The National Bank Act  1 and the Home Owners' Loan Act  2 authorize the Comptroller to recover the costs of the OCC's operations through assessments, fees, and other charges on banks under the jurisdiction of the OCC. 3 In setting assessments, the Comptroller has broad authority to consider variations among institutions, including the nature and scope of the activities of the entity, the amount and type of assets that the entity holds, the financial and managerial condition of the entity, and any other factor the Comptroller determines is appropriate. 4

The OCC collects assessments from banks under its jurisdiction in accordance with 12 CFR part 8. Under part 8, the base assessment for banks is calculated using a table with eleven categories, or brackets, each of which comprises a range of asset-size values. The assessment for each bank is the sum of a base amount, which is the same for every bank in its asset-size bracket, plus a marginal amount, which is computed by applying a marginal assessment rate to the amount in excess of the lower boundary of the asset-size bracket. 5 The marginal assessment rate declines as asset size increases, reflecting economies of scale in bank examination and supervision.

The OCC's annual Notice of Office of the Comptroller of the Currency Fees and Assessments (Notice of Fees) sets forth the marginal assessment rates applicable to each asset-size bracket for each year, as well as other assessment components and fees. Under part 8, the OCC may adjust the marginal rates to account for inflation through the annual Notice of Fees. 6 The OCC also has the discretion under part 8 to adjust marginal rates by amounts other than inflation. 7 The OCC may issue an interim or amended Notice of Fees if the Comptroller determines that it is necessary to revise assessments to meet the OCC's supervisory obligations. 8

Under 12 CFR 8.2, the OCC collects assessments on a semiannual basis, with fees due by March 31 and September 30 (payment due dates) of each year for the six-month period beginning on January 1 and July 1 before each payment due date. 9 Each semiannual assessment is based upon the total assets shown in the institution's most recent Call Report preceding the payment date.

COVID-19 has significantly affected financial institutions, businesses, and consumers. In light of the adverse economic effect of the extraordinary measures that have been taken to limit the public health impacts of the COVID-19 pandemic, the OCC is issuing this interim final rule to reduce assessments for the upcoming semiannual assessment. Under the interim final rule, which amends 12 CFR part 8, the OCC will calculate assessments due on September 30, 2020, using Call Report assets as of December 31, 2019, rather June 30, 2020. The use of December 31, 2019, Call Report assets will result in reduced assessments for most banks. If an institution's June 30, 2020, Call Report assets are lower than the institution's assets as reported on December 31, 2019, the OCC will use the June 30, 2020, Call Report for calculation of the institution's assessment.

The interim final rule will expire after the collection of assessments on September 30, 2020. Thereafter, semiannual assessments will be based on the total assets shown in each institution's most recent Call Report preceding the payment date.

The OCC seeks comment on all aspects of this interim final rule.

The OCC is issuing this interim final rule without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA). 10 Pursuant to section 553(b)(B) of the APA, general notice and opportunity for the public to comment are not require with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”  11

The OCC believes that the public interest is best served by implementing the interim final before the next assessment collection. As discussed above, COVID-19 has significantly affected global economic activity. The reduction of assessments for banks under the jurisdiction of the OCC will reduce burden during this period. Issuance of an interim final rule will provide for expedited implementation of the assessment change and permit the OCC to timely issue an amended Notice of Fees, which will implement the assessment change for the semiannual assessment due on September 30, 2020. 12 For these reasons, the OCC believes that there is good cause consistent with the public interest to issue the interim final rule without advance notice and comment. 13

The APA also requires a 30-day delayed effective date, except for (1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause. 14 Because the rule grants an exemption, the interim final rule is exempt from the APA's delayed effective date requirement. 15 Additionally, the OCC finds good cause to publish the interim final rule with an immediate effective date for the same reasons set forth above. While the OCC believes that there is good cause to issue the rule without advance notice and comment and with an immediate effective date, the OCC is interested in the views of the public and requests comment on all aspects of the interim final rule.

For purposes of Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a “major” rule. 16 If a rule is deemed a “major rule” by the OMB, the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication. 17

The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign based enterprises in domestic and export markets. 18

For the same reasons set forth above with respect to APA requirements, the OCC is adopting the interim final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. 19 Because the interim rule will reduce assessments and provide relief to institutions during the financial stress introduced by the measures taken to limit the public health risks of the COVID-19 pandemic, the OCC believes that delaying the rule would be contrary to the public interest.

As required by the Congressional Review Act, the OCC will submit this interim final rule and other appropriate reports to Congress and the Government Accountability Office for review.

In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), 20 the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. The OCC has reviewed this interim final rule and determined that it would not introduce any new or revise any collection of information pursuant to the PRA. Therefore, no submissions will be made to OMB.

The Regulatory Flexibility Act (RFA)  21 generally requires that an agency to consider whether a proposed rule will have a significant economic impact on a substantial number of small entities. 22 The RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). 23 As discussed above, consistent with section 553(b)(B) of the APA, the OCC has determined for good cause that general notice and opportunity for public comment is unnecessary, and, therefore, the OCC is not issuing a notice of proposed rulemaking. Accordingly, the OCC has concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply.

Nevertheless, the OCC seeks comment on whether, and the extent to which, the interim final rule would affect a significant number of small entities.

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA), 24 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), the OCC must consider, consistent with the principle of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosure, or other new requirements on IDIs generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form, with certain exceptions, including for good cause. 25 The interim final rule would not impose any additional reporting, disclosure, or other new requirements on IDIs. Therefore, for the reasons described above, the OCC finds good cause exists under section 302 of RCDRIA to publish this interim final rule with an immediate effective date. As such, the interim final rule will be effective on June 24, 2020. Nevertheless, the OCC seeks comment on RCDRIA.

Section 722 of the Gramm-Leach-Bliley Act  26 requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The OCC has sought to present the interim final rule in a simple and straightforward manner. The OCC invites comment on whether there are additional steps it could take to make the rule easier to understand. For example:

• Have we organized the material to suit your needs? If not, how could this material be better organized?

• Are the requirements in the regulation clearly stated? If not, how could the regulation be more clearly stated?

• Does the regulation contain language or jargon that is not clear? If so, which language requires clarification?

• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand? What else could we do to make the regulation easier to understand?

Consistent with the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531 et seq., the OCC typically prepares a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. However, UMRA does not apply to final rules for which a general notice of proposed rulemaking was not published. 27 Therefore, because the OCC has found good cause to dispense with notice and comment for this interim final rule, the OCC has not prepared a budgetary impact statement for this interim final rule.

With certain exceptions, the CFTC has been granted exclusive jurisdiction over commodity futures, options, and all other derivatives that fall within the definition of a swap. 1 Further, the Commission has been granted general anti-fraud and anti-manipulation authority over any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity. 2 The Commission's mission is to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation; it does so, in part, by protecting the American public from fraudulent schemes and abusive practices in those markets and products over which it has been granted jurisdiction.

The Commission has long held that certain speculative commodity transactions involving leverage or margin are futures contracts subject to Commission oversight. 3 However, certain judicial decisions called that view into question with respect to certain leveraged retail transactions primarily in foreign currencies. 4 In 2008, Congress addressed this judicial uncertainty by providing that certain enumerated provisions of the CEA apply to certain retail foreign currency transactions pursuant to CEA section 2(c)(2)(C)(iv). 5 This new statutory provision is subject to an exception for retail foreign currency transactions that result in “actual delivery” within two days. 6 Two years later, in the Dodd-Frank Act, Congress similarly extended certain provisions of the CEA to apply to all other “retail commodity transactions” pursuant to CEA section 2(c)(2)(D)(iii). 7

Specifically, CEA section 2(c)(2)(D) applies to any agreement, contract, or transaction in any commodity that is (i) entered into with, or offered to (even if not entered into with), a person that is neither an eligible contract participant  8 nor an eligible commercial entity  9 (“retail”), (ii) on a leveraged or margined basis, or financed by the offeror, the counterparty, or a person acting in concert with the offeror or counterparty on a similar basis. 10 CEA section 2(c)(2)(D) provides that such an agreement, contract, or transaction is subject to CEA sections 4(a), 11 4(b), 12 and 4b  13 “as if the agreement, contract, or transaction was a contract of sale of a commodity for future delivery” ( i.e., a futures contract). 14 The statute, however, excepts certain transactions from its application. In particular, CEA section 2(c)(2)(D)(ii)(III)(aa)  15 excepts a contract of sale that “results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved.”  16

In connection with this statutory authority, the Commission previously issued a proposed interpretation of the term “actual delivery” in the context of CEA section 2(c)(2)(D), accompanied by a request for comment. 17 In that interpretation, the Commission provided several examples of what may and may not constitute actual delivery. After reviewing public comments, the Commission issued a final interpretation in 2013 (the “2013 Guidance”). 18

The 2013 Guidance explained that the Commission will consider evidence “beyond the four corners of contract documents” to assess whether actual delivery of the commodity occurred. 19 The Commission further noted that it will “employ a functional approach and examine how the agreement, contract, or transaction is marketed, managed, and performed, instead of relying solely on language used by the parties in the agreement, contract, or transaction.”  20 The 2013 Guidance also included a list of relevant factors the Commission will consider in determining whether a transaction has resulted in actual delivery  21 and again provided examples  22 of what may and may not constitute actual delivery. The 2013 Guidance provided that satisfactory examples of actual delivery involve transfer of title and possession of the commodity to the purchaser  23 or a depository acting on the purchaser's behalf. 24 Among other things, mere book entries and certain instances where a purchase is rolled, offset, or otherwise netted with another transaction do not constitute actual delivery. 25

Within a year after the 2013 Guidance was released, the Eleventh Circuit issued an opinion affirming a preliminary injunction obtained by the Commission in CFTC v. Hunter Wise Commodities, LLC . 26 Hunter Wise was in line with the Commission's interpretation of actual delivery in the 2013 Guidance. 27 Specifically, the Eleventh Circuit recognized that delivery “denotes a transfer of possession and control.”  28 Indeed, the Eleventh Circuit explained, “[i]f `actual delivery' means anything, it means something other than simply `delivery,' for we must attach meaning to Congress's use of the modifier `actual.' ”  29 Accordingly, the Eleventh Circuit stated that actual delivery “denotes `[t]he act of giving real and immediate possession to the buyer or the buyer's agent,' ” and constructive delivery does not suffice. 30 Recently, the Ninth Circuit agreed, finding the exception requires “some meaningful degree of possession or control by the customer.”  31

Soon after the Hunter Wise decision, the Commission determined that virtual currency is a commodity as that term is defined by CEA section 1a(9). 32 Subsequently, the Commission brought its first enforcement action against a platform that offered virtual currency transactions to retail customers on a leveraged, margined, or financed basis without registering with the Commission. 33 In the Bitfinex settlement order, the Commission found that the virtual currency platform violated CEA sections 4(a) and 4d because the unregistered entity “did not actually deliver bitcoins purchased from them.”  34 Rather, the entity “held the purchased bitcoins in bitcoin deposit wallets that it owned and controlled.”  35

As a result of several requests for additional guidance regarding this subject, the Commission published a proposed interpretation (the “Proposed Interpretation”) regarding the “actual delivery” exception of CEA section 2(c)(2)(D) within the specific context of retail commodity transactions in virtual currency on December 20, 2017. 36 The Commission provided a 90-day comment period and received many public comments.

The Proposed Interpretation set out two central tenets of the Commission's view on when actual delivery of virtual currency has occurred:

(1) A customer having the ability to: (i) Take possession and control of the entire quantity of the commodity, whether it was purchased on margin, or using leverage, or any other financing arrangement, and (ii) Use it freely in commerce (both within and away from any particular platform) no later than 28 days from the date of the transaction; and

(2) The offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) not retaining any interest in or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction.

The Commission has thoroughly reviewed the comments received. Further, the Commission has gained considerable experience and expertise with respect to digital asset markets generally, through additional public input and advisory committee meetings on the evolution of digital asset and cryptocurrency markets, 37 regulatory oversight of exchanges offering derivatives products on certain digital assets, 38 numerous LabCFTC initiatives and market interactions, 39 and market surveillance in furtherance of its anti-fraud and anti-manipulation responsibilities. Applying this knowledge and expertise, as well as its experience in interpreting CEA section 2(c)(2)(D) (particularly in light of recent judicial decisions), the Commission has determined to finalize the Proposed Interpretation with certain revisions discussed herein.

As noted, while the CEA addresses several different types of transactions, this final interpretive guidance specifically concerns the “actual delivery” exception in CEA section 2(c)(2)(D) as it applies to digital assets that serve as a medium of exchange. Notably, CEA section 2(c)(2)(D) and its exceptions remain separate and distinct from application of the swap definition in CEA section 1a(47). 40

The Commission notes that this interpretive guidance is intended to provide an efficient and flexible way to communicate the agency's current views on how the actual delivery exception in Section 2(c)(2)(D) may apply in various situations. Given the complex and dynamic nature of these markets, the Commission believes it is appropriate to take an adaptable approach while it continues to follow developments in this space and evaluate business activity on a case-by-case basis.

Among the many comments submitted, the Commission received 18 substantive comment letters and two substantive comment website entries. These comments were submitted by entities and individuals representing a broad range of interests, including a self-regulatory organization, 41 virtual currency exchanges or execution service providers, 42 dealers or traders in virtual currency transactions, 43 industry trade or advocacy groups, 44 industry developers, 45 trade associations comprised of energy producers and suppliers, 46 and concerned individuals. 47

Several commenters expressed their general support for the Proposed Interpretation as written, with only minor suggested clarifications. 48 For example, NFA indicated that it “fully support[s] the Commission's continued use of its jurisdiction to enhance the regulatory oversight of the nascent market for virtual currencies.”  49 HBUS believed that, once finalized, the Proposed Interpretation “will facilitate the growth of a transparent and fair marketplace for virtual currency, where legitimate business can thrive.”  50 Contrarily, certain commenters believed that the Commission should proceed with caution  51 or take a different approach. 52 However, the majority of commenters primarily focused their responses on issues raised by varying questions posed in the Proposed Interpretation.

Several commenters submitted suggestions for further modification of the “virtual currency” meaning provided in the Proposed Interpretation. 53 In particular, Coin Center suggested that the term “digital commodities” would more accurately reflect all “digital currencies” since many “tokens” at issue contain utility beyond that as a medium of exchange. 54 Separately, 3 Degrees encouraged the Commission to define virtual currency pursuant to a rulemaking process similar to the one used to further define the term “swap.”  55 In addition, the firm suggested “virtual currency” be further defined to focus on the “extent to which a token is able to be used for its intended purpose at the time of evaluation” to determine whether it is within scope. 56 In this regard, 3 Degrees believed that a token that does not have a present use as a medium of exchange or is not otherwise “mimicking the attributes of fiat currency” should be excluded from “virtual currency.”  57 Similarly, ConsenSys urged the Commission to consider further distinguishing “mainstream” virtual currencies (used as a medium of exchange generally) from other types of “virtual tokens.”  58

HBUS supported the Proposed Interpretation's definition of virtual currency and primarily endorsed the “Commission's avoidance of a bright line definition.”  59 IECA and CEWG requested certain products or transactions be specifically excluded from the term and scope of the Proposed Interpretation, including transfers of digital assets between eligible contract participants (“ECPs”) and eligible commercial entities (“ECEs”), other physical commodity transactions effected through blockchain technology, and the trading of environmental commodities ( e.g., renewable identification numbers and renewable energy certificates). 60 Separately, dYdX requested that their specific type of virtual currency-based derivative transaction, which utilizes “smart contract technology,” be included within the scope of the Proposed Interpretation and satisfy the actual delivery exception. 61

After reviewing the comments, the Commission has decided to use the virtual currency definition stated in the Proposed Interpretation to delineate the scope of this final interpretation of the term “actual delivery” in CEA section 2(c)(2)(D). Primarily, the Proposed Interpretation intended to address a digital asset that is, or can be used as, a medium of exchange in commerce, 62 including within a particular blockchain ecosystem. 63 The Commission believes it is appropriate to retain this scope, as many facets of this interpretation focus on the customer's ability to use commodities in this class as a medium of exchange. 64

The importance of the ability to use these commodities as a medium of exchange is apparent given the industry's adoption of the terms “virtual currency” and “cryptocurrency.” Therefore, while this interpretive guidance incorporates several elements of the 2013 Guidance, the Commission views the examples provided herein as superseding the examples provided in the 2013 Guidance in the specific context of retail commodity transactions involving virtual currency. In regards to other digital assets that are commodities, 65 but do not serve as a medium of exchange or otherwise fall within the scope of this interpretive guidance at the time of the transaction, the Commission would continue to refer to the 2013 Guidance to determine whether actual delivery has occurred.

As per the Proposed Interpretation's question, 66 several commenters discussed the meaning of “title” in the context of virtual currency and retail commodity transactions. Chamber advocated for a flexible approach, whereby title is only evidenced by the ability of the purchaser to use the virtual currency “freely and without restriction by the seller or offeror at any time.”  67 CEWG recommended the Commission limit any further interpretation of “title” and “explicitly state that other concepts and indicia of title could apply . . . .”  68 Similarly, FIA urged the Commission to avoid developing a “prescriptive regime concerning what constitutes good title . . .”  69 Cable Car suggested the Commission consider whether there are instances in which title can attach before a transaction is memorialized on the relevant public ledger or blockchain. 70 In a similar manner, DDA asked the Commission to consider issues of internal transfers on “side-chains” that are separate from the general public ledger. 71 In contrast, Mr. Tupper noted that it is unclear whether off-chain transactions could satisfy good title. 72 ConsenSys argued that there is no acceptable equivalent to “title” that exists in the context of virtual currency. 73

After reviewing the comments, the Commission believes the concept of “title” has not fully developed in the context of virtual currency, but the Commission will continue to follow the term's evolution. Indeed, the Commission agrees with the majority of commenters on this subject, and does not believe efforts to further define or utilize “title” in the examples of this interpretive guidance will provide appropriate clarity at this time. As recognized by existing judicial precedent, 74 the Commission believes that evidence of possession and control is most significant, while title may, in fact, connote elements of each, along with undetermined additional elements, such as transfer of ownership. Therefore, the Commission is not including an example illustrating transfer of title in this final interpretation. The Commission notes that, depending on the evolution of the term, it remains open to considering a customer's ability to obtain title as part of the “functional approach” noted in this final interpretation, but the Commission does not seek to further define or interpret the concept at this time.

The Proposed Interpretation noted that, absent Congressional action, the Commission is unable to reduce the actual delivery exception period, 75 and provided the public an opportunity to provide feedback regarding this requirement. A majority of the commenters addressing this subject were in support of any effort by the Commission to decrease the 28-day actual delivery period for retail commodity transactions in virtual currency. 76 HBUS noted that “it generally takes much fewer than 28 days for a virtual currency transfer to complete.”  77 Chamber stated that a shorter delivery period “may be appropriate,” as long as uncontrollable technological factors were considered. 78 Ms. Holland and Mr. Booth each advocated for a 2-day delivery period as a more appropriate standard. 79 Mr. Booth stressed that a shorter delivery period would “provide a significantly larger impact on purchaser protection by decreasing the amount of time a virtual currency seller can hold currency paid for by the purchasing party.”  80 Gemini advocated for a 1-day delivery period, which “more accurately reflects the standard delivery time for spot transactions in virtual currencies.”  81 Gemini noted that the delivery window is “unnecessarily long” and “may give rise to fraudulent activity.”  82

Cable Car noted that “establishing a uniform maximum settlement cycle” for such retail transactions might be beneficial for future oversight. 83 CEWG urged the Commission to clarify that the delivery window would not be shortened for any digital transactions that fall outside CEA section 2(c)(2)(D). 84 FIA recommended that the Commission “allow the virtual currency markets to continue to develop” before determining whether to decrease the actual delivery period. 85

The Commission appreciates the comments received on this subject and agrees that the actual delivery period should correspond to the reality of a virtual currency “spot” transaction. The Commission continues to believe it is limited in its ability to shorten the 28-day delivery period specified in CEA section 2(c)(2)(D). 86 However, the Commission will continue to engage all relevant stakeholders regarding a more appropriate actual delivery period for purposes of the exception to CEA section 2(c)(2)(D) in the context of virtual currency.

In Example 2 of the Proposed Interpretation, actual delivery could occur even if the retail customer utilizes a third-party depository as an agent to secure the purchased virtual currency. 87 However, in order to constitute actual delivery under this example, the customer must obtain “full control” over the commodity within 28 days following the date of the transaction. 88 The Proposed Interpretation asked for further examples of ways in which such control can be demonstrated, 89 and several commenters replied.

Gemini noted that “possession of a private key, or in some instances multiple private keys or credentials, necessary for the transfer of the virtual commodity” would be sufficient proof of “full control.”  90 However, Gemini argued that book entries (which are inconsistent with actual delivery under Example 3 of the Proposed Interpretation) should be permitted to satisfy actual delivery where the purchaser's depository is appropriately licensed and regulated for such a custodial purpose. 91

Chamber suggested that “full control” can be demonstrated as long as the virtual currency is held at a depository “outside the reach of the seller.”  92 Chamber noted that it did not believe requiring possession of private keys is necessary “so long as the purchaser has access and the ability to move the virtual currency from the depository without restriction by the seller or offeror.”  93 Similarly, ConsenSys noted that purchaser control is the appropriate test, but one must look to the purchaser's ability to “use” the commodity and existing functionalities of the virtual currency at the time of the transaction. 94 Coinbase believed that actual delivery can occur “once the customer is able to use the virtual currency to either trade on an exchange platform or transfer it off-platform to purchase goods or services.”  95 FIA argued that actual delivery should not require possession of a private key to demonstrate full control by the purchaser. 96

The Commission appreciates all comments received on this subject and believes actual delivery has occurred when a customer achieves both possession and control of the virtual currency that is underlying the transaction. To avoid further confusion, the Commission clarifies that the customer's possession of a particular key or blockchain address will not be considered further in this interpretive guidance (except as described in Example 1), and has modified the final interpretation to focus on whether the customer has secured a meaningful degree of possession and control of the virtual currency, as discussed below.

In order to satisfy Example 2 of the Proposed Interpretation, an acceptable third-party depository (acting as agent for the customer) cannot be affiliated with the counterparty seller. 97 The Proposed Interpretation did not explicitly extend this statement to the offeror or offeror's execution venue unless acting as a counterparty to the transaction. 98 However, under Example 3 in the Proposed Interpretation, mere book entries would not constitute actual delivery. 99 Therefore, the Proposed Interpretation sought feedback surrounding depository independence, 100 including whether the offeror or its affiliate may maintain some level of association with the depository in demonstration of actual delivery.

Several commenters expressed the view that independence of a third-party depository is an important factor in determining whether actual delivery has occurred. Ms. Holland stated that actual delivery “cannot and should not be satisfied where the offering party, counterparty seller, or any of their agents retain any interest or control over the token at the conclusion of 28 days.”  101 Similarly, Mr. Tupper stated that a virtual currency depository “should operate in an independent manner from execution platforms and market participants.”  102 NFA expressed concern with virtual currency execution venues that purchase relevant commodities for their own account and merely allocate purchases through internal bookkeeping. 103 NFA believes that such internal book entries are not subject to the same level of regulatory scrutiny that exists for traditional depositories authorized to hold customer funds. 104

On the other hand, certain commenters believed that independence of a third-party depository is not necessary as long as the depository is appropriately regulated. Gemini noted that acceptable depositories should be limited to those covered by the CEA's definition of “financial institutions,”  105 which may include affiliates of the offeror or counterparty seller. 106 Chamber supported the idea of a federal licensing regime for virtual currency depositories. 107 Chamber argued that affiliation between offeror and depository should not be prohibited as long as appropriate controls and firewalls are in place to address potential conflicts of interest. 108 Coinbase noted that Commission guidance should “encourage digital assets to be held at regulated entities.”  109

ConsenSys and FIA believed that depository affiliation with the offeror or counterparty seller can be consistent with actual delivery. 110 ConsenSys argued that treating depository affiliation as disqualifying may inadvertently expose the purchased virtual currency to higher cybersecurity risks by encouraging an external transfer away from the offeror and increase transaction costs since such transactions must be verified and recorded on the relevant public ledger. 111 ConsenSys and Coinbase also referenced the 2013 Guidance to argue that the Commission has said that actual delivery can occur even when affiliates of the offeror or seller hold the physical commodity in limited circumstances. 112 However, Coinbase further acknowledged that such affiliation was found to be consistent with actual delivery only by way of the Commission's reference to the regulated nature of the limited entities that would take delivery. 113

After reviewing the variety of comments received and further considering the retail customer concerns at issue, the Commission is deciding to strike a balance. Primarily, the Commission generally believes the two central tenets of actual delivery are demonstrated when there is (i) a transfer of the virtual currency (that is the subject of the transaction) away from the counterparty seller, offeror, and any offeror execution venue ledger or digital account system and (ii) receipt by a separate blockchain address or depository that is chosen by the customer and allows the customer to use the virtual currency freely in commerce, where accepted, as soon as technologically practicable. Actual delivery may be found to have occurred even if there is some level of offeror affiliation with a depository that is a separate, independent legal entity, so long as there are certain safeguards to ensure that the customer receives actual possession and control over the purchased commodity within the 28-day actual delivery period, as described below.

The Commission believes that, in the context of virtual currency, such a transfer of the commodity to a separate entity from the offeror and the offeror's execution venue, when applicable, establishes that a customer achieves meaningful possession and control, including the ability to use the virtual currency as a medium of exchange at any time. The Commission is not alone in treating such a demonstration as critical when such a transaction, bearing hallmarks of a derivative, would otherwise be conducted in an unregulated capacity. 114

This final interpretive guidance includes a new Example 3 and revises Example 2 to describe an appropriate transfer of possession and control to the customer, notwithstanding that an offeror may maintain an affiliation with a depository, so long as the depository is completely separated from any execution venue services and additional safeguards are satisfied. Accordingly, in order for offeror-depository affiliation not to disqualify a transaction from constituting “actual delivery” in Example 2, the Commission believes that an affiliated depository should be: (i) A “financial institution” as defined by CEA section 1a(21); (ii) a separate line of business from the offeror not subject to the offeror's control;  115 (iii) a separate legal entity from the offeror and any offeror execution venue; (iv) predominantly operated for the purpose of providing custodial services, including for virtual currency and other digital assets;  116 (v) appropriately licensed  117 to conduct such custodial activity in the jurisdiction of the customer; (vi) offering the ability for the customer to utilize and engage in cold storage of the virtual currency; and (vii) contractually authorized  118 by the customer to act as its agent.

The Commission believes this balance will ensure that a retail customer receives meaningful possession and control over purchased virtual currency, while permitting the offeror to associate with additional services in relation to the transaction. Further, the Commission believes the factors set forth above for an offeror-affiliated depository would ensure an adequate transfer of possession and control is made to the customer's chosen depository so that the customer can use the commodity freely in commerce, as a medium of exchange.

As mentioned, the Commission believes these factors will demonstrate that the depository's business is focused on providing the customer with control over purchased digital assets, as opposed to control that may be asserted by an affiliated offeror. Specifically, the Commission agrees with certain commenters that a “financial institution,” as defined by CEA section 1a(21), is one useful element to apply to an affiliated depository, as such institutions are already subject to supervision and are familiar with providing custodial services to customers. 119 In furtherance of ensuring that the customer obtains possession and control free and clear from an offeror's execution venue service, the Commission believes that the depository's status as a separate line of business and a separate legal entity is highly critical to the determination of whether actual delivery has occurred. These barriers should forestall attempts by an offeror to assert control over digital assets transferred to an affiliated depository. Further, the Commission believes that requiring such depository services to be operated predominantly for custodial services would further ensure a focus on the customer's control over the purchased asset. While regulatory registrations around digital asset custody are still developing, the Commission believes such regulations should apply to an offeror-affiliated depository to the extent such regulations exist, as they will ensure additional customer protection. Similarly, proper segregation of customer assets pursuant to regulatory requirements for entities offering custodial services further demonstrates customer control and protection from the risks of commingling assets (which may frustrate usability).

Given the noted cybersecurity concerns raised regarding risks associated with external transfers and usage of hot storage, it is also important to consider the availability of cold storage options for the customer. While some external transfer risk may still exist, the option of cold storage will help mitigate the long term risk associated with the transfer. Lastly, the Commission will generally consider whether a customer has control over the contractual relationship regarding custodial services, similar to the custodial services available for other customer assets that are primarily used as a medium of exchange. Taken together, the Commission believes these safeguards would ensure that a customer receives meaningful possession and control in instances where a customer's chosen depository is affiliated with an offeror or an offeror's execution venue services.

The Commission specifically sought comment regarding potential “bucket shop” arrangements, whereby an offeror  120 may act as principal to a trade and take the opposite side of a retail commodity transaction, especially within a self-contained environment. 121 The Commission believes these types of transactions have, in the past, often served as a vehicle for unscrupulous actors to take advantage of customers. Keeping this concern in mind, the Commission sought comment to further consider whether “actual delivery” occurs in instances where an offeror is also a counterparty and the virtual currency remains within the offeror's blockchain address, execution venue, or affiliated depository, when applicable.

Several commenters expressed similar concerns, advocating that offerors should not take the opposite side of a customer transaction. Chamber noted that if an offeror acts as principal, it should not be permitted to rely on the actual delivery exception. 122 Cable Car believed that no unregulated entity should be able to act as principal, especially regarding the potential for a bilateral market consisting of a bucket shop acting as counterparty to its customers. 123 Gemini also agreed that an offeror should not be permitted to take the opposite side of a retail commodity transaction. 124 Further, Gemini noted that “[a]llowing an exchange operator to take the opposite side of participant transactions may create incentives to influence prices and/or trading volumes as offerors would operate with an informational advantage with respect to its participants.”  125 No commenters directly advocated for the ability of an offeror to act as principal in retail commodity transactions.

The Commission appreciates the comments received on this subject and agrees that, in the context of virtual currency, the offeror's ability to take the opposite side of a retail commodity transaction may create situations in which actual delivery fails to occur. Since the plain language of CEA section 2(c)(2)(D) does not specifically address whether the offeror has taken the opposite side of the transaction, the Commission will, within the “functional approach” described in this interpretation, consider such activity as a factor weighing against demonstration of actual delivery. 126 Therefore, as originally stated in the Proposed Interpretation, 127 the Commission will not consider the scenario in Example 2 to constitute actual delivery if an offeror is also the counterparty to the particular transaction.

One of the central tenets of the Proposed Interpretation is that to achieve actual delivery in the context of digital assets serving as a medium of exchange, the offeror and counterparty seller (including any affiliates) cannot retain interest or control over any of the virtual currency in question at the expiration of 28 days from the date of the transaction. 128 This principle supports the other central tenet of actual delivery—a customer securing “possession and control” over the virtual currency and the ability to use it freely in commerce within 28 days from the date of the transaction for its primary purpose as a medium of exchange. 129 Essentially, if a customer cannot practically use the virtual currency freely in commerce as a medium of exchange (and the offeror or seller can essentially take it back), it is difficult to argue the customer truly received or secured control over it in the first instance. 130

The Proposed Interpretation noted that, in order to effect actual delivery, any liens on purchased virtual currency generally cannot extend beyond 28 days from the date of the transaction, and invited public comment on the forced sale scenarios that may result. 131 In the context of this final interpretative guidance, the Commission views forced sale scenarios as any event in which the offeror or counterparty seller, or anyone acting in concert with such persons, retains a security interest or some other contractual ability to forcibly liquidate, sell off, claw back, or reacquire any portion of the virtual currency subject to the transaction in satisfaction of a lien, debt obligation, or other security interest related to the transaction, with or without the prior consent of the customer.

Cable Car advocated that the Commission not permit forced sale scenarios in finding actual delivery. 132 They noted that it would be an “extremely grave error” if the Commission permitted a technical lien termination event on a margined trading platform to qualify for an exception from CEA section 2(c)(2)(D) jurisdiction. 133 Cable Car urged that “[t]he Commission should be on guard against proposed `lien scenarios' that lack economic purpose or serve only to circumvent registration requirements.”  134 Chamber stated that, if there is a possibility of a forced sale event, such an event should not qualify for actual delivery. 135 In addition, Chamber argued that permitting forced sales would circumvent the purpose and intent of the Proposed Interpretation. 136 Further, Chamber noted that allowing such scenarios would be “tantamount to allowing rolling, netting, offsetting and/or cash settlement”—practices prohibited by Example 4 of the Proposed Interpretation. 137

Coinbase recognized that many digital asset spot exchanges offering margin trading operate like futures markets. Specifically, Coinbase noted its observation of exchanges offering margined or leveraged transactions, matching those orders and allowing netting or offsetting settlements—all while forcibly liquidating margin positions if the market moved against the margined position. 138 As Coinbase stated, “[a]ll of these are hallmarks of futures contracts and transactions with these qualities should be traded on regulated contract markets . . . .”  139

The Commission agrees with the majority of comments that a forced sale scenario, as described herein, appears inconsistent with actual delivery in CEA section 2(c)(2)(D). As noted above, while the Commission will consider all relevant facts and circumstances, the presence of a lien, debt obligation, or other security interest on a virtual currency generally makes it impractical for the customer to use the virtual currency freely in commerce as a medium of exchange, thus frustrating actual delivery. Forced sale scenarios would equally prevent a customer from freely utilizing the full amount of the relevant virtual currency in commerce. Again, if a retail customer cannot practically use the virtual currency underlying the transaction freely in commerce as a medium of exchange (and the offeror or seller can essentially take it back), it is difficult to argue the customer truly received or secured control over it in the first instance. 140 The Commission has further revised Example 2  141 and created Example 3  142 in this final interpretive guidance to reflect this view. The Commission notes that it does not intend to frustrate commercial transactions conducted in the normal course of business of the buyer and seller, which may be separately excepted by CEA section 2(c)(2)(D)(ii)(III)(bb). 143

As noted in the Proposed Interpretation, the Commission considers virtual currency to be a commodity as defined under Section 1a(9) of the Act, 144 like many other intangible commodities that the Commission has previously recognized ( e.g., renewable energy credits and emission allowances, certain indices, and certain debt instruments, among others). 145 Indeed, virtual currency structures, at times, have been compared to other long-standing classes of commodities. 146 In addition, multiple federal courts have held that virtual currencies fall within the CEA's commodity definition. 147 As a commodity, virtual currency is subject to applicable provisions of the CEA and Commission regulations, including CEA section 2(c)(2)(D).

The Commission continues to interpret the term “virtual currency” broadly. In the context of this interpretation, virtual currency: 148 Is a digital asset that encompasses any digital representation of value or unit of account that is or can be used as a form of currency ( i.e., transferred from one party to another as a medium of exchange); may be manifested through units, tokens, or coins, among other things; and may be distributed by way of digital “smart contracts,” among other structures. However, the Commission notes that it does not intend to create a bright line definition given the evolving nature of the commodity and, in some instances, its underlying public distributed ledger technology (“DLT” or “blockchain”).

The Commission continues to recognize that certain virtual currencies and their underlying blockchain technologies have the potential to yield notable advancements in applications of financial technology (“FinTech”). As noted in the Proposed Interpretation, the Commission launched the LabCFTC initiative  149 with this potential in mind. LabCFTC continues to engage the FinTech community and promote market-enhancing innovation in furtherance of improving the quality, resiliency, and competitiveness of the markets overseen by the Commission. As such, the Commission is closely following the development and continuing evolution of blockchain technologies and virtual currencies.

Moreover, since virtual currency may serve as an underlying component of derivatives transactions, the Commission maintains a close interest in the development of the virtual currency marketplace generally. Since publication of the Proposed Interpretation, several listed derivatives contracts based on virtual currency have been self-certified to be listed on CFTC registered entities  150 in accordance with the CEA and Commission regulations.

In addition, the Commission continues to closely follow the evolution of the cash or “spot” market for virtual currencies, including related execution venues, especially since such markets may inform and affect the listed derivatives markets. Many cash market execution venues offer services to retail customers that wish to speculate on the price movements of a virtual currency against other currencies. For example, a speculator may purchase virtual currency using borrowed money in the hopes of covering any outstanding balance owed through profits from favorable price movements in the future. Among other scenarios, 151 this interpretation is meant to address the Commission's concern with such “retail commodity transactions,” whereby an entity, platform or execution venue: (i) Offers margin trading or otherwise facilitates  152 the use of margin, leverage, or financing arrangements for their retail market participants; (ii) typically to enable such participants to speculate or capitalize on price movements of the commodity—two hallmarks of a regulated futures marketplace. 153

Despite this concern, the Commission has sought to take a deliberative and measured approach in this area as supported by one commenter, 154 as the Commission does not wish to stifle nascent technological innovation. Accordingly, the Commission has carefully continued to monitor these markets and even sought additional comment on these markets more generally. 155 While these efforts have informed the Commission of the many potential uses of digital assets and related technology, they have also reinforced the Commission's concern regarding potential risk to participants in retail commodity transactions involving virtual currency. The Commission highlighted a host of concerns in the Proposed Interpretation  156 regarding these nascent and speculative  157 markets. In setting forth this final interpretation, the Commission believes that many of the concerns raised remain justified  158 and the “actual delivery” exception from CEA section 2(c)(2)(D) cannot be interpreted in a way that would frustrate the protection for retail customers afforded by Congress.

In consideration of the foregoing, the Commission issues the following final interpretive guidance to inform the public of the Commission's views as to the meaning of the term “actual delivery” in the context of CEA section 2(c)(2)(D) transactions in virtual currency. The Commission, in interpreting the term “actual delivery” for the purposes of CEA section 2(c)(2)(D)(ii)(III)(aa), will continue to follow the 2013 Guidance and “employ a functional approach and examine how the agreement, contract, or transaction is marketed, managed, and performed, instead of relying solely on language used by the parties in the agreement, contract, or transaction.”  159

Further, the Commission will continue to assess all relevant factors  160 that inform an actual delivery determination. 161 More specifically, in the Commission's view, “actual delivery” has occurred within the context of virtual currency when: 162

(1) A customer secures:  163 (i) Possession and control of the entire quantity of the commodity, whether it was purchased on margin, or using leverage, or any other financing arrangement, and (ii) the ability to use the entire quantity of the commodity freely in commerce (away from any particular execution venue) no later than 28 days from the date of the transaction and at all times thereafter; and

(2) The offeror  164 and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis)  165 do not retain any interest in, legal right, or control over any of the commodity purchased on margin, leverage, or other financing arrangement at the expiration of 28 days from the date of the transaction. 166

Consistent with the 2013 Guidance and the Proposed Interpretation, a sham delivery is not consistent with the Commission's interpretation of the term “actual delivery.” As noted above, the Commission believes that actual delivery occurs when the offeror and counterparty seller, including their agents, cease to retain any interest, legal right, or control whatsoever  167 in the virtual currency acquired by the purchaser at the expiration of 28 days from the date of entering into the transaction or at any time prior to expiration of the 28-day period once “actual delivery” occurs. Indeed, in its simplest form, actual delivery of virtual currency connotes the ability of a purchaser to utilize the virtual currency purchased “on the spot” as a medium of exchange in commerce or within the entirety of its relevant blockchain ecosystem.

The Commission believes that, in the context of an “actual delivery” determination in virtual currency, physical settlement involving the entire amount of purchased commodity must occur. A cash settlement or offset mechanism, as described in Example 5 below, is not consistent with the Commission's interpretation. The distinction between physical settlement and cash settlement in this context is akin to settlement of a spot foreign currency transaction at a commercial bank or hotel in a foreign nation—the customer receives physical foreign currency, not U.S. dollars. As mentioned, actual delivery occurs if such physical settlement occurs within 28 days from the date on which the “agreement, contract, or transaction is entered into.”  168

Consistent with the interpretation above, the Commission provides the following non-exclusive examples to further clarify the meaning of actual delivery in the virtual currency context:

Example 1: Actual delivery of virtual currency will have occurred if, within 28 days after entering into an agreement, contract, or transaction, there is a record on the relevant public distributed ledger or blockchain address of the transfer of virtual currency, whereby the entire quantity of the purchased virtual currency, including any portion of the purchase made using leverage, margin, or other financing, is transferred from the counterparty seller's blockchain address  169 to the purchaser's blockchain address, over which the purchaser maintains sole possession and control. When an execution venue or other third party offeror acts as an intermediary, the virtual currency's public distributed ledger should reflect the purchased virtual currency transferring from the counterparty seller's blockchain address to the third party offeror's blockchain address and, separately, from the third party offeror's blockchain address to the purchaser's blockchain address, over which the purchaser maintains sole possession and control.

Example 2: Actual delivery will have occurred if, within 28 days after entering into a transaction:

(1) The counterparty seller or offeror has delivered the entire quantity of the virtual currency purchased, including any portion of the purchase made using leverage, margin, or financing, into the possession of a depository  170 ( i.e., wallet or other relevant storage system) other than one owned, controlled, operated by, or affiliated with, the counterparty seller (including any parent companies, subsidiaries, partners, agents, affiliates, and others acting in concert with the counterparty seller)  171 that has entered into an agreement with the purchaser to hold virtual currency as agent for the purchaser without regard to any asserted interest of the offeror, the counterparty seller, or persons acting in concert with the offeror or counterparty seller on a similar basis;

(2) The purchaser has secured full control over the virtual currency ( e.g., the ability to remove as soon as technologically practicable and use freely up to the full amount of purchased commodity from the depository at any time, including by transferring to another depository of the customer's choosing); and

(3) With respect to the commodity being delivered, no liens (or other interests or legal rights of the offeror, counterparty seller, or persons acting in concert with the offeror or counterparty seller on a similar basis) resulting or relating to the use of margin, leverage, or financing used to obtain the entire quantity of the commodity delivered will continue after the 28-day period has elapsed. 172 This scenario assumes that no portion of the purchased commodity could be subjected to a forced sale or otherwise removed from the customer's control as a method of satisfying this example.

Example 3: Actual delivery will not have occurred if, within 28 days of entering into a transaction, the full amount of the purchased commodity is not transferred away from a digital account or ledger system owned or operated by, or affiliated with, the offeror or counterparty seller (or their respective execution venues) and received by a separate, independent, appropriately licensed, depository or blockchain address in which the customer maintains possession and control in accordance with Example 2.

Example 4: Actual delivery will not have occurred if, within 28 days of entering into a transaction, a book entry is made by the offeror or counterparty seller purporting to show that delivery of the virtual currency has been made to the customer, but the counterparty seller or offeror has not, in accordance with the methods described in Example 1 or Example 2, actually delivered the entire quantity of the virtual currency purchased, including any portion of the purchase made using leverage, margin, or financing, regardless of whether the agreement, contract, or transaction between the purchaser and offeror or counterparty seller purports to create an enforceable obligation  173 to deliver the commodity to the customer.

Example 5: Actual delivery will not have occurred if, within 28 days of entering into a transaction, the agreement, contract, or transaction for the purchase or sale of virtual currency is rolled, offset against, netted out, or settled in cash or virtual currency (other than the purchased virtual currency) between the customer and the offeror or counterparty seller (or persons acting in concert with the offeror or counterparty seller).

On March 24, 2020, DHS published notice of the Secretary's decision to temporarily limit the travel of individuals from Canada into the United States at land ports of entry along the United States-Canada border to “essential travel,” as further defined in that document. 1 The document described the developing circumstances regarding the COVID-19 pandemic and stated that, given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary had determined that the risk of continued transmission and spread of COVID-19 between the United States and Canada posed a “specific threat to human life or national interests.” The Secretary later published a series of notifications continuing such limitations on travel until 11:59 p.m. EDT on June 22, 2020. 2

The Secretary has continued to monitor and respond to the COVID-19 pandemic. As of June 18, there are over 8.2 million confirmed cases globally, with over 445,000 confirmed deaths. 3 There are over 2.1 million confirmed and probable cases within the United States, 4 over 99,000 confirmed cases in Canada, 5 and over 154,000 confirmed cases in Mexico. 6

Given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary has determined that the risk of continued transmission and spread of COVID-19 between the United States and Canada poses an ongoing “specific threat to human life or national interests.”

U.S. and Canadian officials have mutually determined that non-essential travel between the United States and Canada poses additional risk of transmission and spread of COVID-19 and places the populace of both nations at increased risk of contracting COVID-19. Moreover, given the sustained human-to-human transmission of the virus, returning to previous levels of travel between the two nations places the personnel staffing land ports of entry between the United States and Canada, as well as the individuals traveling through these ports of entry, at increased risk of exposure to COVID-19. Accordingly, and consistent with the authority granted in 19 U.S.C. 1318(b)(1)(C) and (b)(2), 7 I have determined that land ports of entry along the U.S.-Canada border will continue to suspend normal operations and will only allow processing for entry into the United States of those travelers engaged in “essential travel,” as defined below. Given the definition of “essential travel” below, this temporary alteration in land ports of entry operations should not interrupt legitimate trade between the two nations or disrupt critical supply chains that ensure food, fuel, medicine, and other critical materials reach individuals on both sides of the border.

For purposes of the temporary alteration in certain designated ports of entry operations authorized under 19 U.S.C. 1318(b)(1)(C) and (b)(2), travel through the land ports of entry and ferry terminals along the United States-Canada border shall be limited to “essential travel,” which includes, but is not limited to—

• U.S. citizens and lawful permanent residents returning to the United States;

• Individuals traveling for medical purposes ( e.g., to receive medical treatment in the United States);

• Individuals traveling to attend educational institutions;

• Individuals traveling to work in the United States ( e.g., individuals working in the farming or agriculture industry who must travel between the United States and Canada in furtherance of such work);

• Individuals traveling for emergency response and public health purposes ( e.g., government officials or emergency responders entering the United States to support federal, state, local, tribal, or territorial government efforts to respond to COVID-19 or other emergencies);

• Individuals engaged in lawful cross-border trade ( e.g., truck drivers supporting the movement of cargo between the United States and Canada);

• Individuals engaged in official government travel or diplomatic travel;

• Members of the U.S. Armed Forces, and the spouses and children of members of the U.S. Armed Forces, returning to the United States; and

• Individuals engaged in military-related travel or operations.

The following travel does not fall within the definition of “essential travel” for purposes of this Notification—

• Individuals traveling for tourism purposes ( e.g., sightseeing, recreation, gambling, or attending cultural events).

At this time, this Notification does not apply to air, freight rail, or sea travel between the United States and Canada, but does apply to passenger rail, passenger ferry travel, and pleasure boat travel between the United States and Canada. These restrictions are temporary in nature and shall remain in effect until 11:59 p.m. EDT on July 21, 2020. This Notification may be amended or rescinded prior to that time, based on circumstances associated with the specific threat.

The Commissioner of U.S. Customs and Border Protection (CBP) is hereby directed to prepare and distribute appropriate guidance to CBP personnel on the continued implementation of the temporary measures set forth in this Notification. The CBP Commissioner may determine that other forms of travel, such as travel in furtherance of economic stability or social order, constitute “essential travel” under this Notification. Further, the CBP Commissioner may, on an individualized basis and for humanitarian reasons or for other purposes in the national interest, permit the processing of travelers to the United States not engaged in “essential travel.”

The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, is delegating the authority to electronically sign this document to Chad R. Mizelle, who is the Senior Official Performing the Duties of the General Counsel for DHS, for purposes of publication in the Federal Register .

On March 24, 2020, DHS published notice of the Secretary's decision to temporarily limit the travel of individuals from Mexico into the United States at land ports of entry along the United States-Mexico border to “essential travel,” as further defined in that document. 1 The document described the developing circumstances regarding the COVID-19 pandemic and stated that, given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary had determined that the risk of continued transmission and spread of COVID-19 between the United States and Mexico posed a “specific threat to human life or national interests.” The Secretary later published a series of notifications continuing such limitations on travel until 11:59 p.m. EDT on June 22, 2020. 2

The Secretary has continued to monitor and respond to the COVID-19 pandemic. As of June 18, there are over 8.2 million confirmed cases globally, with over 445,000 confirmed deaths. 3 There are over 2.1 million confirmed and probable cases within the United States, 4 over 154,000 confirmed cases in Mexico, 5 and over 99,000 confirmed cases in Canada. 6

Given the outbreak and continued transmission and spread of COVID-19 within the United States and globally, the Secretary has determined that the risk of continued transmission and spread of COVID-19 between the United States and Mexico poses an ongoing “specific threat to human life or national interests.”

U.S. and Mexican officials have mutually determined that non-essential travel between the United States and Mexico poses additional risk of transmission and spread of COVID-19 and places the populace of both nations at increased risk of contracting COVID-19. Moreover, given the sustained human-to-human transmission of the virus, returning to previous levels of travel between the two nations places the personnel staffing land ports of entry between the United States and Mexico, as well as the individuals traveling through these ports of entry, at increased risk of exposure to COVID-19. Accordingly, and consistent with the authority granted in 19 U.S.C. 1318(b)(1)(C) and (b)(2), 7 I have determined that land ports of entry along the U.S.-Mexico border will continue to suspend normal operations and will only allow processing for entry into the United States of those travelers engaged in “essential travel,” as defined below. Given the definition of “essential travel” below, this temporary alteration in land ports of entry operations should not interrupt legitimate trade between the two nations or disrupt critical supply chains that ensure food, fuel, medicine, and other critical materials reach individuals on both sides of the border.

For purposes of the temporary alteration in certain designated ports of entry operations authorized under 19 U.S.C. 1318(b)(1)(C) and (b)(2), travel through the land ports of entry and ferry terminals along the United States-Mexico border shall be limited to “essential travel,” which includes, but is not limited to—

• U.S. citizens and lawful permanent residents returning to the United States;

• Individuals traveling for medical purposes ( e.g., to receive medical treatment in the United States);

• Individuals traveling to attend educational institutions;

• Individuals traveling to work in the United States ( e.g., individuals working in the farming or agriculture industry who must travel between the United States and Mexico in furtherance of such work);

• Individuals traveling for emergency response and public health purposes ( e.g., government officials or emergency responders entering the United States to support federal, state, local, tribal, or territorial government efforts to respond to COVID-19 or other emergencies);

• Individuals engaged in lawful cross-border trade ( e.g., truck drivers supporting the movement of cargo between the United States and Mexico);

• Individuals engaged in official government travel or diplomatic travel;

• Members of the U.S. Armed Forces, and the spouses and children of members of the U.S. Armed Forces, returning to the United States; and

• Individuals engaged in military-related travel or operations.

The following travel does not fall within the definition of “essential travel” for purposes of this Notification—

• Individuals traveling for tourism purposes ( e.g., sightseeing, recreation, gambling, or attending cultural events).

At this time, this Notification does not apply to air, freight rail, or sea travel between the United States and Mexico, but does apply to passenger rail, passenger ferry travel, and pleasure boat travel between the United States and Mexico. These restrictions are temporary in nature and shall remain in effect until 11:59 p.m. EDT on July 21, 2020. This Notification may be amended or rescinded prior to that time, based on circumstances associated with the specific threat.

The Commissioner of U.S. Customs and Border Protection (CBP) is hereby directed to prepare and distribute appropriate guidance to CBP personnel on the continued implementation of the temporary measures set forth in this Notification. The CBP Commissioner may determine that other forms of travel, such as travel in furtherance of economic stability or social order, constitute “essential travel” under this Notification. Further, the CBP Commissioner may, on an individualized basis and for humanitarian reasons or for other purposes in the national interest, permit the processing of travelers to the United States not engaged in “essential travel.”

The Acting Secretary of Homeland Security, Chad F. Wolf, having reviewed and approved this document, is delegating the authority to electronically sign this document to Chad R. Mizelle, who is the Senior Official Performing the Duties of the General Counsel for DHS, for purposes of publication in the Federal Register .

The Department previously notified the public of the update to the Mail Stop for the Office of Indian Gaming by publication in the Federal Register . See 84 FR 71451 (December 27, 2019). This rule updates the Mail Stop as listed in the Code of Federal Regulations (CFR) at 25 CFR 293.9 to reflect the Office of Indian Gaming's new address for receipt of Tribal-State Class III gaming compacts. This update is necessary to ensure that the regulations provide an accurate Mail Stop for receipt by the Office of Indian Gaming to begin the 45-day timeline under 25 CFR 293.12.

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

E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The E.O. directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.

This action is not an E.O. 13771 regulatory action because this rule is not significant under Executive Order 12866.

The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). It does not change current funding requirements and would not impose any economic effects on small governmental entities.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act, because this rule does nothing more than update a Federal agency address. This rule:

(a) Will not have an annual effect on the economy of $100 million or more.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or Tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

This rule does not effect a taking of private property or otherwise have taking implications under E.O. 12630. A takings implication assessment is not required.

Under the criteria in section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. A federalism summary impact statement is not required.

This rule complies with the requirements of E.O. 12988. Specifically, this rule: (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and (b) meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in E.O. 13175 and have determined there are no substantial direct effects on federally recognized Indian Tribes that will result from this rulemaking because the rule is limited to updating an address.

OMB Control No. 1076-0172 currently authorizes the collections of information related to approval of Tribal-State Class III gaming compacts, with an expiration of May 31, 2021. This rulemaking does not affect the currently authorized collection. The Department may not conduct or sponsor, and you are not required to respond to, any collection of information unless it displays a currently valid OMB control number.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because this is an administrative and procedural regulation. (For further information see 43 CFR 46.210(i)). We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required.

BIA is taking this action under its authority, at 5 U.S.C. 552, to publish regulations in the Federal Register . Under the Administrative Procedure Act, statutory procedures for agency rulemaking do not apply “when the agency for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(3)(B). BIA finds that the notice and comment procedure are impracticable, unnecessary, or contrary to the public interest, because: (1) These amendments are non-substantive; and (2) the public benefits for timely notification of a change in the official agency address, and further delay is unnecessary and contrary to the public interest. Similarly because this final rule makes no substantive changes and merely reflects a change of address and updates to titles in the existing regulations, this final rule is not subject to the effective date limitation of 5 U.S.C. 553(d).

For the reasons stated in the preamble, the Department of the Interior, Bureau of Indian Affairs, amends part 293 in title 25 of the Code of Federal Regulations to read as follows:

On September 10, 2019, the FBI published in the Federal Register a modified System of Records Notice (SORN) for an FBI system of records titled, “National Crime Information Center (NCIC),” JUSTICE/FBI-001, 84 FR 47533. The NCIC is a national criminal justice information system linking criminal (and authorized non-criminal) justice agencies located in the 50 states, the District of Columbia, U.S. territories and possessions, and selected foreign countries to facilitate the cooperative sharing of criminal justice information. The NCIC provides a system to receive and maintain information contributed by participating agencies relating to criminal justice and national security. Information maintained in the NCIC is readily accessible for authorized criminal justice purposes by authorized users via text-based queries ( i.e., using names and other descriptive data).

On September 18, 2019, the FBI published a Notice of Proposed Rulemaking (NPRM) proposing to amend its existing regulations exempting records maintained in JUSTICE/FBI-001 from certain provisions of the Privacy Act pursuant to 5 U.S.C. 552aG) and (k), and inviting public comment on the proposed exemptions. 84 FR 49073. The comment period was open through October 18, 2019. DOJ received only one substantive comment responsive to the proposed exemptions. That comment, from the Electronic Privacy Information Center (EPIC), urged that “[a]ll of these proposals should be withdrawn,” so that the Department claims no Privacy Act exemptions at all for NCIC system of records. EPIC makes a number of claims, among which are the following:

• “The over collection and maintenance of information that is unverified and unaccountable with no system for redress leaves personal data at a risk.”

• “The FBI sets forward no reason that it should be able to maintain records irrelevant or unnecessary to accomplish a purpose of the agency.”

• “[T]he categories of sources of records at minimum are essential in order to keep the government accountable throughout their data collection and law enforcement activities.”

• “The exemptions as currently proposed are needlessly overbroad.”

• “The NCIC has been known to have inaccurate and unreliable records, making it particularly unsuitable for vast exemptions from regulations designed to protect and optimize the accuracy and reliability of information held on people.”

After consideration of the statements in this public comment from EPIC, the Department has determined that, to protect the ability of the FBI to properly engage in its law enforcement and national security functions, the exemptions as proposed in the NPRM are codified in this final rule for the reasons stated below.

As stated above, the one substantive comment the FBI received regarding its NPRM urged the FBI to withdraw its proposed Privacy Act exemptions. While, generically, it might be true that “[t]he over collection and maintenance of information that is unverified and unaccountable with no system for redress leaves personal data at a risk,” the Department does not agree with this characterization of the FBI's activities. Rather than “over collect,” the FBI works with local, state, federal, and tribal criminal justice partners to determine what information is necessary to collect and share to ensure that the NCIC contains only information relevant and necessary to assist criminal justice agencies in fulfilling their missions. At times, due to the reality of law enforcement investigations, it may not be possible to know in advance what information is relevant and necessary for law enforcement and intelligence purposes. That is one reason that Congress, in the Privacy Act, provided for the ability of agencies to exempt themselves from certain Privacy Act requirements.

Further, regarding the assertion that the FBI will be maintaining “unverified” information, NCIC policy includes strict validation requirements ensuring that criminal justice agencies periodically review their records to ensure to the extent feasible that they are accurate, timely, relevant, and complete. If a record is not timely validated, it is purged from the active NCIC file and retired. Additionally, NCIC policy requires that before any user can take official action on active records within the NCIC ( e.g., arrest an individual, detain a missing person, seize stolen property, charge an individual with violation of a protection order, deny the purchase of a firearm, deny access to explosives), the user must confirm the validity and accuracy of the record with the agency that submitted the record to the NCIC. This ensures that agencies do not take action without verifying information from the NCIC. In addition, the FBI conducts triennial audits of all federal, state, and territorial repositories and a representative sample of local agencies to ensure compliance with policy. Findings of non-compliance are submitted to the Criminal Justice Information Services (CJIS) Advisory Policy Board for review. NCIC access is subject to termination for egregious violations of policy provisions. The NCIC also creates and maintains transaction logs, which can be reviewed to detect potential misuse of system data. And, regarding redress, the FBI in fact has had in place for many years a system for lawful access and amendment of records, detailed at 28 CFR part 16.

In the context of all of these steps taken by the FBI to promote data quality and appropriate data use, EPIC states that “NCIC has been known to have inaccurate and unreliable records”—citing its own past assertions as support for this statement—and concludes that EPIC's allegations make NCIC “particularly unsuitable for vast [Privacy Act] exemptions.” When establishing the Privacy Act exemptions for law enforcement agencies, Congress considered and recognized the potential risks of law enforcement systems having inaccurate and unreliable records. Due to the nature of the type of work law enforcement agencies do and the type of information they must collect to do that work, it is not always possible to ensure the accuracy of records when collected. What is important is not whether a law enforcement agency may have inaccurate or unreliable records in its holdings; rather it is the steps taken by the law enforcement agency to promote data quality and appropriate data use under the circumstances. As detailed above, FBI efforts in this area are eminently reasonable, appropriate, and sufficient.

In response to EPIC's claim that “[t]he FBI sets forward no reason that it should be able to maintain records irrelevant or unnecessary to accomplish a purpose of the agency,” the FBI has not made this claim. Nowhere does the FBI assert that it “should be able to maintain records irrelevant or unnecessary to accomplish a purpose of the agency.” The FBI merely states the fact that it is a law enforcement agency and must act according to the realities and requirements of law enforcement investigations. As stated in the NPRM, relevance and necessity are questions of judgment and timing. Information that appears relevant and necessary when collected may, after further investigation and analysis, be deemed unnecessary. It is only after information is placed in the context of a fully completed investigation and assessed in that light that its relevancy and necessity to a specific investigative activity can be established.

EPIC states that “the categories of sources of records at minimum are essential in order to keep the government accountable throughout their data collection and law enforcement activities.” This statement fails to account for the wealth of public information, including information published by the Department and FBI, detailing types of information maintained in the NCIC as well as indicating the state, local, federal, and tribal law enforcement agency contributors of that information. This plethora of publicly available information already exists and allows the public to keep the government accountable regarding this system of records. As information detailing sources becomes more discrete, however, the realities of law enforcement agencies and investigations again come into play, including the fact that information frequently comes from sensitive sources. As stated in the NPRM, should subsection (e)(4)(!) be interpreted to require more detail regarding the record sources in this system than has already been published in the Federal Register through the SORN documentation, exemption from this provision is necessary to protect the sources of law enforcement and intelligence information and to protect the privacy and safety of witnesses and informants and others who provide information to the FBI.

EPIC states that “[t]he exemptions as currently proposed are needlessly overbroad.” On the contrary, in the NPRM and here in the Final Rule, the Department explains the need for each exemption. The exemptions as taken by FBI are as intended by Congress when it passed the Privacy Act, in order to ensure that law enforcement can continue to properly function in the face of the many requirements of the statute. After careful consideration, Congress allowed for exemptions from some requirements and not from others. Rather than acting counter to the Privacy Act, the Department and FBI are acting pursuant to it. Further, even though the FBI is authorized under the Privacy Act to maintain certain exemptions in all cases, the FBI takes seriously the privacy interests of the public. As stated in the proposed rulemaking, where the FBI determines compliance with an exempted Privacy Act provision—including access and amendment provisions—would not appear to interfere with or adversely affect interests of the United States or other system stakeholders, the FBI at its sole discretion may waive such exemption in that circumstance in whole or in part. In each circumstance, the FBI considers whether the facts of the request merit compliance with an exempted Privacy Act provision(s). In appropriate circumstances, as indicated in the Final Rule, the FBI may waive such exemptions at its discretion.

The Department has considered the submitted comment; however, for the reasons set forth above and the rationales included in the regulations, the Department adopts in this Final Rule the exemptions and rationales proposed in the NPRM.

This regulation has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review” section l(b), Principles of Regulation, and Executive Order 13563 “Improving Regulation and Regulatory Review” section 1(b), General Principles of Regulation.

The Department of Justice has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this rule has not been reviewed by the Office of Information and Regulatory Affairs within the Office of Management and Budget pursuant to Executive Order 12866.

This regulation will only impact Privacy Act-protected records, which are personal and generally do not apply to an individual's entrepreneurial capacity, subject to limited exceptions. Accordingly, the Chief Privacy and Civil Liberties Officer, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This regulation will have no implications for Indian Tribal governments. More specifically, it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Therefore, the consultation requirements of Executive Order 13175 do not apply.

This regulation will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000, as adjusted for inflation, or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by 5 U.S.C. 804 of the Congressional Review Act.

This rule imposes no information collection or recordkeeping requirements.

Pursuant to the authority vested in the Attorney General by 5 U.S.C. 552a and delegated to me by Attorney General Order 2940-2008, 28 CFR part 16 is amended as follows:

DoD now has a single DoD-level Privacy Program rule at 32 CFR 310 (84 FR 14728) that contains all the codified information required for the Department. The Defense Counterintelligence and Security Privacy Act Program regulation at 32 CFR 321, last updated on September 14, 1999 (64 FR 49660), is no longer required and may be removed.

It has been determined that publication of this CFR part removal for public comment is impracticable, unnecessary, and contrary to public interest since it is based on removing DoD policies and procedures that are either now reflected in another CFR part, 32 CFR 310, or are publically available on the Department's website. To the extent that DCSA internal guidance concerning the implementation of the Privacy Act within DCSA is necessary, it will be issued in an internal document.

This rule is one of 20 separate DoD component Privacy rules. With the finalization of the DoD-level Privacy rule at 32 CFR part 310, the Department eliminated the need for this component Privacy rule, thereby reducing costs to the public as explained in the preamble of the DoD-level Privacy rule published on April 11, 2019, at 84 FR 14728-14811.

This rule is not significant under Executive Order (E.O.) 12866, “Regulatory Planning and Review.” Therefore, E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs” does not apply.

On May 6, 2020, the Copyright Royalty Judges (Judges) published a proposed rule amending 37 CFR part 360 to require that all claims to royalty fees collected under compulsory license be filed online through eCRB. 85 FR 26906 (May 6, 2020). The Judges received no comments on the proposal and therefore adopt it as proposed for the reasons set forth below.

In 2017, the CRB deployed its electronic filing and case management system, eCRB, and began accepting claims to compulsory license royalties electronically. The CRB continued, however, to permit the filing of claims on paper forms.

The CRB has since received a diminishing number of paper claims. In the most recent claims filing period for cable and satellite royalties (July 2019), out of 545 and 280 claims, respectively, the CRB received two claims for cable royalties and one claim for satellite royalties that were filed exclusively in paper form. 1 In the most recent claims filing period for DART royalties (January-February 2020), out of 61 claims filed, the CRB received no claims that were filed exclusively in paper form. 2

The handling of paper claims is more resource-intensive for the CRB than the handling of electronic claims. Each paper claim must be opened, date-stamped, numbered, scanned, and uploaded to eCRB, and details from the paper claim must be entered manually into eCRB to generate an electronic claim.

More critically, acceptance of paper claims creates a dependency on the receipt and processing of mail and courier deliveries. The current disruption at the Library of Congress to both mail processing and acceptance of courier deliveries because of the COVID-19 pandemic demonstrates the risk to claims processing of that dependency.

In order to eliminate the need for resource-intensive manual processing of paper claims and to mitigate the risk to CRB operations of a disruption to normal mail and courier delivery, and having received no comments from the public in response to the May 6, 2020 proposed rule, the Judges hereby amend 37 CFR part 360 to require that all claims be filed online through eCRB.

For the reasons set forth in the preamble, and under the authority of chapter 8, title 17, United States Code, the Copyright Royalty Judges hereby amend part 360 of title 37 of the Code of Federal Regulations as follows:

Section 3119 of title 38, United States Code, authorizes the Secretary of Veterans Affairs (Secretary) to make grants to or contract with public or nonprofit agencies, including institutions of higher learning, to advance “the knowledge, methods, techniques, and resources available for use in rehabilitation programs for veterans.” Section 3119 specifically authorizes the Secretary to make grants to such agencies to conduct or provide support for projects which are “designed to increase the resources and potential for accomplishing the rehabilitation of disabled veterans.” (See also implementing regulation at 38 CFR 21.390.)

On August 10, 2016, VA published an interim final rule in the Federal Register , 81 FR 52770, under the authority of sec. 3119 establishing regulations for administering a VEPFS grant program to award grants to eligible entities to fund projects that are successful in accomplishing employment rehabilitation for Veterans with service-connected disabilities. In general, a PFS model is a strategy for successfully attaining positive social or environmental outcomes by paying for an intervention to achieve such outcomes only after the intervention produces these outcomes. The interim final rule included the general process for awarding the grant, criteria and parameters for evaluating grant applications, priorities related to the award of a grant, and general requirements and guidance for administering a VEPFS grant program. VA provided a 60-day public comment period that ended on October 11, 2016, and received nine comments from a single entity.

The first comment recommended amending the definition of “Employment outcome” to include outcomes that occur “during” as well as following the service period so that the PFS agreement reflects the benefits of the selected intervention while services are provided. In addition, this comment and the third comment recommended amending the definitions of “Employment outcome” and “Outcomes payments” to allow a PFS project evaluation to be based on a “comparison” group in addition to a “control” group so there is greater flexibility when structuring valid evaluation methodologies. VA agrees that if employment outcomes can be measured during the service period, an evaluator may be able to obtain useful information that could assist with determining whether employment outcomes have improved across the lifecycle of the project. It is feasible to assume that some outcomes may be achievable and measurable at any point during the lifecycle of the service period. VA believes measuring outcomes during the service period may allow for greater flexibility in transaction structuring for outcomes payments. In addition, VA agrees that basing a project evaluation on a comparison group or a control group will allow for greater flexibility in structuring evaluation methodologies. Having greater flexibility in this regard may allow for greater statistical power when measuring outcomes and benefit the VA program office when evaluating the impact of the outcomes on future rehabilitation policy and programming. Therefore, we are amending the definition of “Employment outcome” to reflect that it means the employment or earnings of a participant in an intervention group or a control or comparison group either during or after a service period. We are further amending this definition and the definition of “Outcomes payments” to indicate that comparison groups, in addition to control groups, may be used when structuring evaluation methodologies.

The second comment proposed adding a definition of “Outcome metrics” and additional comments, including the sixth comment, recommended adding the language, “outcomes metrics or” before “target levels” in a number of the regulatory sections in this rulemaking. “Outcomes metrics or target levels” as a phrase does not make sense. Outcomes are a kind of result of interventional or non-interventional activities. Targets are a hoped-for level of achievement for various outcomes, or a characteristic of outcomes, and are not part of an “either/or” option. Therefore, we will not add the language “outcomes metrics or” to any of the regulatory provisions in this rulemaking. Because we are not adding this proposed language, there is no need to add a definition for “Outcome metrics.”

The fourth comment recommended clarifying that the project partnership may be memorialized in more than one agreement. We are amending the definition of project partnership to reflect that it may consist of multiple agreements because allowing for multiple agreements will provide the project partnership with greater flexibility.

The fifth comment recommended allowing each VEPFS grant to establish the minimum and maximum number of years rather than requiring a minimum 5-year period for all VEPFS grants. VA's original vision for pay for success programming did not account for projects that may have a shorter duration, such as feasibility studies or studies that may require long-term evaluation of certain employment outcomes. To accommodate a broader range of PFS projects with the increased potential for better outcomes, VA agrees that performance period minimums or maximums should be established on a per grant program basis. Thus, we are amending § 21.442(c) to allow each VEPFS grant agreement to establish the project duration instead of setting a required minimum period.

The seventh comment proposed to eliminate the requirement that grantees procure investors in a government acquisition process following procurement standards set forth in 2 CFR 200.317-200.326. The commenter explained that, in typical PFS arrangements to which it has been a party, investors are not “procured” and are not a party to the PFS agreement. Typically, the government is not a party to the investor financing agreements and does not negotiate directly with investors. The commenter explained that investors do not provide services to the government, but fund services to be provided by the service provider and bear the risk that the intervention will not achieve the agreed upon outcomes metrics. Thus, investors are recruited or engaged in a manner that befits their role as risk-bearing entities in the PFS model.

We agree to eliminate the requirement that grant recipients “procure” investors and follow procurement standards set forth in 2 CFR 200.317-200.326. Although the uniform grant regulations at 2 CFR part 200 apply to recipients (and subrecipients) of the PFS grants, they do not contemplate investors as playing a part in the grant agreement or carrying out the purposes of the grant. The procurement of goods and services by way of contract is a key factor in creating a procurement relationship. See 2 CFR 200.330(b). The Federal Acquisition Regulations defining “procurement” and “acquisition” support the position that investors and investments of capital are not “procured.” As the commenter explained, because investors supply money/funding, and do not provide goods or services, obtaining investments is not an acquisition or procurement as contemplated by the uniform grant regulations. While the funding investors provide is used to procure goods or services necessary to carry out the grant's purpose, neither the investor nor the funding is a good or service that is procured. Therefore, the uniform grant regulations at 2 CFR part 200 should not apply, and we agree to exclude “investors” from the requirement in § 21.445(b) that partner entities be procured following procurement standards set forth in 2 CFR 200.317-200.326.

The eighth comment proposed to not require grantees to identify investors at the time of application. We see no reason why grantees should not be able to identify investors at the time of application and the commenter has provided no convincing reason. We do not believe that excluding investors from the procurement requirement supports the argument that investors should be identified later in the grant process. Furthermore, identifying investors later in the process would introduce uncertainty into the overall viability of the applicant's proposed project. Accordingly, we will not make any changes based on this comment.

The ninth comment proposed to allow VA and an applicant to negotiate a cooperative agreement or a grant agreement to provide flexibility in finalizing the terms of the VEPFS grant. As stated above, sec. 3119 provides the authority for the Secretary to make these VEPFS grants. It also provides authority for the Secretary to contract with entities to fund projects that are successful in accomplishing rehabilitation for Veterans with service-connected disabilities. However, there is no authority for the Secretary to enter into cooperative agreements to fund such projects. As VA has no authority to enter cooperative agreements for this purpose, we must decline to change the regulations to allow for the negotiation of cooperative agreements between an applicant and VA.

Based on the rationale set forth in the interim final rule and in this document, VA is adopting the provisions of the interim final rule as a final rule with changes, as noted above.

The Secretary is issuing this rule because there is a need to find new methods for rehabilitating Veterans with service-connected disabilities to become employable and obtain and maintain suitable employment. This rulemaking serves an important Veterans' need in an economical way because it provides the opportunity for discovering such new methods using a strategy that will save taxpayer money. However, funding for a grant awarded under these regulations was available to be obligated within a limited timeframe. Therefore, it was impracticable and contrary to the public interest to delay the rule for the purpose of soliciting advance public comment or to have a delayed effective date. Accordingly, VA issued an interim final rule with an immediate effective date and is now issuing this final rule after having considered the comments submitted.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866.

VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's website at http:// www.va.gov/orpm/, by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”

This final rule is considered an E.O. 13771 regulatory action. Details on the estimated costs of this final rule can be found in the rule's economic analysis.

Although this action contains provisions constituting collections of information at 38 CFR 21.445, 21.447, and 21.448, under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised collections of information are associated with this final rule. The information collection requirements for §§ 21.445, 21.447, and 21.448 are currently approved by OMB and have been assigned OMB control number 2900-0847.

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). The Secretary estimates that, for any VEPFS grant program, no more than ten non-renewable grants will be awarded. For each grant awarded, usually one of each, but no more than a few, outcomes payors, project coordinators, evaluators, investors, and service providers will be involved with the grant program. The goal of these grants is to rehabilitate Veterans with service-connected disabilities with regard to employment. Thus, an insubstantial number of small entities will be affected by this final rule and, accordingly, there will not be a significant economic impact on such affected entities. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

The Catalog of Federal Domestic Assistance number and title for the program affected by this document is 64.116, Vocational Rehabilitation for Disabled Veterans.

The Secretary of Veterans Affairs approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Pamela Powers, Chief of Staff, Performing the Delegable Duties of the Deputy Secretary, Department of Veterans Affairs, approved this document on April 13, 2020, for publication.

Accordingly, the interim final rule amending 38 CFR part 21, which published at 81 FR 52770 on August 10, 2016, is adopted as final with the following changes:

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

On April 7, 2020, the EPA proposed to determine that the West Pinal County nonattainment area failed to attain the 1987 24-hour PM 10 NAAQS by December 31, 2018, the statutory attainment date for the area. 1 For a PM 10 nonattainment area classified as Moderate under the CAA, such as the West Pinal County area, section 188(c) of the CAA states that the area's attainment date is “as expeditiously as practicable, but no later than the end of the sixth calendar year after the area's designation as nonattainment.” Consequently, the applicable attainment date for West Pinal County, designated nonattainment in 2012, was December 31, 2018. CAA section 188(b)(2) requires the EPA to determine whether any PM 10 nonattainment area classified as Moderate attained the 24-hour PM 10 NAAQS by the area's attainment date and requires the EPA to make such a determination within six months after that date.

Our proposed determination that the West Pinal County area failed to attain the PM 10 NAAQS was based on complete, quality-assured, and certified PM 10 monitoring data for the appropriate three-year period, 2016-2018. As discussed in our proposal, an area attains the 24-hour PM 10 standard of 150 micrograms per cubic meter (μg/m 3 ) when the expected number of days per calendar year with a 24-hour concentration exceeding the standard, referred to as an “exceedance”, averaged over a three-year period is equal to or less than one.

In our proposal, the EPA's evaluation of whether the West Pinal County nonattainment area has met the 1987 24-hour PM 10 NAAQS was based on our review of the monitoring data, the adequacy of the PM 10 monitoring network in the nonattainment area, and the reliability of the data collected by that network. The PM 10 standard is attained when the expected number of exceedances, averaged over a three-year period, is less than or equal to one. The expected number of exceedances averaged over a three-year period at any given monitor is known as the PM 10 design value for that site. The PM 10 design value for the nonattainment area is the highest design value from a monitor within that area. Three consecutive years of air quality data are required to show attainment of the PM 10 standard.

We reviewed the 2018 PM 10 design values for all regulatory monitoring sites measuring PM 10 within the West Pinal County nonattainment area, expressed as a single value representing the average expected exceedances over the three-year period, 2016-2018. 2 The PM 10 data showed that the design values at multiple monitoring sites are greater than 1.0 estimated annual average exceedances of the 1987 24-hour PM 10 NAAQS. Consequently, the EPA proposed to determine, based upon three years of complete, quality-assured and certified data from 2016-2018, that the West Pinal County nonattainment area did not attain the 1987 24-hour PM 10 NAAQS by the applicable attainment date of December 31, 2018.

In our proposal to determine that the West Pinal County area did not attain the NAAQS by the relevant attainment date, the EPA noted that the consequence of our determination is that the West Pinal County area will be reclassified as a Serious PM 10 nonattainment area by operation of law and will be subject to all applicable Serious area attainment planning and nonattainment New Source Review requirements. This includes the requirement to submit a Serious area air quality plan within 18 months of the effective date of our final rule, per section 189(b)(2) of the CAA. This Serious area air quality plan must demonstrate attainment of the 24-hour PM 10 NAAQS by December 31, 2022, ten years after the area's designation to nonattainment, per section 188(c)(2) of the CAA.

The public comment period on the proposed rule opened on April 7, 2020, the date of its publication in the Federal Register , and closed on May 7, 2020. During this period, the EPA received one comment letter submitted by the Sierra Club and The Arizona Center for Law in the Public Interest (ACLIPI). The Sierra Club and ACLIPI comment letter expressed support for our proposal and suggested that the EPA take our final action without delay. A copy of this comment letter is included in the docket for this final action.

In accordance with section 188(b)(2) of the CAA, the EPA is taking final action to determine that the West Pinal County Moderate nonattainment area did not attain the 1987 24-hour PM 10 NAAQS by its applicable attainment date of December 31, 2018. Our determination that West Pinal County failed to attain the PM 10 NAAQS is based on complete, quality-assured, and certified PM 10 monitoring data for the appropriate three-year period, 2016-2018.

As a result of our determination of failure to attain the 1987 24-hour PM 10 NAAQS by its applicable attainment date, West Pinal County is reclassified as a Serious PM 10 nonattainment area by operation of law and is subject to all applicable Serious area attainment planning and nonattainment New Source Review requirements, in accordance with section 188(b)(2) of the CAA. This includes the requirement to submit a Serious area air quality plan within 18 months of the effective date of our final rule, per section 189(b)(2) of the CAA. This Serious area air quality plan must demonstrate attainment of the 24-hour PM 10 NAAQS by December 31, 2022, ten years after the area's designation to nonattainment, per section 188(c)(2) of the CAA.

This action is not a significant regulatory action under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and Executive Order 13563 (76 FR 3821, January 21, 2011), and therefore was not submitted to the Office of Management and Budget (OMB) for review.

This action is not an Executive Order 13771 regulatory action because it is not a significant regulatory action under Executive Order 12866.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521) because it does not contain any information collection activities.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612. This action will not impose any requirements on small entities. This action requires the state to adopt and submit SIP revisions to satisfy the statutory requirements that apply to Serious areas and would not itself directly regulate any small entities. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

This action does not contain any unfunded mandate of $100 million or more and does not significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1531-1538). This action itself imposes no enforceable duty on any state, local, or tribal governments, or the private sector. This action determines that the West Pinal County nonattainment area failed to attain the 1987 24-hour PM 10 NAAQS by its applicable attainment date, triggering reclassification as a Serious nonattainment area and existing statutory timeframes for the state to submit SIP revisions. Such a reclassification in and of itself does not impose any federal intergovernmental mandate.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). The requirement to submit SIP revisions to meet the 1987 24-hour PM 10 NAAQS is imposed by the CAA. This final rule does not alter the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132 and consistent with EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicited comments on our prior proposed action from state and local officials.

This action does not have tribal implications as specified in Executive Order 13175. No areas of Indian country are located within the West Pinal County PM 10 nonattainment area. Therefore, no tribal areas are implicated in the area that the EPA has determined to have failed to attain the 1987 24-hour PM 10 NAAQS by the applicable attainment date. The CAA and the Tribal Authority Rule establish the relationship of the federal government and tribes in developing plans to attain the NAAQS, and this rule does nothing to modify that relationship. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because the effect of this action is to reclassify the West Pinal County nonattainment area as Serious nonattainment for the 1987 24-hour PM 10 NAAQS triggering additional Serious area planning requirements under the CAA. This action does not establish an environmental standard intended to mitigate health or safety risks.

This final rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

This action is not subject to the requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because it does not involve technical standards.

Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. The EPA has determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The effect of this final action is to reclassify the West Pinal County nonattainment area as Serious nonattainment for the 1987 24-hour PM 10 NAAQS triggering additional Serious area planning requirements under the CAA.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 24, 2020. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review, does not extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Chapter I, title 40 of the Code of Federal Regulations is amended as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Publishing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl .

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2020-0045 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before August 24, 2020. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2020-0045, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html .

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets .

In the Federal Register of April 15, 2020 (85 FR 20910) (FRL-10006-54), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 8F8725) by Bayer CropScience 2 T.W. Alexander Drive, Research Triangle Park, NC 27709. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of indaziflam ( N -[(1 R, 2 S )-2,3-dihydro-2,6-dimethyl-1 H -inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine) in or on grass, forage, fodder and hay, group 17, forage at 30 parts per million (ppm); grass, forage, fodder and hay, group 17, hay at 10 ppm; sugarcane, cane at 0.01 ppm; cattle, goat, horse, and sheep fat at 0.07 ppm; cattle, goat, horse, and sheep meat at 0.01 ppm; cattle, goat, horse, and sheep meat byproducts at 0.2 ppm; milk at 0.01 ppm; and milk, fat at 0.25 ppm. That document referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket, http://www.regulations.gov . There were no comments received in response to the notice of filing.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for indaziflam including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with indaziflam follows.

On October 10, 2019, EPA published in the Federal Register a final rule establishing tolerances for residues of indaziflam in or on the tropical and subtropical fruit (edible peel) group 23 and tropical and subtropical fruit (inedible peel) group 24 based on the Agency's conclusion that aggregate exposure to indaziflam is safe for the general population, including infants and children. See 84 FR 54510 (FRL-9999-70). That document contains a summary of the toxicological profile and points of departure, assumptions for exposure assessment, and the Agency's determination regarding the children's safety factor, which have not changed.

EPA's dietary exposure assessments have been updated to include the additional exposure from use of indaziflam on grass forage, grass hay, and sugarcane cane, and from exposure to residues in edible ruminant commodities, i.e., reliance on tolerance-level residues for all crops, maximum anticipated residues for all edible ruminant commodities, and an assumption of 100 percent crop treated (PCT). EPA's aggregate exposure assessment incorporated this additional dietary exposure, as well as exposure in drinking water and from residential sources, although those latter exposures are not impacted by the new uses on grass forage, grass hay, and sugarcane cane and thus have not changed since the last assessment. Further information about EPA's risk assessment and determination of safety supporting the tolerances established in the October 10, 2019 Federal Register action, as well as the new indaziflam tolerances, can be found at http://www.regulations.gov in the document titled “Indaziflam—Aggregate Human Health Risk Assessment of the Proposed New Use on Lowbush Blueberry, and Crop Group Expansions to Tropical and Subtropical Fruit, Edible Peel, Group 23 and Tropical and Subtropical Fruit, Inedible Peel, Group 24.” dated September 11, 2019 in docket ID EPA-HQ-OPP-2018-0561 and the document titled, “Indaziflam. Human Health Risk Assessment in Support of the Proposed New Uses on Grasses, Sugarcane, Wildlife Management, and Rights-of-Way” dated April 17, 2020 in docket ID number EPA-HQ-OPP-2020-0045.

Acute dietary risks are below the Agency's level of concern: 20% of the acute population adjusted dose (aPAD) at the 95th percentile of exposure for all infants less than 1 year old, the population subgroup with the highest exposure estimate. Chronic dietary risks are below the Agency's level of concern: 20% of the chronic population adjusted dose (cPAD) for children 1 to 2 years old, the population subgroup with the highest exposure estimate. The updated combined short-term food, water, and residential exposure estimates result in aggregate margins of exposure (MOEs) above the level of concern (LOC) of 100 for all scenarios assessed and are not of concern.

Therefore, based on the risk assessments and information described above, EPA concludes there is a reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to indaziflam residues. More detailed information on the subject action to establish tolerances in or on the grass forage, grass hay, sugarcane cane, and edible ruminant commodities can be found in the document entitled, “Indaziflam. Human Health Risk Assessment in Support of the Proposed New Uses on Grasses, Sugarcane, Wildlife Management, and Rights-of-Way” by going to http://www.regulations.gov . The referenced document is available in the docket established by this action, which is described under ADDRESSES . Locate and click on the hyperlink for docket ID number EPA-HQ-OPP-2020-0045.

There are adequate residue analytical methods for enforcing tolerances for indaziflam residues of concern in/on the registered plant and livestock commodities. Method DH-003-P07-02 is an adequate high-performance liquid chromatography with tandem mass spectrometry (LC-MS/MS) tolerance enforcement method for indaziflam and 1-fluoroethyl diaminotriazine (FDAT) in crops. Method DH-009-A18-01 is an adequate LC-MS/MS tolerance enforcement method for the determination of indaziflam residues in livestock commodities.

These methods may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov .

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established any MRLs for indaziflam.

Therefore, tolerances are established for residues of indaziflam, N -[(1R,2S)-2,3-dihydro-2,6-dimethyl-1 H -inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine, including its metabolites and degradates in or on grass, forage, fodder and hay, group 17, forage at 30 ppm; grass, forage, fodder and hay, group 17, hay at 10 ppm; and sugarcane, cane at 0.01 ppm. Compliance with the tolerance levels specified above is to be determined by measuring only indaziflam and FDAT, 6-[(1 R )-1-fluoroethyl]-1,3,5-triazine-2,4-diamine, calculated as the stoichiometric equivalent of indaziflam, in or on the commodity.

Tolerances are also established for residues of indaziflam, N -[(1R,2S)-2,3-dihydro-2,6-dimethyl-1 H -inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine, including its metabolites and degradates in or on cattle, fat at 0.7 ppm; cattle, meat at 0.01 ppm; cattle, meat byproducts at 0.2 ppm; goat, fat at 0.07 ppm; goat, meat at 0.01 ppm; goat, meat byproducts at 0.2 ppm; horse, fat at 0.07 ppm; horse, meat at 0.01 ppm; horse, meat byproducts at 0.2 ppm; milk at 0.01 ppm; milk, fat at 0.25 ppm; sheep, fat at 0.07 ppm; sheep, meat at 0.01 ppm; and sheep, meat byproducts at 0.2 ppm. Compliance with the tolerance levels specified above is to be determined by measuring only indaziflam in or on the commodity.

Lastly, the existing tolerance in paragraph (a) for “Sugarcane, refined sugar” is removed as unnecessary and the tolerances under paragraph (b), Section 18 emergency exemptions for “Grass, forage, fodder, and hay, group 17 forage”, and “Grass, forage, fodder, and hay, group 17, hay” are removed as unnecessary due to the establishment of the above tolerances.

This action establishes and modifies tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal Governments, on the relationship between the National Government and the States or Tribal Governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

EPA Region 5 is publishing this direct final Notice of Partial Deletion of the Allied Chemical & Ironton Coke Superfund Site (Allied Chemical Site or Site), from the NPL. The Allied Chemical Site covers 129 acres and includes three operable units (OUs). The Goldcamp Disposal Area (GDA) is OU1. The former Coke Plant/Lagoon Area (CPLA) is OU2. The former Tar Plant is OU3. See Figures 1 and 2 in the Docket. Groundwater contamination is present below all three OUs, but is addressed as part of the OU1 and OU2 cleanup remedies.

This partial deletion pertains to the soil (land) portion of OU1 (GDA); the soil (land) and lagoons portion of OU2 (CPLA) except for the OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm (see Figure 3 in the Docket); and all of OU3 (which only addressed contaminated soil and sediment at the Tar Plant and in the adjacent Ohio River). The OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm contains components of the groundwater treatment system and will not be remediated until after the groundwater cleanup is complete. Therefore, the OU2 ROD Soils Area 2 is not being considered for deletion as part of this action. The contaminated groundwater at the Site, which is present below all three OUs but is being addressed as part of the OU1 and OU2 cleanup remedies, is undergoing a long-term cleanup and is also not being considered for deletion as part of this action. The OU2 ROD Soils Area 2 and the groundwater portions of the Allied Chemical Site ( i.e., the groundwater portion of OU1 and OU2, which includes the contaminated groundwater below OU3) will remain on the NPL.

The NPL constitutes Appendix B of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to CERCLA. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). This partial deletion of the Allied Chemical Site is proposed in accordance with 40 CFR 300.425(e) and is consistent with the Notice of Policy Change: Partial Deletion of Sites Listed on the National Priorities List. 60 FR 55466 (Nov. 1, 1995). As described in 40 CFR 300.425(e)(3) of the NCP, a portion of a site deleted from the NPL remains eligible for Fund-financed remedial actions if future conditions warrant such actions.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses the procedures that EPA is using for this action. Section IV discusses the soil, lagoons, and sediment portions of OU1, OU2, and OU3 of the Allied Chemical Site included in this partial deletion and demonstrates how these media/areas meet the deletion criteria. Section V discusses EPA's action to partially delete the soil, lagoons, and sediment in OU1, OU2, and OU3 of the Allied Chemical Site (except for the soil in OU2 ROD Soils Area 2) from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites, or portions thereof, may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. the remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA Section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site or a portion of a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to the deletion of the soil, lagoons, and sediment portions of OU1, OU2, and OU3 of the Allied Chemical Site, excluding the OU2 ROD Soils Area 2:

(1) EPA consulted with the State of Ohio prior to developing this direct final Notice of Partial Deletion and the Notice of Intent for Partial Deletion co-published in the “Proposed Rules” section of the Federal Register .

(2) EPA has provided the State 30 working days for review of this notice and the parallel Notice of Intent to Partially Delete prior to their publication today, and the State, through the Ohio Environmental Protection Agency (OEPA), concurred on the partial deletion of the Allied Chemical Site from the NPL on March 6, 2020.

(3) Concurrent with the publication of this direct final Notice of Partial Deletion, an announcement of the availability of the parallel Notice of Intent for Partial Deletion is being published in a major local newspaper, the Ironton Tribune. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent for Partial Deletion of the Allied Chemical Site from the NPL.

(4) The EPA placed copies of documents supporting the partial deletion in the deletion docket and made these items available for public inspection and copying at https://www.regulations.gov and at https://www.epa.gov/superfund/allied-chemical-ironton .

(5) If adverse comments are received within the 30-day public comment period on this partial deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Partial Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent for Partial Deletion and the comments already received.

Deletion of a portion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a portion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for further response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the soil, lagoons, and sediment portions of OU1, OU2, and OU3, except for the soil in OU2 ROD Soils Area 2, of the Allied Chemical Site from the NPL.

The Allied Chemical Site (OHD043730217) is 129 acres and is located at 3330 South Third Street in Ironton, Lawrence County, Ohio (see Figure 1 in the Docket). The Site is surrounded by industries, businesses, private residences, waterways, and wetlands. Part of the Site is adjacent to, and includes, a portion of the Ohio River.

The Allied Chemical Site is divided into three OUs (see Figure 2 in the Docket). OU1 is the Goldcamp Disposal Area (GDA) and is 10 acres in size. The GDA is a former sand and gravel pit that was used to dispose waste from the Site's Tar Plant, as well as waste from the Goldcamp Gravel Company and foundry sand from a nearby iron works.

OU2 is the former Coke Plant/Lagoon Area (CPLA). The CPLA covers 91 acres and contained the former Coke Plant and five lagoons. The CPLA is bordered by Ice Creek to the east and south. Ice Creek flows into the Ohio River and portions of the CPLA are within the 100 year floodplain. Eastern portions of the CPLA extend into the adjacent Village of Coal Grove, Ohio.

OU2 includes groundwater below the CPLA and in the former Tar Plant area (OU3). Limited areas of soil contamination in OU3 were also evaluated and addressed as part of OU2.

OU3 is the former Tar Plant area. The Tar Plant OU is 28 acres and consists of two parcels, the Main Parcel and the River Parcel. The Main Parcel is 16 acres and contained the former Tar Plant facility. The River Parcel is 12 acres and includes seven acres of the Ohio River (this varies with river elevation). The Main Parcel and the River Parcel of OU3 are separated by an active railroad track.

Initial operations at the Allied Chemical Site began with the Ironton Solvay Coke Company (Ironton) Coke Plant (OU2). In 1926, Ironton and other companies united to form the Allied Chemical & Dye Corporation (Allied Chemical). From 1981 to 1999, Allied Chemical went through additional name changes, mergers and acquisitions and is currently Honeywell International Inc. (Honeywell).

The Coke Plant operated from 1917 to 1982. Products from the coking operations included: Crude tar, coke, light oil, and ammonia. From 1920 through the 1960s, the facility discharged wastewater and solid wastes generated during the coking process into the marshy area east of the plant adjacent to Ice Creek. The waste streams included process wastewater, coke and coal fines, tar decanter sludges, boiler ash, and weak ammonia liquor. Specific constituents present in the waste streams included: Ammonia, benzene, cyanide, metals, naphthalene, phenolics, and polynuclear aromatic hydrocarbons (PAHs).

In the early 1970s, Allied Chemical constructed a wastewater treatment plant (WWTP) and a series of lagoons in the marshy area of the Coke Plant to treat the waste streams from the Coke Plant and the Tar Plant. The treated wastewater discharged to the Ohio River through two permitted outfalls, Outfall 001 and Outfall 002. Outfall 002 was taken out of service in 2001.

In 1977, Allied Chemical sold the Coke Plant to the McClouth Steel Corporation (McClouth Steel). In 1982, McClouth Steel filed for bankruptcy and the Coke Plant was shut down.

Iron City Fuels, Inc. (Iron City Fuels) purchased the Coke Plant property for salvaging after the Coke Plant closed. In 1984, Allied Chemical re-purchased the Coke Plant property, excluding the surface facilities, from Iron City Fuels. Iron City Fuels retained the surface facilities at the Coke Plant for salvaging until 1985.

Iron City Fuels completed their salvage operations and transferred the surface facilities back to Allied Chemical in 1985. In 1987, Allied Chemical entered into a CERCLA Section 106(a) Administrative Order on Consent (AOC) with EPA and OEPA to remove six remaining above-ground storage tanks, 4,700 cubic feet of tar decanter sludge (a K087 hazardous waste), and the material in the #4 weak liquor storage tank from the CPLA for off-site disposal.

Allied Chemical operated the Tar Plant (0U3) from 1945 until 2000 when the Tar Plant closed. The Tar Plant manufactured products from the crude tar produced at the Coke Plant. The Tar Plant contained 124 above ground storage tanks for various coal tar derivatives and chemicals, and numerous buildings housing administrative, laboratory, storage, and maintenance activities. After the Tar Plant closed, the Tar Plant facilities were demolished. The Tar Plant property demolition was completed in 2003.

Specific products from the Tar Plant included: Phthalic anhydride, creosotes, pitches, naphthalene, road tar, driveway sealer, roofing pitch, and anthracene. The Tar Plant disposed the wastes and residues generated during the manufacturing processes to the adjacent GDA (OU1). These wastes included: Anthracene residues and salts, coal tar pitch scrap, and phthalic anhydride residues.

The GDA was a former sand and gravel pit that was approximately 40 feet deep. The GDA received waste from the Tar Plant, as well as waste from the sand and gravel company and foundry sand from a nearby iron foundry.

Allied Chemical purchased the GDA property in 1955. In 1961, the construction of the Greenup Dam on the Ohio River raised the water levels of the river and adjacent groundwater, causing the waste at the bottom of the GDA to be in direct contact with the groundwater.

Allied Chemical stopped using the GDA for waste disposal in 1977 and developed a plan for closing the GDA in consultation with OEPA. The closure included: Removing standing liquid from the GDA for off-site disposal, filling the GDA to surface grade, and capping the GDA with clay. Allied Chemical completed the GDA closure in 1980.

EPA inspected the Allied Chemical Site and completed a Site Inspection Report in 1980. In 1982, OEPA sampled the five Coke Plant lagoons and collected groundwater samples from the Site. OEPA detected high concentrations of PAHs in the lagoon sludge [total PAH concentrations as high as 148,000 milligrams per kilogram (mg/kg) in Lagoon 5] and high levels of cyanide, arsenic, phenol, and metals in the liquid fractions of the lagoons. OEPA detected arsenic in the groundwater at concentrations as high as 120,000 micrograms per liter (µg/l) and benzene at concentrations as high as 1,200 µg/l.

EPA completed a Preliminary Assessment Report and a Remedial Action Master Plan for the Site in 1983. EPA proposed the Site to the NPL on December 30, 1982 (47 FR 58476) due to the potential for groundwater contaminants to affect private well supplies, as well as the Ohio River and Ice Creek, which supply municipal drinking water. EPA finalized the Allied Chemical Site on the NPL on September 8, 1983 (48 FR 40658).

EPA finalized: Cleanup remedies for the Allied Chemical Site in Records of Decision (RODs) issued in 1988, 1990, and 2007; ROD Amendments in 1995, 1997, and 1998; and Explanations of Significant Differences (ESD) in 2015 and 2020. Allied Chemical/Honeywell implemented the EPA-selected cleanup actions for the Site from 1993 to 2015. In 2016, EPA issued a Preliminary Close Out Report documenting that Allied Chemical/Honeywell constructed the cleanup remedies consistent with all requirements and that the cleanups were protective of human health and the environment.

The OU1 property (GDA) is currently owned by Honeywell. The majority of the OU1 property is a capped landfill and the perimeter is fenced. There is presently no anticipated future use for the portion of OU1 located over the landfill. Honeywell split approximately 1.4 acres of OU1 near Third Street that is not part of the landfill from the original parcel, and this property is available for redevelopment.

The OU2 property (Coke Plant/Lagoon Area) is divided into 17 parcels of land. Allied Corporation ( i.e., Honeywell) currently owns two of the 17 parcels: Parcel 2, located in the City of Ironton and Parcel 1 located in the Village of Coal Grove (see Figure 2 in the Docket). Parcel 2 contains the former lagoons which were converted into wetlands and the upgraded WWTP that treats the extracted groundwater from the Site prior to discharge to the Ohio River. Parcel 2 is under security and monitoring by a Honeywell contractor stationed at the WWTP seven days a week during business hours and via telemetry 24 hours per day. Parcel 1 contains a portion of the Lagoon Area and a portion of Ice Creek. A section of Parcel 1 has also been converted into wetlands. The entire perimeter of the WWTP and the lagoons is secured by a chain-link fence with posted warning signs maintained by Honeywell's contractors.

Honeywell donated Parcel 4 of OU2 to the Ironton Port Authority in 2008. Honeywell sold the remaining OU2 parcels to the City of Ironton (City) for use as an industrial park in 2002. The City sold various parcels of OU2 for redevelopment.

The two OU3 parcels, the Main Parcel and the River Parcel, are currently owned by Honeywell/Allied Chemical. The Main Parcel is covered by a low-permeability cover and the perimeter is fenced. The River Parcel has a 2-foot soil cover and a sediment cover. The access road is gated to prevent vehicles from entering the area.

In 2011, EPA's contractor performed a reuse assessment to identify future land use considerations and opportunities and to coordinate reuse goals for the Site. On September 22, 2011, EPA and the City hosted a workshop to plan for Site reuse. Participants included Site owners and representatives from local businesses, adjacent properties, local educational and healthcare institutions, and local and state government. During the workshop, participants gave input regarding future uses and priorities for the Site.

In 2012, EPA's contractor completed a “Reuse Framework” report, which summarized the outcomes of the workshop and the findings of a reuse suitability assessment for the Site. This document includes reuse considerations and opportunities for education, workforce development, and Site improvements that can position the Site for productive reuse.

Several of the OU2 Site parcels have been redeveloped. The ownership information for the OU2 parcels is summarized on Figure 2 in the Docket. The active stakeholders, their interests, and their contact information is summarized in Table 1 of the 2020 Institutional Controls Implementation & Assurance Plan, which is available in the Docket.

This partial deletion pertains to the soil (land) portion of OU1 (GDA); the soil (land) and lagoons portion of OU2 (CPLA), except for the OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm (see Figure 3 in the Docket); and all of OU3 (which only addressed contaminated soil and sediment at the Tar Plant and in the adjacent Ohio River).

The OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm contains components of the groundwater treatment system and will not be remediated until after the groundwater cleanup is complete. Therefore, the OU2 ROD Soils Area 2 is not being considered for deletion as part of this action. The contaminated groundwater at the Site, which is present below all three OUs but is being addressed as part of the OU1 and OU2 cleanup remedies, is undergoing a long-term cleanup and is also not being considered for deletion as part of this action. The OU2 ROD Soils Area 2 and the groundwater portions of the Allied Chemical Site ( i.e., the groundwater portion of OU1 and OU2, which includes the contaminated groundwater below OU3) will remain on the NPL.

Allied Chemical entered into an AOC with EPA and OEPA to conduct a Site-wide Remedial Investigation (RI) and Feasibility Study (FS) at the Allied Chemical Site in 1984. The purpose of the RI was to characterize the nature and extent of contamination associated with the Site and the impact of the contamination on human health and the environment. The purpose of the FS was to develop and evaluate cleanup alternatives to address the unacceptable risks posed by the Site.

Allied Chemical conducted field investigations at the Site in 1984 and finalized the RI Report in 1986. The 1986 RI included: (1) The installation and sampling of over 45 groundwater monitoring wells; (2) collection and analysis of over 200 groundwater samples; (3) collection and analysis of over 200 soil samples; (4) collection and analysis of over ten surface water samples; (5) continuous sampling and analysis of air samples during sampling and excavation; (6) excavation and sampling of waste in over 20 test pits; and (7) collection and analysis of over 1000 samples of fish tissue. The soil and waste samples were analyzed for six Site-specific indicator chemicals: Phenolics, benzene, naphthalene, cyanide, ammonia, and chloride. The groundwater and municipal water samples were analyzed for the six indicator chemicals and EPA's Target Analyte List (TAL) inorganic and Target Compound List (TCL) chemicals.

The 1986 RI determined that the 4-acre waste pit in the GDA contained approximately 300,000 cubic yards of waste material, including hazardous substances disposed from the Tar Plant and the Coke Plant. The bottom five feet of the waste was below the water table and in direct contact with groundwater. The surface of the GDA was a source of contamination because contaminated substances oozed up through the existing cap and collected on the GDA surface. The contaminants of concern (COCs) in the GDA were: Benzene, naphthalene, phenolics, cyanide, ammonia, sulfate, chloride, and the PAHs benz(a)anthracene, benzo(a)pyrene, chrysene, and dibenz(a,h)anthracene.

The groundwater below the GDA was contaminated. The groundwater contamination extended west to the Ohio River and to the production wells located at the Amcast company (formerly Ironton Iron Inc.) located 1,000 feet north of the GDA. Amcast Production Well No. 7 contained benzene at concentrations as high as 36 µg/l. These concentrations were above the Safe Drinking Water Act Maximum Contaminant Level (MCL) for benzene of 5 µg/l. Dense non-aqueous phase liquid (DNAPL) was present on top of the bedrock below the GDA. Total petroleum hydrocarbon concentrations in the DNAPL were 100 to 250 parts per million. Due to the groundwater contamination, Allied Chemical began providing bottled drinking water to Amcast for its employees in 1986.

The 1986 RI found seven areas of soil contamination in the Coke and Tar Plant areas that required cleanup (see Figures 3 and 4 in the Docket). The soils were contaminated with benzo(a)pyrene, a carcinogenic PAH (PAHc). The maximum concentrations of benzo(a)pyrene detected in the contaminated soil were: 150 mg/kg in Area 1, 60 mg/kg in Area 2, 330 mg/kg in Area 3, 96 mg/kg in Area 4, and 39 mg/kg in Area 5. The total amount of soils requiring cleanup in the Coke Plant area was 38,000 cubic yards. Approximately 2,000 cubic yards of soil required cleanup in the Tar Plant area.

The 1986 RI found that Lagoons 1 through 4 in the CPLA contained waste coal and coke, and general debris, including bricks, pieces of metal, and tar. Lagoons 1 and 3 also contained lime kiln sludge (K060), a listed hazardous waste under the Resource Conservation and Recovery Act (RCRA) based on the content of cyanide, naphthalene, phenolic compounds, and arsenic. The analytical sampling indicated that the material in Lagoons 1 through 4 was contaminated with widely varying concentrations of PAHs, ammonia, cyanide, phenolics, sulfate, benzene, and arsenic.

Lagoon 5 in the CPLA was used to dispose decanter tank tar sludge (K087), a RCRA listed hazardous waste based on phenol and naphthalene content. Lagoon 5 was also believed to contain waste coal and coke materials. Lagoon 5 was approximately 40 feet deep and contained approximately 122,000 cubic yards of waste. About five to 15 feet of the waste was below the water table. Analytical sampling in Lagoon 5 detected high concentrations of carcinogenic PAHs. Although the solubility and mobility of PAHs is low, the chemicals are potent carcinogens.

The 1986 RI found that the sediments of Ice Creek downstream from the Site were contaminated from the discharge of wastewater from the Coke Plant operations. The sampling indicated that downstream sediments contained Site-related concentrations of phenolics, naphthalene, ammonia, and cyanide. An examination of 214 fish collected from Ice Creek and the Ohio River, however, did not show any neoplastic liver lesions in the fish. Surface water samples collected downstream of the Site contained higher concentrations of chloride and ammonia than upstream samples, but the concentrations were well below EPA's Water Quality Criteria.

The groundwater in the CPLA and the Tar Plant area was contaminated with several contaminants, including phenolics, ammonia, cyanide, chloride, naphthalene, and benzene. The pattern of groundwater contamination indicated that the contamination was due to a number of localized on-site sources. The data also indicate that DNAPL was present above the surface of the bedrock at some locations.

Groundwater modeling conducted during the RI indicated that the groundwater below the CPLA and Tar Plant flowed toward Ice Creek and the Ohio River. The modeling indicated that the Coal Grove well field located approximately 2,000 feet south of the CPLA, which provides drinking water to about 2,840 residents, obtains approximately 27 percent of its water from Ice Creek leakage, 29 percent of its water from the Ohio River, 41 percent of its water from the aquifer southeast of the well field away from the Site, and three percent of its water from Site groundwater flowing underneath Ice Creek. The modeling and the actual analysis of the Coal Grove municipal water indicated that no drinking water standards were being exceeded in the Coal Grove wellfield as a result of the Allied Chemical Site.

The 1986 RI concluded that contaminated groundwater from the CPLA and Tar Plant was discharging to the Ohio River, but the discharge was not detectable since the river contained contaminants similar to those found in Site groundwater upstream and downstream of the Site. Contaminant loading modeling indicated that the groundwater contaminants discharging to the Ohio River would not be detectable at the City of Ironton's drinking water intake.

Allied Chemical conducted air sampling during the 1986 RI during worst-case conditions by collecting air samples when the most highly contaminated material at the Site, the tar sludge in Lagoon 5, was disturbed with a backhoe. Allied Chemical did not detect any discernible atmospheric volatile organic emissions at the perimeter of the tar sludge area during this sampling.

After the 1986 RI was complete, EPA, OEPA, and Allied Chemical divided the Site into two OUs to expedite the completion of the FS for the GDA (OU1). Allied Chemical completed an Endangerment Assessment and a FS Report for the GDA in 1988. Allied Chemical completed an Endangerment Assessment and a FS Report for the remaining areas of the Site (OU2) in 1990. The OU2 Endangerment Assessment and FS addressed the CPLA, contaminated groundwater below the Tar Plant, and limited areas of soil contamination at the Tar Plant.

Allied Chemical's EA for the GDA examined potential contaminant exposure pathways from the GDA including ground water, surface water (Ohio River contamination via ground water), soil, and air. The potential receptors included Amcast workers drinking contaminated groundwater from Amcast's wells (if bottled water was not supplied), recreational users in the Ohio River ingesting surface water, and workers at the closest business inhaling airborne contaminants. The GDA was covered and fenced, so direct contact with the wastes was not considered a major exposure pathway.

The OU2 EA for the CPLA (and some portions of the Tar Plant) evaluated potential risks to current Coal Grove residents from: Inhalation of downwind dust and vapors; dermal contact with and the incidental ingestion of water in Ice Creek while swimming; using Coal Grove municipal water for drinking and showering; incidental ingestion of contaminated soil while trespassing; and eating fish from Ice Creek. The EA also evaluated potential risks to hypothetical future residents living on the CPLA property and using the contaminated groundwater as a water supply.

The EA for the GDA determined that the contaminated groundwater from the GDA posed an unacceptable risk to people using the groundwater as a source of drinking water. The excess lifetime cancer risk was 6.7 × 10 − 3 . This risk was greater than EPA's acceptable cancer risk range of 1 × 10 − 4 to 1 × 10 − 6 . The noncancer hazard index (HI) calculated for exposure to the GDA groundwater was 3.0, which is greater than EPA's acceptable noncancer HI of 1.0.

Recreational use of the Ohio River did not pose a risk since sampling results did not indicate a significant increase of Site-related contaminants in the Ohio River downstream of the GDA. Air modeling also indicated that potential air releases from the GDA did not pose a significant risk via the air pathway (an excess lifetime cancer risk of 1.6 × 10 − 6 ).

The OU2 EA for the CPLA and portions of the Tar Plant identified unacceptable potential future risks to hypothetical residents living on the CPLA property. The potential future cancer risk was 5.7 × 10 − 3 for children and 3.4 × 10 − 3 for adults. The unacceptable noncancer HIs were 7.1 for children and 4.0 for adults. The cancer risks were primarily due to the concentrations of PAHs in the soil and to benzene and arsenic in the groundwater. The unacceptable noncancer risks were primarily due to cyanide contamination in the groundwater.

The CPLA EA did not identify any unacceptable risks to current Coal Grove residents. The total excess lifetime cancer risk calculated for Coal Grove residents from all exposure pathways was 1.0 × 10 − 5 for children and 2.6 × 10 − 5 for adults. The calculated noncancer HIs for Coal Grove residents for all pathways were well below 1.0, with a maximum HI of 0.163.

At the time of the OU1 and OU2 RI/FS, the Tar Plant was an operating facility with limited accessibility. In 2003, after the Tar Plant closed and the area could be fully investigated, Honeywell (formerly Allied Chemical) entered into a separate AOC with EPA to conduct a RI/FS for the remaining areas of the Tar Plant (OU3) that were not addressed or remediated as part of OU2. Honeywell completed the Tar Plant OU3 RI/FS in 2007 and issued an OU3 RI Addendum in 2008.

The 2007 OU3 RI included: (1) The collection and analysis of 235 soil samples from 146 soil borings down to the water table; (2) 12 paired soil vapor and ambient air samples at locations of highest contaminant concentrations; (3) the installation and sampling of 48 groundwater monitoring wells installed from 28 to 90 feet below ground surface (with 21 locations nested) to horizontally and vertically delineate the groundwater contamination; (4) the installation of 12 DNAPL wells to delineate the extent and thickness of the DNAPL and allow for possible future recovery; and (5) the collection and analysis of 37 Ohio River water and 29 sediment samples to evaluate impacts to the river. Honeywell analyzed the 2007 RI samples for VOCs, PAHs, polychlorinated biphenyls (PCBs), cyanide, arsenic, total phenols, and ammonia. The groundwater samples were also analyzed for nitrate.

Honeywell's 2007 RI for the Tar Plant (OU3) found that the shallow and deep soil on the Main Parcel of the Tar Plant was contaminated with high levels of PAHs (as high as 44,100 mg/kg) and benzene, toluene, ethylbenzene, and xylene (BTEX) (a maximum concentration of 406 mg/kg BTEX). The distribution of PAHs and BTEX in the shallow soil was similar to the distribution of the DNAPL. The soil also contained lesser concentrations of arsenic (maximum concentration of 14.4 mg/kg), PCBs (maximum concentration of 7.7 mg/kg total PCBs), phenols (280 mg/kg), cyanide, and ammonia.

Shallow soil in the River Parcel contained high levels of PAHs and BTEX. High levels of PAHs were also detected in sediment samples collected from the Ohio River adjacent to the Site. The highest concentrations of PAHs in sediment were located downstream of Outfall 001 and ranged from 184 mg/kg to 1,053 mg/kg.

Soil vapor in the Tar Plant OU contained benzene at concentrations as high as 55,000 parts per billion/volume (ppbv) and other VOCs. Benzene (maximum concentration of 0.31 ppbv), toluene, and naphthalene were detected in ambient air.

DNAPL is present in the southern half of the Main Parcel of the Tar Plant and has collected in depressions at the surface of the bedrock. The soil boring data indicates that the DNAPL has not, and is not likely to, migrate toward the Ohio River due to rises in the surface of the bedrock between the Site and the river.

Honeywell completed a Human Health Risk Assessment (HHRA) and a Screening Ecological Risk Assessment (SERA) for the Tar Plant (OU3) in the 2007 Phase 1A RI Report. The HHRA evaluated risks to current trespassers and to future recreational visitors, indoor and outdoor commercial/industrial workers, and construction workers. The HHRA evaluated exposure pathways including dermal contact with and the incidental ingestion of surface and subsurface soil, dust inhalation, the inhalation of ambient air and indoor contaminants via vapor intrusion, dermal contact with and the incidental ingestion of surface water, dermal contact with sediment, and the ingestion of groundwater. The SERA evaluated potential impacts to ecological receptors from exposure to soil and to surface water and sediment in the Ohio River adjacent to the Site.

Honeywell's 2007 OU3 HHRA indicated that the Tar Plant posed an unacceptable risk to current trespassers, future recreational users, future indoor and outdoor commercial/industrial workers, and future construction workers. The total excess lifetime cancer risks ranged from 8 × 10 − 4 to 8 × 10 − 3 . The noncancer HIs ranged from 2 to 1201. The majority of the cancer and noncancer risks were posed by PAHs in the surface and subsurface soil and by concentrations of benzene, toluene, and naphthalene in soil vapor.

The results of the 2007 OU3 SERA indicated that the concentrations of PAHs in the Tar Plant soil posed a hazard to soil invertebrates, worm-eating birds, and predatory birds. Ecological hazard quotients (HQs) greater than or equal to 100 were calculated in scattered areas across the Tar Plant. The SERA also indicated that the concentrations of COCs detected in surface water could cause adverse effects to aquatic receptors. Additionally, the concentrations of Site-related PAHs in sediment could cause adverse effects to benthic organisms (direct contact) and piscivorous birds (food chain).

Allied Chemical and Honeywell conducted Feasibility Studies (FSs) to develop and evaluate cleanup alternatives to address the unacceptable risks associated with the GDA, the CLPA, and the Tar Plant OUs.

The 1988 OU1 FS evaluated four cleanup alternatives for the GDA: No action; slurry wall and cap with groundwater recovery wells inside and outside of slurry wall; incinerate GDA waste and return residual material to GDA, with slurry wall with groundwater recovery wells inside and outside of slurry wall (no cap); and incinerate GDA waste and subsoils with one groundwater recovery well (no slurry wall or cap). All alternatives except the no-action alternative also included groundwater treatment at the on-site WWTP with discharge to the Ohio River under the existing or a modified NPDES permit, connecting Amcast to the municipal water supply, and a DNAPL investigation.

Allied Chemical completed the OU2 FS for the CPLA in 1990. The OU2 FS evaluated varying combinations of cleanup options for the CPLA. Cleanup options for the lagoons and contaminated Coke Plant and OU2 Tar Plant soils included: No action; on-site incineration and off-site waste fuel recovery; partial bioremediation with on-site incineration; partial bioremediation and off-site waste fuel recovery; partial off-site waste fuel recovery with solidification/stabilization of residual materials; and partial bioremediation with on-site waste fuel recovery of lagoon materials and an asphalt and plastic layered cap over the Coke Plant and OU2 Tar Plant soils.

Ice Creek sediment cleanup options included: Monitoring with trigger levels for accelerated monitoring and groundwater remediation; excavation and bioremediation of Ice Creek sediments with lagoon materials; and solidification/stabilization of Ice Creek sediments. All cleanup alternatives included groundwater collection with treatment at the on-site WWTP with discharge to the Ohio River.

Honeywell completed the Tar Plant OU3 FS in 2007. The 2007 FS evaluated eight cleanup alternatives for the contaminated Tar Plant soils, two cleanup alternatives for air, and five cleanup alternatives for Site-related sediment contamination in the Ohio River. The soil alternatives included: No further action; soil cover; low-permeability cover; limited excavation and off-site disposal with either a soil cover or a low-permeability cover; limited excavation with on-site consolidation and a soil cover or a low-permeability cover; and extensive excavation and off-site disposal.

The cleanup alternatives evaluated for the contaminated sediment included: No further action; monitored natural recovery; in-situ capping; dredging and off-site disposal; and a combination of dredging, off-site disposal and in-situ capping. The cleanup alternatives evaluated for the air were no further action and institutional controls (ICs).

EPA selected cleanup remedies for the Allied Chemical Site in RODs EPA issued in 1988, 1990, and 2007. EPA issued three ROD Amendments modifying the remedy in 1995, 1997, and 1998. EPA documented additional changes to the remedy in ESDs EPA issued in 2015 and 2020.

EPA selected the OU1 GDA cleanup remedy in the 1988 ROD. The remedial action objectives (RAOs) for the GDA are to: Mitigate the future generation of contaminated leachate; mitigate the GDA-related contamination of the Amcast potable/sanitary water supply and any other private well supplies located north and northwest of the GDA; mitigate the migration of GDA-related contaminants above applicable Ohio River standards into the Ohio River (Ohio Administrative Code 3745-1-32); and mitigate the potential for direct or indirect contact by the public with hazardous substances in the buried GDA waste.

The major components of the selected GDA remedy included: Constructing a low-permeability slurry wall around the GDA from the ground surface into the low-permeability bedrock; installing a multi-media RCRA hazardous waste cap over the GDA; continuous extraction of groundwater within the containment system with treatment at the existing on-site WWTP located at the CPLA (to be upgraded) to create an inward groundwater gradient within the slurry wall boundaries; extraction and treatment at the on-site WWTP of contaminated groundwater outside the containment system until cleanup standards are achieved; municipal water hook-up for in-plant potable and sanitary uses at the Amcast facility until contaminant levels in groundwater meet the cleanup standards; deed restrictions to limit future uses of the disposal area portion of the property; and a supplemental RI/FS to identify the nature and extent of the DNAPL, develop and evaluate cleanup alternatives, and implement the EPA-approved DNAPL remedy, if different from the currently selected containment alternative.

EPA selected the cleanup remedy for the CPLA in the 1990 ROD. The RAOs for the CPLA cleanup are to: Mitigate the potential for direct or indirect contact of the public with the lagoon area wastes; mitigate the potential for future mobilization of contaminants into the groundwater; mitigate the migration of CPLA-related contaminants into Ice Creek, the Ohio River, and the Coal Grove well field; and remediate all contaminated media to meet ARARs and acceptable risk-based levels for human health and the environment.

The major components of the selected CPLA remedy in the 1990 ROD were: Excavate the entire volume of Lagoon 5 (122,000 cubic yards of material); on-site incineration and waste fuel recovery (heat reuse) of Lagoon 5 material and 31,000 cubic yards of waste coal excavated from the coal overburden area, with the ash to be disposed of at a permitted off-site solid waste facility; excavation and bioremediation on a prepared pad of 40,000 cubic yards of Coke and Tar Plant soils (OU2 ROD Soils Areas 1 to 7); in-situ bioremediation of the remaining volume of material in Lagoons 1 through 4 (475,000 cubic yards), the residual soil in Lagoon 5, and the adjacent inner and outer dikes; monitoring the Ice Creek area and developing a contingency plan in the event that contaminant migration is encountered; groundwater collection, on-site treatment with the groundwater from the GDA, and monitoring; and deed restrictions and fencing.

The 1990 CPLA ROD stated that the cleanup standard for soil was 0.97 mg/kg of PAHc. The standard was based on an excess lifetime cancer risk of 1 ×10 − 6 assuming a direct contact residential land use exposure. The CPLA ROD also provided for an alternative cleanup standard of 97 mg/kg PAHc (a 1 × 10 − 4 cancer risk, which is still within EPA's acceptable risk range) if the threat of direct contact from lagoon soils through residential land use was eliminated by flooding Lagoons 1 through 4 to create a wetland. An assessment of Lagoons 1 through 4 indicated that this area was more likely to be an ecological area than a residential area due to its proximity to Ice Creek and the fact that this low-lying area has historically served as a flood water storage area.

EPA issued ROD Amendments in 1995, 1997 and 1998 modifying the cleanup remedies for the GDA and CLPA based on additional information collected during the predesign and design phases of the project. The three ROD Amendments modified the OU1 and OU2 remedies as follows: Revised the groundwater clean-up standards for benzo(a)pyrene and dibenz(a,h)anthracene for OU1 and OU2 from 0.005 µg/l total to the new MCLs of 0.2 µg/l for benzo(a)pyrene and 0.3 µg/l for dibenz(a,h)anthracene; selected excavation and on-site storage for eventual treatment or placement into the lagoon area for 135,000 additional cubic yards of CPLA soil found to be contaminated with PAHs during the design phase; replaced prepared-pad bioremediation of 40,000 cubic yards of CPLA soil with off-site disposal in an approved landfill; replaced in-situ bioremediation of 475,000 cubic yards of material in Lagoons 1 through 4 with excavation of materials above 97 mg/kg PAHc and wetland development; and replaced incineration of Lagoon 5 materials with recycling, treatment, and/or disposal of the K087 listed waste in an approved off-site hazardous waste facility and the use of the remaining material, excluding debris, as an alternative fuel.

In 2020, EPA issued an ESD for the OU2 CPLA remedy. EPA issued the ESD to formally document a previously accepted change in the soil cleanup standard for arsenic from a residential cleanup level of 0.56 mg/kg selected in the 1990 OU2 ROD to a Site-specific background concentration of 15 mg/kg calculated during the remedial design (RD) phase of the project. See the Cleanup Levels section of this notice for additional information.

EPA issued the Tar Plant OU3 ROD in 2007. The OU3 ROD addressed contaminated soil, sediment and air at the Tar Plant OU. The RAOs for OU3 assumed that future use of the Tar Plant property would be commercial/industrial and may include riverside parks or other recreational use.

The RAOs for the Tar Plant soil are to: Prevent human ingestion and direct contact with soil containing PAHs at concentrations that exceed applicable NCP and Ohio EPA risk management criteria for applicable exposure scenarios; prevent terrestrial invertebrates from being exposed to PAHs at concentrations that may be harmful to invertebrates and worm-eating birds; prevent predatory birds from being exposed to unacceptable concentrations of PAHs; and reduce, to the extent practicable, contaminant leaching from soil that may contribute to groundwater contamination above NCP and/or Ohio EPA risk management criteria.

The RAOs for sediment in the adjacent Ohio River are to prevent human direct contact with sediment containing PAHs that exceed applicable NCP and Ohio EPA risk management criteria for future exposure scenarios, and to prevent benthic invertebrates from direct contact with sediment containing PAHs that exceed preliminary remediation goals based on background toxicity levels. The RAOs for air are to prevent the inhalation of vapors in indoor air in future buildings in excess of NCP and Ohio EPA risk management criteria and to prevent the inhalation of vapors by construction workers during any future grading and/or excavation activities.

EPA's selected cleanup remedy for soil in the 2007 OU3 ROD was the construction of an OEPA-compliant low-permeability solid waste cap over all contaminated portions of the Tar Plant (the entire 16-acre Main Parcel), a geotextile fabric and soil cover over all contaminated portions of the River Parcel (approximately four acres), ICs to protect the integrity of the cap and soil cover, and an IC implementation plan. EPA did not select a low-permeability cap for the River Parcel based on concerns with hydraulic instability caused by hydrostatic pressure differences between the groundwater and surface water which could cause a low-permeability cover to fail.

The selected OU3 remedy for sediment consisted of dredging approximately 3,300 to 5,100 cubic yards of contaminated sediment from the Ohio River using appropriate dredging techniques and turbidity control measures; sediment dewatering and disposal at an approved off-site landfill; evaluating the water from the dewatered sediment during the RD for disposal at the on-site WWTP; and installing an in-situ cap over approximately 0.7 acres of residual sediment contamination using earthen materials (sand, gravel and/or cobbles), engineered materials (geosynthetics or marine mattresses), or a combination of these materials to be determined during the RD. The exact areas and volume of sediment to be excavated and capped would be determined based on additional data collected and evaluated during the RD and post-dredging confirmation sampling.

The selected OU3 remedy for air was ICs in the form of land use restrictions restricting the land to industrial/commercial use and requiring future buildings to include measures ( e.g., physical barriers, venting, monitoring) to protect indoor workers against potential risks from vapor intrusion and outdoor workers during excavation or grading activities.

In 2015, EPA issued an ESD modifying the sediment component of the OU3 remedy based on Honeywell's 2009 and 2011 predesign investigations. The predesign investigations indicated that the volume of sediment requiring excavation increased from 3,300 to 5,100 cubic yards to 50,000 to 60,000 cubic yards, and that the area of sediment requiring capping was 2.3 acres, not 0.7 acres. Due to the significant increase in cost and concerns with potential river bank failure and the destabilization of the adjacent active railroad trackbed, the sediment component of the OU3 remedy was modified from dredging and capping to capping only.

Allied Chemical completed the RD for the GDA remedy in 1992 and constructed the GDA remedial action (RA) from 1993 to 1995 (see Figures 2 and 5 in the Docket). Allied Chemical constructed a soil-bentonite slurry wall around the GDA waste to provide a low-permeability barrier to ground water in-flow and contaminant migration out-flow. The slurry wall has a permeability of approximately 1 × 10 −8 centimeters per second (cm/sec), which exceeds the 1 × 10 −7 cm/sec permeability requirement. Allied Chemical did not key the slurry wall into the bedrock due to concerns that the keying efforts would fracture the bedrock and affect its competence and water-bearing capabilities.

After the slurry wall was constructed, Allied Chemical installed a RCRA Subtitle C hazardous waste compliant cap over the GDA. The cap incorporated a geosynthetic clay liner to minimize future exposure of the buried waste and infiltration. The cap has a permeability of less than 1 × 10 −7 cm/sec. The cap includes a passive gas venting system with capabilities for adding an emissions control system in the future, if needed.

Allied Chemical installed two groundwater pumping wells inside the slurry wall (PW-3 and PW-4) to maintain an inward hydraulic gradient and prevent groundwater contaminants from migrating beyond the slurry wall, and two groundwater pumping wells outside the slurry wall (PW-1 and PW-2) to intercept and extract contaminated groundwater outside the wall. Based on the 1992 Design Report and Allied Chemical's 1992 Design Report Response, EPA revised the groundwater drawdown required to maintain the inward gradient from ten feet to one foot. The groundwater pumped from inside and outside the slurry wall is treated at the on-site WWTP at the CPLA, which was upgraded to add biological and carbon polishing treatment components to the system. The on-site WWTP was later upgraded again in 1997 during the OU2 RA. The treated groundwater is discharged to the Ohio River in compliance with the technical requirements of a Site-specific National Pollutant Discharge Elimination System (NPDES) permit administered by OEPA.

Allied Chemical installed groundwater monitoring wells to monitor the performance of the GDA containment system and the migration of the dissolved and free phase contaminant plumes to assist with delineating the extent of DNAPL and to evaluate potential technologies to address the DNAPL. Allied Chemical also constructed a security fence around the perimeter of the GDA to prohibit trespassing. EPA conducted a final inspection of the OU1 GDA remedy on August 2, 1995. Allied Chemical submitted a final Remedial Design/Remedial Action (RD/RA) completion report for the GDA on September 14, 1995.

Allied Chemical conducted preliminary Site preparation activities for the OU2 CPLA RA from 1994-1995. In 1995, Allied Chemical constructed the CPLA Stormwater Collection/Management System to contain stormwater runoff during the RA. Allied Chemical conducted the OU2 CPLA RA construction activities from 1996 to 2002 (see Figures 3, 4 and 6 in the Docket).

Allied Chemical completed the OU2 CPLA groundwater remedy in 1996 and 1997. The RA for the groundwater remedy included: Installing five groundwater extraction wells and five new groundwater monitoring wells to supplement the existing system; connecting a sixth groundwater extraction well installed in 1992 to the system; and modifying the on-site WWTP to allow for the handling and treatment of the extracted groundwater from the CPLA, the GDA, and the wastewater from the Tar Plant facility operations and to meet NPDES permit requirements. The WWTP modifications included: Installing an iron/suspended solids removal system consisting of aeration/pH adjustment, clarification, and sand filtration; a cyanide removal system using ultraviolet irradiation/oxidation; and flow modifications to the carbon towers organics treatment system. Formal system start-up of the OU2 CPLA groundwater treatment system occurred in June and July 1997.

Allied Chemical conducted the Lagoon 5 remediation activities from 1998 to 1999. Allied Chemical excavated the material in Lagoon 5 down to the underlying clay layer and removed approximately 120,000 tons of waste from the lagoon. Approximately 85,600 tons of coal/coke fines, 16,000 tons of segregated hard tar, and 500 tons of exempted RCRA-K087 listed waste from Lagoon 5 were shipped off-site to power generation plants for feedstock as part of approved alternative fuels programs. Allied Chemical disposed of the contaminated or unusable hard debris (10,800 tons) and soft debris excavated from Lagoon 5 at an off-site landfill. Allied Chemical stabilized 7,100 tons of soft-tar material (RCRA K087 listed waste) from Lagoon 5 on-site and disposed of it at an off-site landfill. Allied Chemical sent the scrap metal that was recovered from Lagoon 5 to a local recycler.

Allied Chemical backfilled the Lagoon 5 excavation with clean, hard debris from previous Site remediation activities ( e.g., concrete pipe supports, brick, and concrete) to an elevation above the water table. The hard debris was covered with 12,000 tons of crushed hard debris and 27,200 tons of soil having PAHc and arsenic concentrations below the 97 mg/kg and 15 mg/kg cleanup levels excavated from other Site areas. Allied chemical seeded and revegetated Lagoon 5, and placed rip-rap along the sides of the lagoon at the tie-ins with the City of Ironton Floodwall.

Based on the results of additional sampling conducted in Lagoons 1 to 4 in 1997, the Lagoon 2 materials were the only materials with PAHc concentrations above the alternate 97 mg/kg PAHc cleanup standard documented in ROD Amendment #3 that required excavation. Allied Chemical removed 8,300 tons of hard tar and 1,200 tons of coal/coke fine materials from Lagoon 2 in 1999 and shipped the material to off-site energy generators for feedstock. Allied Chemical backfilled the excavated areas in Lagoon 2 with 2,000 tons of clay material excavated from Lagoon 5 that had PAHc concentrations less than 97 mg/kg and arsenic concentrations less than 15 mg/kg. Allied Chemical placed a six-inch layer of imported fill material over the excavated area then tapered and sloped the sidewalls of Lagoon 2 downward into the partially backfilled area to create a depression to facilitate the collection of standing water to aid in the development of the wetland ecosystem.

Allied Chemical conducted a Reconnaissance Ecological Risk Assessment for Lagoons 1 to 4 in 1999 before the lagoons were converted into wetlands. The assessment evaluated potential ecological impacts from residual PAHc concentrations in the Lagoons 1 to 4 materials after the Lagoon 2 materials were removed. Allied Chemical's 1999 assessment followed EPA's Sediment Quality Triad Approach and included a vegetation study. The assessment indicated that residual concentrations of PAHc in Lagoons 1 to 4 at concentrations less than or equal to the alternate 97 mg/kg cleanup level would not significantly impact the planned wetland ecosystem or the aquatic or vegetative communities of the converted wetland areas.

Allied Chemical completed the conversion of Lagoons 1 to 4 into wetlands in 2002. The wetland conversion included: Construction of an overflow weir adjacent to Lagoon 4 and placement of rip-rap ( i.e., brick and concrete) in selected areas to minimize erosional effects during flood events; permanent modification of the sluice gate adjacent to Lagoon 3 to permit complete hydraulic connection with Ice Creek to allow for equalized inflow/outflow during flood events; and adoption of an annual monitoring program to evaluate the re-establishment of vegetation and assess the condition of the biological community.

Allied Chemical completed the OU2 soil remediation of the CPLA and OU2 Tar Plant soils, with the exception of the soil in OU2 ROD Soils Area 2, in 2000 (see Figures 3 and 4 in the Docket). The contaminated CPLA soils (OU2 ROD Soils Areas 1, 3 and 4) were excavated to a maximum depth of ten feet. The OU2 Tar Plant soils (OU2 ROD Soils Areas 5 to 7) were excavated to five feet and were not fully characterized due to the ongoing Tar Plant operations. The remaining Tar Plant soils were later addressed by Honeywell during the OU3 Tar Plant investigation and cleanup.

The CPLA OU2 ROD Soils Area 2 could not be remediated because this area is located within the bermed area of the East Tank Farm which contains components of the WWTP for the long-term OU1 and OU2 groundwater cleanup. The soil within OU2 ROD Soils Area 2 will remain on the NPL and is not included in this partial deletion action. OU2 ROD Soils Area 2 is located within the fenced portion of CPLA Parcel 2 which is owned by Allied Chemical/Honeywell. The area is planned for future characterization and remediation when decreased activity levels in this area will minimize potential disruption to the operations of the ongoing groundwater cleanup. It is expected that the OU2 ROD Soils Area 2 materials will be characterized, excavated, and disposed of at an off-site landfill.

Allied Chemical disposed the excavated OU2 CPLA and Tar Plant soils as non-hazardous solid waste in an off-site landfill in accordance with ROD Amendment #2. The excavated soils included: 18,100 tons of soil from CPLA ROD Soils Area 1; 4,000 tons of soil from CPLA ROD Soils Area 3 and the active Truck Scale Facility; 2,600 tons of soil from CPLA ROD Soils Area 4; and 4,700 tons of soil from OU2 Tar Plant ROD Soils Areas 5 to 7.

During the OU2 RA, Allied Chemical excavated contaminated soil and materials from additional areas of the CPLA in accordance with the 1995 ROD Amendment #1 (see Figure 3 in the Docket). These included: Excavating 44,000 tons of surficial coal fines accumulated from the off-loading of feed materials for the coke oven batteries for off-site use as an approved alternative fuel at cement kiln facilities and power generation plants; excavating 17,700 tons of fuel-grade overburden materials from the western portions of Lagoons 2 and 4 for off-site energy recovery; excavating 6,000 tons of petroleum hydrocarbon-contaminated soil from the former Coke Plant Ammonia Concentration Building for off-site disposal as a non-hazardous solid waste; excavating 23,500 tons of PAH-contaminated soils west and south of the former coke oven batteries and other Site areas and disposing the soil with PAHc concentrations greater than 97 mg/kg or arsenic concentrations greater than 15 mg/kg at an off-site landfill as a non-hazardous wastes (3,700 tons) and backfilling the remaining soil into the Lagoon 5 excavation; excavating 3,500 tons of contaminated soil from the Trucker's Parking Lot area and an area located adjacent to the East Tank Farm and backfilling the material into Lagoon 5; excavating 35,000 tons of coal and coke fines and 500 tons of hard tar from the slope of the City of Ironton floodwall for off-site use as alternative fuel; excavating 63,000 tons of material with measured concentrations of PAHc less than 97 mg/kg and arsenic less than 15 mg/kg from the East Side Batteries Area for use as backfill along the toe of the City of Ironton floodwall slope and excavating 8,600 tons of material from this area for off-site energy recovery; and disposing 13,000 tons of hard debris (brick and concrete) and 500 tons of soft debris (wood, plastic, trash, etc.,) encountered in excavated areas as a non-hazardous solid waste at an off-site landfill. Allied Chemical completed these cleanup actions in 2000.

Documentation of the OU2 RA construction activities is provided in the October 23, 2002 Interim Remedial Action Report for Coke Plant/Lagoon Area (CPLA) Operable Unit at the Honeywell-Ironton Facility, which is available in the Docket.

Honeywell initiated OU3 construction activities (see Figure 7 in the Docket) in 2014 starting with the River Parcel. Honeywell conducted Site preparation activities and sealed eight groundwater monitoring wells. Honeywell cleaned out and demolished a concrete oil-water separator type structure at the top of the river bank and removed its associated piping and waste material for off-site disposal. Honeywell relocated the CPLA WWTP outfall, Outfall 001, which discharged to the Ohio River near the demolished structure, to a discharge located on Site at the south property boundary. Honeywell constructed a new storm water system for the Main Parcel with direct discharge to the Ohio River using former NPDES outfall structures 001 and 002.

Honeywell stabilized the riverbank at the soil and sediment interface of the River Parcel with 35,150 square feet of one-foot thick stone-filled Polymeric Marine Mattresses (PMMs) and rip-rap mixed with soil staked with live plant stakes. The PMMs were installed from elevation 512 feet to 515 feet. The rip-rap was installed from elevation 515 feet to 519 feet with some overlap on the PMMs. Honeywell placed the live plant stakes in the rip-rap/soil every three feet on center.

Honeywell removed 75 tons of debris from the Ohio River and installed three separate types of subaqueous sediment caps covering a total of 2.3 acres in the river. Cap A covers the majority of the area and consists of a minimum six-inch sand chemical isolation layer covered by a minimum six-inch gravel erosion protection and filter layer. Caps B and C have the same sand and gravel layers as Cap A but are covered with an additional 12-inches (Cap B) and 18-inches (Cap C) of a cobble erosion protection layer.

Honeywell installed a soil cover over the upland portion of the River Parcel ( i.e., the riverbank) to prevent direct contact with affected soils by humans and potential ecological receptors. The soil cover consisted of 18 inches of vegetative fill covered by six inches of topsoil. Honeywell installed an orange geogrid layer below the vegetative fill to demarcate the underlying subgrade material.

Honeywell installed coir (coconut fiber) matting over the topsoil from the top of the upland slope to the rip-rap at the bottom of the slope and coir logs at the base of the slope, between the soil cover and the rip-rap, to prevent erosion until the vegetation was established. Honeywell installed a temporary irrigation system and planted a mixture of native grasses, sedges and forbs on the sloped soil cover from elevation 519 (the top of the rip-rap) to elevation 547 (the bottom of the railroad embankment), and container plants (trees and shrubs) every ten feet on center from elevation 519 to elevation 538. Honeywell installed a gravel access road and gate near the top of the slope just above the 10-year flood elevation (about 535 feet). Honeywell completed the River Parcel remediation and restoration in 2015.

Honeywell conducted the remedial action construction for the OU3 Main Parcel in 2015. Honeywell demolished the remaining buildings and structures on the Main Parcel and sealed 51 groundwater monitoring wells and one pumping well. Honeywell installed a low-permeability solid waste-compliant cap over the entire 16-acre Main Parcel area (see Figure 7 in the Docket). The low permeability cap consists of a six-inch sand cushion layer over the contaminated soil covered by (from the bottom up): A geosynthetic clay liner (GCL), a 40-mil low-density polyethylene (LDPE) geomembrane layer, a 12-inch sand drainage layer with lateral underground drains to remove water from the top of the LLDPE, a 12-inch protective soil cover layer for vegetative growth, and six inches of topsoil.

Honeywell installed a gas venting system below the cover system to prevent any buildup of gas. The system includes lateral gas collection pipes installed under the six-inch bottom sand cushion layer that are connected to three gas vents along the western edge of the cover. Honeywell installed soil gas monitoring probes around the perimeter of the cap. The gas monitoring probes are spaced approximately 400 feet apart with screens set at 10 feet, 25 feet, and 40 feet below grade.

Honeywell seeded and mulched the topsoil layer of the cover system, constructed a gravel access road along the southern and eastern boundaries of the Main Parcel to provide access to groundwater extraction wells, and constructed a chain-link fence along the perimeter of the Main Parcel, except along South Third Street where an ornamental fence was installed.

EPA, OEPA, and Honeywell conducted a pre-final/final inspection of the River Parcel on November 13, 2014 and a pre-final/final inspection of the Main Parcel on December 16, 2015. Documentation of the OU3 RA construction activities is provided in the March 2016 Final Remedial Action Completion Report for OU3 which is available in the Docket.

EPA, OEPA, and EPA's contractors provided oversight of the cleanup at the Allied Chemical Site throughout the OU1, OU2, and OU3 RD/RAs. EPA and OEPA conducted a pre-final inspection of the Allied Chemical Site on December 19, 2015. During the inspection EPA verified that all remedial actions were conducted in accordance with the approved RD plans and specifications. A punch list of outstanding activities was prepared during the inspection. Honeywell addressed and completed all of the punch list activities by May 4, 2016. A final OU3 inspection and Site walk-through was conducted on June 1, 2016. EPA completed a Preliminary Close Out Report for the Site documenting that the RA construction activities were complete on September 29, 2016.

The soil (land) remedy for the OU1 GDA is in-situ containment of the waste disposal area; therefore the 1988 OU1 ROD does not establish cleanup levels for the GDA waste.

EPA established the cleanup levels for the OU2 CPLA soil in the 1990 OU2 ROD. The OU2 soil cleanup levels applied to soil, the materials in Lagoons 1 to 4, the soil remaining in Lagoon 5 after the removal of the Lagoon 5 waste, and the adjacent dikes. The OU2 CPLA soil cleanup levels were a total PAHc concentration of 0.97 mg/kg and an arsenic concentration of 0.56 mg/kg. These cleanup levels are based on a hypothetical residential exposure, with the cumulative cancer risk level not to exceed 1 × 10 −6 . The 1990 OU2 ROD also required ICs in the form of deed restrictions to prevent any residential or recreational use of the Site.

In March 1995, Allied Chemical submitted a petition to EPA and OEPA providing a statistical evaluation of arsenic concentrations measured at the Site during the 1994 CPLA predesign investigations compared to regionally established background concentrations of arsenic. This petition resulted in the Agencies' adoption of a revised cleanup level for arsenic in soil of 15 mg/kg. This revised cleanup standard for arsenic was identified in several Site reports including the EPA and OEPA-approved 2002 Interim Remedial Action Report for the Coke Plant/Lagoon Area and EPA's 2004 Five-Year Review report for the Site.

Allied Chemical recorded Environmental Deed Restrictions prohibiting residential and recreational use of the CPLA property with the Lawrence County Recorder's office on August 22, 2002 in Plat Book 10/Page 181. EPA formally documented the revised soil cleanup standard for arsenic of 15 mg/kg in an ESD EPA issued in May 2020.

EPA revised the PAHc cleanup level for the Lagoons 1 to 4 material in ROD Amendment #3 in 1998. ROD Amendment #3 selected the alternate cleanup level of 97 mg/kg for PAHc provided in the 1990 OU2 ROD. The 1990 OU2 ROD allowed the 97 mg/kg PAHc alternate cleanup level if the threat of direct contact with the lagoon materials through residential use was eliminated by flooding Lagoons 1 to 4 to create a wetland. The 1999 Reconnaissance Ecological Risk Assessment that Honeywell conducted before converting Lagoons 1 to 4 into a wetland further indicated that the residual concentrations of PAHc in Lagoons 1 to 4 at concentrations less than or equal to the alternate 97 mg/kg cleanup level would not significantly impact the planned wetland ecosystem or the aquatic or vegetative communities of the converted wetland areas.

EPA selected cleanup levels for the OU3 Tar Plant soil and Ohio River sediment in the 2007 OU3 ROD. The cleanup level for soil on the Main Parcel and the River Parcel of the Tar Plant is 0.16 mg/kg of benzo(a)pyrene. This cleanup level is based on a cancer risk of 1 × 10 −6 under future industrial/commercial and recreational use of the property.

The cleanup level for the Ohio River sediment in the 2007 ROD was total PAH concentrations that are equal to or less than background sediment toxicity levels for aquatic receptors (benthos) in sediment from upstream sources. That is, the ROD required the sum of Environmental Sediment Toxicity Benchmark Units (ESTBUs) for Site-impacted sediment to be less than or equal to 10.0. During the RD process, and as allowed by the OU3 ROD, the ESTBU sediment cleanup values of 10, which are based on direct measurements of PAH concentrations in pore water and may overestimate PAH bioavailibity and pore water toxicity, were refined to use an Equilibrium Pore Water Toxic Unit (EPWTU) of 5 instead.

Allied Chemical's OU2 RD/RA for the soil and lagoon remediation was conducted in accordance with the 1992 CPLA Quality Assurance Project Plan (QAPP). The 1992 CPLA QAPP was used as the governing document to guide the field sampling, treatability studies, and analytical activities performed throughout the CPLA RD/RA, including field and laboratory Quality Assurance/Quality Control (QA/QC) procedures and data validation protocols. In addition, task-specific work plans were prepared and followed for each significant activity, including: Pre-Design Investigations for Bioremediation, Groundwater, and Waste Fuel Recovery; Coal Overburden Characterization and Removal; Site Soils and ROD Soils Characterization and Removal; Lagoon Materials Delineation; Floodwall Slope Restoration; East Side Batteries Characterization and Removal; Ice Creek Monitoring Program; and CPLA Compliance Monitoring Program and Stormwater Collection and Monitoring Program.

QA/QC activities for the OU2 CPLA ROD Soils, including OU2 ROD Soils Area 1 (including the Neal Junkyard portion), Area 3 (including the Truck Scale portion), and Area 4, included field sampling to delineate the areal and vertical extent of the impacted areas, followed by excavation to the agreed upon maximum depth of 10 feet. The OU2 Tar Plant ROD Soils Areas 5 to 7 were similarly delineated and the impacted materials excavated to the agreed upon maximum depth of 5 feet.

Allied Chemical collected soil samples from 0-1.0 foot, 1.0-2.5 feet, and 2.5-5.0 feet below ground surface (bgs) in each of the OU2 ROD Soils Areas to determine the final depth of the excavation. CPLA ROD Soils Areas 1, 3 and 4 were additionally sampled from 5.0-7.5 and 7.5-10.0 feet bgs. The soil samples were analyzed for PAHc and arsenic in accordance with the approved USEPA Contract Laboratory Program (CLP) Statements of Work for Organics and Inorganics, respectively, which were in effect at the time of analysis.

The most-highly contaminated sample from each of the excavated OU2 ROD Soils Areas underwent additional testing prior to disposal. The additional tests included RCRA toxicity characteristic leaching procedure (TCLP) analysis, a paint filter test, and the RCRA hazardous characteristic tests for reactivity, corrosivity, and ignitability.

Allied Chemical conducted an initial characterization of the additional CPLA soils identified for remediation in the 1995 ROD Amendment #1 in 1994 and 1995. The soil samples were collected in incremental one-foot intervals down to a maximum depth of 10 feet. In areas with coal and other fuel-grade overburden material, the overlying coal or fuel-grade layer was removed down to the “visually-clean” underlying native materials, and afterwards samples were collected from the top foot and then at the 4.0-5.0 feet depth of the native material. In 1997, the sampling protocol was revised to be consistent with the OU2 ROD Soils Areas sampling, with samples collected from 0.0-1.0 foot, 1.0-2.5 feet, 2.5-5.0 feet, 5.0-7.5 feet, and 7.5-10.0 feet bgs. The samples were analyzed for PAHc and arsenic.

The additional CPLA soils that required remediation based on the predesign investigation were excavated to a maximum depth of 10 feet and the materials were stockpiled on-site. Soil containing PAHc concentrations greater than 97 mg/kg or arsenic concentrations greater than 15 mg/kg were disposed off-site following TCLP and hazardous characteristic testing. Before the stockpiled materials were placed in the Lagoon 5 excavation, the materials were sampled again for PAHc and arsenic at a frequency of 1 sample for every 2,000 cubic yards to confirm they were below cleanup standards.

CPLA soil materials in the area adjacent to the East Tank Farm were characterized using samples collected from 0.0-1.0 foot, 1.0-2.5 feet, 2.5-5.0 feet, 5.0-7.5 feet, and 7.5-10.0 feet intervals. Soil in the Truckers' Parking Lot was sampled incrementally at 0.5-foot intervals from the ground surface to the underlying native material (based on visual observations). Samples of the native material were then collected at 0.5-foot intervals until the analytical results indicated that the concentrations of PAHc and arsenic were below 0.97 mg/kg and 15 mg/kg, respectively. The excavated materials from these areas were either disposed off-site or backfilled directly into Lagoon 5 if they were below cleanup levels.

Characterization of the CPLA East Side Batteries Area focused on the materials in the former Coke Plant processing areas and extending east to the City of Ironton Floodwall. Near-surface materials were removed to expose the underlying “visually-clean” native material. Samples were collected from the native material in 0.5-foot intervals until the concentration of PAHc was less than 0.97 mg/kg and arsenic was less than 15 mg/kg. Based on the analytical results, the materials were excavated and sent off-site for disposal (after TCLP and hazardous characteristic testing) or stockpiled to be placed along the toe of the floodwall in the Lagoon Area. The stockpiled materials were subjected to another round of sampling for PAHc and arsenic at a frequency of 1 sample for every 2,000 cubic yards prior to placement along the floodwall.

Allied Chemical discovered soil contamination in the CPLA Ammonia Concentration Building Area during other Site work due to the discoloration of the soil (a green tint) and a petroleum-like odor. This area was not specifically identified in the CPLA ROD or ROD Amendments. Allied Chemical sampled the material and detected elevated levels of total petroleum hydrocarbons (TPHC).

Allied Chemical conducted a focused investigation in the Ammonia Concentration Building Area and collected soil samples at depth intervals corresponding to 0.0-5.0 feet and 5.0-10.0 feet at designated locations. The samples were analyzed for TPHC using EPA Method 418.1. Based on a review of State of Ohio cleanup standards for hydrocarbon-contaminated soils that were in effect at the time, a Site-specific TPHC cleanup level of 100 mg/kg was adopted for the Ammonia Concentration Building Soils. Allied Chemical excavated the sampled material having TPHC concentrations greater than 100 mg/kg and disposed of it at an off-site landfill following TCLP and hazardous characteristic testing.

The 1990 OU2 ROD and subsequent amendments required the entire contents of Lagoon 5 to be removed. Allied Chemical excavated all of the materials in Lagoon 5 (about 120,000 tons) down to the visually encountered clay layer. Allied Chemical then removed about 2,000 tons of the Lagoon 5 clay, sampled the material to confirm that concentrations of PAHc and arsenic were below the cleanup criteria of 97 mg/kg PAHc and 15 mg/kg arsenic, and backfilled the clay into the excavated areas of Lagoon 2.

The materials in Lagoon 2 that required excavation were delineated during Allied Chemical's 1997 Lagoon Materials Delineation Program. The program involved collecting samples from Lagoons 1 to 4 for PAHc analysis. The PAHc sample data was combined with other existing data for the lagoons and used in a statistical evaluation to determine which materials required removal in order to maintain an overall average concentration of PAHc less than 97 mg/kg to meet the 1998 ROD Amendment #3 requirement for converting the lagoons into a wetland system. The analysis indicated that only certain areas of Lagoon 2 required excavation. Additionally, potential ecological risks posed by the residual PAHc concentrations in the lagoons were evaluated in the 1999 Reconnaissance Ecological Risk Assessment and through the performance of subsequent annual ecological assessments to confirm that the remedial action for the constructed wetlands met objectives.

Honeywell conducted the OU3 Tar Plant RA in accordance with the 2013 Construction Quality Assurance Plan, the 2013 Construction Quality Assurance Plan—Main Parcel, and the 2014 Construction Quality Assurance Plan—River Parcel. The RA for the Main Parcel was a low-permeability solid waste cap containment remedy over the entire 16-acre Main Parcel. The RA for the upland area (riverbank slope) of the River Parcel was a geotextile fabric and soil cover over the entire 4-acre upland area of the River Parcel. Because these remedial actions were containment/cover remedies over the entire property, confirmation sampling was not required. Instead, surveys were conducted to confirm that the RAOs were attained.

The areas of Ohio River sediment that exceeded the refined cleanup level of the sum of EPWTU of 5 or where tar was observed were identified as areas that required remediation during the RD based on the predesign investigation studies. Sediment within the design capping area had sums of EPWTU values that ranged from 5 to 40, while values outside the capped area were less than 5.

The final capped area and thickness of the OU3 Ohio River sediment remedy was confirmed by comparing a baseline multi-beam bathymetric survey conducted prior to capping to verification multi-beam bathymetric surveys conducted after each layer of the cap was placed to check for areal extent and material thicknesses. Honeywell's construction managing contractor monitored the surveying results and verified that the quality and coverage of the cap met the specified design. The construction manager contractor notified the construction contractor of any deficiencies to be corrected during construction, and approved the final completion of areas post-construction.

Operation and maintenance (O&M) activities at the Allied Chemical Site are extensive and include activities associated with groundwater/wastewater operations, monitoring systems, engineered structure maintenance, landscaping, and security. Honeywell's O&M costs for the period 2014 to 2018 averaged over $1.1 million annually.

Honeywell conducts the GDA groundwater monitoring in accordance with the 1994 GDA Remedial Action Monitoring Plan. The CPLA groundwater monitoring and Ice Creek monitoring is performed in accordance with the general protocols outlined in the 1995 CPLA Groundwater Compliance Sampling and Analysis Plan. Honeywell monitors and conducts O&M for the lagoons/wetlands in accordance with the 2000 Lagoon Area Wetlands/Floodplain Conversion Plan. Honeywell conducts O&M on the Tar Plant River Parcel in accordance with the 2015 Operation, Maintenance and Monitoring Plan—River Parcel. The Tar Plant Main Parcel O&M is conducted in accordance with the 2016 Draft Main Parcel Operation, Maintenance, and Monitoring Plan.

The O&M program includes comprehensive groundwater monitoring, potentiometric monitoring, chemical analysis, NPDES discharge monitoring, Site inspections, and any necessary repairs. The groundwater monitoring program includes monitoring contaminant concentrations and groundwater levels to assess the containment of the GDA waste, maintenance of Site-wide hydraulic control, and for the presence of DNAPL. Honeywell also conducts periodic bathymetric surveying in the Ohio River to monitor the performance of the underwater sediment cap.

Honeywell monitors methane gas semiannually at the Main Parcel. In 2002, the Gas Vent Sampling Program at the GDA was terminated based on Honeywell's 2002 Air Emissions Evaluation Report. The 2002 Air Emissions Evaluation Report evaluated the analytical data from 14 consecutive quarterly air monitoring events and determined that the emissions of volatile organic compounds from the four GDA vents was insignificant. The 2002 report also concluded that the ambient impact to the nearest public receptor due to emissions from the vents was orders of magnitude lower than the corresponding Maximum Allowable Ground Level Concentration. As stipulated by EPA and OEPA, Honeywell continues to maintain the gas vents in the event that future sampling is required. At this time, however, no further sampling is anticipated.

Honeywell began annual lagoons/wetland monitoring in 2002. In 2012, Honeywell submitted the Lagoon Area Vegetation and Benthic Macro-invertebrate Monitoring Report, which summarized the activities and findings from the annual wetlands/ecological assessments conducted within the Lagoon Area (Lagoons 1, 2, 3, 4, and 5). Based on consultation with OEPA, EPA informed Honeywell that the final decision to determine whether the re-establishment of the wetland/floodplain community has been achieved would be made after evaluating the field results using OEPA's Vegetation Index of Biotic Integrity (VIBI) Assessment Process.

Honeywell agreed to perform the VIBI assessment on three categories of observed wetland vegetation—forested, scrub/shrub, and emergent—in order to properly represent and assess each vegetative community. Honeywell completed the VIBI Assessment in 2014. Based on this assessment, OEPA and EPA approved the discontinuation of monitoring in Lagoons 1, 3, 4, and 5. The VIBI assessment, however, identified the need to address Lagoon 2 to control the invasive species Purple Loosestrife.

Honeywell completed three herbicide applications in Lagoon 2 in July 2015, 2016, and 2017. Honeywell conducted a follow-up VIBI Assessment of Lagoon 2 in August 2019. The results of the 2019 VIBI are being evaluated. The Lagoon 2 vegetation will continue to be monitored and maintained as part of ongoing O&M.

The 1988, 1990, and 2007 RODs require ICs at the Site. The ICs are a protective measure used in conjunction with the containment and active treatment methods to restrict property use, maintain the integrity of the cleanup remedies, and to assure long-term protectiveness for Site areas which do not allow for unrestricted use/unlimited exposure (UU/UE). The ICs implemented at the Allied Chemical Site include Environmental Covenants (ECs), Environmental Restrictions, city ordinances, and local zoning requirements. A 1989 Unilateral Administrative Order and a 2010 Consent Decree made the ICs a binding requirement on Allied Chemical/Honeywell. Copies of the ICs for the Allied Chemical Site are available in the February 2020 Updated Institutional Control Implementation and Assurance Plan (ICIAP) in the Docket.

The IC for the 8.5-acre portion of the OU1 GDA that includes the landfill cap and slurry wall (see ID 18 on Figure 2 in the Docket) is an EC that was recorded with the Lawrence County Recorder's office on September 14, 2018. The EC requires isolation and containment of the waste pit and DNAPL, prohibits the use of groundwater, prohibits residential activities and exposure, and prohibits activities that would interfere with the slurry wall, cap and, groundwater extraction remedies.

The EC for the remaining 1.5 acres of the GDA that are outside the boundaries of the cap and slurry wall, but above areas with groundwater contamination (Figure 2, IDs 22 and 23), restricts the land use to commercial/industrial activities, prohibits residential use and other residential-type activities such as schools, hospitals, assisted living and daycare facilities, food stores, restaurants and indoor and outdoor entertainment and recreational facilities, prohibits the consumption of groundwater, and prohibits food chain products, manufacturing, and warehousing. This EC was recorded with the County on September 14, 2018.

Land and groundwater use on the OU2 CPLA (Figure 2, IDs 1 to 17) is restricted by Environmental Deed Restrictions recorded with the Recorder's office on August 22, 2002 in Plat Book 10/Page 181. These deed restrictions: Prohibit residential and recreational exposure on the properties; prohibit future use that is incompatible with the remedial actions; prohibit the consumption of groundwater and interference with the remedy; and ensure proper maintenance.

ECs are implemented on two on-site parcels of the Tar Plant OU3 and one off-site parcel (approximately 0.19 acres of the sediment cap on off-site property). The EC for the Tar Plant Main Parcel property, which consists of the 16-acre landfill cap (Figure 2, ID 19) and the EC for the 12-acre River Parcel property, which includes the soil cap on the river bank and part of the Ohio River sediment cap, permit the properties to be used only for commercial/industrial activities, prohibit residential use and other residential-type use, prohibit the use of groundwater, and prohibit future use that is incompatible with the remedial actions and any interference with the remedy. The EC for the River Parcel also prohibits drilling, dredging, and/or vessel anchoring on the capped sediment area. These ECs were recorded with the Lawrence County Recorder's office on September 14, 2018.

The EC for the off-site sediment parcel in the Ohio River (Figure 2, ID 21) was recorded with the Lawrence County Recorder's office on September 26, 2018. This EC prohibits any activities which would interfere with or adversely affect the integrity or the protectiveness of the sediment cap, and does not permit any drilling, dredging, and/or vessel anchoring on the property.

Land and groundwater use on OU1, OU3, and most of OU2 (the portion of OU2 located within the City of Ironton) is additionally restricted by the City of Ironton Municipal Code Chapter 1272, 1977 and Code 1046.35, 2013. Chapter 1272 prohibits the installation of groundwater wells within the City, with the exception of wells installed on commercial property used exclusively and solely for irrigation. Zoning ordinance Code 1046.35 restricts OU1, OU3 and the OU2 property located in Ironton to General Industrial Use.

Long-term stewardship (LTS) is addressed at the Allied Chemical Site through the implementation of the ICIAP and IC monitoring, the ECs, Environmental Deed Restrictions, and local government controls, in conjunction with engineering controls, O&M, and routine Site inspections, to ensure that the remedy remains protective and continues to function as intended. The Allied Chemical Site achieved EPA's Site-Wide Ready for Anticipated Use designation on October 2, 2018.

The Allied Chemical Site requires statutory five-year reviews (FYRs) due to the fact that hazardous substances, pollutants, or contaminants remain at the Site above levels that allow for unrestricted use/unlimited exposure (UU/UE). EPA completed FYRs for the Allied Chemical Site in 1999, 2004, 2009, 2014, and 2019.

EPA completed the most recent FYR for the Site in September 2019. EPA's 2019 FYR found that the Site-wide remedy protects human health and the environment. The exposure pathways that could result in unacceptable risks are being controlled and the cleanup remedies are operating as expected. Site-wide threats have been addressed through: Waste containment and isolation (through the slurry wall, low-permeability hazardous waste and solid waste-compliant caps, soil, and sediment covers, and wetlands conversion); excavation with off-site disposal or off-site energy recovery; on-site groundwater containment, extraction and treatment; and ICs that restrict land use, prohibit groundwater use, and prevent activities that could impair the integrity of the engineering controls.

The 2019 FYR concluded that in order for the remedy to be protective in the long-term, an ICIAP needed to be completed and the LTS procedures from the ICIAP need to be incorporated into the O&M plans for OUs 1, 2, and 3. Honeywell submitted a revised ICIAP to EPA on March 11, 2019 and an updated ICIAP to EPA on February 14, 2020. EPA approved Honeywell's updated ICIAP on March 5, 2020. EPA and OEPA are currently evaluating whether the O&M Plans for the Site need to be amended to incorporate the ICIAP, or whether the ICIAP can be implemented as a stand-alone document in conjunction with the current O&M Plans for OU1, OU2 and OU3.

Copies of EPA's 1999, 2004, 2009, 2014, and 2019 FYR Reports are available in the Docket. EPA expects to complete the next FYR for the Allied Chemical Site in 2024.

EPA satisfied public participation activities for the Allied Chemical Site as required by Sections 113(k)(2)(B)(i-v) and 117 of CERCLA, 42 U.S.C. 9613(k)(2)(B)(i-v) and 9617. In 1986, EPA developed a Community Relations Plan for the Allied Chemical Site. EPA established a local information repository for the Site at the Briggs Lawrence County Public Library in Ironton, Ohio. EPA maintains a copy of the administrative record documents for the Allied Chemical Site at the local information repository, at EPA's Region 5 office in Chicago, Illinois, and on EPA's web page for the Allied Chemical Site at http://www.epa.gov/superfund/allied-chemical-ironton .

EPA distributed fact sheets to the community throughout the Site investigations and cleanups to inform the public about Site activities. In 1986, EPA held a public meeting to present the findings of the OU1 and OU2 RI to the community. EPA released the FS Reports and proposed cleanup plans for the Site to the public in August 1988, September 1990, and July 2007 at the start of the OU1, OU2, and OU3 public comment periods. EPA published newspaper announcements advertising EPA's proposed cleanup plans for the Site, the 30-day public comment periods, and the availability of public meetings, in the Ironton Tribune. EPA mailed fact sheets summarizing the proposed OU1, OU2 and OU3 cleanup plans to individuals on the Site mailing list.

EPA and OEPA conducted public meetings on August 16, 1988 and October 23, 1990. At the meetings, EPA and OEPA explained the details of the Allied Chemical OU1 and OU2 FSs, discussed the proposed cleanup plans, answered questions from the community, and accepted public comments. A court reporter was present to record the meetings. EPA distributed copies of the Proposed Plan fact sheets at the meetings. EPA offered to hold a public meeting to present and discuss EPA's proposed cleanup plan for OU3, but a meeting was not requested.

EPA received a request to extend the public comment period for the OU2 proposed cleanup plan during the October 23, 1990 meeting. As a result, EPA extended the comment period for 30 days. EPA published a notice of the public comment period extension in the Ironton Tribune. On November 7 and 8, 1990, EPA conducted interviews with local officials, residents, and a local environmental interest group to assess community concerns regarding the Site and to evaluate past community relations activities. EPA used the information collected during these interviews to update the 1986 Community Relations Plan and EPA's mailing list.

On November 19, 1990, EPA and Ohio EPA appeared before the Ironton City Council and members of the public to answer additional questions about the Site and the proposed OU2 cleanup plan. EPA distributed a “Question & Answer” fact sheet to provide easy-to-understand answers to the questions raised by the community. EPA mailed a copy of the “Question & Answer” fact sheet to all individuals on the updated mailing list for the Site.

EPA received three public comments during the proposed plan public comment period for OU1, 25 public comments and one concern during the comment period for OU2, and two public comments during the comment period for OU3. EPA responded to the comments in Responsiveness Summaries attached to the 1988, 1990, and 2007 RODs.

EPA issued fact sheets summarizing the proposed ROD Amendments #1 (1995), #2 (1997), and #3 (1998), and held thirty-day public comment periods to accept comments on the proposed ROD Amendments. EPA also held a public meeting on March 30, 1995 to discuss EPA's proposed ROD Amendment #1. EPA did not receive any public comments on proposed ROD Amendments #1 or #2, and only positive comments on EPA's proposed ROD Amendment #3.

EPA placed a copy of the 2015 OU3 ESD and the 2020 OU2 ESD in the information repositories at the Briggs Lawrence Public Library and at EPA's Region 5 office, in the administrative record file, and on EPA's web page for the Allied Chemical Site at https://www.epa.gov/superfund/allied-chemical-ironton .

EPA published advertisements announcing EPA's FYRs for the Allied Chemical Site in the local newspaper, the Ironton Tribune, at the start of the 1999, 2004, 2009, 2014, and 2019 FYRs. The newspaper announcements informed the community about the start and purpose of the FYRs and invited the public to submit comments and concerns about the Site to EPA. EPA placed copies of the FYR Reports in the local information repository at the Briggs Lawrence County Public Library and made them available on EPA's website.

In 2011, EPA and the City hosted a workshop with Site property owners and representatives from local businesses, adjacent properties, local educational and healthcare institutions, and local and state government to plan for Site reuse. In 2018, EPA conducted interviews with the City of Ironton mayor, residents, and businesses as part of the 2019 FYR process, to document any perceived problems or successes with the remedy.

EPA has satisfied public participation activities for this partial deletion of the Allied Chemical Site as required by CERCLA section 113(k), 42 U.S.C. 9613(k), and CERCLA section 117, 42 U.S.C. 9617. EPA arranged to publish an advertisement announcing this proposed direct final Partial Deletion and the 30-day public comment period in the Ironton Tribune concurrent with publishing this partial deletion in the Federal Register . Documents in the deletion docket, which EPA relied on for recommending the partial deletion of the Allied Chemical Site from the NPL, are available to the public at https://www.regulations.gov and at https://www.epa.gov/superfund/allied- chemical-ironton . Documents in the Docket include maps which identify the Allied Chemical Site; the locations of OU1, OU2 and OU3; areas of contamination and remediation; and the ICIAP, FYRs, and other Site reports.

The soil (land) portion of OU1 (GDA); the soil (land) and lagoons portion of OU2 (CPLA), except for the OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm (see Figure 3 in the Docket); and all of OU3 (which only addressed contaminated soil and sediment at the Tar Plant and in the adjacent Ohio River), meet all of the site completion requirements specified in Office of Solid Waste and Emergency Response (OSWER) Directive 9320.2-22, Close Out Procedures for National Priorities List Sites. All cleanup actions and remedial action objectives for OU1 soil, OU2 soil and lagoons (except for OU2 ROD Soils Area 2), and OU3 set forth in the 1988, 1990, and 2007 RODs, the 1995 to 1998 ROD Amendments #1 to #3, and the 2015 ESD have been implemented for all pathways of exposure. The selected remedial actions, RAOs, and associated cleanup levels for OU1 soil, OU2 soil, and lagoons (except for OU2 ROD Soils Area 2) and OU3 are consistent with EPA policy and guidance. No further Superfund response is necessary to protect human health or the environment from the soil portion of OU1, the soil and lagoons portion of OU2 (except for OU2 ROD Soils Area 2), or from OU3.

Section 300.425(e) of the NCP states that a Superfund site or a portion of a site may be deleted from the NPL when no further response is appropriate. EPA, in consultation with the State of Ohio, has determined that all required response actions have been implemented for the soil portion of OU1, the soil and lagoons portion of OU2 (except for the OU2 ROD Soils Area 2), and all of OU3, and that no further response action is appropriate for these media/areas.

EPA, with concurrence of the State of Ohio, through the OEPA, has determined that all appropriate response actions under CERCLA, other than maintenance, monitoring, and five-year reviews, have been completed for the soil (land) portion of OU1 (GDA), the soil (land) and lagoons portion of OU2 (CPLA), except for the OU2 ROD Soils Area 2 located within the bermed area of the East Tank Farm (see Figure 3 in the Docket), and all of OU3 (which only addressed contaminated soil and sediment at the Tar Plant and in the adjacent Ohio River) of the Allied Chemical Site. Therefore, EPA is deleting the soil portion of OU1, the soil and lagoons portion of OU2 except for the OU2 ROD Soils Area 2, and all OU3, of the Allied Chemical Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective August 24, 2020 unless EPA receives adverse comments by July 24, 2020. If adverse comments are received within the 30-day public comment period, EPA will publish a timely notice of withdrawal of this direct final Notice of Partial Deletion before its effective date and the partial deletion will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to partially delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

This final rule replaces and renumbers in its entirety the Committee's regulations in 41 CFR part 51-8 to reflect statutory changes associated with the Freedom of Information Act.

The Freedom of Information Act (FOIA) at 5 U.S.C. 552, requires agencies to “promulgate regulations, pursuant to notice and receipt of public comment, specifying the schedule of fees applicable to the processing of requests [the FOIA] and establishing procedures and guidelines for determining when such fees should be waived or reduced.” Additionally, an agency may, in its regulation, designate those components that can receive FOIA requests, provide for the aggregation of certain requests, and provide for multitrack processing of requests. Finally, the FOIA requires agencies to “promulgate regulations . . . providing for expedited processing of requests for records.”

On June 30, 2016, the FOIA Improvement Act of 2016 (Act) was signed. The Act requires agencies to notify requesters for engaging in dispute resolution through the FOIA Public Liaison and the Office of Government Information Services. It also requires that agencies:

(i) Make records that have been both released previously and requested three or more times available to the public in electronic format,

(ii) Establish a minimum of ninety days for requesters to appeal an adverse determination, and

(iii) Provide, or direct requesters to, dispute resolution services at various times throughout the FOIA process.

The FOIA Improvement Act also adds restrictions to when agencies can charge certain fees if they are not able to meet FOIA's time limits.

The changes associated with this final rule are consistent with Department of Justice's Guidance for Agency FOIA Regulations issued September 8, 2016, and adopts both the format and suggested language of the accompanying Template for Agency FOIA Regulations.

The Committee for Purchase From People Who Are Blind or Severely Disabled published a proposed rule in the Federal Register at 84 FR 23005, May 21, 2019. No comments were received.

This rule is not a significant regulatory action under E.O. 12866 and E.O. 13563.

The Committee believes this final rule is an E.O. 13771 deregulatory action. Many of the measures included in this document should facilitate FOIA requests and production by making it easier for requesters to research and review the Committee's FOIA rule before submitting a request. It is deregulatory in nature in that it provides relief to requestors however the Committee is unable to quantify these savings.

It has been certified that this rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities.

This rule does not contain an information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

This rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments.

FMCSA organizes this final rule as follows:

For access to docket FMCSA-2017-0370 to read background documents and comments received, go to https://www.regulations.gov at any time, or to Docket Operations at U.S. Department of Transportation, Room W12-140, West Building Ground Floor, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to https://www.regulations.gov, as described in the system of records notice “DOT/ALL 14—Federal Docket Management System (FDMS),” which can be reviewed at https://www.transportation.gov/privacy .

The purpose of this regulatory action is to amend and reorganize 49 CFR part 350, including adding relevant sections that are currently located in part 355, and to address certain regulations that are no longer necessary or are redundant. Moreover, the FAST Act requires FMCSA to implement a multi-year CVSP with annual updates for States  1 applying for MCSAP funds and to provide a new MCSAP allocation formula. This rule implements the new MCSAP allocation formula, requires States to adopt 3-year CVSPs, and reorganizes the Agency's regulations to create a standalone subpart for the High Priority Program. FMCSA's primary legal authority for this rulemaking is Title V, Subtitle A of the FAST Act, Public Law 114-94, 129 Stat. 1312, 1514-34 (Dec. 4, 2015).

This rule implements a new MCSAP allocation formula that is effective for FY 2021 grant funds and beyond. The FAST Act required the Secretary of Transportation (Secretary) to assemble a working group to recommend a new MCSAP allocation formula. The Agency considered and fully adopts the recommendations of the working group.

The new MCSAP allocation formula includes three components: State, Border, and Territory. The formula assigns each component a percentage of MCSAP funds. The State Component allocates funds using five equally-weighted factors and then applies minimum and maximum caps to the allocated funding. The Border Component allocates funding based on the number of United States ports of entry and the number of commercial motor vehicle (CMV) crossings at those ports of entry, subject to minimum and maximum funding levels. This Border Component accounts for differences in the number of crossings per port of entry at the Northern border compared to the Southern border of the United States. Finally, the Territory Component ensures that each Territory, except for the Commonwealth of Puerto Rico (which is allocated funding under the State Component), receives a minimum funding amount of $350,000. The formula adds any funds not allocated under the Border or Territory Component to the State Component for allocation. The formula promotes stability in funding and protects States from experiencing significant and unpredicted changes by including a hold-harmless provision and a funding cap.

This rule requires States to use CVSPs in accordance with the FAST Act, and provides direction to States on how and when to submit CVSPs on 3-year cycles. For the first year of the CVSP, States submit quantitative performance objectives, analysis of past performance, and other documents traditionally provided in an annual CVSP, as well as a budget for the initial year. For the second and third years of the CVSP, States submit an annual update that includes changes to the CVSP (including updates to performance objectives and adjustments to activities), a budget for the applicable fiscal year, and other documents required on an annual basis.

FMCSA clarifies that it is a State's obligation to cooperate in the enforcement of hazardous materials safety permits for interstate and intrastate carriers issued under subpart E of 49 CFR part 385 by verifying possession of the permit when required while conducting vehicle inspections and investigations. This rule does not require States to adopt part 385 as a condition of receiving MCSAP funds, but States are strongly encouraged to do so to support a comprehensive CMV safety program.

The rule also revises and reorganizes part 350. Currently, part 350 intertwines the High Priority Program and MCSAP regulations, but some regulations do not apply to both programs. To provide clarity for the eligible recipients, this rule separates the two programs into different subparts in part 350. In addition, FMCSA adds relevant sections of part 355 to part 350. These changes address regulatory compatibility, reduce redundancy, and make part 350 more clear and concise.

Finally, FMCSA removes part 388, titled “Cooperative Agreements with States.” FMCSA does not rely on part 388 provisions to enter into agreements with State partners because there is no specific funding for that part.

This rule adopts a new MCSAP allocation formula to replace the current formula that has been in use for more than a decade with little modification. The new formula makes several improvements over the current formula. The new formula will result in a reallocation of grant funding, beginning with FY 2021, but will not change the total amount of funds distributed.

The rule requires States to use CVSPs in accordance with the FAST Act. It also provides direction to States on how and when to submit CVSPs on 3-year cycles. Under the current regulations, States submit lengthy CVSP applications annually to receive MCSAP funding. However, beginning in FY 2018, States began voluntarily submitting CVSPs on 3-year cycles, as is now required by this rule. Following the implementation of this rule, States will no longer be able to submit annual CVSP applications and must submit robust 3-year CVSP applications for the first year, with annual updates for the second and third years. Based on experience from voluntary implementation, FMCSA expects that 3-year CVSPs will be less burdensome and time consuming for States than submitting lengthy CVSP applications annually, which will result in lower program administrative costs. All 55 current MCSAP participants  2 voluntarily transitioned to 3-year CVSPs, and thus, there is no impact from this change.

FMCSA has and continues to issue the regulations found in 49 CFR parts 350 and 355 under the authority of 49 U.S.C. 504, 13902, 31101, 31102, 31104, 31106, 31108, 31136, 31141, 31161, 31310, 31311, and 31502.

The primary basis for this rule is Title V, Subtitle A of the FAST Act, Public Law 114-94, 129 Stat. 1312, 1514-34 (Dec. 4, 2015), which consolidated several of FMCSA's financial assistance programs and authorized program funding levels through FY 2020. Key provisions, effective FY 2017, include section 5101, which amended 49 U.S.C. 31102, consolidating the former New Entrant, Performance and Registration Information Systems Management (PRISM), Safety Data Improvement, and Border Enforcement grant programs into the MCSAP formula grant. In addition, it established the High Priority Program as a separate discretionary financial assistance program for qualifying entities and projects relating to motor carrier safety and Innovative Technology Deployment. Section 5101 also amended 49 U.S.C. 31104, which prescribes, among other things, authorized funding levels through FY 2020, the minimum Federal funding share applicable to these (and other) FMCSA financial assistance programs, and the periods of time in which awarded funds may be used.

Section 5106 of the FAST Act (note following 49 U.S.C. 31102) required the Secretary to appoint a working group, consisting of prescribed stakeholder interests, to develop and recommend to the Secretary a new MCSAP allocation formula reflecting specified factors for the award of MCSAP funds. Following receipt of the working group's recommendations, section 5106 required the Secretary to issue a notice of proposed rulemaking (NPRM). The working group submitted its report on April 7, 2017, and an addendum to the report on January 8, 2019. As noted below, FMCSA issued its NPRM on August 22, 2019 (84 FR 44162).

Section 5107 of the FAST Act (note following 49 U.S.C. 31102) addresses the maintenance of effort calculations for FY 2017 and subsequent fiscal years until the new MCSAP allocation formula is in place. It also allows States to request a one-time permanent adjustment to their maintenance of effort baselines in the first fiscal year of the new MCSAP allocation formula.

FMCSA has authority under Federal hazardous materials transportation law, 49 U.S.C. 5101-5128, to require States to cooperate in the enforcement of Federal hazardous materials safety permit requirements as a condition to qualify for MCSAP funds. The purpose of the hazardous materials transportation law is “to protect against the risks to life, property, and the environment that are inherent in the transportation of hazardous material in intrastate, interstate, and foreign commerce” (49 U.S.C. 5101). Section 5109(a) provides that a “motor carrier may transport or cause to be transported by motor vehicle in commerce hazardous material only if the carrier holds a safety permit” issued by FMCSA. The Secretary has authority to prescribe what hazardous materials require a safety permit (49 U.S.C. 5109(b)). In addition, the Secretary has authority to require States to adopt provisions compatible with Federal provisions on hazardous materials transportation safety to receive MCSAP funds (49 U.S.C. 31102(c)(1)). Exercising these authorities, this rule clarifies that States are required to cooperate in ensuring carriers transporting certain hazardous materials possess the required FMCSA hazardous materials safety permit.

Any clarifying or non-substantive changes made by this final rule that are not explicitly attributed to the FAST Act or 49 U.S.C. 5101-5128 are made under one or more of the statutory authorities listed at the beginning of this section. FMCSA implements these statutory provisions by delegation from the Secretary in 49 CFR 1.87.

On August 22, 2019, FMCSA published an NPRM titled “ Motor Carrier Safety Assistance Program” in the Federal Register (84 FR 44162). FMCSA received one comment requesting an extension of the comment period. On October 9, 2019, FMCSA published a notice extending the comment period to October 21, 2019 (84 FR 54093). FMCSA received three additional comments on the NPRM. No public meeting was requested and none was held.

The NPRM included a detailed discussion of the background for this regulatory action, including the history of MCSAP, the FAST Act changes to MCSAP, a previous omnibus rule that implemented portions of the FAST Act, the working group, and States' voluntary transition to 3-year CVSPs. That discussion is not repeated here, but can be found in the published NPRM (84 FR at 44165-7).

A detailed summary of the proposed rule can be found in the NPRM (84 FR at 44167-72), which includes discussion of the separation of MCSAP and the High Priority Program provisions, the proposed MCSAP allocation formula, and the proposed 3-year CVSP requirements. It also included discussions of the following topics: (1) The proposed changes to fully implement the PRISM program; (2) the FMCSA Administrator's discretion to distribute funding during an extension of the Agency's authorization or a period the Agency is operating under a continuing resolution; (3) the relocation to 49 CFR part 350 of relevant requirements of part 355 relating to regulatory compatibility: (4) A State's obligation to cooperate in the enforcement of hazardous materials safety permits for interstate and intrastate carriers; and (5) the removal of 49 CFR part 388 for which there is no specific funding and therefore no reliance by the Agency. Finally, FMCSA discussed changes to improve the organization of part 350, update definitions, and clarify when a State may retain an exemption for a particular segment of the motor carrier industry from all or part of its laws or regulations that were in effect before April 1988.

FMCSA received four comments on the NPRM. The first comment requested an extension to the comment period, which was granted (as noted above in Regulatory History). The second comment was non-responsive to the NPRM and, as such, is not discussed here. The Department of California Highway Patrol (CHP) and the Commercial Vehicle Safety Alliance (CVSA) submitted the remaining two comments. Both comments responded to the five questions posed in the NPRM. The Agency summarizes those comments below.

Q.1. Are there other elements FMCSA should consider including in a new MCSAP allocation formula and, if so, what are they? Why should such elements be considered? How would they promote safety?

Comments: Both the CHP and CVSA agreed with the MCSAP elements as proposed. CVSA stated that the “working group conducted a rigorous review of the current formula components, as well as an extensive review of alternative data points before arriving at the final recommendation. The group used safety-based methodology and sought to balance the needs of individual [State] programs with the overarching goal of MCSAP. The final recommendations are designed to direct MCSAP funds to where they can most benefit overall commercial motor vehicle safety, while providing [S]tates with funding stability that enables program managers to plan and adjust their programs accordingly.” CVSA also noted that any changes to the MCSAP elements should be subject to the same evaluation methodology and be based on the same priorities as those considered by the working group. The CHP commented that the funding allocations resulting from the proposed elements appropriately assist the CHP in promoting greater safety and compliance with regulatory requirements within the framework of current CHP operations that meet or exceed FMCSA grant program requirements.

Response: FMCSA agrees with the commenters. As such, the Agency does not make any changes to the proposed elements included in the MCSAP allocation formula.

Q.2. Should there be additional requirements in CVSPs to ensure MCSAP funding is used efficiently to promote safety and, if so, what are they? Why should such requirements be considered? How would they promote safety?

Comments: CVSA responded that no additional requirements should be included and that additional requirements would not be effective. CVSA suggested that FMCSA should look for ways to reduce the burden on States by lessening current reporting requirements, particularly with respect to information to which the Agency has direct access or duplicative sections within the CVSP. The CHP suggested that there be a requirement to use “commercially trained” personnel when MCSAP money is used.

Response: The Agency commits to look for ways to minimize burden by reviewing reporting requirements as a part of its annual review of CVSP design.

Existing paragraph (p) of § 350.211 provides a State must certify that MSCAP-funding personnel (including sub-grantees) meet the standards in 49 CFR part 385, subpart C, for performing inspections, audits, and investigations. Rather than repeating all the certifications that correspond to the conditions States must meet to qualify for MCSAP funds, as in existing § 350.211, new §§ 350.211(i)(1)(i) and 350.213(e)(1)(i) provide that States must certify they meet all the MCSAP conditions in proposed § 350.207. The relevant condition as proposed in § 350.207(a)(6) required more broadly that States must provide assurances they have the “qualified personnel necessary to enforce compatible safety laws, regulations, standards, and orders.” The Agency agrees with the CHP comment that the added specificity in existing § 350.211(p) provides clarity regarding what “qualified personnel” includes. Accordingly, FMCSA modifies § 350.207(a)(6) to include language that clarifies certified personnel are required.

Q.3. Should the Incentive Fund be eliminated from a new MCSAP allocation formula? Why should the Incentive Fund be kept or eliminated? How would keeping or eliminating the Incentive Fund promote safety?

Comments: CVSA recommended elimination of the Incentive Fund. CVSA commented that the “Incentive Fund model does not fit within the proposed structure, as it is not correlated with crash risk, nor does it provide stable, reliable funding for the jurisdictions.” It continued, as noted by the working group, “the factors used in the incentive model are no longer relevant. Distributing funds through the incentive model does not ensure that funds are being spent where they can have the most direct impact on safety.”

The CHP stated that the Incentive Fund does not account for statistical anomalies over the 10-year crash average, allowing single or multiple mass-casualty events in a given year ( i.e., an outlier event) to skew allocation of incentive funding. The CHP noted, if the Incentive Fund is retained, it should be modified to allow the exclusion of statistical outlier events.

Response: As the working group and CVSA noted, the factors used in the Incentive Fund are no longer relevant. Thus, as proposed by the working group and in the NPRM, the Agency eliminates the Incentive Fund.

Q.4. Should a new MCSAP allocation formula include variables connected with crash rates or risk? If so, what variables should be considered and why? How would such variables promote safety?

Comments: CVSA recommended basing allocations on crash risk variables, as proposed by the working group. CVSA noted that the working group considered a number of different variables and measures before concluding that using crash risk, rather than crash rates or other crash-related metrics, would most effectively allocate funds to improve safety. CVSA stated “[f]ocusing on crash rates may have the unintentional effect of moving funds away from a jurisdiction that has a higher risk of crashes but has been successful in reducing the occurrence of those crashes through implementation of their enforcement and outreach programs.”

The CHP agreed with using crash rate variables, but noted the need to adjust crash rates to ensure that outlier events weigh less heavily than the overall number of crashes, to avoid results that present an inaccurate crash picture. The CHP continued that “crash trends indicate a more accurate reflection of the true impacts of enforcement effectiveness than the sheer number of fatalities in a single [crash].”

Response: FMCSA acknowledges the comments, which are in line with the formula proposed by the working group and included in the NPRM that bases allocations on crash risk variables. Because FMCSA eliminates the Incentive Fund and the MCSAP formula factors do not use crash rate data, the MCSAP allocation formula adopted in this rule should not produce the unintentional effects identified by CVSA and the CHP. Accordingly, the Agency does not change the proposed formula in this rule.

Q.5. 3 Should a new MCSAP allocation formula be more sensitive to changes in crash rates? If so, how could a new allocation formula be more sensitive to changes in crash rates and why would it be more sensitive to such changes? How would such a formula promote safety?

Comments: CVSA responded that the proposed allocation formula already balances a number of different factors, such as crash risk, with States' need for reliability and continuity in funding. CVSA recommended that FMCSA consider any suggested changes to the proposed formula carefully, as changes will likely disrupt the balance and have a negative impact on the overall performance of the new formula. While relationship to crash risk is a critical factor, CVSA responded that it is imperative that funds not shift too quickly or unpredictably. If States are not confident in the timing and amount of grant funding, they will be reluctant to fill positions, continue enforcement programs, or engage in bold new initiatives. The CHP commented that a formula that is more sensitive to changes in crash rates would harm States with outlier events, causing a reduction in funding for otherwise successful enforcement and education programs.

Response: FMCSA agrees that an allocation formula that focuses on crash rates can have unintended consequences and harm States when an outlier event occurs. Basing the formula on crash risk, rather than crash rates, most effectively allocates funds to improve safety. The careful balance in the allocation formula of crash risk and predictability in funding is integral to ensuring robust safety programs and innovation. As such, the Agency makes no changes to the proposed formula in this rule.

CVSA also provided several additional comments. Some were more general in nature, and others were suggestions related to one or more specific sections, as reflected in the below discussion of those comments.

CVSA supported FMCSA's efforts to revise part 350 to make necessary updates and clean up irrelevant sections because clarity and uniformity in the regulations are the cornerstones of an effective, consistent enforcement program. CVSA supported separate subparts for the requirements of MCSAP and the High Priority Program and the new requirements for CVSPs, stating these changes bring additional clarity to the regulations, improving States' ability to understand and comply with the requirements in part 350. As discussed above, CVSA supported the adoption of the recommendations set forth by the working group included in this rule. CVSA encouraged FMCSA to continue working to improve the existing data sets and identify potential new ones.

Comment: CVSA noted FMCSA proposed to implement the changes beginning with FY 2020; however, the comment period for the rulemaking ended after the beginning of the fiscal year. CVSA stated that the Agency should not move ahead with implementing the new allocation formula until after the close of the comment period and the Agency issues its final rule. Noting that States and FMCSA need time to prepare for and adjust their programs, CVSA recommended that the Agency implement the allocation formula and changes to part 350 beginning with FY 2021.

Response: FMCSA agrees that States need time to prepare for the changes and adjust their programs accordingly. Therefore, FMCSA modifies § 350.103 to provide that the changes to part 350 take effect for FY 2021 financial assistance funds and beyond.

Comment: CVSA supported the definition changes FMCSA proposed with one exception. It requested that the definition for the North American Standard Inspection (NASI) include attribution to CVSA, as CVSA owns all rights to non-regulatory elements created within the NASI.

CVSA agreed with the proposed elimination of an exception for 49 CFR 171.15 and 171.16 in the definition of Hazardous Materials Regulations (HMRs) and stated it would improve reporting and data collection. However, CVSA noted the preamble discussion made it appear the referenced sections apply only to investigations and not to roadside inspections, but it found the discussion unclear. CVSA requested that the Agency clarify how this change would impact roadside inspections, or add language explaining it applies only to investigations.

Response: With respect to the request to acknowledge CVSA's role in the development of the NASI, FMCSA revises the proposed definition to continue use of the language in existing § 350.105. The existing definition states that FMCSA and CVSA developed the inspection criteria.

Sections 171.15 and 171.16 contain requirements to provide a telephone or online report to the Pipeline and Hazardous Materials Safety Administration (PHMSA) through the National Response Center within 12 hours of a reportable incident (as defined by § 171.15) and a written report to PHMSA within 30 days of a reportable incident (as defined by § 171.16). Because the timing of these reports is tied to specific incidents, they are not generated and enforced through commercial vehicle inspections. This should provide the clarity CVSA requested.

Comment: CVSA expressed concern that the proposed regulations were ambiguous in terms of what States must do to qualify for MCSAP funding. Specifically, proposed § 350.201(b)(3) required States to “[a]dopt and enforce effective motor carrier, CMV, and driver safety regulations and practices consistent with Federal requirements.” Proposed § 350.207(a)(2) provided that to qualify for MCSAP funds a State must improve motor carrier safety “by adopting and enforcing compatible safety laws and regulations, standards, and orders.” CVSA noted the inconsistent language and that the proposed regulations no longer spelled out precisely which Federal Motor Carrier Safety Regulations (FMCSRs) and HMRs must be adopted by States to have compatible laws. CVSA requested that FMCSA revise the language to specifically identify which parts must be adopted.

Response: With respect to § 350.201(b)(3), CVSA points out an unintended consequence of the proposed language. FMCSA intended § 350.201 to be an overview of the goals and purposes of MCSAP. The Agency further intended paragraph (b) to be a restatement of existing § 350.103 regarding the purpose of part 350, which restates the goals of MCSAP in 49 U.S.C. 31102(b). By replacing the introductory paragraph of existing § 350.103 with the phrase “MCSAP requires States to” in proposed § 350.201(b) for brevity, the Agency appeared to add new requirements for States that were inconsistent with those stated in the conditions of participation in proposed § 350.207. This was not FMCSA's intent. To address this issue, FMCSA replaces the phrase “MCSAP requires States to” with a slightly modified version of the introductory paragraph in existing § 350.103. FMCSA also makes changes in § 350.201(b)(3) to maintain consistency in the use of the term “compatible,” as discussed in the next paragraph.

CVSA correctly points out that, except for the definition section, the proposed regulations no longer spelled out precisely which FMCSRs and HMRs States had to adopt to have compatible laws. One of the Agency's goals for this rulemaking is to provide clarity for States with respect to compatibility issues. Currently, there are duplicative regulations addressing compatibility and inconsistent terminology is used when discussing compatibility. This understandably confused States. FMCSA addresses these issues by (1) integrating pertinent provisions of part 355 into part 350 to improve the organization and eliminate duplication of the compatibility regulations, and (2) using clearly defined terms consistently throughout part 350. As such, the Agency defines “compatible” and “compatibility” as terms of art in § 350.105 using the terms “FMCSRs” and “HMRs.” In turn, the Agency defines the terms “FMCSRs” and “HMRs” in § 350.105 by stating the specific regulatory parts included in those definitions that States must adopt. The intent is to simplify the regulatory text and improve consistency by substituting defined terms of art instead of lengthy repetitions of the parts of the regulations States must adopt and enforce, which are prone to being stated inconsistently. Because FMCSA's approach differs from what States are accustomed to, FMCSA revises the proposed regulatory text in this final rule to include cross-references to § 350.105 the first time “compatible” or “compatibility” is used in a section to remind readers to consult the specific regulatory definition.

While reviewing the new terms in proposed § 350.105 to respond to CVSA's comment, the Agency noticed the proposed definition of “compatible” and proposed § 350.303(d) conflicted with the underlying statutory provision in 49 U.S.C. 31141(c). Paragraph (c)(4) of that statutory section provides a State law or regulation on CMV safety (a CMV is defined in 49 U.S.C. 31132 to mean, in part, a vehicle used in interstate commerce) that is in addition to or more stringent than the FMCSRs may be enforced unless the Secretary decides that (A) the State provision has no safety benefit; (B) the State provision is incompatible with the FMCSRs; or (C) enforcement of the State provision would cause an unreasonable burden on interstate commerce (49 U.S.C. 31141(c)(4)). FMCSA included the criteria in proposed § 350.303. Proposed § 350.303(d)(2)(iii) provided that, for such State provisions to be compatible with the FMCSRs and enforceable, the State had to demonstrate that (A) the State provisions had a safety benefit; (B) the State provisions were compatible with the FMCSRs; and (C) enforcement would not cause an unreasonable burden on interstate commerce. In doing so, FMCSA inadvertently created a standard to determine “compatibility” that uses the term “compatible,” which would effectively nullify some of the standard. Thus, FMCSA must align the regulations with the underlying statutory authority.

The Agency corrects this regulatory conflict by changing § 350.303(d)(2)(ii) to provide that the State must demonstrate, in part, a law, regulation, standard, or order on CMV safety that is in addition to or more stringent than the FMCSRs “does not unreasonably frustrate the Federal goal of uniformity.” This change emphasizes the need for uniformity while providing flexibility to States with innovative safety requirements that are not identical to the national norm. Similarly, the Agency modifies the definition of “compatible or compatibility” in § 350.105 relating to interstate commerce to incorporate the statutory standard (as set forth in § 350.303(d)(2)(ii)) to ensure there is no discrepancy between statute and regulation.

Comment: CVSA expressed support for the addition in proposed § 350.207(a)(28) that States document compliance with hazardous materials safety permit requirements in the course of inspections they conduct. It noted, however, that States would need additional time to adopt 49 CFR part 385.

Response: FMCSA clarifies that the rule does not require States to adopt part 385, but States are strongly encouraged to do so to support a comprehensive CMV safety program. States must cooperate in the enforcement of hazardous materials safety permit requirements under part 385 by verifying possession of the permit when required while conducting vehicle inspections and investigations. States are not required, however, to investigate or enforce violations under part 385. This change fosters communication between States and FMCSA by having State enforcement personnel verify the presence of a hazardous materials safety permit, when required, during vehicle inspections and investigations that States conduct so FMCSA can take appropriate enforcement action when warranted. FMCSA revises the proposed regulatory text to clarify the requirement for States regarding hazardous materials safety permits.

Comment: CVSA opposed removing the requirement that a State submit a training plan as part of the CVSP process. It stated that training for inspectors is critical to a uniform, effective national inspection program and that currently inspectors do not receive enough training. CVSA said that removing the requirement could result in a jurisdiction putting less focus on training, impacting both the State's program and the national program negatively.

Response: FMCSA disagrees. While the existing regulations include a requirement for States to include training plans, the electronic commercial vehicle safety plan (eCVSP) does not include the training plans, and has not since the eCVSP's implementation in 2013. At that time, a direct reporting process between the States and the National Training Center replaced the State training plans. FMCSA has not observed adverse effects on inspector training because of the direct reporting process. FMCSA will include information in the annual MCSAP application announcement indicating how a State may report its training plan to the National Training Center if the State wishes to do so.

Comment: Section 350.219 clarifies the grant funding distribution process the Administrator may use in the event of an extension of FMCSA's authorization or a continuing resolution impacting the Agency's budget. CVSA stated that it does not object to the proposed approach, but requested that FMCSA add a specific authority citation for clarity. CVSA also requested examples of when and how FMCSA applied this authority in the past.

Response: Adding a specific authority citation to § 350.219 would not clarify the distribution process the Administrator may use in the event of an extension of the Agency's authorization or during a period the Agency operates under a continuing resolution. As stated in the NPRM, the Administrator's discretion to distribute funds in such situations is found generally in 49 U.S.C. 31102. Section 31102 authorizes the Secretary to administer MCSAP. The Secretary's authority is delegated to FMCSA's Administrator in 49 CFR 1.87(f).

The FMCSRs, and any exceptions to the FMCSRs, apply only within the United States (and, in some cases, United States Territories). Motor carriers and drivers are subject to the laws and regulations of the countries in which they operate, unless an international agreement states otherwise. Drivers and carriers should be aware of the regulatory differences among nations.

Unless explicitly set forth below, FMCSA adopts the sections as proposed in the August 22, 2019 NPRM. The Agency makes some revisions in response to comments and to correct regulatory language not aligned with its underlying statutory authority. Otherwise, the final rule makes only minor editorial and grammatical changes to improve clarity or readability, use consistent phrases, conform style, or correct typographical errors.

Subpart A provides a general overview and defines the terms used in part 350, applicable to both MCSAP and the High Priority Program.

FMCSA adopts § 350.101 as proposed.

The Agency revises § 350.103 to provide that the changes to the financial assistance programs take effect for FY 2021, which begins on October 1, 2020, rather than for FY 2020 as proposed. This change accounts for the timing of the issuance of this rule, which is too late to allow for use of the new MCSAP formula in time for FY 2020 grants. FMCSA removes the qualifier “[u]nless otherwise provided” because there are now no effective dates other than October 1, 2020 provided in part 350. FMCSA adds “financial assistance funds and beyond” at the end of the section to clarify that the changes will continue in effect for financial assistance funds awarded in subsequent fiscal years.

The Agency adds a sentence in the introductory paragraph to remind readers that terms used in part 350 but not defined in § 350.105 are subject to the definitions in 49 CFR part 390.

With the exceptions discussed below, FMCSA adopts the definitions as proposed with only minor editorial changes.

FMCSA revises the definition of “compatible or compatibility” to align with and incorporate the standard in 49 U.S.C. 31141(c) regarding when a State may enforce a law, regulation, standard, or order on CMV safety that is in addition to or more stringent than the FMCSRs. In paragraph (1) pertaining to interstate commerce not involving hazardous materials, the standard of paragraph (1) of proposed § 350.105 becomes subparagraph (i). New subparagraph (ii) addresses State provisions that are in addition to or more stringent than the FMCSRs. When read together, the definition defines these particular State provisions as compatible with the FMCSRs when (1) they are identical to or have the same effect as the FMCSRs, or (2) if in addition to or more stringent than the FMCSRs, they have a safety benefit, do not unreasonably frustrate the Federal goal of uniformity, and do not cause an unreasonable burden on interstate commerce when enforced. In paragraph (2)(ii) pertaining to intrastate commerce not involving hazardous materials, FMCSA removes and replaces “subpart C of this part” with “§ 350.305 or § 350.307” to more specifically identify the sections addressing intrastate variances. The Agency adds language in paragraphs (1) and (2) to clarify that the standards apply only to commerce “not involving the movement of hazardous materials.” Paragraph (3) remains as proposed.

As explained above, the Agency changes the definition of “North American Standard Inspection” to continue use of the definition in existing § 350.105. The definition reads: “ North American Standard Inspection means the methodology used by State CMV safety inspectors to conduct safety inspections of CMVs. This consists of various levels of inspection of the vehicle or driver or both. The inspection criteria are developed by FMCSA in conjunction with the Commercial Vehicle Safety Alliance (CVSA), which is an association of States, Canadian Provinces, and Mexico whose members agree to adopt these standards for inspecting CMVs in their jurisdiction.”

In the definition of “State,” FMCSA adds the phrase “unless otherwise specified in this part” to emphasize that “State” is defined differently in some sections.

Subpart B provides an overview of MCSAP only. FMCSA revises the title to use the defined acronym for the Motor Carrier Safety Assistance Program.

In § 350.201(b), the Agency changes the paragraph title to “MCSAP purpose” to reflect, as explained above, that this section is a restatement of existing § 350.103 about the purpose of part 350, which restates the goals of MCSAP in 49 U.S.C. 31102(b). In addition, FMCSA replaces the phrase “MCSAP requires States to” with a slightly modified version of the introductory paragraph in current § 350.103 regarding the purposes of part 350, to correct the unintentional appearance of imposing new requirements on States to receive MCSAP funds. The introductory language reads: “The purpose of MCSAP is to ensure FMCSA and States, local government agencies, other political jurisdictions, Federally-recognized Indian Tribes, and other organizations and persons work in partnership to establish programs to improve motor carrier, CMV, and driver safety to support a safe and efficient transportation system by—.” The Agency also makes conforming grammatical changes. Finally, FMCSA removes the phrases “consistent with Federal requirements” and “regulations and practices” from proposed paragraph (b)(3) and uses the defined term “compatible” and the phrase “laws, regulations, standards, and orders” to ensure consistent use of defined terms and phrases in part 350. Paragraph (b)(3) reads: “Adopting and enforcing effective and compatible (as defined in § 350.105 of this part) motor carrier, CMV, and driver safety laws, regulations, standards, and orders.”

FMCSA adopts § 350.203 as proposed.

FMCSA adopts § 350.205 as proposed.

In § 350.207(a)(2), the Agency adds a cross reference to § 350.105 for the definition of “compatible.” In § 350.207(a)(6), FMCSA clarifies that the Lead State Agency must give satisfactory assurances in the CVSP that the Lead State Agency “and any subrecipient of MCSAP funds” has the legal authority, resources, and qualified personnel necessary to enforce compatible laws, regulations, standards, and orders on CMV safety, consistent with current MCSAP requirements. As explained above, FMCSA also adds language in paragraph (a)(6) to clarify that only MCSAP-funded personnel certified in accordance with 49 CFR part 385, subpart C, may perform inspections, audits, and investigations. In § 350.207(a)(28), the Agency clarifies that a State's requirement with respect to hazardous materials safety permits is limited to verifying possession of the permit when required while conducting vehicle inspections and investigations, as applicable.

FMCSA changes the words “MCSAP application memorandum” to “MCSAP application announcement” in § 350.209(b).

FMCSA changes the beginning of several paragraphs from “The first year of the CVSP . . .” to “For the first year of the CVSP, . . .”, with conforming changes to the sentences, for consistency across the sections. In § 350.211(a)(1) and (k), the Agency changes the words “MCSAP application memorandum” to “MCSAP application announcement.” In § 350.211(i)(1)(ii), FMCSA changes the phrase “the State maintains required compatibility” to “State laws, regulations, standards, and orders on CMV safety are compatible (as defined in § 350.105 of this part)” to have consistent terminology with § 350.213(e)(1)(ii). Finally, in paragraph (j), the Agency changes the phrase “that was enacted by the State since the last CVSP or annual update was submitted” to “that was enacted by the State since the prior year's submission” to use consistent terminology in the sections and avoid confusion.

In § 350.213(a), FMCSA changes “a State must submit” to “a Lead State Agency must submit” to use consistent terminology in the sections. In § 350.213(a) and (g), the Agency changes the words “MCSAP application memorandum” to “MCSAP application announcement.” The Agency changes the words “prior year's CVSP” in paragraph (a) and “last CVSP or annual update was submitted” in paragraph (f) to “prior year's submission” to use consistent terminology in the sections and avoid confusion. In § 350.213(e)(1)(ii), FMCSA adds a cross reference to § 350.105 for the definition of “compatible.”

FMCSA changes the section title for clarity. In § 350.215(a)(1)(ii)(B), the Agency adds a cross reference to § 350.105 for the definition of “compatible.” Also, some of the regulatory text detailing the Agency response to the annual update submission was inadvertently left out of paragraph (b)(1). FMCSA adds the phrase “because the annual update” as a lead-in to new paragraphs (A) and (B) in § 350.215(b)(1)(ii), which features the same language as in § 350.215(a)(1)(ii) related to the Agency response for the first year of the CVSP.

In § 350.217(e), the Agency makes minor edits to clarify how the hold-harmless provision and funding cap are calculated. FMCSA adds the quoted language to paragraph (1) to clarify that the dollar amounts calculated under paragraphs (c)(6) and (d)(5) of § 350.217 will be totaled “for each State” and then divided by the total MCSAP funds “available for allocation under paragraphs (c) and (d) of this section” to determine a State's percentage of the total MCSAP funds. In paragraph (2), the Agency changes the location of the word “total” at the beginning of the paragraph so the text reads “percentage of total MCSAP funding.” FMCSA also clarifies that the total MCSAP funding in the prior year does not include amounts allocated to American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the Virgin Islands. In paragraph (3), the Agency adds a cross reference to clarify the State's percentage of MCSAP funds allocated for the prior fiscal year is “as calculated under paragraph (e)(2) of this section.”

In § 350.219, FMCSA deletes the words “appropriations act” after “continuing resolution” in the title and introductory clause of the section.

FMCSA adopts § 350.221 as proposed.

FMCSA changes the words “FMCSA policy” to “the MCSAP application announcement” in § 350.223(b)(1) and (2) to clarify where States can find eligible costs. FMCSA also changes the words “MCSAP application memorandum” to “MCSAP application announcement” in § 350.223(c)(2)(i).

In the introductory paragraph of § 350.225(a), FMCSA deletes the phrase “equal to the average aggregate expenditure of the Lead State Agency” because it is redundant. Section 350.225 reflects, in paragraphs (a)(2) and (e), that the grants issued for FY 2021 will be the first year of grants using the new MCSAP allocation formula. Paragraph (b)(5) now includes a cross reference to § 350.223 to further clarify that the MOE calculation excludes a State's matching funds. Paragraph (c) now includes clarifying language regarding eligible costs for the calculation of the MOE and expenditures under the current MOE.

In § 350.227(c), FMCSA separates the introductory paragraph into paragraph (1) to provide the provisions for State traffic laws and regulations relating to CMVs and a paragraph (2) for those provisions relating to non-CMVs, to clarify that the qualifications for reimbursement of traffic enforcement activities apply only to enforcement of laws and regulations relating to non-CMVs. In doing so, FMCSA moves the phrase “when necessary to promote the safe operation of CMVs” to a new paragraph (c)(2)(i) to further clarify that it is a qualification for reimbursement. The Agency redesignates the following paragraphs accordingly. With the addition of the new paragraph (c)(2)(i), FMCSA deletes the redundant phrase “when necessary to promote the safe operation of CMVs” in paragraph (c)(2)(iii).

In § 350.229(a), FMCSA deletes the words “FMCSA policy,” changes the words “MCSAP application memorandum” to “MCSAP application announcement,” and clarifies where States can find eligible costs. In paragraph (b), FMCSA changes the words “MCSAP application memorandum” to “MCSAP application announcement.”

FMCSA adopts § 350.231 as proposed.

Subpart C includes information related to the MCSAP-required compatibility review and variances for intrastate commerce available to States participating in MCSAP.

In the introductory paragraph, FMCSA adds a cross reference to § 350.105 for the definition of “compatibility.”

In § 350.303(a), FMCSA adds a cross reference to § 350.105 for the definition of “compatibility.” FMCSA revises paragraph (d) to conform to that definition in substance and organization by setting forth the standards applicable to each type of commerce in separate paragraphs, and to use the terms “compatible” and “compatibility” consistently. FMCSA moves proposed paragraph (d)(2)(i) to paragraph (d)(1) with minor edits. The Agency specifies that the State must determine whether its laws, regulations, standards, and orders are identical to or have the same effect as, are in addition to or more stringent than, or are less stringent than the FMCSRs, or are identical to the HMRs. FMCSA removes the words “corresponding provision of” and “provisions of,” as they are unnecessary.

In paragraph (d)(2), FMCSA adds an introductory clause providing that the paragraph applies to interstate commerce not involving the movement of hazardous materials. To align the regulations with the underlying statutory authority as mentioned above, the Agency revises and renumbers proposed paragraphs (d)(2)(ii) through (d)(2)(iv) as paragraphs (d)(2)(i) through (d)(2)(iii) to address the enforceability of State provisions that are identical to or have the same effect as, are in addition to or more stringent than, and are less stringent than the FMCSRs, each in its own separate paragraph. In paragraph (d)(2)(ii) (relating to State provisions that are in addition to or more stringent than the FMCSRs), FMCSA changes the language from “[i]t is compatible with the FMCSRs” to “does not unreasonably frustrate the Federal goal of uniformity.” In paragraph (d)(2)(iii) (relating to State provisions that are less stringent than the FMCSRs), the Agency removes the proposed language providing “unless it falls within the provisions of §§ 350.305 or 350.307” and moves it to paragraph (d)(3)(ii) because it is only applicable to intrastate commerce not involving the movement of hazardous materials.

The Agency adds paragraph (d)(3) to create a separate paragraph that addresses State provisions applicable to intrastate commerce not involving hazardous materials to conform to the definition and organization of “compatible” in § 350.105. In the new paragraph, FMCSA separates into paragraphs (d)(3)(i) and (d)(3)(ii) the standard for State provisions that are identical to or have the same effect as the FMCSRs and the standard for those that differ from the FMCSRs, respectively. The Agency redesignates the following subparagraphs in paragraph (d) accordingly.

Paragraph (d)(4) provides the standard applicable to interstate and intrastate commerce involving the movement of hazardous materials.

Finally, in paragraph (g)(3), the Agency changes the words “State or person” to “petitioner” for clarity.

FMCSA revises the title of this section to improve readability and emphasize that variances are only available for State provisions applicable to intrastate commerce. Otherwise, FMCSA adopts § 350.305 as proposed with only minor editorial changes.

FMCSA revises the title of this section to improve readability. Otherwise, FMCSA adopts § 350.307 as proposed with only minor editorial changes.

In § 350.309(a), FMCSA adds a cross reference to § 350.105 for the definition of “compatible.”

Subpart D describes the High Priority Program.

FMCSA adds to the section title “and what entities are eligible for funding under the High Priority Program” to indicate the section also identifies the eligible entities. Otherwise, FMCSA adopts § 350.401 as proposed with only a minor editorial change.

In § 350.403(e) and (f), FMCSA deletes the phrase “safety data improvement projects” to align with the authorizing statute. Section 350.403(g) already includes “safety data improvement projects;” accordingly, inclusion of the phrase in § 350.403(e) and (f) is duplicative and confusing for the reader.

In § 350.403(h), FMCSA adds the phrase “by States” to clarify that Innovative Technology Deployment funds only may be given to States, in accordance with the authorizing statute. In paragraph (i), FMCSA changes the conjunction “and” to “or” to clarify a High Priority Program project only needs to include one, not all, of the objectives.

FMCSA reorganizes § 350.405 so the High Priority Program eligibility requirements for funds related to motor carrier safety activities for States are in paragraph (a)(1) and applicants other than States are in paragraph (a)(2). Conforming changes are made to the numbering of the paragraphs. In paragraph (b), FMCSA adds the eligibility requirements States must satisfy to qualify for High Priority Program funds for Innovative Technology Deployment activities set forth at 49 U.S.C. 31102(l)(3)(C). FMCSA believes it will be more convenient for applicants to have all the eligibility requirements for High Priority Program funds in one location and to know them prior to the availability of the NOFO.

FMCSA adds a sentence to clarify when an entity must apply for High Priority Program funds.

FMCSA adopts § 350.409 as proposed.

FMCSA revises the paragraph titles to correspond to § 350.405. Otherwise, FMCSA adopts § 350.411 as proposed with only minor editorial changes.

In § 350.413(b), FMCSA removes the word “policy” and replaces it with the words “in the NOFO” to clarify where entities can find eligible costs.

FMCSA adopts § 350.415 as proposed.

FMCSA adopts § 350.417 as proposed.

FMCSA removes and reserves part 355 of title 49 of the CFR (Compatibility of State Laws and Regulations Affecting Interstate Motor Carrier Operations) as proposed. FMCSA also removes and reserves part 388 (Cooperative Agreements with States) as proposed.

The Office of Information and Regulatory Affairs determined that this final rule is not a significant regulatory action under section 3(f) of E.O. 12866, Regulatory Planning and Review (58 FR 51735, Oct. 4, 1993), as supplemented by E.O. 13563, Improving Regulation and Regulatory Review (76 FR 3821, Jan. 21, 2011), and does not require an assessment of potential costs and benefits under section 6(a)(3) of E.O. 12866. Accordingly, the Office of Management and Budget (OMB) has not reviewed it under that Order. In addition, this rule is not significant within the meaning of DOT regulations (84 FR 71714, Dec. 27, 2019).

The purpose of the rule is to amend and reorganize 49 CFR part 350, including adding relevant sections that are currently located in part 355. Certain regulations are no longer necessary or are redundant. Moreover, the FAST Act requires FMCSA to implement a multi-year CVSP with annual updates for States applying for MCSAP funds and to provide a new MCSAP allocation formula. The new MCSAP formula helps the Federal Government operate more efficiently by establishing a reallocation of grant funds based on changes in safety factors. The new formula reallocates FY 2021 grant funding, but does not change the total amount of funds distributed. States are the only affected entities of this rule.

The new MCSAP allocation formula replaces the current formula that has been in use for more than a decade with little modification and makes several improvements over the current formula. The basis of the new formula is a careful statistical analysis of the relationship between numerous highway safety variables, crashes, and fatalities. While this analysis revealed that several of the existing formula factors ( e.g., special fuel consumption and population) remain highly correlated with crashes, newer data are available to more closely link the allocation of funding to safety risk.

The formula discontinues the use of Incentive Funds. Instead, the formula allocates funds primarily based on the calculation of the applicable highway and safety factors. Mitigation measures ensure that State funding levels do not fluctuate substantially from year to year. Specifically, subject to the availability of funding, a State would not have a decrease of more than 3 percent, or an increase of more than 5 percent, compared to its share of the formula grant calculation in the previous year. 4 This provides the State a degree of predictability to aid in budget planning, while still allowing for fair allocation of funds based on changes in safety factors.

The new MCSAP formula results in a reallocation of grant funding but will not change the total amount of funds distributed and will not impose or reduce any costs associated with the program.

FMCSA clarifies that it is a State's obligation to cooperate in the enforcement of hazardous materials safety permits for interstate and intrastate carriers as required under subpart E of 49 CFR part 385. The rule requires States to verify possession of the permit when required while conducting vehicle inspections and investigations. State officials already receive training on subpart E of part 385; therefore, FMCSA estimates that no new costs or benefits result from this clarification.

The rule requires States to use CVSPs in accordance with the FAST Act. The rule provides direction to States on how and when to submit CVSPs, which are on 3-year cycles. Under the current regulations, States must submit lengthy annual CVSP applications to receive MCSAP funding. This rule requires States to submit robust 3-year CVSP applications for the first year, with annual updates for the second and third years, resulting in a decrease in costs, or a cost savings, for States and FMCSA. Specifically, for the first year of the CVSP, States submit information regarding performance goals, past performance, and other documents traditionally provided in an annual CVSP. For the second and third years of the CVSP, States submit an annual update that includes a budget for the applicable fiscal year, changes to the CVSP, and other documents required on an annual basis. In response to comments from CVSA, these changes are implemented for FY 2021 and not FY 2020 grant funds, as proposed. This adjustment is to account for the timing of this final rule.

The rule eliminates the exception to adopt §§ 171.15 and 171.16 in the HMRs by States participating in MCSAP. These provisions require reporting of certain hazardous materials incidents. This rule allows States to ensure compliance with these provisions during the course of investigations, but does not require States to conduct investigations. Additionally, eliminating the exception does not expand the incident reporting burden. State officials already receive investigation training, which includes training on enforcement of §§ 171.15 and 171.16. Therefore, FMCSA estimates that no new costs or benefits result from this exception elimination.

E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, does not apply to this action because it is a nonsignificant regulatory action, as defined in section 3(f) of E.O. 12866, and has zero costs; therefore, it is not subject to the “2 for 1” and budgeting requirements. 5

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a “major rule,” as defined by 5 U.S.C. 804(2). 6

The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601 et seq. ), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857 (Mar. 29, 1996), note following 5 U.S.C. 601), requires Federal agencies to consider the impact of their regulatory proposals on small entities, analyze effective alternatives that minimize small entity impacts, and make their analyses available for public comment. The term “small entities” means small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations under 50,000 (5 U.S.C. 601(6)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

This rule primarily affects States applying for MCSAP funds due to the new MCSAP allocation formula governing distribution of MCSAP funds and the requirement to submit CVSPs on a 3-year cycle. States are not small entities because they do not meet the definition of a small entity in section 601 of the RFA. Specifically, States are not small governmental jurisdictions under section 601(5) of the RFA, both because State government is not among the various levels of government listed in section 601(5), and because, even if this were the case, no State, including the District of Columbia and the 5 Territories, has a population of less than 50,000, which is the criterion to be a small governmental jurisdiction under section 601(5) of the RFA.

Although States would not be small entities, there is a possibility that other entities that may be grant program applicants could be small entities. These other entities include local governments, Federally-recognized Indian Tribes, other political jurisdictions, universities, non-profit organizations, and other persons who, although not eligible for MCSAP funds, which are designated for States, would be eligible for funding under the High Priority Program. However, the impact of the rule results from changes to MCSAP, which do not affect the High Priority Program applicants. As such, FMCSA has determined that these non-State entities would not experience economic impacts as a result of the rule.

In summary, this rule only impacts States, including the District of Columbia and the 5 Territories, which are not small entities. The rule thus does not have a significant economic impact on the regulated entities, and does not significantly impact a substantial number of small entities. Accordingly, I certify that the action does not have a significant economic impact on a substantial number of small entities.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this final rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the FMCSA point of contact, Mr. Jack Kostelnik, listed in the FOR FURTHER INFORMATION CONTACT section of this final rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

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 $165 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2018 levels) or more in any 1 year. Though this final rule will not result in such an expenditure, the Agency does discuss the effects of this rule elsewhere in this preamble.

This rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The Agency notes that MCSAP applications are not subject to OMB's standard application requirements pursuant to 2 CFR 1201.206. Entities apply for the Agency's other financial assistance programs using standardized forms found in grants.gov , which account for any information collection burden and are not impacted by this rule.

A rule has implications for federalism under section 1(a) of E.O. 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” FMCSA determined that this rule does not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.

Section 522 of title I of division H of the Consolidated Appropriations Act, 2005 (Pub. L. 108-447, 118 Stat. 2809, 3268 (Dec. 8, 2004), note following 5 U.S.C. 552a), requires the Agency to conduct a privacy impact assessment of a regulation that will affect the privacy of individuals. The assessment considers impacts of the rule on the privacy of information in an identifiable form and related matters. The FMCSA Privacy Officer has evaluated the risks and effects the rulemaking might have on collecting, storing, and sharing personally identifiable information and has evaluated protections and alternative information handling processes in developing the rule to mitigate potential privacy risks. FMCSA determined that this rule does not require the collection of individual personally identifiable information.

Additionally, the Agency submitted a Privacy Threshold Assessment analyzing the rulemaking to the DOT, Office of the Secretary's Privacy Office. The DOT Privacy Office has determined that this rulemaking does not create privacy risk.

The E-Government Act of 2002 (Pub. L. 107-347, 208, 116 Stat. 2899, 2921 (Dec. 17, 2002)), requires Federal agencies to conduct a privacy impact assessment for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology would collect, maintain, or disseminate information because of this rule.

This rule does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

FMCSA analyzed this rule for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680, Mar. 1, 2004), Appendix 2, paragraphs 6.f. and 6.g. The Categorical Exclusions (CEs) in paragraphs 6.f. and 6.g. cover regulations implementing activities, whether performed by FMCSA or by States pursuant to MCSAP, and procedures to promote adoption and enforcement of State laws and regulations pertaining to CMV safety that are compatible with the FMCSRs and HMRs, and procedures to provide guidelines for a continuous regulatory review of State laws and regulations. These CEs cover the requirements in this rule and the rule does not have any effect on the quality of the environment.