On February 13, 2019, the U.S. Department of Energy (DOE) published in the Federal Register a notice of proposed rulemaking and request for comment regarding proposals to update and modernize the Department's current rulemaking methodology titled, “Procedures, Interpretations, and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products” (“Process Rule”). 84 FR 3910. That document announced a public meeting held on March 21, 2019, and request for written comments and information by April 15, 2019.

The public meeting held on March 21, 2019, did not address all of the content included in the notice of proposed rulemaking. Accordingly, DOE has determined that a second public meeting and extension of the comment period is appropriate. This notice announces that DOE will hold a second public meeting on April 11, 2019, to continue discussion on the proposal and to obtain input on topics not covered at the first public meeting. This notice also announces an extension of the public comment period for submitting comments in response to the proposal. The comment period is extended from April 15, 2019, to May 6, 2019. See section V, “Public Participation,” of the notice published on February 13, 2019, for additional information on participating in the public meeting and submitting comments. Id.

On January 10, 2018, the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) met and passed the recommendation to form a VRF multi-split systems working group to meet and discuss and, if possible, reach a consensus on proposed Federal test procedures and standards for VRF multi-split systems. On April 11, 2018, DOE published a notice of intent to establish a working group for VRF multi-split systems to negotiate a notice of proposed rulemaking for test procedures and energy conservation standards. The notice also solicited nominations for membership to the working group. 83 FR 15514. This notice announces the next round of meetings for this working group.

DOE will host a public meeting and webinar on the following dates:

• Wednesday, Apri1 17, 2019 from 9:00 a.m. to 5:00 p.m. at the U.S. Department of Energy, Room 8E-089, 1000 Independence Ave. SW, Washington, DC 20585.

• Thursday, April 18, 2019 from 9:00 a.m. to 5:00 p.m. at the U.S. Department of Energy Room, Room 1E-245, 1000 Independence Ave. SW, Washington, DC 20585.

The purpose of the meeting will be to negotiate in an attempt to reach consensus on proposed Federal test procedures and energy conservation standards for VRF multi-split systems.

The times, dates, and locations of the public meeting are listed in the DATES and ADDRESSES sections of this document. If you plan to attend the public meeting, please notify the ASRAC staff at asrac@ee.doe.gov.

Please note that foreign nationals participating in the public meeting are subject to advance security screening procedures which require advance notice prior to attendance at the public meeting. If a foreign national wishes to participate in the public meeting or webinar, please inform DOE as soon as possible by contacting Ms. Regina Washington at (202) 586-1214 or by email: Regina.Washington@ee.doe.gov so that the necessary procedures can be completed.

DOE requires visitors to have laptops and other devices, such as tablets, checked upon entry into the building. Any person wishing to bring these devices into the Forrestal Building will be required to obtain a property pass. Visitors should avoid bringing these devices, or allow an extra 45 minutes to check in. Please report to the visitor's desk to have devices checked before proceeding through security.

Due to the REAL ID Act implemented by the Department of Homeland Security (DHS), there have been recent changes regarding ID requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. DHS maintains an updated website identifying the State and territory driver's licenses that currently are acceptable for entry into DOE facilities at https://www.dhs.gov/real-id-enforcement-brief. A driver's license from a State or territory identified as not compliant by DHS will not be accepted for building entry and one of the alternate forms of ID listed below will be required. Acceptable alternate forms of Photo-ID include U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by States and territories as identified on the DHS website (Enhanced licenses issued by these States and territories are clearly marked Enhanced or Enhanced Driver's License); a military ID or other Federal government-issued Photo-ID card.

In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE's website: https://energy.gov/eere/buildings/appliance-standards-and-rulemaking-federal-advisory-committee. Participants are responsible for ensuring their systems are compatible with the webinar software.

Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the FOR FURTHER INFORMATION CONTACT section of this notice. The request and advance copy of statements must be received at least one week before the public meeting and may be emailed, hand-delivered, or sent by postal mail. DOE prefers to receive requests and advance copies via email. Please include a telephone number to enable DOE staff to make a follow-up contact, if needed.

ASRAC's Designated Federal Officer will preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. A transcript of the public meeting will be included on DOE's website: https://energy.gov/eere/buildings/appliance-standards-and- rulemaking-federal-advisory-committee. In addition, any person may buy a copy of the transcript from the transcribing reporter. Public comment and statements will be allowed prior to the close of the meeting.

The docket is available for review at https://www.regulations.gov/docket?D=EERE-2018-BT-STD-0003, including Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. All documents in the docket are listed in the https://www.regulations.gov index. However, not all documents listed in the index may be publically available, such as information that is exempt from public disclosure.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the design criteria, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will consider all comments received on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these airworthiness design criteria based on received comments.

On August 16, 2018, Alexander Schleicher GmbH & Co. Segelflugzeugbau (Alexander Schleicher) applied for validation of a type certificate change to add the Model ASK 21 B glider in accordance with the “Technical Implementation Procedures for Airworthiness and Environmental Certification Between the FAA and the European Aviation Safety Agency (EASA),” Revision 6, dated September 22, 2017. This model is a modified version of the Model ASK 21 glider and will be documented on existing Type Certificate Number (No.) G47EU. The Model ASK 21 B is a two-seat, mid-wing glider constructed from glass-fiber reinforced plastic and features a 55.8 foot (17 meters) wingspan with airbrakes on the upper wing surface. The glider has a non-retractable landing gear with a nose wheel and shock-absorbed, braked main wheel and a T-type tailplane. The glider has a maximum weight of 1,323 pounds (600 kilograms).

EASA type certificated the Model ASK 21 B glider in the utility and aerobatic categories and issued Type Certificate No. EASA.A.221, dated August 9, 2018. The associated EASA Type Certificate Data Sheet (TCDS) No. EASA.A.221 defined the certification basis, which Alexander Schleicher submitted to the FAA for review and acceptance.

Gliders are type certificated by the FAA as special class aircraft for which airworthiness standards have not yet been established by regulation. Under the provisions of 14 CFR 21.17(b), the airworthiness standards for special class aircraft are those found by the FAA to be appropriate and applicable to the specific type design. FAA Advisory Circular (AC) 21.17-2A  1 provides guidance on acceptable design criteria for the type certification of gliders and powered gliders in the United States. AC 21.17-2A allows applicants to utilize the Joint Aviation Requirements (JAR)-22  2 , other airworthiness criteria comparable to 14 CFR part 23, or a combination of both as the means for showing compliance for glider certification.

The certification basis for the Model ASK 21 B will be the same as the certification basis for the Model ASK 21 as shown on TCDS No. G47EU, Revision 1, except for areas affected by the change, which will use EASA Certification Specification (CS)-22 3 as shown in these proposed airworthiness criteria.

Applicable Airworthiness Criteria under 14 CFR 21.17(b).

Based on the Special Class provisions of § 21.17(b), the following airworthiness requirements form the FAA certification basis for the Model ASK 21 B:

1. 14 CFR part 21, effective February 1, 1965, including amendments 21-1 through 21-53.

2. Lufttuechtigkeitsforderungen fuer Segelflugzeuge and Motorsegler (LFSM) Airworthiness Requirements for Sailplanes and Powered Sailplanes, dated October 23, 1975.

3. JAR-22, dated April 1, 1980, including amendment 1, dated May 18, 1981.

4. CS-22, amendment 2, dated March 5, 2009, for the following regulations: CS 22.147, 22.455, 22.477, 22.561 except (b)(2), 22.595, 22.597, 22.629, 22.677, 22.685, 22.689, 22.721, 22.771, 22.773, 22.777, 22.779, 22.780, 22.781, 22.785, 22.786, 22.787, 22.788, 22.807, and 22.831.

5. AC 21.23-1, section 5(e)(6), dated January 12, 1981.

6. Operations are limited to Day VFR and to flying in Instrument Meteorological Conditions (IMC) if the glider is equipped as required under 14 CFR 91.205. Night operation is prohibited.

7. FAA Type Certificate Application Date: August 16, 2018.

8. EASA Type Certificate No. EASA.A.221, Issue 05, dated August 9, 2018.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0690; Product Identifier 2018-CE-022-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this SNPRM. We will consider all comments received by the closing date and may amend this SNPRM because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this SNPRM.

We issued an NPRM to amend 14 CFR part 39 by adding an AD that would apply to certain serial-numbered Gulfstream Model G-IV and Model GIV-X airplanes. The NPRM published in the Federal Register on August 2, 2018 (83 FR 37771). The NPRM was prompted by a revision to the ALS of the AMM based on fatigue and damage tolerance (FTD) testing and updated analysis. The NPRM proposed to require revising the ALS in the AMM to incorporate new inspections and life limits contained in Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision B, dated March 12, 2018.

Since we issued the NPRM, Gulfstream updated the life limits in the ALS and issued Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision D, dated August 20, 2018. Revision D differs from Revision B in that the part number (P/N) for the rudder for Model GIV airplanes has been corrected to reflect P/N 1159CS30004, and new life limits for fuselage cockpit side post P/N 1159BM50025-5 and P/N 1159BM50025-6 have been added per Revision C. Since incorporating Revision D instead of Revision B would impose an additional burden over those in the NPRM, we are reopening the comment period to allow the public the chance to comment on these changes.

We gave the public the opportunity to comment on the NPRM. The following presents the comment received on the NPRM and the FAA's response to the comment.

An anonymous commenter indicated that the NPRM is unnecessary. The commenter stated the proposed requirements have already been incorporated into the manufacturer's inspection program through a revision to the AMM, Chapter 5. According to the commenter, the original equipment manufacturer (OEM) publishes revisions to the AMM on a CDROM or electronically through the OEM's website; therefore, it would not be possible for the mechanic responsible for signing off on the AD to physically revise Chapter 5 of the AMM as required by the NPRM. The commenter noted the FAA's estimated cost of compliance and stated that the NPRM does not increase safety, but rather it increases paperwork. We infer that the commenter wanted the NPRM withdrawn.

We do not agree. In accordance with 14 CFR 39.5, the FAA issues an AD addressing a product when we find that: (a) An unsafe condition exists in the product; and (b) the condition is likely to exist or develop in other products of the same type design. We will issue an AD if a revision to the AMM ALS addresses an unsafe condition, i.e., more restrictive inspection intervals, altered non-destructive test (NDT) inspection requirements, and reduced life limits.

While Gulfstream operators may incorporate revisions to the AMM into their maintenance program, not all operators are required to do so. In order for the new life limits in Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision D, dated August 20, 2018, to become mandatory, and to correct the unsafe condition identified in the NPRM, the FAA must require the changes by AD action.

We reviewed Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision D, dated August 20, 2018. The service information describes more restrictive inspection intervals or altered NDT inspection requirements and updated life limits that address fatigue cracking of the principal structural elements (PSEs). Revision D of this service information differs from previous revisions in that it corrects the P/N for the rudder for Model GIV airplanes to reflect rudder P/N 1159CS30004 and adds new life limits for fuselage cockpit side post P/N 1159BM50025-5 and P/N 1159BM50025-6. 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 are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design. Certain changes described above expand the scope of the NPRM. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.

This SNPRM would require revising the ALS of the AMM, Chapter 5 Life Limited Components and Chapter 6 PSE Inspections Intervals, to incorporate new inspections and life limits based on FTD testing and updated analysis.

We estimate that this proposed AD affects 711 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

The extent of damage found during the proposed inspection may vary from airplane to airplane. We have no way of determining the number of airplanes that might need repairs or the cost of such repairs for each airplane.

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 proposed 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 small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

(2) 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 proposes to amend 14 CFR part 39 as follows:

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0203; Product Identifier 2018-CE-052-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No. 2018-0214, dated October 4, 2018 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

You may examine the MCAI on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0203.

We reviewed Diamond Aircraft Temporary Revision TR-MÄM 42-1097 Gustlock on Co-Pilot Side only, Doc. #7.01.15-E, dated July 18, 2018 (TR-MAM 42-1097), which contains amended figures related to the gust lock belt. We also reviewed Diamond Aircraft Industries GmbH Work Instruction WI-MSB 42NG-077, dated August 20, 2018, which contains procedures for removing the pilot (LH) side rudder pedal gust lock mounts and specifies inserting a copy of TR-MAM 42-1097 into the airplane flight manual (AFM). 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.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

We estimate that this proposed AD would affect 53 products of U.S. registry. We also estimate that it would take about 1 work-hour per product to comply with the removal of the pilot side rudder pedal gust lock mounts and to insert copy of TR-MAM 42-1097 into the AFM. The average labor rate is $85 per work-hour. Required parts would cost about $10 per product.

Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $5,035, or $95 per product.

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 small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

(2) 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 proposes to amend 14 CFR part 39 as follows:

Table of Contents I. Executive Summary A. Purpose of the Proposed Rule B. Summary of the Major Provisions of the Proposed Rule C. Legal Authority D. Costs and Benefits II. Background A. Introduction B. Need for Regulation III. Legal Authority IV. Description of the Proposed Rule A. Scope B. Appropriate Controls Would Remain in Place V. Proposed Effective Date VI. Economic Analysis of Impacts VII. Analysis of Environmental Impact VIII. Paperwork Reduction Act of 1995 IX. Federalism X. Consultation and Coordination with Indian Tribal Governments XI. References I. Executive Summary A. Purpose of the Proposed Rule

FDA proposes to remove the regulation requiring a specified test for the presence of Mycoplasma for live virus vaccines produced from in vitro living cell cultures and inactivated virus vaccines produced from such living cell cultures because the regulation is restrictive in that it identifies only one test method in detail to be used even though other methods also may be appropriate. More sensitive and specific methods exist and are currently being practiced, and removal of the required test for Mycoplasma provides flexibility for accommodating new and evolving technology and capabilities without diminishing public health protections.

The proposed rule removes §  610.30 (21 CFR 610.30), which details the method for Mycoplasma testing of samples of the virus harvest pool and control fluid pool of live virus vaccines and inactivated virus vaccines produced from in vitro living cell cultures.

FDA is taking this action under the biological products provisions of the Public Health Service Act (the PHS Act), and the drugs and general administrative provisions of the Federal Food, Drug, and Cosmetic Act (FD&C Act).

Because this proposed rule would not impose any additional regulatory burdens, this regulation is not anticipated to result in any compliance costs and the economic impact is expected to be minimal.

On February 24, 2017, Executive Order 13777, “Enforcing the Regulatory Reform Agenda” ( https://www.federalregister.gov/documents/2017/03/01/2017-04107/enforcing-the-regulatory-reform-agenda, 82 FR 12285; March 1, 2017 ) was issued. One of the provisions in the Executive order requires Agencies to evaluate existing regulations and make recommendations to the Agency head regarding their repeal, replacement, or modification, consistent with applicable law. As part of this initiative, FDA is proposing to revoke a regulation as specified in this proposed rule.

It has become increasingly clear that the test for Mycoplasma requirements is too restrictive for live virus vaccines and inactivated virus vaccines produced from in vitro living cell cultures because they specify particular methodologies when alternatives may be available that provide the same or greater level of assurance of safety. Modifications to mycoplasma testing described in § 610.30 must meet the requirements of 21 CFR 610.9.

Thus, the Agency believes that the regulation may no longer reflect the current testing procedures as a general matter and that it is more appropriate, flexible, and efficient to identify appropriate testing requirements for particular products in the biologics license application (BLA).

This proposed rule would remove the specified test for the presence of Mycoplasma to provide flexibility for accommodating new and evolving technology and capabilities without diminishing public health protections. Removal of this regulation would allow manufacturers of live virus vaccines produced from in vitro living cell cultures and inactivated virus vaccines produced from such living cell cultures to select the most scientifically appropriate Mycoplasma testing method to assure the safety, purity, and potency of their vaccines.

These newer technologies can result in higher sensitivity and specificity of Mycoplasma detection and could reduce the time required to complete testing for Mycoplasma. Removal of this regulation would not remove Mycoplasma testing requirements specified in individual BLAs. A manufacturer of a live virus vaccine produced from in vitro living cell cultures and inactivated virus vaccines produced from such living cell cultures would continue to be required to follow the Mycoplasma test requirements specified in its BLA, unless the BLA were revised to modify or replace the test through a supplement in accordance with §  601.12(c) (21 CFR 601.12(c)). FDA would review proposed changes to a manufacturer's approved biologics license in the context of that particular application to ensure that any such action is appropriate.

The proposed rule, if finalized, will remove the regulation; however, a manufacturer would continue to be required to test for Mycoplasma as specified in its BLA. If finalized, this action will provide regulated industry with flexibility, as appropriate, to employ advances in science and technology as they become available, without diminishing public health protections. As appropriate, the Agency will describe the appropriate tests for particular products in manufacturers' BLAs.

FDA is issuing this proposed rule under the biological products provisions of the PHS Act (42 U.S.C. 216, 262, 263, 263a, and 264) and the drugs and general administrative provisions of the FD&C Act (21 U.S.C. 321, 331, 351, 352, 353, 355, 360, 360c, 360d, 360h, 360i, 371, 372, 374, and 381). Under these provisions of the PHS Act and the FD&C Act, we have the authority to issue and enforce regulations designed to ensure that biological products are safe, pure, and potent, and prevent the introduction, transmission, and spread of communicable disease.

The test for Mycoplasma in §  610.30 is intended to ensure that live virus vaccines produced from in vitro living cell cultures, and inactivated virus vaccines produced from such living cell cultures do not contain Mycoplasma. Currently the regulation details the method for Mycoplasma testing of samples of the virus harvest pool and control fluid pool of live virus vaccines and inactivated virus vaccines produced from in vitro living cell cultures. Removal of this regulation would eliminate a restrictive and duplicative requirement and accommodate new and evolving technology.

We are proposing to remove the specified test for the presence of Mycoplasma for live virus vaccines produced from in vitro living cell cultures and inactivated virus vaccines produced from such living cell cultures. FDA is proposing this action because the existing specified test for the presence of Mycoplasma is restrictive and duplicative of requirements that are also specified in the BLA. This change is intended to remove restrictive or duplicative requirements and accommodate new and evolving technology and capabilities without diminishing public health protections. Removal of this regulation would not remove Mycoplasma testing requirements specified in individual BLAs. A biological product manufacturer would continue to be required to follow the Mycoplasma testing requirements specified in its BLA unless the BLA were revised to modify or replace the test through a supplement in accordance with § 601.12(c). FDA would review proposed changes to a manufacturer's approved biologics license in the context of that particular license to ensure that any such action is appropriate.

FDA is proposing to remove the requirements contained in §  610.30 from the regulations. As a result of removing §  610.30, we would also remove and reserve 21 CFR part 610, subpart D. FDA is proposing this action because the testing method described in the regulation is restrictive and more sensitive and specific testing methods are now available.

FDA believes that if this rulemaking becomes finalized as proposed, we would be able to continue to ensure that appropriate controls remain in place. If the proposed rule is finalized and the regulation calling for a specific test for Mycoplasma is eliminated, manufacturers would continue to be required to perform a test for Mycoplasma described in their BLAs for their licensed live virus vaccines produced from in vitro living cell cultures and their inactivated virus vaccines produced from such cultures. Such requirement would remain in effect unless the BLA were revised to modify or replace the test through a supplement in accordance with §  601.12(c). FDA would review proposed changes to a manufacturer's approved biologics license in the context of that particular license to ensure that any such action is appropriate.

FDA is proposing that any final rule based on this proposed rule become effective 30 days after the date of its publication in the Federal Register .

We have examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, Executive Order 13771, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Executive Order 13771 requires that the costs associated with significant new regulations “shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” We believe that this proposed rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this proposed rule would increase flexibility and does not add any new regulatory responsibilities, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $150 million, using the most current (2017) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.

We believe industry will largely maintain their current practices following the removal of § 610.30 Test for Mycoplasma. Although manufacturers of live virus vaccines and inactivated virus vaccines produced from in vitro living cell cultures may experience some unquantifiable cost savings from streamlining their testing procedures, we predict no quantifiable cost savings. FDA will also maintain its current practices, similarly generating no quantifiable cost savings. Therefore, we expect this proposed rule to be cost neutral.

We have developed a comprehensive Preliminary Economic Analysis of Impacts that assesses the impacts of the proposed rule. The full preliminary analysis of economic impacts is available in the docket for this proposed rule and at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

We have determined under 21 CFR 25.31(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA tentatively concludes that this proposed rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

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

We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13175. We have tentatively determined that the rule does not contain policies that would have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The Agency solicits comments from tribal officials on any potential impact on Indian Tribes from this proposed action.

The following reference is on display at the Dockets Management Staff (see ADDRESSES ) and is available for viewing by interested persons between 9 a.m. and 4 p.m. Monday through Friday; it is also available electronically at https://www.regulations.gov. FDA has verified the website address, as of the date this document publishes in the Federal Register , but websites are subject to change over time.

Therefore, under the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act, and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 610 be amended as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

The Coast Guard recently conducted a Waterways Analysis and Management System (WAMS) study for the Gastineau Channel. The study identified a need to modify an existing safety zone for certain waters of the Gastineau Channel to improve safety of large passenger vessels anchoring within the safety zone. The Captain of the Port, Southeast Alaska, (COTP) has determined that modification of the existing safety zone is necessary to improve the safety of large passenger vessels anchoring in the Gastineau Channel safety zone.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within the safety zone. The Coast Guard is proposing this rulemaking under authority in 33 U.S.C. 1231.

The COTP is proposing to amend 33 CFR 165.1702 by way of expanding the existing safety zone in order to improve safety of large passenger vessels anchoring in the Gastineau Channel. The proposed safety zone would extend the existing safety zone approximately 300 yards at the northernmost end of the safety zone. All vessels may transit or navigate within the safety zone. No vessels, other than large passenger vessels may anchor within the safety zone without the express consent from the Captain of the Port, Southeast Alaska or a designated representative. The regulatory text we are proposing appears at the end of this document.

We developed this proposed 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 NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM 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 a premise that all vessels may transit or navigate within the proposed safety 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 proposed rule would 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 IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES section) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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 proposed 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. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would 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 proposed 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 proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would 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 proposed rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

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 proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this proposed 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 made a preliminary determination 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 proposed rule involves a safety zone that allows all vessels to transit or navigate within the safety zone but prohibits vessels, other than large passenger vessels from anchoring within the safety zone without the express consent from the Captain of the Port, Southeast Alaska or a designated representative. 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 We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to https://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit https://www.regulations.gov/privacyNotice.

Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at https://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

The information presented in this preamble is organized as follows:

The proposed rule to update the test methods for determining if a liquid waste is ignitable under the ignitability characteristic may potentially affect any entity ( e.g., generator, laboratory) that currently conducts flash point testing using either SW-846 Method 1010A (Pensky-Martens) or Method 1020B (Setaflash). The rule may also affect any entity ( e.g., generator, laboratory, combustor) that uses SW-846 air sampling and stack emissions Methods 0010, 0011, 0020, 0023A, or 0051. EPA does not expect the other parts of this proposed action ( i.e., changes to aqueous alcohol exclusion, addition of sampling guidelines for multiphase mixtures, and technical edits) to affect any entity because they do not create new requirements or change existing requirements.

The universe of facilities affected by the proposed updates to the ignitability test methods and SW-846 air sampling and stack emissions methods includes: (1) Commercial laboratories, (2) EPA laboratories, and (3) state laboratories. EPA identified 217 unique commercial laboratories that conduct ignitability testing under either Method 1010A or 1020. EPA identified an additional 18 commercial laboratories accredited to conduct any of the air sampling and stack emissions methods that would be updated under this proposed rule, for a total of 235 commercial labs affected by the rule. These 235 total laboratories are part of 177 unique firms, including several large commercial laboratories with multiple locations. EPA estimates that the total number of laboratories, including 20 state and nine federal laboratories, potentially affected by this rule is 264. The analysis used to identify the potential universe for this proposed rule can be found in EPA's Regulatory Impact Analysis of the Modernization of Ignitable Liquid Determination Rule, which is in the docket.

This discussion is not intended to be exhaustive but rather provides a guide for readers regarding entities likely to be regulated by this action. This discussion lists the types of entities that EPA is now aware could potentially be regulated by this action. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

First, EPA proposes to update the flash point test methods required for determining if a liquid waste is an ignitable hazardous waste. Second, EPA is proposing to codify existing guidance regarding the regulatory exclusion in the ignitable characteristic for aqueous liquids containing alcohols and is requesting comment on whether additional changes may be warranted. Third, EPA is proposing to codify existing sampling guidance regarding waste mixtures having multiple phases when determining whether a waste exhibits the ignitability characteristic. Fourth, EPA is proposing to update cross references to Department of Transportation regulations and to remove obsolete information. Finally, EPA is proposing to provide alternatives to the use of mercury thermometers in the air sampling and stack emissions methods in Test Methods for Evaluating Solid Waste: Physical/Chemical Methods (SW-846). Adding the option of using non-mercury thermometers in place of mercury thermometers would provide the regulated community with increased flexibility in their implementation of these required test methods. The use of alternatives to mercury thermometers is consistent with previous Agency actions and helps achieve the Agency's goal of minimizing the use of mercury.

The EPA is proposing and requesting comment on revisions to modernize the ignitability flash point test methods (Methods 1010A and 1020B) and air sampling and stack emissions methods (Methods 0010, 0011, 0020, 0023A, and 0051) to allow the use of non-mercury thermometers. The Agency is also proposing to update the ignitability regulation (40 CFR 261.21) by codifying guidance for aqueous alcohol solutions and multiphase mixtures, as well as making technical corrections. EPA expects this proposed rulemaking to improve hazardous waste identification, reduce testing costs, improve laboratory safety, and improve environmental compliance, thereby enhancing protection of human health and the environment.

The authority to propose this rule can be found in sections 1002, 1006, 2002, 3001-3009, 3013, and 3017 of the Solid Waste Disposal Act (SWDA) of 1970, as amended by the Resource Conservation and Recovery Act (RCRA) of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6901, 6905, 6912, 6921-6929, 6934, and 6938.

EPA prepared an economic analysis of the potential costs and benefits associated with this proposed action. The Regulatory Impact Analysis of the Modernization of Ignitable Liquid Determinations Rule is available in the docket. The proposed rule will modify SW-846 test methods while also retaining the current procedures to provide entities increased flexibility. For the purpose of the analysis, EPA assumes that every facility that currently conducts flash point testing: (1) Is compliant with the current test methods, (2) will adopt the updated test methods if cost effective, and (3) will continue to conduct flash point testing. The analysis indicates that the rule, as proposed, is projected to result in annualized cost savings of about $78,500 to $477,000 (based on a discount rate of 7 percent). The net present value of costs over 20 years is estimated to be a cost savings of $832,000 to $5 million (seven percent discount rate). EPA's analysis shows qualitative benefits to human health and the environment through the reduced use of mercury thermometers.

Subtitle C of RCRA and its implementing regulations establish a cradle-to-grave regulatory management scheme for certain solid wastes that qualify as hazardous wastes. RCRA defines solid waste as “any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material * * *.” (See RCRA 1004(27), 42 U.S.C. 6903(27).) EPA has further defined the term solid waste for purposes of its RCRA hazardous waste regulations (40 CFR 261.2). To be considered a hazardous waste, a material first must be classified as a solid waste. Under EPA's regulations, generators of solid waste are required to determine whether their wastes are hazardous wastes (40 CFR 262.11). A solid waste is a hazardous waste if it exhibits any of the four characteristics of ignitability, corrosivity, reactivity, or toxicity (40 CFR 261.20-.24), or is a listed waste (40 CFR 261.30-.33). Listed wastes include wastes from non-specific sources, such as spent solvents; by-products from specific industries; and discarded, unused commercial chemical products.

The characteristic of ignitability (40 CFR 261.21) identifies solid waste as hazardous based on the properties of the waste that give it the potential to cause harm to human health or the environment through direct or indirect fire hazard, including contributing to or causing landfill fires. Waste that is identified as hazardous pursuant to 40 CFR 261.21 has the EPA Hazardous Waste Number of D001. Ignitable hazardous waste (D001) is regulated to minimize its opportunity to cause or contribute to fires during routine waste management activities. Solid wastes that are regulated as ignitable hazardous waste include: (1) Certain liquids with flash points below 60 °C (140 °F); (2) non-liquid substances that are capable, under specified conditions, of causing fire through friction, absorption of moisture, or spontaneous chemical changes and, when ignited, burns so vigorously and persistently that they create a hazard; (3) ignitable compressed gases; and (4) oxidizers.

The ignitability characteristic was originally proposed in 1978 (43 FR 58945) with an objective of identifying wastes that present a fire hazard due to being ignitable under routine waste disposal and storage conditions. The ignitability characteristic was finalized in 1980 when EPA promulgated the first phase of regulations under Subtitle C of RCRA to protect human health and the environment from the improper management of hazardous waste (45 FR 33066, May 19, 1980). These regulations included 40 CFR part 261, which in part, defined the ignitability characteristic and incorporated by reference ASTM  1 D 93-79 (Pensky-Martens) and ASTM D 3278-78 (Setaflash) as the required tests for ignitable liquid hazardous waste determinations. In a 1981 revision, EPA revised SW-846 Method 1010 to allow the use of D 93-79 or D 93-80 (46 FR 35246, July 7, 1981).

ASTM standards D 3278-78, D 93-79, and D 93-80 were the methods available for flash point testing at the time of the 1980 and 1981 rulemakings. Since that time, ASTM International (ASTM) has updated D 93 and D 3278 multiple times to improve the standards and incorporate new technology. EPA previously proposed to update the flash point test methods for ignitability in the 2002 proposed Methods Innovation Rule (67 FR 66252, Oct 30, 2002) by replacing ASTM standard D 3278-78 with D 3278-96 and ASTM standards D 93-79 and D 93-80 with D 93-99c. In that proposed rule, EPA also requested comment on whether D 93-00 should instead replace D 93-79 and D 93-80. The public raised concerns that the sampling procedures of the proposed versions of D 93 may lead to a loss of flammable volatile constituents from a sample due to greater headspace in the sampling container. The Agency made the decision to not revise flash point testing when the Methods Innovation Rule was finalized in 2005, agreeing with public comments that EPA further study the changes in flash point testing standards (70 FR 34550, June 14, 2005).

EPA later made corrections to the ignitability characteristic to replace obsolete references to DOT regulations related to definitions of ignitable compressed gases and oxidizers (see July 14, 2006 Federal Register ; 71 FR 40254). That final rule amended § 261.21 by revising paragraphs (a)(3) and (a)(4) and adding notes 1 through 4 to the end of the section. No change was made to § 261.21(a)(1). The current language in § 261.21(a)(1) is substantively the same as it was in 1980.

The Kirk-Othmer Encyclopedia of Chemical Technology defines a flash point as the lowest temperature, corrected to normal atmospheric pressure (101.3kPa), at which the application of an ignition source causes the vapors of a liquid specimen to ignite under the specific conditions of the test (Solvents. Kirk-Othmer Encyclopedia of Chemical Technology. 1-40). A flash point can be measured using a specifically designed apparatus operated under specified procedures. In general, these procedures involve incrementally heating a liquid sample to a specified temperature in an open or closed cup and then exposing the vapors above the liquid to a flame or electric spark ignition source. The person performing the test looks for a flash caused by the vapor phase igniting; if no flash is observed, the sample is heated to a higher temperature and the experiment is repeated. When used for RCRA regulatory purposes, the test is repeated until the temperature surpasses 60 °C (140 °F) using specified procedures and apparatuses to ensure that accurate and precise waste determinations are being made.

EPA currently requires the use of one of two flash point test methods when making an ignitability hazardous waste determination for liquid wastes, if generator knowledge is not used. (For more information on the use of generator knowledge, see Agency guidance, Waste Analysis at Facilities that Generate, Treat, Store and Dispose of Hazardous Wastes, available in the docket.) The required test methods to determine the method-defined parameter for the flash point of ignitable hazardous waste are SW-846 Methods 1010A and 1020B, which are listed in 40 CFR 260.11 and required by 40 CFR 261.21(a)(1). EPA requires the use of a specific method to obtain a method-defined parameter when the particular procedures and/or equipment of that method are necessary to achieve the property measurement required by regulation. Therefore, to determine whether a liquid waste is ignitable hazardous waste under RCRA ( i.e., has a flash point less than 60 ° C (140 °F )), its flash point must be assessed according to the procedures and instrumentation set forth in Methods 1010A or 1020B. While other methods may exist that can measure the flash point of a liquid waste, only the test methods set forth in Methods 1010A or 1020B may be used for determining whether a liquid waste is ignitable under 40 CFR 261.21(a)(1). Because using Method 1010A or 1020B yields results that are driven by the particular technical specifications in those methods, the measures and outcomes from these methods are known as method-defined parameters, and their required use in section § 261.21 can only be amended through a regulatory effort.

Method 1010A is a test method for flash point measurement using a procedure and instrumentation commonly referred to as the Pensky-Martens method. Method 1010A, or the Pensky-Martens method, incorporates by reference ASTM standards D 93-79 and D 93-80. The last two digits at the end of these ASTM standards indicate the year of publication for these standards ( i.e., 1979 and 1980, respectively). ASTM standard D 93 is an actively maintained standard under the ASTM Committee D02 on Petroleum Products, Liquid Fuels, and Lubricants. The most recent update to the D 93 standard is D 93-16a, which was published in 2016.

Alternatively, SW-846 Method 1020B can be used for determining the hazardous waste characteristic of ignitability for liquids. Method 1020B is a test method for flash point measurement using the Setaflash, or small-scale closed-cup, device and method. Method 1020B incorporates by reference ASTM standard D 3278-78, which is maintained by the ASTM Committee D01 on Paint and Related Coatings, Materials, and Applications. The last update to this ASTM standard was in 1996. However, the standard was reaffirmed in 2011 as ASTM D 3278-96(2011).

In making an ignitable liquid hazardous waste determination, either the Pensky-Martens or the Setaflash method may be used for most wastes. The Pensky-Martens test is more appropriate for liquids that are nonhomogenous, form films, have high viscosities, or are slurries because it uses an instrument that can mechanically mix wastes. The Setaflash method, however, provides a practical advantage of reduced sample size and, therefore, reduced lab waste generation when compared to the Pensky-Martens method. Generators and laboratories should choose to use the test method that is most suitable to their needs.

The ignitability characteristic in § 261.21(a)(1) excludes “aqueous solution[s] containing less than 24 percent alcohol by volume” from the scope of liquids subject to § 261.21. When EPA originally proposed the ignitability characteristic in 1978, the proposed rule did not contain an exclusion for aqueous alcohols (43 FR 58945). Commenters on the 1978 proposed rule “argued that the ignitability characteristic improperly includes many liquid wastes such as wine, latex paint and other water borne coatings which contain low concentrations of volatile organics such as alcohol and will consequently exhibit flash points below 100 °F but will not sustain combustion because of the high percentage of water present.” (Background Document for the Characteristic of Ignitability, US EPA, May 2, 1980, page 38.) In response, EPA modified the ignitability characteristic in the final rule with “an exclusion similiar [sic] to that prescribed by DOT [Department of Transportation] and exempt from the ignitability characteristic aqueous solutions with alcohol concentrations of less than 24 percent by volume. This exclusion will remove from the ignitability characteristic such things as wine and latex paint which flash at less than 100 °F but will not sustain combustion.” (ibid., 39.) Thus, the 1980 final rule codified the following text in the definition of ignitability at § 261.21(a)(1): “It is a liquid, other than an aqueous solution containing less than 24 percent alcohol by volume, and has a flash point less than 60 °C (140 °F).”  2 (45 FR 33121; May 19, 1980.)

EPA later clarified the alcohol exclusion in several ways. In the preamble to a later rulemaking (55 FR 22543, June 1, 1990), EPA stated that “the term alcohol [in § 261.21(a)(1)] refers to any alcohol or combination of alcohols” and noted that “[i]f the alcohol has been used for solvent properties and is one of the alcohols specified in EPA Hazardous Waste No. F003 or F005, the waste must be coded with these Hazardous Waste Numbers.” In addition, in 1992, the EPA clarified that the “alcohol exclusion in 40 CFR 261.21(a)(1), however, is not limited to those wastes mentioned in the May 19, 1980, Federal Register . It applies to all aqueous solutions containing less than 24 percent alcohol, even if additional non-alcoholic components are present.” (EPA Monthly Hotline Report, EPA530-R-92-014g, July 1992, page 3.)  3 In that clarification, EPA stated that the “alcohol exclusion for the ignitability characteristic was adopted from the Department of Transportation's (DOT) definition of “combustible liquids” in 49 CFR 173.115(b). The alcohol exclusion in 49 CFR 173.115(b)(2)(ii) applies to aqueous solutions containing 24 percent or less alcohol by volume which contain no less than 50 percent water. Since EPA originally intended to be consistent with DOT regulations when promulgating the alcohol exclusion in § 261.21(a)(1), the 50 percent water stipulation may be applied to the ignitability characteristic.”  4 Thus, for the purpose of the ignitability characteristic in § 261.21(a)(1), EPA stated that “aqueous” means a “solution continuing at least 50 percent water by weight.” (ibid., 4.)

Today, EPA is proposing to remove the requirement to use mercury thermometers in several EPA analytical methods by revising the method or by adding modern alternative methods that may be used. Because of its unique properties, elemental mercury has been used in many applications, including thermometers, fluorescent light bulbs, and some electrical switches. However, mercury from these devices can enter the environment through breakage or spills during use and during recycling or disposal. Mercury is a potent neurotoxin with a variety of well-documented negative health effects. For more information on the negative health effects of mercury exposure, see https://www.epa.gov/mercury/health-effects-exposures-mercury#self .

Government agencies continue to phase out the use of mercury devices, including efforts by EPA (see 76 FR 2056, January 12, 2011; 77 FR 2456, January 18, 2012; and the September 30, 2008 memorandum, Phasing Out Mercury Filled Thermometers  5 ), the National Institute of Standards and Technology (NIST) (see User-Friendly Guidance on the Replacement of Mercury Thermometers   6 ), and the Agency for Toxic Substances and Disease Registry (ATSDR) (see report on Children's Exposure to Elemental Mercury: A National Review of Exposure Events   7 ). Organizations, including ASTM International (see ASTM and the Mercury Initiative  8 ) and the United Nations Environment Programme (UNEP) (see Minamata Convention  9 ), have also worked to phase out mercury thermometer usage. EPA maintains information on efforts to reduce mercury exposures and to address mercury pollution in the environment at https://www.epa.gov/mercury . In the majority of uses, mercury thermometers can be replaced with safer, technically appropriate, readily available non-mercury temperature measurement devices (Ripple and Strouse J. ASTM International 2005).

Although the flash point test methods currently required by § 261.21(a)(1) provide accurate determinations of whether a liquid waste is characteristic for ignitability, these methods were published about 40 years ago, and newer technology is now available. As explained in Section II.E. in this notice, SW-846 Method 1010A currently incorporates by reference ASTM standards D 93-79 and D 93-80, which are known as the Pensky-Martens method. SW-846 Method 1020B currently incorporates by reference ASTM standard D 3278-78, otherwise known as the Setaflash method. These test methods represented technology and best practices developed in 1978, 1979, and 1980. Since then, the ASTM committees that maintain these standards have updated these test methods to incorporate modernized technology and practices, but the RCRA regulations still require the use of the 1978, 1979, and 1980 versions.

Due to the scientific and technological advances over the last few decades, these methods have become outdated and their use presents several challenges to the regulated community. For instance, these standards require mercury thermometers, which are being phased out because of the environmental health and safety concerns of mercury. The Agency's mercury thermometer requirements have become more difficult to meet as organizations, such as NIST (NIST, 2011), discontinue calibration services for mercury thermometers; consensus-based bodies, such as ASTM (ASTM, 2008), phase out mercury thermometers from their standards; and instrument manufacturers phase out mercury thermometers from commercially available equipment. As part of its efforts to reduce mercury usage and release, and in the interest of providing the regulated community with modern, readily available options for compliance, EPA has already revised SW-846 methods that require the use of mercury thermometers to allow for the use of non-mercury-containing temperature measuring devices (77 FR 2456, Jan 18, 2012; 79 FR 11228, Feb 27, 2014).

The decreased use of mercury thermometers and new technology in modern instrumentation combined with the decreased availability of calibration services limit commercially available flash point devices that meet the current EPA testing requirements for ignitable waste. First, the flash point standards required by EPA use reference materials that, as EPA understands, are no longer commercially available as certified reference materials, such as para-xylene for D 3278-78. Second, new technologies, such as electric spark ignition sources in place of flame ignition sources, offer improved lab safety and are available in modern instruments. Third, the Agency believes that new instruments may not be able to increase temperature at the specified rate (temperature ramping rate) in SW-846 Method 1020B.

EPA is proposing to revise the existing required Flash Point Test Methods 1010A and 1020B by adding modern consensus-based standards that reflect the improvements and modernization of flash point testing that has occurred since 1978 to the methods currently required by 261.21(a). EPA understands that many generators and laboratories already have instrumentation capable of modern flash point testing. Therefore, the proposed update adds the flexibility of using modern test methods, provides the potential for cost savings, and enhances the protection of human health and the environment while providing equivalent results (See Section III.D. for information on how the proposed test methods are equivalent to the currently required test methods).

EPA is proposing to revise 40 CFR 261.21 and update Method 1010A to Method 1010B to incorporate by reference ASTM standard D 8175-18 as an alternative to ASTM standards D 93-79 and D 93-80 (Pensky-Martens method) (see Table 1). The D 8175-18 standard is maintained by the ASTM Committee D34 on Waste Management, with whom the Agency worked to modify the existing D 93-16 standard for waste testing. The creation of the D 8175-18 standard utilized the existing knowledge and practices of the flash point testing community to develop a standard specifically suited for flash point testing of waste matrices.

The Agency initially considered proposing to incorporate by reference ASTM standard D 93-16 as a required flash point test method. ASTM standard D 93, has been updated numerous times between 1980 and 2017. The 1979, 1980, 2016, and 2017 versions of D 93 all achieve the same fundamental measurement; the newest versions incorporate newer technology, provide more detailed procedures, and include quality control measures, such as instrument verification using certified reference materials. However, the D 93-16 standard was written for the testing of petroleum products, and EPA, after reviewing the standard, had concerns that the standard was not ideally suited for flash point testing of waste forms. The matrices of discarded chemicals, lab wastes, liquids from emergency response, free products, and other wastes that might make up a waste mixture are often more complex and varied than petroleum products. The Agency is concerned about the appropriateness of some aspects of the D 93-16 sampling procedures when applied to waste analysis. The D 93-16 standards were developed primarily to test the flash point of products while RCRA testing requirements are often for more complex mixtures. For example, heating a sample to lower the viscosity before placing it in the closed cup device for measurement of the flash point may produce results that are not representative when testing waste mixtures with relatively small concentrations of volatile components that easily ignite and readily evaporate at elevated temperatures. The Agency notes that the public raised similar concerns in comments regarding the Agency's proposal to incorporate D 93-99c by reference as part of the Methods Innovation Rule (See comments by the American Chemistry Council, EPA Docket Number EPA-HQ-RCRA-2002-0025). The D 93-16 standard is also designed to measure petroleum products in a temperature range from 40 °C to 370 °C. As the regulatory criteria for flash point of ignitable liquids is 60 °C and below, EPA worked with ASTM to modify the D 93-16 test procedure to measure flash points of waste matrices in a narrower temperature range and closer to room temperature. The lower but narrower temperature range required for RCRA ignitability testing also allows for a slower temperature ramp rate in the method. The Agency notes that it is possible that the lowest temperature of the apparatus is significantly higher than the actual flash point of the sample. Some liquids such as gasoline, pentane, hexane, natural gas condensate, drip oil, etc. have flash points below −20 C, the lower limit of the small scale closed cup test method. Conditions can exceed the fire point (see ASTM D92) and a significant enlargement of the test flame is observed. In such situations, it is to be concluded that the flash point is below the range of the tester and hence below 60 C.

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

Section 1331 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010) (collectively referred to as the Affordable Care Act) provides states with an option to establish a Basic Health Program (BHP). In the states that elect to operate a BHP, the BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the federal poverty level (FPL) who are not otherwise eligible for Medicaid, the Children's Health Insurance Program (CHIP), or affordable employer-sponsored coverage, or for individuals whose income is below these levels but are lawfully present non-citizens ineligible for Medicaid. (For those states that have expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act (the Act), the lower income threshold for BHP eligibility is effectively 138 percent due to the application of a required 5 percent income disregard in determining the upper limits of Medicaid income eligibility (section 1902(e)(14)(I) of the Act)).

A BHP provides another option for states in providing affordable health benefits to individuals with incomes in the ranges described above. States may find a BHP a useful option for several reasons, including the ability to potentially coordinate standard health plans in the BHP with their Medicaid managed care plans, or to potentially reduce the costs to individuals by lowering premiums or cost-sharing requirements.

Federal funding for a BHP under section 1331(d)(3)(A) of the Affordable Care Act is based on the amount of premium tax credit (PTC) and cost-sharing reductions (CSRs) that would have been provided for the fiscal year to eligible individuals enrolled in BHP standard health plans in the state if such eligible individuals were allowed to enroll in a qualified health plan (QHP) through Affordable Insurance Exchanges (“Exchanges”). These funds are paid to trusts established by the states and dedicated to the BHP, and the states then administer the payments to standard health plans within the BHP.

In the March 12, 2014 Federal Register (79 FR 14112), we published a final rule entitled the “Basic Health Program: State Administration of Basic Health Programs; Eligibility and Enrollment in Standard Health Plans; Essential Health Benefits in Standard Health Plans; Performance Standards for Basic Health Programs; Premium and Cost Sharing for Basic Health Programs; Federal Funding Process; Trust Fund and Financial Integrity” (hereinafter referred to as the BHP final rule) implementing section 1331 of the Affordable Care Act), which governs the establishment of BHPs. The BHP final rule establishes the standards for state and federal administration of BHPs, including provisions regarding eligibility and enrollment, benefits, cost-sharing requirements and oversight activities. While the BHP final rule codifies the overall statutory requirements and basic procedural framework for the funding methodology, it does not contain the specific information necessary to determine federal payments. We anticipated that the methodology would be based on data and assumptions that would reflect ongoing operations and experience of BHPs, as well as the operation of the Exchanges. For this reason, the BHP final rule indicated that the development and publication of the funding methodology, including any data sources, would be addressed in a separate annual BHP Payment Notice.

In the BHP final rule, we specified that the BHP Payment Notice process would include the annual publication of both a proposed and final BHP Payment Notice. The proposed BHP Payment Notice would be published in the Federal Register each October, and would describe the proposed funding methodology for the upcoming BHP program year, 1 including how the Secretary considered the factors specified in section 1331(d)(3) of the Affordable Care Act, along with the proposed data sources used to determine the federal BHP payment rates. The final BHP Payment Notice would be published in the Federal Register in February, and would include the final BHP funding methodology, as well as the federal BHP payment rates for the next BHP program year. For example, payment rates published in February 2019 would apply to BHP program year 2020, beginning in January 2020. As discussed in section II.C of this notice, and as referenced in 42 CFR 600.610(b)(2), state data needed to calculate the federal BHP payment rates for the final BHP Payment Notice must be submitted to CMS.

As described in the BHP final rule, once the final methodology has been published, we will only make modifications to the BHP funding methodology on a prospective basis with limited exceptions. The BHP final rule provided that retrospective adjustments to the state's BHP payment amount may occur to the extent that the prevailing BHP funding methodology for a given program year permits adjustments to a state's federal BHP payment amount due to insufficient data for prospective determination of the relevant factors specified in the payment notice. Additional adjustments could be made to the payment rates to correct errors in applying the methodology (such as mathematical errors).

Under section 1331(d)(3)(ii) of the Affordable Care Act, the funding methodology and payment rates are expressed as an amount per eligible individual enrolled in a BHP standard health plan (BHP enrollee) for each month of enrollment. These payment rates may vary based on categories or classes of enrollees. Actual payment to a state would depend on the actual enrollment of individuals found eligible in accordance with a state's certified BHP Blueprint eligibility and verification methodologies in coverage through the state BHP. A state that is approved to implement a BHP must provide data showing quarterly enrollment of eligible individuals in the various federal BHP payment rate cells. Such data should include the following:

• Personal identifier;

• Date of birth;

• County of residence;

• Indian status;

• Family size;

• Household income;

• Number of persons in household enrolled in BHP;

• Family identifier;

• Months of coverage;

• Plan information; and

• Any other data required by CMS to properly calculate the payment.

In the February 29, 2016 Federal Register (81 FR 10091), we published the final notice entitled “Basic Health Program; Federal Funding Methodology for Program Years 2017 and 2018” (hereinafter referred to as the February 2016 payment notice) that sets forth the methodology that would be used to calculate the federal BHP payments for the 2017 and 2018 program years. Updated factors for the program year 2018 federal BHP payments were provided in the CMCS Informational Bulletin, “Basic Health Program; Federal Funding Methodology for Program Year 2018” on May 17, 2017.

On October 11, 2017, the Attorney General of the United States provided the Department of Health and Human Services and the Department of Treasury with a legal opinion indicating that the permanent appropriation at 31 U.S.C. 1324, from which the Departments had historically drawn funds to make CSR payments, cannot be used to fund CSR payments to insurers. In light of this opinion—and in the absence of any other appropriation that could be used to fund CSR payments—the Department of Health and Human Services directed us to discontinue CSR payments to issuers until Congress provides for an appropriation. In the absence of a Congressional appropriation for federal funding for CSRs, we cannot provide states with a federal payment attributable to CSRs that BHP enrollees would have received had they been enrolled in a QHP through an Exchange.

Starting with the payment for the first quarter (Q1) of 2018 (which began on January 1, 2018), we stopped paying the CSR component of the quarterly BHP payments to New York and Minnesota (the states), the only states operating a BHP in 2018. The states then sued the Secretary for declaratory and injunctive relief in the United States District Court for the Southern District of New York. See State of New York, et al, v. U.S. Department of Health and Human Services, 18-cv-00683 (S.D.N.Y. filed Jan. 26, 2018). On May 2, 2018, the parties filed a stipulation requesting a 60-day stay of the litigation so that HHS could issue an administrative order revising the 2018 BHP payment methodology. As a result of the stipulation, the court dismissed the BHP litigation, although it retained jurisdiction to enforce the stipulation and re-open the docket. On July 6, 2018, we issued a Draft Administrative Order on which New York and Minnesota had an opportunity to comment. The states each submitted comments on August 6, 2018. We considered the states' comments and issued a Final Administrative Order on August 24, 2018 setting forth the payment methodology that would only apply to the 2018 BHP benefit year. The payment methodology proposed in this notice would apply the methodology described in the Final Administrative Order with one additional adjustment to account for the impact of individuals selecting different metal-tier level plans in the Exchange. The payment methodology proposed in this notice would apply to program years 2019 and 2020.

We will be making future BHP payments for program year 2019 using the methodology described in the Final Administrative Order published on August 24, 2018 until a final methodology for 2019 and 2020 is published. If necessary, any payments for 2019 will be conformed to the finalized 2019 payment methodology through reconciliation.

Section 1331(d)(3) of the Affordable Care Act directs the Secretary to consider several factors when determining the federal BHP payment amount, which, as specified in the statute, must equal 95 percent of the value of the PTC and CSRs that BHP enrollees would have been provided had they enrolled in a QHP through an Exchange. Thus, the BHP funding methodology is designed to calculate the PTC and CSRs as consistently as possible and in general alignment with the methodology used by Exchanges to calculate the advance payments of the PTC and CSRs, and by the Internal Revenue Service (IRS) to calculate final PTCs. In general, we have relied on values for factors in the payment methodology specified in statute or other regulations as available, and have developed values for other factors not otherwise specified in statute, or previously calculated in other regulations, to simulate the values of the PTC and CSRs that BHP enrollees would have received if they had enrolled in QHPs offered through an Exchange. In accordance with section 1331(d)(3)(A)(iii) of the Affordable Care Act, the final funding methodology must be certified by the Chief Actuary of CMS, in consultation with the Office of Tax Analysis (OTA) of the Department of the Treasury, as having met the requirements of section 1331(d)(3)(A)(ii) of the Affordable Care Act.

Section 1331(d)(3)(A)(ii) of the Affordable Care Act specifies that the payment determination shall take into account all relevant factors necessary to determine the value of the PTCs and CSRs that would have been provided to eligible individuals, including but not limited to, the age and income of the enrollee, whether the enrollment is for self-only or family coverage, geographic differences in average spending for health care across rating areas, the health status of the enrollee for purposes of determining risk adjustment payments and reinsurance payments that would have been made if the enrollee had enrolled in a QHP through an Exchange, and whether any reconciliation of PTC and CSR would have occurred if the enrollee had been so enrolled. Under the payment methodologies for 2015 (79 FR 13887, published on March 12, 2014), for 2016 (80 FR 9636, published on February 24, 2015), and for 2017 and 2018 (81 FR 10091, published on February 29, 2016), the total federal BHP payment amount has been calculated using multiple rate cells in each state. Each rate cell represents a unique combination of age range, geographic area, coverage category (for example, self-only or two-adult coverage through the BHP), household size, and income range as a percentage of FPL, and there is a distinct rate cell for individuals in each coverage category within a particular age range who reside in a specific geographic area and are in households of the same size and income range. The BHP payment rates developed also are consistent with the state's rules on age rating. Thus, in the case of a state that does not use age as a rating factor on an Exchange, the BHP payment rates would not vary by age.

Under the methodology in the Final Administrative Order, the rate for each rate cell is calculated in two parts. The first part is equal to 95 percent of the estimated PTC that would have been paid if a BHP enrollee in that rate cell had instead enrolled in a QHP in an Exchange. The second part is equal to 95 percent of the estimated CSR payment that would have been made if a BHP enrollee in that rate cell had instead enrolled in a QHP in an Exchange. These 2 parts are added together and the total rate for that rate cell would be equal to the sum of the PTC and CSR rates. As noted in the Final Administrative Order, we will assign a value of zero to the CSR portion of the BHP payment rate calculation, because there is presently no available appropriation from which we can make the CSR portion of any BHP Payment.

We propose that Equation (1) would be used to calculate the estimated PTC for eligible individuals enrolled in the BHP in each rate cell. We note that throughout this payment notice, when we refer to enrollees and enrollment data, we mean data regarding individuals who are enrolled in the BHP who have been found eligible for the BHP using the eligibility and verification requirements that are applicable in the state's most recent certified Blueprint. By applying the equations separately to rate cells based on age, income and other factors, we would effectively take those factors into account in the calculation. In addition, the equations would reflect the estimated experience of individuals in each rate cell if enrolled in coverage through an Exchange, taking into account additional relevant variables. Each of the variables in the equations is defined in this section, and further detail is provided later in this section of this payment notice. In addition, we describe how we propose to calculate the adjusted reference premium (ARP) (described later in this section of the payment notice) that is used in Equation (1). This is defined in Equation (2a) and Equation (2b).

We propose that the estimated PTC, on a per enrollee basis, would continue to be calculated for each rate cell for each state based on age range, geographic area, coverage category, household size, and income range. The PTC portion of the rate would be calculated in a manner consistent with the methodology used to calculate the PTC for persons enrolled in a QHP, with 5 adjustments. First, the PTC portion of the rate for each rate cell would represent the mean, or average, expected PTC that all persons in the rate cell would receive, rather than being calculated for each individual enrollee. Second, the reference premium (RP) (described in more detail later in the section) used to calculate the PTC would be adjusted for the BHP population health status, and in the case of a state that elects to use 2018 premiums for the basis of the BHP federal payment, for the projected change in the premium from 2018 to 2019, to which the rates announced in the final payment methodology would apply. These adjustments are described in Equation (2a) and Equation (2b). Third, the PTC would be adjusted prospectively to reflect the mean, or average, net expected impact of income reconciliation on the combination of all persons enrolled in the BHP; this adjustment, as described in section II.D.5 of this notice, would account for the impact on the PTC that would have occurred had such reconciliation been performed. Fourth, the PTC would be adjusted to account for the estimated impacts of plan selection; this adjustment, the metal tier selection factor (MTSF), would reflect the effect on the average PTC of individuals choosing different metal-tier levels of QHPs. Finally, the rate is multiplied by 95 percent, consistent with section 1331(d)(3)(A)(i) of the Affordable Care Act. We note that in the situation where the average income contribution of an enrollee would exceed the ARP, we would calculate the PTC to be equal to 0 and would not allow the value of the PTC to be negative.

We propose using Equation (1) to calculate the PTC rate, consistent with the methodology described above:

Equation 2a and Equation 2b: Adjusted Reference Premium (ARP) Variable (used in Equation 1)

As part of the calculations for the PTC component, we propose to continue to calculate the value of the ARP is described below. Consistent with the existing approach, we are proposing to allow states to choose between using the actual current year premiums or the prior year's premiums multiplied by the premium trend factor (PTF) (as described in section II.F. of this notice). Below we describe how we would continue to calculate the ARP under each option.

In the case of a state that elected to use the RP based on the current program year (for example, 2019 premiums for the 2019 program year), we propose to calculate the value of the ARP as specified in Equation (2a). The ARP would be equal to the RP, which would be based on the second lowest cost silver plan premium in the applicable program year, multiplied by the BHP population health factor (PHF) (described in section II.D of this notice), which would reflect the projected impact that enrolling BHP-eligible individuals in QHPs through an Exchange would have had on the average QHP premium, and multiplied by the premium adjustment factor (PAF) (described in section II.D of this notice), which would account for the change in silver-level premiums due to the discontinuance of CSR payments.

In the case of a state that elected to use the RP based on the prior program year (for example, 2018 premiums for the 2019 program year, as described in more detail in section II.F of this notice), we propose to calculate the value of the ARP as specified in Equation (2b). The ARP would be equal to the RP, which would be based on the second lowest cost silver plan premium in 2018, multiplied by the BHP PHF (described in section II.D of this notice), which would reflect the projected impact that enrolling BHP-eligible individuals in QHPs on an Exchange would have had on the average QHP premium, multiplied by the PAF (described in section II.D of this notice), which would account for the change in silver-level premiums due to the discontinuance of CSR payments, and multiplied by the PTF (described in section II.E of this notice), which would reflect the projected change in the premium level between 2018 and 2019.

Equation 3: Determination of Total Monthly Payment for BHP Enrollees in Each Rate Cell

In general, the rate for each rate cell would be multiplied by the number of BHP enrollees in that cell (that is, the number of enrollees that meet the criteria for each rate cell) to calculate the total monthly BHP payment. This calculation is shown in Equation (3).

(In this equation, we assign a value of zero to the CSR part of the BHP payment rate calculation ( CSR a,g,c,h,i because there is presently no available appropriation from which we can make the CSR portion of any BHP payment. In the event that an appropriation for CSRs for 2019 or 2020 is made, we would determine whether to modify the CSR part of the BHP payment rate calculation ( CSR a,g,c,h,i or include the PAF in the payment methodology.)

Consistent with the previous payment methodologies, we propose that a state implementing a BHP provide us an estimate of the number of BHP enrollees it projects will enroll in the upcoming BHP program quarter, by applicable rate cell, prior to the first quarter and each subsequent quarter of program operations until actual enrollment data is available. Upon our approval of such estimates as reasonable, they would be used to calculate the prospective payment for the first and subsequent quarters of program operation until the state has provided us actual enrollment data. These data would be required to calculate the final BHP payment amount, and make any necessary reconciliation adjustments to the prior quarters' prospective payment amounts due to differences between projected and actual enrollment. Subsequent quarterly deposits to the state's trust fund would be based on the most recent actual enrollment data submitted to us. Actual enrollment data must be based on individuals enrolled for the quarter submitted who the state found eligible and whose eligibility was verified using eligibility and verification requirements as agreed to by the state in its applicable BHP Blueprint for the quarter that enrollment data is submitted. Procedures will ensure that federal payments to a state reflect actual BHP enrollment during a year, within each applicable category, and prospectively determined federal payment rates for each category of BHP enrollment, with such categories defined in terms of age range, geographic area, coverage status, household size, and income range, as explained above.

We propose requiring the use of certain rate cells as part of the proposed methodology. For each state, we propose using rate cells that separate the BHP population into separate cells based on the five factors described as follows:

Factor 1—Age: We propose to continue separating enrollees into rate cells by age, using the following unchanged age ranges that capture the widest variations in premiums under HHS's Default Age Curve:  2

• Ages 0-20.

• Ages 21-34.

• Ages 35-44.

• Ages 45-54.

• Ages 55-64.

Factor 2—Geographic area: For each state, we propose separating enrollees into rate cells by geographic areas within which a single RP is charged by QHPs offered through the state's Exchange. Multiple, non-contiguous geographic areas would be incorporated within a single cell, so long as those areas share a common RP. 3 This provision would also be unchanged from the current method.

Factor 3—Coverage status: We propose to continue separating enrollees into rate cells by coverage status, reflecting whether an individual is enrolled in self-only coverage or persons are enrolled in family coverage through the BHP, as provided in section 1331(d)(3)(A)(ii) of the Affordable Care Act. Among recipients of family coverage through the BHP, separate rate cells, as explained below, would apply based on whether such coverage involves two adults alone or whether it involves children.

Factor 4—Household size: We propose to continue the current methods for separating enrollees into rate cells by household size that states use to determine BHP enrollees' household income as a percentage of the FPL under § 600.320 (Administration, eligibility, essential health benefits, performance standards, service delivery requirements, premium and cost-sharing, allotments, and reconciliation; Determination of eligibility for and enrollment in a standard health plan). We are proposing to require separate rate cells for several specific household sizes. For each additional member above the largest specified size, we propose to publish instructions for how we would develop additional rate cells and calculate an appropriate payment rate based on data for the rate cell with the closest specified household size. We propose to publish separate rate cells for household sizes of 1 through 10.

Factor 5—Household Income: For households of each applicable size, we propose to continue the current methods for creating separate rate cells by income range, as a percentage of FPL. The PTC that a person would receive if enrolled in a QHP through an Exchange varies by household income, both in level and as a ratio to the FPL. Thus, we propose that separate rate cells would be used to calculate federal BHP payment rates to reflect different bands of income measured as a percentage of FPL. We propose using the following income ranges, measured as a ratio to the FPL:

• 0 to 50 percent of the FPL.

• 51 to 100 percent of the FPL.

• 101 to 138 percent of the FPL. 4

• 139 to 150 percent of the FPL.

• 151 to 175 percent of the FPL.

• 176 to 200 percent of the FPL.

