocabulary currently used by the Agency. Also, based upon the relevant field trial and processing studies, EPA is modifying the tolerance in/on aspirated grain fractions to 10 ppm, not 15 ppm as proposed by the registrant. This is due to differences in how the Agency and the registrant each calculated the processed commodity residues for aspirated grain fractions.

Therefore, a tolerance is established for residues of trifloxystrobin, including its metabolites and degradates, in or on flax, seed at 0.40 ppm, and the existing tolerance for grain, aspirated fractions is amended from 5.0 ppm to 10 ppm.

This action establishes a tolerance and amends a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0420 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before April 16, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0420, by one of the following methods:

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

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

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

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In the Federal Register of October 23, 2017 (82 FR 49020) (FRL-9967-37), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 7E8580) by IR-4, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08540. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the herbicide trifluralin a,a,a-trifluoro-2,6-dinitro-N,N-dipropyl-p-toluidine in or on rosemary, fresh leaves at 0.1 parts per million (ppm); rosemary, dry leaves at 0.1 ppm; and rosemary, oil at 2.18 ppm. That document referenced a summary of the petition prepared by Gowan Company, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the level at which the tolerance is being established for rosemary oil, and modified the significant figures and commodity definitions used to be in line with Agency policy. The reason for these changes are explained in Unit IV.C.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for trifluralin including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with trifluralin follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

The primary target organs are the kidney and the liver in rats and dogs for trifluralin. Liver effects include increased liver weights and changes in clinical chemistry parameters. In the kidneys, tubular hyaline casts, minimal cortical tubular epithelial regeneration were observed microscopically, and an increased incidence of progressive glomerulonephritis was seen.

In the rat developmental toxicity study, developmental effects (increased resorptions and wavy ribs) occurred in the presence of less severe maternal effects (decreases in body weight gain, clinical signs, and changes in organ weights). In the 2-generation reproduction study, offspring effects (decreased fetal, neonatal and litter viability) were observed at a dose level where there was less severe maternal toxicity (decreased body weight, body weight gain and food consumption). However, the concern was low since clear NOAELs/LOAELs were established for maternal and developmental toxicities and the doses selected for overall risk assessment would address the concerns seen in these studies. A 21-day dermal toxicity study in the rat showed no systemic toxicity at the limit dose of 1,000 mg/kg/day; dermal effects included sub-epidermal inflammation and ulcerations at 200 mg/kg/day. A rabbit 21-day dermal toxicity study also did not show any systemic toxicity at 1,000 mg/kg/day; dermal effects observed at the LOAEL (100 mg/kg/day) included erythema, edema, and/or scaling and fissuring. A 30-day inhalation exposure to rats with trifluralin at 1,000 mg/m  3 resulted in increased methemoglobin and bilirubin, as well as dyspnea and ruffled fur. Trifluralin is not a neurotoxicant and does not appear to be an immunotoxicant.

In male rats, trifluralin was associated with increased incidence of thyroid follicular cell combined adenoma, papillary adenoma, cystadenoma, and carcinoma tumors. It has been classified as “Group C, possible Human Carcinogen.” Extensive testing showed, however, that trifluralin is neither mutagenic nor genotoxic, and does not inhibit the polymerization of microtubules in mammalian cells.

Specific information on the studies received and the nature of the adverse effects caused by trifluralin as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “ Trifluralin: Human Health Draft Risk Assessment for Registration Review and a Proposed Section 3 Use of Trifluralin on Rosemary” on pages 52-59 in docket ID number EPA-HQ-OPP-2017-0420.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for trifluralin used for human risk assessment is discussed in Unit II.B. of the final rule published in the Federal Register of July 31, 2013 (78 FR 46267) (FRL-9393-5).

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to trifluralin, EPA considered exposure under the petitioned-for tolerances as well as all existing trifluralin tolerances in 40 CFR 180.207. EPA assessed dietary exposures from trifluralin in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Such effects were identified for trifluralin. In estimating acute dietary exposure, EPA used 2003-2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA conducted an unrefined assessment using tolerance level residues, 100 percent crop treated (PCT), and default Dietary Exposure Evaluation Model (DEEM) processing factors.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used 2003-2008 food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, the chronic dietary exposure and risk estimates are somewhat refined and assumed tolerance-level residues for the majority of commodities, PCT data for some existing uses, and DEEM default processing factors. Pesticide Data Program (PDP) monitoring data were used for carrots, potatoes, bell peppers, non-bell peppers, tomatoes, tomato paste, oranges, orange juice, grapes, grape juice, raisins, corn syrup, and wheat flour.

iii. Cancer. EPA determines whether quantitative cancer exposure and risk assessments are appropriate for a food-use pesticide based on the weight of the evidence from cancer studies and other relevant data. If quantitative cancer risk assessment is appropriate, cancer risk may be quantified using a linear or nonlinear approach. If sufficient information on the carcinogenic mode of action is available, a threshold or nonlinear approach is used and a cancer RfD is calculated based on an earlier noncancer key event. If carcinogenic mode of action data is not available, or if the mode of action data determines a mutagenic mode of action, a default linear cancer slope factor approach is utilized. Based on the data summarized in Unit III.A., EPA has concluded that trifluralin should be classified as a possible human carcinogen and a linear approach has been used to quantify cancer risk since no mode of action data are available.

The aggregate cancer risk assessment for adults takes into account exposure estimates from dietary consumption of trifluralin from food, residential and drinking water sources. Exposures from residential uses are based on the lifetime average daily dose and assume an exposure period of 5 days per year and 50 years of exposure in a lifetime. Dietary exposure assumptions were quantified using the same estimates as discussed in Unit III.C.1.ii., Chronic exposure.

iv. Anticipated residue and percent crop treated (PCT) information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency estimated the PCT for existing uses as follows:

The chronic and cancer dietary exposure and risk assessments incorporated the following trifluralin average percent crop treated estimates: Almonds 2.5%; apricots 2.5%; asparagus 20%; barley 1%; beans, green 25%; broccoli 5%; Brussels sprouts 2.5%; cabbage 40%; canola 2.5%; cantaloupes 25%; carrots 30%; cauliflower 5%; celery 2.5%; chicory 20%; corn 1%; cotton 30%; cucumbers 2.5%; dry beans/peas 10%; grapefruit 2.5%; grapes 2.5%; honeydews 30%; lemons 2.5%; nectarines 2.5%; oranges 2.5%; peaches 1%; peanuts 5%; peas, green 10%; pecans 1%; peppers 20%; plums/prunes 1%; potatoes 2.5%; pumpkins 5%; sorghum 2.5%; soybeans 2.5%; squash 2.5%; sugar beets 2.5%; sugarcane 5%; sunflowers 5%; tomatoes 55%; walnuts 1%; watermelons 15%; and wheat 1%. For the remaining commodities, EPA assumed 100% crop treated.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models as well as monitoring data in the dietary exposure analysis and risk assessment for trifluralin in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of trifluralin. The estimated drinking water concentrations (EDWCs) were calculated using a Total Toxic Residues (TTR) exposure modeling method, where trifluralin and its major degradates of concern (TR-4, TR-6, TR-7, TR-14, and TR-15) were combined. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Pesticide in Water Calculator (PWC), the estimated drinking water concentrations (EDWCs) of trifluralin for acute exposures are estimated to be 57 parts per billion (ppb) for surface water and 1.0 ppb for ground water; for chronic exposures for non-cancer assessments are estimated to be 15 ppb for surface water and 1.0 ppb for ground water; and for chronic exposures for cancer assessments are estimated to be 4.4 ppb for surface water and 1.0 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the acute dietary risk assessment, the water concentration value of 57 ppb was used to assess the contribution to drinking water. For the chronic dietary risk assessment, the water concentration of value 15 ppb was used to assess the contribution to drinking water. For the cancer dietary risk assessment, the water concentration of value 4.4 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Trifluralin is currently registered for the following uses that could result in residential exposures: lawns, golf courses, vegetable and ornamental gardens. EPA assessed residential exposure using the following assumptions: For residential handlers, all registered trifluralin product labels with residential use sites ( e.g., lawns, ornamental and vegetable gardens) require that handlers wear specific clothing ( e.g., long sleeve shirt/long pants) and/or use personal protective equipment (PPE) except for one label. Therefore, EPA has assumed that only that one product is intended for homeowner use and has conducted a quantitative residential handler assessment based on the use sites and application rates as provided on the label. The quantitative exposure/risk assessment developed for residential handlers is based on the following scenarios: Applying granules via push-type spreader, spoon, cup, hand dispersal, and shaker can to residential vegetable and ornamental gardens.

Although a non-cancer dermal risk assessment was not performed due to the lack of an adverse effect in the non-cancer dermal study, dermal exposure was estimated for the residential handler cancer risk assessment because dermal exposure does contribute to the overall cancer risk for trifluralin.

There is the potential for post-application exposure for individuals exposed as a result of being in an environment that has been previously treated with trifluralin. For the residential post-application scenarios, all registered trifluralin product labels with residential use sites ( e.g., turf/lawns and ornamental and vegetable gardens) were considered for quantitative assessment. Although there is the potential for dermal exposure to adults and children, a quantitative non-cancer dermal risk assessment was not conducted since no non-cancer dermal hazard was identified. The quantitative non-cancer exposure/risk assessment for residential post-application exposures is based on the following scenario: Incidental oral (hand to mouth, object to mouth, and soil ingestion) exposure for children (1 to <2) from granular formulations applied to turf.

Episodic granular ingestion for children is a potential exposure pathway for granular formulations; however, this exposure scenario could not be assessed because an acute dietary endpoint for general population, including infants and children, was not selected due to no effect attributable to a single (or few) day(s) oral exposure observed in animal studies.

Although a non-cancer dermal risk assessment was not performed due to the lack of an adverse effect in the non-cancer dermal study, dermal exposure was estimated for the residential post-application cancer risk assessment because dermal exposure does contribute to the overall cancer risk for trifluralin. Inhalation exposure is expected to negligible.

The worst-case residential exposure scenario used in the adult non-cancer aggregate assessment reflects inhalation exposure from applications to gardens via hand dispersal.

The worst-case residential exposure used in the adult cancer aggregate assessment reflects dermal exposure from post-application exposure from liquid applications to treated gardens.

The worst-case residential exposure used in the children 1<2 years old aggregate assessment reflects hand-to-mouth exposures from post-application exposure to turf applications.

Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/standard-operating-procedures-residential-pesticide.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

Based on a review of the toxicological database for trifluralin and the other dinitroanilines (benfluralin, butralin, ethalfluralin, fluazinam, flumetralin, oryzalin, pendimethalin, and prodiamine), the Agency has determined that although trifluralin shares some chemical and/or toxicological characteristics ( e.g., chemical structure or apical endpoint) with these other dinitroanilines, the toxicological database does not support a testable hypothesis for a common mechanism of action. No further data are required to determine that no common mechanism of toxicity exists for trifluralin and the other dinitroanilines and no further cumulative evaluation is necessary for trifluralin. For additional details, refer to the document titled “ Dinitroanilines: Screening Analysis of Toxicological Profiles to Consider Whether a Candidate Common Mechanism Group Can Be Established” in docket ID number EPA-HQ-OPP-2017-0420 in www.regulations.gov.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) Safety Factor (SF). In applying this provision, EPA either retains the default value of 10x, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. There was evidence of increased qualitative susceptibility in the rat developmental toxicity study, where fetal developmental effects (increased resorptions and wavy ribs) occurred in the presence of less severe maternal effects (decreases in body weight gain, clinical signs, and changes in organ weights); however, the concern was low since clear NOAELs/LOAELs were established for maternal and developmental toxicities. There was also a low concern for the qualitative susceptibility observed in the rat reproduction study since the dose-response was also well characterized; there was a clear NOAEL/LOAEL for maternal and developmental toxicities; and the effects were seen at a high-dose level (295/337 mg/kg/day). Offspring viability was not adversely affected in the two other 2-generation studies with trifluralin at dose levels up to 100 and 148 mg/kg/day. Similarly, there are no residual uncertainties for pre- and postnatal toxicity since the doses selected for overall risk assessment will address the concerns seen in these studies.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

i. The toxicity database for trifluralin is complete.

ii. There is no indication that trifluralin is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. As noted in section D.2., there was evidence of increased qualitative susceptibility in the rat developmental toxicity study, however, the concern was low for the reasons outlined in that section; furthermore, there was also a low concern for the qualitative susceptibility observed in the rat reproduction study.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on a refined risk assessment that incorporated some PCT and anticipated residue information. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to trifluralin in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by trifluralin.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to trifluralin will occupy less than 1% of the aPAD for females 13-49 years old, the only population group of concern.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to trifluralin from food and water will utilize 3.7% of the cPAD for all infants less than 1 year old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of trifluralin is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Trifluralin is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to trifluralin.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 24,000 for adults and 15,000 for children 1 to less than 2 years old. Because EPA's level of concern for trifluralin is a MOE of 100 or below, these MOEs are not of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

An intermediate-term adverse effect was identified; however, trifluralin is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for trifluralin.

5. Aggregate cancer risk for U.S. population. A cancer aggregate assessment was conducted for trifluralin since it is classified as a “Group C, Possible Human Carcinogen” with a Q  1  * of 2.96 × 10-3 (mg/kg/day)  − 1 based upon male rat thyroid follicular cell combined adenoma, papillary adenoma, cystadenoma, and carcinoma tumor rate in human equivalents. The cancer aggregate risk assessment combines food and drinking water exposures with dermal and inhalation exposure from post-application exposure from treated gardens. The resulting aggregate cancer risk estimate for adults is 1.5 × 10  − 6 .

EPA generally considers cancer risks (expressed as the probability of an increased cancer case) in the range of 1 in 1 million (or 1 × 10  − 6 ) or less to be negligible. The precision which can be assumed for cancer risk estimates is best described by rounding to the nearest integral order of magnitude on the logarithmic scale; for example, risks falling between 3 × 10  − 7 and 3 × 10  − 6 are expressed as risks in the range of 10  − 6 . Considering the precision with which cancer hazard can be estimated, the conservativeness of low-dose linear extrapolation, and the rounding procedure described above, cancer risk should generally not be assumed to exceed the benchmark level of concern of the range of 10  − 6 until the calculated risk exceeds approximately 3 × 10  − 6 . This is particularly the case where some conservatism is maintained in the exposure assessment. EPA has concluded the cancer risk for all existing trifluralin uses and the uses associated with the tolerances established in this action fall within the range of 1 × 10  − 6 and are thus negligible.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to trifluralin residues.

Adequate enforcement methodology (gas chromatography (GC) with electron capture detection (ECD)) is available to enforce the tolerance expression.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for trifluralin on rosemary.

EPA is establishing a tolerance of 3.0 ppm for residues of trifluralin in rosemary oil rather than the proposed value of 2.18 ppm based on Codex rounding classes. For the other tolerances that vary from what the petitioner requested, EPA is establishing tolerance values to conform to current Agency practices on significant figures.

Therefore, tolerances are established for residues of trifluralin, including its metabolites and degradates, in or on rosemary, dried leaves at 0.10 ppm; rosemary, fresh leaves at 0.10 ppm; and rosemary, oil at 3.0 ppm.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

This is a final rule summary of the Commission's Report and Order, released December 17, 2018. A full-text version of this document can be obtained from the following internet address: https://www.fcc.gov/document/fcc-extends-jurisdictional-separations-freeze-six-years.

1. In 1970, when monopoly rate-of-return local exchange carriers (LECs) provided telephone services primarily over circuit-switched, voice networks, the Commission codified its jurisdictional separations rules. Those rules required each LEC to divide its cost of providing service between the interstate and intrastate jurisdictions in a manner reflecting each jurisdiction's relative use of the LEC's network. In an era when the Commission and its State counterparts set virtually all telephone rates based on actual costs, the separations rules helped ensure that each LEC had the opportunity to recover its expenses and earn a reasonable return on its investments.

2. Today, phone companies deliver voice, data, and video services that are increasingly being provided over internet Protocol-based networks. New digital technologies blur the lines between interstate and intrastate communications, making last century's jurisdictional separations rules inadequate and outmoded vis-à-vis their intended purpose. Moreover, the relevance of the cost-separation rules has diminished, as the Commission has incrementally replaced burdensome rate-of-return regulation with the efficiencies of incentive regulation. Currently, only a small percentage of Americans receive their telecommunications services from providers subject to rate-of-return regulation and the cost separation rules. Nevertheless, the Commission's separations rules continue to play an important role in determining how rate-of-return carriers recover some of their costs.

3. In 1997, the Commission recognized the need to comprehensively reform the separations rules and referred separations reform to the Federal-State Joint Board on Jurisdictional Separations (Joint Board) for a recommended decision. More than twenty years later, the Joint Board has not reached agreement on comprehensive separations reform. And so, starting in 2001, originally at the behest of the Joint Board, the Commission has completed several rulemaking proceedings to freeze the separations rules to stabilize and simplify the separations process pending reform. Most recently, the Commission extended the freeze until December 31, 2018.

4. Today, the Commission breaks this cycle. Because so little progress has been made on comprehensive separations reform over the past 20 years, the Commission extends the separations freeze for up to six years so that it and the Joint Board can devote their resources to substantive reform, rather than to extending artificial deadlines. And because previous attempts at comprehensive reform have failed, the Commission requests that the Joint Board approach the challenge incrementally. The Commission asks that, in the short term, the Joint Board focus on how best to amend the separations rules to recognize that they impact only rate-of-return carriers and on whether any other separations rules or recordkeeping requirements can be modified or eliminated in light of that limited application. Coming to a decision on these issues will reduce the Joint Board's work over the longer term as it seeks to replace the existing jurisdictional separations process with a simplified system for reasonably allocating costs between the interstate and intrastate jurisdictions. The Commission begins this incremental reform by allowing rate-of-return carriers that elected to freeze their separations category relationships in 2001 to opt out of that freeze.

5. Jurisdictional separations is the third step in a four-step regulatory process. First, a rate-of-return carrier records its costs and revenues in various accounts using the Uniform System of Accounts prescribed by the Commission's part 32 rules. Second, the carrier divides the costs and revenues in these accounts between regulated and nonregulated activities in accordance with the Commission's part 64 rules, a step that helps ensure that the costs of nonregulated activities will not be recovered through regulated interstate rates. Third, the carrier separates the regulated costs and revenues between the interstate and intrastate jurisdictions using the Commission's part 36 jurisdictional separations rules. Finally, the carrier apportions the interstate regulated costs among the interexchange services and the rate elements that form the cost basis for its exchange access tariffs. Carriers subject to rate-of-return regulation perform this apportionment in accordance with the Commission's part 69 rules.

6. To comply with these rules, rate-of-return incumbent LECs perform annual cost studies that include jurisdictional separations. The jurisdictional separations analysis begins with the categorization of the incumbent LEC's regulated costs and revenues, requiring the incumbent LEC to assign the regulated costs and revenues recorded in its part 32 accounts to various investment, expense, and revenue categories. Part 36 (or separations) category relationships are percentages of costs recorded in a part 32 account that are assigned to separations categories corresponding to that account. The incumbent LEC then allocates the costs or revenues in each category between the interstate and intrastate jurisdictions. Amounts in categories that are used exclusively for interstate or intrastate communications are directly assigned to the appropriate jurisdiction. Amounts in categories that support both interstate and intrastate services are divided between the jurisdictions using allocation factors that reflect relative use or a fixed percentage.

7. In 1997, recognizing that “changes in the law, technology, and market structure of the telecommunications industry” necessitated a thorough reevaluation of the jurisdictional separations process, the Commission initiated a proceeding to comprehensively reform the separations rules. At the same time, pursuant to section 410(c) of the Communications Act of 1934, as amended (the Communications Act), the Commission referred the matter of jurisdictional separations reform to the Joint Board for a recommended decision. Section 410(c) requires the Commission to “refer any proceeding regarding the jurisdictional separation of common carrier property and expenses between interstate and intrastate operations, which it initiates pursuant to a notice of proposed rulemaking” to a Joint Board. Section 410(c) further specifies that after such a referral the Joint Board “shall prepare a recommended decision for prompt review and action by the Commission.”

8. Since the Commission initiated this proceeding in 1997, the Joint Board—comprised of both State and federal members—has been attempting to develop recommendations for comprehensive reform. In response to the Commission's initial referral, the State members of the Joint Board filed a report identifying issues they believed should be addressed. Over the years, the State members filed policy papers setting out options for reform, the Commission or the Joint Board sought comment, and the Joint Board held hearings and meetings to consider the various proposals. In 2009, the Commission made a second referral of comprehensive jurisdictional separations reform to the Joint Board and asked that “the Joint Board prepare a recommended decision regarding whether, how, and when the Commission's jurisdictional separations rules should be modified.” In 2010, the State members of the Joint Board submitted a limited interim proposal, and the Joint Board sought comment on their behalf. Despite two Commission referrals seeking a recommended decision on comprehensive separations reform, the Joint Board has not advanced a recommended decision on comprehensive reform to the Commission.

9. In the course of considering comprehensive reform, the Joint Board did issue a recommendation, in 2000, that the Commission freeze the part 36 category relationships and jurisdictional allocation factors pending resolution of comprehensive reform. The Commission sought comment on that Recommended Decision; and based on the record before it, the Commission adopted the 2001 Separations Freeze Order. The Commission concluded that a freeze would stabilize the separations process pending reform by minimizing any impact of cost shifts on separations results due to circumstances—such as the growth of internet usage, new technologies, and local competition—not contemplated by the rules. The Commission also concluded that a freeze would simplify the separations process by eliminating the need for many separations studies until separations reform was implemented.

10. The Commission agreed with the Joint Board's Recommended Decision to freeze all part 36 category relationships and allocation factors for price cap carriers and to freeze all allocation factors for rate-of-return carriers. The Commission also agreed with the Joint Board that requiring rate-of-return carriers to freeze their category relationships could potentially harm these carriers. The Commission therefore provided rate-of-return carriers a one-time option to freeze their category relationships, enabling each of these carriers to determine whether such a freeze would be beneficial “based on its own circumstances and investment plans.” Presently, rate-of-return carriers in about 45 study areas operate under the category relationships freeze.

11. In the 2001 Separations Freeze Order, the Commission specified that the freeze would last for five years or until the Commission completed comprehensive separations reform, whichever came first. The Commission also concluded that, prior to the expiration of the five-year period, the Commission would, in consultation with the Joint Board, determine whether the freeze period should be extended. The Commission specified that “the determination of whether the freeze should be extended at the end of the five-year period shall be based upon whether, and to what extent, comprehensive reform of separations has been undertaken by that time.”

12. Since then, the Commission has extended the separations freeze seven times, for periods ranging from one year to three years, with the most recent extension expiring on December 31, 2018. In advance of all but one of the freeze extensions, the Commission sought comment on extending the freeze, but it has not referred the specific issue of freeze extensions to the Joint Board. In the 2009 Separations Freeze Extension Order and Second Referral, the Commission asked the Joint Board to consider whether the Commission should allow carriers to unfreeze their separations category relationships and requested that the Joint Board prepare a recommended decision on that matter. The Joint Board has not made a recommendation on that request.

13. In repeatedly extending the freeze, the Commission has explained that the freeze would stabilize and simplify the separations process while the Joint Board and the Commission continued to work on separations reform. In its most recent freeze extension order, the Commission also explained that an extension until December 31, 2018, would provide the Joint Board with sufficient time to consider what effects the Commission's reforms to the high-cost universal service program and intercarrier compensation should have on the separations rules.

14. Earlier this year, the Commission issued a Further Notice of Proposed Rulemaking (Further Notice), 83 FR 35582, July 27, 2018, proposing to extend the jurisdictional separations freeze for 15 years and inviting comment on that proposal. The Commission also sought comment on whether a shorter freeze extension would be preferable and on whether it should alter the scope of the referral to the Joint Board regarding comprehensive separations reform. In so doing, the Commission recognized that the issues before the Joint Board are extremely complex and stated the Commission's preference not to move forward on separations reform without a Joint Board recommendation on an approach to such reform. The Commission also recognized that as a practical matter it would have to choose between extending the separations freeze and requiring changes to long-unchanged allocation factors and, for some carriers, category relationships to take effect on January 1, 2019.

15. The Commission also proposed and sought comment on allowing rate-of-return carriers that had elected to freeze their category relationships in 2001 to opt out of that freeze. The Commission explained that the category relationships freeze has lasted 17 years instead of no more than five years as the Commission and the Joint Board originally had contemplated. The Commission also explained that since opting into the category relationships freeze many rate-of-return carriers had invested in network upgrades or were considering doing so, and that, as a result of the category relationships freeze, these carriers may be unable to recover the costs of those investments from ratepayers that benefit from the upgrades or from the Universal Service Fund. Consequently, the Commission pointed out, these carriers may lack incentives to improve service and deploy advanced technologies like broadband for their customers.

16. Over the course of the last decade, the jurisdictional separations rules have become irrelevant to the carriers that provide most Americans with telecommunications services. The separations rules were never applicable to wireless carriers. In 2008, the Commission granted price cap carriers forbearance from the separations rules; and recently the Commission extended this forbearance to rate-of-return carriers that receive fixed or model-based high-cost universal service support (fixed support carriers) and that elect incentive regulation for their business data services. As a result, by the middle of next year, the separations rules will apply only to rate-of-return carriers serving about 800 study areas.

17. Even for the carriers that remain subject to the separations rules, separations results have only limited applicability because of recent reforms by the Commission. As part of comprehensive reform and modernization of the universal service and intercarrier compensation systems, the Commission adopted rate caps (including a transition to bill-and-keep for certain rate elements) for switched access services for rate-of-return carriers, thereby severing the relationship between costs and switched access rates. In addition, in 2016, the Commission gave rate-of-return carriers the option of receiving high-cost universal service support based on the Alternative Connect America Cost Model (A-CAM). More than 200 carriers opted to receive A-CAM support, which eliminated the need for those carriers to perform cost studies that required jurisdictional separations to quantify the amount of high-cost support for their common line offerings. Also as part of universal service reform, the Commission established rules to provide support for loop costs associated with broadband-only services offered by rate-of-return carriers.

18. As a result of these reforms, the Commission currently uses separations results only for carriers subject to rate-of-return regulation and only for the following limited purposes of calculating: (a) Business data services rates; (b) the charge assessed on residential and business lines, known as a subscriber line charge, allowing carriers to recover part of the costs of providing access to the telecommunications network; (c) the rate for Consumer Broadband-Only Loop service; and (d) the interstate common line and Consumer Broadband-Only Loop support for non-fixed support carriers. The administrator of the universal service support program, the Universal Service Administrative Company also uses separations categorization results for calculating high-cost loop support for certain non-fixed support carriers, but without applying jurisdictional allocations. States also use separations results to determine the amount of intrastate universal service support and to calculate regulatory fees, and some states perform rate-of-return ratemaking using intrastate costs.

19. Based on the record in this proceeding, and cognizant of the impacts, both on rate-of-return carriers subject to the separations freeze and on the Commission, of the seven separations freeze extensions over the last 17 years, the Commission now extends for up to six years the freeze on part 36 category relationships and jurisdictional cost allocation factors that the Commission adopted in the 2001 Separations Freeze Order. This extension will begin on January 1, 2019, and will continue until the earlier of December 31, 2024, or the completion of comprehensive reform of the part 36 jurisdictional separations rules. The Commission also provides carriers that opted to freeze their separations category relationships in 2001 a one-time opportunity to unfreeze and update those relationships so that they can categorize their costs based on current circumstances.

20. The Commission finds, consistent with the recommendation of the State members of the Joint Board and the overwhelming consensus among the commenters, that an extension of the separations freeze beyond its December 31, 2018, expiration date will serve the public interest. As the Commission recognized in the Further Notice, this impending deadline compels the Commission to make a choice between extending the freeze further or allowing long-unused separations rules to take effect on January 1, 2019. The Commission finds that not extending the freeze would impose significant burdens on rate-of-return carriers that would far exceed the benefits, if any, of requiring those carriers to comply with rules that they have not implemented since 2001.

21. In particular, the Commission agrees with those commenters that argue that rate-of-return carriers, particularly smaller rural carriers, would find it extremely difficult, if not impossible, to perform all of the studies needed for full compliance. The Commission has previously found that allowing the existing freeze to lapse and frozen separations rules to be reinstated would impose undue instability and administrative burdens on affected carriers. The record in this proceeding confirms that is still the case.

22. First, the Commission agrees with commenters that developing “traffic factors” to jurisdictionally separate costs assigned to voice-related services is “an arcane science” and that, after 17 years of not performing traffic factor studies, carriers would be required to incur substantial training and other costs to reestablish the expertise necessary to perform them. This expense would hit smaller, rural carriers with limited resources the hardest. The Commission cannot justify imposing such a burden on small carriers particularly given that the impact of such traffic factors is continuing to diminish as investment in voice services decreases due to growing deployment of broadband services.

23. Moreover, as NTCA explains, even if full compliance were possible, “these smaller providers would be forced to return to a regulatory environment that last operated in full nearly two decades ago.” The Commission cannot justify the costs of such compliance, given the outdated nature of the rules with which these small providers would have to comply. Furthermore, as the Commission previously explained, reinstating these largely outmoded rules in full measure could produce negative consequences by causing significant disruptions in carriers' regulated rates, cost recovery, and other operating conditions.

24. The Commission therefore rejects the Irregulators' argument that it should not extend the freeze. The Irregulators express concern that the freeze has led “to improper decision-making at various levels,” with, for example, State governments basing policy on obsolete numbers that over-allocate costs to the intrastate jurisdiction. Yet, they fail to explain how ending the freeze would alleviate any such misallocation. Instead, the Irregulators propose two options for completely revamping the jurisdictional separations process. While those proposals may be useful to the Joint Board's consideration of comprehensive separations reform, they are beyond the scope of the question before the Commission today of whether to extend the separations freeze beyond December 31, 2018.

25. The Commission also finds that another short-term freeze extension will not provide the Joint Board, the Commission, and interested stakeholders sufficient time to complete comprehensive separations reform. Indeed, several commenters support a fifteen-year freeze. By contrast, NARUC and the Colorado PUC both advocate for a freeze of no more than two years. In considering how long to extend the freeze, the Commission agrees with the State members of the Joint Board that an extension of up to six years is appropriate. A freeze of up to six years balances the competing considerations—the difficulty of comprehensive separations reform and the need to focus on that reform rather than on repeated freeze extensions—better than a longer or shorter extension period.

26. The difficulty of comprehensively reforming the separations rules cannot be overstated. The current rules focus on allocating between the interstate and intrastate jurisdictions the costs of circuit-switched voice services provided over primarily copper networks. Those rules have largely been in place since 1969, with some revisions in 1987, and minor revisions earlier this year to harmonize the part 36 rules with changes the Commission made to the part 32 rules. Since the freeze was first put in place, many rate-of-return carriers have converted much of their networks to packet-based technologies that provide telecommunications, information, and video services over fiber facilities. Comprehensive reform, as previously envisioned by the Commission, would entail rewriting the separations rules in a manner that recognizes these technological changes and is consistent with changes to the high-cost universal service program and intercarrier compensation systems. As the Commission's track record of repeated extensions demonstrates, such reform is not a short-term project.

27. Accordingly, the Commission rejects NARUC's argument that it should extend the freeze “on an interim basis for no more than two years to engage timely and substantively [with the Joint Board] on separations issues.” Given the Commission's past experience with short-term separations freezes and stalled attempts at separations reform, the Commission finds that a two-year extension would almost certainly do nothing more than continue the cycle of repeated short-term freeze extensions that has diverted industry, State, and Commission resources away from substantive reform, forcing a break in whatever momentum toward meaningful separations reform the Commission and the Joint Board achieve, long before that reform is complete. The Commission believes instead that an extension of up to six years makes separations reform more likely because it will halt that cycle and provide sufficient time for the Joint Board to focus on short-term and long-term steps toward comprehensive reform.

28. The Commission also declines to extend the freeze indefinitely, as USTelecom urges. USTelecom argues that the separations rules “have become increasing[ly] irrelevant and unnecessary” and that the Commission should therefore focus on substantive intercarrier compensation and universal service reforms, rather than on separations reform. Although the Commission agrees that the separations rules are irrelevant to price cap carriers, they remain applicable to, and impose substantial obligations on, rate-of-return carriers serving about 800 study areas. The Commission therefore believes that there is value to continuing to work towards reform of those rules.

29. In the Rate-of-Return Business Data Services Order, the Commission allowed carriers subject to the category relationships freeze that receive model-based and other forms of fixed high-cost support and elect incentive regulation for business data services to opt out of that freeze and update their category relationships. In this proceeding, the Commission grants all other rate-of-return carriers operating under the category-relationships freeze the opportunity to opt out of it and update their category relationships—enabling those carriers to better recover network upgrade costs from ratepayers that benefit from those upgrades and to take greater advantage of universal service programs that incent broadband deployment.

30. Category Relationships Unfreeze. The rate-of-return carriers that elected to freeze their category relationships in 2001 did so based, in part, on the Commission's representation that the freeze would last no more than five years. Those carriers did not and could not have anticipated that the category relationships freeze would be in place for more than 17 years. Yet, the Commission's current rules prohibit carriers that elected the freeze from withdrawing from it. The result is that some, if not all, carriers with frozen category relationships are unable to recover their business data services costs from business data services customers or from NECA traffic sensitive pool settlements.

31. Rate-of-return carriers that chose to freeze their category relationships in 2001 assign costs within part 32 accounts to categories using their separations category relationships from 2000. Consequently, these companies are still categorizing their costs based on the technologies and services that were in place in 2000, instead of being able to adjust the amounts assigned to separations categories to reflect current network costs and services. This circumstance, in turn, distorts revenue requirements and resulting rates. Allowing carriers to unfreeze and update their category relationships will enable them to more closely align their business data services and Consumer Broadband-Only Loop service rates with the underlying costs of these services. It also will encourage those carriers to expand and upgrade their networks, thus enhancing their capability to provide these services.

