I. Background

USDA AMS administers the National Organic Program (NOP) under the authority of the Organic Foods Production Act of 1990 (OFPA), as amended (7 U.S.C. 6501-6524). The regulations implementing the NOP, also referred to as the USDA organic regulations (7 CFR part 205), were published on December 21, 2000 (65 FR 80548) and became effective on October 21, 2002. Through these regulations, AMS oversees national organic standards for the production, handling, and labeling of organically produced agricultural products. Since October 2002, the USDA organic regulations have been frequently amended, mostly for changes to the National List in 7 CFR 205.601-205.606.

The National List identifies the synthetic substances allowed to be used and nonsynthetic substances prohibited from use in organic farming. The National List also identifies synthetic and nonsynthetic nonagricultural (nonorganic) agricultural substances that may be used in organic handling. The OFPA and USDA organic regulations specifically prohibit the use of any synthetic substance in organic production and handling unless an exemption for using the synthetic substance is provided on the National List. Section 205.105 of the USDA organic regulations also requires that any nonorganic agricultural substance and any nonagricultural substance used in organic handling be listed as allowed on the National List.

The OFPA at § 6578 authorizes the NOSB, operating in accordance with the Federal Advisory Committee Act (§ 1 et seq., 5 U.S.C. App.2), as amended, to assist in evaluating substances to be allowed or prohibited for organic production and handling and to advise the Secretary on the USDA organic regulations. The OFPA sunset provision (§ 6517(e)) also requires a review of all substance exemptions included on the National List within five years of their addition to or renewal on the list. During this sunset review, the NOSB considers any new information pertaining to a substance's impact on human health and the environment, its necessity due to the unavailability of wholly natural substances, and its consistency with organic production and handling. The NOSB subsequently votes to remove a substance allowance or prohibition from the National List.

The Agricultural Improvement Act of 2018 amended the OFPA at § 6518(i)(2) to specify that any vote on a motion proposing to amend the National List requires 2/3 of the votes cast at a meeting of the NOSB at which a quorum is present to prevail. A substance allowance or prohibition remains listed on the National List unless an NOSB motion to remove such substance carries with 2/3 of votes cast, and the Secretary renews or amends the listing for such substance. The NOSB submits its sunset review and recommendations to the Secretary where, as delegated by the Secretary, AMS evaluates the sunset review and recommendations for compliance with the National List substance evaluation criteria in § 6518(m) and other federal statutes or regulations. AMS also considers public comments submitted in association with a specific sunset review process.

AMS published an updated sunset review process in the Federal Register on September 16, 2013 (78 FR 56811). In accordance with the sunset review process, AMS published two notices in the Federal Register announcing the NOSB meetings on April 19-21, 2017, and October 31-November 2, 2017, and inviting public comments on the 2019 sunset review process (November 25, 2016 (81 FR 85205) and May 30, 2017 (82 FR 24659)). AMS also hosted two public webinars (April 13, 2017 and, October 24 and 26, 2017), to provide additional opportunities for public comment. The NOSB received additional comment during the public meetings. At these public meetings, the NOSB reviewed substance exemptions scheduled to sunset from the National List and recommended these exemptions not be removed. Table 1 shows the current listings for these substance exemptions.

AMS has reviewed and accepted the NOSB's 2019 sunset review recommendations and is renewing the listing of these substance exemptions until 2024. 1 AMS has determined that the substance allowances listed in this notice continue to be necessary for organic production and/or organic handling because of the unavailability of organic forms or wholly natural substitutes for the specified uses (§ 6517(c)(1)(A)(ii)). The renewal of these substance allowances will avoid potential disruptions to the organic industry and consumers that may otherwise result from removal from the National List. AMS also has determined that the nonsynthetic substance prohibitions listed in this notice continue to be necessary because use of the two substances is inconsistent with organic production and/or organic handling (§ 6517(c)(2)(A)(ii)).

Five additional substance allowances were also reviewed and subsequently recommended for renewal by the NOSB: Micronutrients, § 205.601(j); chlorhexidine, § 205.603(a); lidocaine, § 205.603(b); chlorine materials, § 205.605(b); and potassium acid tartrate, § 205.605(b). These five substance allowances are not included in this renewal notice, because these substances were already amended on the National List as a result of final rules published on December 27, 2018 (83 FR 66559) and on April 30, 2019 (84 FR 18133). The sunset date for micronutrients, § 205.601(j); chlorhexidine, § 205.603(a); lidocaine, § 205.603(b); and chlorine materials, § 205.605(b) is January 28, 2024. The sunset date for potassium acid tartrate, § 205.605(b), is May 30, 2024.

The NOSB also reviewed and subsequently recommended to the Secretary the removal of the listed exemptions for use of vitamin B 1 (§ 205.601), oxytocin (§ 205.603), procaine (§ 205.603), and konjac flour (§ 205.606). AMS is reviewing the NOSB recommendations to remove these substance allowances from the National List. Any removals from the National List would be addressed in a separate notice and comment rulemaking. AMS plans to take action on these substances before their sunset date of March 15, 2022.

Table 1 lists the substance exemptions being renewed through this document. These specific substance allowances and prohibitions continue as listed on the National List with a new sunset date of October 30, 2024.

Correction to Preamble

In the published final rule beginning on page 45877, in the 3rd column, in the Federal Register of Monday, September 3, 2019 (84 FR 45877-45895), correct the “RIN” heading to read: RIN 0560-AI45.

In addition, the final rule inadvertently omitted the list of counties for Nebraska in 7 CFR 1412.46(f). The listing of counties in § 1412.46(f) specifies which counties have been determined to be regions having a history of double-cropping covered commodities or peanuts with fruits, vegetables, or wild rice. The FSA State committees establish the counties as regions within their respective States. During the development of the final rule, the list of counties for Nebraska was intended to be added as: Box Butte, Dawes-North Sioux, Morrill, and Sheridan. Instead, the final rule did not list any counties in Nebraska. This correction adds the list of Nebraska counties.

For the reasons discussed above, CCC corrects 7 CFR part 1412 as follows:

Table of Contents I. Introduction A. Background B. Summary of Proposed Rule C. Overview of Comments II. Revisions to the Title XI Appraisal Regulations A. Threshold Increase for Residential Real Estate Transactions 1. Definition of Residential Real Estate Transaction 2. Threshold Level 3. Safety and Soundness Considerations for Raising the Residential Real Estate Threshold 4. Consumer Protection Considerations 5. Reducing Burden Associated With Appraisals B. Incorporation of the Rural Residential Appraisal Exemption Under Section 103 of the Economic Growth, Regulatory Relief, and Consumer Protection Act C. Addition of Appraisal Review Requirement D. Conforming and Technical Amendments III. Effective Date IV. Regulatory Analysis A. Regulatory Flexibility Act Analysis B. Paperwork Reduction Act C. Riegle Community Development and Regulatory Improvement Act of 1994 D. Solicitation of Comments on Use of Plain Language E. OCC Unfunded Mandates Reform Act of 1995 Determination Regulatory Text I. Introduction A. Background

In December 2018, the agencies invited comment on a notice of proposed rulemaking (proposal or proposed rule)  1 that would amend the agencies' appraisal regulations promulgated pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Title XI). 2 Specifically, the proposal would increase the monetary threshold at or below which financial institutions that are subject to the agencies' appraisal regulations (regulated institutions) would not be required to obtain appraisals in connection with residential real estate transactions (residential real estate appraisal threshold) from $250,000 to $400,000. In addition, the proposal would add to the list of exempt transactions those transactions that are secured by residential property in rural areas that have been exempted from the agencies' appraisal requirement pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)  3 (rural residential appraisal exemption). The proposal would require regulated institutions to obtain evaluations for transactions exempt from the agencies' appraisal requirements due to the increase in the residential real estate appraisal threshold or the rural residential appraisal exemption. Finally, the proposal would amend the agencies' appraisal regulations to require regulated institutions to subject appraisals for federally related transactions to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice (USPAP), as required under section 1473(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). 4

Title XI directs each Federal financial institutions regulatory agency  5 to publish appraisal regulations for federally related transactions within its jurisdiction. The purpose of Title XI is to protect federal financial and public policy interests  6 in real estate-related transactions by requiring that real estate appraisals used in connection with federally related transactions (Title XI appraisals) be performed in accordance with uniform standards by individuals whose competency has been demonstrated and whose professional conduct will be subject to effective supervision. 7

Title XI directs the agencies to prescribe appropriate standards for Title XI appraisals under the agencies' respective jurisdictions. 8 At a minimum, the statute provides that Title XI appraisals must be: (1) performed in accordance with USPAP; (2) written appraisals, as defined by the statute; and (3) subject to appropriate review for compliance with USPAP. 9

All federally related transactions must have Title XI appraisals. Title XI defines a federally related transaction as a real estate-related financial transaction  10 that the agencies or a financial institution regulated by the agencies engages in or contracts for, that requires the services of an appraiser under Title XI and the interagency appraisal rules. 11 The agencies have authority to determine those real estate-related financial transactions that do not require Title XI appraisals. 12 The agencies have exercised this authority by exempting several categories of real estate-related financial transactions from the agencies' appraisal requirement, including transactions at or below certain designated thresholds. 13

Title XI expressly authorizes the agencies to establish thresholds at or below which Title XI appraisals are not required if: (1) The agencies determine in writing that the threshold does not represent a threat to the safety and soundness of financial institutions; and (2) the agencies receive concurrence from the Consumer Financial Protection Bureau (CFPB) that such threshold level provides reasonable protection for consumers who purchase 1-to-4 unit single-family residences. 14 Under the current thresholds, residential real estate transactions  15 with a transaction value  16 of $250,000 or less, certain real estate-secured business loans (qualifying business loans)  17 with a transaction value of $1 million or less, and commercial real estate (CRE) transactions with a transaction value of $500,000 or less do not require Title XI appraisals. 18 The appraisal threshold applicable to residential real estate transactions has not been changed since 1994. 19

For real estate-related financial transactions at or below the applicable thresholds and for certain existing extensions of credit exempt from the agencies' appraisal requirement, 20 the Title XI appraisal regulations require regulated institutions to obtain an appropriate evaluation of the real property collateral that is consistent with safe and sound banking practices. 21 An evaluation should contain sufficient information and analysis to support the regulated institution's decision to engage in the transaction. 22 The agencies have provided supervisory guidance for conducting evaluations in a safe and sound manner in the Interagency Appraisal and Evaluation Guidelines (Guidelines)  23 and the Interagency Advisory on the Use of Evaluations in Real Estate-Related Financial Transactions (Evaluations Advisory, 24 and together with the Guidelines, Evaluation Guidance).

In 2018, Congress amended Title XI by adding the rural residential appraisal exemption to provide relief for financial institutions engaging in residential real estate transactions in certain rural areas. The exemption provides that residential transactions in certain rural areas do not require Title XI appraisals if the financial institution documents that appraisers are not available for the transaction within reasonable time and cost parameters. 25 The statute does not specifically require that real estate evaluations be performed when financial institutions utilize this exemption.

As noted in the proposed rule, residential property values have increased over time, but the appraisal threshold has not been adjusted since 1994. The agencies believe rising market prices of residential properties have contributed to increased burden for regulated institutions and consumers in terms of transaction time and costs, given that the threshold has remained the same since 1994. The proposed rule was intended to reduce regulatory burden consistent with federal financial and public policy interests in residential real estate-related financial transactions. Based on supervisory experience and available data, the agencies published the proposed rule to accomplish these goals without posing a threat to the safety and soundness of financial institutions.

The agencies proposed to increase the threshold level at or below which appraisals are not required for residential real estate transactions from $250,000 to $400,000. Residential real estate transaction would be defined as a real-estate related financial transaction that is secured by a single 1-to-4 family residential property. For residential real estate transactions exempted from the appraisal requirement as a result of the revised threshold, regulated institutions would be required to obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices.

The agencies also proposed to make conforming changes to add the rural residential appraisal exemption to the appraisal regulations. The agencies proposed that evaluations be required for these transactions. In addition, the agencies proposed to amend the agencies' appraisal regulations to require regulated institutions to subject appraisals for federally related transactions to appropriate review for compliance with USPAP, pursuant to Title XI, as amended by the Dodd-Frank Act. 26 The agencies also proposed several conforming and technical amendments to their appraisal regulations. The agencies invited comment on all aspects of the proposal.

The agencies collectively received over 560 comments regarding the proposal to increase the residential real estate appraisal threshold that addressed a variety of issues. Comments from financial institutions, financial institution trade associations, and state banking regulators generally supported the proposed increase. Comments from appraisers, appraiser trade organizations, individuals, and consumer advocate groups generally opposed the proposal to increase the threshold. The agencies also received a few comments that are addressed separately below concerning the proposed requirement to obtain evaluations for transactions that qualify for the rural residential appraisal exemption or to subject certain appraisals to appropriate review for compliance with USPAP. 27

Commenters supporting the proposed threshold increase asserted that an increase would be appropriate given the increases in real estate values since the current threshold was established as well as the cost and time savings to lenders and borrowers that the higher threshold would provide. Supportive commenters also indicated that a threshold increase would provide burden relief for financial institutions without sacrificing safe and sound banking practices. Many of these commenters saw evaluations as appropriate substitutes for appraisals and institutions as having appropriate risk management controls in place to manage the proposed threshold change responsibly. Some commenters in support of the proposal indicated that the proposed threshold increase would benefit consumers, arguing that costs and delays due to appraisals could be reduced. These commenters asserted that expedited valuations could make the residential mortgage market more efficient and lower closing costs.