These rate cells would only be used to calculate the federal BHP payment amount. A state implementing a BHP would not be required to use these rate cells or any of the factors in these rate cells as part of the state payment to the standard health plans participating in the BHP or to help define BHP enrollees' covered benefits, premium costs, or out-of-pocket cost-sharing levels.

We propose using averages to define federal payment rates, both for income ranges and age ranges, rather than varying such rates to correspond to each individual BHP enrollee's age and income level. We believe that the proposed approach will increase the administrative feasibility of making federal BHP payments and reduce the likelihood of inadvertently erroneous payments resulting from highly complex methodologies. We believe that this approach should not significantly change federal payment amounts, since within applicable ranges, the BHP-eligible population is distributed relatively evenly.

The number of factors contributing to rate cells, when combined, can result in over 350,000 rate cells which can increase the complexity when generating quarterly payment amounts. In future years, and in the interest of administrative simplification, we will consider whether to combine or eliminate certain rate cells, once we are certain that the effect on payment would be insignificant.

To the extent possible, we intend to continue to use data submitted to the federal government by QHP issuers seeking to offer coverage through the Exchange in the relevant BHP state to perform the calculations that determine federal BHP payment cell rates. We propose that the current methodology would not change, but we also propose clarifications regarding the submission of state data in this section.

States operating a State-based Exchange in the individual market, however, must provide certain data, including premiums for second lowest cost silver plans, by geographic area, for CMS to calculate the federal BHP payment rates in those states. We propose that a State-based Exchange interested in obtaining the applicable federal BHP payment rates for its state must submit such data accurately, completely, and as specified by CMS, by no later than 30 days after the publication of the final notice for CMS to calculate the applicable rates for 2019, and by no later than October 15, 2019, for CMS to calculate the applicable rates for 2020. If additional state data (that is, in addition to the second lowest cost silver plan premium data) are needed to determine the federal BHP payment rate, such data must be submitted in a timely manner, and in a format specified by us to support the development and timely release of annual BHP payment notices. The specifications for data collection to support the development of BHP payment rates will be published in CMS guidance and will be available at http://www.medicaid.gov/Federal-Policy-Guidance/Federal-Policy-Guidance.html .

States must submit enrollment data to us on a quarterly basis and should be technologically prepared to begin submitting data at the start of their BHP, starting with the beginning of the first program year. (This differs from the enrollment estimates used to calculate the initial BHP payment, which states would generally be submit to CMS 60 days before the start of the first quarter of the program start date.) This requirement is necessary for us to implement the payment methodology that is tied to a quarterly reconciliation based on actual enrollment data.

We propose to continue the policy adopted in the February 2016 payment notice that in states that have BHP enrollees who do not file federal tax returns (non-filers), the state must develop a methodology which they must submit to us at the time of their Blueprint submission to determine the enrollees' household income and household size consistently with Marketplace requirements. We reserve the right to approve or disapprove the state's methodology to determine household income and household size for non-filers if the household composition and/or household income resulting from application of the methodology are different than what typically would be expected to result if the individual or head of household in the family were to file a tax return.

In addition, as the federal payments are determined quarterly and the enrollment data is required to be submitted by the states to us quarterly, we propose that the quarterly payment would be based on the characteristics of the enrollee at the beginning of the quarter (or their first month of enrollment in the BHP in each quarter). Thus, if an enrollee were to experience a change in county of residence, household income, household size, or other factors related to the BHP payment determination during the quarter, the payment for the quarter would be based on the data as of the beginning of the quarter. Payments would still be made only for months that the person is enrolled in and eligible for the BHP. We do not anticipate that this would have a significant effect on the federal BHP payment. The states must maintain data that are consistent with CMS' verification requirements, including auditable records for each individual enrolled, indicating an eligibility determination and a determination of income and other criteria relevant to the payment methodology as of the beginning of each quarter.

As described in § 600.610 (Secretarial determination of BHP payment amount), the state is required to submit certain data in accordance with this notice. We require that this data be collected and validated by states operating a BHP, and that this data be submitted to CMS.

To calculate the estimated PTC that would be paid if BHP-eligible individuals enrolled in QHPs through an Exchange, we must calculate a RP because the PTC is based, in part, on the premiums for the applicable second lowest cost silver plan as explained in section II.C.4 of this notice, regarding the Premium Tax Credit Formula (PTCF). The proposal is unchanged from the current method except to update the reference years, and to provide additional methodological details to simplify calculations and to deal with potential ambiguities. Accordingly, for the purposes of calculating the BHP payment rates, the RP, in accordance with 26 U.S.C. 36B(b)(3)(C), is defined as the adjusted monthly premium for an applicable second lowest cost silver plan. The applicable second lowest cost silver plan is defined in 26 U.S.C. 36B(b)(3)(B) as the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides that is offered through the same Exchange. We propose to use the adjusted monthly premium for an applicable second lowest cost silver plan in the applicable program year (2019 or 2020) as the RP (except in the case of a state that elects to use the prior plan year's premium as the basis for the federal BHP payment for 2019 or 2020, as described in section II.F of this notice).

The RP would be the premium applicable to non-tobacco users. This is consistent with the provision in 26 U.S.C. 36B(b)(3)(C) that bases the PTC on premiums that are adjusted for age alone, without regard to tobacco use, even for states that allow insurers to vary premiums based on tobacco use in accordance with 42 U.S.C. 300gg(a)(1)(A)(iv).

Consistent with the policy set forth in 26 CFR 1.36B-3(f)(6), to calculate the PTC for those enrolled in a QHP through an Exchange, we propose not to update the payment methodology, and subsequently the federal BHP payment rates, in the event that the second lowest cost silver plan used as the RP, or the lowest cost silver plan, changes (that is, terminates or closes enrollment during the year).

The applicable second lowest cost silver plan premium will be included in the BHP payment methodology by age range, geographic area, and self-only or applicable category of family coverage obtained through the BHP.

We note that the choice of the second lowest cost silver plan for calculating BHP payments would rely on several simplifying assumptions in its selection. For the purposes of determining the second lowest cost silver plan for calculating PTC for a person enrolled in a QHP through an Exchange, the applicable plan may differ for various reasons. For example, a different second lowest cost silver plan may apply to a family consisting of 2 adults, their child, and their niece than to a family with 2 adults and their children, because 1 or more QHPs in the family's geographic area might not offer family coverage that includes the niece. We believe that it would not be possible to replicate such variations for calculating the BHP payment and believe that in the aggregate, they would not result in a significant difference in the payment. Thus, we propose to use the second lowest cost silver plan available to any enrollee for a given age, geographic area, and coverage category.

This choice of RP relies on an assumption about enrollment in the Exchanges. In previous methodologies, we had assumed that all persons enrolled in the BHP would have elected to enroll in a silver level plan if they had instead enrolled in a QHP through an Exchange (and that the QHP premium would not be lower than the value of the PTC). While we propose to continue to use the second-lowest cost silver plan premium as the RP, we are proposing in this methodology to change the assumption about which metal-tier plans enrollees would choose (see the section on the metal-tier selection factor (MTSF) in this methodology).

We do not believe it is appropriate to adjust the payment for an assumption that some BHP enrollees would not have enrolled in QHPs for purposes of calculating the BHP payment rates, since section 1331(d)(3)(A)(ii) of the Affordable Care Act requires the calculation of such rates as if the enrollee had enrolled in a QHP through an Exchange.

The applicable age bracket will be one dimension of each rate cell. We propose to assume a uniform distribution of ages and estimate the average premium amount within each rate cell. We believe that assuming a uniform distribution of ages within these ranges is a reasonable approach and would produce a reliable determination of the total monthly payment for BHP enrollees. We also believe this approach would avoid potential inaccuracies that could otherwise occur in relatively small payment cells if age distribution were measured by the number of persons eligible or enrolled.

We propose to use geographic areas based on the rating areas used in the Exchanges. We propose to define each geographic area so that the RP is the same throughout the geographic area. When the RP varies within a rating area, we propose defining geographic areas as aggregations of counties with the same RP. Although plans are allowed to serve geographic areas smaller than counties after obtaining our approval, we propose that no geographic area, for purposes of defining BHP payment rate cells, will be smaller than a county. We do not believe that this assumption will have a significant impact on federal payment levels and it would likely simplify both the calculation of BHP payment rates and the operation of the BHP.

Finally, in terms of the coverage category, we propose that federal payment rates only recognize self-only and two-adult coverage, with exceptions that account for children who are potentially eligible for the BHP. First, in states that set the upper income threshold for children's Medicaid and CHIP eligibility below 200 percent of FPL (based on modified adjusted gross income (MAGI), children in households with incomes between that threshold and 200 percent of FPL would be potentially eligible for the BHP. Currently, the only states in this category are Idaho and North Dakota. 5 Second, the BHP would include lawfully present immigrant children with household incomes at or below 200 percent of FPL in states that have not exercised the option under the sections 1903(v)(4)(A)(ii) and 2107(e)(1)(E) of the Act to qualify all otherwise eligible, lawfully present immigrant children for Medicaid and CHIP. States that fall within these exceptions would be identified based on their Medicaid and CHIP State Plans, and the rate cells would include appropriate categories of BHP family coverage for children. For example, Idaho's Medicaid and CHIP eligibility is limited to families with MAGI at or below 185 percent FPL. If Idaho implemented a BHP, Idaho children with household incomes between 185 and 200 percent could qualify. In other states, BHP eligibility will generally be restricted to adults, since children who are citizens or lawfully present immigrants and live in households with incomes at or below 200 percent of FPL will qualify for Medicaid or CHIP, and thus be ineligible for a BHP under section 1331 (e)(1)(C) of the Affordable Care Act, which limits a BHP to individuals who are ineligible for minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986).

The PAF considers the premium increases in other states that took effect after we discontinued payments to issuers for CSRs provided to enrollees in QHPs offered through Exchanges. Despite the discontinuance of federal payments for CSRs, QHPs are required to provide CSRs to eligible enrollees. As a result, QHPs frequently increased the silver-level plan premiums to account for those additional costs; adjustments and how those were applied (for example, to only silver-level plans or to all metal-tier plans) varied across states. For the states operating BHPs in 2018, the adjustments were relatively minor, because the majority of enrollees eligible for CSRs (and all who were eligible for the largest CSRs) were enrolled in the BHP and not in QHPs on the Exchanges.

In the Final Administrative Order, we incorporated the PAF into the BHP payment methodology for 2018. We propose to include this factor in the 2019 and 2020 payment methodologies, and to use the same value for the factor as in the Final Administrative Order.

Under the Final Administrative Order, we calculated the PAF for each BHP state by using information requested from QHP issuers in each state and the District of Columbia, and determined the premium adjustment that the responding QHP issuers made to each silver level plan in 2018 to account for the discontinuation of CSR payments to QHP issuers. Based on the data collected, we estimated the median adjustment for silver level QHPs nationwide (excluding those in the two BHP states). To the extent that QHP issuers made no adjustment (or the adjustment was 0), this would be counted as 0 in determining the median adjustment made to all silver level QHPs nationwide. If the amount of the adjustment was unknown—or we determined that it should be excluded for methodological reasons (for example, the adjustment was negative, an outlier, or unreasonable)—then we did not count the adjustment towards determining the median adjustment. 6

For each of the two BHP states, we determined the median adjustment for all silver level QHPs in that state. The PAF for each BHP state equaled 1 plus the nationwide median adjustment divided by 1 plus the state median adjustment for the BHP state. In other words,

To determine the PAF described above, we requested information from QHP issuers in each state serviced by a Federally-facilitated Exchange (FFE) to determine the premium adjustment those issuers made to each silver level plan offered through the Exchange in 2018 to account for the end of CSR payments. Specifically, we requested information showing the percentage change that QHP issuers made to the premium for each of their silver level plans to cover benefit expenditures associated with the CSRs, given the lack of CSR payments in 2018. This percentage change was a portion of the overall premium increase from 2017 to 2018.

According to our records, there are 1,233 silver-level QHPs operating on Exchanges in 2018. Of these 1,233 QHPs, 318 QHPs (25.8 percent) responded to our request for the percentage adjustment applied to silver-level QHP premiums in 2018 to account for the discontinuance of the CSRs. These 318 QHPs operated in 26 different states, with 10 of those states running State-based Exchanges (SBEs), working in partnership with us to implement the FFE in their state in 2018. Thirteen of these 318 QHPs were in New York (and none were in Minnesota). Excluding these 13 QHPs from the analysis, the nationwide median adjustment was 20.0 percent. Of the 13 QHPs in New York that responded, the state median adjustment was 1.0 percent. We believe that this is an appropriate adjustment for QHPs in Minnesota as well, based on the observed changes in New York's QHP premiums in response to the CSR adjustment (and the operation of the BHP in that state) and our analysis of expected QHP premium adjustments for states with BHPs. We calculated the proposed PAF as (1 + 20%) ÷ (1 + 1%) (or 1.20/1.01), which results in a value of 1.188.

We propose that the PAF continue to be set to 1.188 for 2019 and 2020. We believe that this value for the PAF continues to reasonably account for the increase in silver-level premiums experienced in non-BHP states that is associated with the discontinuance of the CSR payments. The impact can reasonably be expected to be similar to that in 2018, because the unavailability of CSR payments has not changed. We welcome comments on this factor and its development.

We propose that the PHF be included in the methodology to account for the potential differences in the average health status between BHP enrollees and persons enrolled through the Exchanges. To the extent that BHP enrollees would have been enrolled through an Exchange in the absence of a BHP in a state, the exclusion of those BHP enrollees in the Exchange may affect the average health status of the overall population and the expected QHP premiums. Our proposal continues the methodology currently in place, except to update reference years.

We currently do not believe that there is evidence that the BHP population would have better or poorer health status than the Exchange population. At this time, there is a lack of experience available in the Exchanges that limits the ability to analyze the health differences between these groups of enrollees. Exchanges have been in operation since 2014, and 2 states have operated BHPs in 2015, 2016, 2017, and 2018, but we do not have the data available to do the analysis necessary to make this adjustment at this time. In addition, differences in population health may vary across states. Thus, at this time, we believe that it is not feasible to develop a methodology to make a prospective adjustment to the PHF that is reliably accurate, consistent with the methodology described in previous notices. We will consider updating the methodology in future years when information becomes available.

Given these analytic challenges and the limited data about Exchange coverage and the characteristics of BHP-eligible consumers that will be available by the time we establish federal payment rates, we believe that the most appropriate adjustment for 2019 would be 1.00. We also propose that the adjustment for 2020 would remain at 1.00.

In the previous BHP payment methodologies, we included an option for states to include a retrospective population health status adjustment. We propose that states be provided with the same option for 2019 and 2020 to include a retrospective population health status adjustment in the certified methodology, which is subject to our review and approval. This option is described further in section II.G of this notice. Regardless of whether a state elects to include a retrospective population health status adjustment, we anticipate that, in future years, when additional data becomes available about Exchange coverage and the characteristics of BHP enrollees, we may estimate the PHF differently.

While the statute requires consideration of risk adjustment payments and reinsurance payments insofar as they would have affected the PTC that would have been provided to BHP-eligible individuals had they enrolled in QHPs, we are not proposing to require that a BHP's standard health plans receive such payments. As explained in the BHP final rule, BHP standard health plans are not included in the risk adjustment program operated by HHS on behalf of states. Further, standard health plans do not qualify for payments from the transitional reinsurance program established under section 1341 of the Affordable Care Act. 7 To the extent that a state operating a BHP determines that, because of the distinctive risk profile of BHP-eligible consumers, BHP standard health plans should be included in mechanisms that share risk with other plans in the state's individual market, the state would need to use other methods for achieving this goal.

Household income is a significant determinant of the amount of the PTC that is provided for persons enrolled in a QHP through an Exchange. Accordingly, both the current and proposed BHP payment methodologies incorporate household income into the calculations of the payment rates through the use of income-based rate cells. We propose defining household income in accordance with the definition of MAGI in 26 U.S.C. 36B(d)(2)(B) and consistent with the definition in 45 CFR 155.300. Income would be measured relative to the FPL, which is updated periodically in the Federal Register by the Secretary under the authority of 42 U.S.C. 9902(2), based on annual changes in the consumer price index for all urban consumers (CPI-U). In our proposed methodology, household size and income as a percentage of FPL would be used as factors in developing the rate cells. We propose using the following income ranges measured as a percentage of FPL:  8

• 0-50 percent.

• 51-100 percent.

• 101-138 percent.

• 139-150 percent.

• 151-175 percent.

• 176-200 percent.

We further propose to assume a uniform income distribution for each federal BHP payment cell. We believe that assuming a uniform income distribution for the income ranges proposed would be reasonably accurate for the purposes of calculating the BHP payment and would avoid potential errors that could result if other sources of data were used to estimate the specific income distribution of persons who are eligible for or enrolled in the BHP within rate cells that may be relatively small.

Thus, when calculating the mean, or average, PTC for a rate cell, we propose to calculate the value of the PTC at each 1 percentage point interval of the income range for each federal BHP payment cell and then calculate the average of the PTC across all intervals. This calculation would rely on the PTC formula described in section II.D.4 of this notice.

As the advance payment of PTC (APTC) for persons enrolled in QHPs would be calculated based on their household income during the open enrollment period, and that income would be measured against the FPL at that time, we propose to adjust the FPL by multiplying the FPL by a projected increase in the CPI-U between the time that the BHP payment rates are calculated and the QHP open enrollment period, if the FPL is expected to be updated during that time. We propose that the projected increase in the CPI-U would be based on the intermediate inflation forecasts from the most recent OASDI and Medicare Trustees Reports. 9

In Equation 1 described in section II.A.1 of this notice, we propose to use the formula described in 26 U.S.C. 36B(b) to calculate the estimated PTC that would be paid on behalf of a person enrolled in a QHP on an Exchange as part of the BHP payment methodology. This formula is used to determine the contribution amount (the amount of premium that an individual or household theoretically would be required to pay for coverage in a QHP on an Exchange), which is based on (A) the household income; (B) the household income as a percentage of FPL for the family size; and (C) the schedule specified in 26 U.S.C. 36B(b)(3)(A) and shown below. The difference between the contribution amount and the adjusted monthly premium for the applicable second lowest cost silver plan is the estimated amount of the PTC that would be provided for the enrollee.

The PTC amount provided for a person enrolled in a QHP through an Exchange is calculated in accordance with the methodology described in 26 U.S.C. 36B(b)(2). The amount is equal to the lesser of the premium for the plan in which the person or household enrolls, or the adjusted premium for the applicable second lowest cost silver plan minus the contribution amount.

The applicable percentage is defined in 26 U.S.C. 36B(b)(3)(A) and 26 CFR 1.36B-3(g) as the percentage that applies to a taxpayer's household income that is within an income tier specified in Tables 1 and 2, increasing on a sliding scale in a linear manner from an initial premium percentage to a final premium percentage specified in Tables 1 and 2. We propose no changes to this methodology. The applicable percentages in Table 1 for calendar year (CY) 2018 would be effective for BHP program year 2019, and the applicable percentages in Table 2 for CY 2019 would be effective for BHP program year 2020.

The applicable percentages for CY 2018 (Table 1) would be used for the 2019 payment methodology, and the applicable percentages for CY 2019 (Table 2) would be used for the 2020 payment methodology. The applicable percentages will be updated in future years in accordance with 26 U.S.C. 36B (b)(3)(A)(ii).

On the Exchange, if an enrollee chooses a QHP and the value of the PTC is greater than the premium, then the PTC is reduced to be equal to the premium. This usually occurs when enrollees eligible for larger PTCs (generally those with lower household incomes or older enrollees) choose bronze-level plans, which have the lowest premiums on the Exchange. Prior to 2018, we believed that the impact of these choices were relatively small on the amount of PTCs that the federal government paid. Most enrollees in income ranges up to 200 percent FPL chose silver-level plans, and in most cases where enrollees chose bronze-level plans, the premium was still more than the PTC. Therefore, we made no adjustment for enrollees choosing non-silver-level plans in developing the BHP payment methodology.

After the discontinuance of the CSR payments in October 2017, several changes occurred that increased the expected impact of enrollees' plan choices on the amount of PTC paid. Silver-level QHP premiums for the 2018 benefit year increased substantially relative to other metal-tier plans in many states (on average, by about 20 percent). We believe this contributed to an increase in the percentage of enrollees with lower incomes choosing bronze-level plans, despite being eligible for CSRs in silver-level plans, because many were able to purchase plans and pay $0 in premium; according to CMS data, the percentage of persons with incomes between 0 percent and 200 percent of FPL eligible for CSRs (those who would be eligible for the BHP if the state operated a BHP) selecting bronze plans increased from about 11 percent in 2017 to about 13 percent in 2018. In addition, the likelihood that a person choosing a bronze-level plan would pay $0 premium increased (and the difference between the bronze-level QHP premium and the available PTC widened). Between 2017 and 2018, the ratio of the average silver plan premium to the average bronze plan premium increased from about 117 percent to 133 percent; that is, the average silver plan premium was 17 percent higher than the average bronze plan premium in 2017, and the average silver plan premium was 33 percent higher than the average bronze plan premium in 2018. Similarly, the average estimated reduction in APTC for enrollees with incomes between 0 percent and 200 percent FPL that chose bronze plan increased from about 11 percent in 2017 to about 23 percent in 2018 (after adjusting for the average age of bronze plan and silver plan enrollees); that is, in 2017, enrollees with incomes in this range who chose bronze plans received 11 percent less than the full value of the APTC, and in 2018, those enrollees who chose bronze plans received 23 percent less than the full value of the APTC. The discontinuance of the CSR payments led to increases in silver plan premiums (and thus in the total potential PTCs), but did not generally increase the bronze plan premiums in most states; we believe this is the primary reason for the increase in the percentage reduction in PTCs paid for those who enrolled in bronze plans between 2017 and 2018. Therefore, we now believe that the impacts on the amount of PTC the government would pay due to enrollees' plan choices are larger and thus more significant, and we are proposing to include an adjustment in the BHP payment methodology to account for this (the MTSF). Section 1331(d)(3) of the Affordable Care Act requires that the BHP payments to states be based on what would have been provided if such eligible individuals were allowed to enroll in QHPs, and we believe that it is appropriate to consider how individuals would have chosen different plans—including across different metal tiers—as part of the BHP payment methodology.

We propose to calculate the MTSF using the following approach. First, we would calculate the percentage of enrollees with incomes below 200 percent of the FPL (those who would be potentially eligible for the BHP) in non-BHP states who enrolled in bronze-level plans in 2018. Second, we would calculate the ratio of the average PTC paid for enrollees in this income range who selected bronze-level plans compared to the average PTC paid for enrollees in the same income range who selected silver-level plans. Both of these calculations would be done using CMS data on Exchange enrollment and payments.

The MTSF would then be set to the value of 1 minus the product of the percentage of enrollees who chose bronze-level plans and 1 minus the ratio of the average PTC paid for enrollees in bronze-level plans to the average PTC paid for enrollees in silver-level plans:

MTSF = 1−(percentage of enrollees in bronze-level plans × (1−average PTC paid for bronze-level enrollees/average PTC paid for silver-level enrollees))

We have calculated that 12.68 percent of enrollees in households with incomes below 200 percent of the FPL selected bronze-level plans in 2018, and that those enrollees received average PTCs equal to 76.66 percent of the average PTCs paid for enrollees in silver-level plans (the average PTC was 27.04 lower for those who selected bronze plans, but after adjusting for the average age of bronze and silver plans enrollees, the difference was reduced to 23.34 percent). Therefore, we propose that the value of the MTSF for 2019 would be 97.04 percent. We also propose to update this with 2019 data for 2020.

We welcome comments on this factor and the determination of the value.

For persons enrolled in a QHP through an Exchange who receive APTC, there will be an annual reconciliation following the end of the year to compare the advance payments to the correct amount of PTC based on household circumstances shown on the federal income tax return. Any difference between the latter amounts and the advance payments made during the year would either be paid to the taxpayer (if too little APTC was paid) or charged to the taxpayer as additional tax (if too much APTC was made, subject to any limitations in statute or regulation), as provided in 26 U.S.C. 36B(f).

Section 1331(e)(2) of the Affordable Care Act specifies that an individual eligible for the BHP may not be treated as a qualified individual under section 1312 who is eligible for enrollment in a QHP offered through an Exchange. We are defining “eligible” to mean anyone for whom the state agency or the Exchange assesses or determines, based on the single streamlined application or renewal form, as eligible for enrollment in the BHP. Because enrollment in a QHP is a requirement for individuals to receive PTC, individuals determined or assessed as eligible for a BHP are not eligible to receive APTC assistance for coverage in the Exchange. Because they do not receive APTC assistance, BHP enrollees, on whom the BHP payment methodology is based, are not subject to the same income reconciliation as Exchange consumers. Nonetheless, there may still be differences between a BHP enrollee's household income reported at the beginning of the year and the actual household income over the year. These may include small changes (reflecting changes in hourly wage rates, hours worked per week, and other fluctuations in income during the year) and large changes (reflecting significant changes in employment status, hourly wage rates, or substantial fluctuations in income). There may also be changes in household composition. Thus, we believe that using unadjusted income as reported prior to the BHP program year may result in calculations of estimated PTC that are inconsistent with the actual household incomes of BHP enrollees during the year. Even if the BHP adjusts household income determinations and corresponding claims of federal payment amounts based on household reports during the year or data from third-party sources, such adjustments may not fully capture the effects of tax reconciliation that BHP enrollees would have experienced had they been enrolled in a QHP through an Exchange and received APTC assistance.

Therefore, in accordance with current practice, we propose including in Equation 1 an income adjustment factor that would account for the difference between calculating estimated PTC using: (a) Household income relative to FPL as determined at initial application and potentially revised mid-year under § 600.320, for purposes of determining BHP eligibility and claiming federal BHP payments; and (b) actual household income relative to FPL received during the plan year, as it would be reflected on individual federal income tax returns. This adjustment would seek prospectively to capture the average effect of income reconciliation aggregated across the BHP population had those BHP enrollees been subject to tax reconciliation after receiving APTC assistance for coverage provided through QHPs. Consistent with the methodology used in past years, we propose estimating reconciliation effects based on tax data for 2 years, reflecting income and tax unit composition changes over time among BHP-eligible individuals.

The OTA maintains a model that combines detailed tax and other data, including Exchange enrollment and PTC claimed, to project Exchange premiums, enrollment, and tax credits. For each enrollee, this model compares the APTC based on household income and family size estimated at the point of enrollment with the PTC based on household income and family size reported at the end of the tax year. The former reflects the determination using enrollee information furnished by the applicant and tax data furnished by the IRS. The latter would reflect the PTC eligibility based on information on the tax return, which would have been determined if the individual had not enrolled in the BHP. We propose that the ratio of the reconciled PTC to the initial estimation of PTC would be used as the IRF in Equation (1) for estimating the PTC portion of the BHP payment rate.

For 2018, OTA estimated that the IRF for states that have implemented the Medicaid eligibility expansion to cover adults up to 133 percent of the FPL will be 97.37 percent, and for states that have not implemented the Medicaid eligibility expansion and do not cover adults up to 133 percent of the FPL will be 97.45 percent. In the 2018 payment methodology, the IRF will be equal to 97.41 percent (this was previously published in the CMCS Informational Bulletin “Basic Health Program; Federal Funding Methodology for Program Year 2018” on May 17, 2017). We propose updating this calculation and the IRF for 2019 and for 2020.

In the interest of allowing states greater certainty in the total BHP federal payments for a given plan year, we have given states the option to have their final federal BHP payment rates calculated using a projected ARP (that is, using premium data from the prior program year multiplied by the PTF defined below), as described in Equation (2b). Under the 2016 BHP payment notice, states were required to make their election for the 2017 program year by May 15, 2016 and to make their election for the 2018 program year by May 15, 2017. We propose that states generally continue to meet the deadline of making their election by May 15 of the year preceding the applicable program year. However, because we are proposing to revise the 2019 payment methodology after the May 15, 2018 deadline has passed, we are proposing that a state may change its election for the 2019 program year, provided that it does so within 30 days of the date of the notice announcing the final BHP payment methodology for 2019. A change in the state's election would be effective retroactive to January 1, 2019. For 2020, the state would need to inform us no later than May 15, 2019 of its decision for the 2020 program year. (If the final methodology is published after this deadline, we may extend this deadline to give states the opportunity to make this election.)

For Equation (2b), we propose to continue to define the PTF, with minor changes in calculation sources and methods, as follows:

PTF: In Equation (2b), we propose to calculate an ARP based on the application of certain relevant variables to the RP, including a PTF. In the case of a state that would elect to use the 2018 premiums as the basis for determining the 2019 BHP payment, for example, it would be appropriate to apply a factor that would account for the change in health care costs between the year of the premium data and the BHP program year. We are proposing to define this as the PTF in the BHP payment methodology. This factor would approximate the change in health care costs per enrollee, which would include, but not be limited to, changes in the price of health care services and changes in the utilization of health care services. This would provide an estimate of the adjusted monthly premium for the applicable second lowest cost silver plan that would be more accurate and reflective of health care costs in the BHP program year.

For the PTF, we propose to use the annual growth rate in private health insurance expenditures per enrollee from the National Health Expenditure (NHE) projections, developed by the Office of the Actuary in CMS ( https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html ). For BHP program year 2019, we propose that the PTF would be 3.8 percent.

States may want to consider that the increase in premiums for QHPs from one year to the next may differ from the PTF developed for the BHP funding methodology for several reasons. In particular, states may want to consider that the second lowest cost silver plan may be different from one year to the next. This may lead to the PTF being greater than or less than the actual change in the premium of the second lowest cost silver plan.

To determine whether the potential difference in health status between BHP enrollees and consumers in the Exchange would affect the PTC, risk adjustment payments that would have otherwise been made had BHP enrollees been enrolled in coverage through an Exchange, we propose to continue to provide states implementing the BHP the option to propose and to implement, as part of the certified methodology, a retrospective adjustment to the federal BHP payments to reflect the actual value that would be assigned to the PHF (or risk adjustment) based on data accumulated during that program year for each rate cell.

We acknowledge that there is uncertainty with respect to this factor due to the lack of experience of QHPs through an Exchange and other payments related to the Exchange, which is why, absent a state election, we propose to use a value for the PHF to determine a prospective payment rate which assumes no difference in the health status of BHP enrollees and QHP enrollees. There is considerable uncertainty regarding whether the BHP enrollees will pose a greater risk or a lesser risk compared to the QHP enrollees, how to best measure such risk, the potential effect such risk would have had on PTC, and risk adjustment that would have otherwise been made had BHP enrollees been enrolled in coverage through an Exchange. To the extent, however, that a state would develop an approved protocol to collect data and effectively measure the relative risk and the effect on federal payments, we propose to permit a retrospective adjustment that would measure the actual difference in risk between the two populations to be incorporated into the certified BHP payment methodology and used to adjust payments in the previous year.

For a state electing the option to implement a retrospective population health status adjustment, we propose requiring the state to submit a proposed protocol to CMS, which would be subject to approval by us and would be required to be certified by the Chief Actuary of CMS, in consultation with the OTA, as part of the BHP payment methodology. We describe the protocol for the population health status adjustment in guidance in Considerations for Health Risk Adjustment in the Basic Health Program in Program Year 2015 ( http://www.medicaid.gov/Basic-Health-Program/Downloads/Risk-Adjustment-and-BHP-White-Paper.pdf ). Under the February 2016 BHP payment notice, states were required to submit a proposed protocol by August 1, 2017 for the 2018 program year. We propose requiring a state to submit its proposed protocol within 60 days of the publication of the final payment methodology for our approval for the 2019 program year, and by August 1, 2019 for the 2020 program year. This submission would also include descriptions of how the state would collect the necessary data to determine the adjustment, including any contracting contingences that may be in place with participating standard health plan issuers. We would provide technical assistance to states as they develop their protocols. To implement the population health status, we propose that we must approve the state's protocol no later than 90 days after the submission of the PHF methodology for the 2019 program year, and by December 31, 2019 for the 2020 program year. Finally, we propose that the state be required to complete the population health status adjustment at the end of the program year based on the approved protocol. After the end of the program year, and once data is made available, we propose to review the state's findings, consistent with the approved protocol, and make any necessary adjustments to the state's federal BHP payment amounts. If we determine that the federal BHP payments were less than they would have been using the final adjustment factor, we would apply the difference to the state's next quarterly BHP trust fund deposit. If we determine that the federal BHP payments were more than they would have been using the final reconciled factor, we would subtract the difference from the next quarterly BHP payment to the state.

This notice's proposed methodology is similar to the methodology originally published in the February 2016 payment notice and modified by the Final Administrative Order. The proposed methodology changes would not revise or impose any additional reporting, recordkeeping, or third-party disclosure requirements or burden on QHPs or on states operating State-based Exchanges. The methodology's information collection requirements and burden estimates are approved by OMB under control number 0938-1218 (CMS-10510). The proposed methodology would not necessitate the need to make any changes under that control number.

Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.

Section 1331 of the Affordable Care Act (codified at 42 U.S.C. 18051) requires the Secretary to establish a BHP, and section (d)(1) specifically provides that if the Secretary finds that a state meets the requirements of the program established under section (a) of section 1331 of the Affordable Care Act, the Secretary shall transfer to the State federal BHP payments described in section (d)(3). This proposed methodology provides for the funding methodology to determine the federal BHP payment amounts required to implement these provisions in program years 2019 and 2020.

We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2) and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) (Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). As noted in the BHP final rule, the BHP provides states the flexibility to establish an alternative coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the Marketplace. To date, two states have established a BHP, and we expect state participation to remain static as a result of this payment methodology. However, the proposed payment methodology differs from prior years' methodologies as the MTSF is incorporated and would reduce BHP payments compared to using the previous year's methodology. We estimate that this rulemaking is “economically significant” as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we have prepared a RIA that, to the best of our ability, presents the costs and benefits of the rulemaking.

The aggregate economic impact of this proposed payment methodology is estimated to be $300 million from CY 2019 through 2020 (measured in real 2019 dollars). For the purposes of this analysis, we have assumed that 2 states would implement BHP in 2019 and 2020. This assumption is based on the fact that two states have established a BHP to date, and we do not have any indication that additional states may implement the program. We also assumed there would be about 802,000 BHP enrollees in 2019 (based on the most recent state estimates of enrollment as of October 2018) and about 806,000 in 2020. The size of the BHP depends on several factors, including the number of and which particular states choose to implement or continue a BHP, the level of QHP premiums, and the other coverage options for persons who would be eligible for the BHP. In particular, while we generally expect that many enrollees would have otherwise been enrolled in a QHP through the Marketplace, some persons may have been eligible for Medicaid under a waiver or a state health coverage program. For those who would have enrolled in a QHP and thus would have received PTCs, the federal expenditures for the BHP would be expected to be more than offset by a reduction in federal expenditures for PTCs. For those who would have been enrolled in Medicaid, there would likely be a smaller offset in federal expenditures (to account for the federal share of Medicaid expenditures), and for those who would have been covered in non-federal programs or would have been uninsured, there likely would be an increase in federal expenditures.

Projected BHP enrollment and expenditures under the previous payment methodology were calculated using the most recent 2018 QHP premiums and state estimates for BHP enrollment. Enrollment was projected to 2019 using the projected increase in the number of adults in the U.S. from 2018 to 2019 (0.5 percent), and premiums were projected using the NHE projection of premiums for private health insurance. Expenditures are in real 2019 dollars and are deflated using the projected change in the medical component of the consumer price index (CPI-M). Expenditures are projected to be $4.890 billion in 2019 and $4.944 billion in 2020.

For the change in the methodology to incorporate the MTSF, the MTSF was calculated as having a value of 97.04 percent (as described previously). This reduced projected expenditures by $149 million in 2019 and $151 million in 2020, compared to projected expenditures using the methodology in the 2018 Final Administrative Order.

The proposed change in the BHP methodology is expected to shift a portion of BHP costs from the Federal government to the state operating a BHP. Currently, we understand that states pay a portion of the BHP costs each year. This increase in costs may lead the states to consider a combination of the following changes: Increasing state payments to the BHP; increasing beneficiary premiums and cost-sharing to the BHP; and reducing payment rates to standard health plans. Beneficiary premiums and cost-sharing are limited under the BHP, so it is unlikely states could make up much of the difference through increased beneficiary contributions. We expect that most of the difference in federal payments would be made up through increases in state funding.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) (RFA) requires agencies to prepare an initial regulatory flexibility analysis to describe the impact of the proposed rule on small entities, unless the head of the agency can certify that the rule will not have a significant economic impact on a substantial number of small entities. The Act generally defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA); (2) a not-for-profit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000. Individuals and states are not included in the definition of a small entity.

Because this proposed methodology is focused solely on federal BHP payment rates to states, it does not contain provisions that would have a direct impact on hospitals, physicians, and other health care providers that are designated as small entities under the RFA. Accordingly, we have determined that the proposed methodology, like the current methodology and the final rule that established the BHP, will not have a significant economic impact on a substantial number of small entities.

In addition, section 1102(b) of the Act requires us to prepare a RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. For the preceding reasons, the Secretary has determined that this proposed methodology will not have a significant impact on the operations of a substantial number of small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2019, that threshold is approximately $154 million. States have the option, but are not required, to establish a BHP. Further, the proposed methodology would establish federal payment rates without requiring states to provide the Secretary with any data not already required by other provisions of the Affordable Care Act or its implementing regulations. Thus, neither the current nor the proposed payment methodologies mandate expenditures by state governments, local governments, or tribal governments.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. The BHP is entirely optional for states, and if implemented in a state, provides access to a pool of funding that would not otherwise be available to the state. This requirement unlike the preceding requirement excludes the impact on the private sectors.

Given the absence of an appropriation for federal CSR payments, we considered several alternatives of how to consider this in the BHP payment methodology for 2019 and 2020, following the Final Administrative Order. In States without BHPs, there were increases in the silver plan premiums due to the lack of federal funding for CSRs in 2018, and those are expected to remain in the rates in 2019 and 2020 (absent federal funding for CSRs). QHP issuers are still responsible for CSRs on behalf of eligible enrollees, regardless of federal funding; therefore, in many States QHP issuers have increased premiums significantly to account for the costs of the CSRs in 2018 and are expected to continue to do so in subsequent years. In states operating BHPs, the majority of the individuals eligible for CSRs (and the vast majority eligible for the largest CSRs) are enrolled in the BHP and not in the Exchange. As a result, in those states, QHP issuers made much smaller adjustments to premiums to account for CSR costs in 2018. We considered whether or not to make an adjustment in the BHP payment methodology for how much QHP premiums would have increased if BHP enrollees had been enrolled through the Exchange instead as part of the Final Administrative Order. We are also considering other methodologies for calculating the adjustment, including using program data to estimate the expected adjustment and to request information from QHPs and/or states for 2019 and 2020 QHP premiums. We are proposing to use the same methodology, data, and adjustment to the premiums as was used in the 2018 payment methodology described in the Final Administrative Order. (See section II.D.2 for more information.)

We are also considering whether or not to make an adjustment to account for the number of enrollees who would select other metal-tier plans on the Exchange (if not for the existence of the BHP) and the impact that this would have on the average PTC paid. In previous methodologies, we have not made such an adjustment; however, there are two results from the discontinuance of CSR payments that we considered in adding this adjustment for the 2019 and 2020 payment methodology. First, there are a significant percentage of enrollees with incomes below 200 percent of the FPL in states without BHPs that have chosen to enroll in bronze-level QHPs, despite the availability of CSRs if they had chosen to enroll in a silver-level QHP (about 13 percent in 2018). Second, the discontinuance of the CSR payments and the subsequent increases to silver-level QHP premiums in 2018 led to a larger difference between the bronze-level and silver-level QHP premiums in many states (from a difference of about 17 percent in 2017 to about 33 percent in 2018). As a result, the likelihood that enrollees eligible for CSRs who enrolled in bronze-level plans would pay $0 in premium increased (and thus the full value of the PTC they were eligible for would not be paid), and the average difference between the bronze-level premium and the full value of the PTC likely increased. In addition, the percentage of enrollees eligible for CSRs enrolled in bronze-level QHPs also increased from 2017 to 2018 (from 11 percent to 13 percent), and we believe this is likely due to the availability of QHPs that effectively had $0 in premium due to the PTC for which individuals qualified. Therefore, we are proposing to make an adjustment for enrollees selecting bronze-level QHPs in this methodology.

In addition, we are also considering whether or not to continue to provide states the option to develop a protocol for a retrospective adjustment to the PHF as we did in previous payment methodologies. We believe that continuing to provide this option is appropriate and likely to improve the accuracy of the final payments.

We also are considering whether or not to require the use of the program year premiums to develop the federal BHP payment rates, rather than allow the choice between the program year premiums and the prior year premiums trended forward. We believe that the payment rates can still be developed accurately using either the prior year QHP premiums or the current program year premiums and that it is appropriate to continue to provide the states the option.

Many of the factors proposed in this notice are specified in statute; therefore, we are limited in the alternative approaches we could consider. One area in which we previously had and still have a choice is in selecting the data sources used to determine the factors included in the proposed methodology. Except for state-specific RPs and enrollment data, we propose using national rather than state-specific data. This is due to the lack of currently available state-specific data needed to develop the majority of the factors included in the proposed methodology. We believe the national data will produce sufficiently accurate determinations of payment rates. In addition, we believe that this approach will be less burdensome on states. In many cases, using state-specific data would necessitate additional requirements on the states to collect, validate, and report data to CMS. By using national data, we are able to collect data from other sources and limit the burden placed on the states. For RPs and enrollment data, we propose using state-specific data rather than national data as we believe state-specific data will produce more accurate determinations than national averages.

We request public comment on these alternative approaches.

In accordance with OMB Circular A- 4, Table 4 depicts an accounting statement summarizing the assessment of the benefits, costs, and transfers associated with this proposed payment methodology.

Executive Order 13771, titled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017 (82 FR 9339, February 3, 2017). It has been determined that this notice is a transfer notice that does not impose more than de minimis costs, and thus is not a regulatory action for the purposes of E.O. 13771.

Overall, federal BHP payments are expected to decrease by $300 million from 2019 through 2020 as a result of the changes to the methodology. The decrease in federal BHP payments is expected to be made up in increased state BHP expenditures, with a potential increase in beneficiary contributions and potential decreases in provider payment rates (including rates to standard health plans in the BHP) as a result of these changes. The analysis above, together with the remainder of this preamble, provides an RIA.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

This is a summary of the Commission's Notice of Proposed Rulemaking ( NPRM ) in WT Docket No. 19-38, FCC 19-22, released on March 15, 2019. The complete text of the NPRM is available for viewing via the Commission's ECFS website by entering the docket number, WT Docket No. 19-38. The complete text of the NPRM is also available for public inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW, Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-488-5563.

This proceeding shall continue to be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules (47 CFR 1.1200 et seq. ). Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

Rulemaking Requirement. Section 616 of the MOBILE NOW Act requires that, within a year of its enactment, the Commission must “initiate a rulemaking proceeding to assess whether to establish a program, or modify existing programs, under which a licensee that receives a license for exclusive use of spectrum in a specific geographic area under Section 301 of the Communications Act of 1934 (47 U.S.C. 301) may partition or disaggregate the license by sale or long-term lease.”  2 The purpose of any such new or modified program for partitioning and disaggregation would be to provide services consistent with the license and make unused spectrum available to “(I) an unaffiliated small carrier; or (II) an unaffiliated carrier to serve a rural area.”  3 Section 616 conditions the adoption of a new or modified program on the Commission making a finding that it would “promote (i) the availability of advanced telecommunications services in rural areas; or (ii) spectrum availability for covered small carriers.”  4

Considerations. Section 616 requires the Commission to consider four key questions in conducting the rulemaking. First, the Commission must examine whether reduced performance requirements with respect to the spectrum obtained through the program would facilitate deployment of advanced wireless services in rural areas. 5 Second, the rulemaking must explore what conditions may be needed on transfers of spectrum under the program to allow covered small carriers to build out spectrum obtained under the program in a reasonable period of time. 6 Third, the Commission must consider whether certain incentives may be appropriate to encourage licensees to lease or sell spectrum, including (i) extending the term of a license; or (ii) modifying the performance requirements of the license relating to the leased or sold spectrum. 7 Section 616 provides, however, that the Commission may offer incentives or reduced performance requirements only if it finds that doing so would be likely to result in increased availability of advanced telecommunications services in a rural area. 8 Additionally, if a party fails to meet any buildout requirements set by the Commission for any spectrum sold or leased under a new or modified partitioning and disaggregation program, “the right to the spectrum shall be forfeited to the Commission unless the Commission finds that there is good cause for the failure of the party.”  9 Finally, the Commission must evaluate the administrative feasibility of those or any other incentives the Commission might consider that further the goals of the rulemaking requirement. 10

Definitions. In establishing its dual goals of making spectrum available to small carriers and promoting the availability of advanced telecommunications services in rural areas, Section 616 defines two key terms. First, the term “covered small carrier” is defined as a carrier  11 that “(A) has not more than 1,500 employees (as determined under section 121.106 of title 13, Code of Federal Regulations, or any successor thereto); and (B) offers services using the facilities of the carrier.” 12 Second, Section 616 defines the term “rural area” as any area other than “(A) a city, town, or incorporated area that has a population of more than 20,000 inhabitants; or (B) any urbanized area contiguous and adjacent to a city or town that has a population of more than 50,000 inhabitants.” 13 As a result, these definitions will apply to any use of the terms “covered small carrier” or “rural area” in this NPRM, notwithstanding any definitions of these terms in other Commission proceedings that may differ from those described by Section 616. 14

The Commission's existing partitioning, disaggregation, and leasing rules are designed to facilitate spectrum access and encourage secondary market transactions that will lead to efficient use of spectrum. The NPRM seeks comment on whether to establish a program, or modify existing programs, for the partitioning, disaggregation, and leasing of licenses. The NPRM also seeks comment on what, if any, changes would promote the availability of advanced telecommunications services in rural areas or spectrum availability for covered small carriers—such as allowing additional time to meet performance obligations under certain circumstances. The NPRM also asks commenters to address three considerations set forth in Section 616, including addressing the administrative feasibility of each consideration; they are: (1) Whether reduced performance requirements applicable to partitioned or disaggregated licenses would promote the availability of advanced telecommunications services in rural areas or spectrum availability for covered small carriers; (2) what conditions may be needed to eliminate impediments to transfers of spectrum to covered small carriers to allow them to build out in a reasonable period of time; and (3) what incentives may encourage licensees to lease or sell spectrum to covered small carriers or unaffiliated carriers that will serve rural areas. The NPRM seeks to develop a record on the success of the Commission's existing rules and therefore seek comment on whether further Commission action would likely promote the availability of advanced telecommunications services in rural areas and facilitate access to spectrum by covered small carriers.

Reduced Performance Requirements in Rural Areas. The NPRM seeks comment on whether reduced performance requirements for partitioned or disaggregated licenses would facilitate the deployment of advanced telecommunications services in rural areas. The Commission's rules permit parties to a partition or disaggregation to agree either to share the responsibility for meeting performance requirements or to satisfy the requirements individually. The NPRM seeks comment on potential modifications to these requirements that may be likely to increase service to rural areas, and on how to ensure that reduced performance requirements do not lead to reduced service in rural areas. The NPRM seeks comment on, for example, extending by one year a receiving party's construction deadline for a partitioned or disaggregated license when (i) the receiving party is a rural carrier or is acquiring spectrum that includes “rural areas,” as defined by Section 616, and (ii) the receiving party elects to meet the construction requirement independently for its partitioned or disaggregated license area. The NPRM seeks comment on various aspects of implementing such an approach, or any other approach that commenters advocate.

The NPRM asks commenters advocating for these specific approaches, or for other approaches involving reduced performance requirements, to discuss how they would be implemented, including how and when they would take effect, to whom they would apply, and any specific conditions that should apply. Commenters should also describe in detail how any such implementation would serve to promote the availability of advanced telecommunications services in rural areas. Further, in light of Section 616's requirement that the Commission consider the administrative feasibility of implementing reduced performance requirements, commenters should discuss the costs and benefits of any proposed implementation.

Conditions on Transfers of Spectrum to Covered Small Carriers. As a threshold matter, the MOBILE NOW Act directs the Commission to focus on programs that would promote spectrum availability for “covered small carriers,” a term that encompasses only common carriers. 15 While the NPRM seeks comment below on issues relating to “covered small carriers,” as required, the Commission also seeks comment on whether it should consider applying any rule revisions to an expanded class of licensees beyond those Congress requires the Commission to consider. The NPRM also seeks comment on what conditions may be needed on transfers of spectrum to allow covered small carriers to build out in a reasonable period. The NPRM asks whether there are procedural barriers to partitioning or disaggregation that limit the utility of those programs for covered small carriers, and if so, the nature of those barriers and the types of entities that are currently foreclosed. In addition to procedural barriers to partitioning and disaggregation, the NPRM seeks comment on whether there are substantive barriers with respect to covered small carriers' ability to satisfy performance requirements applicable to the partitioned or disaggregated spectrum, and whether reduced construction obligations or extended performance deadlines could increase the number of covered small carriers that are willing and able to obtain spectrum through partitioning, disaggregation, or lease arrangements.

The NPRM seeks comment on these and any other relevant considerations regarding special conditions for covered small carriers that obtain access to spectrum through partition or disaggregation. Commenters should discuss in detail both the necessity and the likelihood of any such conditions resulting in increased spectrum availability for covered small carriers. Further, in light of the Section 616 requirement that the Commission consider the administrative feasibility of special conditions for covered small carriers, commenters should also discuss the costs and benefits of any conditions they advocate.

Incentives to Encourage Lease or Sale. The NPRM seeks comment on what, if any, incentives might be appropriate to encourage licensees to lease or sell spectrum to covered small carriers or unaffiliated carriers that will serve rural areas, including license term extensions or modified performance requirements. The NPRM seeks comment on whether the Commission's existing secondary markets rules are sufficiently flexible to provide adequate incentives for licensees to sell or lease their spectrum rights to covered small carriers or unaffiliated carriers that seek to provide service to rural areas. The NPRM asks commenters to discuss the effectiveness of existing benefits of sale or lease, and whether further incentives would be likely to encourage licensees to lease or sell spectrum. For example, the NPRM seeks comment on whether and how modified performance requirements or longer license terms might encourage more licensees to sell or lease their spectrum rights. The Commission asks commenters to discuss the incremental benefits of increasing the number of spectrum sales or leases relative to the potential collateral effects that such incentives may have. For example, while reduced buildout requirements may increase the number of licensees willing to lease spectrum, it may also decrease deployment of advanced wireless services in those license areas as a result of the reduced performance requirements. The NPRM therefore seeks comment on the specific costs and benefits of any incentives that commenters advocate and the relative weight the Commission should apply in evaluating whether those incentives would be likely to result in increased availability of advanced telecommunications services in rural areas.

The NPRM also seeks comment on whether allowing spectrum “reaggregation” for spectrum that has been partitioned or disaggregated on the secondary market—up to the size of the original market area—would increase the incentives of parties to lease or sell spectrum in the first place, and thus ultimately meet the dual goals of increasing the availability of advanced telecommunications services in rural areas and facilitating access to spectrum by covered small carriers. Under the Commission's current rules, while licensees may partition and disaggregate their licenses through spectrum transactions, there is no provision for reaggregating spectrum, even when the partitioned or disaggregated portions of an original market area are acquired by a single entity. Holding multiple licenses for what was once a single license may impose certain regulatory and administrative burdens on licensees, including construction requirements, renewal showings, continuous service requirements, and the need to maintain up-to-date information in ULS. In the context of other proceedings, some parties have asked the Commission to allow reaggregation of spectrum to ease these burdens. 16 The NPRM seeks comment on the relationship between reducing these burdens and incentivizing spectrum transactions.

If commenters advocate for incentives such as modified performance requirements, longer license terms, spectrum reaggregation, or another incentive, the Commission directs them to describe in detail how the incentive would likely increase the availability of advanced telecommunications services in rural areas or facilitate access to spectrum by covered small carriers. Further, in light of the Section 616 requirement that the Commission consider the administrative feasibility of providing incentives to lease or sell spectrum, commenters should also discuss the costs and benefits of any incentives they advocate.

As required by the Regulatory Flexibility Act of 1980 (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules proposed in this document. We request written public comment on the IRFA. Comments must be filed in accordance with the same deadlines as comments filed in response to the NPRM as set forth on the first page of this document, and have a separate and distinct heading designating them as responses to the IRFA. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of the NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

The NPRM contains proposed new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and OMB to comment on the information collection requirements contained in this document, as required by PRA. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

This proposed regulation amends the FEHBAR to list a “self plus one” enrollment type in the carrier advertising instructions so that carriers will be required to list all current enrollment types when advertising their health plans enrollment codes and premium rates to enrollees. This change is a technical correction and does not alter current FEHB family member eligibility guidelines.

This proposed regulation also provides notice to interested stakeholders that we are updating and clarifying the contract clause matrix. Annually, OPM determines which FAR and FEHBAR contract clauses are applicable to FEHB carrier contracts and we include the appropriate clauses in the carrier contracts. We also publish clauses and clause headings in the FEHBAR in order to give the clauses legal regulatory authority. This gives new carriers joining the FEHB Program the benefit of seeing OPM's required clauses in regulation for consideration prior to submitting an application for participation in the FEHB Program. This proposed regulation brings the contract clause matrix in line with the current Federal Acquisition Regulations (FAR) and FEHBAR contract clauses used in all Federal Employees Health Benefits (FEHB) Program carrier contracts.

Section 706 of the Bipartisan Budget Act of 2013 amended chapter 89 of title 5 United States Code (U.S.C) by adding a self plus one enrollment type for Federal employees and annuitants under the FEHB Program. The self plus one enrollment type became available during the 2015 Open Season for the 2016 plan year and was codified in a final rule at https://www.federalregister.gov/documents/2015/09/17/2015-23348/federal-employees-health-benefits-program-self-plus-one-enrollment-type. A self plus one enrollment covers the enrollee and one eligible family member, designated by the enrollee. Eligible family members under a self plus one enrollment include a spouse or eligible child as set forth in § 890.302 of title 5 CFR.

OPM manages the FEHB program which is executed with contractors managing and providing the FEHB benefits to government employees. This rule proposes to update the Federal Employee Health Benefits Acquisition Regulations (FEHBAR) to implement the “self plus one” program via FEHB contracts, and make the FEHB contract clauses consistent with current FAR and FEHBAR clause requirements. Specifically, the regulation amends the FEHBAR at 48 CFR part 1603 to list a self plus one enrollment type in the advertising instructions. OPM considers this change a technical correction as it does not change the operational requirements of the FEHB program and does not alter current FEHB family member eligibility guidelines.

This regulation also provides notice to interested stakeholders that we are updating the contract clause matrix at 48 CFR 1652.370. This will bring the matrix in line with current FAR and FEHBAR contract clauses used in all FEHB Program carrier contracts. The matrix at FEHBAR section 1652.370 lists the FAR and FEHBAR clauses to be used in contracts based on cost analysis and contracts based on a combination of cost and price analysis. Carriers must comply with all matrix clauses during their participation in the FEHB Program. Certain contract clauses are mandatory for FEHB contracts and others are used only when made applicable by pertinent sections of the FAR or FEHBAR. This regulation updates the matrix to include all current contract clauses.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 also emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a significant regulatory action under E.O. 12866.

This proposed rule is not expected to be an E.O. 13771 regulatory action because this proposed rule is not significant under E.O. 12866.

The Office of Personnel Management certifies that this rule will not have a significant economic impact on a substantial number of small entities.

We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles and responsibilities of state, local, or tribal governments.

This regulation meets the applicable standard set forth in Executive Order 12988.

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

This action pertains to agency management, personnel, and organization and does not substantially affect the rights or obligations of no agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number.

This rule involves an OMB approved collection of information subject to the PRA Health Benefits Election, SF 2809, OMB no. 3206-0160. The public reporting burden for this collection is estimated to average 30 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. The total burden hour estimate for this form is 9,000 hours. The systems of record notice for this collection is: OPM SORN GOVT-1 General Personnel Records and OPM SORN CENTRAL-18-Federal Employees Health Benefits Program Claims Data Warehouse.

Accordingly, OPM is proposing to amend title 48, Code of Federal Regulations, parts 1603 and 1652 as follows:

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires each regional fishery management council to submit any FMP or amendment to NMFS for review and approval, partial approval, or disapproval. The Magnuson-Stevens Act also requires that NMFS, upon receiving an FMP or amendment, publish an announcement in the Federal Register notifying the public that the FMP or amendment is available for review and comment.

The FMP being revised by Amendment 13 was prepared by the Councils and implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act.

In the Gulf and South Atlantic, spiny lobster are harvested primarily off the coast of Florida. The original FMP, implemented in 1982, largely complemented Florida's management regime and provided protection for the fishery throughout its range in the Gulf and the South Atlantic (47 FR 29202; July 2, 1982). The FMP adopted many of the management measures implemented by Florida to achieve its conservation and management objectives and effectively coordinate management with Florida. However, it was difficult to keep Federal regulations consistent with changing state regulations because Florida can adjust its management measures more quickly than the Councils and NMFS can change Federal regulations. As a result, NMFS and the Councils developed Amendment 2 to the FMP (54 FR 48059; November 20, 1989), which established a procedure to allow Florida to directly propose to NMFS its state spiny lobster regulations for subsequent implementation in the EEZ off Florida. That procedure was developed to provide a more timely regulatory mechanism to implement compatible regulations and a more formal process for state and Federal coordination.

In 2017, representatives from the Florida Fish and Wildlife Conservation Commission contacted the NMFS Southeast Regional Office requesting that Federal regulations be aligned with Florida state regulations concerning requirements for spiny lobster bully net gear and for daily commercial possession limits of spiny lobster harvested by bully net or diving. However, NMFS determined that the previously established cooperative management procedure for the spiny lobster protocol established in Amendment 2 was removed in Amendment 10 to the FMP (76 FR 75488; December 2, 2011). Consequently, there is no procedure to implement regulations proposed by Florida without a plan amendment or framework to the FMP developed by the Council. These more lengthy processes are inconsistent with promoting compatible regulations for the fishery off Florida.

Amendment 13 includes measures to modify the Federal regulations for the harvest of spiny lobster that apply in the EEZ off Florida to be compatible with Florida regulations concerning bully net gear requirements and commercial daily possession limits when using bully nets or diving. These changes include updating the incorporations by reference to the Florida regulations, as appropriate. Amendment 13 would also re-establish a procedure for an enhanced cooperative management system to provide the state of Florida with a mechanism to propose spiny lobster regulations directly to NMFS for implementation, without a full amendment or framework action to the FMP.

In 2017, Florida implemented a bully net permit, gear marking requirements, and gear prohibitions. There is limited information as to how much spiny lobster bully netting effort occurs in the Federal waters off Florida. However, stakeholders have expressed concerns that spiny lobster bully net vessels are used to disguise unlawful activities and that there are growing conflicts between recreational bully netters and commercial bully netters. Amendment 13 proposes to align Federal and Florida regulations to address these concerns. In addition, consistency between Florida and Federal regulations is expected to improve enforcement and reduce potential confusion among fishers.

Amendment 13 would require commercial bully net vessels in the EEZ off Florida to have a bully net permit from Florida, require that the vessel be marked with the harvester's Florida bully net permit number using reflective paint or other reflective material, prohibit commercial bully net vessels from having trap pullers onboard, and prohibit the simultaneous possession of a bully net and any underwater breathing apparatus (not including dive masks or snorkels) onboard a vessel used to harvest or transport spiny lobster for commercial purposes.

The Federal regulations do not include an express commercial daily vessel harvest and possession limit for spiny lobster harvested by bully net or diving. However, current Federal regulations require commercial spiny lobster harvesters in the EEZ off Florida to have the licenses and certificates specified to be a “commercial harvester,” as defined in Florida's regulations as of 2008. The 2008 version of “commercial harvester” included a person holding the appropriate licenses and certificates for traps and dive gear.

Amendment 13 would incorporate by reference the most recent Florida regulations, which define a commercial harvester as a person who holds a valid saltwater products license with a restricted species endorsement issued by the Florida Fish and Wildlife Conservation Commission (FWC) and (1) a valid crawfish license or trap number and lobster trap certificates, if traps are used to harvest spiny lobster; (2) a valid commercial dive permit if harvest is by diving; or (3) a valid bully net permit if harvest is by bully net. Under Florida's regulations, commercial harvesters are restricted to the commercial harvest limits when bully net gear or dive gear is used. Therefore, bully net and dive fishermen would be restricted to the state bag limit regardless where the spiny lobster are harvested. However, to make the requirements in the EEZ off Florida more clear, Amendment 13 would add an express commercial vessel limit of 250 spiny lobster per vessel per day for spiny lobster harvested by bully net off all Florida counties and harvested by diving off Broward, Dade, Monroe, Collier, and Lee Counties, Florida.

The procedure for the protocol, as last modified in Amendment 2 to the FMP, provided NMFS the flexibility to respond quickly to changes in the spiny lobster fishery by allowing Florida to propose its spiny lobster regulations directly to NMFS for implementation in the EEZ off Florida. The procedure was removed in 2012 when Amendment 10 to the FMP established a new framework procedure (76 FR 75488; December 2, 2011). Without the procedure, Florida cannot propose rules directly to NMFS, limiting the ability to implement consistent regulations in a timely manner.

Amendment 13 would re-establish a procedure for an enhanced cooperative management system to provide Florida with a mechanism to propose regulations concerning spiny lobster directly to NMFS for implementation.

A proposed rule that would implement Amendment 13 has been drafted. In accordance with the Magnuson-Stevens Act, NMFS is evaluating the proposed rule to determine whether it is consistent with the FMP, the Magnuson-Stevens Act, and other applicable laws. If that determination is affirmative, NMFS will publish the proposed rule in the Federal Register for public review and comment.

The Councils have submitted Amendment 13 for Secretarial review, approval, and implementation. Comments on Amendment 13 must be received by June 3, 2019. Comments received during the respective comment periods, whether specifically directed to Amendment 13 or the proposed rule, will be considered by NMFS in its decision to approve, partially approve, or disapprove Amendment 13. Comments received after the comment periods will not be considered by NMFS in this decision. All comments received by NMFS on Amendment 13 or the proposed rule during their respective comment periods will be addressed in the final rule.