This rule affecting 7 CFR part 1222 (the Paper and Paper-Based Packaging Promotion, Research and Information Order (Order)) is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. 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 action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.

Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 1996 Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.

This rule reduces the size of the Board from 12 members to 8 members, reduces the number of regions for manufacturer representation on the Board from four (South, Northeast, Midwest, and West) to two (South and Other parts of the United States), eliminates the at-large seat, and changes the nomination process under the Order. The Order is administered by the Board with oversight by USDA. Under the Order, assessments are collected from manufacturers and importers and used for projects to promote the use of paper and paper-based packaging.

Currently, the 1996 Act and § 1222.40(c) require the Board to review its membership and size of the Board to reflect changes in its geographical distribution and quantity of paper and paper-based packaging manufactured in the U.S. and the quantity of paper and paper-based packaging imported into the U.S. This is the first review of the Board's membership and size since the Board's implementation in 2014. The Board reviewed data to determine if the geographical distribution of paper and paper-based packaging manufactured in the U.S. and the quantity imported into the U.S. and Board membership needed to be changed. The proposed action was unanimously recommended by the Board in June 2018 and will contribute to the effective administration of the program.

Section 1222.40 provides that the Board should consist of 12 members—11 manufacturers and 1 importer. Section 1222.40 also requires that the Board be comprised of manufacturers and importers of paper and paper-based packaging that manufacture or import 100,000 short tons or more of paper and paper-based packaging during the year. Of the 11 manufacturers, 10 shall be from the following four regions: South—6 members; Northeast—1 member; Midwest—2 members; and West—1. One manufacturer at-large member may be from any region and shall manufacture at least 100,000 short tons but no more than 250,000 short tons of paper and paper-based packaging. If there are no eligible nominees, the seat shall be allocated to the largest producing region.

In 2017, approximately 61.3 million short tons of U.S. paper and paper-based packaging was produced and covered under the program. Of the 61.3 million short tons, it is estimated that 64 percent was manufactured in the South, 17 percent was manufactured in the Midwest, 9 percent was manufactured in the Northeast, and 10 percent was manufactured in the West. While the U.S. production of paper and paper-based packaging has dropped from 66.1 million short tons in 2014 to 61.3 million short tons in 2017, the number of domestic companies that pay assessments into the program has decreased from 53 to 39, which equals a 26 percent decrease in three years. Due to the consolidation in the industry, the Board believes that the proposed changes to the Board size and its regions would better reflect the distribution of the manufacturing of paper and paper-based packaging and the imports of paper and paper-based packaging.

With this amendment, the total number of Board members will decrease from the current 12 members to 8 members. The 8-member Board will be comprised of 7 manufacturers and 1 importer. Of the 7 manufacturers, 4 members will be from the South, and 3 members will be from all other parts of the U.S. According to the Board, this action will make the reduced number of seats easier to fill and reflect the current distribution of the industry.

The Board recommended a transitional approach to reduce the Board from 12 members to 8 members over a three-year period. The 2019 Board currently has 12 members. The 2020 Board will have 10 members consisting of 5 members representing the South, 4 members representing the other parts of the U.S., and 1 importer. This will require the Board to fill two seats in the South region whose terms will expire December 31, 2019. The original recommendation was for the 2021 Board to have 8 members consisting of 4 members representing the South, 3 members from other parts of the U.S., and 1 importer. However, this would require half of the board seats to be filled in one year, the five commenters requested that the 2021 Board have 9 members consisting of 5 members representing the South, 3 members representing other parts of the U.S., and 1 importer; and the 2022 Board and subsequent Boards have 8 members consisting of 4 members representing the South, 3 members representing other parts of the U.S., and 1 importer. These changes are authorized under § 1222.40(c). Lastly, the Board recommended one seat from the South whose term will expire on December 31, 2021, be for a two-year term rather than a three-year term. Section 515 of the 1996 Act (7 U.S.C. 7414) and § 1222.42 state that members shall serve for a term of three-years, except for the initial appointments. Therefore, a term shorter than three-years is not being implemented as recommended.

Sections 1222.41 and 1222.46 provide authority for the Board to recommend amendments to the Order. Nominations to the Board are currently made by an election process. This process is conducted by the Board, which notifies all known manufacturers and importers of 100,000 short tons or more of paper and paper-based packaging annually of the open Board seats. Manufacturers and importers may nominate eligible persons from their own company or any other eligible company for a seat on the Board. Once the Board receives the nominees, the Board conducts an election by mail ballot in each region where there is a vacancy. The votes are tabulated by region, with nominees receiving the highest number of votes placed at the top of the list, in descending order. Due to consolidation of companies from 53 to 39, the pool of eligible manufacturers to fill board seats has decreased, therefore the number of eligible nominees has decreased too. The Board recommended a new nomination process to help alleviate this situation.

The Board will conduct outreach and issue a call for nominations for all open seats to all known manufacturers and importers of 100,000 short tons or more of paper and paper-based packaging. The Board will evaluate all the nominees and recommend at least two names for each open seat as their first and second choice to be placed on the nomination slate. Other qualified persons interested in serving in the open seats, but not recommended by the Board, will be submitted and designated as additional nominees for consideration by the Secretary.

In addition, this proposal will change the OMB control number in §§ 1222.88 and 1222.108 from 0581-0281 to 0581-0093, the control number assigned by OMB. This change will reflect the accurate OMB control number.

In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of the rule on small entities. Accordingly, AMS has considered the economic impact of this action on such entities.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration (SBA) defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000, and small agricultural service firms (first handlers and importers) as those having annual receipts of no more than $7.5 million.

According to the Board, there are 39 manufacturers in the United States that produce the types of paper and paper-based packaging covered under the Order. Using an average price of $784 per short ton, 1 a manufacturer who produces less than about 9,560 short tons of paper and paper-based packaging per year would be considered a small entity. It is estimated that no more than three manufacturers produced less than 9,560 short tons per year in 2017. Thus, the majority of manufacturers would not be considered small businesses.

Based on U.S. Customs and Border Protection (Customs) data, it is estimated that in 2017 there were approximately 1700 importers of paper and paper-based packaging. Fifty importers, or about 3 percent, imported more than $7.5 million worth of paper and paper-based packaging. Thus, the majority of importers would be considered small entities. However, all of the 20 entities that imported 100,000 short tons or more (the Order's exemption threshold) also imported more than $7.5 million worth of paper and paper-based packaging. Therefore, none of the 20 importers covered under the Order would be considered small businesses.

Based on domestic production of approximately 61.3 million short tons in 2017 and an average price of $784 per short ton, the domestic paper and paper-based packaging industry is valued at approximately $48.1 billion. According to Customs data, the value of paper and paper-based packaging imports in 2017 was about $5.9 billion.

The rule reduces the size of the Board from 12 members to 8, reduces the number of regions for manufacturers from four (South, Northeast, Midwest, and West) to two (South, and other parts of the United States), eliminates the at-large member, and changes the nomination process as specified in §§ 1222.40 and 1222.41. The revisions are administrative in nature; therefore, there should be no economic impact on manufacturers and importers.

Currently, the Order requires 12 Board members, 11 domestic manufacturers and one importer. Of the 11 domestic manufacturers, 6 represent the South, 2 represent the Midwest, 1 represents the Northeast, 1 represents the West, and 1 at-large member represents any region and must manufacture at least 100,000 short tons, but not more than 250,000 short tons. Due to mergers and closings, the number of eligible companies (manufacturers and importers of 100,000 tons or more of paper and paper-based packaging annually) has decreased from 53 to 39 eligible manufacturers since the inception of the Order in 2014. With an overall pool of 39 eligible U.S. manufacturers, an 8-member Board can effectively represent the interest of the paper and paper-based packaging industry.

The revised 8-member Board will be comprised of 7 manufacturers and 1 importer. Of the 7 manufacturers, 4 members will be from the South, and 3 members will be from all other parts of the U.S. According to the Board, this action makes the reduced number of seats easier to fill and reflects the current distribution of the industry.

This rule is also changing the nomination procedures. The Board unanimously recommended eliminating the election process and recommended a new nomination process, whereby all the submitted names of the eligible candidates are submitted to the Secretary with recommendations by the Board. This action allows the Board the flexibility to provide a slate that reflects the diverse membership of the paper and paper-based packaging industry in terms of various segments of the industry.

The new nomination process allows the Board to conduct outreach to all known manufacturers and importers of 100,000 short tons or more of paper and paper-based packaging, whereby the Board evaluates all the nominees and recommends at least two names for each open seat. Other qualified persons interested in serving in the open seats, but not recommended by the Board, are to be submitted and designated as additional nominees for consideration by the Secretary.

The changes to the size of the Board, number of regions, and nomination process are administrative in nature and have no economic impact on entities covered under the program. These changes are thought to help increase the pool of candidates as companies operate in multiple regions and seek nomination for a region of their choice. Eligible manufacturers and importers interested in serving on the Board have to complete a background questionnaire. Those requirements are addressed later in this rule in the section titled Reporting and Recordkeeping Requirements .

Regarding alternatives, the Board considered recommending no changes and considered a variety of mechanisms for nominating candidates. The Board explored whether other industry organizations should be tasked with nominating candidates but determined that it would unnecessarily complicate the nominations process. However, due to mergers and closings, the number of eligible companies has decreased, making it more difficult to fill Board seats. Therefore, the Board concluded that reducing the Board size, reducing the number of regions, eliminating the at-large member, and revising the nomination process will establish a Board that better reflects the industry.

Lastly, this rule makes changes to §§ 1222.80 and 1222.108 to correct the OMB control numbers that are assigned to the Paper and Packaging Board by OMB.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements that are imposed by the part have been previously approved by OMB under OMB control number 0581-0093. This rule does not result in a change to the information collection and recordkeeping requirements previously approved and does not impose additional reporting requirements or recordkeeping burden on manufacturers or importers of paper and paper-based packaging.

As with all Federal promotion 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 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.

The Board met on June 28, 2018, and unanimously recommended reducing the size of the Board, reducing the number of regions, and eliminating the election process for nominations and using a new nominations process. The Board meetings are open to the public and interested persons are invited to participate and express their views.

A proposed rule concerning this action was published in the Federal Register on April 12, 2019 (84 FR 14891). A 30-day comment period ending May 13, 2019, was provided to allow interested persons to submit comments.

Five comments were received in response to the proposed rule. All of the comments supported reducing the size of the Board from 12 to 8 members, reducing the number of regions from 5 (South, Northeast, Midwest, West, and at-large) to 2 (South and all other parts of the U.S.), and revising the nomination process. All of the comments also stated their support for a transitional approach in reducing the Board from 12 to 8 members. They were supportive of the Board's original proposal to have a two-year term for a member from the South region during the transition; however, as stated previously, the 1996 Act and Order require members serve for a term of three-years, except for the initial appointments, so this change is not being implemented.

All five commenters stated their concern that losing half of the Board in a single year would be disruptive and cause a sudden loss of institutional knowledge within the Board. Therefore, in the alternative, they suggested adding an additional year to the transitional period, for a total of three years. So, the 2020 Board would have 10 members consisting of 5 members representing the South, 4 members representing the other parts of the U.S., and 1 importer. The 2021 Board would have 9 members consisting of 5 members representing the South, 3 members representing other parts of the U.S., and 1 importer. Finally, the 2022 Board and subsequent Boards would have 8 members consisting of 4 members representing the South, 3 members representing other parts of the U.S., and 1 importer. We agree with the commenters that adding an additional year to transition from a current 12 member Board to an 8 member Board in 2022 and beyond will make it less disruptive to the Board's operations going forward. Accordingly, we are adopting the modifications and this final rule with changes to the composition of the Board from the current Board of 12 members to 8 members over the next three-years, reducing the number of manufacturing regions from 5 (South, Northeast, Midwest, West and at-large) to 2 (South and all other parts of the U.S.), and modifications to the nomination process.

After consideration of all relevant material presented, including the information and recommendations submitted by the Board, the comments received, and other available information, it is hereby found that this rule, as hereinafter set forth, is consistent with and will effectuate the purposes of the 1996 Act.

For the reasons set forth in the preamble, 7 CFR part 1222 is amended as follows:

The Department published a proposed rule with request for comments in the Federal Register in June 2008. See Board of Immigration Appeals: Affirmance Without Opinion, Referral for Panel Review, and Publication of Decisions as Precedents, 73 FR 34654 (June 18, 2008). At the conclusion of the comment period on August 18, 2008, three public interest law and advocacy groups; two law professors; a law student and a recent law school graduate; and one non-attorney had submitted six sets of comments. Because some comments overlapped, and because other commenters covered multiple topics, the comments are addressed summarily by topic in Section III, infra.

On October 18, 1999, the Department published a final rule authorizing a single BIA member to affirm the decision of an immigration judge by a summary written order without issuing a separate written opinion. See Executive Office for Immigration Review; Board of Immigration Appeals: Streamlining, 64 FR 56135 (Oct. 18, 1999). The written order used for this purpose is commonly referred to as an affirmance without opinion (AWO). The AWO contains only two sentences, both prescribed by regulation, without any additional language or explanation for the affirmance. Under the relevant regulations, the AWO states: “The Board affirms, without opinion, the result of the decision below [ i.e., the decision of the immigration judge or the Department of Homeland Security (DHS) officer that was appealed to the BIA]. The decision below is, therefore, the final agency determination. See 8 CFR 3.1(a)(7).”  1 See 8 CFR 1003.1(e)(4)(ii). 2

In 2002, the Department published a final rule that, while maintaining the basic AWO process, mandated the use of an AWO in any case that met the regulatory threshold criteria. See Board of Immigration Appeals: Procedural Reforms To Improve Case Management, 67 FR 54878 (Aug. 26, 2002). Compare 8 CFR 3.1(a)(7)(ii) (2000) (providing that a single BIA member “may” affirm without opinion), with 8 CFR 1003.1(e)(4) (2003)  3 (providing that a single BIA member “shall” affirm without opinion).

Under the 2002 rule, an AWO is issued if the BIA member concludes that “the result reached in the decision under review was correct,” that any errors in the decision were “harmless or nonmaterial,” and that either the issues on appeal are “squarely controlled” by precedent and do not present a novel factual scenario that requires a decision to apply precedent or are not so substantial as to warrant issuance of a written opinion by the BIA. 8 CFR 1003.1(e)(4)(i) (2003).

On January 9, 2006, Attorney General Alberto Gonzales directed a comprehensive review of the immigration courts and the BIA. The Department undertook the review in response to concerns about the quality of the decisions of the immigration judges and the BIA and to reports of intemperate behavior by some immigration judges.

The review team received comments about the BIA's streamlining process and its reform regulations. Critics of the procedural reforms rule speculated that the revised procedures allowed BIA members insufficient time to review cases thoroughly and made it more difficult for the BIA to publish adequate numbers of precedent decisions. Supporters observed that the reforms brought much-needed efficiency to the appellate process, which allowed the BIA to eliminate a large backlog of cases and to adjudicate cases in a more timely manner.

On August 9, 2006, Attorney General Gonzales announced that the review was complete and directed that EOIR implement 22 measures to improve adjudications by the immigration judges and the BIA. This final rule is one of several regulatory actions relating to that review.

The 2008 proposed rule stated that the Department had evaluated the BIA's caseload and resources and found that “the basic principles set forth in the [2002] Board reform rule were still necessary to prevent future backlogs and delays in adjudication.” 73 FR at 34655. Thus, the proposed rule did not seek comment on whether the BIA should continue to use AWOs. Id. (stating that “the Department is not reopening or seeking public comment on the existing final regulations that were adopted in 2002”). Rather, the Department proposed three specific adjustments that would: (1) Encourage the increased use of single-member written decisions instead of AWOs to address poor or intemperate decisions of immigration judges, (2) allow the use of three-member written decisions for the purpose of providing greater legal analysis for particularly complex cases, and (3) authorize three-member panels, by majority vote, to designate their decisions as precedent decisions. Id.

At the time of the underlying proposed rule's publication, responsibility for administering EOIR's recognition and accreditation program, which recognizes organizations and authorizes accredited representatives to represent aliens in immigration proceedings before EOIR and in cases with DHS, lay with the BIA. Consequently, under its general authority to issue precedent decisions, the BIA would intermittently issue precedent decisions in cases involving recognition and accreditation issues. See, e.g., Matter of United Farm Workers Found., 26 I&N Dec. 454 (BIA 2014) (addressing whether a recognized organization needs to apply for a representative's accreditation at more than one location). In 2017, responsibility for the recognition and accreditation program within EOIR was transferred from the BIA to the Office of Legal Access Programs (OLAP), but the transfer did not provide a mechanism by which EOIR could designate decisions as precedents. See Recognition of Organizations and Accreditation of Non-Attorney Representatives, 81 FR 92346 (Dec. 19, 2016). This rule would correct that deficiency.

In each of the respects discussed below, the Department in this rulemaking is revising the regulations to clarify the intent and nature of the regulations relating to the form of BIA decisions and the scope of the BIA's consideration of issues presented on appeal. The Department's interpretations of the intended meaning of its regulations are fully consistent with the Attorney General's authority to issue regulations and clarify the intent, purpose, and nature of those regulations. See INS v. Stanisic, 395 U.S. 62, 72 (1969) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945)) (an administrative agency's interpretation of its own regulations is entitled to “`controlling weight unless it is plainly erroneous or inconsistent with the regulation'”); Matter of Armendarez-Mendez, 24 I&N Dec. 646, 653 (BIA 2008).

With regard to the provisions of the 2008 proposed rulemaking, the Department has considered the public comments, the continuing need to maintain AWOs as a necessary resource for BIA adjudication, and the goal of securing finality in immigration cases as efficiently as possible.

With respect to one proposal outlined in the proposed rule, the Department has determined that it will not revise EOIR's regulations to provide for publication of precedent decisions by majority vote of the permanent Board members assigned to a three-member panel. Although the Department recognizes that a single member or a panel of BIA members is able to address and resolve issues in a thorough and judicious manner, the Department also recognizes that the BIA's published decisions representing the views of the majority of the en banc BIA are important in ensuring accuracy, consistency, uniformity, and clarity in the BIA's guidance and interpretation of relevant law and regulation. The current process better provides for the consistency of BIA case law. See Matter of Burbano, 20 I&N Dec. 872, 873-74 (BIA 1994). Apart from this decision regarding publication by majority vote, this final rule adopts, with changes, the regulatory amendments set forth in the proposed rule.

Finally, the Department is including a related revision to the regulations to clarify the intent to provide for the issuance of precedent decisions in the context of the recognition and accreditation program.

The 2008 proposed rule discussed the Department's interpretation of the BIA's regulatory structure regarding the BIA's decision to issue an AWO or a single-member or three-member decision. 73 FR at 34656-57. The purpose of thats discussion was to clarify that institutional concerns, which are uniquely within the BIA's expertise, may factor into the assessment of what form of decision to issue. The Department presented that discussion in regards to both the proposal to allow BIA members to exercise discretion in determining whether to issue an AWO, 73 FR at 34656, and the proposal to clarify that the regulations do not create any substantive or procedural right to a particular form of BIA decision, 73 FR at 34657.

Commenters raised several objections to the discussion in both contexts. With regard to the BIA's discretion, the proposed rule stated that:

The BIA employs a staff of attorneys, paralegals, and support personnel that prepares the cases and draft decisions for BIA member review. In particular, under the BIA's case-processing system, a staff attorney reviews a case and recommends issuance of a decision as an AWO, a single-member decision, or a three-member decision. A BIA member then decides what form of decision to issue after an independent review of the record of proceedings and consideration of the nature of the case, the issues and arguments presented by the parties in support of the appeal or motion, and prior agency decisions. The BIA member also assesses whether the regulatory criteria set forth in 8 CFR 1003.1(e)(4)(i), (e)(5), or (e)(6) require the issuance of an AWO decision, warrant a single-member decision, or warrant referral to a three-member panel for decision. Thus, a BIA member—in contrast to the commenter's suggestion—does not decide whether to issue an AWO based on whether he “lack[s] the time or inclination to spend his or her resources writing a reasoned, public opinion for that particular case.”

The Department seeks to clarify that the use of an AWO does not reflect an abbreviated review of a case, but rather reflects the use of an abbreviated order to describe that review where the regulatory requirements of 8 CFR 1003.1(e)(4)(i) are met. The Department also seeks to clarify that a case before the BIA undergoes tiers of staff screening and review with a BIA member who ultimately determines what form of decision to use. Accordingly, the Department is satisfied that each case has undergone thorough and complete review before a determination of whether an AWO is required. This final rule retains an AWO as a mandatory form of decision to be issued in appropriate situations.

Taking into account caseload and resources in deciding what form of decision the BIA chooses to issue is not new. In 1999, Attorney General Janet Reno linked resource and caseload concerns to the form of the BIA's dispositions when she created the first AWO and single-member reforms and observed that three-member written opinions are time consuming, require significant resources, and should be used selectively. See 64 FR at 56136-38; see also Matter of Burbano, 20 I&N Dec. at 874 (recognizing that “summary treatment of a case does not mean that we have conducted an abbreviated review of the record or have failed to exercise our own discretion”). The BIA in 1998 received in excess of 28,000 new cases, and concerns about resource management have grown only more pronounced in the intervening years; in fiscal year 2018, for example, the BIA received more than 49,000 new cases.

Attorney General Reno also explained that, “[e]ven in routine cases,” the “process of screening, assigning, tracking, drafting, revising, and circulating cases is extremely time consuming.” 64 FR at 56137. In addition, she explained that “disagreements concerning the rationale or style of a draft decision can require significant time to resolve.” Id. Attorney General Reno concluded that the BIA should use more streamlined forms of dispositions and become selective in using three-member decisions. Id. The Department further stated in the 1999 rule that using streamlined forms of decisions would “allow the Board to manage its caseload in a more timely manner” and “maintain a viable appellate organization that handles an extraordinarily large caseload.” 64 FR at 56138. Similarly, in 2002, Attorney General John Ashcroft cited caseload and resource considerations as the justification for expanding the streamlining procedures to promote the issuance of AWOs and to normalize single-member decisions. See 67 FR at 54879. Although former Attorney General Reno's statements in the proposed rule about caseload considerations, internal resources, and layers of review pertained primarily to issuing single-member decisions instead of three-member decisions, these considerations are also relevant when a single BIA member assesses whether an AWO would most efficiently use the BIA's limited resources in resolving an appeal.

The 2008 proposed rule expressed concern that some courts have construed the regulations to permit judicial review of the BIA's decision about what form of opinion to issue, independently of the merits of the final agency position, and that this “additional layer of review in some circuits is not consistent with the [2002] rule's goal of promoting efficiency and finality in the immigration system.” 73 FR at 34657. The proposed rule sought to address this concern by clarifying that regulations providing for an AWO, a single-member opinion, or a three-member panel opinion were intended to reflect an internal agency directive created for the purpose of efficient case management and disposition of cases pending before the BIA, and were not to be interpreted to create any substantive or procedural rights enforceable before any immigration judge, the BIA, or any court. Several commenters raised issues concerning this proposed amendment.

The commenters wrote that the agency may not eliminate an alien's “right” to review of a BIA member's judgment to issue an AWO or other form of BIA decision. The courts of appeals that have reviewed challenges to the streamlining process have uniformly concluded, however, that respondents have no constitutional or statutory right to a particular form or manner of a BIA decision. See Zhang v. U.S. Dept. of Justice, 362 F.3d 155, 157-58 (2d Cir. 2004); Yuk v. Ashcroft, 355 F.3d 1222, 1229-32 (10th Cir. 2004); Dia v. Ashcroft, 353 F.3d 228, 242 (3d Cir. 2003) ( en banc ); Denko v. INS, 351 F.3d 717, 729-30 (6th Cir. 2003); Falcon Carriche v. Ashcroft, 350 F.3d 845, 850-51 (9th Cir. 2003); Khattak v. Ashcroft, 332 F.3d 250, 252-53 (4th Cir. 2003); Georgis v. Ashcroft, 328 F.3d 962, 967 (7th Cir. 2003); Mendoza v. U.S. Att'y Gen., 327 F.3d 1283, 1288-89 (11th Cir. 2003); Albathani v. INS, 318 F.3d 365, 376-77 (1st Cir. 2003). Thus, the Department is not eliminating an existing substantive right, but is simply clarifying the original intent underlying the streamlining regulation that the form of the BIA's decision should not be reviewable.

Indeed, the 2002 final rulemaking explained that there is no statutory right or law requiring a particular form of decision or method of review before the BIA. 67 FR at 54883, 54888-90. Because the BIA is established under the Attorney General's regulations, he “is free to tailor the scope and procedures of administrative review of immigration matters as a matter of discretion.” 67 FR at 54882 (citing, e.g., Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 524-25 (1978)). The 2002 final rulemaking also quoted the Supreme Court's admonition against review of certain agency matters, stating that “ `administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.' ” Id. (quoting Vermont Yankee, 435 U.S. at 524-25 (quoting FCC v. Pottsville Broad. Co., 309 U.S. 134, 143 (1940))).

Commenters also suggested that an independent review of the judgment of a single BIA member to issue an AWO is necessary to ensure the adequacy of the BIA's review. One commenter claimed that “the AWO formula . . . affirms the result reached by the Immigration Judge but expressly eschews reliance on the Immigration Judge's reasoning and affords no information concerning the BIA's reasoning in affirming the decision.” However, the immigration judge's decision becomes the final agency decision for the court's review and provides reasons for the decision that can themselves be reviewed. The 2002 final rulemaking explained that “[t]he immigration judge's order provides the rationale” for an AWO, and “[t]he Department does not believe there is any basis for believing that providing a regurgitation of the same facts and legal reasoning . . . will be beneficial to the respondent or the reviewing courts in most cases.” 67 FR at 54885-86. The 2002 final rule expressly designated the immigration judge's decision as the one to be reviewed, required standard language to that effect in each AWO, and prohibited the BIA from adding any explanation or reasoning. See 8 CFR 1003.1(e)(4)(ii). This prohibition pertains to a single member's reasons for affirming the immigration judge's decision. Thus, the language of the AWO itself states, “The Board affirms, without opinion, the result of the decision below. The decision below is, therefore, the final agency determination.” Id. (emphasis added).

Moreover, as several courts have already recognized, the BIA's judgment to issue an AWO is similar to the practices of several courts of appeals to issue a summary disposition, as a matter of judicial efficiency, in cases that are viewed as not raising novel or complex issues, or whose issues were adequately addressed by the lower court. See, e.g., Ngure v. Ashcroft, 367 F.3d 975, 984-85 (8th Cir. 2004); Blanco de Belbruno v. Ashcroft, 362 F.3d 272, 281-82 (4th Cir. 2004); Dia, 353 F.3d at 240 n.7; Soadje v. Ashcroft, 324 F.3d 830, 832 (5th Cir. 2003); see also 8th Cir. R. 47B (allowing the use of an AWO if an opinion would have no precedential value and (1) fact-findings are not clearly erroneous, (2) the evidence in support of a jury verdict is not insufficient, (3) the relevant administrative order is supported by substantial evidence on the record as a whole, or (4) no error of law appears); 3d Cir. Internal Operating Procedures 10.6 (after affording parties opportunity to submit argument regarding summary action, “the court . . . may take summary action . . . if it clearly appears that no substantial question is presented or that subsequent precedent or a change in circumstances warrants such action”); 4th Cir. R. 36.3 (allowing the use of summary affirmance, following oral argument, where all judges on a panel agree that “a case would have no precedential value, and that summary disposition is otherwise appropriate”). It has never been thought that the Supreme Court would review the propriety of a court's decision to use one of these summary dispositions, as opposed to the merits of the underlying decision, or that these sorts of summary dispositions are improper. See Ngure, 367 F.3d at 985.

Commenters also argued that the decision to dispose of an appeal by AWO should be reviewable as a means of resolving the “jurisdictional conundrum” that arises when a court is unable to determine, by virtue of the AWO, the extent to which the agency's decision rests upon grounds that it may review. This objection is invalid for several reasons.

As a preliminary matter, should a court be unable to ascertain if it has jurisdiction, the court may remand under traditional principles to the agency for clarification, without reviewing the decision to issue an AWO. See SEC v. Chenery Corp., 318 U.S. 80 (1943); see also Zhu v. Ashcroft, 382 F.3d 521 (5th Cir. 2004) (finding flawed analysis of merits of asylum claim and remanding for clarification of whether the BIA agreed with the immigration judge's determination that the asylum application was untimely). If there have been new developments between the time of the immigration judge's decision and the BIA's AWO, and if the court is unable to determine the agency's decision on a question reserved for appeal, the court also has authority under Ventura principles to remand for an agency decision, again, without resorting to independent review of the decision to issue an AWO. See INS v. Ventura, 537 U.S. 12, 16-18 (2002) (per curiam); Haoud v Ashcroft, 350 F.3d 201, 208-09 (1st Cir. 2003) (remanding for an agency decision in the first instance where there were intervening developments after the immigration judge's decision not addressed by his decision). Additionally, when it is possible to conclude that one reviewable ground of the agency's decision is valid and suffices as a basis for the immigration judge's decision, the jurisdictional conundrum simply falls away. See, e.g., Garcia-Melendez v. Ashcroft, 351 F.3d 657, 661-62 (5th Cir. 2003) (finding that respondent applying for cancellation of removal had not established ten years' continuous physical presence in the United States and denying the petition on that basis); cf. Dia, 353 F.3d at 272-73 (Stapleton, J., dissenting) (noting that the court may remand for further explanation if the court, upon examination of the record, is unable to sustain the decision on the grounds stated by the immigration judge and is unable to determine the agency's reasoning on a particular point).

Commenters also objected that the Department's intent regarding the nature and purpose of its regulations is immaterial to whether a court may independently review the BIA's decision to issue an AWO. Settled case law, however, restricts judicial review of an agency's compliance with procedural rules in instances in which the rule in question is designed primarily to benefit the agency carrying out its functions, rather than “to confer important procedural benefits upon individuals in the face of otherwise unfettered discretion.” Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 538-39 (1970). Agencies possess authority to create internal rules to govern their management and performance of their duties that are not intended to also create judicially enforceable rights. See, e.g., Sandin v. Conner, 515 U.S. 472, 481-83 (1995) (recognizing that regulations governing the adjudication of inmate disciplinary charges may be designed primarily to guide correctional officials in administering a prison, and not to create judicially enforceable rights in inmates). Under such circumstances, the agency's compliance with its processes is traditionally not subject to review because the decision whether to follow those processes is committed to agency discretion by law. See Heckler v. Chaney, 470 U.S. 821, 826, 836 (1985) (FDA policy statement that agency is “obligated” to investigate unapproved uses of an approved drug when such use became “widespread” or “endanger[ed] the public health” did not create procedural right to insist on investigation of state's use of drugs in executing condemned prisoners).

The foregoing discussion and the relevant text in the final regulation seek to set forth the Department's position as it has existed since the establishment of the streamlining process and to clarify that the rules governing § 1003.1(e)(4) through (6) are internal agency rules designed to assist the BIA in efficiently managing its caseload and carrying out its duties. The 2002 rule was successful in creating procedures that increased efficiency and promoted finality in immigration cases. The rule was not intended to create an additional layer of judicial review or a substantive right to review the form of the BIA's decision. The efficient and fair adjudication of immigration appeals remains a priority of the Department. This revision to the regulations in no way reflects a diminished commitment to timely and fair adjudications at the administrative appeal level.

Accordingly, this final rule does not adopt the changes to 8 CFR 1003.1(e)(4) related to the AWO process in the proposed rule and retains the language noting that the decision to issue an AWO remains mandatory in appropriate circumstances. It also clarifies that a decision to issue any particular form of decision is a decision based on an internal agency rule or directive created for the purpose of efficient case management that does not create any substantive or procedural rights.

The 2008 proposed rule sought to provide regulatory authority for the Department's longstanding position regarding the scope of a BIA decision regardless of the form of the decision. First, the proposed regulatory text provided that “[a] decision by the Board . . . carries the presumption that the Board properly and thoroughly considered all issues, arguments, claims and record evidence raised or presented by the parties, whether or not specifically mentioned in the decision.” 73 FR at 34663. The purpose of the proposed rule was to clarify that “the Board need not specifically address every issue raised on appeal, but is presumed to have considered all properly raised issues on appeal in reaching its decision, even if that decision is an AWO or short order that does not specifically discuss every issue the parties may have raised on appeal.” 73 FR at 34658 (citing, e.g., Toussaint v. Att'y Gen., 455 F.3d 409 (3d. Cir. 2006)).

Second, the rule proposed that the BIA's decision, whether in the form of an AWO, a single-member decision, or a three-member panel decision, is based on issues and claims of error that the parties raised on appeal and is not to be construed as waiving a party's obligation to exhaust issues and claims before the BIA. 73 FR at 34663. The proposed rule sought to clarify the parties' obligations to identify issues, arguments, and claims of error on appeal in a meaningful manner and with sufficient precision, even in instances where the BIA, in its discretion, sua sponte considers issues not raised on appeal. 73 FR at 34658. Third, the rule proposed to make clear that “the Board may address an issue that was not raised on appeal sua sponte.” Id.

One commenter objected to the stated formalization of a presumption that the BIA properly and thoroughly adjudicates appeals before it, contending that the proposed rule would impede judicial review of BIA decisions and, in effect, would supersede the Department's commitment to provide a reasoned agency decision adequate for judicial review. The Department rejects this argument. The proposed presumption is simply a particularized statement of the well-settled presumption of regularity that attaches to agency processes. See, e.g., INS v. Miranda, 459 U.S. 14, 18 (1982) (presumption of regularity applied to agency adjudication of application for lawful permanent resident status). Board Members, like other government officials, “d[o] their jobs fairly, conscientiously and thoroughly.” Angov v. Lynch, 788 F.3d 893, 905 (9th Cir. 2015) (applying the presumption of regularity to a Department of State letter reflecting the overseas investigation of an asylum claim). Moreover, the proposed rule does not supersede other regulations that govern BIA adjudications and is not intended to impede judicial review or supersede pertinent circuit precedent. See 8 CFR 1003.1; Matter of Olivares-Martinez, 23 I&N Dec. 148 (BIA 2001); Matter of Anselmo, 20 I&N Dec. 25 (BIA 1989).

With regard to exhaustion, the commenter objected to the proposed rule on the grounds that it is an improper attempt to regulate the jurisdiction of the courts of appeals and that use of the term “meaningful manner” creates a more demanding standard than the prevailing standards reflected in judicial opinions. In light of the comment, and upon further consideration, the Department believes that revisions are warranted to clarify the intent of the proposed rule.

As initially proposed in 2008, the rule provided that a BIA decision “is not to be construed as waiving a party's obligation to exhaust administrative remedies by raising in a meaningful manner all issues and claims of error in the first instance on appeal to the Board.” 73 FR at 34663. In adjudicating appeals, the BIA follows the party presentation rule. See, e.g., Matter of M-A-S-, 24 I&N Dec. 762, 767 n.2 (BIA 2009) (noting that DHS did not advance any argument on appeal about additional conditions on the immigration judge's voluntary departure order) (citing Greenlaw v. United States, 554 U.S. 237 (2008)). Under this rule, it is the responsibility of each party to advance its arguments on appeal to the BIA because adversarial proceedings “rely on the parties to frame the issues for decision and assign to [the adjudicator] the role of neutral arbiter of matters the parties present.” Greenlaw, 554 U.S. at 243. This principle applies throughout “our adversary system, in both civil and criminal cases, in the first instance and on appeal.” Id.; see also Honcharov v. Barr, No. 15-71554, 2019 U.S. App. LEXIS 15804, at *5-6 (9th Cir. May 29, 2019) (explaining that “[w]aiver and forfeiture are . . . important tools for preserving the structure of hierarchical court systems,” and that these principles likewise “hold in the context of removal proceedings in the [EOIR]”). The proposed rule sought to reaffirm the obligation of the parties to raise any and all issues and claims before the BIA. See 8 CFR 1003.3(b), 1003.2(b); see also 8 CFR 1003.2(c) (requiring the parties moving to reopen proceedings to identify and specify findings and errors and state new facts to be proved). Indeed, when a party fails to specify the reasons for appeal, the BIA may summarily dismiss it without further consideration of the underlying merits of the case. 8 CFR 1003.1(d)(2)(i)(A). The requirement that the parties allege errors, issues, arguments, or claims with particularity aids the Board in adjudicating the cases before it. Thus, as is its practice, the BIA may decide an appeal or motion based on a party's failure to raise an alleged error, issue, argument, or claim before the BIA, the immigration court, or DHS immigration officer, if such error, issue, argument, or claim existed at the time of adjudication of the appealed matter. See, e.g., Honcharov, 2019 U.S. App. LEXIS 15804, at *6-7 (joining “every other circuit to have addressed the issue” in concluding that “the Board may apply a procedural default rule to arguments raised for the first time on appeal”).

The Department seeks to clarify that the “obligation to exhaust,” as set forth in the proposed rule, is a separate and distinct matter from the doctrine of “exhaustion of administrative remedies,” as set forth in section 242(d)(1) of the Immigration and Naturalization Act (the Act), which refers to the jurisdictional limits of a federal court's review of an issue. 4 See id. at *5 n.2 (explaining that “[w]aiver and forfeiture in this context are related to, but distinct from, the doctrine[ ] of exhaustion”). Nonetheless, for purposes of clarification, the Department has removed the reference to exhaustion of administrative remedies in this final rule. The Department also has removed the “meaningful manner” language because it is not the Department's intention to establish a novel “meaningful manner” standard for presenting claims before the BIA. Instead, the rule seeks to simply reaffirm the need of the parties to raise any and all issues to the BIA on appeal. The rule further clarifies that the BIA, in the exercise of its discretion, may rule on an issue not raised by the parties on appeal if the issue was addressed in the underlying decision. However, this rule is not intended to alter the BIA's practice of not considering evidence proffered for the first time on appeal. See, e.g., Matter of Soriano, 19 I&N Dec. 764, 766 (BIA 1988). Finally, the Department has determined that, given the content of this aspect of the rule, this provision is more appropriately included in a new paragraph at § 1003.1(e)(9), rather than paragraph (e)(4), as previously proposed.

Accordingly, this final rule, in new § 1003.1(e)(9), states that a decision by the Board under paragraph (e)(4), (5), or (6) of that section carries the presumption that “the Board properly and thoroughly considered all issues, arguments, and claims raised or presented by the parties on appeal or in a motion that were deemed appropriate to the disposition of the appeal or motion, whether or not specifically mentioned in the decision.” A decision also carries the presumption that the BIA did not need to consider any issue, argument, or claim not raised or presented by the parties on appeal or in the motion.

In addition to the issues discussed above, one commenter contended that the provision authorizing the BIA to consider issues sua sponte authorizes violations of the BIA's review standards and permits the BIA to engage in fact-finding in violation of regulatory or court rules. The commenter argued that allowing the BIA to consider issues sua sponte would “empower the BIA to provide the reasoning missing from an Immigration Judge's opinion so long as the issue was somehow presented before the Immigration Judge.”

The commenter misunderstands the purpose of the rule. This rule is not intended to undermine the fact-finding authority or to supplement the fact-finding of the immigration judge. Rather, this rule is intended to allow the BIA to resolve issues, when necessary or appropriate, to ensure proper and thorough review of the appeal or motion before it, to provide guidance on the interpretation of the immigration laws and regulations, or to address recurring legal, procedural, and factual issues. Lastly, this provision permits the BIA to address the conduct of immigration judges when appropriate and where such issues were not raised by the parties.

Thus, the BIA must have the tools and flexibility to properly adjudicate the appeals and motions before it. The Department agrees with the commenter that there should be a vehicle by which parties, in appropriate cases, may be provided an opportunity to address dispositive issues the BIA wishes to consider sua sponte before the BIA renders a decision. For this reason, the final rule permits the BIA to set a supplementary briefing schedule where it chooses to consider an issue not raised by the parties in its discretion by stating, in § 1003.1(e)(9), that in any decision under paragraph (e)(5) or (6) of that section, “the Board may rule, in the exercise of its discretion as provided under this part, on any issue, argument, or claim not raised by the parties, and the Board may solicit supplemental briefing from the parties on the issue(s) to be considered before rendering a decision.”

The 2008 proposed rule sought to improve the BIA's review of complex and problematic cases by expanding the criteria for three-member decisions under 8 CFR 1003.1(e)(6). The public comments that addressed this provision supported the decision to expand the criteria.

The proposed rule added a seventh criterion that would have allowed a BIA member, in the exercise of discretion, to refer a case to a three-member panel when the case presents a “complex, novel, or unusual issue of law or fact.” See 73 FR at 34663. Upon further consideration, the Department is revising this criterion to state that a BIA member may refer a case for three-member review “to resolve a complex, novel, unusual, or recurring issue of law or fact.” (Emphasis added.) Addition of the word “recurring” recognizes that the BIA is in the best position to identify issues that are recurring nationwide. Such issues may not result in inconsistent decisions among immigrations judges or rise to the level of “major national import,” see 8 CFR 1003.1(e)(6)(i), (iv), yet immigration judges, attorneys, respondents, and the federal courts still might benefit from guidance from the BIA on how to address such recurring issues. Allowing for referral to a three-member panel will result in enhanced review and analysis and perhaps publication of a precedent decision to provide nationwide guidance, if necessary.

Accordingly, the final rule adopts the proposal to expand the criteria to allow for referral to a three-member panel. This final rule amends 8 CFR 1003.1(e)(6) by adding a new paragraph (vii) to allow assignment to a three-member panel for review when there is a ” need to resolve a complex, novel, unusual, or recurring issue of law or fact.”

One comment, which was endorsed by another commenter, expressed concern with the proposal to authorize a vote by three-member panels on whether to issue precedent decisions. The comment stated that the proposal is unnecessary, ripe for possible misuse, and lacking in adequate oversight and guarantees of uniformity. The comment stated that it would be a mistake to allow two permanent members of the BIA to issue a precedent decision without first obtaining approval of a majority of permanent BIA members. The comment reasoned that the proposed regulation allows only for notice to other members of the BIA; that there is nothing in the supplemental information to indicate that the existing system is burdensome or unworkable; and that the change will result in increased numbers of precedent decisions. The comment concluded that the BIA is currently issuing an adequate number of decisions and that the courts are demonstrating appropriate deference to the BIA. In general, the Department agrees with these comments and has decided not to adopt the proposal to allow the BIA to issue precedent decisions by majority vote of permanent members of a three-member panel.

Although the number of BIA precedent decisions has varied from year to year, the Board has averaged nearly 29 precedent decisions each year over the last 14 years, and it has issued fewer than 23 precedent decisions only once, in 2005, when it issued 11. Consequently, it does not appear that the Board's current process for precedent decisions is unworkable or has inhibited it from providing necessary guidance through published decisions. In short, the Department has determined that the process currently in place for BIA's designation and publication of precedent decisions is appropriate and adequate.

Under this process, the BIA will continue to publish its precedent decisions as three-member panel decisions through the process of a majority vote of permanent members of the BIA and not, as initially proposed, by majority vote of the permanent BIA members assigned to a three-member panel. Adopting the proposed change would be counterproductive and inefficient, creating a greater likelihood of inconsistency among BIA member panels involving similar cases and issues that could be potentially selected for publication. Such potential for greater inconsistency and lack of uniformity among the panel decisions selected for publication would be further amplified by a recent regulation increasing the size of the BIA from 17 to 21 members. See Expanding the Size of the Board of Immigration Appeals, 83 FR 8321 (Feb. 27, 2018). Moreover, the mechanism for resolving this issue, considering a case en banc, does not substantively differ from the current procedure in which Board members vote en banc to publish a decision as precedent. Thus, the proposed change would simply add an additional level of process in order to ultimately achieve a similar result as the current process.

The BIA, as an appellate body and the highest administrative tribunal interpreting immigration law, is charged with, inter alia, providing clear and uniform guidance across the country in applying and interpreting immigration law. Ensuring that only the majority of permanent BIA members vote on and select cases to serve as precedent will continue to provide an invaluable safeguard against unnecessary and potentially conflicting outcomes in cases under the BIA's review. Moreover, the participation of all BIA members in the precedent decision selection and voting process is essential to the efficient and collaborative function of the BIA. This final rule therefore does not adopt the proposal to allow the BIA to issue precedent decisions by majority vote of permanent members of three-member panels.

The Department did not receive any comments on the criteria for publication, in § 1003.1(g)(3)(i) through (vi) of the proposed rule, and adopts this provision with only one change. In addition to the standard in the proposed rule for a decision that “modifies or clarifies a rule of law or prior precedent,” the final rule also includes a reference to a decision that “distinguishes” a rule of law or prior precedent. This standard will allow the BIA to not only consider whether publication of a decision that “modifies, clarifies, or distinguishes” a rule of law or prior precedent is necessary to maintain consistency and uniformity, but also to consider whether a choice not to publish a decision that could potentially be seen as clarifying or distinguishing a prior precedent may result in a lack of clear guidance to immigration judges and parties as to the proper course to follow in other cases because an unpublished decision by the BIA is not binding in other cases.

As discussed above, the Attorney General expects that the BIA will continue to exercise its authority to issue precedent decisions as widely as is practicable to promote the consistency and uniformity of adjudications and to provide authoritative nationwide guidance to the immigration judges, the government, the respondents in immigration proceedings, petitioners for certain alien relatives, members of the immigration bar, and the federal courts with respect to the interpretation of ambiguous provisions of the immigration statutes and regulations and recurring legal, procedural, and factual issues arising in the adjudication of cases before the immigration judges, the U.S. Citizenship and Immigration Services, and the BIA.

Although the regulations transferring responsibility for the recognition and accreditation program clarified the new designation of officials responsible for issuing decisions in those cases, 5 the prior regulatory changes did not address the precedential nature of any such decisions going forward, leaving EOIR without any specified authority to continue to issue precedent decisions to provide guidance in these cases. This oversight was unintentional, and EOIR continues to maintain that precedential guidance in recognition and accreditation cases is important, especially now that the BIA no longer issues the decisions in those cases. See 8 CFR 1292.18. The revisions to this part are matters relating to agency management or personnel and impose no burdens on the public. Further, although the Attorney General maintains plenary authority over immigration matters handled by EOIR, the transfer of oversight responsibility for the recognition and accreditation program from the BIA to OLAP did not include a specific mechanism for the referral of recognition and accreditation cases for review by the Attorney General.

For these reasons, the final rule corrects an oversight regarding precedent decisions involving EOIR's recognition and accreditation program. This correction, which is a logical outgrowth of the broader review of the BIA's use of precedent in the 2008 proposed rulemaking, allows for the continued publication of precedent decisions pertaining to recognition and accreditation, even though those decisions are no longer issued by the BIA. The final rule also corrects a related oversight by reestablishing an explicit mechanism for decisions involving recognition and accreditation to be referred to the Attorney General now that they are no longer adjudicated by the BIA.

Pursuant to the Regulatory Flexibility Act, the Attorney General certifies that this rule will not have a significant economic impact on a substantial number of small businesses or small governmental entities. This rule is related to agency organization and management of cases pending before the immigration judges and the Board. Accordingly, the preparation of a Regulatory Flexibility Analysis is not required.

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

This rule is not a major rule as defined by section 251 of the Congressional Review Act, 5 U.S.C. 804. 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 significant adverse effects on competition, employment, investment, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

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, and other advantages; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of using the best available methods to quantify costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 13771 directs agencies to reduce regulation and control regulatory costs and, for all qualifying regulations, to identify at least two existing regulations for elimination.

This rule has been drafted in accordance with the principles of Executive Order 12866, section 1(b), and Executive Order 13563. Although the notice of proposed rulemaking in 2008 proposed changes to the AWO process, the final regulation does not adopt those changes and does not actually change any part of the AWO process nor amend the portions of 8 CFR 1003.1(e)(4) relating to AWOs. Consequently, there is no expected increase in the use of AWOs due to the final regulation.

Although the use of AWOs is not expected to increase as a result of the final regulation, the Department acknowledges that the final rule may nonetheless raise novel legal or policy issues. The Department thus considers the rule to be a “significant regulatory action” under section 3(f)(4) of Executive Order 12866, and the regulation has accordingly been submitted to the Office of Management and Budget for review.

Finally, this rule is exempt from the requirements of Executive Order 13771 because this rule concerns regulations related to agency organization, management, or personnel. The final rule is an internal rule of procedure that relates to the management of immigration cases on appeal. It does not alter any substantive rights, and it conforms to existing directives on the efficient management and disposition of cases. Accordingly, it does not impose any additional costs on the processing of cases on appeal.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, this rule does not have sufficient federalism implications to warrant preparation of a federalism summary impact statement.

This rule has been prepared in accordance with the standards in sections 3(a) and 3(b)(2) of Executive Order 12988.

This rule is exempt from the requirements of the Paperwork Reduction Act because it does not create any information collection requirements.

Accordingly, for the reasons set forth in the preamble, 8 CFR parts 1003 and 1292 are amended as follows:

FDA is issuing this final rule to implement regulations on the procedures regarding internal agency supervisory review of certain decisions made by CDRH under the FD&C Act. Section 603 of FDASIA (Pub. L. 112-144) added new section 517A to the FD&C Act (21 U.S.C. 360g-1), which was amended by sections 3051 and 3058 of the Cures Act (Pub. L. 114-255). These provisions established procedures and timeframes for supervisory review under Title 21 of the Code of Federal Regulations (CFR) § 10.75 (21 CFR 10.75) of significant decisions by CDRH pertaining to devices. After the enactment of FDASIA, FDA issued a guidance document entitled “Center for Devices and Radiological Health Appeals Processes: Questions and Answers About 517A—Guidance for Industry and Food and Drug Administration Staff” (Q&A Guidance) to provide interpretation of key provisions of section 517A of the FD&C Act, including those that pertain to requests for supervisory review of significant decisions by CDRH (available at: https://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM352254.pdf ). FDA is finalizing this regulation to codify: (1) The procedures and timeframes for § 10.75 appeals of “significant decisions” by CDRH established under section 517A and (2) the interpretation of key provisions of section 517A of the FD&C Act regarding supervisory review. In addition, the regulations codify new procedural requirements for supervisory review within CDRH of other CDRH decisions that were not addressed in FDASIA and the Cures Act.

The final rule provides transparency and clarity for internal and external stakeholders on CDRH's process for supervisory review of decisions and provides requesters new predictability through binding deadlines for FDA action on a request for supervisory review within CDRH and the Center's internal agency review of “significant decisions.” Furthermore, this final rule codifies the types of decisions that are considered “significant decisions,” for which the timeframes apply. The final regulations also codify the timeframe for submission of requests for the review of other decisions within CDRH.

FDA is amending part 10 (21 CFR part 10) by adding § 10.75(e). Section 10.75 currently provides that an interested person outside the Agency may request internal agency review of a decision of an FDA employee. FDA is amending § 10.75 to add paragraph (e) to require that requests for internal agency supervisory review of a decision within CDRH also comply with new § 800.75 (21 CFR 800.75). This change to the regulations encompasses both significant decisions under section 517A of the FD&C Act and other decisions by CDRH employees for which review is requested through the supervisory chain within CDRH.

The final rule also adds new § 800.75 to part 800 (21 CFR part 800). Section 800.75 incorporates in the regulations the provisions of section 517A of the FD&C Act for review of “significant decisions” related to devices regulated under the FD&C Act by CDRH. Section 800.75 defines “significant decisions.” Section 800.75 also includes the timeframes for submission of requests for internal agency review of significant decisions within CDRH and for responses to such requests.

Section 800.75 further addresses requests for supervisory review within CDRH of decisions other than section 517A decisions and indicates the timeframe for submission of these requests for internal agency review.

FDA's legal authority to implement requirements pertaining to the process and timelines for § 10.75 appeals of decisions within CDRH derives from sections 510(k), 515, 515B, 517A, and 520(g) of the FD&C Act (21 U.S.C. 360(k), 360e, 360e-3, 360g-1, and 360j(g)) and other provisions under which a decision might be appealed, and 701(a) of the FD&C Act (21 U.S.C. 371(a)). Section 701(a) of the FD&C Act gives FDA general rulemaking authority to issue regulations for the efficient enforcement of the FD&C Act.

We expect the costs and benefits of the final rule will be negligible.

FDA has long provided a path for outside parties to request internal agency review of decisions. A procedure for this type of review was first published as a proposed regulation in 1975 (40 FR 40682, September 3, 1975). In the preamble for that proposed rule, the Agency recognized that a process for administrative review of Agency decisions would advise outside parties on how they should pursue matters that interest and concern them (40 FR 40682 at 40693). A final rule published in 1977 incorporated these provisions into the Code of Federal Regulations at § 2.17 (21 CFR 2.17) (42 FR 4680, January 25, 1977).

These regulations provided that any decision of an FDA employee, other than the Commissioner, on any matter was subject to review by the employee's supervisor under any of the following circumstances: (1) At the request of the employee, (2) on the initiative of the supervisor, (3) at the request of any interested person outside of the Agency, or (4) as required by duly promulgated delegations of authority. The review shall be accomplished by consultation between the employee and the supervisor, by review of the administrative file, or both. The review shall ordinarily follow established Agency channels of supervision. Internal agency review shall be based on the data and information available in the administrative file. If an interested person presents new data or information not contained in the administrative file, then the matter shall be returned to the appropriate lower level within the Agency for a reevaluation based upon the new information (42 FR 4680 at 4707).

The following year, in 1978, a proposed rule was published to reorganize and revise the Agency's administrative practices and procedures regulations (43 FR 51966, November 7, 1978). When the final rule for that action was published, the regulations for internal agency review were moved from § 2.17 and redesignated as § 10.75 (44 FR 22318, April 13, 1979), where these regulations remain today.

In 1998, § 10.75 was amended to add provisions allowing a sponsor, applicant, or manufacturer of a drug or device to request review of a scientific controversy by an appropriate scientific advisory panel or advisory committee (63 FR 63978, November 18, 1998). Aside from the specific situation addressed by the amendment, the elements of internal agency review under § 10.75 relating to who may request the review and the information on which the review must be based remained unchanged.

Section 10.75 contains regulations that establish an orderly process for internal agency review of decisions, based on information in the FDA administrative file. Section 10.75 applies to requests for review of decisions made by any FDA employee, other than decisions by the Commissioner of Food and Drugs. Section 10.75 does not establish timelines for requests for Agency review or for the Agency to act upon these requests. The FDA guidance document entitled “Center for Devices and Radiological Health Appeals Processes: Guidance for Industry and Food and Drug Administration Staff” describes the § 10.75 appeal processes available to outside stakeholders to request review of decisions or actions by CDRH employees (available at: https://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM284670.pdf ).

On July 9, 2012, the FD&C Act (21 U.S.C. 301 et seq. ) was amended by FDASIA. Section 603 of FDASIA added new section 517A to the FD&C Act, which specifies procedures and timeframes for the supervisory review of significant decisions pertaining to devices regulated by CDRH.

On December 13, 2016, the FD&C Act was further amended by the Cures Act. Section 3051 of the Cures Act, “Breakthrough Devices,” added section 515B to the FD&C Act (as amended by section 901(f)(2) of the FDA Reauthorization Act of 2017 (Pub. L. 115-52)) and amended section 517A(a)(1) to include any significant decision by CDRH regarding a request for designation as a breakthrough device under section 515B.

In addition, section 3058, “Least Burdensome Device Review,” of the Cures Act amended section 517A(a) by adding paragraph (3), which requires that the substantive summary include a brief statement of how the least burdensome requirements were considered and applied consistent with sections 513(i)(1)(D), 513(a)(3)(D), and 515(c)(5) of the FD&C Act (21 U.S.C. 360c(i)(1)(D), 360c(a)(3)(D), and 360e(c)(5)), as applicable.

Section 517A of the FD&C Act provides that any person may request a supervisory review of any significant decision of CDRH regarding the submission or review of a report under section 510(k), an application under section 515, a request for designation under section 515B, or an application for an exemption under section 520(g) of the FD&C Act. Any person may request such review, which may be conducted at the next supervisory level or higher above the individual who made the significant decision. Where the request for supervisory review was made at the organizational level, any person may request a supervisory review to the next organizational level or higher above the level at which the decision was made. In addition, the Office or Center Director may designate a subordinate to be their representative, as the authority for a request made to that level. In this situation, a request for review heard by a designated subordinate is rendered on behalf of the Director and constitutes a review by that level of the organization.

Section 517A of the FD&C Act includes specific timeframes both for the person requesting review and for FDA to respond to such a request. A request for review of a significant decision is required to be submitted to FDA not later than 30 days after such decision. In responding to this request, if the requester seeks an in-person meeting or a teleconference review, FDA is required to schedule the requested interaction not later than 30 days after the request is made. FDA is required to issue a decision not later than 30 days after the interaction, or, in the case of a person who does not seek an in-person meeting or teleconference review, FDA is required to issue a decision no later than 45 days after the request for supervisory review is received by FDA. An exception to the timeframes related to scheduling an in-person meeting or teleconference review, and to FDA's decision on a request for supervisory review of the significant decision, is provided in cases that are referred to experts outside of FDA. Although the procedures and timeframes in section 517A of the FD&C Act apply to an initial request for supervisory review of a significant decision by CDRH, CDRH has chosen to enhance transparency and predictability and apply those procedures and timeframes as well to sequential requests for supervisory review of significant decisions that are submitted to CDRH.

On January 17, 2018, FDA published a proposed rule to incorporate the procedures and timeframes in section 517A of the FD&C Act to an initial or sequential request for supervisory review within CDRH of “significant decisions” by CDRH into FDA's regulations (83 FR 2388). The proposed regulation also introduced new procedural requirements for requests for supervisory review within CDRH under § 10.75 of decisions that do not fall under “significant decisions” under section 517A of the FD&C Act. We are finalizing this rule as described below.

Part 10 is amended to add § 10.75(e). FDA is adding language to clarify that requests by interested persons outside the Agency for internal agency review of a decision within CDRH must also comply with new § 800.75. The amendments to § 10.75(e) are not limited to significant decisions under section 517A of the FD&C Act. Rather, § 10.75(e) also encompasses supervisory review within CDRH of decisions other than 517A decisions made by CDRH.

Section 517A of the FD&C Act establishes procedural requirements, including timeframes for a request for internal agency review of a “significant decision” by CDRH. “Significant decision” is not defined in the statutory provision. FDA defines “significant decision” in § 800.75 to provide greater clarity regarding which decisions fall within this statutory term.

A “517A decision” is defined as a significant decision made by CDRH, as set forth in section 517A of the FD&C Act. We use the term “517A decision” rather than the term “significant decision” because we do not want to imply that any other decisions of CDRH that do not fall within section 517A of the FD&C Act are not significant. Similarly, we do not use the term “non-significant decision” when speaking of decisions outside of the scope of section 517A, as that might imply some unintended assessment on our part concerning the importance of these types of decisions. In addition, because we include regulatory decisions by CDRH in addition to those set forth in section 517A of the FD&C Act, we believe that this will avoid any confusion that might occur in distinguishing between these two categories of decisions. For these reasons, we instead are using the term “517A decision” for those decisions that are identified under section 517A as significant decisions and refer to other decisions by CDRH as “non-517A decisions.”

The review procedures under section 517A of the FD&C Act apply only to a request for review of a significant decision by CDRH regarding submission or review of a report under section 510(k) (Premarket Notification), an application under section 515 (Premarket Approval Application (PMA)/Humanitarian Device Exemption (HDE)), a request for designation under section 515B (Breakthrough Devices), or an application for an exemption under section 520(g) of the FD&C Act (Investigational Device Exemption (IDE)). Under the new § 800.75, only the following decisions are considered significant decisions under section 517A of the FD&C Act and, thus, defined for purposes of this rule as “517A decisions”:

• 510(k): Not substantially equivalent; Substantially equivalent.

• PMA/HDE: Not approvable; Approvable; Approval; Denial.

• Breakthrough Device Designation Request (request for breakthrough designation for devices subject to premarket notification, premarket approval, or De Novo classification process (see “Breakthrough Devices Program: Guidance for Industry and FDA Staff”; available at: https://www.fda.gov/ucm/groups/fdagov-public/@fdagov-meddev-gen/documents/document/ucm581664.pdf ): Grant; Denial of request for breakthrough designation.

• IDE: Disapproval; Approval.

• Failure to reach agreement on protocol under section 520(g)(7) of the FD&C Act.

• “Clinical Hold” determinations under section 520(g)(8) of the FD&C Act.

We are mindful that outside parties may use § 10.75 to request review of decisions other than 517A decisions. For this reason, we provided procedural requirements for internal agency supervisory review within CDRH under § 10.75 of non-517A decisions made by CDRH employees. A request for supervisory review of a CDRH decision other than a 517A decision is to be received no later than 60 days after the date of the decision that is subject to review. Any request received after 60 days in these cases will be denied as untimely, unless CDRH, for good cause related to circumstances beyond the control of the submitter, such as snow emergency, Federal Government shutdown, or other unforeseen emergency event, permits the request to be filed after 60 days.

Section 800.75 provides that requests for CDRH review of 517A decisions and non-517A decisions must be addressed to the next organizational level or higher above the individual who made the decision. Requests to elevate the review of such decisions should include a rationale. The decision to collapse two or more levels of review or to elevate a review would solely be at CDRH's discretion. In addition, requesters should have exhausted review through the supervisory chain below the Center Director level prior to request for review at the Center Director level.

As provided in the FDA guidance entitled “eCopy Program for Medical Device Submissions: Guidance for Industry and Food and Drug Administration Staff” (eCopy guidance), appeals to submission types identified under section 745A(b) of the FD&C Act are subject to the electronic format requirements (available at: https://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm313794.pdf ). Therefore, § 10.75 requests for supervisory review of 517A decisions within CDRH, and certain decisions other than 517A decisions, must be submitted in accordance with section 745A(b) of the FD&C Act and the standards established by the eCopy guidance, when applicable. In addition, requests for breakthrough designation under section 515B of the FD&C Act for devices under sections 510(k), 513(f)(2), and 515(c) of the FD&C Act would be considered “presubmissions” to those submission types as identified under section 745A, and, therefore, requests for breakthrough designation would be subject to section 745A(b) of the FD&C Act, and likewise, § 10.75 requests for review within CDRH.

Further, § 800.75 requires that requests for supervisory review of CDRH decisions other than 517A decisions be sent to the CDRH Ombudsman, and if subject to section 745A of the FD&C Act, are to be submitted in electronic format.

The comments on the proposed rule were generally favorable and supportive of the proposal to codify the procedures and timeframes for supervisory review of 517A and non-517A decisions pertaining to devices regulated by CDRH.

A comment appreciated the Agency's actions to clarify the CDRH process for supervisory review of decisions along with deadlines for certain FDA actions. Another comment, however, requested clarification about escalating review beyond the next organizational level above the decision maker (telescoping review). Another comment questioned whether the scope of significant decisions under section 517A of the FD&C Act should be expanded; specifically, recognition of additional CDRH decisions as 517A decisions. A comment was received on clarifying timeframes for receipt of a substantive summary upon request as required for a 517A decision. The comment also expressed concern over the proposed timeframe for requests for supervisory review of non-517A decisions, requested clarification on specific timeframes for non-517A decisions for requesters that seek to schedule a meeting or teleconference, and requested the addition of timeframes for when CDRH will render a decision.

We are issuing this final rule to codify the procedures and timeframes in section 517A of the FD&C Act, added by section 603 of FDASIA and amended by the Cures Act, for § 10.75 appeals of “significant decisions” regarding the submission or review of a report under section 510(k), an application under section 515, a request for designation under section 515B, or an application for an exemption under section 520(g) of the FD&C Act.

We are also finalizing additional procedural requirements for § 10.75 appeals submitted to CDRH of other types of CDRH decisions not addressed in FDASIA and the Cures Act.

FDA's legal authority to implement requirements pertaining to the process and timelines for § 10.75 appeals submitted to CDRH derives from sections 510(k), 515, 515B, 517A, and 520(g) of the FD&C Act and other provisions under which a decision might be appealed, and 701(a) of the FD&C Act. Section 701(a) of the FD&C Act gives FDA general rulemaking authority to issue regulations for the efficient enforcement of the FD&C Act.

We received various comments from a trade organization and an individual on the proposed rule by the close of the comment period; however, only one commenter provided comments on issues relevant to the proposed rule.

We describe and respond to the comments below. We have separated different issues discussed in the same set of comments and designated them as distinct comments for purposes of our responses. The number assigned to each comment topic is purely for organizational purposes and does not signify the comment's value or importance.

(Comment 1) One comment appreciates FDA's efforts to provide clarity to industry on the CDRH process for supervisory review of decisions, along with binding deadlines for certain FDA actions related to supervisory review and other related timeframes.

(Response 1) FDA proposed the regulation to provide clarity on the process for supervisory review and instruction on how external stakeholders, who disagree with a decision or action taken by CDRH, may seek resolution. FDA believes a well-informed process for CDRH reviews of significant decisions under 517A of the FD&C Act, as well as non-517A decisions, promotes consistency, predictability, efficiency, and a transparent pathway of our review process.

(Comment 2) A comment requested that FDA expand the definition of significant decision as set forth in section 517A of the FD&C Act by including: (1) a grant or denial of Clinical Laboratory Improvement Amendments (CLIA) waiver and a (2) grant or decline of a De Novo classification request.

(Response 2a) When Congress passed CLIA in 1988 (Pub. L. 100-578), amending section 353 of the Public Health Service (PHS) Act (42 U.S.C. 263a), they established clinical laboratory quality standards for all laboratory testing. While the Centers for Medicare & Medicaid Services has primary responsibility for administering CLIA, FDA also has certain responsibilities under CLIA, including categorizing tests as high complexity, moderate complexity, or waived. However, Congress did not include CLIA waived categorization under the PHS Act as regulatory decisions that trigger the requirements under section 517A of the FD&C Act. Therefore, FDA does not intend to expand the definition of a significant decision to the grant or denial of a CLIA waiver because it is outside the scope of the types of decisions expressly included under section 517A of the FD&C Act.

(Response 2b) FDA recognizes that the De Novo classification process is an important part of our regulatory framework. In accordance with section 513(f)(2)(A)(i) of the FD&C Act, any person who submits a 510(k) for a type of device that has not been previously classified under the FD&C Act, and that is classified into class III, may request, after receiving written notice of such classification, FDA to classify the device based on the criteria set forth in section 513(a)(1) of the FD&C Act. Under section 513(f)(2)(A)(ii) of the FD&C Act, a person who determines that there is no legally marketed device upon which to base a determination of substantial equivalence may request FDA to classify the device based on the criteria set forth in section 513(a)(1) of the FD&C Act without first submitting a 510(k). The process created by section 513(f)(2) of the FD&C Act, which was added by the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105-115) and referred to therein as the Evaluation of Automatic Class III Designation, is what is now referred to as the De Novo classification process. Although the decision to grant or decline a De Novo request is within FDA's regulatory authority, it is not a decision type identified in section 517A of the FD&C Act as a significant decision. Because section 517A of the FD&C Act does not identify decisions on requests under section 513 of the FD&C Act as one of the types of significant decisions subject to section 517A, FDA believes that a De Novo request appropriately remains within the regulatory category of a non-517A decision.

(Comment 3) One comment requested that FDA permit the collapsing of two or more levels of review, which is otherwise referred to as “telescoped review” to support assessment at the appropriate level and, alternatively, recommended emphasizing that requesters should exhaust review through the supervisory chain below the Center Director level prior to request for review at the Center Director level, absent adequate rationale.

(Response 3) FDA has recognized that CDRH preserves “telescoped review” as a discretionary action in matters pertaining to regulatory issues, new policy questions, or highly complex scientific questions. As explained in the guidance entitled “Center for Devices and Radiological Health Appeals Processes: Guidance for Industry and Food and Drug Administration Staff,” engagement of a next-level supervisor in a matter under dispute does not necessarily disqualify the next-level supervisor from hearing the dispute on appeal; however, elevation of a dispute may be appropriate if the next-level supervisor has been significantly and substantively involved in the regulatory action under review. Certain circumstances may also warrant referral of the review directly to the next-level supervisor, up to and including the Center Director. In these situations, the Center intends that the review will be undertaken and decided by the next-level supervisor. For example, circumstances such as imminent risk to public health may warrant elevation of a Division-level appeal directly to the Center Director. A stakeholder wishing to elevate a dispute should indicate a request for telescoped review with an accompanying rationale. The decision to collapse two or more levels of review or to elevate a review is made solely at the Center's discretion and the Center intends to document the rationale for the decision in the review decision letter.

Absent approval for “telescoped review,” requesters must exhaust review through the supervisory chain below the Center Director level prior to requesting review at the Center Director level.

(Comment 4) A comment requested clarification on the timeframe for receipt of a substantive summary and requested that FDA allow additional time to request supervisory review following a company's receipt of a substantive summary under section 517A of the FD&C Act.

(Response 4) In accordance with section 517A(a) of the FD&C Act, FDA shall furnish, upon request, a substantive summary of the scientific and regulatory rationale for any significant decision regarding a report under section 510(k), an application under section 515, a request under section 515B, or an application under section 520(g) of the FD&C Act, to the person who is seeking to submit, or who has submitted, such report or application. The substantive summary must include documentation of significant controversies or differences of opinion and the resolution of such controversies or differences of opinion for any such significant decision of CDRH, as well as a brief statement of how least burdensome requirements were considered and applied consistently with sections 513(i)(1)(D), 513(a)(3)(D), and 515(c)(5) of the FD&C Act, as applicable.

CDRH prepares and furnishes the final decision, as well as the substantive summary of the scientific and regulatory rationale, solely on the basis of the information in the administrative record, including in a report under section 510(k), an application under 515, a request for designation under 515B, or an application for an exemption under 520(g) of the FD&C Act. Therefore, both the substantive summary and the final decision rely upon the same information in the administrative record, including the information submitted by the sponsor or applicant.

Additionally, CDRH provides the information necessary to file an appeal in its final decision rendered for one of these reports or applications, including CDRH's rationale for the decision. In other words, the sponsor or applicant has the requisite information needed to submit an appeal in accordance with the timelines designated in the statute or identified as part of this final rule. While the substantive summary may include additional information, such as documentation of significant controversies or differences of opinion and the resolution of such, if applicable, that additional information is not necessary to file an appeal. Nonetheless, CDRH is committed to its current practice of furnishing the request for a substantive summary in a timely manner.

(Comment 5) Another comment suggested that FDA update the final rule to include the following: (1) Revise the deadline for requests for supervisory review of non-517A decisions from 60 to 90 days and, in the alternative and (2) further clarify the meaning of “good cause” as well as expand “good cause” to include matters pertaining to public health and other justifications.

(Response 5a) Although section 517A of the FD&C Act does not require FDA to implement procedures regarding CDRH decisions other than for 517A decisions, we are mindful that outside parties may use § 10.75 to request review of non-517A decisions. For this reason, we proposed that a request for supervisory review of a CDRH decision other than a 517A decision is to be received no later than 60 days after the date of the decision. Any request received after 60 days in these cases will be denied as untimely absent good cause.

We believe 60 days is timely and appropriate for submission of a request for supervisory review of a non-517A decision. We note that this timeframe is twice as long as that for submission of a request for supervisory review of a 517A decision. The primary purpose regarding the deadline of a request for supervisory review of non-517A decisions in this final rule is to provide predictability, and to ensure that such requests are filed in a timely manner. We believe that the timely filing of such requests within the 60-day timeframe will aid CDRH in efficiently handling disputes of non-517A decisions. However, expanding the 60-day timeframe for a request for supervisory review of a non-517A decision may negatively impact other decisions on CDRH regulated medical products. For example, a longer deadline may delay actions and resolutions of other pending matters that may be interrelated. This could negatively affect FDA's ability to act timely in fulfilling its mission to protect and promote the public health. For these reasons, we believe 60 days is an appropriate and reasonable timeframe.

(Response 5b) On the occasion of an unforeseen emergency event, FDA will consider the basis for causes beyond the control of the submitter. As such, FDA may permit the request for supervisory review of a non-517A decision to be filed after 60 days for good cause related to a snow emergency, Federal Government shutdown, or other unforeseen emergency event. We believe that good cause related to “other unforeseen emergency event” can include issues impacting public health. If a request for supervisory review of a non-517A decision is filed after 60 days, FDA will consider whether there is good cause for extending the timeline based on the circumstances.

(Comment 6) A comment requested that FDA provide specific timelines for non-517A decisions related to when CDRH will schedule a meeting or teleconference, if requested by the person requesting supervisory review and when CDRH will render a decision if no teleconference or meeting is requested.

(Response 6) We disagree that timelines for these actions are needed for FDA to provide timely responses for supervisory review of non-517A decisions. This final rule does not negatively affect CDRH's current practice of providing timely responses regarding requests for supervisory review of non-517A decisions. Apart from this rulemaking, we continue to work with industry and welcome stakeholder feedback on how to improve our communication regarding how CDRH will respond to an appeal of an adverse non-517A decision.

This rule will become effective 30 days after its publication in the Federal Register .

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

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because we lack information about the number of firms affected and because the affected firms will incur minimal costs to read and understand the rule, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $154 million, using the most current (2018) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

In our preliminary regulatory impact analysis, we estimated that the costs and benefits of the rule would be negligible. We received no comments on our preliminary regulatory impact analysis of the proposed rule and thus retain our original estimate for the final regulatory impact analysis. Because the final rule does not change the effort needed to prepare and submit a request for supervisory review, we anticipate that affected firms will incur only negligible costs to read and learn about the provisions of the final rule. The final rule will clarify the supervisory review process. However, we do not expect additional costs for FDA.

We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final rule contains previously approved information collections found in FDA regulations and guidance. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information regarding the appeals process for devices in the guidance document entitled “Center for Devices and Radiological Health Appeals Processes” have been approved under OMB control number 0910-0738; the collections of information in 21 CFR part 807, subpart E (premarket notification) have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 812 (investigational device exemption) have been approved under OMB control number 0910-0078; the collections of information in 21 CFR part 814, subparts A through E (premarket approval) have been approved under OMB control number 0910-0231; the collections of information in 21 CFR part 814, subpart H (humanitarian use devices) have been approved under OMB control number 0910-0332; the collections of information regarding “Requests for Feedback on Medical Device Submissions” have been approved under OMB control number 0910-0756; the collections of information in the guidance document, “De Novo Classification Process (Evaluation of Automatic Class III Designation)” have been approved under OMB control number 0910-0844; the collections of information regarding “Recommendations for Clinical Laboratory Improvement Amendments of 1988 (CLIA) Waiver Applications for Manufacturers of In Vitro Diagnostic Devices: Guidance or Industry and Food and Drug Administration Staff” have been approved under OMB control number 0910-0598; and the collections of information regarding “Administrative Procedures for CLIA Categorization: Guidance for Industry and Food and Drug Administration Staff” have been approved under OMB control number 0910-0607.

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

We have analyzed this rule in accordance with the principles set forth in Executive Order 13175. We have determined that the rule does not contain policies 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. Accordingly, we conclude that the rule does not contain policies that have tribal implications as defined in the Executive Order and, consequently, a tribal summary impact statement is not required.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 10 and 800 are amended as follows:

This document contains amendments to 26 CFR part 301. Section 301.7701-2(c)(2)(i) of the regulations specifies that, except as otherwise provided, a business entity that has a single owner and is not a corporation under § 301.7701-2(b) is disregarded as an entity separate from its owner (a disregarded entity). However, § 301.7701-2(c)(2)(iv)(B) treats a disregarded entity as a corporation for purposes of employment taxes imposed under Subtitle C of the Internal Revenue Code (Code). This exception to the treatment of disregarded entities does not apply to taxes imposed under Subtitle A of the Code, including self-employment taxes, and the regulations issued in TD 9670 on June 26, 2014 (79 FR 36204) explicitly provided that the owner of a disregarded entity who is treated as a sole proprietor for income tax purposes is subject to self-employment taxes.

On May 4, 2016, temporary regulations (TD 9766) clarifying the employment tax treatment of partners in a partnership that owns a disregarded entity were published in the Federal Register (81 FR 26693, as corrected July 5, 2016, at 81 FR 43488). Prior to the publication of the temporary regulations, the regulations did not explicitly address situations in which the owner of a disregarded entity is a partnership, and the Department of the Treasury (Treasury Department) and the IRS had been informed that some taxpayers were reading the regulations to permit the treatment of the individual partners in a partnership that owned a disregarded entity (either directly or through tiered partnerships) as employees of the disregarded entity. The Treasury Department and the IRS issued the temporary regulations to clarify that the rule that a disregarded entity is treated as a corporation for employment tax purposes does not apply to the self-employment tax treatment of any individuals who are partners in a partnership that owns a disregarded entity. The temporary regulations, like the final regulations they replaced, continued to explicitly provide that the owner of a disregarded entity who is treated as a sole proprietor for income tax purposes is subject to self-employment taxes. A notice of proposed rulemaking (REG-114307-15) cross-referencing the temporary regulations was published in the Federal Register on the same day (81 FR 26763). No public hearing was requested or held. Comments responding to the notice of proposed rulemaking were received. All comments were considered and are available for public inspection and copying at http://www.regulations.gov or upon request. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision, and the corresponding temporary regulations are removed. The public comments are discussed in this preamble.

The Treasury Department and the IRS received two comments in response to the proposed regulations. One commenter requested that the Treasury Department and the IRS consider addressing whether an eligible entity's election to be classified as an association (and thus a corporation under § 301.7701-2(b)(2)) pursuant to the final entity classification regulations under section 7701 of the Code (also known as the “Check-the-Box” regulations) would change the result such that a partner of the upper tier entity could be an employee at the lower tier entity that is treated as a corporation. While the temporary regulations did not address tiered entities, the use of an entity classified as a corporation under the Check-the-Box regulations presents different issues, such as whether, under the facts and circumstances, the partner is an employee of the corporation. However, these issues are outside the scope of these final regulations, and for this reason, these regulations do not address this comment.

In the preamble of TD 9766, the Treasury Department and the IRS requested comments on the appropriate application of the principles of Rev. Rul. 69-184, 1969-1 C.B. 256, to tiered partnership situations, the circumstances in which it may be appropriate to permit partners to also be employees of the partnership, and the impact on employee benefit plans (including, but not limited to, qualified retirement plans, health and welfare plans, and fringe benefit plans) and on employment taxes if Rev. Rul. 69-184 were to be modified to permit partners to also be employees in certain circumstances.

In response to this request, one commenter described the effects of the application of the principles of Rev. Rul. 69-184 in the context of publicly traded partnerships. This commenter noted that one particular concern in the publicly traded partnership context is that the publicly traded partnership may not know which service providers treated as employees (whether at the publicly traded partnership level or at any disregarded entity owned by the publicly traded partnership) hold units since individuals may purchase units on the open market without the knowledge of the publicly traded partnership. If an acquisition of units by the service provider occurs without the publicly traded partnership's knowledge, then improper tax withholding and benefit plan participation may occur until the publicly traded partnership discovers the error. This commenter also noted a number of negative effects on service providers receiving equity-based compensation from a publicly traded partnership and the ensuing burden required in administering any equity-based compensation plan in the publicly traded partnership context. This commenter requested that the IRS consider an exception to the principles of Rev. Rul. 69-184 for publicly traded partnerships.

As noted in the preamble to TD 9766, these regulations do not address the application of Rev. Rul. 69-184 in tiered partnership situations, but rather clarify that a disregarded entity owned by a partnership is not treated as a corporation for purposes of employing any partner of the partnership. Similarly, these regulations also do not address the application of Rev. Rul. 69-184 to publicly traded partnerships. Accordingly, the final regulations do not provide an exception to the principles of Rev. Rul. 69-184 for publicly traded partnerships. However, the Treasury Department and the IRS will continue to consider the application of Rev. Rul. 69-184, including the specific issue noted by the commenter, and welcome further comments.

The temporary regulations provided that their applicability date would be the later of August 1, 2016, or the first day of the latest-starting plan year following May 4, 2016 of an affected plan (based on the plans adopted before, and the plan years in effect as of, May 4, 2016) sponsored by an entity that is disregarded as an entity separate from its owner for any purpose under § 301.7701-2. It has come to the attention of the Treasury Department and the IRS that some taxpayers may have read the applicability date to begin on the first day of the last plan year prior to the termination of an affected plan (as defined in § 301.7701-2(e)(8)), which may have been a date after May 4, 2017 . This is not a proper reading of the applicability date.

In the case of an entity with several affected plans that may have different plan years, the applicability date was the first day of the plan year of the affected plan that had the latest plan year beginning after May 4, 2016, and on or before May 4, 2017 (assuming that date is after August 1, 2016). For example, an entity may have had two affected plans, with one plan year that began on September 1, 2016, and another plan year that began on January 1, 2017. In this case, the applicability date for this entity would have been January 1, 2017. The applicability date for any entity affected by these regulations should not have been delayed beyond May 4, 2017 in any case. For this reason, the final regulations clarify in § 301.7701-2(e)(8) that the applicability date of § 301.7701-2(c)(2)(iv)(C)( 2 ) is the later of August 1, 2016, or the first day of the latest-starting plan year beginning after May 4, 2016, and on or before May 4, 2017, of an affected plan (based on the plans adopted before, and the plan years in effect as of, May 4, 2016) sponsored by an entity that is disregarded as an entity separate from its owner for any purpose under § 301.7701-2.

This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the NPRM preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Andrew Holubeck of the Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes). However, other personnel from the IRS and the Treasury Department participated in their development.

IRS Revenue Procedures, Revenue Rulings, Notices, and other guidance cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at http://www.irs.gov .

Accordingly, 26 CFR part 301 is amended as follows:

Western Display notified the Coast Guard that it will be conducting a fireworks display from 10 p.m. to 10:30 p.m. on July 4, 2019, to commemorate Independence Day. The fireworks will launch from a site over the Columbia River in Kennewick, WA. In response, on May 24, 2019, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Columbia River, Fireworks Kennewick, WA (84 FR 24059). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended June 10, 2019, we received no comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable because the Coast Guard needs to have a safety zone regulation in place by July 4, 2019, to respond to the potential safety hazards associated with the fireworks display on that date.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). Captain of the Port Columbia River (COTP) has determined that potential hazards associated with the fireworks to be used in this July 4, 2019 display will be a safety concern for anyone within a 450-yard radius of the barge. The purpose of this rule is to ensure safety of vessels and the navigable waters in the safety zone before, during, and after the scheduled event.

As noted above, we received no comments on our NPRM published May 24, 2019. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a safety zone from 9 p.m. to 11:30 p.m. on July 4, 2019. The safety zone would cover all navigable waters of the Columbia River within 450-yards of the discharge site located at 46°13′22″ N, 119° 9′17″ W, in vicinity of Kennewick, WA. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 10 p.m. to 10:30 p.m. fireworks display. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on Vessel traffic would be able to safely transit around this safety zone which would impact a small designated area of the Columbia River for approximately 2.5 hours during the evening when vessel traffic is normally low. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no 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.

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

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

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

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

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

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

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 Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting less than two and a half hours that would prohibit entry within 450 yards of the fireworks discharge site.

It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable and contrary to the public interest. The final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be both impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect the public, vessels, mariners, and property from the hazards associated with a kayak and paddle board race on July 13, 2019.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . For the same reasons discussed in the preceding paragraph, waiting for a 30 day notice period to run would be impracticable and contrary to the public interest.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231); The Captain of the Port Lake Michigan will enforce a safety zone from 10:45 a.m. through noon on July 13, 2019, for a kayak and paddle board race to occur on the Manitowoc River in Manitowoc, WI. The Captain of the Port Lake Michigan has determined that this race will pose a significant risk to public safety and property. Such hazards include collisions, capsized kayaks, and contenders in the water.

With the aforementioned hazards in mind, the Captain of the Port Lake Michigan has determined that this temporary safety zone is necessary to protect persons and vessels during the kayak and paddleboard race in the waters of the Manitowoc River, in Manitowoc, WI. This zone is effective and will be enforced from 10:45 a.m. through noon on July 13, 2019. The safety zone will be enforced for all navigable waters of the Manitowoc River, in the vicinity of the 10th St. Bridge and the Northern point of the Manitowoc Dock within an area bounded by the following coordinates; at 44°05′29.5″ N 87°39′37.5″ W (NAD 83) continuing North across the Manitowoc River to 44°05′32.9″ N 87°39′37.7″ W (NAD 83) then East along the riverbank to 44°05′32.6″ N 87°39′02.2″ W (NAD 83) then South across the Manitowoc River to 44°05′29.1″ N 87°39′03.5″ W (NAD 83) then West returning to the point of origin.

Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or his or her designated on-scene representative. The Captain of the Port or his or her designated on-scene representative may be contacted via VHF Channel 16.

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 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. 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.

We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. The safety zone created by this rule will be relatively small and enforced for only one and a quarter hours. Under certain conditions, vessels may still transit through the safety zone when permitted by the Captain of the Port. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting only one and a quarter hours that will prohibit entry within the established safety zone for the race. It is categorically excluded from further review under paragraph L[60](a) in Table 3-1 of U.S. Coast Guard Environmental Planning Implementing Procedures 5090.1. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.”

Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable and contrary to the public interest. The final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Delaying the effective date of this rule to wait for a comment period to run would be impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect the public and vessels from the hazards associated with a shore based fireworks display on July 3, 2019 or July 4, 2019.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . For the same reasons discussed in the preceding paragraph, waiting for a 30-day notice period to run would be impracticable and contrary to the public interest.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).

The Coast Guard will enforce a safety zone on July 3, 2019 from 9:15 p.m. through 10 p.m., with a rain date of July 4, 2019, for a shore based fireworks display on/near the Illinois River in Peru, Illinois. The Captain of the Port Lake Michigan has determined that the shore based fireworks display will pose a significant risk to public safety and property. Such hazards include premature and accidental detonations, falling and burning debris, and collisions among spectator vessels.

The Captain of the Port Lake Michigan has determined that this temporary safety zone is necessary to ensure the safety of the public during the shore based fireworks display on/near the Illinois River. This safety zone will be enforced from 9:15 p.m. through 10 p.m. on July 3, 2019, with a rain date of July 4, 2019. The safety zone will encompass all waters of the Illinois River between MM 222.4 to MM 222.6. Vessels will not be allowed to enter, transit through, or anchor within the safety zone without the permission of the Coast Guard Captain of the Port Lake Michigan or a designated representative. The Captain of the Port or a designated on-scene representative may be contacted via VHF Channel 16.

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 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled 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).

As this rule is not a significant regulatory action, this rule is exempt from the requirements of 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).

We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues.

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

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered the impact of this temporary rule on small entities. This rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit on a portion of the Illinois River from 9:15 p.m. through 10 p.m. on July 3, 2019, with a rain date of July 4, 2019.

This safety zone will not have a significant economic impact on a substantial number of small entities for the reasons cited in the Regulatory Planning and Review section. Additionally, before the enforcement of the zones, we will issue local Broadcast Notice to Mariners and Local Notice to Mariners so vessel owners and operators can plan accordingly.

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone for a shore based fireworks display on/near the Illinois River, Peru, IL, encompassing all waters of the Illinois River between MM 222.4 to MM 222.6. It is categorically excluded from further review under paragraph L[60](a) in Table 3-1 of U.S. Coast Guard Environmental Planning Implementing Procedures 5090.1. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because to do so would be impracticable to complete a notice-and-comment rulemaking prior to the date of the fireworks display, July 4, 2019, for which a safety zone is needed.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be impracticable because action is needed on July 4, 2019, to respond to the potential safety hazards associated with the fireworks display.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Columbia River (COTP) has determined that potential hazards associated with the fireworks display on July 4, 2019, will be a safety concern for anyone within a 450-yard radius of the launch site. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone before, during, and after the scheduled event.

This rule establishes a safety zone from 9 p.m. until 11:30 p.m. on July 4, 2019. The safety zone will cover all navigable waters of Yaquina Bay within 450 yards of the discharge site located at 44°37′32″ N, 124°2′5″ W, in vicinity of Newport, OR. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 10 p.m. to 10:30 p.m. fireworks display. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of Yaquina Bay for approximately 2 and 1/2 hours during the evening when vessel traffic is normally low. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting less than two and a half hours that would prohibit entry within 450 yards of the fireworks discharge site.

It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. Since the Coast Guard received notice of this event on April 30, 2019, notice and comment procedures would be impracticable in this instance.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . For similar reasons as stated above, notice and comment procedures would be impractical in this instance due to the short notice provided for this event.

The Coast Guard is issuing this rule under authority 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port San Francisco (COTP) has determined that potential hazards associated with the Redwood City Independence Day Fireworks Display on July 4, 2019, will be a safety concern for anyone within a 100-foot radius of the fireworks barge during loading, staging, and transit, and anyone within a 560-foot radius of the fireworks barge starting 30 minutes before the fireworks display is scheduled to commence and ending 30 minutes after the conclusion of the fireworks display. For this reason, a safety zone is needed to protect personnel, vessels, and the marine environment in the navigable waters around the fireworks barge during the fireworks display.

This rule establishes a safety zone from 9 a.m. until 10:20 p.m. on July 4, 2019 during the loading, staging, and transit of the fireworks barge, until approximately 30 minutes after completion of the fireworks display. From 9 a.m. to 9 p.m. on July 4, 2019, during the loading, staging, and transit of the fireworks barge until 30 minutes prior to the start of the fireworks display, the safety zone will encompass the navigable waters around and under the fireworks barge, from surface to bottom, within a circle formed by connecting all points 100 feet out from the fireworks barge. Loading the pyrotechnics onto the fireworks barge is scheduled from 9 a.m. to 3 p.m. on July 4, 2019, at Pier 50 in San Francisco, CA. From 3 p.m. until 6 p.m. on July 4, 2019, the barge will remain at Pier 50. From 6 p.m. to 8:30 p.m. on July 4, 2019, the fireworks barge will be towed from Pier 50 to the display location, where it will remain until the conclusion of the fireworks display.

At 9 p.m. on July 4, 2019, 30 minutes prior to the commencement of the 20-minute Redwood City Independence Day Fireworks Display, the safety zone will increase in size and encompass the navigable waters around and under the fireworks barge, from surface to bottom, within a circle formed by connecting all points 560 feet from the circle center at approximate position 37°30′28.5″ N, 122°12′51.5″ W (NAD 83). The safety zone will terminate at 10:20 p.m. on July 4, 2019.

The effect of the safety zone is to restrict navigation in the vicinity of the fireworks loading, staging, transit, and firing site. Except for persons or vessels authorized by the COTP or the COTP's designated representative, no person or vessel may enter or remain in the restricted areas. These regulations are needed to keep spectators and vessels away from the immediate vicinity of the fireworks firing site to ensure the safety of participants, spectators, and transiting vessels.

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 limited duration and narrowly tailored geographic area of the safety zone. Although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are waterfront facilities, 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 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.

This rule may affect the following entities, some of which may be small entities: Owners and operators of waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities and sightseeing, if these facilities or vessels are in the vicinity of the safety zone at times when this zone is being enforced. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: (i) This rule will encompass only a small portion of the waterway for a limited period of time, and (ii) the maritime public will be advised in advance of these safety zones via Notice to Mariners.

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone of limited size and duration. It is categorically excluded from further review under paragraph L60(a) in Table 3-1 of U.S. Coast Guard Environmental Planning Implementing Procedures 5090.1. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

On March 14, 2019, the KC Air Show Charities notified the Coast Guard that it would be conducting an airshow over the Missouri River near Kansas City, MO on July 3, 2019 from 2 p.m. to 6 p.m., July 4, 2019 from noon to 6 p.m., and from 2 p.m. to 6 p.m. each day from July 5, 2019 through July 7, 2019. In response, on April 15, 2019, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Missouri River, Mile Markers 366.3 to 369.8, Kansas City, MO (84 FR 15165). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this airshow. During the comment period that ended on May 15, 2019, we received 17 comments.

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

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Upper Mississippi River (COTP) has determined that potential hazards associated with the air show to take place from July 3, 2019 through July 7, 2019 will be a safety concern for persons and vessels in that area. The purpose of this rule is to ensure safety of life on these navigable waters before, during, and after the scheduled event.

As noted above, we received seventeen comments on our NPRM published on April 15, 2019. Six of those commenters approved the establishment of the safety zone in that area. Three other commenters asked if there was a detour around the zone. Due to the limited width of the Missouri River, it is not possible to navigate a vessel around the safety zone. However, this rule provides plenty of notice for potential travelers to plan ahead for this event. In addition, anyone desiring to enter or pass through this zone, may request permission from the COTP or a designated representative. Such requests will be considered on a case-by-case basis considering all circumstances, and mainly the safety of the requested passage to the vessel and the show participants.

Three commenters asked the Coast Guard to list examples under which a vessel might be allowed to enter the zone and under which it would be excluded. One of these commenters specifically asked how “obviously risky vessels” would be treated if they request permission to enter the zone. And the other one asked under what circumstances “small entities” would be allowed to enter the zone. As stated above and in the NPRM, all requests for entry will be handled on a case-by-case basis. Any vessel that is deemed unsafe by the COTP or a designated representative will not be allowed to enter the zone. As another example, a vessel in the state of emergency, or a medical vessel, may be allowed to enter the zone if it is deemed safe by the COTP or a designated representative.

Two commenters were concerned about the enforcement times. One of them indicated that the enforcement times should be tailored to the exact length of the air show, and the other one indicated that a bigger time cushion would be needed it the show was delayed. The Coast Guard agrees that the time cushion should be provided to account for any delays, including weather, vessel entries, safety reasons, etc. In response to these comments, the Coast Guard has modified this rule's enforcement times to make it more flexible. We have added another day, July 3, 2019, during which the rule will be enforced from 1 p.m. to 7 p.m. We have also extended the beginning and end of the enforcement period as follows. Instead of noon—6 p.m. on July 4, 2019, the rule will be enforced 11 a.m.-7 p.m., and instead of 2 p.m.-6 p.m. on July 5-7, 2019, the rule will be enforced 1 p.m.-7 p.m.

Three commenters were concerned about business vessels that might be unable to transit the area safely or at all. One of these commenters asked the Coast Guard to move the safety zone to land. The other one suggested that the government compensate the vessels unable to transit the area. And the third commenter asked if business vessels would be safe transiting the area. The Coast Guard cannot move the zone because it does not have the authority to establish a marine safety zone on land. The comment about relief for small entities was of general nature and did not provide the Coast Guard with specific information requested in the NPRM. We asked that a business that believes it is qualified as a small entity and that the NPRM had a significant economic impact on it, to provide the Coast Guard with an explanation on why that specific business thought it qualified as such an entity and to what degree the rule would affect it. As to the comment about the safety of business vessels, the Coast Guard stresses that the safety of persons and vessels is the primary reason this safety zone. As stated above, the COTP or a designated representative may allow vessels to enter the zone on a case-by-case basis considering all circumstances, including the safety of a business vessel.

Another three commenters asked how the zone would be enforced and to how to contact the COTP. As stated in the NPRM, the COTP can be contacted at (314) 269-2332.

For the reasons stated above, the only changes in the regulatory text of this rule from the proposed rule in the NPRM is the modification of the enforcement time to allow for more flexibility. We have added another day, July 3, 2019, during which the rule will be enforced from 1 p.m. through 7 p.m. We have also extended the beginning and end of the enforcement period as follows. Instead of noon through 6 p.m. on July 4, 2019, the rule will be enforced 11 a.m. through 7 p.m., and instead of 2 p.m. through 6 p.m. on July 5-7, 2019, the rule will be enforced 1 p.m. through 7 p.m.

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 duration, location, and size of the safety zone. This zone will be in effect for up to eight hours per day for a total of five days and will affect three and one-half miles of the Missouri River. Additionally, persons and vessels would be allowed to request entry into the zone from the COTP or a designated representative.

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 no 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.

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

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

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

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

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

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 Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will last up to eight hours per day for five days along three and one-half miles of the Missouri River for scheduled air show. This action is categorically excluded from further review under paragraph L60(a) in Table 3-1 of U.S. Coast Guard Environmental Planning Implementing Procedures 5090.1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard will enforce the Safety Zones; Annual Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following events:

(1) Festival of the Fish, Vermilion, OH; The safety zone listed in Table 165.939 as (a)(1) will be enforced from 9:45 p.m. through 11:15 p.m. on June 14, 2019.

(2) Mentor Harbor Yacht Club Fireworks, Mentor, OH; The safety zone listed in Table 165.939 as (b)(5) will be enforced from 8:45 p.m. through 9:30 p.m. on July 03, 2019.

(3) Lorain Independence Day Celebration, Lorain, OH; The safety zone listed in Table 165.939 as (b)(7) will be enforced from 8:45 p.m. through 11:15 p.m. on July 04, 2019.

(4) Bay Village Independence Day Celebration, Bay Village, OH; The safety zone listed in Table 165.939 as (b)(11) will be enforced from 9:45 p.m. through 10:45 p.m. on July 04, 2019.

(5) Whiskey Island Paddlefest, Cleveland, OH; The safety zone listed in Table 165.939 as (c)(1) will be enforced from 7:15 a.m. through 11:45 a.m. July 20, 2019.

Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or a designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Buffalo or a designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice of enforcement is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552 (a). In addition to this notice of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that the safety zone need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

The Corps is publishing this final rule to adjust a civil monetary penalty for inflation pursuant to the Inflation Adjustment Act. This law requires the Corps to publish an initial “catch-up” adjustment with subsequent annual adjustments for inflation. The purpose of the Inflation Adjustment Act is to maintain the deterrent effect of civil penalties by translating originally enacted statutory civil penalty amounts to today's dollars and rounding statutory civil penalties to the nearest dollar. Although the Inflation Adjustment Act required agencies to make an initial “catch-up” adjustment through an interim final rule to be published by July 1, 2016, and to publish annual adjustments beginning no later than January 15, 2017, the Corps has not yet made either adjustment for civil penalties under 33 U.S.C. 555. Accordingly, the Corps is combining both the “catch-up” adjustment that would have become effective by August 1, 2016, and the three annual adjustments for 2017, 2018, and 2019 in this final rule. The rule will apply prospectively, to penalty assessments beginning on its effective date, August 1, 2019. Subsequently, the Corps intends to publish annual adjustments as required by the Inflation Adjustment Act, no later than January 15 of each calendar year.

The Inflation Adjustment Act prescribes a formula for adjusting statutory civil penalties to reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law. The adjustment criteria is provided by the Inflation Adjustment Act for the initial “catch-up” adjustment, the December 16, 2016, Office of Management and Budget (OMB) Memorandum regarding the “Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015”, the December 15, 2017, OMB Memorandum regarding the “Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” and the December 14, 2018, OMB Memorandum regarding the “implementation of Penalty Inflation Adjustments for 2019, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015.” The 2016 catch-up adjustment and the 2017, 2018, and 2019 annual adjustments for inflation will increase the maximum civil penalty under 33 U.S.C. 555 to $5,732 per violation.

Pursuant to the Inflation Adjustment Act, the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), and guidance issued by the Office of Management and Budget (OMB), 1 the Corps finds that good cause exists for issuing this final rule without prior notice and comment. The Inflation Adjustment Act does not require agencies to implement the required adjustments through a notice and comment process unless proposing an adjustment of less than the amount otherwise required, and the Corps is not exercising any discretion it may have to make a lesser adjustment. For the annual adjustments beginning in 2017, the Inflation Adjustment Act provides a clear formula for adjustment of the civil penalties, and accordingly, the Corps has no discretion to vary the amount of the adjustment to reflect any views or suggestions provided by commenters. The Inflation Adjustment Act further provides that the increased penalty levels apply to penalties assessed after the effective date of the increase. For these reasons, the Corps finds that notice and comment would be impracticable and unnecessary in this situation and contrary to the language of the Inflation Adjustment Act. Although the Corps finds good cause for issuing this final rule without prior notice and comment, and the Corps has no discretion on this action, the 30-day delayed effective date period does provide the opportunity for the public to voice its concerns if the Corps has overlooked anything. Comments received on this civil penalty rulemaking will generally not be viewed as “adverse.”

Section 4 of the Inflation Adjustment Act directs Federal agencies to publish annual penalty inflation adjustments. In accordance with Section 553 of the Administrative Procedure Act (APA), most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the Federal Register . However, because the Inflation Adjustment Act directed agencies to make the initial “catch-up” adjustment through an interim final rule, agencies were not required to complete a notice and comment process prior to promulgating that adjustment. 2 Section 4(b)(2) of the Inflation Adjustment Act further provides that each agency shall make the annual inflation adjustments “notwithstanding section 553” of the APA. According to the December 2016, December 2017, and December 2018 OMB guidance issued to Federal agencies on the implementation of the 2017, 2018, and 2019 annual adjustments, the phrase “notwithstanding section 553” means that “the public procedure the APA generally provides—notice, an opportunity for comment, and a delay in effective date—is not required for agencies to issue regulations implementing the annual adjustment.” Consistent with the language of the Inflation Adjustment Act and OMB's implementation guidance, this rule is not subject to notice and opportunity for public comment. As the Corps did not previously publish an interim final rule, the Corps is delaying the effective date of this final rule for 30 days following publication.

On August 3, 2011, the Deputy Secretary of Defense delegated to the Secretary of the Army the authority and responsibility to adjust penalties administered by the U.S. Army Corps of Engineers. On August 29, 2011, the Secretary of the Army delegated that authority and responsibility to the Assistant Secretary of the Army for Civil Works.

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, 701 (Inflation Adjustment Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 as previously amended by the 1996 Debt Collection Improvement Act (DCIA; collectively, “prior inflation adjustment Acts”), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The Inflation Adjustment Act requires agencies to do the following: (1) Adjust the level of civil monetary penalties with an initial “catch-up” adjustment, through an interim final rule to be published by July 1, 2016; and (2) beginning no later than January 15, 2017, make subsequent annual adjustments for inflation. The Inflation Adjustment Act does not alter an agency's statutory authority, to the extent it exists, to assess penalties below the maximum level. This final rule implements the initial “catch-up” adjustment mandated by the Inflation Adjustment Act as well as the 2017, 2018, and 2019 annual inflation adjustments mandated by the Act.

The Inflation Adjustment Act amends prior inflation adjustment Acts by substantially revising the method of calculating inflation adjustments. Prior inflation adjustment Acts required adjustments to civil penalties to be rounded significantly. For example, a penalty increase that was greater than $1,000, but less than or equal to $10,000, would be rounded to the nearest multiple of $1,000. While this allowed penalties to be kept at round numbers, it meant that agencies often would not increase penalties at all if the inflation factor was not large enough. Furthermore, increases to penalties were capped at 10 percent, which meant that longer periods without an inflation adjustment could cause a penalty to rapidly lose value in real terms. Over time, this formula caused agency civil penalties to lose value relative to total inflation, thereby undermining Congress' original purpose in enacting statutory civil monetary penalties to be a deterrent and to promote compliance with the law. The Inflation Adjustment Act has removed these rounding rules. Penalties now are simply rounded to the nearest dollar. This rounding ensures that penalties will be increased each year to more effectively keep up with inflation.

The Inflation Adjustment Act required a “catch-up” adjustment that reset the inflation calculations by excluding prior inflationary adjustments under prior inflation adjustment Acts, and subsequent, annual adjustments to all civil penalties under the laws implemented by that agency. With this rule, the new statutory maximum penalty level listed in Table 1 will apply to all statutory civil penalties assessed on or after the effective date of this rule.

OMB issued guidance on calculating the initial “catch-up” adjustment in February 2016. That guidance included a table of multipliers to adjust the penalty level based on the year that the penalty was established or last adjusted by statute or regulation (other than the Inflation Adjustment Act).

Table 1 shows the calculation of the initial catch-up adjustment based on the guidance provided by OMB. Column (1) contains the United States Code citations for the penalty statute. Column (2) contains the dollar amount most recently established by law (other than prior inflation adjustment Acts) for the civil monetary penalty under 33 U.S.C. 555. Column (3) sets out the year the Corps' civil monetary penalty was enacted or last adjusted by law (other than adjustments under the Inflation Adjustment Act). Column (4) sets out the factor determined by OMB to adjust for inflation from October of the corresponding year in column (3) to October 2015. Column (5) sets out the adjusted civil monetary penalty resulting from multiplying the dollar amount of the civil monetary penalty set out in Column (2) by the inflation factor in column (4). Column (6) sets out the civil monetary penalty that was in effect on November 2, 2015. Column (7) sets out the maximum catch-up penalty—an amount that is 250 percent of the 2015 penalty—which is calculated by multiplying the penalty amount in Column (6) by 2.5 (to achieve a 150 percent increase for a total of 250 percent of the 2015 penalty). Column (8) sets out the initial catch-up penalty amount, which is the lesser of the adjusted civil monetary penalty in Column (5) or the maximum civil monetary penalty in Column (7).

The Office of Management and Budget (OMB) issued guidance on calculating the 2017 and 2018 annual inflation adjustments. See December 14, 2018, Memorandum for the Heads of Executive Departments and Agencies, from Mick Mulvaney, Director, OMB, Subject: Implementation of Penalty Inflation Adjustments for 2019, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015; December 15, 2017, Memorandum for the Heads of Executive Departments and Agencies, from Mick Mulvaney, Director, OMB, Subject: Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015; December 16, 2016, Memorandum for the Heads of Executive Departments and Agencies, from Shaun Donovan, Director, OMB, Subject: Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The OMB provided to agencies the cost-of-living adjustment multiplier for 2017, based on the Consumer Price Index (CPI-U) for the month of October 2016, not seasonally adjusted, which is 1.01636. Likewise, the OMB provided to agencies the cost-of-living adjustment multiplier for 2018, based on the CPI-U for the month of October 2017, not seasonally adjusted, which is 1.02041. More recently, the OMB provided to agencies the cost-of-living adjustment multiplier for 2019, based on the CPI-U for the month of October 2018, not seasonally adjusted, which is 1.02522.

Agencies are to adjust “the maximum civil monetary penalty or the range of minimum and maximum civil monetary penalties, as applicable, for each civil monetary penalty by the cost-of-living adjustment.” For 2017, agencies multiply each applicable penalty by the multiplier, 1.01636, and round to the nearest dollar. For 2018, agencies are similarly required to multiply each applicable penalty by the multiplier, 1.02041, and round to the nearest dollar. Lastly, for 2019, agencies are required to multiply each applicable penalty by the multiplier, 1.02522, and round to the nearest dollar. The multiplier should be applied to the most recent penalty amount, i.e., the one that includes the initial catch-up adjustment mandated by the Inflation Adjustment Act. Row (9) in Table 1 sets out the 2017 Inflation Adjustment Multiplier while row (10) sets out the 2018 Inflation Adjustment Multiplier. Row (11) sets out the new penalty level which takes effect 30 days after the date of publication in the Federal Register .

In sum, under this final rule, the maximum penalty for violations under 33 U.S.C. 555 will increase from $2,500 per violation to $5,732.

This rule will not result in any additional costs to implement the Corps Navigation Program because the civil penalty in 33 U.S.C. 555 has been in effect since 1986 when Congress amended Section 11 of the Rivers and Harbors Appropriation Act of 1922 to provide for the assessment of civil penalties. This rule merely adjusts the value of a current statutory civil penalty to reflect and keep pace with the levels originally set by Congress when the statute was amended, as required by the Inflation Adjustment Act. This rule will result in additional costs to the person or entity receiving remuneration for the movement of vessels or for the transportation of goods or passengers on the navigable waters who do not comply with the statement and reporting requirements under 33 U.S.C. 555 and 33 CFR 207.800, because it increases the maximum penalty amount to $5,732 for each violation. The benefit of this rule will be to improve the effectiveness of Corps civil monetary penalties by maintaining their deterrent effect and promoting compliance with the law.

In compliance with the principles in the President's Memorandum of June 1, 1998, regarding plain language, this preamble is written using plain language. The use of “we” in this notice refers to the Corps and the use of “you” refers to the reader. We have also used the active voice, short sentences, and common everyday terms except for necessary technical terms.

This final rule will not impose any new information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). This action merely increases the level of a statutory civil penalty that could be imposed in the context of a Federal civil administrative enforcement action or civil judicial case for violations of a Corps-administered statute and its implementing regulations.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. For the Corps navigation program, the collection of commercial statistics pertaining to rivers, harbors and waterways, and annual reports thereof to Congress, are required by the River and Harbor Act of June 23, 1866 (14 Stat. 70), the act of February 21, 1891 (26 Stat. 766), the River and Harbor Act of June 13, 1902 (32 Stat. 376), the River and Harbor Act of July 25, 1912 (937 Stat. 201), the River and Harbor Act of September 22, 1922 (42 Sta.1043), and Public Law 16, February 10, 1932 (47 Stat. 42).2, the current OMB approval number for information requirements is maintained by the Corps of Engineers (OMB approval number 0710-0006). However, there are no new approval or application processes required as a result of this rulemaking that necessitate a new Information Collection Request (ICR). The regulation would not impose reporting or recordkeeping requirements. Therefore, this action is not subject to the Paperwork Reduction Act.

The OMB has not designated this final rule a “significant regulatory action” under Executive Order 12866. Accordingly, OMB has not reviewed this rule. Moreover, this final rule makes a nondiscretionary adjustment to an existing civil monetary penalty in accordance with the Inflation Adjustment Act and OMB guidance. The Corps, therefore, did not consider alternatives and does not have the flexibility to alter the adjustments of the civil monetary penalty amounts as provided in this rule. To the extent this rule increases a civil monetary penalty, it would result in an increase in transfers from persons or entities assessed a civil monetary penalty to the government.

This rule is not significant under E.O. 12866, therefore, it is not subject to the requirements of E.O. 13771.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires the Corps to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” The phrase “policies that have Federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This rule does not have federalism implications. This nondiscretionary action is required by the Inflation Adjustment Act and will have no substantial direct effects on the 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. Therefore, Executive Order 13132 does not apply to this rule.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions.

The Regulatory Flexibility Act applies only to rules subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act, 5 U.S.C. 553, or any other statute. See 5 U.S.C. 601-612. The Regulatory Flexibility Act does not apply to this final rule because a notice-and-comment rulemaking process is not required for the reasons stated above.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under Section 202 of the UMRA, the agencies generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating a rule for which a written statement is needed, section 205 of the UMRA generally requires the agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the Corps to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the agency publishes with the final rule an explanation why that alternative was not adopted. Before the Corps establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, they must have developed under Section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

We have determined that this final rule does not impose new substantive requirements and therefore does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any one year. Therefore, this rule is not subject to the requirements of Sections 202 and 205 of the UMRA. For the same reasons, we have determined that this final rule contains no regulatory requirements that might significantly or uniquely affect small governments. Therefore, this final rule is not subject to the requirements of Section 203 of UMRA. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs us to use voluntary consensus standards in our regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards.

This rule does not involve technical standards. Therefore, we did not consider the use of any voluntary consensus standards.

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that we have reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, we must evaluate the environmental health or safety effects of the rule on children, and explain why the regulation is preferable to other potentially effective and reasonably feasible alternatives.

This rule is not subject to this Executive Order because it is not economically significant as defined in Executive Order 12866. In addition, it does not concern an environmental or safety risk that we have reason to believe may have a disproportionate effect on children.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires agencies to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The phrase “policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

This rule does not have tribal implications. The rule imposes no new substantive obligations on tribal governments but instead merely adjusts the value of a current statutory civil monetary penalty to reflect and keep pace with the levels originally set by Congress when the statutes were enacted. The calculation of the increases is formula-driven and prescribed by statute and OMB guidance, and the Corps has no discretion to vary the amount of the adjustment to reflect any views or suggestions provided by commenters. Therefore, Executive Order 13175 does not apply to this rule.

The Corps prepares appropriate environmental documentation, including Environmental Impact Statements when required, for all permit decisions. Therefore, environmental documentation under the National Environmental Policy Act is not required for this rule. This final rule does not constitute a major Federal action significantly affecting the quality of the human environment because it merely increases the value of statutory civil monetary penalties to reflect and keep pace with the levels originally set by Congress when the statutes were enacted. The calculation of the increases is formula-driven and prescribed by statute and OMB guidance, and the Corps has no discretion to vary the amount of the adjustment.

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

Executive Order 12898 requires that, to the greatest extent practicable and permitted by law, each Federal agency must make achieving environmental justice part of its mission. Executive Order 12898 provides that each Federal agency conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that such programs, policies, and activities do not have the effect of excluding persons (including populations) from participation in, denying persons (including populations) the benefits of, or subjecting persons (including populations) to discrimination under such programs, policies, and activities because of their race, color, or national origin. This rule is not expected to negatively impact any community, and therefore is not expected to cause any disproportionately high and adverse impacts to minority or low-income communities. This rule relates solely to the adjustments to a civil penalty to account for inflation.

This rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This rule relates only to the adjustments to civil penalties to account for inflation. This rule is consistent with current agency practice, does not impose new substantive requirements, and therefore will not have a significant adverse effect on the supply, distribution, or use of energy.

For the reasons set forth in the preamble, the Corps amends 33 CFR part 207 as follows:

The USPTO revises the rules in parts 2, 7, and 11 of title 37 of the Code of Federal Regulations to require foreign applicants, registrants, or parties to a proceeding to be represented by an attorney, as defined in § 11.1, 37 CFR 11.1, that is, an attorney who is an active member in good standing of the bar of the highest court of a U.S. state (including the District of Columbia and any Commonwealth or territory of the U.S.) and who is qualified under § 11.14(a), 37 CFR 11.14(a), to represent others before the Office in trademark matters. A requirement that such foreign applicants, registrants, or parties be represented by a qualified U.S. attorney will (1) instill greater confidence in the public that U.S. registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims and (2) enable the USPTO to more effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters.

The trademark register must accurately reflect marks that are actually in use in commerce in the U.S. for the goods/services identified in the registrations. By registering trademarks, the USPTO has a significant role in protecting consumers, as well as providing important benefits to U.S. commerce by allowing businesses to strengthen and safeguard their brands and related investments.

The public relies on the register to determine whether a chosen mark is available for use or registration. When a person's search of the register discloses a potentially confusingly similar mark, that person may incur a variety of resulting costs and burdens, such as those associated with investigating the actual use of the disclosed mark to assess any conflict, initiating proceedings to cancel the registration or oppose the application of the disclosed mark, engaging in civil litigation to resolve a dispute over the mark, or choosing a different mark and changing business plans regarding its mark. In addition, such persons may incur costs and burdens unnecessarily if the disclosed registered mark is not actually in use in U.S. commerce, or is not in use in commerce in connection with all the goods/services identified in the registration. An accurate and reliable trademark register helps avoid such needless costs and burdens.

A valid claim of use made as to a registered mark likewise benefits the registrant. Fraudulent or inaccurate claims of use jeopardize the validity of any resulting registration and may render it vulnerable to cancellation. Furthermore, trademark documents submitted in support of registration require statutorily prescribed averments and must be signed in accordance with § 2.193(e)(1), 37 CFR 2.193(e)(1). If signed by a person determined to be an unauthorized signatory, a resulting registration may be invalid.

Therefore, the USPTO anticipates that implementation of this rule will have the benefit of generally reducing costs to applicants, registrants, and other parties and providing greater value to consumers who rely on registered marks.

As discussed below, in the past few years, the USPTO has seen many instances of unauthorized practice of law (UPL) where foreign parties who are not authorized to represent trademark applicants are improperly representing foreign applicants before the USPTO. As a result, increasing numbers of foreign applicants are likely receiving inaccurate or no information about the legal requirements for trademark registration in the U.S., such as the standards for use of a mark in commerce, who can properly aver to matters and sign for the mark owner, or even who the true owner of a mark is under U.S. law. This practice raises legitimate concerns that affected applications and any resulting registrations are potentially invalid, and thus negatively impacts the integrity of the trademark register.

The requirement for representation by a qualified U.S. attorney is also necessary to enforce compliance by all foreign applicants, registrants, and parties with U.S. statutory and regulatory requirements in trademark matters. It will not only aid the USPTO in its efforts to improve and preserve the integrity of the U.S. trademark register, but will also ensure that foreign applicants, registrants, and parties are assisted only by authorized practitioners who are subject to the USPTO's disciplinary rules.

The USPTO is implementing the requirement for representation by a qualified U.S. attorney in response to the increasing problem of foreign trademark applicants who purportedly are pro se ( i.e., one who does not retain a lawyer and appears for himself or herself) and who are filing inaccurate and possibly fraudulent submissions that violate the Trademark Act (Act) and/or the USPTO's rules. For example, such foreign applicants file applications claiming use of a mark in commerce, but frequently support the use claim with mocked-up or digitally altered specimens that indicate the mark may not actually be in use. Many appear to be doing so on the advice, or with the assistance, of foreign individuals and entities who are not authorized to represent trademark applicants before the USPTO. This practice undermines the accuracy and integrity of the U.S. trademark register and its utility as a means for the public to reliably determine whether a chosen mark is available for use or registration, and places a significant burden on the trademark examining operation.

(1) Show-Cause Authority: Under 35 U.S.C. 3(b)(2)(A), the Commissioner for Trademarks (Commissioner) possesses the authority to manage and direct all aspects of the activities of the USPTO that affect the administration of trademark operations. The Commissioner may use that authority to investigate and issue an order requiring an applicant to show cause why the applicant's representative, or the applicant itself, should not be sanctioned under § 11.18(c), 37 CFR 11.18(c), for presenting a paper to the USPTO in violation of § 11.18(b), 37 CFR 11.18(b). However, given the location of foreign applicants and those acting on their behalf, as well as potential language barriers, the show-cause authority has rarely been successful in resolving the underlying issues. Although all those who sign documents in trademark matters before the USPTO do so subject to criminal penalties for knowing and willful false statements made to a government agency under 18 U.S.C. 1001, the criminal perjury prosecution option under 18 U.S.C. 1001 is similarly difficult to enforce against those who are not subject, or are not easily subject, to U.S. jurisdiction. Further, proof to support such sanctions under § 11.18 is often difficult to obtain. For these primary reasons, when a foreign applicant fails to comply with statutory and regulatory requirements in ex parte examination, it has been challenging and, in some cases, impossible for the Commissioner to use her show-cause authority to impose the sanctions available under § 11.18(c).

(2) USPTO Disciplinary Authority Under 35 U.S.C. 32: Requiring foreign applicants, registrants, and parties to retain U.S. counsel in all trademark matters before the USPTO will likely reduce the instances of UPL and misconduct. In addition, when UPL and/or misconduct does occur, requiring foreign applicants, registrants, and parties to retain U.S. counsel will enable the Office of Enrollment and Discipline (OED) to more effectively pursue those who are engaged in UPL and/or misconduct. OED's disciplinary jurisdiction extends to a “Practitioner,” as that term is defined in § 11.1, 37 CFR 11.1, or a non-practitioner who offers legal services to people seeking to register trademarks with the USPTO. For practitioners, OED may investigate and institute formal disciplinary proceedings, which can result in discipline of the practitioner, including: (1) Exclusion from practice before the Office; (2) suspension from practice before the Office; (3) reprimand or censure; or (4) probation.

When formal discipline is issued against a U.S. practitioner, OED may also notify other federal agencies and the U.S. state bar(s) where the practitioner is licensed and/or authorized to practice law, as appropriate. A number of states have criminal statutes penalizing UPL. Depending on the state, the state bar, consumer-protection arm of the state's attorney office, and/or state consumer-protection agency may investigate UPL and take action to protect the public. Additionally, consumer-protection organizations and law-enforcement agencies can investigate possible civil or criminal fraud at the federal and state level. OED's ability to refer a disciplinary matter to a state bar for further action or to a federal or state consumer-protection agency, or law-enforcement agency, thus effectively deters disciplined practitioners from violating the terms of their disciplinary orders.

However, the threat of a claim of UPL has not been equally effective with foreign applicants and the unqualified foreign individuals, attorneys, or firms advising them. Although the USPTO investigates possible UPL by such foreign parties, because these parties are not practitioners authorized to practice before the USPTO, the absence of any realistic threat of disciplinary action has impeded the USPTO's efforts to deter foreign parties from engaging in UPL or violating a USPTO exclusion order. In addition, while the USPTO can send a letter to a foreign government regarding the USPTO's exclusion order, foreign government officials have great discretion regarding whether to pursue further sanctions against their own citizens. Further, since foreign parties are representing foreign applicants, there may be few U.S. stakeholders directly affected by UPL by the foreign party. There is little incentive for a state or federal law-enforcement or consumer-protection agency to take action against a foreign party engaged in UPL to protect U.S. interests, or to pursue further action with consumer-protection agencies in other countries where the foreign national does business. Moreover, the threat of criminal perjury prosecution in U.S. courtrooms does not have the same deterrent effect for foreign nationals as it does for U.S. nationals and domiciles.

As a practical matter, even if U.S. law enforcement is able to devote resources toward prosecution of a foreign national for a violation of 18 U.S.C. 1001, exerting jurisdiction over such a party is not always possible. Furthermore, many foreign unauthorized parties acting on behalf of foreign applicants and registrants who have been excluded by a Commissioner's order typically continue to engage in UPL before the USPTO, often increasing the scale of their efforts and employing tactics intended to circumvent the USPTO's rules.

Under this rule, submissions must be made by practitioners subject to the disciplinary jurisdiction of OED, making it less likely that they will be signed by an unauthorized party or contain statements that are inaccurate, particularly as to any averment of use of the mark in U.S. commerce or intention to use the mark. Further, because it will result in a more accurate and reliable trademark register, fewer U.S. applicants, registrants, and parties will incur the costs associated with investigating the actual use of a mark to assess any conflict, initiating proceedings to cancel a registration or oppose an application, engaging in civil litigation to resolve a dispute over a mark, or changing business plans to avoid use of a chosen mark.

Contributing to concerns regarding UPL, in recent years the USPTO has experienced a significant surge in foreign filings, with the number of trademark applications from foreign applicants increasing as a percentage of total filings, as shown in the following table. The numbers in parentheses indicate the number of applications represented by each percentage:

The USPTO predicts that the number of foreign trademark filings will continue to rise based on a variety of economic factors, including the strength of the U.S. economy. This growth is coupled with a significant growth in the number of filings by foreign pro se applicants in FY15 through FY17, especially as compared with filings by U.S. pro se applicants. The information shown below reflects the representation status at the time the USPTO electronic record was searched to obtain the data. Representation status may change over the course of prosecution. However, system limitations only permit the USPTO to retrieve representation status at the time a search is done.

The USPTO continues to address numerous instances of UPL by foreign parties who engage in tactics designed to circumvent USPTO rules. When the USPTO identifies UPL by foreign parties in an application, the USPTO sends information to the applicant's address of record informing the applicant that its appointed representative has been “excluded” from practice before the USPTO and cannot represent the applicant in the matter. In addition, the USPTO publishes the orders excluding foreign unauthorized individuals and entities on its website and suggests that applicants review all application submissions previously submitted on their behalf. However, in many applications, the address information for the applicant is not legitimate ( i.e., the address is for the unauthorized individual or entity representing the applicant) or is incomplete or inaccurate, and the USPTO cannot be sure that the affected applicants receive the information regarding the excluded representative. This fact raises concerns that the affected applications are potentially invalid because they were signed by an unauthorized party or contain statements that are inaccurate, particularly as to any averment of use of the mark in U.S. commerce or intention to use the mark, which forms the underlying statutory basis for federal registration.

Efforts to educate foreign applicants about UPL or to impose effective sanctions against the foreign unauthorized individuals or entities have proved ineffective. The problem of foreign applicants who violate U.S. legal and regulatory requirements in trademark matters and do so largely on the advice of foreign unauthorized individuals or entities grows each month. Within the last few years, the scale of the problem has become massive, with the estimated number of total tainted applications now in the tens of thousands. It also is becoming increasingly difficult for the USPTO, with its limited resources, to identify and prove misconduct and UPL, particularly as tactics and technology to mask the misconduct evolve.

(1) Requirement for Representation. Under this rule, § 2.11 is amended to require applicants, registrants, or parties to a trademark proceeding whose domicile is not located within the U.S. or its territories to be represented by an attorney who is an active member in good standing of the bar of the highest court of any of the 50 states of the U.S., the District of Columbia, or any Commonwealth or territory of the U.S.

In this final rule, the USPTO has further revised § 2.11 to add paragraph (f), which limits an applicant's or registrant's remedy to a petition to the Director in the situation when the USPTO issues an Office action that maintains only a requirement under paragraphs (a), (b), and/or (c) of this section, or maintains the requirement for the processing fee under § 2.22(c) in addition to one or all of those requirements. These requirements are purely procedural in nature and thus are appropriate subject matter for a petition to the Director. They also raise narrow issues that can be more efficiently reviewed and resolved by the Director on petition than by the Trademark Trial and Appeal Board on appeal. Therefore, the USPTO believes that it will streamline examination and expedite resolution of challenges to an Office action that maintains only these requirements by requiring that such challenge be made by a petition to the Director.

To ensure clarity regarding who is subject to the requirements of § 2.11, § 2.2 is amended to define “domicile” and “principal place of business.” Although it was not in the proposed rule, the USPTO also amends § 7.1(f) to clarify that the other definitions in § 2.2 apply to part 7. The requirement is similar to the requirement that currently exists in many other countries. The majority of countries with a similar requirement condition the requirement on domicile and the USPTO is following this practice. Moreover, requiring a qualified attorney to represent applicants, registrants, and parties whose domicile is not located within the U.S. or its territories is an effective tool for combatting the growing problem of foreign individuals, entities, and applicants failing to comply with U.S. law. For consistency with this requirement, the USPTO has clarified that the address required in §§ 2.22(a)(1) and 2.32(a)(2) is the domicile address. Further, to authorize the USPTO to require an applicant or registrant to provide and maintain a current domicile address, the USPTO codifies a new regulatory section at 37 CFR 2.189.

An affected applicant is required to obtain U.S. counsel to prosecute the application. Therefore, when the USPTO receives a trademark application filed by a foreign domiciliary, with a filing basis under section 1 and/or section 44 of the Act, 15 U.S.C. 1051, 1126, that does not comply with the requirements of § 2.11(a), the applicant will be informed in an Office action that appointment of a qualified U.S. attorney is required. The applicant will have the current usual period of six months to respond to an Office action including the requirement, and failure to comply will result in abandonment of the application. See 37 CFR 2.63, 2.65(a).

Foreign-domiciled applicants who submit an application based on section 66(a) of the Act (Madrid application), 15 U.S.C. 1141f, are also subject to the requirement to appoint a qualified U.S. attorney. Madrid applications are initially filed with the International Bureau (IB) of the World Intellectual Property Organization and subsequently transmitted to the USPTO. There is currently no provision for designating a U.S. or any other local attorney in an application submitted to the IB. Therefore, the USPTO will waive the requirement to appoint a qualified U.S. practitioner prior to publication for the small subset of Madrid applications (2.9% of all Madrid applications in fiscal year 2017) submitted with all formalities and statutory requirements already satisfied and in condition for publication upon first action until the Madrid system is updated to allow for the designation of a U.S. attorney.

(2) Recognition of representatives and requirement for bar information. Under § 2.32(a)(4), a recognized representative must provide his or her bar information as a requirement for a complete trademark application. For consistency with requiring this information as to pending applications, the requirement is added to § 2.17(b)(3) to make clear that the requirement for attorney bar information for recognized representatives also applies in post-registration maintenance documents, submissions in Madrid applications, and TTAB proceedings. Also, § 2.17(b)(1)(iii) and (b)(2) is amended to clarify the previous wording “in person” and “personal appearance” regarding how a qualified practitioner is recognized as a representative. Section 2.17(e) is revised to clarify that recognition of all foreign attorneys and agents, not just those from Canada, is governed by § 11.14(c). The change to § 2.17(g) was made in response to a commenter who requested that the USPTO clarify how long representation continues. Prior to implementation of this rule, § 2.17(g) referred to the duration of a power of attorney. However, under § 2.17(b), a representative may be recognized by methods other than the filing of a power of attorney. Therefore, in order to respond to the commenter's inquiry and to clarify when recognition ends, regardless of the how the representative was recognized, the USPTO felt it was necessary to amend § 2.17(g) to make clear that it refers to the duration of recognition, not just to the duration of a power of attorney. However, no changes were made to the current length of representation. Conforming amendments are also made to § 2.22, for filing a TEAS Plus application.

(3) Reciprocal recognition. Under this rule, § 11.14 is amended to clarify that only registered and active foreign attorneys or agents who are in good standing before the trademark office of the country in which the attorney or agent resides and practices may be recognized for the limited purpose of representing parties located in such country, provided the trademark office of such country and the USPTO have reached an official understanding to allow substantially reciprocal privileges. This rule also requires that in any trademark matter where an authorized foreign attorney or agent is representing an applicant, registrant, or party to a proceeding, a qualified U.S. attorney must also be appointed pursuant to § 2.17(b) and (c) as the representative who will file documents with the Office and with whom the Office will correspond.

Currently, only Canadian attorneys and agents are reciprocally recognized under § 11.14(c). This rule removes from the regulations at § 11.14(c) the authorization for reciprocally recognized Canadian patent agents to practice before the USPTO in trademark matters, but continues to allow reciprocal recognition of Canadian trademark attorneys and agents in trademark matters. Those Canadian patent agents already recognized to practice in U.S. trademark matters continue to be authorized to practice in pending trademark matters on behalf of Canadian parties only (1) so long as the patent agent remains registered and in good standing in Canada and (2) in connection with an application or post-registration maintenance filing pending before the Office on the effective date of this rule for which the recognized patent agent is the representative. Recognized Canadian trademark attorneys and agents continue to be authorized to represent Canadian parties in U.S. trademark matters.

The following tables estimate the costs for complying with this rule, using FY17 filing numbers for pro se applicants and registrants with a domicile outside the U.S. or its territories and for Madrid applicants and registrants. The professional rates shown below are the median charges for legal services in connection with filing and prosecuting an application, or filing a post-registration maintenance document, as reported in the 2017 Report on the Economic Survey, published by the American Intellectual Property Law Association.

As noted above, applicants subject to this rule are required to retain U.S. counsel to prosecute an application and to handle post-registration maintenance requirements and proceedings before the Trademark Trial and Appeal Board (TTAB). The tables below reflect two sets of aggregate costs—those for applicants who filed pro se in FY17 and would have retained counsel prior to filing and those who would have retained counsel after filing. As discussed above, the information shown below reflects the representation status at the time the USPTO electronic record was searched to obtain the data. Representation status may change over the course of prosecution and after registration. The USPTO does not collect information or statistics on applicants who file pro se but subsequently retain counsel during the prosecution of their application. The USPTO recognizes that there may have been a higher number of pro se applicants at filing than is reflected below because some of those applicants subsequently retained counsel prior to the date the search report was generated. Therefore, although it is possible that a higher number of pro se applicants may incur the cost of having counsel prepare and file an application, some applicants would have already incurred the additional cost for prosecution of the application.

The following table sets out the estimated costs, based on filing basis, if pro se applicants in FY17 with a domicile outside the U.S. or its territories retained counsel prior to filing their applications. A filing basis is the statutory basis for filing an application for registration of a mark in the U.S. An applicant must specify and meet the requirements of one or more bases in a trademark or service mark application. 37 CFR 2.32(a)(5). There are five filing bases: (1) Use of a mark in commerce under section 1(a) of the Act; (2) bona fide intention to use a mark in commerce under section 1(b) of the Act; (3) a claim of priority, based on an earlier-filed foreign application under section 44(d) of the Act; (4) ownership of a registration of the mark in the applicant's country of origin under section 44(e) of the Act; and (5) extension of protection of an international registration to the U.S. under section 66(a) of the Act. 15 U.S.C. 1051(a)-(b), 1126(d)-(e), 1141f(a). The number of applicants shown within each filing-basis category in the tables below reflects the basis status at the time the USPTO electronic record was searched to obtain the representation status.

Although the USPTO believes that applicants who are subject to the requirement should retain U.S. counsel prior to filing an application, the USPTO recognizes that not all will do so. Therefore, the USPTO expects that the total estimated costs reflected in the table below would be reduced by the number of applicants within each filing-basis category who file an application without retaining U.S. counsel.

Alternatively, the table below sets out the estimated costs, based on filing basis, if pro se applicants in FY17 with a domicile outside the U.S. or its territories retained counsel after filing their applications. As in the situation described above, the USPTO anticipates that a certain number of these applicants would retain U.S. counsel prior to filing an application. Therefore, the USPTO expects that the total estimated costs reflected in the table below would be increased by the number of applicants within each filing-basis category who chose to do so.

As discussed above, Madrid applications are initially filed with the IB and subsequently transmitted to the USPTO. In FY17, the USPTO received 24,418 Madrid applications in which the applicant had an address outside the U.S. or its territories, and thus would be subject to the requirement to retain U.S. counsel. There is currently no provision for designating a U.S. attorney in an application submitted to the IB. Therefore, the USPTO presumes that none of the Madrid applicants subject to the requirement retained U.S. counsel prior to filing. However, USPTO records indicate that at some point after filing, 14,602 of those FY17 Madrid applicants were represented by counsel. Therefore, only the remaining 9,816 Madrid applicants would be subject to the requirement to retain U.S. counsel to prosecute their applications, as shown in the following table:

The following table sets out the estimated costs to FY17 pro se registrants who would be subject to § 2.11(a) when filing a post-registration maintenance document.

For applicants, registrants, and parties not subject to the requirement to retain U.S. counsel, the USPTO anticipates that implementation of this rule will result in a more accurate and reliable trademark register, which will have the benefit of generally reducing costs to applicants, registrants, and parties and providing greater value to consumers who rely on registered marks. Under this rule, submissions will be made by practitioners subject to the disciplinary jurisdiction of OED, making it less likely that they will be signed by an unauthorized party or contain statements that are inaccurate, particularly as to any averment of use of the mark in U.S. commerce or intention to use the mark. Because it will result in a more accurate and reliable trademark register, fewer U.S. applicants, registrants, and parties will incur the costs associated with investigating the actual use of a mark to assess any conflict, initiating proceedings to cancel a registration or oppose an application, engaging in civil litigation to resolve a dispute over a mark, or changing business plans to avoid use of a chosen mark.

The USPTO published a notice of proposed rulemaking (NPRM) on February 15, 2019, at 84 FR 4393, soliciting comments on the proposed amendments. In response, the USPTO received comments from five groups and thirty-three commenters representing law firms, organizations, individuals, and other interested parties. The majority (74%) expressed support for the proposed requirement, with several noting that it was long overdue. Other commenters objected to the proposed requirement and suggested alternatives. In addition, some commenters raised concerns regarding discrimination against foreign-domiciled applicants and registrants while others were worried that applicants and registrants would find ways to bypass the requirement. Similar or related comments are grouped together and summarized below, followed by the USPTO's responses. All comments are posted on the USPTO's website at https://www.uspto.gov/trademark/trademark-updates-and-announcements/comments-proposed-rulemaking-require-foreign-domiciled .

Comment: One commenter inquired about the “international considerations” taken into account in drafting the rule to require U.S. counsel for a complete application but not as a condition to obtain a filing date.

Response: Two such considerations for not making the requirement for U.S. counsel a filing date requirement are Article 5 (“Filing Date”) of both the World Intellectual Property Organization's Singapore Treaty on the Law of Trademarks (2006) and the Trademark Law Treaty (1994). The U.S. is a contracting party to both treaties.

Comment: In response to the USPTO's invitation to submit comments regarding whether the USPTO should defer full examination of an application until the applicant complies with the requirement to appoint U.S. counsel or should conduct a complete examination and issue an Office action that includes the requirement along with other applicable refusals and requirements, four commenters supported the first option and two commenters supported the second. One commenter also noted that the proposed rule was unclear on the effective date and how the proposed rules would be implemented not only with regard to newly filed trademark applications, but also as to pending applications and existing registrations, pending proceedings before the TTAB, petitions, and letters of protest.

Response: The USPTO is sympathetic to the comments submitted by those who support deferred examination of an application filed by a foreign applicant who is not represented by U.S. counsel and thus has not complied with the requirements of § 2.11. Having an application reviewed by a U.S. licensed attorney prior to examination on the merits would help ensure that the application was signed by an authorized party and that all statements made in the application are accurate, particularly as to any averment that the mark is in use or intended to be used in U.S. commerce. However, the USPTO's internal electronic systems currently are not designed to accommodate a deferred examination workflow, and our current understanding is that implementing changes to those systems would require substantial investment and take at least a year or more to complete. The USPTO is currently exploring ways in which it may be able to update its electronic systems to accommodate deferred examination.

Therefore, upon the effective date of this rule and until such time as the USPTO's electronic systems may be updated to accommodate deferred examination, the USPTO will examine all newly filed applications for compliance with this rule in accordance with current examination guidelines by, in most cases, conducting a complete review of the application and issuing an Office action that includes the requirement for U.S. counsel and for domicile, when appropriate, as well as any other refusals and/or requirements. The USPTO retains its discretion to defer substantive examination and examine only for this or other requirements in appropriate circumstances. Similarly, upon the effective date of this final rule, the USPTO will examine all newly filed post-registration maintenance documents for compliance with this rule in accordance with current examination guidelines.

Furthermore, the USPTO believes it is likely that most applicants who would be subject to the requirement to appoint U.S. counsel will make the appointment in their initial application filing. Most pro se foreign applicants have historically filed their applications using TEAS Plus, which is the lowest-cost filing option, requires a complete application, and usually results in a quicker approval for publication and registration. The revisions to § 2.22(a) enacted herein require foreign applicants who file using the TEAS Plus option to designate a U.S. attorney as the applicant's representative in order to submit the application. Assuming that these applicants continue to avail themselves of this attractive lower-cost option, the USPTO will not need to issue an Office action requiring the appointment of a U.S. counsel for TEAS Plus applicants because the application will necessarily include the required designation at filing in order to be able to successfully file with TEAS Plus. If a foreign applicant does not designate a U.S. attorney as the applicant's representative on the TEAS Plus application, the applicant will be unable to validate and file the application.

The USPTO will also implement the following procedures regarding application and registration documents filed prior to the effective date of this rule. If a document submitted by a foreign applicant or registrant prior to the effective date of this rule requires no further action by the applicant or registrant, the USPTO will not require appointment of U.S. counsel as to that filing. For example, if a foreign applicant submits a new application that is in condition for approval for publication or issuance of a registration on first action, the examining attorney will approve the application for publication or issuance of the registration. Similarly, if a response to an Office action that was filed prior to the effective date of the rule satisfies all outstanding requirements or overcomes all outstanding refusals, the examining attorney will approve the application for publication or issuance of a registration. However, if a further Office action must be issued, the Office action will include the requirement for appointment of U.S. counsel and for domicile, when appropriate.

The same procedure will be followed for post-registration maintenance documents. If a post-registration maintenance document filed before the effective date of this rule is acceptable as filed, the USPTO will not require appointment of U.S. counsel as to that document. If a post-registration Office action must be issued, however, the Office action will include the requirement for appointment of U.S. counsel. The same procedures will be followed for petitions submitted prior to the effective date of this rule. Note that third-parties who submit letters of protest regarding pending applications, pursuant to section 1715 of the Trademark Manual of Examining Procedure, are not applicants, registrants, or parties to a proceeding. Therefore, they are not subject to the requirement of this rule to appoint U.S. counsel.

The TTAB generally will apply this rule to all proceedings filed on or after the effective date of this rule, and to all proceedings pending on the effective date of this rule in which the parties must take further action. If it is necessary to require a foreign party to obtain U.S. counsel, the TTAB will suspend the proceedings and inform the party of the time frame within which it must obtain U.S. counsel.

Comment: The USPTO received five comments that raised concerns about the rule discriminating against foreign-domiciled applicants and registrants.

Response: The USPTO disagrees that the requirement for foreign-domiciled applicants and registrants to retain U.S. counsel discriminates against foreign-domiciled applicants and registrants. This rule is necessary to ensure compliance with U.S. trademark law and USPTO regulations. In order to maintain the integrity of the federal trademark register, for the benefit of all its users, the USPTO must have the appropriate tools to enforce compliance by all applicants and registrants. As discussed in the NPRM and in the preamble, while the USPTO has effective mechanisms to sanction U.S.-domiciled applicants and registrants, the currently available mechanisms for the USPTO to sanction foreign-domiciled applicants and registrants for violations have proven to be ineffective. As the NPRM and preamble also note, a significant number of trademark offices around the world require foreign-domiciled applicants and registrants to obtain local counsel as a condition for filing papers with those trademark offices.

Comment: One commenter did not agree with the proposal to waive the requirement to appoint a qualified U.S. practitioner prior to publication for the small subset of Madrid applications submitted with all formalities and statutory requirements satisfied and in condition for publication upon first action until the Madrid system is updated to allow for the designation of a U.S. attorney. The commenter suggested that Madrid applicants be subject to the requirement for U.S. counsel to ensure compliance with the requirement for a bona fide intention to use the mark in U.S. commerce in connection with the goods or services identified in the application.

Response: The USPTO appreciates the concern raised by the commenter and has given it careful consideration. However, there is currently no mechanism for the USPTO to require a U.S. attorney to be appointed as a condition for a foreign national to file an international application under the Madrid Protocol that includes a request for extension of protection into the U.S. Moreover, the subset of Madrid applications that would not be subject to this rule is very small and, in the interests of the Madrid System, the USPTO will waive the requirement for U.S. counsel in this limited situation. Additionally, there are existing mechanisms to challenge the bona fide intention to use of an applicant filing via section 66 or section 44 of the Act.

Comment: Some commenters noted that the proposed rule may increase costs for foreign applicants.

Response: The USPTO acknowledges that the costs to comply with this rule will be incurred by foreign applicants, registrants, and parties. However, the USPTO also agrees with the commenter who stated that “the costs created by misuse of our existing system is [sic] borne by all good faith trademark users regardless of where they live or whether or not they are represented.” This rule provides qualitative value to all applicants and registrants, as well as to consumers, because it will result in a more accurate and reliable trademark register. As noted above, fraudulent or inaccurate claims of use jeopardize the validity of any registration and may render it vulnerable to cancellation. Under this rule, submissions will be made by practitioners subject to the disciplinary jurisdiction of OED, making it less likely that they will be signed by an unauthorized party or contain statements that are inaccurate, particularly as to any averment of use of the mark in U.S. commerce or intention to use the mark in U.S. commerce. Because it will result in a more accurate and reliable trademark register, fewer applicants, registrants, and parties will incur the costs associated with changing business plans to avoid use of a chosen mark. As noted by one commenter, “[b]eing forced to adopt a different mark because a first choice is blocked by a bad faith application or registration significantly adds to the cost of adopting a new trademark. The cost of delaying a brand launch for years pending the outcome of an opposition or cancellation action, however, is much greater and, in most cases, not feasible.”

Comment: Some commenters suggested that the USPTO allow trademark agents to represent others in trademark matters before the USPTO.

Response: Part 11 of title 37 of the Code of Federal Regulations governs the practice of trademark law before the USPTO. Under § 11.14(a), 37 CFR 11.14(a), only an attorney, as defined in § 11.1, may represent others before the USPTO in trademark matters. Under § 11.1, an attorney is defined as an individual who is an active member in good standing of the bar of the highest court of any State, which is defined as any of the 50 states of the U.S., the District of Columbia, and any Commonwealth or territory of the U.S. The only exception is § 11.14(c), which is amended under this rule to clarify that only registered and active foreign attorneys or agents who are in good standing before the trademark office of the country in which the attorney or agent resides and practices may be recognized for the limited purpose of representing parties located in such country, provided the trademark office of such country and the USPTO have reached an official understanding to allow substantially reciprocal privileges. This rule also requires that in any trademark matter where an authorized foreign attorney or agent is representing an applicant, registrant, or party to a proceeding, a qualified U.S. attorney must also be appointed pursuant to § 2.17(b) and (c) as the representative who will file documents with the USPTO and with whom the Office will correspond. As noted above, currently, only Canadian attorneys and agents are reciprocally recognized under § 11.14(c).

Revising the USPTO's current rules to allow representation by other trademark agents would not provide a solution to the ever-growing problem of UPL in trademark matters.

Comment: One commenter suggested that the USPTO consider instituting a secondary bar certification, as is required for patent attorneys, in order for an attorney to provide trademark representation. Another commenter expressed concern that the USPTO might require such certification.

Response: Although the USPTO appreciates the first commenter's rationale that a secondary bar certification would help to ensure that practitioners who represent parties in trademark matters are knowledgeable in this area of practice, the USPTO does not plan at this time to require such certification. However, the USPTO will continue to review such suggestions in light of the statutory framework set forth in the Administrative Procedure Act. See 5 U.S.C. 500.

Comment: Some commenters expressed concerns regarding efforts by foreign applicants and registrants to circumvent the proposed requirement by using temporary or fraudulent U.S. addresses or by fraudulently using the address and contact information of U.S. attorneys. One commenter suggested that the USPTO train employees to identify suspicious domicile, attorney, and email addresses and several others suggested that the USPTO set up a secure system, similar to that used for patent applications, for filing and prosecuting trademark applications.

Response: The USPTO appreciates the concerns expressed by the commenters regarding efforts to circumvent this rule. The USPTO does not have the resources to investigate each U.S. domicile address provided by a non-U.S. citizen to determine whether it legitimately identifies a permanent legal residence or a principal place of business. However, the USPTO will train examining attorneys on identifying characteristics of applicant information that would warrant inquiry as to whether the applicant is subject to the requirement. Further, if the USPTO becomes aware of a potentially fictitious or false domicile address or attorney information, the USPTO can, under § 2.61(b), require the applicant, registrant, or party to provide proof of the validity of the domicile address or attorney information.

Currently, under § 11.18(b), any party who signs, files, or submits a paper to the USPTO is certifying that all statements made of the party's own knowledge are true, or made on information and belief are believed to be true and that the paper is not being presented for an improper purpose. Under § 2.189 of this rule, each applicant and registrant must provide and keep current the address of its domicile. Further, under § 2.11(e) of this rule, a foreign applicant, registrant, or party who attempts to circumvent the requirements of § 2.11(a) of this rule by providing false, fictitious, or fraudulent information regarding its domicile address or its attorney will be subject to the sanctions in § 11.18(c), which includes terminating the proceedings before the USPTO, for example, abandoning an application or cancelling a registration.

The USPTO is also in the process of updating its electronic systems to make them more secure, including to require login to take action in trademark files.

Comment: One commenter stated that “U.S. licensed attorneys are not required to independently verify the validity of specimens submitted by their clients when prosecuting a trademark application and may rely on the sworn statements and specimens provided by their clients.” Another commenter inquired as to the due-diligence requirements of U.S.-licensed attorneys to ensure that use claims are valid in all of the trademark applications they file, not just those of foreign applicants.

Response: Under USPTO rules, attorneys must conduct a reasonable inquiry, before submitting any filing, to determine that the filing is not being presented for any improper purpose and that the facts have evidentiary support. 37 CFR 11.18. Thus, attorneys have an independent obligation to ensure to the best of their knowledge, information, and belief that the requirements for use in U.S. commerce are met in the filings they sign or submit to the Office on behalf of their clients and it is the responsibility of the applicant and the applicant's attorney to determine whether an assertion of use in commerce has a basis in existing law and is supported by the relevant facts, including that the specimen of use is valid. 37 CFR 11.18; TMEP section 901.04.

Sanctions for violating these rules could include striking the filing, terminating the proceedings, and referring the attorney to OED for appropriate action. In addition, attorneys could be disciplined for such violations, including exclusion or suspension from practice before the USPTO, reprimand, censure, or probation. Attorneys disciplined by the USPTO also may be disciplined by their state bar.

Comment: Some commenters recommended that the USPTO amend the application form to reference the rule requirements in several languages, to include a section for the attorney bar information, and to mask the bar information.

Response: The USPTO has no plans to update the application form to reference required information in languages other than English. Under § 2.21(a), which sets out the requirements for receiving a filing date, an application under section 1 or section 44 of the Act must be in the English language. Regarding bar information, on the effective date of this rule, the application form will include specific fields to enter attorney address and bar information, including attorney bar numbers for those jurisdictions that provide them.

Attorney address and bar information is publicly available from multiple sources such as firm websites, state boards of bar overseers, and various bar associations. Because such information is so widely available to the public, it appears unnecessary to mask the information in the USPTO's publicly available records. However, because the USPTO appreciates the concern that attorney bar information may be misused by bad actors in trademark filings, the USPTO intends to mask in the public database bar information that is entered in the dedicated fields for such information on a Trademark Electronic Application System (TEAS) form.

Comment: One commenter requested that the USPTO clarify whether, under this rule, representation by U.S. counsel continues after registration and through any TTAB proceedings unless properly withdrawn under §§ 2.19 and 11.116.

Response: Prior to implementation of this rule. § 2.17(g) referred to the duration of a power of attorney. However, under § 2.17(b), a representative may be recognized by methods other than the filing of a power of attorney. Therefore, in order to respond to the commenter's inquiry and to clarify when recognition ends, regardless of the how the representative was recognized, the USPTO felt it was necessary to amend § 2.17(g) to make clear that it refers to the duration of recognition, not just to the duration of a power of attorney. However, no changes were made to the current length of representation. Under § 2.17(g), representation during the pendency of an application ends when the mark registers, when ownership changes, or when the application is abandoned. Representation by a practitioner recognized after registration ends when the mark is cancelled or expired, when ownership changes, or when an affidavit under section 8, 12(c), 15, or 71 of the Act, renewal application under section 9 of the Act, or request for amendment or correction under section 7 of the Act, is accepted or finally rejected. Representation in TTAB proceedings may end when a written revocation of the authority to represent a party is filed with the TTAB or when the TTAB grants permission for the practitioner to withdraw. The USPTO notes that even after representation is considered to have ended under these rules, if the attorney does not formally withdraw as representative, the USPTO's systems may still reflect the attorney's information and the USPTO may send courtesy reminders of post-registration filing deadlines to the attorney.

Comment: One commenter stated that it supports the USPTO's proposal to seek more reciprocal agreements with other countries, but requested information regarding how the USPTO identifies, negotiates, and implements reciprocal agreements. Another commenter indicated that he was in favor of the rule because it “adds reciprocity.”

Response: The USPTO notes that the NPRM did not include a proposal to seek or add additional reciprocal agreements.

The USPTO revises § 2.2 to add § 2.2(o), defining “domicile” and § 2.2(p), defining “principal place of business.”

The USPTO revises § 2.11 to change the heading to “Requirement for representation,” deletes the first sentence, includes the remaining sentence in new § 2.11(a) and adds § 2.11(b)-(f), which set out the requirements regarding representation of applicants, registrants, or parties to a proceeding whose domicile is not located within the U.S. or its territories.

The USPTO revises § 2.17(b)(1)(iii) and (b)(2) to clarify how a qualified practitioner is recognized and authorized as a representative. The USPTO adds § 2.17(b)(3) to require the bar information of recognized representatives. The USPTO revises § 2.17(e) to change the word “Canadian” in the heading to “Foreign,” to state that recognition of foreign attorneys and agents is governed by § 11.14(c) of this chapter, and to delete current § 2.17(e)(1) and (2). The USPTO also revises § 2.17(g) to change the heading to “Duration of recognition” and to amend paragraphs (g)(1) and (2) to clarify when recognition of a representative ends.

The USPTO revises § 2.22(a)(1) to require the applicant's domicile address and adds § 2.22(a)(21) to require representation by a U.S. attorney for applicants, registrants, or parties to a proceeding whose domicile is not located within the U.S. or its territories as well as the attorney's name, postal address, email address, and bar information.

The USPTO revises § 2.32(a)(2) to include the requirement for the domicile address of each applicant and § 2.32(a)(4) to delete the current text and to indicate that when the applicant is, or must be, represented by an attorney, the attorney's name, postal address, email address, and bar information are required.

The USPTO adds § 2.189 to require applicants and registrants to provide and keep current their domicile addresses.

The USPTO revises § 7.1(f) to indicate that all definitions in § 2.2 apply to part 7 and not just paragraphs (k) and (n) in § 2.2.

The USPTO redesignates current § 11.14(c) as § 11.14(c)(1) and clarifies the requirements for reciprocal recognition in revised paragraph (c)(1). The USPTO also adds § 11.14(c)(2) to require that in any trademark matter where an authorized foreign attorney or agent is representing an applicant, registrant, or party to a proceeding, a qualified U.S. attorney must also be appointed pursuant to § 2.17(b) and (c) as the representative who will file documents with the Office and with whom the Office will correspond. The USPTO revises § 11.14(e) to add the heading “Appearance,” and the prefatory phrase “Except as specified in § 2.11(a) of this chapter” and the wording “or on behalf of” to the second sentence, and deletes the third sentence. The USPTO also deletes the wording “if such firm, partnership, corporation, or association is a party to a trademark proceeding pending before the Office” from § 11.14(e)(3).

A. Administrative Procedure Act: The changes in this rulemaking involve rules of agency practice and procedure, and/or interpretive rules. See Perez v. Mortg. Bankers Ass'n, 135 S. Ct. 1199, 1204 (2015) (Interpretive rules “advise the public of the agency's construction of the statutes and rules which it administers.” (citation and internal quotation marks omitted)); Nat'l Org. of Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (Rule that clarifies interpretation of a statute is interpretive.); Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 (DC Cir. 2001) (Rules governing an application process are procedural under the Administrative Procedure Act.); Inova Alexandria Hosp. v. Shalala, 244 F.3d 342, 350 (4th Cir. 2001) (Rules for handling appeals were procedural where they did not change the substantive standard for reviewing claims.).

Accordingly, prior notice and opportunity for public comment for the changes in this rulemaking are not required pursuant to 5 U.S.C. 553(b) or (c), or any other law. See Perez, 135 S. Ct. at 1206 (Notice-and-comment procedures are required neither when an agency “issue[s] an initial interpretive rule” nor “when it amends or repeals that interpretive rule.”); Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), does not require notice and comment rulemaking for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” (quoting 5 U.S.C. 553(b)(A))). However, the Office has chosen to seek public comment before implementing the rule to benefit from the public's input.

B. Final Regulatory Flexibility Analysis: The USPTO publishes this Final Regulatory Flexibility Analysis (FRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) to examine the impact of the Office's changes to require U.S. counsel for foreign-domiciled applicants, registrants, and parties to a proceeding. Under the RFA, whenever an agency is required by 5 U.S.C. 553 (or any other law) to publish a notice of proposed rulemaking (NPRM), the agency must prepare and make available for public comment a FRFA, unless the agency certifies under 5 U.S.C. 605(b) that the proposed rule, if implemented, will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603, 605. The USPTO published an Initial Flexibility Analysis (IRFA), along with the NPRM, on February 15, 2019 (84 FR 4393). The USPTO received no comments from the public directly applicable to the IFRA, as stated below in Item 2.

Items 1-6 below discuss the six items specified in 5 U.S.C. 604(a)(1)-(6) to be addressed in a FRFA. Item 6 below discusses alternatives considered by the Office.

1. Succinct statement of the need for, and objectives of, the rule:

This rule requires applicants, registrants, or parties to a proceeding whose domicile is not located within the U.S. or its territories to be represented by an attorney who is an active member in good standing of the bar of the highest court of a U.S. state (including the District of Columbia and any Commonwealth or territory of the U.S.) and who is qualified to represent others before the Office in trademark matters.

The requirement for representation by a qualified U.S. attorney is in response to the increasing problem of foreign trademark applicants who purportedly are pro se and who are filing what appear to be inaccurate and even fraudulent submissions that violate the Act and/or the USPTO's rules. In the past few years, the USPTO has seen many instances of UPL where foreign parties who are not authorized to represent trademark applicants are improperly representing foreign applicants before the USPTO. As a result, increasing numbers of foreign applicants are likely receiving inaccurate or no information about the legal requirements for trademark registration in the U.S., such as the standards for use of a mark in commerce, who can properly aver to matters and sign for the mark owner, or even who the true owner of a mark is under U.S. law. This practice raises legitimate concerns that affected applications and any resulting registrations are potentially invalid, particularly as to averments of use of the mark in U.S. commerce or intention to use the mark, and thus negatively impacts the integrity of the federal trademark register.

The requirement is also necessary to enforce compliance by all foreign applicants, registrants, and parties with U.S. statutory and regulatory requirements in trademark matters. Thus, it will not only aid the USPTO in its efforts to improve and preserve the integrity of the U.S. trademark register, but will also ensure that foreign applicants, registrants, and parties are assisted only by authorized practitioners who are subject to the USPTO's disciplinary rules.

The policy objectives of this rule are to: (1) Instill greater confidence in the public that U.S. registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims and (2) enable the USPTO to more effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters. As to the legal basis for this rule, section 41 of the Act, 15 U.S.C. 1123, as well as 35 U.S.C. 2, provide the authority for the Director to make rules and regulations for the conduct of proceedings in the Office.

2. A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the Agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments:

The USPTO did not receive any public comments in response to the IRFA. However, the Office received comments about the proposed requirement for U.S. counsel, which are discussed in the preamble.

3. The response of the Agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments:

The USPTO did not receive any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule.

4. Description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available:

To comply with this rule, foreign applicants, registrants, or parties are required to be represented by an attorney who is an active member in good standing of the bar of the highest court of a U.S. state (including the District of Columbia and any Commonwealth or territory of the U.S.). Applicants for a trademark are not industry specific and may consist of individuals, small businesses, non-profit organizations, and large corporations. The USPTO does not collect or maintain statistics on small- versus large-entity applicants, registrants, or parties, and this information would be required in order to determine the number of small entities that would be affected by the proposed rule.

5. Description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record:

There are no recordkeeping requirements imposed by this rule. The reporting requirement of this rule consists of entering the attorney name, address, and bar information in the required fields on the USPTO's electronic forms or providing the information on documents submitted to the USPTO by other methods. There are no professional skills necessary for the reporting of the attorney name, address, and bar information.

To comply with this rule, applicants, registrants, and parties to a proceeding whose domicile is not located within the U.S. must hire an attorney who is an active member in good standing of the bar of the highest court of a U.S. state (including the District of Columbia and any Commonwealth or territory of the U.S.) and who is qualified under § 11.14(a), 37 CFR 11.14(a), to represent them before the Office in trademark matters.

6. Description of the steps the Agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the Agency which affect the impact on small entities was rejected:

The USPTO considered three alternatives before recommending that foreign applicants, registrants, or parties be represented by a qualified U.S. attorney. The USPTO chose the alternative herein because it will enable the Office to achieve its goals effectively and efficiently. Those goals are to (1) instill greater confidence in the public that U.S. registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims and (2) enable the USPTO to more effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters.

Due to the difficulty in quantifying the intangible benefits associated with the preferred alternative, the Office provides below a discussion of the qualitative benefits to trademark applicants and registrants. One of the primary benefits of the preferred alternative is ensuring the accuracy of the trademark register. The accuracy of the trademark register as a reflection of marks that are actually in use in commerce in the U.S. for the goods/services identified in the registrations listed therein serves a critical purpose for the public and for all registrants. By registering trademarks, the USPTO has a significant role in protecting consumers, as well as providing important benefits to American businesses, by allowing them to strengthen and safeguard their brands and related investments. Such benefits would be especially valuable for small entities for the following reasons. The public relies on the register to determine whether a chosen mark is available for use or registration. When a person's search of the register discloses a potentially confusingly similar mark, that person may incur a variety of resulting costs and burdens, such as those associated with investigating the actual use of the disclosed mark to assess any conflict, initiating proceedings to cancel the registration or oppose the application of the disclosed mark, engaging in civil litigation to resolve a dispute over the mark, or changing business plans to avoid use of the party's chosen mark. In addition, such persons may incur costs and burdens unnecessarily if a registered mark is not actually in use in commerce in the U.S., or is not in use in commerce in connection with all the goods/services identified in the registration. An accurate and reliable trademark register helps avoid such needless costs and burdens. A valid claim of use made as to a registered mark likewise benefits the registrant. Fraudulent or inaccurate claims of use jeopardize the validity of any resulting registration and may subject it to attack and render it vulnerable to cancellation.

The chosen alternative also addresses the increasing problem of foreign trademark applicants who purportedly are pro se and who are filing what appear to be inaccurate and possibly even fraudulent submissions that violate the Act and/or the USPTO's rules. Requiring foreign applicants, registrants, and parties to retain U.S. counsel in all trademark matters before the USPTO will likely reduce the instances of UPL and misconduct and, when misconduct does occur, it will enable OED to more effectively pursue those who are engaged in UPL and/or misconduct. The threat of a claim of UPL has not been effective with foreign applicants and the unqualified foreign individuals, attorneys, or firms advising them.

The USPTO estimated the costs for complying with the rule using FY17 filing numbers for pro se applicants and registrants with a domicile outside the U.S. or its territories, and for Madrid applicants and registrants. As discussed in the preamble, the cost estimates reflect the representation status at the time the USPTO electronic record was searched to obtain the data.

Applicants under section 1 or section 44 of the Act who are subject to this rule are required to retain U.S. counsel to meet the requirements for a complete application under § 2.32(a)(4). Based on FY17 filing numbers, if such applicants did not retain counsel prior to filing an application, the USPTO estimates that the cost for representation would be $42,413,400. The estimated cost if such applicants had retained counsel prior to filing their applications would be $73,800,950. Madrid applications, which are based on section 66(a) of the Act, are initially filed with the IB and subsequently transmitted to the USPTO. In FY17, the USPTO received 24,418 Madrid applications in which the applicant had an address outside the U.S. or its territories, and thus would be subject to the requirement. There is currently no provision for designating a U.S. attorney in an application submitted to the IB. Therefore, the USPTO presumes that none of the Madrid applicants subject to the requirement would have retained U.S. counsel prior to filing. However, USPTO records indicate that at some point after filing, 14,602 of those FY17 Madrid applicants were represented by counsel. Therefore, only the remaining 9,816 Madrid applicants would be subject to the requirement to retain U.S. counsel to prosecute their applications. Therefore, the USPTO estimates the cost to all FY17 Madrid applicants to retain counsel after filing their applications as $9,816,000. The estimated costs to FY17 pro se registrants who registered under section 1, section 44, or section 66(a) of the Act and who would be subject to the requirement to retain U.S. counsel when filing a post-registration maintenance document is $1,018,500.

The costs to comply with this rule would be incurred by foreign applicants, registrants, and parties. This rule does not impact individuals or large or small entities with a domicile within the U.S. Moreover, this rule provides qualitative value to all applicants and registrants, as well as to consumers, because it will result in a more accurate and reliable trademark register. Under this rule, submissions will be made by practitioners subject to the disciplinary jurisdiction of OED, making it less likely that they will be signed by an unauthorized party or contain statements that are inaccurate, particularly as to any averment of use of the mark in U.S. commerce or intention to use the mark. Because it will result in a more accurate and reliable trademark register, fewer applicants, registrants, and parties will incur the costs associated with investigating the actual use of a mark to assess any conflict, initiating proceedings to cancel a registration or oppose an application, engaging in civil litigation to resolve a dispute over a mark, or changing business plans to avoid use of a chosen mark.

The second alternative considered would be to take no action at this time. This alternative was rejected because the Office has determined that the requirement is needed to accomplish the stated objectives of instilling greater confidence in the public that U.S. registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims and enabling the USPTO to more effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters.

A third alternative considered was to propose a revision to § 2.22 that would require foreign applicants to retain U.S. counsel in order to obtain a filing date for an application under section 1 and/or section 44 of the Act. This alternative was rejected due to international considerations. Thus, when the USPTO receives an application filed by a foreign domiciliary, with a filing basis under section 1 and/or section 44 of the Act that does not comply with the requirements of § 2.11(a), the USPTO must inform the applicant that appointment of a qualified U.S. attorney is required. Although this places an additional burden on the USPTO, it minimizes the impact of this rule on small entities. Although such entities may choose to incur the cost of retaining counsel to prepare and file an application, they would not be required to do so.

C. Executive Order 12866 (Regulatory Planning and Review): This rulemaking has been determined to be significant for purposes of Executive Order 12866 (Sept. 30, 1993).

D. Executive Order 13563 (Improving Regulation and Regulatory Review): The Office has complied with Executive Order 13563 (Jan. 18, 2011). Specifically, the Office has, to the extent feasible and applicable: (1) Made a reasoned determination that the benefits justify the costs of the rule; (2) tailored the rule to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector and the public as a whole, and provided on-line access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes.

E. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs): This rule is not subject to the requirements of Executive Order 13771 (Jan. 30, 2017) because it is expected to result in no more than de minimis costs to citizens and residents of the United States.

F. Executive Order 13132 (Federalism): This rulemaking does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

G. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

H. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

I. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

J. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

K. Executive Order 12630 (Taking of Private Property): This rulemaking will not affect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

L. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), prior to issuing any final rule, the USPTO will submit a report containing the final rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the Government Accountability Office. The changes in this notice are not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this notice is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

M. Unfunded Mandates Reform Act of 1995: The changes set forth in this notice do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

N. National Environmental Policy Act: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

O. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions that involve the use of technical standards.

P. Paperwork Reduction Act: This rulemaking involves information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collection of information involved in this rule has been reviewed and previously approved by OMB under control numbers 0651-0009, 0651-0050, 0651-0051, 0651-0054, 0651-0055, 0651-0056, and 0651-0061. We estimate that 41,000 applications will have an additional burden of 5 minutes due to this rulemaking, adding in 3,000 burden hours across all trademark collections.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

For the reasons stated in the preamble and under the authority contained in 15 U.S.C. 1123 and 35 U.S.C. 2, as amended, the Office amends parts 2, 7, and 11 of title 37 as follows:

The EPA is publishing this rule to correct inaccurate text in the CFR that has been identified since the original publication. This action will prevent confusion regarding dumping at designated ocean dumping sites and ensure that the regulations contain the correct information. Specifically, the EPA intends to eliminate confusion regarding the applicable coordinate datum for ocean dumping sites, to correct formatting of coordinates for ocean dumping sites, to clarify the name of one ocean dumping site, to correctly specify the size of one ocean dumping site, to update several out-of-date addresses and names of EPA organizational units, and to correct a typographical error. In addition, the EPA is explaining the circumstances when email is an acceptable method for MPRSA reporting.

The EPA is taking this action to implement the Marine Protection, Research, and Sanctuaries Act (MPRSA) of 1972, as amended, sometimes referred to as the Ocean Dumping Act. The MPRSA section 108, 33 U.S.C. 1418, authorizes the EPA to issues such regulations to carry out its responsibilities conferred under the MPRSA. The MPRSA regulates the disposition of any material into ocean waters, unless expressly excluded under the MPRSA. Section 101 of the MPRSA (33 U.S.C. 1411) generally prohibits the transportation of any material for the purpose of dumping, except as authorized by a permit. Under the MPRSA, no permit may be issued for ocean dumping where such dumping will unreasonably degrade or endanger human health, welfare, or amenities, or the marine environment, ecological systems, or economic potentialities. Most material disposed of in the ocean today is dredged material ( i.e., sediments) removed from the bottom of waterways to maintain navigation channels and berthing areas. Other materials that are currently disposed of in the ocean include fish wastes, human remains, marine mammal carcasses, ice piers in Antarctica, and vessels. Ocean dumping cannot occur except pursuant to a permit under the MPRSA and its implementing regulations.

Under the MPRSA, the EPA is responsible for establishing criteria for reviewing and evaluating permit applications and for designating ocean dumping sites. The EPA is the permitting authority for ocean dumping of all materials except dredged material. The U.S. Army Corps of Engineers (USACE) is the permitting authority for ocean dumping of dredged material. The USACE applies EPA's ocean dumping criteria to determine whether to authorize ocean disposal of dredged material under MPRSA permits (or, in the case of federal projects, under an administrative equivalent of a permit). The MPRSA permits for, and federal projects involving, ocean disposal of dredged material are subject to EPA review and concurrence. The EPA also is responsible for designating recommended ocean dumping sites for all types of materials, including dredged material.

The EPA's ocean dumping regulations at 40 CFR parts 220 through 228 establish criteria and procedures for ocean dumping permitting and designation and management of ocean disposal sites. The ocean dumping regulations at 40 CFR part 229 contain three general permits issued under the MPRSA.

The regulations also contain the locations and requirements for use of all EPA-designated ocean dumping sites by EPA Region (40 CFR 228.15). The regulations at 40 CFR 228.15(a)(3) note that all ocean dumping site coordinates in 40 CFR 228.15 are based upon North American Datum of 1927 (NAD27) unless specifically noted. Over time, however, as new ocean dumping sites were designated, the applicable datum for some sites had not been specifically noted even though the EPA had identified the site coordinates based on the newer, more accurate geodetic datum, North American Datum of 1983 (NAD83), which has since replaced the NAD27 datum for widespread use. This action revises the regulation to specify that the coordinate datum for all sites are based on NAD83 unless specifically noted as NAD27. This action also specifies the datum as NAD27 for those sites previously not specified as such, based on the EPA's confirmation that NAD27 were used. Additionally, this rule revises incorrect formatting of site coordinates at 40 CFR 228.15, including adding zero placeholders and correcting misplaced coordinate punctuation to correspond to the relevant North American Datum. None of these revisions reflect any substantive change to the location coordinates used by persons disposing dredged materials at the respective sites.

This action further clarifies the name of one ocean dumping site at 40 CFR 228.15(j)(21) from “Atchafalaya River and Bayous Chene, Boeuf, and Black, LA” to “Atchafalaya River and Bayous Chene, Boeuf, and Black, LA (ODMDS East),” to reflect the name commonly used to describe the site.

This action also revises an incorrectly specified size of one site at 40 CFR 228.15(l)(3)(ii), but does not enlarge the site nor change the previously designated coordinates. This change revises the previously incorrectly calculated site area from 6.5 square nautical miles (22 square kilometers) to its correct size, 7.85 square nautical miles (27 square kilometers).

Various portions of the ocean dumping regulations require notification of certain other federal agencies when specified actions are taken under the regulations. This rule updates the out-of-date addresses provided in the regulations for two of these agencies at 40 CFR parts 223, 224, and 229. These addresses have changed since the rule was promulgated in 1977. These changes do not alter application or interpretation of the rules, nor change the federal agencies to be notified.

Additionally, 40 CFR 222.6 and 223.4(d) reference three EPA divisions that no longer exist due to subsequent reorganizations within the EPA: The Water Programs Division, the Surveillance and Analysis Division, and the Enforcement Division. These changes do not alter operation of the rule, but instead describe the relevant underlying functions performed so that the regulation is no longer tied to the names of EPA organizational components.

The ocean dumping regulations specify that when emergency dumping occurs, the EPA Administrator, EPA Regional Administrator, or the nearest Coast Guard district be notified by radio, telephone, or telegraph. The rule updates 40 CFR 224.2(b) to allow notification of emergency dumping by email, in addition to radio, telephone, or telegraph. There are no other reporting obligations in the MPRSA regulations where the notification format is specified.

This rule corrects a typographical error in 40 CFR 222.12(a)(1), which describes procedures applicable to actions on ocean dumping permit applications under Section 102 of the MPRSA. The pre-existing text read “. . . When an appeal or motion to referred to the Administrator . . .” This action corrects the typographical error to instead read “. . . When an appeal or motion is referred to the Administrator. . .” The rule also corrects a typographical error in 40 CFR 228.6(b), which describes specific criteria for site selection under Section 102 of the MPRSA. The pre-existing text read “The results of a disposal site evaluation and/or designation study based on the criteria stated in paragraphs ( b )(1) through (11) of this section . . .” This action corrects the typographical error to instead read “The results of a disposal site evaluation and/or designation study based on the criteria stated in paragraphs ( a )(1) through (11) of this section . . .”

These changes act to correct the text of existing regulations to conform to the underlying support for the EPA's action and appropriate current practice, organization, or procedure. This rule will help to prevent confusion regarding ocean dumping at designated ocean dumping sites and ensure that the regulations contain the correct information.

Generally, ocean dumping sites and permits are used by persons seeking to dispose of dredged material or other materials in ocean waters. However, there are no regulated entities potentially affected by this action, because this action does not make any substantive changes to the EPA's ocean dumping regulations. This is a housekeeping measure intended only to eliminate confusion by specifying the applicable coordinate datum for ocean dumping sites, to correct formatting of coordinates for ocean dumping sites, to clarify the name of one ocean dumping site, to correctly specify the size of one ocean dumping site, to update several out-of-date addresses and names of EPA organizational units, and to correct a typographical error.

Under the Administrative Procedure Act (APA), agencies generally are required to publish a notice of proposed rulemaking and provide an opportunity for the public to comment on any substantive rulemaking action. However, the APA provides exceptions from this requirement for the promulgation of agency rules of organization, procedure, or practice, and when an agency for good cause finds that notice and public procedure is unnecessary. See 5 U.S.C. 553(b)(A) and 5 U.S.C. 553(b)(B).

The EPA finds that this action, in part, constitutes a rule of organization, procedure, or practice that is excepted from notice and public comment. This action updates the regulations to identify the successor EPA divisions or offices referenced at 40 CFR 222.6 and 223.4(d). In addition, the rule specifies email as an acceptable form of MPRSA reporting. Neither of these changes alters operation of the underlying rule.

Further, the APA provides an exception from the requirement to publish a notice of proposed rulemaking and opportunity for public comment when the agency for good cause finds (and incorporates the finding and a brief statement of reasons in the rules issued) that a notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. See 5 U.S.C. 553(b)(B).

The EPA finds good cause to publish a final rule without prior notice and comment because notice and public procedure is unnecessary. This action does not alter the jurisdiction or authority of the EPA or the entities regulated under the MPRSA. This final rule does not modify any location, size, or limitations of designated ocean disposal sites, nor does it change any procedures described by the regulations. The revisions are technical corrections that do not substantively change the EPA's ocean dumping regulations nor application or operation of the regulations. This action is non-significant because it does not involve any new science, economics, or novel legal or policy issues. The EPA does not anticipate any costs or burdens associated with this action. This rule does not establish any new requirements, mandates, or procedures. This is a housekeeping measure intended only to eliminate confusion by specifying the applicable coordinate datum for ocean dumping sites, to correct formatting of coordinates for ocean dumping sites, to clarify the name of one ocean dumping site, to correctly specify the size of one ocean dumping site, to update several out-of-date addresses and names of EPA organizational units, and to correct a typographical error.

This action does not impose any new information collection burden under the provisions of the PRA (44 U.S.C. 3501 et seq. ), (burden is defined at 5 CFR 1320.3(b)), because it merely corrects the published regulatory text, as explained above. It does not establish or modify any information reporting or recordkeeping requirements, and therefore is not subject to the requirements of the Paperwork Reduction Act.

This rule does not establish any new requirements, mandates, or procedures. As explained previously, this final action merely specifies the applicable coordinate datum for ocean dumping sites, corrects formatting of coordinates for ocean dumping sites, clarifies the name of one ocean dumping site, specifies the size of one ocean dumping site, updates several out-of-date addresses and names of EPA organizational units, and corrects a typographical error. This rule is a housekeeping measure and does not result in any additional or new regulatory requirements. Accordingly, it has been determined that this action is not a “significant regulatory action” under Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore was not submitted to the Office of Management and Budget (OMB) for review. In addition, this action does not contain any unfunded mandate, as described in the Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531-1538 and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector. This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government as specified by Executive Order 13132 (64 FR 43255, August 4, 1999). This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). Thus, Executive Order 13175 does not apply to this action. The EPA believes that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994), because it does not establish an environmental health or safety standard, as it is a correction to a previously promulgated regulatory action and does not have any impact on human health or the environment. This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. Because this action is not subject to notice-and-comment requirements under the APA or any other statute, and because it does not impose any new requirements on small entities, this action is not subject to the Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612). The RFA applies to rules subject to notice and comment rulemaking requirements under the APA, 5 U.S.C. 553. The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk. This rule does not involve technical standards and is therefore not subject to the National Technology Transfer and Advancement Act of 1995, Public Law 104-113, section 12(d) (15 U.S.C. 272 note).

This action is subject to the Congressional Review Act (CRA) (5 U.S.C. 801-808), and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and comment rulemaking procedures are impracticable, unnecessary or contrary to the public interest (5 U.S.C. 808(2)). The EPA has made a good cause finding for this rule as discussed in Section IV.A. in this preamble, including the basis for that finding.

For the reasons set forth in the preamble, 40 CFR parts 222, 223, 224, 228, and 229 is amended as follows:

NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2019 non-CDQ sablefish trawl ITAC in the Bering Sea subarea of the BSAI is 633 metric tons (mt) as established by the final 2019 and 2020 harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019). In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2019 non-CDQ sablefish trawl ITAC in the Bering Sea subarea of the BSAI will soon be reached. Therefore, NMFS is requiring that non-CDQ sablefish caught with vessels using trawl gear in the Bering Sea subarea of the BSAI be treated as prohibited species in accordance with § 679.21(b).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the prohibited retention of non-CDQ sablefish by vessels using trawl gear in the Bering Sea subarea of the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as June 26, 2019.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by §§ 679.20 and 679.21 and is exempt from review under Executive Order 12866.