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

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This proposed rule falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed 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 proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, Far West spearmint oil handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate would be applicable to all assessable spearmint oil for the 2020-2021 marketing year, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such 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 no later than 20 days after the date of the entry of the ruling.

This proposed rule would increase the assessment rate from $0.10 per pound of Far West spearmint oil handled, the rate that was established for the 2019-2020 marketing year, to $0.14 per pound of Far West spearmint oil handled for the 2020-2021 and subsequent marketing years.

The Order authorizes the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members are familiar with the Committee's needs and with the costs of goods and services in their local area and are in a position to formulate an appropriate budget and assessment rate. The Committee discusses and formulates the assessment rate in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2019-2020 and subsequent marketing years, the Committee recommended, and USDA approved, an assessment rate of $0.10 per pound of Far West spearmint oil handled. That assessment rate would continue in effect from marketing year to marketing year unless modified, suspended, or terminated by USDA upon recommendation with information submitted by the Committee or other information available to USDA.

The Committee met on February 26, 2020, and unanimously recommended expenditures of $214,825 and an assessment rate of $0.14 per pound of Far West spearmint oil handled for the 2020-2021 and subsequent marketing years. In comparison, last year's budgeted expenditures were $272,850. The proposed assessment rate of $0.14 is $0.04 higher than the $0.10 rate currently in effect. The Committee recommended the assessment rate increase because expenditures have exceeded assessment revenue in the previous six marketing years and financial reserves have been reduced to approximately $87,468. The Committee believes that drawing from reserves to fund operations is not a sustainable strategy and that the previous assessment increase from $0.09 to $0.10 per pound of Far West spearmint oil handled, effective for the 2019-2020 and subsequent marketing years, was not sufficient to offset declining sales volume and increasing costs. The Committee projects expenses to exceed income by $63,525 if the assessment rate is left unchanged for the 2020-2021 marketing year. The Committee believes that the proposed assessment rate would allow the Committee to adequately balance budgeted expenses with projected income for the 2020-2021 and subsequent marketing years.

The major expenditures recommended by the Committee for the 2020-2021 marketing year include $169,000 for contracted administration by Ag Association Management, Inc., $26,025 for administrative expenses, $8,800 for Committee expenses, $6,500 for software/website maintenance, and $4,500 for market research and development projects. In comparison, major expenses for the 2019-2020 marketing year included $169,000 for contracted administration, $30,850 for administrative expenses, $15,000 for Committee expenses, $6,500 for software/website maintenance, and $13,000 for market research and development projects.

The Committee derived the recommended assessment rate by considering anticipated expenses, expected spearmint oil sales, and the amount of funds available in the authorized reserve. Income derived from handler assessments, calculated at $210,000 (1,500,000 pounds of spearmint oil × $0.14 per pound assessment rate), along with $1,300 in other income and $3,525 from reserve funds, would be enough to cover budgeted expenses of $214,825. Funds in the reserve (estimated to be $87,468 at the beginning of the 2020-2021 marketing year) would be kept within the maximum permitted by § 985.42(a) of the Order and would not exceed the Committee's operational expenses of one marketing year.

The assessment rate proposed in this rule would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although the modified assessment rate would be in effect for an indefinite period, the Committee would continue to meet prior to or during each marketing year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2020-2021 marketing year budget, and those for subsequent marketing years, would be reviewed and, as appropriate, approved by USDA.

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 proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

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

There are approximately 41 producers and 94 producers of Scotch and Native spearmint oil, respectively, in the regulated area and approximately 8 spearmint oil handlers subject to regulation under the Order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts of less than $1,000,000, and small agricultural service firms have been defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201).

The Committee reported that recent producer prices for spearmint oil range from $14.00 to $17.50 per pound. The National Agricultural Statistics Service (NASS) reported that the 2018 U.S. season average spearmint oil producer price per pound was $16.80. Multiplying $16.80 per pound by 2018-2019 marketing year spearmint oil utilization of 1,963,028 million pounds yields a crop value estimate of about $33.0 million. Total 2018-2019 marketing year spearmint oil utilization, reported by the Committee, was 717,952 pounds and 1,245,076 pounds for Scotch and Native spearmint oil, respectively.

Given the reporting requirements for the volume regulation provisions of the Order, the Committee maintains accurate records of each producer's production and sales. Using the $16.80 average spearmint oil price, and Committee production data for each producer, the Committee estimates that 38 of the 41 Scotch spearmint oil producers and 89 of the 94 Native spearmint oil producers could be classified as small entities under the SBA definition.

There is no third-party or governmental entity that collects and reports spearmint oil prices received by spearmint oil handlers. However, the Committee estimates an average spearmint oil handling markup at approximately 20 percent of the price received by producers. Multiplying 1.20 by the 2018 producer price of $16.80 yields a handler free on board (FOB) price estimate of $20.16 per pound.

Multiplying this estimated handler FOB price by spearmint oil utilization of 1,963,028 pounds results in an estimated handler-level spearmint oil value of $39.6 million. Dividing this figure by the number of handlers (8) yields estimated average annual handler receipts of about $5.0 million, which is well below the SBA threshold for small agricultural service firms.

Furthermore, using confidential data on pounds handled by each handler, and the abovementioned estimated handler price per pound, the Committee reported that it is not likely that any of the eight handlers had a 2018-2019 marketing year spearmint oil sales value that exceeded the $30 million SBA threshold.

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

This proposal would increase the assessment rate collected from handlers for the 2020-2021 and subsequent marketing years from $0.10 to $0.14 per pound of spearmint oil handled. The Committee unanimously recommended 2020-2021 expenditures of $214,825 and an assessment rate of $0.14 per pound of spearmint oil. The proposed assessment rate of $0.14 is $0.04 higher than the rate currently in effect. The Committee estimates that the industry will handle 1,500,000 pounds of spearmint oil during the 2020-2021 marketing year. Thus, the $0.14 per pound rate should provide $210,000 in assessment income. The Committee anticipates that income derived from handler assessments, along with $1,300 of other income and $3,525 from its reserve fund, will fully fund all budgeted expenses for the 2020-2021 marketing year. Furthermore, the Committee expects that assessment revenue will completely cover budgeted expenses for the 2021-2022 and subsequent marketing years.

The major expenditures recommended by the Committee for the 2020-2021 marketing year include $169,000 for contracted administration by Ag Association Management, Inc., $26,025 for administrative expenses, $8,800 for Committee expenses, $6,500 for software/website maintenance, and $4,500 for market research and development projects. Budgeted expenses for these items in the 2019-2020 marketing year were $169,000, $30,850, $15,000, $6,500, and $13,000, respectively.

The Committee recommended the assessment rate increase because expenditures have exceeded assessment revenue in the previous six marketing years and financial reserves have been reduced to approximately $87,468. The Committee believes that drawing from reserves to fund operations is not a sustainable strategy and that the previous assessment increase from $0.09 to $0.10 per pound of Far West spearmint oil handled was not sufficient to offset declining sales volume. The Committee projects expenses to exceed income by $63,525 if the assessment rate is left unchanged for the 2020-2021 marketing year. The Committee believes that the proposed assessment rate would allow the Committee to adequately balance budgeted expenses with projected income for the 2020-2021 and subsequent marketing years.

Prior to arriving at this budget and assessment rate, the Committee discussed various alternatives, including maintaining the current assessment rate of $0.10 per pound and increasing the assessment rate to a different amount. However, leaving the assessment rate unchanged would have required the Committee to deplete its financial reserve to a fiscally unsustainable level. Based on estimated shipments, the recommended assessment rate of $0.14 per pound of spearmint oil should provide $210,000 in assessment income. The Committee determined assessment revenue would be adequate to cover most of the budgeted expenditures for the 2020-2021 marketing year and all of the Committee's budgeted expenditures for subsequent marketing years. Moving forward, any excess funds would be used to replenish the Committee's monetary reserve. Reserve funds would be kept within the amount authorized in the Order.

A review of historical information and preliminary information pertaining to the upcoming marketing year indicates an average producer price of approximately $15.90-17.40 per pound of spearmint oil for the 2020-2021 season. Therefore, estimated assessment revenue for the 2020-2021 marketing year as a percentage of total producer revenue would be between 0.80 and 0.88 percent ($0.14 divided by $17.40 and $15.90, respectively).

This proposed action would increase the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs would be offset by the benefits derived by the operation of the Order.

The Committee's meetings were widely publicized throughout the Far West spearmint oil industry. All interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the February 26, 2020, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this action on small businesses.

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

This proposed rule would not impose any additional reporting or recordkeeping requirements on either small or large Far West spearmint oil handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: https://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.

A 30-day comment period is provided to allow interested persons to respond to this proposal.

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

As authorized under the Act, this proposed rule would add a new subpart D to 7 CFR part 1200—Rules of Practice and Procedure Governing Proceedings Under Research, Promotion, and Information Programs. Proposed subpart D would address procedures specific to the formulation of new programs under the Act.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

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

This proposed rule invites comments on the procedure to establish new research and promotion programs—or orders—under the Act. 7 U.S.C. 7413(b)(1)(B) authorizes associations of producers of an agricultural commodity or other individuals to petition USDA to establish a research, promotion, and/or information program with respect to that commodity. The purpose of such programs is to provide a framework for agricultural industries to pool their resources and combine efforts to develop new markets, strengthen existing markets, and conduct important research and promotion activities. See 7 U.S.C. 7411(b).

USDA's Agricultural Marketing Service (AMS) oversees these programs. With this proposed rule, AMS seeks to establish procedures for formulating new programs so interested parties are aware of the process and requirements.

Proposed § 1200.202(a) would provide that an industry association or individuals may file a written proposal for a new research and promotion program with the AMS Administrator (Administrator). Under proposed § 1200.202(b), the Administrator would consider whether there is broad industry support for the proposed program and whether proposed provisions of the program are authorized under the Act. The Administrator would also evaluate anticipated benefits to the industry and the economic feasibility of the program. Finally, the Administrator would consider whether the proposed program would tend to effectuate the declared policy of the Act. Under proposed § 1200.202(c), if the Administrator determined that the program would not effectuate the policy of the Act, AMS would deny the proposal and would so notify the proponent(s), explaining the grounds for denial. Under proposed § 1200.202(d), if the Administrator determined that the proposed program would likely effectuate the purposes of the Act by benefitting producers, handlers, and importers of the commodity, or others in the marketing chain, the Administrator would notify the proponent(s) that AMS would proceed with program development and, in accordance with proposed § 1200.204, the proponent(s) would be required to post a bond or other collateral to cover AMS expenses to develop the program.

The Act provides that once a board is established under an order, the Secretary of Agriculture (Secretary) must be reimbursed for all expenses incurred in the implementation, administration, and supervision of the order, including all referenda costs incurred in connection with the order. The board uses assessment funds collected from regulated entities to reimburse the Secretary for program oversight.

However, AMS incurs substantial expense in the development process leading to program establishment. AMS may conduct industry outreach meetings, solicit public input, analyze economic data, draft rulemaking documents, and conduct initial referenda. These activities are necessary to progress toward program establishment. Typical expenses for these preliminary activities may include, but not be limited to, employee time and travel, supplies, printing, and mailing.

In some cases, the proponent industry may elect to defer an initial referendum for up to three years after the program is established. In other cases, despite all efforts of the proponent and AMS to develop a new program, ultimately the proposed program may not be established. Nevertheless, under either of these scenarios, AMS will have already incurred expenses related to program development.

Section 7417(a)(2) of the Act provides that the Secretary can require the industry seeking a new program to post a bond or other collateral to cover the cost of the initial referendum. Proposed § 1200.201 would define cost of the referendum to mean all the expenses AMS incurs in the development of a potential new program, including the cost of conducting an initial referendum.

The amount of the bond or collateral required under proposed § 1200.204 would be based on unique factors like the projected number of staff hours involved, the amount of staff travel necessary for outreach, the size and complexity of the proposed program, and the number of industry members to be polled in an initial referendum. This would ensure that AMS would be reimbursed on a timely basis for all expenses related to program development, even if the initial referendum is deferred or if the program is not established.

Section 1200.202(e) of the proposed rule would provide that once AMS has worked with industries or individuals to develop a proposed order, AMS would publish notice of the proposal in the Federal Register to allow the public to comment on the proposed program. Based on comments, AMS would determine whether to proceed with program establishment.

Under § 1200.203 of the proposed rule, if AMS determined to proceed with program establishment, the Administrator could conduct an initial referendum among the producers, handlers, and importers who would be subject to assessment under the program in order to determine whether they favor establishment of the program. The Act provides that USDA could also establish the program and defer the initial referendum for up to three years after the program is established. See 7 U.S.C. 7417(b). In either case, referendum voters would be those entities who, during a representative period determined by the Administrator, produced, handled, and/or imported the agricultural commodity. For referendum expenses incurred after a board is established, the Secretary will be reimbursed by the board appointed to administer the program, as provided by the Act. See 7 U.S.C. 7417(f).

Under proposed § 1200.205, if at any time during the development process, based on public comments, referendum votes, or other information available, AMS determined that the proposed program would not tend to effectuate the policy of the Act, the Administrator would terminate proceedings and would collect reimbursement for program development expenses from the bond or collateral posted by the program proponent(s).

The proposed rule would also make other administrative provisions related to establishment of a new program. Section 1200.201 of the proposed rule would define other terms necessary for administration of the regulation. Section 1200.206 would provide for the issuance, effectuation, and publication of the new order.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), requires agencies to consider the economic impact of each rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The purpose of research, promotion, and information programs is to benefit all sizes of producers, handlers, and importers of an agricultural commodity.

The Act makes it possible for producer associations or other individuals engaged in specific agricultural commodity industries to submit a proposal for a new program. It is impossible for AMS to determine which industries may seek research and promotion programs in the future or to determine the number or size of business entities that might propose such programs. The expenses necessary for each program's development depend on factors such as projected staff hours to develop the program, travel expenses related to outreach, size and complexity of the proposed program, and the size of the industry to be polled in a referendum. Based on its experience with past program proposals, AMS estimates that expenses for typical program development range from $80,000 to $150,000. Thus, under the proposed rule, proponents could be required to post bonds or other collateral to cover those amounts if AMS agreed to proceed with proposed program development. Costs to individuals or businesses would depend on the number of entities in each proponent group. Given that we don't know the identity or business size of future program proponents, AMS cannot determine what economic impact this proposed rule might have on small entities. Based on experience with proponents seeking to establish new programs under the Act, AMS believes that this rule is unlikely to have a significant economic impact on a substantial number of small entities.

There would be no new direct costs associated with the implementation of the proposed rule. The proposed rule codifies procedures for proposing new research and promotion programs under the Act that have been practiced since the Act's adoption in 1996. In addition to specifying the program proposal process, the rule would clarify that the cost of the referendum to be covered by the required bond or collateral would include all the costs associated with program development.

No information collection or recordkeeping requirements are imposed on the public by this proposed rule. Accordingly, OMB clearance is not required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, Chapter 35.

As with all Federal promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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.

For the reasons set forth in the preamble, AMS proposes to amend 7 CFR part 1200 as follows:

This proposal affecting 7 CFR part 1210 is authorized under the Watermelon Research and Promotion Act (Act) (7 U.S.C. 4901-4916).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. The Act provides that it shall not affect or preempt any other State or Federal law authorizing promotion or research relating to an agricultural commodity.

Under section 1650 of the Act (7 U.S.C. 4909), a person may file a written petition with USDA if they believe that the Plan, any provision of the Plan, or any obligation imposed in connection with the Plan, is not in accordance with the law. In any petition, the person may request a modification of the Plan or an exemption from the Plan. The petitioner will have the opportunity for a hearing on the petition. Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If the petitioner disagrees with the ALJ's ruling, the petitioner has 30 days to appeal to the Judicial Officer, who will issue a ruling on behalf of USDA. If the petitioner disagrees with USDA's ruling, the petitioner may file, within 20 days, an appeal in the U.S. District Court for the district in which the petitioner resides or conducts business.

This proposal invites comments on realigning the Board's representation and procedures under the Plan. The Board administers the Plan with oversight by USDA. The Plan is a nationally coordinated program of research, development, advertising, and promotion designed to strengthen the watermelon's position in the marketplace and to establish, maintain, and expand markets for watermelons. The program is financed by assessments on producers growing 10 acres or more of watermelons, handlers of watermelons, and importers of 150,000 pounds of watermelons or more per year. The Plan specifies that handlers are responsible for collecting and submitting both the producer and handler assessments to the Board, reporting their handling of watermelons, and maintaining records necessary to verify their reporting(s). Importers are responsible for payment of assessments to the Board on watermelons imported into the United States through U.S. Customs and Border Protection (Customs).

This proposal invites comments on realignment of the Board by reducing the number of production districts under the Plan for producer and handler representation on the Board, and proportionally reducing the number of importer seats on the Board from twelve to nine. The Board administers the Plan with oversight by USDA. These changes were recommended by the Board after a review of the production volume and assessments paid in each production district as well as the assessments paid by importers. The Plan requires that such a review be conducted at least every 5 years. These changes would help facilitate program operations and the Board voted to forward this recommendation to the Secretary at their October 26, 2019 meeting.

Section 1210.320(a) of the Plan specifies that the Board shall be comprised of producers, handlers, importers, and one public representative appointed by the Secretary. Pursuant to § 1210.320(b), the Plan originally divided the United States into seven districts of comparable production volumes of watermelons, and each district was allocated two producer members and two handler members. Section 1210.320(d) specifies that importer representation on the Board shall be proportionate to the percentage of assessments paid by importers to the Board, except that at least one representative of importers shall serve on the Board.

The current Board is comprised of 41 members—14 producers (two from each district), 14 handlers (two from each district), 12 importers, and one public member.

Section 1210.320(c) requires the Board, at least every five years, to review the districts to determine whether realignment is necessary. In conducting the review, the Board must consider: (1) The most recent three years of USDA production reports or Board assessment reports if USDA production reports are unavailable; (2) shifts and trends in quantities of watermelon produced, and (3) other relevant factors. As a result of the review, the Board may recommend to USDA that the districts be realigned.

Pursuant to § 1210.501 of the Plan, the seven current districts are as follows:

District 1 —The State of Florida;

District 2 —The States of Kentucky, North Carolina, South Carolina, Tennessee, Virginia and West Virginia;

District 3 —The State of Georgia;

District 4 —The States of Connecticut, Delaware, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Wisconsin, and Washington, DC;

District 5 —The State of California;

District 6 —The State of Texas;

District 7 —The States of Alabama, Alaska, Arizona, Arkansas, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.

The districts listed above were recommended by the Board in 2016 and established through rulemaking by USDA in 2017 (82 FR 44966).

In 2019, the Board's Executive Committee conducted a review of the U.S. watermelon production districts to determine whether realignment was necessary. The committee held teleconferences on August 14 and September 11, 2019, and reviewed production data for 2016, 2017 and 2018 from USDA's National Agricultural Statistics Service's (NASS) Vegetables Annual Summary for 2018 and Market News Reports. Due to changes in the geographical coverage of USDA's data collection on watermelon production, Board assessment data was used for the states for which USDA data was not available. To protect personally identifiable information (PII) of watermelon producers and handlers, the average of 2016-2018 assessment data was converted to a percentage of production. The combined data is shown in Table 1 below.

Upon review, the Board recommended at their October 26, 2019 meeting to reduce the number of U.S. production districts from seven to five, thus eliminating two districts, retaining two districts as drawn, and creating three new districts. The proposed districts would be as follows:

District 1 —The State of Florida (no change);

District 2 —The State of Georgia (formerly District 3).

District 3 —The States of Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas.

District 4 —The States of Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin, and Washington, DC.

District 5 —The States of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.

As shown in Table 2, each district would represent, on average, 20 percent of the total U.S. production, with a range of approximately 18 to 24.5 percent. USDA has reviewed NASS, Market News, and Board assessment data, and as shown in Table 2, determined that the production estimates are consistent with the Board's recommendation.

Section 1210.501 of the Plan would be revised accordingly.

Section 1210.320(e) of the Plan requires USDA to evaluate the average annual percentage of assessments paid by importers during the three-year period preceding the date of the evaluation and adjust, to the extent practicable, the number of importer representatives on the Board.

Table 4 below shows domestic and import assessment data for watermelons for the years 2016, 2017 and 2018. The data is from the Board's financial audits for 2016, 2017  2 and 2018.

Based on this data, the three-year average annual import assessments for watermelons for 2016-2018 was $1,087,984, approximately 32 percent of the Board's assessment income. To make the number of importers on the Board proportionate to the assessments paid as well as to the percentages of U.S. watermelon produced by the reduced number of production districts, the number of importers should decrease from twelve to nine members.

In order to clearly summarize the change in board membership for producers, handlers, and importers, § 1210.502 of the Plan would be revised to reflect the new composition of the Board.

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

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $1,000,000 and small agricultural service firms (handlers and importers) as those having annual receipts of no more than $30 million.

According to the Board, there are 505 producers, 140 handlers, and 252 importers who were required to pay assessments under the Plan in 2018. NASS data for the 2018 crop year estimated about 350.5 hundredweight (cwt.) of watermelons were produced per acre in the United States, and the 2018 grower price was $16.90 per cwt. 3 Thus, the value of watermelon production per acre in 2018 averaged about $5,923 (350.5 cwt. × $16.90). At that average price, a producer would have to farm over 169 acres to receive an annual income from watermelons of $1,000,000 ($1,000,000 divided by $5,923 per acre equals approximately 169 acres). Using 2017 USDA Census of Agriculture data, a maximum of 119 farms had watermelon acreage greater than or equal to 250 acres, and 13,401 out of a total of 13,520 farms producing watermelons reported less than 250 acres of watermelon on their farms. 4 Therefore, assuming watermelon producers operate no more than one farm, a majority (99 percent) of all U.S. watermelon farms would be classified as small businesses.

Also based on the Board's data, using a price of $0.169 per pound and the number of pounds handled annually, none of the watermelon handlers have receipts over the $30 million threshold. 5 6 Therefore, all watermelon handlers would be considered small businesses. A handler would have to ship over 177 million pounds of watermelons to be considered large (177,514,793 × $0.169 f.o.b. equals approximately $30,000,000).

Based on 2018 Customs data, over 99 percent of watermelon importers shipped less than $30 million worth of watermelons that year. Based on the foregoing, the majority of watermelon producers, handlers and importers that would be affected by this proposed rule would be classified as small entities.

Regarding the value of the commodity, based on 2018 NASS data, the value of the U.S. watermelon crop was about $656.6 million. 7 According to Customs data, the value of 2018 imports was about $312.4 million.

This proposal invites comments on revising §§ 1210.321, 1210.423, 1210.501 and 1210.502 of the Plan to reduce the number of U.S. production districts from seven to five, thus eliminating two districts, retaining two districts as drawn, and creating three new districts. Accordingly, § 1210.320 requires the number of importer members to also decrease proportionately from 12 to 9 members, for a total of 30 Board members.

The Plan currently divides the United States into seven districts of comparable production volumes of watermelons, and each district is allocated two producer members and two handler members. Further, importer representation on the Board must be, to the extent practicable, proportionate to the percentage of assessments paid by importers, except there must be at least one importer on the Board.

At least every five years, the Board is required to evaluate, based on the preceding three-year period, the average production in each production district and the average annual percentage of assessments paid by importers. The Board conducted this review in 2019 and recommended reducing the number of districts from seven to five. Authority for these changes is provided in § 1210.320 of the Plan.

Regarding the economic impact of the proposed rule on affected entities, neither the reduction in the number of production districts nor the reduction in Board membership imposes any additional costs on industry members. The recommended changes are necessary to improve the Board's ability to ensure both a quorum at Board meetings and a sufficient number of potential nominees. Further, the accompanying reduction of importer seats from twelve to nine provides for the equitable representation of producers, handlers and importers on the Board.

Regarding alternatives, the Board considered two scenarios in realigning the districts. Scenario 1 would divide the U.S. into four production districts, and Scenario 2 would divide the U.S. into five production districts. In accordance with the Plan, both scenarios preserve the composition of 2 producers and 2 handlers per district. Ultimately the Board recommended Scenario 2, retaining the State of Florida as District 1, changing the district designation for Georgia from District 3 to District 2, and creating new Districts 3, 4, and 5 as follows:

(a) District 3 would be comprised of the States of Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas;

(b) District 4 would be comprised of the States of Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin, and Washington, DC; and

(c) District 5 would be comprised of the States of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.

In accordance with § 1210.320, the Board recommended the alignment scenario described in this proposed rule because it: (1) Would provide for a proportional geographical representation on the Board for producers and handlers; (2) would not create any producer or handler vacancies on the Board; and (3) would increase the pool of candidates to be considered for appointment to the Board by the Secretary.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Plan's information collection and recordkeeping requirements have been approved previously under OMB number 0581-0093. This proposed rule would not result in a change to the information collection and recordkeeping requirements previously approved and would impose no additional reporting requirements or recordkeeping burden on domestic producers, handlers, or importers of watermelon.

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

Regarding outreach efforts, the Board's Executive Committee held teleconferences on August 14 and September 11, 2019 to review the production data to assess whether changes to the number of districts and district boundaries were warranted. All Board and committee meetings, including meetings held via teleconference, are open to the public and interested persons are invited to participate and express their views.

AMS has performed this initial RFA analysis regarding the impact of these changes to the Plan on small entities and invites comments concerning potential effects of this action.

USDA has determined that this proposed rule is consistent with and would effectuate the purposes of the Act.

A 30-day comment period is provided to allow interested persons to respond to this proposal. All written comments received in response to this proposed rule by the date specified will be considered prior to finalizing this action.

For the reasons set forth in the preamble, 7 CFR part 1210 is proposed to be amended as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0339; Product Identifier 2020-NM-046-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM 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 received about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0060, dated March 16, 2020 (“EASA AD 2020-0060”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A350-941 airplanes. This proposed AD was prompted by reports that the latches for the forward and aft pressure relief doors could be opened during exposure to fire, leading to a breach in the engine core firewall. The FAA is proposing this AD to address a possible breach in the engine core firewall. This condition, if not corrected, could lead to an uncontained engine fire, possibly resulting in reduced control of the airplane. See the MCAI for additional background information.

EASA AD 2020-0060 describes procedures for modification and re-identification of the affected TRs and latch access doors LADs.

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 proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2020-0060 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

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 2020-0060 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2020-0060 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed 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 2020-0060 that is required for compliance with EASA AD 2020-0060 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0339 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 3 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

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

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

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

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

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0337; Product Identifier 2020-NM-044-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM 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 received about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0054, dated March 11, 2020 (“EASA AD 2020-0054”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-941 airplanes.

This proposed AD was prompted by a report that seven SSCs lost hydraulic locking function due to a sheared seal on the blocking valve. The FAA is proposing this AD to address loss of hydraulic locking function on the SSCs, which in combination with one engine inoperative at takeoff, could result in reduced controllability of the airplane. See the MCAI for additional background information.

EASA AD 2020-0054 describes procedures for repetitive operational tests of the hydraulic locking function on each SSC (any type), when fitted on the blue or yellow hydraulic circuits, and replacing any affected SSC with a serviceable part. 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 proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2020-0054 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

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 2020-0054 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2020-0054 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed 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 2020-0054 that is required for compliance with EASA AD 2020-0054 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0337 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 5 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA estimates the following costs to do any necessary on-condition action that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need this on-condition action:

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

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

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

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

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0336; Product Identifier 2020-NM-032-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM 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 received about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0031, dated February 18, 2020 (“EASA AD 2020-0031”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A350-941 and -1041 airplanes.

This proposed AD was prompted by a report that sticking effects have been observed affecting the breathing bag on certain passenger oxygen masks. The FAA is proposing this AD to address sticking of the breathing bag on certain passenger oxygen masks, which could prevent the breathing bag from fully inflating, and possibly injure cabin occupants following a depressurization event. See the MCAI for additional background information.

EASA AD 2020-0031 describes procedures for replacement of affected passenger oxygen masks. 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 proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2020-0031 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

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 2020-0031 will be incorporated by reference in the FAA final rule. This proposed AD would therefore require compliance with EASA AD 2020-0031 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed 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 2020-0031 that is required for compliance with EASA AD 2020-0031 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0336 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 13 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the FAA has included all known costs in our cost estimate.

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

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

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

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

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0334; Product Identifier 2020-NM-014-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM based on those comments.

The FAA will post all comments received, 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 received about this NPRM.

The CAAI, which is the aviation authority for Israel, has issued Israeli AD ISR-I-53-19-10-5, dated October 10, 2019 (“Israeli AD ISR-I-53-19-10-5”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Gulfstream Aerospace LP Model Gulfstream G280 airplanes.

This proposed AD was prompted by a report of inadequate clearance between certain fuel probes (probe No.1 and probe No.3) and the forward fuel tank structure. The FAA is proposing this AD to address such inadequate clearance, which could result in a potential source of ignition in a fuel tank, possible fire, and consequent reduced structural integrity of the airplane. See the MCAI for additional background information.

Israeli AD ISR-I-53-19-10-5 requires checking the clearance between forward fuel probes No. 1 and aft probe No. 3 and the forward fuel tank structure, by measuring each probe's distance to the adjacent skin, and adjusting the clearance, including reinstallation of the probes at the correct distance if necessary. 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 a 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 proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in Israeli AD ISR-I-53-19-10-5 described previously, as incorporated by reference.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and the European Union Aviation Safety Agency (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 to use this process. As a result, Israeli AD ISR-I-53-19-10-5 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with Israeli AD ISR-I-53-19-10-5 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Service information specified in Israeli AD ISR-I-53-19-10-5 that is required for compliance with Israeli AD ISR-I-53-19-10-5 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0334 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 80 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0338; Product Identifier 2020-NM-047-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM based on those comments.

The FAA will post all comments received, 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 received about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0070, dated March 24, 2020 (“EASA AD 2020-0070”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A350-941 and -1041 airplanes.

This proposed AD was prompted by the results of laboratory tests on non-rechargeable lithium batteries installed in certain ELTs, which highlighted a lack of protection against current injections of 28 volts DC or 115 volts AC that could lead to thermal runaway and a battery fire. The FAA is proposing this AD to address local fires in non-rechargeable lithium batteries installed in certain ELTs, which could result in damage to the airplane and injury to occupants. See the MCAI for additional background information.

EASA AD 2020-0070 describes procedures for modifying a certain ELT by installing a diode between the ELT and the terminal block. 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 proposing this AD after evaluating all the relevant information and determining the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2020-0070 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

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 2020-0070 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2020-0070 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed 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 2020-0070 that is required for compliance with EASA AD 2020-0070 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0338 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 7 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the FAA has included all known costs in the cost estimate.

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

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

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

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

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

The Great Western Tube Float is an annual recurring event listed in Table 1, Item 9 of 33 CFR 100.1102, Annual Marine Events on the Colorado River, between Davis Dam (Bullhead City, Arizona) and Headgate Dam (Parker, Arizona). Special local regulations exist for the marine event to allow for special use of the Colorado River, Parker, AZ for this event.

The purpose of this rulemaking is to update the location for the Great Western Tube Float which will provide effective control over the marine event and insure safety of life in the regatta or marine parade area. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70041.

The Great Western Tube Float is an annual event normally held on a Saturday in June on the waters of the Colorado River, Parker, AZ.

33 CFR 100.1102 lists the annual marine events and special local regulations on the Colorado River, between Davis Dam (Bullhead City, Arizona) and Headgate Dam (Parker, Arizona). The enforcement date and regulated location for this marine event are listed in Table 1, Item 9 of Section 100.1102.

The location listed in the Table indicates that the marine event will occur on the navigable waters of the Colorado River from La Paz County Park to the BlueWater Resort and Casino, immediately before the Headgate Dam. However, this rule will change the location to the navigable waters of the Colorado River from Buckskin Mountain State Park to La Paz County Park, to reflect the actual location of this year's event. This change is needed to accommodate the sponsor's event plan and ensure that adequate regulations are in place to protect the safety of vessels and individuals that may be present in the regulated area. No other portion of Table 1 of Section 100.1102 or other provisions in Section 100.1102 would be affected by this regulation.

The special local regulations are necessary to provide for the safety of the crew, spectators, participants, and other vessels and users of the Colorado River waterway. Persons and vessels will continue to be prohibited from anchoring, blocking, loitering, or impeding within this regulated waterway during the enforcement period unless authorized by the COTP, or his designated representative. Additionally, movement of all vessels within the regulated area and entry of all vessels into the regulated area will be restricted. Before the effective period, the Coast Guard will publish information on the event in the weekly LNM. The proposed regulatory text appears at the end of this document.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the special local regulation. This event takes place annually on one Saturday in June and will utlize only a small portion of the Colorado River during the event. This event is already included in our regulations, the only change is to the location on the river where the event would take place. The Coast Guard will publish a local notice to mariners in the weeks before the event that details the vessel restrictions of the regulated area.

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

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

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

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

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

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

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

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves the establishment of marine event special local regulations on the navigable waters of the Colorado River. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

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

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, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to https://www.regulations.gov and will include any personal information you have provided. For more about privacy and submissions in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

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

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 100 as follows:

Invitation to Comment: We invite you to submit comments regarding the proposed priorities. To ensure that your comments have maximum effect in developing the notice of final priorities, we urge you to identify clearly the proposed priority that each comment addresses.

We invite you to assist us in complying with the specific requirements of Executive Orders 12866, 13563, and 13771 and their overall requirement of reducing regulatory burden that might result from the proposed priorities. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

During and after the comment period, you may inspect all public comments about the proposed priorities by accessing Regulations.gov . You may also inspect the comments in person in Room 5059, 550 12th Street SW, Washington, DC, between the hours of 9:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of each week except Federal holidays.

Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the proposed priorities. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT .

Purpose of Program: The Innovative Rehabilitation Training program is designed to develop (a) new types of training programs for rehabilitation personnel and to demonstrate the effectiveness of these new types of training programs for rehabilitation personnel in providing rehabilitation services to individuals with disabilities; (b) new and improved methods of training rehabilitation personnel so that there may be a more effective delivery of rehabilitation services to individuals with disabilities by designated State rehabilitation agencies and designated State rehabilitation units or other public or non-profit rehabilitation service agencies or organizations; and (c) new innovative training programs for VR professionals and paraprofessionals to have a 21st-century understanding of the evolving labor force and the needs of individuals with disabilities so they can more effectively provide VR services to individuals with disabilities.

Program Authority: 29 U.S.C. 709(c) and 772.

Applicable Program Regulations: 34 CFR parts 385 and 387.

Proposed Priorities: This document contains four proposed priorities.

The purpose of the Client Assistance Program (CAP) under the Rehabilitation Act of 1973, as amended by the Workforce Innovation and Opportunity Act (WIOA) (Rehabilitation Act), is to advise and inform VR clients and applicants with disabilities of all services and benefits available to them through programs authorized under the Rehabilitation Act, including under sections 113 and 511, and title I of the Americans with Disabilities Act of 1990, and advocate on behalf of VR clients and applicants in their relationships with projects, programs, and services provided under the Rehabilitation Act.

According to the Annual Client Assistance Program Report (RSA-227), CAP offices responded to 40,917 requests for information and referral in FY 2018. They also provided extensive services—including assistance and advocacy—to 4,038 individuals with disabilities that year.

In FY 2014, the Rehabilitation Services Administration (RSA) funded a CAP training and technical assistance center, which primarily provides training on the statutory and regulatory requirements governing VR services. Such training continues to be necessary, however, to be effective advocates for VR clients and applicants today. CAP professionals also need greater expertise about the expanded opportunities for quality employment and economic self-sufficiency made available after WIOA. These opportunities include a focus on acquiring career-oriented credentials, such as advanced postsecondary degrees; career exploration and advancement strategies, such as work-based learning, apprenticeships, customized employment, and career pathways; and pre-employment transition services and outreach to subminimum wage employers. Furthermore, CAP professionals require updated leadership, relationship-building, and management skills to be effective advocates for VR clients and applicants.

A project under this priority must increase the capacity of CAP professionals to inform VR clients and applicants about the expanded opportunities under WIOA and provide the assistance and advocacy the clients and applicants need. The project must develop a new or substantially improved training program, including stand-alone modules to be incorporated into an existing academic degree program for educating VR counselors or other VR professionals and paraprofessionals, or into short-term training for VR professionals, or both. The training program or modules must be developed by the end of the first year of the project period and piloted, refined, implemented, evaluated, and disseminated in years two, three, four, and five of the project period. A process for feedback and continuous improvement to ensure the training program or modules are refined throughout years two, three, four, and five must be included.

The training must be of sufficient scope, intensity, and duration for VR CAP professionals, paraprofessionals, and individuals studying to become VR professionals and paraprofessionals to achieve increased skill, knowledge, and competence in the topic area.

The training curricula and materials must encompass: (a) The expanded opportunities available under WIOA and the pertinent provisions regarding unified and combined State plans, common performance measures, and the workforce development system; (b) specific opportunities and challenges for individuals with the most significant disabilities, students and youth with disabilities, and traditionally underserved populations, including those at the intersection of poverty and disability; and (c) leadership, relationship-building, and management skills promoting effective CAP personnel interaction with State VR agencies, State Rehabilitation Councils, and other VR stakeholders.

Training delivery methods must encompass: (a) State-of-the-art communication tools and platforms, including virtual conferences, social media, and searchable databases; and (b) the latest knowledge translation methods and techniques. The applicant must include the resources developed by the RSA VR Technical Assistance Centers and Demonstration and Training projects, available at the National Clearinghouse for Rehabilitation Training Materials, and other Federal and nongovernment sources, in developing its training and technical assistance curricula and delivery methods.

Self-employment, business ownership, and telecommuting could be viable options for individuals with disabilities who face barriers to competitive integrated employment, such as health challenges, inaccessible work sites, and lack of transportation, and could offer people with disabilities an opportunity for economic independence. A 2017 study funded by the National Institute on Disability, Independent Living, and Rehabilitation Research (NIDILRR)  1 analyzed data from 230,931 VR consumers age 16 or older who completed VR services and became employed in 2008 or 2009. The researchers found that: (1) On average, only 2.1 percent of VR consumers became self-employed; (2) self-employment rates were lowest for consumers in urban counties (1.4 percent) and highest for consumers in isolated rural counties (5.2 percent), while the rates in large rural and small rural counties fell in between (3.5 percent and 3.7 percent); and (3) consumers who became self-employed earned about $1.30 more per hour, on average, at the start of their jobs than consumers who became competitively employed. Consumers who became self-employed were also able to work about three hours less per week, on average, and still earn weekly pay equivalent to their competitively employed peers.

The U.S. Department of Labor, Office of Disability Employment Policy (ODEP) examined telework practices of public and private sector employers, finding that 80 percent had employees with disabilities and 23 percent had employees who telework, but only 8 percent had employees with disabilities who telework. 2

The use of self-employment, business ownership, and telecommuting may assist VR consumers with achieving competitive integrated employment.

A project in the area of assisting and supporting individuals with disabilities pursuing self-employment, business ownership, and telecommuting must develop a new or substantially improved and, to the extent possible, evidence-based  3 training program, including stand-alone modules and instructional materials to be incorporated into an existing academic degree program for educating VR counselors or other VR professionals and paraprofessionals or into short-term training for VR professionals, or both. The training program or modules must be developed by the end of the first year of the project period and piloted, refined, implemented, evaluated, and disseminated in years two, three, four, and five of the project period. A process for feedback and continuous improvement to ensure the training program or modules are refined throughout years two, three, four, and five must be included.

The training must be of sufficient scope, intensity, and duration for VR professionals, paraprofessionals, and individuals studying to become VR professionals and paraprofessionals to achieve increased skill, knowledge, and competence in the area of assisting and supporting individuals with disabilities pursuing self-employment, business ownership, and telecommuting.

The purpose of the Innovative Rehabilitation Training program, Field Initiated project, is to develop, refine, implement, evaluate, and disseminate innovative methods of training for VR personnel in an area for which no training currently exists, enhance training in an area for which the existing training is no longer current or relevant, or enhance training in an area that has received increased emphasis under the Rehabilitation Act.

A field-initiated project must clearly identify the topic to be addressed and provide sufficient evidence to demonstrate the need for the innovative rehabilitation training in a proposed new topic area or, in areas for which there is existing training, demonstrate that the existing training is not adequately meeting the needs of VR professionals, paraprofessionals, and individuals studying to become VR professionals and paraprofessionals.

The project must develop a new or substantially improved and, to the extent possible, evidence-based  4 training program, including stand-alone modules and instructional materials to be incorporated into an existing academic degree program for educating VR counselors or other VR professionals and paraprofessionals, or into short-term training for VR professionals, or both. The training program or modules must be developed by the end of the first year of the project period and piloted, refined, implemented, evaluated, and disseminated in years two, three, four, and five of the project period. A process for feedback and continuous improvement to ensure the training program or modules are refined throughout years two, three, four, and five must be included.

The training must be of sufficient scope, intensity, and duration for VR professionals, paraprofessionals, and individuals studying to become VR professionals and paraprofessionals to achieve increased skill, knowledge, and competence in the topic area.

In order to increase the size of the applicant pool, we propose a priority for applications from new potential grantees.

(a) Under this priority, an applicant must demonstrate one or more of the following:

(i) The applicant has never received a grant, including through membership in a group application submitted in accordance with 34 CFR 75.127-75.129, under the program from which it seeks funds.

(ii) The applicant does not, as of the deadline date for submission of applications, have an active grant, including through membership in a group application submitted in accordance with 34 CFR 75.127-75.129, under the program from which it seeks funds.

(iii) The applicant has not had an active discretionary grant under the program from which it seeks funds, including through membership in a group application submitted in accordance with 34 CFR 75.127-75.129, in one of the following number of years before the deadline date for submission of applications under the program:

(1) One year;

(2) Two years;

(3) Three years;

(4) Four years;

(5) Five years;

(6) Six years; or

(7) Seven years.

(iv) The applicant has not had an active discretionary grant from the Department, including through membership in a group application submitted in accordance with 34 CFR 75.127-75.129, in one of the following number of years before the deadline date for submission of applications under the program:

(1) One year;

(2) Two years;

(3) Three years;

(4) Four years;

(5) Five years;

(6) Six years; or

(7) Seven years.

(v) The applicant has not had an active contract from the Department in one of the following number of years before the deadline date for submission of applications under the program:

(1) One year;

(2) Two years;

(3) Three years;

(4) Four years;

(5) Five years;

(6) Six years; or

(7) Seven years.

(b) For the purpose of this priority, a grant or contract is active until the end of the grant's or contract's project or funding period, including any extensions of those periods that extend the grantee's or contractor's authority to obligate funds.

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register . The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

Under Executive Order 12866, the Office of Management and Budget (OMB) determines whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities in a material way (also referred to as an “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This proposed regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

Under Executive Order 13771, for each new rule that the Department proposes for notice and comment or otherwise promulgates that is a significant regulatory action under Executive Order 12866 and that imposes total costs greater than zero, it must identify two deregulatory actions. For FY 2020, any new incremental costs associated with a new rule must be fully offset by the elimination of existing costs through deregulatory actions. However, Executive Order 13771 does not apply to “transfer rules” that cause only income transfers between taxpayers and program beneficiaries, such as those regarding discretionary grant programs. Because the proposed priorities would be utilized in connection with a discretionary grant program, Executive Order 13771 does not apply.

We have also reviewed this proposed regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing the proposed priorities only on a reasoned determination that their benefits justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We have also determined that this regulatory action does not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities. The costs would include the time and effort in responding to the priority for entities that choose to respond.

In addition, we have considered the potential benefits of this regulatory action and have noted these benefits in the background section of this document. The benefits include receiving comments regarding the best way to support the work of the State VR agencies in the Client Assistance Program (84.263D); assisting and supporting individuals with disabilities pursuing self-employment, business ownership, and telecommuting (84.263E); and field-initiated projects related to VR (84.263F); and whether the activities identified reflect the greatest needs in the field.

Executive Order 12866 and the Presidential memorandum “Plain Language in Government Writing” require each agency to write regulations that are easy to understand.

The Secretary invites comments on how to make these proposed priorities easier to understand, including answers to questions such as the following:

• Are the requirements in the proposed regulations clearly stated?

• Do the proposed regulations contain technical terms or other wording that interferes with their clarity?

• Does the format of the proposed regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity?

• Would the proposed regulations be easier to understand if we divided them into more (but shorter) sections?

• Could the description of the proposed regulations in the SUPPLEMENTARY INFORMATION section of this preamble be more helpful in making the proposed regulations easier to understand? If so, how?

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

To send any comments that concern how the Department could make these proposed regulations easier to understand, see the instructions in the ADDRESSES section.

Regulatory Flexibility Act Certification: The Secretary certifies that this proposed regulatory action would not have a significant economic impact on a substantial number of small entities. The U.S. Small Business Administration Size Standards define “small entities” as for-profit or nonprofit institutions with total annual revenue below $7,000,000 or, if they are institutions controlled by small governmental jurisdictions (that are comprised of cities, counties, towns, townships, villages, school districts, or special districts), with a population of less than 50,000.

The small entities that this proposed regulatory action would affect are public or private nonprofit agencies and organizations, including Indian Tribes and institutions of higher education that may apply. We believe that the costs imposed on an applicant by the proposed priorities would be limited to paperwork burden related to preparing an application and that the benefits of these proposed priorities would outweigh any costs incurred by the applicant. There are very few entities who could provide the type of technical assistance required under the proposed priorities. For these reasons these proposed priorities would not impose a burden on a significant number of small entities.

Paperwork Reduction Act of 1995: The proposed priorities contain information collection requirements that are approved by OMB under OMB control number 1820-0018.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

In accordance with section 411 of the General Education Provisions Act, 20 U.S.C. 1221e-4, the Secretary particularly requests comments on whether these proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format ( e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT .

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

Invitation to Comment: We invite you to submit comments regarding this proposed waiver and extension.

We invite you to assist us in complying with the specific requirements of Executive Orders 12866, 13563, and 13771 and their overall requirement of reducing regulatory burden that might result from this proposed waiver and extension. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

During and after the comment period, you may inspect all public comments about this proposed waiver and extension in Room 5059, 550 12th Street SW, Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of each week, except Federal holidays.

Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for this proposed waiver and extension. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT .

We are proposing to extend the Rehabilitation Short-Term Training—Client Assistance Program (CAP) for an additional year to assess and enhance the Department's CAP training and technical assistance approaches in light of (a) the expanded quality employment opportunities for individuals with disabilities promoted by the Workforce Innovation and Opportunity Act (WIOA) (29 U.S.C. 3101 et seq. ); (b) promising employment initiatives advanced by the Rehabilitation Service Administration's (RSA's) Vocational Rehabilitation Technical Assistance Centers, consistent with WIOA; and (c) new training delivery platforms and methodologies that could be applied to this CAP training program. In short, the waiver and extension will allow RSA to design a new, innovative training program that, consistent with WIOA, would maximize the capacity of CAP personnel to inform, advise, and advocate for individuals with disabilities and facilitate their access to expanded quality employment opportunities in their States through services and supports available under the Rehabilitation Act of 1973, as amended by WIOA (Rehabilitation Act). These services and supports may include (a) pre-employment transition services and the limitations on the use of subminimum wages under sections 113 and 511 of the Rehabilitation Act; (b) career-focused credentials attainment and measurable skill gains; and (c) career exploration and career advancement strategies such as work-based learning, apprenticeships, customized employment, and career pathways.

The Rehabilitation Act authorizes the Short-Term Training Program under section 302 (29 U.S.C. 772) to train CAP personnel authorized under section 112 of the Rehabilitation Act (29 U.S.C. 732).

In September 2015, RSA awarded a 60-month grant to the National Disability Rights Network under the Rehabilitation Short-Term Training to the CAP to provide training and technical instruction to the 57 CAP grantees on the statutory and regulatory requirements governing the provision of vocational rehabilitation (VR) and other services under the Rehabilitation Act. The National Disability Rights Network's capacity-building activities address CAP management and operations, individual and systems advocacy, data collection and reporting, and specific provisions such as pre-employment transition services and limitations on the use of subminimum wages. Its training and technical instruction vehicles include an annual VR orientation meeting, a fiscal management conference, webinars, on-site visits, ongoing web resources and alerts, specialized institutes, and an annual conference, among other activities. The current project period ends on September 30, 2020.

The Department will not be running a Rehabilitation Short-Term Training to the CAP competition in FY 2020. Rather, the Department will be including the CAP as one of the topic areas under the Innovative Rehabilitation Training program. The Department has concluded that it would not be in the public interest to have a lapse in the critically needed resources currently provided by the Rehabilitation Short-Term Training to the CAP. Allowing training and technical instruction to lapse while the Department establishes its innovative CAP training program would reduce the capacity of the 57 CAP grantees nationwide to provide information to, and advocate on behalf of, individuals with disabilities seeking or receiving services from the VR and other programs under the Rehabilitation Act critical to their achievement of high-quality employment, independent living, and self-sufficiency.

For these reasons, the Secretary proposes to waive the requirements in 34 CFR 75.250, which prohibit project periods exceeding five years, and the requirements in 34 CFR 75.261(a) and (c)(2), which allow the extension of a project period only if the extension does not involve the obligation of additional Federal funds. The waiver would allow the Department to issue a one-time FY 2020 continuation award to the Rehabilitation Short-Term Training to the CAP, as follows.

Any activities carried out during the year of this continuation award must be consistent with the scope, goals, and objectives of the grantee's application as approved in the FY 2015 competition. The requirements for continuation awards are set forth in 34 CFR 75.253.

The Secretary certifies that the proposed waiver and extension of the project period would not have a significant economic impact on a substantial number of small entities. The only entity that would be affected by the proposed waiver and extension of the project period is the current grantee and any other potential applicant.

The Secretary certifies that the proposed waiver and extension would not have a significant economic impact on these entities because the extension of an existing project period imposes minimal compliance costs, and the activities required to support the additional year of funding would not impose additional regulatory burdens or require unnecessary Federal supervision.

This notice of proposed waiver and extension of the project period does not contain any information collection requirements.

This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance. This document provides early notification of our specific plans and actions for this program.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format ( e.g., braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT .

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

I. What action is EPA proposing?

North Carolina has a SIP-approved combined construction and operating permit program for minor sources, and the program's regulations include requirements for obtaining preconstruction and operating permits for different types of minor sources. The program covers “true minor” sources, which have the potential to emit (PTE) certain pollutants below major source thresholds for new sources and modifications. The SIP-approved minor source permitting program also includes provisions for issuing permits that establish federally enforceable emission limits to restrict the PTE of certain pollutants below major source and major modification applicability thresholds, referred to as “synthetic minor” sources in the North Carolina SIP. These program rules also specify exemptions from the requirement to obtain construction and operating permits.

North Carolina's September 18, 2009, 1 2 submittal revises rule 15A North Carolina Administrative Code (NCAC) 02Q .0304, Applications, to make clarifying and ministerial edits. The September 16, 2016, 3 4 submittal revises 15A NCAC 02D .0101, Definitions, and 15A NCAC 02Q .0101, Required Air Quality Permits; .0103, Definitions; and .0104, Where to Obtain and File Permit Applications, to make clarifying and administrative updates. 5 Finally, the July 10, 2019, submittal readopts, and makes clarifying and ministerial edits to, the following: 15A NCAC 02Q .0101, Required Air Quality Permits; .0103, Definitions; .0104, Where to Obtain and File Permit Applications; .0105, Copies of Referenced Documents; .0106, Incorporation by Reference; .0107, Confidential Information; .0108, Delegation of Authority; .0109, Compliance Schedule for Previously Exempted Activities; .0110, Retention of Permit at Permitted Facility; and .0111, Applicability Determinations. 6 These changes are discussed in detail in Section II of this notice.

EPA has reviewed the proposed changes to the minor source construction and operating permitting regulations and preliminarily finds them to be consistent with CAA sections 110(a)(2)(C) and 110(l) and EPA's minor NSR regulations found at 40 CFR 51.160—164.

The September 18, 2009, submittal makes changes to Rule 15A NCAC 02Q .0304, Applications, to make clarifying and ministerial updates to the required elements of applications for obtaining, modifying, or renewing a permit. Specifically, redundant language is removed and minor edits are made to clarify applicable provisions. Accordingly, EPA is proposing to approve these changes as minor clarifying amendments.

The September 16, 2016, submittal makes several rule changes. First, Subchapter 02D is revised at 15A NCAC 02D .0101, Definitions, to make ministerial edits throughout the rule, including changes to punctuation, numbering, and other minor language edits. Next, the submittal adds a definition for “transportation facility,” which notes that such a facility is a “complex source,” as defined by General Statutes, Article 21, Water and Air Resources, § 143-213, Definitions at 213(22). North Carolina's SIP includes an identical definition in 02Q .0103, Definitions. EPA is preliminarily concluding that the inclusion of this definition in 02D .0101 is consistent with applicable CAA requirements.

Next, 02Q .0101, Required Air Quality Permits, is changed to include ministerial edits at paragraph (a), including changes to punctuation and other minor language edits. Additionally, paragraph (b) is changed to remove “Transportation Facility Construction Permits” as a listed type of required permit. This type of permit was previously included in the North Carolina SIP under 02D Section .0800 and 02Q Section .0600, but those Sections have since been removed from the SIP. See 82 FR 22086 (May 12, 2017). As a result, EPA is proposing approval of this change to 02Q .0101.

Finally, 02Q .0103, Definitions; and .0104, Where to Obtain and File Permit Applications, are revised to include ministerial edits throughout ( e.g., changes to punctuation and other minor language edits) and to remove or revise language that previously cross-referenced 02D Section .0800 and 02Q Section .0600. As described above, these changes are necessary to accurately reflect the current SIP requirements given the removal of 02D .0800 and 02Q .0600. EPA is proposing to approve these changes as minor clarifying amendments.

North Carolina's July 10, 2019, submittal makes several rule changes. First, the revision makes non-substantive and ministerial edits to the following: 15A NCAC 02Q .0101, Required Air Quality Permits; .0103, Definitions; .0104, Where to Obtain and File Permit Applications; .0107, Confidential Information; .0108, Delegation of Authority; .0109, Compliance Schedule for Previously Exempted Activities; .0110, Retention of Permit at Permitted Facility; and .0111, Applicability Determinations. For example, the proposed edits include changes to punctuation, numbering, and other minor language edits.

In 15A NCAC 02Q .0105, Copies of Referenced Documents, DAQ updated the agency name and the addresses of offices for which reference documents can be located. Additionally, the changes to 15A NCAC 02Q .0106, Incorporation by Reference, replace the address where a copy of the CFR can be purchased to a link to the Government Printing Office where a digital copy of the CFR can be obtained for free. These ministerial updates will better serve the regulated community and the public.

EPA views these changes in the July submittal as either non-substantive or otherwise necessary to clarify applicability. Therefore, EPA proposes to find that the changes will not interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of the Act, consistent with CAA section 110(l).

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference 15A NCAC 02D .0101, Definitions, state effective January 1, 2015; 15A NCAC 02Q .0101, Required Air Quality Permits; .0103, Definitions; .0104, Where to Obtain and File Permit Applications; .0105, Copies of Referenced Documents; .0106, Incorporation by Reference; .0107, Confidential Information; .0108, Delegation of Authority; .0109, Compliance Schedule for Previously Exempted Facilities; .0110, Retention of Permit at Permitted Facility; and .0111, Applicability Determinations, state effective April 1, 2018; and 15A NCAC 02Q .0304, Applications, state effective September 1, 2010. These changes are either non-substantive or otherwise necessary to clarify applicability. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 office (please contact the person identified in the For Further Information Contact section of this preamble for more information).

EPA is proposing to approve the changes described above to North Carolina's SIP submitted on September 18, 2009, September 16, 2016, and July 10, 2019.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 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. This action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed 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).

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 as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

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

EPA is proposing to take several related actions. EPA is proposing to determine that the Inland Sheboygan nonattainment area is attaining the 2008 ozone NAAQS, based on quality-assured and certified monitoring data for 2017-2019, and that the Inland Sheboygan area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to change the legal designation of the Inland Sheboygan area from nonattainment to attainment for the 2008 ozone NAAQS. EPA is also proposing to approve, as a revision to the Wisconsin SIP, the State's maintenance plan (such approval being one of the CAA criteria for redesignation to attainment status) for the area. The maintenance plan is designed to keep the Inland Sheboygan area in attainment of the 2008 ozone NAAQS through 2030. EPA is also proposing to approve, as revisions to the Wisconsin SIP, the State's 2011 base year emissions inventory, emission statement certification, VOC RACT requirements, motor vehicle I/M certification, and NO X RACT certification. EPA also finds adequate and is proposing to approve the newly established 2020 and 2030 MVEBs for the Inland Sheboygan area.

EPA has determined that ground-level ozone is detrimental to human health. On July 18, 1997, EPA revised the former 1-hour ozone primary and secondary standards and replaced them with 8-hour standards at a level of 0.08 parts per million (ppm) (40 CFR 50.10). On March 27, 2008, EPA further revised the 8-hour ozone NAAQS by lowering the level of the primary and secondary standards from 0.08 ppm to 0.075 ppm (40 CFR 50.15).

Upon promulgation of a new or revised NAAQS, section 107(d)(1)(B) of the CAA requires EPA to designate as nonattainment any areas that are violating the NAAQS, based on the most recent three years of quality assured ozone monitoring data. On April 30, 2004 (69 FR 23858) and May 21, 2012 (77 FR 30088), EPA designated the entirety of Sheboygan County in Wisconsin as nonattainment for the 1997 ozone NAAQS and 2008 ozone NAAQS, respectively.

On March 1, 2011, EPA determined that the Sheboygan nonattainment area had attained the 1997 ozone NAAQS (76 FR 11080). Since that determination, the area has continued to attain the 1997 ozone NAAQS, and the area retains its Moderate classification. On December 19, 2016, EPA reclassified the Sheboygan nonattainment area for the 2008 ozone NAAQS as Moderate with an attainment date of July 20, 2018 (81 FR 91841).

On July 15, 2019, EPA revised the designation for the Sheboygan nonattainment area for the 1997 ozone NAAQS and 2008 ozone NAAQS, by splitting the original area into two distinct nonattainment areas that together cover the identical geographic area of the original nonattainment area (84 FR 33699). 1 One of the separate areas, called the Shoreline Sheboygan County, WI nonattainment area, consists of the eastern portion of the original area, including the Sheboygan Kohler-Andrae monitor. The other separate area, called the Inland Sheboygan County, WI nonattainment area, consists of the western portion of the original area, including the Sheboygan Haven monitor. On August 23, 2019, EPA determined that the Inland Sheboygan area and Shoreline Sheboygan area qualified for one-year attainment date extensions for the 2008 ozone NAAQS to July 20, 2019 (84 FR 44238).

Section 107(d)(3)(E) of the CAA allows redesignation of an area to attainment of the NAAQS provided that: (1) The Administrator determines that the area has attained the NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP, applicable Federal air pollutant control regulations, and other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for the purposes of redesignation under section 110 and part D of the CAA.

On April 16, 1992, EPA provided guidance on redesignations in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990 (57 FR 13498) and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:

For redesignation of a nonattainment area to attainment, the CAA requires EPA to determine that the area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). An area is attaining the 2008 ozone NAAQS as determined in accordance with 40 CFR 50.15 and appendix P of part 50, based on three complete, consecutive calendar years of quality-assured air quality data for all monitoring sites in the area. To attain the NAAQS, the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations (ozone design values) at each monitor must not exceed 0.075 ppm. The air quality data must be collected and quality-assured in accordance with 40 CFR part 58 and recorded in EPA's Air Quality System (AQS). Ambient air quality monitoring data for the 3-year period must also meet data completeness requirements. An ozone design value is valid if daily maximum 8-hour average concentrations are available for at least 90% of the days within the ozone monitoring seasons, 2 on average, for the 3-year period, with a minimum data completeness of 75% during the ozone monitoring season of any year during the 3-year period. See section 2.3 of appendix P to 40 CFR part 50.

EPA has reviewed the available ozone monitoring data from the Sheboygan Haven monitor, which is the only monitoring site in the Inland Sheboygan area. These data are from the 3-year period from 2017-2019, which is the most recent 3-year period available. These data have been quality assured, are recorded in the AQS, and have been certified. These data demonstrate that the Inland Sheboygan area is attaining the 2008 ozone NAAQS. The annual fourth-highest 8-hour ozone concentrations and the 3-year average of these concentrations (monitoring site ozone design value) for the monitoring site are summarized in Table 1.

The Inland Sheboygan area's 3-year ozone design value for 2017-2019 is 0.066 ppm, which meets the 2008 ozone NAAQS. Therefore, in this action, EPA proposes to determine that the Inland Sheboygan area is attaining the 2008 ozone NAAQS.

EPA will not take final action to determine that the Inland Sheboygan area is attaining the NAAQS nor to approve the redesignation of this area if the design value of a monitoring site in the area violates the NAAQS after proposal but prior to final approval of the redesignation. Preliminary 2020 data to date indicate that this area continues to attain the 2008 ozone NAAQS. As discussed in section IV.D.3. below, WDNR has committed to continue monitoring ozone in this area to verify maintenance of the 2008 ozone NAAQS.

As criteria for redesignation of an area from nonattainment to attainment of a NAAQS, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA ( see section 107(d)(3)(E)(v) of the CAA) and that the state has a fully approved SIP under section 110(k) of the CAA ( see section 107(d)(3)(E)(ii) of the CAA). We are proposing to determine that Wisconsin has met all currently applicable SIP requirements for purposes of redesignation of the Inland Sheboygan area to attainment of the 2008 ozone standard under section 110 and part D of the CAA, in accordance with section 107(d)(3)(E)(v). Additionally, with the exception of the base year emissions inventory requirement of section 182(a)(1) of the CAA, the emissions statement requirement of section 182(a)(3)(B) of the CAA, the VOC RACT requirements of section 182(b)(2) of the CAA, the I/M requirements of section 182(b)(4) of the CAA, and the NO X RACT requirements of section 182(f) of the CAA, EPA finds that all applicable requirements of the Wisconsin SIP for the area, for purposes of redesignation, have been fully approved under section 110(k) of the CAA. As discussed in sections VI. through X. below, EPA is proposing to approve Wisconsin's base year emissions inventory, emissions statement, motor vehicle I/M, VOC RACT, and NO X RACT SIP submissions as meeting the Moderate RACT requirements of section 182(b)(2) of the CAA for the Inland Sheboygan area under the 2008 ozone NAAQS. Upon final approval of these SIP elements, all applicable requirements of the Wisconsin SIP for the area will have been fully approved under section 110(k) of the CAA.

In making these determinations, EPA ascertained which CAA requirements are applicable to the Inland Sheboygan area and the Wisconsin SIP and, if applicable, whether the required Wisconsin SIP elements are fully approved under section 110(k) and part D of the CAA. As discussed more fully below, SIPs must be fully approved only with respect to currently applicable requirements of the CAA.

The September 4, 1992 Calcagni memorandum ( see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E) of the CAA. Under this interpretation, a state and the area it wishes to redesignate must meet the relevant CAA requirements that are due prior to the state's submittal of a complete redesignation request for the area. See also the September 17, 1993, Michael Shapiro memorandum and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan to attainment of the 1-hour ozone NAAQS). Applicable requirements of the CAA that come due subsequent to the state's submittal of a complete request remain applicable until a redesignation to attainment is approved, but are not required as a prerequisite to redesignation. See section 175A(c) of the CAA. Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 68 FR 25424, 25427 (May 12, 2003) (redesignation of the St. Louis/East St. Louis area to attainment of the 1-hour ozone NAAQS).

Since EPA is proposing to determine that the Inland Sheboygan area has attained the 2008 ozone standard, under 40 CFR 51.1118, if that determination is finalized, the requirements to submit certain planning SIPs related to attainment, including attainment demonstration requirements (the Reasonably Available Control Measures (RACM) requirement of section 172(c)(1) of the CAA, the Reasonable Further Progress (RFP) and attainment demonstration requirements of sections 172(c)(2) and (6) and 182(b)(1) of the CAA, and the requirement for contingency measures of section 172(c)(9) of the CAA) would not be applicable to the area as long as it continues to attain the NAAQS and would cease to apply upon redesignation. In addition, in the context of redesignations, EPA has interpreted requirements related to attainment as not applicable for purposes of redesignation. For example, in the General Preamble EPA stated that:

The section 172(c)(9) requirements are directed at ensuring RFP and attainment by the applicable date. These requirements no longer apply when an area has attained the standard and is eligible for redesignation. Furthermore, section 175A for maintenance plans provides specific requirements for contingency measures that effectively supersede the requirements of section 172(c)(9) for these areas. “General Preamble for the Interpretation of Title I of the Clean Air Act Amendments of 1990,” (General Preamble) 57 FR 13498, 13564 (April 16, 1992).

See also Calcagni memorandum at 6 (“The requirements for reasonable further progress and other measures needed for attainment will not apply for redesignations because they only have meaning for areas not attaining the standard.”).

Section 110(a)(2) of the CAA delineates the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) Include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of part C prevention of significant deterioration (PSD) and part D new source review (NSR) permit programs; (5) include provisions for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public and local agency participation in planning and emission control rule development.

Section 110(a)(2)(D) of the CAA requires SIPs to contain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of certain air pollutants, e.g., the NO X SIP call, the Clean Air Interstate Rule (CAIR), and the Cross State Air Pollution Rule (CSAPR). However, like many of the 110(a)(2) requirements, the section 110(a)(2)(D) SIP requirements are not linked with a particular area's ozone designation and classification. EPA concludes that the SIP requirements linked with the area's ozone designation and classification are the relevant measures to evaluate when reviewing a redesignation request for the area. The section 110(a)(2)(D) requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area within the state. Thus, we believe these requirements are not applicable requirements for purposes of redesignation. See 65 FR 37890 (June 15, 2000), 66 FR 50399 (October 19, 2001), 68 FR 25418, 25426-27 (May 13, 2003).

In addition, EPA believes that other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's ozone attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated to attainment of the 2008 ozone NAAQS. The section 110 and part D requirements that are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability ( i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania proposed and final rulemakings, 61 FR 53174-53176 (October 10, 1996) and 62 FR 24826 (May 7, 1997); Cleveland-Akron-Loraine, Ohio final rulemaking, 61 FR 20458 (May 7, 1996); and Tampa, Florida final rulemaking, 60 FR 62748 (December 7, 1995). See also the discussion of this issue in the Cincinnati, Ohio ozone redesignation (65 FR 37890, June 19, 2000), and the Pittsburgh, Pennsylvania ozone redesignation (66 FR 50399, October 19, 2001).

We have reviewed Wisconsin's SIP and have concluded that it meets the general SIP requirements under section 110 of the CAA, to the extent those requirements are applicable for purposes of redesignation. 3

Section 172(c) of the CAA sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications.

The Inland Sheboygan area was initially classified as Marginal and then reclassified as Moderate under subpart 2 for the 2008 ozone NAAQS. As such, the area is subject to the subpart 1 requirements contained in section 172(c) and section 176. Similarly, the area is subject to the subpart 2 requirements contained in sections 182(a) and (b) (Marginal and Moderate nonattainment area requirements). A thorough discussion of the requirements contained in section 172(c) and 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).

CAA Section 172(b) requires states to submit SIPs meeting the requirements of section 172(c) no later than three years from the date of the nonattainment designation.

Section 172(c)(1) requires the plans for all nonattainment areas to provide for the implementation of all RACM as expeditiously as practicable and to provide for attainment of the primary NAAQS. Under this requirement, a state must consider all available control measures, including reductions that are available from adopting RACT on existing sources. Because attainment has been reached in the Inland Sheboygan area, no additional measures are needed to provide for attainment and section 172(c)(1) requirements are no longer considered to be applicable, as long as the area continues to attain the standard until redesignation. See 40 CFR 51.1118.

The RFP requirement under section 172(c)(2) is defined as progress that must be made toward attainment. Because attainment has been reached, no additional measures are needed to provide for attainment.

Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. This requirement is superseded by the inventory requirement in section 182(a)(1) discussed below.

Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA approved Wisconsin's NSR program on October 6, 2014 (79 FR 160064) and February 7, 2017 (82 FR 9515). However, EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Wisconsin has demonstrated that the Inland Sheboygan area will be able to maintain the standard without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request. See rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Wisconsin's PSD program will become effective in the Inland Sheboygan area upon redesignation to attainment. EPA approved Wisconsin's PSD program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496).

Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we believe the Wisconsin SIP meets the requirements of section 110(a)(2) for purposes of redesignation.

Section 172(c)(9) requires the SIP to provide for the implementation of contingency measures if the area fails to make reasonably further progress or to attain the NAAQS by the attainment deadline. With respect to contingency measures for failure to attain the NAAQS by the attainment deadline, this requirement is not relevant for purposes of redesignation because the Inland Sheboygan area has demonstrated monitored attainment of the 2008 ozone NAAQS. (General Preamble, 57 FR 13564). See also 40 CFR 51.1118.

Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity), as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.

EPA interprets the conformity SIP requirements as not applying for purposes of evaluating a redesignation request under section 107(d), because state conformity rules are still required after redesignation and Federal conformity rules apply where state conformity rules have not been approved. 4 See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida). Nonetheless, Wisconsin has an approved conformity SIP for the Inland Sheboygan area. See 79 FR 10995 (February 27, 2014).

Section 182(a)(1) requires states to submit a comprehensive, accurate, and current inventory of actual emissions from sources of VOC and NO X emitted within the boundaries of the ozone nonattainment area. EPA approved Wisconsin's base year emissions inventory for the entirety of Sheboygan County on March 7, 2016 (81 FR 11673). In its October 9, 2019 submittal, WDNR requested that EPA replace the previously approved 2011 inventory for all of Sheboygan County with a 2011 base year emissions inventory for the Inland Sheboygan area. This inventory is discussed below in section IV.C.2. and VI. of this proposed rule. EPA is proposing to approve the inventory for the Inland Sheboygan area for the 2011 nonattainment year as meeting the section 182(a)(1) base year inventory requirement.

Under section 182(a)(2)(A), states with ozone nonattainment areas that were designated prior to the enactment of the 1990 CAA amendments were required to submit, within six months of classification, all rules and corrections to existing VOC RACT rules that were required under section 172(b)(3) prior to the 1990 CAA amendments. The Inland Sheboygan area is not subject to the section 182(a)(2) RACT “fix up” requirement for the 2008 ozone NAAQS because it was designated as nonattainment for this standard after the enactment of the 1990 CAA amendments and because Wisconsin complied with this requirement for the Inland Sheboygan area under the prior 1-hour ozone NAAQS. See 59 FR 41709 (August 15, 1994) and 60 FR 20643 (April 27, 1995).

Section 182(a)(2)(B) requires each state with a Marginal ozone nonattainment area that implemented or was required to implement a vehicle I/M program prior to the 1990 CAA amendments to submit a SIP revision for an I/M program no less stringent than that required prior to the 1990 CAA amendments or already in the SIP at the time of the CAA amendments, whichever is more stringent. For the purposes of the 2008 ozone standard and the consideration of Wisconsin's redesignation request for this standard, the Inland Sheboygan area is not subject to the section 182(a)(2)(B) requirement because the area was designated as nonattainment for the 2008 ozone standard after the enactment of the 1990 CAA amendments and because Wisconsin complied with this requirement for the Inland Sheboygan area under the prior 1-hour ozone NAAQS.

Section 182(a)(3) requires states to submit periodic emission inventories and a revision to the SIP to require the owners or operators of stationary sources to annually submit emission statements documenting actual VOC and NO X emissions. As discussed below in section IV.D.4. of this proposed rule, Wisconsin will continue to update its emissions inventory at least once every three years. With regard to stationary source emission statements, EPA approved Wisconsin's emission reporting program as satisfying the CAA emission statement requirement on December 6, 1993 (58 FR 64155). In a September 25, 2017 SIP submittal, WDNR certified that this approved SIP regulation remains in place and remain enforceable for the 2008 ozone standard. As discussed in section VII., below, EPA is proposing to approve Wisconsin's emission statement certification SIP as meeting the section 182(a)(3)(B) requirements of the CAA for the Inland Sheboygan area for the 2008 ozone NAAQS.

Section 182(b)(1) requires the submission of an attainment demonstration and RFP plan. Because attainment has been reached, section 182(b)(1) requirements are no longer considered to be applicable, as long as the area continues to attain the standard.

Section 182(b)(2) requires states with Moderate nonattainment areas to implement VOC RACT with respect to each of the following: (1) All sources covered by a Control Technology Guideline (CTG) document issued between November 15, 1990, and the date of attainment; (2) all sources covered by a CTG issued prior to November 15, 1990; and, (3) all other major non-CTG stationary sources. For the reasons discussed in section IX., below, EPA is proposing to find that the Wisconsin SIP meets the section 182(b)(2) Moderate RACT requirements for the Inland Sheboygan area under the 2008 ozone NAAQS.

Section 182(b)(3) requires states to adopt Stage II gasoline vapor recovery regulations. On May 16, 2012 (77 FR 28772), EPA determined that the use of onboard vapor recovery technology for capturing gasoline vapor when gasoline-powered vehicles are refueled is in widespread use throughout the highway motor vehicle fleet and waived the requirement that current and former ozone nonattainment areas implement Stage II vapor recovery systems on gasoline pumps. EPA approved a revision to Wisconsin's Stage II program on November 4, 2013 (78 FR 65875).

Section 182(b)(4) requires an I/M program in each state with a Moderate ozone nonattainment area. EPA approved Wisconsin's I/M program on August 16, 2001 (66 FR 42949) and approved revisions to the program on September 19, 2013 (78 FR 57501). On September 25, 2017, WDNR submitted a SIP certifying that Wisconsin's SIP-approved I/M program meets the I/M requirements of the CAA for the Inland Sheboygan area for the 2008 ozone NAAQS. As discussed in section VIII., below, EPA is proposing to approve Wisconsin's I/M certification SIP as meeting the I/M requirements of the CAA for the Inland Sheboygan area for the 2008 ozone NAAQS.

Regarding the source permitting and offset requirements of sections 182(a)(2)(C), 182(a)(4), and 182(b)(5), Wisconsin currently has a fully-approved part D NSR program in place. EPA approved Wisconsin's NSR SIP on January 18, 1995 (60 FR 3538) and February 7, 2017 (82 FR 9515). Further, EPA approved Wisconsin's SIP revision addressing the NSR requirements for the 2008 ozone NAAQS, on May 3, 2019 (84 FR 18989). In addition, EPA approved Wisconsin's PSD program on October 6, 2014 (79 FR 60064). The State's PSD program will become effective in the Inland Sheboygan area upon redesignation of the area to attainment.

Section 182(f) requires states with Moderate nonattainment areas to implement NO X RACT. EPA approved Wisconsin's NO X RACT SIP on October 19, 2010 (75 FR 64155). On September 25, 2017, WDNR submitted a SIP certifying that Wisconsin's SIP-approved NO X RACT rules meet the NO X RACT requirements of CAA section 182(f) for the Inland Sheboygan area for the 2008 ozone NAAQS. As discussed in section X., below, EPA is proposing to approve Wisconsin's NO X RACT certification SIP as meeting the NO X RACT requirements of the CAA for the Inland Sheboygan area for the 2008 ozone NAAQS.

Thus, as discussed above, with approval of Wisconsin's section 182(1)(1) base year inventory requirement, section 182(a)(3)(B) emission statement requirements, section 182(b)(2) VOC RACT requirements, section 182(b)(4) I/M program requirements, and section 182(f) NO X RACT requirements, EPA finds that the Inland Sheboygan area will satisfy all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.

At various times, Wisconsin has adopted and submitted, and EPA has approved, provisions addressing the various SIP elements applicable for the ozone NAAQS. As discussed above, if EPA finalizes approval of Wisconsin's section 182(a)(1) base year inventory requirements, section 182(a)(3)(B) emission statement requirements, section 182(b)(2) VOC RACT requirements, section 182(b)(4) I/M program requirements, and section 182(f) NO X RACT requirements, EPA will have fully approved the Wisconsin SIP for the Inland Sheboygan area under section 110(k) for all requirements applicable for purposes of redesignation under the 2008 ozone NAAQS. EPA may rely on prior SIP approvals in approving a redesignation request ( see the Calcagni memorandum at page 3; Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-990 (6th Cir. 1998); Wall v. EPA, 265 F.3d 426). Additional measures may also be approved in conjunction with a redesignation action ( see 68 FR 25426 (May 12, 2003) and citations therein).

To redesignate an area from nonattainment to attainment, section 107(d)(3)(E)(iii) of the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from the implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable emission reductions. EPA has determined that Wisconsin has demonstrated that that the observed ozone air quality improvement in the Inland Sheboygan area is due to permanent and enforceable reductions in VOC and NO X emissions resulting from state measures adopted into the SIP and Federal measures.

In making this demonstration, the State has calculated the change in emissions between 2011 and 2014. The reduction in emissions and the corresponding improvement in air quality over this time period can be attributed to several regulatory control measures that the Inland Sheboygan area and upwind areas have implemented in recent years. In addition, Wisconsin provided an analysis to demonstrate the improvement in air quality was not due to unusually favorable meteorology. Based on the information summarized below, EPA finds that Wisconsin has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emissions reductions.

CAIR/CSAPR. Under the “good neighbor provision” of CAA section 110(a)(2)(D)(i)(I), states are required to address interstate transport of air pollution. Specifically, the good neighbor provision provides that each state's SIP must contain provisions prohibiting emissions from within that state which will contribute significantly to nonattainment of the NAAQS, or interfere with maintenance of the NAAQS, in any other state.

On May 12, 2005, EPA published CAIR, which required eastern states, including Wisconsin, to prohibit emissions consistent with annual and ozone season NO X budgets and annual sulfur dioxide (SO 2 ) budgets (70 FR 25152). CAIR addressed the good neighbor provision for the 1997 ozone NAAQS and 1997 fine particulate matter (PM 2.5 ) NAAQS and was designed to mitigate the impact of transported NO X emissions, a precursor of both ozone and PM 2.5 , as well as transported SO 2 emissions, another precursor of PM 2.5 . The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded CAIR to EPA for replacement in 2008. North Carolina v. EPA, 531 F.3d 896, modified, 550 F.3d 1176 (2008). While EPA worked on developing a replacement rule, implementation of the CAIR program continued as planned with the NO X annual and ozone season programs beginning in 2009 and the SO 2 annual program beginning in 2010.

On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA published CSAPR to replace CAIR and to address the good neighbor provision for the 1997 ozone NAAQS, the 1997 PM 2.5 NAAQS, and the 2006 PM 2.5 NAAQS. 5 Through Federal Implementation Plans, CSAPR required electric generating units (EGUs) in eastern states, including Wisconsin, to meet annual and ozone season NO X budgets and annual SO 2 budgets implemented through new trading programs. After delays caused by litigation, EPA started implementing the CSAPR trading programs in 2015, simultaneously discontinuing administration of the CAIR trading programs. On October 26, 2016, EPA published the CSAPR Update, which established, starting in 2017, a new ozone season NO X trading program for EGUs in eastern states, including Wisconsin, to address the good neighbor provision for the 2008 ozone NAAQS (81 FR 74504). The CSAPR Update is estimated to result in a 20% reduction in ozone season NO X emissions from EGUs in the eastern United States, a reduction of 80,000 tons in 2017 compared to 2015 levels. The reduction in NO X emissions from the implementation of CAIR and then CSAPR occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

Reductions in VOC and NO X emissions have occurred statewide and in upwind areas as a result of Federal emission control measures, with additional emission reductions expected to occur in the future. Federal emission control measures include the following:

Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards. On February 10, 2000(65 FR 6698), EPA promulgated Tier 2 motor vehicle emission standards and gasoline sulfur control requirements. These emission control requirements result in lower VOC and NO X emissions from new cars and light duty trucks, including sport utility vehicles. With respect to fuels, this rule required refiners and importers of gasoline to meet lower standards for sulfur, which were phased in between 2004 and 2006. By 2006, refiners and importers were required to meet a 30 ppm average sulfur level, with a maximum cap of 80 ppm. This reduction in fuel sulfur content ensures the effectiveness of low emission-control technologies. The Tier 2 tailpipe standards established in this rule were phased in for new vehicles between 2004 and 2009. EPA estimates that, when fully implemented, this rule will cut NO X and VOC emissions from light-duty vehicles and light-duty trucks by approximately 76% and 28%, respectively. NO X and VOC reductions from medium-duty passenger vehicles included as part of the Tier 2 vehicle program are estimated to be approximately 37,000 and 9,500 tons per year, respectively, when fully implemented. As projected by these estimates and demonstrated in the on-road emission modeling for the Inland Sheboygan area, the majority of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as remaining older vehicles are replaced with newer, compliant model years.

Tier 3 Emission Standards for Vehicles and Gasoline Sulfur Standards. On April 28, 2014 (79 FR 23414), EPA promulgated Tier 3 motor vehicle emission and fuel standards to reduce both tailpipe and evaporative emissions and to further reduce the sulfur content in fuels. The rule is being phased in between 2017 and 2025. Tier 3 sets new tailpipe standards for non-methane organic gases (NMOG) and NO X, presented as NMOG+NO X , and for particulate matter. The VOC and NO X tailpipe standards for light-duty vehicles represent approximately an 80% reduction from today's fleet average and a 70% reduction in per-vehicle particulate matter (PM) standards. Heavy-duty tailpipe standards represent about a 60% reduction in both fleet average VOC and NO X and per-vehicle PM standards. The evaporative emissions requirements in the rule will result in approximately a 50% reduction from previous standards and apply to all light-duty and on-road gasoline-powered heavy-duty vehicles. Finally, the rule lowered the sulfur content of gasoline to an annual average of 10 ppm by January 2017. As projected by these estimates and demonstrated in the on-road emission modeling for the Inland Sheboygan area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

Heavy-Duty Diesel Engine Rules. In July 2000, EPA issued a rule for on-road heavy-duty diesel engines that includes standards limiting the sulfur content of diesel fuel. Emissions standards for NO X, VOC and PM were phased in between model years 2007 and 2010. In addition, the rule reduced the highway diesel fuel sulfur content to 15 parts per million by 2007, leading to additional reductions in combustion NO X and VOC emissions. EPA has estimated future year emission reductions due to implementation of this rule. EPA estimated that by 2015 NO X and VOC emissions would decrease nationally by 1,260,000 tons and 54,000 tons, respectively, and that by 2030 NO X and VOC emissions will decrease nationally by 2,570,000 tons and 115,000 tons, respectively. As projected by these estimates and demonstrated in the on-road emission modeling for the Inland Sheboygan area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

Non-road Diesel Rule. On June 29, 2004 (69 FR 38958), EPA issued a rule adopting emissions standards for non-road diesel engines and sulfur reductions in non-road diesel fuel. This rule applies to diesel engines used primarily in construction, agricultural, and industrial applications. Emission standards were phased in for the 2008 through 2015 model years based on engine size. The sulfur limits for non-road diesel fuels were phased in from 2007 through 2012. EPA estimates that when fully implemented, compliance with this rule will cut NO X emissions from these non-road diesel engines by approximately 90%. As projected by these estimates and demonstrated in the non-road emission modeling for the Inland Sheboygan area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

Non-road Spark-Ignition Engines and Recreational Engine Standards. On November 8, 2002 (67 FR 68242), EPA adopted emission standards for large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. These emission standards were phased in from model years 2004 through 2012. When fully implemented, EPA estimates an overall 72% reduction in national VOC emissions from these engines and an 80% reduction in national NO X emissions. As projected by these estimates and demonstrated in the non-road emission modeling for the Inland Sheboygan area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

Category 3 Marine Diesel Engine Standards. On April 30, 2010 (75 FR 22896), EPA issued emission standards for marine compression-ignition engines at or above 30 liters per cylinder. Tier 2 emission standards apply beginning in 2011 and are expected to result in a 15 to 25% reduction in NO X emissions from these engines. Final Tier 3 emission standards apply beginning in 2016 and are expected to result in approximately an 80% reduction in NO X from these engines. As projected by these estimates and demonstrated in the non-road emission modeling for the Inland Sheboygan area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

Wisconsin is using a 2011 emissions inventory as the nonattainment year. Although the Sheboygan Haven monitor in the Inland Sheboygan area was not yet operational in 2011, this is appropriate because it was one of the years used to designate the area as nonattainment due to an exceedance of the NAAQS at the Sheboygan Kohler-Andrae monitor. Wisconsin is using 2014 as the attainment year, which is appropriate because the Sheboygan Haven monitor in the Inland Sheboygan area began operating in 2014, and the monitor attained the NAAQS in the 2014 attainment year and every year thereafter.

Point source inventory. Wisconsin created the point source emission inventory using annually reported point source emissions, EPA's Clean Air Markets Division database, and approved EPA techniques for emissions calculation ( e.g., emission factors) for 2011 and 2014 point source emissions from state inventory databases.

There is one EGU point source facility located in the Inland Sheboygan County area. For this facility, WDNR used the maximum daily heat input reported in EPA's Clean Air Markets Division (CAMD) database as a conservative estimate of summer day heat input during the 2011 and 2014 ozone seasons. The summer day emissions were then calculated by multiplying the maximum daily heat input by an average NO X and VOC emission rate.

Wisconsin tabulated the 2011 and 2014 emissions inventories for non-EGU point sources using the emissions data reported annually by each facility operator to the Wisconsin air emissions inventory (AEI). The AEI calculates emissions for each individual emissions unit or process line by multiplying fuel or process throughput by the appropriate emission factor that is derived from mass balance analysis, stack testing, continuous emissions monitoring, engineering analysis, or EPA's Factor Information Retrieval database. The emission calculations in the AEI also account for any operating control equipment.

Nonpoint (area) source inventory. For the 2011 nonattainment year, nonpoint source emissions inventory estimates were based on the 2011 National Emissions Inventory (NEI) version 2, except for the residential and commercial portable fuel containers and Stage II refueling categories. 6 Emission calculation methodologies used in developing 2011 nonpoint emissions inventory are available in EPA's 2011 NEI, version 2 TSD. 7

For the 2014 attainment year, nonpoint source emissions inventory estimates were based on the data interpolation between 2011 NEI version 2 and EPA's 2017 emissions modeling inventory, except for the Stage II refueling category. Methodologies used to develop 2017 emissions modeling inventory are available in EPA's 2011 version 6.3 emissions modeling platform. 8

In order to obtain the area source emissions for the Inland Sheboygan County area, the whole county emission estimates were allocated to the partial county based on population data. The Sheboygan County population for 2014 was estimated by interpolating the population between 2013 and 2015 population data from the Wisconsin Department of Administration. The partial county population was identified based on the relative population of the Minor Civil Divisions in the Inland Sheboygan County area compared with the entire county. For 2011 and 2014, 48% of the county's population was estimated to live in the Inland Sheboygan County area.

On-road mobile source inventory. On-road mobile sources are motorized mobile equipment that are primarily used on public roadways. Examples of on-road mobile sources include cars, trucks, buses and road motorcycles. Wisconsin used the Motor Vehicle Emission Simulator (MOVES), EPA's recommended mobile source model, to develop on-road emissions rates. The version used was MOVES2014b.

The modeling inputs to MOVES include detailed transportation data ( e.g., vehicle-miles of travel by vehicle class, road class and hour of day, and average speed distributions), which were provided by the Wisconsin Department of Transportation.

Non-road mobile source inventory. The methodology for the 2011 and 2014 non-road emissions categories were developed using EPA's MOVES2014b model, using the same summer day temperatures used for the on-road modeling. The model was run for Sheboygan County for the months of June, July and August. Summer day emissions were calculated by dividing the total emissions over these three months by 92 (the number of days in the three months). Emissions were then allocated from the full county to the Inland Sheboygan area based on surrogates such as population, land area and water area, depending on the category.

For commercial marine, aircraft and rail locomotive (MAR) categories, for the 2011 nonattainment year, the annual emissions estimates used for Sheboygan County are those in EPA's 2011 NEI version 2. For the 2014 attainment year, annual emissions estimates for Sheboygan County were based on the data interpolation between 2011 NEI version 2 and EPA's 2017 emissions modeling inventory.

Summer day emissions for these MAR categories were estimated by dividing the annual emissions by 365. This same value was used in EPA's 2011 version 6.3 emissions modeling platform. The allocation of the full county emissions to the Inland Sheboygan area is based on surrogates such as population, land area and water area, depending on the MAR category.

Using the inventories described above, Wisconsin's submittal documents changes in VOC and NO X emissions from 2011 to 2014 for the Inland Sheboygan area. Emissions data are shown in Table 2. Data are expressed in terms of tons per summer day (TPSD). Due to rounding, some totals may not correspond with the sum of the separate categories, and some net change amounts may not correspond with the difference of the separate years.

As shown in Table 2, NO X and VOC emissions in the Inland Sheboygan area declined by 0.96 TPSD and 0.74 TPSD, respectively, between 2011 and 2014.

To further support Wisconsin's demonstration that the improvement in air quality is due to permanent and enforceable emission reductions and not unusually favorable meteorology, an analysis was performed by WDNR. Because the Sheboygan Haven monitor in the Inland Sheboygan area was not operational until 2014, WDNR lacks long-term meteorological data from the Sheboygan Haven site. However, in its February 11, 2020 request that EPA redesignate the Shoreline Sheboygan area, WDNR submitted a meteorological analysis based on 19 years of data collected at the Sheboygan Kohler-Andrae monitor, which is approximately 11 miles from the Haven monitor. Because data from the Sheboygan Kohler-Andrae monitor were used in the initial nonattainment designation of the area, and because this is the closest ozone monitor with sufficient data to perform a longer term analysis of ozone trends vs. meteorological indicators, this analysis is appropriate for purposes of demonstrating that the improvement in air quality in the Inland Sheboygan area is due to permanent and enforceable emissions reductions rather than favorable meteorology.

In its February 11, 2020 submittal, Wisconsin analyzed the maximum fourth-highest 8-hour ozone values for May, June, July, August, and September, for years 2001 to 2019. First, the maximum 8-hour ozone concentration at the Sheboygan Kohler-Andrae monitor was compared to the number of days where the maximum temperature was greater than or equal to 80 °F. Second, WDNR examined the relationship between the average summer temperature for each year of the 2001-2019 period and the fourth-highest 8-hour ozone concentration. These analyses show that over the last 19 years, ozone concentrations at the Kohler-Andrae monitor have decreased substantially. In contrast, temperatures have remained relatively constant, with an increase in the number of hot days and a slight decrease in the average season temperature. Because the correlation between temperature and ozone formation is well established, these data suggest that reductions in precursors are responsible for the reductions in ozone concentrations in the area, and not unusually favorable summer temperatures.

As discussed above, Wisconsin identified numerous Federal rules that resulted in the reduction of VOC and NO X emissions from 2011 to 2014. In addition, Wisconsin's analyses of meteorological variables associated with ozone formation demonstrate that the improvement in air quality in the area between the year violations occurred and the year attainment was achieved is not due to unusually favorable meteorology. Therefore, EPA finds that Wisconsin has shown that the air quality improvements in the Inland Sheboygan area are due to permanent and enforceable emissions reductions.

To redesignate an area from nonattainment to attainment, section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the maintenance plan must demonstrate continued attainment of the NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan which demonstrates that attainment of the NAAQS will continue for an additional 10 years beyond the initial 10-year maintenance period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures, as EPA deems necessary, to assure prompt correction of the future NAAQS violation.

The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five elements: (1) An attainment emission inventory; (2) a maintenance demonstration; (3) a commitment for continued air quality monitoring; (4) a process for verification of continued attainment; and (5) a contingency plan. In conjunction with its request to redesignate the Inland Sheboygan area to attainment for the 2008 ozone NAAQS, Wisconsin submitted a SIP revision to provide for maintenance of the 2008 ozone NAAQS through 2030, more than 10 years after the expected effective date of the redesignation to attainment. As discussed below, EPA proposes to find that Wisconsin's ozone maintenance plan includes the necessary components and to approve the maintenance plan as a revision of the Wisconsin SIP.

As discussed above, the Sheboygan Haven monitor in the Inland Sheboygan area has shown attainment of the standard since 2014. Wisconsin selected 2014 as the attainment emissions inventory year to establish attainment emission levels for VOC and NO X . The attainment emissions inventory identifies the levels of emissions in the Inland Sheboygan area that are sufficient to attain the 2008 ozone NAAQS. The derivation of the attainment year emissions is discussed above in section IV.C.2. of this proposed rule. The emissions for the 2014 attainment year, by source category, are summarized in Table 2 above.

Wisconsin has demonstrated maintenance of the 2008 ozone NAAQS through 2030 by ensuring that current and future emissions of VOC and NO X for the Inland Sheboygan area remain at or below attainment year emission levels. A maintenance demonstration need not be based on modeling. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001), Sierra Club v. EPA, 375 F. 3d 537 (7th Cir. 2004). See also 66 FR 53094, 53099-53100 (October 19, 2001), 68 FR 25413, 25430-25432 (May 12, 2003).

Wisconsin is using emissions inventories for the years 2020 and 2030 to demonstrate maintenance. 2030 was selected because it is 10 years after the expected effective date of the redesignation to attainment, and 2020 was selected to demonstrate that emissions are not expected to spike in the interim between the 2014 attainment year and the 2030 final maintenance year. The emissions inventories were developed as described below.

Wisconsin estimated the future year point source emissions by applying growth factors to the 2014 attainment year emissions inventory, as well as considering new and modified sources. Wisconsin's 2020 area source emissions were estimated primarily by interpolating between EPA's 2017 and 2028 modeling inventories, while 2030 area source emissions were estimated primarily by extrapolating EPA's 2023 and 2028 modeling inventories.

The 2020 and 2030 projected on-road and non-road emissions, except for MAR categories, were developed using the MOVES2014a model, as was the case for the 2011 and 2014 emissions. However, for the two MAR categories of aircraft and rail locomotive, the 2020 and 2030 emissions were calculated by linearly interpolating or extrapolating from the 2017, 2023 and, where available, 2028 values from EPA's 2011 Emissions Modeling Platform, Version 6.3.

Emissions data for the 2011 nonattainment year, 2014 attainment year, 2020 interim year, and 2030 maintenance year are shown in Tables 3 and 4 below. Data are expressed in terms of TPSD. Due to rounding, some totals may not correspond with the sum of the separate categories, and some net change amounts may not correspond with the difference of the separate years.

As shown in Tables 3 and 4, NO X and VOC emissions in the Inland Sheboygan area are projected to decrease by 1.93 TPSD and 1.13 TPSD, respectively, between the 2014 attainment year and 2030 maintenance year. Wisconsin's maintenance demonstration for the Inland Sheboygan area shows maintenance of the 2008 ozone NAAQS by providing emissions information to support the demonstration that future emissions of NO X and VOC will remain at or below 2014 emission levels when considering both future source growth and implementation of future controls.

Wisconsin has committed to continue to operate the Sheboygan Haven monitor in the Inland Sheboygan area. Wisconsin has committed to consult with EPA prior to making changes to the existing monitoring network should changes become necessary in the future. Wisconsin remains obligated to meet monitoring requirements, to continue to quality assure monitoring data in accordance with 40 CFR part 58, and to enter all data into the AQS in accordance with Federal guidelines.

Wisconsin has confirmed that it has the legal authority to enforce and implement the requirements of the maintenance plan for the Inland Sheboygan area. This includes the authority to adopt, implement, and enforce any subsequent emission control measures determined to be necessary to correct future ozone attainment problems.

Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic update of the area's emissions inventory. Wisconsin will continue to operate the current ozone monitor located in the Inland Sheboygan area. There are no plans to discontinue operation, relocate, or otherwise change the existing ozone monitoring network other than through revisions in the network approved by EPA.

In addition, to track future levels of emissions, Wisconsin will continue to develop and submit to EPA updated emission inventories for all source categories at least once every three years, consistent with the requirements of 40 CFR part 51, subpart A, and in 40 CFR 51.122. The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002 (67 FR 39602). The CERR was replaced by the Annual Emissions Reporting Requirements on December 17, 2008 (73 FR 76539). The most recent triennial inventory for Wisconsin was compiled for 2014. Point source facilities covered by Wisconsin's emission statement rule, Wisconsin Administrative Code NR 438, will continue to submit VOC and NO X emissions on an annual basis.

Section 175A of the CAA requires that the state adopt a maintenance plan as a SIP revision that includes such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation of the area to attainment of the NAAQS. The maintenance plan must identify: The contingency measures to be considered and, if needed for maintenance, adopted and implemented; a schedule and procedure for adoption and implementation; and a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be considered, adopted, and implemented. The maintenance plan must include a commitment that the state will implement all measures with respect to the control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d) of the CAA.

As required by section 175A of the CAA, Wisconsin has adopted a contingency plan for the Inland Sheboygan area to address possible future ozone air quality problems. The contingency plan adopted by Wisconsin has two levels of response, a warning level response and an action level response.

In Wisconsin's plan, a warning level response will be triggered when an annual fourth-highest monitored value of 0.075 ppm or higher is monitored within the maintenance area. A warning level response will require Wisconsin to conduct a study. The study would include the two elements. The first element would assess whether actual emissions have deviated significantly from the emissions projections contained in this maintenance plan for the area, along with an evaluation of which sectors and states are responsible for any emissions increases. Second, Wisconsin would investigate whether unusual meteorological conditions during the high-ozone year led to the high monitored ozone concentrations. The study will evaluate whether the trend, if any, is likely to continue and, if so, the control measures necessary to reverse the trend. The study will consider ease and timing of implementation, as well as economic and social impacts, and will be completed no later than May 1st of the next season. Implementation of necessary controls in response to a warning level response trigger will occur within 18 months.

In Wisconsin's plan, an action level response would be triggered if a three-year design value exceeds the level of the 2008 ozone NAAQS (0.075 ppm). When an action level response is triggered, Wisconsin will determine what additional control measures are needed to assure future attainment of the 2008 ozone NAAQS. Control measures selected will be adopted and implemented within 18 months from the close of the ozone season that prompted the action level. Wisconsin may also consider if significant new regulations not currently included as part of the maintenance provisions will be implemented in a timely manner and would thus constitute an adequate contingency measure response.

Wisconsin included the following list of potential contingency measures in its maintenance plan. However, Wisconsin is not limited to the measures on this list:

1. Anti-idling control program for mobile sources, targeting diesel vehicles

2. Diesel exhaust retrofits

3. Traffic flow improvements

4. Park and ride facilities

5. Rideshare/carpool program

6. Expansion of the vehicle emissions testing program

To qualify as a contingency measure, emissions reductions from that measure must not be factored into the emissions projections used in the maintenance plan. Wisconsin notes that because it is not possible to determine what control measures will be appropriate in the future, the list is not comprehensive.

EPA has concluded that Wisconsin's maintenance plan adequately addresses the five basic components of a maintenance plan: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. In addition, as required by section 175A(b) of the CAA, Wisconsin has committed to submit to EPA an updated ozone maintenance plan eight years after redesignation of the Inland Sheboygan area to cover an additional ten years beyond the initial 10-year maintenance period. Thus, EPA finds that the maintenance plan SIP revision submitted by Wisconsin for the Inland Sheboygan area meets the requirements of section 175A of the CAA, and EPA proposes to approve it as a revision to the Wisconsin SIP.

Under section 176(c) of the CAA, new transportation plans, programs, or projects that receive Federal funding or support, such as the construction of new highways, must “conform” to ( i.e., be consistent with) the SIP. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing air quality problems, or delay timely attainment of the NAAQS or interim air quality milestones. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and ensuring conformity of transportation activities to a SIP. Transportation conformity is a requirement for nonattainment and maintenance areas.

Under the CAA, states are required to submit, at various times, control strategy SIPs for nonattainment areas and maintenance plans for areas seeking redesignations to attainment of the ozone standard and maintenance areas. See the SIP requirements for the 2008 ozone NAAQS in EPA's December 6, 2018 implementation rule (83 FR 62998). These control strategy SIPs (including reasonable further progress plans and attainment plans) and maintenance plans must include MVEBs for criteria pollutants, including ozone, and their precursor pollutants (VOC and NO X ) to address pollution from on-road transportation sources. The MVEBs are the portion of the total allowable emissions that are allocated to highway and transit vehicle use that, together with emissions from other sources in the area, will provide for attainment or maintenance. See 40 CFR 93.101.

Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment must be established, at minimum, for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, Transportation Conformity Rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and how to revise the MVEB, if needed, subsequent to initially establishing a MVEB in the SIP.

As discussed earlier, Wisconsin's maintenance plan includes NO X and VOC MVEBs for the Inland Sheboygan area for 2020, which is an interim year, as well as 2030, which is the last year of the maintenance period. The MVEBS were developed as part of an interagency consultation process which includes Federal, state, and local agencies. The MVEBS were clearly identified and precisely quantified. These MVEBs, when considered together with all other emissions sources, are consistent with maintenance of the 2008 ozone NAAQS.

EPA is proposing to approve the MVEBs for use to determine transportation conformity in the Inland Sheboygan area, because EPA has determined that the area can maintain attainment of the 2008 ozone NAAQS for the relevant maintenance period with mobile source emissions at the levels of the MVEBs.

A “safety margin” is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. As noted in Tables 3 and 4, the emissions in the Inland Sheboygan area are projected to have safety margins of 1.93 TPSD for NO X and 1.13 TPSD for VOC in 2030 (the difference between emissions in the 2014 attainment year, and projected emissions in the 2030 maintenance year, for all sources in the Inland Sheboygan area). Similarly, there is a safety margin of 1.03 TPSD for NO X and 0.67 TPSD for VOC in 2020. Even if emissions exceeded projected levels by the full amount of the safety margin, the counties would still demonstrate maintenance since emission levels would equal those in the attainment year.

Wisconsin is not allocating any of the safety margin to the mobile source sector. Wisconsin can request an allocation to the MVEBs of the available safety margins reflected in the demonstration of maintenance in a future SIP revision.

As discussed above, section 182(a)(1) of the CAA requires areas to submit a base year emissions inventory. As part of Wisconsin's redesignation request for the Inland Sheboygan area, the State submitted a 2011 base year emissions inventory. This inventory is discussed above in section IV.C.2. and summarized in Table 2. EPA is proposing to approve this 2011 base year inventory as meeting the section 182(a)(1) emissions inventory requirement for the Inland Sheboygan area.

Section 182(a)(3)(B) of the CAA requires states with ozone nonattainment areas to submit revisions to their SIP to require the owner or operator of each major stationary source of NO X or VOC to provide the state with an annual statement documenting the actual emissions of NO X and VOC from their source. Under section 182(a)(3)(B)(ii), a state may waive the emissions statement requirement for any class or category of stationary sources which emits less than 25 tons per year of VOC or NO X if the state, in its base year emissions inventory, provides an inventory of emissions from such class or category of sources. States and EPA have generally interpreted this waiver provision to apply to sources (without specification of a specific source class or source category) emitting less than 25 tons per year of VOC or NO X .

Many states, including Wisconsin, adopted these emissions statement rules for the 1-hour ozone NAAQS. For these states, EPA is accepting certifications that their previously adopted emissions statement rules remain in place and are adequate to meet the emissions statement rule requirement under the 2008 ozone standard.

Under NR 438 of the Wisconsin Administrative Code, Wisconsin requires annual NO X and VOC emission reporting from any facility in the State that emits NO X above 10,000 pounds (5 tons) per year and VOC above 6,000 pounds (3 tons) per year. This includes facilities in nonattainment areas such as the Inland Sheboygan area for the 2008 ozone NAAQS. EPA previously approved NR 438 into the Wisconsin SIP on December 6, 1993 (58 FR 64155).

In a September 25, 2017, SIP submission, WDNR certified that this approved SIP regulation remains in place and remains enforceable for the 2008 ozone NAAQS.

Because Wisconsin has an EPA approved SIP provision requiring stationary sources to report annually their NO X emissions over 5 tons and VOC emissions over 3 tons, EPA is proposing to approve Wisconsin's emissions statement certification SIP as meeting the requirement of section 182(a)(3)(B) of the CAA for the 2008 ozone for the Inland Sheboygan area.

The requirement to adopt a motor vehicle I/M program for Moderate ozone nonattainment areas is described in CAA section 182(b)(4) and the regulations for basic and enhanced I/M programs are found at 40 CFR part 51, subpart S. Under these cumulative requirements, states with areas classified as Moderate nonattainment for ozone with 1990 Census-defined urbanized populations of 200,000 or more are required to adopt basic I/M programs, while Serious and higher classified ozone nonattainment areas outside of the northeast ozone transport region with 1980 Census-defined urbanized populations of 200,000 or more are required to adopt enhanced I/M programs. Wisconsin's I/M program has been in operation since 1984. It was originally implemented in accordance with the 1977 CAA Amendments and operated in the six counties of Kenosha, Milwaukee, Ozaukee, Racine, Washington and Waukesha. Sheboygan County was added to the program in July 1993, resulting in a seven-county program area that has remained to the present. In 1995, Wisconsin transitioned to an enhanced I/M program. EPA approved Wisconsin's I/M program on August 16, 2001 (66 FR 42949) and approved revisions to the program on September 19, 2013 (78 FR 57501). Wisconsin's approved I/M program in the SIP is consistent with the requirements of 40 CFR part 51, subpart S, for the alternate low enhanced performance standards. In its September 25, 2017, submission, Wisconsin certified that it still meets the Federal I/M performance requirement. Therefore, EPA is proposing to find that Wisconsin has met the I/M requirement for the Inland Sheboygan area for the 2008 ozone NAAQS.

Sections 172(c)(1) and 182(b)(2) of the CAA require states to implement RACT in ozone nonattainment areas classified as Moderate (and higher). Specifically, these areas are required to implement RACT for all major VOC and NO X emissions sources and for all sources covered by a CTG. A CTG is a document issued by EPA which establishes a “presumptive norm” for RACT for a specific VOC source category. States must submit rules, or negative declarations when no such sources exist for CTG source categories.

EPA's SIP Requirements Rule for the 2008 ozone NAAQS provides several pathways by which states may meet RACT requirements. States can meet the RACT requirements associated with the 2008 ozone NAAQS either through: (1) A certification that previously adopted RACT controls in their SIP approved by EPA under a prior ozone NAAQS continue to represent adequate RACT control levels for attainment of the 2008 ozone NAAQS; (2) through the adoption of new or more stringent regulations or controls that represent RACT control levels; and/or (3) a negative declaration if there are no source categories subject to certain CTGs within the nonattainment area.

Wisconsin previously addressed RACT requirements in the Inland Sheboygan area in developing attainment plans for the 1979 and 1997 ozone standards. Wisconsin has previously adopted RACT rules for VOC emission sources in its nonattainment areas under Wisconsin Administrative Code NR 420. Wisconsin has evaluated the previously adopted regulations and determined that these rules still satisfy RACT. Wisconsin's submittal describes the VOC RACT program for the Inland Sheboygan area. The submittal provided a list of the CTGs for which RACT requirements have been codified in Wisconsin Administrative Code.

Wisconsin has not adopted VOC RACT regulations for four CTGs: Shipbuilding and ship repair, aerospace manufacturing, fiberglass boat manufacturing, and the oil and natural gas industry. In addition, while Wisconsin has adopted rules to cover industrial adhesive use, metal and plastic parts coatings, and automobile and light-duty truck manufacturing, Wisconsin's Administrative Code does not reflect the most recently published CTG for these three categories.

Wisconsin preformed an applicability analysis for these seven categories in the Inland Sheboygan nonattainment area. Wisconsin's analysis took the following steps: First, Wisconsin relied on the Wisconsin Air Emissions Inventory to create a list of all the VOC emitting facilities in the Inland Sheboygan area. Wisconsin searched the list for facilities having the applicable CTG Standard Industrial Classification (SIC) codes. Second, Wisconsin searched the Wisconsin Air Resource Program database, which contains facility and emissions information about all Wisconsin companies that have obtained an air pollution control permit, for sources located within the partial county nonattainment area with the applicable SIC codes. Third, Wisconsin searched the membership directories found on the applicable SIC code organizations' websites. Finally, Wisconsin searched the ReferenceUSA database for facilities located within the Inland Sheboygan area with the SIC codes listed above.

Wisconsin's analysis determined that there are no facilities in the Inland Sheboygan area for the shipbuilding and ship repair, aerospace manufacturing, fiberglass boat manufacturing, oil and natural gas industry, miscellaneous industrial adhesives, metal and plastic parts coatings, and automobile and light-duty truck assembly coatings categories. These are the seven categories in which Wisconsin has not adapted the most recently published CTGs. Wisconsin provided Negative Declarations for these CTG categories.

In summary, Wisconsin has certified that the VOC RACT rules previously adopted by the state and approved into Wisconsin's SIP continue to meet VOC RACT requirements for the area under the 2008 ozone NAAQS. Wisconsin has adequately documented its analysis of sources in the area to support its negative declarations for categories in which Wisconsin has not adopted the most recently published CTGs. EPA finds Wisconsin's VOC RACT SIP submittal to be approvable as meeting the Moderate VOC RACT requirements of section 182(b)(2) of the CAA.

Section 182(f) of the CAA requires RACT level controls for major stationary sources of NO X located in Moderate ozone nonattainment areas. Section 302 of the CAA defines a major stationary source as any facility which has the potential to emit 100 tons per year of any air pollutant. RACT is defined as the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility. On October 19, 2010, EPA approved Wisconsin's NO X RACT program into the SIP for purposes of the 1997 ozone NAAQS (75 FR 64155). Wisconsin's NO X RACT requirements are codified at NR 428.20 to 428.26 of the Wisconsin Administrative Code. Wisconsin's NO X RACT rules are applicable to major stationary sources of NO X located in Wisconsin's Moderate ozone nonattainment areas, including the Inland Sheboygan area. On September 25, 2017, WDNR submitted a SIP certifying that Wisconsin's SIP-approved NO X RACT rules meet the NO X RACT requirements of CAA section 182(f) for the Inland Sheboygan area for the 2008 ozone NAAQS. Because Wisconsin has EPA-approved NO X RACT rules applicable to Inland Sheboygan area sources in its SIP, EPA is proposing to find that Wisconsin has satisfied the NO X RACT requirements for the Inland Sheboygan area for the 2008 ozone NAAQS.

On March 6, 2015, EPA revoked the 1997 ozone NAAQS along with associated designations and classifications (80 FR 12264). Thus, the Inland Sheboygan area has no designation under the 1997 ozone NAAQS that can be changed through redesignation as governed by CAA section 107(d)(3)(E). Therefore, EPA is not proposing a redesignation of the Inland Sheboygan area for the 1997 ozone NAAQS under CAA section 107(d)(3)(E).

However, in evaluating Wisconsin's request to redesignate the Inland Sheboygan area under the 2008 ozone standard, EPA determined that the area has met the five criteria in section 107(d)(3)(E) for redesignation, including the requirement that Wisconsin meet all applicable requirements of section 110 and part D of the CAA for the Inland Sheboygan area, and have a fully approved SIP for the area under section 110(k) of the CAA. As part of that evaluation, EPA has determined that Wisconsin has a fully approved SIP and meets the anti-backsliding requirements under the 1997 ozone standard as codified at 40 CFR 51.1105(a)(1) and 40 CFR 51.1100(o).

EPA is proposing to determine that the Inland Sheboygan nonattainment area is attaining the 2008 ozone NAAQS, based on quality-assured and certified monitoring data for 2017-2019. EPA is proposing to determine that upon final approval of Wisconsin's 2011 base year emissions inventory, emission statement certification SIP, VOC RACT SIP, I/M certification SIP, and NO X RACT certification SIP, the area will have met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to change the legal designation of the Inland Sheboygan area from nonattainment to attainment for the 2008 ozone NAAQS. EPA is also proposing to approve, as a revision to the Wisconsin SIP, the state's maintenance plan for the area. The maintenance plan is designed to keep the Inland Sheboygan area in attainment of the 2008 ozone NAAQS through 2030. EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Inland Sheboygan area.

Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, 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), because redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on tribes, impact any existing sources of air pollution on tribal lands, nor impair the maintenance of ozone national ambient air quality standards in tribal lands.

This is a summary of the Public Notice ( Auction 107 Comment Public Notice ), AU Docket No. 20-25, FCC 20-23, adopted on February 28, 2020 and released on March 3, 2020. The Auction 107 Comment Public Notice includes the following attachment: Attachment A, Proposed Upfront Payment and Minimum Opening Bid Amounts. The complete text of the Auction 107 Comment Public Notice, including its attachment, is available for public inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. The complete text is also available on the Commission's website at www.fcc.gov/auction/107 or by using the search function for AU Docket No. 20-25 on the Commission's ECFS web page at www.fcc.gov/ecfs. Alternative formats are available to persons with disabilities by sending an email to FCC504@fcc.gov or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated in the Auction 107 Comment Public Notice in AU Docket No. 20-25.

1. By the Auction 107 Comment Public Notice, the Commission seeks comment on the procedures to be used for Auction 107, the auction of new flexible-use overlay licenses in the 3.7-3.98 GHz band (the 3.7 GHz Service). The Commission expects the bidding for licenses in Auction 107 to commence on December 8, 2020. The Commission proposes to use an ascending clock auction format for the licenses offered in Auction 107 and then hold a sealed bid assignment phase. The Auction 107 Comment Public Notice seeks comment on proposed auction procedures for bidding to acquire licenses in Auction 107.

2. Auction 107 will offer 5,684 new flexible-use overlay licenses for spectrum in the 3.7-3.98 GHz band throughout the contiguous United States subject to clearing requirements. The Commission adopted the 3.7 GHz Report and Order, [April 23, 2020], which describes in detail the rules applicable to the licenses offered in these 280 megahertz of spectrum. The Commission will offer up to 280 megahertz of spectrum licensed on an unpaired basis in three blocks divided into 20-megahertz sub-blocks by partial economic area (PEA) in the contiguous states and the District of Columbia (PEAs 1-41, 43-211, 213-263, 265-297, 299-359, and 361-411). The Commission will not issue flexible-use overlay licenses for Honolulu, Anchorage, Kodiak, Fairbanks, Juneau, Puerto Rico, Guam-Northern Mariana Islands, U.S. Virgin Islands, American Samoa, and the Gulf of Mexico (PEAs numbers 42, 212, 264, 298, 360, 412-416). Specifically, the A Block will cover 100 megahertz from 3.7-3.8 GHz in five 20-megahertz sub-blocks: 3700-3720 MHz (A1), 3720-3740 MHz (A2), 3740-3760 MHz (A3), 3760-3780 MHz (A4), and 3780-3800 MHz (A5). The B Block will cover 100 megahertz from 3.8-3.9 GHz in five 20-megahertz sub-blocks: 3800-3820 MHz (B1), 3820-3840 MHz (B2), 3840-3860 MHz (B3), 3860-3880 MHz (B4), and 3880-3900 MHz (B5). The C Block will cover 80 megahertz from 3.9-3.98 GHz, and four 20-megahertz sub-blocks will be licensed for flexible use: 3900-3920 MHz (C1), 3920-3940 MHz (C2), 3940-3960 MHz (C3), and 3960-3980 MHz (C4). The 20 megahertz at 3980-4000 MHz will be a guard band and not available for auction. All 3.7 GHz Service licenses will be issued for 15-year, renewable license terms. A licensee in the 3.7-3.98 GHz band may provide any services permitted under terrestrial fixed or mobile allocations, as set forth in the non-Federal Government column of the Table of Frequency Allocations in section 2.106 of the Commission's rules, as modified by the 3.7 GHz Report and Order.

3. A list of markets in which licenses will be offered in Auction 107, including proposed upfront payment and minimum opening bid amounts, is available in Attachment A to the Auction 107 Comment Public Notice.

4. Transition of Incumbent Operations. The 3.7-4.2 GHz band currently is allocated in the United States exclusively for non-Federal use on a primary basis for Fixed Satellite Service (FSS) and Fixed Service (FS) services. In the 3.7 GHz Report and Order, the Commission modified the licenses and market access authorizations of incumbent FSS operators and FS licensees to clear the 3.7-4.0 GHz band for new flexible-use terrestrial operations. For additional information about clearing and conditions on the licenses to be offered in Auction 107, potential bidders should carefully review the 3.7 GHz Report and Order.

5. Each potential bidder is solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the potential uses of a license that it may seek in Auction 107. In addition to the typical due diligence considerations that the Commission encourages of bidders in all auctions, the Commission calls particular attention in Auction 107 to the clearing process and license conditions described in the 3.7 GHz Report and Order. Each applicant should closely follow releases from the Commission concerning these issues and consider carefully the technical and economic implications for commercial use of the 3.7-3.98 GHz band. The Commission makes no representations or warranties about the use of this spectrum for particular services. Each applicant should be aware that a Commission auction represents an opportunity to become a Commission licensee, subject to certain conditions and regulations. This includes the established authority of the Commission to alter the terms of existing licenses by rulemaking, which is equally applicable to licenses awarded by auction. A Commission auction does not constitute an endorsement by the Commission of any particular service, technology, or product, nor does a Commission license constitute a guarantee of business success.

6. In the 3.7 GHz Report and Order, the Commission decided to conduct any auction of new flexible-use licenses for the 3.7 GHz Service in conformity with the amended Part 1 rules. The Commission's Part 1 rules require each applicant seeking to bid to acquire licenses in a spectrum auction to provide certain information in a short-form application (FCC Form 175), including ownership details and numerous certifications.

7. Prohibition of Certain Communications. Section 1.2105(c)(1) of the Commission's rules provides that, subject to specified exceptions, after the short-form application filing deadline, all applicants are prohibited from cooperating or collaborating with respect to, communicating with or disclosing, to each other or any nationwide provider of communications services that is not an applicant, or, if the applicant is a nationwide provider, any non-nationwide provider that is not an applicant, in any manner the substance of their own, or each other's, or any other applicants' bids or bidding strategies (including post-auction market structure), or discussing or negotiating settlement agreements, until after the down payment deadline. Section 1.2105(c)(5)(i) defines “applicant” as including all officers and directors of the entity submitting a short-form application to participate in the auction, all controlling interests of that entity, as well as all holders of partnership and other ownership interests and any stock interest amounting to 10% or more of the entity, or outstanding stock, or outstanding voting stock of the entity submitting a short-form application.

8. The operation of the rule prohibiting certain communications requires that the Commission identify nationwide providers in connection with each auction. Because the applicable service rules for the 3.7-3.98 GHz band will allow a licensee to provide flexible terrestrial wireless services, including mobile services, the Commission's identification of four nationwide providers in the Communications Marketplace Report suggests that it should identify those same entities as nationwide providers for purposes of 3.7 GHz licenses and Auction 107. This is consistent with the Commission's identification of “nationwide providers” for the purpose of implementing its competitive bidding rules in Auctions 101, 102, 103 and the forward auction portion of the Broadcast Incentive Auction. Accordingly, consistent with the procedures adopted for prior auctions of flexible-use licenses for advanced wireless services, the Commission proposes to identify AT&T, Sprint, T-Mobile, and Verizon Wireless as “nationwide providers” for the purpose of implementing the Commission's competitive bidding rules in Auction 107, including section 1.2105(c), the rule prohibiting certain communications. The Commission seeks comment on this proposal.

9. The Commission seeks comment on establishing reasonable caps on the total amount of bidding credits that an eligible small business, very small business, or rural service provider may be awarded for Auction 107.

10. Eligibility for the small business bidding credit is determined according to a tiered schedule of small business size definitions that are based on an applicant's average annual gross revenues for the relevant preceding period, and which determine the size of the bidding credit discount. In the 3 .7 GHz Report and Order, the Commission determined that eligibility for the small business bidding credit in the auction of licenses in the 3.7-3.98 GHz band would be defined using two of the thresholds of the standardized schedule of small business sizes. Specifically, the Commission determined that an entity with average annual gross revenues for the preceding five years not exceeding $55 million would be designated as a “small business” eligible for a 15% bidding credit, and that an entity with average annual gross revenues for the preceding five years not exceeding $20 million would be designated as a “very small business” eligible for a 25% bidding credit. The Commission further determined that entities providing commercial communication services to a customer base of fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers in primarily rural areas would be eligible for the 15% rural service provider bidding credit. The Commission defined rural area as a county with a population density of 100 persons or fewer per square mile.

11. In the Updating Part 1 Report and Order, 80 FR 56764, September 18, 2015, the Commission established a process to implement a reasonable cap on the total amount of bidding credits that an eligible small business or rural service provider may be awarded in any auction, based on an evaluation of the expected capital requirements presented by the particular service and inventory of licenses being auctioned. The Commission determined that bidding credit caps would be implemented on an auction-by-auction basis, but resolved that, for any particular auction, the total amount of the bidding credit cap for small businesses would not be less than $25 million, and the bidding credit cap for rural service providers would not be less than $10 million. For Auctions 101, 102, and 103, the Commission adopted a $25 million cap on the total amount of bidding credits that may be awarded to an eligible small business in each auction and a $10 million cap on rural service provider bidding credits in each auction.

12. The Commission proposes to adopt the same bidding credit caps for Auction 107. Like Auctions 101, 102, and 103, the Commission believes that the range of potential use cases suitable for spectrum in the 3.7-3.98 GHz band, combined with the relatively small geographic areas for new flexible-use overlay licenses in the 3.7 GHz Service, may permit deployment of smaller scale networks with lower total costs. Moreover, past auction data suggests that the proposed caps will allow the substantial majority of eligible small businesses in the auction to take advantage of the bidding credit program. The Commission therefore believes that its proposed caps will promote the statutory goals of providing meaningful opportunities for bona fide small businesses to compete in auctions and in the provision of spectrum-based services, without compromising the Commission's responsibility to prevent unjust enrichment and ensure efficient and intensive use of spectrum.

13. Similarly, the Commission proposes to adopt a $10 million cap on the total amount of bidding credits that may be awarded to an eligible rural service provider in Auction 107. An entity is not eligible for a rural service provider bidding credit if it has already claimed a small business bidding credit. The Commission anticipates that a $10 million cap on rural service provider bidding credits will not constrain the ability of any rural service provider to participate fully and fairly in Auction 107. No rural service provider exceeded the $10 million cap in the Broadcast Incentive Auction, Auction 101, or Auction 102. In addition, to create parity in Auction 107 among eligible small businesses and rural service providers competing against each other in smaller markets, the Commission proposes a $10 million cap on the overall amount of bidding credits that any winning small business bidder may apply to winning licenses in markets with a population of 500,000 or less. This proposal is consistent with the approach adopted by the Commission in the Broadcast Incentive Auction, Auction 101, Auction 102, and Auction 103.

14. The Commission seeks comment on these proposed caps. Specifically, do the expected capital requirements associated with operating in the 3.7-3.98 GHz band, the potential number and value of 3.7 GHz Service licenses, past auction data, or any other considerations justify a higher cap for either type of bidding credit? Moreover, are there convincing reasons for not maintaining parity with the bidding credit caps in Auctions 101, 102, and 103? Commenters are encouraged to identify unique circumstances and characteristics of this mid-band auction that should guide the Commission in establishing bidding credit caps, and to provide specific, data-driven arguments in support of their proposals.

15. The Commission reminds applicants applying for designated entity bidding credits that they should take due account of the requirements of the Commission's rules and implementing orders regarding de jure and de facto control of such applicants. These rules include a prohibition, which applies to all applicants (whether or not they are seeking bidding credits), against changes in ownership of the applicant that would constitute an assignment or transfer of control. Applicants should not expect to receive any opportunities to revise their ownership structure after the filing of their short- and long-form applications, including making revisions to their agreements or other arrangements with interest holders, lenders, or others in order to address potential concerns relating to compliance with the designated entity bidding credit requirements. Applicants will not be permitted to change their bidding credit type selection ( i.e., from small business to rural service provider, or vice versa) after the short-form deadline.

16. As with most recent Commission spectrum license auctions, the Commission proposes to limit information available in Auction 107 in order to prevent the identification of bidders placing particular bids until after the bidding has closed. More specifically, the Commission proposes to not make public until after bidding has closed: (1) The PEAs that an applicant selects for bidding in its short-form application (FCC Form 175), (2) the amount of any upfront payment made by or on behalf of an applicant for Auction 107, (3) any applicant's bidding eligibility, and (4) any other bidding-related information that might reveal the identity of the bidder placing a bid.

17. Bidders would have access to additional information related to their own bidding and bid eligibility. For example, bidders would be able to view their own level of eligibility before and during the auction through the FCC auction bidding system.

18. After the close of bidding, bidders' PEA selections, upfront payment amounts, bidding eligibility, bids, and other bidding-related information would be made publicly available.

19. The Commission seeks comment on the details of its proposal for implementing limited information procedures, or anonymous bidding, in Auction 107. Commenters opposing the use of anonymous bidding in Auction 107 should explain their reasoning and propose alternative information rules.

20. In keeping with the Commission's usual practice in spectrum license auctions, the Commission proposes that applicants be required to submit upfront payments as a prerequisite to becoming qualified to bid. The upfront payment is a refundable deposit made by an applicant to establish its eligibility to bid on licenses. Upfront payments protect against frivolous or insincere bidding and provide the Commission with a source of funds from which to collect payments owed at the close of bidding. The Commission's rules require that any auction applicant that, pursuant to 47 CFR 1.2105(a)(2)(xii), certifies that it is a former defaulter must submit an upfront payment equal to 50% more than the amount that otherwise would be required. The Commission proposes upfront payments based on $0.015 per MHz-pop. The results of these calculations will be rounded using the Commission's standard rounding procedures for auctions: Results above $10,000 are rounded to the nearest $1,000; results below $10,000 but above $1,000 are rounded to the nearest $100; and results below $1,000 are rounded to the nearest $10. The proposed upfront payments equal approximately half the proposed minimum opening bids, which are established as described in Section IV.A.7.a of the Auction 107 Comment Public Notice. The Commission seeks comment on these upfront payment amounts, which are specified in Attachment A to the Auction 107 Comment Public Notice. If commenters believe that these upfront payment amounts are not reasonable amounts, they should explain their reasoning and suggest an alternative approach. Commenters may wish to suggest other modifications to our proposal, such as weighting the minimum opening bid calculation using past auction prices.

21. The Commission further proposes that the amount of the upfront payment submitted by a bidder would determine its initial bidding eligibility in bidding units, which are a measure of bidder eligibility and bidding activity. The Commission proposes to assign each generic spectrum block in a given PEA a specific number of bidding units, equal to one bidding unit per $10 of the upfront payment listed in Attachment A to the Auction 107 Comment Public Notice. The number of bidding units for one block in a given PEA is fixed, since it is based on the MHz-pops in the block, and does not change during the auction as prices change. To the extent that bidders wish to bid on multiple generic blocks simultaneously, whether within the same PEA or in different PEAs, they would need to ensure that their upfront payment provides enough eligibility to cover multiple blocks.

22. Under the Commission's proposed approach, a bidder's upfront payment would not be attributed to blocks in a specific PEA or PEAs, or to particular categories of blocks, if there is more than one. A bidder may place bids on multiple blocks in PEAs that it selected for bidding in its FCC Form 175, provided that the total number of bidding units associated with those blocks does not exceed its eligibility-based limit for the round. A bidder cannot increase its eligibility during the auction; it can only maintain its eligibility or decrease its eligibility. Thus, in calculating its upfront payment amount, and hence its initial bidding eligibility, an applicant must determine the maximum number of bidding units on which it may wish to bid in any single round and submit an upfront payment amount covering that total number of bidding units. The Commission seeks comment on these proposals.

23. For Auction 107, the Commission proposes that, at any time before or during the bidding process, the Office of Economics and Analytics (OEA), in conjunction with the Wireless Telecommunications Bureau (WTB), may delay, suspend, or cancel bidding in Auction 107 in the event of a natural disaster, technical obstacle, network interruption, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. In such a case, OEA would notify participants of any such delay, suspension, or cancellation by public notice and/or through the FCC auction bidding system's announcement function. If the bidding is delayed or suspended, OEA, in its sole discretion, may elect to resume the auction starting from the beginning of the current round or from some previous round, or it may cancel the auction in its entirety. The Commission emphasizes that OEA and WTB would exercise this authority solely at their discretion. The Commission seeks comment on this proposal.

24. The Commission proposes to conduct Auction 107 using an ascending clock auction design. Under the proposed auction format, bidding would take place in two phases. The first phase of the auction—the clock phase—would consist of successive clock bidding rounds in which bidders indicate their demands for categories of generic license blocks in specific PEAs, followed by a second phase—the assignment phase—with bidding for frequency-specific license assignments. The Commission seeks comment on bidding procedures for the two phases of Auction 107.

25. The Commission directs OEA, in conjunction with WTB, to prepare and release a technical guide supplementing the information in the Auction 107 Comment Public Notice and including the mathematical details and algorithms of the proposed auction design.

26. During the clock phase of Auction 107, bidders will indicate their demands for generic license blocks in two bidding categories in specific geographic areas—in this case, PEAs. The Commission's proposed clock auction format would proceed in a series of rounds, with bidding being conducted simultaneously for all spectrum blocks in all PEAs available in the auction. During each bidding round, the bidding system would announce a per-block clock price for each category in each PEA, and qualified bidders would submit, for each category and PEA for which they wish to bid, the number of blocks they seek at the clock prices associated with the current round. Bidding rounds would be open for predetermined periods of time. Bidders would be subject to activity and eligibility rules that govern the pace at which they participate in the auction.

27. Under the Commission's proposal, for each product—a category in a PEA—the clock price for a generic license block would increase from round to round if bidders indicate total demand for blocks in that product that exceeds the number of blocks available. The bidding rounds would continue until, for all products, the total number of blocks that bidders demand does not exceed the supply of available blocks. At that point, those bidders indicating demand for a product at the final price would be deemed winning bidders.

28. Following the clock phase, the assignment phase will offer clock phase winners the opportunity to bid an additional amount for licenses with specific frequencies. All winning bidders, regardless of whether they bid in the assignment phase, will be assigned licenses for contiguous blocks within a category in a PEA.

29. The Commission seeks comment on specific procedures to implement this ascending clock auction and on alternative procedures for conducting, in a timely manner, an auction of 3.7-3.98 GHz licenses.

30. The 3.7 GHz Report and Order determined that the 3.7-3.98 GHz band will be reconfigured and licensed in uniform 20-megahertz sub-blocks in each of 406 PEAs. The 3.7 GHz Report and Order also establishes a two-phase accelerated relocation process. In Phase I, participating incumbent space station operators would relocate their services out of blocks A1-A5 and relocate incumbent earth stations in the 46 PEAs that are subject to the Phase I deadline out of those blocks. In Phase II, participating space station operators would relocate their services out of blocks B1-B5 and C1-C4 and transition all incumbent earth stations out of all the blocks. To facilitate bidding in the clock phase, the Commission proposes to establish two categories of generic blocks in each PEA.

31. The Commission proposes that the first category of generic blocks will consist of the 20-megahertz subblocks between 3.7-3.8 GHz. This category, designated Category A, will comprise a total of five blocks: A1-A5. A second category, Category BC, will consist of the remaining sub-blocks between 3.8-3.98 GHz for a total of nine blocks: (B1-B5, C1-C4).

32. In each bidding round, a bidder will have the opportunity to bid for the quantity of generic blocks it demands in each of the two bidding categories. Bidding in the clock phase will determine a single price for all the generic blocks in each category in each PEA.

33. The Commission's proposal for bidding on generic blocks in two categories is based on the close similarity of the blocks within each bidding category. The Commission distinguishes between Category A and Category BC to recognize that bidders may value early access to blocks A1-A5, both in the 46 PEAs subject to the Phase I incumbent earth station deadline and in other PEAs where a bidder might seek voluntary early transition of incumbent earth stations. To the extent a bidder has a preference for specific frequency licenses, the bidder may bid for its preferred blocks in the assignment phase. However, a bidder for a generic block cannot be assured that it will be assigned, or not be assigned, any particular frequency block. The Commission asks that commenters explain any concerns they may have about the interchangeability of generic blocks within the two proposed categories of generic blocks, bearing in mind potential tradeoffs between the number of categories and auction length, the ability of the auction system to assign contiguous blocks to winners of multiple blocks, and bidder manageability.

34. The Commission also seeks comment on an alternative approach to establishing bidding categories, grouping the available blocks according to the specific clearing deadline to which incumbent earth stations are subject, i.e., Phase I or Phase II. Specifically, the Commission could designate blocks A1-A5 in the 46 PEAs that are subject to the Phase I deadline as Category P1 for clock phase bidding. And the Commission could designate all other blocks as Category P2 for clock phase bidding. Thus, under this alternative approach, the 46 PEAs that are subject to the Phase I deadline would each have two bidding categories and the 360 PEAs that are not subject to the Phase I incumbent earth station deadline would each have a single bidding category. The Commission asks commenters to consider whether the A Block licenses that would not be subject to the Phase I deadline are sufficiently interchangeable with the B and C Block licenses to be bid as a single bidding category in the clock phase, and whether this categorization would facilitate contiguous assignment across all blocks in the assignment phase.

35. Under the proposed clock auction format, Auction 107 would consist of sequential bidding rounds, each followed by the release of round results. The Commission proposes to conduct bidding simultaneously for all spectrum blocks in both bidding categories for all PEAs available in the auction. In the first bidding round of Auction 107, a bidder would indicate, for each product, how many generic license blocks it demands at the minimum opening bid price. During each subsequent bidding round, the bidding system would announce a per-block clock price for each product, and qualified bidders would submit, for each product for which they wish to bid, the number of blocks they seek at the clock prices associated with the current round. Bidding rounds would be open for predetermined periods of time. Bidders would be subject to activity and eligibility rules that govern the pace at which they participate in the auction.

36. For each product, the clock price for a generic license block would increase from round to round if bidders indicate total demand for that product that exceeds the number of blocks available. The bidding rounds would continue until, for all products, the total number of blocks that bidders demand does not exceed the supply of available blocks. At that point, those bidders indicating demand for a block at the final price would be deemed winning bidders.

37. The initial bidding schedule would be announced in a public notice to be released at least one week before the start of bidding. Under the Commission's proposal, OEA would retain the discretion to adjust the bidding schedule in order to foster an auction pace that reasonably balances speed with the bidders' need to study round results and adjust their bidding strategies. Such adjustments may include changes in the amount of time for bidding rounds, the amount of time between rounds, or the number of rounds per day, and would depend upon bidding activity and other factors. The Commission seeks comment on this proposal. Commenters should address the role of the bidding schedule in managing the pace of the auction and should specifically discuss the tradeoffs in managing auction pace by bidding schedule changes, by changing the activity requirement percentage or the bid increment percentage, or by using other means.

38. The Commission proposes to conduct Auction 107 over the internet. A bidder would be able to submit its bids using the bidding interface screens and/or using the bidding system's upload function that allows bid files in a CSV format to be uploaded. The bidding system would not allow bids to be submitted unless the bidder selected the PEAs on its FCC Form 175 and the bidder has sufficient bidding eligibility.

39. During each round of the bidding, a bidder would also be able to remove bids placed in the current bidding round. If a bidder modifies its bids for blocks in a PEA in a round, the system would take the last bid submission as that bidder's bid for the round. No bids may be withdrawn after the close of a round.

40. The Commission proposes a simultaneous stopping rule for Auction 107, under which all blocks in both categories in all PEAs would remain available for bidding until the bidding stops in every PEA. Specifically, the Commission proposes that bidding close for all blocks after the first round in which there is no excess demand in any product. Excess demand is calculated as the difference between the number of blocks of aggregate demand and supply. Consequently, under this approach, it is not possible to determine in advance how long Auction 107 would last. The Commission seeks comment on its proposed simultaneous stopping rule.

41. The Commission proposes to make public after each round of Auction 107, for each category in each PEA: The supply; the aggregate demand; the posted price of the last completed round; and the clock price for the next round. The posted price of the previous round is, generally: The start-of-round price if supply exceeds demand; the clock price of the previous round if demand exceeds supply; or the price at which a reduction caused demand to equal supply. The identities of bidders demanding blocks in a specific category or PEA would not be disclosed until after Auction 107 concludes ( i.e., after the close of bidding).

42. Under the Commission's proposal, each bidder would have access to additional information related to its own bidding and bid eligibility. Specifically, after the bids of a round have been processed, the bidding system would inform each bidder of the number of blocks it holds after the round (its processed demand) for every PEA and its eligibility for the next round.

43. Limiting the availability of bidding information during the auction balances the Commission's interest in providing bidders with sufficient information about the status of their own bids and the general level of bidding in all areas and license categories to allow them to bid confidently and effectively, while restricting the availability of information that may facilitate identification of bidders placing particular bids, which could potentially lead to undesirable strategic bidding.

44. To ensure that the auction closes within a reasonable period of time, an activity rule requires bidders to bid actively throughout the auction, rather than wait until late in the auction before participating. For this clock auction, a bidder's activity in a round for purposes of the activity rule would be the sum of the bidding units associated with the bidder's demands as applied by the auction system during bid processing. Bidders are required to be active on a specific percentage (the activity requirement percentage) of their current bidding eligibility during each round of the auction. Failure to maintain the requisite activity level would result in a reduction in the bidder's eligibility, possibly curtailing or eliminating the bidder's ability to place additional bids in the auction.

45. The Commission proposes to require that bidders maintain a fixed, high level of activity in each round of Auction 107 in order to maintain bidding eligibility. Specifically, the Commission proposes to require that bidders be active on between 90% and 100% of their bidding eligibility in all clock rounds, with the specific percentage within this range to be set for each round. Thus, the activity rule would be satisfied when a bidder has bidding activity on blocks with bidding units that total 90% to 100% of its current eligibility in the round. If the activity rule is met, then the bidder's eligibility does not change for the next round. If the activity rule is not met in a round, the bidder's eligibility would be reduced. The Commission proposes to calculate bidding activity based on the bids that are applied by the FCC auction bidding system. That is, if a bidder requests a reduction in the quantity of blocks it demands in a PEA, but the FCC auction bidding system cannot apply the request because demand would fall below the available supply, then the bidder's activity would reflect its unreduced demand. Under the ascending clock auction format, the FCC auction bidding system will not allow a bidder to reduce the quantity of blocks it demands in an individual PEA if the reduction would result in aggregate demand falling below (or further below) the available supply of blocks in the PEA.

46. Because a bidder's eligibility for the next round is calculated based on the bidder's demands as applied by the auction system during bid processing, a bidder's eligibility may be reduced even if the bidder submitted bids with activity that exceeds the required activity for the round. This may occur, for example, if the bidder bids to reduce its demand in PEA X by two blocks (with 10 bidding units each) and bids to increase its demand by one block (with 20 bidding units) in PEA Y. If the bidder's demand can only be reduced by one block in PEA X (because there is only one block of excess demand), the increase in PEA Y cannot be applied, and absent other bidding activity the bidder's eligibility would be reduced. To potentially help a bidder avoid having its eligibility reduced as a result of submitted bids that could not be accepted during bid processing, the Commission seeks comment on additional procedures that would allow a bidder to submit bids with associated bidding activity greater than its current bidding eligibility. For example, depending upon the bidder's overall bidding eligibility and the activity limit percentage, a bidder could submit an “additional” bid or bids that would be considered (in price point order with its other bids) and applied as available eligibility permits during the bid processing. However, under these additional procedures, the bidder's activity as applied by the auction system during bid processing would not exceed the bidder's current bidding eligibility. That is, if a bidder were allowed to submit bids with associated bidding units exceeding 100% of its current bidding eligibility, its processed activity would never exceed its eligibility.

47. Specifically, the Commission seeks comment on additional procedures by which, after Round 1, a bidder may submit bids with bidding units totaling up to an activity upper limit equal to the bidder's current bidding eligibility for the round times a percentage (the activity limit percentage) equal to or greater than 100%. For Round 1, the activity upper limit would be 100% of the bidder's initial bidding eligibility. The Commission seeks comment on setting an initial activity limit percentage of 120% to apply to Round 2 and subsequent rounds (potentially changing it during the auction within a range of 100% and 140%), in which the Commission would implement this approach. In any bidding round, the auction bidding system would advise the bidder of its current bidding eligibility, its required bidding activity, and its activity upper limit.

48. Under the Commission's proposed procedures, OEA would retain the discretion to change the activity requirement percentage during the auction, and the Commission seeks comment in connection with potential additional procedures on whether OEA should similarly retain the discretion to change the activity limit percentage during the auction. The bidding system would announce any such changes in advance of the round in which they would take effect, giving bidders adequate notice to adjust their bidding strategies.

49. The Commission invites comment on this activity rule proposal and it further seeks comment on using an activity upper limit to address the potential for loss of bidding eligibility under some circumstances. The Commission also encourages commenters to address whether the Commission should set the activity requirement percentage between 90% and 100% for each round and, should the Commission adopt an activity upper limit, whether to set the activity limit percentage between 100% and 140%. Further, the Commission seeks comment on where to set these percentages initially. The Commission also seeks comment on the relationship between the proposed activity rules and the ability of bidders to switch their demands across PEAs. The Commission encourages any commenters that oppose the proposed range for the activity requirement percentage and the activity limit percentage range described herein to explain their reasons with specificity.

50. Missing bids. The Commission points out that under the proposed clock auction format, bidders are required to indicate their demands in every round, even if their demands at the new round's prices are unchanged from the previous round. Missing bids—bids that are not reconfirmed—are treated by the auction bidding system as requests to reduce to a quantity of zero blocks for the product. If these requests are applied, or applied partially, then a bidder's bidding activity, and its bidding eligibility for the next round, may be reduced.

51. For Auction 107, the Commission does not propose to provide for activity rule waivers to preserve a bidder's eligibility. The Commission notes that its proposal to permit a bidder to submit bids with bidding activity greater than its eligibility, within the precise limits described herein, would address some of the circumstances under which a bidder risks losing bidding eligibility and otherwise could wish to use a bidding activity waiver, while minimizing any potential adverse impacts on bidder incentives to bid sincerely and on the price setting mechanism of the clock auction. This approach not to allow waivers is consistent with the ascending clock auction procedures used in other FCC clock auctions. The clock auction relies on precisely identifying the point at which demand decreases to equal supply to determine winning bidders and final prices. Allowing waivers would create uncertainty with respect to the exact level of bidder demand and interfere with the basic clock price-setting and winner determination mechanism. Moreover, uncertainty about the level of demand would affect the way bidders' requests to reduce demand are processed by the bidding system. The Commission seeks comment on this approach.

52. As part of the pre-bidding process for each auction, the Commission seeks comment on the use of a minimum opening bid amount and/or reserve price, as mandated by section 309(j) of the Communications Act of 1934, as amended.

53. The Commission proposes to establish minimum opening bid amounts for Auction 107. The bidding system will not accept bids lower than these amounts. Based on the Commission's experience in past auctions, setting minimum opening bid amounts judiciously is an effective tool for accelerating the competitive bidding process. For Auction 107, the Commission proposes to establish initial clock prices, or minimum opening bids, by PEA.

54. The Commission does not propose to establish any aggregate reserve price in Auction 107. The Commission is not aware at this time of circumstances that require establishment of an aggregate reserve price in the public interest for the auction of 3.7 GHz Service licenses and propose only the per product minimum opening bids that it discusses here. The Commission seeks comment on this issue.

55. For Auction 107, the Commission proposes to calculate minimum opening bid amounts using a formula based on bandwidth and license area population, which is similar to its approach in many previous spectrum auctions. The Commission proposes to use a calculation based on $0.03 per MHz-pop. The Commission seeks comment on these minimum opening bid amounts, which are specified in Attachment A to the Auction 107 Comment Public Notice. If commenters believe that these minimum opening bid amounts would result in unsold licenses, are not reasonable amounts, or should instead operate as reserve prices, they should explain their reasoning and propose an alternative approach. Commenters may wish to suggest other modifications to the Commission's proposal, such as weighting the minimum opening bid calculation using past auction prices. Commenters should support their claims with valuation analyses and suggested amounts or formulas for reserve prices or minimum opening bids.

56. In establishing minimum opening bid amounts, the Commission particularly seeks comment on factors that could reasonably affect bidders' valuation of the spectrum, including the type of service offered, market size, population covered by the proposed facility, and any other relevant factors.

57. Commenters may also wish to address the general role of minimum opening bids in managing the pace of the auction. For example, commenters could compare using minimum opening bids— e.g., by setting higher minimum opening bids to reduce the number of rounds it takes licenses to reach their final prices—to other means of controlling auction pace, such as changing the bidding schedule, the activity requirement percentage, or the bid increment percentage.

58. Under the Commission's proposed clock phase procedures for Auction 107, after bidding in the first round and before each subsequent round, the FCC auction bidding system would announce the start-of-round price and the clock price for the upcoming round—that is, the lowest price and the highest price at which bidders can specify the number of blocks they demand during the round. The start-of-round price is also referred to as the posted price of the previous round. As long as aggregate demand for blocks in the product exceeds the supply of blocks, the start-of-round price would be equal to the clock price from the prior round. If demand equaled supply at a price in a previous round, then the start-of-round price for the next round would be equal to the price at which demand equaled supply. If demand was less than supply in the previous round, then the start-of-round price for the next round would not increase.

59. The Commission proposes to set the clock price for blocks in a specific product for a round by adding a percentage increment to the start-of-round price. For example, if the start-of-round price for a block in a given PEA is $10,000, and the percentage increment is 20%, then the clock price for the round will be $12,000. The result will be rounded up to the nearest $1,000.

60. The Commission proposes to set the increment percentage within a range of 5% to 20% inclusive, to set the initial increment percentage at 10%, and potentially to adjust the increment as rounds continue. The proposed 5% to 20% increment range will allow the Commission to set a percentage that manages the auction pace and takes into account bidders' needs to evaluate their bidding strategies while moving the auction along quickly.

61. The Commission seeks comment on these proposed procedures.

62. The Commission proposes generally to permit a bidder to make intra-round bids by indicating a point between the start-of-round price and the clock price at which its demand for blocks changes. In placing an intra-round bid, a bidder would indicate a specific price and a quantity of blocks it demands if the price for blocks should increase beyond that price. For example, if a bidder has processed demand of 3 blocks at the start of the round price of $200, but wishes to hold only 2 blocks if the price increases by more than $10 (assuming the bid increment is more than $10), the bidder will indicate a bid quantity of 2 at a price of $210 ($200+$10). Similarly, if the bidder wishes to reduce its demand to 0 if the price increases above $200 at all, the bidder will indicate a bid quantity of 0 at the start-of-round price of $200.

63. Intra-round bids would be optional; a bidder may choose to express its demands only at the clock prices. This proposal to permit intra-round bidding would allow the auction system to use relatively large increments, thereby speeding the auction, without running the risk that a jump in the clock price will overshoot the market clearing price—the point at which demand for blocks equals the available supply. The Commission seeks comment on the proposal to allow intra-round bids.

64. Under the ascending clock auction format the Commission proposes for Auction 107, a bidder would indicate in each round the number of blocks in each product that it demands at a given price. A bidder that wishes to change the quantity it demands (relative to its demands from the previous round as processed by the bidding system) would express its demands at the clock price or at an intra-round price. A bidder that is willing to maintain the same demand in a product at the new clock price would bid for that quantity at the clock price, indicating that it is willing to pay up to that price, if need be, for the specified quantity. Bids to maintain demand would always be applied by the auction bidding system.

65. In order to facilitate bidding for multiple blocks in a PEA, the Commission proposes that bidders will be permitted to make two types of bids: Simple bids and switch bids. A “simple” bid indicates a desired quantity of blocks in a category at a price (either the clock price or an intra-round price). A “switch” bid allows the bidder to request to move its demand for a quantity of blocks from the A category to the BC category, or vice versa, within the same PEA at a price for the “from” category (either the clock price or an intra-round price).

66. The Commission does not propose to incorporate any form of package bidding procedures into the clock phase of Auction 107. Package bidding would add complexity to the bidding process, and the Commission does not see significant benefit from such procedures, given the clock auction and assignment phase format it is proposing. A bidder may bid on multiple blocks in a PEA and in multiple PEAs. The Commission proposes that the assignment phase will assign contiguous blocks to winners of multiple blocks in a category in a PEA and give bidders an opportunity to express their preferences for specific frequency blocks, thereby facilitating aggregations of licenses.

67. The Commission proposes bid processing procedures that the auction bidding system would use, after each bidding round, to process bids to change demand to determine the processed demand of each bidder for each product and a posted price for each product that would serve as the start-of-round price for the next round.

68. Under the ascending clock auction format, the FCC auction bidding system will not allow a bidder to reduce the quantity of blocks it demands in a product if the reduction would result in aggregate demand falling below (or further below) the available supply of blocks in the product. Therefore, if a bidder submits a simple bid to reduce the number of blocks for which it has processed demand as of the previous round, the FCC auction bidding system will treat the bid as a request to reduce demand that will be applied only if the “no excess supply” rule would be satisfied. Similarly, if a bidder submits a switch bid to move its demand for a quantity of blocks from the A category to the BC category within the same PEA, the FCC auction bidding system will treat the bid as a request that will be applied only if the “no excess supply” rule would be satisfied for the A category in the PEA.

69. The bidding system will not allow a bidder to increase the quantity of blocks it demands in a product if the total number of bidding units associated with the bidder's demand exceeds the bidder's bidding eligibility for the round. Therefore, if a bidder submits a simple bid to increase the number of blocks for which it has processed demand as of the previous round, the FCC auction bidding system will treat the bid as a request to increase demand that will be applied only if that would not cause the bidder's activity to exceed its eligibility. The eligibility rule for bids to increase demand does not apply to switch bids because the bidder's processed activity does not change when a switch bid is applied.

70. Under our proposed bid processing procedures, a bid (simple bid or switch bid) that involves a reduction from the bidder's previous demands could be applied partially—that is, reduced by fewer blocks than requested in the bid—if excess demand is insufficient to support the entire reduction. A switch bid may be applied partially, but the increase in demand in the “to” category will always match in quantity the reduction in the “from” category. A simple bid to increase a bidder's demand could be applied partially if the total number of bidding units associated with the bidder's demand exceeds the bidder's bidding eligibility for the round.

71. The Commission proposes to process bids to change demand in order of price point after a round ends, where the price point represents the percentage of the bidding interval for the round. For example, if the start-of-round price is $5,000 and the clock price is $6,000, a price of $5,100 will correspond to the 10% price point, since it is 10% of the bidding interval between $5,000 and $6,000. Bids to maintain demand are always applied before the bidding system considers bids to change demand. Under this proposal, the FCC auction bidding system would process bids to change demand in ascending order of price point, first considering intra-round bids in order of price point and then bids at the clock price. The system would consider bids at the lowest price point across all PEAs, then look at bids at the next price point in all areas, and so on. The Commission proposes that, if there are multiple bids at a single price point, the system will process bids in order of a bid-specific pseudo-random number. As it considers each submitted bid during bid processing, the FCC auction bidding system would determine the extent to which there is excess demand in each PEA at that point in the processing in order to determine whether a bidder's request to reduce demand can be applied. Likewise, the auction bidding system would evaluate the activity associated with the bidder's most recently determined demands at that point in the processing to determine whether a request to increase demand can be applied.

72. Because in any given round some bidders may request to increase demands for licenses while others may request reductions, the price point at which a bid is considered by the auction bidding system can affect whether it is applied. In addition to proposing that bids be considered by the system in increasing order of price point, the Commission further proposes that bids not applied because of insufficient aggregate demand or insufficient eligibility be held in a queue and considered, again in order, if there should be excess demand or sufficient eligibility later in the processing after other bids are processed.

73. Therefore, under the Commission's proposed procedures, once a round closes, the auction system would process bids to change demand by first considering the bid submitted at the lowest price point and determining the maximum extent to which that bid can be applied given bidders' demands as determined at that point in the bid processing. If the bid can be applied (either in full or partially), the number of licenses the bidder holds at that point in the processing would be adjusted, and aggregate demand would be recalculated accordingly. If the bid cannot be applied in full, the unfulfilled bid, or portion thereof, would be held in a queue to be considered later during bid processing for that round. The FCC auction bidding system would then consider the bid submitted at the next highest price point, applying it in full, in part, or not at all, given the most recently determined demands of bidders. Any unfulfilled requests would again be held in the queue, and aggregate demand would again be recalculated. Every time a bid or part of a bid is applied, the unfulfilled bids held in the queue would be reconsidered, in the order of the original price points of the bids (and by pseudo-random number, in the case of tied price points). The auction bidding system would not carry over unfulfilled bid requests to the next round, however. The bidding system would advise bidders of the status of their bids when round results are released.

74. The Commission further proposes bid processing procedures that would determine, based on aggregate demand, the posted price for each product for the round that will serve as the start-of-round price for the next round. Under the Commission's proposal, the uniform price for all of the blocks in a product would increase from round to round as long as there is excess demand for blocks in the product but would not increase if aggregate demand does not exceed the available supply of blocks.

75. The Commission proposes that if, at the end of a round, the aggregate demand for blocks in the product exceeds the supply of blocks, the posted price would equal the clock price for the round. If a reduction in demand was applied during the round and caused demand in the product to equal supply, the posted price would be the price at which the reduction was applied. If aggregate demand is less than or equal to supply and no bid to reduce demand was applied for the product, then the posted price would equal the start-of-round price for the round. The range of acceptable bid amounts for the next round would be set by adding the percentage increment to the posted price.

76. When a bid to reduce demand can be applied only partially, the uniform price for the product would stop increasing at that point, since the partial application of the bid would result in demand falling to equal supply. Hence, a bidder that makes a bid to reduce demand that cannot be fully applied would not face a price for the remaining demand that is higher than its bid price.

77. After the bids of the round have been processed, if the stopping rule has not been met, the FCC auction bidding system would announce clock prices to indicate a range of acceptable bids for the next round. Each bidder would be informed of its processed demand and the extent of excess demand for blocks in each product.

78. The Commission seeks comment on its proposals regarding bid processing for Auction 107.

79. Under the Commission's proposed clock auction format for Auction 107, bidders with processed demand for a product at the time the stopping rule is met will become the winning bidders of licenses corresponding to that number of blocks and will be assigned specific frequencies in the assignment phase. The final clock phase price for a generic block in a product would be the posted price for the final round. This and other Auction 107 bid processing details are addressed in the Clock Phase Technical Guide.

80. Following the conclusion of the clock phase, the Commission proposes to conduct an assignment phase using a series of single-round sealed-bid bidding rounds, where each clock phase winning bidder will have the opportunity to indicate its preferences for specific frequency licenses corresponding to the generic blocks it won in the clock phase. A bidder will be assigned contiguous frequencies for blocks it wins within each category and PEA regardless of whether it chose to bid in the assignment phase.

81. The Commission proposes to sequence assignment rounds to make it easier for bidders to incorporate frequency assignments from previously assigned areas into their bid preferences for other areas, recognizing that bidders winning multiple blocks of licenses generally will prefer contiguous blocks across adjacent PEAs. To that end, the Commission proposes to conduct rounds for the largest markets first to enable bidders to establish a “footprint” from which to work.

82. Specifically, the Commission proposes to conduct a separate assignment round for each of the top 20 PEAs and to conduct these assignment rounds sequentially, beginning with the largest PEAs. Once the top 20 PEAs have been assigned, the Commission proposes to conduct, for each Regional Economic Area Grouping (REAG), a series of assignment rounds for the remaining PEAs within that region. In Auction 1002, the Commission conducted sequential rounds for the top 40 PEAs and for Auction 102, it did the same. The Commission altered its proposal for Auction 103, in order to further speed up the assignment phase by including PEAs 21-40 in the simultaneous REAG assignment rounds. The Commission's experience in Auction 1002 and Auction 102 suggests that this proposed change will not adversely affect bidders. The Commission will consider the results of Auction 103, as well as any commenter input, before determining its final procedures. The six REAGs are: Northeast, Southeast, Great Lakes, Mississippi Valley, Central, and West.

83. The Commission further proposes, where feasible, to group into a single market for assignment any non-top 20 PEAs within a region in which the same winning bidders need to be assigned the same number of blocks in each category, and all are subject to the small markets bidding cap or all are not subject to the cap, which will also help maximize contiguity across PEAs. The Commission proposes to sequence the assignment rounds within a REAG in descending order of population for a PEA group or individual PEA. The Commission further proposes to conduct the bidding for the different REAGs in parallel in order to reduce the total amount of time required to complete the assignment phase.

84. The Commission seeks comment on these proposals for sequencing assignment rounds, including conducting separate rounds for the top 20 PEAs, and on our proposal to group PEAs for bidding under some circumstances within REAGs.

85. Under the Commission's proposal, in each assignment round, a bidder will be asked to assign a price to one or more possible frequency assignments for which it wishes to express a preference, consistent with its winnings for generic blocks in the clock phase. The price will represent a maximum payment that the bidder is willing to pay, in addition to the base price established in the clock phase for the generic blocks, for the frequency-specific license or licenses in its bid. If there are two categories, the Commission proposes that a bidder will submit its preferences for blocks it won in the 3.7-3.8 GHz and 3.8-3.98 GHz bands separately, rather than submitting bids for preferences that include blocks in both categories. That is, if a bidder won one block in Category A and two blocks in Category BC, it would not be able to submit a single bid amount for an assignment that included both categories. Instead, it would submit its bid or bids for assignments in Category A separately from its bid or bids for assignments in Category BC.

86. The Commission proposes to use an optimization approach to determine the winning frequency assignment for each category in each PEA or PEA group. The Commission proposes that the auction system will select the assignment that maximizes the sum of bid amounts among all assignments that satisfy the contiguity requirements. Furthermore, if multiple blocks in a category in a PEA remain unsold, the unsold licenses will be contiguous. The Commission proposes that the additional price a bidder will pay for a specific frequency assignment (above the base price) will be calculated consistent with a generalized “second price” approach—that is, the winner will pay a price that would be just sufficient to result in the bidder receiving that same winning frequency assignment while ensuring that no group of bidders is willing to pay more for an alternative assignment that satisfies the contiguity restrictions. The Assignment Phase Technical Guide provides mathematical details of this proposal. This price will be less than or equal to the price the bidder indicated it was willing to pay for the assignment. The Commission proposes to determine prices in this way because it facilitates bidding strategy for the bidders, encouraging them to bid their full value for the assignment, knowing that if the assignment is selected, they will pay no more than would be necessary to ensure that the outcome is competitive. The Commission proposes to determine prices using the Vickrey-nearest approach, which is described in the Assignment Phase Technical Guide.

87. The Commission seeks comment on these proposed procedures.

88. Any winning bidder that defaults or is disqualified after the close of an auction ( i.e., fails to remit the required down payment by the specified deadline, fails to submit a timely long-form application, fails to make full and timely final payment, or is otherwise disqualified) is liable for a default payment under section 1.2104(g)(2) of the Commission's rules. This payment consists of a deficiency payment, equal to the difference between the amount of the bidder's winning bid and the amount of the winning bid the next time a license covering the same spectrum is won in an auction, plus an additional payment equal to a percentage of the defaulter's bid or of the subsequent winning bid, whichever is less.

89. The Commission's rules provide that, in advance of each auction, it will establish a percentage between 3% and 20% of the applicable winning bid to be assessed as an additional default payment. As the Commission has indicated, the level of this additional payment in each auction will be based on the nature of the service and the licenses being offered.

90. For Auction 107, the Commission proposes to establish an additional default payment of 15%, which is consistent with that adopted for Auctions 101, 102, and 103. As noted in the CSEA/Part 1 Report and Order, 71 FR 6214, February 7, 2006, defaults weaken the integrity of the auction process and may impede the deployment of service to the public, and an additional default payment of up to 20% will be more effective in deterring defaults than the 3% used in some earlier auctions. At the same time, the Commission does not believe the detrimental effects of any defaults in Auction 107 are likely to be unusually great. In light of these considerations, the Commission proposes for Auction 107 an additional default payment of 15% of the relevant bid. The Commission seeks comment on this proposal.

91. In case they are needed for post-auction administrative purposes, the bidding system will calculate individual per-license prices that are separate from final auction payments, which are calculated on an aggregate basis. The bidding system will apportion to individual licenses any assignment phase payments and any capped bidding credit discounts, since in both cases, a single amount may apply to multiple licenses.

92. The Commission intends to provide additional information on the bidding system and to offer demonstrations and other educational opportunities for applicants in Auction 107 to familiarize themselves with the FCC auction application system and the auction bidding system. For example, the Commission intends to release online tutorials that will help applicants understand the procedures to be followed in the filing of their auction short-form applications (FCC Form 175) and on the bidding procedures for Auction 107.

93. Supplemental Initial Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared a Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in the Auction 107 Comment Public Notice to supplement the Commission's Initial and Final Regulatory Flexibility Analyses completed in the 3.7 GHz NPRM and 3.7 GHz Report and Order, and other Commission orders pursuant to which Auction 107 will be conducted. Written public comments are requested on the Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the same deadline for comments specified on the first page of the Auction 107 Comment Public Notice. The Commission will send a copy of the Auction 107 Comment Public Notice, including the Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Auction 107 Comment Public Notice and Supplemental IRFA (or summaries thereof) will be published in the Federal Register .

94. Need for, and Objectives of, the Proposed Rules. The Auction 107 Comment Public Notice sets forth the proposed auction procedures for those entities that seek to bid to acquire licenses in Auction 107. The Auction 107 Comment Public Notice seeks comment on proposed procedural rules to govern Auction 107, which will auction flexible-use overlay licenses for the 3.7 GHz Service in the 3.7-3.98 GHz band. This process is intended to provide notice of and adequate time for potential applicants to comment on proposed auction procedures. To promote the efficient and fair administration of the competitive bidding process for all Auction 107 participants, the Commission seeks comment on the following proposed procedures:

• Use of anonymous bidding/limited information procedures which will not make public: (1) The license areas that an applicant selects for bidding in its auction application (FCC Form 175); (2) the amount of any upfront payment made by or on behalf of an applicant for Auction 107; (3) an applicant's bidding eligibility; and (4) any other bidding-related information that might reveal the identity of the bidder placing a bid, until after bidding has closed;

• Establishment of bidding credit caps for eligible small businesses and rural service providers in Auction 107;

• Retention by OEA of discretion to adjust the bidding schedule in order to manage the pace of Auction 107;

• Use of a simultaneous stopping rule for Auction 107, under which all blocks in both categories in all PEAs would remain available for bidding until the bidding stops in every PEA;

• Provision of discretionary authority to OEA, in conjunction with WTB, to delay, suspend, or cancel bidding in Auction 107 for any reason that affects the ability of the competitive bidding process to be conducted fairly and efficiently;

• Use of a clock auction format for Auction 107 under which each qualified bidder will indicate in successive clock bidding rounds its demands for categories of generic blocks in specific geographic areas;

• Use of an activity rule that would require bidders to be active on between 90% and 100% of their bidding eligibility in all regular clock rounds;

• Use of an activity rule that does not include a waiver of the rule to preserve a bidder's eligibility;

• A specific minimum opening bid amount for products available in Auction 107;

• A specific upfront payment amount for products available in Auction 107;

• Establishment of a bidder's initial bidding eligibility in bidding units based on that bidder's upfront payment through assignment of a specific number of bidding units for each generic block;

• Establishment of acceptable bid amounts, including clock price increments and intra-round bids, along with a proposed methodology for calculating such amounts;

• A proposed methodology for processing bids and requests to reduce and increase demand;

• Establishment of an assignment phase that will determine which frequency-specific licenses will be won by the winning bidders of generic blocks during the clock phase; and

• Establishment of an additional default payment of 15% under section 1.2104(g)(2) of the Commission's rules in the event that a winning bidder defaults or is disqualified after the auction.

95. The proposed procedures for the conduct of Auction 107 constitute the more specific implementation of the competitive bidding rules contemplated by Parts 1 and 30 of the Commission's rules, the 3.7 GHz Report and Order, and relevant competitive bidding orders, and are fully consistent therewith.

96. Legal Basis. The Commission's statutory obligations to small businesses under the Communications Act of 1934, as amended, are found in sections 309(j)(3)(B) and 309(j)(4)(D). The statutory basis for the Commission's competitive bidding rules is found in various provisions of the Communications Act of 1934, as amended, including 47 U.S.C. 154(i), 301, 302, 303(e), 303(f), 303(r), 304, 307, and 309(j). The Commission has established a framework of competitive bidding rules, updated most recently in 2015, pursuant to which it has conducted auctions since the inception of the auctions program in 1994 and would conduct Auction 107. In promulgating those rules, the Commission conducted numerous RFA analyses to consider the possible impact of those rules on small businesses that might seek to participate in Commission auctions. In addition, a Final Regulatory Flexibility Analysis (FRFA) is included in the concurrent rulemaking order that adopts rule provisions relevant to the Auction 107 Comment Public Notice.

97. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register . A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

98. Regulatory Flexibility Analyses were incorporated into the 3.7 GHz NPRM and the 3.7 GHz Report and Order. In those analyses, the Commission describes in detail the small entities that might be significantly affected. In the Auction 107 Comment Public Notice, the Commission incorporated by reference the descriptions and estimates of the number of small entities from the previous Regulatory Flexibility Analyses in the 3.7 GHz NPRM and the 3.7 GHz Report and Order.

99. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities. The Commission designed the auction application process itself to minimize reporting and compliance requirements for applicants, including small business applicants. In the first part of the Commission's two-phased auction application process, parties desiring to participate in an auction file streamlined, short-form applications in which they certify under penalty of perjury as to their qualifications. Eligibility to participate in bidding is based on an applicant's short-form application and certifications, as well as its upfront payment. In the second phase of the process, winning bidders file a more comprehensive long-form application. Thus, an applicant which fails to become a winning bidder does not need to file a long-form application and provide the additional showings and more detailed demonstrations required of a winning bidder.

100. The Commission does not expect the processes and procedures proposed in the Auction 107 Comment Public Notice will require small entities to hire attorneys, engineers, consultants, or other professionals to participate in Auction 107 and comply with the procedures the Commission ultimately adopts because of the information, resources, and guidance the Commission makes available to potential and actual participants. For example, the Commission intends to release an online tutorial that will help applicants understand the procedures for filing of the auction short-form application (FCC Form 175). The Commission also intends to make information on the bidding system available and offer demonstrations and other educational opportunities for applicants in Auction 107 to familiarize themselves with the FCC auction application system and the auction bidding system. By providing these resources as well as the resources discussed in the Auction 107 Comment Public Notice, the Commission expects small business entities who use the available resources to experience lower participation and compliance costs. Nevertheless, while the Commission cannot quantify the cost of compliance with the proposed procedures, it does not believe that the costs of compliance will unduly burden small entities that choose to participate in the auction because the proposals for Auction 107 are similar in many respects to the procedures in recent auctions conducted by the Commission.

101. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.

102. The Commission has taken steps to minimize any economic impact of its auction procedures on small businesses through, among other things, the many resources the Commission provides potential auction participants. Small entities and other auction participants may seek clarification of or guidance on complying with competitive bidding rules and procedures, reporting requirements, and the FCC's auction bidding system. An FCC Auctions Hotline provides access to Commission staff for information about the auction process and procedures. The FCC Auctions Technical Support Hotline is another resource which provides technical assistance to applicants, including small entities, on issues such as access to or navigation within the electronic FCC Form 175 and use of the FCC's auction bidding system. Small entities may also use the web-based, interactive online tutorial produced by Commission staff to familiarize themselves with auction procedures, filing requirements, bidding procedures, and other matters related to an auction.

103. The Commission also makes various databases and other sources of information, including the Auctions program websites and copies of Commission decisions, available to the public without charge, providing a low-cost mechanism for small entities to conduct research prior to and throughout the auction. Prior to and at the close of Auction 107, the Commission will post public notices on the Auctions website, which articulate the procedures and deadlines for the auction. The Commission makes this information easily accessible and without charge to benefit all Auction 107 applicants, including small entities, thereby lowering their administrative costs to comply with the Commission's competitive bidding rules.

104. Prior to the start of bidding, eligible bidders are given an opportunity to become familiar with auction procedures and the bidding system by participating in a mock auction. Further, the Commission intends to conduct Auction 107 electronically over the internet using its web-based auction system that eliminates the need for bidders to be physically present in a specific location. Qualified bidders also have the option to place bids by telephone. These mechanisms are made available to facilitate participation in Auction 107 by all eligible bidders and may result in significant cost savings for small business entities that use these alternatives. Moreover, the adoption of bidding procedures in advance of the auction, consistent with statutory directive, is designed to ensure that the auction will be administered predictably and fairly for all participants, including small entities.

105. For Auction 107, the Commission proposes a $25 million cap on the total amount of bidding credits that may be awarded to an eligible small business and a $10 million cap on the total amount of bidding credits that may be awarded to a rural service provider. In addition, the Commission propose a $10 million cap on the overall amount of bidding credits that any winning small business bidder may apply to winning licenses in markets with a population of 500,000 or less. Based on the technical characteristics of the 3.7-3.98 band and the Commission's analysis of past auction data, the Commission anticipates that its proposed caps will allow the majority of small businesses to take full advantage of the bidding credit program, thereby lowering the relative costs of participation for small businesses.

106. The proposed procedures for the conduct of Auction 107 constitute the more specific implementation of the competitive bidding rules contemplated by Parts 1 and 30 of the Commission's rules, the 3.7 GHz Report and Order, and relevant competitive bidding orders, and are fully consistent therewith.

107. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.

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

I. Background

DoD, GSA, and NASA are proposing to amend the FAR to implement section 863 of the NDAA for FY 2016 (Pub. L. 114-92, codified at 15 U.S.C. 644(e)(3) and 15 U.S.C. 657q(c)(2)) and SBA's implementing regulations. Section 863 requires public notification of an agency's determination to substantially bundle or consolidate contract requirements.

Specifically, publication of a notice is required when the head of a contracting agency determines that an acquisition plan for a procurement involves substantial bundling of contract requirements. The head of the contracting agency must publish a notice on a public website that such determination has been made not later than 7 days after making the determination. Any solicitation for a procurement related to the acquisition plan may not be published earlier than 7 days after such notice is published. A justification for the determination must be published with the solicitation. The justification must address the specific benefits anticipated, any alternative approaches, impediments to participation by small business concerns as prime contractors, and actions designed to maximize participation of small business concerns as subcontractors. See 15 U.S.C. 644(e)(3)(A) through (C) for a list of the requirements.

Section 863 also requires publication of a notice when the senior procurement executive (SPE) or chief acquisition officer (CAO) makes a determination that an acquisition strategy involving consolidation of contract requirements is necessary and justified under 15 U.S.C. 657q(c)(2)(A). The SPE or CAO must publish a notice on a public website that such determination has been made not later than 7 days after making the determination. Any solicitation for a procurement related to the acquisition strategy may not be published earlier than 7 days after such notice is published. A justification for the determination must be published with the solicitation. The justification must include the information in 15 U.S.C. 657q(c)(1)(A) through (E).

SBA published a rule to implement section 863 on November 29, 2019, at 84 FR 65647. SBA's implementation is very similar to the statutory language.

The proposed changes to the FAR are summarized in the following paragraphs.

At FAR 7.107-5, Notifications, a requirement is added for publication of a notification of substantial bundling on the Governmentwide point of entry (GPE). Any solicitation for a procurement may not be published earlier than 7 days after a notice is published concerning a determination that the procurement involves substantial bundling of contract requirements. The head of the agency must also publish in the GPE the rationale for substantial bundling with the publication of the solicitation. The rationale must address the information required at 7.107-4(b), such as the specific benefits anticipated, any alternative approaches, impediments to participation by small business concerns as prime contractors, and actions designed to maximize participation of small business concerns as subcontractors. A reference to the notification requirement at FAR 7.107-5 is added to FAR 5.205, Special situations.

At 7.107-5, Notifications, a requirement is added for the SPE or CAO to publish a notice on the GPE that a determination has been made that a consolidation of contract requirements is necessary and justified. The SPE or CAO must also publish the determination that consolidation is necessary and justified with the publication of the solicitation. A reference to the notification requirement at FAR 7.107-5 is added to FAR 5.205, Special situations.

This rule proposes to implement a statutory requirement for Federal agencies to provide notifications to the public on consolidation and substantial bundling of contract requirements. No solicitation provisions or contract clauses are being created or revised in this proposed rule.

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 proposed rule is not expected to be subject to E.O. 13771, Reducing Regulation and controlling Regulatory Costs, because this rule is not a significant regulatory action under E.O. 12866.

The change may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The Initial Regulatory Flexibility Analysis (IRFA) has been performed and is summarized as follows:

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the SBA. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit comments separately and should cite 5 U.S.C. 610 (FAR case 2019-003) in correspondence.

This 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, DoD, GSA, and NASA are proposing to amend 48 CFR part(s) 5 and 7, as set forth below:

The revision and additions read as follows:

Executive Summary

Why we need to publish a rule. Under the Endangered Species Act of 1973, as amended (Act), we are required to conduct a review of all listed species at least once every 5 years (5-year review) to review their status and determine whether they should be classified differently or removed from listed status. In our 2013 5-year review for the Cumberland sandwort, we recommended reclassifying the species from endangered to threatened. We initiated another 5-year review for the species on May 7, 2018 (83 FR 20093), and determined the species met the criteria for delisting. Therefore, we are publishing this proposed rule to delist the species.

What this document does. This document proposes to remove the Cumberland sandwort from the List. It also announces the availability of a draft PDM plan for the Cumberland sandwort. This determination is based on a thorough review of the best available scientific and commercial data, which indicate that the Cumberland sandwort has recovered and no longer meets the definition of an endangered or a threatened species under the Act. Our review shows that threats to the species identified at the time of listing ( i.e., timber harvesting, trampling from recreational uses, and digging for archaeological artifacts) have been reduced to the point that they no longer threaten the species, and the Cumberland sandwort has increased in abundance and range. Our review also indicates that potential effects of projected climate change are not expected to cause the species to become endangered in the foreseeable future.

The basis for our action. Under the Act, we may determine that a species is an endangered or threatened species because of one or more of the five factors described in section 4(a)(1) of the Act. We must consider the same factors in removing a species from the List (delisting) in determining whether a species meets the definition of an endangered species or a threatened species.

Here, we have determined that the Cumberland sandwort may be considered for delisting based on recovery. In the rule listing the Cumberland sandwort (53 FR 23745, June 23, 1988), the primary threats identified for the species were the destruction and modification of habitat (Factor A) due to trampling by recreational users of the rockhouse and bluff habitats where the species occurs, trampling and soil disturbance from looting of archeological artifacts ( i.e., relic digging), and timber harvesting in or adjacent to occupied sites. While some habitats occupied by Cumberland sandwort are exposed to these potential stressors, many are protected from these activities, and available data support the determination that the species is more resilient to these threats than was assumed at the time of listing. The listing rule also discussed limited distribution and small population size (Factor E), along with inadequate regulatory mechanisms for preventing habitat destruction (Factor D), as factors contributing to the species' endangerment. However, our review of the status of and listing factors for the Cumberland sandwort indicated: (1) An increase in the number of occurrences of the species within its geographically restricted range and increased abundance in some occurrences; (2) resiliency to existing and potential threats; (3) the protection of 66 extant occurrences located on Federal and State conservation lands by regulations or management plans to prevent habitat destruction or removal of plants; and (4) the implementation of beneficial management practices. Accordingly, the Cumberland sandwort no longer meets the definition of an endangered or threatened species under the Act.

Peer review. We are requesting comments from independent specialists to ensure that we base our determination on scientifically sound data, assumptions, and analyses.

We want any final rule resulting from this proposal to be as accurate and effective as possible. Therefore, we invite tribal and governmental agencies, the scientific community, industry, and other interested parties to submit data, comments, and new information concerning this proposed rule. The comments that will be most useful and likely to influence our decision are those that are supported by data or peer-reviewed studies and those that include citations to, and analyses of, applicable laws and regulations. Please make your comments as specific as possible and explain the basis for them. In addition, please include sufficient information with your comments to allow us to authenticate any scientific or commercial data you reference or provide. In particular, we are seeking comments on:

(1) Biological data regarding the Cumberland sandwort, including the locations of any additional occurrences, survey data, or other relevant information;

(2) Relevant data concerning any threats (or lack thereof) to the Cumberland sandwort;

(3) Additional information regarding the range, distribution, life history, ecology, and habitat of the Cumberland sandwort;

(4) Current or planned activities within the geographic range of the Cumberland sandwort that may negatively impact or benefit the Cumberland sandwort; and

(5) The draft PDM plan and the methods and approach detailed in it.

Please note that submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination, as section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”

In developing a final determination on this proposed action, we will take into consideration all comments and any additional information we receive. Such information may lead to a final rule that differs from this proposal. All comments and recommendations, including names and addresses, will become part of the administrative record.

You may submit your comments and materials concerning the proposed rule by one of the methods listed in ADDRESSES . We request that you send comments only by the methods described in ADDRESSES .

We will post your entire comment—including your personal identifying information—on http://www.regulations.gov. If you provide personal identifying information in your comment, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so.

Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on http://www.regulations.gov.

Section 4(b)(5)(E) of the Act provides for one or more public hearings on this proposal, if requested. We must receive requests for a public hearing, in writing, at the address shown in FOR FURTHER INFORMATION CONTACT by the date shown in DATES . We will schedule a public hearing on this proposal, if requested, and announce the date, time, and place of the hearing, as well as how to obtain reasonable accommodations, in the Federal Register at least 15 days before the hearing.

In accordance with our policy published in the Federal Register on July 1, 1994 (59 FR 34270), and our August 22, 2016, memorandum updating and clarifying the role of peer review of listing actions under the Act, we will solicit the expert opinions of at least three appropriate and independent specialists regarding the science in this proposed rule and the draft PDM plan. The purpose of such review is to ensure that we base our decisions on scientifically sound data, assumptions, and analyses. The peer reviewers will be selected based upon their expertise in the Cumberland sandwort's biology, habitat, and physical or biological factors that will inform our determination. We will send peer reviewers copies of this proposed rule and the draft PDM plan immediately following publication of this proposed rule in the Federal Register . We will invite them to comment, during the public comment period, on the specific assumptions and conclusions regarding this proposed delisting rule and the associated draft PDM plan. We will summarize the opinions of these reviewers in the final decision documents, and we will consider their input and any additional information we receive as part of our process of making a final decision on this proposal and draft PDM plan. Such communication may lead to a final decision that differs from this proposal.

On June 23, 1988, we listed the Cumberland sandwort as endangered, due to the threat of habitat destruction or modification resulting from unintended trampling by recreational users of public lands, unauthorized digging of Native American artifacts, and timber harvesting, combined with the low number of occurrences known to exist at the time of listing and low abundance at most occurrences (53 FR 23745). On June 20, 1996, we released a recovery plan for the Cumberland sandwort (Service 1996). We completed another 5-year review for the Cumberland sandwort on December 23, 2013. This 5-year review summarized all new information accumulated on the species since the publication of the species' recovery plan and recommended reclassification to threatened status. We initiated a third 5-year review for the species on May 7, 2018 (83 FR 20093), and, based on our review of available data we gathered during preparation of that 5-year review, and presented herein, we have determined that the recovery criteria for delisting the species have been met. This rule will, therefore, equate to our 5-year review. We are providing the 2013 5-year review as a supplemental document to the proposed rule at https://www.regulations.gov at (Docket No. FWS-R4-ES-2019-0080) or https://www.fws.gov/southeast/endangered-species-act/five-year-reviews/.

For additional details on previous Federal actions, including recovery actions, see discussion under the Recovery section of the preamble, below.

Below, we present a thorough review of the taxonomy, life history, ecology, and overall status of this plant, referencing data from the 2013 5-year review (Service 2013) where appropriate.

Cumberland sandwort ( Arenaria cumberlandensis ), a member of the Pink family (Caryophyllaceae), was first recognized and described as a species in 1979 (Wofford and Kral 1979, entire). This species, along with several other species of Arenaria, was transferred to the genus Minuartia while retaining the specific epithet (McNeill 1980, entire). The species is listed as Minuartia cumberlandensis (Wofford and Kral) McNeill in A Fifth Checklist of Tennessee Vascular Plants (Chester et al. 2009, p. 43), the Integrated Taxonomic Information System (ITIS) (2019), and Flora of North America (2019). However, an examination of the taxonomy of Minuartia using DNA sequences determined that all species in Minuartia section Uninerviae should be elevated to genus Mononeuria, along with Geocarpon minimum (Dillenberger and Kadereit 2014, p. 79). The Flora of the Southern and Mid-Atlantic States accepted this recommendation, assigning the name Mononeuria cumberlandensis (B.E. Wofford & Kral) Dillenberger & Kadereit to Cumberland sandwort (Weakley 2015, p. 820). Although there have been changes to the species' taxonomy since the time of listing, we are proposing to remove the species from the List of Endangered and Threatened Plants using the name by which it was initially listed, Arenaria cumberlandensis (= Mononeuria cumberlandensis ).

In a study of populations in Tennessee, Cumberland sandwort was found to possess “fairly high” levels of genetic variation (Winder 2004, pp. 16-19). Observed levels of heterozygosity were consistent with expected effects of frequent mating among closely related individuals, or inbreeding (Winder 2004, p. 19), a common phenomenon in small populations due to the greater likelihood that most or all individuals in the population will be closely related (Allendorf and Luikart 2007, p. 306). Greater genetic similarity was found among populations within about 4 kilometers (km) (2.5 miles (mi)) of one another, but a wide range of values were observed at distances of 4 to 25 kilometers (2.5 to 15.5 mi), beyond which populations were consistently dissimilar (Winder 2004, p. 27). Thus, Cumberland sandwort populations generally are genetically independent of one another and have been for a significant period of time, with possible exceptions where gene flow could occur among densely clustered populations in close geographic proximity to one another (Winder 2004, p. 28). The majority of the genetic variation found in the species is retained within a central cluster of populations located in Pickett County, Tennessee, and in Laurel Fork (Fentress County) (Winder 2004, p. 37). The genetic structure of the lone Kentucky population and its relation to sites sampled in Tennessee are unknown.

The following description of Cumberland sandwort is modified from Wofford and Kral (1979, pp. 257-259) and Kral (1983, pp. 363-364). This species is a delicate perennial that occurs in small cushionlike clumps, with upright stems 10 to 15 centimeters (cm) (4 to 6 inches (in)) tall that are slender and triangular in shape. Leaves are opposite, 2 to 3 cm (0.8 to 1.2 in) long and 1 to 3 millimeters (mm) (0.04 to 0.12 in) wide, and are thin and bright green in color, with glassy margins. Basal leaves are longer and wider than those at the top of the stems. The flowers are symmetrical, five-parted, and usually solitary at the end of the stems. The sepals (a part of the flower that provides protection for the flower in bud and sometimes provides support for petals when in bloom) are green and inconspicuously three-veined, and the white petals usually have five green veins. The fruit is a 3- to 3.5-mm-long (0.12 to 0.14 in) ovoid capsule containing numerous reddish-brown reticulated (having the form or appearance of a net) seeds that are 0.5 to 0.7 mm (0.02 to 0.03 inches) long.

The mild conditions of the sheltered habitat where Cumberland sandwort occurs allow rosettes (circular arrangement of leaves) to persist through winter and produce abundant, leafy stems in the spring (Winder 2004, p. 5). The species flowers from May through August, with some flowers persisting as late as November (Wofford and Kral 1979, p. 259; Winder 2004, p. 5).

Cumberland sandwort inhabits fine-grained, sandy soils that comprise the floors of the interior of “rockhouses” (cave-like recesses produced by differential weathering of sandstone). These habitats are typically behind the dripline of overlying cliffs, ledges, and solution pockets of cliffs, where these features are found in Pennsylvanian sandstones on the Cumberland Plateau in southern Kentucky and northern Tennessee (Horton 2017, entire). The species occupies sites that generally share characteristics of high levels of shade, moisture, and humidity, and relatively constant, cool temperatures (Wofford and Smith 1980, p. 7), although some smaller occurrences occupy drier and warmer sites. Few other species are directly associated with Cumberland sandwort microsites, but the following species are important indicators that suitable habitat conditions are present within a given rockhouse or bluff site: Silene rotundifolia (round-leaved catchfly), Thalictrum clavatum (mountain meadow-rue), Heuchera parviflora (little-flowered alumroot), Ageratina lucae-braunae (Lucy Braun's snakeroot), Stenanthium diffusum (diffuse reather-bells) and the bryophytes Vittaria appalachiana (Appalachian shoestring fern), Bryoxiphium norvegicum (Norway bryoxiphium moss), and Scopelophila cataractae (cataract scopelophila moss) (TDEC 2011b, p. 5).

When Cumberland sandwort was listed as endangered, the species was known from 11 occurrences (Wofford and Smith 1980, pp. 9-18), which were treated as 5 populations (53 FR 23745, June 23, 1988). Of these occurrences, 1 was in McCreary County, Kentucky, and 10 were distributed among four Tennessee counties (Fentress, Morgan, Pickett, and Scott). The species recovery plan (Service 1996, pp. 6-8) reported that 28 occurrences were extant, including the 11 from the listing rule, 27 of which were partly or entirely located on publicly owned conservation lands. One of these 28 occurrences was in McCreary County, Kentucky, and the remaining 27 were distributed among the 4 Tennessee counties reported in the listing rule. All occurrences reported in the listing rule and species recovery plan were located in the South Fork Cumberland River drainage. Of these 28 occurrences, all but 3 were extant as of 2017 (TNHID 2018).

As explained below, documentation to verify past or present existence is lacking for two of the three occurrences we did not determine to be extant as of 2017, raising questions regarding their validity. The “Middle Creek 2” occurrence reported in the recovery plan was apparently based on an observation reported by a National Park Service (NPS) archaeologist, but staff of the TDEC Division of Natural Areas (TDNA) were unable to confirm the presence of Cumberland sandwort at the mapped location, which they attribute to a mapping error when the occurrence was reported. The Morgan County occurrence reported in the recovery plan, with only the site name “Sunbright” given for location information, also cannot be verified. No citation was provided in the recovery plan for this record, and no record existed for this site in the Tennessee Natural Heritage Inventory Database (TNHID) (2018), maintained by the Natural Heritage Program at TDNA. A search of herbarium records for Cumberland sandwort from Morgan County, Tennessee, produced no specimens from the vicinity of Sunbright (SERNEC Data Portal 2018). However, a new extant occurrence record was documented in TNHID for Scott County, based on the label for a specimen collected in 2002 from a site not previously known to be occupied by Cumberland sandwort.

The Big Branch occurrence reported in the recovery plan was not recorded in the TNHID (2018), so no attempts have been made to relocate this occurrence. Staff from NPS reported the occurrence in comments provided after reviewing the draft recovery plan (NPS 1995). We provided information to TDNA on the Big Branch occurrence reported by NPS, and there is now a historical record for this occurrence in the TNHID.

In order to evaluate the current status of Cumberland sandwort, we used data from Natural Heritage Programs in Kentucky (KNHP 2018) and Tennessee (TNHID 2018) to determine the location and condition of mapped element occurrences. An element occurrence (E.O.) is a fundamental unit of information in the NatureServe Natural Heritage methodology, and is defined as “an area of land and/or water in which a species . . . is, or was present” (NatureServe 2004). There were 64 extant occurrences of Cumberland sandwort reported in the 2013 5-year review. As of 2018, there were 71 extant occurrences, distributed among the 5 counties where the species was reported to be extant when the recovery plan was published: 1 in McCreary County, Kentucky (Kentucky Natural Heritage Program (KNHP) 2018); 1 in Morgan, 26 in Fentress, 38 in Pickett, and 5 in Scott Counties, Tennessee (TNHID 2018). Of these occurrences, 12 occur within the Obey River drainage in Tennessee; 11 of these occurrences have been discovered since 2005 on recently acquired, State-owned conservation lands, and 1 on privately owned lands in 2016. The remaining 59 occurrences lie within the South Fork Cumberland River drainage, and all but 1 in Tennessee. Four of the occurrences in the South Fork Cumberland River drainage are located on privately owned lands in Tennessee; the remainder are located on state or federal conservation lands. In addition to these 71 natural occurrences of Cumberland sandwort, one introduced occurrence has been established in McCreary County, Kentucky, on the Daniel Boone National Forest (DBNF) (Pence et al. 2011, entire).

The TDEC Natural Heritage Program began monitoring Cumberland sandwort in Tennessee during 2000, estimating abundance in 34 sites as part of a project to conduct surveys for new locations and update records for previously known occurrences of the species (TDEC 2000, entire). The number of occurrences monitored has increased to 55, and TDEC has categorized sites into three tiers of differing priority, with highest priority sites to be most frequently monitored (TDEC 2007, p. 5):

• Tier 1 sites have a history of site disturbance related to recreational use or illicit digging of Native American artifacts.

• Tier 2 sites face fewer immediate threats in the less frequently visited sites they occupy.

• Tier 3 sites faced no imminent threats at the time of categorization.

Designating tiers provides for more frequent monitoring of sites with a greater likelihood of being adversely affected by known threats that could warrant management intervention. Tier 1 sites are monitored every 1 to 3 years, Tier 2 sites every 3 to 6 years, and Tier 3 sites every 6 to 10 years (TDEC 2007, p. 5). In addition to monitoring during 2000 and 2006 (before the tier system was developed), TDEC monitored Tier 1 sites during 2010 and 2011 (TDEC 2011a, entire), 2014 (TDEC 2014, entire), and 2017 (TDEC unpublished data). Tier 2 sites were monitored during 2011 through 2012 (TDEC 2012, entire), and Tier 3 sites were monitored during 2016 and 2017 (TDEC unpublished data).

The Service receives monitoring data in the form of written reports and occurrence-level summary data provided in the TNHID (2018). We used these summary data to determine which sites in each tier had been monitored in two or more years, making it possible to assess whether Cumberland sandwort had declined, remained stable, or increased either in estimated abundance or area occupied. Based on data provided in the TNHID, 18 occurrences are in Tier 1, 24 in Tier 2, and 13 in Tier 3 for which such data were available. Tier 1 occurrences have been monitored an average of 4.7 times, with time between initial and the most recent monitoring events averaging 15.8 years. Tier 2 occurrences have been monitored an average of 2.4 times over an average timespan of 8.4 years. Tier 3 occurrences have been monitored an average of 2.4 times over an average timespan of 12.1 years. Fifteen occurrences in Tennessee have been monitored only once or have not, as yet, been assigned to a monitoring tier.

After reviewing all available monitoring data, TDEC assessed whether individual occurrences had declined, remained stable, or increased over the time that they have been monitored (McCoy 2018, pers. comm.). However, statistical trend analysis of Cumberland sandwort monitoring data from Tennessee is not feasible for two reasons: First, estimates of abundance generated in 2000 and in later monitoring events lack adequate precision for statistically analyzing change in abundance over time, and second, visual estimates of area occupied by the species can introduce potential for observer bias because these areas are not precisely measured. However, the preparation of hand-drawn maps by TDEC botanists, beginning with the initial monitoring effort in 2000, allows tracking persistence and stability of individual patches within occupied sites and detecting substantial changes in their estimated size. Based on the best available data, of the 18 Tier 1 occurrences, 2 demonstrate evidence of decline, 13 are stable, and 3 have increased. Of the 24 Tier 2 occurrences that have been monitored on two or more occassions, 5 demonstrate evidence of decline, 18 are stable, and 1 has increased. Of the 13 Tier 3 occurrences, 2 have declined, 10 are stable, and 1 has increased (McCoy 2018, pers. comm.).

Section 4(f) of the Act directs us to develop and implement recovery plans for the conservation and survival of threatened and endangered species unless we determine that such a plan will not promote the conservation of the species. Recovery plans are not regulatory documents and are instead intended to: (1) Establish goals for long-term conservation of a listed species; (2) define criteria that are designed to indicate when the threats facing a species have been removed or reduced to such an extent that the species may no longer need the protections of the Act; and (3) provide guidance to our Federal, State, and other governmental and non-governmental partners on methods to minimize threats to listed species. There are many paths to accomplishing recovery of a species, and recovery may be achieved without all criteria being fully met. For example, one or more criteria may have been exceeded while other criteria may not have been accomplished, yet the Service may judge that, overall, the threats have been minimized sufficiently, and the species is robust enough, to reclassify the species from endangered to threatened or perhaps delist the species. In other cases, recovery opportunities may have been recognized that were not known at the time the recovery plan was finalized. These opportunities may be used instead of methods identified in the recovery plan.

Likewise, information on the species may be learned that was not known at the time the recovery plan was finalized. The new information may change the extent that criteria need to be met for recognizing recovery of the species. In short, recovery of species is a dynamic process requiring adaptive management that may, or may not, fully follow the guidance provided in a recovery plan.

The Cumberland Sandwort Recovery Plan (see Previous Federal Actions, above) included recovery criteria to indicate when threats to the species have been adequately addressed and prescribed actions that were thought to be necessary for achieving those criteria. Below we discuss our analysis of available data and our determination as to whether recovery criteria for Cumberland sandwort have been achieved.

The objective of the recovery plan is to delist the Cumberland sandwort. Recovery criteria in the plan state that Arenaria cumberlandensis (Cumberland sandwort) will be considered for reclassification from endangered to threatened status when 30 geographically distinct, self-sustaining occurrences are protected in four counties in Tennessee and Kentucky and have maintained stable or increasing numbers for 5 consecutive years. The species will be considered for delisting when 40 geographically distinct, self-sustaining occurrences are protected and have maintained statistically stable or increasing numbers for 5 consecutive years. At least 12 of these occurrences must be in counties other than Pickett County, Tennessee.

Methods were chosen for monitoring that minimize trampling of Cumberland sandwort and disturbance of the sandy soil substrate the species occupies. The tradeoff of using this method to minimize disturbance is the inability to statistically analyze trends for individual occurrences or Cumberland sandwort as a species. To address this limitation, we developed a framework for using available distribution and monitoring data, aerial photography, and qualitative assessment of trends for each occurrence to evaluate whether recovery criteria for Cumberland sandwort have been achieved.

Using this framework we assessed the species' viability based on the three conservation biology principles of resiliency, representation, and redundancy (Shaffer and Stein 2000, entire). Resiliency is the ability to sustain populations in the face of environmental variation and transient perturbations. To be resilient, a species must have healthy populations that are able to sustain themselves through good and bad years. The greater the number of healthier populations, the more resiliency a species possesses. Representation is the range of variation or adaptive diversity found in a species, and is the source of a species' ability to adapt to near- and long-term changes in the environment. Maintaining adaptive diversity requires conserving both ecological and genetic diversity, which enable a species to be more responsive and adaptive to change and, therefore, more viable. Finally, redundancy protects species against the unpredictable and highly consequential events for which adaptation is unlikely, allowing them to withstand catastrophic events. Redundancy spreads risk and is best achieved by having multiple populations widely distributed across a species' range.

We characterized the resiliency of 69 of the 71 extant Cumberland sandwort occurrences using available data on three factors (complete data were not available for two of the extant occurrences): Occurrence size expressed as estimated abundance or areal coverage, recorded observations of threats causing disturbance to plants or the substrates in which they were rooted, and assessment of general forest conditions from recorded observations or evaluation of aerial photography, for the reasons that follow. Smaller populations are at greater risk of (1) losing genetic variation due to drift (change in the frequency of alleles in a population due to random, stochastic events), and (2) inbreeding, which decreases the likelihood that an individual will receive pollen from a compatible mate and produce viable offspring (Allendorf and Luikart 2007, pp. 122-123). Small populations also may face higher risks of extinction due to diminished resilience to demographic and environmental stochasticity (Münzbergová 2006, p. 143). Demographic stochasticity is the variation in vital rates ( i.e., probabilities of survival and reproduction) among individuals of a given age or life-cycle stage, at a given point in time, while environmental stochasticity is variation in vital rates over time, affecting all individuals of a given age or stage similarly (Lande 1988, p. 1457). Undisturbed substrates contribute to Cumberland sandwort resiliency by providing suitable sites for germination, growth, and reproduction to occur. Also, the presence of contiguous forest vegetation in the vicinity of Cumberland sandwort occurrences helps to maintain suitable hydrology and microclimate, potentially buffering severity of stress resulting from environmental perturbations, such as drought. We evaluated representation by considering the distribution of resilient occurrences among the counties and watersheds from which the species is known. Finally, we evaluated redundancy based on the overall number of resilient occurrences distributed throughout its range.

In evaluating resiliency, we used estimates of abundance, where available, combined with estimates of areal coverage to provide a basis for categorizing occurrences into groups of low, medium, or high abundance. Occurrences with fewer than 100 individuals (Heschel and Page 1995, pp. 128-131; Münzbergová 2006, p. 148) or with areal coverage less than 1 m 2 were ranked “low”; occurrences with 100-1,000 individuals or with areal coverage ranging from 1 to 5 m 2 were ranked “medium”; and occurrences with more than 1,000 individuals or areal coverage greater than 5 m 2 were ranked “high”. We ranked substrate conditions at each occurrence based on recorded observations of threats (TDEC 2011b, pp. 37-44). Substrate conditions were ranked “high” for sites with no record of disturbance; “medium” for sites with moderate risk of exposure to the threat based on limited historical evidence of digging for archeological artifacts ( i.e., relic digging) or trampling by humans or wildlife in limited areas within available habitat; and “low” for sites with high risk of exposure as indicated by recent evidence of relic digging or trampling throughout available habitat. We used aerial imagery available through Google Earth Pro TM to determine whether forests in the general vicinity of Cumberland sandwort occurrences exhibited signs of timber harvest, as indicated by substantially reduced tree densities, presence of logging equipment trails, or conversion to non-native, evergreen forest types. Forest conditions were ranked “high” in locations where late seral forest was present upslope and downslope of occupied sites and in adjacent areas; “medium” in locations where risk of exposure to the threat was moderate based on evidence of logging having occurred within the prior 15 years in the vicinity of, but not immediately upslope, downslope, or adjacent to, occurrences; and “low” in sites where risk of exposure was high based on evidence of logging within the prior 15 years in the forest immediately surrounding the occupied habitat.

Of the 69 occurrences that we could evaluate for all 3 resiliency factors, 12 were ranked as low in abundance, 27 ranked medium, and 30 occurrences ranked high. Substrate conditions ranked low at 12, medium at 25, and high at 32 occurrences. We were able to evaluate forest conditions at all 71 extant occurrences, with the following results: 8 occurrences ranked low, 3 ranked medium, and 60 ranked high.

Using the ranks for the 3 resiliency factors (abundance, substrate condition, and forest condition), we calculated an overall resiliency index for 68 of the 70 Tennessee occurrences (table 1) and the lone Kentucky occurrence. We assigned numerical scores of one for factor ranks of “low,” two for “medium” ranks, and three for “high” ranks. Using these scores, we calculated a weighted average, wherein factor ranks for abundance were given twice the weight of factor ranks for substrate and forest condition, due to the importance of population size in maintaining genetic variation and determining resilience to demographic and environmental stochasticity (Sgrò et al. 2011, p. 329). The resulting resiliency index for an occurrence ranges from one to three and is categorized as follows:

• Low rank for scores of 1.5 or less;

• Low-medium rank for scores greater than 1.5 and less than 2.0;

• Medium rank for scores ranging from 2.0 to 2.5;

• Medium-high rank for scores greater than 2.5 and less than 3.0;

• High rank for scores of 3.0.

Available data for the Kentucky occurrence indicate that the species abundance rank is medium at that location and that the occurrence is not exposed to threats from trampling or relic digging. This location, in BSF, is protected from timber harvesting, and available data indicate that surrounding forests are undisturbed. These factors produced an overall resiliency rank of medium for this occurrence.

In Tennessee, 56 occurrences had overall resiliency ranks of medium or higher. Table 1 shows the resiliency ranks for all Tennessee occurrences. All of the stable and increasing trends in the medium, medium-high, and high resiliency ranks represent counts of occurrences considered self-sustaining, as required by recovery criteria.

For the purpose of evaluating Cumberland sandwort's status with respect to recovery criteria, we define self-sustaining to include those populations that had an overall resiliency index rank of medium or higher and that TDEC determined were stable or increasing (Table 1) based on available monitoring data, as described above in Species Information. For the Kentucky occurrence, available data indicate that the occurrence is stable. We consider 66 occurrences on Federal or State conservation lands (Table 2), as well as 2 occurrences located on private lands where land use is restricted by conservation easements, to be protected. Using these definitions, 42 protected occurrences (including the 1 in Kentucky) are self-sustaining (table 1 presents data for Tennessee). These occurrences have been known to exist for an average of 21 years, with a range of 7 to 44 years spanning the first and most recent observations recorded for the species in these sites. This exceeds one criterion for removing Cumberland sandwort from the List— i.e., that there be at least 40 geographically distinct, protected, and self-sustaining occurrences that have been stable or increasing for at least 5 years.

Atlantic HMS are managed under the dual authorities of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and the Atlantic Tunas Convention Act (ATCA). NMFS published in the Federal Register (71 FR 59058, October 2, 2006) final regulations, effective November 1, 2006, implementing the 2006 Consolidated Atlantic HMS FMP, which details management measures for Atlantic HMS fisheries. The implementing regulations for the 2006 Consolidated Atlantic HMS FMP and its amendments are at 50 CFR part 635. This proposed rule considers management actions that would streamline the regulations to align the retention limits for commercial swordfish permits established for HMS Commercial Caribbean Small Boat permit holders under Amendment 4 with those established in Amendment 8 to the 2006 Consolidated Atlantic HMS FMP for Swordfish General Commercial permit holders and HMS Charter/Headboat permit holders with a commercial sale endorsement on a non-for hire commercial trip.

A brief summary of the background of this proposed action is provided below. Additional information regarding Atlantic HMS management can be found in the Draft EA for this proposed action and the 2006 Consolidated Atlantic HMS FMP and its amendments, found online (see ADDRESSES ).

Sharks have been managed by NMFS as delegated by the Secretary of Commerce since 1993 under the authority of the Magnuson-Stevens Act. NMFS implemented the FMP for Sharks of the Atlantic Ocean, which established three management complexes: Large coastal sharks, small coastal sharks, and pelagic sharks (NMFS, 1993). This 1993 FMP implemented commercial quotas for large coastal sharks and pelagic sharks and established recreational retention limits for all sharks, consistent with the large coastal sharks rebuilding program. As a result of the 1996 amendments to the Magnuson-Stevens Act, NMFS implemented an FMP in 1999 that revised much of the management of Atlantic sharks, including establishing new commercial quotas, a commercial size limit, a new rebuilding plan for large coastal sharks, and a limited access fishing permit program for the commercial fishery. Between 1999 and 2008, NMFS changed many of the shark management measures, which included revising quotas, eliminating the commercial minimum size, adjusting the recreational retention and size limits, establishing a time/area closure off the coast of North Carolina, establishing a mechanism for changing the species on the prohibited species list, requiring shark dealers to attend shark identification workshops, and requiring gillnet, bottom longline, and pelagic longline fishermen to attend workshops on the safe handling and release of protected resources and prohibited sharks.

The final rule for Amendment 2 to the 2006 Consolidated Atlantic HMS FMP (Amendment 2) (73 FR 35778, June 24, 2008; corrected 73 FR 40657, July 15, 2008) implemented management measures that included, but were not limited to, establishing rebuilding plans for porbeagle, dusky, and sandbar sharks consistent with stock assessments; implementing commercial quotas and retention limits consistent with stock assessment recommendations to prevent overfishing and rebuild overfished stocks; modifying recreational measures to reduce fishing mortality of overfished/overfishing stocks; modifying reporting requirements; requiring that all Atlantic sharks be offloaded with fins naturally attached; collecting shark life history information via the implementation of a shark research program; and implementing time/area closures recommended by the South Atlantic Fishery Management Council.

The final rule for Amendment 3 to the 2006 Consolidated Atlantic HMS FMP (Amendment 3) (75 FR 30483, June 1, 2010; corrected 75 FR 50715, August 17, 2010; updated effective date of Atlantic Smoothhound Shark Fishery Management Measures 76 FR 70064, November 10, 2011) implemented management measures that included, but were not limited to, rebuilding blacknose sharks and ending overfishing of blacknose and shortfin mako shark. This amendment also added smoothhound sharks (smooth dogfish ( Mustelus canis ) and Florida smoothhound ( Mustelus norrisi )) under NMFS management; created an open access commercial smoothhound permit and commercial smoothhound quota (715.5 metric tons (mt) dressed weight (dw)); required smoothhound sharks to be landed with fins naturally attached; required commercial smoothhound permit holders to sell their catch to a federally-permitted shark dealer; and delayed the smoothhound shark management measures until such time as the agency could implement the new permit, incorporate provisions of the Shark Conservation Act, and implement the findings of the Biological Opinion.

The final rule for Amendment 4 to the 2006 Consolidated Atlantic HMS FMP (Amendment 4) (77 FR 59842, October 1, 2012) implemented management measures that included, but were not limited to, creating the HMS Commercial Caribbean Small Boat permit for the traditional small-scale commercial handgear fishing fleet in the U.S. Caribbean region. This permit currently has a swordfish retention limit of two swordfish per trip (50 CFR 635.24(b)(3)). Current regulations do not allow for inseason modifications to this retention limit. In addition to implementing a swordfish retention limit, a shark retention limit was set at zero sharks per vessel per trip. Similar to the swordfish retention limit, the shark retention limit established by Amendment 4 can only be modified through framework regulatory procedures, see 50 CFR 635.34(b), which requires carrying out a rulemaking for a framework adjustment to adjust the limit.

The final rule for Amendment 6 to the 2006 Consolidated Atlantic HMS FMP (Amendment 6) (80 FR 50073, August 18, 2015) implemented management measures that included, but were not limited to, establishing regional and sub-regional quotas for large coastal and small coastal sharks in the Atlantic and Gulf of Mexico, removing vessel upgrading restrictions for shark limited access permit holders, and increasing the large coastal shark retention limit for shark directed limited access permit holders to a maximum of 55 large coastal sharks other than sandbar sharks per trip with a default of 45 large coastal sharks other than sandbar sharks per trip.

The final rule for Amendment 8 to the 2006 Consolidated Atlantic HMS FMP (Amendment 8) (78 FR 52011, August 21, 2013) implemented management measures that included, but were not limited to, establishing additional opportunities for U.S. fishermen to harvest swordfish. Specifically, Amendment 8 established an open access Swordfish General Commercial permit with default retention limits set at two swordfish per vessel per trip for the U.S. Caribbean region, three swordfish per vessel per trip for the Northwest Atlantic and Gulf of Mexico regions, and zero swordfish per vessel per trip in the Florida Swordfish Management Area. These retention limits also apply to permit holders who hold an HMS Charter/Headboat permit with a commercial sale endorsement (and only when on a non-for-hire trip). Amendment 8 also implemented regulations allowing NMFS to adjust these retention limits on an inseason basis between zero and six swordfish per vessel per trip (50 CFR 635.24(b)(4)(iv)). These retention limits also apply to permit holders who hold an HMS Charter/Headboat permit with a commercial sale endorsement (and only when on a non for-hire trip). In order to provide additional opportunities for fishermen to catch the U.S. North Atlantic swordfish quota, and after considering the specified regulatory criteria, NMFS has consistently adjusted the retention limits for the Swordfish General Commercial permit and the HMS Charter/Headboat permit when on a commercial trip upward from the default limits (two or three fish) to the maximum of six fish per vessel per trip in each of the past five years that the permit has been in existence in all areas except the Florida Swordfish Management Area, where the retention limit has remained at zero fish per vessel per trip.

The final rule for Amendment 9 to the 2006 Consolidated Atlantic HMS FMP (Amendment 9) (80 FR 73128, November 24, 2015) implemented management measures that included, but were not limited to, establishing an effective date for previously-adopted smoothhound shark management measures finalized in Amendment 3; adjusting the commercial quota for the smoothhound shark fishery based on recent stock assessments; implementing the smooth dogfish-specific provisions of the Shark Conservation Act ( i.e., all sharks landed from Federal waters in the United States must be landed with their fins naturally attached to the carcass, with limited exception for smooth dogfish); implementing the 2012 Shark Biological Opinion; and implementing Atlantic shark gillnet vessel monitoring system requirements. In March 2015, the Southeast Data, Assessment, and Review (SEDAR) 39 stock assessments for smoothhound sharks were completed. Notice of stock status determinations of no overfishing and not overfished for Atlantic smooth dogfish and Gulf of Mexico smoothhound sharks published on June 29, 2015 (80 FR 36974). These stock assessments provided information that could allow NMFS to establish scientifically-based quotas, and the final rule for Amendment 9 considered that new information and resulting quotas. Amendment 9 implemented a commercial quota for the smoothhound shark fishery in the Atlantic Region, and in the Gulf of Mexico region, with no size or retention limit restrictions for smoothhound sharks.

In 2017, International Commission for the Conservation of Atlantic Tunas (ICCAT) Standing Committee on Research and Statistics (SCRS) reassessed North Atlantic swordfish and found that the stock remained not overfished and that overfishing was not occurring. SCRS also indicated that the North Atlantic swordfish stock has been rebuilt since at least 2013 (78 FR 12273, February 2, 2013). The United States has not fully harvested its swordfish quota in several years; therefore, there is a need to continue to provide additional opportunities for fishermen to catch the U.S. quota. NMFS has received comments from HMS Advisory Panel (AP) members at three HMS AP meetings (September 2017, March 2018, and September 2019) requesting that NMFS increase the current swordfish and shark retention limits for the HMS Commercial Caribbean Small Boat permit. Specifically, AP members have requested that NMFS increase the retention limit of the HMS Commercial Caribbean Small Boat permit from two to six swordfish per vessel per trip, similar to the current upper swordfish retention limit for the Swordfish General Commercial permit and HMS Charter/Headboat permit with a commercial sale endorsement, and allow for an increase in the shark retention limit of the HMS Commercial Caribbean Small Boat permit from zero to three sharks per vessel per trip, in order to retain sharks for personal consumption or to sell at the local market or restaurant. Furthermore, additional outreach with the Caribbean Fishery Management Council, the territorial governments, and general discussions with commercial and recreational fishermen have shown interest in increasing the current shark retention limits for the HMS Commercial Caribbean Small Boat permit from zero to three sharks per vessel per trip.

As described above, based on the rebuilt status of North Atlantic swordfish and shark stocks, increased interest in participating in the swordfish and shark fisheries, and the need to more fully utilize the U.S. ICCAT-recommended swordfish quota allocation, NMFS is proposing management changes to the swordfish retention limits of the HMS Commercial Caribbean Small Boat, Swordfish General Commercial, and HMS Charter/Headboat commercial permits, and to the shark retention limits of the HMS Commercial Caribbean Small Boat permit. This rule proposes to update and revise existing HMS regulations to increase the flexibility of, and provide consistency between, the North Atlantic swordfish and shark retention limits for vessel owners issued the HMS Commercial Caribbean Small Boat permit, the Swordfish General Commercial permit, and the HMS Charter/Headboat permit with a commercial sale endorsement, all of whom fish with similar handgears within U.S. Atlantic and Caribbean waters. Furthermore, this proposed action would increase administrative efficiencies by managing these permits similarly ( i.e., using inseason adjustment authority) with the goal of more fully utilizing the available U.S. swordfish quota, while also avoiding quota overharvests.

NMFS prepared a draft EA, RIR, and an IRFA, which present and analyze the anticipated environmental, social, and economic impacts of each alternative considered for this proposed rule. The complete list of alternatives and related analyses are provided in the draft EA/RIR/IRFA and are not repeated here in its entirety. A copy of the draft EA/RIR/IRFA prepared for this proposed rulemaking is available from NMFS (see ADDRESSES ).

NMFS considered three alternatives (Alternatives A1-A3) to modify the mechanism to adjust swordfish and shark retention limits for vessels issued the HMS Commercial Caribbean Small Boat permit. NMFS considered four alternatives (Alternatives B1-B4) for modifying the swordfish retention limits for the Swordfish General Commercial permit, the HMS Commercial Caribbean Small Boat permit, and for HMS Charter/Headboat permit holders with a commercial sale endorsement on a non-for hire ( i.e., commercial) trip. NMFS also considered three alternatives (Alternatives C1-C3) for modifying the shark retention limits for the HMS Commercial Caribbean Small Boat permit.

Currently, adjusting the swordfish and shark retention limit for the HMS Commercial Caribbean Small Boat permit requires conducting a rulemaking to make a framework adjustment, while the retention limits for the Swordfish General Commercial and HMS Charter/Headboat permit holders with a commercial sale endorsement can be changed through an inseason adjustment. This means that NMFS currently has to take two separate regulatory actions to adjust the swordfish retention limits for the three swordfish commercial permits. Specifically, in the U.S. Caribbean region, adjusting swordfish retention limits through two different regulatory procedures with different time frames has caused confusion among fishermen.

Under Alternative A1 (No Action), NMFS would maintain the current ability to adjust the regional swordfish retention limit for vessels issued the HMS Commercial Caribbean Small Boat permit only through framework adjustment procedures (see 50 CFR 635.34(b)).

Under Alternative A2 (Preferred Alternative), NMFS would implement the Swordfish General Commercial Permit inseason adjustment authorization criteria codified at 50 CFR 635.24(b)(4)(iv) to adjust the regional swordfish retention limit for the HMS Commercial Caribbean Small Boat permit. Before making any inseason adjustments to the Commercial Caribbean Small Boat permit retention limit, NMFS would consider the following criteria and other relevant factors:

A. The usefulness of information obtained from biological sampling and monitoring of the North Atlantic swordfish stock;

B. The estimated ability of vessels participating in the fishery to land the amount of swordfish quota available before the end of the fishing year;

C. The estimated amounts by which quotas for other categories of the fishery might be exceeded;

D. Effects of the adjustment on accomplishing the objectives of the FMP and its amendments;

E. Variations in seasonal distribution, abundance, or migration patterns of swordfish;

F. Effects of catch rates in one region precluding vessels in another region from having a reasonable opportunity to harvest a portion of the overall swordfish quota; and;

G. Review of dealer reports, landing trends, and the availability of swordfish on the fishing grounds.

Under Alternative A3 (Preferred Alternative), NMFS would implement the shark inseason trip limit adjustment authorization criteria codified at 50 CFR 635.24(a)(8) to adjust the regional shark retention limit for the HMS Commercial Caribbean Small Boat permit. Before making any inseason adjustments to the Commercial Caribbean Small Boat permit retention limit, NMFS would consider the following criteria and other relevant factors:

A. The amount of remaining shark quota in the relevant area or region, to date, based on dealer reports;

B. The catch rates of the relevant shark species/complexes in the region, to date, based on dealer reports;

C. Estimated date of fishery closure based on when the landings are projected to reach 80 percent of the quota given the realized catch rates;

D. Effects of the adjustment on accomplishing the objectives of the 2006 Consolidated Atlantic HMS FMP and its amendments;

E. Variations in seasonal distribution, abundance, or migratory patterns of the relevant shark species based on scientific and fishery-based knowledge, and/or;

F. Effects of catch rates in one part of a region precluding vessels in another part of that region from having a reasonable opportunity to harvest a portion of the relevant quota.

Regarding the alternatives considered to adjust the retention limits, Alternative B1 (No Action) would maintain the existing range of zero to six swordfish per vessel per trip within all regions for Swordfish General Commercial permit holders and for HMS Charter/Headboat permit holders with a commercial sale endorsement. The default retention limits established for these permits would remain at: (1) Northwest Atlantic region—three swordfish per vessel per trip; (2) Gulf of Mexico region—three swordfish per vessel per trip; (3) U.S. Caribbean region—two swordfish per vessel per trip; and, (4) Florida Swordfish Management Area—zero swordfish per vessel per trip. NMFS would also maintain the current retention limit of two swordfish per vessel per trip for vessels issued an HMS Commercial Caribbean Small Boat permit.

Alternative B2 (Preferred Alternative) would maintain the default swordfish retention limit of zero swordfish per vessel per trip for the Florida Swordfish Management Area and establish a default swordfish retention limit of six swordfish per vessel per trip for all other regions and for HMS Commercial Caribbean Small Boat and Swordfish General Commercial permit holders, and HMS Charter/Headboat permit holders with a commercial sale endorsement. Additionally, for the HMS Commercial Caribbean Small Boat permit, NMFS would establish a retention limit range of zero to six swordfish per vessel per trip, with a default retention limit of six swordfish per vessel per trip.

Similar to Alternative B2, Alternative B3 would change the retention limit range for all three permits and the default retention limits for all three permits in all areas, except the Florida Swordfish Management Area, which would remain with a default limit of zero swordfish per vessel per trip. Specifically, the retention limit range would change to zero to 18 swordfish per vessel per trip for all permits. The default retention limits established for these permits would be changed to 18 swordfish per vessel per trip in the Northwest Atlantic and Gulf of Mexico regions and to six swordfish per vessel per trip in the U.S. Caribbean.

Alternative B4 is similar to Alternative B3, except it would change the default retention limit for all permits and all areas to 18 swordfish per vessel per trip, except for the Florida Swordfish Management Area, which would remain with a default limit of zero swordfish per vessel per trip. Accordingly, the retention limit range would change to zero to 18 swordfish per vessel per trip for all permits.

Alternative C1 (No Action) would maintain the current shark retention limit for HMS Commercial Caribbean Small Boat permit holders of zero sharks per vessel per trip.

Alternative C2 (Preferred Alternative) would establish a default retention limit of three smoothhound and/or tiger sharks (combined) per vessel per trip for HMS Commercial Caribbean Small Boat permit holders. The retention limit range would be zero to three smoothhounds and/or tiger sharks (combined) per vessel per trip. The retention of any other shark species would not be allowed under this alternative.

Alternative C3 would establish a default retention limit of six non-prohibited large coastal, small coastal, pelagic, and/or smoothhound sharks (combined) per vessel per trip for HMS Commercial Caribbean Small Boat permit holders. The retention limit range would be zero to six non-prohibited large coastal, small coastal, pelagic, and/or smoothhound sharks (combined) per vessel per trip.

Preferred Alternatives A2 and A3, in combination with Preferred Alternatives B2 and C2 would establish inseason adjustment authority for the swordfish and shark retention limits under the HMS Commercial Caribbean Small Boat permit in the U.S. Caribbean. The ability to adjust the retention limit between zero and six for all three permits and all regions for swordfish, and adjust the retention limit between zero and three smoothhound and/or tiger sharks (combined) for the HMS Commercial Caribbean Small Boat permit holders would result in NMFS being more flexible and able to respond in a more timely manner when adjusting the swordfish and shark retention limits. This flexibility would also provide consistency for swordfish management across the permits and regions. This flexibility could allow NMFS to lower the retention limit throughout the year, if necessary, to prevent exceeding the North Atlantic swordfish quota. Thus, Alternatives A2 and A3 would likely have neutral direct and indirect, short- and long-term, ecological impacts. Because these alternatives would increase flexibility in managing the swordfish and shark fisheries as needed, while still preventing overharvest of the North Atlantic swordfish and shark quotas, NMFS prefers these alternatives at this time.

Under Alternative B2 (Preferred Alternative), the default retention limit for all three permits in all regions (other than the Florida Swordfish Management Area which would remain at zero fish per vessel per trip) would change to six swordfish per vessel per trip. Currently, the maximum swordfish retention limit for Swordfish General Commercial permit holders and HMS Charter/Headboat permit holders with a commercial sale endorsement is six swordfish per vessel per trip with a default limit of three swordfish per vessel per trip in the Northwest Atlantic and Gulf of Mexico regions and two swordfish per vessel per trip in the U.S. Caribbean region. NMFS has increased these swordfish retention limits to six every year for each of the past six years that the Swordfish General Commercial permit has been in existence, in order to provide additional fishing opportunities to harvest the U.S. swordfish quota, which is currently underharvested. Because the fishermen with a Swordfish General Commercial permit and the HMS Charter/Headboat permit with a commercial sale endorsement already fish under the default retention limit preferred here, NMFS does not anticipate any changes to current fishing practices or bycatch mortality rates not previously analyzed in Amendment 8. Thus, Alternative B2, would have neutral direct and indirect ecological impacts on the U.S. swordfish stock in the short- and long-term for Swordfish General Commercial permit holders and the HMS Charter/Headboat permit holders with a commercial sale endorsement. Because the per trip and annual revenue for these permit holders would essentially remain the same as under Alternative B1, this alternative would also result in neutral direct socioeconomic impacts to Swordfish General Commercial permit holders and HMS Charter/Headboat permit holders with a commercial sale endorsement in the short- and long-term. The current HMS Commercial Caribbean Small Boat permit swordfish retention limit is two swordfish per vessel per trip. If NMFS were to increase the retention limit to six swordfish per vessel per trip, it is likely that this alternative will have neutral direct ecological impacts on the U.S. swordfish stock in the short-and long-term as this action would not affect or alter the science-based quotas for the North Atlantic swordfish, and the swordfish stock can support higher removal levels within established quotas without jeopardizing the sustainability of the stock. In addition, because authorized gear under the HMS Commercial Caribbean Small Boat permit has low bycatch and bycatch mortality, NMFS anticipates Alternative B2 to have neutral indirect ecological impact in the short- and long- term. Affected fishermen could realize higher trip revenues since they would have more swordfish to sell, assuming a vessel is able to retain the maximum trip limit. This minor increase in per trip, and annual, revenue would result in neutral direct socioeconomic impacts in the short- and long-term to HMS Commercial Caribbean Small Boat permit holders as any increase in annual ex-vessel revenue would be relatively minor.

Under Alternative C2 (Preferred Alternative), the default shark retention limit would change to three smoothhound and/or tiger sharks (combined) for HMS Commercial Caribbean Small Boat permit holders, with a retention limit range of zero to three smoothhounds and/or tiger sharks (combined) per vessel per trip. The retention of any other shark species would not be allowed under this alternative. Currently, the default shark retention limit for HMS Commercial Caribbean Small boat permit holders is zero sharks per vessel per trip. Preferred Alternative C2 would not likely adversely affect shark populations for several reasons. First, this range is a conservative limit that is analogous to the lowest retention limit of the existing HMS permits. Second, the smoothhound shark stock is healthy, not overfished, and with no overfishing occurring. And while the non-prohibited large coastal shark stock status is unknown (the tiger shark stock is part of the non-prohibited aggregated large coastal shark stocks), tiger shark landings have been below the allocated shark quotas for the non-prohibited large coastal shark management group. Moreover, the non-prohibited large coastal shark quotas have not been fully harvested in recent years and NMFS is not expecting increased landings of tiger sharks to adversely affect the stocks. Third, both of these shark species can withstand higher removals within the established quotas and the proposed retention limits without jeopardizing the sustainability of the stocks. Fourth, the quotas for smoothhound and non-prohibited large coastal sharks are not being modified in this rulemaking and fishermen would continue to be limited to the total amount of sharks that can be harvested, as well as by seasonal closures when the shark quotas have reached or are projected to reach 80 percent of the relevant quota or are projected to reach 100 percent of the relevant quota by the end of the fishing season ( see § 635.28(b)(2)). Fifth, both of these species have unique physical features that make them easy to distinguish from other shark species. Thus, alternative C2 is anticipated to have neutral direct ecological impacts to shark stocks in the short- and long-term. This alternative would also have neutral indirect ecological impacts. While other bycatch species may be caught during fishing activities targeting smoothhounds and/or tiger sharks, the use of handgears in the small-scale fishery as authorized by the HMS Commercial Caribbean Small Boat permit would allow for a quick release of bycatch species, maximizing their post-release survival rate. It is anticipated that fishermen using handgear would have no adverse impacts on ESA-listed species, including marine mammals and sea turtles, beyond the impacts analyzed in the 2004 and 2012 Biological Opinions which concluded that the HMS handgear fishery will not jeopardize any ESA-listed species, including the Central and Southwest Distinct Population Segment of the scalloped hammerhead shark. Under alternative C2, permitted HMS Commercial Caribbean Small Boat permit holders would be able to land and sell smoothhound and tiger sharks. If NMFS increases the retention limit to three sharks per vessel per trip, fishermen would potentially realize higher per trip and annual revenues since they would have sharks to sell. This minor increase in per trip and annual revenue would result in neutral direct socioeconomic impacts in the short- and long-term to the HMS Commercial Caribbean Small Boat permit holders because any potential increase would be relatively minor.

As described above, NMFS also considered five other alternatives on retention limits—three other alternatives regarding the swordfish retention limits (Alternatives B1, B3, and B4) and two other alternatives regarding shark retention limits (Alternatives C1, and C3)—and one other alternative regarding the mechanism to adjust retention limits for the HMS Commercial Caribbean Small Boat permit (Alternative A1). At this time, NMFS does not prefer Alternatives A1 (No Action), B1 (No Action), and C1 (No Action) because these alternatives do not meet the objectives of the rule: Providing additional fishing opportunities to fishermen when other factors, such as availability of fish on the grounds and available quota, support such an increase. NMFS does not prefer Alternative B3, B4, or C3 at this time. With regard to Alternatives B3 and B4, it is not yet clear that Swordfish General Commercial permit holders or HMS Commercial Caribbean Small Boat permit holders would achieve the full benefits of, a retention limit of up to 18 swordfish from a retention limit range of zero to 18 swordfish per vessel per trip or if a default retention limit of six to 18 swordfish per trip is most appropriate for the U.S. Caribbean region, given prior landings and the current make-up of the HMS Commercial Caribbean Small Boat fleet. With regard to Alternative C3, it is also not clear if HMS Commercial Caribbean Small Boat permit holders would achieve the full benefits of a retention limit of up to six shark per vessel per trip (non-prohibited large coastal, small coastal, pelagic, and smoothhound sharks, combined) or if a default retention limit of six sharks per vessel per trip is most appropriate for the U.S. Caribbean region, given prior landings and the current make-up of the HMS Commercial Caribbean Small Boat fleet. NMFS specifically requests comments on the HMS Commercial Caribbean Small Boat permit, Swordfish General Commercial permit, and HMS Charter/Headboat permit swordfish and shark retention limits.

Specific Requests for Comments: NMFS requests comments from the public on the proposed action and this document. In particular, NMFS would like the following questions considered and is specifically requesting comments from the public.

1. NMFS specifically requests comments on whether vessels, having a Swordfish General Commercial permit, can support the extra weight of additional swordfish.

2. NMFS specifically requests comments on whether vessels, having an HMS Commercial Caribbean Small Boat permit, can support the extra weight of additional swordfish.

3. NMFS specifically requests comments on the ability of the small-scale fleet to hold and market the proposed, increased retention limit for sharks.

4. NMFS specifically requests comments on the six-shark retention limit alternative, and the ability for the fleet to hold six sharks, and to transport them safely back to their homeport.

5. NMFS specifically requests comments on the swordfish retention limits of the HMS Commercial Caribbean Small Boat permit, Swordfish General Commercial permit, and HMS Charter/Headboat permit when a vessel is on a commercial trip, and the shark retention limits of the HMS Commercial Caribbean Small Boat permit.

6. NMFS specifically requests comments on price data for swordfish and non-prohibited large coastal, small coastal, pelagic, and smoothhound sharks in the U.S. Caribbean.

Comments on this proposed rule may be submitted via http://www.regulations.gov or at a public conference call/webinar. NMFS solicits comments on this proposed rule through [ insert date 60 days after the date of publication in the Federal Register ]. During the comment period, NMFS will hold three conference calls/webinars for this proposed rule. Requests for sign language interpretation or other auxiliary aids should be directed to Nicolas Alvarado or Delisse Ortiz at 727-824-5399/240-681-9037, at least 7 days prior to the meeting.

The webinar/conference calls will take place on May 19, 2020, May 27, 2020, and June 10, 2020. Information for registering and accessing the webinars can be found at https://www.fisheries.noaa.gov/action/modifications-some-north-atlantic-swordfish-and-shark-retention-limits-and-inseason.

The public is reminded that NMFS expects participants at the public hearings to conduct themselves appropriately. At the beginning of the conference call, the moderator will explain how the conference call will be conducted and how and when attendees can provide comments. The NMFS representative will attempt to structure the meeting so that all the attending members of the public will be able to comment, if they so choose, regardless of the controversial nature of the subject(s). Attendees are expected to respect the ground rules, and, if they do they may not be allowed to speak during the conference call.

Pursuant to the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that the proposed rule is consistent with the 2006 Consolidated Atlantic HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, ATCA, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866 Regulatory Planning and Review.

This proposed rule is expected to be an Executive Order 13771 deregulatory action. The proposed rule would increase flexibility for, and reduce the burden to, fishermen by modifying the North Atlantic swordfish and shark retention limit in U.S. Atlantic and Caribbean waters and allowing those retention limits to be increased within a certain range if warranted, which would result in the ability for fishermen to catch and retain more fish. This proposed action would also streamline the regulations by aligning the different swordfish retention limits between different commercial swordfish permits that use similar gears.

An IRFA was prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule would have on small entities if adopted. A description of the action, why it is being considered, and the legal basis for this action are contained below. A summary of the analysis follows. A copy of this analysis is available from NMFS (see ADDRESSES ).

Section 603(b)(1) of the Regulatory Flexibility Act requires Agencies to describe reasons why the action is being considered. The purpose of this proposed action is to consider modifications to the swordfish retention limits for vessels issued HMS Commercial Caribbean Small Boat permits, Swordfish General Commercial permits, and HMS Charter/Headboat permits with a commercial endorsement (applicable only when on a non-for hire trip), and shark retention limits for vessels issued an HMS Commercial Caribbean Small Boat permit, and adding regulatory criteria for inseason adjustment to the retention limits of the HMS Commercial Caribbean Small Boat permit retention limits while avoiding under- and overharvest.

Section 603(b)(2) requires Agencies to describe the objectives of the proposed rule. NMFS has identified the following objectives, which are consistent with existing statutes such as the Magnuson-Stevens Act and its objectives, with regard to this proposed action:

• Maintain optimum yield for the swordfish fishery;

• Management measures shall, where practicable, minimize costs and avoid unnecessary duplication; and

• Take into account the importance of fishery resources to fishing communities in order to provide for the sustained participation of such communities, and to the extent practicable, minimize adverse economic impacts on such communities.

Section 603(b)(3) of the RFA requires Agencies to provide an estimate of the number of small entities to which the rule would apply. The Small Business Administration (SBA) has established size criteria for all major industry sectors in the United States, including fish harvesters. Provision is made under the SBA's regulations for an agency to develop its own industry-specific size standards after consultation with Advocacy and an opportunity for public comment (see 13 CFR 121.903(c)). Under this provision, NMFS may establish size standards that differ from those established by the SBA Office of Size Standards, but only for use by NMFS and only for the purpose of conducting an analysis of economic effects in fulfillment of the agency's obligations under the RFA. To utilize this provision, NMFS must publish such size standards in the Federal Register , which NMFS did on December 29, 2015 (80 FR 81194). In that final rule effective on July 1, 2016, NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes. NMFS considers all HMS permit holders to be small entities because they all had average annual receipts of less than $11 million for commercial fishing.

The proposed rule would apply to the approximately 35 HMS Commercial Caribbean Small Boat permits, 667 Swordfish General Commercial permits, and 3,769 HMS Charter/Headboat permit holders, based on an analysis of permit holders as of December 2019. Of those 667 Swordfish General Commercial permit holders, 24, or 3.6 percent of permit holders, landed swordfish in 2019. Of the 35 HMS Commercial Caribbean Small Boat permit holders, 5, or 14.2 percent of permit holders, landed swordfish in 2019. Of the 3,769 HMS Charter/Headboat vessels only 23, or 0.6 percent of permit holders, landed swordfish in 2019. NMFS has determined that the proposed rule would not likely affect any small governmental jurisdictions.

Section 603(b)(4) of the RFA requires Agencies to describe any new reporting, record-keeping and other compliance requirements. The action does not contain any new collection of information, reporting, or record-keeping requirements. The alternatives considered would review and potentially modify the swordfish retention limits for existing swordfish commercial permits, modify shark retention limits for HMS Commercial Caribbean Small Boat permits and add regulatory criteria for inseason adjustment of the HMS Commercial Caribbean Small Boat permit retention limits.

Under section 603(b)(5) of the RFA, agencies must identify, to the extent practicable, relevant Federal rules which duplicate, overlap, or conflict with the proposed rule. Fishermen, dealers, and managers in these fisheries must comply with a number of international agreements, domestic laws, and fishery management measures. These include the Magnuson-Stevens Act, ATCA, the High Seas Fishing Compliance Act, the Marine Mammal Protection Act, the Endangered Species Act, the National Environmental Policy Act, the Paperwork Reduction Act, and the Coastal Zone Management Act. This proposed rule has been determined not to duplicate, overlap, or conflict with any Federal rules.

One of the requirements of an IRFA is to describe any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impacts of the proposed rule on small entities. These impacts are discussed below. Additionally, the RFA (5 U.S.C. 603 (c)(1)-(4)) lists four general categories of “significant” alternatives that would assist an agency in the development of significant alternatives. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) Clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) Use of performance rather than design standards; and (4) Exemptions from coverage of the rule, or any part thereof, for small entities.

NMFS examined each of these categories of alternatives. Regarding the first, second, and fourth categories, NMFS cannot establish differing compliance requirements for small entities or exempt small entities from coverage of the rule or parts of it because all of the businesses impacted by this rule are considered small entities and thus the requirements are already designed for small entities. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act. As described below, NMFS analyzed several different alternatives in this proposed rulemaking and provides rationales for identifying the preferred alternatives to achieve the desired objectives.

The alternatives considered and analyzed are described below. The IRFA assumes that each vessel will have similar catch and gross revenues to show the relative impact of the proposed action on vessels.

Alternative A1 would maintain the current ability to adjust the regional swordfish retention limits for vessels possessing the HMS Commercial Caribbean Small Boat permit only through framework adjustment procedures (see 50 CFR 635.34(b)). Under this alternative, NMFS does not anticipate any change in economic impacts, as this would maintain NMFS' ability to modify swordfish retention limits using the existing current framework adjustment procedures. As such, this alternative would have neutral economic impacts on HMS permit holders. However, this alternative would have additional administrative burden and time costs associated with continuing to be required do a framework action to change the trip limit for the HMS Commercial Caribbean Small Boat permit.

Alternatives A2 and A3 would implement inseason adjustment authority for swordfish and sharks, similar to those codified at 50 CFR 635.24(b)(4)(iv) and 50 CFR 635.24(a)(8), respectively, in order to modify the retention limit for the HMS Commercial Caribbean Small Boat within a range, as described in Alternatives B2 to B4 and Alternatives C2 to C3, respectively. NMFS already has the ability to adjust the swordfish retention limits under the Swordfish General Commercial and HMS Charter/Headboat permits, and the shark retention limits under the Shark Limited Access permits. Under these alternatives (A2 and A3), inseason adjustment authority would provide NMFS with more flexibility in the regulations to be more responsive to the changes needed in the swordfish and shark fisheries within the fishing season. The alternatives would provide for a new regulatory process that would not change the actual retention limits. Therefore, the alternatives would have neutral socioeconomic impacts to HMS permit holders.

Alternative B1, the No Action alternative, would maintain the zero to six swordfish per vessel per trip retention limit range within all Swordfish General Commercial permit management regions, and maintain the existing default swordfish retention trip limit of two swordfish per vessel per trip for Swordfish General Commercial permit holders in the U.S. Caribbean and three swordfish per vessel per trip for Swordfish General Commercial permit holders and HMS Charter/Headboat permit holders with a commercial sale endorsement within the Gulf of Mexico and Northwest Atlantic regions. The default swordfish retention trip limit for the Florida Swordfish Management Area would remain at zero. For the HMS Commercial Caribbean Small Boat permit, the swordfish retention trip limit of two swordfish per vessel per trip would be maintained.

A single swordfish is estimated to be worth $331 (ex-vessel), on average, whereas six swordfish are estimated to be worth $1,987 (ex-vessel). Under the No Action alternative, the potential gross revenue per trip for each HMS Commercial Caribbean Small Boat vessel landing the trip limit would remain at approximately $662 based on the average ex-vessel price of swordfish, with gross revenue from swordfish ranging from $662 under a two fish limit to $1,987 under a six swordfish limit. Similarly, the potential gross revenue per trip for vessels possessing a Swordfish General Commercial permit or a HMS Charter/Headboat permit with a commercial sale endorsement fishing in either the U.S. Caribbean, Northwest Atlantic or Gulf of Mexico and landing the full trip limit would remain at $1,987, with gross revenue from swordfish ranging from either $662 under a two fish limit or $993 under a three swordfish limit to $1,987 under a six swordfish limit. Alternative B1 would likely result in neutral economic impacts since there would be no change in the management structure of the swordfish fishery.

Alternative B2 (Preferred Alternative), would maintain the zero to six swordfish retention limit range, but would increase the default limit to the highest swordfish retention limit of six swordfish per vessel per trip for most of the swordfish management regions (NW Atlantic, Gulf of Mexico, U.S. Caribbean) for vessels possessing an HMS Commercial Caribbean Small Boat permit, a Swordfish General Commercial permit, or vessels with an HMS Charter/Headboat permit with a commercial sale endorsement. The default swordfish retention trip limit for the Florida Swordfish Management Area would remain at zero. Under this alternative, the potential gross revenue per trip for each vessel that has landed the maximum allowed trip limit under either of the three swordfish commercial swordfish permits and within the U.S. Caribbean, Northwest Atlantic, and Gulf of Mexico would be $1,987 per vessel per trip. For example, for a vessel making ten trips per year and retaining the maximum allowable limit each trip, annual gross revenue derived from swordfish would generate up to $19,870 under a six swordfish limit. See Table 4.2 in draft EA/IRFA (summarizing average number of trips per year under the different permits). By having a higher default trip limit for swordfish, this alternative would continue to provide a seasonal, or secondary, fishery for most participants as well as provide new socioeconomic benefits to some fishermen, fishing tackle manufacturers and suppliers, bait suppliers, fuel providers, and swordfish dealers. Alternative B2 would likely result in neutral economic impacts in the short- and long-term. Because NMFS has increased the swordfish retention limit in the Northwest Atlantic and Gulf of Mexico, and the U.S. Caribbean regions to six every year for each of the past six years since the implementation of the Swordfish General Commercial permit, any economic impact would be neutral for Swordfish General Commercial permit holders and HMS Charter/Headboat permit holders with a commercial sale endorsement. For the HMS Commercial Caribbean Small Boat permit, fishermen would realize higher trip revenues since they could sell up to four additional swordfish per trip than the current two swordfish per vessel per trip limit. However, this alternative would result in neutral direct socioeconomic impacts to the HMS Commercial Caribbean Small Boat permit holders in the short- and long- term as any increase in annual ex-vessel revenue would be relatively minor.

Alternative B3 would modify the existing swordfish retention limit range by increasing it from a zero to six swordfish per vessel per trip to zero to 18 swordfish per vessel per trip for all swordfish management regions. Similar to Alternative B2, this alternative would establish a default swordfish retention limit of six swordfish per vessel per trip for the HMS Commercial Caribbean Small Boat permit within the U.S. Caribbean region. However, unlike Alternative B2, this alternative would increase the default swordfish retention limit from six swordfish per vessel per trip to 18 swordfish per vessel per trip for vessels possessing a Swordfish General Commercial permit, or vessels with an HMS Charter/Headboat permit with a commercial sale endorsement within the Northwest Atlantic, Gulf of Mexico, and the U.S. Caribbean swordfish management regions. The default swordfish retention trip limit for the Florida Swordfish Management Area would remain at zero. Under this alternative, the potential gross revenue from swordfish for each vessel with an HMS Commercial Caribbean Small Boat permit within the U.S. Caribbean region would range from $1,987 per trip under a six swordfish limit to $5,961 per trip under an 18 swordfish limit. Fishermen would realize higher trip revenues since they would have more swordfish to sell, assuming a vessel is able to retain the maximum trip limit, and more fishermen may conduct a greater number of trips or longer trips. If all of the five active HMS Commercial Caribbean Small Boat vessels in 2019 landed the six-swordfish default trip limit and take an average of four trips per year they could realize an increase in annual revenue of up to $39,740. See Table 4.2 in draft EA/IRFA (summarizing average of trips per year under the different permits). Alternative B3 would likely result in minor beneficial direct impacts on HMS Commercial Caribbean Small Boat permit holders in the short- and long-term. Similarly, the potential gross revenue per trip for vessels possessing a Swordfish General Commercial permit or vessels with an HMS Charter/ Headboat permit and a commercial sale endorsement fishing in either the U.S. Caribbean, Northwest Atlantic or Gulf of Mexico swordfish management regions retaining the maximum 18-swordfish limit on each trip would be $5,961. For example, for a vessel making ten trips per year and retaining the maximum allowable limit each trip, annual gross revenue derived from swordfish would generate up to $59,616 under an 18 fish limit. Alternative B3 would likely result in minor beneficial direct economic impacts on Swordfish General Commercial permit holders or HMS Charter/Headboat permit holders with a commercial sale endorsement in the short- and long-term since the default retention limit would be set higher than the current default limit for all swordfish management region, resulting in fishermen potentially realizing higher trip revenues since fishermen would have more swordfish to sell.

Alternative B4 would modify the existing default swordfish retention limit range by increasing it from a zero to six swordfish per vessel per trip to a zero to 18 swordfish per vessel per trip for all swordfish management regions, with the default swordfish retention limit set at the maximum trip limit of 18 swordfish per vessel per trip everywhere except the Florida Swordfish Management Area, which would remain at zero. As noted above, Alternative B3 would make the same modifications, but with a lower (six swordfish) default retention limit for the HMS Commercial Caribbean Small Boat permit within the U.S. Caribbean region. Similar to Alternative B3, under Alternative B4, the potential gross revenue per trip for each vessel with an HMS Commercial Caribbean Small Boat permit, a Swordfish General Commercial permit, or a vessel with an HMS Charter/Headboat permit and commercial sale endorsement fishing in either the U.S. Caribbean, the Northwest Atlantic or the Gulf of Mexico swordfish management regions retaining the maximum allowed limit on each trip would be $5,961. For example, for a vessel making ten trips per year and retaining the maximum allowable limit ( i.e., an 18 swordfish retention limit) each trip, the annual gross revenue derived from swordfish would generate up to $59,616. In increasing the retention limit above the default limit for all swordfish management regions, fishermen would realize higher trip revenues since they would have more swordfish to sell. Consequently, the outcome of Alternative B4 would likely result in minor beneficial direct economic impacts on the HMS Commercial Caribbean Small Boat permit holders, Swordfish General Commercial permit holders, and HMS Charter/Headboat permit holders with a commercial sale endorsements in the short- and long-term.

Alternative C1, the No Action alternative, would maintain the current range of zero to three sharks per vessel per trip for the HMS Commercial Caribbean Small Boat permit, with a default shark retention limit of zero sharks per vessel per trip. Thus, if the retention limit remains the same there would likely be neutral direct economic impacts to HMS Commercial Caribbean Small Boat permit holders in the short- and long-term. However, the No Action alternative would not provide NMFS with flexibility to address multiple requests by commercial shark fishermen to land a limited number of sharks, when factors, such as availability of fish on the grounds and available quota, support such an increase.

Alternative C2 (Preferred Alternative) would establish a retention limit range of zero to three smoothhounds and/or tiger sharks (combined) per vessel per trip, with a default shark retention limit of three smoothhound and/or tiger sharks (combined) per vessel per trip. The retention of any other shark species would not be allowed under this alternative. The retention limit could be raised or lowered in the region in season within the zero to three shark per vessel per trip range. Under this alternative, the potential annual gross revenue for each vessel that has landed the maximum allowed trip limit of three smoothhounds and/or tiger sharks (combined) per vessel per trip would be as follow: (a) If only tiger sharks were caught, and the vessel takes two trips per month (24 trips per year), then the annual revenue per vessel associated with this activity would be $4,455; and (b) if only smoothhound sharks were caught, and the vessel conducted two trips per month (24 trips per year), then the annual revenue per vessel would be $733. See Table 3.9 in draft EA/IRFA (summarizing number of trips landing sharks per year under the different permits). Because NMFS would have the authority to adjust the shark retention limit from zero to three, the annual ex-vessel revenue estimates could vary from $0 (under a zero fish limit) to as much as $733 to $4,455, depending on the species composition of the catch. This minor increase in per trip, and annual revenue would result in neutral direct economic impacts in the short- and long-term to the HMS Commercial Caribbean Small Boat permit holders because any potential increase would be relatively minor.

Under Alternative C3, NMFS would establish a retention limit range of zero to six non-prohibited large coastal, small coastal, pelagic, and smoothhound sharks (combined) per vessel per trip, with a default retention limit of six non-prohibited large coastal, small coastal, pelagic, and smoothhound sharks (combined) per vessel per trip for HMS Commercial Caribbean Small Boat permit holders. Under this alternative, the potential annual gross revenue for each vessel that has landed the maximum allowed trip limit of six non-prohibited large coastal, small coastal, pelagic, and smoothhound sharks per vessel per trip would vary depending on the composition of the catch. If only large coastal sharks were caught, and the vessel takes two trips per month (24 trips per year), then the annual revenue per vessel associated with this activity would be $8,910. Assuming a successful trip and two trips per month, the annual revenue per vessel associated with a vessel landing the full trip limit of either small coastal, pelagic or smoothhound sharks would be $5,110, $11,269, and $1,468, respectively. Because NMFS would have the authority to adjust the shark retention limit from zero to six, the annual ex-vessel revenue estimates could vary from $0 (under a zero fish limit) to as much as $1,468 to $11,269, depending on the species composition of the catch. This minor increase in per trip, and annual, revenue would result in neutral economic impacts to the HMS Commercial Caribbean Small Boat permit holders in the short- and long-term because any potential increase would be relatively minor.

For the reasons set out in the preamble, 50 CFR part 635 is proposed to be amended as follows:

The revisions and addition read as follows: