This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Agreement and Order No. 986, (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The American Pecan Council (Council) locally administers the Order and is comprised of growers and handlers of pecans operating within the production area, and one accumulator and one public member.

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

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

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

This final rule revises the reporting requirements under the Order by reducing the number of monthly reports from six to three and revising the inter-handler report from a monthly to an annual report. This action also makes other conforming and clarifying changes to the reporting requirements. These changes will help reduce the regulatory burden on handlers by reducing reporting requirements. This action was unanimously recommended by the Council at its December 18, 2018, meeting.

Sections 986.75, 986.76, and 986.77 of the Order provide authority to the Council to require handlers to submit reports of inventory, merchantable pecans handled, and pecans received by handlers, respectively, on such dates as the Council may prescribe. Section 986.78 further provides, with the approval of the Secretary, authority for the Council to collect other reports and information from handlers needed to perform its duties.

Section 986.162 outlines the reporting requirements for inter-handler transfers, and § 986.175 establishes the requirements for the annual year-end inventory report. Section 986.177 prescribes the monthly reporting requirements for pecans received by handlers and for pecans purchased outside the United States. Section 986.178 includes requirements for a monthly report of shipments and inventory, a monthly report of exports, and a monthly report of pecans exported to Mexico for shelling to be returned to the United States.

During the promulgation of the Order, the data collection component was considered one of the most important aspects of the Order. Consequently, when discussing establishing reporting requirements, the Council wanted to ensure the data needed was being collected so valuable reports could be provided to the industry. The Council recommended the initial reporting requirements in 2017, which required handlers to submit six different reports each month and an annual report including pecans received, shipped, held in inventory, transferred, exported for sale or shelling, and purchased from outside the United States. To facilitate this information collection, the Council held handler information sessions throughout 2018 to explain the reporting process and gather feedback on which, if any, reports were difficult to complete.

At its December 18, 2018, meeting, the Council revisited the reporting requirements, reviewing feedback from the handler sessions. During the handler sessions, some industry members stated it was expensive and time consuming to submit accurate reports each month. Council staff also indicated that handlers were submitting incomplete and inaccurate reports, making it difficult to summarize the data and distribute accurate, timely statistical reports. It was also reported that Council staff were fielding calls daily regarding reporting requirements and the burden placed on handlers. The monthly inter-handler transfer report was also cited specifically as needing to be changed.

To address these concerns, the Council discussed ways to reduce the number of reporting requirements and to address the concerns surrounding the inter-handler transfer report. To accomplish this, the Council recommended combining four of the monthly reporting requirements into two, and converting the inter-handler transfer report from a monthly report into an annual report to reduce and simplify the reporting process. These changes would reduce the number of monthly reports from six to three.

The Council recommended combining the monthly report of pecans received and the report of shipments and inventory into one summary report. The report of pecans received currently includes handler information, the month covered by the report, the total weight and type of inshell pecans received, and the weight by variety of improved pecans received. The report also includes information regarding total assessments owed and total pounds reported to date. The report of shipments and inventory includes handler information, the month covered by the report, shipments of shelled and inshell pecans, current inventory, and pecans in inventory already committed for shipment.

In addition to combining the reports, the Council also recommended eliminating reporting pecans received by variety. Many handlers submit information on mixed loads, and found it burdensome, and in some cases impossible, to identify the variety of pecans received. Further, Council staff estimated over 76 percent of all pecans received cannot be identified by variety. Some varieties are also limited in use, so disclosing their tonnage would not be possible without potentially revealing proprietary information.

Handlers also expressed difficulty in understanding which reports applied to them and whether they needed to submit additional reports throughout the fiscal year. Consequently, the Council revised the summary report to include guidance that assists handlers in determining whether any other reports are necessary.

The Council agreed the information on pecans received could easily be combined with the report of shipments and inventory to create one monthly summary report. The Council believes this consolidated report will be easier for handlers to complete and still provide the necessary information.

Two other reports the Council agreed could be combined are the report of pecans purchased outside the United States and the report of pecans shipped to Mexico for shelling and then returned to the United States. The monthly report of pecans purchased outside the United States includes the name of the handler importing pecans, the month covered by the report, the date imported, country of origin, volume, and variety of pecans imported. The report of inshell pecans exported to Mexico for shelling includes handler information, the month covered by the report, dates of shipments, the total weight of inshell pecans shipped for shelling, and the weight of shelled pecans returned to the United States.

Initially, the Council recommended separate reports to ensure the import data collected was accurate. The industry was concerned import data available at the time was not accounting for domestic product sent to Mexico for processing then returned to the United States. Hence, it was difficult to estimate current supply. However, feedback from the industry indicated handlers could provide the necessary data to account for both foreign purchases and domestic product being shelled then returned from Mexico in a consolidated report rather than submitting two separate reports. Thus, the Council recommended combining these two reports.

The current inter-handler transfer report is submitted monthly. The report includes information on the month of transfer, type of pecans transferred, the volume transferred, the amount of assessments owed on the pecans transferred, handler information, and signatures of the two handlers involved. It also indicates if the transferring handler or receiving handler would be responsible for reporting and paying the assessments.

When established, the inter-handler transfer form was intended to relieve small handlers of the burden of reporting and submitting assessments by allowing them to transfer those requirements to a second handler purchasing the pecans. In practice, handlers have struggled to track the volume of all the shipments within a month, and often the forms submitted were incomplete or did not include both handler signatures.

Inter-handler transfers usually occur between the same two handlers throughout the year. Consequently, the Council recommended to simplify the process of meeting the inter-handler transfer requirements by establishing one report that would cover the transfers between the same two handlers for the whole fiscal year. Agreements between new handlers require submission of a new form with the Council.

The changes will require handlers to submit a report following the first transfer of the fiscal year. By filing the Inter-Handler Transfer Form with the Council, the receiving and transferring handlers establish an agreement that remains in effect for the entire fiscal year. The receiving and transferring handlers need to complete their portions of the form and file it annually with the Council. It also removes the requirement for the report to include the associated volume transferred. Instead, the volume associated with the inter-handler transfer will be reported by the receiving handler. Handlers will still maintain the option of designating who is responsible for paying the assessments on the pecans transferred, as currently authorized in § 986.162(a)(5). The Council expects the change to provide some reporting relief to small handlers and create a more efficient method of tracking transferred pecans.

Along with these changes, the Council recommended conforming and clarifying adjustments to the remaining two reporting forms in §§ 986.175 and 986.178. These changes include renumbering the forms to remain in sequential order, removing past dates that no longer apply, and updating terms to be consistent with the Order. The Council believes these revised reporting requirements are necessary to maintain compliance with the assessment requirements of the Order and provide accurate reports to the industry on the production and total supply of pecans.

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

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

There are approximately 2,500 growers of pecans in the production area and approximately 250 handlers subject to the Order. Small agricultural growers are defined by the Small Business Administration as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).

According to information from the National Agricultural Statistics Service (NASS), the average grower price for pecans during the 2016-2017 season was $2.59 per pound and 269 million pounds were utilized. The value for pecans that year totaled $697 million ($2.59 per pound multiplied by 269 million pounds). Taking the total value of production of pecans and dividing it by the total number of pecan growers provides an average return per grower of $278,684. Using the average price and utilization information, and assuming a normal distribution among growers, the majority of growers receive less than $1,000,000 annually.

Evidence presented at the formal rulemaking hearing, held in 2015, indicated an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $2.59 per pound of inshell pecans results in an estimated handler price of $3.17 per pound. With a total 2017 production of 269 million pounds, the total value of production in 2017 was $853 million ($3.17 per pound multiplied by 269 million pounds). Taking the total value of production of pecans and dividing it by the total number of pecan handlers provides an average return per handler of $3.4 million. Using this estimated price, the utilization volume, number of handlers, and assuming a normal distribution among handlers, the majority of handlers have annual receipts of less than $30,000,000. Thus, the majority of growers and handlers regulated by the Order may be classified as small entities.

This final rule revises the reporting requirements in the Order by reducing the number of monthly reports from six to three and revising the inter-handler report from a monthly to an annual report. This rule also makes other conforming changes to the reporting requirements. This final rule revises §§ 986.162, 986.175, 986.177, and 986.178. The authority for these actions is provided in §§ 986.75, 986.76, 986.77, and 986.78 of the Order.

It is not anticipated that this action will impose additional costs on handlers or growers, regardless of size. Handlers should see a savings in time and labor cost due to the reduced number of forms submitted each month. The change to an annual inter-handler transfer report in place of a monthly report will provide additional time savings to both handlers involved in the transaction. Council members, including those representing small businesses, recommended these changes in order to ease the reporting and regulatory burden on industry handlers. The benefits of this rule are expected to be equally available to all pecan growers and handlers, regardless of their size.

The Council discussed other alternatives to this action, including eliminating the inter-handler transfer option. However, removing the inter-handler transfer option from the Order could involve a lengthy process. Also, the inter-handler transfer was supported during promulgation of the marketing order as a way to ease reporting burdens on small businesses.

Another alternative considered was leaving the current reporting requirements unchanged. When the current requirements were established, the Council was eager to collect as much data as possible. Despite considerable industry outreach, many handlers had difficulty meeting the reporting requirements. The Council believed it must respond to the issues raised by handlers and address the extensive resources being used by its staff to help handlers comply with the reporting requirements in the Order. Therefore, the alternatives were rejected.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0291 Federal Marketing Order for Pecans. This final rule will require changes to the Council's existing forms by combining forms and shifting one form from a monthly report to an annual report. Modifying the forms as indicated will decrease the burden on pecan handlers required to complete the forms and enhance Board efficiencies related to information collection. The revised forms have been submitted to OMB for approval.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

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

Further, the Council's meetings were widely publicized throughout the pecan industry and all interested persons were invited to attend the meetings and participate in Council deliberations on all issues. Additionally, the Council's meeting held on December 18, 2018, was a public meeting and all entities, both large and small, were able to express views on this issue.

A proposed rule concerning this action was published in the Federal Register on November 20, 2019, (84 FR 64028). Copies of the rule were sent via email to Council members and known pecan handlers. Finally, the rule was made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending December 20, 2019, was provided to allow interested persons to respond to the proposal.

During the comment period, five comments were received in response to the proposal. Of the comments received, two fully supported the regulation as proposed, one was in support but requested changes to the proposal, one was opposed, and one questioned the need to make the proposed changes.

The three commenters supporting the regulation stated that the recommended changes would simplify the reporting process for handlers. One comment mentioned the changes would support industry compliance and the long-term management of pecans. Another mentioned the consolidation of the reports would increase accurate reporting and efficiency.

One comment received expressed opposition to all the changes in the proposed action. The comment recommended that the Council maintain their current reporting requirements because consolidating the forms would cause a compromise of important data. In 2017, the Council initially recommended the reporting requirements to collect valuable industry data. Once the forms were implemented, both staff and industry members realized handlers were having trouble keeping up with multiple reports each month. As previously stated, the Council reviewed the feedback from handlers and staff and determined the necessary information could be collected in fewer reports.

The only data points being eliminated by this action are volumes by variety, which handlers indicated were nearly impossible to accurately report due to the prevalence of mixed loads; and inter-handler transfer volumes, which the industry expressed were not valuable in decision-making. As such, this action will allow the Council to continue collecting relevant information by converting four of the monthly reporting requirements into two, and converting the inter-handler transfer report form a monthly report into an annual report. This action will simplify the reporting process by reducing the number of monthly reports from six to three, which will benefit handlers.

Two of the comments submitted, one with partial support and one in opposition, raised concerns regarding the proposed changes to the inter-handler transfer report. One commenter stated the proposed action would lead to inaccurate information and records. The other added that reducing the frequency of the inter-handler report was insufficient to accurately track and collect necessary data for industry members. Both comments recommended the Council consider quarterly or bi-annual reporting as an alternative to the proposal.

The Council considered all of these alternatives when reviewing the reporting requirements. The inter-handler transfer form was initially intended to relieve the reporting burden on small handlers. Industry members suggested, and the Council agreed, the annual report will still achieve this goal. Industry feedback indicated that transfers normally occur between the same two handlers throughout the year. This action requires handlers to submit a report following the first transfer of the fiscal year and will remain in effect for the entire fiscal year. Agreements between new handlers will require submission of a new form with the Council. Reporting transferred volume was intended to aid in the collection of assessments, not for its value in reporting to the industry. The new report eliminates the need to track multiple transfers between the same parties. As such, this action will provide reporting relief to small handlers and create administrative efficiencies in collecting assessments.

One last commenter took no position on the proposed changes, but rather questioned if changing the reporting requirements would result in a significant enough change to justify the process. The benefits of this action will help reduce the regulatory burden on all handlers by reducing the number of reports submitted and eliminating details that were burdensome to track and not highly valuable to the industry. This action reduces the number of monthly reports from six to three and revises the inter-handler report from a monthly to an annual report. This action will also make other conforming and clarifying changes to the reporting requirements so the requirements and the corresponding information provided meets the needs of the industry.

Accordingly, no changes will be made to the rule as proposed.

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

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

For the reasons set forth in the preamble, 7 CFR part 986 is amended as follows:

Through this notification Rural Development expands servicing flexibilities on four guaranteed loan programs to enable lenders to better assist rural business, water, and community facility borrowers in responding to the economic impacts of the COVID-19 pandemic.

On March 31, 2020, the Agency announced in the Federal Register at 85 FR 17721 that beginning March 31, 2020, and through September 30, 2020, the USDA Business and Industry (B&I) Guaranteed Loan Program, Rural Energy for America Program (REAP), Community Facilities Guaranteed Loan Program, and Water and Waste Guaranteed Program lenders may assist borrowers experiencing temporary cash flow issues resulting from the COVID-19 pandemic, by deferring payments for a period no longer than 180 days from the date the original payment is due. In accordance with 7 CFR 4287.107 (RBCS),7 CFR 3575.69 (RHS), and 7 CFR 1779.69 (RUS), the lender is responsible for servicing the entire loan and for taking all servicing actions that a reasonably prudent lender would perform in servicing its own portfolio of loans that are not guaranteed.

The lender must notify the Agency in writing of any payment deferments. Written notification to the Agency will meet the standard for concurrence until September 30, 2020. After September 30, 2020, lenders must resume obtaining Agency approval in accordance with all applicable program regulations, forms, and existing authorities. This guidance applies to all borrowers that had a current repayment status as of January 31, 2020.

If the loan has been sold on the secondary market, the secondary market holder and lender must agree to the deferment actions being taken. The Agency will expect a written deferral agreement signed by both parties in these instances prior to executing any payment deferral action. A copy of the deferral agreement must be provided to the Agency.

The Agency does not consider a loan that is under a deferral or forbearance agreement to be a delinquent loan. Unpaid interest accruing during a deferral or forbearance agreement is not subject to the limitation of the guarantee of accrued interest under 7 CFR 4287.145(d) (RBCS),7 CFR 3575.3 (RHS), nor 7 CFR 1779.3 (RUS).

This notification expands upon the deferral flexibilities announced in the March 31, 2020, Federal Register notification by providing that lenders may also approve and make covered loans under the provisions of Section 1102 of the CARES Act.

The lender must notify the Agency in writing of any covered loans made under Section 1102 of the CARES Act. Written notification to the Agency will meet the standard for concurrence until September 30, 2020. After September 30, 2020, lenders must resume obtaining Agency approval in accordance with all applicable program regulations, forms, and existing authorities.

Discussion

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0002, dated January 8, 2020 (“EASA AD 2020-0002”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Fokker Services B.V. Model F28 Mark 0100 airplanes.

This AD was prompted by a report of a crack found in the inboard boom of the left-hand frame at fuselage STA 17011. The FAA is issuing this AD to address cracking at the fuselage station, which could reduce resistance to fatigue and possibly affect the structural integrity of the airplane. See the MCAI for additional background information.

EASA AD 2020-0002 describes procedures for a detailed inspection and repair for cracking of the fuselage at STA 17011. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI referenced above. The FAA is issuing this AD because the FAA evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

This AD requires accomplishing the actions specified in the service information described previously, as incorporated by reference. This AD also requires sending the inspection results to Fokker.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities (CAAs) to use this process. As a result, EASA AD 2020-0002 is incorporated by reference in this final rule. This AD, therefore, requires compliance with EASA AD 2020-0002 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2020-0002 that is required for compliance with EASA AD 2020-0002 is available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0207.

Since there are currently no domestic operators of these products, notice and opportunity for public comment before issuing this AD are unnecessary. In addition, for the reason stated above, the FAA finds that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and the FAA did not precede it by notice and opportunity for public comment. The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0207; Product Identifier 2020-NM-008-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this AD. The FAA will consider all comments received by the closing date and may amend this AD based on those comments.

The FAA will post all comments, without change, to https://www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact the agency receives about this AD.

Where paragraph (2) of EASA AD 2020-0002 requires accomplishing the corrective action “before next flight, or before exceeding the fly-on time (if any) provided by Fokker Services, as applicable,” this AD requires that cracking must be repaired before further flight. The FAA has determined that, because of the safety implications and consequences associated with that cracking, any cracked fuselage frame must be repaired or modified before further flight.

The FAA considers this AD interim action. If final action is later identified, the FAA may consider further rulemaking at that time.

Currently, there are no affected U.S.-registered airplanes. If an affected airplane is imported and placed on the U.S. Register in the future, the FAA provides the following cost estimates to comply with this AD:

The FAA estimates that it takes about 1 work-hour per product to comply with the reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be $85 per product.

The FAA has received no definitive data that would enable the agency to provide cost estimates for the on-condition actions specified in this AD.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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

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

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

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

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

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

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

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

Rainy River and Rainy Lake serve as the border between the United States of America and Canada. The Canadian National bridge is a single leaf bascule type railroad bridge that provides a horizontal clearance of 125 feet. The water level on Rainey Lake and under the bridge is controlled by a hydro-electric dam facility at International Falls, Minnesota. Charted datum is based on the water level surface of Rainy Lake. When the gauge at Fort Frances, Canada reads 1107.0 feet, it results in a variable vertical clearance of 6 to 10 feet in the closed position. The railroad bridge carries significant train traffic across the international border and is the customs port of entry. The drawbridge currently operates under title 33 of the Code of Federal Regulation (CFR), § 117.664.

Prior to March 2011, the Canadian National Bridge was remotely operated without authorization from the District Commander and the railroad failed to operate the bridge in a manner that supported good stewardship of the waterway. After review of the complaints, meetings with the town mayor, and after inquiries from the office of the Honorable Senator James Oberstar, the District Commander ordered the bridge owner to reinstate drawtenders at the bridge by March 2011.

The bridge owner has requested to resume remote operations at the bridge after operating the bridge without complaint for seven boating seasons.

Several trains cross the bridge daily traveling from a Canadian train control district to a United States train control district and must stop at the United States port of entry to debark Canadian train crews and embark United States train crews and vice versa, depending on direction of travel. The train is also inspected prior to entering the United States.

Most of the vessels in the area are Customs and Border Protection patrol boats, houseboats, and other runabouts. Unpowered sail and paddle craft will pass through the bridge if the current is slow. Eight vessels on average request bridge openings each year.

The test schedule will run from midnight on May 1, 2020 to midnight on October 15, 2020. During this test schedule, the bridge will operate remotely with tenders at the bridge to monitor the effectiveness of the remote equipment. The length of the test deviation is necessary to allow all seasonal residents the opportunity to comment on the operations of the bridge. The bridge operates several cameras, a 2-way public address system, and a VHF-FM Marine Radio that monitors channel 16. The bridge owner will continue to maintain a drawtender's log and provide those logs at the end of the test deviation. Vessels able to safely pass under the bridge without an opening may do so at any time.

The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

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

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

We accept anonymous comments. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided. For more about privacy and submissions in response to this document, see DHS's Correspondence System of Records notice (84 FR 48645, September 26, 2018). All public comments will be in our online docket at https://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

The Amtrak Railroad Bridge, mile 3.77, over the South Branch of the Chicago River provides a vertical clearance of 10 feet in the closed position and 65 feet in the open position based on International Great Lakes Datum of 1985 (IGLD85). The bridge opens an average of twelve times a day for vessels. An average of 150,000 rail commuters cross the bridge daily along with freight and other passenger trains. The South Branch of the Chicago River is part of a network of waterways that allows vessels to travel from Chicago, IL to New Orleans, LA. Cook County, IL, described the Chicago River as the fifth largest port in the United States, hosting commercial vessels over 300 tons, recreational power and sailing vessels, several passenger vessels, water taxies, paddle boats, and various paddle craft. With the exception of the Amtrak Bridge, vessels can pass under all the bridges in the Chicago metropolitan area without an opening.

In accordance with general bridge regulations found in 33 CFR 117.5, a drawbridge must open promptly and fully when signaled to open. Not every vessel needs the Amtrak Bridge to open to the full 65 feet and we believe the test deviation will show the Amtrak Bridge can open half way and allow most vessels to pass. Vessels that need a full opening can request it without advance notice. We believe that opening to an intermediary position will increase the bridge availability by 50% to both rail and vessels. It was recently discovered the remote operations of the Amtrak Bridge has not been included in the current regulation; but has been operating without concerns from the maritime community. The drawbridge currently operates under title 33 of the Code of Federal Regulation (CFR), § 117.391.

The test deviation is necessary to allow the public to observe the bridge in operation and allow the permanent and seasonal residents of the area the opportunity to comment on the operation of the bridge in the intermediate position. The test schedule will run from midnight on June 1, 2020 to midnight on September 1, 2020.

The bridge owner will continue to maintain a drawtender's log and provide those logs at the end of the test deviation. Vessels able to safely pass under the bridge without an opening may do so at any time and vessels may request a full opening without advance notice.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

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

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

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Background

On December 20, 2018, the President signed the Agriculture Improvement Act of 2018 (the Farm Bill). Title VIII, Subtitle G, section 8705, of the Farm Bill requires the Forest Service to issue regulations that streamline the Agency's procedures for evaluating applications to locate or modify communications facilities on NFS lands.

The Forest Service is responsible for managing NFS lands that are adjacent to rural and urban areas. The Forest Service authorizes the occupancy and use of NFS lands for communications facilities (buildings, towers and ancillary improvements) and fiber optic lines, which provide critical communications services, including television, radio, cellular services, emergency services and broadband, to these areas. The Forest Service administers over 3,700 special use authorizations for communications uses at 1,530 communications sites and more than 400 communications use authorizations for fiber optic lines on NFS lands.

The Secretary of Agriculture's Rural Prosperity Task Force Report of 2017 identified connecting rural communities across the United States as a strategic priority for USDA because “[i]n today's information-driven global economy, e-connectivity is not simply an amenity—it has become essential.”

On January 8, 2018, the President signed Executive Order 13821, Streamlining and Expediting Requests to Locate Broadband Facilities in Rural America, which states that “ Americans need access to reliable, affordable broadband internet service to succeed in today's information-driven, global economy” (83 FR 1507). The Executive Order directs Federal agencies “to use all viable tools to accelerate the deployment and adoption of affordable, reliable, modern high-speed broadband connectivity to rural America. . . .” Id. Agencies are encouraged to reduce barriers to capital investments, remove obstacles to broadband services, and more efficiently employ Government resources. Id.

Section 6409 of the Middle Class Tax Relief and Job Creation Act of 2012, as amended by section 606(a), division P, Consolidated Appropriations Act, 2018, also known as the Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act), codified at 47 U.S.C. 1455(b)(3), requires the Forest Service within 270 days of receipt of an application for a communications facility or a communications use to grant or deny the application and to notify the applicant of the grant or denial.

On September 25, 2019, the Forest Service published a proposed rule implementing part of section 8705 in the Federal Register (84 FR 50703) with a 60-day comment period ending November 25, 2019. The Agency sought public comment on amending its regulations to implement the part of section 8705 providing for streamlining the Agency's procedures for evaluating applications to locate or modify communications facilities on NFS lands.

As discussed in the Federal Register notice for the proposed rule, existing Forest Service regulations at 36 CFR 251.54(g) and existing Forest Service directives in Forest Service Handbook (FSH) 2709.11, Chapter 10, already implement the provisions in sections 8705(b)(1) through (b)(3) and (c)(4) regarding procedures for evaluating and granting applications for communications uses in a uniform, standardized manner that is competitively and technologically neutral and non-discriminatory and regarding streamlining evaluation of applications for communications uses on previously disturbed NFS lands. Proposed revisions to the Forest Service's NEPA regulations at 36 CFR part 220 (84 FR 27544) would further streamline evaluation of communications use applications. In addition, the Forest Service will be publishing proposed revisions to its directives at FSH 2709.11, Chapter 90, to further implement the streamlining provisions in section 8705. The Forest Service will publish a subsequent notice in the Federal Register for a proposed rule to implement section 8705(c)(3)(B), which requires regulations to implement a new programmatic administrative fee for communications use authorizations to cover the costs of administering the Forest Service's communications site program.

The Forest Service received 8 written comments on the proposed rule providing for streamlining the Agency's procedures for evaluating applications to locate or modify communications facilities on NFS lands. With one exception, all respondents supported the proposed rule. One respondent provided comments that were outside the scope of the proposed rule. Comments within the scope of the proposed rule addressed a range of topics primarily in the following areas: the communications site mapping tool, communications use application tracking system, compliance with the National Environmental Policy Act and MOBILE NOW Act, communications use application and authorization process and co-location requirements, 30-year term for communications use authorizations, processing fees, and technical requirements for communications uses.

Respondents generally supported the Forest Service's efforts to amend its regulations to streamline the application and authorization process for locating communications facilities on NFS lands.

Comment: One respondent expressed appreciation of ongoing efforts by the Forest Service to develop an online mapping tool for communications sites on NFS lands.

Response: The Department believes the online mapping tool is an important component of the Forest Service's communications site program and will provide existing authorization holders and future applicants with important information about areas of NFS lands that are developed and available for wireless communications uses. The map viewer was launched in October 2019 and is available at https://www.fs.usda.gov/managing-land/special-uses/commsitemapviewer.

Comment: Several respondents recommended that the Forest Service implement a transparent, web-based filing, tracking, monitoring, and reporting platform for applications to locate or modify communications facilities on NFS lands. One respondent suggested that this type of system would further partnerships and collaboration with the Forest Service and would establish clear expectations regarding meeting the timeframe for granting or denying a communications use application under the MOBILE NOW Act.

Response: The Department agrees that a web-based filing, tracking, monitoring, and reporting tool would help the Forest Service deliver the level of customer service that the Agency strives to provide. The Forest Service has undertaken modernization efforts of its entire special uses program, which includes communications uses. The Forest Service has implemented an e-permitting pilot for two of the less complex types of special uses. Implementation of e-permitting for communications uses is under consideration. The e-permitting portal would allow for a proponent to file a proposal and track its progress through acceptance as an application. The Forest Service is committed to developing a more robust web-based system. However, with its current program funding levels and staffing shortage, the Agency is constrained by the limited ability of its existing internal database. The Forest Service has developed an internal report for tracking the status of communications use applications and will utilize the report at all levels of the Agency to ensure the requirements of section 8705 of the Farm Bill are met.

Comment: One respondent commented on the difference between the phrase, “receipt of a duly filed application,” in the MOBILE NOW Act versus the phrase, “acceptance of a proposal as an application for a new communications facility,” in the proposed rule. The respondent expressed concern that adding the phrase, “acceptance of a proposal,” to the regulation could delay the start of processing and frustrate the congressional purpose for the processing timeline. Additionally, the respondent raised concerns about some national forests having an “open season” during which they allow special use proposals to be submitted and then determine which proposals to accept as applications. This respondent stated that in order to prevent this practice from being applied to communications use applications, the phrase “acceptance of a proposal” should be replaced with the phrase “receipt of an application.” The respondent further stated that it was unclear what is required for a proposal to be accepted as an application. The respondent stated that if the “acceptance of a proposal” language is included in the final rule, the rule should provide guidance regarding the requirements for acceptance of a proposal and the requirements for the content of an application. Another respondent suggested that the Forest Service adopt an initial timeframe for reviewing an application and advise the applicant if additional information is necessary. The respondent recommended a 30-day timeframe for that purpose.

Response: The MOBILE NOW Act requires Federal agencies within 270 days of receipt of an application for a communications facility or a communications use to grant or deny the application and notify the applicant of the grant or denial. The Department is integrating the 270-day timeframe for responding to applications for communications facilities and communications uses with the requirements in the Forest Service's regulations and directives governing special use proposals and applications. In accordance with Forest Service regulations and directives at 36 CFR 251.54(g) and Forest Service Handbook (FSH) 2709.11, Chapter 10, section 11.22, paragraph 1, and section 11.24, a special use proposal is not accepted as an application until it passes initial and second-level screening. The initial and second-level screening criteria are found at 36 CFR 251.54(e)(1) and (5) and FSH 2709.11, Chapter 10, sections 12.21 and 12.32. The 270-day timeframe will begin upon acceptance of an application for a proposed communications facility or proposed communications use in accordance with 36 CFR 251.54(g)(1). The 270-day timeframe is also triggered upon receipt of proposals for modifications to existing communications facilities under 36 CFR 251.61 and applications for a new authorization for existing communications facilities under 36 CFR 251.64(b). These proposals are not subject to initial and second-level screening and are immediately accepted as applications upon submission. However, these proposals must meet the requirements in FSH 2709.11, Chapter 10, section 11.2, paragraph 2.

Existing Forest Service directives at FSH 2709.11, Chapter 10, section 12.12, state that the authorized officer must, within 60 calendar days of receipt of a proposal, review the proposal and advise the proponent as to whether the Forest Service will accept the proposal as a formal application or deny the proposal based on initial or second-level screening criteria. The 60-day review period does not include periods in which the authorized officer is waiting for additional information from the proponent or a governmental entity that is needed to complete review of a proposal. The 60-day period may be extended in rare situations involving complex proposals. The Forest Service's existing regulations and directives comply with congressional intent by providing a uniform and standard process for reviewing proposals, accepting applications, and authorizing the use and occupancy of NFS lands. With certain exceptions, such as when an opportunity is competitively offered through issuance of a prospectus, the Forest Service does not condone restricting acceptance of proposals for use and occupancy of NFS lands to specified time periods. Unless subject to these exceptions, a proposal for use and occupancy of NFS lands may be submitted at any time.

Existing Forest Service regulations at 36 CFR 251.54(a) require those proposing a use or occupancy of NFS lands, including proposed communications uses, to contact the Forest Service office responsible for management of the affected lands as early as possible. This pre-proposal meeting gives the Forest Service an opportunity to discuss the proposed use or occupancy with the proponent and any initial concerns the Agency may have or requirements the proponent should be aware of. Existing Forest Service regulations at 36 CFR 251.54(d) specify requirements and procedures for special use proposals, such as the proponent's technical and financial capability and a project description. In addition, existing Forest Service regulations at 36 CFR 251.54(e)(3) specify that for proposed uses that meet the minimum requirements, the authorized officer is required, to the extent practicable, to provide further guidance and information, such as possible land use conflicts, application procedures, applicable processing and monitoring fees, other permit or clearance requirements, environmental and management considerations, and other special conditions. Furthermore, existing Forest Service regulations at 36 CFR 251.54(g) provide direction for acceptance and processing of special use applications, including applications for communications uses.

Forest Service regulations at 36 CFR 251.58(c)(7) and Forest Service directives at FSH 2709.11, Chapter 20, section 21.11d, establish customer service standards for processing special use applications, including applications for communications facilities and uses, that are subject to processing fees. Specifically, for applications that take 50 hours or less to process and that are subject to a categorical exclusion from documentation in an environmental assessment (EA) or environmental impact statement (EIS), the Forest Service endeavors to process the application within 60 calendar days of the date of receipt of the processing fee. If the application cannot be processed within that 60-day period, the authorized officer must notify the applicant in writing prior to the 30th calendar day of that period of the reasons for the delay and a projected date for completion of processing. For all other applications, including those that require an EA or an EIS, the authorized officer must, within 60 calendar days of acceptance of the application, notify the applicant in writing of the anticipated steps that will be needed to process the application.

Comment: Several respondents supported the standard 30-year term for communications use authorizations. Multiple respondents stressed the importance of the standard 30-year term for providing greater long-term certainty and greater incentive to invest at communications sites. One respondent requested more information on when a shorter term would be warranted. Additionally, one respondent recommended that the Forest Service also provide for automatic renewal of communications use authorizations every 10 years.

Response: The Department agrees that the standard 30-year term for communications use authorizations will provide greater long-term certainty for those constructing, operating, and maintaining communications facilities on NFS lands; may provide greater incentive to invest at communications sites on NFS lands; and may facilitate lending for improvements at communications sites on NFS lands. The standard 30-year term for communications use authorizations will also reduce the backlog of expired authorizations and workload on Forest Service personnel, since communications use authorizations will be issued less frequently.

Forest Service authorized officers will retain the authority to issue a communications use authorization for less than 30 years. These situations should be infrequent and should be based on documented case-specific circumstances that warrant a shorter term, such as when a decision has been made to convert the area where a communications facility is located to a higher public purpose or when a communications facility or use is needed only for a limited period.

Forest Service communications use authorizations expire at the end of their term and are not renewable. To replace an expiring authorization, an application for a new authorization must be submitted in accordance with the terms and conditions of the existing authorization. Requiring submission of an application for a new authorization upon expiration provides an opportunity for the authorized officer to make a determination as to whether the use and occupancy to be authorized by the new authorization are still consistent with the standards and guidelines in the applicable land management plan, are still being utilized as originally authorized, and are being operated and maintained in accordance with all the provisions of the authorization, per existing Forest Service regulations at 36 CFR 251.64. Additionally, the authorized officer may prescribe new terms and conditions when the new authorization is issued, per 36 CFR 251.64. Having the ability to make these assessments and include new terms and conditions as needed are critical management tools for the Forest Service that strengthen the Agency's ability to effectively manage NFS lands.

Comment: One respondent requested clarification on the amount of processing fees a governmental agency must pay when applying for a special use authorization for a communications facility or a communications use.

Response: Section 8705(c)(3) of the Farm Bill requires the Department to issue regulations that include a structure of fees for submitting a communications use application based on the cost to the Forest Service of considering that type of application and issuing communications use authorizations based on the cost to the Forest Service of any maintenance or other activities required to be performed by the Forest Service as a result of the location or modification of the communications facility.

The statutory requirements in section 8705(c)(3) are reflected in § 251.58(c) of the Forest Service's existing regulations and FSH 2709.11, Chapter 20, of the Agency's existing directives, which establish procedures for assessing processing fees to recover the Agency's costs incurred in evaluating special use applications and issuing special use authorizations, including communications use applications and authorizations. State, local, and tribal governmental entities are not exempt from paying processing and monitoring fees. As noted in 36 CFR 251.58(g), Federal agencies are exempt from cost recovery fees only if they are applying for or conducting a use or activity that is not authorized by the Federal Land Policy and Management Act (FLPMA) or the Mineral Leasing Act (MLA). Federal agency applications and authorizations for uses and activities authorized by FLMPA or the MLA are subject to processing and monitoring fees. Communications uses are authorized under FLPMA. Therefore, Federal agencies are not exempt from processing fees for communications uses.

The Forest Service will publish a subsequent notice of a proposed rule in the Federal Register to implement the programmatic administrative fee as required by section 8705(c)(3)(A) of the Farm Bill.

Comment: One respondent suggested that the Forest Service consider implementing a reasonable timeframe for completing documentation of a categorical exclusion for special use authorizations. Another respondent believed there were citation errors in the proposed rule for communications facilities and uses, specifically, in the citations to the expanded and new categorical exclusions for special use authorizations.

Response: The Forest Service is committed to the goals of making project decisions in a timely manner and improving or eliminating inefficient processes. The proposed new categorical exclusion for special use authorizations, to be codified at 36 CFR 220.5(d)(11), would not require a project or case file and decision memo, so the Forest Service anticipates that its review for this categorical exclusion would be conducted expeditiously to the extent permitted by the circumstances of the proposed use. Although a project or case file and decision memo are required for the proposed expanded categorical exclusion for special use authorizations, to be codified at 36 CFR 220.5(e)(3), the Agency anticipates that reviews for this categorical exclusion also typically could be conducted expeditiously to the extent permitted by the circumstances of the proposed use.

The proposed NEPA regulations would re-codify the existing categorical exclusion sections at 36 CFR 220.6(d) and (e) as 36 CFR 220.5(d) and (e). Therefore, under the proposed NEPA regulations, the new categorical exclusion under paragraph (d) would be codified at 36 CFR 220.5(d)(11), and the existing categorical exclusion at 36 CFR 220.6(e)(3) would be re-codified at 36 CFR 220.5(e)(3). The proposed rule on streamlining processing of communications use applications incorrectly cited the existing categorical exclusion for special use authorizations as 36 CFR 220.5(e)(3). The correct citation to the existing categorical exclusion is 36 CFR 220.6(e)(3).

Comment: Several respondents commented on the timeframe in the MOBILE NOW Act for the Forest Service to grant or deny an application for a communications facility or a communications use and to notify the applicant of the grant or denial. One respondent stated that the Forest Service should ensure the MOBILE NOW Act requirements are applied to applications that are pending as of the effective date of the final rule, as well as to applications that are submitted after the effective date of the final rule. The same respondent recommended that the final rule provide that failure to meet the 270-day timeframe would result in the application being deemed granted. Additionally, the respondent suggested that the Department evaluate internal procedures to determine if a timeframe shorter than 270 days could be implemented.

Response: The Forest Service implemented the requirements of the MOBILE NOW Act on August 13, 2018, shortly after enactment of the act on March 22, 2018. Therefore, the requirements of the act have been implemented during this entire rulemaking. The Forest Service is reinforcing its directives by incorporating the MOBILE NOW Act requirements into the Agency's regulations. In implementing the MOBILE NOW Act, the Forest Service evaluated its internal procedures and determined that the full 270-day timeframe provided for in the act is reasonable and necessary to complete the requisite environmental analysis. The Forest Service anticipates meeting the 270-day timeframe. Therefore, there is no need for the final rule to specify a consequence for not meeting the timeframe.

Comment: One respondent recommended an expedited process for evaluating requests to co-locate new communications uses on or in existing communications facilities. The respondent specifically identified the Federal Communications Commission (FCC)'s 60-day requirement for processing co-location applications. One respondent opposed requiring co-location of new communications uses on or in existing communications facilities.

Response: The Forest Service defines co-location as the installation of telecommunications equipment in or on an existing communications facility or other structure. FSH 2709.11, Ch. 90, sec. 90.5. Co-location in or on an existing communications facility does not require a separate communications use authorization from the Forest Service, provided the proposed use is consistent with the communications site management plan and compatible with all existing uses at the communications site. FSH 2709.11, Ch. 90, sec. 94.1, para. 1. Existing Forest Service directives at FSH 2709.11, Chapter 90, section 94.1, paragraph 4, give authorization holders at a communications site 30 days to provide the authorized officer with documentation that the proposed use would cause harmful interference with their communications uses. Upon completion of coordination with the Forest Service and existing authorization holders and mitigation of any concerns, the proponent may proceed with installation of equipment. The Forest Service will be publishing proposed directives for public comment that would expedite requests to co-locate communications uses in or on existing communications facilities.

The Forest Service has no plans to modify its existing directives governing when co-location is appropriate. The Forest Service's existing directives encourage, rather than require, co-location of new communications uses on or in existing communications facilities. Regardless, the Department notes that proponents should be prepared to justify the need for new communications facilities. With the advent of recent technological advancements, especially digital transition switchover, many communications facilities on NFS lands are underutilized. Existing authorization holders should make excess space on or in their communications facilities available at a competitive rate for new communications uses if they can reasonably be accommodated.

Comment: One respondent stated that the Forest Service should avoid imposing new requirements regarding intermodulation analysis and other technical issues on communications use authorization holders; should continue to rely on the FCC's and National Telecommunications and Information Administration (NTIA)'s technical rules related to interference and other issues, as appropriate, as these agencies are best positioned to take the lead in the development and enforcement of technical rules for communications facilities; and should not create duplicative requirements that could create uncertainty for communications providers deploying services on NFS lands.

Response: The Department agrees that the FCC and NTIA have statutory and regulatory authority for spectrum management and enforcement of spectrum license or authorization requirements. However, the Forest Service has statutory and regulatory authority for managing use and occupancy of NFS lands and is responsible for ensuring compliance with laws, regulations, and directives applicable to management of those lands. For wireless communications uses, it is the Forest Service's responsibility to facilitate orderly development of communications sites in a high-quality communications environment while addressing safety and environmental concerns. These goals are accomplished by establishing management requirements in the communications use authorization and applicable communications site management plan and ensuring that all authorization holders comply with the requirements. The Forest Service will continue to exercise its authority to manage use and occupancy of NFS lands for communications uses.

Comment: A respondent recommended that the proposed rule address beam paths, specifically, how owners of communications facilities obtain authorization to keep beam paths on NFS lands clear of vegetation or structures, including when the communications use is not on NFS lands, but the beam path crosses NFS lands.

Response: The Department recognizes the importance of maintaining beam paths. Routine trimming or minimal vegetation removal for beam path maintenance associated with communications uses on NFS lands is considered routine maintenance, which may be authorized under the corresponding communications use authorization. Routine vegetation management to maintain beam paths that cross NFS lands for communications uses off NFS lands would require a separate special use authorization.

Comment: One respondent suggested that the Forest Service engage with all stakeholders at a communications site before implementing a new or modified communications site management plan for the site. The respondent also recommended that the Agency implement a 30-day period for stakeholders to review a new or modified communications site management plan for the site.

Response: The Department does not believe that the Forest Service should engage with all users at a communications site before implementing a new or modified communications site management plan for the site. It is the responsibility of authorization holders at a communications site to ensure their occupants' comments or concerns are brought to the attention of the Forest Service. The Forest Service has no legal relationship with the occupants co-located in or on communications facilities that are owned by private or other governmental entities. The Department believes that the Forest Service should engage with existing authorization holders at a communications site when developing a new communications site management plan or modifying an existing communications site management plan that would change how the site is managed. The Forest Service will consider comments and concerns from users co-located in or on communications facilities that are owned by private or other governmental entities that are submitted through an authorization holder at the site regarding development of a new communications site management plan or modification of an existing communications site management plan that would change how the site is managed. The Department agrees that the Forest Service should provide for a 30-day period for authorization holders at a communications site to review a new communications site management plan or modified communications site management plan that would change how the site is managed. Communications site management plans are an important component of a communications use authorization. They promote effective administration of the communications site by delineating the types of uses that are appropriate for the site and the technical and administrative requirements for management of the site. In addition, communications site management plans provide direction for day-to-day operations, including requirements for new construction, modification of existing facilities, equipment standards, special environmental considerations, and access. Although it has been standard Forest Service practice to coordinate the development of new communications site management plans with existing authorization holders at the site, Forest Service directives do not address this practice. The Forest Service will be publishing proposed directives for public comment that would require the authorized officer to give existing authorization holders at a communications site 30 days to review new communications site management plans and modifications to existing communications site management plans that would change how the site is managed. Communications use authorization holders remain responsible for coordinating the requirements of the applicable communications site management plan with occupants in or on their communications facilities.

Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this final rule is not significant.

This final rule has been reviewed in accordance with E.O. 13771 on reducing regulation and controlling regulatory costs and has been designated as an “other action” for purposes of the E.O.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), OIRA has designated this final rule as not a major rule as defined by 5 U.S.C. 804(2).

The final rule will establish procedures for streamlining the Forest Service's evaluation of applications to locate or modify communications facilities on NFS lands. Agency regulations at 36 CFR 220.6(d)(2) (73 FR 43093) exclude from documentation in an environmental assessment or environmental impact statement “rules, regulations, or policies to establish Service-wide administrative procedures, program processes, or instructions.” The Department has concluded that this final rule falls within this category of actions and that no extraordinary circumstances exist which would require preparation of an EA or EIS.

The Department has considered the final rule under the requirements of the Regulatory Flexibility Act (5 U.S.C. 602 et seq. ). This final rule will not have any direct effect on small entities as defined by the Regulatory Flexibility Act. The final rule will not impose recordkeeping requirements on small entities; will not affect their competitive position in relation to large entities; and will not affect their cash flow, liquidity, or ability to remain in the market. Therefore, the Department has determined that this final rule will not have a significant economic impact on a substantial number of small entities pursuant to the Regulatory Flexibility Act.

The Department has considered the final rule under the requirements of E.O. 13132, Federalism. The Department has determined that the final rule conforms with the federalism principles set out in this executive order; will not impose any compliance costs on the states; and will not have substantial direct effects on the states, on the relationship between the Federal government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, the Department has concluded that the final rule does not have Federalism implications.

The Department has determined that national tribal consultation is not necessary for the final rule. The final rule, which updates the Forest Service's administrative procedures for reviewing applications and issuing authorizations for communications uses, is programmatic and does not have any direct effects on tribes. Tribal consultation will occur as appropriate in connection with specific applications for communications facilities and communications uses on NFS lands.

The Department has analyzed the final rule in accordance with the principles and criteria in E.O. 12630, Governmental Actions and Interference with Constitutionally Protect Property Rights. The Department has determined that the final rule will not pose the risk of a taking of private property.

The Department has reviewed the final rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Department has determined that the final rule will not constitute a significant energy action as defined in E.O. 13211.

The Department has analyzed the final rule in accordance with the principles and criteria in E.O. 12988, Civil Justice Reform. Upon publication of the final rule, (1) all state and local laws and regulations that conflict with the final rule or that impede its full implementation will be preempted; (2) no retroactive effect will be given to this final rule; and (3) it will not require administrative proceedings before parties may file suit in court challenging its provisions.

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), signed into law on March 22, 1995, the Department has assessed the effects of the final rule on state, local, and tribal governments and the private sector. The final rule will not compel the expenditure of $100 million or more by any state, local, or tribal government or anyone in the private sector. Therefore, a statement under section 202 of the Act is not required.

The final rule does not contain any recordkeeping or reporting requirements or other information collection requirements as defined in 5 CFR part 1320 that are not already required by law or not already approved for use. Accordingly, the review provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) and its implementing regulations at 5 CFR part 1320 do not apply.

Therefore, for the reasons set forth in the preamble, the Forest Service is amending part 251, subpart B, of title 36 of the Code of Federal Regulations as follows:

In response to the COVID-19 pandemic, the President has declared a national emergency and executive branch and state governments have adopted guidelines recommending, among other restrictions, that members of the public avoid discretionary travel. 1 Consequently, users of the Copyright Office's services currently may be limited in their ability to physically deliver materials to the U.S. Postal Service or other carrier for shipment to the Office. In addition, the Office has implemented an extended telework policy, resulting in a substantially reduced number of onsite staff available to process deliveries to and from the Office. Further, because the Office is currently closed to the public, it cannot receive in-person deliveries. 2

While much of the Office's services, including applications for copyright registration submitted through the electronic Copyright Office (“eCO”) system, are already largely digital, in some cases users are required to submit materials through physical mailing services. To help ensure both that members of the public can continue to access Office services and that Office staff can respond to inquiries in a timely manner, the Office is updating various regulations to allow certain types of submissions and responses to be made electronically, for example, through dedicated email addresses that the Office is establishing. Previously, these regulations permitted delivery only by mail or other physical means. The updates pertain to the following Office services: (1) Submitting notices of termination for recordation, 3 (2) requests for removal of personally identifiable information from the online public catalog or other public records, 4 (3) cancellation of completed registrations, 5 (4) filing of satellite carrier statements of account, 6 (5) recordation of certain contracts by cable systems located outside of the forty-eight contiguous states, 7 (6) filing of statements of account for digital audio recording devices or media, 8 (7) filing of a Notice of Intent to Enforce a Restored Copyright, 9 (8) filing of a Notice to Libraries and Archives of Normal Commercial Exploitation or Availability at Reasonable Price, 10 (9) group registration of automated databases, 11 (10) requests for reconsideration for refusals to register, 12 (11) supplementary registrations for restored works, non-photographic databases, and renewal registrations, 13 (12) registration of restored copyrights, 14 (13) renewal registrations, 15 and (14) requests for full-term retention of copyright deposits. 16

The final rule also updates several of these regulations to remove the requirement that submissions to the Office contain a handwritten signature. The rule instead adopts a more flexible requirement that submissions contain “a legally binding signature, including an electronic signature as defined in 15 U.S.C. 7006.” The Office previously adopted a rule permitting electronic signatures on statements of account filed with the Office under the statutory license for secondary transmissions by cable systems, 17 and the same rationale is applicable here. These changes apply to regulations governing statements of account for satellite carriers and digital audio recording technology products, recordation of certain cable contracts, and full-term retention requests.

As new electronic submission options are implemented, the Office will provide instructions on its website and on any relevant Office forms. The Office also will provide electronic submission options for other services where such delivery methods are already permitted under existing regulations, including filing recorded documents and notices of termination. 18 For information about these options and other Office operations during the COVID-19 pandemic, members of the public should visit https://www.copyright.gov/coronavirus, which will be updated regularly.

In light of the ongoing national emergency, the Copyright Office finds good cause to publish these amendments as a final rule effective immediately, and without first publishing a notice of proposed rulemaking, “because of the demonstrable urgency of the conditions they are designed to correct.”  19 Further, these updates constitute a change to a “rule[ ] of agency . . . procedure, or practice”  20 which do not “alter the rights or interests of parties,” but merely “alter[s] the manner in which the parties present themselves or their viewpoints to the agency.”  21

For the reasons set forth in the preamble, the Copyright Office amends 37 CFR parts 201 and 202 as follows:

I. Background

On November 13, 2019 (84 FR 61592), EPA published a notice of proposed rulemaking (NPRM) for the Commonwealth of Pennsylvania. In the NPRM, EPA proposed approval of administrative and definition amendments, as well as incorporation by reference of the NAAQS, to ACHD Rules and Regulations, Article XXI, Air Pollution Control. The formal SIP revision was submitted by Pennsylvania, on behalf of Allegheny County, on February 15, 2019. 1

The February 15, 2019 submittal includes amended versions of ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders. The amendment to section 2101.10 removed ACHD's existing SIP approved list of NAAQS and added, through incorporation by reference, all NAAQS promulgated by the EPA under the CAA at 40 CFR part 50. The amendment to section 2101.20 added the following definition for County Council, “ `County Council' means the Council of Allegheny County, Pennsylvania.” The amendments to section 2109.02 revised the reference to “Board of County Commissioners” to “County Executive” in paragraphs (a)(5) and (6).

Other specific requirements and the rationale for EPA's proposed action are explained in the NPRM and Technical Support Document (TSD) and will not be restated here. No adverse comments were received on the NPRM.

EPA is approving the February 15, 2019 submittal, which includes administrative deletions, additions, and revisions to ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders, as a revision to the Pennsylvania SIP.

In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the ACHD Rules and Regulations, Article XXI, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders described in the amendments to 40 CFR part 52 set forth below.

EPA has made, and will continue to make, these materials generally available through https://www.regulations.gov and at the EPA Region III Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 2

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 (Pub. L. 104-4);

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

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

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

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the 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, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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 June 8, 2020. 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 revising the Pennsylvania SIP to reflect amendments to ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

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

On October 27, 1998, EPA published the NO X SIP Call, which required eastern states, including Ohio, to submit SIPs that prohibit excessive emissions of ozone season NO X by implementing statewide emissions budgets (63 FR 57356). Under the NO X SIP Call regulations as originally promulgated, where a state's SIP relies on control measures for Electric Generating Units (EGUs) and large non-EGUs to achieve the required emissions reductions, the SIP must also require these sources to monitor emissions according to the provisions of 40 CFR part 75, which generally entails the use of continuous emission monitoring systems (CEMS). Ohio triggered this requirement by including control measures in their SIP for these types of sources, and the requirement has remained in effect despite the discontinuation of the NO X Budget Trading Program under the NO X SIP Call after the 2008 ozone season.

On March 8, 2019, EPA finalized updates to the NO X SIP Call regulations that make the inclusion of 40 CFR part 75 monitoring requirements for these sources in SIPs optional rather than mandatory for NO X SIP Call purposes (84 FR 8422). Under the updated provision, a state's SIP would still need to include some form of emissions monitoring requirements for these types of sources, consistent with the NO X SIP Call's general enforceability and monitoring requirements, but states would no longer be required to satisfy these general NO X SIP Call requirements specifically through the adoption of 40 CFR part 75 monitoring requirements. In Ohio, the sources potentially affected by this amendment include large non-EGUs covered by the NO X SIP Call that are not required to monitor according to 40 CFR part 75 under other programs such as the Acid Rain Program or a Cross-State Air Pollution Rule (CSAPR) trading program.

On August 26, 2019, Ohio EPA submitted a request that EPA update Ohio's SIP to reflect revised rules at OAC Chapter 3745-14. The revised rules expand the set of allowed monitoring methodologies available to Ohio's large non-EGUs for NO X SIP Call purposes and set forth the process by which an affected source's designated representative may apply to the Ohio EPA director for an installation or operating permit authorizing the source to switch to one of the newly allowed methodologies. The new methodologies include one based on 40 CFR part 60 monitoring procedures and another based on monitoring of heat input combined with the use of an approved source-specific emission factor. On November 4, 2019, EPA published a rulemaking proposing to approve Ohio's request to update the Ohio SIP to reflect these revised rules (84 FR 59327). Public comments on the proposal were due by December 4, 2019. EPA's rationale for approving Ohio's request, including EPA's basis for finding that approval of the request is not prohibited by section 110(l) of the CAA, is set forth in the proposal and is not repeated here except as necessary to respond to comments.

During the comment period, EPA received two comments, both of which are available in the docket for this action. One comment is supportive of EPA's proposed action. The second comment, which was submitted in two parts, questions whether approval of the revised rules into the Ohio SIP would be consistent with certain EPA guidance documents and requests that the monitoring requirements for individual sources be approved into the SIP. A summary of the second comment and EPA's response is provided below.

Comment: The commenter first cites an EPA guidance document, referred to here as the Blue Book, which discusses SIP approvability considerations for state rules establishing reasonably available control technology (RACT) requirements for volatile organic compounds (VOC). 1 The comment quotes from a section headed “Exemptions, Variances, and Alternative Means of Control” addressing state rules that include what the document calls “generic” provisions. The commenter asks how EPA is “meeting the requirements that pertain to generic regulations” in the Blue Book.

Next, the commenter cites a different EPA guidance document, referred to here as the Generic RACT Rule Guidance, which discusses SIP approvability considerations for state rules that do not currently have specific RACT requirements established for sources, but where there is a general regulatory requirement that certain sources meet RACT and that those RACT limits be submitted to EPA for approval. 2 The commenter quotes from the document's definition of a “generic” rule and asks EPA to “explain how Ohio's generic process-setting rule is allowed when no specific monitoring requirements are being established at this time.”

Finally, the commenter asks EPA to “affirmatively state that sources wishing to use alternative monitoring methods under [Ohio's monitoring rule] must be approved by EPA into the Ohio SIP” and that “without this approval the sources must still comply with the normal monitoring methods even if the source is granted approval at the state level.”

Response: EPA does not agree that approval of Ohio's rule revisions into the SIP would be inconsistent with the cited EPA guidance documents or that individual sources' specific monitoring requirements for NO X SIP Call purposes must be approved into the SIP.

With respect to the suggestions of inconsistencies with the cited guidance documents, EPA disagrees that the documents apply to this action, for two principal reasons. The first reason is that the focus of both documents is the approvability of state rules establishing emission control requirements to meet certain provisions of the CAA requiring SIPs to include provisions to implement RACT at certain sources in nonattainment areas, see CAA section 182(b)(2), not monitoring requirements. This action does not concern such RACT emission control requirements. The control measure that Ohio's affected non-EGUs are using to meet the underlying emissions reduction requirements under the NO X SIP Call for purposes of addressing the provisions of CAA section 110(a)(2)(D)(i)(I)—specifically, a collective cap on the sources' seasonal NO X mass emissions—has already been approved into the Ohio SIP, see 84 FR 48789 (September 17, 2019), and Ohio has not sought to modify those requirements in this SIP revision. The Ohio rule revisions at issue in this action address only the monitoring methodologies that will be available for use by the affected sources to demonstrate compliance with the approved section 110(a)(2)(D)(i)(I) control measure.

The second reason EPA disagrees that the cited guidance documents apply to this action is that—even assuming that in some situations the considerations raised in the documents with regard to a “generic” emission control provision might also be relevant to a “generic” monitoring rule—the revised Ohio monitoring rule at issue in this action is not a “generic” rule as defined in either document. Those guidance documents generally define a “generic” rule as one that commits sources to comply with an underlying Federal obligation in the future while deferring establishment of the actual requirements that sources must meet. The commenter does not identify what aspect of the State's monitoring rule would indicate that it is “generic,” and EPA believes that the revised Ohio monitoring rule is not “generic” under the definition provided in these guidance documents. Rather, the rule in fact does prescribe the actual monitoring requirements that sources must meet and it does not authorize deviations from these requirements. 3 The fact that the rule provides flexibility by allowing sources to choose from a menu of several alternative approved monitoring methodologies does not render the rule “generic.” Other monitoring regulations, including the provisions at 40 CFR part 75 which the State's SIP currently applies for purposes of meeting the NO X SIP Call requirements, similarly offer at least some sources a choice among multiple approved monitoring methodologies. See, e.g., appendices D and E to 40 CFR part 75 and 40 CFR 75.19. Consistent with EPA's 2019 amendments to the NO X SIP Call regulations, Ohio's revised monitoring rule merely expands the menu of approved monitoring methodologies available to its large non-EGUs for NO X SIP Call purposes to include certain additional alternatives (beyond the previously allowed 40 CFR part 75 monitoring methodologies) and sets forth the permit modification process that sources must follow when switching from one approved methodology to another.

With respect to the commenter's request that EPA require the NO X SIP Call monitoring requirements for individual sources to be approved into the SIP (in addition to approval by the State under the rule at issue in this action), EPA does not agree that this is a necessary condition of approving the SIP revision under the NO X SIP Call regulations. In the proposal for this action, EPA explained the proposed rationale for approval of the SIP revision—namely, that the emissions data monitored and reported under Ohio's revised rules using the expanded menu of allowed monitoring approaches would be sufficient to determine whether the State's large non-EGUs are in compliance with their collective emissions cap for NO X SIP Call purposes. See 84 FR at 59330. The commenter has provided no information suggesting either that the emissions data obtained under Ohio's revised rules as submitted would be insufficient to determine compliance with the collective emissions cap or that approval of individual sources' monitoring requirements into the SIP is needed to ensure that the data would be sufficient. Accordingly, EPA is approving Ohio's revised rules into the SIP for the reasons discussed in the proposal and does not find it necessary for the State to seek SIP approval of the individual sources' monitoring requirements for NO X SIP Call purposes.

EPA is approving Ohio EPA's request to modify its SIP to include the revisions at OAC rules 3745-14-01, 3745-14-04, and 3745-14-08.

This action is effective immediately upon publication in the Federal Register . Section 553(d) of the Administrative Procedure Act (5 U.S.C. 553(d)), which applies to this action, generally requires that actions covered by the section become effective not less than 30 days after publication but also provides several exceptions. Under section 553(d)(1), a rulemaking action may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction.” This action falls within the exception under section 553(d)(1) because the nature of the rule changes being approved is to relieve a restriction by allowing certain additional types of monitoring instead of allowing only monitoring in accordance with 40 CFR part 75. Additionally, section 553(d)(3) allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” The purpose of the 30-day waiting period generally prescribed in section 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. This action, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, this action allows Ohio to authorize the use of approved monitoring methodologies from a menu of alternatives that would be expanded to include options beyond the previously allowed 40 CFR part 75 monitoring methodologies, following a request by the source. Any changes in the specific requirements applicable to a particular affected source will be authorized through state permitting processes that provide additional notice to the source. For these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for this action to become effective on the date of publication in the Federal Register .

In addition to approving the State rule revisions discussed above into the Ohio SIP, in this action EPA is also revising the table entry in the regulations at 40 CFR 52.1870(c) for OAC rule 3745-14-03, which was approved into the SIP in a previous action (84 FR 48789, September 17, 2019). The revisions to the table entry have no substantive effect but clarify EPA's regulations by correcting the title and State-effective date shown for Ohio's rule.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Ohio Regulations described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available through www.regulations.gov, and at the EPA Region 5 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 4

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 (Pub. L. 104-4);

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

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

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

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the 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 June 8, 2020. 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:

Throughout this document “we,” “us,” and “our” refer to EPA.

The EPA is approving revisions to 10 Code of State Regulation (CSR) 10-2.205, Control of Emissions from Aerospace Manufacture and Rework Facilities and 10 CSR 10-5.295, Control of Emissions from Aerospace Manufacture and Rework Facilities in the Missouri SIP. Missouri made several revisions to the rules. These revisions are described in detail in the technical support document (TSD) included in the docket for this action. The EPA is finalizing this action because the revisions to these rules will not have a negative impact on air quality.

The State submission has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submission also satisfied the completeness criteria of 40 CFR part 51, appendix V. The State provided public notice on this SIP revision from August 1, 2018 to September 30, 2018 and received fourteen comments on the two rules. Missouri responded to all comments. In addition, the revision meets the substantive SIP requirements of the CAA, including section 110 and implementing regulations.

The public comment period on the EPA's proposed rule opened February 4, 2020, the date of its publication in the Federal Register and closed on March 4, 2020 (85 FR 6121). During this period, EPA received one comment that was supportive of the revisions to the rule. The comment can be found in the docket for this action.

The EPA is taking final action to amend 10 CSR 10-2.205 and 10 CSR 10-5.295, Control of Emissions from Aerospace Manufacture and Rework Facilities, which apply in the Kansas City and St. Louis areas, respectively.

In this document, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Missouri Regulations described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 7 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Therefore, these materials have been approved by the EPA for inclusion in the State Implementation Plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 1

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, 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 (Pub. L. 104-4);

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

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

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

• Is not subject to requirements of the National Technology Transfer and Advancement Act (NTTA) because this rulemaking does not involve technical standards; 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 the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

Under section 307(b)(1) of the Clean Air Act CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 8, 2020. 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)).

For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as set forth below:

The information in this section is organized as follows:

A delisting petition is a request from a generator to exclude waste from the list of hazardous wastes under RCRA regulations. In a delisting petition, the petitioner must show that waste generated at a particular facility does not meet any of the criteria for which EPA listed the waste as set forth in 40 CFR 261.11 and the background document for the waste. In addition, a petitioner must demonstrate that the waste does not exhibit any of the hazardous waste characteristics (that is, ignitability, reactivity, corrosivity, and toxicity) and must present sufficient information for us to decide whether factors other than those for which the waste was listed warrant retaining it as a hazardous waste. See 40 CFR 260.22, Section 3001(f) of RCRA, 42 U.S.C. 6921(f) and the background document for a listed waste.

A generator of a waste excluded from the hazardous waste lists of 40 CFR part 261 subpart D remains obligated under RCRA to confirm that its waste remains nonhazardous based on the hazardous waste characteristics in order to continue to manage the waste as non-hazardous.

Under 40 CFR 260.20, 260.22, and 42 U.S.C. 6921(f), facilities may petition the EPA to remove their wastes from otherwise applicable hazardous waste storage, treatment and disposal requirements by excluding them from the lists of hazardous wastes contained in 40 CFR 261.31 and 261.32. Specifically, 40 CFR 260.20 allows any person to petition the Administrator to modify or revoke any provision of 40 CFR parts 260 through 266, 268, and 273. 40 CFR 260.22 provides a generator the opportunity to petition the Administrator to exclude a waste from the lists of hazardous wastes on a “generator specific” basis.

Emerald manufactures various organic chemicals used as artificial flavors and fragrances, food preservatives, plasticizers, and intermediates at their facility in Kalama, Washington. Most of the chemicals produced are derived from toluene or from the oxidation products of toluene, including benzoic acid and benzaldehyde. Additional products are produced as derivatives of benzoic acid and benzaldehyde. Products are typically purified by continuous or batch distillation. In conjunction with its manufacturing processes, Emerald operates an industrial wastewater treatment system, consisting of an anaerobic digestion process and an aerobic oxidation system, both of which are biological treatment systems very similar to municipal wastewater treatment systems. This treatment system produces industrial wastewater treatment plant biological solids (IWBS). As documented in the Petitioners' delisting petitions, the IWBS designates as U019 (benzene) and U220 (toluene).

FMF operates receiving, storage, treatment, and land application facilities in Lewis County, Washington for wastewater treatment plant treatment solids received from municipal, industrial, and private wastewater treatment plants. FMF is not permitted or otherwise authorized to manage, treat, or dispose of hazardous or dangerous wastes. Emerald contracted with FMF to land apply Emerald's IWBS beginning in October 1995. FMF mixed Emerald's IWBS with treatment solids from other facilities and land applied or stored the mixed IWBS/treatment solids wastes at several FMF facilities. The RCRA rules require that listed hazardous wastes, when mixed with other materials, continue to be regulated as listed hazardous wastes (40 CFR 261.3). The mixed IWBS/treatment solids wastes are currently stored at three FMF facilities: Burnt Ridge located at 856 Burnt Ridge Road, Onalaska, Washington; Newaukum Prairie located at 349 State Route 508, Chehalis, Washington; and Big Hanaford located at 307 Big Hanaford Road, Centralia, Washington. Under a separate action, 1 Ecology is requiring that Emerald and FMF remove these wastes from the three units according to closure plans approved pursuant to WAC 173-303-610.

The Petitioners have requested that up to 4,700 cubic yards at the Burnt Ridge facility, 10,400 cubic yards at the Newaukum Prairie facility, and 5,000 cubic yards at the Big Hanaford facility of IWBS/treatment solids be excluded from the list of hazardous wastes.

FMF conducted an investigation of the wastes at each of the three storage units in September 2014. 2 Three composite samples of the mixed IWBS/treatment solids wastes were collected from each storage unit. At Burnt Ridge and Newaukum Prairie, each composite sample consisted of nine grab samples collected from various depths. Each composite sample collected at Big Hanaford consisted of six grab samples collected from various depths.

Each composite sample was analyzed for the following constituents or constituent groups: Volatile organic compounds (VOCs), semivolatile organic compounds (SVOCs), total metals, total cyanide, and total solids. The specific analytes included in the analysis are defined by the analytical method used for each group.

In addition, two composite samples from the Newaukum Prairie storage unit and one composite sample each from the Burnt Ridge and Big Hanaford storage units were analyzed for the following parameters or constituent groups: Pesticides; polychlorinated biphenyl (PCB) Aroclors; dioxins and furans, reported as 2,3,7,8-tetrachlorodibenzodioxin toxicity equivalence quotient; ammonia; Total Kjeldahl Nitrogen (TKN); pH, nitrite; and nitrate + nitrite (the concentration of nitrate was calculated by the analytical laboratory). Fourteen grab samples from the Newaukum Prairie storage unit and seven grab samples each from the Burnt Ridge and Big Hanaford storage units were analyzed for total fecal coliform.

Emerald conducted additional sampling of the mixed IWBS/treatment solids wastes at each of the three storage units in August and October 2017. 3 Emerald performed the additional sampling based on the preliminary delisting levels and the September 2014 investigation. Samples from the storage units at Burnt Ridge, Newaukum Prairie, and Big Hanaford were analyzed for selected volatile organic compounds (acetone, benzene, methanol, and toluene), total solids, and pH. Samples from Big Hanaford were analyzed for total acrylonitrile; cobalt; 4-methylphenol; 2,4-dinitrotoluene; 2,6-dinitrotoluene; and naphthalene.

The EPA is finalizing an exclusion for a one-time amount up to 20,100 cubic yards of U019 (benzene) and U220 (toluene) mixed material from the list of federal hazardous wastes currently located at three FMF facilities, as proposed in our notice of proposed rulemaking 84 FR 60975 (November 12, 2019). The wastes covered by this delisting are limited to 4,700 cubic yards of mixed materials at the Burnt Ridge facility, 10,400 cubic yards at the Newaukum Prairie facility, and 5,000 cubic yards at the Big Hanaford facility, present at each facility as of the effective date of this exclusion and that are associated with closure of hazardous waste management units at three facilities owned and operated by FMF in accordance with closure plans approved by Ecology. The Petitioners petitioned EPA to exclude, or delist, these wastes because they believed that the petitioned wastes do not meet the criteria for which they were listed and that there are no additional constituents or factors which could cause the wastes to be hazardous waste. Review of this petition included consideration of the original listing criteria, as well as the additional factors required by the Hazardous and Solid Waste Amendments of 1984 (HSWA). See 42 U.S.C. 6921(f), and 40 CFR 260.22(d)(2) through (4).

The EPA proposed on November 12, 2019 (84 FR 60975) to exclude or delist the petitioned wastes at the three FMF facilities from the list of hazardous wastes in 40 CFR 261.31 and accepted public comment on the proposed rulemaking. The EPA considered all comments received, and for reasons discussed in both the proposal and this final action, has determined that the petitioned wastes should be excluded from regulation as hazardous waste under the specified conditions, as originally proposed.

The EPA received comments from seven individuals on the proposed rulemaking. Some commenters expressed support for the proposed exclusion while still raising some adverse comments. A brief summary of the adverse comments and EPA's responses to them are as follows.

Commenter 1 (Docket entry Comment 0025). This commenter disagreed with the proposed rule on the basis that “there is already enough hazardous waste being expelled into our environment, and that this one-time amount of hazardous waste still pollutes our environment.” The commenter also asserted that the proposed action “goes against the hazardous waste regulations under [RCRA].” EPA disagrees that the proposed delisting action will result in hazardous waste being expelled into the environment. The scope of this rulemaking is limited to a determination of whether the covered wastes may be appropriately managed as solid wastes and not hazardous wastes. In fact, this delisting, in conjunction with closure of the units under Ecology's dangerous waste program is expected to address commenter's concerns regarding releases from these units by ensuring that the wastes are placed in a secure, monitored landfill. Further, the proposed action is not in conflict with RCRA, but is an exercise of authority specifically provided for the delisting of hazardous wastes found in the implementing regulations at 40 CFR 260.20 and 22.

Commenter 2 (Docket entry Comment 0026). This commenter questioned “[w]hat is to be gained for the environment by allowing these [two] companies to dump these chemicals in an improved landfill instead of cleaning up the land”. The commenter appears to misunderstand how the action that EPA is finalizing relates to the obligation of the Petitioners to clean up the three sites where the waste is currently stored. As noted in Footnote 4 in the notice of proposed rulemaking, Ecology has determined that the units managing the candidate wastes at the three FMF facilities are illegally storing listed hazardous waste, and that in order to return to compliance with the state dangerous waste regulation and to protect the environment, each of the facilities must be closed under an approved dangerous waste closure plan. Based on the analysis presented in the proposed rule, EPA has determined that it is protective of human health and the environment to allow wastes from closure of these units to be disposed of in a monitored solid waste landfill. EPA acknowledges the commenter's concern regarding cleaning up the land affected by past management of these wastes, but notes that clean up obligations at these sites is beyond the scope of this rulemaking.

This commenter also provided adverse comments on EPA's proposed “Strengthening Transparency in Regulatory Science” regulation. This matter is outside of the scope of this final rulemaking.

Commenter 3 (Docket entry Comment 0027). This commenter questioned the ethics and legitimacy of the exemption of the Petitioners' wastes from regulation as hazardous wastes and stressed the importance of laws being applied evenly to all parties. The commenter seems to assert that allowing for a delisting process offers some parties an unfair advantage and questioned whether ulterior motives were at play that “pose a greater risk to public safety than initially understood.” EPA disagrees with the commenter's contention that this action is inconsistent with regulatory requirements. As explained in detail in the notice of proposed rulemaking, EPA is exercising regulatory authority that is potentially available to any petitioner whose wastes meet the criteria for delisting provided under the law. Additionally, as explained elsewhere in this final action, EPA believes that this delisting action, will provide a timely and protective pathway to closure of the three FMF facilities under the state dangerous waste program. Finally, the commenter noted that wastes in the three FMF facilities may pose “a greater risk to public safety than initially understood.” As discussed in detail in the notice of proposed rulemaking, EPA has carefully considered the risks of the waste using established risk evaluation methodology. Based on this analysis EPA has determined that excluding these wastes from the hazardous waste management system, subject to the conditions of this final rule, is fully protective of human health and the environment.

Commenter 4 (Docket entry Comment 0028). This commenter identified hazards associated with toluene, as described in a safety data sheet for the chemical and questioned what benefit delisting over 20,000 cubic yards of a mixture containing this chemical would have for the general public. As discussed in the notice of proposed rulemaking, characterization sampling and analysis as well as the risk analysis of the wastes using the Delisting Risk Assessment Software (DRAS) explicitly considered toluene and concluded that it was not present at levels that warranted retention of the mixed material as a listed waste. Whether or not a delisting benefits the public at large is not a criterion for consideration under the procedures set out at 40 CFR 260.20 for delisting a listed hazardous waste. However, as explained in the proposed rulemaking, this action will provide a timely and protective pathway to closure of the three FMF facilities under the state dangerous waste program. Timely and protective closure of these facilities and responsible management of the wastes at issue in an appropriately regulated landfill is in the public interest.

Commenter 5 (Docket entry Comment 0029). The commenter was supportive of the proposed delisting but expressed a preference that the Petitioners analyze five (as opposed to three) samples of the mixed IWBS/treatment solids wastes before the start of closure activities. EPA continues to believe that three samples of the materials in question will provide a reasonable demonstration of compliance with the delisting conditions. EPA proposed the sampling requirement as a condition of the exclusion in order to ensure analytical data are available for all delisting verification constituents, including a small number of constituents considered in the delisting analysis but not included in the original waste characterization database. Should results of the analysis of these additional samples demonstrate other than full compliance with the delisting conditions, the terms of the exclusion enable EPA to require the Petitioners to take appropriate action or to suspend the effectiveness of the delisting.

Commenter 6 (Docket entry Comment 0030a). This commenter expressed concern regarding testing of groundwater or drinking water wells in the area north of the Newaukum Prarie site and raised several concerns about monitoring results and the extent of contamination at the three sites and made recommendations for future monitoring. These comments are beyond the scope of this rulemaking and are best addressed by Ecology. This commenter also stated that cobalt was considered only in the analysis of wastes at the Big Hanaford site—in fact, EPA considered cobalt at all three sites, as documented in Tables 3, 4 and 5 in the notice of proposed rulemaking. This commenter also requested that only state or EPA supervised site workers should be used to gather material for compliance. EPA disagrees that such direct supervision of sample collection is necessary to assure compliance with the requirements of the delisting. EPA generally requires hazardous waste facilities to conduct their own delisting verification sampling and analysis, with agency oversight and review. EPA will carefully review the results of sampling and analysis required under the delisting rule to ensure the resulting data are appropriate for use in demonstrating compliance with requirements of the delisting exclusion.

Commenter 7 (Docket entries Comment 0031 and 0032). This commenter submitted two sets of comments that are substantially similar. The commenter described what he believes to be environmental damage to plants in areas surrounding the Newaukum Prairie site, and groundwater contamination near the Newaukum and Burnt Ridge sites that the commenter attributes to Petitioner FMF's activities. The commenter urges additional and more current testing of groundwater to be performed in the area. The commenter also describes health impacts and nuisance issues that he believes are attributable to Petitioner FMF's activities at the Newaukum site. This commenter raised concerns about the operations and aeration of lagoons at Newaukum site. Finally, the commenter urges that the material at Newaukum should be disposed of at a landfill that is qualified and licensed to handle this material, and states that Petitioner FMF would prefer to land apply the materials in Lewis county, Washington. In taking this final action, Petitioners will be required to dispose of materials from the sites identified by this commenter in a RCRA Subtitle D landfill. Under the terms of this final exclusion, land application of the materials subject to this delisting is prohibited. However, other matters concerning ongoing operations at the Petitioner FMF's sites and groundwater or other sampling activities beyond sampling of the delisted materials are outside of the scope of this rulemaking.

EPA is finalizing this exclusion as proposed, including all of the associated conditions. As a key condition of this exclusion, the Petitioners must dispose of this waste in a subtitle D landfill licensed, permitted or otherwise authorized by a state, and will remain obligated to verify that the waste meets the allowable concentrations set forth here. This exclusion applies only to a maximum volume of waste and is effective only if all conditions contained in this rule are satisfied. Wastes in excess of these quantities or that otherwise do not meet the conditions of this exclusion must be managed as hazardous waste.

This rule is effective April 8, 2020. The Hazardous and Solid Waste Amendments of 1984 amended section 3010 of RCRA, 42 U.S.C. 6930(b)(1), to allow rules to become effective in less than six months when the regulated community does not need the six-month period to come into compliance. This rule reduces rather than increases the existing requirements and, therefore, is effective immediately upon publication under the Administrative Procedures Act, pursuant to 5 U.S.C. 553(d).

This exclusion is being issued under the federal RCRA delisting program. Therefore, only states subject to federal RCRA delisting provisions would be affected. This exclusion is not effective in states that have received authorization to make their own delisting decisions. Also, the exclusion may not be effective in states having a dual system that includes federal RCRA requirements and their own requirements. The EPA allows states to impose their own regulatory requirements that are more stringent than EPA's, under Section 3009 of RCRA. These more stringent requirements may include a provision that prohibits a federally issued exclusion from taking effect in the state. As noted in the notice of proposed rulemaking, Ecology is expected to make a parallel delisting decision under their separate state authority. The EPA also notes that if the Petitioners transport the petitioned waste to or manage the waste in any state with delisting authorization or their own state-only delisting requirements, they must obtain a delisting from that state before they can manage the waste as nonhazardous in that state. The EPA urges the Petitioners to contact the state regulatory authority in each state to or through which they may wish to ship their waste to determine the status of their waste under that state's laws.

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

This action is exempt from review by the Office of Management and Budget because it is a rule of particular applicability, not general applicability. The action approves a delisting petition under RCRA for the petitioned waste at a particular facility.

This action is considered an Executive Order 13771 deregulatory action. This final rule provides meaningful burden reduction by allowing the Petitioners to manage a one-time amount of up to 20,100 cubic yards of material under RCRA Subtitle D management standards rather than the more stringent RCRA Subtitle C standards. This action will significantly reduce the costs associated with the on-site management, transportation and disposal of this waste stream by shifting its management from RCRA Subtitle C hazardous waste management to RCRA Subtitle D nonhazardous waste management.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) because it only applies to a particular facility.

Because this rule is of particular applicability relating to a particular facility, it is not subject to the regulatory flexibility provision of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This action does not contain any unfunded mandate as described in the Unfunded Mandates Reform Act (2 U.S.C. 1531-1538) and does not significantly or uniquely affect small governments. The action imposes no new enforceable duty on any state, local, or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. This action applies only to a particular facility on non-tribal land. Thus, Executive Order 13175 does not apply to this action.

This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. The health and safety risks of the petitioned waste were evaluated using the EPA's Delisting Risk Assessment Software (DRAS), which considers health and safety risks to children. Use of the DRAS was described in section III.E of the proposed delisting. The technical support document and the user's guide for DRAS are available at https://www.epa.gov/hw/hazardous-waste-delisting-risk-assessment-software-dras.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This action does not involve technical standards as described by the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note).

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). The EPA has determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The EPA's risk assessment, as described in section III.E in the proposed delisting, did not identify unacceptable risks from management of this material in an authorized or permitted RCRA Subtitle D solid waste landfill ( e.g., municipal solid waste landfill or commercial/industrial solid waste landfill). Therefore, the EPA believes that any populations in proximity of the landfills used by this facility should not be adversely affected by common waste management practices for this delisted waste.

This action is exempt from the Congressional Review Act (5 U.S.C. 801 et seq. ) because it is a rule of particular applicability.

For the reasons set out in the preamble, 40 CFR part 261 is amended as follows:

This final rule amends the DFARS as follows:

1. In section 202.101, the definition of “Departments and agencies” is revised to update the list.

2. In section 252.225-7013, Duty-Free Entry, the address for notification of the Government customs team is updated.

Therefore, 48 CFR parts 202 and 252 are amended as follows:

DoD published a proposed rule in the Federal Register at 84 FR 18221 on April 30, 2019, to implement section 831 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which amends 10 U.S.C. 2307 to address the use of performance-based payments (PBPs).

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

DoD reviewed the public comments in the development of the final rule. There was widespread support for the proposed implementation of 10 U.S.C. 2307(b)(2) requirement that PBPs shall not be conditioned upon costs incurred in contract performance, but on achievement of performance outcomes (232.1001(a)). A number of changes are made in the final rule, which are expected to increase support for the rule, such as permitting alternate forms of security for performance-based payments and clarifying that an acceptable accounting system is not required for incurred costs under the performance-based payments clause. A discussion of the comments and the changes made to the rule as a result of the comments received is provided, as follows:

1. The requirement for compliance with Generally Accepted Accounting Principles (GAAP) in order to receive performance-based payments at DFARS 232.1003-70 and in the representation at 252.232-7015 has been modified to apply to the contractor's financial statements, rather than the “output” of the contractor's accounting system, and the requirement that compliance with GAAP must be evidenced by audited financial statements has been removed.

2. The procedures at DFARS 232.1004 are modified to eliminate the requirement to first agree on price using customary progress payments and then require consideration if performance-based payments are subsequently negotiated. In addition, contracting officers are encouraged to use both the progress payments and performance based payments clauses and provisions, when considering both types of financing methods.

3. The DFARS clauses 252.232-7012, Performance-Based Payments—Whole-Contract Basis, and 252.232-7013, Performance-Based Payments—Deliverable Items, are modified to specifically state that it is not necessary to have a Government-unique cost accounting system in order to report incurred costs under the clause.

4. A new paragraph (d) is added in DFARS 252.232-7012 and 252.232-7013 that provides some flexibility with regard to acceptable security, although title to the property described in paragraph (f) of the clause at FAR 52.232-32, Performance-Based Payments, is still the preferred security for receipt of performance-based payments.

5. A new provision is added at DFARS 252.232-7016, Notice of Progress Payments or Performance-Based Payments, to be used in lieu of FAR 52.232-13, Notice of Progress Payments, when the solicitation contains clauses for progress payments and performance-based payments, to explain that only one type of financing will be included in the resultant contract, except as may be authorized on separate orders subject to FAR 32.1003(c).

a. Generally support the rule.

Comment: Various respondents expressed general support for the rule, particularly the removal of the requirement to limit PBP financing to costs incurred. One respondent stated that the proposed rule is a significant improvement over the current DFARS, creating a more inviting marketplace for private sector entities and nontraditional defense contractors. Another respondent wholeheartedly supported amending the DFARS to implement section 831 of the NDAA for FY 2017.

Response: Noted.

b. Generally oppose the rule.

Comment: One respondent stated that this rule is worse than the previous rule (DFARS Case 2017-D019, published 8/24/2018, withdrawn 10/4/2018), and against the original genuine intent of simplification to motivate the performance of the supplier. Another respondent recommended adopting the revisions to the DFARS proposed in DFARS Case 2017-D019 that implement section 831, while disregarding those changes that were outside the scope of section 831.

One respondent stated that when DoD issued the proposed rule under DFARS case 2017-D019, DoD explained that the proposed rule would “relieve the administrative burden on contractors” by deleting the current regulations relating to performance-based payments at DFARS subpart 232.10 and the associated clauses at DFARS 252.232-7012 and 252.232-7013. This respondent recommended that DoD should repeal in their entirety the current DFARS regulations related to PBPs and the associated clauses, and any associated Procedures, Guidance, and Information (PGI), because existing FAR regulations are sufficient.

Response: It is the intent of this rule to implement section 831 of the NDAA for FY 2017. The prior DFARS Case 2017-D019 presented a cohesive approach to contract financing, in order to increase DoD's business effectiveness and efficiency as well as to provide an opportunity for both small and other than small entities to qualify for increased customary progress payment rates and maximum performance-based payment rates, based on whether the offeror/contractor has met certain performance criteria. The provisions of that rule were interdependent upon each other, and DoD cannot segregate out specific aspects of that rule in the absence of the criteria that were intended to motivate performance.

In response to the comment that DoD should repeal in their entirety the current DFARS regulations relating to performance-based payments, DoD does not consider this to be in the best interest of DoD or of contractors. DFARS coverage, as modified by this final rule, provides needed clarification and also provides flexibility with regard to security for performance-based payments. The following discussion will address more specific concerns about the proposed rule.

Many respondents stated that DoD should clearly establish PBPs as the default choice for contract financing.

a. Benefits of performance-based payments.

Comment: Several respondents particularly emphasized the benefits of PBPs. These respondents stated that PBPs better align the interests of the Government and the contractors. According to these respondents, by effectively attributing the payments to the work performance, rather than just costs incurred, the Government receives tangible product deliverables and the contractor receives cash payment tied to performance, which encourages the timely execution of the contract. One respondent stated that PBPs may reduce costs for Government oversight and compliance, encourage nontraditional and small business entities to enter the Federal marketplace, and facilitate contractor financing and performance of contracts.

Response: DoD agrees that appropriate use of PBPs has benefits. This rule is consistent with the statutory preference for PBP; however, the Government reserves the right to determine the best option for contract financing based on the individual contract action. Due to the evaluation criteria required to determine whether PBP is the best method of contract financing, DoD will not direct that PBP is the default choice for contracts.

b. Eliminate the requirement for two-step negotiation and consideration.

Comment: Although not addressed in the proposed rule, many respondents were concerned that the existing procedures at DFARS 232.1004 pose hindrances to the preference for PBPs. Specifically, many respondents were concerned about retention of the procedures at DFARS 232.1004, which require initial agreement on price using customary progress payments before negotiations begin on the usage of performance-based payments. One respondent stated that the two-step negotiation process is unjustifiably unique to DoD.

Furthermore, the DFARS currently requires negotiation of consideration to be received by the Government if the performance-based payments payment schedule will be more favorable to the contractor than customary progress payments. Two respondents stated that this process is counter to the system outlined in FAR 32.005(a). One of these respondents stated that performance-based payments are a program management tool, whereas progress payments simply reimburse contractors for costs incurred. Therefore, according to the respondent, comparing the payments schedule of one to the other is not an “apples-to-apples” comparison. Performance goals required by PBPs serve as additional requirements placed on the contractor that offset the payment schedule difference offered by PBPs compared to progress payments. Requiring additional consideration erodes the potential benefits of PBPs relative to the increased risk accepted by contractors, and undermines the policy objective to incentivize performance. Several respondents stated that DoD added this policy specifically to reverse the preference for PBPs.

Response: DoD has removed this requirement in the final rule (see DFARS 232.1004).

c. Eliminate or completely overhaul the PBP analysis tool.

Comment: Several respondents specifically recommended eliminating or completely overhauling the PBP analysis tool, which DoD developed to allow the contracting officer and industry to compare the financial cost and benefits of using PBPs versus customary progress payments. While one respondent acknowledged that slight changes have been made to improve the tool, the respondent still finds the “conceptual shortcomings” of DoD's policy unchanged. One respondent offered the following detailed criticisms of the PBP Tool:

• The tool assumes if there are costs in the first month of the program there will be a Progress Based Payment in the first month of the program. Invoices for PBP's are submitted after the end of the month and thus cannot be paid before about the middle of the 2nd month of the program. This flaw skews the results by assuming the contractor receives payment nearly a month before it is possible. The tool does not provide a mechanism for adjusting calculations based on specific contract requirements when such requirements impact payment lag time either positively or negatively.

• The PBP tool is intentionally structured to keep a contractor cash flow negative regardless of how well the contractor performs.

Response: The DoD tool takes into account a 22-day lag time between when expenditures occur and when progress payments are made. This accounts for the fact that all expenditures do not occur on the first day of a month or the last day. This is an industry average, and does not accommodate unique lag times by contract.

Contractors are supposed to have a positive investment in the effort. FAR 32.1004(b)(3)(ii) states that the contracting officer must ensure that PBPs are not expected to result in an unreasonably low or negative level of contractor investment in the contract.

Therefore, contracting officers are still required to use the PBP analysis tool to objectively measure both the benefits and risks of the PBP financing arrangement, and negotiate a mutually beneficial settlement position that reflects adequate consideration to the Government for the improved contractor cash flow. However, the PBP Tool has been revised to remove the cost limitation in accordance with this final rule.

a. Audited financial statement.

Comment: One respondent found the requirement to evidence compliance with Generally Accepted Accounting Principles (GAAP) through audited financial statements burdensome to the contractor.

Response: The requirement that the contractors compliance with GAAP must be evidenced through audited financial statements has been removed from the final rule.

b. Make language of rule mirror the statute.

Comment: One respondent was concerned that the proposed DFARS rule does not exactly mirror the statute when it requires that “the output of a contractor's accounting system” shall be in compliance with GAAP, whereas the statute requires “a contractor's accounting system” to be in compliance (or noncompliance) with GAAP.

Response: The wording of the statute is imprecise, because an accounting system cannot be in compliance with GAAP. Compliance with GAAP means that the financial statements are fairly presented, i.e., that the information contained within the financial statements complies with GAAP in all material respects. Therefore, in order to improve the clarity of the final rule, the requirement for compliance with GAAP in order to receive PBPs is now applied to “the contractor's financial statements” rather than “the output of the contractor's accounting system” (see 232.1003-70 and 252.232-7015).

c. Representation is unnecessary.

Comment: One respondent stated that the proposed representation at DFARS 252.232-7015 with regard to compliance with GAAP is unnecessary, since costs incurred have no bearing on the amounts billed under PBPs.

Response: The fact that incurred costs no longer have bearing on the amounts billed under PBPs has no relevance to the requirement for representation by the offeror that its financial statements are, or are not, in compliance with GAAP. Section 831, as codified at 10 U.S.C. 2307(b)(4), requires compliance with GAAP in order to receive performance-based payments. Providing a representation is one of the least burdensome ways to demonstrate compliance with GAAP.

Most respondents had objections to the continued requirement for reporting of incurred costs in the clauses at DFARS 252.232-7012 and 252.232-7013.

a. Requirement for Government-unique accounting system.

Comment: One respondent noted that 10 U.S.C. 2307 expressly states that the Secretary of Defense shall ensure that nontraditional defense contractors and other private sector companies are eligible for performance-based payments and that there shall be no requirements for a contractor to develop Government-unique accounting systems or practice as a prerequisite for agreeing to receive PBPs. Some respondents believed that retention of the requirement to report cumulative contract costs incurred to date, as a condition of receiving PBPs, imposes a requirement to develop a Government-unique accounting system, and therefore is inconsistent with 10 U.S.C. 2307(b)(4)(A), as amended by section 831. For example, one respondent stated that the cost reporting in the proposed rule would require a Government-unique job order cost accounting system to generate FAR- and DFARS-compliant cost reports.

Response: The reporting of incurred costs does not require a Government-unique cost accounting system. Systems that identify costs with the projects for which they are incurred (“job costing,” as a broad term) are not at all unique to Government requirements. It would be highly unlikely for a fiscally sound company to have no means of identifying the costs of performing a contract. Furthermore, the rule does not require any particular accounting system; rather, the rule states that “incurred cost is determined by the Contractor's accounting books and records.”

Comment: One respondent while expressing concern that the reporting requirement could be interpreted to require the submission of FAR part 31 compliant costs, stated that costs generated by a GAAP-compliant system should be sufficient to provide DoD with data necessary for negotiation of PBPs in future contracts. This respondent recommended clarification that a contractor may report costs from its GAAP-compliant system, adjusted by a decrement factor to reflect estimated unallowable costs as appropriate.

Response: The clauses in the final rule have been revised to specify that if the Contractor's accounting system is not capable of tracking costs on a job order basis, the Contractor shall provide a realistic approximation of the allocation of incurred costs attributable to this contract in accordance with the Contractor's accounting system.

DoD considers that it would constitute excessive risk to the Government and would be an impediment to issuing financing payments to a company if that company is unable to comply with this requirement, even when it is properly understood that this clause does not require a “Government-unique” accounting system. To the extent that a company is unable to report the costs of performance at all, relying on its own accounting books and records, this will make it impossible for the Government to have any confidence that complete performance of the contract is assured, or that the negotiated events “reflect prudent contract financing” (FAR 32.1004(b)(2)(i)) and do not “result in an unreasonably low or negative level of contractor investment in the contract” (FAR 32.1004(b)(3)(ii)).

b. Disincentive to use of PBPs, rather than a preference.

Comment: One respondent stated that nontraditional entities may be disinterested in expending time and resources to implement business systems to collect and report costs on a contract basis, which are beyond the system necessary to comply with GAAP. Similarly, another respondent stated that the requirement to report incurred costs undermines the stated preference for PBPs, could deter contractors from pursuing PBPs because contractors with only fixed-price contracts are unlikely to track costs on a contract-by-contract basis, and effectively would require many contractors to add business and compliance systems if they were to pursue PBPs. They suggest that this is therefore contrary to the statutory preference at 10 U.S.C. 2307 for PBPs as a means of financing.

Response: If the contractor's financial statements are in compliance with GAAP, it is likely that the contractor, even a nontraditional defense contractor, will have some means of providing a realistic approximation of the allocation of incurred costs. While it is possible that some contractors will have no such system at all, rather than only no “Government-unique” system, DoD does not believe it is reasonable, necessary, or the intent of Congress, to issue Government financing when the recipient has no such visibility over its costs.

c. Unnecessary and irrelevant.

Comment: Most respondents contended that the requirement to report incurred costs was unnecessary. For example, one respondent stated that the Government should recognize the limits of the cost data collected when using it to inform negotiations on future contracts utilizing PBPs. This respondent contended that collecting costs incurred at each milestone payment represents an incomplete picture of total costs incurred by a contractor to complete a project. According to the respondent, at least 10 percent of the contract costs are incurred between the last PBP milestone payment and the end of the program. Additionally, there are other factors such as rate adjustments which later affect the total costs incurred.

Another respondent stated that there is no need to use a comparison of a prior contract's PBP values and incurred costs in the negotiation of future contracts' PBP values.

Many respondents stated that what happened on the prior contract is simply not relevant to negotiation of the current contract's PBP event values. One respondent noted that a requirement to use information on incurred costs is not found in the DoD User's Guide to performance-Based Payments, nor is it found in the current (or proposed) DFARS language, nor is it found in the current PGI associated with PBPs. Several respondents also pointed out that because these are firm-fixed-price contracts, neither the contractor nor the Government have a need to track contract costs or report them in the manner required by the proposed rule.

Response: It would not be appropriate to collect this information on incurred costs as a means to condition payment of the current PBP events on incurred costs. The events are negotiated in advance of performance, and will not be changed merely on the basis of incurred costs. However, aside from the value to Government negotiators of being able to evaluate current proposals for PBP milestone values against past experience, it remains important for the Government to know the risk it is incurring when it makes payments that may be disproportionate to the contractor's investment in contract performance. That is why the amounts assigned to PBP events must be “commensurate with the value of the performance event or performance criterion” (FAR 32.1004(b)(3)(ii)). DoD does not believe that Congress was unconcerned with ensuring some degree of accountability; if it had been, there would have been no purpose to the statutory requirement that “in order to receive performance-based payments, a contractor's accounting system shall be in compliance with Generally Accepted Accounting Principles.”

d. Use of incurred cost data in negotiations.

Comment: One respondent was concerned that use of prior incurred costs in negotiation will create “never-ending discussions, allowing an excuse to prime contractors and contracting officer to delay payments and requiring in any case the burden on data collecting, validating, etc. on both the Supplier and the Buyer.” This respondent also raised the issue of how data on incurred costs will be stored and managed and who will have access to the database created with these costs. The respondent questioned how the contracting officer will be able to find applicable previous cases.

Response: In accordance with FAR 15.403-3(b), the contracting officer may require data other than certified cost or pricing data to support a determination of a fair and reasonable price. In negotiations, one way to ensure a fair and reasonable price is through the use of various price analysis techniques and procedures to include a comparison of proposed prices to historical prices ( i.e., incurred costs) paid for the same or similar items. Use of prior incurred costs in negotiations are not meant to create “never-ending” discussions, but to facilitate negotiation of a fair and reasonable price for all concerned parties. The requirement to provide incurred cost data is not a new requirement, and this data has been available for use in negotiations for many years. As with any sensitive information, all incurred cost data will be maintained in the official contract file for official use only. There is no intent to create a new database.

Comment: Two respondents addressed the requirement in FAR 52.232-32(f) that the Government take title to work in progress immediately upon the date of the receipt of a PBP payment.

Two respondents stated that the requirement for title conflicts with 10 U.S.C. 2307(b)(4)(A), which states that in order to receive performance-based payments, a contractor's accounting system shall be in compliance with GAAP, and there shall be no requirement for a contractor to develop Government-unique accounting systems or practices as a prerequisite for agreeing to receive performance-based payments. According to the respondents, because many GAAP-compliant accounting systems are unable to isolate the work in process associated with a particular unit from the rest of the supply chain until delivery, requiring a contractor to deliver title to such goods is therefore de facto requirement for a Government-unique accounting system.

One respondent also stated that requiring title to work in process immediately upon receipt of a PBP payment represents bad policy. According to the respondent, allowing contractors to aggregate component purchases across multiple contracts can reduce costs and improve schedules. To maximize this flexibility, contractors need to be able to reallocate common parts between contracts based on customer needs and vendor availability. This benefits DoD.

Two respondents pointed out that DoD has existing flexibility in 10 U.S.C. 2307(d) to accept alternate forms of security for PBPs instead of taking title. According to these respondents, such alternate forms of security are common in the commercial marketplace, and allowing contractors without Government-unique accounting systems to provide an alternate form of security is the only way to implement the mandate from Congress to open PBP access to all contractors with GAAP-compliant systems.

Response: While title to the property described in paragraph (f) of the clause at FAR 52.232-32, Performance-Based Payments, is the preferred security for receipt of progress payments, the final rule (DFARS 252.232-7012 and 252.232-7013) addresses the concerns and comments expressed concerning title by allowing the use of other forms of security if the contractor's accounting system is not capable of identifying and tracking through the build cycle the property that is allocable and properly chargeable to the contract.

Comment: Two respondents stated that the DFARS does not define “nontraditional defense contractor” and recommended inclusion in the DFARS of the definition at 10 U.S.C. 2302(9).

Response: The definition of “nontraditional defense contractor” at 10 U.S.C. 2302(9) is incorporated in the DFARS at 212.001. However, since the term is now used in part 232, this final rule moves the definition from DFARS 212.001 to DFARS 202.101, so that the definition is applicable throughout the DFARS.

Comment: One respondent recommended revision to the proposed rule to provide clarity on the financial ceiling of 90 percent provided for in the FAR. According to the respondent, the DFARS should clearly state that performance-based payments will be based on a percentage of price, and that the ceiling for the basis will be 90 percent (FAR 32.1004(b)(2)(ii)).

Response: The DFARS does not restate the 90 percent ceiling that is already stated in FAR 32.1004(b)(2)(ii) and doing so is unnecessary because the DFARS supplements the FAR. Further, performance-based payments are not based on a percentage of price. The bases for performance-based payments are clearly defined in FAR 32.1002.

Comment: One respondent recommended that the final rule should clarify in the DFARS that a PBP payment associated with a particular milestone should reflect the value of all work accomplished by the contractor at the time it meets the milestone. This is consistent with current guidance in the PBP Guide, but the respondent has still encountered widespread confusion. According to the respondent, clarifying this interpretation can reduce the administrative burden by allowing flexibility to choose fewer and more meaningful milestones.

Response: DoD has considered this comment and concludes that no further clarification is required in the final rule. The DoD Performance Based Payment Guide contains sufficient direction with regard to identifying PBP events, establishing completion criteria for PBP events, and establishing PBP event values. PBP events are established as representative milestones that may reflect the total effort needed to accomplish not only that particular milestone, but other activities through that timeframe; milestone events or criteria may be either severable or cumulative, and the contract should state which applies (FAR 32.1004(a)(2)). However, care must be taken to ensure that there is reasonable consistency in event valuation and that valuation of events is reflective of their relative value to the successful performance of the contract, so that the contractor's financial focus is in basic alignment with programmatic priorities.

Several respondents recommended additional training and guidance on PBPs to both program managers and contracting officers.

a. PBP process.

Comment: One respondent recommended training on the PBP milestone process because the respondent has encountered reluctance on the part of the Government due to lack of experience in use of PBPs and concern for administrative burden on the Government. Another respondent noted that establishing proper milestones requires an understanding of what it takes to perform the contract and how much it will cost. However, it also requires understanding of how businesses operate and why they need certain funding when they do. Therefore, the respondent recommended guidance and training to procurement personnel on how to reach the proper balance between DoD and contractor needs.

Response: Each DFARS case is reviewed for training requirements/changes to current Defense Acquisition University training. In addition to the Continuing Learning Course (CLC 026), Performance Based Payment Overview, the Performance Based Payment Guide, and Guide for Performance Based Service Acquisitions, courses in the Contracting and Program Management curriculum contain appropriate information on PBPs to align with course goals. The changes in the DFARS will prompt changes in the guides and course to ensure the workforce understands the processes.

b. Cash flow.

Comment: One respondent recommended guidance to contracting officers that a slightly positive cash flow is acceptable and encouraged, since it further incentivizes performance. Another respondent when addressing training also noted that limiting reasonable cash flow to contractors may result in deferring expenditures, which could result in late delivery.

Response: FAR 32.1004(b)(2)(i) states that performance-based payments shall reflect prudent contract financing provided only to the extent needed for contract performance, and FAR 32.1004(b)(3)(ii) states that the contracting officer shall ensure that performance-based payment amounts are commensurate with the value of the performance event or performance criterion and are not expected to result in an unreasonably low or negative level of contractor investment in the contract. DoD is not trying to limit reasonable cash flow with this rule as it does not differ from FAR 32.1004 (b)(2)(ii) which limits contract financing to 90% of price. Any training provided will be done so in accordance with the rules in the FAR and DFARS.

Comment: One respondent recommended that DoD should consider making PBPs available to commercial item contracts that are large in terms of scope and dollar value when the contractor needs early funding of the facilities, equipment, supplies and the like for performance. The respondent requested that DoD should provide guidance for such use of PBPs.

Response: The law contemplates the use of financing similar to performance based payments on commercial item as well as other contracts. However, it also requires that payments for commercial items “be made under such terms and conditions as the head of the agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the United States” (10 U.S.C. 2307(f)(1)). It is impossible to specify in the DFARS what specific terms and conditions for PBPs “are appropriate or customary in the commercial marketplace,” since we assume they may vary widely depending on the marketplace for the kind of supply or service item being purchased. For this reason, the FAR and DFARS do not provide further detailed guidance other than what is already prescribed in FAR 32.2 and DFARS 232.2, “Commercial Item Purchase Financing.”

This rule amends the clauses at DFARS 252.232-7012 and 252.232-7013 and adds a new provision at DFARS 252.232-7015, Performance-Based Payments—Representation. These clauses and provision do not apply to contracts at or below the simplified acquisition threshold or for the acquisition of commercial items. In accordance with 10 U.S.C. 2307(f) and 41 U.S.C. 4505, FAR 32.201 provides that payment for commercial items may be made under such terms and conditions as the agency head determines are appropriate or customary in the commercial marketplace and are in the best interest of the United States. Furthermore, FAR 32.202-1 states that Government financing of commercial purchases is expected to be different from that used for noncommercial purchases. While the contracting officer may adapt techniques and procedures from the noncommercial subparts for use in implementing commercial contract financing arrangements, the contracting officer must have a full understanding of effects of the differing contract environments and of what is needed to protect the interests of the Government in commercial contract financing.

This rule amends the DFARS to implement changes to performance-based payment policies for DoD contracts by amending the policy on performance-based payments at DFARS 232.1001 and amending the clauses at DFARS 252.232-7012, Performance-Based Payments—Whole Contract Basis, and 252.232-7013, Performance-Based Payments—Deliverable Item Basis.

This rule may benefit contractors who receive contract financing from the Government in the form of performance-based payments. Performance-based payments do not apply to—

• Payments under cost-reimbursement line-items;

• Contracts awarded under the authority of FAR part 12 or part 13;

• Contracts for architect-engineer services or construction, or for shipbuilding or ship repair, when the contract provides for progress payments based upon a percentage or stage of completion.

Performance-based payments are tied to the achievement of specific, measurable events or accomplishments that are defined and valued in advance by the parties to the contract. Total performance-based payments cannot exceed 90 percent of the contract price.

This rule removes the DFARS restrictions that limit performance-based payments to amounts not greater than costs incurred up to the time of payment.

If performance-based payments to the contractor based on the negotiated value of completed milestone events are allowed to exceed the total costs incurred up to the time of payment, the cost to the contractor of short-term borrowing will decrease and the cost to the Government of borrowing will increase.

In addition, there is a minimal cost to offerors and the Government related to a new provision at DFARS 252.232-7015, Performance-Based Payments—Representation, which requires each offeror responding to a solicitation that may result in a contract providing performance-based financing to represent whether the offeror's financial statements are in compliance with Generally Accepted Accounting Principles.

This final rule includes additional amendments in response to industry feedback on the proposed rule, which are described in section II.A. of this preamble. In particular, one of the amendments provides alternative forms of security, in lieu of the requirements of paragraph (f) of the clause at FAR 52.232-32. The amendment to the rule will facilitate the use of performance-based payments by contractors that may not have accounting systems designed for FAR part 15 cost-reimbursement work, and contractors without job-cost accounting systems that can associate work in progress with a specific contract. One company expressed support for this specific amendment at an E.O. 12866 meeting on the final rule.

DoD has performed a regulatory cost analysis on this rule. The following is a summary of the estimated public cost savings and Government costs in millions calculated in perpetuity in 2016 dollars at a 7-percent discount rate:

To access the complete Regulatory Cost Analysis, go to the Federal eRulemaking Portal at www.regulations.gov, search for “DFARS Case 2019-D002,” click “Open Docket,” and view “Supporting Documents.”

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

This rule is an E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, deregulatory action. We estimate that this rule generates $1.4 million in annualized cost savings, discounted at 7 percent relative to year 2016, over a perpetual time horizon. Details on the estimated cost savings can be found in section IV. of this preamble.

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

This rule implements section 831 the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which amends 10 U.S.C. 2307 to address the use of performance-based payments. The primary objective of this rule is to remove the restrictions at DFARS 232.1001(a) and the clauses at 252.232-7012(b)(i) and 252.232-7013(b)(i) that limit performance-based payments to amounts not greater than costs incurred up to the time of payment, as required 10 U.S.C. 2307.

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

This rule will apply to approximately 55 small entities per year that are awarded contracts that provide performance-based contract payments from DoD.

This rule adds a reporting requirement that will require an entry in the annual representations and certifications with regard to whether the offeror's financial statements are in compliance with Generally Accepted Accounting Principles. DoD estimates that the skill necessary for this requirement is at the journeyman level and that each entry will require an average of 6 minutes.

This rule will not have a significant economic impact on small entities. There are no significant alternatives consistent with the stated objectives of the statute.

This rule affects the information collection requirements at DFARS subpart 232.10 (and associated clauses at DFARS 252.232-7012 and 252.232-7013, currently approved under OMB Control Number 0704-0359, DFARS Part 232, Contract Financing. The impact, however, is negligible, because only the last three lines of the table are deleted, which do not impose the predominance of the burden. This rule also adds a new information collection requirement that has been approved by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). This information collection requirement has been assigned OMB Control Number 0750-0001, entitled “Defense Federal Acquisition Regulation Supplement (DFARS), Performance-Based Payments—Representation.”

Therefore, 48 CFR parts 202, 204, 212, 232, and 252 are amended as follows:

I. Background

DoD published a proposed rule in the Federal Register at 84 FR 58362 on October 31, 2019, to modify DFARS clause 252.207-7002, Payment for Subline Items Not Separately Priced, to conform the text of the clause to the current contract line item structure terminology by replacing “contract line item” with “contract line or subline item” and add a prescription for the DFARS clause in the applicable section of DFARS 204.71. No public comments were received in response to the proposed rule. No changes are made in the final rule from the proposed rule.

This rule does not create any new provisions or clauses. The rule updates language used in the clause text to conform with current contract line item structure terminology. This rule does not change the applicability of the affected clause.

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

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

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

The Department of Defense is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to modify the text of DFARS clause 252.204-7002, Payment for Subline Items Not Separately Priced, to simplify and conform the clause text to current Government contract line item structure terminology.

The objective of this rule is to clarify the intent of the clause for contractors, when submitting invoices under contracts that contain items that are not separately priced. The modification of this DFARS clause supports a recommendation from the DoD Regulatory Reform Task Force. No public comments were received in response to the initial regulatory flexibility analysis.

Based on an average of data for fiscal year 2016 through 2018 from the Federal Procurement Data System and Electronic Document Access, DoD awards approximately 12,435 contracts annually that includes the DFARS clause 252.204-7002. Of the 12,435 awards, approximately 4,924 contracts (40%) are awarded to 1,564 unique small business entities. Based on the available data and the objective of the rule, DoD does not anticipate that this proposed rule will significantly impact small business entities. This rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses. This rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known significant alternative approaches to the rule that would meet the stated objectives.

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

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

I. Background

DoD published a proposed rule in the Federal Register at 84 FR 25225 on May 31, 2019, to implement section 852 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232). Section 852 provides for accelerated payments to DoD contractors that are small businesses and to small business subcontractors by accelerating payments to their prime contractors. Thirteen respondents submitted public comments in response to the proposed rule.

DoD reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments is provided, as follows:

This final rule adds a definition of “accelerated payment” to the clause at DFARS 252.232-7017, Accelerating Payments to Small Business Subcontractors—Prohibition on Fees and Consideration. The definition specifies that accelerated payments are made as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.

Comment: Most respondents expressed support for the proposed rule.

Response: DoD acknowledges the respondents' support.

Comment: One respondent expressed overall support for the proposed rule if the rule ensures all large business prime contractors are required to pay their subcontractors within 15 days of receiving an invoice from their small business subcontractors, regardless of whether the prime has been paid by the Federal Government. Another respondent suggested an authority to enforce, and a forum to address, grievances for payments from the Government that are past due.

Response: This final rule incorporates the statutory language of section 852 of the NDAA for FY 2019, as implemented via 10 U.S.C. 2307, which establishes the 15-day timeframe as a goal, rather than a firm deadline. The rule provides for prime contractors to make accelerated payments to small business subcontractors after receipt of payment from the Government because a prime contractor who subcontracts with small businesses could be a small business itself. Federal Acquisition Regulation (FAR) subpart 32.9 implements the statutory requirements concerning required documentation for invoice and acceptance, the establishment of payment due dates, and the payment of late payment interest penalties after the due date established under the Prompt Payment Act ( e.g., 30 days). DoD payment offices must adhere to these requirements and make payments as quickly as possible, to the fullest extent permitted by law.

Concerning the respondent's suggestion regarding a forum to address late payments, as prescribed in 5 CFR 1315.18, questions concerning delinquent payments should be directed to the designated agency office, or the office responsible for issuing the payment if different from the designated agency office. Questions about disagreements over payment amount or timing should be directed to the contracting officer for resolution. Small business concerns may obtain additional assistance on payment issues by contacting the agency's Office of Small Business Programs.

Comment: One respondent suggested that the rule could be improved by also imposing an interest penalty on all small business invoices submitted to the prime contractor that are not paid within 15 days of receipt. Another respondent recommended an authority for the Government to pay interest penalties to both contractors when invoices are past due.

Response: Section 852 does not provide for interest penalties to be paid by the prime contractor for late payments to a subcontractor. Therefore, this final rule does not impose interest penalties beyond those implemented in FAR subpart 32.9 under the Prompt Payment Act. The subcontract between the prime contractor and the subcontractor is a business arrangement between two private parties, and therefore Prompt Payment Act interest penalties do not apply.

Comment: Two respondents expressed a preference for the proposed rule to mandate prompt payment instead of making it a goal, however, they commended the DoD proposal to revise the DFARS to implement section 852 of the NDAA for FY 2019 to pay small businesses within 15 days, rather than the current 30-day standard. It is viewed as an important first step for DoD small business contractors. Two other respondents stated that FAR 52.232-40 does not provide for the 15-day payment goal “to the fullest extent permitted by law,” which creates a conflict with the specific 15-day goal that section 852 directs DoD to adopt. One of the respondents recommends a new DFARS prescription and contract clause to supplement FAR 52.232-40 be added that provides for the 15-day payment goal “to the fullest extent permitted by law.” The respondent supports the revision to DFARS 232.903 to comport with the provisions of section 852 with respect to small business prime contractors.

Response: DoD recognizes the respondents' preference to mandate payment within 15 days instead of making it a goal; and agrees that the goal is an important step for small business contractors working with the DoD. DoD also affirms support for the revision to DFARS 232.903 to implement the provisions of section 852.

Regarding a conflict with the FAR, this final DFARS rule provides details to supplement, rather than conflict with, the requirements of FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors. The rule relies on the FAR clause and the DFARS clause at 252.232-7017, used together in a contract, to communicate to prime contractors the requirements concerning accelerated payments. See section III of this preamble for a more detailed explanation of how the clauses are used together. DoD agrees that it is important to clarify what constitutes an accelerated payment from a prime contractor to a small business subcontractor in the context of this DFARS rule. Therefore, the final rule revises the clause at DFARS 252.232-7017 to define “accelerated payment” as a payment made to a small business subcontractor as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.

Comment: One respondent suggested that the definition of small business subcontractors be clarified for the purposes of accelerated payments as those that are directly supporting or charged to a DoD contract in which the prime contractor is receiving accelerated payments ( i.e., not those supporting indirect, commercial, or foreign efforts by the prime contractor).

Response: This final rule does not provide a definition of “small business subcontractor.” This term is defined at FAR 2.101. The definition provided in the FAR applies to the DFARS, including this rule.

Comment: One respondent suggested that the heading to DFARS 232.009 be changed to read “Providing accelerated payments to small business contractors and small business subcontractors” because DFARS 232.009-1 adds coverage for both small business and small business subcontractors. In addition, the respondent suggested that the term “small business primes” in both DFARS 232.009 and DFARS 232.009-1 would be clearer than “small business contractor”.

Response: The final rule does not include the respondent's suggested edits. Revising the heading of DFARS 232.009 as suggested would create a disconnect with the title of the new contract clause prescribed in this section. In addition, DFARS 232.009 is numbered to correspond to FAR 32.009, which addresses the same subject matter. This drafting convention allows contracting officers to locate more easily coverage of similar topics in the FAR and DFARS. It is not necessary to add “prime contractors” to the heading because, in the FAR and DFARS, the term “contractor” means the prime contractor.

Comment: One respondent stated that section 852 addresses two types of accelerated payments, but noted both are applicable to DoD only. The first type addresses payments to small business prime contractors; the second type addresses payments to any DoD prime contractor that subcontracts with small businesses. The respondent indicated a preference for both types of accelerated payments to be made applicable governmentwide. The respondent also stated that, at a minimum, the rule should acknowledge the governmentwide application of making accelerated payments to small business prime contractors, as provided for in FAR clause 52.232-25, Prompt Payment.

Response: DoD affirms the respondent's statement that section 852 of the NDAA for FY 2019 applies to DoD only. As such, this final DFARS rule will be applicable to DoD only. DoD notes, however, that FAR Case 2020-007, Accelerated Payments Applicable to Contracts with Certain Small Business Concerns, is in process to implement section 873 of the NDAA for FY 2020, which modifies 31 U.S.C. 3903(a) to require accelerated payments for small business prime contractors and prime contractors that subcontract with small business concerns.

Comment: One respondent expressed concern that the rule could be improved by defining what constitutes a small business.

Response: The FAR defines “small business concern” in subpart 2.1, Definitions. The definition of “small business concern” in the FAR applies throughout the DFARS, including to this rule.

Comment: One respondent commented on DoD's inability to estimate the number of small business subcontractors who have been required to pay fees or provide consideration in return for accelerated payments from prime contractors, or the dollar value of these fees or consideration. The respondent asked if it was feasible to survey a sample of subcontractors to DoD prime contractors regarding the average fees paid to the prime contractors, and use that data to estimate fees paid by subcontractors to DoD prime contractors in general. The respondent also asked if the contractors could be sorted by size ( i.e., small, medium, and large), with an average fee for each size contractor, to find a weighted average number of contractors and fee.

Response: Resources are not available for a survey such as the respondent suggested. DoD does not have any data on which to base an estimate of the number of subcontractors required to pay fees or provide consideration to the prime contractor in return for accelerated payments, or the dollar value of the fees or consideration. Public comments did not provide insight into whether small business subcontractors had been required to pay fees or provide consideration for accelerated payments, or the dollar value of such fees or consideration.

Comment: One respondent expressed concern that the initial regulatory flexibility analysis prepared for the proposed rule lacked adequate information to allow small businesses to determine the impact of the rule.

Response: See section VII. of this preamble.

This final rule adds a reference to the statute (10 U.S.C. 2307(a) to the instruction at DFARS 212.301(f)(xiii)(G) for use of the clause at DFARS 252.232-7017 in commercial item acquisitions. In the contract clause, this final rule adds a new paragraph (a) to provide a definition for “Accelerated payment” also adds the paragraph heading of “Subcontracts” to paragraph (c).

Current DoD policy, as stated in DFARS 232.903, is to pay small business contractors as quickly as possible after receipt of invoices and proper documentation. This rule specifies that DoD will provide payment as quickly as possible, to the fullest extent permitted by law, with a goal of 15 days after receipt of proper invoices and documentation, and before normal payment due dates. For items that ordinarily require payment in less than 15 days ( e.g., perishable food), DoD will provide payment as quickly as possible after receipt of proper invoices and documentation, and before the normal payment due date.

With few exceptions, DoD will provide accelerated payments to small business contractors and to prime contractors that agree to provide accelerated payments to their small business subcontractors without further consideration or fees. DoD will not be able to provide accelerated payments to prime contractors if such payments would result in a violation of the Antideficiency Act. An example would be a lapse in appropriated funds.

This final DFARS rule relies on a FAR clause and a DFARS clause, used together in a contract, to—

(1) Communicate to the prime contractor the requirement to provide accelerated payments to small business subcontractors; and

(2) Obtain the prime contractor's agreement, by signature of the contract, to provide accelerated payments without requiring further consideration from, or charging fees to, the small business subcontractor.

DoD contracting officers do not use the DFARS in isolation; they use the DFARS together with the FAR. The FAR currently requires contracting officers to insert the clause at FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors, in solicitations and contracts. This final DFARS rule will require DoD contracting officers to insert the new DFARS clause 252.232-7017, Accelerating Payments to Small Business Subcontractors—Prohibition on Fees and Consideration, in solicitations and contracts that include FAR 52.232-40. This means both clauses will be included in DoD contracts.

The FAR clause and the DFARS clause will work together to require accelerated payments to small business subcontractors when DoD provides accelerated payments to the prime contractor. FAR 52.232-40 currently requires prime contractors to provide accelerated payments to their small business subcontractors when the Government provides accelerated payments to the prime contractors. DFARS clause 252.232-7017 defines “accelerated payment” as “a payment made to a small business subcontractor as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.” By using both clauses together in a contract, this final DFARS rule requires a prime contractor who receives an accelerated payment from the Government to pay its small business subcontractors as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.

DoD estimates that 40,282 contractors (including 30,498 small businesses) will receive accelerated payments each year, based on data obtained from the Federal Procurement Data System (FPDS) and input from subject matter experts from the Defense Finance and Accounting Services and the Office of the Under Secretary of Defense (Comptroller). Specifically, DoD awarded contracts to an average of 40,689 unique entities (including 30,806 small businesses) each year from FY 2016 through FY 2018. Subject matter experts estimated that DoD would not provide accelerated payments to approximately 1 percent of these contractors (407, including 308 small businesses) because such payments could result in a violation of the Antideficiency Act ( e.g., during a lapse in appropriated funds). Therefore, approximately 40,282 contractors (including 30,498 small businesses) per year would receive accelerated payments.

DoD estimates that there were approximately 9,483 small business subcontractors on DoD prime contracts in FY 2018, based on data from USASpending.gov cross-referenced with size representations for DoD contracts. DoD further estimates that approximately 1 percent (95) small business subcontractors may not receive accelerated payments because DoD was not able to provide accelerated payments to the prime contractor (see the previous paragraph).

This rule prohibits contractors from requiring any further consideration from, or charging fees to, their small business subcontractors when making accelerated payments. This prohibition would benefit small business subcontractors who have been required to provide consideration or pay fees to the prime contractor in order to receive accelerated payments. Any costs for prime contractors to implement the prohibition on fees and consideration are expected to be de minimis since DoD expects that only a small number of contractors have required such consideration or fees from their small business subcontractors.

As noted in a preceding paragraph, DoD estimates there were approximately 9,483 small business subcontractors on DoD prime contracts in FY 2018. It is not possible for DoD to estimate how many of these small business subcontractors may have been required to provide consideration or pay fees to the prime contractor in order to receive accelerated payments, nor is it possible to estimate the dollar value of the consideration provided or fees paid. Despite a request for comments on this specific topic, DoD received no information from the public that would inform these estimates. If any small business subcontractors have been required to provide consideration or pay fees in return for accelerated payments, the prohibition on such consideration or fees could result in cost savings. However, if no small business subcontractors have been required to provide consideration or pay fees, there would be no cost savings as a result of this rule.

This rule applies the requirements of section 852 of the NDAA for FY 2019 to contracts at or below the simplified acquisition threshold (SAT) and to contracts for the acquisition of commercial items, including commercially available off-the-shelf (COTS) items.

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

Given that the requirements of section 852 of the NDAA for FY 2019 were enacted to provide accelerated payments to small business contractors and subcontractors, and since approximately 96 percent of DoD contracts are valued at or below the SAT, DoD has determined that it is in the best interest of the Federal Government to apply the rule to contracts at or below the SAT. An exception for contracts at or below the SAT would exclude contracts intended to be covered by the law, thereby undermining the overarching public policy purpose of the law.

10 U.S.C. 2375 governs the applicability of laws to DoD contracts and subcontracts for the acquisition of commercial items, including COTS items, and is intended to limit the applicability of laws to contracts and subcontracts for the acquisition of commercial items, including COTS items. 10 U.S.C. 2375 provides that if a provision of law contains criminal or civil penalties, or if the Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)) makes a written determination that it is not in the best interest of the Federal Government to exempt commercial item contracts, the provision of law will apply to contracts for the acquisition of commercial items. Due to delegations of authority from USD(A&S), the Principal Director, DPC, is the appropriate authority to make this determination.

Given that the requirements of section 852 of the NDAA for FY 2019 were enacted to provide accelerated payments to small business contractors and subcontractors, and since more than half of DoD's contractors are small businesses providing commercial items, including COTS items, DoD has determined that it is in the best interest of the Federal Government to apply the rule to contracts for the acquisition of commercial items, including COTS items, as defined at FAR 2.101. An exception for contracts for the acquisition of commercial items, including COTS items, would exclude the contracts intended to be covered by the law, thereby undermining the overarching public policy purpose of the law.

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

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

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

This final rule is necessary in order to amend the DFARS to implement section 852 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232). Section 852 provides for accelerated payments to DoD contractors that are small businesses and to small business subcontractors by accelerating payments to their prime contractors. Specifically, section 852 requires DoD, to the fullest extent permitted by law, to establish an accelerated payment date for small business contractors, with a goal of 15 days after receipt of a proper invoice, if a specific payment date is not established by contract. For contractors that subcontract with small businesses, section 852 requires DoD, to the fullest extent permitted by law, to establish an accelerated payment date, with a goal of 15 days after receipt of a proper invoice, if—

(a) A specific payment date is not established by contract; and

(b) The contractor agrees to make accelerated payments to the subcontractor without any further consideration from, or fees charged to, the subcontractor.

The objective of the rule is to implement section 852 by providing accelerated payments to small business contractors and to small business subcontractors via accelerated payments to prime contractors.

DoD received comments from the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, which are summarized below:

(a) Number of subcontractors required to pay fees: DoD did not provide the number of small business subcontractors who have been required to provide consideration or pay fees in return for accelerated payments from prime contractors.

(b) Conclusion regarding cost savings: DoD concludes, without sound data, that the rule could result in cost savings because of the proposed prohibition on fees and consideration in return for accelerated payments.

(c) Conflict with FAR: The rule conflicts with FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors, which does not require payment within 15 days.

(d) Reason for not accelerating payment: According to DoD, subject matter experts have estimated that DoD would not provide accelerated payments to approximately 1 percent of contractors because such payments would put DoD at risk of a violation of law. DoD did not qualify these individuals as subject matter experts or provide the bases or assumptions that support their conclusions. DoD did not provide small businesses with information on what would constitute a violation of law that would result in DoD not providing accelerated payments to small businesses.

(e) Action plan when payments are not accelerated: The rule does not provide a sound action plan for small businesses who may be denied the legal right to accelerated payments.

DoD provides the following responses, including changes made to the final rule as a result of the comments:

(a) Number of subcontractors required to pay fees: DoD has no data on which to base an estimate of the number of small business subcontractors who have been required to pay fees or provide consideration to prime contractors in return for accelerated payments. In the proposed rule, DoD requested public comment on the topic of consideration or fees in return for accelerated payments. However, none of the public comments addressed this topic. Therefore, in the final rule DoD has provided a rough estimate of the number of small business subcontractors on DoD contracts. DoD estimates there were approximately 9,483 small business subcontractors on DoD contracts in FY 2018.

(b) Conclusion regarding cost savings: The conclusion that the rule could result in cost savings was based on a reasonable assumption that, if a small business was required to pay a fee in return for accelerated payments, and the rule prohibits that fee, then the small business will not be required to pay the fee in the future. If no small businesses have been required to pay a fee, then there would be no cost savings as a result of this rule. In the final rule, DoD has made this clarification in section III of the preamble for this final rule.

(c) Conflict with FAR: The rule provides details to supplement, rather than conflict with, the requirements of FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors. DoD agrees that it is important to clarify what constitutes an accelerated payment from a prime contractor to a small business subcontractor in the context of this DFARS rule. Therefore, the final rule revises the clause at DFARS 252.232-7017, Accelerating Payments to Small Business Subcontractors—Prohibition on Fees and Consideration, to clarify that “accelerated payment” means “a payment made to a small business subcontractor as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.” See paragraph (e) for an explanation of how the FAR clause and the DFARS clause will be used together to provide for accelerated payments to small business subcontractors.

(d) Reason for not accelerating payment: The estimate that 1 percent of contractors would not receive accelerated payments was based on DoD's expectation that this would be a rare occurrence. DoD's subject matter experts from the Defense Finance and Accounting Service and the Office of the Under Secretary of Defense (Comptroller) have provided clarification on the circumstances that could result in DoD not providing accelerated payments to small businesses. DoD would not be able to provide accelerated payments if such payments would result in a violation of the Antideficiency Act. An example would be a lapse in appropriated funds. DoD has made this clarification in section III of the preamble for this final rule.

(e) Action plan when payments are not accelerated: DoD's interpretation of section 852 of the NDAA for FY 2019 is that section 852 does not create a right to accelerated payments. It requires DoD, to the fullest extent permitted by law, to pay contractors on an accelerated basis, with a goal of 15 days. It also requires the prime contractor's agreement to provide accelerated payments without requiring further consideration from, or charging fees to, the small business subcontractor. As with any issue or concern related to payments, small businesses may seek assistance from the Office of Small Business Programs for DoD or for the DoD component that awarded the prime contract. This final DFARS rule relies on a FAR clause and a DFARS clause used together in a contract to—

(i) Communicate to the prime contractor the requirement to provide accelerated payments to small business subcontractors; and

(ii) Obtain the prime contractor's agreement, by signature of the contract, to provide accelerated payments without requiring further consideration from, or charging fees to, the small business subcontractor.

DoD contracting officers use the FAR and DFARS together to award contracts, not one or the other in isolation. The FAR currently requires contracting officers to insert FAR 52.232-40 in solicitations and contracts. This final rule will require contracting officers to insert the new DFARS clause 252.232-7017 in solicitations and contracts that include FAR 52.232-40. This means both clauses will exist in DoD contracts and will work together to require accelerated payments to small business subcontractors when DoD provides accelerated payments to the prime contractor. FAR 52.232-40 currently requires prime contractors to make accelerated payments to their small business subcontractors upon receipt of accelerated payments from the Government. DFARS clause 252.232-7017 defines accelerated payment as “a payment made to a small business subcontractor as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.” By using both clauses together, this final DFARS rule requires a prime contractor who receives an accelerated payment from the Government to pay its small business subcontractors as quickly as possible, with a goal of 15 days or less after receipt of payment from the Government or receipt of a proper invoice from the subcontractor, whichever is later.

This rule applies to small businesses that are DoD prime contractors. According to data obtained from the Federal Procurement Data System, DoD awarded contracts to an average of 30,806 unique small entities each year from FY 2016 through FY 2018. DoD estimates that it may not be possible to provide accelerated payments to approximately 308 small business contractors (1 percent) because such payments would put DoD at risk of a violation of the Antideficiency Act ( e.g., during a lapse in appropriated funds). Therefore, approximately 30,498 small contractors per year would receive accelerated payments.

This rule also applies to small businesses that are subcontractors on DoD prime contracts. DoD estimates that there were approximately 9,483 small business subcontractors on DoD prime contracts in FY 2018, based on data from www. USASpending.gov cross-referenced with size representations for DoD contracts. DoD estimates that approximately 95 small business subcontractors (1 percent) may not receive accelerated payments because DoD was not able to provide accelerated payments to the prime contractor. With regard to the impact of the prohibition on fees or other consideration in return for accelerated payments, it is not possible for DoD to estimate how many of these small business subcontractors may have been required to provide consideration or pay fees to the prime contractor in order to receive accelerated payments.

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

There are no known, significant alternatives that would accomplish the objectives of the applicable statute.

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

Therefore, 48 CFR parts 212, 232, and 252 are amended as follows:

DoD published a proposed rule in the Federal Register at 84 FR 48512 on September 13, 2019, to modify DFARS clause 252.229-7001, Tax Relief, to incorporate the information included in DFARS clause 252.229-7000, Invoices Exclusive of Taxes or Duties. Combining these clauses results in DFARS clause 252.229-7000 being removed from the DFARS. The rule implements a recommendation of the DoD Regulatory Reform Task Force established under Executive Order (E.O.) 13777, “Enforcing the Regulatory Reform Agenda.”

No public comments were received in response to the proposed rule. No changes from the proposed rule are made in the final rule.

This rule does not create any new provisions or clauses. The rule combines two clauses into a single clause and does not change the applicability of the affected clauses.

E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 20, 1993. This rule is not a major rule as defined at 5 U.S.C. 804.

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

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

DoD is amending DFARS clause 252.229-7001, Tax Relief, to incorporate the information included in DFARS clause 252.229-7000, Invoices Exclusive of Taxes or Duties. Combining these clauses will result in DFARS clause 252.229-7000 being removed from the DFARS. The objective of this rule is to streamline DoD contract terms and conditions and contractor responsibilities pertaining to foreign taxes and duties. The modification of these DFARS clauses supports a recommendation from the DoD Regulatory Reform Task Force under E.O. 13771.

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

This rule is combines two existing clauses that address the same topic into a single comprehensive clause. These clauses apply to solicitations and contracts awarded to a foreign concern for contract performance in a foreign country.

This rule is not expected to impact small business entities because this rule only applies to foreign entities. The Small Business Administration (SBA) identifies a “small business” as a “a business entity organized for profit, with a place of business located in the United States, and which operated primarily within the United States or which makes a significant contribution to the U.S. economy through the payment of taxes or use of American products, materials, or labor” (13 CFR 121.102(a)). This rule only applies to foreign contractors, which do not meet the SBA definition of “small business” entities.

This rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses. This rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known significant alternative approaches to the rule that would meet the stated objectives. This rule is not expected to have a significant economic impact on small entities.

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

Therefore, 48 CFR parts 229 and 252 are amended as follows:

I. Background

DoD published a proposed rule in the Federal Register at 84 FR 58364 on October 31, 2019, to include the text of DFARS clause 252.232-7001, Disposition of Payments, in DFARS clause 252.232-7000, Advance Payment Pool, and then remove DFARS clause 252.232-7001 from the DFARS. Both clauses clarify the terms and conditions that apply when advance payment pool agreements are authorized under a contract. As such, these DFARS clauses can be combined to streamline and consolidate the information provided to contractors regarding advance payment pool agreements. No public comments were received in response to the proposed rule. No changes are made in the final rule from the proposed rule.

This rule does not create any new provisions or clauses. The rule combines two clauses on the same topic into a single clause and makes minor modifications to simplify clause text. This rule does not change the applicability of the affected clauses, which are not included in solicitations and contracts that are valued at or below the simplified acquisition threshold or for commercial items, including commercially available off-the-shelf items.

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

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

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

The Department of Defense is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to modify the DFARS clause 252.232-7000, Advance Payment Pool, to incorporate the information included in DFARS clause 252.232-7001, Disposition of Payments, and make minor changes to simplify the clause text. Combining these clauses will result in 252.232-7001 being removed from the DFARS. The objective of this rule is to streamline and consolidate the information provided to contractors regarding advance payment pool agreements. The modification of this DFARS clause supports a recommendation from the DoD Regulatory Reform Task Force. No public comments were received in response to the initial regulatory flexibility analysis.

This rule does not include any new reporting, recordkeeping, or other compliance requirements for small businesses. This rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known significant alternative approaches to the rule that would meet the stated objectives.

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

Therefore, 48 CFR parts 232 and 252 are amended as follows: