I. Issuing This Rule During COVID-19 National Emergency

The COVID-19 national emergency is creating unprecedented economic disruption to the economy, including the mortgage market. FHFA recognizes the substantial public and private sector efforts in responding to the pandemic and considered the ongoing uncertainty and regulatory burden created by the existing, outdated Bank housing goals regulation. FHFA has concluded that issuing this final rule is an important priority to provide greater certainty for the Banks and other market participants. In addition, features of the final rule such as the three-year enforcement phase-in (discussed in Section IV.D.) and the option to propose alternative target levels (discussed in Section VIII.) will make the housing goals more adaptable during disruptions such as the COVID-19 national emergency.

The eleven Federal Home Loan Banks are wholesale financial institutions organized under the Federal Home Loan Bank Act (Bank Act). 1 The Banks are cooperatives; only members of a Bank may purchase the capital stock of a Bank, and only members or certain eligible housing associates (nonmember borrowers such as state housing finance agencies) may obtain access to secured loans, known as advances, or other products provided by a Bank. 2 Any eligible institution (generally, a federally insured depository institution or state-regulated insurance company) may become a member of a Bank if it satisfies certain criteria and purchases a specified amount of the Bank's capital stock. 3

As government-sponsored enterprises, the Banks have certain privileges under federal law, which allow them to borrow funds at spreads over the rates on U.S. Treasury securities of comparable maturity that are narrower than those available to corporate borrowers generally. The Banks pass along their funding advantage to their members and housing associates—and ultimately to consumers—by providing advances and other financial services at rates that would not otherwise be available to these institutions. 4 Among those financial services are the Banks' Acquired Member Assets (AMA) programs, under which the Banks provide financing for members' housing finance activities by purchasing mortgage loans.

FHFA's AMA regulation authorizes the Banks to acquire eligible mortgages from their members and housing associates as a means of advancing their housing finance mission, and it prescribes the parameters within which the Banks may do so. 5 Through the acquisition of AMA mortgages, the Banks provide a source of liquidity to their members and housing associates to further mission-related lending.

FHFA's AMA regulation authorizes each Bank, at its discretion, to purchase assets that qualify as AMA subject to the requirements of the AMA regulation. Currently, each of the Banks except the Atlanta Bank offers an AMA program for the purchase of single-family mortgages, though the size of their programs varies. As of December 31, 2018, the Banks' total outstanding AMA mortgages were $63 billion, 6 representing less than 6 percent of their total assets. In contrast, the eleven Banks' total outstanding advances, their primary business line, represented 68 percent of total assets. Outstanding mortgages relative to total assets at the Banks offering AMA programs ranged from a high of 18 percent and 17 percent at the Indianapolis and Topeka Banks, respectively, to a low of 2 percent or less at the New York and Atlanta Banks. Further, as a point of comparison, in 2018, the mortgage purchases of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), represented 63 percent of the secondary mortgage market comprising Fannie Mae, Freddie Mac, the Government National Mortgage Association (Ginnie Mae), and the Banks. The Banks' combined mortgage purchases represented less than 1 percent of that secondary market.

The AMA programs that the Banks currently offer are the Mortgage Purchase Program (MPP) and the Mortgage Partnership Finance (MPF) program. The Banks generally acquire 15- to 30-year conventional, conforming fixed-rate mortgage loans secured by 1- to 4-unit properties. The Banks also acquire single-family mortgage loans guaranteed or insured by a department or agency of the federal government ( i.e., non-conventional mortgages).

The existing Bank housing goals regulation has been in effect since January 2011. 7 The regulation implements section 10C(a) of the Bank Act, which requires the Director of FHFA to “establish housing goals with respect to the purchase of mortgages, if any, by the [Banks].”  8 Section 10C(b) requires that the Bank housing goals be “consistent with” the housing goals established by FHFA for the Enterprises under sections 1331 through 1334 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act), taking into consideration “the unique mission and ownership structure of the [Banks].”  9

The regulation establishes three single-family owner-occupied purchase money mortgage goals and one single-family refinancing mortgage goal applicable to the Banks' purchases under their AMA programs. The goals for purchase money mortgages separately measure the percentage of purchase money mortgages acquired by a Bank that serve low-income families, families in low-income areas, and very low-income families. 10 The goal for refinancing mortgages measures the percentage of refinancing mortgages acquired by a Bank that serve low-income families. The target levels of the housing goals are established retrospectively by FHFA in the year following the year of the Banks' AMA mortgage purchases, using Home Mortgage Disclosure Act (HMDA) data to calculate the percentage of single-family mortgage originations in the Bank's district that qualify for each of the housing goals.

The existing regulation provides that a Bank is subject to the housing goals if its AMA mortgage purchases in a given year exceed a volume threshold of $2.5 billion in unpaid principal balance. Each year, FHFA determines whether any Banks have exceeded the volume threshold. For each Bank that has exceeded the volume threshold, FHFA determines the Bank's performance under the housing goals by calculating the percentage share of the Bank's AMA mortgage purchases that qualify for each housing goal. A Bank meets a housing goal if its performance is equal to or greater than the target level of the housing goal established by FHFA based on HMDA data for that year.

On November 2, 2018, FHFA published in the Federal Register a proposed rule to amend the existing Bank housing goals regulation. 11 The 90-day public comment period on the proposed rule ended January 31, 2019. FHFA proposed replacing the existing regulation's four single-family housing goals with a new, combined prospective single-family housing goal that would measure the affordable share of AMA mortgage purchases by each Bank. FHFA also proposed establishing a new, separate prospective housing goal that would measure the extent to which small members and housing associates sell loans to the Banks under the AMA programs. The prospective housing goals set forth in the proposed rule would provide certainty for the Banks by informing them of the housing goal target levels in advance and would provide clarity and flexibility for the Banks by consolidating multiple goals.

FHFA received 23 comment letters in response to the proposed rule. This number includes a joint comment letter from the presidents of the eleven Banks. One comment letter was unrelated to the proposed rule. FHFA also held a number of meetings, including webinars, with Bank representatives and other stakeholders to describe the contents of the proposed rule, discuss issues raised by the proposed rule, and obtain clarifications of specific comments made in the letters.

Overall, commenters supported FHFA's proposed rule because it would make the housing goals more effective at encouraging affordable housing and easier to implement for the Banks. The comments on particular provisions of the proposed housing goals rule are discussed in more detail starting in Section VI. below.

The final rule eliminates the current $2.5 billion volume threshold, such that all Banks are subject to the new housing goals, regardless of their AMA mortgage purchase volume, consistent with the proposed rule.

As proposed, the final rule establishes a new single combined prospective mortgage purchase housing goal in advance that replaces the four existing retrospective housing goals for home-purchase mortgages for low-income families, home-purchase mortgages for low-income areas, home-purchase mortgages for very low-income families, and refinancing mortgages for low-income families. 12 The new housing goal includes each of these four categories, but does not include separate target levels for each category. The final rule establishes one overall target level for the new housing goal at 20 percent of the number of a Bank's total AMA mortgage purchases. The final rule also permits a Bank to request FHFA approval of an alternative target level for the goal. The final rule further provides that no more than 25 percent of the mortgages counted toward the housing goal may be mortgages for families with incomes above 80 percent of area median income (AMI).

As proposed, the final rule establishes a new prospective housing goal that measures the extent of participation by small members and housing associates in a Bank's AMA program. Specifically, the final rule requires that at least 50 percent of a Bank's total AMA users must be community-based AMA users. “Community-based AMA user” is a new term defined to mean any user whose average total assets over the three-year period culminating in the year preceding the one being measured are no greater than the applicable community-based AMA user asset cap, which itself is a new term meaning $1,224,000,000, subject to annual adjustments by FHFA, beginning in 2021, to reflect any percentage increase in the preceding year's Consumer Price Index (CPI) for all urban consumers, as published by the U.S. Department of Labor. The final rule retains the proposed asset cap but incorporates it directly into the housing goals regulation and delinks the housing goals regulation from the Bank members regulation. Accordingly, these new terms replace “community financial institution or CFI” and “CFI asset cap,” which were proposed as new terms but neither of which appears in the final rule. “AMA user” is a newly defined term in § 1281.1 that means a participating financial institution from which the Bank purchased at least one AMA mortgage during the year for which the housing goals are being measured. If a Bank is unable to meet the 50 percent target level, the Bank may still meet the small member participation housing goal if the percentage of its total AMA users that are community-based AMA users is at least 3 percentage points greater than the percentage in the preceding year. The final rule permits a Bank to request FHFA approval of an alternative target level for this goal.

Consistent with the proposed rule, the final rule establishes a three-year phase-in period for enforcement of the two new housing goals, starting with the effective date of the final rule and ending on December 31, 2023. During the phase-in period, FHFA will monitor and report the Banks' housing goals performance but will not impose a housing plan remedy in the event that a Bank fails to meet either or both of the housing goal target levels.

Consistent with the proposed rule, the final rule revises and simplifies the criteria and requirements under which mortgages are either included or excluded from FHFA's measurement of a Bank's performance under the housing goals. The final rule also revises the housing goals reporting requirements to reflect the new structure of the Bank housing goals.

The final rule eliminates the $2.5 billion volume threshold in the existing housing goals regulation. This means that all Banks acquiring any AMA mortgages are subject to the housing goals regardless of their AMA mortgage purchase volume. The elimination of the volume threshold is consistent with the proposed rule and addresses the fact that the threshold has operated as an upper limit on Bank AMA programs.

All eleven commenters who addressed the volume threshold supported its proposed elimination. Some commenters regarded the volume threshold as an artificial cap on liquidity. Others characterized it as a way for the Banks to avoid the goals entirely by keeping mortgage purchases below the threshold. No commenter opposed the proposed elimination of the threshold.

Thirty-six state or local advocacy and community development organizations, in a joint comment letter, supported the proposed elimination of the volume threshold, stating that it had served to effectively exempt the vast majority of Banks from the housing goals. A nonprofit consumer advocacy group commented that FHFA had made a strong argument for elimination of the volume threshold.

A trade association for credit unions, in support of the proposed elimination of the volume threshold, commented that the threshold operated as an upper limit on Bank AMA programs. A lender trade association asserted that as a result of removing the volume threshold, the Banks would be expected to either increase their total purchases, including affordable housing loans, or shift more of their total mortgage purchases towards affordable housing mortgages in order to comply with the housing goal, and characterized either result as desirable. This commenter urged close monitoring of the Banks to ensure they do not cease their AMA mortgage purchases to avoid noncompliance with the housing goal if the volume threshold were eliminated, although the commenter described that as an unlikely outcome.

A U.S. Senator stated that the volume threshold is inconsistent with the Banks' mission responsibility to meet the affordable housing needs in their districts. A trade association representing state housing finance agencies commented that the volume threshold has effectively exempted most Banks from the housing goals and served as a de facto upper limit on Banks' AMA purchases, resulting in less liquidity for affordable mortgage lending. Similarly, a nationwide nonprofit community development organization asserted that the volume threshold creates a “perverse incentive” for the Banks to limit their mortgage purchases, also claiming that removal of the threshold will encourage more AMA participation. An individual credit union commented that it supported all changes FHFA proposed.

In their joint comment letter, the Banks requested clarity on FHFA's intent concerning the final rule's effect on the Banks' overall AMA activity, noting that the proposed rule would allow a Bank to reduce its overall AMA activity as a means of increasing the percentage of its AMA purchases that qualify for the goal. FHFA notes that the final rule does not prohibit a Bank from managing its volume of AMA activity as a means of meeting the housing goal, nor does the existing regulation. FHFA recently issued an Advisory Bulletin  13 addressing FHFA's expectations for Banks' management of the risks of their AMA programs. FHFA also expects that the Banks will comply with the final rule by prioritizing purchases of AMA mortgages for low- and very low-income families, and for families in low-income areas.

As discussed in the proposed rule, the volume threshold was originally adopted to allow smaller Bank AMA programs to operate without meeting housing goal target levels, particularly programs focused on providing liquidity for smaller Bank members. Over time, however, the volume threshold has instead operated as an upper limit on Bank AMA programs. Banks below the volume threshold in effect avoid the housing goals, while Banks above the threshold face application of housing goals that AMA programs were not designed to, and typically did not, meet.

Housing goals will better serve their public purpose if they are flexible enough to be meaningful and achievable for a variety of Bank AMA programs. The final rule creates a mechanism for the housing goals to apply to all Banks while allowing flexibility to address unique situations for particular Banks if necessary. The new process for setting the target levels of the housing goals should help address issues faced by smaller AMA programs by allowing the Banks to propose meaningful and achievable alternative target levels based on the nature of the AMA program at each Bank.

Accordingly, as proposed, the final rule eliminates the existing $2.5 billion volume threshold, making the housing goals applicable to all Banks regardless of their AMA purchase volume. Banks may propose alternative target levels to FHFA for approval, as discussed below in Section VIII.

Section 1281.11(a) of the final rule replaces the four existing separate retrospective mortgage purchase housing goals with a single prospective mortgage purchase housing goal that includes all single-family, first lien AMA mortgages purchased by a Bank, with limited exceptions. Purchase money or refinancing mortgages meeting the income or geographic eligibility requirements for any of the existing four housing goals would count toward performance under this new combined goal. This includes mortgages for low- or very low-income borrowers and mortgages for borrowers living in low-income areas.

Refinancing mortgages for low-income borrowers, which previously counted only for the separate low-income families refinancing goal, are now included in the new combined goal. By combining the different categories into a single, combined goal, the final rule also counts refinancing mortgages for families of any income level who reside in low-income areas, subject to the cap on counting loans to higher-income borrowers in low-income areas, discussed in Section VI.D. below.

FHFA's proposal to consolidate the four existing housing goals into a single combined goal received support from a number of commenters. A bank trade association, a credit union trade association, and a credit union generally emphasized the additional flexibility the proposal would provide the Banks in serving specific needs within their districts. A lenders trade association commented that given the relatively small historical sizes of AMA programs, there is little value in segregating AMA mortgage purchases into more granular categories, and that a single, consolidated goal would reduce the Banks' compliance burden.

An organization representing state housing finance agencies also favored consolidating the goals, noting that, unlike the Enterprises' mortgage purchases, the Banks' AMA programs are limited in scope and resources, making it harder for the Banks to develop products or programs designed to serve each separate goal. It also commented that, unlike the Enterprises, the Banks generally operate with a regional focus, and that each Bank district has different needs.

Thirty-six state or local advocacy and community development organizations, in a joint comment letter, opposed combining the four existing housing goals into one goal. These commenters stated that the four housing goals align with the statutory requirement that the Banks' housing goals be consistent with the Enterprises' housing goals. The commenters also asserted that the four housing goals target different populations and neighborhoods, each with unique needs. The commenters expressed concern that the Banks could satisfy the new single combined housing goal by purchasing mortgages targeting certain easier-to-serve populations while providing little support for other populations, such as very low-income borrowers, that may prove more difficult to serve.

A consumer advocacy organization shared these concerns about service to very low-income borrowers under the proposal. The commenter also observed that the proposed rule preamble did not provide analysis of the past or trending distribution of purchase money and refinance loans in AMA mortgage acquisitions. It expressed concern about potential underrepresentation of refinance loans in the Banks' AMA programs if the final rule adopted the proposed combined goal for purchase money and refinance loans. The commenter stated that the combined goal is likely to have less impact in the current and immediate past rate environments where refinances were at very low levels, but that this may not always be the case. This commenter did not object to the proposal but expressed concern that a consolidated housing goal might reduce access to credit for some categories of low-income borrowers. The commenter urged FHFA to monitor Bank housing goals performance closely under the final rule and be prepared to return to more granular housing goals if AMA mortgage purchases skew away from serving very low-income borrowers.

After considering the comments, FHFA has concluded that the proposed new single, combined mortgage purchase housing goal is appropriate for the Banks' AMA programs. The Banks' AMA programs are voluntary and serve a small fraction of the secondary market. The new combined goal draws from the same categories used in the Enterprise and Bank housing goals regulations, 14 while giving the Banks additional flexibility to meet the needs of each of their districts. FHFA also recognizes that, due to the voluntary nature of the Banks' AMA programs, requiring AMA programs to serve all the categories of borrowers at precise target levels, as under the existing Bank housing goals, may be more likely to discourage Bank participation in AMA programs than to increase service to underserved borrowers. In addition, concerns that combining the four existing housing goals categories would result in certain populations being neglected are at least partially addressed by the final rule's cap on counting loans to higher-income borrowers in low-income areas, discussed in Section VI.D. below.

Accordingly, for the foregoing reasons, and consistent with the proposed rule, the final rule establishes a single, combined mortgage purchase housing goal for low- and very low-income borrowers and borrowers in low-income areas and counts purchase money and refinance mortgages identically under the goal. Although the final rule does not establish specific target levels for each of the four categories under the new combined goal, FHFA will continue to require the Banks to report data allowing FHFA to identify and monitor AMA activity under each of the four categories.

Section 1281.11 of the final rule sets the target level for the new combined mortgage purchase housing goal at 20 percent of the total number of AMA mortgage loans purchased by a Bank, consistent with the proposed rule. This means that a Bank meets the housing goal if 20 percent or more of the AMA mortgage loans it purchases serve some combination of low-income households, very low-income households, or households in low-income areas, subject to a 25 percent cap on loans purchased by the Bank that serve higher-income borrowers in low-income areas. Consistent with the approach in the existing regulation and the proposed rule, the mortgage purchase goal is denominated as a percentage of number of loans, not unpaid principal balance. Also consistent with the proposed rule, the final rule provides the Banks with the option to propose alternative Bank district-specific target levels, discussed further in Section VII. below.

Commenters provided mixed responses to the proposed 20 percent target level for the new mortgage purchase housing goal. A U.S. Senator supported the proposed target level, noting that many of the targeted borrowers have difficulty obtaining financing and that serving them is consistent with the mission of the Banks. A credit union also supported the proposed target level, stating that it would not appear to add any risk to the Banks or do anything other than improve on what already works well. A lenders trade association commented that the proposed target level would strike an appropriate balance between rigor and feasibility, but also recommended that, should any Banks discontinue their AMA programs as a result of the target level, FHFA be prepared to reevaluate the target level or work with those Banks on developing alternative Bank-specific target levels.

Several advocacy organizations recommended a different target level for the new mortgage purchase housing goal. Thirty-six state or local advocacy and community development organizations, in a joint comment letter, opposed the imposition of the same percentage target level on all Banks, instead recommending Bank district-specific target levels at levels unspecified in the comment letter. A nonprofit community revitalization organization regarded the proposed target level as too low, stating that eight of the eleven Banks already met this target level each year since 2011. A nonprofit consumer advocacy organization expressed concern that the proposed target level could encourage at least six Banks to reduce their AMA mortgage purchase efforts because their historical performance exceeded the proposed target level. The commenter favored setting the target level between 25 and 30 percent, which it noted several Banks had exceeded in the past and which it believed the Banks could meet in the future. A trade association representing state housing finance agencies similarly observed that several Banks have exceeded the proposed target level in recent years, suggesting that it could prompt some Banks to lower their purchases of mortgages for low- and moderate-income borrowers.

A credit union trade association took the opposite view, favoring an initial target level that all Banks have already met. The commenter stated that the Banks could then focus on building their AMA purchase volumes overall without fear of missing the goal. The commenter stated that this would help in assessing the impact of removing the $2.5 billion volume threshold, and that FHFA could then evaluate the data and set a new incremental target level at the end of the initial three-year period.

In their joint comment letter, the Banks stated that while a 20 percent target level might be achievable in favorable economic times, it might also be hard to sustain over the long term. The Banks indicated that such a level may be difficult to achieve during economic downturns, which might compromise Banks' prudent management of their AMA programs. A community bankers trade association similarly commented that a Bank's ability to reach a 20 percent target level likely depends on the macroeconomic climate at the time.

Several commenters offered alternative formulations of the goal that would change the target level. For instance, a nonprofit community revitalization organization suggested starting with a lower, unspecified target level and gradually increasing it each year, culminating in an unspecified target level above 20 percent. The commenter also suggested establishing specific subgoals based on Bank district needs and on the types of small member institutions or geographic areas, e.g., small members located in rural areas.

The Banks jointly recommended that the proposed 20 percent target level decrease to 10 percent in two situations. First, the 20 percent target level would drop if, in a single year, one or more AMA users who had individually or collectively provided 10 percent or more of the AMA mortgages ceased being a member of the Bank. Second, the 20 percent target level would drop upon a material increase in mortgage delinquencies (defined as delinquencies exceeding 90 days), as measured in either FHFA's published mortgage-backed securities statistics or in a Bank's AMA mortgage portfolio.

A community bankers trade association recommended that FHFA set an alternate floor that would be triggered upon an unexpected economic downturn that made the 20 percent target level too onerous, providing 10 percent as an example of such a floor. The commenter stated that members need to view the AMA programs as consistent and reliable, and doubts about the reliability of a Bank as an outlet for their mortgage production may result in members limiting their AMA activity.

The Banks jointly commented that any new housing goal should be established such that each Bank is in compliance as of the effective date. Accordingly, the Banks recommended having a separate percentage floor for any Bank performing below the 20 percent target level from the outset. Alternatively, the Banks suggested that a Bank that has submitted an alternative target level for FHFA approval should not be subject to the 20 percent target level while the review process is pending. The Banks further suggested, as an alternative to a percentage floor, that FHFA could establish a range of possible target levels in the regulation, and then periodically set a specific target level within the range by way of a supervisory letter to the Banks.

The final rule establishes the target level for the prospective mortgage purchase housing goal at 20 percent, the same level as in the proposed rule. In determining the target level for the new mortgage purchase goal, FHFA considered the comments received, as well as national housing needs, the past performance of the Banks under the housing goal, the ability of the Banks to lead the industry in making mortgage credit available, and the size of the mortgage market for affordable loans relative to the overall mortgage market. The factors considered by FHFA in setting the Bank housing goal are similar to the factors that FHFA is required by statute to consider in setting the Enterprise housing goals. 15 Those factors include: (1) National housing needs; (2) economic, housing, and demographic conditions; (3) past performance on the housing goals; (4) ability to lead the industry in making mortgage credit available; (5) the size of the affordable market relative to the overall market; and (6) the financial condition of the Enterprises.