32. The Commission also agrees with commenters that allowing affected carriers to opt out of the freeze will enable these carriers to take better advantage of universal service programs that promote broadband growth. As commenters point out, the category relationships freeze undermines incentives for certain carriers to move toward broadband-only services. Endeavor, for example, explains that, without an opportunity to unfreeze and re-categorize investment levels, the ability of carriers to qualify for support of broadband-capable network loops through the Connect America Fund—Broadband Loop Service (CAF-BLS) program is significantly reduced. Unfreezing category relationships will allow a carrier to assign broadband-only loop costs to the consumer broadband-only revenue requirement and also receive CAF-BLS support based on these costs, as carriers seek to meet consumer demand for broadband-only lines.

33. In addition, consistent with the Commission's finding in the Rate-of-Return Business Data Services Order and the consensus of commenters in this proceeding including the State Members of the Federal-State Joint Board, the Commission concludes that affected carriers should be given the flexibility to choose whether to unfreeze their category relationships. Were the Commission instead to require all affected carriers to unfreeze and update their category relationships, the burden on some affected carriers could outweigh any potential benefits. As the Commission has recognized, the size, cost structures, and investment patterns of rate-of-return carriers vary widely. Certain rate-of-return carriers' cost structures may not have changed significantly enough since the freeze began to warrant the administrative costs that these carriers would incur in updating their category relationships, costs that would be borne by their customers and the high-cost universal service support program. Other carriers may find that updating their category relationships would disrupt business plans made based on a continuation of the category relationships freeze since it has been in effect for such a long period. Allowing affected carriers the flexibility to choose whether to unfreeze their category relationships properly recognizes that some carriers will embrace the opportunity to more accurately categorize their investments, while others would find updating their category relationships to be unduly costly or disruptive.

34. Consistent with Commission precedent, the Commission adopts July 1, 2019, as the effective date for opting out of the freeze. The Commission finds it important to implement the unfreeze option “efficiently and swiftly” while at the same time giving carriers enough time to prepare. Commenters generally agree that July 1, 2019, is a reasonable effective date. The Commission requires that carriers currently in the NECA traffic-sensitive pool notify NECA by March 1, 2019, of their decision to opt out of the category relationships freeze. This deadline provides the same advance notice that carriers exiting the NECA pool must give NECA under § 69.3 of the Commission's rules. The Commission also requires carriers that file their own tariffs to provide the Wireline Competition Bureau with notice of their intent to opt out of the category relationships freeze by May 1, 2019.

35. The Commission finds there is insufficient basis in the record to modify any other aspects of the separations freeze. The Commission sought detailed input on several other possible modifications to the freeze, including whether carriers that unfreeze their category relationships should be permitted to refreeze them and whether carriers that did not freeze their category relationships in 2001 should be permitted to freeze them. In addition, carriers now apportion their categorized costs using jurisdictional allocation factors for the year 2000, and the Commission sought input on whether it should allow or require carriers to reset these factors using current data. The record provides insufficient information, however, about the impact of allowing such a reset of jurisdictional allocation factors or about how best to implement such a reset. Moreover, requiring all rate-of-return carriers to reset their jurisdictional allocation factors would impose substantial burdens on small rural carriers. And requiring or allowing all rate-of-return carriers to reset their jurisdictional allocation factors would impose a substantial burden on NECA and the Commission in reviewing such changes. Some commenters support other modifications to the separations freeze, such as giving carriers the opportunity to unfreeze and then refreeze their category relationships. The Commission agrees with NECA, however, that allowing companies to unfreeze and then refreeze their category relationships would risk gamesmanship, a risk that the Commission cannot adequately address on the current record. Indeed, the record lacks sufficient information to accurately assess the benefits and drawbacks of making changes to the separations freeze, other than to the category relationships freeze.

36. Implementation of the Unfreeze. The Commission adopts the suggestion that carriers that file their own tariffs and unfreeze their category relationships be required to update their part 36 category relationships in new cost studies on which their interstate tariffed rates, other than switched access rates, will be based going forward, beginning with the 2019 annual filing. Rate-of-return carriers subject to §§ 61.38 and 61.39 of the Commission's rules shall explain the impact of the unfreeze and describe these studies in the “Description & Justification” sections of their filings. Carriers subject to § 61.38 shall include the results of these studies in their tariff review plans. Carriers subject to § 61.39 are not required to submit the supporting data at the time of filing, but the Commission and interested parties may request the data. NECA carriers that elect to unfreeze their category relationships must reflect these unfrozen relationships in the cost studies on which their pool settlements are based beginning with the last six months of studies for calendar year 2019.

37. The Commission concludes, consistent with the view of nearly all commenters addressing the issue, that it should take steps to prevent double-recovery of costs. Unfreezing separations category relationships could result in a carrier's recovery of the same costs through higher business data services rates and unchanged switched access recovery. Updated category relationships will change the costs assigned to common line, to interstate switched access, and to business data services. The USF/ICC Transformation Order capped all interstate switched access rates at 2011 levels, subject to specified reductions over time. The Commission does not with this action make changes to the carefully-balanced transition to bill-and-keep set forth in that Order. Unless cost reductions to interstate switched access are reflected in a carrier's revised base period revenue, however, a carrier will over-recover costs through its capped interstate switched access rates.

38. To prevent this over-recovery, the Commission follows the approach it took in the Rate-of-Return Business Data Services Order. There, the Commission adopted a method similar to the approach the Bureau followed in waiving the category relationships freeze in the Eastex Waiver Order, which commenters generally agree is a reasonable approach to prevent double-recovery. Thus, a carrier subject to § 61.38 or § 61.39 of the Commission's rules must calculate the difference between the interstate switched access costs in two cost studies—one based on unfrozen category relationships that is the basis for its tariff-year 2019-2020 rates and a second study that is the same except that it is based on frozen category relationships. Each carrier must then adjust its base period revenue by an amount equal to the interstate switched access cost difference between the two cost studies before applying the annual 5% reduction to the base period revenue, as required by the USF/ICC Transformation Order.

39. A carrier that participates in the NECA interstate switched access tariff must report to NECA the interstate switched access cost difference between the two calendar year 2018 studies and its base period revenue as revised to reflect the cost difference. These procedures protect both carriers and customers from any unintended consequences of unfreezing category relationships. Finally, the Commission requires NECA to reflect these base period revenue changes in its settlement procedures.

40. The Commission finds that these measures provide a reasonable and not unduly burdensome method for preventing double-recovery of costs when a carrier chooses to unfreeze its category relationships. Each carrier will need to perform detailed calculations to implement its choice to update category relationships. Because the Commission has an obligation to protect ratepayers against the harms of double-recovery, the Commission rejects ITTA's assertion that the procedure carriers are required to follow to prevent double-recovery is too burdensome, particularly since ITTA poses no alternative.

41. The Commission declines to alter the scope of the referral to the Joint Board, and instead asks the Joint Board to adopt an incremental approach to separations reform by focusing first on cleaning up the existing separations rules and then on long-term steps toward comprehensive reform of the remaining rules. As previously articulated by the Commission, those issues include whether the separations rules are still needed, whether specific separations categories should be consolidated or disaggregated, and how certain types of costs should be allocated between the jurisdictions. Although the Commission has never retreated from its goal of comprehensive separations reform, over the years it has asked the Joint Board to focus on certain specific issues within that broad area. Most recently, the Commission referred to the Joint Board the harmonization of the Commission's part 32 jurisdictional separations rules with previous amendments to its part 32 accounting rules and asked the Joint Board to issue a recommended decision on that matter. The Joint Board issued its Recommended Decision eight months after receiving that referral; and, after seeking public comment on the Joint Board's recommendations, the Commission amended its separations rules consistent with those recommendations.

42. Therefore, rather than narrowing the scope of the separations reform referral, the Commission believes that the best course is to ask the Joint Board to focus on certain discrete issues in the short term. First, should the Commission amend the separations rules to recognize that price cap carriers and rate-of-return carriers that have adopted the new incentive regulation framework for their business data services offerings are not subject to them—an action that would recognize the Commission's forbearance from application of the separations rules to these carriers? Second, given that the separations rules apply only to certain rate-of-return carriers and only for certain purposes, are there rules or recordkeeping requirements that the Commission should modify or eliminate in light of the freeze extension of up to six years? In highlighting these issues, the Commission hopes to draw on the Commission's recent experience with the Joint Board in amending the part 36 separations rules to harmonize them with changes in the part 32 accounting rules.

43. Longer term, the Commission continues to seek the Joint Board's recommendations on how the Commission might replace the existing jurisdictional separations process with a simplified system for reasonably allocating costs between the interstate and intrastate jurisdictions. The Commission agrees with NARUC that the existing separations rules, which presume circuit-switched, primarily voice networks, require updating to reflect today's network configurations and mix of broadband, video, and voice services. The Commission also shares NARUC's and the Irregulators' concern that those rules necessarily misallocate network costs. The Commission knows that any changes to the separations rules will need to be harmonized with the Commission's reforms to the universal service, intercarrier compensation, and business data services rules. Indeed, the Commission extends the separations freeze for up to six years to free resources to address these and other long-term separations problems. The Commission looks forward to working with the Joint Board in a more directed manner, addressing these important issues step-by-step. By addressing the separations procedures in a concerted fashion—through substantive reforms of the universal service, intercarrier compensation, and business data services rules on one hand, and focused revisions of specific areas in the separations rules on the other—the Commission hopes to resolve the complex separations issues that have proven so challenging well before the end of the maximum six-year extension period.

44. The Commission rejects NARUC's assertion that because it did not refer or receive a recommended decision from the Joint Board on the specific proposal to extend the freeze for 15 years, and because it did not receive a recommended decision from the Joint Board on allowing carriers subject to the category relationships freeze the opportunity to update their category relationships, the Commission is violating section 410(c) of the Communications Act. In so arguing, NARUC ignores the fact that the Commission has twice referred comprehensive separations reform to the Joint Board. The Joint Board clearly understood that these referrals encompassed a separations freeze; otherwise it would have sought an additional referral before recommending the initial freeze. Moreover in 2009, the Commission referred the specific question of whether to allow carriers subject to the category relationships freeze the opportunity to unfreeze those relationships. The Joint Board has never come to a recommended decision on the latter referral, and the only Recommended Decision the Joint Board has issued addressing any part of either comprehensive reform referral was the decision the Joint Board issued in 2000 recommending a separations freeze. Following the Joint Board recommendation, the Commission adopted the separations freeze and recognized that it might need to extend the freeze if comprehensive reform were not completed before the freeze expired.

45. Because the Commission has not completed comprehensive reform, consistent with the Commission's 2001 Separations Freeze Order, the Commission has extended the separations freeze seven times without an additional referral to, or receiving an additional recommended decision from, the Joint Board. The first time the Commission extended the freeze it explicitly found that the extension was within the scope of the Joint Board's previous recommendation. NARUC's assertion that the Commission found in 2001 that it would be required to receive a specific recommendation from the Joint Board on each extension of the separations freeze is plainly wrong. The Commission committed to consulting with the Joint Board on extensions of the initial five-year freeze; it did not commit to referring freeze extensions to the Joint Board. For their part, State members of the Joint Board have repeatedly submitted letters supporting the freeze extensions; and, as part of this proceeding, the current State members recommend that the Commission extend the separations freeze for up to six years and allow carriers a one-time opportunity to unfreeze their category relationships.

46. In its comments, NARUC attempts to distinguish the proposed 15-year freeze from earlier, shorter freeze extensions by arguing that a freeze of up to 15 years is the “policy equivalent” of a permanent freeze. The Commission's decision to extend the freeze for only six years should alleviate NARUC's concern. Moreover, the Commission's decision to extend the freeze for up to six years is consistent with the recommendation of the State members of the Joint Board and informed by the record of this proceeding and by the Joint Board's failure to reach a recommendation on comprehensive reform for the last 21 years. Furthermore, the freeze the Commission adopts today is not permanent; it will expire on a date certain absent further action by the Commission.

47. Regarding the Commission's 2001 pledge to “consult[] with the Joint Board” to “determine whether the freeze period shall be extended,” the notice and comment and ex parte periods for the Further Notice provided ample opportunity for the Joint Board, including its State members, to voice their opinions on the extension. The State members of the Joint Board have taken the opportunity to engage in extensive discussions with all the other Joint Board members. These discussions meet any obligation the Commission may have under section 410(c) to afford the State members of the Joint Board an opportunity to participate in the Commission's deliberations on this Report and Order.

48. Moreover, given the lack of action by the Joint Board on the Commission's two referrals of comprehensive reform and separate referral of an unfreeze of the category relationships and the recommendations of the State Joint Board members, the Commission's actions today are necessary and appropriate. Section 410(c) directs that, after a referral, the Joint Board “shall prepare a recommended decision for prompt review and action by the Commission.” Nothing in section 410(c) obligates the Commission to wait indefinitely for a recommended decision before acting. The Commission concludes that the only reasonable interpretation of the statutory language allows the Commission to act unilaterally where, as here, issues have been pending before the Joint Board for many years without a recommended decision. Any contrary interpretation would allow the Joint Board to indefinitely delay Commission action. Congress could not have intended that result while requiring that the Commission act promptly once the Joint Board issues a recommended decision.

49. Reducing the length of the freeze extension should also alleviate NARUC's concern that extending the freeze for up to 15 years would result in unjust and unreasonable rates because of the frozen allocation of the underlying costs to the interstate and intrastate jurisdictions. A freeze extension of up to six years will free up resources to address whether the separations rules produce reasonable results within the meaning of section 201(b) of the Communications Act and determine the proper methodology if the rules need to be revised. This is no easy undertaking, given the need to ensure that any changes to the separations rules are consistent with the Commission's high-cost universal service and intercarrier compensation rules. Although the Commission agrees with NARUC on the need for separations reform, it finds that extending the freeze for up to six years will accelerate that reform. Accordingly, the Commission finds that a freeze extension of up to six years, in combination with a one-time option to unfreeze category relationships, will increase the Commission's and the Joint Board's ability to ensure just and reasonable rates.

50. Paperwork Reduction Act Analysis. This document contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, the Commission sought specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes most businesses with fewer than 25 employees, in the Final Regulatory Flexibility Analysis below.

51. Congressional Review Act. The Commission will send a copy of this Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

52. Final Regulatory Flexibility Act Analysis. The Regulatory Flexibility Act of 1980 requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in the Report and Order on small entities. The FRFA is set forth in part V, below.

53. Effective Date. The Commission finds good cause to make the extension of the separations freeze effective immediately upon publication of a summary of the Report and Order in the Federal Register . The current freeze expired on December 31, 2018. To avoid unnecessary disruption to carriers subject to the separations rules, the Commission preserves the status quo by making the extension of the freeze effective upon publication.

54. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Final Regulatory Flexibility Analysis (FRFA) on the possible significant economic impact on small entities by the Report and Order. An Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the Further Notice of Proposed Rulemaking. The Commission sought written public comment on the proposals in this rulemaking proceeding, including comment on the IRFA. The Commission did not receive comments on the IRFA.

55. The Commission's part 36 jurisdictional separations rules originated more than 30 years ago when the Commission and its State counterparts used costs to set rates, and the rules were designed to help prevent local exchange carriers (LECs) from recovering the same costs from both the interstate and intrastate jurisdictions. In 1997, the Commission initiated a proceeding to comprehensively reform those rules in light of the statutory, technological, and marketplace changes that had affected the telecommunications industry. In 2001, the Commission, pursuant to a recommendation by the Federal-State Joint Board on Jurisdictional Separations (Joint Board), froze the part 36 separations rules for a five-year period beginning July 1, 2001, or until the Commission completed comprehensive separations reform, whichever came first. The Commission has extended the freeze seven times, with the most recent extension expiring on December 31, 2018. The deadline compelled the Commission to make a choice between extending the freeze further or allowing long-unused separations rules to take effect on January 1, 2019.

56. The Commission finds that not extending the freeze would impose significant burdens on rate-of-return carriers that would far exceed the benefits, if any, of requiring those carriers to comply with rules that they have not implemented since 2001. Accordingly, the Report and Order extends for up to six years the freeze of part 36 category relationships and jurisdictional cost allocation factors that the Commission adopted in the 2001 Separations Freeze Order and subsequently extended until December 31, 2018. This additional extension will begin upon publication of the Order in the Federal Register , and will continue until the earlier of December 31, 2024, or the completion of comprehensive reform of the part 36 jurisdictional separations rules.

57. Also, in the 2001 Separations Freeze Order, the Commission granted rate-of-return carriers a one-time option to freeze their category relationships. Carriers that chose to freeze their category relationships in 2001 assign costs within part 32 accounts to categories using their separations category relationships from 2000. Consequently, these companies are still separating their costs based on the technologies and services that were in place in 2000, instead of being able to adjust the amounts assigned to separations categories to reflect the current network costs and services.

58. In the Rate-of-Return Business Data Services Order, the Commission allowed carriers subject to the category relationships freeze that receive model-based and other forms of fixed high-cost support and elect incentive regulation for business data services to opt out of that freeze and update their category relationships. In this Report and Order, the Commission grants all other rate-of-return carriers operating under that freeze the opportunity to opt out of it—enabling carriers to better recover network upgrade costs from ratepayers that benefit from those upgrades and to take greater advantage of universal service programs that incent broadband deployment.

59. There were no comments that specifically addressed the proposed rules and policies presented in the IRFA that was part of the Further Notice.

60. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

61. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.

62. Incumbent Local Exchange Carriers. The rules adopted in this Report and Order affect the tariffed rates for interstate regulated services for incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for providers of incumbent local exchange services. The closest applicable size standard under the SBA rules is for Wired Telecommunications Carriers. Under the SBA definition, a carrier is small if it has 1,500 or fewer employees. According to the FCC's Telephone Trends Report data, 1,307 incumbent LECs reported that they were engaged in the provision of local exchange services. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most incumbent LECs are small entities that may be affected by the rules and policies adopted in this proceeding.

63. The Commission has included small incumbent LECs in this RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard ( e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. Because the Commission's proposals concerning the part 36 rules will affect all incumbent LECs, some entities employing 1,500 or fewer employees may be affected by the rule changes adopted in the Report and Order. The Commission has therefore included small incumbent LECs in this RFA analysis, although the Commission emphasizes that this RFA action has no effect on the Commission's analyses and determinations in other, non-RFA contexts.

64. None. Carriers are not required to unfreeze their category relationships. Even if they choose to do so, affected carriers may adjust their category relationships in cost studies that generally are conducted prior to filing tariffed rates.

65. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) The establishment of differing compliance and reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or part thereof, for small entities.

66. The jurisdictional freeze has eliminated the need for all incumbent LECs, including incumbent LECs with 1,500 employees or fewer, to complete certain annual separations studies that otherwise would be required by the Commission's rules. Thus, an extension of this freeze avoids increasing the administrative burden of regulatory compliance for rate-of-return incumbent LECs, including small incumbent LECs.

67. Presently, rate-of-return carriers in a limited number of study areas operate under the category relationships freeze. When the Commission granted rate-of-return carriers the opportunity to elect the category relationships freeze, it specified the freeze would be an interim, “transitional measure” lasting no more than five years. But, the freeze has now lasted 17 years, and carriers that elected it are prohibited from withdrawing from that election. In the Report and Order, the Commission grants affected carriers the opportunity to voluntarily opt out of this freeze, rather than requiring carriers to do so. The Commission recognizes that the size, cost structures, and investment patterns of these carriers vary widely, and therefore enables an individual carrier to decide for itself whether the economic benefits of unfreezing its category relationships outweigh any costs. The Commission therefore certifies that this Report and Order will not have a significant economic impact on a substantial number of small entities.

68. None.

69. The Commission will send a copy of the Report and Order, including the FRFA, to Congress and the Government Accountability Office pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Report and Order, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

70. Accordingly, it is ordered that, pursuant to the authority contained in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, this Report and Order is adopted.

71. It is further ordered that, pursuant to the authority contained in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, and part 36 of the Commission's rules, 47 CFR part 36, is amended as set forth in the Final Rules below.

72. It is further ordered that, pursuant to the authority contained in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, except as otherwise provided in this Report and Order, the amendments to 47 CFR part 36 set forth in the Final Rules below shall be effective on the date of publication of a summary of the Report and Order in the Federal Register .

73. It is further ordered that the amendments to 47 CFR 36.3(b) specified below in the Final Rules, which may contain new or modified information collection requirements that require approval by the OMB under the Paperwork Reduction Act, will become effective after OMB review, on the effective date specified in a document that the Commission will publish in the Federal Register announcing such effective date.

74. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

75. It is further ordered that the Commission shall send a copy of the Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 36 as follows:

This publication of Appendix A of the Defense Federal Acquisition Regulation Supplement (DFARS) updates the Charter of the ASBCA from the most recent prior version, dated May 14, 2007, to its latest version, dated April 9, 2018. The updated Charter implements changes to ASBCA internal administration to better support the Board's mission of hearing, considering, and determining appeals by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions. In addition to minor administrative changes and a rearranging of paragraphs to improve the logical flow of the document and add clarity, the following substantive changes were made to the Charter:

• References to “Under Secretary of Defense for Acquisition, Technology and Logistics” were changed to “Under Secretary of Defense responsible for acquisition.”

• Former paragraph 4 (new paragraph 3) was shortened to clearly state the Board Chairman's broad powers and responsibilities and to remove detailed processes deemed not appropriate for this type of document.

• The requirement for the Board to forward quarterly reports of the Board's proceedings to various Defense officials was removed. The requirement for annual reports was retained.

The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is the Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule only publishes the updated ASBCA charter and is therefore not required to be published for public comment, because the rule does not have a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form.

Executive Order (E.O.) 12866, Regulatory Planning and Review; and E.O. 13563, Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b). This rule is not a major rule as defined at 5 U.S.C. 804(2).

This rule is not an E.O. 13771 regulatory action, because this rule concerns regulations related to agency organization, management, or personnel.

Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section II of this preamble), the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

This rule does not impose any new information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Therefore, DoD is amending 48 CFR appendix A to chapter 2 as follows:

DoD published a proposed rule in the Federal Register at 83 FR 42820 on August 24, 2018, to revise the DFARS to implement the antiterrorism training requirements for contractors provided in DoD Instruction (DoDI) O-2000.16, Volume 1, DoD Antiterrorism (AT) Program Implementation: DoD AT Standards (available at http://www.esd.whs.mil/Directives/issuances/dodi/ ). The rule will ensure contractors, who as a condition of contract performance require routine physical access to a Federally-controlled facility or military installation, are aware of the requirement for contractor personnel to complete Level I DoD antiterrorism awareness training. Routine physical access is considered more than intermittent access, such as when a contractor employee is required to obtain a Common Access Card. The training is required within 30 days of requiring access and annually thereafter and must be completed either through DoD-sponsored and certified computer or web-based distance learning instruction, or under the instruction of a qualified Level I antiterrorism awareness instructor.

There were no public comments submitted in response to the proposed rule. There are no changes made to the final rule with regard to public comments; however, there are some minor editorial revisions incorporated. The definition of “military installation” at DFARS 204.7201, Definitions, and the clause at 252.204-7004, DoD Antiterrorism Awareness Training for Contractors, is updated to reflect more precisely the statutory definition at 10 U.S.C. 2801(c)(4) to address activities in a foreign country. Additionally, the clause is updated to reflect the current secured weblink of https://jko.jten.mil/ for information and guidance pertaining to the DoD antiterrorism awareness training. These minor editorial updates are administrative and have no effect on the public.

This rule creates a new DFARS clause 252.204-7004, Antiterrorism Awareness Training for Contractors, to advise DoD contractors of the requirement for its employees (and those of its subcontractors, if applicable) to complete Level I antiterrorism awareness training within 30 days of requiring access and annually thereafter, if, as a condition of contract performance require routine physical access to a Federally-controlled facility or a military installation. DoD plans to apply this clause to solicitations and contracts below the simplified acquisition threshold and to the procurement of commercial items, including commercially available off-the-shelf items (as defined in Federal Acquisition Regulation 2.101). This is necessary in order to reach as wide an audience as possible to ensure contractor personnel who are required to have routine physical access to a Federally-controlled facility or military installation are aware of this training requirement.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This final rule is not an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

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

This final rule is necessary to implement the requirements of DoD Instruction O-2000.16, Volume 1, DoD Antiterrorism (AT) Program Implementation: DoD AT Standards, to ensure that contractors complete Level I antiterrorism awareness training. The objective of this final rule is to ensure contractor personnel who, as a condition of contract performance, require routine physical access to a Federally-controlled facility or military installation are aware of terrorism threats and the proper responses to threat actions. In recent years, there have been terrorist events directed at Federally-controlled facilities and military installation and all personnel that routinely access those facilities need to be aware of the threat.

There were no issues raised by the public in response to the initial regulatory flexibility analysis provided in the proposed rule.

It is expected that contracts that contain the clause at Federal Acquisition Regulation (FAR) 52.204-9, Personal Identity Verification of Contractor Personnel, are contracts that would require contractor personnel to have routine physical access to Federally-controlled facilities or military installations. According to data available in the Electronic Data Access system, in fiscal year 2017, DoD awarded 137,106 contracts containing the clause at FAR 52.204-9 to 15,814 businesses, of which 10,837 (68.5 percent) were to small businesses. Common Access Cards (CAC) are issued to contractors who require routine physical access to a Federally-controlled facility or military installation. There are currently 507,665 contractors that hold CAC cards.

The rule does not impose any reporting or recordkeeping requirements.

There are no known alternative approaches that would accomplish the stated objectives. The impact is not expected to be significant, because current contractor employees who hold a CAC have already completed the requisite training and the cost of training new contractor personnel is at the expense of the Department. The time allotted for the training is approximately two hours per year. The training will provide safety awareness and precautionary measures that will benefit contractor personnel requiring routine physical access to a Federally-controlled facilities or military installations. This awareness not only benefits the contractor personnel, but also DoD civilians, military, and its assets.

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

Therefore, 48 CFR parts 204, 212, and 252 are amended as follows:

DoD published a proposed rule in the Federal Register at 83 FR 54698 on October 31, 2018, to implement sections 221 and 861 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-91).

Section 221 amends 10 U.S.C. 2302(2)(B) to allow for an expanded application of other competitive procedures by replacing the words “basic research” with “science and technology”. “Competitive procedures” were defined in 10 U.S.C. 2302(2)(B) to include “the competitive selection for award of basic research proposals resulting from a general solicitation, and the peer review or scientific review (as appropriate) of such proposals.” Changing the words “basic research” to “science and technology” expands the meaning of other competitive procedures to apply to “advanced technology development” and “advanced component development and prototypes” research proposals, in addition to “basic research” and “applied research” proposals. One of the solicitation methods for research and development proposals, a broad agency announcement (BAA), is defined in the Federal Acquisition Regulation (FAR) as “a general announcement of an agency's research interest including criteria for selecting proposals and soliciting the participation of all offerors capable of satisfying the Government's needs.” Section 221 permits the use of BAAs for competitive selection of science and technology proposals by authorizing the use of the competitive procedures at 10 U.S.C. 2302(2)(B) that result from a general solicitation and peer or scientific review of such proposals—a key element of the BAA process.

Section 861 amends 10 U.S.C. 2302e to allow for an extended term limit and increased dollar threshold under the contract authority for advanced development of initial or additional prototype units awarded from a competitive selection, as specified in 10 U.S.C. 2302(2)(B). The statutory term limit extends from 12 months to 2 years and the dollar threshold increases from $20 million to $100 million in fiscal year 2017 constant dollars (10 U.S.C. 2302e). Section 861 also amends 10 U.S.C. 2302e to repeal the obsolete authority implemented by section 819 of the NDAA for FY 2010 (Pub. L. 111-84), thereby eliminating the expiration date of the authority.

One respondent submitted a public comment on the proposed rule.

DoD reviewed the public comment in the development of the final rule. A discussion of the comment received and any changes made to the rule is provided as follows:

DoD did not make any changes to the proposed rule as a result of the public comment.

Comment: The respondent recommended the proposed rule update 213.106-1(b) to address documentation requirements related to competition for actions not exceeding the simplified acquisition threshold (SAT).

Response: Since there is no DFARS 213.106-1(b) section, DoD reviewed FAR 13.106-1(b), Soliciting Competition, which allows contracting officers to solicit from a single source, for purchases not exceeding the SAT, if the contracting officer determines that circumstances deem only one source reasonably available. This rule relates to soliciting proposals using other competitive procedures (such as a broad agency announcement) and is not related to solicitations of a single source for purchases not exceeding the SAT; therefore, DoD determined that the public comment is outside the scope of this rule.

One minor editorial change is made to the final rule. DoD compared the proposed rule to the current version of the DFARS text and noted the need to correct a typo at DFARS 215.371-4(a) by changing the word “sections” to “section”.

This rule does not add any new provisions or clauses or impact any existing provisions or clauses.

Executive Order (E.O.s) 12866, Regulatory Planning and Review; and E.O. 13563, Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This is not a major rule under 5 U.S.C. 804.

This final rule is not an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

A final regulatory flexibility analysis has been prepared and is summarized as follows:

This rule proposes to amend the DFARS to implement sections 221 and 861 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018.

Section 221 expands the definition of “competitive procedures” at 10 U.S.C. 2302(2)(B) by removing the term “basic research” and adding “science and technology” in its place. Section 861 implements a statutory modification to 10 U.S.C. 2302e to extend the term limit and dollar threshold for the contract authority for advanced development of initial or additional prototype units from 12 months to 2 years and from $20 million to $100 million in fiscal year 2017 constant dollars (10 U.S.C. 2302e), respectively. The modification also repeals the obsolete authority of section 819 of the NDAA for FY 2010 (Pub. L. 111-84), thereby eliminating the expiration date of September 30, 2019, for the contract authority for advanced development of initial or additional prototype units.

The objective of this rule is to implement sections 221 and 861 to establish broad agency announcements as a competitive procedure that may be used to select science and technology proposals and to expand the term limit and dollar threshold for the contract authority for advanced development of initial or additional prototype units. This rule impacts internal Government procedures by expanding the meaning of other competitive procedures to include the competitive selection of science and technology proposals and expands the contract authority for advanced development of initial or additional prototype units.

There were no public comments concerning the initial regulatory flexibility analysis.

In FY 2017, DoD awarded 1,853 contracts for research and development, excluding Small Business Innovation Research (SBIR) and Small Technology Transfer Research (STTR) program requirements. Approximately 53% of those new contract actions were awarded to 1,005 of unique small business and nontraditional DoD entities. There were 2,858 new contract awards for SBIR and STTR program requirements for DoD. Approximately 66% of those new contract actions were awarded to 1,891 of unique small business and nontraditional DoD entities.

This final rule does not include any new reporting or recordkeeping requirements for small entities.

There are no known significant alternative approaches to the final rule that would meet the requirements of the applicable statute.

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

Therefore, 48 CFR parts 206, 215, 234, and 235 are amended as follows:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR 30644 on June 29, 2018, to implement section 875(c) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328), which requires DoD to revise the DFARS to encourage contractors to propose commercial or non-Government standards and industry-wide practices that meet the intent of military or Government-unique specifications and standards. Four respondents submitted comments on the proposed rule.

DoD reviewed the public comments in the development of the final rule. A discussion of the comments received and any changes made to the rule are provided as follows:

There were no changes from the proposed rule made in the final rule as a result of the public comments.

Comment: Two respondents provided support for the proposed rule.

Response: DoD acknowledges the support for the rule.

Comment: Several respondents shared concerns with DoD's implementation of section 875 of the NDAA for FY 2017, regarding how standards would be added to the Acquisition Streamlining and Standardization Information System (ASSIST) database in order to implement the statutory requirements. The respondents also recommended revisions to the rule to allow contractors to propose equally effective standards and supporting data for reliance upon standards that meet the intent of the Government's requirements and to require the Government to determine that a commercial or non-Government requirement does not meet a military specification or standard.

Response: Maintenance of the ASSIST database is beyond the scope of this rule. Questions regarding standards and the ASSIST database should be directed to the Defense Standardization Program Office. Contact information is available at https://www.dsp.dla.mil/Contact-Us1/. Removing the prohibition at DFARS 211.107(b) on DoD using Federal Acquisition Regulation (FAR) 52.211-7, Alternatives to Government-Unique Standards, allows offerors to propose standards as alternatives, as intended. The language in the rule meets the intent of the statute at section 875(c) of the NDAA for FY 2017.

Comment: One respondent supported the use of the ASSIST database as a repository of voluntary consensus standards adopted by DoD and recommended additional instructions and clarification on how non-Government standards are selected for inclusion in the database.

Response: Maintenance or modification of the ASSIST database is beyond the scope of this rule. Questions regarding standards and the ASSIST database should be directed to the Defense Standardization Program Office. Contact information is available at https://www.dsp.dla.mil/Contact-Us1/.

Comment: Three respondents were concerned by the limitation on applicability of section 875 of the NDAA for FY 2017 requirements to contracts over the simplified acquisition threshold (SAT) and noncommercial contracts.

Response: Section III of this final rule preamble clarifies that the rule does not exclude solicitations for contracts valued at or below the SAT. No change to the text of the rule is required, since the proposed rule did not include a limitation to contracts valued above the SAT in the clause prescription. This rule, however, is not applicable to commercial contracts, including COTS, since Government- or military-unique specifications and standards should not be used in commercial contracts.

Comment: One respondent was concerned that the existing solicitation provision at FAR 52.211-7, Alternatives to Government-Unique Standards, uses a different standard in determining whether the standard proposed by the contractor is acceptable. The respondent was also concerned the rule required burden of proof from the contractor to demonstrate the contractor's proposed standard meets the Government's requirement.

Response: Although the statute uses the phrase “encourage contractors to propose commercial or non-Government standards and industry-wide practices that meet the intent of the military specifications and standards,” DoD retains the responsibility to ensure the requirements are met. Although offerors are encouraged to propose alternative standards, they must be subject to DoD's review and approval. DoD standards ensure that essential mission requirements are met. It is the offeror's responsibility to demonstrate that its proposed alternative standards meet the essential DoD mission requirements.

Comment: One respondent recommended revising DFARS clause 252.211-7005, Substitutions for Military or Federal Specifications and Standards, to meet the intent of the requirements in section 875.

Response: The rule revises the prescription to require the use of the provision at FAR 52.211-7 when Government-unique specifications and standards are included in DoD solicitations; use of this provision was previously optional. This approach meets the intent of section 875 requirements.

Comment: One respondent recommended revising DFARS 211.201 to add the new requirements established in section 875, which require military specifications to be used in acquisitions only to define an exact design solution when there is no acceptable commercial or non-Government standard, or when the use of a commercial or non-Government standard is not cost effective.

Response: DoD has determined it is unnecessary to revise DFARS 211.201, since the rule removes the prohibition at DFARS 211.107(b). This rule requires DoD to use FAR provision 52.211-7 to permit offerors to propose commercial or non-Government standards and industry-wide practices.

A reference to section 875(c) of the NDAA for FY 2017 is added at 211.107(b) and a minor editorial change is made to DFARS 211.201 to revise the name of the database from “DLA ASSIST database” to “ASSIST database”.

The purpose of this rule is to implement section 875(c) of the NDAA for FY 2017, which requires DoD to revise the DFARS to encourage offerors to propose commercial or non-Government standards and industry-wide practices that meet the intent of military or Government-unique specifications and standards. The rule does not add any new provisions or clauses; however, to comply with section 875(c), the rule requires DoD contracting officers to use the provision at FAR 52.211-7 in DoD solicitations that include military or Government-unique specifications and standards.

41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to such contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts at or below the SAT, the law will apply to them. The Principal Director, Defense Pricing and Contracting (DPC), is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations.

In accordance with 41 U.S.C. 1905, the Principal Director, DPC, has determined that it would not be in the best interest of the Federal Government to exempt acquisitions not greater than the SAT from the requirements of section 875(c) of the NDAA for FY 2017. This rule prescribes the use of the provision at FAR 52.211-7 in DoD solicitations that include military or Government-unique specifications and standards, which include those for acquisitions valued at or below the SAT. It is possible that contracts valued at or below this threshold (currently $250,000), could contain military or Government-unique specifications or standards; therefore, it is necessary and appropriate to include this provision in such contracts in order to give potential offerors an opportunity to propose alternatives to such specifications and standards. Providing such opportunities to offerors may increase competition and ultimately drive down costs associated with compliance with military or Government-unique specifications and standards.

10 U.S.C. 2375 governs the applicability of Defense-unique statutes to contracts and subcontracts for procurement of commercial items, including commercially available off-the-shelf (COTS) items. It is intended to limit the applicability of these laws to such contracts or subcontracts. 10 U.S.C. 2375(b)(2) provides that if a provision of law contains criminal or civil penalties, or if the Under Secretary of Defense for Acquisition and Sustainment makes a written determination that it is not in the best interest of the Department of Defense to exempt contracts for the procurement of commercial items, then the provision of law will apply to contracts for the procurement of commercial items. 10 U.S.C. 2375(c)(2) and (d)(2) make similar provisions for subcontracts under contracts for the procurement of commercial items, and for the procurement of commercially available off-the-shelf (COTS) items.

Determinations in accordance with 10 U.S.C. 2375 have not been made. This rule does not prescribe the provision at FAR 52.211-7 for use in solicitations issued using FAR part 12 procedures for the acquisition of commercial items, including COTS, since such contracts should not include military or Government-unique specifications or standards.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This final rule is an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

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

This final rule implements section 875(c) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328). The objective of this rule is to require the use of FAR 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations that include military or Government-unique specifications and standards. This will encourage and permit offerors to propose alternatives to Government-unique standards by using an existing FAR provision. The legal basis for this rule is section 875(c) of the NDAA for FY 2017.

There were no significant issues raised by the public in response to the initial regulatory flexibility analysis.

Based on Federal Procurement Data System data for Product Service Code 5342 (hardware, weapon systems), this rule could potentially apply to approximately 710 unique entities, of which 565 are small businesses. This is based on the number of DoD contract awards in FY 2017. However, of that total, and given the DoD policy of discouraging the use of military specifications and standards in solicitations, this rule would likely impact no more than 40 offerors or potential contractors (the approximate number of DoD contractors involved in major weapons systems). Accordingly, DoD estimates that this rule will have limited impact. Given the fact that some small number of DoD solicitations may include a military or Government-unique specification or standard generally limited to those involving a major weapons system, this rule provides a means for offerors to propose alternatives on a given solicitation.

This rule contains reporting and recordkeeping requirements for those entities that, in response to a DoD solicitation containing military or Government-unique standards, wish to propose voluntary consensus standards that meet the Government's requirements as alternatives to the Government-unique standards. The professional skill sets required are those of mid-level administrative personnel.

There are no known significant alternative approaches to the rule that would meet the requirements of the statute. DoD considers the approach described in the rule to be the most practical and beneficial for both Government and industry.

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The rule contains information collection requirements. OMB has cleared this information collection requirement under OMB control number 9000-0153, titled, OMB Circular A-119; FAR Sections Affected: 52.211-7 and 53.105.

Therefore, 48 CFR part 211 is amended as follows:

I. Background

DoD is amending the DFARS to implement section 881 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232). Section 881 codifies the authority for information relating to supply chain risk at 10 U.S.C. 2339a and repeals the sunset date at sections 806(g) of the NDAA for FY 2011 (Pub. L. 111-383), as modified by section 806(a) of the NDAA for FY 2013 (Pub. L. 112-239), making the authority permanent.

DoD published a final rule (DFARS Case 2012-D050) in the Federal Register at 80 FR 67243 on October 30, 2015, to implement section 806 of the NDAA for FY 2011, as amended by section 806 of the NDAA for FY 2013 (Pub. L. 112-239). The objective of the rule was to minimize the potential risk for supplies and services purchased by DoD to maliciously degrade the integrity and operation of sensitive information technology systems. The rule implemented the use of supply chain risk as an evaluation factor in information technology procurements for services or supplies as a covered system, as a part of a covered system, or in support of a covered system. DFARS provision 252.239-7017, Notice of Supply Chain Risk, and DFARS clause 252.239-7018, Supply Chain Risk, were added to inform contractors of the requirement to mitigate supply chain risk in the provision of supplies and services to the Government and other statutory authorities afforded to the Government under section 806.

Section 881 of the NDAA for FY 2019 codified this authority at 10 U.S.C. 2339a and removed the September 30, 2018, sunset date. This final rule removes the sunset date at DFARS 239.7300(b) and changes numerous statutory citations from section 806 of Public Law 111-383 to 10 U.S.C. 2339a. This rule makes no change to the authority for information relating to supply chain risk currently implemented in the DFARS, other than removing the sunset date, updating the statutory citations, and the following minor editorial changes:

• Corrects the reference to 44 U.S.C. 3552(b) in the definition of “covered system.”

• Replaces the description of a national security system with the defined term “covered system” in the definition of “supply chain risk.”

• Changes “Under Secretary of Defense for Acquisition, Technology, and Logistics” to “Under Secretary of Defense for Acquisition and Sustainment.”

The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is 41 U.S.C. 1707 entitled “Publication of Proposed Regulations.” Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because this rule merely removes the sunset date of the existing regulation, making it permanent, and replaces the obsolete statutory citations with the new 10 U.S.C. 2339a reference.

This rule only removes the sunset date from DFARS 239.7300(b) and updates the statutory citations to 10 U.S.C. 2339a, wherever necessary. The rule continues to prescribe the associated clauses to contracts at or below the simplified acquisition threshold and for commercial items, including commercially available off-the-shelf items.

Executive Orders (E.O.) 12866 and E.O. 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This final rule is not an E.O. 13771 regulatory action, because this rule is not a significant under E.O. 12866.

Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section II. of this preamble), the analytical requirement of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

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

Therefore, 48 CFR 212, 215, 239, and 252 are amended as follows:

I. Background

DoD published a proposed rule in the Federal Register at 83 FR 42846 on August 24, 2018, to modify DFARS clause 252.247-7023, Transportation of Supplies by Sea, to include the instructions currently specified in DFARS clause 252.247-7024, Notification of Supplies by Sea, and then remove DFARS clause 252.247-7024 from the DFARS. No public comments were received in response to the proposed rule.

This rule does not create any new provisions or clauses or impose any new requirements. The rule merely consolidates existing instructions regarding notifications of transportation of supplies by sea into a single DFARS clause, 252.247-7023, which will continue to apply to contracts for commercial and commercially available Off-the-shelf items, as well as contracts at or below the simplified acquisition threshold.

Executive Order (E.O.) 12866, Regulatory Planning and Review; and E.O. 13563, Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget, Office of Information and Regulatory Affairs, has determined that this is not a significant regulatory action as defined under section 3(f) of E.O. 12866 and, therefore, was not subject to review under section 6(b). This rule is not a major rule as defined at 5 U.S.C. 804(2).

This final rule is not an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

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

DoD is amending DFARS clause 252.247-7023, Transportation of Supplies by Sea, to include the instructions currently specified in DFARS clause 252.247-7024, Notification of Supplies by Sea, and then removing DFARS clause 252.247-7024 from the DFARS. The objective of this rule is to streamline the instructions to contractors pertaining to the transportation of supplies by sea. The combination of these DFARS clauses supports a recommendation from the DoD Regulatory Reform Task Force.

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

Based on fiscal year 2016 data from the Federal Procurement Data System, the Government issued approximately 83,000 contract actions that included DFARS clause 252.247-7023. Of the 83,000 contract actions, approximately 39,000 awards were made to 15,000 unique small businesses entities.

This rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses.

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

The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; however, these changes to the DFARS do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 0704-0245, titled: Defense Federal Acquisition Regulation Supplement (DFARS) Part 247, Transportation and Related Clauses.

Therefore, 48 CFR parts 212, 247, and 252 are amended as follows:

DoD published a proposed rule in the Federal Register at 83 FR 42850 on August 24, 2018, to implement section 823 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. Section 823 modifies 10 U.S.C. 2305a to provide an exemption from the phase two design-build maximum number of offerors that may be selected to submit competitive proposals for contracts exceeding $4 million. The exemption provides that if the contract value exceeds $4 million and the solicitation is issued pursuant to an indefinite-delivery indefinite-quantity (IDIQ) contract for design-build construction, the maximum number of offerors to be selected may exceed five.

In addition, for other than IDIQ contracts, the rule provides authority to exceed the five offeror maximum when the contracting officer's decision is approved by the head of the contracting activity, delegable to a level no lower than the senior contracting official within the contracting activity, when the solicitation is for a contract that exceeds $4 million. When a solicitation is for a contract that does not exceed $4 million, the rule provides that the number of offerors is at the contracting officer's discretion.

Three respondents submitted public comments in response to the proposed rule.

DoD reviewed the public comments in the development of the final rule. A discussion of the comments received and any changes made to the rule are provided as follows:

There were no changes from the proposed rule made in the final rule as a result of the comments received. The comments did not recommend changes to the proposed rule; rather, the respondents expressed concerns over the underlying intent of the statute.

Comment: Several respondents stated that the statutory requirement will create a significant administrative and cost burden on the Government and/or industry. One respondent suggested that the exemption will require DoD officials to review an unnecessarily high number of full proposals undermining the purpose of both IDIQ contracts and design-build.

Response: The rule does not require contracting officers to consider more than five offerors; instead, the rule provides contracting officers the option to allow for more than five offerors to submit competitive proposals in solicitations for contracts for design-build construction that exceed $4 million.

Comment: Several respondents stated that the statutory requirement will drive away highly qualified design-build firms and/or possibly favor lower qualified firms. One respondent stated that increasing the number of offerors will reduce participation from highly qualified firms who incur much of the cost in these competitions. The same respondent noted that increasing the number of offerors may favor lower qualified offerors based on artificially low bids.

Response: DoD does not agree that the statutory requirement, and the resulting implementing rule, will drive away highly qualified design-build firms and/or possibly favor lower qualified firms. The competitive selection criteria will not change based on this rule. Conversely, the rule could be viewed as providing expanded opportunity for qualified firms to compete.

Comment: One respondent stated that the statutory requirement will create a learning curve for new firms, which will result in longer project times.

Response: DoD does not agree that expanding the competitive pool will necessarily result in longer project times. While a learning curve might be expected for any new firm or new requirement, this does not drive the decision of whether or not to restrict competition.

Comment: Two respondents stated that the statutory requirement moves away from industry best practices. One respondent stated that the statutory requirement diminishes the opportunities for innovation that design-build offers.

Response: While the rule may be viewed by the respondents as moving away from industry best practices, this rule is necessary to meet the requirements of the statute. Opening up the competitive pool may result in opportunities for increased innovation.

Comment: One respondent stated that the statutory requirement will create a larger competitive pool which will diminish accountability.

Response: Opening up the competitive pool should not have any effect upon or diminish accountability.

One minor editorial change is made to the rule numbering to correctly designate the added DFARS rule text as “236.303-1(a)(4)” in lieu of “236.303-1(4)”.

This rule does not create any new provisions or clauses or impact any existing provisions or clauses.

Executive Order (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This is not a major rule under 5 U.S.C. 804.

This final rule is not an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

A final regulatory flexibility analysis has been prepared and is summarized as follows:

This rule amends the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 823 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018, which modifies 10 U.S.C. 2305a(d) regarding the maximum number of offerors that may be selected to submit competitive proposals under solicitations for two-phase design-build. Specifically, the selection procedures are modified by providing an exemption from the maximum number of five offerors when the contract value in a solicitation exceeds $4 million and the solicitation is issued pursuant to an indefinite-delivery indefinite-quantity (IDIQ) contract for design-build construction. The rule provides the authority to exceed the five offeror maximum when the contracting officer's decision is approved by the head of the contracting activity, delegable to a level no lower than the senior contracting official within the contracting activity, when the solicitation is for a contract that exceeds $4 million. The rule also provides that the number of offerors is at the contracting officer's discretion when the solicitation is for a contract that does not exceed $4 million.

There were no significant issues raised by the public comments in response to the initial regulatory flexibility analysis.

Based on FY 2017 data from the Federal Procurement Data System, DoD issued approximately 499 new awards for construction exceeding $4 million to 396 unique businesses, to include IDIQ contracts, purchase orders, and orders under basic ordering agreements. Of the 499 new awards for construction, approximately 305 awards (approximately 61 percent) were made to 252 unique small entities (approximately 64 percent). This estimate is based on the assumption that contracts for design-build are coded as “construction” in FPDS, in which case a smaller number of small entities are actually impacted by the opportunity to exceed to the five offeror maximum for contracts valued in excess of $4 million. For contracts valued at or below $4 million, the FAR already provides an opportunity for contracting officers to determine that a greater number of offerors is in the Government's interest and is consistent with the purposes and objectives of the two-phase design-build selection procedures. No significant impact is expected to result from authorizing contracting officers to exceed the maximum number at their own discretion.

This final rule does not include any new reporting or recordkeeping requirements for small entities.

There are no known significant alternative approaches to the final rule that would meet the requirements of the applicable statute.

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

Therefore, 48 CFR part 236 is amended as follows:

Background

The New England Fishery Management Council's Northeast Skate Complex Fishery Management Plan (FMP) manages a complex of seven skate species (barndoor, clearnose, little, rosette, smooth, thorny, and winter skate) off the New England and mid-Atlantic coasts. Skates are harvested and managed in two different fisheries: One for food (the wing fishery) and one for lobster and crab bait (the bait fishery).

The fishing year for skates is from May 1 to April 30. The directed wing fishery is managed using possession limits in two separate seasons. The bait fishery has possession limits in three separate seasons (Table 1). When catch approaches the seasonal total allowable landings (TAL), a lower, more restrictive incidental possession and landing limit is implemented to slow harvest and help ensure that seasonal quotas are not exceeded.

In recent years, a combination of lower overall catch limits and strong fishery participation has caused the incidental limits in both the wing and bait fisheries to be put into effect with several months remaining in the fishing year. To address this issue for the bait fishery, the Council developed and NMFS implemented Framework 4 in March 2018 to better control the catch of skate bait throughout the fishing year (83 FR 6133; February 13, 2018). Similarly, the Council developed Framework 6 to adjust measures to extend the directed skate wing fishing year and reduce negative impacts when skate wing incidental limits are triggered. The Council took final action on Framework 6 at its June 2018 meeting. On November 27, 2018, we proposed management modifications to implement Framework Adjustment 6 to the Northeast Skate Complex Fishery Management Plan and revise the 2018-2019 specifications (83 FR 60818).

This action adjusts the management uncertainty buffer between the annual catch limit (ACL) and annual catch target (ACT) in the skate FMP. The current uncertainty buffer between the ACL and ACT is 25 percent ( i.e., ACT = 75 percent of ACL). This action reduces this buffer to 10 percent, resulting in an increase in the TALs for both the wing and bait fisheries. Council analysis indicates that this revised buffer will likely delay the need to implement the restrictive incidental limit of 500 lb (227 kg) in the wing fishery until later this spring. For the bait fishery, this buffer reduction is expected to delay enacting the incidental limits until around March. The analyses within Framework 6 indicate that the level of management uncertainty within the skate fishery has likely reduced since the implementation of the ACL operational framework in 2010. For example, management controls put in place have been effective at constraining catch; species identification and catch accounting has improved; ACLs have not been exceeded, and only minor overages of fishery TALs have occurred. This action also makes an administrative change to the accountability measures regulation to be consistent with the uncertainty buffer changes.

The modification to the management uncertainty buffer results in adjustments to the 2018-2019 specifications implemented through Framework 5 (83 FR 48985; September 28, 2018). As a result, this action implements the following revised 2018-2019 specifications (Table 2):

1. The acceptable biological catch (ABC) and ACL remains at 31,327 mt.

2. An ACT of 28,194 mt (90 percent of the ACL).

3. A TAL of the 15,788 mt for the entire skate fishery.

4. A TAL of 10,499 mt for the wing fishery that is divided in two seasons according to the current regulations at 50 CFR 648.322. In season 1 (May 1-August 31) the TAL will be 5,984 mt (57 percent), and the remainder of the TAL allocated to Season 2 (September 1-April 30). As the 2018 fishing year started on May 1, the wing TALs will be retroactively increased. The regulations for the skate fishery allow for unused wing TAL from Season 1 to be rolled-over to Season 2. NMFS estimates that 4,490 mt of wings were landed in Season 1, and therefore 1,494 mt can be rolled over to Season 2 in 2018. Given this, the Season 2 wing TAL in 2018 will be approximately 6,009 mt.

5. A TAL of 5,289 mt for the bait fishery that is divided into three seasons according to the current regulations at § 648.322. In Season 1 (May 1-July 31) the TAL is 1,629 mt (30.8 percent); in Season 2 (August 1-October 31) the TAL is 1,962 mt (37.1 percent), and the remainder (1,698 mt) is allocated to Season 3 (November 1-April 30). As the 2018 fishing year started on May 1, the bait TALs will be retroactively increased. The regulations for the skate fishery allow for the unused bait TAL from Seasons 1 and 2 to be rolled-over to Season 3. Therefore, NMFS will adjust the 2018 Season 3 bait TAL accordingly. The 2018 Season 3 bait TAL will increase by 1,062 mt, resulting in a final season 3 TAL of 2,760 mt.

The Council reviewed the Framework 6 regulations and deemed them necessary and appropriate to implement consistent with section 303(c) of the Magnuson-Stevens Conservation and Management Act.

We received nine public comments on the proposed rule, which we have merged into three comments below.

Comment 1: The Sustainable Fisheries Association (SFA), the Atlantic Offshore Lobstermen's Association, and one member of the public offered support for this action. The SFA also requested that this final rule be implemented as soon as possible to avoid an unnecessary closure of the directed wing fishery based on the TALs implemented through Framework 5.

Response: NMFS agrees and is implementing this rule as soon as possible.

Comment 2: Four individuals and Shark Advocates International were not supportive of the reduction in the uncertainty buffer due to concerns over declining skate populations and inadequate fisheries data.

Response: Based on the most recent assessment information, NMFS disagrees that the skate species are depleted. With the exception of thorny skate, the seven other skate species that make up the skate complex are not overfished or experiencing overfishing. Thorny skates are overfished, but overfishing is not occurring and retention and landing of thorny skates is prohibited. This action is based on the best available information and takes into account the status of these stocks when determining appropriate management buffers and specifications. The Council's analysis for Framework 6 indicated that several sources of management uncertainty outlined in the 2010 action that established the 75-percent buffer have been improved such that revising the buffer is appropriate. The Council may adjust the management uncertainty buffer in a future action if it is determined that the buffer should be increased to respond to changes in available data or skate stock status.

Comment 3: We received one additional letter from the New London Seafood Distributors that made no comment on the proposed measures, but requested that additional measures be considered. Specifically, the organization is interested in adjusting seasonal possession limits and allowing for a higher proportion of the TAL in Season 3.

Response: These suggestions are outside the scope of this action but the Council may consider this information in a future action. New specifications for fishing years 2020-2022 are expected to be developed by the Council in 2019.

There are no changes to the measures from the proposed rule.

The Administrator, Greater Atlantic Region, NMFS, determined that Framework 6 is necessary for the conservation and management of the northeast skate complex and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable law.

The Assistant Administrator for Fisheries, NOAA, finds that because this rule relieves restrictions ( i.e., increases the total allowable landings available to the wing and bait fisheries to allow the fisheries to continue uninterrupted), it is excepted from the 30-day delay in effectiveness under 5 U.S.C. 533(d)(1). During the partial government shutdown that began on December 21, 2018, the wing fishery reached 91 percent of its current 2018 TAL, which is above the 85-percent threshold for implementing the incidental possession limit that would essentially close the directed wing fishery by reducing the possession limit to 500 lb (227 kg). Because this action will increase the 2018-2019 TAL by 20 percent, the possession limit threshold would be extended to later in the fishing year. If the 30-day delay of effectiveness is not waived, unnecessarily restrictive incidental limits will need to be implemented and be in effect longer, putting some vessels at a disadvantage. This would be contrary to the public interest because it would undermine the intent of this rule to extend the directed fishing time for both the skate wing and bait fisheries. As a result, NMFS is waiving the requirement.

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

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

Fisheries, Fishing, Recordkeeping and reporting requirements.

For the reasons set out in the preamble, 50 CFR part 648 is amended as follows: