This rule makes minor changes to existing NRCS regulations and an NRCS administered Commodity Credit Corporation (CCC) regulation. The 2018 Farm Bill (Pub. L. 115-334) made mandatory minor changes to several conservation programs and related requirements, including State Technical Committee, Watershed Protection and Flood Prevention, HFRP, TSP Assistance, and VPA-HIP. The minor changes include:

• Adding to the membership of the State Technical Committee (7 CFR part 610, subpart C);

• Waiving the requirement for watershed plans under certain circumstances under the Watershed Protection and Flood Prevention (7 CFR part 622);

• Expanding the purposes of HFRP (7 CFR part 625);

• Authorizing that certification of TSPs be through a qualified non-federal entity (7 CFR part 652); and

• Including as a criteria for evaluation of VPA-HIP bids whether the land is enrolled in the Wetlands Reserve Easement (WRE) component of the Agricultural Conservation Easement Program (ACEP).

The 2018 Farm Bill added the State Cooperative Extension Service and land grant universities in the State to the membership of the State Technical Committee. This rule adds representatives from these organizations to the list of members in 7 CFR 610.22.

The Watershed Protection and Flood Prevention Act of 1954 (Pub. L. 83-566, Watershed Operations), as amended by section 2401 of the 2018 Farm Bill, authorizes NRCS to install watershed improvement measures to reduce flooding, sedimentation, and erosion damage; improve conservation, development, utilization, and disposal of water; and advance conservation and proper utilization of land.

Working in cooperation with soil conservation districts and other local sponsoring organizations, NRCS prepares detailed watershed plans that outline soil and water management problems and proposals to alleviate the problems, including estimated benefits and costs, cost-sharing arrangements, and operation and maintenance arrangements. The 2018 Farm Bill authorizes NRCS to waive the watershed plan for works of improvement if the NRCS Chief determines that (1) the watershed plan is unnecessary or duplicative; and (2) the works of improvement are otherwise consistent with applicable requirements. NRCS incorporates the waiver in 7 CFR 622.31.

HFRP is authorized by Title V of the Healthy Forests Restoration Act of 2003 (Pub. L. 108-148). The 2018 Farm Bill amended HFRP to add that protection of at-risk species is a purpose in the conservation of forest land, permanent easements are an enrollment option for acreage on Tribal land, and land that improves the well-being of a species identified as of greatest conservation need by a State wildlife action plan is now eligible and a priority for enrollment. Additionally, the 2018 Farm Bill removed the requirement to not use more than 40 percent of funds allocated each fiscal year for cost-share agreements, and not more than 60 percent of funds allocated each fiscal year for easements. The 2018 Farm Bill also updated the types of practices that can be conducted on enrolled land. NRCS incorporates these changes into 7 CFR part 625.

Additionally, NRCS is removing reference to the Regional Conservation Partnership Program (RCPP) authorized under Subtitle I of Title XII of the Food Security Act of 1985 (known as the 1985 Farm Bill). The 2018 Farm Bill amendments change how HFRP interacts with RCPP. The Agricultural Act of 2014 (Pub. L. 113-79) identified HFRP as a covered program under RCPP, and authorized the NRCS Chief to waive non-statutory, discretionary HFRP provisions and operational procedures where the NRCS Chief determined the waiver would further the purposes of HFRP. However, due to the changes to RCPP in the 2018 Farm Bill, NRCS is revising 7 CFR 625.1 to remove the specific waiver authority. (Other RCPP regulatory changes are being made in a separate rulemaking.)

NRCS is also taking this opportunity to make some minor administrative changes and corrections to improve the coordination between NRCS easement programs. These changes include: Updating the definition of Indian Tribe to clearly include Pueblos, identifying that lands are ineligible if there are onsite or offsite conditions that could interfere with the ability to meet HFRP purposes, and incorporating payment flexibility for easement and restoration payments to allow single payments, annual payments, and restoration payments based on actual or average costs. Finally, NRCS is making a correction to 7 CFR 625.10(d) because 30-year contracts had inadvertently been omitted from the types of agreements identified in that paragraph.

The 2018 Farm Bill amended the TSP provisions in section 1242 of the 1985 Farm Bill by defining third-party provider and adding authority for NRCS to certify a TSP through a non-federal entity approved by the Secretary to perform the certification. The current regulatory definition of third-party provider is consistent with the 2018 Farm Bill changes and does not require any changes to implement the 2018 Farm Bill. NRCS had authorized non-federal entities to recommend TSPs for certification; NRCS is amending the alternative certification process to specify that NRCS will enter into agreements with the recommending organizations to certify TSPs.

VPA-HIP is authorized by section 1240R of the 1985 Farm Bill. VPA-HIP provides, within funding limits, grants to State and Tribal Governments to encourage owners and operators of privately held farm, ranch, and forest land to voluntarily make that land available for access by the public for wildlife-dependent recreation, including hunting and fishing under programs administered by State and Tribal Governments. NRCS administers VPA-HIP on behalf of CCC. The 2018 Farm Bill amended VPA-HIP funding to authorize $50,000,000 for fiscal years 2019 through 2023, to the maximum extent practicable, and requires $3 million of the VPA-HIP funds be made available to encourage public hunting and other recreational activities on lands subject to ACEP-WRE. Since the VPA-HIP regulation identifies program priorities, NRCS is adding this new priority in 7 CFR 1455.20(c)(5).

In general, the Administrative Procedure Act (APA, 5 U.S.C. 553) requires that a notice of proposed rulemaking be published in the Federal Register and interested persons be given an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or without opportunity for oral presentation, except when the rule involves a matter relating to public property, loans, grants, benefits, or contracts. This rule involved matters relating to benefits and is therefore is exempt from the APA requirements. Further, the regulations to implement the programs of Chapter 58 of Title 16 of the U.S. Code, as specified in 16 U.S.C. 3846, and the administration of those programs, are:

• To be made as an interim rule effective on publication, with an opportunity for notice and comment;

• Exempt from the Paperwork Reduction Act (44 U.S.C. chapter 35); and

• To use the authority under 5 U.S.C. 808 related to Congressional review and avoid any potential delay in the effective date.

The APA exemption covers the changes for HFRP and Watershed Protection and Flood Prevention. The exemption in 16 U.S.C. 3846 covers the changes for the other programs in this rule. Therefore, this rule is effective on the date of publication in the Federal Register .

NRCS invites interested persons to participate in this rulemaking by submitting written comments or views about the changes made by this interim rule. The most helpful comments reference a specific portion of the regulation, explain the reason for any recommended changes, and include supporting data and references to relevant section of either the 2018 Farm Bill or the 1985 Farm Bill. All comments received on or before the closing date for comments will be considered. If changes to the regulation need to be made in response to public comments, those comments will be addressed in a subsequent rulemaking.

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “Improving Regulation and Regulatory Review,” direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasized the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” established a federal policy to alleviate unnecessary regulatory burdens on the American people.

The Office of Management and Budget (OMB) designated this rule as not significant under Executive Order 12866, “Regulatory Planning and Review,” and therefore, OMB has not reviewed this rule.

Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” requires that, in order to manage the private costs required to comply with federal regulations, for every new significant or economically significant regulation issued, the new costs must be offset by the elimination of at least two prior regulations. As this rule is designated not significant, it is not subject to Executive Order 13771.

Executive Order 12866, as supplemented by Executive Order 13563, requires each agency to write all rules in plain language. In addition to your substantive comments on this rule, we invite your comments on how to make the rule easier to understand. For example:

• Are the requirements in the rule clearly stated? Are the scope and intent of the rule clear?

• Does the rule contain technical language or jargon that is not clear?

• Is the material logically organized?

• Would changing the grouping or order of sections or adding headings make the rule easier to understand?

• Could we improve clarity by adding tables, lists, or diagrams?

• Would more, but shorter, sections be better? Are there specific sections that are too long or confusing?

• What else could we do to make the rule easier to understand?

The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), generally requires an agency to prepare a regulatory analysis of any rule whenever an agency is required by APA or any other law to publish a proposed rule, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule is not subject to the Regulatory Flexibility Act because no law requires that a proposed rule be published for this rulemaking initiative.

The environmental impacts of this rule have been considered in a manner consistent with the provisions of the National Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and the NRCS regulations for compliance with NEPA (7 CFR part 650). The 2018 Farm Bill requires minor changes to NRCS conservation programs, and there are no changes to the basic structure of the programs. The majority of the changes are mandatory and, therefore, do not require evaluation under the National Environmental Policy Act. In addition, minor administrative improvements are made to the regulations as a result of continuing evaluations of NRCS program implementation efforts. The only discretionary regulatory changes are administrative in nature. Such administrative changes fall within a categorical exclusion for policy development, planning, and implementation that relate to routine administrative activities (7 CFR 1b.3(a)(1)). As such, NRCS has determined that the provisions identified in this rule are mandatory or minor and administrative requirements of the 2018 Farm Bill programs and do not constitute a major federal action that would significantly affect the quality of the human environment, individually or cumulatively. Therefore, NRCS will not prepare an environmental assessment or environmental impact statement for this regulatory action.

Executive Order 12372, “Intergovernmental Review of Federal Programs,” requires consultation with State and local officials that would be directly affected by proposed federal financial assistance. The objectives of the Executive Order are to foster an intergovernmental partnership and a strengthened federalism, by relying on State and local processes for State and local government coordination and review of proposed federal financial assistance and direct federal development. For reasons specified in the final rule related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs and activities in this rule are excluded from the scope of Executive Order 12372.

This rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” This rule will not preempt State or local laws, regulations, or policies unless they represent an irreconcilable conflict with this rule. Before any judicial actions may be brought regarding the provisions of this rule, the administrative appeal provisions of 7 CFR part 11 are to be exhausted.

This rule has been reviewed under Executive Order 13132, “Federalism.” The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, except as required by law. Nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

NRCS has assessed the impact of this rule on Indian Tribes and determined that this rule does not, to our knowledge, have Tribal implication that requires Tribal consultation under Executive Order 13175. The regulation changes do not have Tribal implications that preempt Tribal law and are not expected have a substantial direct effect on one or more Indian Tribes. If a Tribe requests consultation, NRCS will work with the USDA Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions, and modifications identified in this rule are not expressly mandated by the 2018 Farm Bill.

Separate from Tribal consultation, communication and outreach efforts are in place to assure that all producers, including Tribes (or their members), are provided information about the regulation changes. Specifically, NRCS obtains input through Tribal Conservation Advisory Councils. A Tribal Conservation Advisory Council may be an existing Tribal committee or department and may also constitute an association of member Tribes organized to provide direct consultation to NRCS at the State, regional, and national levels to provide input on NRCS rules, policies, programs, and impacts on Tribes. Tribal Conservation Advisory Councils provide a venue for agency leaders to gather input on Tribal interests. Additionally, NRCS will be holding several sessions with Indian Tribes and Tribal entities across the country in fiscal year 2019 to describe the 2018 Farm Bill changes to NRCS conservation programs, obtain input about how to improve Tribal and Tribal member access to NRCS conservation assistance, and make any appropriate adjustments to the regulations that will foster such improved access.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 104-4), requires federal agencies to assess the effects of their regulatory actions on State, local, and Tribal Governments or the private sector. Agencies generally must prepare a written statement, including cost benefits analysis, for proposed and final rules with federal mandates that may result in expenditures of $100 million or more in any 1 year for State, local or Tribal governments, in the aggregate, or to the private sector. UMRA generally requires agencies to consider alternatives and adopt the more cost-effective or least burdensome alternative that achieves the objectives of the rule. This rule contains no federal mandates, as defined under Title II of UMRA, for State, local, and Tribal Governments or the private sector. Therefore, this rule is not subject to the requirements of UMRA.

SBREFA (Pub. L. 104-121) normally requires that an agency delay the effective date of a major rule for 60 days from the date of publication to allow for Congressional review. This rule is not a major rule under the SBREFA. Therefore, neither NRCS nor the CCC is required to delay the effective date for 60 days from the date of publication to allow for Congressional review. As stated above, this rule is effective on the date of publication in the Federal Register .

The titles and numbers of the Federal Domestic Assistance Programs in the Catalog of Federal Domestic Assistance to which this rule applies are:

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

For the reasons discussed above, CCC and NRCS amend 7 CFR parts 610, 622, 625, 652, and 1455 as follows:

This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This rule is issued under Marketing Order No. 985, as amended (7 CFR part 985), regulating the handling of spearmint oil produced in the Far West. Part 985 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of spearmint oil producers operating within the area of production, and a public member.

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

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. Under the Order now in effect, salable quantities and allotment percentages may be established for classes of spearmint oil produced in the Far West. This rule establishes quantities and percentages for Class 1 (Scotch) and Class 3 (Native) spearmint oil for the 2019-2020 marketing year, which begins on June 1, 2019.

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

Pursuant to §§ 985.50, 985.51, and 985.52, the Order requires the Committee to meet each year to consider supply and demand of spearmint oil and to adopt a marketing policy for the ensuing marketing year. When such considerations indicate a need to establish or to maintain stable market conditions through volume regulation, the Committee recommends salable quantity limitations and allotment percentages to regulate the quantity of Far West spearmint oil available to the market.

According to § 985.12, “salable quantity” is the total quantity of each class of oil (Scotch or Native) that handlers may purchase from, or handle on behalf of, producers during a given marketing year. The total industry allotment base is the aggregate of all allotment bases held individually by producers as prescribed under § 985.53(d)(1). The total allotment base is generally revised each year on June 1 due to producer base being lost because of the “bona fide effort” production provision of § 985.53(e).

Each producer's prorated share of the salable quantity of each class of oil, or their “annual allotment” as defined in § 985.13, is calculated by using an allotment percentage. The percentage is derived by dividing the salable quantity by the total industry allotment base for that same class of oil.

The Committee met on October 17, 2018, to consider its marketing policy for the 2019-2020 marketing year. At that meeting, the Committee determined that, based on the current market and supply conditions, volume regulation for both classes of oil is necessary. With a 6-2 vote, the Committee recommended a salable quantity and allotment percentage for Scotch spearmint oil of 832,081 pounds and 38 percent. The two members voting in opposition to the recommendation favored volume regulation, but at an undesignated higher level than what was proposed. The Committee voted unanimously on its recommended salable quantity and allotment percentage for Native spearmint oil of 1,395,813 pounds and 56 percent. Salable quantities and allotment percentages have been placed into effect each season since the Order's inception in 1980.

The Committee's recommended 2019-2020 marketing year salable quantity and allotment percentage for Scotch spearmint oil represent an increase from the previous year's levels. The 2019-2020 marketing year salable quantity of 832,081 pounds is 71,421 pounds more than the 2018-2019 marketing year salable quantity of 760,660 pounds. The allotment percentage, recommended at 38 percent for the 2019-2020 marketing year, is an increase from the 35 percent in effect the previous year. The total estimated allotment base for the coming marketing year is estimated at 2,189,668 pounds. This figure represents a one-percent increase over the 2018-2019 marketing year total allotment base of 2,168,008.

The Committee considered several factors in making its recommendation, including the current and projected future supply, estimated future demand, production costs, and producer prices. The Committee's recommendation also accounts for established acreage of Scotch spearmint oil, consumer demand, existing carry-in, reserve pool volume, and increased production in competing markets.

According to the Committee, as costs of production have increased, many producers have forgone new plantings of Scotch spearmint. This has resulted in a significant decline in production of Scotch spearmint oil over past years. Production has decreased from 1,113,346 pounds produced in 2016, to 817,857 pounds produced in 2017, and to an estimated 671,662 pounds for 2018.

Industry reports also indicate that the relatively low trade demand for Scotch spearmint oil is likely the result of decreased consumer demand for spearmint-flavored products, especially chewing gum in China and India. Scotch spearmint oil sales have averaged 794,808 pounds per year over the last three years, and 902,076 pounds over the last five years. For the 2018-2019 crop, the Committee estimates trade demand to be 805,000 pounds.

In addition, increasing production of spearmint oil in competing markets, most notably Canada and the U.S. Midwest, has also put downward pressure on the Scotch market.

Given the general decline in demand and anticipated market conditions for the coming year, the Committee decided it was prudent to estimate that the Scotch spearmint oil trade demand for the 2019-2020 marketing year trade is 805,000 pounds, unchanged from the prior year. Should the established volume regulation levels prove insufficient to adequately supply the market, the Committee has the authority to recommend intra-seasonal increases, as it has in previous marketing years.

The Committee calculated the minimum salable quantity of Scotch spearmint oil that will be required during the 2019-2020 marketing year (590,335 pounds) by subtracting the estimated salable carry-in on June 1, 2019, (214,645) from the estimated trade demand (805,000). This minimum salable quantity represents the minimum amount of Scotch spearmint oil that may be needed to satisfy estimated demand for the coming year. To ensure that the market will be fully supplied, the Committee recommended a 2019-2020 marketing year salable quantity of 832,081 pounds. The salable quantity of 832,081 pounds, combined with an estimated 214,645 pounds of salable quantity carried in from the previous year, will yield a total available supply of 1,046,726 pounds Scotch spearmint oil for the 2019-2020 marketing year, and leave an estimated 241,726 pounds of salable oil to carry into the 2020-2021 marketing year.

Salable carry-in is the primary measure of excess spearmint oil supply under the Order, as it represents overproduction in prior years that is currently available to the market without restriction. Under volume regulation, spearmint oil that is designated as salable continues to be available to the market until it is sold and may be marketed at any time at the discretion of the owner. Salable quantities established under volume regulation over the last three seasons have exceeded sales, leading to a gradual build of Scotch spearmint oil salable carry-in.

The Committee estimates that there will be 215,757 pounds of salable carry-in of Scotch spearmint oil on June 1, 2019. If current market conditions are maintained and the Committee's projections are correct, salable carry-in will increase to 241,726 pounds at the beginning of the 2020-2021 marketing year. This level is above the quantity that the Committee generally considers favorable (150,000 pounds). However, the Committee anticipates that this higher salable carry-in will be manageable given the expected declining production levels of Scotch spearmint oil. The Committee believes that, given the current economic conditions in the Scotch spearmint oil industry, some Scotch spearmint oil producers will not produce enough oil in the 2019-2020 marketing year to fill all of their base allotment. Therefore, it is anticipated that the actual quantity of Scotch spearmint oil carried into the next marketing year will be less than the quantity calculated above.

Spearmint oil held in reserve is oil that has been produced in excess of a producer's marketing year allotment and is not available to the market in the current marketing year without an increase in the salable quantity and allotment percentage. Oil held in the reserve pool is another indicator of excess supply. Scotch spearmint oil held in the reserve pool, which was completely depleted at the beginning of the 2014-2015 marketing year, has been gradually increasing over the past five years. The Committee reported that there were 71,088 pounds of Scotch spearmint oil held in the reserve pool as of May 31, 2017. The reserve pool increased to 202,638 pounds on May 31, 2018 but is expected to drop back down to 115,473 pounds by May 31, 2019. This quantity of reserve pool oil should be an adequate buffer to supply the market, if necessary, if the industry experiences an unexpected increase in demand.

The Committee recommended an allotment percentage of 38 percent for the 2019-2020 marketing year for Scotch spearmint oil. During its October 17, 2018, meeting, the Committee calculated an initial allotment percentage by dividing the minimum required salable quantity (590,355 pounds) by the total estimated allotment base (2,189,688 pounds), resulting in 27 percent. However, producers and handlers at the meeting indicated that the computed percentage (27 percent) might not adequately supply the potential 2019-2020 Scotch spearmint oil market demand and may also result in inadequate carry-in for the subsequent marketing year. After deliberation, the Committee increased the recommended allotment percentage to 38 percent. The total estimated allotment base (2,189,688 pounds) for the 2019-2020 marketing year multiplied by the salable allotment percentage (38 percent) will yield 832,081 pounds, which is the recommended salable quantity for the 2019-2020 marketing year.

The 2019-2020 marketing year computational data for the Committee's recommendation is detailed below.

(A) Estimated carry-in of Scotch spearmint oil on June 1, 2019: 214,645 pounds. This figure is the difference between the 2018-2019 marketing year total available supply of 1,019,645 pounds and the 2018-2019 marketing year estimated trade demand of 805,000 pounds.

(B) Estimated trade demand of Scotch spearmint oil for the 2019-2020 marketing year: 805,000 pounds. This figure was established at the Committee meeting held on October 17, 2018.

(C) Salable quantity of Scotch spearmint oil required from the 2019-2020 marketing year production: 590,355 pounds. This figure is the difference between the estimated 2019-2020 marketing year trade demand (805,000 pounds) and the estimated carry-in on June 1, 2019 (214,645 pounds). This salable quantity represents the minimum amount of Scotch spearmint oil production that may be needed to satisfy estimated demand for the coming year.

(D) Total estimated Scotch spearmint oil allotment base of for the 2019-2020 marketing year: 2,189,688 pounds. This figure represents a one-percent increase over the 2018-2019 total actual allotment base of 2,168,008 pounds, as prescribed by § 985.53(d)(1). The one-percent increase equals 21,680 pounds. This total estimated allotment base is generally revised each year on June 1 in accordance with § 985.53(e).

(E) Computed Scotch spearmint oil allotment percentage for the 2019-2020 marketing year: 27 percent. This percentage is computed by dividing the minimum required salable quantity (590,355 pounds) by the total estimated allotment base (2,189,688 pounds).

(F) Recommended Scotch spearmint oil allotment percentage for the 2019-2020 marketing year: 38 percent. This is the Committee's recommendation and is based on the computed allotment percentage (27 percent) and input from producers and handlers at the October 17, 2018, meeting. The recommended 38-percent allotment percentage reflects the Committee's belief that the computed percentage (27 percent) may not adequately supply anticipated 2019-2020 Scotch spearmint oil market demand.

(G) Recommended Scotch spearmint oil salable quantity for the 2019-2020 marketing year: 832,081 pounds. This figure is the product of the recommended salable allotment percentage (38 percent) and the total estimated allotment base (2,189,688 pounds) for the 2019-2020 marketing year.

(H) Estimated total available supply of Scotch spearmint oil for the 2019- 2020 marketing year: 1,046,726 pounds. This figure is the sum of the 2019-2020 marketing year recommended salable quantity (832,081 pounds) and the estimated carry-in on June 1, 2019 (214,645 pounds).

For the reasons stated above, the Committee believes that the recommended salable quantity and allotment percentage will adequately satisfy trade demand, will result in a reasonable carry-in for the following year, and will contribute to the orderly marketing of Scotch spearmint oil.

The Committee recommended a Native spearmint oil salable quantity of 1,395,813 pounds and an allotment percentage of 56 percent for the 2019-2020 marketing year. These figures are, respectively, 87,866 pounds and 3 percentage points higher than the levels established for the 2018-2019 marketing year.

The Committee utilized handlers' anticipated sales estimates of Native spearmint oil for the coming year, historical and current Native spearmint oil production, inventory statistics, and international market data obtained from consultants for the spearmint oil industry to arrive at these recommendations.

The Committee anticipates that 2018 production will total 1,477,128 pounds, similar to last year's production but down from 1,694,684 pounds produced in 2016. Committee figures show that total Native spearmint acres remained relatively static and that the estimated yield, at 167.4 pounds per acre, was up from 160.9 pounds per acre in 2017. Sales of Native spearmint oil for the 2017-2018 marketing year spiked, up 21 percent from the previous year to 1,565,515 pounds. Sales for the current marketing year have cooled a bit, but the Committee still estimates sales through the 2018-2019 marketing year of 1,450,000 pounds.

The Committee expects that only 8,005 pounds of salable Native spearmint oil from prior years will be carried into the 2019-2020 marketing year. This amount is down from the 48,062 pounds of salable oil carried into the 2018-2019 marketing year, and 143,011 pounds carried into the 2017-2018 marketing year.

Further, the Committee estimates that there will be 1,150,927 pounds of Native spearmint oil in the reserve pool at the beginning of the 2019-2020 marketing year. This figure is 130,344 pounds higher than the quantity of reserve pool oil held by producers the previous year and is consistent with the gradual increase in reserves experienced over the past three marketing years.

The Committee expects end users of Native spearmint oil to continue to rely on Far West production as their main source of high-quality Native spearmint oil, but demand may be at lower quantities than the past year moving forward in response to long-term market factors. A sharp spike in demand for Native spearmint oil was experienced by handlers late in the 2017-2018 marketing year, spurred by the popularity of a new product in the market. This sharp spike in demand caused the remaining available 2017-2018 marketing year salable quantity to be depleted. While sales in the 2018-2019 marketing year are expected to come down from the prior year spike, the Committee still anticipates demand at relatively high levels.

The Committee estimates the 2019-2020 marketing year Native spearmint oil trade demand to be 1,400,000 pounds. This figure is based on input provided by producers at six production area meetings held in mid-October 2018, as well as estimates provided by handlers and other meeting participants at the October 17, 2018, meeting. This figure represents a decrease of 50,000 pounds from the previous year's estimate. The average estimated trade demand for Native spearmint oil derived from the producer meetings was 1,380,000 pounds, whereas the handlers' estimates ranged from 1,300,000 to 1,500,000 pounds. The average of Native spearmint oil sales over the last three years is 1,364,782 pounds. The quantity marketed over the most recent full marketing year, 2017-2018, was 1,565,515 pounds. However, the Committee considers that year to be an anomaly. The Committee chose to be slightly conservative in the establishment of its trade demand estimate for the 2019-2020 marketing year to avoid oversupplying the market.

The estimated 2019-2020 marketing year carry-in of 8,005 pounds of Native spearmint oil, plus the recommended salable quantity of 1,395,813 pounds, results in an estimated total available supply of 1,403,818 pounds of oil during the 2019-2020 marketing year. With the corresponding estimated trade demand of 1,400,000 pounds, the Committee projects that 3,818 pounds of oil will be carried into the 2019-2020 marketing year, resulting in a decrease of 4,187 pounds year-over-year. The Committee estimates that there will be 1,150,927 pounds of Native spearmint oil held in the reserve pool at the beginning of the 2019-2020 marketing year. Should the industry experience an unexpected increase in trade demand, oil in the Native spearmint oil reserve pool could be released to satisfy that demand.

The Committee recommended an allotment percentage of 56 percent for the 2019-2020 marketing year. During its October 17, 2018, meeting, the Committee calculated an initial allotment percentage by dividing the minimum required salable quantity (1,391,995 pounds) by the total estimated allotment base (2,492,523 pounds), resulting in 55.8 percent. However, producers and handlers at the meeting expressed that the computed percentage of 55.8 percent may not adequately supply the potential 2019-2020 Native spearmint oil market demand or result in adequate carry-in for the subsequent marketing year. After deliberation, the Committee increased the recommended allotment percentage to 56 percent. The total estimated allotment base (2,492,523 pounds) for the 2019-2020 marketing year multiplied by the recommended salable allotment percentage (56 percent) yields 1,395,813 pounds, the recommended salable quantity for the year.

The 2019-2020 marketing year computational data for the Committee's recommendations is further outlined below.

(A) Estimated carry-in of Native spearmint oil on June 1, 2019: 8,005 pounds. This figure is the difference between the revised 2018-2019 marketing year total available supply of 1,458,005 pounds and the revised 2018-2019 marketing year estimated trade demand of 1,450,000 pounds.

(B) Estimated trade demand of Native spearmint oil for the 2019-2020 marketing year: 1,400,000 pounds. This estimate was established by the Committee at the October 17, 2018, meeting.

(C) Salable quantity of Native spearmint oil required from the 2019-2020 marketing year production: 1,391,995 pounds. This figure is the difference between the estimated 2019-2020 marketing year estimated trade demand (1,400,000 pounds) and the estimated carry-in on June 1, 2019 (8,005 pounds). This is the minimum amount of Native spearmint oil that the Committee believes will be required to meet the anticipated 2019-2020 marketing year trade demand.

(D) Total estimated allotment base of Native spearmint oil for the 2019-2020 marketing year: 2,492,523 pounds. This figure represents a one-percent increase over the 2018-2019 total actual allotment base of 2,467,845 pounds as prescribed in § 985.53(d)(1). The one-percent increase equals 24,678 pounds of oil. This estimate is generally revised each year on June 1, due to adjustments resulting from the bona fide effort production provisions of § 985.53(e).

(E) Computed Native spearmint oil allotment percentage for the 2019-2020 marketing year: 55.8 percent. This percentage is calculated by dividing the required salable quantity (1,391,995 pounds) by the total estimated allotment base (2,492,523 pounds) for the 2019-2020 marketing year.

(F) Recommended Native spearmint oil allotment percentage for the 2019-2020 marketing year: 56 percent. This is the Committee's recommendation based on the computed allotment percentage (55.8 percent) and input from producers and handlers at the October 17, 2018, meeting. The recommended 56 percent allotment percentage is also based on the Committee's belief that the computed percentage (55.8 percent) may not adequately supply the potential market for Native spearmint oil in the 2019-2020 marketing year.

(G) Recommended Native spearmint oil 2019-2020 marketing year salable quantity: 1,395,813 pounds. This figure is the product of the recommended allotment percentage (56 percent) and the total estimated allotment base (2,492,523 pounds). This amount is slightly less than the estimated trade demand for the 2019-2020 marketing year but could be increased as needed through an intra-seasonal increase in the salable quantity and allotment percentage.

(H) Estimated available supply of Native spearmint oil for the 2019-2020 marketing year: 1,403,808 pounds. This figure is the sum of the 2019-2020 recommended salable quantity (1,395,813 pounds) and the estimated carry-in on June 1, 2019 (8,005 pounds).

The Committee's recommended Scotch and Native spearmint oil salable quantities and allotment percentages of 832,081 pounds and 38 percent, and 1,395,813 pounds and 56 percent, respectively, will match the available supply of each class of spearmint oil to the estimated demand of each, thus avoiding extreme fluctuations in inventories and prices. This rule is similar to regulations issued in prior seasons.

The salable quantities established in this final rule are not expected to cause a shortage of either class of spearmint oil. Any unanticipated or additional market demand for either class of spearmint oil which may develop during the marketing year could be satisfied by an intra-seasonal increase in the salable quantity and corresponding allotment percentage. The Order contains a provision in § 985.51 for intra-seasonal increases to allow the Committee the flexibility to respond quickly to changing market conditions.

Under volume regulation, producers who produce more than their annual allotments during the marketing year may transfer such excess spearmint oil to producers who have produced less than their annual allotment. In addition, on December 1 of each year, producers who have not transferred their excess spearmint oil to other producers must place their excess spearmint oil production into the reserve pool to be released in the future in accordance with market needs and under the Committee's direction.

USDA has reviewed the Committee's marketing policy statement for the 2019-2020 marketing year. The Committee's marketing policy statement, a requirement whenever the Committee recommends volume regulation, meets the requirements of §§ 985.50 and 985.51.

The establishment of salable quantities and allotment percentages in this rule is expected to fully satisfy anticipated market needs. In determining anticipated market needs, the Committee considered historical sales, as well as changes and trends in production and demand. This rule also provides producers with information regarding the amount of spearmint oil that should be produced for the 2019-2020 season to meet anticipated market demand.

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

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

There are approximately 33 producers and 90 producers of Scotch and Native spearmint oil, respectively, in the regulated production area and approximately 8 spearmint oil handlers subject to regulation under the Order. Small agricultural service firms are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201).

The Committee reported that recent producer prices for spearmint oil range from $15.50 to $18.00 per pound. The National Agricultural Statistics Service (NASS) reported that the 2017 U.S. season average spearmint oil producer price per pound was $16.20. Multiplying $16.20 per pound by 2016-17 spearmint oil utilization of 2,186,751 million pounds yields a crop value estimate of about $35.4 million. Total 2016-17 spearmint oil utilization, reported by the Committee, is 621,236 pounds and 1,565,515 pounds for Scotch and Native spearmint oil, respectively.

Given the accounting requirements for the volume regulation provisions of the Order, the Committee maintains accurate records of each producer's production and sales. Using the $16.20 average spearmint oil price, and Committee production data for each producer, the Committee estimates that 11 of the 33 Scotch spearmint oil producers and 34 of the 90 Native spearmint oil producers could be classified as small entities under the SBA definition.

There is no third party or governmental entity that collects and reports spearmint oil prices received by spearmint oil handlers. However, the Committee estimates an average spearmint oil handling markup at approximately 20 percent of the price received by producers. Multiplying 1.20 by the 2016 producer price of $16.20 yields a handler f.o.b. price per pound estimate of $19.44.

Multiplying this handler f.o.b price by spearmint oil utilization of 2,186,751 pounds results in an estimated handler-level spearmint oil value of $42.5 million. Dividing this figure by the number of handlers (8) yields estimated average annual handler receipts of about $5.3 million, which is below the SBA threshold for small agricultural service firms.

Furthermore, using confidential data on pounds handled by each handler, and the abovementioned estimated handler price per pound, the Committee reported that it is likely that at least two of the eight handlers had 2017-2018 marketing year spearmint oil sales value that exceeded the SBA threshold.

Therefore, in view of the foregoing, the majority of producers of spearmint oil may be classified as large entities and the majority of handlers of spearmint oil may be classified as small entities.

This final rule establishes the quantity of spearmint oil produced in the Far West, by class, which handlers may purchase from, or handle on behalf of, producers during the 2019-2020 marketing year. The Committee recommended this action to help maintain stability in the spearmint oil market by matching supply to estimated demand, thereby avoiding extreme fluctuations in supplies and prices. Establishing quantities that may be purchased or handled during the marketing year through volume regulations allows producers to coordinate their spearmint oil production with the expected market demand. Authority for this action is provided in §§ 985.50, 985.51, and 985.52.

The Committee estimated trade demand for the 2019-2020 marketing year for both classes of oil at 2,205,000 pounds and expects that the combined salable carry-in will be 222,650 pounds. The combined required salable quantity is 1,982,350 pounds. Under volume regulation, total sales of spearmint oil by producers for the 2019-2020 marketing year will be held to 2,450,544 pounds (the salable quantity established for both classes of spearmint oil of 2,227,894 pounds, plus 222,650 pounds of carry-in). This total available supply of 2,450,544 pounds should be more than adequate to supply the 2,205,000 pounds of anticipated total trade demand for spearmint oil. In addition, as of May 31, 2018, the total reserve pool for both classes of spearmint oil stood at 1,223,221 pounds. Furthermore, that quantity is expected to rise over the course of the 2018-2019 marketing year to 1,266,400. Should trade demand increase unexpectedly during the 2019-2020 marketing year, reserve pool spearmint oil could be released into the market to supply that increase in demand.

The established allotment percentages, upon which 2019-2020 producer allotments are based, are 38 percent for Scotch spearmint oil and 56 percent for Native spearmint oil. Without volume regulation, producers would not be held to these allotment levels, and could sell unrestricted quantities of spearmint oil. The USDA econometric model estimated that the season average producer price per pound (from both classes of spearmint oil) would decline about $2.20 per pound because of the higher quantities of spearmint oil that would be produced and marketed without volume regulation. The surplus situation for the spearmint oil market that would exist without volume regulation in 2019-2020 also would likely dampen prospects for improved producer prices in future years because of the buildup in stocks.

The use of volume regulation allows the industry to fully supply spearmint oil markets while avoiding the negative consequences of over-supplying these markets. The use of volume regulation is believed to have little or no effect on consumer prices of products containing spearmint oil and will not result in fewer retail sales of such products.

The Committee discussed alternatives to its recommended volume regulation levels for both classes of spearmint oil, including not regulating during the 2019-2020 marketing year. The Committee rejected the idea of not regulating any volume for either class of spearmint oil because of the severe, price-depressing effects that would likely occur without volume regulation. The Committee also discussed and considered salable quantities and allotment percentages that were above and below the levels that were ultimately recommended for both classes of spearmint oil. Ultimately, the action taken by the Committee was to recommend increasing the salable quantity and allotment percentage for both Scotch and Native spearmint oil from the levels established for the 2018-2019 marketing year.

As noted earlier, the Committee's recommendation to establish salable quantities and allotment percentages for both classes of spearmint oil was made after careful consideration of all available information including: (1) The estimated quantity of salable oil of each class held by producers and handlers; (2) the estimated demand for each class of oil; (3) the prospective production of each class of oil; (4) the total of allotment bases of each class of oil for the current marketing year and the estimated total of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity.

Based on its review, the Committee believes that the salable quantities and allotment percentages established in this rule will achieve the objectives sought. The Committee also believes that, should there be no volume regulation in effect for the upcoming marketing year, the Far West spearmint oil industry would return to the pronounced cyclical price patterns that occurred prior to the promulgation of the Order. As previously stated, annual salable quantities and allotment percentages have been issued for both classes of spearmint oil since the Order's inception. The salable quantities and allotment percentages established herein are expected to facilitate the goal of maintaining orderly marketing conditions for Far West spearmint oil for the 2019-2020 and future marketing years.

Costs to producers and handlers, large and small, resulting from this action are expected to be offset by the benefits derived from a more stable market and increased returns. The benefits of this rule are expected to be equally available to all producers and handlers regardless of their size.

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

This rule establishes salable quantities and allotment percentages for Scotch spearmint oil and Native spearmint oil produced in the Far West during the 2019-2020 marketing year. Accordingly, this rule does not impose any additional reporting or recordkeeping requirements on either small or large Far West spearmint oil producers or handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public-sector agencies. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

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

A proposed rule concerning this action was published in the Federal Register on February 15, 2019 (84 FR 4381). Copies of the proposed rule were also mailed or sent via facsimile to all Far West spearmint oil handlers. The proposal was made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending March 18, 2019, was provided for interested persons to respond to the proposal. No comments were received during the comment period. Accordingly, no changes will be made to the rule as proposed.

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

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

For the reasons set forth in the preamble, 7 CFR part 985 is amended as follows:

The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2017-0192, dated September 28, 2017 (referred to after this as “the MCAI”), to address an unsafe condition for the specified products. The MCAI states:

Aliens are ineligible to receive visas if they are inadmissible under any of the grounds in section 212(a) of the Immigration and Nationality Act (INA), 8 U.S.C. 1182(a). Section 212(d)(3)(A)(i) of the INA, 8 U.S.C. 1182(d)(3)(A)(i), authorizes the Department of Homeland Security to approve a waiver covering most grounds in section 212(a) of the INA, if the Secretary of State or a consular officer recommends that the alien be admitted temporarily into the United States, despite the inadmissibility. This provision does not authorize waivers under INA sections 212(a)(3)(A)(i)(I) (espionage or sabotage), (3)(A)(ii) (unlawful activity), (3)(A)(iii) (opposition to or overthrow of United States Government or opposition by force, violence, or unlawful means), (3)(C) (serious adverse foreign policy consequences), (3)(E)(i) (participation in Nazi persecutions), or (3)(E)(ii) (participation in genocide)). State regulations at 22 CFR 40.301 describe the authority of consular officers to recommend waivers.

For cases in which a nonimmigrant visa applicant is inadmissible based on an inadmissibility ground for which a waiver may be granted under section 212(d)(3)(A)(i) of the INA, and the consular officer has decided not to recommend a DHS waiver on the officer's own authority, but the applicant or an interested party insists on pursuing a waiver, 22 CFR 40.301 currently requires the consular officer to refer the request to State for a possible exercise of the Secretary of State's authority to recommend a waiver to DHS. Neither section 212(d)(3)(A)(i) of the INA nor Department regulations prescribe standards or criteria for the consular officers making referrals to State. While the INA makes no express provision for the submission by nonimmigrant visa applicants of requests for section 212(d)(3)(A)(i) waivers, State created an avenue for such requests in 22 CFR 40.301(a). See 24 FR 6678, 6686 (1959) (formerly 22 CFR 41.95(a)).

This final rule modifies the non-statutory requirement for consular officers to refer section 212(d)(3)(A)(i) waiver requests to State for consideration based on an applicant's request, by limiting it to specified circumstances. This rule will increase transparency for inadmissible aliens seeking an exercise of the Secretary's authority to recommend DHS grant a waiver, and will limit the requirement that consular officers refer waiver requests to circumstances that involve a key State interest, as reflected in the enumerated criteria. This rule has no impact on cases involving security-related grounds of inadmissibility, which consular officers must consider in accordance with other State guidance, on consular officers' existing discretion to pursue waivers on behalf of ineligible visa applicants, or on the factors DHS considers in exercising its section 212(d)(3)(A) waiver authority.

Under this rule, which constitutes an exercise of the Secretary of State's authority under section 212(d)(3)(A)(i) of the INA, consular officers are required to refer waiver requests to State in response to a request from the Secretary of State, whose request shall be presumed to meet one of the criteria (paragraphs 1-5) enumerated below, or in response to a request from a visa applicant for a case that the consular officer has reason to believe involves one of the following circumstances:

1. Foreign Relations: Refusal of the nonimmigrant visa application would become a bilateral irritant or be raised by a foreign government with a high ranking United States Government official;

2. National Security: The nonimmigrant visa applicant's admission to the United States would advance a U.S. national security interest;

3. Law Enforcement: The nonimmigrant visa applicant's admission to the United States would advance an important U.S. law enforcement objective;

4. Significant Public Interest: The nonimmigrant visa applicant's admission to the United States would advance a significant U.S. public interest ; or

5. Urgent humanitarian or medical reasons: The nonimmigrant visa applicant's admission to the United States is warranted due to urgent humanitarian or medical reasons.

Consistent with this exercise of the Secretary's authority to recommend a waiver under section 212(d)(3)(A)(i) of the INA, this rule also clarifies that requests by the Secretary for a consular officer to submit a report to State are presumed to involve one of the enumerated circumstances. In addition, this rule includes technical edits to improve the structure and clarity of 22 CFR 40.301, revise the heading of paragraph (b) to clarify that consular officers are permitted to submit recommendations to a designated DHS office, and eliminate the requirement that the Secretary of State define certain categories of cases for which consular officers may recommend waivers directly to DHS.

The rule clarifies existing State guidance that consular officers may refer to State, but may not submit directly to DHS, a recommendation to DHS to waive certain security-related grounds of inadmissibility and the rule narrows the scope of other situations in which consular officers must refer waiver cases to State, upon request of the applicant or on their own initiative, to those cases the consular officer believes meet one of the criteria enumerated below. This rule does not affect consular officers' existing authority or discretion to submit non-security related waiver recommendations directly to DHS or refer cases to State. The vast majority of waiver recommendations to DHS under section 212(d)(3)(A)(i) of the INA are initiated by consular officers without applicant requests. The rule does not limit, in any way, DHS's independent discretionary authority to approve or deny a waiver. Finally, the rule applies only to visa applications for which the consular officer conducts an in person interview under section 222(h) of the INA on or after the rule's effective date.

In all cases in which the consular officer: (1) Determines a nonimmigrant visa applicant is not eligible for a visa due to inadmissibility; (2) decides not to recommend directly that DHS grant a waiver; (3) would choose not to refer the case to State to consider pursuing a waiver, but the applicant continues to request a waiver; (4) determines that there is no reason to believe that one of the criteria for referral to State are met; the officer will refuse the visa application without referring the case to State, notwithstanding the applicant's request. In cases where an applicant requests a waiver referral to State, the adjudicating consular officer will determine whether the case involves one of the enumerated five criteria and will inform the applicant whether or not the officer will make the referral to State. While there is no mechanism for applicants to seek reconsideration or appeal of a consular officer's determination that the request does not satisfy one of the enumerated criteria, affected applicants may submit new nonimmigrant visa applications with information justifying a waiver under one of the enumerated grounds.

This rule constitutes a rule of policy and procedure, and as a result, it is exempt from notice and comment under 5 U.S.C. 553(b)(3)(A). This final rule limits the non-statutory requirement that consular officers refer requests for waivers under INA section 212(d)(3)(A) to the Department, by specifying limited circumstances, based on a new policy, in which such referrals are required. Because this is a rule of policy and procedure, it is effective upon publication in the Federal Register .

Because this final rule is exempt from notice and comment rulemaking under 5 U.S.C. 553, it is exempt from the regulatory flexibility analysis requirements set forth by the Regulatory Flexibility Act (5 U.S.C. 603 and 604). Nonetheless, consistent with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Department of State certifies that this rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule does not require the Department of State to prepare a statement because it will not result in any such expenditure, nor will it significantly or uniquely affect small governments. This rule involves visas, which involves individuals, and does not directly or substantially affect, state, local, or tribal governments, or businesses.

This rule is not a major rule as defined in 5 U.S.C. 804, for purposes of congressional review of agency rulemaking under the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic and import markets.

Executive Orders 13563 and 12866 direct agencies to assess 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, distributed impacts, and equity). These Executive Orders stress the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Department of State has examined this rule in light of Executive Order 13563, and has determined that the rulemaking is consistent with the guidance therein. The Department of State has reviewed this rulemaking to ensure its consistency with the regulatory philosophy and principles set forth in Executive Order 12866. The Office of Information and Regulatory Affairs (OIRA) has determined this rule to be a significant, though not economically significant, regulatory action. Consequently, OIRA has reviewed this rule. This rule will ensure consistency with U.S. and international law and the increased clarity will benefit the U.S. public. There are no anticipated direct costs to the public associated with this rule.

This regulation will not have substantial direct effect on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Nor will the rule have federalism implications warranting the application of Executive Orders 12372 and 13132.

The Department of State has reviewed the rule in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Section 5 of Executive Order 13175 do not apply to this rulemaking.

This rule is not subject to the requirements of Executive Order 13771 because it is de minimis.

This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

Accordingly, for the reasons set forth in the preamble, 22 CFR part 40 is amended to read 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 COTP Captain of the Port PATCOM Patrol Commander U.S.C. United States Code II. Background, Purpose, and Legal Basis

On October 12, 2018, the LeadDog Marketing Corporation notified the Coast Guard of an intention to conduct the “Sail Grand Prix 2019” in San Francisco Bay. Sail Grand Prix is a sailing league featuring world-class sailors racing 50-foot foiling catamarans. The inaugural season started February 2019 in five iconic cities throughout the world, traveling to San Francisco Bay in May 2019. In San Francisco, they proposed to take advantage of the natural amphitheater that the central bay and city waterfront provide.

In response, on March 18, 2019, the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Special Local Regulation; Sail Grand Prix 2019 Race Event; San Francisco, CA” (84 FR 9727). There we stated why we issued the NPRM and invited comments on our proposed regulatory action related to this sailing event. During the comment period that ended on April 17, 2019, we received one comment.

Based off lessons learned during the multi-agency planning process, we are implementing an additional zone to the Special Local Regulation, Zone “D”. Zone “D” will be a no loitering or anchoring area along the San Francisco Waterfront that will allow vessels to transit, allowing for more accessibility to the waterfront areas. Additionally, to accommodate the updated, finalized event agenda, the times were altered to minimize impact to San Francisco Waterfront.

Under 5 U.S.C. 533(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

This special local regulation will encompass all navigable waters of the San Francisco Bay, from surface to bottom, within the area formed by connecting the following latitude and longitude points in the following order: 37°48′18″ N, 122°27′44″ W; thence to 37°48′30″ N, 122°27′56″ W; thence to 37°49′14″ N, 122°27′59″ W; thence to 37°49′30″ N, 122°25′36″ W; thence to 37°49′10″ N, 122°25′10″ W; thence to 37°48′45″ N, 122°25′10″ W; thence to 37°48′42″ N, 122°25′13″ W and thence along the shore to the point of beginning. Located within this footprint, there will be three separate regulated areas: Zone “A”, the Official Race Box Area; Zone “B”, the Spectator Area; Zone “C”, the Regulated Waterfront Transit Area; and Zone “D” the No Loitering or Anchoring Zone.

Zone “A”, the Official Race Box Area, will be marked by approximately 12 colored visual markers. The position of these markers will be specified via Broadcast Notice to Mariners at least 3 days prior to the event. Because of the hazards posed by the sailing competition, Zone “A” is necessary to provide protection from the operation of the high-speed sailing vessels within this area.

Zone “B”, the Spectator Area, will include specified parts of the waters immediately adjacent to racing Zone “A” and will be defined by latitude and longitude points as per Broadcast Notice to Mariners. Zone “B” will be further divided into three additional sub-areas: Zone “B1 East”, Zone “B1 West”, and Zone “B2”. Zone “B1 East” and Zone “B1 West” will be the general spectator zone that is open to all vessel spectators. Zone “B2” will be a separate designated spectator area marked by approximately four colored buoys that will be managed by marine event sponsor officials. The designation of Zone “B”, to include Zone “B1 East”, Zone “B1 West”, and Zone “B2”, will allow spectators to observe the Sail Grand Prix 2019 race event in a regulated area at a safe distance from the sailing race occurring in Zone “A”.

Zone “C” will be the designated Waterfront Transit Area along the city of San Francisco waterfront marked by buoys on one side and the shoreline on the other. This one-directional lane will provide vessels the opportunity to pass along the San Francisco waterfront, avoiding interference with the other established areas. Vessels will be authorized to transit through this zone with approval from the COTP or designated authority. Zone “C” is essential to provide vessels the opportunity to transit along the city of San Francisco waterfront while maintaining the integrity of the regulated areas for the race event. Due to the dynamic nature of the Sail Grand Prix 2019, there is a need for a Waterfront Transit Area so mariners along the waterfront can transit the impacted waterways at designated times. This Zone “C” is necessary for the protection of waterway users and participants in the sailing race event while minimizing the impact to the city of San Francisco maritime community.

Zone “D” will be the No Loitering or Anchoring Zone. This Zone will allow vessels to transit along the waterfront throughout the duration of the Sail Grand Prix. All vessels shall maintain headway and shall not loiter or anchor within the confines of Zone “D”. Mariners can transit Zone “D” freely during the Sail Grand Prix, decreasing the impact to the San Francisco Waterfront Area.

These regulations are needed to keep persons and vessels away from the sailing race vessels, which exhibit unpredictable maneuverability and have a demonstrated likelihood during the simulation of racing scenarios for capsizing. The special local regulation will help prevent injuries and property damage that may be caused upon impact by these fast-moving vessels. The provisions of this temporary special local regulation will not apply to anchored vessels, nor will they exempt racing vessels from any federal, state, or local laws or regulations, including Nautical Rules of the Road. The Coast Guard is issuing this rulemaking under authority in 33 U.S.C. 1231.

Under 33 CFR 100.35, the Coast Guard District Commander has authority to promulgate certain special local regulations deemed necessary to ensure the safety of life on the navigable waters immediately before, during, and immediately after an approved regatta. Pursuant to 33 CFR 1.05-1(i), the Commander of Coast Guard District 11 has delegated to the COTP San Francisco the responsibility of issuing such regulations.

As noted above, we received 1 respondent written comment on our NPRM published March 18, 2019. The comment recommends establishing the rule for the specific period of time during the race and recommends prohibiting all other vessels on the water. In order to mitigate the risk to safe operation of vessels on the race days, the Coast Guard defined a regulated area for spectator vessels. The Coast Guard aims to facilitate safe viewing of the race competition by establishing and assigning maintenance responsibility of a clearly delineated region for spectators to safely maneuver while viewing the competition.

No changes were made to the rule based upon the received comment; however the Coast Guard recognizes the importance of imposing appropriate controls on vessels attempting to gain access to the regulated race area on the days of the race completion.

After discussion with other local government agencies and involved sponsor personnel, Zone “D” was added in efforts to reduce the impact to the San Francisco Waterfront and allow mariners to access marines and fuel docks within Zone “D”. Additionally, to accommodate the updated, finalized event agenda, the times were altered to minimize impact to San Francisco Waterfront.

This rule establishes a special local regulation associated with the Sail Grand Prix 2019 race event from 10:30 a.m. on May 4, 2019 to approximately 3:00 p.m. on May 5, 2019 which will be enforced from 10:30 a.m. to 3:00 p.m. on May 4, 2019, and 10:30 a.m. to 3:00 p.m. on May 5, 2019, or as announced by Broadcast Notice to Mariners. The areas regulated by this special local regulation are east of the Golden Gate Bridge, south of Alcatraz Island, west of Treasure Island, and in the vicinity of the city of San Francisco waterfront. The Coast Guard will establish a primary race area, a spectator area, a waterfront transit area and a no loitering or anchoring area. An image of this regulated area may be found in the docket. The special local regulation covers all navigable waters of the San Francisco Bay, from surface to bottom, within the area formed by connecting the following latitude and longitude points in the following order: 37°48′18″ N, 122°27′44″ W; thence to 37°48′30″ N, 122°27′56″ W; thence to 37°49′14″ N, 122°27′59″ W; thence to 37°49′30″ N, 122°25′36″ W; thence to 37°49′10″ N, 122°25′10″ W; thence to 37°48′45″ N, 122°25′10″ W; thence to 37°48′42″ N, 122°25′13″ W and thence along the shore to the point of beginning. Zone “A”, Zone “B”, Zone “C” and Zone “D” are all to be included within the special local regulation.

The duration of the establishment of this special local regulation is intended to ensure the safety of vessels in these navigable waters during the scheduled race days. This temporary special local regulation will temporarily restrict vessel traffic adjacent to the city of San Francisco waterfront in the vicinity of the Golden Gate Bridge and Alcatraz Island and prohibit vessels and persons not participating in the race event from entering the dedicated race area.

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

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

This regulatory action determination is based on the size, location, and duration of the special local regulation. With this special local regulation, the Coast Guard intends to maintain commercial access to the ports through an alternate vessel traffic management scheme. The special local regulation is limited in duration, and is limited to a narrowly tailored geographic area with designated and adequate space for transiting vessels to pass when permitted by the COTP or a designated representative. In addition, although this rule restricts access to the waters encompassed by the special local regulation, the effect of this rule will not be significant because the local waterway users will be notified in advance via public Broadcast Notice to Mariners to ensure the special local regulation will result in minimum impact. Therefore mariners will be able to plan ahead and transit outside of the periods of enforcement of the special local regulation, and if they choose not to do so, they will be able to transit the city of San Francisco Waterfront via Zone “C” with approval from the COTP or designated representative or Zone “D”. The entities most likely to be affected are commercial vessels and pleasure craft engaged in recreational activities.

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 received 00 comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

When the special local regulation is in effect, vessel traffic can pass safely around the regulated area. The maritime public will be advised in advance of this special local regulation via Broadcast Notice to Mariners.

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 ) 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 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 rule or any policy or action of the Coast Guard.

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have 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 rule involves a special local regulation that will create regulated areas of limited size and duration that includes defined regulated areas for vessel traffic to pass. Normally such actions are categorically excluded from further review under paragraphs L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

The Medicaid program was established by the Congress in 1965 to provide health care services for low-income and disabled beneficiaries. Section 1902(a)(32) of the Social Security Act (the Act) requires direct payment to providers who render services to Medicaid beneficiaries. It states that no payment under the plan for care and services provided to an individual shall be made to anyone other than such individual or the person or institution providing such care or service, under an assignment or power of attorney or otherwise, unless a specified exception is met.

We first codified § 447.10 implementing section 1902(a)(32) of the Act in the “Payment for Services” final rule published in the September 29, 1978 Federal Register (43 FR 45253), and we have amended that regulation in the ensuing years. The 1978 final rule incorporated several specific statutory exceptions to the general principle requiring that direct payment be made to the individual provider. The regulations implementing section 1902(a)(32) of the Act have generally tracked the plain statutory language and required direct payments absent a statutory exception.

In 2012, we proposed a new regulatory exception in the “State Plan Home and Community-Based Services, 5-Year Period for Waivers Provider Payment Reassignment, and Setting Requirements for Community First Choice” proposed rule published in the May 3, 2012 Federal Register (77 FR 26361, 26406) for “a class of practitioners for which the Medicaid program is the primary source of service revenue” such as home health care providers. We recognized in the proposed rule that section 1902(a)(32) of the Act does not specifically provide for additional exceptions to the direct payment requirement (77 FR 26364, 26382).

In response to the May 3, 2012 proposed rule, we received seven comments, all generally supportive of the proposed regulatory exception. We finalized the regulatory exception in the “State Plan Home and Community-Based Services, 5-Year for Waivers Provider Payment Reassignment, and Home and Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers” final rule published in the January 16, 2014 Federal Register (79 FR 2947, 3001) authorizing a state to make payments to third parties on behalf of certain individual providers “for benefits such as health insurance, skills training, and other benefits customary for employees.”

More recently, we have become concerned that § 447.10(g)(4) is neither explicitly nor implicitly authorized by the statute, which identifies the only permissible exceptions to the rule that only a provider may receive Medicaid payments. Unlike section 1902(a)(6) of the Act, that requires a State agency to make such reports, in such form and containing such information, as the Secretary may from time to time may require, section 1902(a)(32) of the Act provides for a number of exceptions to the direct payment requirement that we believe constitutes an exclusive list of exceptions and does not authorize the agency to create new exceptions. The regulatory provision at § 447.10(g)(4) granted permissions that Congress has not expressly authorized, and in our interpretation, has foreclosed. Therefore, we published the “Reassignment of Medicaid Provider Claims” proposed rule in the July 12, 2018 Federal Register (83 FR 32252 through 32255) where we proposed to remove the regulatory exception at § 447.10(g)(4).

We proposed to remove only § 447.10(g)(4) leaving in place the other provisions in § 447.10 including the exceptions at § 447.10(e), (f) and (g)(1) through (3). We sought comments regarding how we might provide further clarification on the types of payment arrangements that would be permissible assignments of Medicaid payments, such as arrangements where a state government withholds payments under a valid assignment. Specifically, we invited comments with examples of payment withholding arrangements between states and providers that we should address.

With regard to the authorities under sections 1915(c), 1915(i), 1915(j), 1915(k), and 1115 of the Act, we explained that this final rule will not impact a state's ability to perform Financial Management Services (FMS) or secure FMS through a vendor arrangement. FMS are services and functions that assist the Medicaid beneficiary or his/her family to: (1) Manage and direct the disbursement of funds contained in the participant-directed budget; (2) facilitate the employment of staff by the family or participant, by performing as the participant's agent such employer responsibilities as processing payroll, withholding Federal, state, and local tax and making tax payments to appropriate tax authorities; and (3) performing fiscal accounting and making expenditure reports to the Medicaid beneficiary or family and state authorities.

As discussed in response to comments below, the arrangements under FMS are not affected by the provisions of the final rule because this model involves the FMS vendor receiving monies from the state to administer the participant-directed budget and make payment to providers on behalf of the beneficiary. The budget furnished to the FMS vendor is not a “payment under the plan for any care or service provided to an individual,” and thus is not subject to the restrictions imposed by section 1902(a)(32) of the Act and § 447.10.

We also requested comments on whether and how the proposed removal of § 447.10(g)(4) would impact self-directed service models, where the Medicaid beneficiary takes responsibility for retaining and managing his or her own services, and, in some cases, may be performing payroll and other employer-related duties. We were especially interested in comments that described the additional flexibilities needed to support beneficiaries opting for self-directed service models, which may ensure stable, high-quality care for those beneficiaries.

We received 7,166 timely comments from concerned citizens, parents of disabled individuals, health care providers, unions, state agencies, and advocacy groups. The comments ranged from general support to opposition to the proposed removal of § 447.10(g)(4) and included very specific questions or comments regarding the proposed change. For the purpose of addressing the comments in this final rule, the term “provider(s)” refers to the individual practitioner(s) that were subject to § 447.10(g)(4), and the term “reimbursement” refers to the payment of provider claims.

Comment: Several commenters indicated that CMS never had the statutory authority to add the exceptions that were detailed in § 447.10(g)(4). For instance, one commenter indicated that CMS lacked the authority to make an additional exception to the statute at section 1902(a)(32) of the Act in 2014.

Response: We agree with the commenters. After hearing from stakeholders since the publication of the 2014 final rule and engaging in a review of the statutory support for § 447.10(g)(4), we have determined that the regulatory provision is foreclosed by statute, which is the reason we have removed § 447.10(g)(4).

Comment: Several commenters stated CMS provided no other explanation to support the concern that § 447.10(g)(4) was not authorized by the statute at section 1902(a)(32) of the Act. Some commenters also suggested that CMS misunderstood the meaning of section 1902(a)(32) of the Act, which commenters stated was enacted to prevent abuses stemming from factoring, and that the statute does not support CMS' interpretation that it prohibits customary employee payroll deductions.

Response: We removed the provision at § 447.10(g)(4) due to the lack of any evidence of express or implied authority to implement new exceptions to section 1902(a)(32) of the Act. See e.g.,, TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001) (“Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.”); NRDC v. EPA, 489 F.3d 1250, 1259-1260 (D.C. Cir. 2007) (holding that where Congress provides certain enumerated exceptions in a statute, an agency “may not, consistent with Chevron, create an additional exception on its own”). We have not seen any evidence of such intent in the text, structure, purpose, and legislative history; rather those tools of statutory construction in our view collectively confirm that the list of exceptions in section 1902(a)(32) of the Act was intended to be exclusive, and that that list of exceptions does not encompass the circumstance outlined in § 447.10(g)(4). Thus, we believe that Congress has spoken to “the precise question at issue,” Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), and thus the exception at § 447.10(g)(4) must be deleted.

We agree with the commenter that Congress had expressed concern about abusive factoring arrangements when it enacted section 1902(a)(32) of the Act. Congress sought to stem factoring and other abuses by enacting a broad prohibition that precludes states from making any payment for care or services to any person or entity other than the individual receiving care or services under the state plan, or the person or institution providing such care. Congress prohibited more than just assignment of provider payment—it prohibited payments to anyone other than the beneficiary and the provider, whether made “under an assignment or power of attorney or otherwise.” Section 1902(a)(32) of the Act (emphasis added). Notwithstanding this broad prohibition, Congress did carve out certain exceptions, including an exception that explicitly allows a state to make payments to the employer of a provider when the provider is contractually required to turn over his or her right to payment to the employer as a condition of employment. Because Congress recognized the employer-employee relationship in its list of exceptions to the direct payment rule, we do not interpret section 1902(a)(32) of the Act as prohibiting employee payroll deductions that are made by a bona fide employer. But Congress did not create a similar exemption that would allow “deductions” to be taken from a provider's reimbursement check and diverted to a third party. While those dollars may ultimately go toward the same purpose—for example, health insurance coverage—it is the means by which those dollars are taken from the provider that run afoul of section 1902(a)(32) of the Act. The January 16, 2014 final rule impermissibly expanded upon the statutory exceptions to create a new category of entities that can receive all or part of a Medicaid provider's reimbursement. This rule restores the direct payment rule to what we believe is its proper scope, and puts Medicaid providers back in control of their reimbursements.

Comment: Many commenters indicated CMS conceded section 1902(a)(32) of the Act does not expressly provide for additional exceptions to the direct payment principle.

Response: We believe the commenters may have been referring to the following language from the preamble to the January 16, 2014 final rule (79 FR 2947, 2949) that implemented § 447.10(g)(4) which stated, “[w]hile the statute does not expressly provide for additional exceptions to the direct payment principle, we believe the circumstances at issue were not contemplated under the statute.” After hearing from stakeholders and engaging in further review of the statute, we determined that we lacked authority to enact a new exception not explicitly or implicitly authorized by section 1902(a)(32) of the Act.

Comment: One commenter recommended a new regulation to focus on payments to employees of beneficiaries. Specifically, the commenter suggested that a regulation should indicate that payments to individual practitioners who are employed, in whole or in part, by a beneficiary can be assigned only to a government agency, or entity, or by court order.

Response: This comment is outside of the scope of this rule; however, we will take into consideration whether a regulation or subregulatory guidance is needed to further clarify this issue.

Comment: One commenter indicated that courts have concluded that similar arrangements, such as payment to Health Maintenance Organizations (HMO) under a contract with a Medicaid enrolled provider, are valid and authorized by § 447.10(g)(3) despite the lack of corresponding statutory authority.

Response: The provision at § 447.10(g)(3) is outside the scope of this rulemaking. We will evaluate commenter concerns and may address the issues raised by the provision at § 447.10(g)(3) in future rulemaking.

Comments: Several commenters stated CMS should issue regulatory language or, at least clarify in the final rule, that section 1902(a)(32)(B) of the Act permits states to assign Medicaid monies owed to personal care providers only to government agencies or by court order, which will permit necessary tax deductions but eliminate a state's ability to reassign reimbursement to private third parties.

Response: Only a provider may reassign his or her payment. In addition, we agree that the statute does not preclude, and in fact expressly permits, a state to make a payment in accordance with a provider's assignment, if such assignment is made to a governmental agency or entity or is established by or under a court order. The statute also expressly permits the state to make payment to the employer of the provider, instead of making a direct payment to the provider, where the provider turns over his or her professional fees to the employer as a condition of employment. The employer may withhold taxes and other voluntary deductions for benefits like health insurance through the payroll process. Whether a particular assignment is permitted under section 1902(a)(32) of the Act will depend on the particular facts of the arrangement. We will take into consideration whether a regulation or further subregulatory guidance is needed to clarify the types of assignments permitted under section 1902(a)(32)(B) of the Act.

Comment: Multiple commenters claimed CMS' action regarding the removal of § 447.10(g)(4) may be arbitrary and capricious as related to the Administrative Procedure Act (Pub. L. 79-404, enacted on June 11, 1946) (APA). For example, one commenter indicated that hostility to union membership is an arbitrary and capricious reason for an agency action.

Response: We disagree with the commenter. We previously believed that we had authority to enact the exception at § 447.10 (g)(4) because the statute did not contemplate the circumstances at issue. However, upon further review, we have determined that we did not have such authority, because section 1902(a)(32) of the Act neither explicitly nor implicitly authorized us to enact additional exceptions. Section 1902(a)(32) of the Act broadly prohibits states from making Medicaid payments to anyone other than the beneficiary or the provider furnishing items or services, unless one of certain enumerated exceptions are met. Accordingly, we believe that the statutory exceptions are exclusive and that we lacked the authority to create a new regulatory exception. Under the APA, neither change nor the presence of some reliance interests are fatal. As the courts have noted, there is “no basis in the [APA] or in our opinions for a requirement that all agency change be subjected to more searching review” and an agency “need not demonstrate to a court's satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 514-15 (2009) (emphasis in original). Although an agency must “display awareness that it is changing position,” it must only “provide a more detailed justification than what would suffice for a new policy created on a blank slate” when its “its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account.” Id. In this case, we have acknowledged that we have changed position but believe that we have good reasons for doing so under the circumstances. We do not believe that our new policy rests upon new or different factual findings but solely a new legal analysis. And we believe that the reliance interests at issue are not serious—and in any event, even if they are for the sake of argument, deemed to be serious—we believe that we have justified moving forward with our proposal notwithstanding those reliance interests.

Comment: Several commenters stated there was no need for a change to § 447.10(g)(4) or that there was no evidence that stakeholders wanted a change to § 447.10(g)(4). Commenters also indicated that states, providers, and other stakeholders have acted in reliance on the previous policy.

Response: As previously discussed, we are removing § 447.10(g)(4) because, after revisiting our previous interpretation, we have determined that we lacked statutory authority to implement § 447.10(g)(4). We understand that stakeholders may have relied on the provision at § 447.10(g)(4) to ease administrative burden on certain providers by withholding a portion of the providers' Medicaid reimbursement and redirecting those payments to third parties on the providers' behalf. However, we note that the rescission of this provision simply eliminates one method by which such payments to third parties may be made—it does not, and surely cannot—eliminate a provider's right to make such payments to third parties by other legal means. Providers remain free to purchase health insurance, training, and other benefits after receiving their Medicaid reimbursements.

Comment: One commenter stated that reassignment of provider reimbursement under § 447.10(g)(4) was an option, not a requirement.

Response: We agree with the commenter that the regulations did not require providers to assign their right to payments to third parties. An assignment is typically a voluntary act where one party intentionally transfers a right, such as a right to future payment, to another party. 1 Although providers had the option to utilize § 447.10(g)(4), our lack of statutory authority to promulgate this regulation requires us to rescind it.

Comment: Several commenters noted that the rescission of § 447.10(g)(4) would facilitate the proper use of Medicaid funds.

Response: We appreciate the commenters' support. As previously discussed, we are removing § 447.10(g)(4) because, after revisiting our previous interpretation, we have determined that we lacked statutory authority to implement § 447.10(g)(4).

Comment: Many commenters stated that removal of § 447.10(g)(4) would result in a loss or disruption of benefits for home care workers, specifically health insurance coverage, and may lead to increases in uncompensated care costs and/or Medicaid enrollment, which may create downstream negative impacts. Commenters expressed concern that the proposed rule would prohibit automatic paycheck deductions and that Congress did not intend to affect healthcare deductions and deductions for voluntary union dues with the anti-reassignment provisions in statute. Several commenters stated that, as a result of this rule, home health workers will lose health insurance coverage.

Response: We disagree with the commenters. The effect of this final rule is the elimination of one method of getting payment from A to B. It in no way prevents health care workers from purchasing health insurance, enrolling in trainings, or paying dues to a union or other association. Further, as previously described, the statute expressly allows payments to employers, and nothing in this rule would interfere with an employer's ability to make payroll deductions that are required by law or voluntary deductions for things like health and life insurance, contributions to charitable causes, retirement plan contributions, and union dues. Moreover, nothing in this rule would prevent a provider from affirmatively assigning his or her right to payment to a government agency.

We also note that there is a distinction between payroll deductions made by an employer and diversions of Medicaid payments as a result of a valid assignment. Section 1902(a)(32) of the Act specifically allows the state to make Medicaid payments to a home care worker's employer, and any deductions made by the employer are outside the scope of the statutory direct payment rule. Section 447.10(g)(4) pertained to payment diversion, not to voluntary wage deductions made under a bona fide employment arrangement. Specifically, it pertained to the class of practitioners for which the Medicaid program is the primary source of service revenues, such as home health workers, who are not employees of the state. As non-employees, such practitioners do not receive salaries or wages from the state. Instead, they are the recipients of Medicaid payment for services they furnish. Certain assignments or other transfers of such payments are permitted under section 1902(a)(32) of the Act; however, the diversion to other third parties not otherwise identified in the statute is not.

Comment: Several commenters indicated that the removal of paragraph (g)(4) from § 447.10 would result in potential harm to the Medicaid program, including to stakeholders. For example, commenters indicated that the removal of the paragraph would result in a reduction in the number of individual practitioners, leading to a decrease in access and quality of care for beneficiaries and an increase in more expensive institutional care. One commenter noted that government has a role to promote quality care and improve effectiveness and efficiency of care.

Several commenters stated that the proposed rule was not consistent with the mandates set forth in the Americans with Disabilities Act of 1990 (Pub. L. 101-336, enacted on July 26, 1990) (ADA), as it would result in destabilization of the workforce that provides in-home care, and it would increase the likelihood of an individual being institutionalized.

Response: While we agree that the government has a role in promoting high-quality, efficient healthcare, these commenter did not explain how or why these alleged harms would occur, nor did they cite to any evidence as to how the proposed change would cause harm to the Medicaid program, its beneficiaries, or the health care workforce that cares for the beneficiaries. Section 1902(a)(30)(A) of the Act requires states to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area. As long as the requirements of section 1902(a)(30)(A) of the Act are met, states have the flexibility to address concerns regarding access and quality of care utilizing economic and efficient payment methodologies. Additionally, as noted previously, this rule does not prevent individual practitioners from purchasing or receiving any benefits, memberships, or trainings using the income they earn from the Medicaid program. It simply ensures that Medicaid reimbursement is paid directly to the practitioner (or, as permitted by law, to the practitioner's employer, business agent, or facility where the care or service was furnished) and not impermissibly redirected to third parties. That is, this rule does not restrict what Medicaid providers may do with their Medicaid reimbursement once it is paid to them. As such, we do not expect that this rule would adversely affect access to, or quality of, care.

Comment: Several commenters opposed the proposed rule and mentioned that eliminating the automatic payment of retirement or health care premiums from a provider's pay could cause a financial hardship if they had to purchase those benefits separately and not collectively through their employment.

Response: This rule does not affect voluntary wage deductions for employer-sponsored benefits. Section 1902(a)(32) of the Act specifically allows the state to make Medicaid payments to a home care worker's employer, and any deductions made by the employer are outside the scope of the statutory direct payment rule.

Comment: Several commenters opposed the proposed rule and stated that the removal of § 447.10(g)(4) would eliminate a worker's ability to participate in a health plan and is likely to cause those beneficiaries to shift to the state Medicaid program or other publicly subsidized coverage that will likely lead to higher rather than lower costs for the state.

Response: We believe the commenters are asserting that the loss of the ability to reassign a portion of an individual practitioner's Medicaid payment will ultimately result in that individual practitioner becoming a Medicaid beneficiary, which will likely result in increased costs for the state. As noted previously, we are removing § 447.10(g)(4) due to the lack of express or implicit statutory authority to implement new exceptions to section 1902(a)(32) of the Act. To the extent that the commenter is suggesting that practitioners will become uninsured as a result of this rule, we again reiterate that nothing in this rule prevents an individual practitioner from purchasing health insurance. Depending on a practitioner's particular circumstances, he or she may be eligible to purchase or obtain insurance coverage through a number of channels, including group coverage through an employer or an association, individual insurance coverage that is Affordable Care Act-compliant and guaranteed available to the general public, or, if the practitioner meets eligibility criteria, through Medicaid. As required by section 1902(a)(30)(A) of the Act, states must ensure that provider reimbursement rates are “consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

Comment: Several commenters that opposed the proposed rule noted the removal of this provision may result in administrative burden created by eliminating automatic payroll deductions for items such as health insurance, skills training, and other benefits customary for employees.

Response: While we acknowledge that automatic payroll deductions may reduce administrative burden for some health care workers who would otherwise need to make a separate payment, we again note that elimination of § 447.10(g)(4) will not disrupt payroll deductions that are made under a bona fide employment relationship and are otherwise permissible under state and federal law. Section 447.10(g)(4) pertained to the class of practitioners for which the Medicaid program is the primary source of service revenues, such as home health workers, who are not employees of the state or a home health agency that is paid by the state for its employees' services. As non-employees, such practitioners do not receive salaries or wages from the state. Instead, they are the recipients of Medicaid payments, and the state must directly pay them for their services. The removal of § 447.10(g)(4) eliminates the regulatory exception that purported to allow states to “deduct” or withhold portions of a provider's Medicaid reimbursement and re-direct the payment to third parties. However, individual practitioners can decide to use their payments for items like health and life insurance coverage and skills training. To the extent allowed by state and federal laws, states may also continue to allow individual practitioners to receive healthcare coverage from or through the state. Individual practitioners may also seek employment with home health agencies or other employers that offer benefit packages.

Comment: Many commenters stated that the proposed rule would impact the flexibility states have to administer their Medicaid programs, resulting in potential harm to providers because certain individual Medicaid practitioners would not be able to have items such as health insurance, skills training, and other benefits customary for employees reassigned from their reimbursement.

Response: States retain the flexibility to operate their Medicaid programs within existing Medicaid statutes and regulations. Nothing in this rule prevents a state from investing in its health care workforce, such as through strategies to ensure that the workforce is appropriately trained and that reimbursement rates are set at levels adequate to ensure beneficiaries have access to necessary care. As long as the requirements of section 1902(a)(30)(A) of the Act are met, states have flexibility to address concerns regarding access and quality of care utilizing economic and efficient payment methodologies.

Comment: We received several comments that varied from support to opposition of the proposed rule's impact on self-directed care and FMS.

Response: The removal of § 447.10(g)(4) eliminates a state's ability to redirect provider reimbursement for the delivery services under section 1905(a) of the Act to third parties that are not recognized under the statute. However, this rule does not impact a state's ability to perform FMS or secure FMS through a vendor arrangement provided under sections 1915(c), 1915(i), 1915(j), and 1915(k) and 1115 authorities of the statute.

Comment: One commenter requested that CMS codify, within the regulation text, the clarification included in the proposed rule regarding FMS under sections 1915(c), 1915(i), 1915(j), 1915(k) and 1115 authorities of the statute, to allow FMS vendors to reassign reimbursement with the expressed intent of paying for the services rendered by the FMS vendor.

Response: We note that payment to the FMS vendor for services is not affected by the provisions of the final rule because this model involves the FMS vendor receiving monies from the state to administer the participant-directed budget and make payment to providers on behalf of the beneficiary. As noted previously, the budget furnished to the FMS vendor is not a “payment under the plan for any care or service provided to an individual,” and thus, is not subject to the restrictions imposed by section 1902(a)(32) of the Act and § 447.10.

Under the authorities in sections 1915(c), 1915(i), 1915(j), 1915(k) and 1115 of the Act, FMS vendors are service providers. As such, depending on the authority, the state has the option to claim the cost it incurs for the provision of FMS as either a direct medical service, claimable via the applicable FMAP rate or, as a state program administrative expenditure. Therefore, we do not believe it is necessary to include regulation text outlining the ability of states to reimburse entities for their contracted service provider functions, but we do reiterate that states may continue to do so. This was the case prior to the inclusion of § 447.10(g)(4).

Comment: Several commenters noted that the original intent of section 1902(a)(32) of the Act was to eliminate the practice of selling Medicaid accounts receivables to “factors,” and not to prevent union dues and benefits from being deducted from the provider's reimbursement.

Response: We agree with the commenters that one of the original intents of section 1902(a)(32) of the Act, perhaps even the main one, was to address concerns relating to the sale of receivables to factors. But we do not believe that this was necessarily Congress' only concern, and we note that factoring is not specifically mentioned in the statute and CMS found it necessary to subsequently emphasize via regulation that payments to factors are not permitted. See § 447.10(h). In any event, Congress chose to address its concern about factoring with a broad prohibition and only limited exceptions. It could have done it in a more targeted way, but it did not. Notably, Congress did not limit itself to addressing payments to third parties that involving reassignment and powers of attorney; it also amended the statute to include “or otherwise” language, expanding its application to situations that did not involve factoring. While a commenter stated that, in the context of the sentence, “or otherwise” refers only to mechanisms similar to an “assignment” or “power of attorney” that permit third parties to act in the provider's stead in seeking Medicaid payments, and thus present a similar potential for abuse, we do not believe that the statute or legislative history makes this clear. Congress addressed its concern by requiring direct payment to providers in all circumstances, unless one of the limited statutory exceptions is met. As explained previously, we are removing § 447.10(g)(4) because the payment diversions it authorizes are neither explicitly nor implicitly authorized by the statute.

Comment: A large number of commenters, both in opposition and support of the proposed rule, mentioned unions and/or union dues, and some commenters mentioned the benefits workers receive from union membership. Other commenters noted that there are existing state laws surrounding union membership.

Response: We are removing § 447.10(g)(4) due to the lack of statutory authority to implement additional exceptions to section 1902(a)(32) of the Act. It is well outside the scope of our authority to regulate how an individual practitioner chooses to use the income he or she receives from the Medicaid program. While we realize some states relied on § 447.10(g)(4) as a mechanism to transfer contributions from practitioners to unions or other organizations, practitioners may continue contributing to unions or other organizations. This rule merely forecloses the ability of a practitioner to assign a portion of his or her Medicaid payment to a union. However, other means remain available. A provider may voluntarily agree to automatic credit card or bank account deductions to pay for union dues once 100 percent of reimbursement has been received. In regard to existing state laws surrounding union membership, if state law(s) and/or regulation(s) conflict with § 447.10 after the removal of paragraph (g)(4), the state Medicaid agency will need to take corrective action to comply with current federal statute and regulations. We are available to answer any questions states may have or to provide additional technical assistance to states.

Comment: Several commenters referenced state attempts to privatize providers or make providers state employees in order to reassign portions of the provider's reimbursement. Specifically, two commenter referenced states that passed legislation to privatize all homecare givers and force them to pay union dues.

Response: As the comments are not directly applicable to the removal § 447.10(g)(4), they are outside the scope of this final rule. However, we note that § 447.10(g)(4) was specifically applicable to Medicaid enrolled individual practitioners who provided services on a contractual basis.

Comment: One commenter noted that the proposed removal of § 447.10(g)(4) conflicts with National Labor Relations Act which allows home care worker agencies to deduct union dues from a provider's paycheck.

Response: The provisions of the final rule do not affect home care worker agencies that make payroll deductions as authorized by their employees, provided that the requirements in § 447.10(g)(1) are met. We do not see any conflict between removal of § 447.10(g)(4) and the National Labor Relations Act.

Comment: Multiple commenters stated the proposed removal of § 447.10(g)(4) will, in no way, prevent home care workers from voluntarily joining unions.

Response: We agree. This rule does not prohibit an individual practitioner from using his or her income to pay dues to a union.

Comment: One commenter indicated that authorized deductions of union dues or other benefit payments from their paycheck should not require a statutory exception to the anti-reassignment provision because such a deduction does not constitute a reassignment. Another commenter suggested that payroll deductions meet the qualification for third party payments provided in the current statute.

Response: Aside from certain enumerated exceptions at section 1902(a)(32) of the Act, Medicaid payments must be paid directly to the individual or institution that furnished the care or service to a Medicaid beneficiary. For Medicaid payments, a distinction must be made between payroll deductions and payment reassignment. Section 447.10(g)(4) pertained to the class of practitioners for which the Medicaid program is the primary source of service revenues, such as home health workers, who are not employees of the state. As non-employees, such practitioners do not receive salaries/wages from the state. Instead, they are the recipients of Medicaid payments, and only certain reassignments are permitted.

In addition, the existing third party payments permitted in the statute are not payroll deductions. Specifically, section 1902(a)(32) of the Act contains several specific exceptions to the general principle requiring direct payment to individual practitioners. There are exceptions for payments for practitioner services where payment is made to the employer of the practitioner, and the practitioner is required as a condition of employment to turn over fees to the employer; payments for practitioner services furnished in a facility when there is a contractual arrangement under which the facility bills on behalf of the practitioner; reassignments to a governmental agency or entity, or through a court order, or to a billing agent; payments to a practitioner whose patients were temporarily served by another identified practitioner; or payments for a childhood vaccine administered before October 1, 1994. None of these exceptions allow for the type of payments transfers requested by the commenters.

Comment: Several commenters stated that their rights will be impacted by this rule. They referenced examples such as an individual's right to join/support a union, workers' rights, and individual rights under the Constitution.

Response: It should be noted that we are removing paragraph (g)(4) due to the lack of authority to implement additional exceptions to section 1902(a)(32) of the Act. The removal of § 447.10(g)(4) does not prevent individuals from exercising their individual rights. It only prevents the state from redirecting payments that, per the statute, must be paid directly to the practitioner. However, individual practitioners can purchase or contribute to the items previously allowed under paragraph (g)(4) through transactions separate from their Medicaid reimbursement.

With regard to workers' rights, § 447.10(g)(4) pertained to the class of practitioners for which the Medicaid program was the primary source of service revenues, who were not employees.

Comment: One commenter indicated § 447.10(g)(4) has been rescinded due to a bias against Unions.

Response: The intent of the rule is to ensure that Medicaid practitioners paid fully and directly for their services as required by law. The Department, in no way, intends to prevent or discourage union membership. Although rescission of § 447.10(g)(4) will eliminate a provider's ability to reassign portions of their reimbursement to contribute to union dues, we would like to note that providers remain free to contribute to union dues and other benefits through methods other than assignment of their right to payment.

Comment: One commenter indicated that the agency lacked any data to justify the rescission of § 447.10(g)(4). This commenter also indicated that the agency lacked any analysis of this rule's impact on home care workers, beneficiaries, or states.

Response: During the 30-day comment period, we suggested stakeholders to provide comments and analyses with regard to the economic significance of this rule. While we received comments that provided estimates of the potential impact of this rule, those estimates were not supported by any substantive analysis. As the agency has no authority to create additional exceptions to section 1902(a)(32) of the Act, the provision at § 447.10(g)(4) must be removed regardless of its economic significance.

Comment: Several commenters indicated this rule would result in a significant economic impact. For example, one commenter indicated that assignments to unions amounted to $99.2 million in 2017, with cumulative total of $924,174,007 from 2000 to 2017. Another commenter indicated that assignments to unions amount to $150 million in 2017 and totaled approximately $1.4 billion since 2000.

Response: In the proposed rule, we estimated the dues related portion of the economic impact of this rule to be between $0 and approximately $71 million. While we received comments that provided estimates of the potential impact of this rule, those estimates were not supported by any documentation or analysis.

Comment: One commenter recommended that CMS to conduct and publish an analysis of the issues pertaining to reassignment before finalizing this rule.

Response: As mentioned in the proposed rule, we did not formally track the amount of reimbursement that was being reassigned to third parties under § 447.10(g)(4), although one state submitted a state plan amendment as a direct result of that provision. In the proposed rule, we estimated that the financial impact of removing § 447.10(g)(4) could range from $0-71 million. We also suggested that stakeholders provide comment and analysis with regard to the economic significance of this rule during the comment period. While we received comments that focused on the union dues aspect of this rule and estimated the potential impact to be $150 million in 2017 and $1.4 billion from 2000 to 2017 these estimates were not supported by any substantive analysis.

Comment: Several commenters stated that § 447.10(g)(4) helped to facilitate improper use of Medicaid funds.

Response: With the removal of the regulatory provision, these concerns should be alleviated. It is also important to note that through all aspects of the Medicaid program, we work to ensure that Medicaid funds are properly used by states.

Comment: Several commenters noted that the statement in the proposed rule, “designed to ensure that taxpayer dollars dedicated to providing healthcare services for low-income vulnerable Americans are not siphoned away for other purposes,” is false. Several commenters also noted that as union dues are deducted from already earned income, the state is merely a pass-through entity as it relates to the reassignment of items such as health insurance, skills training, and other benefits customary for employees.

Response: Outside of the exceptions listed in the statute, section 1902 (a)(32) of the Act requires direct payment to individual practitioners for the rendering of Medicaid services. A state agency is not permitted to “pass through” Medicaid reimbursement for healthcare services to third parties not recognized under the Medicaid statute.

Comment: One commenter stated that CMS mischaracterized and misunderstood the flow of payments to individual Medicaid practitioners. The commenter further elaborated by indicating that the proposed rule's regulatory impact analysis reflected a similar misunderstanding as it suggested that states may have increased reimbursement levels in order to reassign portions of a provider's payment to a third party. The commenter suggested that the removal of § 447.10(g)(4) may result in the lowering of rates if states are no longer able to make reassignments to third parties. Other commenters, however, stated rates would not be negatively affected.

Response: To our knowledge, one state submitted a state plan amendment to increase rates as a direct result of the ability to redirect a portion of individual practitioners' reimbursement for the items outlined in § 447.10(g)(4). We note that, as indicated in the proposed rule, we did not formally track states' diversion of provider reimbursement to third parties. As such, we cannot comment on other actions states may have taken in response to the issuance of § 447.10(g)(4). States are obligated to adopt payment methods that assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area as specified in section 1902(a)(30) of the Act. To the extent that any state has developed provider reimbursement rates to take into account a provider's reasonable overhead expenses, we do not anticipate that a state would reduce rates simply because it can no longer perform an administrative function for a provider. However, to the extent a state wishes to reduce documented payment levels, it must submit a State plan amendment and assure the proposed payment level does not trigger concerns regarding access to, or quality of, care.

Comment: Many commenters took exception to the 30-day comment period for the proposed rule and requested a 60-day comment period instead.

Response: The APA requires the agency to provide at least a 30-day comment period for Medicaid regulations. Because the removal of § 447.10(g)(4) is a straightforward rule change, we concluded that 30 days was ample time to respond. Commenters may be confused by section 1871(b)(1) of the Act, which requires a 60-day comment period for Medicare rulemaking. However, this regulation has no effect on the Medicare program, and thus is not subject to the requirements in section 1871 of the Act.

Comment: Multiple commenters noted that the removal of § 447.10(g)(4) has federalism implications and violates state sovereignty. Specifically, one commenter claimed that implementation of the proposed rule would disrupt states' established laws and would commandeer State governments and their subsidiaries in violation of the Tenth Amendment by regulating the “States in their sovereign capacity.” Another commenter claimed the agency is in violation of Executive Order 13132, which requires that the agency consult with the affected states, engage in real consideration of alternative policies, use the least restrictive means possible to achieve its results, and comply with other rules.

Response: We disagree with the commenters. While the removal of § 447.10(g)(4) may have an indirect effect on the way that states pay certain providers, it does not have the kind of “substantial direct effect” on states that would implicate Executive Order 13132. The provision at § 447.10(g)(4) was added in the interest of administrative efficiency and convenience for states and certain classes of providers.

As discussed previously, removal of § 447.10(g)(4) eliminates a state's ability to redirect a portion of provider reimbursement for items such as health insurance, skills training, and other benefits customary for employees to third parties (apart from government agencies or under a court order under § 447.10(e)) and federal law is clear that Medicaid payment may only be made to the individual beneficiary or person or entity furnishing the service, except in limited circumstances. Neither state law nor the federalism concerns raised by comments can override this federal statutory directive.

Comment: One commenter noted this rule is in direct conflict with the August 3, 2016 Center for Medicaid and CHIP Services (CMCS) Informational Bulletin (CIB) entitled “Suggested Approaches for Strengthening and Stabilizing the Medicaid Home Care Workforce.”

Response: We believe the commenter is referring to the following language on the second page of the CIB: “State Medicaid Agencies may, with the consent of the individual practitioner, make a payment on behalf of the practitioner to a third party that provides benefits to the workforce such as health insurance, skills training, and other benefits customary for employees (§ 447.10(g)(4)).” The language in the CIB will be revised to align with the language in this final rule.

After consideration of the public comments, we are finalizing our proposal to remove § 447.10(g)(4).

To the extent a state changes its payment as a result of this rule, the state will be required to notify entities of the pending change in payment and update its payment system. We believe the associated burden is exempt from the Paperwork Reduction Act (PRA) in accordance with 5 CFR 1320.3(b)(2). We believe that the time, effort, and financial resources necessary to comply with the aforementioned requirement would be incurred by the state during the normal course of their activities, and therefore, should be considered usual and customary business practices.

As outlined in the proposed rule, we were concerned that § 447.10(g)(4) was insufficiently linked to the exceptions expressly permitted by the statute and violated the statute. As noted in the January 16, 2014 final rule (79 FR 2947, 3001), section 1902(a)(32) of the Act provides for a number of exceptions to the direct payment requirement, but the language does not explicitly or implicitly authorize the agency to create new exceptions. Therefore, the regulatory provision grants permissions that Congress has foreclosed. Accordingly, we removed the regulatory exception at § 447.10(g)(4).

We have examined the impacts of this final 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), and the Congressional Review Act (5 U.S.C. 804(2)).

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 that may: (1) Have 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) create a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in 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). We estimate that this final rule could be “economically significant” as it may have an annual effect on the economy in excess of the $100 million threshold of Executive Order 12866, and hence that this final rule is also a major rule under the Congressional Review Act. However, there was considerable uncertainty around this estimate. As such, the Department invited public comments to help refine this analysis, but no substantive analysis of the economic impact of this rule was provided.

As discussed previously, in the January 16, 2014 final rule (79 FR 2947, 3039), we authorized states to make payments to third parties on behalf of individual providers “for benefits such as health insurance, skills training, and other benefits customary for employees.” We lacked information with which to quantify the potential impacts of this policy on these types of payments as the Department does not formally track the amount of reimbursement that is being reassigned to third parties under the regulatory provision that we are now removing. To offer one example, one likely impact of this rulemaking is that states will stop redirecting a portion of homecare workers' payments to unions for membership dues. We estimated that unions may currently collect as much as $71 million from such assignments. 2 While we have not similarly quantified the amount of other authorized reassignments, such as health insurance, skills training, or other benefits, we estimated that the amount of payments made to third parties on behalf of individual providers for the variety of benefits within the scope of this rulemaking could potentially be in excess of $100 million. While we sought comments on this estimate, and particularly on the type and amount of payments currently being reassigned under the exceptions in § 447.10(g), we did not receive any comments that provided a substantive analysis with regard to the economic significance of this rule.

The potential direct financial impact to providers of this policy change could be affected by many factors, such as the nature and amounts of the types of payments currently being reassigned and decisions made by homecare providers after a final policy takes effect about whether or not to voluntarily make payments to third parties for these types of benefits once the payments are no longer automatically withheld from their reimbursement checks. The Department was unable to quantify these direct financial impacts in the absence of specific information about the types and amount of payments being reassigned. Even where it may have been possible to derive such estimates, such as with the example of union dues, the Department lacks information to reliably estimate the proportion of homecare providers likely to stop making payments versus those likely to continue making payments through alternative means. While we requested comments on the factors that might influence the direct financial impacts to providers and recipients of reassignments of this policy change for the varied types and amount of payments currently being reassigned under the exceptions in § 447.10(g), we did not receive any substantive analysis regarding this issue.

Although states will no longer be able to withhold and redirect portions of a provider's payment to third parties not recognized by the statute, states are expected to maintain provider rates at levels necessary to ensure access to care. It may be the case that some states have set provider rates by taking into account the costs of health and welfare benefits, training costs, and other benefits. This rule does not alter the costs of those benefits to the provider, but may alter the means by which the provider remits payments to cover those costs—that is, instead of the state making payments to third parties on a provider's behalf, the provider would make the payments directly to the third parties. We requested comments, particularly from states, on potential state behavior under the proposed policy; however, we did not receive any substantive analysis or useful information regarding this issue.

As described above, it was difficult for us to conduct a detailed quantitative analysis given this considerable uncertainty and lack of data. However, we believe that without this final rule, states may be engaging in practices that do not comport with section 1902(a)(32) of the Act. We welcomed comments with regard to the quantitative impact of the elimination of states' ability to reassign Medicaid payment for items such as health insurance, skills training and other benefits customary for employees. We also sought comments identifying impacts to states and the federal government as a result of this final rule, including on the assumption that the time, effort and financial resources necessary to comply with the proposed requirement would be incurred by states during the normal course of their activities, and therefore, would not impose additional costs. While commenters provided estimates of the potential impacts of this rule, the estimates only focused on the union dues aspect of the rule and they were not supported by any substantive analysis. For example, one commenter indicated that assignments to unions amounted to $99.2 million in 2017, with cumulative total of $924,174,007 from 2000 to 2017. Another commenter indicated that assignments to unions amount to $150 million in 2017 and totaled approximately $1.4 billion since 2000.

The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5 million in any 1 year. Individual employees and states are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined, and the Secretary certifies, that this final rule will not have a significant economic impact on a substantial number of small entities. The significance on small business entities refers to the potential impact on the providers. Though we received comments that claimed the removal of § 447.10(g)(4) would create an administrative burden for providers, these comments lacked any substantive data or supporting detail. We currently do not possess sufficient data to quantify administrative burden associated with the removal of the regulatory text at § 447.10(g)(4), however, we do not believe the burden would be significant for any provider as any burden associated with this rescission would be due to the provider making arrangements to pay for items that were previously purchased or contributed to via the assignments allowed under § 447.10(g)(4). Those providers with a bank account at a financial institution, or another financial product such as a prepaid debit card, could elect an automatic electronic payment for items previously reassigned by the state. In those instances, the burden cost would be one time and negligible since deductions can be set up through financial institutions and can often easily be set up online. For those providers without a bank account, the burden would be the cost of mailing payments directly to a third party or opening a bank account or an alternative financial product. In those instances, the associated cost of mailing payments each month would be negligible and would not exceed the 3 percent threshold of revenue earned by the vast majority of non-employer entities that render Home Health Care Services under the Census Bureau's North American Industry Classification System (NAICS) 62161, as reflected in Table 1, most of which earn revenue that does not exceed $25,000 per year. For instance, a $10 box of envelopes and $6.60 for 12 stamps equals $17 total per year, which is less than 3 percent of $25,000 or $750. With regard to providers on the low end of the revenue spectrum with revenues of $5,000 per year, 3 percent of their revenue equates to $150, which far exceeds the cost of $17 per year for postage. We also assume that the actual items purchased through third parties (existing union dues, training programs, health premiums) would be unaffected by the regulatory change as § 447.10(g)(4) did not establish new items, but merely allowed for the state to reassign payments for these items.

In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. 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 for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this final rule 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 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. This rule is not expected to have an impact that exceeds the $154 million threshold, and therefore, will not have a significant effect on state, local, or tribal governments or on the private sector.

Executive Order 13132 establishes certain requirements that an agency must meet when it issues 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. Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable.

We considered issuing guidance to require states to formally document consent to reassign portions of a provider's payment. We also considered limiting the items for which provider reassignment could be made. However, we had become concerned that § 447.10(g)(4) was insufficiently linked to the exceptions expressly permitted by the statute and violated the statute. Therefore, we believed that removing the regulatory exception was the best course of action.

As required by OMB Circular A-4 under Executive Order 12866 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf ) in Table 2, we have prepared an accounting statement showing the classification of transfers associated with the provisions in this final rule. The accounting statement is based on estimates provided in this regulatory impact analysis and omits categories of impacts for which partial quantification has not been possible.

Executive Order 13771, entitled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017 and 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.” This final rule is considered an E.O. 13771 regulatory action.

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

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below:

The snapper-grouper fishery in the South Atlantic includes vermilion snapper and is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The South Atlantic Fishery Management Council prepared the FMP. The FMP is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

The commercial ACL (commercial quota) for vermilion snapper in the South Atlantic is divided equally among two 6-month fishing seasons, January through June and July through December. For the January 1 through June 30, 2019, fishing season, the commercial quota is 388,703 lb (176,313 kg), gutted weight, 431,460 lb (195,707 kg), round weight (50 CFR 622.190(a)(4)(i)(D)). On May 9, 2019, upon implementation of the final rule for Abbreviated Framework 2 to the FMP (84 FR 14021; April 9, 2019), the commercial quota for each vermilion snapper 6-month fishing season will be increased to 483,658 lb (219,384 kg), gutted weight; 536,860 lb (243,516 kg), round weight.

Under 50 CFR 622.191(a)(6)(ii), NMFS is required to reduce the commercial trip limit for vermilion snapper from 1,000 lb (454 kg), gutted weight, 1,110 lb (503 kg), round weight, to 500 lb (227 kg), gutted weight, 555 lb (252 kg), round weight, when 75 percent of the applicable commercial quota is reached or projected to be reached, by filing a notification to that effect with the Office of the Federal Register. Based on the best scientific information available, NMFS has determined that the trip limit should be reduced based on the current commercial quota for the January 1 through June 30, 2019, fishing season for vermilion snapper. Additionally, NMFS has determined that 75 percent of the available commercial quota that will be effective on May 9, 2019, for the January 1 through June 30, 2019, fishing season for vermilion snapper will be reached by May 2, 2019. Accordingly, NMFS is reducing the commercial trip limit for vermilion snapper to 500 lb (227 kg), gutted weight, 555 lb (252 kg), round weight, in or from the South Atlantic EEZ at 12:01 a.m., local time, 5 calendar days after this notice files with the Office of the Federal Register. This reduced commercial trip limit will remain in effect until the start of the next fishing season on July 1, 2019, or until the applicable commercial quota is reached and the commercial sector closes, whichever occurs first. The next vermilion snapper season in the South Atlantic will open on July 1, 2019, with a commercial trip limit of 1,000 lb (454 kg), gutted weight; 1,110 lb (503 kg), round weight (50 CFR 622.191(a)(6)(i)).

The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of South Atlantic vermilion snapper and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.191(a)(6)(ii) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

This action responds to the best scientific information available. The Assistant Administrator for Fisheries, NOAA (AA), finds that the need to immediately implement this commercial trip limit reduction constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), because prior notice and opportunity for public comment on this temporary rule is unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule establishing and providing for a reduction in the commercial trip limit has already been subject to notice and comment, and all that remains is to notify the public of the commercial trip limit reduction. Providing prior notice and opportunity for public comment is contrary to the public interest because any delay in reducing the commercial trip limit could result in the commercial quota being exceeded. There is a need to immediately implement this action to protect the vermilion snapper resource, since the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Providing prior notice and opportunity for public comment on this action would require time and increase the likelihood that the commercial sector could exceed its quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

The ocean salmon fisheries in the EEZ off Washington, Oregon, and California are managed under a “framework” FMP. Regulations at 50 CFR part 660, subpart H, provide the mechanism for making preseason and inseason adjustments to the management measures, within limits set by the FMP, by notification in the Federal Register . 50 CFR 660.408, in addition to the FMP, governs the establishment of annual management measures.

The management measures for the 2019 and pre-May 2020 ocean salmon fisheries that are implemented in this final rule were recommended by the Council at its April 9 to 16, 2019, meeting.

The Council announced its annual preseason management process for the 2019 ocean salmon fisheries in the Federal Register on February 11, 2019 (84 FR 3145), and on the Council's website at www.pcouncil.org. NMFS published an additional notice of opportunities to submit public comments on the 2019 ocean salmon fisheries in the Federal Register on February 14, 2019 (84 FR 4049). These notices announced the availability of Council documents, the dates and locations of Council meetings and public hearings comprising the Council's complete schedule of events for determining the annual proposed and final modifications to ocean salmon fishery management measures, and instructions on how to comment on the development of the 2019 ocean salmon fisheries. The agendas for the March and April Council meetings were published in the Federal Register (84 FR 3763, February 13, 2019, and 84 FR 5421, February 21, 2019, respectively) and posted on the Council's website prior to the actual meetings.

In accordance with the FMP, the Council's Salmon Technical Team (STT) and staff economist prepared four reports for the Council, its advisors, and the public. All four reports were made available on the Council's website upon their completion. The first of the reports, “Review of 2018 Ocean Salmon Fisheries,” was prepared in February when the first increment of scientific information necessary for crafting management measures for the 2019 and pre-May 2020 ocean salmon fisheries became available. The first report summarizes biological and socio-economic data for the 2018 ocean salmon fisheries and assesses the performance of the fisheries with respect to the Council's 2018 management objectives as well as providing historical information for comparison. The second report, “Preseason Report I Stock Abundance Analysis and Environmental Assessment Part 1 for 2019 Ocean Salmon Fishery Regulations” (PRE I), provides the 2019 salmon stock abundance projections and analyzes the impacts on the stocks and Council management goals if the 2018 regulations and regulatory procedures were applied to the projected 2019 stock abundances. The completion of PRE I is the initial step in developing and evaluating the full suite of preseason alternatives.

Following completion of the first two reports, the Council met in Vancouver, WA, from March 6 to 12, 2019, to develop 2019 management alternatives for proposal to the public. The Council proposed three alternatives for commercial, recreational, and treaty Indian fisheries management for analysis and public comment. These alternatives consisted of various combinations of management measures designed to ensure that stocks of coho and Chinook salmon meet conservation goals, and to provide for ocean harvests of more abundant stocks. After the March Council meeting, the Council's STT and staff economist prepared a third report, “Preseason Report II Proposed Alternatives and Environmental Assessment Part 2 for 2019 Ocean Salmon Fishery Regulations” (PRE II), which analyzes the effects of the proposed 2019 management alternatives.

The Council sponsored public hearings to receive testimony on the proposed alternatives on March 25, 2019, in Westport, WA, and Coos Bay, OR; and on March 26, 2019, in Ukiah, CA. The States of Washington, Oregon, and California sponsored meetings in various fora that also collected public testimony, which was then presented to the Council by each state's Council representative. The Council also received public testimony at both the March and April meetings and received written comments at the Council office and electronic submissions via the Council's electronic portal.

The Council met from April 9 to 16, 2019, in Rohnert Park, CA, to adopt its final 2019 salmon management recommendations. Following the April Council meeting, the Council's STT and staff economist prepared a fourth report, “Preseason Report III Analysis of Council-Adopted Management Measures for 2019 Ocean Salmon Fisheries” (PRE III), which analyzes the environmental and socio-economic effects of the Council's final recommendations. After the Council took final action on the annual ocean salmon specifications in April, it transmitted the recommended management measures to NMFS, published them in its newsletter, and posted them on the Council website ( www.pcouncil.org ).

The annual salmon management cycle begins May 1 and continues through April 30 of the following year. This final rule is effective on May 6, rather than the traditional May 1 date, because the April Council meeting in 2019 occurred too late to allow NMFS to review, approve, and implement the Council's recommended management measures by May 1. The rule implementing the salmon fishery management measures in 2018 was effective until the effective date of this 2019 rule (84 FR 19005, May 1, 2018). The majority of fisheries recommended by the Council for 2019 begin after May 6, 2019, the effective date for this rule. Fisheries scheduled to begin before May 6, 2019, under the Council's recommended management measures are the commercial and recreational fisheries in the Monterey area (Pigeon Point to U.S./Mexico Border); recreational fisheries between Cape Falcon, OR, and the Oregon/California Border; and treaty Indian troll fisheries. For purposes of analyzing the impacts of these fisheries on individual stocks relative to the applicable objectives in the FMP, Council analysts assumed fisheries prior to May 6, 2019, would be conducted under the 2018 management measures for the May 1 to May 6 time period, consistent with the effective date of the 2018 salmon management measures rule.

The environmental assessment (EA) for this action comprises the Council's documents described above (PRE I, PRE II, and PRE III), providing analysis of environmental and socioeconomic effects under NEPA. The EA and its related Finding of No Significant Impact are posted on the NMFS West Coast Region website ( www.westcoast.fisheries.noaa.gov ).

The FMP requires that the fisheries be shaped to meet escapement-based Annual Catch Limits (ACLs), Endangered Species Act (ESA) consultation requirements, obligations of the Pacific Salmon Treaty (PST) between the U.S. and Canada, and other conservation objectives detailed in the FMP. Because the ocean salmon fisheries are mixed-stock fisheries, this requires “weak stock” management to avoid exceeding limits for the stocks with the most constraining limits. Abundance forecasts for individual salmon stocks can vary significantly from one year to the next; therefore, the stocks that constrain the fishery in one year may differ from those that constrain the fishery in the next. For 2019, limits for five stocks are the most constraining on the fisheries; these are described below.

Fisheries south of Cape Falcon, OR, are limited in 2019 primarily by conservation concerns for Klamath River fall-run Chinook salmon (KRFC), Sacramento River fall-run Chinook salmon (SRFC), and ESA conservation requirements for California Coastal Chinook salmon (CCC). Both KRFC and SRFC stocks were determined in 2018 to be overfished, and the Council is developing rebuilding plans intended to be implemented in 2020. Fisheries north of Cape Falcon are limited primarily to meet ESA conservation requirements for Puget Sound Chinook salmon. Meeting ocean escapement objectives for Upper Columbia River summer-run Chinook salmon will further constrain fisheries north and south of Cape Falcon. The limitations imposed in order to protect these stocks are described below. The alternatives and the Council's recommended management measures for 2019 were designed to avoid exceeding these limitations. The Queets, Juan de Fuca, and Snohomish coho stocks were determined in 2018 to be overfished, and the Council is developing rebuilding plans for these stocks, intended to be implemented in 2020; meeting conservation objectives for these three stocks will not constrain fisheries in 2019.

Klamath River fall-run Chinook salmon (KRFC): Abundance for this non-ESA-listed stock in recent years has been historically low, and the stock is currently overfished based on spawning escapement in 2015, 2016, and 2017. The FMP defines “overfished” status in terms of a three-year geometric mean escapement level and whether it is below the minimum stock size threshold. Forecast abundance for KRFC has improved since the record low in 2017, and in 2019 fisheries will be managed to meet the FMP conservation objective, a maximum sustainable yield spawning escapement goal (S MSY ) of 40,700 natural area spawners. Fisheries south of Cape Falcon, particularly in the Klamath Management Zone (KMZ) from Humbug Mountain, OR to Humboldt South Jetty, CA, will be somewhat constrained to meet this goal, but less so than in 2017 when there was a complete closure of commercial and recreational ocean salmon fishing in the KMZ.

Sacramento River fall-run Chinook salmon (SRFC): SRFC is not an ESA-listed stock; however, abundance for this stock in recent years has been low compared with its conservation objective and this stock is currently overfished based on spawning escapement in 2015, 2016, and 2017. The abundance forecast for SRFC in 2019 is somewhat higher than in the previous three years. However, preseason abundance forecasts for SRFC have tended to be optimistic and exploitation rates underestimated in recent years, when compared to postseason abundance estimates. For example, during the period 2014 through 2018, the preseason abundance forecast for SRFC was, on average, 33 percent higher than the post season abundance estimate, and preseason exploitation rate forecasts averaged 32 percent lower than the postseason exploitation rate estimates. In order to be conservative given the frequent upward bias in the abundance forecasts, underestimation of exploitation rates, and the fact that SRFC are overfished, the Council has recommended fisheries to achieve a spawning escapement of 160,000 which is toward the higher end of the FMP Conservation Objective range (122,000 to 180,000 natural and hatchery adult spawners). Meeting this risk averse spawning escapement goal will constrain fisheries south of Cape Falcon in 2019, but should provide increased fishing opportunity and economic benefit to many fishery dependent communities in Oregon and California when compared to recent years.

Upper Columbia River summer-run Chinook salmon: Abundance forecast of this non-ESA-listed stock in 2019 is 35,900, which is less than half of the average for the past decade, 78,000 (2009-2018). Fisheries north and south of Cape Falcon will be somewhat constrained in 2019 to meet the ocean escapement objective set under the 2018 U.S. v. Oregon Management Agreement.

California Coastal Chinook salmon (CCC)—ESA-listed Threatened: In 2000, NMFS consulted under ESA section 7 on the effects of the ocean salmon fishing conducted in accordance with the FMP on the California Coastal Chinook salmon Evolutionarily Significant Unit (ESU). NMFS concluded in a biological opinion dated April 28, 2000, that these fisheries would jeopardize the continued existence of CCC and provided a reasonable and prudent alternative (RPA) that included limiting annual harvest impacts on age-four KRFC to no more than 16 percent, as a surrogate for CCC. NMFS re-initiated consultation in 2005, and reaffirmed the 2000 RPA; therefore, the 16 percent impact rate on age-four KRFC remains in place as an RPA under ESA section 7. Meeting this impact rate in 2019 will constrain fisheries south of Cape Falcon, particularly in the KMZ from Humbug Mountain, OR to Humboldt South Jetty, CA.

Puget Sound Chinook—ESA-listed Threatened: Impacts on threatened Puget Sound Chinook from Council-managed fisheries are addressed through a 2004 biological opinion. Generally, these impacts are quite low and within the range contemplated in the 2004 opinion. However, because Puget Sound Chinook are also impacted by fisheries in Puget Sound and associated freshwater fisheries (collectively referred to as “inside” fisheries), the Council and NMFS usually consider the impacts of Council-area and inside fisheries on Puget Sound Chinook together, and they base their analysis of the combined fishery impacts on a package of Puget Sound fisheries to which the State of Washington and Indian tribes with treaty rights to fish in Puget Sound have agreed through a negotiation process that runs concurrent with the Council's salmon season planning process. In 2019, fisheries north of Cape Falcon will be constrained to avoid jeopardy to the Puget Sound Chinook salmon ESU, when combined with inside fisheries.

The Southern Resident Killer Whale distinct population segment (SRKW) is listed under the Endangered Species Act as endangered (70 FR 69903, November 18, 2005). NMFS issued a biological opinion analyzing the effects of the ocean salmon fisheries on SRKW in 2009; the opinion concluded that these fisheries are not likely to jeopardize SRKW. Since the 2009 biological opinion was issued, there has been considerable research on the status of SRKW and the importance of the availability of Chinook salmon, their primary prey, to their survival and recovery. NMFS reinitiated consultation on the effects of the ocean salmon fisheries to SRKW on April 12, 2019. To inform the new consultation, the Council formed an ad hoc workgroup including salmon and SRKW experts at its April 2019 meeting and endorsed a schedule for the workgroup culminating in final Council action for adoption of a preferred alternative recommendation on the fishery assessment and any conservation measure(s) or management tool(s) to address the impacts of the fishery to SRKW in November 2019. NMFS would expect to complete the reinitiated consultation in time to inform the 2020 management measures for the fisheries.

Pending completion of the reinitiated consultation, NMFS assessed the potential effects of the 2019 fisheries on SRKW and reported on that assessment at the April Council meeting. The assessment included consideration of all information currently available relating to the impacts of the alternatives the Council was considering for the 2019 ocean salmon fisheries on the overall abundance of Chinook salmon available to SRKW, and specifically on Chinook salmon stocks designated as draft priority stocks for SRKW prey purposes in a 2018 report prepared by NMFS and the Washington Department of Fish and Wildlife. For the assessment, salmon abundance was ranked in “quartiles” of low, middle, and high abundance compared with a 25-year retrospective time period, 1992 through 2016. The assessment determined that the 2019 preseason overall coastal and inland Chinook salmon abundance is likely to fall within the middle range of abundance, when compared to the period 1992 through 2016. The assessment also evaluated fishery reductions in Chinook salmon abundance and estimated that the recommended 2019 management measure would fall in the middle range when compared to 1992 through 2016.

Abundance forecasts in 2019 for 14 of 16 priority prey Chinook salmon stocks contributing to Council-area salmon fisheries are in the middle or upper quartiles of abundance when compared to the period 1992 through 2016. Although two priority stocks (Lower Columbia River and Upper Willamette spring-run Chinook salmon) are anticipated to have low abundance in 2019 relative to previous years, these stocks are minor contributors to the catch of PFMC ocean salmon fisheries, and we do not anticipate the 2019 Council-area salmon fisheries would substantially reduce the availability of those priority Chinook prey stocks to SRKW. Furthermore, the overall forecast composition in 2019 contains a higher proportion of Chinook salmon stocks that are considered to be higher priority than the average composition in the retrospective time period (1992 through 2016). Based on that assessment, NMFS made a determination that, consistent with sections 7(a)(2) and 7(d) of the ESA, this action will not jeopardize any listed species, would not adversely modify designated critical habitat, and will not result in any irreversible or irretrievable commitment of resources that would have the effect of foreclosing the formulation or implementation of any reasonable and prudent alternative measures (NMFS 2019).

Prior to and during the March Council meeting, the Hoopa Valley Tribe, which has salmon fishing rights on the Klamath River, objected to a change to the model input the Council's Salmon Technical Team started using in 2018 to estimate the impacts of ocean fisheries to Southern Oregon/Northern California Coast coho (SONCC coho). The SONCC coho ESU is listed as threatened under the ESA (62 FR 24588, May 6, 1997). In 1999, NMFS consulted on the effects to SONCC coho, and other ESA-listed salmon ESUs, from implementing the Salmon FMP. In our biological opinion, we determined that the fisheries were likely to jeopardize the continued existence of the SONCC coho salmon ESU and developed an RPA that requires fisheries management measures developed under the Salmon FMP achieve an ocean exploitation rate on Rogue/Klamath coho salmon (the indicator for the SONCC coho ESU) of no more than 13 percent. The Tribe submitted comments to NMFS and the Council process, alleging that the change to the model input was inappropriate and triggered reinitiation of consultation. NMFS West Coast Region has responded in writing to the Tribe, and in the Council record, that it does not agree that the change to the model input triggered reinitiation of consultation (Thom 2019). Further, we believe the new model input is consistent with the best available scientific information and allows for more accurate assessment of fishery impacts to SONCC coho. The Council's recommended management measures for 2019 meet the RPA requirements for SONCC coho.

Annual Catch Limits (ACLs) are set for two Chinook salmon stocks, SRFC and KRFC, and one coho stock, Willapa Bay natural coho. The Chinook salmon stocks are indicator stocks for the Central Valley Fall Chinook complex and the Southern Oregon/Northern California Chinook complex, respectively. The Far North Migrating Coastal Chinook complex includes a group of Chinook salmon stocks that are caught primarily in fisheries north of Cape Falcon, Oregon, and other fisheries that occur north of the U.S./Canada border. No ACL is set for these stocks because they are managed subject to provisions of the PST between the U.S. and Canada. Other Chinook salmon stocks caught in fisheries north of Cape Falcon are ESA-listed or hatchery produced, and are managed consistent with ESA consultations or hatchery goals. Willapa Bay natural coho is the only coho stock for which an ACL is set, as the other coho stocks in the FMP are either ESA-listed, hatchery produced, or managed under the PST.

ACLs for salmon stocks are escapement-based, which means they establish a number of adults that must escape the fisheries to return to the spawning grounds. ACLs are set based on the annual potential spawner abundance forecast and a fishing rate reduced to account for scientific uncertainty. For SRFC in 2019, the overfishing limit (OFL) is S OFL = 379,632 (potential spawner abundance forecast) multiplied by 1−F MSY (1−0.78) or 83,519 returning spawners (F MSY is the fishing mortality rate that would result in maximum sustainable yield—MSY). S ABC is 379,632 multiplied by 1−F ABC (1−0.70) (F MSY reduced for scientific uncertainty = 0.70) or 113,890. The S ACL is set equal to S ABC, i.e., 113,890 spawners. The adopted management measures provide for a projected SRFC spawning escapement of 160,159. For KRFC in 2019, S OFL is 87,893 (potential spawner abundance forecast) multiplied by 1−F MSY (1−0.71), or 25,489 returning spawners. S ABC is 87,893 multiplied by 1−F ABC (1−0.68) (F MSY reduced for scientific uncertainty = 0.68) or 28,126 returning spawners. S ACL is set equal to S ABC , i.e., 28,126 spawners. The adopted management measures provide for a projected KRFC spawning escapement of 40,700. For Willapa Bay natural coho in 2019, S OFL = 91,843 (potential spawner abundance forecast) multiplied by 1−F MSY (1−0.74) or 23,879 returning spawners. S ABC is 91,843 multiplied by 1−F ABC (1−0.70) (F MSY reduced for scientific uncertainty = 0.70) or 27,553. S ACL is set equal to S ABC , i.e., 27,553 spawners. The adopted management measures provide for a projected Willapa Bay natural coho ocean escapement of 56,300. In summary, for 2019, projected abundance of the three stocks with ACLs (SRFC, KRFC, and Willapa Bay natural coho), in combination with the constraints for ESA-listed and non-ESA-listed stocks, are expected to result in escapements greater than required to meet the ACLs for all three stocks with defined ACLs.

As explained in more detail above under “Stocks of Concern,” fisheries north and south of Cape Falcon are constrained by impact limits necessary to protect ESA-listed salmon stocks including CCC and Puget Sound Chinook salmon, to meet conservation objectives for non-listed KRFC and SRFC, and to meet the ocean escapement objective for non-listed Upper Columbia River Summer Chinook. For KRFC and SRFC, FMP conservation objectives provide for higher escapement than 2019 ACLs.

The Council invited written comments on developing 2019 salmon management measures in their notice announcing public meetings and hearings (84 FR 3145, February 11, 2019). At its March meeting, the Council adopted three alternatives for 2019 salmon management measures having a range of quotas, season structure, and impacts, from the least restrictive in Alternative I to the most restrictive in Alternative III. These alternatives are described in detail in PRE II. Subsequently, comments were taken at three public hearings held in March, staffed by representatives of the Council and NMFS. The Council received 152 written comments on 2019 ocean salmon fisheries via their electronic portal and an additional 3,142 comments related to salmon management and SRKW. The three public hearings were attended by a total of 106 people; 43 people provided oral comments. Comments came from individual fishers, fishing associations, fish buyers, and processors. Written and oral comments addressed the 2019 management alternatives described in PRE II, and generally expressed preferences for a specific alternative or for particular season structures as well as concern over economic impacts of restricting fisheries for conservation of weak stocks. All comments were included in the Council's briefing book for their April 2019 meeting and were considered by the Council, which includes a representative from NMFS, in developing the recommended management measures transmitted to NMFS on April 24, 2019. In addition to comments collected at the public hearings and those submitted directly to the Council, several people provided oral comments at the April 2019 Council meeting. NMFS also invited comments to be submitted directly to the Council or to NMFS, via the Federal Rulemaking Portal ( www.regulations.gov ) in a notice (84 FR 4049, February 14, 2019).

Comments on alternatives for fisheries north of Cape Falcon. For fisheries north of Cape Falcon, Alternative I was favored by most commercial and recreational fishery commenters at the public hearing in Westport, WA. A variety of specific comments were made on a variety topics such as season lengths and landing restrictions. The Council adopted an alternative that is within the range of the alternatives considered.

Comments on alternatives for fisheries south of Cape Falcon. Comments on the alternatives for fisheries south of Cape Falcon tended to support a blend of Alternatives I and II. The importance of economic impacts to fishers and their communities was mentioned in several comments. Two people testified at the Council's April meeting on their support for the commercial Point Reyes to Point San Pedro (Fall Area Target Zone) fishery in Alternative I. Public comment was also provided at the April meeting supporting a fishery regime that would result in a spawning escapement for SRFC of 160,000. The Council adopted an alternative within the range of alternatives considered, including the Fall Area Target Zone fishery and a spawning escapement for SRFC of 160,000.

Comments on incidental halibut retention in the commercial salmon fisheries. At its March meeting, the Council identified three alternatives for landing limits for incidentally caught halibut that are retained in the salmon troll fishery. The alternatives included: (1) A range of trip limits for halibut possession and landing, (2) two alternatives for the ratio of halibut to Chinook salmon landed in a trip, and (3) the number of halibut that could be retained prior to catching any Chinook salmon. There were few comments received on the halibut alternatives, focused on ensuring the fishery was managed to allow access to the entire IPHC allocation. The Council adopted an alternative for incidental halibut retention that is within the range of the alternatives considered.

Comments from federally recognized tribes, including treaty tribe representatives. At its March and April meetings, the Council heard testimony from members of several federally recognized tribes including tribes with treaty rights for salmon harvest; additional comments were submitted in writing. There was strong concern expressed by all tribal representatives about environmental conditions that are deleterious to salmon survival. Comments were also made regarding predation on salmonids by pinnipeds and double-crested cormorants, especially in the Columbia River and the importance of providing salmon passage above dams on the Upper Columbia River.

Comments on SRKW. At the Westport public hearing, the April Council meeting, and through electronic submissions, there were comments in favor of 2019 ocean salmon management that increases the abundance and availability of Chinook salmon for SRKW, including the recommendation of providing a specific allocation of Chinook salmon for the whales. After considering information provided by NMFS on the potential effects of the 2019 fishery alternatives to SRKW, the Council recommended management measures that do not provide additional measures to ensure prey abundance beyond what is needed to ensure all limits and objectives required for salmon stocks are met.

The Council, including the NMFS representative, took all of these comments into consideration. The Council's final recommendation generally includes aspects of all three alternatives, while taking into account the best available scientific information and ensuring that fisheries are consistent with impact limits for ESA-listed stocks, ACLs, PST obligations, other ESA requirements, and tribal fishing rights.

The Council's recommended ocean harvest levels and management measures for the 2019 fisheries are designed to apportion the burden of protecting the weak stocks identified and discussed in PRE I equitably among ocean fisheries and to allow maximum harvest of natural and hatchery runs surplus to inside fishery and spawning needs. NMFS finds the Council's recommendations to be responsive to the goals of the FMP, the requirements of the resource, and the socioeconomic factors affecting resource users. The recommendations are consistent with the requirements of the MSA, U.S. obligations to Indian tribes with federally recognized fishing rights, and U.S. international obligations regarding Pacific salmon. The Council's recommended management measures are consistent with the proposed actions analyzed in NMFS' ESA consultations for those ESA-listed salmon species that may be affected by Council fisheries, and are otherwise consistent with ESA obligations. Accordingly, NMFS, through this final rule, approves and implements the Council's recommendations.

North of Cape Falcon, 2019 management measures for non-Indian commercial troll and recreational fisheries have somewhat decreased quotas for Chinook salmon compared to 2018; coho quotas are substantially higher than in 2018.

Quotas for the 2019 treaty-Indian commercial troll fishery North of Cape Falcon are 35,000 Chinook salmon and 55,000 coho in ocean management areas and Washington State Statistical Area 4B combined. These quotas provide somewhat fewer Chinook salmon and substantially more coho than in 2018. The treaty-Indian commercial fisheries include a May and June fishery with a quota of 17,500 Chinook, and a July and August fishery, with quotas of 17,500 Chinook and 55,000 coho.

South of Cape Falcon, commercial troll and recreational fishery management measures are are shaped to meet conservation and management goals for KRFC and SRFC spawning escapement and fishery impact limitations for CCC. Commercial and recreational fisheries south of Cape Falcon will be directed primarily at Chinook salmon; commercial fisheries south of Cape Falcon will have no coho retention.

The timing of the March and April Council meetings makes it impracticable for the Council to recommend fishing seasons that begin before May 1 of the same year. Therefore, this action also establishes the 2020 fishing seasons that open earlier than May 1. The Council recommended, and NMFS concurs, that the commercial season off Oregon from Cape Falcon to the Oregon/California border, the commercial season off California from Horse Mountain to Point Arena, the recreational season off Oregon from Cape Falcon to Humbug Mountain, and the recreational season off California from Horse Mountain to the U.S./Mexico border will open in 2020 as indicated in the “Season Description” section of this document. At the March 2020 meeting, NMFS may take inseason action, if recommended by the Council or the states, to adjust the commercial and recreational seasons prior to May 1 in the areas off Oregon and California.

The following sections set out the management regime for the ocean salmon fishery. Open seasons and days are described in Sections 1, 2, and 3 of the 2019 management measures. Inseason closures in the commercial and recreational fisheries are announced on the NMFS hotline and through the U.S. Coast Guard (USCG) Notice to Mariners as described in Section 6. Other inseason adjustments to management measures are also announced on the hotline and through the Notice to Mariners. Inseason actions will also be published in the Federal Register as soon as practicable.

The following are the management measures recommended by the Council, approved, and implemented here for 2019 and, as specified, for 2020.

Parts A, B, and C of this section contain restrictions that must be followed for lawful participation in the fishery. Part A identifies each fishing area and provides the geographic boundaries from north to south, the open seasons for the area, the salmon species allowed to be caught during the seasons, and any other special restrictions effective in the area. Part B specifies minimum size limits. Part C specifies special requirements, definitions, restrictions, and exceptions.

May 6 through the earlier of June 28 or 13,200 Chinook, no more than 5,000 of which may be caught in the area between the U.S./Canada border and the Queets River and no more than 1,800 of which may be caught in the area between Leadbetter Point and Cape Falcon (C.8). Open seven days per week (C.1). In the area between the U.S./Canada border and the Queets River: During the period May 6 through May 15 the landing and possession limit is 100 Chinook per vessel for the open period, during the period May 16 through June 28 the landing and possession limit is 50 Chinook per vessel per landing week (Thursday through Wednesday) (C.1, C.6). In the area between Leadbetter Point and Cape Falcon: During the period May 6 through May 15 the landing and possession limit is 100 Chinook per vessel for the open period, during the period May 16 through June 28 the landing and possession limit is 50 Chinook per vessel per landing week (Thursday through Wednesday) (C.1, C.6). All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 28 inches total length (B). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).

When it is projected that approximately 60 percent of the overall Chinook guideline has been landed, or approximately 60 percent of the Chinook subarea guideline has been landed in the area between the U.S./Canada border and the Queets River, or approximately 60 percent of the Chinook subarea guideline has been landed in the area between Leadbetter Point and Cape Falcon, inseason action will be considered to ensure the guideline is not exceeded.

July 1 through the earlier of September 30 or 13,050 Chinook or 30,400 marked coho (C.8). Open seven days per week. All salmon may be retained, except no chum retention north of Cape Alava, Washington, in August and September (C.4, C.7). Chinook minimum size limit of 28 inches total length. Coho minimum size limit of 16 inches total length (B, C.1). All coho must be marked with a healed adipose fin clip (C.8.d). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Landing and possession limit of 150 marked coho per vessel per landing week (Thursday through Wednesday) (C.1).

For all commercial troll fisheries north of Cape Falcon: Mandatory closed areas include: Salmon Troll Yelloweye Rockfish Conservation Area (YRCA), Cape Flattery and Columbia Control Zones, and, beginning August 12, Grays Harbor Control Zone (C.5). Vessels must land and deliver their salmon within 24 hours of any closure of this fishery. Vessels fishing or in possession of salmon north of Leadbetter Point must land and deliver all species of fish in a Washington port and must possess a Washington troll license. Vessels may not land fish east of the Sekiu River or east of the Megler-Astoria Bridge. For delivery to Washington ports south of Leadbetter Point, vessels must notify the Washington Department of Fish and Wildlife at 360-249-1215 prior to crossing the Leadbetter Point line with area fished, total Chinook, coho, and halibut catch aboard, and destination with approximate time of delivery. During any single trip, only one side of the Leadbetter Point line may be fished (C.11). Vessels fishing or in possession of salmon south of Leadbetter Point must land and deliver all species of fish within the area and south of Leadbetter Point, except that Oregon permitted vessels may also land all species of fish in Garibaldi, OR. Under state law, vessels must report their catch on a state fish receiving ticket. Oregon State regulations require all fishers landing salmon into Oregon from any fishery between Leadbetter Point, WA, and Cape Falcon, OR, to notify Oregon Department of Fish and Wildlife (ODFW) within one hour of delivery or prior to transport away from the port of landing by either calling 541-867-0300 ext. 271 or sending notification via email to nfalcon.trollreport@state.or.us. Notification shall include vessel name and number, number of salmon by species, port of landing and location of delivery, and estimated time of delivery. Inseason actions may modify harvest guidelines in later fisheries to achieve or prevent exceeding the overall allowable troll harvest impacts (C.8). Vessels in possession of salmon north of the Queets River may not cross the Queets River line without first notifying WDFW at 360-249-1215 with area fished, total Chinook, coho, and halibut catch aboard, and destination. Vessels in possession of salmon south of the Queets River may not cross the Queets River line without first notifying WDFW at 360-249-1215 with area fished, total Chinook, coho, and halibut catch aboard, and destination.

April 20-30;

May 6-30;

June 1-August 29;

September 1-October 31 (C.9.a).

Open seven days per week. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). All vessels fishing in the area must land their fish in the state of Oregon. See gear restrictions and definitions (C.2, C.3). Beginning September 1, no more than 75 Chinook allowed per vessel per landing week (Thursday through Wednesday).

In 2020, the season will open March 15 for all salmon except coho. Chinook minimum size limit of 28 inches total length. Gear restrictions same as in 2019. This opening could be modified following Council review at its March 2020 meeting.

April 20-30;

May 6-30;

June 1 through the earlier of June 30, or a 3,200 Chinook quota;

July 1 through the earlier of July 31, or a 2,500 Chinook quota;

August 1 through the earlier of August 29, or a 1,200 Chinook quota; (C.9.a).

Open seven days per week. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Prior to June 1, all salmon caught in this area must be landed and delivered in the state of Oregon. June 1 through August 29 weekly landing and possession limit of 50 Chinook per vessel per landing week (Thursday through Wednesday). Any remaining portion of Chinook quotas may be transferred inseason on an impact neutral basis to the next open quota period (C.8.b). All vessels fishing in this area during June, July, and August must land and deliver all salmon within this area or into Port Orford, within 24 hours of any closure of this fishery, and prior to fishing outside of this area. For all quota managed seasons (June, July, and August), Oregon state regulations require fishers to notify ODFW within one hour of landing and prior to transport away from the port of landing by calling 541-867-0300 extension 252 or sending notification via email to kmzor.trollreport@state.or.us, with vessel name and number, number of salmon by species, location of delivery, and estimated time of delivery.

In 2020, the season will open March 15 for all salmon except coho. Chinook minimum size limit of 28 inches total length. Gear restrictions same as in 2019. This opening could be modified following Council review at its March 2020 meeting.

June 1 through the earlier of June 30, or a 2,500 Chinook quota;

July 1 through the earlier of July 30, or a 2,500 Chinook quota;

August 2 through the earlier of August 31, or a 2,000 Chinook quota (C.9.b).

Open five days per week (Friday through Tuesday). All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). Landing and possession limit of 20 Chinook per vessel per day (C.8.f). Any remaining portion of Chinook quotas may be transferred inseason on an impact neutral basis to the next open quota period (C.8.b). All fish caught in this area must be landed within the area, within 24 hours of any closure of the fishery, and prior to fishing outside the area (C.10). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Klamath Control Zone closed (C.5.e). See California State regulations for additional closures adjacent to the Smith and Klamath Rivers.

Closed.

For all commercial fisheries south of Cape Falcon: when the fishery is closed between the Oregon/California border and Humbug Mountain and open to the south, vessels with fish on board caught in the open area off California may seek temporary mooring in Brookings, OR, prior to landing in California, only if such vessels first notify the Chetco River Coast Guard Station via VHF channel 22A between the hours of 0500 and 2200 and provide the vessel name, number of fish on board, and estimated time of arrival (C.6).

June 4-30;

July 11-31;

August 1-28 (C.9.b).

Open seven days per week. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). All salmon must be landed in California. All salmon caught in the area must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). When the California KMZ fishery is open, all fish caught in the area must be landed south of Horse Mountain until the California KMZ fishery has been closed for at least 24 hours (C.6).

In 2020, the season will open April 16-30 for all salmon except coho, with a 27 inch Chinook minimum size limit and the same gear restrictions as in 2019. All salmon caught in the area must be landed in the area. This opening could be modified following Council review at its March 2020 meeting.

May 16-31;

June 4-30;

July 11-31;

August 1-28;

September 1-30 (C.9.b).

Open seven days per week. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). All salmon must be landed in California. All salmon caught in the area prior to September 1 must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). When the California KMZ fishery is open, all fish caught in the area must be landed south of Horse Mountain until the California KMZ fishery has been closed for at least 24 hours (C.6).

October 1-4, 7-11, 14-15.

Open five days per week, Monday through Friday. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). All salmon caught in this area must be landed between Point Arena and Pigeon Point (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).

May 1-31;

June 4-30;

July 11-31 (C.9.b).

Open seven days per week. All salmon except coho may be retained (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). All fish must be landed in California. All salmon caught in the area must be landed and offloaded no later than 11:59 p.m., August 5 (C.6). When the California KMZ fishery is open, all fish caught in the area must be landed south of Horse Mountain until the California KMZ fishery has been closed for at least 24 hours (C.6).

For all commercial troll fisheries in California: California State regulations require all salmon be made available to a California Department of Fish and Wildlife (CDFW) representative for sampling immediately at port of landing. Any person in possession of a salmon with a missing adipose fin, upon request by an authorized agent or employee of the CDFW, shall immediately relinquish the head of the salmon to the state (California Fish and Game Code § 8226).

All salmon on board a vessel must meet the minimum size, landing/possession limit, or other special requirements for the area being fished and the area in which they are landed if the area is open or has been closed less than 48 hours for that species of salmon. Salmon may be landed in an area that has been closed for a species of salmon more than 48 hours only if they meet the minimum size, landing/possession limit, or other special requirements for the area in which they were caught. Salmon may not be filleted prior to landing.

Any person who is required to report a salmon landing by applicable state law must include on the state landing receipt for that landing both the number and weight of salmon landed by species. States may require fish landing/receiving tickets be kept on board the vessel for 90 days or more after landing to account for all previous salmon landings.

a. Salmon may be taken only by hook and line using single point, single shank, barbless hooks.

b. Cape Falcon, OR, to the Oregon/California border: no more than 4 spreads are allowed per line.

c. Oregon/California border to U.S./Mexico border: no more than 6 lines are allowed per vessel, and barbless circle hooks are required when fishing with bait by any means other than trolling.

Trolling defined: Fishing from a boat or floating device that is making way by means of a source of power, other than drifting by means of the prevailing water current or weather conditions.

Troll fishing gear defined: One or more lines that drag hooks behind a moving fishing vessel engaged in trolling. In that portion of the fishery management area off Oregon and Washington, the line or lines must be affixed to the vessel and must not be intentionally disengaged from the vessel at any time during the fishing operation.

Spread defined: A single leader connected to an individual lure and/or bait.

Circle hook defined: A hook with a generally circular shape and a point which turns inward, pointing directly to the shank at a 90° angle.

a. Except as provided under C.4.b below, it is unlawful for a vessel to have troll or recreational gear in the water while in any area closed to fishing for a certain species of salmon, while possessing that species of salmon; however, fishing for species other than salmon is not prohibited if the area is open for such species, and no salmon are in possession.

b. When Genetic Stock Identification (GSI) samples will be collected in an area closed to commercial salmon fishing, the scientific research permit holder shall notify NOAA Office of Law Enforcement, USCG, CDFW, WDFW, and Oregon State Police at least 24 hours prior to sampling and provide the following information: The vessel name, date, location, and time collection activities will be done. Any vessel collecting GSI samples in a closed area shall not possess any salmon other than those from which GSI samples are being collected. Salmon caught for collection of GSI samples must be immediately released in good condition after collection of samples.

a. Cape Flattery Control Zone —The area from Cape Flattery (48°23′00″ N lat.) to the northern boundary of the U.S. EEZ; and the area from Cape Flattery south to Cape Alava (48°10′00″ N lat.) and east of 125°05′00″ W long.

b. Salmon Troll YRCA (50 CFR 660.70(c)) —The area in Washington Marine Catch Area 3 from 48°00.00′ N lat.; 125°14.00′ W long. to 48°02.00′ N lat.; 125°14.00′ W long. to 48°02.00′ N lat.; 125°16.50′ W long. to 48°00.00′ N lat.; 125°16.50′ W long. and connecting back to 48°00.00′ N lat.; 125°14.00′ W long.

c. Grays Harbor Control Zone —The area defined by a line drawn from the Westport Lighthouse (46°53′18″ N lat., 124° 07′01″ W long.) to Buoy #2 (46°52′42″ N lat., 124°12′42″ W long.) to Buoy #3 (46°55′00″ N lat., 124°14′48″ W long.) to the Grays Harbor north jetty (46°55′36″ N lat., 124°10′51″ W long.).

d. Columbia Control Zone —An area at the Columbia River mouth, bounded on the west by a line running northeast/southwest between the red lighted Buoy #4 (46°13′35″ N lat., 124°06′50″ W long.) and the green lighted Buoy #7 (46°15′09′ N lat., 124°06′16″ W long.); on the east, by the Buoy #10 line which bears north/south at 357° true from the south jetty at 46°14′00″ N lat.,124°03′07″ W long. to its intersection with the north jetty; on the north, by a line running northeast/southwest between the green lighted Buoy #7 to the tip of the north jetty (46°15′48″ N lat., 124°05′20″ W long.) and then along the north jetty to the point of intersection with the Buoy #10 line; and, on the south, by a line running northeast/southwest between the red lighted Buoy #4 and tip of the south jetty (46°14′03″ N lat., 124°04′05″ W long.), and then along the south jetty to the point of intersection with the Buoy #10 line.

e. Klamath Control Zone —The ocean area at the Klamath River mouth bounded on the north by 41°38′48″ N lat. (approximately 6 nautical miles north of the Klamath River mouth); on the west by 124°23′00″ W long. (approximately 12 nautical miles off shore); and on the south by 41°26′48″ N lat. (approximately 6 nautical miles south of the Klamath River mouth).

If prevented by unsafe weather conditions or mechanical problems from meeting special management area landing restrictions, vessels must notify the USCG and receive acknowledgment of such notification prior to leaving the area. This notification shall include the name of the vessel, port where delivery will be made, approximate number of salmon (by species) on board, the estimated time of arrival, and the specific reason the vessel is not able to meet special management area landing restrictions.

In addition to contacting the USCG, vessels fishing south of the Oregon/California border must notify CDFW within one hour of leaving the management area by calling 800-889-8346 and providing the same information as reported to the USCG. All salmon must be offloaded within 24 hours of reaching port.

During authorized periods, the operator of a vessel that has been issued an incidental halibut harvest license by the International Pacific Halibut Commission (IPHC) may retain Pacific halibut caught incidentally in Area 2A while trolling for salmon. Halibut retained must be no less than 32 inches in total length, measured from the tip of the lower jaw with the mouth closed to the extreme end of the middle of the tail, and must be landed with the head on. When halibut are caught and landed incidental to commercial salmon fishing by an IPHC license holder, any person who is required to report the salmon landing by applicable state law must include on the state landing receipt for that landing both the number of halibut landed, and the total dressed, head-on weight of halibut landed, in pounds, as well as the number and species of salmon landed.

License applications for incidental harvest must be obtained from the IPHC (phone: 206-634-1838). Applicants must apply prior to mid-March 2020 for 2020 permits (exact date to be set by the IPHC in early 2020). Incidental harvest is authorized only during April, May, and June of the 2019 troll seasons and after June 30 in 2019 if quota remains and if announced on the NMFS hotline (phone: 800-662-9825 or 206-526-6667). WDFW, ODFW, and CDFW will monitor landings. If the landings are projected to exceed the IPHC's 44,899 pound preseason allocation or the total Area 2A non-Indian commercial halibut allocation, NMFS will take inseason action to prohibit retention of halibut in the non-Indian salmon troll fishery.

May 1, 2019, until the end of the 2019 salmon troll season, and April 1-30, 2020, license holders may land or possess no more than one Pacific halibut per each two Chinook, except one Pacific halibut may be possessed or landed without meeting the ratio requirement, and no more than 35 halibut may be possessed or landed per trip. Pacific halibut retained must be no less than 32 inches in total length (with head on). IPHC license holders must comply with all applicable IPHC regulations.

Incidental Pacific halibut catch regulations in the commercial salmon troll fishery adopted for 2019, prior to any 2019 inseason action, will be in effect when incidental Pacific halibut retention opens on April 1, 2020, unless otherwise modified by inseason action at the March 2020 Council meeting.

a. “C-shaped” YRCA is an area to be voluntarily avoided for salmon trolling. NMFS and the Council request salmon trollers voluntarily avoid this area in order to protect yelloweye rockfish. The area is defined in the Pacific Council Halibut Catch Sharing Plan in the North Coast subarea (Washington marine area 3), with the following coordinates in the order listed:

48°18′ N lat.; 125°18′ W long.;

48°18′ N lat.; 124°59′ W long.;

48°11′ N lat.; 124°59′ W long.;

48°11′ N lat.; 125°11′ W long.;

48°04′ N lat.; 125°11′ W long.;

48°04′ N lat.; 124°59′ W long.;

48°00′ N lat.; 124°59′ W long.;

48°00′ N lat.; 125°18′ W long.;

and connecting back to 48°18′ N lat.; 125°18′ W long.

In addition to standard inseason actions or modifications already noted under the season description, the following inseason guidance applies:

a. Chinook remaining from the May through June non-Indian commercial troll harvest guideline north of Cape Falcon may be transferred to the July through September harvest guideline if the transfer would not result in exceeding preseason impact expectations on any stocks.

b. Chinook remaining from the May, June, and/or July non-Indian commercial troll quotas in the Oregon or California KMZ may be transferred to the Chinook quota for the next open quota period if the transfer would not result in exceeding preseason impact expectations on any stocks.

c. NMFS may transfer salmon between the recreational and commercial fisheries north of Cape Falcon if there is agreement among the areas' representatives on the Salmon Advisory Subpanel (SAS), and if the transfer would not result in exceeding preseason impact expectations on any stocks.

d. At the March 2020 meeting, the Council will consider inseason recommendations for special regulations for any experimental fisheries (proposals must meet Council protocol and be received in November 2019).

e. If retention of unmarked coho (adipose fin intact) is permitted by inseason action, the allowable coho quota will be adjusted to ensure preseason projected impacts on all stocks is not exceeded.

f. Landing limits may be modified inseason to sustain season length and keep harvest within overall quotas.

Consistent with Council management objectives:

a. The State of Oregon may establish additional late-season fisheries in state waters.

b. The State of California may establish limited fisheries in selected state waters. Check state regulations for details.

C.10. For the purposes of California Fish and Game Code, Section 8232.5, the definition of the KMZ for the ocean salmon season shall be that area from Humbug Mountain, Oregon, to Horse Mountain, California.

C.11. Latitudes for geographical reference of major landmarks along the West Coast are listed in Section 5 of this rule.

Parts A, B, and C of this section contain restrictions that must be followed for lawful participation in the fishery. Part A identifies each fishing area and provides the geographic boundaries from north to south, the open seasons for the area, the salmon species allowed to be caught during the seasons, and any other special restrictions effective in the area. Part B specifies minimum size limits. Part C specifies special requirements, definitions, restrictions and exceptions.

June 22 through earlier of September 30 or 16,600 marked coho subarea quota, with a subarea guideline of 5,200 Chinook (C.5).

Open seven days per week. All salmon may be retained, except no chum beginning August 1; two salmon per day. All coho must be marked with a healed adipose fin clip (B, C.1). Beginning August 1, Chinook non-retention east of the Bonilla-Tatoosh line (C.4.a) during Council managed ocean fishery. See gear restrictions and definitions (C.2, C.3). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational total allowable catches (TACs) for north of Cape Falcon (C.5).

June 22 through earlier of September 30, or 4,050 marked coho subarea quota with a subarea guideline of 1,100 Chinook (C.5).

October 1 through earlier of October 13, or 100 marked coho quota, or 100 Chinook quota (C.5) in the area north of 47°50′00″ N lat. and south of 48°00′00″ N lat.

Open seven days per week. All salmon may be retained; two salmon per day. All coho must be marked with a healed adipose fin clip (C.1). See gear restrictions and definitions (B, C.2, C.3). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).

June 22 through earlier of September 30 or 59,050 marked coho subarea quota, with a subarea guideline of 12,700 Chinook (C.5).

Open seven days per week. All salmon may be retained; two salmon per day, no more than one of which may be a Chinook. All coho must be marked with a healed adipose fin clip (B, C.1). See gear restrictions and definitions (C.2, C.3). Grays Harbor Control Zone closed beginning August 12 (C.4.b). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).

June 22 through earlier of September 30 or 79,800 marked coho subarea quota, with a subarea guideline of 7,150 Chinook (C.5).

Open seven days per week. All salmon may be retained; two salmon per day, no more than one of which may be a Chinook. All coho must be marked with a healed adipose fin clip (B, C.1). See gear restrictions and definitions (C.2, C.3). Columbia Control Zone closed (C.4.c). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).

March 15 through October 31 (C.6), except as provided below during the all-salmon mark-selective coho fishery and the non-mark-selective coho fishery (C.5).

Open seven days per week. All salmon except coho may be retained; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).

In 2020, the season will open March 15 for all salmon except coho; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2019 (C.2, C.3). This opening could be modified following Council review at the March 2020 Council meeting.

Mark-selective coho fishery: June 22 through the earlier of August 25, or 90,000 marked coho quota (C.6). Open seven days per week. All salmon may be retained; two salmon per day. All retained coho must be marked with a healed adipose fin clip (C.1). See minimum size limits (B). See gear restrictions and definitions (C.2, C.3). Any remainder of the mark-selective coho quota may be transerred inseason on an impact neutral basis to the non-selective coho quota from Cape Falcon to Humbug Mountain (C.5).

Non-mark-selective coho fishery: August 31-September 30, open each Friday through Sunday, or 9,000 non-mark-selective coho quota (C.6). Open days may be modified inseason (C.5). All salmon may be retained, two salmon per day (C.1). See minimum size limits (B). See gear restrictions and definitions (C.2, C.3).

May 25-September 2 (C.6).

Open seven days per week. All salmon except coho may be retained, except as described above in the Cape Falcon to Oregon/California border all-salmon mark-selective coho fishery. Two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).

For recreational fisheries from Cape Falcon to Humbug Mountain: Fishing in the Stonewall Bank YRCA restricted to trolling only on days the all depth recreational halibut fishery is open (call the halibut fishing hotline 800-662-9825 for specific dates) (C.3.b, C.4.d).

May 25-September 2 (C.6).

Open seven days per week. All salmon except coho may be retained; two salmon per day (C.1). Chinook minimum size limit of 20 inches total length (B). See gear restrictions and definitions (C.2, C.3). Klamath Control Zone closed in August (C.4.e). See California State regulations for additional closures adjacent to the Smith, Eel, and Klamath Rivers.

April 13-30;

May 18-October 31 (C.6).

Open seven days per week. All salmon except coho may be retained; two salmon per day (C.1). Chinook minimum size limit of 20 inches total length (B). See gear restrictions and definitions (C.2, C.3).

In 2020, season opens April 4 for all salmon except coho, two salmon per day (C.1). Chinook minimum size limit of 20 inches total length (B); and the same gear restrictions as in 2019 (C.2, C.3). This opening could be modified following Council review at the March 2020 Council meeting.

April 13-30;

May 18-October 31 (C.6).

Open seven days per week. All salmon except coho may be retained; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length through April 30, then 20 inches thereafter (B). See gear restrictions and definitions (C.2, C.3).

In 2020, season opens April 4 for all salmon except coho; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2019 (C.2, C.3). This opening could be modified following Council review at the March 2020 Council meeting.

April 6-August 28 (C.6).

Open seven days per week. All salmon except coho may be retained; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).

In 2020, season opens April 4 for all salmon except coho; two salmon per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2019 (C.2, C.3). This opening could be modified following Council review at the March 2020 Council meeting.

California State regulations require all salmon be made available to a CDFW representative for sampling immediately at port of landing. Any person in possession of a salmon with a missing adipose fin, upon request by an authorized agent or employee of the CDFW, shall immediately relinquish the head of the salmon to the state (California Code of Regulations Title 14 Section 1.73).

All salmon on board a vessel must meet the minimum size or other special requirements for the area being fished and the area in which they are landed if that area is open. Salmon may be landed in an area that is closed only if they meet the minimum size or other special requirements for the area in which they were caught. Salmon may not be filleted prior to landing.

Ocean Boat Limits: Off the coast of Washington, Oregon, and California, each fisher aboard a vessel may continue to use angling gear until the combined daily limits of Chinook and coho salmon for all licensed and juvenile anglers aboard have been attained (additional state restrictions may apply).

Salmon may be taken only by hook and line using barbless hooks. All persons fishing for salmon, and all persons fishing from a boat with salmon on board, must meet the gear restrictions listed below for specific areas or seasons.

a. U.S./Canada border to Point Conception, California: No more than one rod may be used per angler; and no more than two single point, single shank barbless hooks are required for all fishing gear.

b. Horse Mountain, California, to Point Conception, California: Single point, single shank, barbless circle hooks (see gear definitions below) are required when fishing with bait by any means other than trolling, and no more than two such hooks shall be used. When angling with two hooks, the distance between the hooks must not exceed five inches when measured from the top of the eye of the top hook to the inner base of the curve of the lower hook, and both hooks must be permanently tied in place (hard tied). Circle hooks are not required when artificial lures are used without bait.

a. Recreational fishing gear defined: Off Oregon and Washington, angling tackle consists of a single line that must be attached to a rod and reel held by hand or closely attended; the rod and reel must be held by hand while playing a hooked fish. No person may use more than one rod and line while fishing off Oregon or Washington. Off California, the line must be attached to a rod and reel held by hand or closely attended; weights directly attached to a line may not exceed four pounds (1.8 kg). While fishing off California north of Point Conception, no person fishing for salmon, and no person fishing from a boat with salmon on board, may use more than one rod and line. Fishing includes any activity which can reasonably be expected to result in the catching, taking, or harvesting of fish.

b. Trolling defined: Angling from a boat or floating device that is making way by means of a source of power, other than drifting by means of the prevailing water current or weather conditions.

c. Circle hook defined: A hook with a generally circular shape and a point which turns inward, pointing directly to the shank at a 90° angle.

a. The Bonilla-Tatoosh Line: A line running from the western end of Cape Flattery to Tatoosh Island Lighthouse (48°23′30″ N lat., 124°44′12″ W long.) to the buoy adjacent to Duntze Rock (48°24′37″ N lat., 124°44′37″ W long.), then in a straight line to Bonilla Point (48°35′39″ N lat., 124°42′58″ W long.) on Vancouver Island, British Columbia.

b. Grays Harbor Control Zone—The area defined by a line drawn from the Westport Lighthouse (46°53′18″ N lat., 124°07′01″ W long.) to Buoy #2 (46°52′42″ N lat., 124°12′42″ W long.) to Buoy #3 (46°55′00″ N lat., 124°14′48″ W long.) to the Grays Harbor north jetty (46°55′36″ N lat., 124°10′51″ W long.).

c. Columbia Control Zone: An area at the Columbia River mouth, bounded on the west by a line running northeast/southwest between the red lighted Buoy #4 (46°13′35″ N lat., 124°06′50″ W long.) and the green lighted Buoy #7 (46°15′09′ N lat., 124°06′16″ W long.); on the east, by the Buoy #10 line which bears north/south at 357° true from the south jetty at 46°14′00″ N lat., 124°03′07″ W long. to its intersection with the north jetty; on the north, by a line running northeast/southwest between the green lighted Buoy #7 to the tip of the north jetty (46°15′48″ N lat., 124°05′20″ W long.) and then along the north jetty to the point of intersection with the Buoy #10 line; and on the south, by a line running northeast/southwest between the red lighted Buoy #4 and tip of the south jetty (46°14′03″ N lat., 124°04′05″ W long.), and then along the south jetty to the point of intersection with the Buoy #10 line.

d. Stonewall Bank YRCA: The area defined by the following coordinates in the order listed:

44°37.46′ N lat.; 124°24.92′ W long.

44°37.46′ N lat.; 124°23.63′ W long.

44°28.71′ N lat.; 124°21.80′ W long.

44°28.71′ N lat.; 124°24.10′ W long.

44°31.42′ N lat.; 124°25.47′ W long.

and connecting back to 44°37.46′ N lat.; 124°24.92′ W long.

e. Klamath Control Zone: The ocean area at the Klamath River mouth bounded on the north by 41°38′48″ N lat. (approximately 6 nautical miles north of the Klamath River mouth); on the west by 124°23′00″ W long. (approximately 12 nautical miles off shore); and, on the south by 41°26′48″ N lat. (approximately 6 nautical miles south of the Klamath River mouth).

Regulatory modifications may become necessary inseason to meet preseason management objectives such as quotas, harvest guidelines, and season duration. In addition to standard inseason actions or modifications already noted under the season description, the following inseason guidance applies:

a. Actions could include modifications to bag limits, or days open to fishing, or extensions or reductions in areas open to fishing.

b. Coho may be transferred inseason among recreational subareas north of Cape Falcon to help meet the recreational season duration objectives (for each subarea) after conferring with representatives of the affected ports and the Council's SAS recreational representatives north of Cape Falcon, and if the transfer would not result in exceeding preseason impact expectations on any stocks.

c. Chinook and coho may be transferred between the recreational and commercial fisheries north of Cape Falcon if there is agreement among the representatives of the SAS, and if the transfer would not result in exceeding preseason impact expectations on any stocks.

d. Fishery managers may consider inseason action modifying regulations restricting retention of unmarked (adipose fin intact) coho. To remain consistent with preseason expectations, any inseason action shall consider, if significant, the difference between observed and preseason forecasted (adipose-clipped) mark rates. Such a consideration may also include a change in bag limit of two salmon, no more than one of which may be a coho.

e. Marked coho remaining from the Cape Falcon to Humbug Mountain recreational mark-selective coho quota may be transferred inseason to the Cape Falcon to Humbug Mountain non-mark-selective recreational fishery if the transfer would not result in exceeding preseason impact expectations on any stocks.

Consistent with Council management objectives, the States of Washington, Oregon, and California may establish limited seasons in state waters. Check state regulations for details.

Parts A, B, and C of this section contain requirements that must be followed for lawful participation in the fishery.

May 1 through the earlier of June 30 or 17,500 Chinook quota.

All salmon may be retained except coho. If the Chinook quota is exceeded, the excess will be deducted from the later all-salmon season (C.5). See size limit (B) and other restrictions (C).

July 1 through the earlier of September 15, or 17,500 Chinook quota, or 55,000 coho quota.

All salmon. See size limit (B) and other restrictions (C).