Commenters opposing an increase to the residential real estate appraisal threshold asserted that the proposal would elevate risks to borrowers, financial institutions, the financial system, and taxpayers. Several commenters asserted that the increased risk would not be justified by burden relief resulting from a threshold increase. As described in more detail below, many commenters in opposition asserted that the proposal would negatively impact consumers. Many of these comments focused on views that evaluations are inadequate substitutes for appraisals.

Many commenters opposing the proposal highlighted the benefits that state licensed or state certified appraisers bring to the real estate valuation process. Commenters asserted that appraisers serve a necessary function in real estate lending and expressed concerns that bypassing them to create a more streamlined valuation process could lead to fraud and another real estate crisis. Many commenters asserted that appraisers are the only unbiased party in the valuation process, in contrast to buyers, agents, lenders, and sellers, who each have an interest in the underlying transactions. Several commenters rejected assertions that there was an appraiser shortage warranting regulatory relief.

Several commenters questioned the proposal in light of the agencies' previous decision not to propose an increase to the residential real estate appraisal threshold during the regulatory review process required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). 28 A few commenters also questioned whether the proposed threshold increase is consistent with Congressional intent, given that the rural residential real estate exemption was made available only to transactions meeting certain criteria, while the proposed threshold increase would exempt all residential transactions at or below $400,000.

After carefully considering the comments and conducting further analysis, the agencies are adopting the final rule as proposed, and are increasing the residential real estate appraisal threshold from $250,000 to $400,000. As discussed in the proposal and further detailed below, increasing the residential real estate appraisal threshold will provide meaningful regulatory relief for financial institutions without threatening the safety and soundness of financial institutions.

The agencies are authorized to increase the threshold based on express statutory authority to do so upon making a determination in writing that the threshold does not represent a threat to the safety and soundness of financial institutions and receiving concurrence from the CFPB that the threshold level provides reasonable protection for consumers who purchase 1-to-4 unit single-family residences. 29

As detailed below, the agencies have determined that a residential real estate appraisal threshold of $400,000 will not threaten the safety and soundness of financial institutions and have received concurrence from the CFPB that this threshold level provides reasonable protection for consumers who purchase 1-4 unit single-family residences.

The agencies recognize that they decided against proposing a residential appraisal threshold increase during the EGRPRA process. The agencies have reconsidered this decision based on continued comments received from financial institutions and state bank regulatory agencies that increasing the residential appraisal threshold would provide meaningful burden relief, as well as further analysis regarding safety and soundness and consumer protection factors related to the proposal, as detailed below. The agencies also recognize that Congress recently amended Title XI to provide a narrow, self-effectuating appraisal exemption for rural transactions meeting certain requirements. However, the agencies also observe that Congress did not amend the agencies' long-standing authority in Title XI to establish a threshold level at or below which a certified or licensed appraiser is not required to perform an appraisal in connection with federally related transactions. Through the EGRRCPA amendment, Congress mandated that rural transactions meeting specific statutory criteria be exempted from the appraisal regulations; however, there is no indication that Congress intended to restrict the agencies' authority to provide additional exemptions pursuant to their existing statutory authority.

The agencies are also finalizing as proposed the requirement to obtain an evaluation for transactions that qualify for the rural residential appraisal exemption and the requirement that appraisals for federally related transactions be subject to appropriate review for compliance with USPAP. The final rule also makes several technical and conforming changes to the appraisal regulations. These changes are discussed in more detail below, in the order in which they appear in the rule. The effective date for the rule will be the first day after its publication in the Federal Register, other than the evaluation requirement for transactions exempted by the rural residential appraisal exemption and the appraisal review provision, which will become effective on January 1, 2020.

1. Definition of Residential Real Estate Transaction. The agencies proposed to define a residential real estate transaction as a real estate-related financial transaction secured by a single 1-to-4 family residential property and specifically asked commenters whether the proposed definition is appropriate. The agencies received one comment generally supporting the proposed definition and one comment generally opposing the definition, neither of which included any detail regarding the reasoning for the position. This definition is consistent with current references to appraisals for residential real estate in the agencies' appraisal regulations and in Title XI, and the definition of commercial real estate transaction that was created in the recent rulemaking to increase the appraisal threshold for commercial real estate (CRE) transactions (CRE rulemaking). 30 Adding this definition does not change any substantive requirement, but provides clarity to the regulation. 31 Therefore, the agencies are adopting the definition of a residential real estate transaction as proposed.

2. Threshold Level. The agencies proposed increasing the residential real estate appraisal threshold from $250,000 to $400,000. In determining the level of increase, the agencies considered increases in housing prices and general inflation across the economy since the current threshold was established in 1994. The agencies also considered comments received during the EGRPRA process and in response to questions posed about the residential threshold in the CRE rulemaking. 32 As discussed in the proposal, the agencies analyzed the Standard & Poor's Case-Shiller Home Price Index (Case-Shiller Index)  33 and the FHFA Index  34 to determine changes in house prices since 1994. The agencies also analyzed general measures of inflation by reviewing the Consumer Price Index (CPI). 35

A residential property that sold for $250,000 as of June 30, 1994, would be expected to sell in March 2019 for $643,750 according to the Case-Shiller Index and $621,448 according to the FHFA Index (see Table 1 below). The agencies also considered housing prices over the most recent financial cycle which were generally at a low point in 2011. During the low point of the cycle, in December 2011, a house that sold for $250,000 in 1994 would have been expected to sell for $445,152 in December 2011, according to the Case-Shiller Index and $414,629 according to the FHFA Index.

The agencies adopted a conservative approach and proposed a threshold of $400,000 to approximate housing prices based on the low point during the most recent cycle. The proposed threshold level is also consistent with general measures of inflation across the economy reflected in the CPI since 1994. The agencies invited comment on the proposed level for the residential real estate appraisal threshold.

The agencies received a number of comments agreeing that the proposed threshold level would be justified by changes in real estate prices, inflation, and the data presented by the agencies in the proposal. Other commenters supporting a threshold increase supported a higher threshold, such as $500,000. These commenters generally asserted that doing so would be more consistent with the data presented. Some commenters also cited consistency with the CRE appraisal threshold as a justification for increasing the residential real estate threshold to $500,000. One commenter supporting a higher threshold questioned why the agencies did not adjust from the lowest point in the most recent cycle to account for price appreciation up to a more recent date, as was done in the CRE rulemaking. Several commenters supportive of increasing the threshold recommended that the agencies either commit to adjusting the threshold periodically, or automatically adjust the threshold periodically, to reflect changes in housing values, market conditions or inflation.

Some commenters opposing the increase asserted that inflationary changes are inadequate justifications for increasing the appraisal threshold. Some opposing commenters suggested the agencies should either maintain the current $250,000 threshold or lower the threshold, with suggested ranges from $100,000 or under to $275,000. Some commenters suggested eliminating the residential appraisal threshold exemption entirely and requiring appraisals for all residential real estate transactions. A few commenters suggested lower thresholds and that transactions under the current and proposed thresholds often pose risk to financial institutions and to consumers. Some of these commenters asserted that many transactions involving defaults or foreclosures are transactions below $400,000.

Some commenters asserted that the threshold should vary based on market values in specific geographic areas, and that a national threshold level is inappropriate given differences in property values across the country. Some commenters suggested doing so by basing the threshold on the GSE conforming loan limits for specific geographic areas. Several commenters asserted that inflationary measures such as the CPI are inappropriate measures on which to base the threshold because they are not accurate indicators of housing prices. One of these commenters suggested that the threshold be based on wage growth and housing affordability. Two commenters asserted that adjusting the $250,000 threshold based on changes in prices would be inappropriate because that level was not itself the result of an inflation adjustment and was either arbitrary or improper.

After carefully considering the comments received, and for the reasons discussed previously, the agencies have decided to increase the residential real estate appraisal threshold to $400,000, as proposed. Increasing the appraisal threshold for residential real estate transactions to $400,000 approximates more recent house prices and provides an inflation adjustment to a threshold that has not been increased since 1994. The agencies based the beginning point for this analysis on $250,000 because, as discussed below, supervisory experience with the $250,000 threshold indicates that this threshold level did not threaten the safety and soundness of financial institutions.

The agencies acknowledge that the data presented indicates that a house sold in 1994 would sell for higher than $400,000 today; however, the agencies believe the more conservative approach is appropriate. Setting the threshold level to the low point of the most recent cycle takes into consideration potential price fluctuations to which financial institutions that engage in residential real estate lending could be exposed. This approach also considers that a high percentage of residential real estate transactions is already captured by the existing residential real estate threshold, as reflected below in Table 2.

The agencies also concluded that automatic adjustments to the threshold or agency commitments to set timetables for future threshold increases would not be appropriate. The agencies already periodically review their regulations to identify outdated or unnecessary regulatory requirements, such as through the EGRPRA process, and can consider any comments concerning the thresholds through that process. In addition, the agencies are required by Title XI to weigh safety and soundness implications regarding any proposed threshold increase and obtain CFPB concurrence. The other alternative proposals suggested, such as varying the threshold based on local housing prices or wages, would add unnecessary regulatory burden and complexity by introducing numerous threshold levels across the country.

3. Safety and Soundness Considerations for Raising the Residential Real Estate. Threshold. Under Title XI, the agencies may set a threshold at or below which a Title XI appraisal is not required if they determine in writing that such a threshold level does not pose a threat to the safety and soundness of financial institutions. 36 In the proposal, the agencies preliminarily determined that the proposed threshold level for residential real estate transactions would not pose a threat to the safety and soundness of financial institutions. The preliminary determination was based on supervisory experience regarding causes of losses at financial institutions, analysis of available Home Mortgage Disclosure Act (HMDA) data, and the fact that evaluations would be required for transactions below the proposed threshold. 37 The agencies invited comment on their preliminary finding that the proposed threshold would not pose a threat to the safety and soundness of financial institutions, as well as the data used to support the finding. After taking into account the comments, discussed below, and analyzing a range of data and information, the agencies have determined that the threshold level of $400,000 for residential real estate transactions does not represent a threat to the safety and soundness of financial institutions.

Agency staff used HMDA data to estimate the number and dollar volume of institutions' residential real estate transactions that would be affected by the increased threshold. Table 2 below shows the number and dollar volume of transactions in 2017 that: (i) Would have been exempted under the current threshold; (ii) would be newly exempted under the proposed threshold increase; (iii) in total would be exempted as a result of the proposed threshold increase; and (iv) would not be exempted following the proposed threshold increase. The data are limited to first-lien, single-family mortgage originations  38 on residential properties by FDIC-insured institutions and affiliated institutions that are not sold to the GSEs or otherwise insured or guaranteed by a U.S. government agency (“regulated transactions”). 39

The 2017 HMDA data suggests that the $250,000 threshold currently exempts approximately 20 percent of the total dollar volume of regulated transactions. Raising the threshold to $400,000 will exempt an additional estimated 14 percent of the dollar volume, thus increasing the share of the dollar volume of regulated transactions that are exempt to approximately 35 percent.

The agencies reviewed HMDA data to measure the percent of regulated transactions exempted in 1994 when the threshold was raised from $100,000 to $250,000 as compared to raising the threshold from $250,000 to $400,000. The data show that increasing the threshold from $100,000 to $250,000 in 1994 resulted in an estimated 77 percent of the total dollar volume of regulated transactions being exempt. 41 By comparison, as referenced above in Table 2, 2017 HMDA data indicates that increasing the threshold from $250,000 to $400,000 will result in an estimated 35 percent of the total dollar volume of regulated transactions being exempt. As stated in the proposal, the threshold increase will exempt a much smaller percentage of regulated transactions by dollar volume.

In the proposal, the agencies requested comment on whether the proposed level of $400,000 for the threshold would be appropriate from a safety and soundness perspective, and on what sources of data would be appropriate for the safety and soundness analysis. In general, commenters who supported the proposed increase in the threshold viewed the data presented in the proposed rule as supporting the increase, while commenters opposed to the increase found the data insufficient.

A number of commenters noted that the scope of the threshold had decreased significantly since it was established in 1994 due to inflation in home values. As such, they argued that an increase in the threshold would be justified to align the threshold with its 1994 scope. Other commenters expressed concern that the proposed threshold level would exempt too high a percentage of residential transactions from the protections provided by appraisals. These commenters focused on the percentage of residential transactions that would be affected, either on a national basis or based on specific geographic areas. Many such commenters cited data indicating that the proposed threshold of $400,000 is well above median home prices nationally and would exempt a large majority of residential transactions in specific areas. One commenter indicated that only 17 metropolitan statistical areas have a median sales price for single-family homes that exceeds $400,000. Several commenters cited to sources of data that indicated lower median home prices than the sources cited in the proposal.

A number of commenters requested that the agencies conduct alternative analyses and pointed out that the agencies did not analyze the local or regional markets affected by the increase nor the impact on particular borrowers or communities. Some commenters called for further study of home prices by region and metro area and for the agencies to show which markets would be most affected by the threshold increase. In particular, commenters requested that the agencies analyze the effect of the proposed increase in the threshold in dynamic markets and compare its effect in urban versus rural areas. One commenter indicated that HMDA data are the wrong source of information for evaluating the impact of the threshold on rural areas, given that certain low volume originators in rural areas are not required to report HMDA data.

Based on the agencies' supervisory experience and analysis, as discussed in more detail below, the current threshold has not negatively impacted safety and soundness, and the agencies do not believe raising the threshold to $400,000 will present a safety and soundness concern. Although several commenters were concerned that the agencies had not analyzed the effects on local markets or particular communities, the agencies' supervisory experience with the current threshold since 1994 suggests that this incremental increase will not negatively affect safety and soundness on the local or national level based on loss rates for residential real estate loans as discussed below and observations during examinations.

Moreover, the 2017 HMDA data also suggests that, though the impact on the total dollar volume of exempted transactions would be somewhat limited, the number of exempted transactions would increase materially and provide cost savings and regulatory burden relief for financial institutions. As shown in table 2 above, the agencies estimate that the increase would exempt an additional 214,000 transactions and thus raise the share of the number of regulated transactions that would be exempt from 56 percent to 72 percent. This analysis of the 2017 HMDA data indicates that the increased threshold will affect a low aggregate dollar volume but a material number of transactions, suggesting the potential for financial savings and burden relief with limited additional risk. 42

Further, as covered in the proposal, the 2017 HMDA data show that the rule would provide significant burden relief in rural areas. The agencies estimate that increasing the appraisal threshold to $400,000 would potentially increase the share of exempted transactions from 82 percent to 91 percent of the number, and from 43 percent to 58 percent of the dollar volume, of regulated transactions that were secured by residential property located in a rural area. 43

a. Use of Evaluations. The Title XI appraisal regulations require regulated institutions to obtain evaluations for several categories of real estate-related financial transactions that the agencies have determined do not require a Title XI appraisal, including transactions at or below the current thresholds. 44 Accordingly, the agencies proposed to require that regulated institutions entering into residential real estate transactions at or below the proposed residential real estate appraisal threshold obtain evaluations that are consistent with safe and sound banking practices unless the institution chooses to obtain an appraisal for such transactions. The agencies requested comment on use of evaluations instead of appraisals for residential real estate transactions.

In general, commenters who supported the increase in the threshold also viewed evaluations as providing sufficient valuation information and analysis for financial institutions and consumers to engage in safe and sound residential real estate transactions. Those opposed to the increase in the threshold generally argued that evaluations would not provide enough support for these transactions and would pose a threat to financial institutions and consumers.

Commenters in support of the proposal asserted that there would be little impact to safety and soundness by relying on evaluations instead of appraisals. Some financial institutions commented that they had found evaluations to generally contain sufficient information and analysis to be the basis for lending decisions. Several commenters noted that financial institutions are only allowed to use evaluations when doing so is consistent with safety and soundness and that the institution always retains the discretion to seek an appraisal. Some of these commenters also asserted that they have adequate programs and policies to ensure that evaluations are used prudently.

Many commenters opined that appraisals are more accurate and reliable sources of valuation information than evaluations because they are done by professionals with strict training requirements and who are subject to state credentialing and disciplinary review for poor quality work. In contrast, commenters noted there are no standardized requirements for those who perform evaluations. Commenters also noted that appraisals are required to follow established requirements as provided by USPAP, which guarantees a certain level of information and quality, whereas evaluations lack standard requirements for information or structure. Some of these commenters expressed particular concern about homes in rural areas that tend to have unusual features or fewer comparable properties and thus are harder to value. Some commenters also raised concerns about the use of evaluations on homes that may need repairs, suggesting that evaluations may not uncover these issues.

Many commenters argued that appraisers are the only independent third party in a real estate transaction and that only appraisers' opinions are independent and unbiased. These commenters represented that those who perform evaluations often do not have the same level of independence from the transaction. Some commenters asserted that appraisals provide more accuracy than evaluations because they include a physical inspection of the property. In contrast, some commenters who were providers of evaluation services indicated that they typically include a physical inspection of the property in their product. A few commenters suggested that evaluations are subject to less regulatory scrutiny than appraisals.

Commenters also opined about the use of automated valuation models (AVMs) in the performance of evaluations. Many commenters felt that AVMs are unreliable and expressed concern that raising the threshold could lead to greater reliance on AVMs. Some of these commenters asserted that it would be inappropriate for the agencies to expand the residential real estate transaction threshold before issuing quality control standards for AVMs, as required by Title XI. 45 In contrast, some commenters believed that AVMs could provide valuable information, and that improvements in technology and greater availability of information has improved the quality of evaluations. One commenter indicated that AVMs are more predictive of default than appraisals. Another indicated that evaluations based on AVMs are generally more objective than appraisals because they are not skewed by knowledge of the contract price.

The agencies are adopting this aspect of the final rule without change. As is the case currently for transactions under the threshold exemptions, evaluations will be required for transactions exempted by the new threshold that do not receive appraisals. 46 Although the agencies recognize, as many commenters noted, that evaluations are not subject to the same uniform standards as appraisals in terms of structure and content or the preparer's training and credentialing requirements, evaluations must be consistent with safe and sound banking practices. 47 The agencies have provided the Evaluation Guidance to assist institutions in complying with this requirement. 48 The Evaluation Guidance provides information to help ensure that evaluations provide a credible estimate of the market value of the property pledged as collateral for the loan. For instance, the Evaluation Guidance states that, generally, evaluations should be performed by persons who are competent, independent of the transaction, and have the relevant experience and knowledge of the market, location, and type of real property being valued.

Although some commenters expressed concern that raising the threshold would cause financial institutions to feel pressured to use evaluations whenever possible in order to remain competitive, data analyzed by the agencies suggests that financial institutions are generally using caution when determining when evaluations are suitable for a given transaction. A five-year review of supervisory information on the use of appraisals and evaluations by large financial institutions found larger lenders obtained appraisals on 74 percent of portfolio residential real estate originations at or below the current $250,000 threshold. 49 These data suggest that financial institutions are often exercising discretion in determining when to use evaluations and are not automatically using evaluations whenever permitted.

Further, individuals performing evaluations are expected to be independent of the transaction. The agencies note that many evaluations of residential properties that are a consumer's principal dwelling are covered by the valuation independence requirements of section 1472 of the Dodd-Frank Act and its implementing regulation. 50 Among other requirements, this regulation prohibits conflicts of interest and coercion in the preparation of any opinion of value and prohibits preparers of opinions of value from materially misrepresenting the value of the property. 51 In addition, the agencies have issued guidance to help institutions ensure that they have the proper controls to fulfill independence expectations. 52

Regarding concerns about AVM use, the agencies note that, while financial institutions may use AVMs in preparing evaluations, any evaluation in which they are used must be consistent with safe and sound practices. The agencies have published guidance to help ensure that financial institutions' use of AVMs is consistent with this requirement. 53

Electronic Access and Filing

This document may be viewed online under the docket number noted above through the Federal eRulemaking portal at: http://www.regulations.gov . An electronic copy of this document may also be downloaded from the Office of the Federal Register's website at: http://www.archives.gov/federal-register and the Government Publishing Office's website at: http://www.gpo.gov/fdsys .

Over time, various legislative changes have made 23 CFR part 652 obsolete. In addition, the design guidelines described in this regulation no longer constitute best practices, based on the most recent safety and multimodal network research. Therefore, this rulemaking will remove 23 CFR part 652 in its entirety.

This regulation, enacted on March 22, 1984, has been inconsistent with title 23 U.S.C. since the Intermodal Surface Transportation Efficiency Act (ISTEA) (Pub. L. 102-240, 105 Stat. 1914) was enacted on December 18, 1991. Subsequent surface transportation legislation and implementing regulations have rendered this regulation obsolete, including the National Highway System Designation Act of 1995 (Pub. L. 104-59, 109 Stat. 568); the Transportation Equity Act for the 21st Century of 1998 (Pub. L. 105-178, 112 Stat. 107); the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) of 2005 (Pub. L. 109-59, 119 Stat. 1144); the Moving Ahead for Progress in the 21st Century Act (MAP-21) of 2012 (Pub. L. 112-141, 126 Stat. 405); and the Fixing America's Surface Transportation (FAST) Act of 2015 (Pub. L. 114-94, 129 Stat. 1312), as well as the Americans with Disabilities Act of 1990 (ADA) (Pub. L. 101-336, 104 Stat. 327). Safety and multimodal network research leading to new planning and design guidelines and practices have added to the inconsistency between this regulation and current practices. The section-by-section analysis describes how each section of part 652 has been superseded.

§ 652.1 Purpose. This section is obsolete. Subsequent law provided broad flexibility to fund pedestrian and bicycle projects without the restrictions in part 652. See discussion of § 652.7 for additional information.

§ 652.3 Definitions. The definitions in this section are not needed because the regulation will be removed.

§ 652.5 Policy. This section is either obsolete or superseded by subsequent laws, regulations, and guidance. Current law in 23 U.S.C. 217 incorporates provisions in this section relating to pedestrian and bicyclist accommodation. The ADA and DOT's implementing regulation in 49 CFR part 27 incorporate accessibility requirements. Planning requirements in 23 U.S.C. 134 and 135 and 23 CFR parts 420 and 450 address issues related to pedestrian and bicycle accommodation, such as assessing current and anticipated traffic and traffic conflicts.

§ 652.7 Eligibility. This section is obsolete because ISTEA and subsequent surface transportation legislation authorized broad eligibility for pedestrian and bicycle projects through Federal highway funding programs including, but not limited to the following:

• Bicycle transportation and pedestrian walkways (23 U.S.C. 217);

• National Highway Performance Program (23 U.S.C. 119);

• Surface Transportation Block Grant Program (23 U.S.C. 133), including the Surface Transportation Program Set-Aside (23 U.S.C. 133(h));

• Highway Safety Improvement Program (23 U.S.C. 148);

• Congestion Mitigation and Air Quality Improvement Program (23 U.S.C. 149);

• Federal Tribal Transportation Program (23 U.S.C. 202);

• Federal Lands Transportation Program (23 U.S.C. 203);

• Federal Lands Access Program (23 U.S.C. 204); and

• Recreational Trails Program (23 U.S.C. 206).

§ 652.9 Federal participation. This section is obsolete because ISTEA and subsequent surface transportation legislation authorized broad eligibility for pedestrian and bicycle projects through Federal highway funding programs as described above. Pedestrian and bicycle projects are now subject to the requirements of the program under which they are funded (such as the minimum Federal share).

§ 652.11 Planning. This section is obsolete because ISTEA and subsequent surface transportation legislation incorporated planning provisions for pedestrian and bicycle projects in 23 U.S.C. 134 and 135, and implementing regulations in 23 CFR parts 420 and 450.

§ 652.13 Design and Construction Criteria.

§ 652.13(a). The American Association of State Highway and Transportation Officials' “Guide for the Development of New Bicycle Facilities, 1981” has been superseded by several revisions. Title 23, U.S.C. does not require design standards for pedestrian and bicycle facilities. Section 109 stipulates design requirements for the National Highway System, which are implemented by 23 CFR part 625. Further, new research on pedestrian and bicycle planning, design, construction, and maintenance has led to newer practices for the safe and effective accommodation of pedestrians and bicyclists within the multimodal transportation network. The FHWA considers these documents and other resources when developing guidelines and best practices for pedestrian and bicycle facilities. These documents are available at https://www.fhwa.dot.gov/environment/bicycle_pedestrian/ and at https://safety.fhwa.dot.gov/ped_bike/.

§ 652.13(b). The ADA and DOT's implementing regulations superseded the requirements of § 652.13(b). Curb cut provisions are incorporated into 49 CFR 27.75. The FHWA has published additional guidance, available at https://www.fhwa.dot.gov/environment/bicycle_pedestrian/ and https://www.fhwa.dot.gov/accessibility/.

All substantive requirements and provisions of 23 CFR part 652 have been superseded by or incorporated into subsequent law, regulation, or guidance. Therefore, part 652 is obsolete and may be removed without adversely impacting the ability of FHWA or the State or local transportation departments to carry out the Federal-aid highway program.

Under the Administrative Procedure Act (APA) (5 U.S.C. 553(b)), an agency may waive the prior notice and opportunity for public comment requirements if it finds, for good cause, that the requirements are impracticable, unnecessary, or contrary to the public interest. The issuance of this rule without prior notice and opportunity for public comment is based on the good cause exception in 5 U.S.C. 553(b)(3)(B). Seeking public comment is unnecessary. This action is merely a ministerial action to remove a regulation from the CFR that has been rendered obsolete by the passage of subsequent legislation, and the removal of this regulation will have no substantive impact. The FHWA believes that because the underlying statutory authority for this regulation has substantially changed since adopted, this final rule eliminates any confusion that may be caused by its existence in the CFR. For these reasons, FHWA does not anticipate receiving meaningful comments on a proposal to remove the regulation from the CFR and finds good cause to forgo notice and an opportunity for public comment.

The APA also allows agencies, upon finding of good cause, to make a rule effective immediately upon publication (5 U.S.C. 533(d)(3)). For the same reasons discussed above, the Agency believes good cause exists for making this action effective immediately upon publication.

The FHWA has determined that this action does not constitute a significant regulatory action within the meaning of Executive Order (E.O.) 12866 or within the meaning of DOT regulatory policies and procedures. This is a ministerial action to remove an obsolete regulation from the CFR. The removal of this regulation will have no substantive impact or economic impact; therefore, a full regulatory evaluation is not necessary.

This final rule is considered an E.O. 13771 deregulatory action. This final rule repeals a whole part from the Code of Federal Regulations that has been identified as outdated or unnecessary, thus reducing the Department's regulatory footprint. Cost savings associated with this deregulatory action are not quantifiable.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 5 U.S.C. 60l-612), FHWA has evaluated the effects of this final rule on small entities, such as local governments and businesses. This is a ministerial action to remove an obsolete regulation from the CFR. Administration of Federal-aid highway construction projects by small entities will not be affected by the deletion. Therefore, FHWA certifies that the action will not have a significant economic impact on a substantial number of small entities.

The FHWA has determined that this rule does not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). The actions in this final rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $155 million or more in any 1 year (when adjusted for inflation) in 2014 dollars for either State, local, and Tribal governments in the aggregate, or by the private sector. In addition, the definition of “Federal Mandate” in the Unfunded Mandates Reform Act excludes financial assistance of the type in which State, local, or Tribal governments have authority to adjust their participation in the program in accordance with changes made in the program by the Federal Government. The Federal-aid highway program permits this type of flexibility.

The FHWA has analyzed this final rule in accordance with the principles and criteria contained in E.O. 13132. Since is a ministerial action to remove an obsolete regulation from the CFR, FHWA has determined that this rule does not have federalism implications. The FHWA has also determined that this action does not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions.

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program. State and local governments are not directly affected by this action because it is a ministerial action to remove an obsolete regulation from the CFR.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et seq. ), Federal agencies must obtain approval from the Office of Management and Budget for each collection of information they conduct, sponsor, or require through regulations. The FHWA has determined that this final rule does not contain collection of information requirements for the purposes of the PRA.

The FHWA has analyzed this final rule for the purposes of the National Environmental Policy Act (NEPA) (42 U.S.C. 4321, et seq. ) and has determined that this action does not have any effect on the quality of the human and natural environment because it is a ministerial action to remove an obsolete regulation from the CFR.

The FHWA has analyzed this final rule under E.O. 13175 and believes that it will not have substantial direct effects on one or more Indian Tribes, does not impose substantial direct compliance costs on Indian Tribal governments, and does not preempt Tribal law. This rule does not impose any direct compliance requirements on Indian Tribal governments nor does it have any economic or other impacts on the viability of Indian Tribes. Therefore, a Tribal summary impact statement is not required.

The FHWA has analyzed this final rule under E.O. 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use. The FHWA has determined that this action is not a significant energy action under the E.O. and 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.

The FHWA has analyzed this rule under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. This action does not effect a taking of private property or otherwise have taking implications under E.O. 12630.

This action meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

The FHWA has analyzed this action under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. The FHWA certifies that this action will not cause an environmental risk to health or safety that may disproportionately affect children.

A Regulation Identifier Number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

In consideration of the foregoing, FHWA amends 23 CFR chapter I as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

On June 10, 2016, the Indiana Department of Environmental Management (IDEM) submitted a request for EPA to approve its infrastructure SIP for the 2012 annual PM 2.5 NAAQS. The June 10, 2016 IDEM submittal included a technical analysis of its interstate transport of pollution relative to the 2012 PM 2.5 NAAQS that demonstrates that current controls are adequate for Indiana to show that it meets prongs one and two of the “good neighbor” provision  1 under CAA section 110(a)(2)(D)(i). On July 30, 2019 (84 FR 36848), EPA proposed to approve the portion of the submission dealing with those requirements.

Our July 30, 2019 proposed rule provided a 30-day review and comment period. The comment period closed on August 29, 2019. EPA did not receive any comments.

In this action, EPA is approving the portion of Indiana's June 10, 2016, submission certifying that the current Indiana SIP is sufficient to meet the required infrastructure requirements under CAA section 110(a)(2)(D)(i), specifically prongs one and two of the “good neighbor” provisions, with respect to the 2012 PM 2.5 NAAQS.

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

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

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 9, 2019. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

I. Background

In FR Doc. 2019-16762 of August 16, 2019 (84 FR 42044) there were a number of technical and typographical errors that are identified and corrected by the Correction of Errors section of this correcting document. The corrections in this correcting document are applicable to discharges occurring on or after October 1, 2019 as if they had been included in the document that appeared in the August 16, 2019 Federal Register .

On page 42190, we inadvertently omitted information about the change in the manufacturer of ZEMDRI TM (Plazomicin).

On page 42191, we made a typographical error in the maximum new technology add-on payment for a case involving the use of GIAPREZA TM .

On pages 42208, we made typographical errors in the discussion regarding the substantial clinical improvement criterion and CABLIVI®.

On pages 42264 through 42265, we are correcting technical errors that have come to our attention in the description of certain data relating to the GammaTile TM technology, based on information provided by the applicant.

On page 42338, due to conforming changes discussed in section II.B. of this correcting document, we are correcting the transition budget neutrality factor for the transition wage index policy.

On page 42372, we inadvertently omitted the final Factor 3 of the uncompensated care payment methodology's cost-to-charge ratio (CCR) “ceiling” and the number of hospitals trimmed.

On page 42426, we made a typographical error in the discussion of the change related to critical access hospital (CAH) payment for ambulance services.

On pages 42459, 42466, 42472, 42474, and 42504, in the discussion of the Hospital Inpatient Quality Reporting (IQR) Program, we made typographical and technical errors in website and website-related information.

We are correcting an error in the version 37 ICD-10 MS-DRG assignment for some cases in the historical claims data in the FY 2018 MedPAR files used in the ratesetting for the FY 2020 IPPS/LTCH PPS final rule, which resulted in inadvertent errors in the MS-DRG relative weights (and associated average length-of-stay (LOS)). Additionally, the version 37 MS-DRG assignment and relative weights are used when determining total payments for purposes of all of the budget neutrality factors and the final outlier threshold. As a result, the corrections to the MS-DRG assignment under the ICD-10 MS-DRG Grouper version 37 for some cases in the historical claims data in the FY 2018 MedPAR files and the recalculation of the relative weights directly affected the calculation of total payments and required the recalculation of all the budget neutrality factors and the final outlier threshold.

In addition, as discussed in section II.D. of this correcting document, we made certain technical errors with regard to the calculation of Factor 3 of the uncompensated care payment methodology. Factor 3 is used to determine the total amount of the uncompensated care payment a hospital is eligible to receive for a fiscal year. This amount is then used to calculate the amount of the interim uncompensated care payments a hospital receives per discharge. Per discharge uncompensated care payments are included when determining total payments for purposes of all of the budget neutrality factors and the final outlier threshold. As a result, the revisions made to address these technical errors in the calculation of Factor 3 directly affected the calculation of total payments and required the recalculation of all the budget neutrality factors and the final outlier threshold.

We made an inadvertent error in the Medicare Geographic Classification Review Board (MGCRB) reclassification status of one hospital in the FY 2020 IPPS/LTCH PPS final rule. Specifically, one hospital (CCN 330273) was treated as being reclassified under section 1886(d)(10) of the Act; however, its MGCRB reclassification had been withdrawn. In addition, we made an inadvertent error in the application of the rural floor to one hospital (CCN 220016), in that we assigned this hospital the rural wage index rather than the rural floor (Note: As finalized in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through 42336) the calculation of the rural floor does not include the wage data of urban hospitals reclassified as rural under section 1886(d)(8)(E) of the Act (as implemented at § 412.103).) We also made inadvertent errors related to the application of the out-migration adjustment under section 1886(d)(13) of the Act. Specifically, in the FY 2020 IPPS/LTCH PPS final rule, we inadvertently applied the out-migration adjustment to hospitals that received an MGCRB reclassification to their home area. Additionally, the final FY 2020 IPPS wage index with reclassification is used when determining total payments for purposes of all budget neutrality factors (except for the MS-DRG reclassification and recalibration budget neutrality factor and the wage index budget neutrality adjustment factor) and the final outlier threshold.

Due to the correction of the combination of errors listed previously (corrections to the MS-DRG assignment for some cases in the historical claims data and the resulting recalculation of the relative weights and average length of stay, revisions to Factor 3 of the uncompensated care payment methodology, the correction to the MGCRB reclassification status of one hospital, correction of the application of the rural floor to one hospital, and the correction in the application of the out-migration adjustment to certain hospitals with a geographic reclassification), we recalculated all IPPS budget neutrality adjustment factors, the fixed-loss cost threshold, the final wage indexes (and geographic adjustment factors (GAFs)), and the national operating standardized amounts and capital Federal rate. (We note there was no change to the rural community hospital demonstration program budget neutrality adjustment resulting from the correction of this combination of errors.) Therefore, we made conforming changes to the following:

• On pages 42621 and 42636, the MS-DRG reclassification and recalibration budget neutrality adjustment factor.

• On page 42621, the reclassification hospital budget neutrality adjustment. (We note that although we recalculated the updated wage index budget neutrality adjustment, that factor did not change as a result of the recalculation.)

• On page 42622, the rural floor budget neutrality adjustment and the lowest quartile wage index budget neutrality adjustment.

• On page 42623, the transition budget neutrality adjustment.

• On page 42625, the calculation of the estimated percentage of FY 2020 capital outlier payments, the estimated total Federal capital payments and the estimated capital outlier payments.

• On page 42630, the calculation of the outlier fixed-loss cost threshold, total operating Federal payments, total operating outlier payments, the estimated percentage of capital outlier payments, the outlier adjustment to the capital Federal rate and the related discussion of the percentage estimates of operating and capital outlier payments.

• On pages 42632 through 42634, the table titled “Changes from FY 2019 Standardized Amounts to the FY 2020 Standardized Amounts”.

On page 42624, we inadvertently omitted the discussion of incorporating a projection of operating outlier payment reconciliations for the FY 2020 outlier threshold calculation.

On page 42632, in the table titled “Changes from FY 2019 Standardized Amounts to the FY 2020 Standardized Amounts”, we are also correcting the typographical errors in the Nonlabor percentage (If Wage Index is Greater Than 1.0000) and in the FY 2020 Update factor.

On pages 42637 through 42640, in our discussion of the determination of the Federal hospital inpatient capital-related prospective payment rate update, due to the recalculation of the GAFs, we have made conforming corrections to the increase in the capital Federal rate, the GAF/DRG budget neutrality adjustment factors, the capital Federal rate, and the outlier adjustment to the capital Federal rate and the outlier threshold (as discussed previously), along with certain statistical figures (for example, percent change) in the accompanying discussions. Also, as a result of these errors we have made conforming corrections in the table showing the comparison of factors and adjustments for the FY 2019 capital Federal rate and FY 2020 capital Federal rate.

On page 42641, we made typographical errors in the LTCH standard Federal payment rate.

On page 42648, we are making conforming changes to the fixed-loss amount for FY 2020 site neutral payment rate discharges, and the high-cost outlier (HCO) threshold (based on the corrections to the IPPS fixed-loss amount discussed previously).

On pages 42651 and 42652, we are making conforming corrections to the national adjusted operating standardized amounts and capital standard Federal payment rate (which also include the rates payable to hospitals located in Puerto Rico) in Tables 1A, 1B, 1C, and 1D as a result of the conforming corrections to certain budget neutrality factors and the outlier threshold previously described.

On page 42652, we made a typographical error in the LTCH PPS standard Federal payment rate (reduced update) in Table 1E.

On pages 42657 through 42662, 42664 through 42669, and 42684 through 42686 in our regulatory impact analyses, we have made conforming corrections to the factors, values, and tables and accompanying discussion of the changes in operating and capital IPPS payments for FY 2020 and the effects of certain IPPS budget neutrality factors as a result of the technical errors that lead to changes in our calculation of the operating and capital IPPS budget neutrality factors, outlier threshold, final wage indexes, operating standardized amounts, and capital Federal rate (as described in section II.B. of this correcting document).

These conforming corrections include changes to the following tables:

• On pages 42657 through 42660, the table titled “Table I—Impact Analysis of Changes to the IPPS for Operating Costs for FY 2020”.

• On pages 42664 through 42666, the table titled “Comparison of FY 2019 and FY 2020 IPPS Estimated Payments Due to Rural Floor with National Budget Neutrality”.

• On pages 42668 through 42669, the table titled “Table II—Impact Analysis of Changes for FY 2020 Acute Care Hospital Operating Prospective Payment System (Payments per discharge)”.

• On pages 42685 through 42686, the table titled “Table III—Comparison of Total Payments per Case [FY 2019 payments compared to FY 2020 payments]”.

On pages 42671 through 42675, we are correcting the discussion of the “Effects of the Changes to Medicare DSH and Uncompensated Care Payments for FY 2020” for purposes of the Regulatory Impact Analysis in Appendix A of the FY 2020 IPPS/LTCH PPS final rule, including the table titled “Modeled Uncompensated Care Payments for Estimated FY 2020 DSHs by Hospital Type: Model Uncompensated Care Payments ($ in Millions)—from FY 2019 to FY 2020” on pages 42672 through 42674, in light of the corrections discussed in section II.D. of this correcting document.

We are correcting the errors in the following IPPS tables that are listed on page 42651 of the FY 2020 IPPS/LTCH PPS final rule and are available on the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.

The tables that are available on the internet have been updated to reflect the revisions discussed in this correcting document.

Table 2—Case-Mix Index and Wage Index Table by CCN-FY 2020. The correction of the error (as discussed in section II.B. of this correcting document) related to one hospital's MGCRB reclassification status, the correction of the application of the rural floor to one hospital, and the correction of the application of the out-migration adjustment to hospitals that reclassified to their home area necessitated the recalculation of the FY 2020 wage indexes. Also, the corrections to the version 37 MS-DRG assignment for some cases in the historical claims data and the resulting recalculation of the relative weights and ALOS (as discussed in section II.B. of this correcting document), corrections to Factor 3 of the uncompensated care payment methodology, and recalculation of the FY 2020 wage indexes necessitated the recalculation of the rural floor budget neutrality factor (as discussed in section II.B. of this correcting document). Therefore, we are correcting the values for all hospitals in the columns titled “FY 2020 Wage Index Prior to Quartile and Transition”, “FY 2020 Wage Index With Quartile”, and “FY 2020 Wage Index With Quartile and Cap”.

For the hospital (CCN 330273) for which we are correcting its MGCRB reclassification status (as discussed in section II.B. of this correcting document), we are also correcting the columns titled “Reclassified/Redesignated CBSA” and “MGCRB Reclass”. For the hospitals that reclassified to their home area for which we inadvertently applied the out-migration adjustment, as discussed in section II.B. of this correcting document), we are also correcting the column titled “Out-Migration Adjustment”.

Table 3.—Wage Index Table by CBSA—FY 2020. Corrections to the version 37 MS-DRG assignment for some cases in the historical claims data and the resulting recalculation of the relative weights and ALOS, corrections to Factor 3 of the uncompensated care payment methodology, and the correction of the reclassification, rural floor application and outmigration adjustment errors (discussed in section II.B. of this correcting document) necessitated the recalculation of the rural floor budget neutrality factor and the FY 2020 wage indexes (as discussed in section II.B. of this correcting document). Therefore, we are making corresponding changes to the wage indexes and GAFs of all CBSAs listed in Table 3. Specifically, we are correcting the values and flags in the columns titled “Wage Index”, “GAF”, “Reclassified Wage Index”, “Reclassified GAF”, “State Rural Floor”, “Eligible for Rural Floor Wage Index”, “Pre-Frontier and/or Pre-Rural Floor Wage Index”, “Reclassified Wage Index Eligible for Frontier Wage Index”, “Reclassified Wage Index Eligible for Rural Floor Wage Index”, and “Reclassified Wage Index Pre-Frontier and/or Pre-Rural Floor”.

Additionally, some of the labels for the area names of the rural CBSAs were displayed incorrectly (the area name did not correspond to the CBSA code in the column titled “CBSA”). Therefore, we are correcting the column titled “Area Name” for the affected CBSAs. Also, there were technical errors in the calculation of the FY 2020 average hourly wage and 3-year average hourly wage for some CBSAs, and therefore, we are correcting the columns titled “FY 2020 Average Hourly Wage” and “3-Year Average Hourly Wage (2018, 2019, 2020)” for the affected CBSAs. Specifically, we inadvertently counted the salaries and hours of multicampus hospitals twice when calculating the FY 2020 average hourly wage and 3-year average hourly wage for the CBSAs that include those hospitals, and some providers were inadvertently not assigned to a CBSA when we calculated the 3-year average hourly wage. We also inadvertently did not display the wage index of 1.0000 in the state rural floor for some states that are eligible for the Frontier wage index. Therefore, we are correcting the column titled “State Rural Floor” for the affected CBSAs. (Note: As stated in the FY 2020 IPPS/LTCH PPS Final Rule (84 FR 42312), section 10324 of Public Law 111-148 requires that hospitals in frontier States cannot be assigned a wage index of less than 1.0000.)

Table 5.—List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay—FY 2020. We are correcting this table to reflect the recalculation of the relative weights, geometric average length-of-stay (LOS), and arithmetic mean LOS as a result of the corrections to the version 37 MS-DRG assignment for some cases in the historical claims data used in the calculations (as discussed in section II.B. of this correcting document).

Table 7B.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2018 MedPAR Update—March 2019 GROUPER Version 37 MS-DRGs. We are correcting this table to reflect the recalculation of the relative weights, geometric average length-of-stay (LOS), and arithmetic mean LOS as a result of the corrections to the version 37 MS-DRG assignment for some cases in the historical claims data used in the calculations (as discussed in section II.B. of this correcting document).

Table 18.—FY 2020 Medicare DSH Uncompensated Care Payment Factor 3. We are correcting this table to reflect corrections to the Factor 3 calculations for purposes of determining uncompensated care payments for the FY 2020 IPPS/LTCH PPS final rule for the following reasons:

• To correct the Factor 3s that were computed for hospitals where a MAC had accepted an amended report, reopened a report, and/or adjusted uncompensated care cost data on a report, but the corrected uncompensated care data were inadvertently omitted from the June 30, 2019 extract of the Healthcare Cost Report Information System (HCRIS).

• To correct for the inadvertent inclusion of terminated hospitals in the Factor 3 calculations.

We are revising Factor 3 for all hospitals to correct these errors. We are also revising the amount of the total uncompensated care payment calculated for each DSH-eligible hospital. The total uncompensated care payment that a hospital receives is used to calculate the amount of the interim uncompensated care payments the hospital receives per discharge; accordingly, we have also revised these amounts for all DSH-eligible hospitals. Per discharge uncompensated care payments are included when determining total payments for purposes of all of the budget neutrality factors and the final outlier threshold. As a result, these corrections to uncompensated care payments impacted the calculation of all the budget neutrality factors as well as the outlier fixed-loss cost threshold. These corrections will be reflected in Table 18 and the Medicare DSH Supplemental Data File. In section IV.C. of this correcting document, we have made corresponding revisions to the discussion of the “Effects of the Changes to Medicare DSH and Uncompensated Care Payments for FY 2020” for purposes of the Regulatory Impact Analysis in Appendix A of the FY 2020 IPPS/LTCH PPS final rule to reflect the corrections discussed previously.

We also are correcting the errors in the IPPS files described below that are available on the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html. The files that are available on the internet have been updated to reflect the corrections discussed in this correcting document.

We are correcting the erroneous designation of the following ten ICD-10-CM diagnosis codes as a HAC within HAC 05: Falls and Trauma for FY 2020 in the ICD-10 MS-DRG Definitions Manual Version 37 Appendix I Hospital Acquired Conditions (HACs) List and the ICD-10 MS-DRG Grouper Mainframe Software Version 37: S02.121K (Fracture of orbital roof, right side, subsequent encounter for fracture with nonunion); S02.122K (Fracture of orbital roof, left side, subsequent encounter for fracture with nonunion); S02.129K (Fracture of orbital roof, unspecified side, subsequent encounter for fracture with nonunion); S02.831K (Fracture of medial orbital wall, right side, subsequent encounter for fracture with nonunion); S02.832K (Fracture of medial orbital wall, left side, subsequent encounter for fracture with nonunion); S02.839K (Fracture of medial orbital wall, unspecified side, subsequent encounter for fracture with nonunion); S02.841K (Fracture of lateral orbital wall, right side, subsequent encounter for fracture with nonunion); S02.842K (Fracture of lateral orbital wall, left side, subsequent encounter for fracture with nonunion); S02.849K (Fracture of lateral orbital wall, unspecified side, subsequent encounter for fracture with nonunion) and S02.85XK (Fracture of orbit, unspecified, subsequent encounter for fracture with nonunion). We have corrected the ICD-10 MS-DRG Definitions Manual Version 37 and the ICD-10 MS-DRG Grouper Mainframe Software Version 37 to correctly reflect that these diagnosis codes are not defined as HACs for MS-DRG assignment for FY 2020.

Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), the agency is required to publish a notice of the proposed rulemaking in the Federal Register before the provisions of a rule take effect. Similarly, section 1871(b)(1) of the Act requires the Secretary to provide for notice of the proposed rulemaking in the Federal Register and provide a period of not less than 60 days for public comment. In addition, section 553(d) of the APA, and section 1871(e)(1)(B)(i) of the Act mandate a 30-day delay in effective date after issuance or publication of a rule. Sections 553(b)(B) and 553(d)(3) of the APA provide for exceptions from the notice and comment and delay in effective date APA requirements; in cases in which these exceptions apply, sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act provide exceptions from the notice and 60-day comment period and delay in effective date requirements of the Act as well. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act authorize an agency to dispense with normal rulemaking requirements for good cause if the agency makes a finding that the notice and comment process are impracticable, unnecessary, or contrary to the public interest. In addition, both section 553(d)(3) of the APA and section 1871(e)(1)(B)(ii) of the Act allow the agency to avoid the 30-day delay in effective date where such delay is contrary to the public interest and an agency includes a statement of support.

We believe that this correcting document does not constitute a rule that would be subject to the notice and comment or delayed effective date requirements. This document corrects technical and typographical errors in the preamble, addendum, payment rates, tables, and appendices included or referenced in the FY 2020 IPPS/LTCH PPS final rule, but does not make substantive changes to the policies or payment methodologies that were adopted in the final rule. As a result, this correcting document is intended to ensure that the information in the FY 2020 IPPS/LTCH PPS final rule accurately reflects the policies adopted in that document.

In addition, even if this were a rule to which the notice and comment procedures and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the final rule or delaying the effective date would be contrary to the public interest because it is in the public's interest for providers to receive appropriate payments in as timely a manner as possible, and to ensure that the FY 2020 IPPS/LTCH PPS final rule accurately reflects our methodologies and policies. Furthermore, such procedures would be unnecessary, as we are not making substantive changes to our methodologies or policies, but rather, we are simply implementing correctly the methodologies and policies that we previously proposed, requested comment on, and subsequently finalized. This correcting document is intended solely to ensure that the FY 2020 IPPS/LTCH PPS final rule accurately reflects these methodologies and policies. Therefore, we believe we have good cause to waive the notice and comment and effective date requirements.

In FR Rule Doc. 2019-16762 of August 16, 2019 (84 FR 42044), we are making the following corrections:

1. On page 42190, second column, second full paragraph, lines 1 through 4, the sentence “Achaogen, Inc. submitted an application for new technology add-on payments for ZEMDRI TM (Plazomicin) for FY 2019.” is corrected to read “Achaogen, Inc. submitted an application for new technology add-on payments for ZEMDRI TM (Plazomicin) for FY 2019 (we note that Cipla USA Inc. has since acquired ZEMDRI TM (Plazomicin) from Achaogen Inc.)”

2. On page 42191, third column, first partial paragraph, line 2, the figure “$4,083.75” is corrected to read “$1,950.”

3. On page 42208,

a. First column, second full paragraph, line 18 (last line), the term “comparing” is corrected to read “compared”.

b. Second column, fifth full paragraph, line 1, the phrase “all the” is corrected to read “all of the”.

4. On page 42264, third column, first full paragraph, lines 12 through 16, the sentence “The applicant stated that they collaborated with a biostatistics firm to advise to ensure the analysis of their data meets the highest standards.” is corrected to read “The applicant stated that they collaborated with a biostatistics firm to ensure the analysis of their data meets the highest standards.”.

5. On page 42265,

a. First column,

i. First full paragraph,

A. Line 8, the phrase “performed on 79 patients” is corrected to read “performed on 74 patients with 79 tumors”.

B. Lines 30 through 33, the sentence “Based on the data, there was no statistically significant difference between the control arm treatment and GammaTile TM treatment.” is corrected to read “There was a statistically significant difference between the control arm treatment and GammaTile TM treatment for patients with recurrent meningioma and brain metastases and no statistically significant difference between the control arm treatment and GammaTile TM treatment for patients with recurrent high-grade glioma.”.

ii. Second paragraph, lines 2 and 3, the phrase “the initial 20 of 79 patients” is corrected to read “the initial 19 patients (with 20 tumors) of the 74 patients”.

b. Second column, first partial paragraph, lines 17 through 33, the sentences “While we acknowledge the difficulty in establishing randomized control groups in studies involving recurrent brain tumors, after careful review of all data received to date, we find the data did not show a statistically significant difference between the time to first recurrence in the control arm in comparison to the time to second recurrence in the GammaTile TM treatment arm. Based on the information stated above, we are unable to make a determination that GammaTile TM technology represents a substantial clinical improvement over existing therapies.” are corrected to read “While we acknowledge the difficulty in establishing randomized control groups in studies involving recurrent brain tumors, based on the information stated above, we are unable to make a determination that GammaTile TM technology represents a substantial clinical improvement over existing therapies.”.

6. On page 42338, second column, first full paragraph, line 14, the figure “0.998838” is corrected to read “0.998835”.

7. On page 42379, second column, first full paragraph, the last line is corrected by adding the parenthetical sentence “(For the final rule, this trim removed 5 hospitals that have a CCR above the calculated ceiling of 1.082 for FY 2015 cost reports.)”.

8. On page 42426, second column, first full paragraph, line 9, the phrase “its community” is corrected to read “its community.”.

9. On page 42459, first column, footnote paragraph (footnote 395), the website “ https://ecqi.healthit.gov/ecqi-tools-key-resources/content/vsac )” is corrected to read “ https://ecqi.healthit.gov/tool/vsac”.

10. On page 42466, second column, footnote paragraph (footnote 447), the website title “2015 Considerations for Implementing Measures in Federal Programs: Hospitals” is corrected to read “Spreadsheet of MAP 2015 Final Recommendations”.

11. On page 42472, third column, footnote paragraph (footnote 473), the published date “2013” is corrected to read “2015”.

12. On page 42474, second column, footnote paragraph (footnote 478), the website title “2015 Considerations for Implementing Measures in Federal Programs: Hospitals” is corrected to read “Spreadsheet of MAP 2015 Final Recommendations”.

13. On page 42504, third column, footnote paragraph (footnote 663), the website “ https://ecqi.healthit.gov/content/about-ecqi” is corrected to read “ https://ecqi.healthit.gov/about-ecqi.”.

1. On page 42621,

a. First column, last bulleted paragraph, line 17 and line 22, the figure “0.997649” is corrected to read “0.996859”.

b. Third column, last paragraph, line 11, the figure “0.985425” is corrected to read “0.985447”.

2. On page 42622,

a. First column, last full paragraph, line 3, the figure “0.997081” is corrected to read “0.997073”.

b. Third column, first bullet, last line, the figure “0.997987” is corrected to read “0.997984”.

3. On page 42623, first column, first full paragraph, line 5, the figure “0.998838” is corrected to read “0. 998835”.

4. On page 42624, second column,

a. Second full paragraph (immediately under the section heading “(a) Incorporating a Projection of Outlier Payment Reconciliations for the FY 2020 Outlier Threshold Calculation”), the sentence “We proposed the following methodology to incorporate a projection of outlier payment reconciliations for the FY 2020 outlier threshold calculation.” is corrected to read “We proposed the following methodology to incorporate a projection of operating outlier payment reconciliations for the FY 2020 outlier threshold calculation.”.

b. Before the second partial paragraph which begins with the phrase “Step 1.” the language is corrected by adding the following paragraphs to read as follows:

“ Step 1. —Use the Federal FY 2014 cost reports for hospitals paid under the IPPS from the most recent publicly available quarterly HCRIS extract available at the time of development of the proposed rule and final rules, and exclude sole community hospitals (SCHs) that were paid under their hospital-specific rate (that is, if Worksheet E, Part A, Line 48 is greater than Line 47 in the applicable columns.) In the proposed rule, we stated that we used the December 2018 HCRIS extract for the proposed rule and that we expected to use the March 2019 HCRIS extract for the FY 2020 final rule.

Step 2. —Calculate the aggregate amount of historical total of operating outlier reconciliation dollars (Worksheet E, Part A, Line 2.01) using the Federal FY 2014 cost reports from Step 1.

Step 3. —Calculate the aggregate amount of total Federal operating payments using the Federal FY 2014 cost reports from Step 1. The total Federal operating payments consist of the Federal payments (Worksheet E, Part A, Line 1.01 and Line 1.02, plus Line 1.03 and Line 1.04), outlier payments (Worksheet E, Part A, Line 2 and Line 2.02), and the outlier reconciliation payments (Worksheet E, Part A, Line 2.01). We note that a negative amount on Worksheet E, Part A, Line 2.01 for outlier reconciliation indicates an amount that was owed by the hospital, and a positive amount indicates this amount was paid to the hospital.

Step 4. —Divide the amount from Step 2 by the amount from Step 3 and multiply the resulting amount by 100 to produce the percentage of total operating outlier reconciliation dollars to total Federal operating payments for FY 2014. This percentage amount would be used to adjust the outlier target for FY 2020 as described in Step 5.

Step 5. —Because the outlier reconciliation dollars are only available on the cost reports, and not in the Medicare claims data in the MedPAR file used to model the outlier threshold, we proposed to target 5.1 percent minus the percentage determined in Step 4 in determining the outlier threshold. Using the FY 2014 cost reports based on the December 2018 HCRIS extract (as used for the proposed rule), because the aggregate outlier reconciliation dollars from Step 2 are negative, we targeted an amount higher than 5.1 percent for outlier payments for FY 2020 under our proposed methodology.

For the FY 2020 proposed rule, based on December 2018 HCRIS, 16 hospitals had an outlier reconciliation amount recorded on Worksheet E, Part A, Line 2.01 for total operating outlier reconciliation dollars of negative $24,433,087 (Step 2). The total Federal operating payments based on the December 2018 HCRIS was $82,969,541,296 (Step 3). The ratio (Step 4) was a negative 0.029448 percent, which, when rounded to the second digit, was negative 0.03 percent. Therefore, for FY 2020, we proposed to incorporate a projection of outlier reconciliation dollars by targeting an outlier threshold at 5.13 percent [5.1 percent−(−0.03 percent)]. When the percentage of operating outlier reconciliation dollars to total Federal operating payments is negative (such is the case when the aggregate amount of outlier reconciliation is negative), the effect is a decrease to the outlier threshold compared to an outlier threshold that is calculated without including this estimate of operating outlier reconciliation dollars. In section II.A.4.i.(2) of the Addendum to the proposed rule, we provided the FY 2020 outlier threshold as calculated for the proposed rule both with and without including this proposed percentage estimate of operating outlier reconciliation.

As explained earlier, we stated in the proposed rule that we believe this is an appropriate method to include outlier reconciliation dollars in the outlier model because it uses the total outlier reconciliation dollars based on historic data rather than predicting which specific hospitals will have outlier payments reconciled for FY 2020. However, we stated we would continue to use a 5.1 percent target (or an outlier offset factor of 0.949) in calculating the outlier offset to the standardized amount. In the past, the outlier offset was six decimals because we targeted and set the threshold at 5.1 percent by adjusting the standardized amount by the outlier offset until operating outlier payments divided by total operating Federal payments plus operating outlier payments equaled approximately 5.1 percent (this approximation resulted in an offset beyond three decimals). However, we stated that under our proposed methodology, we believed a three decimal offset of 0.949 reflecting 5.1 percent is appropriate rather than the unrounded six decimal offset that we have calculated for prior fiscal years. Specifically, as discussed in section II.A.5. of the Addendum in the proposed rule, we proposed to determine an outlier adjustment by applying a factor to the standardized amount that accounts for the projected proportion of total estimated FY 2020 operating Federal payments paid as outliers. Our proposed modification to the outlier threshold methodology was designed to adjust the total estimated outlier payments for FY 2020 by incorporating the projection of negative outlier reconciliation. That is, under our proposal, total estimated outlier payments for FY 2020 would be the sum of the estimated FY 2020 outlier payments based on the claims data from the outlier model and the estimated FY 2020 total operating outlier reconciliation dollars. We stated that we believe the proposed methodology would more accurately estimate the outlier adjustment to the standardized amount by increasing the accuracy of the calculation of the total estimated FY 2020 operating Federal payments paid as outliers. We stated that in other words, the net effect of our outlier proposal to incorporate a projection for outlier reconciliation dollars into the threshold methodology would be that FY 2020 outlier payments (which include the estimated recoupment percentage for FY 2020 calculated for the proposed rule of 0.03 percent) would be 5.1 percent of total operating Federal payments plus total outlier payments. Therefore, we stated the operating outlier offset to the standardized amount is 0.949 (1−0.051).

In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that, although we were not making any proposals with respect to the methodology for FY 2021 and subsequent fiscal years, the above-described proposed methodology could advance by 1 year the cost reports used to determine the historical outlier reconciliation (for example, for FY 2021, the FY 2015 outlier reconciliations would be expected to be complete). We stated that we were considering additional options in order to have available more recent estimates of outlier reconciliation for future rulemaking.

We invited public comment on our proposed methodology for projecting the estimate of outlier reconciliation and incorporating that estimate into the modeling for the fixed-loss cost outlier threshold.

Comment: Some commenters supported the methodology and stated that they were able to replicate the CMS calculation of the adjustment based on the outlier reconciliations reported in the cost reports. A commenter requested that CMS confirm the steps taken in calculating the reconciliation amount included the following steps: (1) Exclude Maryland hospitals from the analysis; (2) base the list of IPPS providers on all Medicare participating providers in FY 2014 and do not restrict consideration to only current IPPS providers; (3) if a provider has multiple cost reports, use all of them; and (4) if there were multiple columns for the line in the cost report, only the first column should be used. The commenter also requested that CMS describe any other steps it took in the analysis.

Some commenters raised concerns with the completeness of outlier reconciliations and/or finalized cost reports. The commenters recommended that an earlier cost report year (FY 2012 or FY 2013) be used instead of the FY 2014 cost report year as proposed. One commenter stated that in their review of FY 2012 through FY 2014 cost reports for completeness, there were no changes in HCRIS to the FY 2012 cost reports during the last year, yet their analysis of FY 2013 cost report showed several changes in 2019. The commenter was concerned that the FY 2014 reconciliations in the cost report are still subject to change and suggested CMS use FY 2012 data for purposes of the FY 2020 outlier threshold calculation. Another commenter that recommended CMS use FY 2013 cost reports stated that FY 2013 cost reports likely provided more audited cost reports, even though they were less current.

Response: We thank the commenters for their support and input on the proposed methodology.

Regarding the commenter who requested clarification on specific methodology steps, as noted in the proposed rule, in Step 1, we used the Federal FY 2014 cost reports for hospitals paid under the IPPS, and therefore excluded hospitals not paid under the IPPS, such as Maryland hospitals and cancer hospitals. Also, we did not restrict the data included to only current IPPS providers; specifically, we used all cost reports with a begin date in the Federal fiscal year 2014 including if a hospital had multiple cost reports during the fiscal year. For the request for clarification on multiple columns for a line in the cost report, when there were multiple columns available and the provider was paid under the IPPS for that period of the cost report, then we believe it is appropriate to use multiple columns, as the multiple columns are needed to fully represent the relevant IPPS payment amounts. For example, where there were geographic reclassifications in different periods of the cost report and/or SCH/MDH status in different periods of the cost report, which are two of the reasons for multiple columns, we believe all such columns should be used to determine the IPPS payment amounts. We note the proposed rule calculation inadvertently did not incorporate the multiple columns, however these multiple columns have been used in projecting the estimated outlier reconciliation for this final rule.

Regarding the comments on using an earlier cost report year instead of the proposed FY 2014, we note that the proposed rule used data from 16 hospitals and the final rule is using data from 22 hospitals. As stated above, we believe that many of the reasons aside from outlier reconciliation that resulted in a delay in the cost reports being final settled have now been resolved. Additionally, as stated above, we believe that the updated FY 2014 cost reports for the final rule provide the most recent and complete available data to project the estimate of operating outlier reconciliation, while the commenters' recommended approach would use data for earlier years. We also note that the March 2019 HCRIS, includes approximately 92 percent of finalized FY 2014 cost reports while the March 2019 HCRIS for FY 2013 includes approximately 95 percent of finalized FY 2013 cost reports. Given the very small percentage variance in finalized cost reports from FY 2013 to 2014 in the March 2019 HCRIS, we believe it would be more accurate to use the more recent data based on FY 2014 cost reports. Given the amount of time that has passed since FY 2012 cost reports, which is 8 years prior to the upcoming fiscal year, we believe any additional incremental increase in the percentage of finalized cost reports for FY 2012 is outweighed by using the more recent FY 2014 cost reports because they would more accurately project the estimate of operating outlier reconciliation.

The March 2019 HCRIS contained data for 20 hospitals. While we proposed to use the March 2019 HCRIS extract to calculate the reconciliation adjustment for this FY 2020 IPPS final rule, data for two additional outlier reconciliations were made available to CMS outside of the March 2019 HCRIS update. We believe including these two hospitals will lend additional accuracy to project the estimate of operating outlier reconciliation used in the calculation of the outlier threshold. Therefore, in order to use the most complete data for FY 2014 cost reports, we are using the March 2019 HCRIS extract, supplemented by these two additional hospitals' data for this FY 2020 IPPS final rule. We expect to use the March HCRIS for the final rule for future rulemaking, as we generally expect historical cost reports for the applicable fiscal year to be available by March. The following table shows the March 2019 HCRIS with the addition of two hospitals' outlier reconciliation data for this final rule

After consideration of the comments received, and for the reasons discussed in the proposed rule and in this final rule, we are finalizing the methodology described above for incorporating the outlier reconciliation in the outlier threshold calculation. Therefore, for this final rule we used the same steps described above and in the proposed rule to incorporate a projection of operating outlier payment reconciliations for the calculation of the FY 2020 outlier threshold calculation.

For this FY 2020 final rule, based on the March 2019 HCRIS and supplemental data for two hospitals, 22 hospitals had an outlier reconciliation amount recorded on Worksheet E, Part A, Line 2.01 for total operating outlier reconciliation dollars of negative $35,136,843 (Step 2). The total Federal operating payments based on the March 2019 HCRIS is $84,051,485,178 (Step 3). The ratio (Step 4) is a negative 0.041804 percent, which, when rounded to the second digit, is negative 0.04 percent. Therefore, for FY 2020, using the finalized methodology, we incorporated a projection of outlier reconciliation dollars by targeting an outlier threshold at 5.14 percent [5.1 percent−(−.04 percent)]. As noted above, when the percentage of operating outlier reconciliation dollars to total Federal operating payments is negative (such is the case when the aggregate amount of outlier reconciliation is negative), the effect is a decrease to the outlier threshold compared to an outlier threshold that is calculated without including this estimate of operating outlier reconciliation dollars. In section II.A.4.i.(2) of this Addendum of this final rule, we provide the FY 2020 outlier threshold as calculated both with and without including this percentage estimate of operating outlier reconciliation.

We establish an outlier threshold that is applicable to both hospital inpatient operating costs and hospital inpatient capital related costs (58 FR 46348). Similar to the calculation of the adjustment to the standardized amount to account for the projected proportion of operating payments paid as outlier payments, as discussed in greater detail in section III.A.2. of the Addendum in the proposed rule and this final rule, we proposed to reduce the FY 2020 capital standard Federal rate by an adjustment factor to account for the projected proportion of capital IPPS payments paid as outliers. The regulations in 42 CFR 412.84(i)(4) state that any outlier reconciliation at cost report settlement will be based on operating and capital CCRs calculated based on a ratio of costs to charges computed from the relevant cost report and charge data determined at the time the cost report coinciding with the discharge is settled. As such, any reconciliation also applies to capital outlier payments. As part of our proposal for FY 2020 to incorporate into the outlier model the total outlier reconciliation dollars from the most recent and most complete fiscal year cost report data, we also proposed to adjust our estimate of FY 2020 capital outlier payments to incorporate a projection of capital outlier reconciliation payments when determining the adjustment factor to be applied to the capital standard Federal rate to account for the projected proportion of capital IPPS payments paid as outliers. To do so, we proposed to use the following methodology, which generally parallels the methodology to incorporate a projection of operating outlier reconciliation payments for the FY 2020 outlier threshold calculation.”.

5. On page 42625, lower fourth of the page (after the table), second column, partial paragraph,

a. Line 5, the figure “5.47” is corrected to read “5.45”.

b. Line 7, the figure “$441,745,478” is corrected read “$440,250,855”.

c. Line 8, the figure “$441,745,478” is corrected to read “$440,250,855”.

d. Line 10, the figure “$8,077,508,094” is corrected to read “$8,077,323,420”.

6. On page 42630,

a. Top third of the page,

i. First column, third paragraph, line 11, the figure “$26,473” is corrected to read “$26,552”.

ii. Second column, first partial paragraph,

A. Line 2, the figure “$91,413,886,336” is corrected to read “$91,232,894,870”.

B. Line 3, the figure “$4,943,282,951” is corrected to read “$4,943,522,543”.

C. Line 17, the figure “$26,662” is corrected to read “$26,763”.

D. Line 24, the figure “$26,473” is corrected to read “$26,552”.

iii. Third column, first partial paragraph, lines 8 through 15, the sentence “We project that the threshold for FY 2020 of $26,473 (which reflects our methodology to incorporate an estimate of outlier reconciliations) will result in outlier payments that will equal 5.1 percent of operating DRG payments and 5.42 percent of capital payments based on the Federal rate.” is corrected to read “We project that the threshold for FY 2020 of $26,552 (which reflects our methodology to incorporate an estimate of operating outlier reconciliations) will result in outlier payments that will equal 5.1 percent of operating DRG payments and we estimate that capital outlier payments will equal 5.37 percent of capital payments based on the Federal rate (which reflects our methodology discussed above to incorporate an estimate of capital outlier reconciliations).

b. Middle of the page, the following the untitled table is corrected to read as follows:

7. On pages 42632 through 42634, the table titled “CHANGES FROM FY 2019 STANDARDIZED AMOUNTS TO THE FY 2020 STANDARDIZED AMOUNTS”, is corrected to read as follows:

8. On page 42636, lower third of the page, first column, last paragraph, line 13, the figure “0.997649” is corrected to read “0.996859”.

9. On page 42637, first column, second full paragraph, line 6, the figure “0.70” is corrected to read “0.64”.

10. On page 42638, lower two-thirds of the page (after the table),

a. First column, second paragraph,

i. Line 10, the figure “5.47 ” is corrected to read “5.45”.

ii. Line 22, the figure “5.39” is corrected to read “5.37”.

b. Second column,

i. First partial paragraph,

A. Line 1, the figure “5.47” is corrected to read “5.45”.

B. Line 5, the figure “0.9461” is corrected to read “0.9463”.

ii. First full paragraph,

A. Lines 5 and 6, the figurative phrase “0.9461 is a −0.35 percent change” is corrected to read “0.9463 is −0.33 percent change”.

B. Lines 9 through 11, the figurative expression “0.9965 (0.9461/0.9494; calculation performed on unrounded numbers)” is corrected to read “0.9967 (0.9463/0.9494; calculation performed on unrounded numbers)”.

C. Line 13, the figure “−0.35” is corrected to read “−0.33”.

12. On page 42639,

a. First column, second partial paragraph, line 16, the figure “1.0005” is corrected to read “1.0004”.

b. Second column,

i. First partial paragraph, line 8, the figure “1.0005” is corrected to read “1.0004”.

ii. Second column, first full paragraph,

A. Line 13, the figure “0.9987” is corrected to read “0.9979”.

B. Line 15, the figure “0.9987” is corrected to read “0.9979”.

C. Line 17, the figurative expression “0.9956 (0.9987 × 0.9968)” is corrected to read “0.9948 (0.9979 × 0.9968)”.

c. Third column,

i. First full paragraph,

A. Line 2, the figure “0.9956” is corrected to read “0.9948”.

B. Line 6, the figure “0.9987” is corrected to read “0.9979”.

ii. Second full paragraph,

A. Line 9, the figure “$462.61” is corrected to read “$462.33”.

B. Line 10, the figure “0.70 percent” is corrected to read “0.64 percent”.

iii. Second bulleted paragraph, line 5, the figure “0.9956” is corrected to read “0.9948”.

iv. Third bulleted paragraph, line 2, the figure “0.9461” is corrected to read “0.9463”.

v. Last paragraph,

A. Line 12, the figure “0.44” is corrected to read “0.52”.

B. Line 14, the figure “0.35” is corrected to read “0.33”.

C. Line 18, the figure “0.70” is corrected to read “0.64”.

13. On page 42640, the chart titled “COMPARISON of FACTORS AND ADJUSTMENTS: FY 2019 CAPITAL FEDERAL RATE AND THE FY 2020 CAPITAL FEDERAL RATE” is corrected to read as follows:

14. On page 42641,

a. Second column, third paragraph, line 43, the figure “$42,677.63” is corrected to read “$42,677.64.”

b. Third column, line 5, the figure “$41,844.89” is corrected to read “$41,844.90”.

15. On page 42648, second column,

a. Third paragraph, line 8, the figure “$26,473” is corrected to read “$26,552”.

b. Third paragraph, last line, the figure “$26,473” is corrected to read “$26,552”.

c. Sixth paragraph, line 3, the figure “$26,473” is corrected to read “$26,552”.

16. On page 42651, bottom of the page, the table titled “TABLE 1A—NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (68.3 PERCENT LABOR SHARE/31.7 PERCENT NONLABOR SHARE IF WAGE INDEX IS GREATER THAN 1) —FY 2020” is corrected to read as follows:

17. On page 42652—

a. Top of page—

i. The table titled “TABLE 1B—NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (62 PERCENT LABOR SHARE/38 PERCENT NONLABOR SHARE IF WAGE INDEX IS LESS THAN OR EQUAL TO 1)—FY 2020” is corrected to read as follows:

This is a summary of the Commission's Report and Order (R&O), IB Docket No. 17-95, FCC 18-138, adopted on September 26, 2018, and released on September 27, 2018. The full text of this document is available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-18-138A1.pdf. The full text of this document is also available for inspection and copying during business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities, send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

This document contains new and modified information collection requirements. The Commission has received approval from the Office of Management and Budget (OMB) for the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. OMB approval was received on July 17, 2019 for OMB control number 3060-0678. In addition, we previously sought comments from the public on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

In this Report and Order (R&O), the Commission simplifies its rules to facilitate the continued deployment of Earth Stations in Motion (ESIMs) and reduce the regulatory burdens on ESIMs. First, we reorganize and consolidate the sections in part 25 of the Commission's rules, including technical and operational as well as application rules, for the three types of Fixed-Satellite Service (FSS) earth stations that the Commission authorizes to transmit while in motion: Earth Stations on Vessels (ESVs), Vehicle-Mounted Earth Stations (VMESs), and Earth Stations Aboard Aircraft (ESAAs), collectively known as ESIMs. Second, we amend our rules to allow the operation of ESIMs in the conventional Ka-band. Specifically, our rules apply to ESIMs communicating with geostationary-orbit (GSO) FSS space stations operating in 18.3-18.8 GHz and 19.7-20.2 GHz (space-to-Earth), and 28.35-28.6 GHz and 29.25-30.0 GHz (Earth-to-space) frequency bands. The new rules create regulatory equity by adopting a regulatory regime for ESIM operations in the conventional Ka-band similar to that which currently exists in the conventional C-band, the conventional Ku-band, and in portions of the extended Ku-band. 1

Commenters generally applaud the Commission for its decision to consolidate ESIMs regulations into a single rule section. 2 AC BidCo urges the Commission to implement these revisions to eliminate redundancy in its rules and provide a unified framework for all ESIM operations. 3 Many commenters also support the proposed technical and operational changes. Several parties support extending the routine licensing of ESIMs into the Ka-band. 4 Iridium, however, expresses concerns with this proposal, 5 which are addressed below. As discussed in this decision, we generally adopt many of the changes proposed in the ESIMS NPRM.

We proposed to bring all the technical, operational and coordination requirements for blanket licensed-ESV, VMES and ESAA earth stations that are linked to GSO FSS space stations under one umbrella rule section, § 25.228, applicable to ESIMs generally. We grouped ESIM requirements into the following categories: (1) Core rules ( i.e. those applicable to all ESIMs); (2) vehicle-type specific  6 rules that apply across multiple frequency bands; (3) frequency-band specific status and coordination rules; and (4) vehicle-type specific rules that apply to a single frequency band. In this Order, we adopt changes within all of these subparts to accomplish our goal of simplifying and streamlining the ESIMs rules.

Following the structure of the ESIMs NPRM, we first address proposals involving changes in more than one rule section and then address proposed changes in the remaining rules in the order in which they appear in part 25.

As proposed in the ESIMs NPRM, we amend several current definitions and add new definitions to our rules to provide greater clarity regarding the operation of earth stations in motion with GSO FSS space stations. 7 In response to the proposed changes to the definitions in the NPRM, commenters uniformly support the changes discussed below.

Definition of ESIMs. We adopt a definition for ESIMs in § 25.103. 8 ESIM is defined to mean a term that collectively designates ESVs, VMESs and ESAAs, which are already defined in § 25.103. 9

Revised Definition of Blanket License. We adopt the proposal to change the definition of Blanket License in § 25.103 to refer to the type of satellite service in which the earth station operates, i.e., FSS or MSS rather than the type of earth station, i.e., fixed or mobile. 10 Changing the earth-station categorization in this definition to FSS and MSS better reflects the types of stations that can be licensed to operate anywhere in a geographic area specified in the license. Additionally, we adopt other minor rewording for clarity.

Definition of Network Control and Monitoring Center (NCMC). We also adopt the proposed definition of Network Control and Monitoring Center in § 25.103. 11 An NCMC, as used in the part 25 rules, is a facility that has the capability to remotely control earth stations operating as part of a satellite network or system. 12

Eliminating Cross-References in Revised Definitions. We revise the definitions of VMES and ESAA to eliminate cross-references to rule sections (§§ 25.226 and 25.227 respectively) that we are deleting in this Report and Order. 13 Similarly, any cross-references to those deleted sections elsewhere in the rules are deleted as well. 14 Furthermore, we revise the definitions of routine processing and a two-degree compliant space station in § 25.103 to remove a cross-reference to § 25.138(a), because we are consolidating § 25.138(a) into § 25.218(i), as explained below.

In the ESIMs NPRM, the Commission proposed moving the conventional Ka-band provisions from § 25.138 into similar paragraphs of § 25.218. 15 The Commission also proposed applying § 25.218 to all applications for fixed and temporary-fixed FSS earth stations transmitting to geostationary space stations in the conventional or extended C-band or Ku-band, or the conventional Ka-band, and to all applications for ESIMs in the conventional C-, Ku-, or Ka-band, 16 except for applications proposing transmission of analog command signals at a band edge with bandwidths greater than 1 MHz or transmission of any other type of analog signals with bandwidths greater than 200 kHz. 17 Section 25.218 contains off-axis equivalent isotropically radiated power (EIRP) density envelopes for FSS earth stations transmitting to GSO FSS space stations in the conventional C-band, extended C-band, conventional Ku-band, or extended Ku-band. 18 Earth stations in these frequency bands that comply with these envelopes are considered “two-degree-spacing compliant,” and the operators of their target space stations are not required to coordinate the operation of these earth stations with operators of nearby space stations. As proposed in the NPRM, 19 we merge the off-axis EIRP density provisions of § 25.138 into § 25.218, thus extending the applicability of § 25.218 to conventional Ka-band GSO FSS earth stations. 20 Commenters support adoption of a consolidated rule that eliminates duplicative references to the off-axis EIRP spectral density limits and that would apply a single set of limits across all types of FSS earth station, including those on mobile platforms. 21

Similarly, for organizational coherence, the Commission proposed making the conventional Ka-band requirements in § 25.138(f), which hold blanket licensees responsible for operations of transceivers operating under their license, applicable to earth station licensees in all frequency bands. 22 We will place this requirement in new § 25.290, 23 and eliminate the cross-reference to § 25.138. 24 The Commission proposed that § 25.290 would also include the rule contained in § 25.287(d), which imposes the same requirement on licensees of mobile transmitters or transceivers operating in some Mobile-Satellite Service frequencies, allowing that that § 25.287(d) be removed. 25 Commenters broadly support these streamlining reorganizational moves which we adopt. 26

In the ESIMs NPRM, the Commission sought comment on combining the core ESIMs rules that were essentially the same for each type of ESIM. 27 As both Boeing and the Joint Commenters note, the “core” rules governing ESVs, VMESs, and ESAAs are nearly but not quite identical, which creates unnecessary confusion for applicants and operators. 28 The Commission proposed to amend the core rules, where necessary, to create uniformity. Specifically, for rules related to the Commission's GSO FSS two-degree orbital spacing policy, control of operating ESIMs, operational reports, and electromagnetic radiation safety, the Commission proposed substantive changes in some cases to eliminate unnecessary variations across types of ESIMs. 29 As proposed in the NPRM, we also eliminate unnecessary duplication of rules across different rule sections. 30 These changes are widely applauded by commenters. 31 In the discussion to follow, we explain the substantive changes to the following areas of our ESIM rules: (1) Antenna pointing accuracy requirements, (2) EIRP density limits, (3) the self-monitoring (self-diagnostics) requirement, (4) the network control and monitoring center requirement, (5) logging requirements, and (6) the installation requirements related to radiation safety.

Antenna Pointing Accuracy Requirement. As explained in the ESIMs NPRM, the definition of theta as revised by the 2015 Second Report and Order obviates the need for an antenna pointing accuracy requirement, because the limit on off-axis EIRP density toward adjacent satellites is fixed regardless of the direction in which the earth station antenna is pointed. 32 Therefore, the Commission proposed to eliminate the antenna pointing accuracy requirement contained in the individual ESV, VMES, and ESAA rules in §§ 25.221, 25.222, 25.226, and 25.227. 33 Most commenters support eliminating this requirement. 34 ViaSat notes that it is now well-established in the industry and in the Commission's precedent that GSO FSS spectrum resources can be used for service to mobile platforms without adversely changing the operating environment created by a traditional FSS earth station. 35 ViaSat further states that “commercially available pointing mechanisms enable transmissions from these earth stations to remain focused on the desired GSO FSS space station even while the earth station is mounted on a moving platform. These technologies have been proven to be reliable through almost two decades of successful coexistence.”  36

We adopt the proposal to eliminate the antenna pointing requirement. ESIM transmissions must remain within our off-axis EIRP density limits under all operating conditions. As discussed above, 37 these limits are specified at off-axis angles measured with respect to a vector from the earth station to the target satellite, not with respect to the direction the antenna is pointed. Thus, it is unnecessary for the Commission to prescribe limits on ESIM antenna pointing accuracy. By eliminating the antenna pointing accuracy requirement but maintaining the off-axis EIRP density limits, we give ESIM operators more flexibility in anomalous situations, because they can meet the off-axis EIRP density limits either by maintaining accurate antenna pointing or by reducing EIRP density when the antenna is mispointed, while continuing to protect adjacent-band operations. 38

Off-Axis EIRP Density Limits. In the ESIMs NPRM, the Commission noted that the off-axis EIRP density limits rule, § 25.218, applied to applications for GSO FSS earth stations at fixed locations, but specifically excepted applications for ESVs, VMESs, and ESAAs. 39 However, the numerical EIRP density limits over each specified angular range and the definition of θ in § 25.218 are the same as those for the same frequency bands in the individual ESIM §§ 25.221, 25.222, 25.226, and 25.227. Thus, to streamline the ESIMs rules, we cross-reference the off-axis EIRP density limits that already exist in § 25.218. And because the conventional Ka-band off-axis EIRP density limits currently in § 25.138 are merged into § 25.218, we only need to cross-reference § 25.218 to cover all of the frequency bands in which our rules provide for ESIM operations. Most commenters are in favor of these changes. 40

One commenter, CTIA, expresses concern that relaxing the off-axis EIRP density limits may unintentionally limit the ability for FSS and Upper Microwave Flexible Use Service (UMFUS) to coexist. 41 CTIA asserts that knowledge of the precise off-axis EIRP density from an FSS earth station is a key component in determining the interference margin between ESIMs in the presence of terrestrial operations in the adjacent spectrum bands. 42 CTIA's concerns, however, are misplaced since the Commission is not relaxing the off-axis EIRP density limits for ESIMs.

Shutdown Requirements. The shutdown requirements contained in the individual ESIM sections require cessation of emissions for ESV, VMES, and ESAA transmitters based on detection of antenna mispointing. 43 Consistent with the proposed changes regarding antenna mispointing, the Commission proposed to replace the shutdown requirements with provisions in paragraphs (b) and (c) of § 25.228 requiring cessation or reduction of emissions in the event that the ESIM or its associated network control and monitoring system detects that the ESIM has exceeded or is about to exceed the off-axis EIRP density limits. 44 Commenters generally support this proposal, which we adopt. 45

Contention Protocols. The Commission proposed that § 25.228 would not include the requirement in paragraphs (a)(4) of §§ 25.226 and 25.227 that VMES and ESAA applicants that plan to use a contention protocol in the uplink transmissions of their ESIMs certify that their use of the contention protocol is reasonable. 46 This requirement is already contained in § 25.115(i), and applies by its terms to applications for ESIMs. 47 No commenters object to this revision, which is adopted. 48

Point of Contact in the United States. The Commission proposed to consolidate the requirement that there be a point of contact in the United States with the authority and ability to cease all emissions into the platform-specific rules for ESVs, VMESs, and ESAAs in § 25.228. 49 No commenters take exception to this proposal, which we adopt. 50

Data Logging Requirement. The Commission proposed to eliminate the data logging requirements that are in paragraphs (a)(5) of §§ 25.221 and 25.222 for C- and Ku-band ESV operators and in paragraphs (a)(6) of §§ 25.226 and 25.227 for Ku-band VMES and ESAA operators. 51 The Commission has never requested the logs for the vehicle location, transmit frequency, channel bandwidth, and target satellite of ESIM transmissions from an ESIM operator. Commenters almost uniformly report never having been asked for this data and were consistent in their support for eliminating the requirement. 52 For example, Hughes comments that the Commission should find that the data logging requirements imposed on ESIM operators are onerous and unnecessary and, accordingly, should be eliminated. 53 In its reply comments, ViaSat notes that HNS, Gogo, Inmarsat, Kymeta, Intelsat and Boeing confirm ViaSat's experience and understanding that ESIM location information has been unnecessary because there does not appear to have been any suspected cases of interference. 54 However, SES and O3b state in reply comments that it had used this data to resolve interference events, without providing specifics. 55 SES and O3b requests that if the Commission chooses to eliminate the requirement, we should remind ESIM operators that they must cooperate fully to resolve instances of harmful interference. 56 Section 25.274(g) of the Commission's rules already imposes this requirement for all operators. 57 Given the experience with several years of ESIM operations, we find that the logging requirement is no longer necessary.

Remote Monitoring and Control Requirement. The Commission proposed to incorporate a remote monitoring and control requirement in our proposed § 25.228(c), and make it applicable to all types of ESIMs. 58 The Commission proposed that each remote terminal must be (1) monitored and controlled by a network control and monitoring center (NCMC) or equivalent facility, (2) that each remote terminal must comply with “disable transmission” commands from the NCMC, and (3) that the NCMC must monitor the operation of each ESIM terminal in its network, and transmit a “disable transmission” command to a remote terminal that malfunctions in such a way as to cause unacceptable interference to another radiocommunication station. These requirements are spread throughout the existing rule sections. 59 While the Commission did not include the 100 millisecond response time for complying with a “disable transmission” command in the text of the proposed rules, the Commission did pose the question as to whether it should be maintained. 60 Commenters support the proposal to harmonize the requirements and maintain the 100 millisecond response time. 61 For example, ViaSat notes that the capability of NCMCs to command individual ESIMs to cease or reduce emissions within 100 milliseconds if the aggregate off-axis EIRP density limits are being exceeded is already required in the separate service rules for each type of ESIM and has not been a barrier to ESIM deployment. 62 Thus, ViaSat says incorporating a requirement into the consolidated rule to monitor the aggregate power density levels of all ESIMs in the network would not increase regulatory burdens or otherwise impede future deployment of ESIMs. 63 To the contrary, ViaSat points out that this requirement is necessary to ensure that ESIM networks that use variable power control are capable of complying with the off-axis EIRP density limits in the aggregate, and thus ensuring that adjacent satellite networks are adequately protected. 64

In contrast, Telesat asserts that specific NCMC capability requirements regarding aggregate off-axis EIRP spectral density limits are unnecessary and suggests that one possible approach for network operators to ensure compliance with aggregate off-axis EIRP spectral density limits is through the methodology in ITU Resolution 156. 65 Telesat argues that network designers and operators should decide whether to monitor aggregate off-axis spectral density limits, but should not be required to do so. 66

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 Atka mackerel ICA for the BS/EAI is 800 metric tons (mt) and the 2019 Atka mackerel total allowable catch allocated to the Amendment 80 cooperative is 18,452 mt as established by the final 2019 and 2020 harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019).

The Administrator, Alaska Region, NMFS, has determined that 400 mt of the Atka mackerel ICA for the BS/EAI will not be harvested. Therefore, in accordance with § 679.91(f), NMFS reallocates 400 mt of Atka mackerel from the BS/EAI ICA to the Amendment 80 cooperative in the BSAI. In accordance with § 679.91(f), NMFS will reissue cooperative quota permit for the reallocated Atka mackerel following the procedures set forth in § 679.91(f)(3).

The harvest specifications for Atka mackerel included in the harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019) are revised as follows: 400 mt of Atka mackerel for the BS/EAI ICA and 18,842 mt of Atka mackerel for the Amendment 80 cooperative allocations in the BS/EAI. Table 6 is revised and republished in its entirety as follows:

This will enhance the socioeconomic well-being of harvesters dependent upon Atka mackerel in this area. The Regional Administrator considered the following factors in reaching this decision: (1) The current catch of Atka mackerel ICA in the BS/EAI, (2) the harvest capacity and stated intent on future harvesting patterns of the Amendment 80 cooperative that participates in this BS/EAI fishery.

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 reallocation of Atka mackerel from the BS/EAI ICA to the Amendment 80 cooperative in the BSAI. Since the fishery is currently open, it is important to immediately inform the industry as to the revised allocations. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery, to allow the industry to plan for the fishing season, and to avoid potential disruption to the fishing fleet as well as processors. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of September 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 § 679.91 and is exempt from review under Executive Order 12866.