In determining the target level for the new mortgage purchase housing goal, FHFA considered the nation's affordable housing needs, which affect both homeowners and renters, while focusing on homeownership as the policy area most directly connected to the Bank housing goals. The national homeownership rate declined every year from 2004 to 2017, with particularly sharp declines for younger households and African American households. 16 Tight access to mortgage credit is an ongoing factor in the lack of access to homeownership, particularly in places with lower-cost homes. 17 Workers in essential sectors like construction often cannot afford to purchase even modestly priced homes in most metropolitan statistical areas. As an example, a typical carpenter could afford the median home price with a three percent down payment in only 40 percent of metropolitan statistical areas in a recent analysis. 18 Workers in less well-paid professions struggle even more. Improved financing opportunities can help mitigate homeownership difficulties for underserved borrowers. FHFA recognizes these affordable housing challenges and has considered them in selecting a target level for the prospective mortgage purchase housing goal.

In setting the target level for the mortgage purchase housing goal at 20 percent, FHFA also analyzed what the Banks' past performance under the goal would have been if the goal had been in effect at that time (including all loans that would have been counted under the proposed rule). Chart 1 below replicates and extends the proposed rule preamble analysis to include 2018 performance and to reflect the formulation of the prospective mortgage purchase housing goal in the final rule, which excludes non-conventional loans sold by AMA users with assets above the community-based AMA user asset cap. A full color version of Chart 1 and the other charts below appear in this preamble to the final rule as published on FHFA's website. The tables and charts in this preamble mask the identity of individual Banks by using letters instead of names to maintain confidentiality of Bank data. The letters identifying the Banks have been randomized for each table and chart ( e.g., Bank A may refer to different Banks in different tables).

Chart 1 shows generally that Bank AMA performance as measured by the new prospective mortgage purchase housing goal was above the 20 percent target level for most Banks in most years since 2011. Bank I would have met or exceeded the 20 percent target level in 2015-2017 if all non-conventional loans were included (as in the proposed rule), but Bank I performed below 20 percent in 2015-2017 based on exclusion of non-conventional loans from institutions exceeding the community-based AMA user asset cap (as in the final rule). Bank I's 2018 performance was back above 20 percent.

Three Banks—E, G and H—show performance of zero for some years in the chart. These Banks were not purchasing AMA loans at the beginning of the time series and began building their AMA programs over time. In addition, Bank H purchased only non-conventional AMA loans for several years in the series, so the exclusion of such loans sold by institutions above the community-based AMA user asset cap has large effects on both the numerator and denominator of the goals performance percentage. Hence, Bank H performance is zero in some years and very high in others. Bank H did not have an active AMA program in 2019.

FHFA has also considered the ability of the Banks to lead the industry in making mortgage credit available. To assess the ability of the Banks to lead the industry, FHFA started by comparing how the Banks would have performed under the prospective mortgage purchase housing goal in 2018 with how Fannie Mae and Freddie Mac would have performed if they had been subject to the same goal in 2018. Table 1 below shows performance percentages for each Enterprise, applying the same calculation method applicable under the Bank housing goals established in this final rule.

As shown in Table 1, the Enterprise performance under the Bank housing goals would have exceeded the performance of most Banks in 2018. Fannie Mae's performance under the prospective mortgage purchase housing goal would have been 36 percent, and Freddie Mac's performance would have been 33 percent. As discussed above, all but two Banks would have exceeded the 20 percent target level in 2018, but only four Banks would have had performance levels above 30 percent (including one Bank whose performance has varied widely). The average performance for all Banks combined in 2018 would have been 26.6 percent.

There are a number of factors that help explain the difference between the performance of the Banks and the performance of the Enterprises. FHFA, through the AMA regulation, requires that if the Banks establish AMA programs, AMA users must bear a substantial portion of the credit risk associated with the loans they sell by providing a credit enhancement obligation, which the PFI must fully secure. Additionally, some Banks, through their capital structure plans, have AMA stock purchase requirements for members selling loans to the Bank. Taken together, the credit enhancement obligation, collateral requirement and potential member stock purchase requirement result in loans for which the Bank AMA program is the best execution qualifying for the mortgage purchase housing goal at a lower rate than loans sold to the Enterprises.

Other factors that help explain the difference in performance include the vast difference between the size of the Enterprises' mortgage portfolios and the Banks' mortgage portfolios. The Enterprises together serve more than 60 percent of the single-family secondary market, while the Banks' AMA programs serve less than one percent. Further, Banks are permitted to purchase AMA mortgages only from members in their districts, while the Enterprises serve a national market. In 2018, Bank System members totaled 6,863, of which only 861 sold mortgages to the Banks. Additionally, the Enterprises are chartered to provide stability and liquidity in the secondary market for residential mortgages by purchasing and making commitments to purchase residential mortgages. The Banks, in contrast, operate AMA programs at their discretion.

In setting the target level for the mortgage purchase housing goal at 20 percent, FHFA recognizes that the Banks' AMA programs have little ability to lead the industry due to their limited size relative to the overall mortgage market. The mortgage credit enhancement requirements of AMA programs and the supervisory expectations in the AMA Advisory Bulletin address safety and soundness considerations. These factors further explain the difference between the historical performance of the Banks on the new mortgage purchase housing goal and the nationwide market level for the mortgage market as a whole.

The Banks' AMA mortgage purchases represent less than one percent of secondary mortgage market purchases by Ginnie Mae, Fannie Mae, and Freddie Mac, as discussed above and in the proposed rule preamble. Using a target level based on a market-wide measure would not be appropriate for the housing goals applicable to the AMA programs, which are currently a set of niche programs for Bank members and housing associates  19 due to the Banks' unique structure and role in the market.

The FAA issued AD 2018-07-15, Amendment 39-19246 (83 FR 15036; April 9, 2018) (“AD 2018-07-15”) to address an unsafe condition on XtremeAir GmbH Model XA42 airplanes equipped with an engine mount part number XA42-7120-151. AD 2018-07-15 required repetitive inspections of the engine mount strut junction for cracks and was based on MCAI originated by an aviation authority of another country. The FAA issued AD 2018-07-15 to detect and address cracking of the engine mount frame, which could lead to detachment of the engine in-flight and result in loss of control.

Since the FAA issued AD 2018-07-15, during a scheduled maintenance inspection of a Model XA42 airplane, an occurrence was reported of separation of both left-hand and right-hand diagonal struts of the engine mount frame.

The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, superseded its MCAI and issued EASA AD No. 2019-0239R1, dated December 18, 2019 (referred to after this as “the MCAI”), to correct this unsafe condition for XtremeAir GmbH Model XA42 airplanes. The MCAI states:

You may examine the MCAI on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0568.

The FAA reviewed XtremeAir GmbH Mandatory Service Bulletin SB-XA42-2019-008, Issue B.00, dated December 4, 2019. The service information contains procedures for inspection of the area of the junction of the left-hand and right-hand diagonal struts of the engine mount, forward of the oil cooler, for cracks. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because cracking of the engine mount frame could lead to in-flight detachment of the engine and result in loss of control of the airplane. AD 2018-07-15 only required an inspection of the left-hand diagonal strut. Since AD 2018-07-15 was issued, an occurrence was reported of separation of both the left-hand and right-hand diagonal struts of the engine mount frame. The additional inspection required by this AD is necessary to detect cracks in the right-hand diagonal strut of the engine mount frame. Therefore, the FAA finds that notice and opportunity for public comment before issuing this AD are impracticable. In addition, for the reasons stated above, the FAA finds that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and the FAA did not precede it by notice and opportunity for public comment. The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2020-0568; Project Identifier MCAI-2020-00505-A” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this AD. The FAA will consider all comments received by the closing date and may amend this AD because of those comments.

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

The FAA estimates that this AD will affect 16 products of U.S. registry. The FAA also estimates that it will take 0.5 work-hour per product per inspection cycle to inspect the diagonal struts of the engine mount. The average labor rate is $85 per work-hour. Required parts would cost about $0 per product.

Based on these figures, the FAA estimates the cost of the inspection on U.S. operators to be $680.00 or $42.50 per product per inspection cycle.

In addition, the FAA estimates that replacing an engine mount, if necessary, will take 24 work-hours and require parts costing $5,000, for a cost of $7,040 per product. The FAA has no way of determining the number of products that may need this action.

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

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

The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-8 and 737-9 airplanes. The NPRM published in the Federal Register on February 26, 2020 (85 FR 11000). The NPRM was prompted by a report that certain exterior fairing panels on the top of the engine nacelle and strut (the thumbnail fairing and mid strut fairing panels) may not have the quality of electrical bonding necessary to ensure adequate shielding of the underlying wiring from the electromagnetic effects of HIRF, which could potentially lead to a dual-engine power loss event and/or display of hazardously misleading primary propulsion parameters. The NPRM proposed to require a detailed inspection of the thumbnail fairing panels and mid strut fairing panels for excessive rework of the metallic (aluminum foil) inner surface layer, replacement of any excessively reworked panels, and modification of the thumbnail fairing assembly to ensure adequate bonding.

The FAA is issuing this AD to address this condition, which could result in a forced off-airport landing or excessive flightcrew workload.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA received comments from several organizations and individuals. The following discussion presents the comments received on the NPRM and the FAA's response to each comment.

The Air Line Pilots Association, International (ALPA) and three individuals expressed support for the NPRM.

United Airlines (UAL) requested that the proposed AD be revised to exclude airplanes that have not been delivered. UAL noted that the proposed AD would apply to all Model 737-8 and 737-9 airplanes included in line numbers 5602 through 7901, which is beyond the effectivity of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019. UAL reasoned that for airplanes that have not been delivered, Boeing would incorporate the intent of the service bulletin at the factory, which would provide an equivalent level of safety. UAL suggested that if those airplanes are not excluded from the proposed AD's applicability, the FAA should provide credit to prevent the need for future alternative method of compliance (AMOC) requests.

The FAA agrees with the commenter, for the reasons the commenter provided. The FAA has revised paragraph (c) of this AD to limit the applicability to those airplanes identified in Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019.

American Airlines (AAL) and UAL requested that the proposed AD be revised to correct the part number for the thumbnail fairing. UAL noted that Figure 2 and Figure 8 of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, specify certain thumbnail fairings, but those figures specify the incorrect part numbers. The commenters noted that Boeing issued Information Notice 737-54-1056 IN 01, dated January 29, 2020, to correct the part numbers. This Information Notice is in the docket for this rulemaking, attached to the comment of Hainan Airlines Aviation Technic (Hainan). UAL added that, although the Information Notice specifies the correct “IS” part numbers, it specifies the wrong “WAS” part numbers, and noted that Boeing plans to address this in a future Information Notice or service bulletin revision. UAL asked that the final rule include an exception to allow inspection and installation of thumbnail fairings having the correct part number.

The FAA agrees with the commenters' requests. The FAA has added paragraph (h) of this AD to include exceptions to the service information; this includes paragraph (h)(1) of this AD, which identifies the correct part numbers to be used when accomplishing the service instructions. Operators must use part number 313A6110-5, 313A6110-7, or 313A6110-9 in lieu of part number 311A6111-5, 311A6111-7, or 311A6111-9 when inspecting or installing affected thumbnail fairings. The FAA has also redesignated subsequent paragraphs accordingly.

AAL suggested to the FAA that the proposed AD be revised to clarify the rivet hole size called out for installing a nutplate. AAL stated that note (d) to Figure 4 of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, specifies to drill a hole with a diameter of “0.192—0.196.” AAL stated that Boeing confirmed the rivet hole size will be corrected with a revised service bulletin.

The FAA agrees that the rivet hole size specified in note (d) to Figure 4 of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, is incorrect. SB 737-54-1056 Revision 1, corrects this hole size diameter with the following language: “(d) Drill through Thumbnail Land Assembly with a hole Diameter of 0.097—0.101.” The FAA has added paragraph (h)(2) to this AD to clarify the correct rivet hole size to use when installing a nutplate.

Hainan requested that the proposed AD be revised to provide clarification regarding the inspection and replacement criteria for critical and non-critical bonding zones (which are specified in Step 4 of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019). Hainan noted that Boeing Information Notice 737-54-1056 IN 01, dated January 29, 2020, provides clarity regarding the inspection and the conditions that require replacement of the panels.

The FAA agrees with the commenter's request. The FAA has added paragraph (h)(3) of this AD to clarify the inspection and replacement criteria for critical bonding zones. The FAA has also added paragraph (h)(4) of this AD to clarify the inspection and replacement criteria for non-critical bonding zones.

Boeing requested that paragraph (e) of the proposed AD as well as the SUMMARY and the Discussion section in SUPPLEMENTARY INFORMATION of the NPRM be revised to be consistent with the potential aircraft system impacts Boeing communicated in reporting this issue to the FAA prior to issuance of the NPRM, and to remove any references to an unsafe condition resulting from lightning strikes. Boeing stated that the descriptions of the potential unsafe conditions in the proposed AD are inconsistent with its subject matter expert's evaluation of the safety issue. Boeing added that there is not a safety concern in the event of a lightning strike, because all of the electrical and electronic systems with wiring in the affected area retain sufficient margin between their design and qualification levels and the lightning-induced transient levels, even with the loss of electrical bonding of the foil-lined panels in the engine strut. Boeing further noted that the proposed AD does not mention the potential for displays of misleading primary propulsion parameters on the flight deck displays. Boeing stated that the proposed AD inaccurately describes a scenario where HIRF or lightning induced on one engine's wiring could cross-couple to the opposite engine's wiring via the common avionics system's connections. Boeing provided suggestions for revised wording.

The FAA agrees with the commenter's request for the reasons provided. Based on further analysis done after issuance of the NPRM, the FAA has determined that lightning strikes are not a safety concern for the unsafe condition identified in this AD. The FAA has revised the SUMMARY and the Discussion section in SUPPLEMENTARY INFORMATION of this final rule as well as paragraph (e) of this AD to incorporate the changes requested by Boeing.

Boeing requested that the special flight permit language in paragraph (i) of the proposed AD be revised to provide guidance on the HIRF spectrum of concern to operators. Boeing noted that the potential for aircraft systems' exposure to HIRF levels higher than their original qualification levels is limited to the frequency range between 1 MHz and 100 MHz. Boeing stated that operators do not need to consider potential HIRF sources outside this frequency spectrum when assessing routes for special flight permit requests. Boeing added that providing clarification on the frequency range of concern would reduce the burden on both operators and the FAA in submitting and reviewing special flight permit requests.

The FAA agrees with the request because the agency has determined that only the HIRF frequency range between 1 MHz and 100 MHz is of concern. The FAA has revised paragraph (i) of this AD to clarify the HIRF frequency range that must be identified when submitting a request for a special flight permit.

Boeing requested that the compliance time in the proposed AD be changed from “before further flight” to “before revenue flight.” Boeing noted that the compliance time in Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, is six months. Boeing added that it is revising the service bulletin and plans to change the compliance time to “prior to revenue flight” in the revised service bulletin. Boeing noted that “prior to revenue flight” aligns with the Boeing safety review board recommendation.

The FAA disagrees with the commenter's request. Without the safety features installed during the modification required by this AD, airplanes are exposed to potentially unsafe electromagnetic effects. The FAA has included provisions in paragraph (i) of this AD (paragraph (h) of the proposed AD) for operators who may need to relocate an airplane prior to accomplishing the actions required by this AD. The FAA has not changed this AD regarding this issue.

Hainan requested that the compliance time for the proposed AD be revised to “within six months after the effective date of this AD or before further flight, whichever occurs first.” Hainan noted that Boeing recommended a compliance time of within six months after the original issue date of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019. Hainan suggested that, due to the unknown return-to-service dates for the affected airplanes, a revised compliance time would allow airlines to plan for the actions required by this AD. Hainan pointed out that another recent AD on these same airplane models has a compliance time of 24 months.

The FAA disagrees with the commenter's request. Without the safety features installed during the modification required by this AD, airplanes are exposed to potentially unsafe electromagnetic effects. The FAA notes that the compliance time is designed to ensure the actions required by this AD are done before further flight ( i.e., before the affected airplanes are returned to service), and operators may do these actions at any time before further flight. The FAA has not changed this AD regarding this issue.

Hainan requested that the proposed AD be revised to provide a grace period for the required modification. Hainan stated that Boeing can only provide new panels based on the results of required inspections. Hainan suggested that due to the international transportation impacts caused by the 2019 Novel Coronavirus, new panels may not be available to operators in a timely manner.

As a result of Hainan's comment, the FAA confirmed in June 2020 that a sufficient number of required parts will be available from the manufacturer to modify the worldwide fleet within the compliance time of the NPRM, which is adopted as proposed. However, under the provisions of paragraph (j) of this AD, the FAA will consider requests for approval of an extension of the compliance time if sufficient data are submitted to substantiate that the new compliance time would provide an acceptable level of safety. The FAA has not changed this AD regarding this issue.

Hainan requested that paragraph (g) of the proposed AD be revised to specify “replacement and modification” rather than “modification.” Hainan noted that the actions in the proposed AD include both modification and replacement.

Paragraph (g) of the proposed AD specified a detailed inspection and the modification as applicable. Replacement is one part of the modification, and is required only if excessive rework is found during that inspection. Thus, the FAA has determined that specifying “replacement and modification” in paragraph (g) of this AD is not necessary, and the agency has not changed this AD regarding this issue.

Hainan requested that the wording in paragraph (g) of the proposed AD be revised to specify “Steps 4., 6. or 7. through 9., . . .” instead of “Steps 4., 6. through 9., inclusive . . . .” Hainan noted that Steps 6. and 7. of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, are two different options for one action.

The FAA acknowledges that Steps 6. and 7. of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, are two options for the same action. However, the FAA notes that this is clearly stated in Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, which labels Step 6. as “ACTION 2 (OPTION 1)” and Step 7. as “ACTION 2 (OPTION 2).” Operators are required to do only one of these options to show compliance with this AD. The FAA has not changed this AD regarding this issue.

AAL suggested to the FAA that the proposed AD be revised to include steps to deactivate the slats. AAL noted that Boeing recommended deactivating the slats and thrust reversers using the Aircraft Maintenance Manual (AMM) as an accepted procedure and stated such instructions would be included in a revision of the service information.

The FAA agrees that deactivating the slats prior to accomplishing the actions specified in the service bulletin would help to protect any maintenance personnel working on that area, and that the AMM provides acceptable procedures for deactivating the slats. However, the FAA does not agree with making slat deactivation a requirement of this AD, since this procedure is not needed to address the unsafe condition. The FAA has not changed this AD regarding this issue.

AAL suggested to the FAA that the proposed AD be updated to account for a revision of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019, if one exists. AAL noted that Boeing stated that such a revision is in process and AAL asked if the FAA is aware of such a revision.

The FAA acknowledges that Boeing has informed the agency of its intent to issue revised service information. However, that revision has not yet been published by Boeing. As stated earlier, the FAA has added several exceptions to this AD to correct errors in Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019. With these exceptions, operators will be able to comply with this AD using Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019.

The FAA clarifies that where the AD specifies to perform certain “Steps” of the Boeing service bulletin, such steps refer to the numbered actions specified within the Procedures section of the Accomplishment Instructions. The FAA has revised paragraph (g) of this AD to change the required procedures by not including steps 9 and 12 of Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019. The FAA has determined that these steps, while expected to be accomplished, are not required to address the unsafe condition identified in this AD and this change makes this AD consistent with revision 1 of the Boeing service information.

The FAA reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add more burden upon the public than was already proposed in the NPRM.

The FAA also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

The FAA reviewed Boeing Special Attention Service Bulletin 737-54-1056, dated December 11, 2019. This service information describes procedures for a detailed inspection of the thumbnail fairing panels and mid strut fairing panels for excessive rework of the metallic (aluminum foil) inner surface layer (resulting in foil cuts), replacement of any excessively reworked panels, and modification of the thumbnail fairing assembly to ensure adequate bonding. Modification actions include doing a form-in-place gasket of the thumbnail land assemblies; preparing the mating surfaces between the thumbnail fairing panel and the left and right thumbnail land assemblies; and doing a bond check of the thumbnail fairing panel and the thumbnail land assemblies on the left and right side of the thumbnail fairing panel on both engines. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 128 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any necessary modifications that would be required based on the results of the required inspection. The FAA has no way of determining the number of aircraft that might need these modifications:

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

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

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

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

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

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

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

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

This document contains amendments to the Income Tax Regulations (26 CFR part 1) under section 199A of the Code.

Section 199A was enacted on December 22, 2017, by section 11011 of Public Law 115-97, 131 Stat. 2054, commonly referred to as the Tax Cuts and Jobs Act (TCJA), and was amended on March 23, 2018, retroactively to January 1, 2018, by section 101 of Division T of the Consolidated Appropriations Act, 2018, Public Law 115-141, 132 Stat. 348 (2018 Act). Section 199A applies to taxable years beginning after 2017 and before 2026.

Section 199A provides a deduction of up to 20 percent of QBI from a U.S. trade or business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate (section 199A deduction). The section 199A deduction may be taken by individuals and by some trusts and estates. A section 199A deduction is not available for wage income or for income earned by a C corporation (as defined in section 1361(a)(2)). If the taxpayer's taxable income exceeds the statutorily defined amount in section 199A(e)(2) (threshold amount), the taxpayer's section 199A deduction may be limited based on (i) the type of trade or business conducted, (ii) the amount of W-2 wages paid with respect to the trade or business (W-2 wages), and/or (iii) the unadjusted basis immediately after acquisition (UBIA) of qualified property held for use in the trade or business (UBIA of qualified property). These statutory limitations are subject to phase-in rules in section 199A(b)(3)(B) based upon taxable income above the threshold amount (phase-in rules).

Section 199A also provides individuals and some trusts and estates, but not corporations, a deduction of up to 20 percent of their combined qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income, including qualified REIT dividends and qualified PTP income earned through passthrough entities. This component of the section 199A deduction is not limited by W-2 wages or UBIA of qualified property.

Overall, the section 199A deduction is the lesser of (1) the sum of the combined QBI and qualified REIT and PTP components described in the prior two paragraphs or (2) an amount equal to 20 percent of the excess (if any) of the taxpayer's taxable income for the taxable year over the taxpayer's net capital gain for the taxable year.

Additionally, section 199A(g) provides that specified agricultural or horticultural cooperatives may claim a special entity-level deduction that is substantially similar to the domestic production activities deduction under former section 199.

The statute expressly grants the Secretary of the Treasury or his delegate (Secretary) authority to prescribe such regulations as are necessary to carry out the purposes of section 199A (section 199A(f)(4)), and provides specific grants of authority with respect to certain issues including: The treatment of acquisitions, dispositions, and short taxable years (section 199A(b)(5)); certain payments to partners for services rendered in a non-partner capacity (section 199A(c)(4)(C)); the allocation of W-2 wages and UBIA of qualified property (section 199A(f)(1)(A)(iii)); restricting the allocation of items and wages under section 199A and such reporting requirements as the Secretary determines appropriate (section 199A(f)(4)(A)); the application of section 199A in the case of tiered entities (section 199A(f)(4)(B)); preventing the manipulation of the depreciable period of qualified property using transactions between related parties (section 199A(h)(1)); and determining the UBIA of qualified property acquired in like-kind exchanges or involuntary conversions (section 199A(h)(2)).

The Department of the Treasury (Treasury Department) and the IRS published final regulations (TD 9847) interpreting section 199A on February 8, 2019 (February 2019 Final Regulations) in the Federal Register (84 FR 2952). Along with the publication of the February 2019 Final Regulations, the Treasury Department and the IRS published a notice of proposed rulemaking (REG 134652-18) in the Federal Register (84 FR 3015) providing additional guidance under section 199A relating to the treatment of previously suspended losses included in qualified business income and determining the section 199A deduction for taxpayers that hold interests in regulated investment companies, split-interest trusts, and charitable remainder trusts (February 2019 Proposed Regulations). No public hearing on the February 2019 Proposed Regulations was requested or held. After full consideration of the comments received on the February 2019 Proposed Regulations, this Treasury decision adopts the proposed regulations with clarifying changes and additional modifications in response to comments as described in the Summary of Comments and Explanation of Revisions. Comments on issues related to the February 2019 Proposed Regulations that are beyond the scope of these final regulations are not discussed in this preamble, but may be addressed in future guidance.

The Treasury Department and the IRS also received comments on the February 2019 Final Regulations. The Treasury Department and the IRS continue to study the issues raised in those comments and may address them in future guidance.

These final regulations contain amendments to two substantive sections of the February 2019 Final Regulations, §§ 1.199A-3 and 1.199A-6, each of which provides rules relevant to the calculation of the section 199A deduction. The amendments to § 1.199A-3(b)(1)(iv) provide additional rules and clarification on the treatment of suspended losses. Section 1.199A-3(d) provides guidance that allows a shareholder in a regulated investment company (RIC) within the meaning of section 851(a) to take a section 199A deduction with respect to certain income of, or distributions from, the RIC. The amendments to § 1.199A-6(d) include additional rules related to trusts and estates under section 663 of the Code. This Summary of Comments and Explanation of Revisions describes each of the final rules contained in this document in turn.

Section 1.199A-3(b)(1)(iv) of the February 2019 Final Regulations provides that previously disallowed losses or deductions (including under sections 465, 469, 704(d), and 1366(d)) allowed in the taxable year are generally taken into account for purposes of computing QBI, except to the extent the losses or deductions were disallowed, suspended, limited, or carried over from taxable years ending before January 1, 2018. These losses are used, for purposes of section 199A, in order from the oldest to the most recent on a first-in, first-out (FIFO) basis. The February 2019 Proposed Regulations expanded this rule to provide that previously disallowed losses or deductions are treated as losses from a separate trade or business in the year they are taken into account in determining taxable income. Further, the attributes of the previously disallowed losses or deductions, including whether they are attributable to a trade or business and whether they would otherwise be included in QBI, are determined in the year the loss or deduction is incurred.

The Treasury Department and the IRS are aware that taxpayers and practitioners have questioned whether the exclusion of section 461(l) from the list of loss disallowance and suspension provisions in § 1.199A-3(b)(1)(iv) means that losses disallowed under section 461(l) are not considered QBI in the year the losses are taken into account in determining taxable income. Generally, for taxable years beginning after December 31, 2020, and before January 1, 2026, section 461(l) disallows an excess business loss for taxpayers other than C corporations. See section 2304(a) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281 (2020). Any disallowed excess business loss is treated as a net operating loss carryover for the taxable year for purposes of determining any net operating loss carryover under section 172(b) in subsequent taxable years. See section 172(b) as amended by section 2304(b) of the CARES Act.

The list of loss disallowance and suspension provisions in § 1.199A-3(b)(1)(iv) is not exhaustive. If a loss or deduction that would otherwise be included in QBI under the rules of § 1.199A-3 is disallowed or suspended under any provision of the Code, such loss or deduction is generally taken into account for purposes of computing QBI in the year it is taken into account in determining taxable income. These final regulations clarify this point by amending § 1.199A-3(b)(1)(iv)(A) to specifically reference excess business losses disallowed by section 461(l) and treated as a net operating loss carryover for the taxable year for purposes of determining any net operating loss carryover under section 172(b) in subsequent taxable years.

The Treasury Department and the IRS are also aware that taxpayers and practitioners have questioned how the phase-in rules apply when a taxpayer has a suspended or disallowed loss or deduction from a Specified Service Trade or Business (SSTB). Whether an individual has taxable income at or below the threshold amount, within the phase-in range, or in excess of the phase-in range, the determination of whether a suspended or disallowed loss or deduction attributable to an SSTB is from a qualified trade or business is made in the year the loss or deduction is incurred. If the individual's taxable income is at or below the threshold amount in the year the loss or deduction is incurred, and such loss would otherwise be QBI, the entire disallowed loss or deduction is treated as QBI from a separate trade or business in the subsequent taxable year in which the loss is allowed. If the individual's taxable income is within the phase-in range, then only the applicable percentage of the disallowed loss or deduction is taken into account in the subsequent taxable year. If the individual's taxable income exceeds the phase-in range, none of the disallowed loss or deduction will be taken into account in the subsequent taxable year. These final regulations clarify this treatment and provide an example of a taxpayer with taxable income in the phase-in range and a suspended loss from an SSTB.

The Treasury Department and the IRS received one comment requesting further clarification of the FIFO ordering rule. The commenter questioned whether the FIFO ordering rule should continue to apply for losses incurred in taxable years beginning on or after January 1, 2018. The commenter also asked for clarification regarding whether the rule applied on an annual basis such that each year is tracked separately and FIFO is applied for losses that are incurred each year or whether FIFO applies such that there is a single bucket of losses no matter the year incurred. The commenter recommended additional supporting worksheets or other forms to assist in the calculation, particularly if every year must be tracked individually.

The Treasury Department and the IRS have determined that in order to properly calculate the deduction, it is necessary for the FIFO rule to apply for losses incurred in taxable years beginning on or after January 1, 2018, and that the rule must be applied on an annual basis by category ( i.e., sections 465, 469, etc.). Accordingly, these final regulations retain the FIFO rule as proposed. The Treasury Department and the IRS continue to consider whether new worksheets or forms are necessary to assist in the calculation.

The February 2019 Proposed Regulations also provide that if a loss or deduction is partially disallowed, QBI in the year of disallowance must be reduced proportionately. These final regulations retain this rule, but with slight modifications, and provide examples.

If a RIC has certain items of income or gain, subchapter M of chapter 1 of the Code provides rules under which a RIC may pay dividends that a shareholder in the RIC may treat in the same manner (or a similar manner) as the shareholder would treat the underlying item of income or gain if the shareholder realized it directly. Like the preamble to the February 2019 Proposed Regulations, this preamble refers to this treatment as “conduit treatment.” The February 2019 Proposed Regulations include rules providing conduit treatment for qualified REIT dividends earned by a RIC. The Treasury Department and the IRS received one comment requesting that the proposed rules providing this treatment be finalized. These final regulations adopt those proposed rules.

The February 2019 Proposed Regulations do not provide conduit treatment for qualified PTP income earned by a RIC. Instead, the preamble to the February 2019 Proposed Regulations requested comments on issues relating to whether and how to provide conduit treatment for qualified PTP income, including the treatment of items attributable to an SSTB of a PTP allocated to a RIC and the treatment of losses of a PTP allocated to a RIC. The Treasury Department and the IRS received several comments addressing conduit treatment for qualified PTP income earned by a RIC. Two commenters recommended that conduit treatment be extended to qualified PTP income earned by RICs, excluding any items attributable to SSTBs. Both commenters suggested that any losses allocated to RICs from PTPs could be carried forward by the RIC for purposes of section 199A. Another commenter suggested methods by which RICs could track, and pay dividends attributable to, an SSTB of a PTP.

Another commenter suggested that RICs, particularly business development companies that conduct lending activities, be allowed to pay “QBI dividends” to their shareholders in cases where the RIC had income from an activity that would generate QBI if conducted by a partnership or an S corporation.

The Treasury Department and the IRS continue to consider those comments and evaluate whether it is appropriate and practicable to provide conduit treatment for qualified PTP income or other income of a RIC to further the purposes of section 199A(b)(1)(B).

Section 1.199A-6 provides guidance that certain specified entities (including trusts and estates) might need to compute the section 199A deduction of the entity and/or passthrough information to each of its owners or beneficiaries, so they may compute their section 199A deduction. Section 1.199A-6(d) contains special rules for applying section 199A to trusts and decedents' estates.

Under § 1.199A-6(d)(3)(ii), the QBI, W-2 wages, UBIA of qualified property, qualified REIT dividends, and qualified PTP income of a trust or estate are allocated to each beneficiary and to the trust or estate based on the relative proportion of the trust's or estate's distributable net income (DNI) for the taxable year that is distributed or required to be distributed to the beneficiary or is retained by the trust or estate. Proposed § 1.199A-6(d)(3)(iii) further provides that a trust described in section 663(c) with substantially separate and independent shares for multiple beneficiaries will be treated as a single trust for purposes of determining whether the taxable income of the trust exceeds the threshold amount.

The Treasury Department and the IRS received comments requesting guidance on the interaction between section 199A and the separate share rule in section 663(c). In particular, the commenters requested guidance on the allocation of QBI, W-2 wages, UBIA of qualified property, qualified REIT dividends, and qualified PTP income of a trust or estate to beneficiaries and the trust or estate based on DNI. The commenters noted differences in the allocation of overall DNI to beneficiaries of a trust or estate under sections 643(a) and 663(c) and asked about the allocation of these items in circumstances involving tax-exempt income and charitable deductions, as well as situations in which no DNI is allocated to a beneficiary. The commenters asserted that under § 1.663(c)-2(b)(5), deductions, including the section 199A deduction, attributable solely to one share are not available to any other separate share of the trust or estate. The commenters recommended that the allocation of QBI, W-2 wages, UBIA of qualified property, qualified REIT dividends, and qualified PTP income of a trust or estate should be based on the portion of such items that are attributable to the income of each separate share. In addition, the commenters recommended that § 1.663(c)-2(b) be amended to clarify how gross income not included in accounting income is allocated among separate shares.

After considering the comments and studying the separate share rule in more depth, the Treasury Department and the IRS have clarified the separate share rule in these final regulations to provide that, in the case of a trust or estate described in section 663(c) with substantially separate and independent shares for multiple beneficiaries, the trust or estate will be treated as a single trust or estate not only for purposes of determining whether the taxable income of the trust or estate exceeds the threshold amount but also in determining taxable income, net capital gain, net QBI, W-2 wages, UBIA of qualified property, qualified REIT dividends, and qualified PTP income for each trade or business of the trust or estate, and computing the W-2 wage and UBIA of qualified property limitations. Further clarification of the separate share rule under section 663 is beyond the scope of these final regulations, but the Treasury Department and the IRS intend to continue to study the issues raised by the commenters. Accordingly, these final regulations provide that the allocation of these items to the separate shares of a trust or estate described in section 663(c) will be governed by the rules under section 663(e) and such guidance as may be published in the Internal Revenue Bulletin ( see § 601.601(d)(2)(ii)( b )).

Section 1.199A-6(d)(3)(v) of the February 2019 Proposed Regulations provides rules under which the taxable recipient of a unitrust or annuity amount from a charitable remainder trust described in section 664 can take into account QBI, qualified REIT dividends, or qualified PTP income for purpose of determining the recipient's section 199A deduction. The Treasury Department and the IRS received no comments on these rules and these final regulations adopt these rules as proposed.

Executive Orders 13771, 13563, and 12866 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility.

These final regulations have been designated by the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) as subject to review under Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Treasury Department and OMB regarding review of tax regulations. OIRA has designated this final regulation as economically significant under section 1(c) of the Memorandum of Agreement. Accordingly, OIRA has reviewed these final regulations. For purposes of Executive Order 13771 this rule is regulatory.

Section 199A of the TCJA provides taxpayers other than corporations a deduction of up to 20 percent of QBI from domestic businesses plus up to 20 percent of their combined qualified REIT dividends and qualified publicly traded partnership income. Because the section 199A deduction had not previously been available, regulations are necessary to provide taxpayers with computational and definitional guidance regarding the application of section 199A.

The Treasury Department and the IRS previously issued the February 2019 Final Regulations regarding various items related to the calculation of the section 199A deduction. However, the February 2019 Final Regulations did not address treatment of REIT dividends received by RICs. Because RICs are taxed as C corporations, dividends paid by RICs are generally ineligible for the section 199A deduction under the statute, which excludes C corporation income from the definition of QBI. However, the statute also directs the Secretary to prescribe such regulations as are necessary to carry out the purposes of section 199A, including regulations for its application in the case of tiered entities. These final regulations establish rules under which RIC dividends associated with qualified REIT dividends may be eligible for a section 199A deduction.

In addition, these final regulations establish rules for the treatment of previously suspended losses in calculation of QBI and rules for applying section 199A to trusts and decedents' estates.

The analysis in this section compares these final regulations (these regulations) to a no-action baseline reflecting anticipated Federal income tax-related behavior in the absence of these regulations.

To assess the economic effects of these regulations, the Treasury Department and the IRS considered the economic effects of (i) rules for the treatment of previously suspended losses in calculation of QBI; (ii) rules providing conduit treatment for qualified REIT dividends earned by a RIC; and (iii) rules for applying section 199A to trusts and decedents' estates.

Regarding items (i) and (iii): These regulations provide certainty and clarity to taxpayers regarding terms and calculations necessary for taxpayers to determine their section 199A deduction. In the absence of this clarity, the likelihood would be exacerbated that different taxpayers would hold different interpretations of the tax treatment of previously suspended losses or the application of section 199A to trusts and decedents' estates. These regulations help taxpayers to hold more similar interpretations of the tax treatment of these items. In general, overall economic performance is enhanced when individuals and businesses face more uniform signals about tax treatment. Certainty and clarity over tax treatment also reduce compliance costs for taxpayers.

The Treasury Department and the IRS do not project meaningful changes in economic activity as a result of these provisions, relative to the no-action baseline.

Regarding item (ii): These regulations provide that an individual who is a shareholder of a RIC that has an ownership interest in a REIT may, for section 199A purposes, treat certain dividends received from a RIC in the same way the shareholder would treat dividends received directly from the REIT. Specifically, under these regulations RIC shareholders are generally eligible for the section 199A deduction on their section 199A dividends. In the absence of these regulations, dividends received from a RIC that has an ownership interest in a REIT would not qualify for the section 199A deduction while dividends received directly from that REIT would generally qualify for the deduction. Thus, in the absence of these regulations, direct ownership of REITs is tax-advantaged relative to indirect ownership of REITs through RICs even though the underlying economic activity is similar.

As a general principle, overall economic performance is improved to the extent that the tax consequences of investment through a financial intermediary (such as a RIC) are equivalent to the tax consequences of direct investment. In the absence of these regulations, a tax incentive would arise for individuals to invest directly in REITs rather than through RIC intermediaries. This would distort investment allocation relative to a tax-neutral treatment of financial intermediaries, leading investors to make decisions based on differential tax treatment rather than purely based on the value of investments. In particular, it would likely cause investors to hold less diversified portfolios. 1 The Treasury Department and the IRS therefore project that, under these regulations, individual investors seeking to invest in real estate would in general hold more diversified portfolios relative to the no-action baseline.

Another economic loss that would likely arise in the absence of these regulations is due to the costs of acquiring information. RICs, including mutual funds and exchange-traded funds, simplify decision-making for investors by finding, indexing, and vetting REITs. This is an efficient market organization due to economies of scale in gathering relevant information. In the absence of these regulations, individual investors face substantial incentives to invest directly in REITs due to asymmetric tax treatment, and face larger time costs to evaluate REIT investment options than RICs. The same level of investment can be achieved with substantially less resource use if research costs are incurred by RICs rather than individual investors, and therefore this rule will lead to more efficient resource use in making aggregate investment decisions.

On the basis of these effects, the Treasury Department and the IRS also project that these regulations will lead investors, on average, to hold more real estate in their portfolios (relative to the no-action baseline) and thus hold a smaller share of investment in other industries.

The Treasury Department and the IRS project that the economic effects of these regulations will exceed $100 million per year relative to the no-action baseline. The compliance costs alone are estimated to be approximately $149 million (excluding any compliance cost savings), as described in the Paperwork Reduction Act section of these analyses. These compliance costs arise because the regulations require a RIC to compute and report section 199A dividends to its shareholders in order for them to benefit from the section 199A deduction on qualified REIT dividends earned by the RIC. In some sense, these costs are optional since RICs that do not pay section 199A dividends, either because they do not receive qualified REIT dividends or because they choose not to take on the additional record-keeping, avoid these compliance costs entirely. Nonetheless, we expect that many RICs will choose to incur the compliance costs to facilitate their shareholders' section 199A deductions.

Though many RICs keep detailed records of their investment portfolios, these regulations nonetheless create non-trivial administrative costs for any RICs that wish to provide section 199A dividends to their shareholders. However, this increase in compliance costs may be accompanied by a decrease in compliance costs for REITs who would otherwise see an influx of individual investors holding direct interest in REITs. The Treasury Department and the IRS have not estimated this compliance cost savings.

Beyond any potential compliance cost reduction, several other economic benefits result from these regulations, including those flowing from enhanced financial diversification and reduced information-gathering costs. While we have not attempted to quantify the economic benefits of these effects, we project that they are likely to be substantial as well. We estimate that up to $6.0 billion in REIT dividends accrued to individual taxpayers through RICs in taxable year 2018. Of this, $5.6 billion went to taxpayers with positive taxable income, who thus could potentially use section 199A deductions. This corresponds to aggregate potential deductions of up to $1.1 billion (20 percent of $5.6 billion). Under an assumption that the effective tax rate for these investors was 30 percent, then under the no-action baseline taxpayers would theoretically be willing to incur up to $336 million in economic costs in order to receive the section 199A deduction on their income derived from REITs that currently flows through RICs. Thus, relative to the no-action baseline, these regulations provide up to $336 million in annual benefits by allowing investors to avoid these costs.

Another way of gauging the potential economic benefits from these regulations is to consider them relative to the investment returns currently flowing to REIT investors through RICs. If RIC intermediaries provide economic benefits (relative to direct ownership of REITs) equal to five percent of investment returns, then the benefits of these regulations relative to the no-action baseline would be up to $280 million (five percent of $5.6 billion), assuming the same levels of economic activity as in taxable year 2018.

The Treasury Department and the IRS project that more taxpayers will claim the section 199A deduction under these regulations, reducing government revenue relative to the no-action baseline. On its own, this reduction in revenue itself would affect the United States economy. Either the deficit would increase or other taxes would need to be raised. This effect should be weighed against the enhanced efficiency arising from the regulations. We have not attempted to quantify these effects. Similarly, we have not attempted to quantify the efficiency effects of the shift in investment away from other industries and toward real estate that may result from these regulations, relative to the no-action baseline.

The Treasury Department and the IRS estimate that the rules regarding RICs as financial intermediaries for REIT investors will affect up to 2,500 RICs and up to 4.8 million individual tax units. These estimates are derived from the universe of taxable year 2018 administrative tax records. For taxable year 2018, taxpayers were able to rely on the February 2019 Proposed Regulations, which meant that RICs could provide conduit treatment for REIT dividends for section 199A purposes (as in these regulations). Accordingly, 2,500 entities that did not file Form 1120-REIT issued at least one Form 1099-DIV with section 199A dividends. For comparison, approximately 1,400 REITs issued at least one Form 1099-DIV with section 199A dividends. Approximately 5.2 million tax units received at least one Form 1099-DIV with section 199A dividends from the 2,500 non-REIT entities. Among these tax units, roughly 4.8 million had positive taxable income and therefore could have potentially benefited from the section 199A deduction. 2

The collection of information contained in these regulations will be reviewed by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-0110. The collection of information required by this regulation is in § 1.199A-3. The collection of information in § 1.199A-3 is required for RICs that choose to report information regarding qualified REIT dividends to their shareholders. It is necessary to report the information to the IRS and relevant taxpayers to ensure that taxpayers properly report in accordance with the rules of these regulations the correct amount of deduction under section 199A. The collection of information in § 1.199A-3 is satisfied by providing information about section 199A dividends as Form 1099-DIV (OMB control number 1545-0110) and its instructions may prescribe.

For purposes of the PRA, the reporting burden associated with § 1.199A-3 will be reflected in the next revision to Form 1099-DIV. The burden associated with the information collection in the regulation represents 1.567 million hours and $149 million (2018 dollars) annually to comply with the information collection requirement in the regulation. These estimates capture both changes made by the TCJA and those that arise out of these regulations. The burden hours estimate was derived from IRS's legacy burden model and is discussed in further detail on Form 1099-DIV. The hourly rate is derived from the IRS's office of Research, Applied Analytics, and Statistics Business Taxpayer Burden model that relates time and out-of-pocket costs of business tax preparation, derived from survey data, to assets and receipts of affected taxpayers along with other relevant variables, and converted by the Treasury Department to $2017. The Treasury Department and the IRS request comment on all aspects of information collection burdens related to these regulations. Proposed revisions (if any) to these forms that reflect the information collections contained in these regulations will be made available for public comment at www.irs.gov/draftforms and will not be finalized until after the forms have been approved by OMB under the PRA.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number.

In accordance with the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this final rule will not have a significant economic impact on a substantial number of small entities.

The final rule is not likely to affect a substantial number of small entities. Section 1.199A-3 applies to RICs that pay section 199A dividends. Congress created RICs to give small investors access to the professional management and asset diversification that are available only with very large investment portfolios. To insure appropriate non-tax regulation of these substantial investment portfolios, subchapter M of chapter 1 of the Code requires that such RICs must be eligible for registration, and must actually be registered with the Securities and Exchange Commission under the Investment Company Act of 1940. There are some small businesses that are publicly traded, but most publicly traded businesses are not small entities as defined by the Regulatory Flexibility Act. Thus, the Treasury Department and IRS expect that most RICs are not small entities for purposes of the Regulatory Flexibility Act. Accordingly, the Treasury Department and the IRS have determined that this Treasury decision will not affect a substantial number of small entities. Finally, no comments regarding the economic impact of these regulations on small entities were received.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business and no comments were received.

The principal authors of these regulations are Michael Y. Chin and Steven Harrison, Office of the Associate Chief Counsel (Financial Institutions and Products) and Robert Alinsky, Vishal Amin, Margaret Burow, and Sonia Kothari, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

Swim events, fireworks displays, and marine events are held on an annual recurring basis on the navigable waters within the Coast Guard Sector Long Island Sound Captain of the Port (COTP) Zone. The Coast Guard has established special local regulations and safety zones for some of these annual recurring events on a case by case basis to ensure the protection of the maritime public and event participants from potential hazards. In the past, the Coast Guard has not received public comments or concerns regarding the impact to waterway traffic from regulations associated with these annually recurring events. Events were either added or deleted to the table of annual events based on their likelihood to recur in subsequent years. Additionally, minor changes to existing events such as position, date, or title, were made to ensure the accuracy of event details.

On April 21, 2020, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Special Local Regulations and Safety Zones; Coast Guard Sector Long Island Sound Annual and Recurring Safety Zone and Special Local Regulation Update (85 FR 22049). There we stated why we issued the NPRM and invited comments on our proposed regulatory action. During the comment period that ended on May 21, 2020, we received five comments.

The Coast Guard issues this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The COTP Sector Long Island Sound is amending 33 CFR 100.100 Special Local Regulations; Regattas and Boat Races in the Coast Guard Sector Long Island Sound Captain of the Port Zone, Table to § 100.100 and 33 CFR 165.151 Safety Zones; Fireworks Displays, Air Shows, and Swim Events in the Captain of the Port Long Island Sound Zone, Table to § 165.151.

The marine events listed therein include air shows, fireworks displays, and other marine related events requiring a limited access area restricting vessel traffic for safety purposes. The amendments to the tables will more accurately reflect the dates of marine events based on historical occurrences.

The rule applies to the annual recurring events listed in the Table to 100.100 and Table 165.151 in 33 CFR. The tables provide the event name and the locations of the events. Notifications will be made to the local maritime community through all appropriate means such as Local Notice to Mariners and Broadcast Notice to Mariners well in advance of the events. If the event does not have a date listed, then exact dates and times of the enforcement period will be announced through a Notice of Enforcement in the Federal Register .

This rule expands date ranges for marine events listed in 33 CFR parts 100 and 165 with the goal of significantly reducing the administrative burden on personnel. This rule is also removes four marine events from 33 CFR 165.151.

As noted above, we received five comments on our NPRM published April 21, 2020. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

Two comments were general questions regarding the marking of fireworks safety zones. This rule expands the date ranges for events that are published in 33 CFR parts 100 and 165. In past years, some of these events fell outside the date range published in the CFR. In those circumstances, the Coast Guard would have to publish a temporary rule in the Federal Register with the revised date. Making these changes will better align the date ranges with the events and will also reduce the Coast Guard's administrative burden associated with publishing a temporary rule to reflect the revised date. Each marine event will have its own safety plan which will require the Coast Guard's review and validation. Each safety plan validated within the Sector Long Island Sound COTP Zone is unique to the individual event for which it has been submitted. Each event, therefore, will have individual methods and rules for marking boundaries, routes, and ensuring safe areas for their respective events.

A third comment questioned the mechanism for notifying the public of enforcement dates and the process for reviewing marine events and also communicated concerns related to COVID-19 and the associated challenges. This rule merely amends the date range for specific events listed in 33 CFR part 100 and 165. It is not a confirmation that the event will actually take place. For all marine events, including those listed in the CFR, the event sponsor is required to submit a marine event application. The Coast Guard reviews and considers each application individually and maintains the authority to approve or disapprove each event based on available and relevant information regardless of the event's listing in the CFR. If and when a marine event application is approved, the Coast Guard notifies the public of the event by a Broadcast Notice to Mariners, Local Notice to Mariners, and/or by Notice of Enforcement.

A fourth comment questioned the Coast Guard's consideration of small entities in the development of this rule. As stated above, this rule changes the date range only for specific events, all of which have already undergone the process of public review and notification. The regulations' effect on small entities was considered during the original comment period for each event.

A fifth comment was not relevant to this rulemaking.

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

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

This regulatory action determination is based on the revisions only being administrative in nature.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule is amending 33 CFR 100 and 165. The amendments in question will have no impact on any small businesses outside of those already noted (if any) in previous rulemaking. To ensure the public is aware of the enforcement of the any regulations, the Coast Guard will issue a notice of the time and location of each regulated area through a Notice of Enforcement, Local Notice to Mariners, or Broadcast Notice to Mariners, as appropriate.

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

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves special local regulations for various one-day marine events and safety zones for fireworks displays and one day swimming events. Normally such actions are categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Memorandum for Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR parts 100 and 165 as follows:

The PD program provides grants to train Indian individuals to become teachers or administrators in school districts that serve a high proportion of Indian students. ESEA section 6122 (20 U.S.C. 7442). Under section 6122(h) of the ESEA, the Secretary must require, by regulation, that individuals who receive training under this program either perform work related to the training and that benefits Indian students in a local educational agency that serves a high proportion of Indian students, or repay all or a prorated part of the assistance received. Under the program regulations implementing this requirement, when participants graduate from their pre-service training program, they must report on their employment status every six months. 34 CFR 263.10(b). If they have not found qualifying employment in 12 months, then they are referred for cash payback. 34 CFR 263.8(c)(1). In addition, graduates who start their work payback but are no longer in qualifying employment and do not submit evidence of such employment within a 12-month period are also referred for cash payback. 34 CFR 263.8(c)(1).

The Department understands that, due to the national emergency caused by COVID-19, it is very difficult for graduates to find qualifying employment at this time and, in some cases, previously employed individuals have lost their jobs. The Department is therefore providing additional time for participants to meet these regulatory requirements regarding evidence of employment, by amending the provisions in § 263.8(c). Participants who graduate from a program during Federal fiscal year (FY) 2020 (October 1, 2019-September 30, 2020) will have 24 months to submit evidence of qualifying employment. Similarly, employed graduates in work payback during FY 2020 must submit evidence of continuing employment within a 24-month period, rather than a 12-month period. The Department is changing only the provision for converting students to cash payback (34 CFR 263.8(c)(1)); the regulatory requirements for reporting every six months remains unchanged (34 CFR 263.10(b)).

Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the Department generally offers interested parties the opportunity to comment on proposed regulations. However, the APA provides that an agency is not required to conduct notice and comment rulemaking when the agency for good cause finds that notice and public comment thereon are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). Here, there is good cause to waive notice and comment rulemaking, because going through the full rulemaking process would delay the Department's ability to provide relief to PD program participants who would otherwise be referred for cash payback.

The good cause exception is appropriate “in emergency situations or where delay could result in serious harm.” See Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 2004) (internal citations omitted). “The public interest prong of the good cause exception to the APA notice and comment requirement is met only in the rare circumstance when ordinary procedures—generally presumed to serve the public interest—would in fact harm that interest.” Mack Trucks Inc. v. E.P.A., 682 F.3d 87, 95 (D.C. Cir. 2012).

The COVID-19 pandemic has escalated at a rapid pace and scale, resulting in extraordinary circumstances including widespread school closures. Many participants are experiencing difficulties in finding employment, or have lost employment, and we have received requests for extensions of these deadlines. The COVID-19 crisis has hit particularly hard in Indian Country. Some participants who graduated in 2019 are not able to find jobs for fall 2020, given the crisis and the lack of resources for many school districts. Permitting these Native American participants to continue to seek employment in schools that serve a high proportion of Native American students, rather than being forced into debt during this difficult time, is in the public interest. There are approximately 500 participants currently in work-related payback status who are required to submit their employment status every six months (see 34 CFR 263.10). For those participants who lost their job a number of months ago, or who graduated in spring 2019 and are still seeking employment, their second six-month submission may be due within days or weeks and would trigger the transition to cash payback under § 263.8. Due to the emergency nature of this situation, there is not time for public notice and comment. By extending the timeline for submission of employment evidence, this final regulation ensures that these participants will not be forced into debt during this crisis, which would be contrary to the public interest. Instead they can continue to seek qualifying employment.

The APA also generally requires that regulations be published at least 30 days before their effective date but excepts from that requirement rules that grant or recognize an exemption or relieve a restriction (5 U.S.C. 553(d)(1)). Because these regulations relieve restrictions on participants by providing additional time to obtain qualifying employment, this exception to the delayed effective date under the APA applies.

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

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

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

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

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

This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f)(1) of Executive Order 12866.

Under Executive Order 13771, for each new regulation that the Department proposes for notice and comment or otherwise promulgates that is a significant regulatory action under Executive Order 12866 and that imposes total costs greater than zero, it must identify two deregulatory actions. For FY 2020, any new incremental costs associated with a new regulation must be fully offset by the elimination of existing costs through deregulatory actions. Because this final rule is not a significant regulatory action, the requirements of Executive Order 13771 do not apply. 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).

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

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

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

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

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

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

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

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

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

In accordance with the Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. This extension of the regulatory deadline for participants to find and keep qualifying employment is not expected to have any costs because it merely allows additional time for those participants to submit their evidence of employment in light of the extraordinary circumstances related to the COVID-19 pandemic. There is no additional burden on our stakeholders but rather a benefit, and the additional burden on the Department, if any, is minor.

The Regulatory Flexibility Act does not apply to this rulemaking because there is good cause to waive notice and comment under 5 U.S.C. 553.

The final regulations do not create any new information collection requirements.

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

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

For the reasons discussed in the preamble, the Secretary amends title 34 of the Code of Federal Regulations as follows:

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

The EPA is taking final action to approve all SIP revisions submitted by the State of North Dakota on May 2, 2019, with the exception of several revisions that we are acting on in a separate action or are taking no action on, as outlined in section II of our proposed rulemaking published on March 20, 2020. 1 The SIP revisions that we are acting on contain amendments to N.D. Admin. Code Chapter 33.1-15-15 (Prevention of Significant Deterioration of Air Quality) and N.D. Admin. Code Chapter 33.1-15-14 (Designated Air Contaminant Sources, Permit to Construct, Minor Source Operating Permit, Title V Operating Permit). The amendments address changes to the State's Ambient Air Quality Standard for ozone and update the State's PSD rules and permit-to-construct rules.

Our March 20, 2020 rulemaking contains a detailed summary of the SIP revisions in question and an explanation of the bases for our proposed approval. 2 We invited comment on all aspects of our proposal, and provided a 30-day comment period, which ended on April 20, 2020.

We received no comments during the public comment period.

As outlined in our proposed rulemaking, the EPA is taking final action to approve the addition of new and revised rules to 33.1-15-15 and 33.1-15-14 as submitted on May 2, 2019.

Specifically, we are taking final action to approve the following revisions: Revisions to Chapter 33.1-15-15 (Prevention of Significant Deterioration)—33.1-15-15-01.2.; Revisions to Chapter 33.1-15-14 (Designated Air Contaminant Sources, Permit to Construct, Minor Source Permit to Operate, Title V Permit to Operate)—33.1-15-14-02.

In this document, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the State of North Dakota's revisions to its SIP as described in section III of this preamble. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 8 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by the EPA for inclusion in the SIP, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 3

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

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the 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 nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, EPA amends 40 CFR part 52 as follows:

On December 20, 2019, the EPA proposed to approve, under CAA section 110(k)(3), or to conditionally approve, under CAA section 110(k)(4), all or portions of submittals from the California Air Resources Board (CARB) of revisions to the California SIP for the Ventura County ozone nonattainment area for the 2008 ozone NAAQS. 1 The relevant SIP revisions include Ventura County Air Pollution Control District's (VCAPCD's or “District's”) Final 2016 Ventura County Air Quality Management Plan (“2016 Ventura County AQMP”), and the Ventura County portion of CARB's 2018 Updates to the California State Implementation Plan (“2018 SIP Update”). Collectively, we refer to these revisions as the 2016 Ventura County Ozone SIP, and we refer to our December 20, 2019 proposed rule as the “proposed rule.”

Our proposed conditional approval of the contingency measures element of the 2016 Ventura County AQMP relied on specific commitments: (1) From the District to modify an existing rule or rules that would provide for additional emissions reductions in the event that Ventura County fails to meet a reasonable further progress (RFP) milestone or fails to attain the 2008 ozone NAAQS by the applicable attainment date, and (2) from CARB to submit the revised District rule(s) to the EPA as a SIP revision within 12 months of our final action. 2 For more information on the SIP revision submittals and related commitments, please see our proposed rule.

In our proposed rule, we provided background information on the ozone standards, 3 area designations, related SIP revision requirements under the CAA, and the EPA's implementing regulations for the 2008 ozone NAAQS, referred to as the 2008 Ozone SIP Requirements Rule (“2008 Ozone SRR”). To summarize, the Ventura County ozone nonattainment area is classified as Serious for the 2008 ozone NAAQS, and the 2016 Ventura County Ozone SIP was developed to address all the SIP requirements that apply to a Serious nonattainment area for the 2008 ozone NAAQS other than the SIP requirements for new source review and reasonably available control technology previously addressed in separate submittals and EPA actions.

For our proposed rule, we reviewed the various SIP elements contained in the 2016 Ventura County Ozone SIP, evaluated them for compliance with statutory and regulatory requirements, and proposed to conclude that they meet all applicable requirements with the exception of the contingency measures element. On February 27, 2020, the EPA took final action to approve all the elements of the 2016 Ventura County Ozone SIP except for the contingency measures element. 4 In our February 27, 2020 final rule, we indicated that we would be taking final action on the contingency measures element in a separate final rule. This action is our final action on the contingency measures element.

With respect to the contingency measures element of the 2016 Ventura County Ozone SIP, in our proposed rule, we evaluated the element for compliance with the CAA sections 172(c)(9) and 182(c)(9). We explained that the key is that the statute requires that contingency measures provide for additional emissions reductions that are not relied on for RFP or attainment and that the purpose of contingency measures is to provide continued emissions reductions while the plan is being revised to meet the missed milestone or attainment date. We further explained that neither the CAA nor the EPA's implementing regulations for the 2008 Ozone NAAQS require that contingency measures achieve a specific amount of emissions reductions, but that the EPA will evaluate that on a case-by-case basis depending on the facts and circumstances.

In our proposed rule, in light of the Bahr decision, 5 we determined that the contingency measures element of the 2016 Ventura County Ozone SIP could not be fully approved without supplementation by the District and CARB. However, we also determined that the element could be conditionally approved as meeting the requirements of CAA sections 172(c)(9) and 182(c)(9) for the 2008 ozone NAAQS, based upon commitments from the District and CARB to adopt and submit a revised rule or rules with provisions designed to take effect if the area fails to meet an RFP milestone or fails to attain by the applicable attainment date. 6

Please see our proposed rule for more information concerning the background for this action and for a more detailed discussion of the rationale for conditional approval of the contingency measures element of the 2016 Ventura County Ozone SIP.

The public comment period on the proposed rule opened on December 20, 2019, the date of its publication in the Federal Register , and closed on January 21, 2020. During this period, the EPA received five anonymous comments and one comment letter submitted by Air Law for All on behalf of the Center for Biological Diversity, the Center for Environmental Health, and Citizens for Responsible Oil and Gas (collectively referred to herein as “CBD”).

In our February 27, 2020 final action on the 2016 Ventura County Ozone SIP other than the contingency measures element, we explained that the EPA was not responding to the five anonymous commenters because their comments are either not adverse or not pertinent to the proposed action. We also indicated that the comment letter from CBD relates solely to our proposed conditional approval of the contingency measures element, and that we would be addressing CBD's comments in a separate final rule on the contingency measures element. We address CBD's comments in the following paragraphs of this final rule.

Comment #1: CBD recounts the background leading to the Bahr decision and provides a discussion of policy implications of that decision. CBD also provides its negative critique of the LEAN decision  7 and asserts that EPA must interpret the contingency measures requirement consistent with the Bahr decision on a nationwide basis and not just within the Ninth Circuit's jurisdiction.

Response #1: In our proposed rule, we explain that we have reviewed the contingency measures element of the 2016 Ventura County Ozone SIP in light of the Bahr decision. In other words, for the purposes of our review and action on the 2016 Ventura County Ozone SIP, we accept the Bahr decision as governing our review of the contingency measures element. The issue of extending the Bahr decision with respect to the contingency measures requirement outside of the jurisdiction of the Ninth Circuit is beyond the scope of this rulemaking.

Comment #2: Because the District did not quantify the potential additional emissions reductions from any of the three prospective contingency measures, CBD asserts that the reductions must be assumed to be de minimis.

Response #2: In our proposed rule, we acknowledged that the potential contingency measures that were identified by the District would not achieve one year's worth of RFP, given the types of measures under consideration and the magnitude of emissions reductions constituting one year's worth of RFP in this nonattainment area. We disagree that it is necessary to have an estimate of the emissions reductions for purposes of proposing a conditional approval. However, in response to this comment, the District and CARB developed preliminary estimates of the reductions that would likely be achieved by the contingency measures under consideration, if triggered by a failure to achieve an RFP milestone or failure to attain the 2008 ozone NAAQS by the applicable attainment date. 8 In developing the preliminary estimates, the District narrowed the list of prospective contingency measures to a single one, i.e., amendments to Rule 74.2 (“Architectural Coatings”). 9 We have reviewed the preliminary estimates for the amendments to Rule 74.2, and find that they are based on reasonable assumptions and factors. Based on the preliminary estimates, emissions reductions from amendments to Rule 74.2 would likely be in the range of 0.02 to 0.06 tons per day (tpd) of volatile organic compounds (VOC), which amount to approximately 2 to 5 percent of one year's worth of RFP. 10 As we anticipated in our proposed rule, the reductions would not amount to one year's worth of RFP.

CBD asserts that, if the EPA or the District develop preliminary emissions estimates for the prospective contingency measures, then the EPA must necessarily re-propose action on the contingency measures element. We disagree and find that the development of the estimates and presentation herein is a logical outgrowth of the proposed rule and CBD's comments. The quantification of emissions reductions does not affect our rationale for our proposed conditional approval of the contingency measures element because we assumed that the reductions, whatever they would ultimately be, would not be equivalent to one year's worth of RFP.

Comment #3: CBD asserts that consideration of surplus emissions reductions from already-implemented measures in evaluating the adequacy of contingency measures is functionally no different than simply approving the already-implemented measures as contingency measures, which is inconsistent with the Bahr decision. CBD also asserts that the EPA's approach in this action would allow states to meet the contingency measures requirement through submittal of token de minimis contingency measures so long as already-implemented measures provide for surplus emissions reductions equivalent to one year's worth of RFP. CBD views the EPA's consideration of surplus reductions from already-implemented measures as relying on a factor Congress has not intended the Agency to consider in evaluating the adequacy of contingency measures under CAA section 172(c)(9).

Response #3: First, the EPA does not interpret CAA section 172(c)(9) or 182(c)(9) as allowing states to meet the requirements through submittal merely of token or de minimis contingency measures. States must include contingency measures in nonattainment plans that will be triggered in the event of a failure to meet RFP or failure to attain. However, the number of such contingency measures, or the amount of emissions reductions that such measures need to achieve, may vary. As explained in the proposal, the EPA considers it appropriate to take into account the full facts and circumstances at issue in a given nonattainment area when evaluating the adequacy of contingency measures, and this may include approving contingency measures that achieve less than the one year's worth of RFP in that area. The EPA emphasizes that it does not interpret the CAA to require states to adopt only token or de minimis contingency measures; it interprets the CAA to require contingency measures appropriate for the area.

Second, we disagree that, if the EPA takes into account the total facts and circumstances in a given nonattainment area when assessing the adequacy of contingency measures, and in particular the amount of emissions reductions that such measures will achieve, that this contradicts Congressional intent. The specific explicit factors Congress intended the Agency to use in evaluating contingency measures are set forth in CAA sections 172(c)(9) and 182(c)(9) and include specificity (“implementation of specific measures”), timing (“measures to be undertaken” and “to take effect”), triggers (if the area fails to attain the NAAQS by the applicable [NAAQS] or if the area fails to meet any applicable milestone), federal enforceability (“included in the [SIP]”), and readiness (measures must be designed to take effect without further action by the state or the EPA). We will review the contingency measure that is the subject of the conditional approval with those factors in mind when we receive the submittal of the revised District rule as a SIP revision from CARB.

Neither CAA section 172(c)(9) nor 182(c)(9) contain language implying that the factors discussed above are the only factors for the Agency to consider. Neither section specifies the magnitude of emissions reductions that contingency measures must achieve as an explicit factor for the EPA to consider, although consideration of the magnitude is appropriate in determining whether the contingency measure or measures submitted by the state meet the requirements of CAA sections 172(c)(9) and 182(c)(9). Consideration of the magnitude of emissions reductions is appropriate because contingency measures serve a remedial function where an area fails to achieve an RFP milestone or fails to attain the NAAQS by the applicable attainment date, and RFP and attainment are achieved through emissions reductions. 11

Just as the CAA does not include the magnitude of emissions reductions as a specific explicit consideration, the CAA also does not prescribe how the EPA is to evaluate that question. As such, the EPA is not relying on a factor that Congress did not intend the EPA to consider when the Agency considers the emissions reductions from already-implemented measures that are surplus to those needed for RFP or attainment within a given nonattainment area when evaluating whether the state's contingency measure submittal meets CAA sections 172(c)(9) and 182(c)(9).

Comment #4: CBD asserts that contingency measures should at a minimum equal one year's worth of RFP and asserts that CAA section 182(g) provides statutory support for the interpretation that contingency measures should provide for one year's worth of RFP.

Response #4: Neither the CAA nor the EPA's implementing regulations for the ozone NAAQS establish a specific amount of emissions reductions that implementation of contingency measures must achieve. However, consistent with our long-standing guidance, we agree that contingency measures should generally provide for emissions reductions approximately equivalent to one year's worth of progress, which, for Serious ozone nonattainment areas such as Ventura County, amounts to reductions of 3 percent of the RFP baseline emissions inventory for the nonattainment area.

CBD finds statutory support in CAA section 182(g) for the EPA's recommendation that contingency measures should generally provide for one year's worth of progress. We do not disagree that our recommendation concerning emissions reductions from contingency measures comports generally with the statutory scheme for attainment planning. However, like sections 172(c)(9) and 182(c)(9), section 182(g) does not explicitly identify the magnitude of reductions that contingency measures must achieve nor does not it address how to evaluate the reductions from contingency measures in light of the facts and circumstances of a given nonattainment area.

In making the recommendation that contingency measures typically achieve one year's worth of RFP, the EPA has considered the overarching purpose of such measures in the context of attainment planning. The purpose of emissions reductions from implementation of contingency measures is to ensure that, in the event of a failure to meet an RFP milestone or a failure to attain the NAAQS by the applicable attainment date, the state will continue to make progress toward attainment though additional emissions reductions at a rate similar to that specified under the RFP requirements. The intent is that the state will achieve the emissions reductions from the contingency measures while conducting additional control measure development and implementation as necessary to correct the RFP shortfall or as part of a new attainment demonstration plan. 12 The facts and circumstances of a given nonattainment area may justify larger or smaller amounts of emissions reductions for contingency measure purposes.

In reviewing a SIP revision for compliance with CAA sections 172(c)(9) and 182(c)(9), the EPA evaluates whether the contingency measure or measures would provide emissions reductions that, when considered with surplus emissions reductions from other measures, ensure sufficient continued progress in the event of a failure to achieve an RFP milestone or to attain the ozone NAAQS by the applicable attainment date. We continue to evaluate the sufficiency of continued progress that will result from contingency measures in light of our guidance, but in appropriate circumstances do not believe that the contingency measures themselves must provide for one year's worth of RFP. Such appropriate circumstances include situations in which sufficient progress would be maintained by the contingency measures and surplus emissions reductions from other sources while the state proceeds to develop and implement additional control measures as necessary to correct the RFP shortfall or as part of a new attainment demonstration plan. In other words, if there are additional emissions reductions projected to occur after the RFP milestone years or the attainment year that a state has not relied upon for purposes of RFP or attainment or to meet other nonattainment plan requirements, and that result from measures the state has not adopted as contingency measures, then those reductions may support EPA approval of contingency measures identified by the state even if the contingency measures would result in less than one year's worth of RFP in appropriate circumstances.

As to whether the contingency measure, once adopted, would provide for sufficient continued progress in the event of a failure to achieve an RFP milestone or a failure to attain the NAAQS, we reviewed the documentation provided in the 2018 SIP Update of “surplus” reductions, as clarified by CARB in August 2019 from CARB's already-adopted mobile source control program in the two RFP milestone years and in the year following the attainment year. For the Ventura County nonattainment area, CARB's estimates of “surplus” reductions in the RFP milestone years (5.1 tpd of oxides of nitrogen (NO X ) in 2020 and 7.1 tpd of NO X in 2017) are 6 to 9 times greater than one year's worth of progress (0.8 tpd of NO X ). 13 With respect to the year after the attainment year, CARB estimates that NO X emissions in Ventura County will be approximately 0.9 tpd lower in 2021 than in the 2020 attainment year due to mobile source controls and vehicle turnover, and thus continued emissions reductions are assured in the year after the attainment year even before accounting for the emissions reductions from the to-be-adopted local contingency measure. 14 As such, we conclude that the to-be-adopted District contingency measure need not in itself achieve one year's worth of RFP.

In conclusion, we anticipate that the emissions reductions from the contingency measure ultimately adopted by the District will be sufficient, although we expect that it will achieve less than 1.1 tpd of VOC or 0.8 tpd of NO X reductions ( i.e., one year's worth of RFP), because other surplus emission reductions measures (not relied upon directly to meet the statutory contingency measure requirement or any other nonattainment plan requirement including RFP or attainment) will ensure sufficient continued progress in the event of a failure to achieve an RFP milestone or a failure to attain the NAAQS by the applicable attainment date. Therefore, we expect the contingency measure, once adopted and submitted, to be sufficient to remedy the deficiency in the contingency measures element of the 2016 Ventura County Ozone SIP, and the commitment to submit such a contingency measure as an appropriate basis for a conditional approval.

For the reasons discussed above, under CAA section 110(k)(4), the EPA is taking final action to conditionally approve as a revision to the California SIP the contingency measures element of the 2016 Ventura County Ozone SIP, submitted by CARB on April 11, 2017 and December 5, 2018, as meeting the requirements of CAA sections 172(c)(9) and 182(c)(9) for RFP and attainment contingency measures. 15 Our conditional approval is based on commitments by the District and CARB to supplement the contingency measures element of the 2016 Ventura County Ozone SIP through submission, as a SIP revision (within one year of the effective date of our final conditional approval action), of a revised District rule that would add new limits or other requirements if an RFP milestone is not met or if Ventura County fails to attain the 2008 ozone NAAQS by the applicable attainment date. 16

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

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

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

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

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

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

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

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

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

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

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

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

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. 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 nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

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

This rulemaking was initiated pursuant to the Commission's December 20, 2019 Order in FMC Docket No. P3-18, which granted in part and denied in part, a petition by the World Shipping Council (WSC) for regulatory relief. Pet'n of the World Shipping Council for an Exemption from Certain Provisions of the Shipping Act of 1984, as amended, and for a Rulemaking Proceeding, Pet. No. P3-18, 1 F.M.C.2d 504 (FMC Dec. 20, 2019). Specifically, the Commission granted WSC's request for an exemption from the requirement in 46 U.S.C. 40502(d) that carriers publish a concise Statement of Essential Terms (ETs) with each service contract, determining that an exemption from section 40502(d) would not result in a substantial reduction in competition or be detrimental to commerce, and further determined to initiate a rulemaking to implement the ET publication exemption.

On February 14, 2020, the Commission issued a Notice of Proposed Rulemaking (NPRM) to obtain public comments regarding its proposal to implement the exemption by removing the ET publication requirements in 46 CFR part 530. 85 FR 8527 (Feb. 14, 2020). The Commission calculated that the proposed rule would reduce the regulatory burden associated with these requirements. The comment period for the NPRM expired April 14, 2020. Two comments were received, from the National Industrial Transportation League (NITL) and the World Shipping Council.

As described in more detail below, the final rule adopts much of the proposed regulatory text without substantive change. The final rule eliminates the requirement in § 530.12 that carriers publish ETs for individual service contracts. Although the NPRM proposed replacing this requirement with a requirement that carriers publish general service contract rules and notices as a separate part of the individual carrier's automated tariff system, the Commission has determined to make this provision optional rather than mandatory. The final rule also adopts the following regulatory changes proposed in the NPRM: (1) Changes to other sections in Part 530 to reflect the elimination of the ET publication requirements; (2) the correction of outdated references to FMC bureaus and offices in Part 530; and (3) the correction of an outdated reference to a Department of Defense Command.

Commenters in the subject rulemaking did not identify a use for the publication of ETs corresponding to individual service contracts, and therefore, supported their elimination. NITL strongly supports the Commission's NPRM. Agreeing with the Commission's assessment that “the publication of Statements of Essential Terms corresponding to individual service contracts is of questionable value,” NITL believes that the current ET publication requirements “impose significant regulatory costs and burdens on ocean carriers, without providing any meaningful benefits to shippers that outweigh the costs.” WSC supports the NPRM to the extent it would eliminate the requirement to publish service contract essential terms.

Therefore, the Commission has determined to implement the exemption from section 40502(d) by revising the Commission's regulations at 46 CFR 530.12, which currently require ocean carriers to publish ETs corresponding to their individual service contracts in tariff format.

Consistent with the purpose of the NPRM, WSC also recommends that the Commission change the heading of 46 CFR part 530 subpart C in the final rule to read “Publication of service contract rules and notices.” The Commission agrees that it is appropriate to revise the heading of part 530 subpart C to reflect the elimination of the publication requirements for ETs and to reflect and clarify the ongoing purpose of § 530.12 related to the optional publication of service contract rules and notices as a separate part of the individual carrier's automated tariff system. The Commission has therefore made this change in the final rule.

As the Commission noted in the NPRM, in addition to the required Statements of Essential Terms, most, if not all, ocean carriers include in their ET publications, the rules and notices that generally apply to all service contracts or to a particular subset of service contracts. Thus, an ocean carrier's ET publication may be comprised of two components: (1) The rules and notices that generally apply to all service contracts; and (2) the required ETs corresponding to individual service contracts.

As explained in the NPRM, in the Commission's experience, there can be substantial benefits to both ocean carriers and shippers by publishing a “blanket” rule or notice in the carrier's ET tariff publication that applies to most, or all, service contracts, thereby eliminating the potential need to periodically amend hundreds of individual service contracts. Consequently, the Commission seeks to facilitate the ocean carriers' current practice of publishing generally applicable service contract tariff rules and notices in their ET tariff publications. The Commission therefore proposed to amend the existing requirement in § 530.12 that ocean carriers must publish ETs corresponding to individual service contracts and replace it with a requirement that ocean carriers publish general service contract rules and notices as a separate part of the individual ocean carrier's automated tariff system, thereby codifying existing ocean carrier practice.

NITL indicated its support for ocean carriers publishing general service contract rules and notices in their carrier automated tariff systems, as this latter requirement “will simply implement a current practice followed by most ocean carriers.” NITL, at 2. As reflected in NITL's comments, the ability to publish such rules and notices benefits ocean carriers and shippers alike, by obviating the need to amend hundreds of service contracts, should unusual circumstances arise. NITL also cites with approval the Commission's estimate that the proposed amendments “will significantly reduce administrative burdens” and “will benefit all industry stakeholders.” Id. at 3.

WSC's comments suggest, however, that an ocean carrier's service contract rules and notices can be published under the tariff regulations in 46 CFR part 520 and that any requirement to publish service contract rules and notices in a separate publication under 46 CFR part 530 reflects a new regulatory burden. The Commission's intent in the NPRM was to retain the existing practice, favored by most ocean carriers, of allowing service contract rules and notices to be published in a separate document under 46 CFR part 530. The Commission has determined that this can be accomplished by making carrier publication of such rules and notices under 46 CFR 530.12 optional rather than mandatory, thereby eliminating any risk of additional regulatory burden on carriers. At the carrier's discretion, such publication may be accomplished under the tariff regulations in part 520 or in a separate publication under 46 CFR 530.12.

The final rule therefore relieves ocean carriers of the regulatory burden of ET publication by eliminating individual Statements of Essential Terms, while retaining the ability of ocean carriers to publish service contract rules and notices in their ET tariff publications, should they wish to do so.

The Administrative Procedure Act generally requires a minimum of 30 days before a final rule can go into effect, but excepts from this requirement: (1) Substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretive rules and statements of policy; and (3) when an agency finds good cause for a shorter period of time and includes those findings with the rule. 5 U.S.C. 553(d).

The final rule implements the Commission's determination to exempt ocean carriers from the requirement that they publish ETs with each service contract. The final rule also allows, but does not require, carriers to publish general service contract rules and notices as a separate part of the individual carrier's automated tariff system. The remaining amendments are technical amendments to update the names of Commission bureaus and offices as well as those of other government entities. Because the final rule grants or recognizes an exemption, the Commission has determined to make the rule effective upon publication.

The rule is not a “major rule” as defined by the Congressional Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies. 5 U.S.C. 804(2).

The Regulatory Flexibility Act, 5 U.S.C. 601-612, provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 553, the agency must prepare and make available for public comment a final regulatory flexibility analysis describing the impact of the rule on small entities, unless the head of the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 604, 605. Accordingly, the Chairman of the Federal Maritime Commission certifies that the final rule will not have a significant impact on a substantial number of small entities. The regulated business entities that would be impacted by the rule are vessel-operating common carriers. The Commission has determined that VOCCs generally do not qualify as small entities under the guidelines of the Small Business Administration (SBA). See FMC Policy and Procedures Regarding Proper Consideration of Small Entities in Rulemakings (Feb. 7, 2003), available at https://www.fmc.gov/wp-content/uploads/2018/10/SBREFA_Guidelines_2003.pdf.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in proposed rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11.

The information collection requirements in Part 530, Service Contracts, are currently authorized under OMB Control Number 3072-0065. In compliance with the PRA, the Commission submitted the proposed revised information collections to the Office of Management and Budget. Notice of the revised information collections was published in the Federal Register and public comments were invited. See 85 FR 8527 (February 14, 2020). Comments received regarding the proposed changes, as well as the Commission's responses, are discussed above. No comments specifically addressed the revised information collection in Part 530, with the exception of a reference by one commenter to the cost savings cited in the NPRM as a basis for its strong support.

As noted above, this final rule will eliminate a substantial and unnecessary regulatory burden on ocean carriers by removing the requirement to publish Statements of Essential Terms corresponding to individual service contract filings. The final rule also includes an option allowing, but not requiring, carriers to publish general service contract rules and notices, which most VOCCs currently include in their ET tariffs, thereby avoiding the need to amend hundreds of individual service contracts, should circumstances so warrant. As background, of the 147 VOCCs currently serving the U.S. trades, 71 do not file service contracts with the Commission, and thus would not be impacted by this rulemaking. Of the 76 VOCC that file service contracts, 25 filed less than ten original contracts thus far in FY 2020, with seven of those only filing one contract this fiscal year. Among VOCCs that utilize service contracts more extensively as a pricing mechanism, only 20 filed over 100 original contracts thus far in FY 2020.

With respect to the cost savings associated with eliminating the publication of Statements of Essential Terms corresponding to original service contracts and amendments, the Commission estimates the savings to VOCCs as roughly 41,048 man-hours, for an approximate savings of $1,987,133 annually. 1 Service contract rules and notices in carrier automated tariff systems, on the other hand, are rarely published or revised, inasmuch as they govern a broad swath of carrier contracts, and many times are intended to quickly and efficiently address an ad hoc industry situation. 2 Thus, in any given year, there may be no new service contract rules or notices published in a carrier's automated tariff system. The Commission observes that there are potential benefits associated with ensuring that carriers have the option to continue to publish these rules and notices as a separate part of the individual carrier's automated tariff system, thereby allowing a carrier to avoid revising hundreds of service contracts.

Regarding the burden associated with the filing of service contracts with the Commission, a substantial majority of filers, 74 percent, have recognized greater efficiencies by automating their service contract filing processes using the Commission's “web services” automated filing system. Using FY 2018 figures, the Commission estimates the remaining burden associated with service contract filing to be roughly 3,542 man-hours, or $402,088 annually. 3 Inclusive of the burden associated with the optional publication of service contract rules under § 530.12, 4 the entire burden associated with this information collection is calculated as $3,482,351 for contract filers, a substantial reduction.

The Commission's regulations categorically exclude certain rulemakings from any requirement to prepare an environmental assessment or an environmental impact statement because they do not increase or decrease air, water or noise pollution or the use of fossil fuels, recyclables, or energy. 46 CFR 504.4. The proposed rule amends the requirements related to the publication of Essential Terms associated with service contracts. This rulemaking thus falls within the categorical exclusion for actions related to the receipt service contracts (§ 504.4(a)(5)). Therefore, no environmental assessment or environmental impact statement is required.

This rule meets the applicable standards in E.O. 12988 titled, “Civil Justice Reform,” to minimize litigation, eliminate ambiguity, and reduce burden.

The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, at http://www.reginfo.gov/public/do/eAgendaMain.

For the reasons stated in the preamble, the Federal Maritime Commission amends 46 CFR part 530 as follows:

In FR Doc. 2020-10167 appearing on page 31704 in the Federal Register of Wednesday, May 27, 2020, the following corrections are made:

1. On page 31704, in the third column, the DATES section is corrected to read:

2. On page 31704, in the third column, the first and second paragraphs in the SUPPLEMENTARY INFORMATION section are corrected to read:

“This document announces that OMB approved the information collection requirements in 47 CFR 27.1412(c) introductory text, (c)(2), 27.1412(d) introductory text and (d)(1), and 27.1419, on May 5, 2020. These rules were adopted in the 3.7 GHz Report and Order, FCC 20-22, published at 85 FR 22804 on April 23, 2020, and are deemed effective on June 22, 2020. The Commission publishes this document as an announcement of the effective and compliance dates for these new information collection requirements. OMB approval for all other new or amended rules for which OMB approval is required will be requested, and the Commission will announce the effective and compliance date(s) for those rules after such approval is provided by publishing another document in the Federal Register setting forth that date (or dates). Compliance with all new or amended rules adopted in the 3.7 GHz Report and Order that do not require OMB approval will be required as of June 22, 2020, see 85 FR 22804 (Apr. 23, 2020).

“With respect to the rules covered by this announcement— i.e., those discussed herein for which OMB has already issued its approval—if you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street SW, Washington, DC 20554, regarding OMB Control Number 3060-1272. Please include the OMB Control Number in your correspondence. The Commission will also accept your comments via email at PRA@fcc.gov .”

3. On page 31705, in the third column, the first sentence in the paragraph under the heading “Transition Plans” is corrected to read:

“The 3.7 GHz Report and Order calls for each eligible space station operator to submit to the Commission by June 12, 2020, and make available for public review, a detailed transition plan describing the necessary steps and estimated costs for the eligible space station operator to complete the transition of existing operations in the lower portion of the 3.7-4.2 GHz band to the upper 200 megahertz of the band and its individual timeline for doing so consistent with the regular relocation deadline or by the accelerated relocation deadlines.”

This is a summary of the Commission's Report and Order in WT Docket No. 02-55, FCC 20-61, released on May 12, 2020. The document is available for download at http://fjallfoss.fcc.gov/edocs_public/. The complete text of this document is also available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

1. In the Order, the Commission accelerates the successful conclusion of the Commission's 800 MHz rebanding program by eliminating certain audit and financial reconciliation requirements that have been part of the program since its inception but are no longer necessary as rebanding nears completion.

2. The Final Regulatory Flexibility Analysis required by section 604 of the Regulatory Flexibility Act, 5 U.S.C. 604, is included in Appendix B of the Report and Order.

3. The Order document does not contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.

4. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs that this rule is non-major under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

5. Accordingly, It Is Ordered that, pursuant to sections 4(i), 4(j), 301, 303, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 301, 303, and 403, the Order Is Hereby Adopted .

6. It Is Further Ordered that the amendments of the Commission's rules as set forth in Appendix A of the Report and Order Are Adopted , effective July 27, 2020.

7. It Is Further Ordered that the Commission Shall Send a copy of the Report and Order in a report to be sent to Congress and the General Accounting Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 90 as follows:

Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ) governing the harvest of North Atlantic swordfish by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27 subdivides the U.S. North Atlantic swordfish quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and implemented by the United States into two equal semi-annual directed fishery quotas; an annual incidental catch quota for fishermen targeting other species or catching swordfish recreationally, and a reserve category, according to the allocations established in the 2006 Consolidated Atlantic Highly Migratory Species Fishery Management Plan (2006 Consolidated Atlantic HMS FMP) (71 FR 58058, October 2, 2006), as amended, and in accordance with implementing regulations. NMFS is required under ATCA and the Magnuson-Stevens Act to provide U.S. fishing vessels with a reasonable opportunity to harvest the ICCAT-recommended quota.

In 2017, ICCAT Recommendation 17-02 specified that the overall North Atlantic swordfish total allowable catch (TAC) be set at 9,925 metric tons (mt) dressed weight (dw) (13,200 mt whole weight (ww)) through 2021. Consistent with scientific advice, this was a reduction of 500 mt ww (375.9 mt dw) from previous ICCAT-recommended TACs. However, the United States' baseline quota remained at 2,937.6 mt dw (3,907 mt ww) per year. The Recommendation (17-02) also continued to limit underharvest carryover to 15 percent of a contracting party's baseline quota. Thus, the United States may carry over a maximum of 440.6 mt dw (586.0 mt ww) of underharvest. Absent adjustments, the codified baseline quota is 2,937.6 mt dw for 2020. At this time, given the extent of expected underharvest in 2019, NMFS anticipates carrying over the maximum allowable 15 percent (440.6 mt dw), which would result in a final adjusted North Atlantic swordfish quota for the 2020 fishing year equal to 3,378.2 mt dw (2,937.6 + 440.6 = 3,378.2 mt dw). As in past years we anticipate allocating 50 mt dw from the adjusted quota to the Reserve category for inseason adjustments/research and allocating 300 mt dw to the Incidental category, which includes recreational landings and landings by incidental swordfish permit holders, consistent with § 635.27(c)(1)(i)(D) and (B). This would result in an adjusted quota of 3,028.2 mt dw for the directed fishery, which would be split equally (1,514.1 mt dw) between the two semi-annual periods in 2020 (January through June, and July through December).

The 2020 North Atlantic swordfish fishing year, which is managed on a calendar-year basis and divided into two equal semi-annual quotas for the directed fishery, began on January 1, 2020. Landings attributable to the Swordfish General Commercial permit count against the applicable semi-annual directed fishery quota. Regional default retention limits for this permit have been established and are automatically effective from January 1 through December 31 each year, unless changed based on the inseason regional retention limit adjustment criteria at § 635.24(b)(4)(iv). The default retention limits established for the Swordfish General Commercial permit are: (1) Northwest Atlantic region—three swordfish per vessel per trip; (2) Gulf of Mexico region—three swordfish per vessel per trip; (3) U.S. Caribbean region—two swordfish per vessel per trip; and, (4) Florida Swordfish Management Area—zero swordfish per vessel per trip. The default retention limits apply to Swordfish General Commercial permitted vessels and to HMS Charter/Headboat permitted vessels with a commercial endorsement when fishing on non-for-hire trips. As a condition of these permits, vessels may not possess, retain, or land any more swordfish than is specified for the region in which the vessel is located.

Under § 635.24(b)(4)(iii), NMFS may increase or decrease the Swordfish General Commercial permit vessel retention limit in any region within a range from zero to a maximum of six swordfish per vessel per trip. Any adjustments to the retention limits must be based upon a consideration of the relevant criteria provided in § 635.24(b)(4)(iv), which include: (A) The usefulness of information obtained from biological sampling and monitoring of the North Atlantic swordfish stock; (B) the estimated ability of vessels participating in the fishery to land the amount of swordfish quota available before the end of the fishing year; (C) the estimated amounts by which quotas for other categories of the fishery might be exceeded; (D) effects of the adjustment on accomplishing the objectives of the fishery management plan and its amendments; (E) variations in seasonal distribution, abundance, or migration patterns of swordfish; (F) effects of catch rates in one region precluding vessels in another region from having a reasonable opportunity to harvest a portion of the overall swordfish quota; and, (G) review of dealer reports, landing trends, and the availability of swordfish on the fishing grounds.

NMFS has considered these criteria as discussed below and their applicability to the Swordfish General Commercial permit retention limit in all regions for July through December of the 2020 North Atlantic swordfish fishing year. NMFS has determined that the Swordfish General Commercial permit retention limits in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions applicable to persons issued a Swordfish General Commercial permit or HMS Charter/Headboat permit with a commercial endorsement (when on a non-for-hire trip) should be increased from the default levels that would otherwise automatically become effective on July 1, 2020, to six swordfish per vessel per trip from July 1 through December 31, 2020, unless otherwise later noticed. These are the same limits that were implemented through an inseason adjustment for the period January 1 through June 30, 2020 (85 FR 14, January 2, 2020). Given the rebuilt status of the stock and the availability of quota, increasing the Swordfish General Commercial permit retention limits in these three regions to six fish per vessel per trip will increase the likelihood that directed swordfish landings will approach, but not exceed, the available annual swordfish quota, and increase the opportunity for catching swordfish during the 2020 fishing year.

In 2019, a six swordfish per vessel trip limit was in effect for Swordfish General Commercial permit holders in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions for the entire fishing season. As of December 31, 2019, this limit resulted in total annual directed swordfish landings of approximately 986 mt dw, or 32.6 percent of the 3,028.2 mt dw annual adjusted directed quota for 2019, which includes landings under the six fish trip limit.

Among the regulatory criteria for inseason adjustments to retention limits, and given the rebuilt status of the stock and availability of quota, is the requirement that NMFS consider the “effects of the adjustment on accomplishing the objectives of the fishery management plan and its amendments.” See § 635.24(b)(4)(iv)(D). A consideration in deciding whether to increase the retention limit, in this case, is the objective of providing opportunities to harvest the full North Atlantic directed swordfish quota without exceeding it based upon the 2006 Consolidated Atlantic HMS FMP goal to, consistent with other objectives of this FMP, “manage Atlantic HMS fisheries for continuing optimum yield so as to provide the greatest overall benefit to the Nation, particularly with respect to food production, providing recreational opportunities, preserving traditional fisheries, and taking into account the protection of marine ecosystems.” This action will help preserve a traditional swordfish handgear fishery (rod and reel, handline, harpoon, bandit gear, and greenstick). Although this action does not specifically provide recreational fishing opportunities, it will have a minimal impact on the recreational sector because recreational landings are counted against a separate incidental swordfish quota.

NMFS has examined dealer reports and landing trends and determined that the information obtained from biological sampling and monitoring of the North Atlantic swordfish stock is useful. See § 635.24(b)(4)(iv)(A). Regarding the estimated ability of vessels participating in the fishery to land the amount of swordfish quota available before the end of the fishing year, § 635.24(b)(4)(iv)(B), NMFS reviewed electronic dealer landings data, which indicates that sufficient directed swordfish quota should be available for the July through December 2020 semi-annual quota period if recent swordfish landing trends continue. The directed swordfish quota has not been harvested for several years and, based upon current landing trends, is not likely to be harvested or exceeded in 2020. Based upon recent landings rates from dealer reports, an increase in the vessel retention limits to six fish for Swordfish General Commercial permit holders and Charter/Headboat permit holders with a commercial endorsement (when on a non-for-hire trip) in three regions is not likely to cause quotas for other categories of the fishery to be exceeded. See § 635.24(b)(4)(iv)(C). Similarly, regarding the criteria about the effects of catch rates in one region precluding vessels in another region from having a reasonable opportunity to harvest a portion of the overall swordfish quota, § 635.24(b)(4)(iv)(F), we expect there to be sufficient swordfish quota for the entirety of the 2020 fishing year. Thus, increased catch rates in these three regions as a result of this action would not be expected to preclude vessels in the other region ( e.g., the buoy gear fishery in the Florida Swordfish Management Area) from having a reasonable opportunity to harvest a portion of the overall swordfish quota.

In making adjustments to the retention limits NMFS must also consider variations in seasonal distribution, abundance, or migration patterns of swordfish, and the availability of swordfish on the fishing grounds. See § 635.24(b)(4)(iv)(G). With regard to swordfish abundance, the 2018 report by ICCAT's Standing Committee on Research and Statistics indicated that the North Atlantic swordfish stock is not overfished (B 2015 /B msy = 1.04), and overfishing is not occurring (F 2015 /F msy = 0.78). Increasing retention limits for the General Commercial directed fishery is not expected to affect the swordfish stock status determination because any additional landings would be within the ICCAT-recommended U.S. North Atlantic swordfish quota allocation, which is consistent with conservation and management measures to prevent overfishing on the stock. Increasing opportunities by increasing retention limits from the default levels beginning on July 1, 2020, is also important because of the migratory nature and seasonal distribution of swordfish. In a particular geographic region, or waters accessible from a particular port, the amount of fishing opportunity for swordfish may be constrained by the short amount of time that the swordfish are present in the area as they migrate.

Finally, another consideration, consistent with the FMP and its amendments, is to continue to provide protection to important swordfish nursery areas and migratory corridors. Therefore, NMFS has determined that the retention limit for the Swordfish General Commercial permit will remain at zero swordfish per vessel per trip in the Florida Swordfish Management Area at this time. As discussed above, NMFS considered consistency with the 2006 HMS FMP and its amendments, and the importance for NMFS to continue to provide protection to important swordfish nursery areas and migratory corridors. As described in Amendment 8 to the 2006 Consolidated Atlantic HMS FMP (78 FR 52011, August 21, 2013), the area off the southeastern coast of Florida, particularly the Florida Straits, contains oceanographic features that make the area biologically unique. It provides important juvenile swordfish habitat, and is essentially a narrow migratory corridor containing high concentrations of swordfish located in close proximity to high concentrations of people who may fish for them. Public comment on Amendment 8, including from the Florida Fish and Wildlife Conservation Commission, indicated concern about the resultant high potential for the improper rapid growth of a commercial fishery, increased catches of undersized swordfish, the potential for larger numbers of fishermen in the area, and the potential for crowding of fishermen, which could lead to gear and user conflicts. These concerns remain valid. NMFS will continue to collect information to evaluate the appropriateness of the retention limit in the Florida Swordfish Management Area and other regional retention limits. This action therefore maintains a zero-fish retention limit in the Florida Swordfish Management Area.

The directed swordfish quota has not been harvested for several years and, based upon current landing trends, is not likely to be harvested or exceeded during 2020. This information indicates that sufficient directed swordfish quota should be available from July 1 through December 31, 2020, at the higher retention levels, within the limits of the scientifically-supported TAC and consistent with the goals of the 2006 Consolidated Atlantic HMS FMP as amended, ATCA, and the Magnuson-Stevens Act, and are not expected to negatively impact stock health.

NMFS will continue to monitor the swordfish fishery closely during 2020 through mandatory landings and catch reports. Dealers are required to submit landing reports and negative reports (if no swordfish were purchased) on a weekly basis.

Depending upon the level of fishing effort and catch rates of swordfish, NMFS may determine that additional retention limit adjustments or closures are necessary to ensure that the available quota is not exceeded or to enhance fishing opportunities. Subsequent actions, if any, will be published in the Federal Register . In addition, fishermen may access https://www.fisheries.noaa.gov/atlantic-highly-migratory-species/2020-atlantic-swordfish-landings-updates for updates on quota monitoring.

The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

Based on recent data for the first semi-annual quota period, NMFS has determined that landings have been very low through April 30, 2020 (21.9 percent of 1,318.8 mt dw quota). Adjustment of the retention limits needs to be effective on July 1, 2020; otherwise lower, default retention limits will apply. Delaying this action for prior notice and public comment would unnecessarily limit opportunities to harvest available directed swordfish quota, which may have negative social and economic impacts for U.S. fishermen. If this action is delayed, some fishermen may not benefit from the adjustment at all, given a short period of access to the fishery due to seasonal fish migration. This action does not raise conservation and management concerns. Adjusting retention limits does not affect the overall, North Atlantic swordfish U.S. quota, and available data show the adjustment would have a minimal risk of exceeding the ICCAT-allocated quota. NMFS notes that the public had an opportunity to comment on the underlying rulemakings that established the U.S. swordfish quota and retention limit adjustment criteria. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For all of the above reasons, there is also good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

This action is being taken under 50 CFR 635.24(b)(4) and is exempt from review under Executive Order 12866.

NMFS manages the U.S. groundfish fisheries of the Gulf of Alaska (GOA) under the GOA FMP. The North Pacific Fishery Management Council (Council) prepared, and the Secretary of Commerce (Secretary) approved, the GOA FMP under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the GOA FMP appear at 50 CFR parts 600 and 679. The Council is authorized to prepare and recommend a fishery management plan (FMP) amendment for the conservation and management of a fishery managed under the FMP. NMFS conducts rulemaking to implement FMP amendments and regulatory amendments. FMP amendments and regulations developed by the Council may be implemented by NMFS only after approval by the Secretary.

The Council recommended Amendment 109 to the GOA FMP (Amendment 109) and a regulatory amendment for pollock fisheries in the GOA. This final rule implements Amendment 109 by changing Central Gulf of Alaska (CGOA) and Western Gulf of Alaska (WGOA) Pacific cod seasonal apportionments to increase the trawl catcher vessel (CV) sector's A season total allowable catch (TAC) while proportionally decreasing the sector's B season TAC. This final rule also implements the Council's regulatory amendment by combining the CGOA and WGOA trawl CV pollock fishery A and B seasons into a single season (redesignated as the A season), and the C and D seasons into a single season (redesignated as the B season), and by changing the annual start date of the redesignated pollock B season from August 25 to September 1. These changes for pollock and Pacific cod are only applicable to the CGOA and the WGOA, which are comprised of NMFS statistical areas 610 (WGOA) and 620 and 630 (CGOA) (see Figure 3 to part 679). This preamble uses the term “management area” to refer to “statistical area” to avoid confusion with State of Alaska “statistical areas.” Also, the term “management area” is commonly used by harvesters and processors to refer to NMFS statistical areas.

NMFS published the Notice of Availability for Amendment 109 in the Federal Register on February 6, 2020 (85 FR 6890), with public comments invited through April 6, 2020. NMFS published the proposed rule to implement Amendment 109 in the Federal Register on February 28, 2020 (85 FR 11939), with public comments invited through March 30, 2020.

NMFS received 35 comment letters which contain a total of 13 unique comments during the comment periods. A summary of these comments and the responses by NMFS are provided under the heading “Response to Comments” below.

This final rule modifies the seasonal apportionment of pollock and Pacific cod TAC in the CGOA and WGOA. The purpose of this action is to reduce operational and management inefficiencies in the CGOA and WGOA trawl CV pollock and Pacific cod fisheries by (1) reducing regulatory time gaps between the pollock fishery A and B seasons and the C and D seasons, and (2) changing seasonal Pacific cod apportionments in the GOA to allow greater harvest opportunities earlier in the year. Modifying the seasonal allocations of pollock and Pacific cod could allow the fisheries to more fully harvest the TAC of GOA pollock and Pacific cod, increase management flexibility, and potentially decrease prohibited species catch (PSC) while not redistributing fishing opportunities between management areas or harvest sectors.

The trawl groundfish fisheries in the GOA include fisheries for pollock, sablefish, several rockfish species, numerous flatfish species, Pacific cod, and other groundfish. Trawl gear captures groundfish by towing a net above or along the ocean floor. This final rule affects the trawl fisheries for pollock and Pacific cod in two specific areas of the GOA: (1) The CGOA regulatory area (comprised of management areas 620 and 630), and (2) the WGOA regulatory area (comprised of management area 610). These specific areas are defined at 50 CFR 679.2. This action applies only to the federally permitted CVs using trawl gear to harvest pollock or Pacific cod in management areas 610, 620, and 630 of the GOA. This action does not apply to the Eastern GOA West Yakutat District (management area 640).

Regulations at 50 CFR 679.4(k) require trawl vessels participating in the GOA pollock and Pacific cod fisheries to possess a License Limitation Program license (LLP). Overall, 124 CV LLPs are endorsed for GOA trawl fishing. Ninety-seven CV LLPs are endorsed for CGOA trawl fishing and 78 CV LLPs are endorsed for WGOA trawl fishing. Fifty-one LLPs are trawl-endorsed for both areas.

The four pollock seasons for the CGOA and WGOA (management areas 610, 620, and 630) are currently defined in regulations at § 679.23(d)(2) as follows:

Through the annual harvest specifications process, NMFS establishes pollock TACs for management areas 610, 620, and 630 within the CGOA and the WGOA. These TACs are established in proportion to the distribution of the pollock biomass in those areas as determined by the most recent NMFS surveys. In addition, the regulations at 50 CFR 679.20(a)(5)(iv)(B) state that 25 percent of the combined pollock TAC for the CGOA and WGOA is allocated to each of the four seasons. The seasonal apportionments are then further apportioned across management areas ( i.e., management area 610, 620, and 630) based on estimated biomass distribution throughout the year. The most recent example of these allocations is found in the 2020-2021 annual harvest specifications for the GOA (85 FR 13802, March 10, 2020).

Over the last 15 years, the seasonal pollock biomass distribution has shifted substantially, resulting in relatively smaller seasonal apportionments in management area 610—most notably in the A and B seasons—while substantially increasing seasonal apportionments and annual TACs in management area 620 and, to a lesser degree, management area 630. The seasonal biomass distribution aspect of annual harvest specifications is designed so that the pollock fleet is able to harvest fish where they are occurring, and not to allocate harvest opportunities to one area relative to another.

NMFS inseason managers monitor the catch of pollock and close the directed pollock fishery in each management area when they determine the seasonal apportionment will be taken. Because this process is based on many variable factors, sometimes catch exceeds the seasonal apportionment and sometimes catch is less than the seasonal apportionment.

NMFS' objective is to allow for optimal harvest while avoiding an overage of the seasonal apportionment or the annual TAC. TAC that is not harvested in one area or season that cannot be reallocated to a subsequent season is not made available for later harvest. TAC that remains at the end of the D season is not rolled over to the following calendar year.

After each management area's overages or underages are accounted for, NMFS has the ability to reallocate, or “rollover,” pollock that is not harvested in one season to the subsequent season in the same or other management area(s). Rollovers are made according to a prescribed series of steps that are predicated on the area TAC levels and seasonal apportionments established in the annual harvest specifications and are described in detail in Section 2.1.1 in the Analysis.

Regulations at § 679.20(a)(5)(iv)(B) state that unharvested pollock may be added to a subsequent seasonal allocation provided that the revised seasonal apportionment does not exceed 20 percent of the subsequent season's pollock apportionment for the management area. This provision also states that any rollover of unharvested pollock is applied first to the subsequent season in the same management area, and only then may any remaining pollock be further reallocated to other GOA management areas. The purpose of the rollover is to help fishery participants harvest as much of the TAC as possible. However, the rollover regulations are designed to mitigate incentives for the fleet to underharvest or overharvest the seasonal pollock apportionment in a management area in order to influence the amount of pollock available in the subsequent season.

NMFS establishes annual Pacific cod TACs for the WGOA and CGOA and apportions these TACs across two seasons. NMFS apportions 60 percent of the annual WGOA and CGOA Pacific cod TACs to the A season, and apportions 40 percent of the annual WGOA and CGOA Pacific cod TACs to the B season. For vessels deploying trawl gear, the A season occurs from January 20 through June 10, and the B season occurs from September 1 through November 1.

Since the implementation of Amendment 83 to the GOA FMP in 2012 (76 FR 74670, December 1, 2011), NMFS, after subtracting a set-aside for the jig gear sector, also allocates the annual WGOA and CGOA Pacific cod TACs among five sectors in the WGOA and six sectors in the CGOA. Each sector's allocation is apportioned between the A and B seasons in each area, and the ratio for each sector's seasonal apportionment is not required to be a 60:40 percent ratio. However, for all gear (trawl and non-trawl) and operational-type (CVs and catcher/processors (C/Ps)) sectors, the total of A season sector apportionments in each area equals 60 percent of the annual Pacific cod TAC, and the total of B season sector apportionments in each area equals 40 percent of the annual Pacific cod TAC.

Regulations at 50 CFR 679.20(a)(12)(i) and Tables 2-2 and 2-3 in the Analysis show the seasonal percentage allocations for each sector. These tables illustrate that no sector, in isolation, experiences a 60:40 percent seasonal TAC split. The WGOA trawl CVs receive a relatively greater proportion of their annual Pacific cod TAC allocation in the A season, as they do not target Pacific cod in the fall (B season). The sectors that receive a small percentage of the annual TAC tend to be those that encounter Pacific cod as incidental catch that must be retained (as an Improved Retention/Improved Utilization Program (IR/IU) species) but do not conduct directed fishing for Pacific cod.

Regulations at § 679.20(a)(12)(ii) describe the reallocation of sector allocations. NMFS publishes these reallocations as inseason actions in the Federal Register and posts them on the NMFS Alaska Region website as Information Bulletins. Regulations at § 679.20(a)(12)(ii) also state that NMFS should take into account “the capability of a sector [. . .] to harvest the remaining Pacific cod TAC.” There are no set dates upon which reallocations should occur; NMFS relies on its management expertise, as well as communication with the fleets about their expected levels of activity or encounter rates of Pacific cod. In practice, NMFS reallocates Pacific cod that it projects will go unharvested by a sector. The regulations provide a hierarchy that guides preference in reallocations if there are competing needs for additional TAC. The regulations at § 679.20(a)(12)(ii)(B) state that NMFS should consider reallocation to CV sectors first, then reallocation to the combined CV and C/P pot sector, and then to any of the other C/P sectors (trawl and hook-and-line). NMFS provides a record of inseason Pacific cod TAC reallocations on its website. Since 2012, almost all inseason reallocations of Pacific cod have occurred during the B season, and most reallocations flowed from the trawl CV sector; no reallocations have been made to the trawl CV sector.

This final rule addresses concerns that arose from a series of discussion papers that were presented to the Council in 2017, 2018, and 2019. The discussion papers examined the amount of uncaught Pacific cod TAC in all gear sectors during the WGOA and CGOA B season, options for changing WGOA and CGOA pollock and Pacific cod seasonal allocations with the goal of improving efficiency in fishery management, and whether delaying the start of the WGOA and CGOA pollock C season from August 25 to September 1 might provide operational benefits to vessels and processors that also engage in salmon fisheries or groundfish fisheries outside of the GOA.

For the pollock fishery, status quo management can result in time gaps between the A and B seasons and between the C and D seasons. The time gaps vary in length depending on the pace of fishing and TAC utilization during the A and C seasons. Table 4-8 in Section 4.5.1.2 of the Analysis shows instances where fisheries were closed for up to 80 percent of a season when the pollock TAC was taken quickly. In other cases, NMFS has closed directed fishing for pollock toward the very end of one season, and before another season has started, resulting in closures that lasted as little as one day.

The Council and NMFS acknowledge that these time gaps between seasons create operational inefficiencies and increase costs compared to a continuous fishery. For harvesters, operational inefficiencies could include fuel costs to transit back and forth to fishing grounds, lost labor productivity ( i.e., more days to earn the same income), missed windows of good weather, inability to fish during periods of high catch per unit effort (CPUE), or inability to fish during periods of high pollock roe content (and higher value product) that can occur between the A and B seasons. Processors also experience reduced productivity if labor and equipment are idled. A long time gap between seasons could also erode the real-time knowledge of the fishing grounds that skippers develop over the course of a continuous season. That knowledge is often key to achieving higher CPUE and minimizing bycatch of non-target species and PSC. Section 4.6.1.1.1 of the Analysis describes these inefficiencies in greater detail. Harvesters acknowledge that “pulse” fishing can limit the ability of the fleet to avoid fishing during periods of higher bycatch of species such as Chinook salmon and halibut and can limit the ability of the fleet to fish during periods of lower bycatch. In contrast, combining seasons and reducing time gaps could give the fleet more flexibility to avoid fishing in times of expected high Chinook salmon PSC rates by providing a lower risk of running out of time to fully harvest a seasonal TAC. Section 3.3 of the Analysis describes bycatch rates in the pollock and Pacific cod fisheries and the factors that can result in higher, or lower, bycatch of various species.

In recommending regulatory changes for the WGOA and CGOA pollock fishery, the Council also sought to address a concern about the amount of pollock TAC that may go unharvested in a season because of existing restrictions on TAC rollover (see regulations at § 679.20(a)(5)(iv)(B)). Ultimately, the Council recommended the current rollover cap of 20 percent remain the same. The Council's recommendation to maintain the status quo 20 percent rollover cap was responsive to public testimony that underharvest in one season might continue into the following season, especially if the underharvest is due to poor fishing conditions in the underharvested area. As such, a higher rollover cap might increase the possibility of leaving fish stranded because TAC cannot be rolled over to other areas. This is further explained in Section 4.6.3 of the Analysis.

In addition, this final rule delays the start of the redesignated pollock B season from August 25 to September 1 to provide operational benefits to vessels and processors that also engage in salmon fisheries or groundfish fisheries outside of the GOA. A later pollock start date will minimize the potential for the redesignated pollock B season to overlap the end of salmon harvest and reduce the operational challenges that can occur with harvesters and processors that participate in both of these fisheries. Section 4.6.2.1 of the Analysis describes the operational inefficiencies and costs for harvesters and processors that can occur when processors cannot process peak capacities of pollock and salmon at the same time, resulting in limited deliveries of one species or the other.

To address concerns related to management inefficiencies in the GOA pollock fishery, this final rule implements regulations to (1) combine the A and B seasons into a single season (redesignated as the A season), combine the C and D seasons into a single season (redesignated as the B season), and allocate pollock among the redesignated A season and redesignated B season at 50 percent to the A season and 50 percent to the B season, applicable to management areas 610, 620, and 630; and (2) change the start date of the redesignated B pollock season in the GOA from August 25 to September 1, resulting in a redesignated B season that runs from September 1 to November 1.

In recent years, trawl CVs in the GOA Pacific cod fishery have only conducted directed fishing for B season Pacific cod in the CGOA. The WGOA trawl CV sector receives 10.7 percent of the total annual WGOA Pacific cod TAC in the B season (see Table 2-2 in the Analysis), but it goes largely unharvested by trawl vessels except as incidental catch during the C and D seasons in the pollock trawl fishery. In the CGOA, where the trawl CV fishery is prosecuted, harvest of Pacific cod in the B season lags A season harvest by a significant margin in percentage terms. Table 3-4 in the Analysis shows that harvest of CGOA B season Pacific cod TAC was typically below 50 percent and began to fall precipitously in the years leading up to the 2018 reduction in ABC. While industry participants have reported that fish size and flesh quality can be better in the fall B season than in the late-winter A season due to the length of time removed from spawning activity, GOA Pacific cod do not tend to aggregate in the fall in a manner that lends itself to efficient harvest with trawl gear. As a result, a significant portion of the GOA Pacific cod B season TAC is left unharvested by trawl CVs, while the A season TAC is more fully prosecuted by trawl CVs.

The Council acknowledged the changes that have occurred in the B season Pacific cod fishery, resulting in unharvested Pacific TAC. To address this concern, the Council recommended Amendment 109 for Pacific cod trawl CV fisheries in the GOA. This final rule implementing Amendment 109 increases trawl CV allocations of Pacific cod TAC in the CGOA and WGOA during the A season while proportionally decreasing trawl CV allocations of Pacific cod TAC in the CGOA and WGOA during the B season. Specifically, 25.29364 percent of the annual CGOA Pacific cod TAC will be allocated to the trawl CV sector during the A season and 16.29047 percent will be allocated to the B season. Additionally, 31.54 percent of the annual WGOA Pacific cod TAC will be allocated to the trawl CV sector during the A season and 6.86 percent will be allocated to the B season.

A description of the alternatives considered by the Council in regard to Amendment 109 and the regulatory amendment but not selected is provided in the proposed rule preamble and in Section 2.5 of the Analysis.

In adopting its preferred alternatives, the Council considered effects of this action on Steller sea lions. For the CGOA and WGOA pollock trawl fishery, Section 4.6.2 of the Analysis explains that various factors affect pollock harvest patterns, including, but not limited to, fish aggregation and quality (roe content), market availability, encounter rates with PSC-limited species, high and low TAC years for pollock, economic opportunities in—or trade-offs with—other fisheries, and other individual vessel business decisions. These factors can be difficult to predict with accuracy, with respect to this action, at this time. Additionally, many constraints that dictate the timing and pace of the pollock fishery would remain, even if seasons were combined and the fleet had more available TAC at any given moment with which to optimize its fishing. Those constraints would be expected to prevent harvest patterns from changing in a significantly different manner under this rule than seen in the past.

Finally, changing the start of the combined C/D season from August 25 to September 1 does not change anticipated effects to the pollock stock (as noted in Section 3.2.3 of the Analysis), and therefore does not change anticipated impacts to prey availability for Steller sea lions.

For the Pacific cod fishery in the CGOA and WGOA, the overall change in seasonal allocation across all sectors combined is 4 percent from the B season to the A season. This modest shift in seasonal allocation is not expected to result in an increase in vessel participation, nor a change in the spatial distribution of the fishing vessels (as noted in Section 4.6.4. of the Analysis).

For the reasons outlined above, the Council and NFMS do not expect the implementation of Amendment 109 and the regulatory amendment to result in discernable spatial harvest concentrations or decreases in temporal dispersion of harvest which would significantly affect prey availability for Steller sea lions.

In recommending Amendment 109 and the regulatory amendment, the Council has chosen a portion of each action alternative for each of the GOA CV pollock and Pacific cod fisheries. This blended action provides the greatest improvements to operational and management efficiency of all the alternatives while not re-distributing allocations of pollock or Pacific cod between management areas or among participants, which is a stated objective in the purpose and need for this action.

This final rule revises § 679.20(a)(5)(iv)(B) to combine the pollock A and B seasons into a single season (redesignated as the A season) in the GOA Western and Central regulatory areas and combine C and D seasons into a single season (redesignated as the B season). This final rule also apportions 50 percent of the CGOA and WGOA pollock TAC to the redesignated A season and 50 percent to the redesignated B season. These changes will not affect the relative amount of CGOA and WGOA pollock TAC apportioned to each season because current regulations specify that the TAC be evenly apportioned among each GOA pollock season.

This final rule revises § 679.23(d)(2) to change the dates of the redesignated A season as January 20 through May 31 and the dates of the redesignated B season as September 1 through November 1. This revision effectively leaves the duration of the redesignated A season unchanged from the duration of the current A and B seasons, but shortens the duration of the redesignated B season (September 1 to November 1) from the duration of the current C and D seasons (August 25 to November 1).

This final rule revises § 679.20(a)(12)(i) to specify the new seasonal apportionments of Pacific cod TAC for the CV trawl sectors in the CGOA and the WGOA. Although the overall ratio of A and B seasonal apportionments of Pacific cod for the trawl CV sector is changing, this final rule does not affect the seasonal apportionments of Pacific cod to any of the other sectors. The seasonal apportionment of Pacific cod remains unchanged for all other sectors in the CGOA and the WGOA.

This final rule also revises the tables at § 679.20(a)(12)(i)(A) and (B) to change the seasonal allowance of Pacific cod for trawl CVs in the WGOA and the CGOA. For both the CGOA and the WGOA, the A season allowance increases by approximately 4 percent while the B season allowance decreases by approximately 4 percent.

NMFS received 35 comment letters on the proposed rule and the NOA which contain 13 unique comments. Two of these comments were not relevant to the content of this rule and were not addressed. NMFS has summarized and responded to the remaining 11 unique comments below. The comments were from individuals and industry representatives representing trawl fishermen from the CGOA and WGOA.

Comment 1: Amendment 109 will benefit the community, processors, and the trawl fishermen. Combining the pollock A and B seasons will increase economic value by extending the period of time fishermen have access to the valuable pollock roe fishery. Combining the A, B, C, and D seasons into two seasons will increase fish processing efficiency and reduce processing costs.

Response: NMFS agrees. The final rule and Section 4.6.1.1.1 of the Analysis describe inefficiencies with status quo management which can result in time gaps between the A and B seasons and between the C and D seasons. The Council and NMFS acknowledge that these time gaps between seasons create operational inefficiencies and increase costs compared to a continuous fishery. This final rule combines the A and B seasons and the C and D season, thereby reducing the occurrence of time gaps in the fishery.

Comment 2: Several commenters expressed support for the implementation of the regulatory amendment to combine the pollock A, B, C, and D seasons in the WGOA. They believe that this action will help provide increased benefits in pollock roe harvest, reduce mandatory stand downs between season closures, and reduce catch of Chinook salmon PSC.

Response: NMFS agrees. In recommending this action, the Council noted their intent in modifying the seasons or seasonal allocations of pollock and cod was to increase fishery yield, particularly for roe quality and quantity of pollock, increase management flexibility, and potentially decrease PSC. The Council's rationale for this recommendation is described in Section 2.6 of the Analysis.

Comment 3: One commenter expressed support for the proposed changes to the pollock fishery for several reasons. First, the proposed changes will improve efficiency and reduce operating costs for processors and fishing vessels since there will be less stop and go due to end of season stand downs. Second, combining the seasons gives fishermen the opportunity to manage the fisheries better and for maximum value from pollock (increased roe fishery). The commenter notes that in the WGOA, fishermen have often successfully negotiated voluntary stand downs within seasons to maximize harvest. However, these voluntary stand downs are never guaranteed because everyone needs to agree in order for them to work. Combining the seasons would remove two instances each year when these stand downs would have to be arranged (since there will only be two seasons). Third, the proposed changes will reduce bycatch of Chinook salmon in the WGOA C/D seasons. Fourth, starting the new B season on September 1 gives processors and fishermen a better transition time between salmon and pollock. Six less days for the combined C/D season should not have significant impact on the bottom line.

Response: NMFS acknowledges this comment. This final rule implements the Council's intent to increase fishery yield, particularly for roe quality and quantity of pollock, increase management flexibility, and potentially decrease PSC. The Council's rationale for this action is described in Section 2.6 of the Analysis.

Comment 4: Several commenters expressed support for the increase in apportionment of the A season Pacific cod trawl sector. They feel this will reduce bycatch and leave less fish unharvested in the B season, particularly in the WGOA.

Response: NMFS acknowledges this comment. In recommending Amendment 109, the Council noted that more Pacific cod TAC for the trawl CV sector in the A season could provide additional opportunity for harvest of Pacific cod when fish are aggregated and when the fleet and processors are more heavily engaged in the fishery. This is described further in Section 4.6.4 of the Analysis.

In recommending Amendment 109, the Council also considered impacts on bycatch and noted that this action could reduce interactions with PSC in the Pacific cod fishery. The Council's rationale for this action is described in Section 2.6 of the Analysis.

Comment 5: Combining CGOA pollock A and B seasons would result in substantial increases in Chinook salmon bycatch. Current bycatch avoidance strategies, such as voluntary stand downs from fishing, are contentious at best. It is a distinct and real possibility that the Chinook salmon PSC cap could be completely exhausted within a combined A and B season, leaving pollock stranded in the water during the fall months.

Response: The Analysis prepared for this action did not indicate that it would increase Chinook salmon bycatch. Chinook salmon PSC in the GOA pollock fishery is discussed in detail in Section 3.3.1.3 of the Analysis and again in Section 4.6.2 of the Analysis. Combining the CGOA and WGOA pollock A/B and C/D seasons is intended to provide the fleet and processors with flexibility to prosecute the pollock fishery in a manner that maximizes yield and profitability within other constraints on the timing and intensity of fishing that would not be removed by combining the seasons. By providing for increased flexibility, vessels could mitigate high Chinook salmon PSC rates by standing down during times of seasonally high Chinook salmon bycatch. A vessel is less likely to voluntarily stand down when a smaller seasonal TAC is nearing completion or if a regulated season end-date is approaching. This action will increase the size of seasonal TACs and reduce the number of season end dates from four to two.

Aside from reducing the cost of PSC stand downs, combining the seasons could also allow vessels to reallocate their effort toward parts of the season that are historically correlated with lower Chinook PSC rates. Figure 3-7 in Section 3.3.1.3 of the Analysis suggests that the “A” part of the A/B season and the “D” part of the C/D season carry higher intrinsic PSC rates. The commenter alluded to this as well. Taken at face value, vessels might expect lower PSC rates if they focused effort away from those times. Section 4.6.2 of the analysis notes that it is not clear that seasonality alone drives Chinook PSC. Rates might be higher at the beginning of the fishing year (A season) because skippers are learning the conditions on the grounds. Rates could also be higher at that time because vessels are in competition for valuable roe pollock and the fleet is fishing with more effort and exposing itself to extrapolation of observed PSC events over a larger number of unobserved vessels.

As described in Section 3.3.1.1 of the Analysis, flexibility introduced by season redefinitions implemented in this final rule could shift pollock harvest toward the “B” portion of the A/B season and the “C” part of the C/D season, either of which would reduce the expected incidence of Chinook salmon PSC. With regard to D season effort, it is expected that a combination of more pollock availability earlier in the fall, relatively milder at-sea conditions, and lower expected Chinook salmon PSC encounter rates will generally attract CV trawl effort to September (the “C” part of the C/D season). Such an outcome could reduce pollock trawl fishery impacts on Chinook salmon by reducing Chinook salmon mortality relative to the status quo, as noted in Section 4.6.2 of the Analysis. These factors could similarly drive shifts in fishery effort toward the latter part of the consolidated A/B season but the result may be less profound given the attraction of the valuable roe season that occurs earlier in the year. Section 4.6.2 of the Analysis describes existing constraints that would help to dictate the timing and pace of the pollock fishery even if seasons were lengthened and the fleet had more available TAC at any given moment. These include limited vessel capacities, the 300,000 lb trip limit, and limits to processing capacity.

Information on Chinook salmon incidental catch in the GOA pollock fishery shows that, on average, Chinook salmon PSC is generally greater in the D season than in the A season, often times substantially so ( https://www.fisheries.noaa.gov/sites/default/files/akro/goasalmonmort2020.html; accessed April 2, 2020). As described above, this action has the potential to decrease fishing effort in the “D” season by shifting fishing effort to earlier in the fall, resulting in less Chinook salmon PSC being taken at the end of the year. Chinook salmon PSC that is no longer needed for “D” season fishing could serve as a PSC buffer by enabling more Chinook salmon PSC to be taken during the A season if Chinook salmon PSC rates increase during the A season in years of unusually high Chinook salmon bycatch. As such, NFMS does not expect this action to directly result in significantly increased annual Chinook salmon bycatch nor does NMFS believe this action will directly jeopardize the fleet's ability to fully prosecute the GOA pollock fishery TAC.

Comment 6: Changing the start date for the pollock C/D season is solely a measure to delay the fishery until the canneries are done processing salmon. In years when salmon harvest is down this is not needed. In years when pollock quotas are large, the fishery needs as much fishing time as possible. Shortening the season could result in available pollock harvest being left in the water.

Response: The Council's purpose in recommending a change in the start date of the combined C/D season was to enhance the operational and management efficiency of the GOA pollock trawl fishery. Under the status quo season dates, the C season can overlap the end of the salmon harvest in some years, causing congestion that plays out differently at individual processing facilities depending on throughput capacity and the characteristics of their delivering fleet. A later start date could eliminate the need for participants to negotiate voluntary stand-downs in high salmon harvest years. Regulatory uniformity around a start date also mitigates timing conflicts that intermittently affect a subset of participants. This rationale is addressed in Section 4.6.2.1 of the Analysis.

NMFS acknowledges that fishery participants may be differentially impacted by this action depending on factors such as the fisheries they participate in, annual variation in GOA pollock TAC, and annual variability in the level of salmon harvest. The Council considered these items fully during its June 2019 meeting when final action was taken. Ultimately, the Council determined that the overall benefits gained by enhanced operational and management efficiency outweigh what might be lost by delaying the start of the redesignated pollock B season by 7 days. NMFS agrees with the Council's recommendation to start the redesignated pollock B season on September 1.

Comment 7: For smaller vessels, weather patterns and fish aggregations make it more difficult to safely fish during the A season. The B season gives pollock time to aggregate closer to Kodiak and for immature pollock to separate out from mature pollock. Combining the A and B seasons could put smaller vessels at a disadvantage because it is harder for them to access the resource earlier in the year. Combining the seasons will also lead to high discard rates of immature pollock upon delivery to Kodiak's processors which are not equipped to process small, immature fish.

Response: As discussed in the response to Comment 5, there are other constraining factors, both in regulation and in the fishery, which should limit the degree of changes in fishing effort and behavior as a result of combining the A and B seasons.

Section 4.6.2 of the Analysis notes that various factors affect harvest patterns in this fishery, including, but not limited to, fish aggregation and quality (roe content), market availability, encounter rates with PSC-limited species, high and low TAC years for pollock, economic opportunities in—or trade-offs with—other fisheries, and other individual vessel business decisions. Many constraints that dictate the timing and pace of the pollock fishery would remain, even under a combined A/B season. Given the multiple constraints that dictate the timing and pace of the fishery and inter-annual variability in harvest patterns, it would be difficult to accurately determine whether any shift in effort was a direct result from merging the A/B seasons and C/D seasons under this action. As such, NFMS does not expect this action to result in substantial shifts in harvest opportunities for fishery participants, or in harvest composition of immature versus mature pollock.

Comment 8: Combining the A and B seasons would result in increased participation from American Fisheries Act (AFA) vessels that are capable of coming into the GOA to fish pollock but are also capable of fishing in the Bering Sea and Aleutian Islands management area. This in turn reduces the available quota that is left to participants that are only able to fish within the GOA.

Response: The Council's recommendation of combining the A and B and the C and D seasons was driven by the potential for increased flexibility for the GOA pollock fleet and processors. As discussed in the responses to Comment 5 and Comment 7 and in Section 4.6.2 of the Analysis, many constraints that dictate the timing and pace of the GOA pollock fishery would remain even if the season were lengthened and the fleet had more available TAC at any given moment with which to optimize its fishing.

During its December 2018 and June 2019 meetings, the Council deliberated over stakeholders' concerns about season modifications allowing AFA-exempt and non-exempt vessels to increase participation in the GOA. In light of existing constraints on the pace and timing of the fishery, the Council does not anticipate that the increased TAC available at the beginning of the season will result in additional vessels entering the GOA fishery to an impactful degree. During its deliberation, the Council noted that AFA non-exempt vessels did not enter the GOA pollock fishery during the recent, historically high years of GOA pollock TACs (see Section 4.5.1.1 of the Analysis). However, the Council recognized that it is difficult to predict what the impacts of this action will be, and that there is diversity among the GOA trawl business operations that could be affected by this action. The Council noted that further action could be taken at a later date if a significant increase in participation by the AFA-affiliated vessels is observed in the GOA. NFMS agrees with the Council's recommendation.

Comment 9: Trawling is very destructive. It destroys the bottom of the ocean and should not be operated at all. Trawl bycatch should not be measured in metric tons; it is extremely wasteful and harms the environment. All quotas need to be drastically reduced by 75 percent at a minimum.

Response: This final rule modifies the pollock and Pacific cod seasons and seasonal allocation in the WGOA and CGOA. This final rule does not change the overall allocation of GOA pollock quota, the methods for measuring the amount of bycatch, or management measures currently in place to protect marine benthic habitat in the GOA. Harvest quotas are set each year by NMFS and the Council through the annual harvest specification process. The public is invited to comment on the harvest specifications during the October and December Council meetings and when the harvest specification proposed rule is published in the Federal Register annually in the fall.

Comment 10: The best way to determine if this rule will actually lower or increase rates of bycatch and help with fixing management gaps is to implement 100 percent observer or electronic monitoring (EM) coverage on trawl vessels.

Response: This final rule modifies the pollock and Pacific cod seasons and seasonal allocation in the WGOA and CGOA. Section 2.6 of the Analysis describes the rationale for this action. The Analysis does not indicate that implementing 100 percent observer or EM coverage is necessary to accomplish the purpose of and need for this action. Further, NMFS has determined that the existing level of observer coverage provides the necessary level of information needed to manage bycatch and PSC limits. Therefore, this final rule does not change observer or EM coverage rates.

Comment 11: When debating these changes in regulation, please use bycatch reduction as the primary metric for determining which path to take. In the GOA trawl fishery as a whole, there is concern that the value of bycatch is exceeding the value of target species catch.

Response: NMFS acknowledges this comment. The Council and NMFS considered the effects of this action on bycatch. Section 3.3.1.3 of the Analysis and the response to Comment 5 above describe some ways that a reduction in bycatch could be achieved from this action. Section 4.5.1.3 of the Analysis describes the economic value of the GOA pollock and Pacific cod trawl fisheries. This action does not apply to all GOA trawl fisheries, and the Analysis does not compare the value of all GOA trawl fisheries to the bycatch in all GOA trawl fisheries.

There were no changes to the regulatory text from the proposed rule to the final rule.

The NMFS Assistant Administrator has determined that Amendment 109 is necessary for the conservation and management of the GOA Pacific cod fishery and that it is consistent with the Magnuson-Stevens Act, and other applicable law. Furthermore, the NMFS Assistant Administrator has determined that this final rule is consistent with the Council's regulatory amendment for GOA pollock, Amendment 109 to the GOA FMP, other provisions of the Magnuson-Stevens Act, and other applicable law.

This final rule has been determined to be not significant for the purposes of Executive Order 12866.

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

An RIR was prepared to assess the costs and benefits of available regulatory alternatives. A copy of this analysis is available from NMFS (see ADDRESSES ). NMFS is recommending Amendment 109 and the regulatory revisions in this final rule based on those measures that maximized net benefits to the Nation.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

For reasons set out in the preamble, 50 CFR part 679 is amended as follows:

The North Pacific Fishery Management Council (Council) developed the IFQ Program for the commercial Pacific halibut (halibut) and sablefish fisheries. The IFQ Program for the sablefish fishery is implemented by the Bering Sea and Aleutian Islands (BSAI) Fishery Management Plan (FMP) and Federal regulations at 50 CFR part 679 under the authority of section 303(b) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The IFQ Program for the halibut fishery is implemented by Federal regulations at 50 CFR part 679 under the authority of section 5 of the Northern Pacific Halibut Act of 1982 (Halibut Act).

The International Pacific Halibut Commission (IPHC) and NMFS manage fishing for Pacific halibut through regulations established under the authority of the Halibut Act. The IPHC promulgates regulations governing the halibut fishery under the Convention between the United States and Canada for the Preservation of the Halibut Fishery of the Northern Pacific Ocean and Bering Sea (Convention). The IPHC's regulations are subject to approval by the Secretary of State with the concurrence of the Secretary of Commerce (Secretary). NMFS publishes the IPHC's regulations as annual management measures pursuant to 50 CFR 300.62.

Section 5 of the Halibut Act, 16 U.S.C. 773c(a) and (b), provides the Secretary with general responsibility to carry out the Convention and the Halibut Act. Section 5(c) of the Halibut Act also provides the Council with authority to develop regulations, including limited access regulations, that are in addition to, and not in conflict with, approved IPHC regulations. Regulations developed by the Council may be implemented by NMFS only after approval by the Secretary.

Government health mandates and travel restrictions during the 2020 IFQ season (March 14, 2020-November 15, 2020) may limit the ability of some fishery participants to travel to various ports in Alaska, and may constrain fishing operations while these provisions are in place. Existing regulatory limitations on the transfer of IFQ constrains the transfer of allocations to other fishery participants.

On April 7, 2020, NMFS received a request to consider emergency action under section 305(c) of the Magnuson-Stevens Act to revise the IFQ transfer provisions to provide greater flexibility to transfer IFQ to alleviate constraints imposed by ongoing health mandates and travel restrictions. On April 16, 2020, NMFS notified the Council of the request to provide an opportunity for the Council to consider the request. The Council held a special meeting on May 15, 2020, to consider this request, among other matters. The Council recommended that NMFS implement an emergency rule to provide greater flexibility to transfer IFQ.

The following sections describe the IFQ Program, the existing IFQ transfer provisions, and the emergency rule and justification for emergency action.

The IFQ Program for the management of the fixed gear (hook-and-line and pot gear) halibut and sablefish fisheries off Alaska was implemented by NMFS in 1995 (58 FR 59375; November 9, 1993). A central objective of the IFQ Program is to support the social and economic character of the fisheries and the coastal fishing communities where many of these fisheries are based.

Under the IFQ Program, access to the fixed gear sablefish and halibut fisheries is limited to those persons holding quota share (QS). NMFS issued separate QS for sablefish and halibut to qualified applicants based on their historical participation during a set of qualifying years in the sablefish and halibut fisheries. QS is an exclusive, revocable privilege that allows the holder to harvest a specific percentage of either the total allowable catch (TAC) in the sablefish fishery or the annual commercial catch limit in the halibut fishery. In addition to being specific to sablefish or halibut, QS is designated for specific geographic areas of harvest, a specific vessel operation type (catcher vessel (CV) or catcher/processor), and for a specific range of vessel sizes that may be used to harvest the sablefish or halibut (vessel category). There are four vessel categories of halibut QS: Category A shares are designated for catcher/processors, vessels that process their catch at sea ( i.e., freezer longline vessels), and do not have a vessel length restriction; Category B shares are designated to be fished on CVs greater than 60 feet length overall (LOA); Category C shares are designated to be fished on CVs greater than 35 feet but less than or equal to 60 feet LOA; and Category D shares are designated to be fished on CVs less than or equal to 35 feet LOA.

NMFS annually issues IFQ permits to each QS holder. An annual IFQ permit authorizes the permit holder to harvest a specified amount of the IFQ species in a regulatory area from a specific operation type and vessel category. IFQ is expressed in pounds and is based on the amount of QS held in relation to the total QS pool for each regulatory area with an assigned catch limit.

Another goal of the IFQ Program is to promote an owner-operator fleet. To meet these goals, the IFQ Program includes restrictions on the ability of QS holders to transfer their annual IFQ. The Council and NMFS recognized that at the time the IFQ Program was implemented, some QS holders had long-standing business arrangements with hired masters who harvested IFQ on behalf of the QS holder. Therefore, the IFQ Program authorizes the use of hired masters in certain instances. Since the implementation of the IFQ Program, the Council has recommended and NMFS has approved further regulatory amendments to limit the ability of QS holders to designate a hired master to discourage absentee ownership and move towards an owner-operated program.

Halibut and sablefish are managed in separate geographic areas of harvest. The sablefish IFQ regulatory areas are defined and shown in Figure 14 to 50 CFR part 679 and in section 3 of the Analysis. The halibut IFQ areas are consistent with the IPHC's regulatory areas. NMFS's IFQ regulatory areas are described in Figure 15 to 50 CFR part 679. This proposed rule uses the term “Area” to refer to a specific IFQ regulatory area ( e.g., Area 2C).

The Council developed transfer restrictions to retain the owner-operator nature of the CV fisheries and limit consolidation of QS. Only persons who were originally issued CV QS (B and C for sablefish; B, C, and D for halibut) or who qualified as crew members are allowed to hold or purchase CV QS. Only individuals and initial recipients are eligible to hold CV QS and they are required to be on the vessel when the IFQ is being fished (with a few exceptions). Since 1998, transfers of CV IFQ has generally been prohibited except under a few specific conditions. Temporary transfers of CV IFQ are allowed under six special circumstances: (1) Medical transfers, (2) beneficiary (survivorship) transfers, (3) military transfers, (4) transfers through Community Quota Entities, (5) transfers to Guided Angler Fish program, and (6) transfers to Community Development Quota groups in years of low halibut abundance. IFQ permits, and any associated transfers, are valid for a calendar fishing year.

The IFQ Program includes a temporary medical transfer provision at 50 CFR 679.42(d)(2) that allows a quota holder not otherwise qualified to hire a master to temporarily transfer their annual IFQ to another individual if the quota holder or their immediate family member have a temporary medical condition that prevents them from fishing. The provision is intended to provide a mechanism for QS holders who are experiencing a temporary medical condition that would prevent them from fishing during a season to transfer their annual IFQ to another individual.

An applicant for a temporary medical transfer must document his or her medical condition by submitting an affidavit to NMFS from a healthcare provider that describes the medical condition affecting the applicant and attests to the inability of the applicant to participate in the IFQ fishery for which she or he holds QS. In the case of a family member's medical emergency, the affidavit must describe the necessity for the quota holder to tend to an immediate family member who suffers from the medical condition. The Council recommended and NMFS has implemented regulations that limit the number of instances that QS holders may use the provision for any medical condition. NMFS will not approve a medical transfer if the QS holder has been granted a medical transfer in any three of the previous seven years for a medical condition (starting in 2020).

Initial recipients (excluding Areas 2C for halibut or SE for sablefish—these Areas correspond to Southeast Alaska) of CV QS may be absent from the vessel conducting IFQ fishing of his or her QS, provided the QS holder can demonstrate ownership of the vessel that harvests the IFQ halibut or sablefish (a minimum of at least 20 percent ownership interest in the vessel harvesting the IFQ for the 12 months prior to submitting the hired master application) and representation of the QS holder on the vessel by a hired master. This exception allows fishermen who traditionally operated their fishing businesses using hired masters prior to the IFQ Program implementation to continue to hire a master. By limiting the hired master provision to initial recipients, the use of this owner-on-board exception will decline and eventually cease with the transfer of all QS from initial recipients to new entrants (“second generation”).

The use of a hired master is not classified as a transfer of IFQ since the QS holder does not submit a transfer application and is responsible for the hired master staying within the harvest limits. While not technically a transfer, use of a hired master provides the flexibility of a transfer in that it allows an individual's IFQ to be harvested by another person without requiring the QS holder to directly participate in the fisheries.

Under existing regulations, individuals who can hire a master to fish their IFQ are not eligible to use the medical transfer provision. Those who can typically hire a master include initial recipients in all areas except for Southeast Alaska. Both initial recipients of Southeast Alaska halibut and sablefish QS and second generation QS holders are eligible to use the medical transfer provision. QS holders who own QS in multiple areas would make landings in different parts of the State to fish their QS. Many QS holders live outside of Alaska and travel into the State of Alaska to fish their IFQ.

This emergency rule implements temporary IFQ transfer provisions for the 2020 IFQ fishing year by revising regulations in two places. First, this emergency rule revises regulations at § 679.41(h)(2) to modify the conditions under which IFQ may be transferred by referring to a new regulatory paragraph at § 679.41(p). Second, the emergency rule adds a new regulatory paragraph at § 679.41(p) which describes the process for obtaining a temporary IFQ transfer for the 2020 IFQ fishing year.

The temporary IFQ transfer process described at § 679.41(p) is separate and distinct from the process that may be used to transfer IFQ under the hired master and medical transfer provisions previously described, or any other IFQ transfer provisions in existing regulations. Any temporary IFQ transfer under § 679.41(p) would be applicable only during the 2020 IFQ fishing year. This action allows all QS holders to transfer their IFQ for the remainder of the 2020 fishing year.

QS holders wishing to transfer their IFQ under this emergency rule need to complete an Application for Temporary Transfer of Halibut/Sablefish Individual Fishing Quota found on https://www.fisheries.noaa.gov/region/alaska. A temporary IFQ transfer, like this emergency action, is valid only for the calendar year in which it is approved. All individual QS holders who hold CV IFQ would be eligible to use this temporary provision.

Although the temporary IFQ transfer provision described in § 679.41(p) is distinct from other IFQ transfer provisions in regulation, the process for QS holders to apply for a transfer, the NMFS review and approval process, are similar to those used for other IFQ transfer procedures in § 679.41.

Section 305(c) of the Magnuson-Stevens Act provides authority for rulemaking to address an emergency. Under that section, a Council may recommend emergency rulemaking if it finds an emergency exists as described below. NMFS's Policy Guidelines for the Use of Emergency Rules require that an emergency must exist and that NMFS have an administrative record justifying emergency regulatory action and demonstrating compliance with the Magnuson-Stevens Act and the National Standards (see NMFS Instruction 01-101-07 (March 31, 2008) and 62 FR 44421-01; August 21, 1997). Emergency rulemaking is intended for circumstances that are “extremely urgent,” where “substantial harm to or disruption of the . . . fishery . . . would be caused in the time it would take to follow standard rulemaking procedures (62 FR 44421-01).”

Under NMFS' Policy Guidelines for the Use of Emergency Rules, the phrase “an emergency exists involving any fishery” is defined as a situation that meets the following three criteria:

(1) Results from recent, unforeseen events or recently discovered circumstances;

(2) Presents serious conservation or management problems in the fishery; and

(3) Can be addressed through emergency regulations for which the immediate benefits outweigh the value of advance notice, public comment, and deliberative consideration of the impacts on participants to the same extent as would be expected under the normal rule making process.

The following sections describe why the Council and NMFS determined that allowing transfer flexibility to all IFQ Program participants for the remainder of the 2020 IFQ fishing year meets these criteria.

Government health mandates and travel restrictions during the 2020 IFQ fishing year (March 14, 2020-November 15, 2020) may limit the ability of some fishery participants to travel to various ports in Alaska, and may constrain fishing operations while these provisions are in place. Fishery participants have stated that these measures have increased costs to QS holders who live outside of Alaska because meeting these requirements could result in up to 30-40 days of additional time needed to harvest IFQ. In addition to increased costs, reports of ex-vessel prices for halibut and sablefish have decreased substantially in many Alaskan ports due to recent and unforeseen market conditions (see Section 3 of the Analysis). State health mandates and travel restrictions have limited the ability to access fishing ports in a timely and cost-efficient manner and these restrictions were recent and unforeseen during the 2020 IFQ fishing year.

It is not known if health mandates and travel restrictions currently in place by the State of Alaska, municipalities, or other states will remain in effect throughout the duration of the 2020 IFQ fishing year. Even if these health mandates and travel restrictions are relieved, fishery participants may not be able to conduct fishing operations due to limited air travel to many Alaskan ports. Alternatively, health mandates and travel restrictions could be strengthened during the 2020 IFQ fishing year.

As noted earlier, existing hired master and medical transfer provisions are only available under specific conditions ( i.e., an individual may not be able to receive a medical transfer unless a health care provider attests that their medical condition precludes their participating in IFQ fisheries). Due to these limitations, and the recent and unforeseen limitations on the IFQ fisheries, an emergency action is required to provide all IFQ holders with the ability to transfer IFQ. Sections 3.2 and 3.3 of the Analysis provides additional detail on the hired master and medical transfer provisions.

Ongoing health mandates and travel restrictions present serious management problems in the IFQ fisheries. If there is not additional flexibility to transfer IFQ, some fishery participants may forego harvesting catch due to the additional costs and logistical challenges to comply with existing health mandates and travel restrictions.

If harvesters forego catch, this could result in the under-harvest of IFQ accounts. Under existing IFQ regulations, harvesters may “roll over” up to 10 percent of an IFQ permit's remaining balance to the following year (§ 679.40 (c)). However, anyone unable to harvest at least 90 percent of their allocation of IFQ would be at risk of foregoing harvests. Based on the harvest information in Section 3 of the Analysis, it is clear that halibut and sablefish are being harvested at substantially lower rates than in previous years. For example, during the first two months of the IFQ season (March 14-May 7), 54 percent less halibut was harvested, and 11 percent less sablefish was harvested than over the same period in 2019.

Given current harvest rates, ongoing health mandates, travel restrictions and other related logistical challenges facing the IFQ fisheries, additional flexibility in IFQ transfer provisions would increase the ability for harvesters to harvest, and processors to process a larger proportion of the overall TACs. This would directly address a serious management concern, the under harvest of allocations due to recent, unforeseen, and recently discovered events.

NMFS notes that this emergency action would not cause conservation concern by increasing the risk of overharvest of IFQ. The requested emergency action would not increase the halibut catch limits or the sablefish TACs. The total amount of IFQ issued would not increase. This emergency rule would not modify existing requirements on the types of vessels and gear that could be used, monitoring requirements, record keeping regulations, or other aspects of the IFQ Program.

NMFS and the Council have determined that the emergency situation created by ongoing health mandates, travel restrictions, and other related logistical challenges faced by the IFQ fisheries can be best addressed by emergency regulations. As explained earlier, not all QS holders are able to use existing regulatory provisions to transfer IFQ. Providing for a temporary transfer of IFQ for all CV QS holders for the 2020 IFQ fishing year would not create conservation or management concerns and is consistent with the overall goals of the IFQ Program—namely, to provide for the complete and efficient harvest of the halibut and sablefish resource (see Section 5 of the Analysis for additional detail).

To address the emergency, NMFS must implement an emergency rule that waives the notice-and-comment rulemaking period. The benefits of waiving notice-and-comment rulemaking will serve the industry and public by allowing for additional harvest of halibut and sablefish by IFQ participants. Any delay in implementing rulemaking will reduce opportunities to harvest halibut and sablefish. Section 4.2 of the Analysis describes the potential additional harvest opportunities for the IFQ participants in greater detail.

Without immediate implementation, the IFQ Program participants will not have sufficient time and ability to prosecute these fisheries as intended. The halibut and sablefish IFQ fisheries are harvested from numerous ports from hundreds of vessels that must be coordinated with other harvesting and processing activities. Increasing the flexibility for harvesters to transfer IFQ expeditiously will provide additional opportunity for halibut and sablefish to be harvested before the end of the IFQ fishing year. Otherwise, fishing time for some harvesters would be extremely limited or unavailable for the duration of the 2020 IFQ fishing year. For example, absent the waiver, harvesters with IFQ may not be able to travel to fishing ports under current or future health mandates, travel restrictions, or limited air travel with sufficient time to coordinate with other harvesters and processors. Vessel owners need time to secure crew, which may shift into other groundfish fisheries, non-groundfish fisheries or other activities if they are unable to secure adequate IFQ to support their fishing operations. In addition, vessel owners need sufficient lead time to revise fishing plans, restock vessels, change gear, and have the vessel travel to and from the fishing grounds to prosecute the IFQ fisheries.

This emergency action would not impose additional restrictions on the IFQ halibut and sablefish fisheries, but would alleviate limitations thereon. This emergency rule would not increase the amount of available harvests, increase any risk of overharvest, or otherwise modify conservation measures. This emergency rule is needed to allow for the complete and efficient harvest of the IFQ fisheries and to temporarily alleviate unforeseen economic and social consequences due to the recent and unforeseen limitations on the IFQ fisheries detailed in this preamble.

The emergency action considerations discussed herein also warrant instituting these IFQ transfer measures in the halibut fisheries under the Halibut Act. The Halibut Act authorizes the Council to develop limited access program regulations for the halibut fisheries that, in another step, must then be approved by the Secretary. As discussed further below, emergency-based halibut fishery regulations that waive prior notice and comment and a 30-day delay in effectiveness period must be consistent with the requirements of the Administrative Procedure Act (APA).

The Assistant Administrator for Fisheries, NOAA, has determined that this emergency rule is consistent with the National Standards, other provisions of the Magnuson-Stevens Fishery Conservation and Management Act, the Halibut Act, and other applicable laws.

This final rule has been determined to be not significant for the purposes of Executive Order 12866.

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

The Assistant Administrator for Fisheries, NOAA, finds good cause pursuant to 5 U.S.C. 553(b)(B) of the APA to waive prior notice and the opportunity for public comment because it would be impracticable and contrary to the public interest. This emergency rule would provide flexibility for QS holders to temporarily transfer their IFQ to an eligible individual to harvest their IFQ during the remainder of the 2020 IFQ fishing year. This emergency rule would apply only to CV QS that is held by individuals. This emergency rule would not modify any additional restrictions on IFQ transfers. This rule is in response to recent and unforeseen circumstances that have prompted increased restrictions in travel and health mandates. These restrictions present serious problems in managing the IFQ Program. Without the increased flexibility to temporarily transfer IFQ, it is likely that a significant portion of the harvest will be forgone. The associated loss in harvesting and processing revenues would likely impact the harvesters, crew, and communities that are active in the IFQ Program.

As explained earlier, after receiving a letter from industry participants on April 7, 2020, the Council and NMFS became aware of how restrictions may impact IFQ participants for the remainder of the 2020 IFQ fishing year. The Council and NMFS had no way of foreseeing the impact on fishery operations.

Finally, the time required for notice-and-comment rulemaking would not provide relief from the forgone harvests because it would not provide sufficient time before the end of the 2020 IFQ fishing year. The 2020 IFQ fishing year closes in November and there is not enough time to follow the standard rulemaking process prescribed by the Magnuson-Stevens Act and required by the APA. NMFS has no other way than this emergency rule to amend these IFQ transfer provisions in time to restore forgone fishing opportunities for 2020. Allowing for access to the remaining halibut and sablefish IFQ for the rest of 2020 will provide immediate economic benefits that outweigh the value of the deliberative notice-and-comment rulemaking process.

Similarly, for the reasons above that support the need to implement this emergency rule in a timely manner, the Assistant Administrator for Fisheries finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness provision of the APA and make the emergency rule effective immediately upon publication in the Federal Register . As stated above, NMFS anticipates that this emergency rule will allow for harvest of the remaining IFQ and should prevent prolonged economic losses from the potential forgone harvests.

The Analysis prepared for this emergency rule is available from NMFS (see ADDRESSES ).

This emergency rule is exempt from the procedures of the Regulatory Flexibility Act because the rule is not subject to the requirement to provide prior notice and opportunity for public comment pursuant to 5 U.S.C. 553 or any other law. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

This emergency rule contains a collection-of-information requirement subject to review and approval by the OMB under the Paperwork Reduction Act (PRA). NMFS has submitted an emergency information request for this requirement to OMB for approval under a new control number. Due to the need to begin collecting this information immediately, NMFS is unable to allow for the time periods normally required for clearance under the PRA. This new collection will be discontinued after the 2020 IFQ fishing season, which ends November 15, 2020.

This information collection adds a checkbox to the Application for Temporary Transfer of Halibut/Sablefish Individual Fishing Quota (IFQ), which is approved under OMB Control Number 0648-0272. The checkbox will indicate the application is being submitted for a temporary transfer for the 2020 fishing year only. The public reporting burden for this form will remain at two hours, which includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

NMFS estimates up to 40 percent of the QS holders may request this temporary transfer. The new collection will cover the additional QS holders that NMFS estimates may use this form to request this temporary transfer. This will result in an estimated 1,100 respondents, 550 total responses, 1,110 total burden hours, and $12,100 total recordkeeping and reporting costs to the public for the new collection.

Send comments on these or any other aspects of the collection of information to NMFS Alaska Region (see ADDRESSES ) and to OIRA by email to OIRA_Submission@omb.eop.gov or by fax to (202) 395-5806.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to penalty for failure to comply with, a collection of information subject to the requirement of the PRA, unless that collection of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at: https://www.reginfo.gov/public/do/PRASearch#.

For the reasons set out in the preamble, 50 CFR part 679 is amended as follows: