On September 24, 2020, the Department published the “Identification of Prohibited Transactions to Implement Executive Order 13942 and Address the Threat Posed by TikTok and the National Emergency with Respect to the Information and Communications Technology and Services Supply Chain” (the “Identification”) in the Federal Register at 85 FR 60061. The Identification provided that the following transactions would be prohibited:

1. Any provision of services to distribute or maintain the TikTok mobile application, constituent code, or application updates through an online mobile application store, or any online marketplace where mobile users within the land or maritime borders of the United States and its territories may download or update applications for use on their mobile devices;

2. Any provision of internet hosting services enabling the functioning or optimization of the TikTok mobile application within the land and maritime borders of the United States and its territories;

3. Any provision of content delivery network services enabling the functioning or optimization of the TikTok mobile application within the land and maritime borders of the United States and its territories;

4. Any provision of directly contracted or arranged internet transit or peering services enabling the functioning or optimization of the TikTok mobile application within the land and maritime borders of the United States and its territories;

5. Any utilization of the TikTok mobile application's constituent code, functions, or services in the functioning of software or services developed and/or accessible within the land and maritime borders of the United States and its territories; or

6. Any other transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd., or its subsidiaries, including TikTok Inc., in which any such company has any interest, as may be identified at a future date under the authority delegated under Executive Order 13942.

Transactions identified in paragraph 1 above were to be prohibited at 11:59 p.m. eastern standard time on September 27, 2020; transactions identified in paragraphs 2, 3, 4, and 5 above were to be prohibited at 11:59 p.m. eastern standard time on November 12, 2020.

On September 18, 2020, Plaintiffs, who are three content creators using the TikTok mobile app, filed a lawsuit in the United States District Court for the Eastern District of Pennsylvania ( Douglas Marland et al. v. Trump et al., No. 20-cv-4597), seeking various relief, including a court order to prohibit the Department from implementing Executive Order 13942 or the identified prohibited transactions. Plaintiffs subsequently filed a motion for a preliminary injunction to pursue such relief, limited to the prohibited transactions in Paragraph 1. On September 26, 2020, the District Court denied the Plaintiffs' motion.

However, on October 30, 2020, the District Court issued an Order granting the Plaintiffs' renewed motion for a preliminary injunction. This Order enjoined the Department from enforcing the Identification and the prohibition on transactions identified in Paragraphs 1-6 above.

The Department is complying with the terms of this Order. Accordingly, this serves as NOTICE that the Secretary's prohibition of identified transactions pursuant to Executive Order 13942, related to TikTok, HAS BEEN ENJOINED, and WILL NOT GO INTO EFFECT, pending further legal developments.

Any further guidance and updates regarding the subject litigation will be posted on the Department website ( www.commerce.gov ) on an ongoing basis.

Dated: November 9, 2020.

The current regulation at 25 CFR part 248 addresses rights of persons to use “in lieu fishing sites,” which are lands acquired by the Secretary of War and transferred to the Secretary of the Interior in 1945, to replace Indian fishing grounds submerged or destroyed as a result of the construction of the Bonneville Dam. See 59 Stat. 22. The regulations refer to outdated positions and offices. This rule updates those outdated terms as shown in the table below:

These changes are necessary to clarify who is responsible for the actions listed in these sections and to clarify in § 248.10 that decisions of the Regional Director go to the Assistant Secretary—Indian Affairs, rather than any other official.

This rule also corrects two typographical errors. The first, in § 248.2, uses the term “is accordance” instead of “in accordance.” The second, in § 248.10, refers to a decision “on” the official, rather than “of” the official.

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

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

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

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

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act, because this rule only replaces outdated references to position titles. This rule:

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

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

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

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

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

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

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

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

This rule does not contain information collection requirements, and a submission to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) is not required. We may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number.

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

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

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

For the reasons stated in the preamble, the Department of the Interior, Bureau of Indian Affairs, amends part 248 in title 25 of the Code of Federal Regulations as follows:

This rule permits coverage of services referred by TRICARE-authorized Podiatrists for PT and OT. Prior to the issuance of this regulatory action, the language of Title 32 Code of Federal Regulations (CFR), § 199.4(c)(3)(x) stated that PT and OT may be cost-shared when services are referred and monitored by a physician, certified physician assistant, or certified nurse practitioner. As a result, otherwise authorized PT and OT services for TRICARE beneficiaries were not covered benefits when Podiatrists (even when acting within their scope of license) referred the services. Podiatrists are included in the provider category of “Other allied health professional” listed in 32 CFR 199.6(c)(3)(iii) and are recognized by TRICARE statute, 10 U.S.C. 1079(a), as authorized to assess or diagnose illness, injury, or bodily malfunction as a prerequisite for TRICARE coverage of otherwise allowable treatment. According to the American Podiatric Medical Association, all United States jurisdictions recognize podiatrists as independent practitioners and do not limit Podiatrists' authority to refer their patients to PT and OT services. This rule makes it possible for that care to be cost-shared by the TRICARE program.

State governments generally regulate the licensure and practice of health care professionals, and DoD limits TRICARE benefits coverage to services and supplies furnished by otherwise authorized TRICARE individual professional providers performing within the scope of their state license or certification; granted by the applicable state or jurisdiction. State scope of practice laws vary with regard to the range of services, and some include the authority to refer PT and OT. Title 32 CFR 199.6(c)(1) provides that licensing be interpreted as requiring a license to practice in the jurisdiction where services are being furnished; generally a state license in the United States, or for care and treatment provided outside the continental United States, whatever comparable jurisdictional requirements (including licensure or certification) may exist in the host nation. Title 32 CFR 199.1(b) states that the regulation applies in all foreign countries, unless specific exemptions are granted by the Director. After assessing the information available, DoD has determined that it is unnecessarily restrictive not to cover otherwise authorized PT and OT services for TRICARE beneficiaries merely because the services are referred by a Podiatrist. Therefore, the regulation is amended to allow TRICARE coverage of PT and OT services when referred by a Podiatrist who is a TRICARE-authorized provider and acting within the scope of their state licensure or certification.

This rule allows TRICARE coverage of otherwise authorized PT and OT services when referred by a TRICARE-authorized Podiatrist, acting within the scope of his/her state licensure or certification.

This rule is issued under 10 U.S.C. 1073 (a)(2) giving authority and responsibility to the Secretary of Defense to administer the TRICARE program. The text of 10 U.S.C. chapter 55 can be found at https://manuals.health.mil/pages/DisplayManual.aspx?SeriesId=MD.

The Department of Defense published a proposed rule in the Federal Register on April 8, 2019 (84 FR 13855). Comments were accepted for 60 days, and the comment period closed on June 7, 2019. A total of 22 comments were received. Those comments and the resulting changes to the rule text are described in the next section.

The majority of comments received supported the proposed rule as a time and cost-saving measure for TRICARE beneficiaries as well as the TRICARE program. Included were comments received from organizations representing various medical fields regarding specific aspects of the rule. These comments provided feedback that in part, resulted in several changes to the rule text. The changes include: Refocusing to solely address referrals by Podiatrists instead of all “Other allied health professionals” to refer for PT and OT; revising the nomenclature for Podiatrists from Doctors of Podiatry or Surgical Chiropody to Doctors of Podiatric Medicine, or Podiatry; adding Podiatrists to the list of providers who can refer and provide ongoing oversight in order for the services of physical therapists and occupational therapists to be considered for benefits on a fee-for service basis; and removing the option in the proposed rule for Podiatrists to refer patients to speech therapy (ST) services based on the lack of direct relationship between such a referral and podiatric practice. A discussion of the more significant comments concerning DoD's proposed rule, and our responses to these comments, are set forth below.

A commenter asked why TRICARE doesn't support the use of Physical Therapist Assistants (PTAs) and Certified Occupational Therapy Assistants (COTAs) in the care of its beneficiaries. The commenter also stated that TRICARE was the only payer source to have that restriction. The Department published a final rule on March 17, 2020, (85 FR 15061) which added certified or licensed PTAs and OTAs as TRICARE-authorized providers when supervised by a TRICARE-authorized physical therapist or occupational therapist in accordance with Medicare's rules for supervision and qualification.

Another commenter asserted that athletic trainers, if recognized by TRICARE as paramedical providers, would support the DoD in providing greater efficiencies through care coordination. The addition of athletic trainers as TRICARE-authorized providers is outside the scope of this rule.

Several commenters requested clarification regarding PTs, OTs, and STs' ability to self-refer where allowed by state law under the proposed rule. The commenters assert that as PTs, OTs and STs are recognized as “Other allied health professionals” under 32 CFR 199.6(c)(3)(iii), the proposed rule includes the ability for PTs, OTs, and STs to self-refer as well as refer beneficiaries to another therapy practitioner where allowed by state law. The commenters reason that when state law is silent, no referral from another health care professional is required, whereas when state law imposes a referral requirement, TRICARE coverage will hinge on the PTs, OTs, and STs securing a referral in accordance with state law. This rule is revised to only allow Podiatrists to refer for PT and OT services, therefore, the commenters' issue is moot. However, to respond to this comment generally, self-referral by TRICARE providers is prohibited under 32 CFR 199.6(a)(13)(xi), which directs providers to “refer CHAMPUS beneficiaries only to providers with which the referring provider does not have an economic interest, as defined in § 199.2.” Title 32 CFR 199.2 defines economic interest as “(1) Any right, title, or share in the income, remuneration, payment, or profit of a CHAMPUS-authorized provider, or of an individual or entity eligible to be a CHAMPUS-authorized provider, resulting, directly or indirectly, from a referral relationship; [. . .] (2) A referral relationship exists when a CHAMPUS beneficiary is sent, directed, assigned or influenced to use a specific CHAMPUS-authorized provider, or a specific individual or entity eligible to be a CHAMPUS-authorized provider.” Under these provisions, TRICARE-authorized providers are barred from self-referral, even if self-referral is acceptable under the state or jurisdiction's licensure or certification requirements.

A commenter also requested clarification as to whether and how the “ongoing oversight and supervision” of the program of treatment would apply to “Other allied health professionals” who would refer TRICARE beneficiaries for therapy services. As an example, the commenter asked if a social worker [referring] occupational therapy for a TRICARE beneficiary, would have to sign the OT plan of care and would that same social worker have to monitor and sign off on any changes to the plan of care if there is a significant change in function for the TRICARE beneficiary 6 months after they initiated the plan of care. This rule is revised to only allow Podiatrists to refer PT and OT services; therefore the commenter's issue is moot. However to address the commenter, consider a Podiatrist rather than a social worker referring OT for a TRICARE beneficiary. The Podiatrist will provide ongoing and continual supervision by signing the OT plan of care, monitoring treatment and signing off on any changes to the plan of care if there is a significant change in function for the TRICARE beneficiary six months after they initiated the plan of care. Requirements for referral and supervision are defined at § 199.6(c)(2)(iv).

We adopt the proposed rule with changes as described in the comment responses.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. It has been determined that this rule is not a significant regulatory action. The rule does not: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a section of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency; (3) Materially alter the budgetary impact 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 set forth in these Executive Orders.

E.O. 13771 seeks to control costs associated with the government imposition of private expenditures required to comply with Federal regulations and to reduce regulations that impose such costs. Consistent with the analysis of transfer payments under OMB Circular A-4, this rule does not involve regulatory costs subject to E.O. 13771.

This rule allows TRICARE coverage of otherwise authorized PT and OT services when referred by a TRICARE-authorized Podiatrist acting within the scope of his/her license.

This rule impacts all TRICARE beneficiaries, TRICARE-authorized providers, the TRICARE program and its Managed Care Support Contractors (MCSC). Beneficiaries will spend less time and expense obtaining referrals from their TRICARE-authorized primary care provider for PT and OT services related to foot and ankle conditions. Beneficiaries' courses of treatment will not be unnecessarily delayed by the need to obtain a referral from their primary care provider. TRICARE-authorized primary care providers and specialists will not need to spend unnecessary time seeing patients requiring PT or OT referrals for foot and ankle conditions, resulting in savings to the TRICARE program. TRICARE-authorized Podiatrists will be able to prescribe and oversee their patients' PT and OT courses of treatment. MCSCs will also be minimally impacted as this rule will require them to update their systems to accommodate the change.

Once beneficiaries initiate an episode of care with a Podiatrist for a covered disease or condition, they need not return to their primary care provider or specialist for an office visit to obtain an examination and a referral for PT and OT services. Assuming two hours by appointment (appointment, travel, waiting room, exam room), beneficiaries will save approximately 20,000 hours each year by not having to visit their referring provider prior to seeking PT or OT services. Referring providers will also save time, approximately 2,200 hours (15 minutes for a podiatrist to consult with a referring provider regarding a PT prescription) each year, as a result of reduced coordination and paperwork.

The amendment covers PT and OT services, when referred by a TRICARE-authorized Podiatrist acting within the scope of their license, and is not expected to increase the amount of otherwise covered PT and OT services. This is because referrals for such services are currently being written by those providers authorized to do so under the TRICARE program or those providers are countersigning prescriptions or referrals from a Podiatrist. The DoD does anticipate, however, that there may be a marginal increase in administrative costs to accommodate changes to our contractors' systems, although the overall result of this change will create an efficiency in the process.

This rule does not create new costs to the government, because it falls under the Transfer Payment clause in accordance with OMB Circular A-4. As this rule states, TRICARE payments for PT and OT services provided to military beneficiaries and prescribed by TRICARE-authorized Podiatrists, represents an “Insurance Payment” as described in OMB Circular A-4.

The primary impact of this rule will result in less time and expense spent by beneficiaries and referring providers to obtain necessary medical services and supplies. Almost 10,000 beneficiaries visited a primary care provider after seeking care from a Podiatrist, but prior to PT services, in 2017. With an average copay/cost-share of $24 across networks and TRICARE programs, this rule will conservatively save beneficiaries up to $230,000 per year in cost-sharing and will conservatively save TRICARE $1.1 million per year as a result of reduced visits to referring providers.

DoD considered several alternatives to this rulemaking. The first alternative involved taking no action. Although this alternative would be the most cost neutral for DoD, it was rejected as not benefitting TRICARE beneficiaries in need of PT and OT services during the regular course of foot and ankle treatment. For example, and according to “American Podiatric Medical Association,” plantar fasciitis is treated with conservative efforts such as PT and OT services before turning to surgery. Additionally following foot or ankle surgery PT and OT services are necessary as a part of the post-operative treatment. This alternative also placed TRICARE at odds with common practice by other health care entities.

The second alternative DoD considered, and the regulatory change offered in the proposed rule, was allowing all TRICARE-authorized “Other allied health professionals” to refer PT, OT and ST services. After the proposed rule was published, the Department received input from internal and external stakeholders and ultimately determined that this alternative was problematic because more the half of the 18 types of TRICARE-authorized “Other allied health professionals” do not have the authority to diagnose and treat a mental or physical illness, injury or bodily malfunction in accordance with 10 U.S.C. 1079(a)(12). Commenters also raised concerns over self-referrals, causing the Department to re-evaluate this alternative. Moreover, in accordance with 32 CFR 199.6(c)(3)(iii), the majority of TRICARE-authorized “Other allied health professionals” require the ongoing monitoring and supervision of a physician for a program or episode of treatment. Those TRICARE-authorized “Other allied health professionals” who may not provide covered care independent of a physician include: Certified Physician Assistant, Anesthesiologist Assistant, Licensed Registered Nurse, Audiologist, Licensed Registered Physical and Occupational Therapists, Licensed Registered Speech Therapist, Nutritionist, Registered Dietician, and TRICARE Certified Mental Health Counselor. While certified physician assistants require supervision of a physician, they were given authority to refer for therapy services under a rule published on August 10, 2018 (75 FR 50882) due to changes in the way billing occurred under the national provider identification system, and to align with Medicare's allowance for nonphysician providers to provider referrals for therapy services. DoD finds it is appropriate to continue to allow certified physician assistants to refer and oversee therapy services due to the direct relationship physician assistants have with physicians, and because they often serve as a patient's primary care provider, while not extending this privilege to other providers that may not provide independent care. Therefore DoD reconsidered this alternative and found it to be in conflict with current Program law. DoD considers the approach described in this final rule to be the most beneficial to both TRICARE beneficiaries and the TRICARE program. It offers time and cost savings and optimum continuity of care to beneficiaries, at no additional costs to the TRICARE program and affords the program the opportunity to expand health care delivery options.

The Department of Defense certifies that this final rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

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).

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. This final rule will not mandate any requirements for State, local, or tribal governments, nor will affect private sector costs.

This rulemaking does not contain a “collection of information” requirement, and will not impose additional information collection requirements on the public under Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. chapter 35).

E.O. 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This final rule will not have a substantial effect on State and local governments.

Accordingly, 32 CFR part 199 is amended as follows:

The USPTO conducted a fee review in FY 2019 that formed the basis for this regulatory process to adjust and set new trademark user fees. While trademark-related costs of operations have risen, trademark fees have not changed since January 2017. The revenue and workload assumptions in this rule are based on the assumptions found in the FY 2021 Congressional Justification ( i.e., the USPTO's FY 2021 budget submission to Congress). However, projections of aggregate revenues and costs are based on point-in-time estimates, and the circumstances surrounding these assumptions can change quickly. Notably, since the FY 2021 Congressional Justification was published, some fee collections have been lower than anticipated, due to lower than expected post-registration and Madrid filings.

Although economic circumstances have changed substantially since the FY 2021 budget was developed, the USPTO determined it remains the most appropriate starting point for developing this Final Rule. First, the USPTO's projections of aggregate revenues and costs are necessarily estimates that can change substantially from one point in time to the next due to numerous factors outside the USPTO's control, including cyclical economic changes or exogenous shocks, such as COVID-19, changes in the laws governing USPTO revenues or expenditures, and other events. Nevertheless, the USPTO has historically used its most recent budget assumptions when setting fees because they are the most recent complete evaluation of the USPTO's budget expectations and requirements, and they provide assumptions for stakeholders to use when formulating their comments. Those projections were developed in late calendar year 2019, prior to the COVID-19 outbreak, and they assumed continuing stable economic growth, not the sharp economic downturn and rebound of 2020.

As part of the multi-year fee-setting process, the Trademark Public Advisory Committee (TPAC) held a public hearing at the USPTO on September 23, 2019. The Office considered and analyzed all comments, advice, and recommendations received from the TPAC in proposing the fees set forth in the notice of proposed rulemaking (NPRM) published in the Federal Register on June 19, 2020, at 85 FR 37040. In formulating this rule, the USPTO considered the state of the U.S. economy, the operational needs of the agency, and public comments submitted pursuant to the NPRM and made adjustments to the substance of this rule based on these considerations.

The USPTO has considered the state of the U.S. economy, the operational needs of the agency, and the comments and advice received from the public during the 45-day comment period. The current economic conditions illustrate the need for the increases set forth in this rule. The majority of USPTO's trademark revenue comes from new applications, but the initial costs to examine applications exceed the revenues from those applications. These examination costs have been increasing over the years while the USPTO has kept filing fees low enough to encourage broad public participation in the trademark system by offsetting examination costs with revenues generated with intent-to-use (ITU) and maintenance filings. Despite this balancing of front- and back-end costs, the USPTO has been observing multi-year consistent trends that have begun to adversely affect this model. The USPTO is receiving record levels of new trademark application filings, carrying with them larger front-end examination costs, while the percentage of ITU and maintenance filings are decreasing, resulting in less back-end revenue. With larger net costs that are not being offset by back-end revenue, the USPTO would be unable to maintain an operating reserve, which puts the Office on an unsustainable funding model.

The USPTO has observed these trends taking place whether the economy is doing well or facing turmoil, but the present situation is particularly challenging in light of the impact of the pandemic and its effect on the economy and filings. In particular, over the last six months, the USPTO has experienced a surge in new applications while maintenance filings continue to be impacted by lower rates of payment from one-time filers and individual applicants. The surge is also undermining the other traditional revenue sources that have historically offset front-end costs, such as ITU, since the USPTO is receiving more use-based applications, especially from foreign filers. While the USPTO is observing a surge in filings at present, given past experience, we expect a future decline to bring filings in line with the underlying economic dynamism. Although the timing and the magnitude of a future correction may be difficult to anticipate with complete accuracy, given past experience, the USPTO anticipates that a correction in filing levels could generate funding shortfalls that quickly drain our reserves and affect our operations and financial stability.

The USPTO received some comments urging the Office not to raise any fees. As noted below, in the discussion of the Regulatory Flexibility Act, one regulatory alternative that was considered was to leave all trademark fees as currently set. This alternative was rejected because, due to changes in demand for certain services and rising costs described herein, the Office has determined that a fee increase is needed to meet future budgetary requirements as described in the FY 2021 Congressional Justification. As discussed further below, the alternative of making no changes to trademark fees would not have achieved the goals of this rulemaking. Those goals are to assist in promoting access to the trademark system, protect the integrity of the register, and promote the efficiency of the trademark registration process by incentivizing: (1) Maintenance of registrations for goods and services for which marks are actually in use, (2) more timely filing of applications and other documents, and (3) faster resolution of appeals and inter partes proceedings at the TTAB.

USPTO has weighed carefully current economic conditions and the potential hardship that the fee increase could create for businesses and individuals. The USPTO has undertaken many efforts to provide various types of relief, including deadline extensions and fee postponements. Additionally, in the FY 2021 Congressional Justification, implementation of the fee rule was slated for August of 2020. Considering the impact of the pandemic, uncertainty about the economy, and stakeholder feedback, the USPTO paused development of the fee rule over the summer of 2020. The latest economic data point to continued recovery in many sectors of the economy. Because of this and the relatively small annual cost to businesses and individuals from USPTO's trademark applications and maintenance fees, the Office has decided to finalize the fee rule for implementation in January 2021.

I. Purpose: The USPTO protects consumers and provides benefits to businesses by effectively and efficiently carrying out the trademark laws of the United States. As a fee-funded agency, appropriate fees are critically important for the USPTO to maintain the quality and timeliness of examination and other services, and to stabilize and modernize aging information technology (IT) infrastructure on which the Office and its customers rely. The fee schedule enacted in this rulemaking is estimated to provide aggregate revenue to recover the USPTO's aggregate estimated future costs and ensure the USPTO can achieve strategic and operational goals. These goals include effectively using resources to maintain low trademark pendency and high quality, fostering business effectiveness, stabilizing and modernizing trademark IT systems, continuing programs for stakeholder and public outreach, enhancing operations of the TTAB, and ensuring financial sustainability to facilitate effective trademark operations.

Section 10 of the AIA authorizes the Director of the USPTO (Director) to set or adjust by rule any fee established, authorized, or charged under the Trademark Act of 1946, 15 U.S.C. 1051 et seq., as amended (the Trademark Act or the Act) for any services performed by, or materials furnished by, the Office. See section 10 of the AIA, Public Law 112-29, 125 Stat. 284, 316-17, as amended by the SUCCESS Act, Public Law 115-273, 132 Stat. 4158. Section 10 of the AIA prescribes that trademark fees may be set or adjusted only to recover the aggregate estimated costs to the USPTO for processing, activities, services, and materials related to trademarks, including administrative costs to the USPTO with respect to such trademark and TTAB operations. This authority includes the flexibility to set individual fees to advance key policy objectives. Thus, the Director may set individual fees at, below, or above their respective associated costs, while taking into account the aggregate estimated costs to the USPTO.

The USPTO estimates, based on the assumptions found in the FY 2021 Congressional Justification, that the additional aggregate revenue derived from the fee schedule set forth here will recover the future costs of implementing strategic and operational goals, including the cost of necessary IT stabilization and modernization activities. Also, the additional revenue will allow the USPTO to achieve sustainable funding by gradually building the operating reserve, which mitigates the risk of immediate unplanned financial disruptions that can adversely affect pendency and quality. Based on the assumptions found in the FY 2021 Congressional Justification, the Office estimates reaching the optimal six-month trademark operating reserve level in FY 2025. However, projections of aggregate revenues and costs are based on point-in-time estimates, and the circumstances surrounding these assumptions can change quickly. Notably, since the FY 2021 Congressional Justification was published, some fee collections have been lower than anticipated, due to lower than expected post-registration and Madrid filings.

II. Summary of Major Provisions: The USPTO is setting or adjusting trademark fees codified in 37 CFR parts 2 and 7. Fees are increased for all application filing types ( i.e., paper applications, applications filed via the Trademark Electronic Application System (TEAS), and requests for extension of protection under section 66(a) of the Trademark Act, 15 U.S.C. 1141f). The per-class fee increases range from $25 for a TEAS Plus application to $150 for a paper application. In addition, fees for filing affidavits or declarations of use or excusable non-use under section 8 or section 71 of the Act (section 8 or section 71 affidavits), 15 U.S.C. 1058, 1141k, are increasing by $100 per class. As described in further detail below, these increases address policy considerations related to ensuring a more accurate register as well as reflecting increased processing costs to the Office in handling these filings.

This rule creates two levels of fees for petitions. There is one fee for petitions to the Director under §§ 2.146 and 2.147, and a lower fee for a petition to revive an abandoned application under § 2.66. Currently, the fees for these petitions are $200 if filed on paper and $100 if filed through TEAS. This rule sets the fee for petitions under §§ 2.146 and 2.147 at $350 if filed on paper and $250 if filed through TEAS. The fees for a petition to revive under § 2.66 are set at $250 if filed on paper and $150 if filed through TEAS. These fees take into account the different processing costs of these filings.

The USPTO is also setting a new $50 fee for filing a letter of protest, along with new regulations that codify letter-of-protest procedures. The new fee and procedures are designed to help offset processing costs and deter the filing of unsupported or irrelevant letters of protest, while not discouraging the filing of relevant, well-supported letters of protest. The new regulatory section is based on existing, longstanding procedures for letters of protest, which are currently set forth in the Trademark Manual of Examining Procedure (TMEP), as well as the procedures set out in the patents rules in 37 CFR 1.290 and 1.291 and the Manual of Patent Examining Procedure (MPEP) governing third-party submissions concerning pending applications, which serve a function similar to letters of protest.

As discussed further below, some of the fee adjustments made in this rule are meant to adjust applicant behaviors that put an undue burden on the trademark system and that can adversely affect the quality and integrity of the trademark register. Some of these behavior adjustments are accomplished with new fees ( e.g., post audit deletion of goods and services) or with targeted increases ( e.g. TEAS Plus vs. TEAS Standard to promote more efficient, higher quality, and most cost effective filings, especially for small businesses, or increases for paper filing fees to encourage electronic filing). As a further example, the rule also sets a new fee structure to encourage registrants to perform due diligence before filing a section 8 or section 71 affidavit to maintain a registration, so as to determine the goods or services for which the registered mark is no longer in use and to delete those goods, services, and/or classes from the registration. The rule sets two fee levels for amendments to registrations to delete goods, services, and/or classes that depend on when the amendment is submitted. The first is a $0 fee if the only amendment made in a request under section 7 of the Act (section 7 request), 15 U.S.C. 1057(e), that is filed prior to submission of a section 8 or section 71 affidavit, is the deletion of goods, services, and/or classes. The current practice that results in no amendment fee for section 8 or section 71 affidavits that specify fewer than all of the goods or services listed in the registration when the affidavit is filed, which results in the deletion of goods, services, and/or classes not included in the affidavit from the registration, is unchanged. However a fee will be assessed if goods, services, and/or classes are deleted in either a section 7 request, a response to an Office action, or a voluntary amendment filed after submission, but prior to acceptance, of a section 8 or section 71 affidavit. This is a per-class fee of $250 for submissions filed through TEAS and $350 for submissions permitted to be filed on paper. To implement the new fee requirement, corresponding new regulations are enacted at §§ 2.161(c) and 7.37(c). In addition, the rule revises the section titles and restructures §§ 2.161 and 7.37 to set out the requirements for section 8 and section 71 affidavits more clearly. Except for the new provision regarding the fee required for deletions made after submission and prior to acceptance of the affidavit, the substantive text of §§ 2.161 and 7.37 is not otherwise revised.

Finally, as discussed below, 16 fees related to TTAB filings (8 for electronic filings and 8 for paper filings) are established or adjusted in this rule. Ten existing fees (5 electronic/5 paper) are increased, specifically, those for initiating an ex parte appeal from an examining attorney's refusal to register a mark, for initiating an opposition proceeding, for initiating a cancellation proceeding, and for filing each of two different types of extensions of time to oppose. Six new filing fees (3 electronic/3 paper) are established, which are explained below. The new and adjusted fees are generally designed to recover more of the costs of TTAB procedures, reduce the extent to which they are subsidized by other trademark fee collections, and advance policy objectives. The USPTO also revises § 2.114(a) to provide that a partial refund of the filing fee for a petition to cancel may be made in cases involving only a nonuse or abandonment claim, when default judgment is entered in the case, where there was no appearance by a defendant, and where no filings were made other than the petition to cancel.

III. Rulemaking Goals and Strategies: Consistent with federal fee setting standards, the Office conducted a biennial review of fees, costs, and revenues that began in FY 2019 and found that fee adjustments were necessary to provide the resources needed to improve trademark operations and to implement the USPTO 2018-2022 Strategic Plan (Strategic Plan). As a result, the fee adjustments in this rule directly align with the Office's strategic goals and key objectives as outlined in this section. Consistent with the USPTO's strategic goals and obligations under the AIA, the overall objective of this rule is to ensure the fee schedule generates sufficient revenue to recover the prospective aggregate costs of trademark and TTAB strategic improvements and operations, including the associated administrative costs. Fees must be set at levels projected to cover the cost of future budgetary requirements and maintain an operating reserve at a sufficient level.

Trademark applications in FY 2019 represented filings in a record number of over 673,000 classes of goods/services. During ordinary economic times, application filings generally have increased by an average historical rate of between 7% and 8% per year. To ensure its ability to keep pace with demand, the USPTO is in the midst of a multi-year IT systems and infrastructure upgrade, which is critical to the future of the U.S. trademark registration system and represents a significant cost to the Office.

Trademark filings—and, therefore, total revenue—are sensitive to general economic conditions. In the last two recessions, new application filings declined (2001, by −21.0%; 2002, by −12.7%; and 2009, by −12.3%). So far, in the current uncertain economic environment, trademark application filings are showing some resilience; however, with a protracted pandemic, the risk of a major filing decline remains high. The USPTO anticipates a return to historical growth rates as trademark applicants return to expected activities. However, current fees have not kept up with increases in salary, IT and other costs, and a return to traditional growth rates means a return to additional costs for new staff and supporting resources including information technology. In general, the proposed increases are commensurate with the size of the cost recovery shortfalls in trademark examination and TTAB proceedings. As discussed above, with the larger net costs from applications, revenue surpluses derived from other services, such as ITU and maintenance payments, are being reduced. The increases in this rule are designed to address those shortfalls, which as noted above are projected to increase in the future without the fee adjustments being made in this rule.

The USPTO, as a fully fee-funded agency, retains an operating reserve to ensure sufficient financial resources are available to support and promote public confidence in the U.S. intellectual property (IP) system. The operating reserve enables the USPTO to maintain operations by absorbing and responding to immediate and temporary changes in its economic and operating environments or circumstances, such as unexpected economic downturns, reducing the risk for short-term financial actions and providing the security for long-term strategic investments, such as IT development projects that are crucial to operations and customer support. An adequate operating reserve also allows the USPTO to continue serving its users in the event of a short-term lapse in congressional appropriations or other disruptions to the agency's cash flow.

The fee schedule in effect prior to this rulemaking was insufficient to satisfy future budgetary requirements to: (1) Meet the expenses that will result from projected filings; (2) recover the costs necessary to support trademark and TTAB operations and administrative services; (3) make necessary investments in IT systems, IP policy, and USPTO programs related to trademark and TTAB operations; and (4) achieve optimal operating reserve levels to ensure financial sustainability. Budgetary requirements increased to address unplanned pay raises, additional review of filings for potential fraud, post-registration audits, agency administrative operations, and continued investments in IT that required additional funding beginning in FY 2020. IT investments include modernization of IT systems to create a fully electronic workflow and state-of-the-art technological resources for external and internal users. New systems will also be deployed that enhance access for external trademark customers and stakeholders. Operational gains from these IT investments will allow for a broader public base to more efficiently and effectively apply for, register, and maintain trademark registrations and to continue to invest in and reap the benefits of strong brands, which will ultimately benefit American consumers and sustain economic activities.

Without the fee adjustments enacted in this rule, based on the assumptions found in the FY 2021 Congressional Justification, budgetary requirements would exceed revenues and available operating reserve balances beginning in FY 2022 through FY 2025 ( see Table 1).

Table 2 below shows the available revenue and operating reserve balances by fiscal year, after including the new fee rates in the projected fee collections. The numbers in the table below were developed in late calendar year 2019, prior to the COVID-19 pandemic, in support of the FY 2021 Congressional Justification, and have been updated to remove the previously proposed fee for requests for reconsideration filed more than three months from the date of issuance of a final Office action. Under current circumstances, it is difficult to predict what the actual numbers will be. However, since the USPTO was projecting insufficient funding even during an economic expansion ( see Table 1), and the trademark financial outlook has worsened since the onset of the pandemic, the fee increase is a necessary step to put the Office on a sustainable financial path.

Additional information on estimated costs can be found in the USPTO FY 2021 Congressional Justification at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information, which includes two revenue estimates, one based on the current fee schedule and another based on the fee schedule proposed in the NPRM ( see Appendix IV: USPTO Fees—Change from FY 2020 PB to FY 2021 PB).

Another fee setting goal of this rulemaking is to set individual fees to further key IP protection policy objectives while taking into account the cost of a particular service. The USPTO seeks to enhance trademark protection for IP rights holders by offering application processing options and promoting IP protection strategies.

A. Aligning Fees With Costs: The first fee setting policy consideration is to set and adjust trademark fees to more closely align them with the costs of providing the relevant services. The overall goal is to achieve total cost recovery from fee collections for trademark and TTAB operations, including associated administrative services. In determining which fees to set or adjust, this rule targets changes to the category of fees in which the gap between the cost of the service and the current fee rate is the greatest, and where narrowing that gap serves policy objectives. As noted above, application filing fees, petition fees, and TTAB fees do not fully cover the costs of processing and examination for those services. Instead, these costs are recovered or subsidized from fees paid for intent-to-use and post-registration maintenance filings that return more than the costs of processing such filings. As noted above, the USPTO anticipates, based on current trends, that this shortfall in cost recovery for these front-end services will continue absent the fee adjustments made in this rule. For example, using FY 2019 earned revenue compared to costs or expenses, application filing fees recovered 65% of expenses, petition (trademark processing) fees recovered 50% of expenses, and TTAB fees recovered just 31% of expenses ( see Table 3).

The fee schedule enacted in this rule will increase the percentage of fee revenues collected over a five year period for application filings by 21%, for petition filings by 73%, and for TTAB filings by 58% overall, thereby increasing the cost recovery for these services ( see Table 4).

Estimated revenues account for adjustments made to fee rates after considering public comments received in regard to this rulemaking.

B. Protecting the Integrity of the Trademark Register: The second fee setting policy consideration is to set or adjust fees to provide resources necessary to improve the accuracy of the trademark register. The trademark register is a reflection of marks that are actually in use in commerce in the United States for the goods and/or services identified in the registrations and its accuracy serves a critical purpose for the public and for all registrants. An accurate register allows the public to rely on the register to determine potential trademark rights. By registering trademarks, the USPTO has a significant role in protecting consumers, as well as providing important benefits to American businesses, by allowing them to strengthen and safeguard their brands and related investments. The public relies on the register to determine whether a chosen mark is available for use or registration. When a person's search of the register discloses a potentially confusingly similar mark, that person may incur a variety of resulting costs and burdens, such as those associated with investigating the actual use of the disclosed mark to assess any conflict, initiating proceedings to cancel the registration or oppose the application of the disclosed mark, engaging in civil litigation to resolve a dispute over the mark, or changing business plans to avoid the use of that person's chosen mark. In addition, such persons may incur costs and burdens unnecessarily if a registered mark is not actually in use in commerce in the United States or is not in use in commerce in connection with all the goods and/or services identified in the registration. An accurate and reliable trademark register helps avoid such needless public costs and burdens.

This rule sets and adjusts fees to encourage actions by trademark filers that help facilitate more efficient processing and the prompt conclusion of application prosecution by assessing fees for second and subsequent extension requests to file appeal briefs. In addition, filings that may result in a less accurate register, including post-registration filings to maintain registrations that may include goods or services for which the mark is no longer in use, are among those filings targeted under this objective. The new fee structure for requests to delete goods, services, and/or classes from a registration will protect and improve the integrity of the register and the efficiency of the process by incentivizing both more timely filings and proactive action by registrants to ensure the accuracy of their registrations. The increased efficiencies realized through this rule will benefit all applicants and registrants by allowing registrations to be granted sooner and more efficiently by removing unused marks and unsupported goods and services from the register. In addition, revenue generated by this rule allows for continuing development of methods for detecting and addressing filing practices that threaten the integrity of the register.

C. Improving the Efficiency of USPTO Processes: The third fee setting policy consideration pertains to improving the efficiency of the trademark and TTAB processes. To that end, this rule targets changes to fees that will administratively improve application and appeal processing by incentivizing more complete and timely filings and prosecution. For example, TEAS Plus, the lowest-cost TEAS application filing option, has more stringent initial application requirements and thus tends to result in a more complete application, which expedites processing, shortens pendency, minimizes manual processing and the potential for data-entry errors, and is thus more efficient for both the filer and the USPTO. While the per-class fee for TEAS Plus is increasing by $25 (to $250) under this rule, the per-class fee for TEAS Standard, which has less stringent initial application requirements, is increasing by $75 (to $350), resulting in a difference of $100 in the per-class fees of the respective filing options (double the current difference of $50), providing a greater financial incentive to choose the more efficient TEAS Plus filing option.

D. Ensuring Financial Sustainability to Facilitate Effective Trademark Operations: The fourth fee setting policy consideration pertains to ensuring sufficient revenue to recover the aggregate costs of Trademark and TTAB operations in future years. Additional resources are necessary to fund the multi-year project to upgrade IT systems and infrastructure and other business improvements, while also maintaining a sufficient operating reserve balance to ensure sustainable funding that will mitigate the risk of unplanned financial disruptions that could threaten operations and planned investments.

Operating reserves are intended to mitigate operational risk caused by a lack of financial resources. The USPTO defines an optimal balance and a minimum acceptable balance for the trademark operating reserve. The optimal balance sets the goal for building and maintaining the operating reserve—it defines the desired level of operating reserves the USPTO wishes to maintain. The USPTO analyzes risks related to spending and fee collections, considering the likelihood and consequence of each and its impact to financial stability, in determining the optimal reserve level. The USPTO has determined six months of operating or budgetary requirements to be the optimal trademark reserve.

This rule will provide a stable financial foundation to fulfill the USPTO mission and maintain performance. The budgetary requirements of the USPTO are comprised of substantial fixed costs, which require increased fee rates to ensure revenue sufficient to recover aggregate costs. Based on the assumptions found in the FY 2021 Congressional Justification, this rule will produce sufficient revenue to recover the aggregate costs of Trademark and TTAB operations, including executing USPTO strategic goals, policy objectives, and initiatives; creating a better and fairer cost-recovery system that balances subsidizing costs to encourage broader usage of IP rights-protection mechanisms and participation by more trademark owners; promoting a strong incentive for more efficient filing behaviors; and protecting the federal trademark register as a reliable indicator of marks in use in commerce.

Based on the assumptions found in the FY 2021 Congressional Justification, the USPTO projects that trademark fee collections in total would increase by an average of 20% per year, or $76 million to $91 million per year, over the five-year planning period as compared to the baseline ( see Table 5).

The projections of both aggregate revenues and costs are based on point-in-time estimates and assumptions that are subject to change. There is considerable uncertainty in estimating both fee collections and budgetary requirements in ordinary times, and even more so now. In addition to the COVID-19 pandemic, a number of other risks could materialize ( e.g., lower application volumes, decreased renewals, recompetition of major contracts, lease renewals, changing assumptions about presidentially authorized or congressionally mandated employee pay raises, etc.) that could change the USPTO's budgetary outlook. These estimates are refreshed annually in the formulation of the USPTO's Budget, and the USPTO continues to gain new data as the pandemic unfolds.

IV. Comments and Responses: In response to the NPRM published on June 19, 2020, the USPTO received comments from four intellectual property organizations and fifteen individual commenters, representing law firms, small business owners, and individuals. These comments are posted on the Regulations.gov website at https://beta.regulations.gov/document/PTO-T-2019-0027-0001 .

The Office received comments both generally supporting the need to increase fees and objecting to particular proposed fee increases. Four major user groups representing thousands of trademark professionals and trademark owners, who run the gamut from large corporations, to small businesses and individuals submitted comments on behalf of their members. The user groups generally acknowledged and supported the need to increase fees to further USPTO's strategic objectives and facilitate effective operations, including encouraging e-filing and enabling needed improvements in technology and technology infrastructure. However, the user groups objected to or had comments regarding some specific fee increases, as discussed below. In addition, at least one user group noted that some business owners struggle to pay the current fees and suggested that the USPTO consider the state of the U.S. economy before issuing the final rule. Several of the other commenters objected to any increase in fees, as they believed such increases placed hardships on small business owners. Multiple commenters requested additional information on the rationales for the increases and that the Office take the current economy into consideration before issuing a final rule.

The USPTO appreciates the commenters' support of the need to increase revenue as well as their concerns regarding the impact of the rule on small businesses owners. As noted above, in formulating this rule, the USPTO considered the state of the U.S. economy, the operational needs of the agency, and comments submitted in response to the NPRM. The USPTO is also mindful of the current difficulties many USPTO users are experiencing as a result of the COVID-19 pandemic. The USPTO has undertaken many efforts to provide various types of relief, including deadline extensions and fee postponements. Additionally, in the FY 2021 Congressional Justification, implementation of the fee rule was slated for August of 2020. Considering the impact of the pandemic, and in response to the stakeholder feedback, the USPTO paused development of the fee rule over the summer of 2020 and deferred the timing of implementation of the fee rule from August 2020 to January 2021. This is the first change of trademark fee rules in almost four years. Fees were adjusted in January 2017, and many of those changes were to encourage electronic filing by increasing fees for certain paper submissions. See 81 FR 78042 and FR 81 72694. Since that time, the USPTO has made electronic filing mandatory except in limited circumstances.

Further, after considering all comments, the Office has withdrawn the proposed fee for requests for reconsideration filed more than three months from the date of issuance of a final Office action, which commenters noted are a frequently used option for applicants prosecuting applications.

It should also be noted that USPTO's fees for trademark services remain relatively small compared to the legal fees many applicants incur in seeking those services. Many applicants engage attorneys to handle their filing with the Office, and based on data concerning the cost of trademark representation, including from the American Intellectual Property Law Association's 2019 Report of the Economic Survey, USPTO understands that trademark fees represent a small fraction of the legal fees a filer would generally pay to have an attorney represent them during the application process. In a TTAB proceeding, where even more time and work is required by an attorney representing a party before the Board, the fees for TTAB services would generally be an even smaller fraction of attorney fees associated with the representation. Understanding that legal fees are a significant expense, the USPTO will continue to help to minimize the cost of the application process for small businesses through the USPTO's law school clinic program, which enables qualified individuals and small businesses in need of trademark legal services to receive pro bono assistance in filing applications and responding to Office actions in trademark applications.

The Office also notes that some of the fees being increased in this rule are paid by only a relatively small number of applicants—such as TTAB fees and letter of protest fees, which are not incurred by the majority of applicants with trademark business before the Office—and therefore these fee increases are unlikely to impact a large number of applicants, including small business owners.

Some commenters also expressed concerns with specific individual fees. In the interest of providing context, when the USPTO received comments about a specific fee, they are summarized, and the USPTO's responses are provided, in the discussion below of the individual fee rationale.

V. Individual Fee Rationale: Based on the assumptions found in the FY 2021 Congressional Justification, the USPTO projects the aggregate revenue generated from this rule will recover the prospective aggregate costs of its trademark and TTAB operations and associated administrative services. However, each individual fee is not necessarily set at an amount equal to the estimated cost of performing the activities related to the fee. Instead, as described above, some of the fees are set to address increases in budgetary requirements as well as balance several key policy considerations, and executing these policy considerations through the trademark fee schedule is consistent with the goals and objectives outlined in the Strategic Plan. Once the cost recovery and key policy considerations are factored in, fees are set at, above, or below individual cost-recovery levels for the service provided. Additional details on the cost methodologies used to derive the historical fee unit expenses can be found in “USPTO Fee Setting—Activity Based Information and Trademark Fee Unit Expense Methodology” at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting .

A. Trademark application filing fees: This rule increases all application filing fees by varying amounts. The filing fee for a paper trademark application is increasing by $150, from $600 per class to $750 per class. The TEAS Plus application filing fee is increasing by $25, from $225 per class to $250 per class. The TEAS Standard application filing fee is increasing by $75, from $275 per class to $350 per class. The fee for filing an application under section 66(a) of the Act is increasing by $100, from the equivalent of $400 per class, as paid in Swiss francs, to the equivalent of $500 per class, as paid in Swiss francs.

Comments: One commenter expressed support for the increase in the paper application filing fee. Four commenters expressed concerns about the increase in electronic initial application fees. Of those four comments, one generally commented that increases will impact small businesses, while the others expressed concern about the amount of the increase in the TEAS Standard application and resulting gap in cost between TEAS Plus and TEAS Standard applications.

Response: The USPTO appreciates the commenter's support of the need to increase the paper application fee. The USPTO also appreciates commenters' concerns regarding the increase in the TEAS Standard fees and impact on small business owners. Initial application fees are generally kept lower than the full processing cost in order to enable broader participation in the trademark registration system. The increase in the fees will help close the gap between the processing cost and incoming revenue while still keeping the fees below the full processing cost. The USPTO also notes that filers continue to have the option to select TEAS Plus, which is only increasing by $25, from $225 per class to $250 per class, which is less than current TEAS Standard fee rates, and encourages filers, including individuals and small business owners, to use this less expensive filing option.

This rule also decreases the processing fee for failure to meet the filing requirements under § 2.22(a) for a TEAS Plus application from $125 to $100 per class. Thus, if the processing fee is required in a TEAS Plus application, the resulting per-class fee will equal the per-class fee for a TEAS Standard application. If a decrease in the processing fee were not enacted, the per-class fee for an application initially filed as TEAS Plus would exceed the fee for a TEAS Standard application, creating a disincentive to choose TEAS Plus, which, as noted above, tends to be more efficient for both filers and the USPTO.

B. Fees for Paper Trademark Filings: This rule maintains the cost differential for all paper filings to better align fees with costs by setting all trademark processing fees for paper filings $100 to $200 higher than the corresponding electronic filing fees (per class, when applicable). Overall, it is more costly for the USPTO to process paper filings than electronic filings, and that cost is not recovered by the current fees for paper filings. Raising the fees for paper filings will help offset the higher processing costs and move the USPTO closer to total cost recovery.

A final rule published on July 31, 2019 (84 FR 37081), which became effective on February 15, 2020 (84 FR 69330), requires applicants and registrants to file electronically through TEAS all trademark applications based on section 1 and/or section 44 of the Act, 15 U.S.C. 1051, 1126, and all submissions filed with the USPTO concerning applications or registrations, with limited exceptions. This followed a final rule published on October 7, 2016 (81 FR 69950), which became effective on January 14, 2017, requiring all parties in TTAB proceedings to file electronically through the Electronic System for Trademark Trials and Appeals (ESTTA). At present, the vast majority of filings are submitted electronically. For example, in FY 2019, less than 0.02% of initial applications were filed on paper. Thus, an increase in paper filing fees will have no impact on the vast majority of applicants, registrants, and parties to Board proceedings, who already meet the requirement to file documents electronically.

C. Other Trademark Processing Fees: This rule also increases certain other trademark processing fees to further key policy goals. The rule sets out increases to the fees for petitions to the Director as well as section 8 and section 71 affidavits. In addition, the rule sets new fees and procedural regulations for filing a letter of protest, and for deleting goods, services, and/or classes from a registration after submission and prior to acceptance of a section 8 or section 71 affidavit. Finally, the USPTO decided not to implement the proposed new fee for a request for reconsideration filed more than three months, but within six months, after the issue date of a final action or with a petition to revive an abandoned application.

(1) Petitions to the Director in Trademark Matters: This rule separates petitions to the Director into two types. Each type has a new and distinct fee amount with different levels of increases from the current single fee. The rule increases the fee for filing a petition to the Director for petitions filed under §§ 2.146 or 2.147 by one amount and establishes a separate fee code for petitions to revive filed under § 2.66 that increases the fee by less than the fee for petitions filed under §§ 2.146 or 2.147. The fees enacted herein are intended to facilitate effective trademark operations. The fee for electronically filing a petition to the Director under §§ 2.146 or 2.147 is increasing from the current fee of $100 to $250, and the fee for filing on paper is increasing from $200 to $350. The fee for electronically filing a petition to revive an abandoned application under § 2.66 is increasing from the current fee of $100 to $150, and the fee for filing on paper is increasing from $200 to $250.

Generally, petitions under §§ 2.146 or 2.147 extend the trademark registration and post-registration processes by introducing additional processing and examination into the timeline, which may lead to applications and registration maintenance documents remaining in a pending status for longer periods of time, potentially blocking others. They can also be used to delay processing of TTAB matters. By increasing fees for these filings, the USPTO discourages misuse of the process through unnecessary filings that delay prosecution of an application or registration maintenance document.

Comments: One commenter indicated that they did not oppose the increase to the fee for petitions to the Director under § 2.66 to revive an abandoned application and also generally supported or are neutral regarding the increase in the fee for petitions to the Director under §§ 2.146 and 2.147. Another commenter noted that the amount of the increase for petitions under §§ 2.146 and 2.147, from $100 to $250, seems significantly beyond the rate that is appropriate for periodic increases.

Response: The USPTO appreciates the feedback regarding the increase in fees for a petition to the Director. The fee for filing a petition to the Director has not increased since the fee was established, more than 30 years ago. Under this rule, petitions to the Director have been separated by type. Petitions under § 2.66 to revive an application abandoned for failure to respond to an Office action or notice of allowance are increased by a smaller amount because they cost less to process. These petitions generally require less processing when the filer complies with certain criteria in the submission itself. Petitions to the Director under §§ 2.146 and 2.147 usually include unique facts that require a lengthier review process. The increase in the fees for each type of petition will help to recoup more of the costs to process these filings. Additionally, the increase will further policy considerations consistent with the goals and objectives outlined in the Strategic Plan because this fee should discourage misuse of the petition process through unnecessary filings that delay prosecution of an application or registration maintenance document, or an appeal or trial proceeding before the TTAB.

(2) Section 8 or Section 71 Affidavits: Fees from post-registration filings have historically been set to recover more than the costs of processing the filings. The fees are used to help offset the cost of application processing and examination as well as TTAB trial proceedings and appeals—services for which the fees charged generally do not recover the full cost. In general, fewer post-registration maintenance filings are made by pro se and foreign registrants, who comprise a growing share of new applicants. Based on recent pre-pandemic trends, the overall percentage of registrations being maintained is decreasing. Therefore, the USPTO anticipates that it will face a continuing decrease in revenue from maintenance filings going forward if adjustments are not made. Increasing fees for section 8 and section 71 affidavits is necessary to continue to enable the USPTO to achieve aggregate cost recovery while allowing other fees to remain below their individual unit costs.

This rule also increases the fees for these filings in part because of the post-registration audit program, which was implemented as a result of the 2012 Post Registration Proof of Use Pilot Program (pilot program). During the pilot program, section 8 or section 71 affidavits for 500 registrations were reviewed as to actual use of the marks in connection with the goods and/or services identified in the registrations in order to assess the accuracy and integrity of the trademark register. The findings of the pilot program demonstrated a need for ongoing measures for additional review of these filings on a permanent basis. Since codifying the authority to require additional information and evidence concerning the use of registered marks in connection with section 8 and 71 maintenance filings in 2017 (82 FR 6259), the USPTO has conducted additional reviews of the actual use of the marks in 8,276 section 8 or section 71 affidavits through January 1, 2020. In more than 50% of the registrations undergoing the additional review, the registrations have either been removed from the register or had goods or services deleted, resulting in a more accurate trademark register. The fee increases implemented in this rule will also support the cost of this additional review.

Comments: Three commenters expressed concerns about the increase in fees for filing a section 8 or section 71 affidavit. One commenter stated that the increase of $100 is excessive in light of the $25 increase four years ago. A second commenter indicated the increases will decrease renewal filings, particularly among small business owners. The third commenter stated that the increase in fees is significant. This commenter also mentioned increases to the section 15 fee. The USPTO notes that although an increase to the section 15 fee was initially considered, it was not proposed in the NPRM.

Response: The USPTO appreciates the commenters' concerns regarding the increase in the fees. These post-registration filing fees have historically been set to recover more than the costs of processing the filings in order to offset costs in other parts of the process. In addition, these fees are increasing to offset the cost of the legal examination required to conduct the post registration audit program, a valuable tool for improving the accuracy and integrity of the trademark register.

Costs for this additional examination were discussed in the last fee adjustment in 2017. At that time, the Office was in the process of reviewing the findings from the pilot program and codifying regulations for the permanent audit program. The results of this ongoing audit program indicate that not only should this program continue, but also that the need for legal examination of an increasing number of filings is warranted. Based on these findings, the increase in fees is necessary to help offset costs for this program and allow other fees to remain below their individual unit costs.

(3) Letters of Protest in Trademark Applications: This rule sets a new $50 fee for filing a letter of protest. A letter of protest allows a third party to bring to the attention of the USPTO evidence bearing on the registrability of a mark in a pending application. In this way, the letter-of-protest procedure can potentially improve the quality of the examination of a given application. The procedure is not, however, a substitute for the statutory inter partes opposition and cancellation procedures available to third parties who believe they would be damaged by the registration of the involved mark. A letter of protest, properly supported, should aid in examination without causing undue delay or compromising the integrity and objectivity of the ex parte examination process, which is designed to involve communications regarding an application only between the applicant and the Office. For this reason, the protestor is not permitted to submit legal arguments, contact the examining attorney assigned to the subject application, or participate in any Office proceedings relating to the protest or the application to which it is directed. The limited involvement of the third party ends with the filing of the protest. The questions of whether evidence is relevant to a ground for refusal appropriate in ex parte examination, whether a refusal should be made, or whether a registration will issue are matters for the Office to determine during the ex parte examination process that occurs between the applicant and the Office acting on behalf of the public.

The Office incurs costs associated with the work of reviewing and processing each letter. The filing volume for letters of protest has steadily increased in recent years, with the USPTO receiving 2,726 in FY 2017; 3,480 in FY 2018; and 4,106 in FY 2019. Thus, letters of protest continue to generate increasing additional expenses, which will likely further increase in the future.

Comments: The Office received comments both generally supporting and objecting to the new fee to file a letter of protest. Commenters supporting the fee stated that the amount is reasonable and appropriate to recoup costs. Two of the commenters indicated that the fee should be kept as low as possible, with one suggesting that the fee should be set at $25 instead of $50, and one suggesting that the fee should be refunded if the letter of protest is granted. Several other commenters expressed concerns about the impact to small businesses by requiring a fee to file a letter of protest. These commenters also noted that letters of protest aid the Office by bringing to light information and/or refusals that an examining attorney may miss. These commenters stated that the Office should not charge a fee for a process that allows the public to aid in the registration process.

Response: The USPTO understands the desire to keep the fee low so as to not discourage the use of the letter-of-protest process. However, given the costs to process these filings, the USPTO has determined that a fee is necessary to help offset some of the processing costs. Similar to petitions under §§ 2.146 and 2.147, review of letters of protest cannot be automated because they include unique facts requiring review by staff attorneys to ensure guidelines are met before the information is sent to the examining attorney for review. In FY 2019, the evidence in approximately 25% of pre-publication letters of protest and 94% of post-publication letters of protest was not forwarded to the examining attorney. This suggests that a significant portion of filings do not contain relevant information or evidence, do not meet the requirements for a letter of protest, or are otherwise unnecessary. These filings generate additional costs without a proportionate corresponding benefit. The fee set by this rule is below the amount required to recoup the full processing cost. The fee is intended to be at a level high enough to partially offset processing costs and deter the filing of unsupported or irrelevant filings, but low enough so as not to discourage the filing of relevant, well-supported letters of protest. This fee is also consistent with the recommendations contained in the TPAC report that it fall within the $20 to $100 fee range. The USPTO does not anticipate that the letter of protest fee will impact a large number of parties with business before the Office. The letter of protest is a purely voluntary process that most applicants and registrants do not use. In addition, the letter of protest process was developed many years ago when examining attorneys had limited resources for gathering evidence to support refusals of registration. The tools available to examining attorneys today are far more advanced, reducing the need for letters of protest.

In connection with this fee, the USPTO also codifies a new regulatory section at 37 CFR 2.149, which sets out the procedures for letters of protest. The new regulatory section is based on the existing longstanding procedures for letters of protest, which are currently set forth in the TMEP, with appropriate modifications that more closely align the procedures with those for similar third-party submissions and protests in patent applications under 37 CFR 1.290 and 1.291 and as set out in MPEP §§ 1134 and 1901. This action is being undertaken at this time due to the rising volume of letters of protest in recent years, which has resulted in the need to codify procedures for submission of such protests in the regulations and to adjust those procedures to deal efficiently with this higher volume of filings.

Under the procedures set forth in the regulatory text at § 2.149, a letter of protest must be timely filed through TEAS and must include: (1) The fee; (2) the serial number of the pending application that is the subject of the protest; (3) an itemized evidence index that includes identification of the documents, or portions of documents, being submitted as evidence and a concise factual statement of the relevant grounds for refusal of registration appropriate in ex parte examination that each identified item supports; and (4) a clear and legible copy of the supporting evidence identified in the evidence index. If the letter of protest is filed before publication of the subject application, the evidence must be relevant to the identified ground(s) for refusal. If filed on the date of or within 30 days after publication of the subject application, the evidence must establish a prima facie case for refusal on the identified grounds, such that failure to issue a refusal or make a requirement would likely result in issuance of a registration in violation of the Act or regulations.

The letter-of-protest process is intended to provide an opportunity for the protestor to efficiently and effectively provide relevant evidence in support of the proposed legal grounds for refusing registration of the application identified in the submission. It is inappropriate for the protestor to “dump” evidence and leave it to the Office to determine its possible relevance. Therefore, an index is required for all submissions listing the documents submitted as evidence and the ground(s) for refusal each item of evidence supports. In addition, the procedures also require that the submission not total more than 10 items of evidence in support of a specified ground of refusal and not more than 75 total pages of evidence without a detailed and sufficient explanation that establishes the special circumstances that necessitate providing more than 10 items of evidence per refusal ground or more than 75 total pages of evidence. This requirement encourages the submission of evidence that is succinct, not duplicative, and limited to the most relevant evidence. It should be a rare situation in which more than 10 items of evidence or 75 total pages of evidence is necessary to support the proposed legal grounds for refusal. However, some examples of situations that might constitute such special circumstances are when: (1) A subject application includes multiple classes and the protestor needs to provide evidence of relatedness of the goods and/or services for all classes in the application; (2) evidence submitted to support a refusal for descriptiveness consists of fewer than 10 discrete items, but each item comprises multiple pages, totaling more than 75 pages; or (3) a protestor raises more than one ground for refusal and the evidence necessary to support all grounds raised totals more than 10 items or 75 pages.

A letter of protest submitted by a third party is not made part of the application record to preserve the ex parte nature of examination. If the USPTO determines that the submission complies with the proposed regulations, only the specified grounds for refusal and the provided evidence relevant to the grounds for refusal would be included in the application record for consideration by the examining attorney. A third party filing a letter of protest will not receive any communication from the USPTO relating to the submission other than acknowledgement that it has been received by the Office and notification of whether the submission is found to be compliant or non-compliant. Also, the Office will not accept amendments to a non-compliant submission that was previously filed or requests to reconsider a compliance determination. Rather, the third party may submit a new letter of protest that is compliant if the time period for submitting a letter of protest has not closed. A protestor does not, by the mere filing of a protest, obtain a “right” to argue the protest before the Office. As noted above, the questions of whether evidence is relevant to a refusal ground appropriate in ex parte examination, whether a refusal will be made, or whether a registration will issue are matters for the Office to determine as part of the ex parte examination process that occurs between the applicant and the Office acting on behalf of the public. Therefore, the procedures also provide that: (1) The Office's determination whether to include submitted evidence in the record of an application would be final and non-petitionable, (2) the limited involvement of the third party ends with the filing of the letter of protest, and (3) the third party may not directly contact the examining attorney assigned to the application.

(4) Requests for Reconsideration in Trademark Applications: The USPTO has decided not to implement the proposed new fee for a request for reconsideration filed more than three months, but within six months, after the issue date of a final action or with a petition to revive an abandoned application. The proposed fee was $400 for a TEAS submission and $500 for a paper submission. No fee was proposed to be incurred for requests filed within three months of the issue date of a final action.

Comments: Seven commenters objected to and expressed a variety of concerns regarding implementation of a fee for requests for reconsideration of a trademark application. One commenter noted that the proposed fee would impose a significant financial burden late in the process. Another commenter noted that the proposed fee would be higher than the initial application fee.

Response: After further review, the USPTO has determined that the proposed fee might not provide significant enhancement to the timeliness or quality of the examination process and would impose an additional financial burden to administer. Given these considerations and the public concerns about such a fee, including the impact of potential fee increases on small businesses and individuals, the USPTO withdraws this proposed fee.

(5) Deletion of Goods, Services, and/or Classes from Registrations: Currently, amendments to registrations may be made by filing a section 7 request for amendment or correction of a registration for $100, if submitted through TEAS, or $200, if filed on paper. This rule sets a $0 fee for a section 7 request that is filed through TEAS prior to the submission of a section 8 or section 71 affidavit and that consists only of a request to delete specified goods, services, and/or classes. As noted above, the current practice that results in no additional amendment fee for section 8 or section 71 affidavits that specify fewer than all of the goods or services listed in the registration when the affidavit is filed, which results in the deletion of goods, services, and/or classes not included in the affidavit from the registration, is unchanged. However, a fee will be assessed if goods, services, and/or classes are deleted in a section 7 request, a response to an Office action, or a voluntary amendment filed after submission, but prior to the acceptance, of a section 8 or section 71 affidavit. This rule sets a new fee of $250 per class, if filed through TEAS, or $350 per class, if a paper filing is permitted, for deleting goods, services, and/or classes from the registration under such circumstances.

The $0 fee option is available to, and the $250 (or $350) per-class fee will be assessed against, all registrants. Thus, the fees are not related to the post-registration audit program or a TTAB finding. The fees are intended to improve the accuracy and integrity of the register by encouraging all registrants to perform due diligence before filing a section 8 or section 71 affidavit to maintain a registration, so as to determine the goods, services, and/or classes for which the registered mark is no longer in use and to delete them from the registration.

Comments: One commenter indicated support for a $0 fee for a section 7 request to delete goods or services prior to filing a section 8 or 71 affidavit. Two commenters expressed concern for offsetting the cost to the USPTO to mail an updated paper registration certificate to filers who take advantage of the $0 fee.

Response: The comments have been considered; however, the USPTO anticipates that other fees will help offset these costs. The decision to implement this fee as proposed prioritizes the key policy objective of incentivizing improvement of the accuracy and integrity of the register.

Comments: Five commenters expressed concerns regarding the new fee to delete goods, services, and/or classes from a registration after a section 8 or 71 affidavit has been submitted. One commenter indicated there should be no fee for changes made online. Three commenters indicated the amount of the fee is too high, with two commenters suggesting the fee should be $100 per class. Finally, one commenter expressed concerns regarding the post-registration audit program and use of the fee to incentivize an increase in audited files.

Response: Applicants and registrants are required to submit all trademark filings electronically ( i.e., online). 37 CFR 2.23. Since the fee is intended to incentivize all registrants to perform the due diligence necessary to ensure that the mark is in use on all goods and/or services recited in the registration prior to the submission of a section 8 or 71 affidavit, not implementing the fee for an electronic filing would undermine the USPTO's express purpose in proposing the fee. Further, the fee is not charged if the registrant performs its due diligence and deletes any goods, services, and/or classes for which the mark is not in use within the section 8 or 71 affidavit at the time of filing.

As noted above, the fee structure for requests to delete goods, services, and/or classes from a registration will protect and improve the integrity of the register and the efficiency of the process by incentivizing both more timely filings and proactive action by registrants to ensure the accuracy of their registrations. Undermining the quality of the register will generate potentially exorbitant undue costs and hardship on registrants, applicants, and the agency. The new fee needs to be high enough to reflect the significance of incomplete due diligence. At the same time, the fee should not be so low as to have limited deterrence. The USPTO believes that $250 is the appropriate fee to incentivize the desired practices. Further, the increased efficiencies realized through this rule will benefit all applicants and registrants by allowing registrations to be granted sooner and more efficiently by removing unused marks and unsupported goods and services from the register. In addition, revenue generated by this rule allows for continuing development of methods for detecting and addressing filing practices that threaten the integrity of the register.

The USPTO assures the public that any decision to increase the number of registrations audited after submission of a post-registration maintenance document would be made to promote the accuracy and integrity of the register and not because of the possibility that it might increase revenue. As noted above, the no-fee option is available to, and the $250 (or $350) per-class fee will be assessed against, all registrants. The fee is applied to all registrations in which goods or services are deleted after submission, but prior to acceptance, of a section 8 or 71 affidavit, not only to deletions in registrations being audited.

When filing a section 8 or 71 affidavit, all registrants are required to specify the goods and/or services for which the mark is in use in commerce. These fees will serve to improve the integrity and quality of the register by incentivizing all registrants to perform the due diligence necessary before submission of a section 8 or 71 affidavit to maintain a registration. Thus, registrants who ensure that their marks are in use in commerce in connection with the goods and/or services listed in the registration before the submission of a section 8 or 71 affidavit, and who delete those goods, services, and/or classes for which the mark is not in use when the affidavit is submitted, are not subject to this fee. However, registrants who later determine, either as part of an audit or not, that some of the goods, services, and/or classes included in the affidavit must be deleted are subject to the fee.

D. TTAB Fees: This rule sets or adjusts 16 TTAB-related fees (8 for electronic filings and 8 for paper filings). Ten existing fees (5 electronic/5 paper) are increased, specifically, those for initiating an ex parte appeal from an examining attorney's refusal to register a mark, for initiating an opposition proceeding, for initiating a cancellation proceeding, and for filing each of two different types of extensions of time to oppose. Six new filing fees (3 electronic/3 paper) are established, and are explained below. The rule also codifies that the TTAB has discretion to grant a refund of a portion of the filing fee for a petition to cancel. While the percentage increase for a number of TTAB fees is larger than the application filing fees discussed above, the USPTO notes that many of the TTAB fees remain below cost recovery, considering the significant costs the Board incurs in conducting proceedings. In addition, TTABs fees are a small percentage of the total litigation costs incurred by a party before the Board, considering the attorney fees and other expenses of litigation.

(1) Existing Fees for Trial Cases: To better align the costs of providing TTAB services with the fees charged for them, this rule increases the fee for petitions for cancellation and notices of opposition by $200 per class. The rule also amends § 2.114(a) to allow the USPTO discretion to refund a portion of the petition fee in cases of default judgment where there is no appearance by a defendant and no filings are made other than the petition to cancel, reflecting reduced work needed on the part of the TTAB. The resulting lower net fee for a petition to cancel that meets these characteristics also furthers the policy goal of not discouraging the filing of petitions to cancel by petitioners with knowledge that a registered mark is no longer in use, or was never put to use, and therefore should be removed from the register. The refund will be in the amount of $200 per class, as explained below.

Comments: Four IP stakeholder organizations provided comments on the proposed $200 per class increases in the fees for trial cases (Notices of Opposition and Petitions for Cancellation). Three of the four noted the increases of four years ago, and stated that they consider the proposed increases “steep” or “excessive.”

Response: The percentage of TTAB costs associated with processing of trial cases varies a great deal, as compared to the uniform per class filing fee. Clearly, in an opposition or cancellation case in which no appearance by a defendant is made, no filing other than the plaintiff's initial complaint is made, and the case is decided by way of default judgment, a higher percentage of TTAB operational costs is covered than in a case involving significant motion practice and a full trial. The original set of fee proposals discussed in the TPAC fee setting hearing with the public and stakeholders included a discussion of shifting some of the costs of TTAB trials to heavier users of trial case services, for example, by requiring a fee for the filing of a motion for summary judgment. However, initial stakeholder input during the fee setting hearing clearly indicated a preference for more uniform filing fees and fewer user fees for particular filings.

The costs associated with processing trial cases are more substantial than with appeal cases because of the larger number of trial cases and the procedural complexities. For example, the Board's staff of 18 interlocutory attorneys exists primarily to handle contested motions in trial cases. Since parties in trial cases pay no fees associated with the myriad motions, voluminous evidentiary submissions, and many briefs that can be filed, trial case filing fees need to be set for all commenced trial cases at a level that furthers cost recovery for all such cases. In addition, as noted above, USPTO initial fees for filing trial cases at the TTAB, compared to other costs associated with financing litigation, such as attorney fees, remain a small part of overall litigation costs.

As noted in the NPRM, TTAB fee revenue presently covers only 31% of TTAB operating costs. Applicants and registrants making filings in the trademark operation, the vast majority of whom do not use TTAB services, subsidize TTAB costs. The TTAB can recover a more substantial percentage of its operating costs, thereby reducing the subsidization of TTAB operations, while still keeping TTAB filing fees low as a portion of the overall cost of litigation by attaching fees to the TTAB filings that are significant enough in number to bring in appreciable revenue. The most effective means for raising revenue that will allow the Board to recover more of its operating costs lies in filing fees for trial cases, and in particular, oppositions

(2) Partial Refunds of Qualifying Cancellation Fees:

Comments: Three IP stakeholder organizations addressed the proposal to grant the TTAB discretion to provide partial refunds in cancellation cases asserting abandonment or nonuse of a registered mark, where there is no appearance by a defendant, no filings are made other than the petition to cancel, and where a default judgment is entered. Commenters sought clarification regarding how the Board would exercise such discretion, whether the refund would be processed as a matter of course by the Board, or whether a refund request must be filed and whether the refund of $200 is per class or per proceeding. One of these commenters also sought clarification as to whether the petitioner would need to have a deposit account for the refund to issue.

Response: First, the Office is granted discretion under revised § 2.114(a) precisely because it must have the discretion to refund any portion of a fee otherwise required. The TTAB will process refunds as a matter of course during the process of termination of a cancellation case, so long as the stated requirements are met. Paralegals will have no need to exercise individual discretion to determine whether to provide a refund or not.

Second, refunds will be handled by TTAB paralegals, during the process of terminating cancellation proceedings. The petitioner will not have to request the refund. The refund will be processed in the same way that refunds now are processed for cases that should not have been instituted and are dismissed as a nullity. Therefore, a filer who did not use a deposit account to pay the filing fee would not need to establish an account just for the purpose of receiving a refund.

Third, as explained in the NPRM, under this rule a petitioner filing only an abandonment or nonuse claim, where no other filings are made, and in which a default judgment is entered, would receive a $200 per class refund of the filing fee. That is, the net filing fee would be the same as it was prior to this rule. Notwithstanding the pressing need to cover more of the TTAB's operating costs, the refund of a portion of the fee for a petition to cancel provided for by this rule, under defined circumstances, means that many filers of petitions for cancellation will see no increase in the filing fee for such cases.

Comments: One commenter sought clarification as to what would happen if the Board granted a motion to reopen a case in which the Board had entered default judgment.

Response: To ensure that cancellation petitioners who do not obtain default judgments are treated equally, if a motion to reopen was granted in a cancellation case that was originally decided by default, the petitioner would be assessed the amount of the refund processed at the time of default.

Comments: One commenter suggested that the refund conditions be expanded to allow for filing of some documents prior to entry of a default judgment ( e.g., “no substantive filings” were made or only “simple, procedural” filings were made).

Response: The Office appreciates the comment that some cancellation cases asserting only abandonment or nonuse claims may have few filings and no “substantive” filings prior to entry of default judgment. However, the refund procedure is established with clear guidelines for determining when a refund will be provided to avoid case-by-case discretionary judgments on whether a filing was substantive or a “simple, procedural filing.”

The Office will not expand the refund process to cancellation cases asserting abandonment that involve filing of more than just the initial complaint prior to entry of judgment. Extending the refund to cancellation cases asserting abandonment and that involve filings other than the initial complaint would require time-consuming case-by-case judgments regarding whether the filings were substantive or not or were simple and procedural. Moreover, cases that did not involve substantive filings might still involve many procedural filings that could cause the case to remain pending for a long period of time, and the refund proposal is designed to benefit cases that are terminated rapidly. In addition, decisions by TTAB personnel regarding whether filings were substantive or simple could then be subject to review on petition and would result in additional delays prior to termination.

Comments: Commenters also proposed that a refund should be available in opposition cases and for all cases of default judgment, regardless of the grounds asserted by the plaintiff. Of the two stakeholder organizations that addressed the issue of the frequency with which default judgment is entered in opposition proceedings, one stated that the reported experience of its members is that default judgments are just as frequent in opposition proceedings as they are in cancellation proceedings. In contrast, the other acknowledged that default judgments are rare in opposition proceedings.

Response: The TTAB's expedited cancellation proceeding pilot confirmed only the high rate of default judgment in cancellation cases asserting abandonment or nonuse alone. Thus, the Board did not have any basis to propose refunds in opposition cases or in cancellation cases asserting other grounds. The NPRM refund proposal was limited to cancellation cases asserting only abandonment or nonuse, in which the defendant does not enter an appearance, the only filing was the initial complaint, and that results in default judgment. This was rooted in the recognition of the high number of abandonment or nonuse claims, the high rate of default in cases in which those are the only claims, and the ability to handle refund processing in the normal course of terminating a cancellation proceeding. Based on statistics from the TTAB's recent two-year expedited cancellation proceeding pilot program, abandonment is the most common claim in cancellation proceedings, appearing in 34% of filings. The default rate in cancellation cases in which abandonment is the only claim is 60%. The decision to process refunds in such cases results in no net increase in the cancellation filing fee for many petitioners and also encourages filings that help ensure the integrity of the register. Cancellation cases involving assertion of other grounds serve other purposes that may be unrelated to the integrity of the register. Opposition cases typically do not involve abandonment claims and, even if they result in default judgments do not result in removal of registered but unused marks from the register.

(3) Fees for Extensions of Time to Oppose: This rule also increases fees for filing requests for an extension of time to file an opposition. Prior to enactment of this rule, applicants could request: (1) An initial 30-day extension for no fee, (2) a subsequent 60-day extension (or an initial 90-day extension) for a fee of $100 for electronic filings and $200 for paper filings, and (3) a final 60-day extension for a fee of $200 for electronic filings and $300 for paper filings. This rule maintains this tiered structure with an increase of $100 for the first 60-day (or initial 90-day) electronic extension and $200 for the final 60-day electronic extension. Paper-filed extension requests will increase by $200 for each filing. The fees are per application, not per class.

These fees are designed to yield efficiencies by encouraging potential opposers to make decisions regarding filing an opposition sooner, thus reducing delays to applicants whose filings have been made the subject of extensions of time to oppose. Additionally, by encouraging earlier decisions to initiate proceedings, the uncertainty experienced by these applicants will be ameliorated by having their applications proceed to determination on the merits sooner. This will also help protect the integrity of the trademark register by encouraging timely decisions and filings to ensure that the rights of other applicants and the public are not adversely affected.

Further, currently about two-thirds of the cost of TTAB operations is subsidized by revenue from other trademark processing fees. The increases in existing TTAB fees set by this rule, and the new fees set by this rule, will not recover the full costs of TTAB operations, but they are estimated to increase cost recovery by 7% and to bring the TTAB incrementally closer to full cost recovery.

Finally, the extension of time to oppose fees will help offset TTAB processing costs. In FY 2019, the USPTO received 20,502 requests for extensions of time to file a notice of opposition. It is customary for requests that delay processing of records, such as extensions, to incur a fee, which offsets costs associated with processing the filing, as well as the overall cost of processing appeals and trials. These fees are necessary to help achieve primary Office goals of recovering the aggregate costs of operations, along with key policy considerations, such as encouraging efficient processing.

Comments: Two IP stakeholder organizations and one law firm provided comments on the extension of time to oppose fees. One stakeholder organization noted only the proposed fee for the final 60-day extension of time to oppose, and it is unclear whether the organization's comment concerns only that extension or both types of extensions that carry fees. All commenters noted that fees for these filings were first levied four years ago and that the proposed increases are, percentage-wise, substantial. Comments also suggested that an applicant engaged in settlement talks with a potential opposer could attempt to force an increase in costs for the potential opposer to continue settlement talks by not responding to attempts to settle the parties' differences. The law firm suggested that potential opposers might proceed to file a notice of opposition rather than pay the increased fees for the extensions of time to oppose. The law firm also suggested that processing of extensions of time to oppose is largely automated and, therefore, the fee increase cannot be justified on the grounds of cost recovery.

Response: Many potential opposers are aware of applications that have been filed and that are perceived as potentially conflicting well before a mark is published for opposition, as demonstrated by the large number of Letters of Protest filed each year, many of which seek to ensure an examining attorney is aware of the protestor's prior registration or other concerns. A potential opposer and an applicant can initiate settlement discussions as soon as the application is approved for publication in the Trademark Official Gazette and before it actually publishes. Then, upon publication, there is a 30-day opposition period, and a 30-day extension of that period can be obtained at no cost. Extension of time to oppose fees do not apply until 60 days after the date of publication. The additional 60 days that can be obtained for the period covering 60-120 days from publication carry a fee that is charged per application, not per class of goods or services in the application. A final extension for another 60 days can be obtained for a higher fee, also per application, not per class. The fee structure encourages parties to discuss settlement of differences, but charges more the longer the discussions go on and applications are delayed.

When fees for extensions were first proposed, commenters posited that potential opposers might file oppositions rather than pay the extension fees. The Board has not seen any evidence of a significant change in practice. On the contrary, the number of extensions of time to oppose filed has generally increased on an annual basis. Opposition fees are paid per class for the opposed application, while fees that are required for extensions of the opposition period accrue on a per-application basis. As such, filing an opposition to avoid paying an extension fee when negotiations to avoid commencement of an opposition are progressing would in most instances cost a potential opposer more. When negotiations are not progressing, the potential opposer may wish to consider an earlier determination as to whether filing of an opposition is desirable. In trial cases, it is not unusual for the Board to be informed that an adversary is not willing to engage in settlement talks. The Board has limited ability to force such discussions. In addition, the Board has received objections to its approval of extensions of time to oppose from applicants who assert that the potential opposer has no real basis for an opposition and seeks only to delay the application. Thus, the extension fees are intended to facilitate earlier discussion of settlement and recognize that delay can be a concern for both parties.

As noted above in the discussion of increases in filing fees for trial cases, cost recovery by the TTAB is not assessed solely on the basis of each particular type of filing or Board proceeding. As stakeholders have indicated a preference for spreading out cost recovery over many filings, rather than be faced with steeply higher costs for involved and protracted proceedings, cost recovery for all Board operations is facilitated by apportionment of fees on filings that are most frequently made. Extensions of time to oppose are filed on an annual basis at three times the rate of the filing of notices of opposition. Therefore, they are a logical type of filing for which to charge nominal fees for longer extensions. In addition, the fact that processing of extensions of time to oppose is largely automated does not mean that there are no costs associated with their processing. Development and enhancements of automated processing systems cost a great deal.

(4) Fees for Filing an Appeal Brief: This rule increases the fee for filing a notice of appeal by $25 per class, based on inflation, and establishes new fees for filing an appeal brief of $300 per class if filed on paper and $200 per class if filed through ESTTA. These fees address the TPAC report recommendations to apply the majority of the aggregate increases in appeal fees to the costs incurred when an appeal brief is filed, which increases the likelihood that the appeal will have to be decided on the merits.

(5) Fees for Filing Requests for Extension of Time to File an Appeal Brief: This rule sets fees for second and subsequent requests for extensions of time to file an appeal brief at $200 per application if filed on paper and $100 per application if filed through ESTTA. These fees yield efficiencies by encouraging applicants to move forward with their appeals, resulting in a quicker resolution of the appeal, the pendency of which can adversely impact the rights of other applicants and registrants. Implementing a tiered fee structure minimizes costs to all applicants, including smaller entities, as there is no fee for a first request for extension of time to file the appeal brief.

(6) Fees for Oral Hearing: This rule sets the fee for a request for an oral hearing at $500 per proceeding. Oral hearings are not requested in the vast majority of cases before the TTAB. They are optional and are most useful when cases involve complex issues, a complex record, or highly technical goods and/or services. This fee will help offset the costs of scheduling and conducting the hearing, as well as the maintenance of equipment for remote participation.

Comments: Two IP stakeholder organizations and one law firm addressed the proposed fee for an oral hearing in an ex parte appeal or trial case. One organization noted its concern but did not provide an explanation of the basis for its concern, though it did suggest limiting the fee to in-person arguments. The other organization concluded that the fee will discourage the use of oral hearings and could weaken a party's chance of success in a matter before the TTAB. The law firm considers trademark cases to be inherently complex and long and the fee to be a disservice to the bar, to the parties, and to fair determinations of cases.

Response: This fee appropriately places Board costs on actual users of this service. Approximately 100 hearings have been requested on an annual basis in recent years. While some practitioners routinely request an oral argument for cases in which they are involved, most do not. The Board has no evidence that outcomes for parties that request an oral argument are appreciably different than for those that do not. No Board case is decided without thorough review of the record and briefs, which, as frequently stated, are of paramount importance. However, hearings are available for those who request them.

Because there is no current fee for requesting an oral hearing, it is not unusual for a party to request one only to cancel shortly before the hearing. Charging a fee for requesting a hearing may help deter requests for hearings that could later be cancelled. Hearings incur costs that are not associated with cases submitted for decision on the briefs. The scheduling and running of hearings requires a dedicated staff position, and the TTAB must maintain a hearing room for use when in-person hearings are held and the technical infrastructure necessary to offer parties the option to appear by video rather than incur the costs associated with having to travel to the USPTO. This infrastructure has a finite lifespan and needs regular upgrading or replacement.

The USPTO revises § 2.6(a)(1)(i) to increase the per-class fee for filing an initial application on paper from $600 to $750.

The USPTO revises § 2.6(a)(1)(ii) to increase the per-class fee for filing an application under section 66(a) of the Act from $400 to $500.

The USPTO revises § 2.6(a)(1)(iii) to increase the per-class fee for filing a TEAS Standard application from $275 to $350.

The USPTO revises § 2.6(a)(1)(iv) to increase the per-class fee for filing a TEAS Plus application from $225 to $250.

The USPTO revises § 2.6(a)(1)(v) to decrease the processing fee under § 2.22(c) from $125 to $100 per class.

The USPTO adds § 2.6(a)(11)(iii) to establish a fee of $0 for filing a section 7 request to amend a registration through TEAS prior to submission of a section 8 or section 71 affidavit and that consists only of the deletion of goods, services, and/or classes.

The USPTO revises § 2.6(a)(12)(i) and (ii) to increase the per-class fee for filing a section 8 affidavit from $225 to $325 for a paper submission and from $125 to $225 for a TEAS submission.

The USPTO adds § 2.6(a)(12)(iii) and (iv) to establish fees for the deletion of goods, services, and/or classes after submission and prior to acceptance of a section 8 affidavit. The addition of § 2.6(a)(12)(iii) and (iv) sets the per-class fee at $350 for a paper submission and $250 for a TEAS submission.

The USPTO revises § 2.6(a)(15) to establish separate fees for petitions to the Director under §§ 2.146 or 2.147 and petitions to revive an abandoned application under § 2.66. The revisions to § 2.6(a)(15)(i) and (ii) set the fee for filing a petition to the Director under §§ 2.146 or 2.147 at $350 for a paper submission and $250 for a TEAS submission. The addition of § 2.6(a)(15)(iii) and (iv) sets the fee for filing a petition to revive an abandoned application under § 2.66 at $250 for a paper submission and $150 for a TEAS submission.

The USPTO revises § 2.6(a)(16)(i) and (ii) to increase the per-class fee for filing a petition to cancel from $500 to $700 for a paper submission and from $400 to $600 for an ESTTA submission.

The USPTO revises § 2.6(a)(17)(i) and (ii) to increase the per-class fee for filing a notice of opposition from $500 to $700 for a paper submission and from $400 to $600 for an ESTTA submission.

The USPTO revises § 2.6(a)(18) to increase the fee for filing an ex parte appeal and to establish new fees for requests for an extension of time to file an appeal brief and for filing a brief in an ex parte appeal. The revisions to § 2.6(a)(18)(i) and (ii) increase the per-class fee for filing an ex parte appeal from $300 to $325 for a paper submission and from $200 to $225 for an ESTTA submission. The addition of § 2.6(a)(18)(iii) sets the per-application fee for filing a first request for an extension of time to file an appeal brief at $0. The addition of § 2.6(a)(18)(iv) and (v) sets the per-application fee for filing a second or subsequent request for an extension of time to file an appeal brief at $200 for a paper submission and $100 for an ESTTA submission. The addition of § 2.6(a)(18)(vi) and (vii) sets the per-class fee for filing a brief in an ex parte appeal at $300 for a paper submission and $200 for an ESTTA submission.

The USPTO revises § 2.6(a)(22)(i) and (ii) to increase the fee for filing a request for an extension of time to file a notice of opposition pursuant to § 2.102(c)(1)(ii) or (c)(2) from $200 to $400 for a paper submission and from $100 to $200 for an ESTTA submission.

The USPTO revises § 2.6(a)(23)(i) and (ii) to increase the fee for filing a request for an extension of time to file a notice of opposition pursuant to § 2.102(c)(3) from $300 to $500 for a paper submission and from $200 to $400 for an ESTTA submission.

The USPTO adds § 2.6(a)(24) to establish a fee for filing a request for an oral hearing before the TTAB of $500 per proceeding.

The USPTO adds § 2.6(a)(25) to establish a fee of $50 for the filing of a letter of protest per subject application.

The USPTO revises § 2.114(a) to provide that a partial refund of the fee for a petition to cancel, equal to the increase in that fee otherwise enacted in this rulemaking, may be made in cases of default judgment where there was no appearance by a defendant and no filings are made other than the petition to cancel.

The USPTO adds § 2.149, which codifies the procedures and requirements for letters of protest.

The USPTO revises the section title and restructures § 2.161 to set out the requirements for section 8 affidavits or declarations more clearly. The USPTO also adds, at revised § 2.161(c), a provision stating that if goods, services, and/or classes are deleted from a registration after submission and prior to the acceptance of a section 8 affidavit or declaration, the deletion must be accompanied by the relevant fee under § 2.6(a)(12)(iii) or (iv) for each class from which goods, services, and/or classes are deleted.

The USPTO revises § 7.6(a)(6)(i) and (ii) to increase the per-class fee for filing a section 71 affidavit from $225 to $325 for a paper submission and from $125 to $225 for a TEAS submission.

The USPTO adds § 7.6(a)(6)(iii) and (iv) to establish fees for the deletion of goods, services, and/or classes after submission and prior to acceptance of a section 71 affidavit. The added § 7.6(a)(iii) and (iv) set the per-class fee at $350 for a paper submission and $250 for a TEAS submission.

The USPTO revises the section title and restructures § 7.37 to set out the requirements for section 71 affidavits or declarations more clearly. The USPTO also adds, at revised § 7.37(c), a provision stating that if goods, services, and/or classes are deleted from a registration after submission and prior to acceptance of a section 71 affidavit or declaration, the deletion must be accompanied by the relevant fee under § 7.6(a)(6)(iii) or (iv) for each class from which goods, services, and/or classes are deleted.

A. America Invents Act: This rulemaking sets and adjusts fees under section 10(a) of the AIA as amended by the SUCCESS Act. Section 10(a) of the AIA authorizes the Director to set or adjust by rule any trademark fee established, authorized, or charged under the Trademark Act for any services performed by, or materials furnished by, the USPTO ( see section 10 of the AIA, Pub. L. 112-29, 125 Stat. 284, 316-17, as amended by Pub. L. 115-273, 132 Stat. 4158). Section 10(e) of the AIA sets forth the general requirements for rulemakings that set or adjust fees under this authority. In particular, section 10(e)(1) requires the Director to publish in the Federal Register any proposed fee change under section 10 and include in such publication the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change. For such rulemakings, the AIA requires that the USPTO provide a public comment period of not less than 45 days.

The TPAC advises the Under Secretary of Commerce for Intellectual Property and Director of the USPTO on the management, policies, goals, performance, budget, and user fees of trademark operations. When adopting fees under section 10 of the AIA, the AIA requires the Director to provide the TPAC with the proposed trademark-related fees at least 45 days prior to publishing them in the Federal Register . The TPAC then has at least 30 days within which to deliberate, consider, and comment on the proposal, as well as hold a public hearing(s) on the proposed fees. The TPAC must make a written report available to the public of the comments, advice, and recommendations of the committee regarding the proposed fees before the USPTO issues any final fees. The USPTO will consider and analyze any comments, advice, or recommendations received from the TPAC before finally setting or adjusting fees.

Consistent with the requirements of the AIA, on August 28, 2019, the Director notified the TPAC of the USPTO's intent to set or adjust trademark fees and submitted a preliminary trademark fee proposal with supporting materials. The preliminary trademark fee proposal and associated materials are available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

The TPAC held a public hearing in Alexandria, Virginia, on September 23, 2019. Transcripts of this hearing and comments submitted to the TPAC in writing are available for review at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The TPAC subsequently issued a report, dated October 31, 2019, regarding the preliminary proposed fees. The report can be found online at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

B. Final Regulatory Flexibility Analysis: The USPTO publishes this Final Regulatory Flexibility Analysis (FRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) to examine the impact of the USPTO's proposed changes to trademark fees on small entities. Under the RFA, whenever an agency is required by 5 U.S.C. 553 (or any other law) to publish an NPRM, the agency must prepare and make available for public comment a FRFA, unless the agency certifies under 5 U.S.C. 605(b) that the proposed rule, if implemented, will not have a significant economic impact on a substantial number of small entities ( see 5 U.S.C. 603, 605). The USPTO published an Initial Regulatory Flexibility Analysis (IRFA), along with the NPRM, on June 19, 2020 (85 FR 37040). The USPTO received no comments from the public directly applicable to the IFRA, as stated below in Item 2.

Items 1-6 below discuss the six items specified in 5 U.S.C. 604(a)(1)-(6) to be addressed in a FRFA. Item 6 discusses alternatives considered by the Office.

1. Succinct statement of the need for, and objectives of, the rule:

The USPTO is setting and adjusting certain trademark fees as authorized by section 10 of the AIA, as amended by Public Law 115-273, 132 Stat. 4158 (the SUCCESS Act). The fee schedule established under section 10 in this rulemaking will, based on the assumptions found in the FY 2021 Congressional Justification, recover the aggregate estimated costs to the USPTO while achieving strategic and operational goals, such as implementing measures to maintain trademark pendency and high trademark quality, modernizing the trademark IT systems, continuing important programs for stakeholder and public outreach, enhancing operations of the TTAB, and maintaining a sufficient operating reserve. Aggregate costs are estimated through the USPTO budget formulation process with the annual preparation of a five-year performance-based budget request. Revenues are estimated based on the projected demand (workload) for trademark products and services and fee rates.

The policy objectives of the rule are to: (1) Better align fees with costs, (2) protect the integrity of the trademark register, (3) improve the efficiency of USPTO processes related to trademark and TTAB operations, and (4) ensure financial sustainability to facilitate effective trademark operations. The legal basis for the rule is section 10 of the AIA, as amended, which provides the authority for the Director to set or adjust by rule any fee established, authorized, or charged under the Trademark Act of 1946, 15 U.S.C. 1051 et seq., as amended. See also section 31 of the Trademark Act, 15 U.S.C. 1113.

2. A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments:

The USPTO did not receive any public comments in response to the IRFA. However, the Office received comments about fees in general, as well as particular fees, and their impact on small entities, which are further discussed in the preamble.

3. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments:

The USPTO did not receive any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule.

4. Description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available:

The USPTO does not collect or maintain statistics in trademark cases on small- versus large-entity applicants, and this information would be required in order to determine the number of small entities that would be affected by the proposed rule.

This rule applies to any entity filing trademark documents with the USPTO. The USPTO estimates, based on the assumptions found in the FY 2021 Congressional Justification, that during the first full fiscal year under the fees as proposed, the USPTO would expect to collect approximately $76 million more in trademark processing and TTAB fees in FY 2021. The USPTO would receive an additional $40 million in fees from applications for the registration of a mark, including requests for extension of protection and subsequent designations; $2 million more from petitions and letters of protest; and $27 million more for section 8 and section 71 affidavits. TTAB fees would increase by $6 million.

Trademark fees are collected for trademark-related services and products at different points in time in the trademark application examination process and over the lifecycle of the registration. Approximately 55% of all trademark fee collections are from application filing fees. Fees for TTAB proceedings and appeals comprise 2.5% of revenues. Fees from other trademark activities, petitions, assignments and certifications, and Madrid processing are approximately 5% of revenues. Fees for filing post-registration and intent-to-use filings, which subsidize the costs of filing, search, examination, and TTAB activities, comprise 37.5%.

The USPTO's five-year estimated aggregate trademark fee revenue is based on the number of trademark applications and other fee-related filings it expects to receive for a given fiscal year and work it expects to process in a given fiscal year (an indicator of future fee workload and budgetary requirements). Within the iterative process for estimating aggregate revenue, the USPTO adjusts individual fee rates up or down based on policy and cost considerations and then multiplies the resulting fee rates by appropriate workload volumes to calculate a revenue estimate for each fee, which is then used to calculate the aggregate revenue. Additional details about the USPTO's aggregate revenue, including projected workloads by fee, are available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

5. Description of the reporting, recordkeeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record:

The final rule imposes no new reporting or recordkeeping requirements. The main purpose of the final rule is to set and adjust trademark fees. The final rule also codifies new procedural regulations at 37 CFR 2.149 for the submission of letters of protest. The USPTO does not collect or maintain statistics in trademark cases on small- versus large-entity applicants and is unable to provide an estimate of the classes of small entities that will be subject to the new procedural requirements. However, the USPTO does not anticipate that the final rule would have a disproportionate impact upon any particular class of small or large entities.

6. Description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected:

The USPTO considered four alternatives, based on the assumptions found in the FY 2021 Congressional Justification, before enacting this rule: (1) The adjustments included in this final rule, (2) an across-the-board adjustment of 22%, (3) the unit cost of providing services based on FY 2019 costs, and (4) no change to the baseline of current fees. The alternatives are each explained here with additional information regarding how each alternative was developed and the aggregate revenue estimated. A description of the Aggregate Revenue Methodologies is available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

The USPTO is setting or adjusting trademark fees codified in 37 CFR parts 2 and 7. Fees are adjusted for all application filing types ( i.e., paper applications, applications filed via TEAS, and requests for extension of protection under section 66(a) of the Trademark Act (15 U.S.C. 1141f)). The USPTO also sets or adjusts certain other trademark processing fees to further effective administration of the trademark system. For example, the rule increases the fees for certain petitions to the Director as well as section 8 and section 71 affidavits, sets a new fee and proposes procedural regulations for filing a letter of protest, and sets new fees for deleting goods, services, and/or classes from a registration after submission and prior to acceptance of a section 8 or section 71 affidavit.

The USPTO chose the alternative established in this rule because it will enable the Office to achieve its goals effectively and efficiently without unduly burdening small entities, erecting barriers to entry, or stifling incentives to innovate. The alternative established here secures the USPTO's objectives for meeting the strategic goals of encouraging broader usage of IP rights-protection mechanisms and participation by more trademark owners and more efficient resolution of appeals and inter partes proceedings at the TTAB by increasing revenue to meet the Office's aggregate future costs. In particular, the new fee structure for requests to delete goods, services, and/or classes from a registration will protect the integrity of the register and the efficiency of the process by incentivizing both more timely filings and proactive action by applicants and registrants. The increased efficiencies realized through this rule will benefit all applicants and registrants by allowing registrations to be granted in a timely manner and more efficiently by removing unused marks and unsupported goods and services from the register. All trademark applicants and registrants should benefit from the efficiency that will be realized under the final rule.

With regard to the new regulations governing the filing of letters of protest, the USPTO anticipates that the impact to affected entities will be small. The proposed fee of $50 is set at a level high enough to recognize there are processing costs and deter the filing of unsupported or irrelevant filings, but low enough so as not to discourage the filing of relevant, well-supported letters of protest. In addition, the new procedural regulations for filing letters of protest are not anticipated to significantly impact affected entities because the new regulations are based on existing informal procedures set out in the TMEP.

Finally, the new provision at § 2.114(a) provides that a partial refund of the fee for a petition to cancel may be made in cases of default judgement where there was no appearance by a defendant and no filings were made other than the petition to cancel. This change will balance the cost recovery obtained from the increase in the fee for a petition to cancel, a case type that has increased markedly in recent years, against the benefit of having petitions to cancel filed to remove registrations from the register when petitioners have determined through their investigations that the registered marks are no longer in use. In such situations, default judgments often result, efficiently clearing the register of marks that would otherwise stand as potential bars to applications seeking to register similar marks. This reduces costs for applicants filing such applications.

The fee schedule for this alternative (labeled “Alternative 1—Final Rule”) is available in the document entitled “Final Regulatory Flexibility Act Tables” at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

Another alternative to setting and adjusting fees that was considered was to increase all fees by the same 22% across the board. This alternative would maintain the status quo structure of cost recovery, where processing and examination costs are subsidized by fees paid for intent-to-use and post-registration maintenance filings (both of which exceed the cost of performing these services), given that all fees would be adjusted by the same escalation factor. This structure would promote innovation strategies and allow applicants to gain access to the trademark system through fees set below cost, while registrants would pay maintenance fees above cost to subsidize the below-cost front-end fees. This alternative was ultimately rejected. Although this alternative generates sufficient aggregate revenue to recover aggregate operating costs, unlike the final rule fee structure, there would be no improvements in fee schedule design. As such, this alternative would not accomplish the stated objective of enhancing the integrity of the register by incentivizing users to maintain accurate goods and/or services. Further, it would not enhance the efficiency of the process, as it would offer no new incentives for users to timely file applications and other filings or to resolve appeals and inter partes proceedings at the TTAB more expeditiously. The fee schedule for this alternative (labeled “Alternative 2—Across-the-Board Adjustment”) is available in the document entitled “Final Regulatory Flexibility Act Tables” at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

A third alternative that was considered was to set all trademark fees to allow for the USPTO to recover 100% of the unit costs associated with each product or service provided, based on the historical unit costs of the products and services provided by the USPTO. The USPTO uses activity based information to determine the unit costs of activities that contribute to the services and processes provided by individual fees. It is common practice in the Federal Government to set a particular fee at a level that recovers the cost of a given good or service. In Office of Management and Budget (OMB) Circular A-25, User Charges, the OMB states that user charges (fees) should be sufficient to recover the full cost to the Federal Government of providing the particular service, resource, or good, when the Government is acting in its capacity as sovereign. Under the unit cost recovery alternative, fees are generally set in line with the FY 2019 cost of providing the product or service. The USPTO recognizes that this approach does not account for changes in the fee structure or inflationary factors that could likely increase the costs of certain trademark services and necessitate higher fees in the out-years. However, the USPTO contends that the FY 2019 data is the best unit cost data available to inform this analysis. This alternative would produce a structure in which application and processing fees would increase significantly for all applicants, and intent-to-use and post-registration maintenance filing fees would decrease dramatically when compared with current fees. In addition, these fees would change from year to year based on the number of applications submitted. This alternative was rejected because it was determined that the unit costs for any given product or service can vary from year to year, such that a yearly review of all, and an adjustment to many, trademark fees would be continually required and could also lead to consumer confusion regarding the amount at which any given trademark fee was currently set and what the relevant fee would be in the future. Additionally, this alternative does not address improvements in fee design to accomplish the stated objectives of encouraging broader usage of IP rights-protection mechanisms and participation by more trademark owners as well as practices that improve the efficiency of the process. The fee schedule for this alternative (labeled “Alternative 3—Unit Cost Recovery”) is available in the document entitled “Final Regulatory Flexibility Act Tables” at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

A final alternative to setting and adjusting fees would be to take no action at this time regarding trademark fees and to leave all trademark fees as currently set. This alternative was rejected because, due to changes in demand for certain services and rising costs, the Office has determined that a fee increase is needed to meet future budgetary requirements as described in the FY 2021 Congressional Justification. Further, as previously explained, the fee schedule established in this final rule will assist in promoting access to the trademark system, protecting the integrity of the register, and promoting the efficiency of the trademark registration process by incentivizing: (1) Maintenance of registrations for goods and services for which marks are actually in use, (2) more timely filing of applications and other documents, and (3) faster resolution of appeals and inter partes proceedings at the TTAB. The fee schedule for this alternative (labeled “Alternative 4—Baseline—Current Fee Schedule”) is available in the document entitled “Final Regulatory Flexibility Act Tables” at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

C. Executive Order 12866 (Regulatory Planning and Review): This rule has been determined to be Significant for purposes of Executive Order 12866 (Sept. 30, 1993).

D. Executive Order 13563 (Improving Regulation and Regulatory Review): The USPTO has complied with Executive Order 13563 (Jan. 18, 2011). Specifically, the USPTO has, to the extent feasible and applicable: (1) Made a reasoned determination that the benefits justify the costs of the rule; (2) tailored the rule to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) provided the public with a meaningful opportunity to participate in the regulatory process, including soliciting the views of those likely affected prior to issuing a notice of proposed rulemaking, and provided online access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes, to the extent applicable.

E. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs): This final rule is not subject to the requirements of Executive Order 13771 (Jan. 30, 2017) because this final rule involves a transfer payment.

F. Executive Order 13132 (Federalism): This rule does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

G. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

H. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

I. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

J. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

K. Executive Order 12630 (Taking of Private Property): This rulemaking will not affect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

L. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), prior to issuing any final rule, the USPTO will submit a report containing the final rule and other required information to the United States Senate, the United States House of Representatives, and the comptroller general of the Government Accountability Office. The changes in this rulemaking are not expected to result in an annual effect on the economy of $100 million or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this rulemaking is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

M. Unfunded Mandates Reform Act of 1995: The changes set forth in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of $100 million (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of $100 million (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

N. National Environmental Policy Act of 1969: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

O. National Technology Transfer and Advancement Act of 1995: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions that involve the use of technical standards.

P. Paperwork Reduction Act of 1995: This final rule involves information collection requirements that are subject to review and approval by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collections of information involved with this final rule have been reviewed and previously approved by OMB under OMB control numbers 0651-0009, 0651-0027, 0651-0028, 0651-0040, 0651-0050, 0651-0051, 0651-0054, 0651-0055, 0651-0056, and 0651-0061. This final rule establishes and adjusts certain trademark fees, which updates the total annual non-hour cost burdens by $33,440,550 as set out in the following table:

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

On June 22, 2010, the EPA published a new 1-hour primary SO 2 NAAQS of 75 parts per billion (ppb), which is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations does not exceed 75 ppb, as determined in accordance with appendix T of 40 CFR part 50. 1 On August 5, 2013, the EPA designated the first set of areas of the country as nonattainment for the 2010 1-hour SO 2 NAAQS, including the partial Muscatine County NAA in Iowa. 2 The designations were effective October 4, 2013, which triggered a requirement for Iowa to submit a SIP revision with a plan for how the Muscatine NAA would attain the 2010 1-hour SO 2 NAAQS as expeditiously as practicable in accordance with CAA sections 110, 172 and 191-192. Section 191(a) of the CAA directs states to submit SIPs for areas designated as nonattainment for the 2010 1-hour SO 2 NAAQS to the EPA within 18 months of the effective date of the designation, i.e., by no later than April 4, 2015, in this case. Section 192(a) requires that such plans provide for NAAQS attainment as expeditiously as practicable, but no later than 5 years from the effective date of the nonattainment designation, i.e., no later than October 4, 2018 in this case. Section 172(c) of part D of title I of the CAA lists the required components of a NAA plan submittal. The base year emissions inventory (section 172(c)(3)) is required to show a “comprehensive, accurate, current inventory” of all relevant pollutants in the NAA. The NAA plan must identify and quantify any expected emissions from the construction of new sources to account for emissions in the area that might affect reasonable further progress (RFP) toward attainment, or that might interfere with attainment and maintenance of the NAAQS, and it must provide for a nonattainment new source review (NNSR) program (section 172(c)(5)). The attainment demonstration must include a modeling analysis showing that the enforceable emissions limitations and other control measures taken by the state will provide for RFP and expeditious attainment of the NAAQS (section 172(c)(2), (4), (6) and (7)). The NAA plan must include an analysis of the reasonably available control measures (RACM) considered, including reasonably available control technology (RACT) (section 172(c)(1)). Finally, the attainment plan must provide for contingency measures (section 172(c)(9)) to be implemented either in the case that RFP toward attainment is not made, or in the case that the area fails to attain the NAAQS by the attainment date. The EPA's regulations at 40 CFR part 51, subparts F and G further prescribe the procedural and substantive requirements attainment plans must meet in order to obtain the EPA's approval.

On April 23, 2014, the EPA issued a guidance document entitled, “Guidance for 1-Hour SO 2 Nonattainment Area SIP Submissions” (hereafter April 2014 Guidance). 3 The April 2014 Guidance provides recommendations for the development of SO 2 attainment SIPs to satisfy CAA requirements for NAAs (see, e.g., sections 172 and 191-192). As detailed in the EPA's April 2014 guidance, such attainment plans are to contain six CAA-required elements: An emissions inventory of current emissions for all sources of SO 2 within the NAA; a NNSR permit program; an attainment demonstration using an EPA-approved air dispersion model; contingency measures; RFP; and implementation of a control strategy. The state noted that as part of its control strategy, 58 construction permits in the attainment plan relied on the SIP-called SSM-related provisions in Iowa Administrative Code (IAC) 567-24.1(1) (“Condition 6” of each permit). Therefore, the state's NAA plan SIP submission requested that the EPA not act on Condition 6 of the included permits, and accordingly this language is not incorporated into the SIP. 4 An attainment demonstration must also meet the requirements of 40 CFR 51.112 and part 51, appendix W, and include inventory data, modeling results, and emissions reduction analyses on which the state has based its projected attainment. The April 2014 Guidance also discusses the option to utilize emission limits with longer averaging times of up to 30 days so long as the state meets various suggested criteria to ensure attainment of the 2010 1-hour SO 2 NAAQS.

On March 18, 2016, the EPA published a document that the state of Iowa failed to submit the required SO 2 attainment plan for the Muscatine area by the SIP submittal deadline. 5 This finding initiated a deadline under CAA section 179(a) for the potential imposition of new source and highway funding sanctions. Iowa submitted an attainment demonstration for the Muscatine NAA on May 26, 2016 and the SIP became complete by operation of law on November 26, 2016. Due to the SIP submittal becoming complete by operation of law, the sanctions under section 179(a) were never imposed. Additionally, under CAA section 110(c), the finding triggered a requirement that the EPA promulgate a Federal Implementation Plan (FIP) within two years of the finding unless, by that time (a) the state has made the necessary complete submittal and (b) the EPA has approved the submittal as meeting applicable requirements. With this final action to approve the Iowa SIP, the EPA's statutory obligation to issue a FIP no longer applies.

On August 24, 2017, the EPA proposed to approve Iowa's SIP submittal, which included all the specific attainment planning elements mentioned previously and new SO 2 emission limits at Grain Processing Corporation (GPC), Muscatine Power and Water (MPW), and Monsanto, the three primary SO 2 sources located inside the boundaries of the NAA. 6 The emission limits at MPW have an averaging time of 21 days, longer than the 1-hour form of the primary SO 2 NAAQS. These longer-term average limits were developed in accordance with the April 2014 Guidance. The 30-day public comment period closed on September 25, 2017. The EPA received three sets of comments on the proposed approval of Iowa's SIP submission. One set of comments was from an anonymous source and was in support of the proposed rule, a second set of comments was from the Sierra Club, and a third set of comments was from the Iowa Environmental Council (IEC), both of which were adverse to the proposed rule. All of the public comments are available in the docket for this final rulemaking action. Among the adverse comments, the EPA received comment suggesting that insufficient information was provided in the docket to allow the reviewer the ability to fully evaluate the attainment plan and the EPA's proposed action to approve it. Another comment similarly stated that insufficient emissions inventory information for the 2018 attainment year was provided in the proposed action.

As a result of these comments suggesting insufficient information was available, on January 9, 2018, the EPA published, in the Federal Register , a supplemental notice of proposed rulemaking (SNPRM) that: (1) Provided additional information in the docket and clarified that all information, including large files, were available upon request; (2) provided an updated 2018 projected emissions inventory;  7 and (3) re-opened the comment period to afford the public an opportunity to comment on the specific additions of information only. 8 The 30-day public comment period closed on February 9, 2018. The EPA received eight sets of comments during the public comment period for the supplemental notice. One set of comments from the Sierra Club and one set of comments from an anonymous submitter were adverse to the proposed action. The Sierra Club comments were largely related to the longer-term average limits for MPW, while the anonymous submitter requested additional modeling information. Six sets of comments were not directly related to the proposed action.

On both the August 24, 2017, and January 9, 2018, notices of proposed rulemaking, the EPA received adverse comments related to SSM provisions in the Iowa SIP. As a result of adverse comments received on the proposal actions, the EPA published a second SNPRM on June 22, 2020, to provide additional detail regarding technical support for approving the attainment demonstration and control strategy submitted by Iowa for the Muscatine NAA. This proposal also detailed the policy under consideration by the EPA Region 7 Office related to SSM provisions in the Iowa SIP and, if adopted, proposed to withdraw the SIP call issued to Iowa as part of the EPA's 2015 SSM SIP Action. The 30-day public comment period closed on July 22, 2020. The EPA received three sets of comments during this third public comment period. Two sets of comments, one from the SSM Coalition and one from NEDACAP (National Environmental Development Association's Clean Air Project), were supportive of the EPA's proposed action. The third set of comments represents a joint set of adverse comments submitted by several environmental and public health organizations (Earthjustice, Environmental Integrity Project, Iowa Environmental Council, Natural Resources Defense Council, and Sierra Club). All of the public comments received on the three aforementioned proposals  9 are included in the public docket for this action at www.regulations.gov. Also included in the docket for this action is a Response to Comment (RTC) document which includes summaries of the adverse comments received on the three proposals along with the EPA's responses to those comments. No response is needed for comments in support of or not related to the proposed actions. For a comprehensive discussion of Iowa's SO 2 attainment SIP and the EPA's analysis and rationale for approval, please also refer to the August 24, 2017, January 9, 2018, and June 22, 2020, proposed rulemakings. 10 The EPA also updated Document A, “Index of Docket Documents” in the docket to this rulemaking for ease of referencing supporting materials for this action.

On June 30, 2011, Sierra Club (Petitioner) filed a petition for rulemaking (petition) asking the EPA to consider how identified air agency rules in the EPA-approved SIPs treated excess emissions during periods of startup, shutdown, or malfunction of industrial process or emission control equipment. On July 12, 2015, the EPA responded to the petition, restated and updated its national policy regarding SSM provisions in SIPs, and found pursuant to CAA section 110(k)(5) that a number of the identified provisions were “substantially inadequate” to meet Clean Air Act requirements, requiring certain states to amend those provisions. 11 This action is referred to as the 2015 SSM SIP Action. 12 In the 2015 SSM SIP Action, among other things, the EPA defined the following terms:

The EPA used the U.S. Court of Appeals for the D.C. Circuit's decision in Sierra Club v. Johnson, 551 F.3d 1019 (D.C. Cir. 2008) ( Sierra Club ), to further support its position in the 2015 SSM SIP Action that SIPs may not contain SSM exemption provisions. In Sierra Club, the D.C. Circuit reviewed an EPA rule promulgated pursuant to CAA section 112 that contained an automatic SSM exemption and found that “the SSM exemption violates the CAA's requirement that some section 112 standard apply continuously.”  15 In the 2015 SSM SIP Action, the EPA applied the Sierra Club court's interpretation of CAA section 302(k) definition of “emission limitation” in the CAA section 112 context to the requirements of CAA section 110. CAA section 110(a)(2)(A) provides that SIPs shall include “enforceable emission limitations and other control measures, means, or techniques . . . as may be necessary or appropriate to meet the applicable requirements of this chapter.” The EPA's application of the Sierra Club decision to CAA section 110 SIP requirements rested on the Agency's premise that the D.C. Circuit's interpretation of the definition of “emission limitation” in CAA section 302(k) applied generally to the Act. The EPA thus determined that Sierra Club was consistent with the EPA's national policy at that time, expressed through previously issued guidance documents and regulatory actions prohibiting exemption provisions for otherwise applicable emission limits in SIPs (such as automatic exemptions granted for startup, shutdown, and malfunction events). Based on this premise, the EPA interpreted the lack of continuous control as creating a substantial risk that exemptions could permit excess emissions that could ultimately result in a NAAQS violation.

As part of the Agency's response to the 2011 petition from Sierra Club, the EPA evaluated dozens of existing SIP provisions across numerous states—including the Iowa SIP—related to automatic excess emission exemptions for consistency with the EPA's national policy at that time. As a result, the EPA issued findings in its 2015 SSM SIP Action that certain SIP provisions for 36 states (including Iowa) were substantially inadequate to meet CAA requirements. In the 2015 SSM SIP Action, the EPA granted the Sierra Club's petition with respect to IAC subrule 567-24.1(1), finding that the provision was substantially inadequate and issuing a SIP call for that provision, and the EPA denied the petition with respect to IAC 567-24.1(4). 16 17

In the 2015 SSM SIP Action, the EPA found IAC 567-24.1(1) to be substantially inadequate to meet the requirements of the Act on the basis that this provision automatically allows for exemptions from the otherwise applicable SIP emission limitations, which was found at the time to be inconsistent with CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). 18 Specifically, IAC 567-24.1(1) explicitly states that excess emissions during periods of startup, shutdown, and cleaning of control equipment are not violations of the emission standard. 19 Iowa has not submitted a SIP revision in response to the SIP call issued for IAC 567.24.1(1).

On October 9, 2020, the EPA issued a Guidance Memorandum outlining a new national policy related to specific SIP provisions governing excess emissions during SSM events. 20 The new guidance memorandum superseded the guidance provided in the 2015 SSM SIP Action on automatic exemption and affirmative defense provisions, but did not alter the determinations made in the 2015 SSM SIP Action that identified specific state SIP provisions that were substantially inadequate to meet the requirements of the Act. Specifically, in this guidance memorandum, the EPA expressed that exemption provisions—both those referred to as “automatic exemptions”  21 and those termed “director discretion provisions”  22 in the 2015 SSM SIP Action—may be permissible in SIPs under certain circumstances. The general requirements in CAA section 110 to attain and maintain the NAAQS and the latitude provided to states through the SIP development process create a framework in which a state may be able to ensure attainment and maintenance of the NAAQS notwithstanding the presence of SSM exemptions in the SIP. It is permissible for a SIP to contain SSM exemptions only if the SIP is composed of numerous planning requirements that are collectively NAAQS-protective by design. Such redundancy helps to ensure that the NAAQS are both attained and maintained, which was Congress's goal in creating the SIP development and adoption process. In evaluating whether the requirements of a SIP are collectively NAAQS protective despite the inclusion of an SSM exemption provision, the EPA will conduct an in-depth analysis of the SIP, including a multifactor, weight-of-the-evidence exercise that balances many considerations.

The policy contained in the 2015 SSM SIP Action—that SIPs that included exemption provisions cannot be consistent with CAA requirements—was predicated on the idea that an emission limitation or standard could not apply continuously, in line with the CAA section 302(k)'s definition of “emission limitation,” if the SIP permitted exemptions for any period of time from the emission limitation or standard. Under this policy, the presumed lack of “continuous emission limitations or standards” was viewed as creating a substantial risk that exemptions could permit excess emissions that could ultimately result in a NAAQS violation. However, for SIPs with overlapping planning requirements that together ensure attainment and maintenance of the NAAQS, a prohibition on exemption provisions was unnecessary and came at the expense of state autonomy and flexibility. The EPA now believes that the general requirements in CAA section 110 to attain and maintain the NAAQS and the inherent flexibilities of the SIP development process create a continuous framework in which a state may, depending on the other features of its SIP, be able to ensure attainment and maintenance of the NAAQS notwithstanding the presence of SSM exemptions in a SIP.

The 2015 SSM SIP Action cited the D.C. Circuit's decision in Sierra Club, as discussed in section I.B. of this document, as support for the position that SIPs may not contain SSM exemption provisions. The EPA's application of the Sierra Club decision to CAA section 110 SIP requirements rested on the Agency's premise that the D.C. Circuit's interpretation of the definition of “emission standards” in CAA section 302(k) applied generally to the whole Act. Although the Sierra Club decision does not allow sources to be exempt from complying with CAA section 112 emission standards during periods of SSM, that holding is not binding on the EPA's consideration of SIPs under CAA section 110. In the Sierra Club decision, the court explained, “[i]n requiring that sources regulated under section 112 meet the strictest standards, Congress gave no indication that it intended the application of MACT standards to vary based on different time periods.” 551 F.3d at 1028. That is, the court found that when the EPA promulgates standards pursuant to CAA section 112, a single or some combination of CAA section 112-compliant standards must apply continuously, but the court did not make any statement applying its holding beyond CAA section 112. Cf. Sierra Club, 551 F.3d at 1027 (“When sections 112 and 302(k) are read together, then, Congress has required that there must be continuous section 112-compliant standards.”) See also id. (“[s]ection 302(k)'s inclusion of this broad phrase in the definition of `emission standard' suggests that emissions reduction requirements `assure continuous emission reduction' without necessarily continuously applying a single standard.”). The general duty provision that applied during SSM periods was “neither `a separate and independent standard under CAA section 112(d),' nor `a free- standing emission limitation that must independently be in compliance' with section 112(d), nor an alternative standard under section 112(h).” Id. at 1028. The decision itself did not address whether the rationale articulated with respect to SSM exemptions in CAA section 112 rules applies to SIPs approved under section 110. It also did not address what forms of SIP provisions could combine to appropriately create continuous protections.

The EPA took the position in the 2015 SSM SIP Action that the legal reasoning in Sierra Club applied equally to CAA section 112 rules and section 110 approved SIPs. More specifically, in the 2015 SSM SIP Action, the EPA interpreted CAA section 302(k)'s definition of “continuous” to apply broadly to both sections 112 and 110. But further consideration has shown that an alternative reading of the relevant statutory sections is superior as a matter of both law and policy.

Fundamentally, CAA sections 112 and 110 have different goals and establish different approaches for implementation by the state and the EPA. The court in Sierra Club recognized that Congress intended “that sources regulated under section 112 meet the strictest standards,” a requirement without a similar analog in CAA section 110. Sierra Club at 1028. CAA section 112 sets forth specific standards for specific source categories once they are listed for regulation pursuant to CAA section 112(c). Once listed, the statute directs the EPA (not the states) to use a specific and exacting process to establish nationally applicable, category-wide, technology-based emissions standards. See 42 U.S.C. 7412(d) (requiring the EPA to establish emission standards, known as “maximum available control technology” or “MACT” standards, for major sources that “require the maximum degree of reduction in emissions of the hazardous air pollutants subject to this section” that the EPA determines is achievable considering statutory factors). States do not have a role in establishing section 112 standards and do not generally enjoy flexibility in determining how the ultimate requirements of CAA section 112 will be met.

In contrast, the CAA sets out a different requirement for section 110 SIPs, reflecting that SIP development and implementation rely on a federal-state partnership and are designed to be flexible for each state's circumstances. The CAA sets the minimum requirements to attain, maintain, and enforce ambient air quality standards, while allowing each state to customize its own approach for the sources and air quality challenges specific to its own circumstances. It is important to note that the EPA sets the NAAQS for each criteria pollutant  23 to provide the requisite degree of protection for public health and welfare, but does not direct the states on how to achieve the NAAQS. Implementation of the NAAQS, then, is fundamentally different in nature than the source-specific standards the EPA issues under section 112. Therefore, the D.C. Circuit's concern that section 112 standards must apply “continuously” to regulate emissions from a particular source are not necessarily applicable in the context of section 110, where a state's plan may contain a broad range of measures, including limits on the emissions of multiple pollutants from multiple sources of various source categories—all directed towards Congress's broad goal of timely attainment and maintenance the NAAQS.

It is important also to note that the list of potential CAA section 110(a)(2)(A) measures that a state may implement are required only “as may be necessary or appropriate to meet the applicable requirements of this chapter.” This language suggests that Congress intended to give states the flexibility to craft a plan that makes the most sense for that state, so long as the set of emissions limitations, control measures, means and techniques, when taken as a whole, meet the requirements of attaining and maintaining the NAAQS.

Because the purposes and mechanisms of CAA sections 110 and 112 are different, it is reasonable to interpret the same term (emission limitation) to have different meanings in those sections; a singular interpretation may not necessarily apply statute-wide. The U.S. Supreme Court has recognized that principles of statutory construction are not so rigid as to necessarily require that the same terminology has the exact same meaning in different parts of the same statute. See Envtl. Defense v. Duke Energy Corp., 549 U.S. 561, 574 (2007). The Court explained in Duke Energy that there is “no effectively irrebuttable presumption that the same defined term in different provisions of the same statute must be interpreted identically.” Id. at 575-6. “Context counts,” stated the Court; terms can have “different shades of meaning” reflecting “different implementation strategies” even in the same statute. Id. at 574, 76 (citations omitted). See also Utility Air Regulatory Group v. EPA, 573 U.S. 302, 320 (2014) (“a statutory term—even one defined in the statute—may take on distinct characters from association with distinct statutory objects calling for different implementation strategies.” (citations omitted)). Indeed, the D.C. Circuit's decision interpreting section 112 acknowledged that “the court must examine the meaning of certain words or phrases in context.” Sierra Club, 551 F.3d at 1027.

The text of CAA section 110(a)(2)(A) reflects the increased flexibility built into section 110 as compared to section 112. The requirement that the “emissions standards” the EPA issues under section 112, see, e.g., section 112(c)(2), apply continuously may, as the D.C. Circuit held, prevent the EPA from providing SSM exemptions in those standards. However, at the same time, it is reasonable to interpret the concept of continuous “emission limitations” in a SIP to be focused not on a single standard that applies invariably, but rather on whether the various components of the state's SIP operate together in a continuous manner to ensure attainment and maintenance of the NAAQS. Unlike section 112, which relies exclusively on “emissions standards,” section 110 relies on a web of potential control mechanisms—“emission limitations and other control measures, means or techniques (including economic incentives . . .), as well as schedules and timetables for compliance.” And section 110 gives the State discretion to choose among these mechanisms “as may be necessary or appropriate to meet the applicable requirements of this chapter.” Therefore, it is reasonable to conclude that the Sierra Club decision's disapproval of SSM provisions under section 112 should not be extended to CAA section 110.

Determining whether a specific exemption provision will be permissible in an identified state SIP will involve an in-depth analysis of the SIP to determine whether it is composed of numerous planning requirements that are, when taken collectively, protective of the NAAQS. The EPA anticipates that this will be a multifactor, weight-of-the evidence exercise that balances many considerations. In such an instance, the EPA believes it may conclude that a SIP adequately provides for attainment and maintenance of the NAAQS, even if the SIP allows exemptions to specific emission limits for discrete periods, such as SSM events. A state may be able to demonstrate that a combination of emission limitations “as may be necessary or appropriate” that apply during normal operations but not during SSM periods and “other control measures, means, or techniques” that may apply during SSM periods—such as general duty provisions in the SIP with respect to criteria pollutants, work practice standards, best management practices, or alternative emission limits—are protective of the NAAQS.

In addition to reviewing any information provided by the state, the EPA may consider other available evidence and provide additional analysis, as necessary, when reviewing SSM emission limitation exemptions in SIPs. For example, the EPA could also consider a state's air quality and whether a state has any current nonattainment areas for a NAAQS as factors in its overall weight-of-the-evidence analysis, particularly when considering whether to withdraw a SIP call issued in 2015 for an exemption provision. A state's SIP provisions may be more likely to be protective of the NAAQS where the State has already attained the NAAQS and its current air quality does not exceed the standard.

The EPA will also consider the SSM provision itself. For example, a requirement that sources use best practicable air pollution control practices to minimize emissions during startup, shutdown, or malfunction periods may be considered favorably in determining whether a given exemption provision (in combination with the other provisions of the SIP) is approvable. If the provision contains limitations on whether SSM events are considered emission standard violations or requires that source owners or operators limit the duration and severity of SSM events, it may be reasonable to conclude that such a provision, when considered alongside other factors, will not jeopardize a state's ability to attain and maintain the NAAQS.

As a result of adverse comments received on the prior proposal actions, the EPA Region 7 Office published a second SNPRM on June 22, 2020, to provide additional detail regarding technical support for approving the attainment demonstration and control strategy submitted by Iowa for the Muscatine NAA. Also in that SNPRM, the EPA Region 7 Office announced that it was considering adopting a policy regarding SSM exemption provisions in the Iowa SIP, and, if adopted, proposed to withdraw the SIP call issued to Iowa as part of the 2015 SSM SIP Action. During the course of preparing a final decision on the June 22, 2020 proposal to withdraw the SIP call issued to Iowa, the EPA issued a guidance memorandum containing a new national policy addressing SSM exemption provisions in SIPs, as discussed in section I.D. of this document. In reliance on the rationale articulated both in the June 22, 2020 proposal and the RTC document associated with this final action, and consistent with this new national policy, the EPA is taking final action to withdraw the SIP call issued to Iowa as part of the EPA's 2015 SSM SIP Action.

Related to the SSM exemption provisions in the Iowa SIP, and as detailed in the EPA's June 22, 2020, NPRM, the EPA Region 7 Office evaluated the Iowa SIP and identified numerous provisions in the SIP that, when taken as a whole, demonstrate that the SIP in its entirety is protective of the NAAQS. 24 Specifically, as detailed later in this section as well as in the June 22, 2020 NPRM, the Iowa SIP includes a series of overlapping requirements that provide for robust testing, reporting, and accountability for sources, including during periods of excess emissions. Such overlapping requirements enable Iowa Department of Natural Resources (IDNR) to implement the NAAQS, allowing IDNR to maintain oversight, work with sources to maintain compliant operation, and, if necessary, enforce against sources.

Although IAC 567-24.1(1) was SIP called as part of the EPA's 2015 SSM SIP Action, the provision contains limitations on whether SSM events are considered emission standard violations and requires that source owners or operators limit the duration and severity of SSM events. IAC 567-24.1(1) states:

While the subrule does allow for an exemption for excess emissions, it also provides for two key backstops that protect air quality and help to ensure attainment and maintenance of the NAAQS: (1) Startup, shutdown and cleaning is to be accomplished expeditiously; and, (2) startup, shutdown, and cleaning is to be accomplished in a way that is consistent with good practice for minimizing emissions. IAC 567-24.1(4) clarifies that an “expeditious manner” is the time necessary to determine the cause of the excess emissions and to correct it within a reasonable period of time. IAC 567-24.1(4) also states that a “reasonable period of time” is eight hours plus the period of time required to shut down the process without damaging the process or control equipment.

In addition to backstops built into the exemption provision itself, the remainder of Iowa's SIP contains further protections. On March 22, 2018, the EPA approved Iowa's 2010 SO 2 infrastructure SIP as submitted to the EPA on July 29, 2013. Therefore, Iowa has the requisite statutory authority that provides an adequate framework for attaining and maintaining the NAAQS. 25 As detailed in the EPA Region 7 Office's technical support document for Iowa's 2010 SO 2 infrastructure SIP approval, the director of the IDNR has the duty to ensure that the NAAQS is attained and maintained in accordance with federal laws and regulations, and is granted broad oversight, authority, and discretion with which to do so. 26

Iowa Code 455B.132 designates IDNR as the Agency to prevent, abate, or control air pollution. The Environmental Protection Commission (EPC) governs the environmental services of IDNR and has the duty to develop emission limits and compliance schedules in order to abate, control, and prevent air pollution. 27 The EPC adopts, amends, or repeals rules that are necessary to obtain approval of the state SIP under CAA section 110. 28 The EPC is also charged with adopting, amending, or repealing ambient air quality standards necessary to protect public health and welfare. 29 Furthermore, 455B.134(9) states that the director shall issue orders consistent with rules to cause the abatement or control of air pollution, or to secure compliance with permit conditions.

The IDNR director's duty to ensure the NAAQS is attained and maintained is reflected in specific provisions throughout Iowa's SIP, as detailed below. First, in adopting the NAAQS into its state regulations, IAC 567-28.1 requires that IDNR implement the NAAQS “in a time frame and schedule consistent with implementation schedules in federal laws and regulations.” For NAAs, CAA section 172(c), among other relevant statutory provisions, requires state plans to provide for attainment as expeditiously as practicable and for the implementation of reasonable available control measures (RACM) as expeditiously as practicable. As mentioned previously, the EPA has approved Iowa's 2010 SO 2 infrastructure SIP, meaning that the EPA has, through notice and comment rulemaking, found that the SIP provides for the implementation, maintenance, and enforcement of the NAAQS. Other than the Muscatine 2010 1-hour SO 2 NAA, there are no other NAAs, for any criteria pollutant, in the state. 30 As can be seen via recent ambient air quality monitoring data for SO 2, monitored air quality in the Muscatine NAA is well below the NAAQS of 75 parts per billion (ppb). The current 3-year (2017-2019) SO 2 design value for the area is 25 ppb. 31 As detailed in the prior proposals and the RTC document contained in the docket for this action, the highest modeled concentration in the Muscatine NAA, based on permitted emissions limits, is 187.87 ug/m3 or 72 ppb, which demonstrates attainment of the 2010 SO 2 NAAQS. Additionally, all areas in Iowa are currently monitoring air quality design values that are below the NAAQS for all criteria pollutants for the 2017-2019 period. 32

Furthermore, the SIP provides for emergency powers comparable to that of the EPA Administrator under CAA section 303, and the state has a fully approved emergency episodes plan that meets the applicable requirements of 40 CFR part 51, subpart H, at IAC 567-26.1-4. IAC 567-28.1, in concert with IAC 567-26.1-4 and the state's statutory provisions detailed further below, lay out IDNR's responsibility and authority for ensuring that air quality is protected, and the NAAQS are attained and maintained in the state of Iowa, notwithstanding an exemption for startup-, shutdown-, and cleaning-related excess emissions in the SIP. The attainment status of areas in the State as well as monitored air quality demonstrate successful implementation on the part of the state.

The Iowa SIP also provides IDNR with the specific discretion of whether to issue a construction permit for a source based solely on an analysis of that source's impact on attainment or maintenance of the NAAQS. Specifically, IAC 567-22.3(1) states:

Additionally, IAC 567-22.3(5) provides IDNR with the discretion to modify “ an existing permit for a major stationary source or an emission limit contained in an existing permit for a major stationary source if necessary to attain or maintain an ambient air quality standard.” Accordingly, these provisions provide the state air agency with the authority to limit the issuance of construction permits and modify existing permits to ensure that the NAAQS is attained and maintained. This authority, when considered along with the enforcement, maintenance, and oversight provisions discussed herein, ensures accountability for sources and, when taken as a whole, protects air quality and provides for attainment and maintenance of the NAAQS, even though the Iowa SIP allows exemptions for excess emissions during periods of startup, shutdown, and cleaning. Of note, the State has been implementing its SIP-approved construction program, which includes issuing construction permits with Condition 6 (as mentioned previously, Condition 6 relies upon the SIP-called SSM-related provisions in IAC 567-24.1(1)), and has not monitored a NAAQS violation resulting in the need to revise a permit due solely on emissions from SSM events.

In addition to specific discretion afforded the IDNR director to ensure attainment and maintenance of the NAAQS, there are a number of direct requirements on sources in Iowa's approved SIP. IAC 567-24.1(2) details the initial report that a source owner or operator must submit when an emission limit is exceeded. Such incidences are to be reported to the appropriate IDNR regional office within eight hours of the onset of an incident. Reports are to be submitted via email, in person, or over the telephone. At a minimum, initial incident reports are to include the quantity, duration, cause and remedial steps taken for periods of excess emissions. IAC 567-24.1(3) requires that a written report is to be submitted as a follow-up to all required initial reports to the IDNR within seven days of the onset of the event. The written report is, at a minimum, to include the information required for initial reports under 24.1(2). In addition, written reports are to include, if the owner claims that the excess emission was due to malfunction, documentation to support such a claim.

IAC 567-25.1(6), (7), and (8) detail the testing and sampling requirements for owners and operators of pollution control equipment. Specifically, any facility required to install a continuous monitoring system shall provide regular reports to IDNR, including periods of excess emissions. Furthermore, IDNR is granted the authority to require sources to conduct compliance demonstrations, including testing, which “ may be required as necessary to determine actual emissions from a source where that source is believed to have a significant impact on the public health or ambient air quality of an area.” IDNR may also conduct independent emissions testing as deemed necessary. These provisions require sources to report periods of excess emissions, ensuring that the state is aware of any such events. The state could also require sources to conduct testing during such periods, further enabling the state to protect air quality and ensure attainment and maintenance of the NAAQS.

Owners or operators of any control equipment are also required to maintain and repair equipment or control equipment in such a way that minimizes and remedies any causes of excess emissions. IAC 567-24.2(1) details the maintenance and repair that owners or operators are required to undertake, including maintaining operations that minimize emissions, undertaking scheduled routine maintenance, and remedying any cause of excess emissions in an expeditious manner. (“[E]xpeditious manner,” as discussed above, is defined in IAC 567-24.1(4)). Furthermore, IAC 567-24.2(1)(c) states that owners or operators shall: Minimize the amount and duration of any excess emission to the maximum extent possible during periods of such emissions. These measures may include but not be limited to the use of clean fuels, production cutbacks, or the use of alternate process units or, in the case of utilities, purchase of electrical power until repairs are completed.

IAC 567 24.2(2) provides IDNR with the authority to require owners and operators to develop maintenance plans where, “ in the judgement of the executive director a continued pattern of excess emissions indicative of inadequate operation and maintenance is occurring. ” Such maintenance plans have been required of sources over time as appropriate and are to include numerous maintenance and inspection requirements. Most notably, these plans are to include a contingency plan intended to minimize the frequency, duration, and severity of excess emission events.

Lastly, there are a number of Iowa-specific state regulations that help ensure attainment and maintenance of the NAAQS. Iowa Code 455B.139 states that, if the director has evidence that any person is causing air pollution that creates a public health and safety emergency, the director may, without notice, issue an emergency order requiring the immediate discontinuation of emissions. While not SIP-approved, and therefore not federally enforceable, these codes provide supplemental support that the state has considerable oversight and discretion to enforce against sources and ensure attainment and maintenance of the NAAQS.

As further discussed in section I.D. of this document, the EPA issued a new national guidance memorandum related to SIP provisions containing exemptions for excess emissions during SSM events. Through this final action, the EPA Region 7 Office is applying that national policy based on the evaluation of Iowa's SIP. As such, the EPA Region 7 Office is withdrawing the SIP call issued for Iowa as part of the 2015 SSM SIP Action. 33

The EPA is taking final action to approve Iowa's SO 2 attainment plan for the Muscatine NAA. The EPA has determined that Iowa's attainment plan and control strategy demonstrates attainment and provides for maintenance of the 2010 1-hour SO 2 NAAQS in the Muscatine NAA and meets the other NAA planning requirements. Specifically, the EPA is approving Iowa's May 26, 2016, SIP revision, which includes the state's modeled attainment demonstration for the Muscatine NAA, RFP, RACT/RACM, base-year and projection-year emission inventories, and contingency measures.

The EPA is further approving numerous permits that Iowa issued containing emission limits and associated monitoring, recordkeeping and reporting requirements that the attainment plan relies on. For Grain Processing Corporation, the EPA is approving permits numbered 75-A-353-S2, 90-A-111-S1, 92-A-383-S2, 92-A-385-S1, 02-A-781-S2, 02-A-782-S2, 03-A-471-S1, 11-A-338-S1, issued on July 6, 2015, and 95-A-374-S4, 15-A-078, 79-A-194-S2, 71-A-067-S4, 75-A-087-S1, 72-A-199-S2, 74-A-014-S1, 74-A-015-S2, 79-A-195-S2, 80-A-149-S5, 80-A-150-S5, 85-A-031-S2, 85-A-032-S2, 85-A-038-P1, 85-A-135-P1, 91-A-068-S2, 93-A-110-P1, 94-A-055-S1, 94-A-061-S1, 09-A-482-S2, 10-A-563-S1, 15-A-202, 15-A-208, 15-A-209, 15-A-326, 06-A-1261-S1, 15-A-354, 15-A-199, issued on December 10, 2015, and 15-A-213, issued on January 26, 2016, and 15-A-203, 15-A-204, 15-A-205, 15-A-206, 15-A-207, 15-A-480, 15-A-481, 15-A-482, 15-A-483, 15-A-484, 15-A-485, 15-A-486, 05-A-926-S4, issued on February 15, 2016, and 15-A-200, 15-A-201 issued on March 25, 2016. For Muscatine Power and Water, the EPA is approving permits numbered 13-A-152-S1, 74-A-175-S4, 95-A-373-P3, 80-A-191-P3 issued on March 2, 2016. For Monsanto, the EPA is approving permits numbered 82-A-092-P11 and 88-A-001-S3, issued May 13, 2015. As noted previously, the EPA is approving these permits with the exception of Condition 6 (Condition 6 relies on the SSM-related provisions of IAC 567-24.1(1)) in each of these permits as requested by Iowa. 34

The EPA has determined that the state's attainment plan meets the applicable requirements of sections 110, 172, and 191-192 of the CAA. The EPA's analysis is further discussed in prior proposed rulemakings as well as the RTC found in the docket for this final action. 35 The EPA's final action to approve the Iowa SIP terminates the EPA's statutory obligation to issue a FIP for the Muscatine NAA.

Based on the EPA's evaluation of the Iowa SIP contained in section II of this document, consistent with the EPA's national policy, 36 and after carefully considering the comments received, the EPA Region 7 Office is taking final action to withdraw the SSM SIP call for Iowa. The EPA received adverse comments related to the SSM provisions of the Iowa SIP on the aforementioned proposed rulemakings. All of the adverse comments along with the EPA's responses to those comments are included in the separate RTC document contained in the docket for this final action.

In this rule, 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 an Iowa regulation described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available through www.regulations.gov, and at the EPA Region 7 Office (please contact the applicable person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Therefore, these materials have been approved by the EPA for inclusion in the state implementation plan, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the Clean Air Act 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. 37

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this final 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);

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

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

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

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

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

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

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

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

The SIP is not approved to apply on any Indian reservation land or in any other area where 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).

For the reasons stated in the preamble, title 40 CFR part 52 is amended as follows:

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

On October 17, 2006 (71 FR 61144), in accordance with section 109(d)(1) of the Clean Air Act (CAA), the EPA revised the level of the 24-hour PM 2.5 NAAQS, lowering the primary and secondary standards from the 1997 level of 65 micrograms per cubic meter (µg/m 3 ) to 35 µg/m 3 . On November 13, 2009 (74 FR 58688), the EPA designated several areas as nonattainment for the 2006 24-hour PM 2.5 NAAQS, including the Salt Lake City and Provo NAAs. On May 10, 2017 (82 FR 21711), the EPA determined that the Salt Lake City and Provo 2006 24-hour PM 2.5 NAAs failed to attain by the Moderate area attainment date of December 31, 2015 and were reclassified to Serious 2006 24-hour PM 2.5 NAAs.

Under 40 CFR 50.13 and 40 CFR part 50, appendix N, a NAA meets the 2006 24-hour PM 2.5 NAAQS when the area's design value  1 is less than or equal to 35 µg/m 3 . On June 8, 2020 (85 FR 35033), the EPA proposed to determine, based on the most recent three years (2017-2019) of valid data, 2 that the Salt Lake City and Provo NAAs have attained the 2006 primary and secondary 24-hour PM 2.5 NAAQS. Subsequently, on July 7, 2020 (85 FR 40618), the EPA published a correction document, which corrected an error in Table 1 of the June 8 proposed rule. The table in the June 8 document had erroneously listed the 2017-2019 98th percentiles and design value for the Spanish Fork monitor twice; correctly, in the row for the Spanish Fork monitor, and incorrectly, in the row for the Lindon monitor. Additional detail on the basis for this action can be found in the June 8 proposed action and the July 7 correction document.

The EPA received a public comment on the June 8 proposed action that identified the inaccuracy discussed above. The EPA acknowledged this mistake and corrected the table in the July 7, 2020 (85 FR 40618) correction document, which also gave notice that the EPA was providing an additional comment period. From June 8, 2020 to August 6, 2020, the EPA received additional public comments on the proposed action and the correction document from Western Resource Advocates (WRA), the Utah Petroleum Association (UPA), and from individuals. Below is the summary of comments submitted and the EPA's response to these comments.

WRA comment: WRA submitted comments  3 asserting that because the data do not include three years of monitoring from a near-road monitor, EPA cannot determine that the Salt Lake City area attained the 2006 24-hour PM 2.5 standard by the Serious attainment date of December 31, 2019. Citing the EPA's 2013 rule revising the PM NAAQS (78 FR 3086, 3241) the comment asserts that Utah was required to have an operational PM 2.5 near-road monitor in the Salt Lake City NAA by January 1, 2017, but that Utah did not install the monitor until January 2019. WRA further states that the August 24, 2016 PM 2.5 state implementation plan (SIP) Requirements rule (81 FR 58010, 58136) supports that requirement by providing evidence that PM 2.5 concentrations are higher near highways and that, as a result, low-income and minority populations are disproportionately exposed to high PM 2.5 concentrations and therefore bear a disproportionate risk of adverse health outcomes from PM 2.5 . Citing the same rule, the comment asserts that “EPA has explained that monitoring data from the required PM 2.5 near road monitor[s] is to be considered when determining if a nonattainment area is attaining a PM 2.5 NAAQS.” The comment asserts that “Utah did not meet its legal obligations and failed to install and operate a near-road monitor as required, by the beginning of 2017,” and that “[w]ithout data covering 2017 to 2019 from an operational near road monitor, Utah cannot show and EPA cannot find attainment.” WRA requests that the EPA withhold any determination of attainment by the attainment date of the PM 2.5 standard “until Utah can establish that the standard is being met at a near road monitor.”

As a further basis for its request, WRA cites the COVID-19 global pandemic, recent studies that show a preliminary link between PM 2.5 exposure and death from COVID-19, health disparities in the U.S. population, and disproportionate pollution impacts on parts of the population, including those living near highways.

EPA response: The EPA agrees that new near-road PM 2.5 monitor requirements were set out in the January 15, 2013 PM 2.5 rule (78 FR 3086), but we do not agree that the Agency is prohibited from making a determination that the Salt Lake City area attained by its attainment date because of the absence of three full years of data from a near-road PM 2.5 monitor. As explained below, quality-assured, quality-controlled, and certified ambient air quality monitoring data were collected for each year from 2017 through 2019 in accordance with an approved annual monitoring network plan (AMNP) for each year. The EPA has reviewed this data and concludes that it justifies a finding of attainment and shows the area attained by its attainment date.

Under the CAA, the Agency must determine whether the area attained by the attainment date, based on the area's design value as of the attainment date ( i.e., the design value derived from the three calendar years of data preceding the attainment date). 4 The design value calculation must be based on three years of valid annual mean values for data collected at a suitable monitor for PM 2.5 , determined in accordance with the procedures in 40 CFR part 50, appendix N. 5 Review and approval of AMNPs requires notice and comment at the state level; the state must include and address any comments in the plan submitted to the EPA for review. 6

With respect to the commenter's assertion concerning the EPA's 2013 rule revising the PM NAAQS, that rule did require at least one operational near-road PM 2.5 monitor in each Core Based Statistical Area (CBSA) with a population greater than or equal to 1 million but less than 2.5 million by January 1, 2017. 7 But it did not bar the EPA from making attainment determinations in the absence of near-road monitors. As recognized in the 2016 rule that WRA relies on, 8 “States should consult with the appropriate EPA regional office to determine how and when near-road data should be used in the PM 2.5 NAAQS implementation process for specific nonattainment areas.”  9

The EPA's finding that an area has attained the 2006 24-hour PM 2.5 standard must be based on complete, quality-assured data that is gathered at established state and local air monitoring stations (SLAMS) in the NAA and entered in AQS. Monitoring agencies submit AMNPs to the EPA for review and approval, and annually certify that the data submitted to AQS are accurate to the best of their knowledge. As described in our proposed rule, the Utah Division of Air Quality (UDAQ) has complied with these requirements, and the EPA approved the AMNPs for the relevant years. 10

The monitoring requirements in 40 CFR 58.10 lay out the roles of the air agency and the EPA in identifying whether a site is consistent with the network plan requirements for a NAAQS. Accordingly, after the January 15, 2013 (78 FR 3086) final rule became effective, the State of Utah and EPA Region 8 began collecting information and assessing multiple characteristics for each identified roadway. An important consideration for near-road assessments was the complexity of urban land use in the Salt Lake City NAA. Factors such as the type of road (highways and arterial roadways), traffic activity patterns (number of vehicles, fleet mix, and vehicle speeds), traffic volume, meteorology (wind speed/direction, temperature, humidity, and atmospheric stability), topography, roadway design features, and the presence of nearby structures and barriers were reviewed by UDAQ in conjunction with historical monitoring data to show potential near-road PM 2.5 sites.

After UDAQ's review of the parameters above and following the EPA's guidance, 11 the State identified the Interstate-15 (I-15) corridor as the best candidate for a near-road PM 2.5 monitoring site. Near the end of 2016, however, the Utah Department of Transportation (UDOT) began a major expansion project on I-15 to help address traffic problems. Due to the timing of this highway expansion on I-15, UDAQ was not able to place a properly sited near-road PM 2.5 monitor by the January 1, 2017 deadline. Alternate locations outside the I-15 corridor were considered by UDAQ and the EPA, but on closer review of the traffic counts by both agencies at these locations, they were determined to be outside the core areas where potential pollution impacts would be near a location of maximum NO 2 concentrations, 12 and therefore would not satisfy the monitoring network requirements or be as useful for achieving monitoring objectives. 13

UDAQ and the EPA discussed how to address the monitor siting question in light of the highway construction, and in July 2018 a EPA Region 8 monitoring contact conducted an on-site assessment with UDAQ monitoring staff along the I-15 corridor to identify potential sites. During this assessment, they located several potential sites, but all but one was determined to be unusable. The only potential site had been set aside initially because the station could not be installed long-term due to the road expansion, which would require the site to be moved multiple times. Nonetheless, after discussions with UDOT and the additional site reviews, UDAQ and the EPA decided in August 2018 that the best location was the site that had initially been set aside. Therefore, the near-road PM 2.5 monitoring site was established and began recording data on January 1, 2019 (AQS ID 49-035-4002), after the road construction was completed.

The near-road PM 2.5 site, including updates on site locations, was discussed in UDAQ's AMNPs. As required, following publication, the AMNPs were available for at least 30 days of public inspection and comment. If any comments had been submitted, UDAQ would have been required to address any significant issues raised in the public comment before submitting the AMNP to the EPA for review. The EPA acts on AMNPs through informal adjudications in which the EPA determines whether the network plans satisfy the requirements in 40 CFR 58.10. Such adjudications are not rulemakings subject to the public participation requirements of the Administrative Procedure Act (APA) ( see 5 U.S.C. 553), although they are final agency actions subject to judicial review ( see 5 U.S.C. 706). 14

In this case, UDAQ provided each of the AMNPs to the public for the required 30-day inspection, and no public comments were submitted on any AMNP. Based on the completeness of the network, and considering the constraints imposed on Utah's planning by the I-15 road construction project, the EPA approved the AMNPs for 2017, 2018 and 2019. No party challenged the approval of any of these AMNPs.

Although the near-road monitor was not included in the 2017-2019 AMNPs, and although the one year of available data from that monitor is not sufficient for calculating a design value, UDAQ and the EPA have decided to make the data from that monitor available in AQS for public review. The 98th percentile daily average concentration for 2019 at the PM 2.5 near-road monitor was 31.0 µg/m 3 . Therefore, the available data do not support a conclusion that, if the monitor had been operating since 2017 with concentrations similar to 2019 and had a valid design value based on three years of data, data from the near-road monitor would have altered the conclusion that the area attained the standard.

The lack of three years of near-road data does not preclude the EPA from making a determination based on the available data for the Salt Lake City NAA as to whether the area attained by the statutory Serious 2006 24-hour PM 2.5 attainment date of December 31, 2019, because the EPA is making the determination based on a design value determined in accordance with the requirements of 40 CFR part 50, appendix N, and other relevant regulations. As stated in the comment from WRA, “ [w]hen complete data from near-road PM 2.5 ambient monitors become available, the data should be used by states and the EPA for all aspects of the NAAQS implementation process, from attainment planning to the determination of attainment.”  15 UDAQ's near-road PM 2.5 monitor does not have a complete 3-year design value to be used in the determination, and accordingly it should not be considered in calculating the area's design value. UDAQ and the EPA are committed to collecting a complete 3-year data set for the near-road PM 2.5 monitor in the future.

With respect to WRA's comment about COVID-19, the CAA requires the EPA to determine whether an area attained an established NAAQS by its attainment date. The statute does not permit the agency to decline to make that determination on the basis raised by the commenter. As explained further below in the response to the citizen comments, this determination of attainment by the attainment date is based on attainment of the existing 2006 24-hour PM 2.5 NAAQS. Any consideration of new factors, including those regarding vulnerable populations raised by WRA, would come into play if EPA were to set a new NAAQS, not in making attainment determinations under existing NAAQS. 16

Comment: UPA submitted comments in support of the proposed determination that the Salt Lake City and Provo 2006 24-hour PM 2.5 NAAs attained by their Serious area date of December 31, 2019. UPA provides details on the design values (2017-2019) at all eligible monitors in the Salt Lake City NAA and asserts that they meet the primary and secondary 2006 24-hour PM 2.5 NAAQS of 35 µg/m 3 . UPA states that these design values are a result of emission reductions in direct PM 2.5 and PM 2.5 precursors from a large number of sources ( e.g., major point sources, mobile sources, etc.). Additionally, UPA comments that the proposed determination meets the detailed requirements laid out in 40 CFR part 50, appendix N, which comprises the total of all requirements that the NAA must meet for a determination of attainment by the attainment date.

EPA response: We acknowledge the UPA's comments.

Comment: The remaining comments submitted for the proposed finding that the Salt Lake City and Provo 2006 24-hour PM 2.5 NAAs attained by the Serious attainment date of December 31, 2019, were from multiple citizens, some of whom were anonymous. Generally, these comments presented a number of arguments against the proposed determination of attainment by the attainment date: (1) The NAAs are some of the most polluted regions for PM 2.5 in the country, according to the American Lung Association; (2) the data leading to EPA's attainment determination are primarily due to a series of milder and stormier winters with fewer inversion days, not to major progress in reducing emissions; (3) by relaxing the requirements that haven't been attained for several years previously, the sense of urgency about seriously unhealthy air quality by the State of Utah will be reduced; (4) the CAA states that air quality standards “shall accurately reflect the latest scientific knowledge,” but the current PM 2.5 standards are not up to date; and (5) the air they breathe impacts the health of the individual, the family, and the communities.

Some of these comments from citizens were unique in content. One commenter requested that the refineries should be moved east of the Wasatch Front, with incentives if necessary, to move them outside the metropolitan counties. Another commenter mentioned that these areas are still out of attainment for the ozone NAAQS.

EPA response: In making a determination as to whether a PM 2.5 area attained by its attainment date, the EPA is permitted to consider only the air quality data of the area as of the attainment date. See CAA section 179(c)(1) (general nonattainment area provision) (“As expeditiously as practicable after the applicable attainment date for any nonattainment area, but not later than 6 months after such date, the Administrator shall determine, based on the area's air quality as of the attainment date, whether the area attained the standard by that date.”) (emphasis added); CAA section 188(b)(2) (subpart 4 p.m. specific provisions) (“Within 6 months following the applicable attainment date for a PM-10 nonattainment area, the Administrator shall determine whether the area attained the standard by that date.”). We therefore do not agree that the concerns raised by the commenter—that the areas at issue in this document are purportedly “some of the most polluted regions for PM 2.5 in the country”; that air quality data were primarily influenced by meteorological factors; that making the determination could have a disincentivizing effect on efforts of state regulators; and that the current PM 2.5 NAAQS are not sufficiently up to date—are bases that the EPA may consider when making its determination of whether an area attained by the attainment date. The statute simply does not permit the agency to take into consideration the types of factors raised by these comments.

With respect to the comment that the air the public breathes affects the individual, families, and communities, the EPA agrees. This is precisely why the CAA requires the EPA to make determinations of whether an area attained the NAAQS by its attainment date. If a Serious PM 2.5 area fails to attain by its attainment date, the EPA's determination triggers statutory consequences, such as contingency measures (CAA section 172(c)(9)); the requirement to submit a new plan within 12 months of the finding of failure to attain demonstrating how the area will attain (CAA section 189(d)); and from the date of such submission until attainment, an annual reduction in PM 2.5 or PM 2.5 precursor emissions within the area of not less than 5 percent of the amount of such emissions as reported in the most recent inventory prepared for the area (CAA section 189(d)).

The commenter's second, third, fourth, and fifth points above are beyond the scope of this action, as is the comment requesting that refineries be moved away from the Salt Lake City area. The comment stating that the State of Utah still has ozone NAAs has not presented any information germane to this action. The EPA is not permitted to consider the attainment or nonattainment status of areas in a state for other NAAQS when making determinations of whether an area attained the NAAQS at issue by its attainment date.

The EPA is finalizing our determination, pursuant to CAA section 188(b)(2), that based on the most recent 3 years (2017-2019) of quality assured, certified air quality monitoring data, the Salt Lake City and Provo NAAs attained the 2006 24-hour PM 2.5 NAAQS by the December 31, 2019 attainment date.

This final action does not constitute a redesignation of the Salt Lake City and Provo NAAs to attainment for the 2006 24-hour PM 2.5 NAAQS under CAA section 107(d)(3), because we have not yet approved a maintenance plan for the Salt Lake City and Provo NAAs as meeting the requirements of section 175A of the CAA and have not determined that the area has met the other CAA requirements for redesignation. The classification and designation status in 40 CFR part 81 will remain Serious nonattainment for these areas until the EPA determines that Utah has met the CAA requirements for redesignation to attainment for the Salt Lake City and Provo NAAs.

This action finalizes a determination of attainment by the attainment date based on air quality and thus would 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, Jan. 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, Feb. 2, 2017) regulatory action because it is not a significant regulatory action 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, Aug. 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, Feb. 16, 1994).

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 January 19, 2021. Filing a petition for reconsideration by the Administrator of this final action 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 action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2)).

In FR Doc. 2020-23970, beginning on page 68782 in the Federal Register of Friday, October 30, 2020, the following corrections are made:

1. On page 68790, in the first column, in part 64, the authority citation “The authority citation for part 61 continues to read as follows:” is corrected to read “The authority citation for part 64 continues to read as follows:”

2. On page 68790, in the first column, in part 64, the authority citation “Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp.; p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp.; p. 376.” is corrected to read “Authority: 42 U.S.C. 4001 et seq., Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.”

3. On page 68790, in the first column, in part 64, instruction number 4 is corrected to read “Revise § 64.6 to read as follows:”.

In the Federal Register of October 23, 2020, starting on page 67450, in FR Doc. 2020-19951, make the following corrections:

1. On page 67450, in the second column, correct the second sentence of the Summary section to read:

SUMMARY: * * * In response to a directive from the United States Court of Appeals for the District of Columbia Circuit, the Commission determined that, except in limited circumstances, it is impractical to separate out the intrastate and interstate components of ancillary service charges imposed in connection with inmate calling services. * * *

2. On page 67450, in the third column, correct the first sentence of the Supplementary Information section to read:

SUPPLEMENTARY INFORMATION: This is a final rule summary of the Commission's Report and Order, released August 7, 2020. * * *

Background

The Migratory Bird Treaty Act of 1918 (MBTA, 16 U.S.C. 703 et seq. ) was enacted to conserve certain species of migratory birds and gives the Secretary of the Interior the authority to regulate the harvest of these birds. The law further authorizes the Secretary to issue regulations to ensure that the indigenous inhabitants of the State of Alaska may take migratory birds and collect their eggs for nutritional and other essential needs during seasons established by the Secretary “so as to provide for the preservation and maintenance of stocks of migratory birds” (16 U.S.C. 712(1)).

The take of migratory birds for subsistence uses in Alaska occurs during the spring and summer, during which timeframe the sport harvest of migratory birds is not allowed. Regulations governing the subsistence harvest of migratory birds in Alaska are located in title 50 of the Code of Federal Regulations (CFR) in part 92. These regulations allow for the continuation of customary and traditional subsistence uses of migratory birds and prescribe regional information on when and where the harvesting of birds in Alaska may occur. The migratory bird subsistence harvest regulations are developed cooperatively by the Alaska Migratory Bird Co-Management Council (Council), which consists of the U.S. Fish and Wildlife Service, the Alaska Department of Fish and Game (ADFG), and representatives of Alaska's Native population. The Council's primary purpose is to develop recommendations pertaining to the subsistence harvest of migratory birds.

This rule incorporates changes to the subsistence harvest regulations that were recommended by the Council in 2018 and 2019, as described below. This rule also sets forth a list of migratory bird season openings and closures in Alaska by region.

Per the collaborative process described above, we published a proposed rule to update the regulations for the taking of migratory birds for subsistence uses in Alaska during the spring and summer (85 FR 27698, May 11, 2020). By the end of the comment period on the proposed rule, we received nine comments. While some of the comments pertained to issues that are outside the scope of this rulemaking action, we hereby respond to the relevant issues that were raised in the public input. We made no changes to the proposed rule as a result of the input we received via the public comments (see Final Regulations, below, for more information).

Issue: A commenter expressed support for regulations that allow indigenous people to engage in their traditional subsistence and cultural practices. Another commenter indicated that the regulations seem to allow for “a truly sustainable system,” but the proposed rule did not include information about limits to individual harvests.

Response: The Service's intent of these regulations is to maintain sustainable populations of migratory birds concurrent with ensuring the continuation of customary, traditional, and cultural harvest of migratory birds by rural residents of Alaska who are eligible participants.

The distribution, types of species, and levels of migratory bird harvest during the spring-summer subsistence season in Alaska are based on tradition, culture, and nutritional needs. Harvest levels are based on a tradition of: Take only what is needed and leave the rest for future generations. The Service monitors the distribution, abundance, and trend of migratory bird species via aerial and ground-based surveys and banding programs; adaptive harvest management is based on these data.

Issue: Some commenters expressed objections regarding Federal regulations that allow killing of migratory birds for any purposes, including subsistence uses.

Response: The MBTA authorizes the indigenous inhabitants of the State of Alaska to take migratory birds and collect their eggs for nutritional and other essential needs during seasons established by the Secretary of the Interior. The proposed rule did not address other types of potential migratory bird mortality or criminal violations of the MBTA.

Issue: A commenter expressed support for Alaska Native customary and traditional migratory bird subsistence harvest throughout the State. However, the commenter has specific concerns about subsistence bird harvest along the city of Kodiak road system.

The commenter expressed concern about wasteful bird harvest along the Kodiak road system associated with the fall-winter sport harvest and thinks that a spring-summer hunt will have the same issues. The commenter believes that wasteful take could pose a serious threat to local bird populations and is concerned that there is no effort to narrow the harvest list beyond the four exceptions related to species of conservation concern. The commenter further expressed concerns about the ability of regulatory officials to administer and police a permit system effectively in a community the size of Kodiak. The commenter believes that allowing a large, nonnative community to take birds along the Kodiak road system could injure subsistence resources.

Response: The regulation will permit the harvest of migratory birds and their eggs during spring-summer in the Kodiak Island Roaded Area by residents of the Kodiak Archipelago Region of Alaska for a 3-year trial period (2020-2022) after which time the regulation would sunset. The Service recognizes the necessity to protect species of conservation concern along the Kodiak road system; thus, spring-summer subsistence hunting and egg gathering in the Roaded Area would remain closed for Arctic terns, Aleutian terns, mew gulls, and emperor geese. Arctic and Aleutian tern nesting colonies have declined by greater than 80 percent in Alaska over the last 20 years, and only a few colonies remain on Kodiak Island, the largest of which are within the Roaded Area. Thus, protecting these tern species from further decline is a high priority of the Service.

Furthermore, the Roaded Area would remain closed to take of mew gulls and eggs because colony-level disturbance from targeted mew gull harvest could be detrimental to nesting terns and mew gull nests, and eggs may be confused with those of terns resulting in incidental harvest of tern eggs. Also, the Roaded Area would remain closed to take of emperor geese out of concern that it would provide unrestricted hunter access to a relatively small wintering population of emperor geese that utilize several bays near the road system, potentially increasing harvest vulnerability of a carefully managed species.

The mandatory registration permit hunt and required reporting of hunter activity and harvest will allow estimation of hunter participation, bird and egg harvest, and harvest composition during the 3-year trial period; this information will be used to inform a potential proposal and a decision to reopen the Roaded Area to subsistence hunting in the future. The Roaded Area registration permit will be administered by the ADFG Division of Subsistence in cooperation with the Sun'aq Tribe of Kodiak. Administration of the registration permit will be similar to that of the registration permit for subsistence hunting administered successfully in Cordova, Alaska, with a reporting rate of 93 percent.

Enforcement of regulations for the Kodiak Island Roaded Area will be the responsibility of the Service's Office of Law Enforcement. Enforcement personnel are aware of cultural and traditional practices of migratory bird subsistence harvest by rural residents of Alaska who are eligible to participate for this permit hunt concurrent with the need to ensure conservation of migratory birds, particularly species of conservation concern; of the necessary adherence to specific regulations requiring a permit and mandatory harvest reporting; and that hunting and egg gathering of Arctic terns, Aleutian terns, mew gulls, and emperor geese would remain closed in the Roaded Area.

In the proposed rule, we set forth the same subsistence harvest regulations in subpart D, Annual Regulations Governing Subsistence Harvest, as those from the 2018 and 2019 subsistence harvest seasons (see 83 FR 13684, March 30, 2018, and 84 FR 12946, April 3, 2019) for the 2020 season with the following five exceptions:

The current date range at the Yukon Delta National Wildlife Refuge to set the 30-day closure period to protect waterbird species during their primary nesting is June 1-August 15. However, this timeframe does not allow for a closure period that sufficiently protects them during early nesting in years that allow early nesting. This rule extends the date range for the 30-day closure by 2 weeks on the front end to provide refuge managers the flexibility to begin the closure period in May in years that allow early nesting.

This rule adjusts the boundary between the Northern and Southern Units of the North Slope Region in Alaska to move the communities of Atqasuk and Wainwright from the Southern Unit to the Northern Unit. Currently, season dates in the Northern Unit better align with the timing of hunting activities in Atqasuk and Wainwright, relative to spring breakup patterns and the phenology of migratory birds, than those of the Southern Unit. Accordingly, the change will result in season dates that more effectively balance the opportunity for hunters to harvest birds and eggs with an appropriate 30-day closure period to protect birds during the primary nesting period. This change in unit boundaries is not expected to result in increased harvest of birds and eggs in the North Slope Region.

While all Alaska subsistence harvest regions, except the Yukon/Kuskokwim Delta (YKD) Region, use fixed dates for the mandatory 30-day primary nesting period closure when bird and egg take is prohibited, the North Slope Borough Fish and Game Management Committee in 2019 asked for flexible dates for the 30-day closure period in the North Slope Region of Alaska. Accordingly, we proposed to allow the dates for the 30-day closure period in the North Slope Region to be changed from fixed dates published in the Federal Register to variable, annually derived dates if environmental and biological conditions warrant such a change. If a change in dates is unwarranted, the dates published in the Federal Register would apply. This rule allows for a protocol similar to that used by the YKD Region that would allow for the 30-day closure dates to be based on reports from field biologists and local villagers of when most birds have initiated nesting. Outreach materials would announce the closure dates.

This rule changes the southern boundary of the Special Brant Hunting Season on the North Slope Region of Alaska. The regulations currently allow harvest of migrating brant from June 20 through July 5 along the coastline and in open water around the village of Wainwright. The change extends the boundary associated with the Special Black Brant Hunting Season south and west to include the entirety of Kasegaluk Lagoon to provide hunters from the village of Point Lay the opportunity to harvest migrating brant. While this boundary change may increase brant harvest slightly in the North Slope Region, any additional harvest is expected to have negligible impact to brant population status.

This rule allows migratory bird hunting and egg gathering by registration permit in the Kodiak Island Roaded Area in the Kodiak Archipelago Region of Alaska for a 3-year trial period (2020-2022). This rule change will allow all residents of the Kodiak Archipelago Region the opportunity to participate in subsistence hunting activities without the need for a boat. Current regulations close the Roaded Area to all subsistence migratory bird hunting and egg gathering, but allow these activities in adjacent marine waters beyond 500 feet from shore, including offshore islands where access requires a watercraft.

The required registration permit and the mandatory reporting of hunter activity and harvest will allow estimation of hunter participation, bird and egg harvest, and harvest composition during the 3-year trial period. These data will inform a potential proposal and decision to reopen the Roaded Area to subsistence hunting in the future. To protect species of conservation concern, spring-summer subsistence hunting and egg gathering for Arctic terns, Aleutian terns, mew gulls, and emperor geese would remain closed in the Roaded Area.

We are making no changes to the regulatory revisions proposed in our May 11, 2020, document (85 FR 27698) as a result of the input we received via the public comments. We are, however, making two changes to the proposed regulations at § 92.31(g) to correct errors, as described below.

In the proposed revisions to paragraph (g)(1), we included three references to the “North Slope Borough boundary;” in the final rule, we change these references to the “North Slope regional boundary.” The current regulations in § 92.31(g) refer to the “North Slope regional boundary,” and we should have been consistent and used that same terminology in the proposed rule. This correction of the boundary description will have no negative repercussions to subsistence hunters. On the contrary, this change will make the boundary description more accurate, and clarity of geographic boundaries is essential for hunters and for the production of consistent maps for public outreach and regulations booklets.

The proposed revisions to paragraph (g)(4) included this line, which we are now removing, “The 30-day closure period will occur between June 7 and July 29 of each year.” This specific closure period was not part of the Council's proposal. Moreover, this language was not included in the proposed rule in the section of the preamble that described the proposed regulatory changes pertaining to the North Slope Region. Addition of this language was an administrative error, and we remove it from the final rule. As described in the preamble, the closure period will allow for flexible dates based on environmental and biological conditions.

The Service has dual objectives and responsibilities for authorizing a subsistence harvest while protecting migratory birds and endangered and threatened species. Although these objectives continue to be challenging, they are not irreconcilable, provided that: (1) Regulations continue to protect endangered and threatened species; (2) measures to address documented threats are implemented; and (3) the subsistence community and other conservation partners commit to working together.

Mortality, sickness, and poisoning from lead exposure have been documented in many waterfowl species. The Service will work with partners to increase our education, outreach, and enforcement efforts to ensure that subsistence waterfowl hunting is conducted using nontoxic shot.

We have monitored subsistence harvest for more than 25 years through the use of household surveys in the most heavily used subsistence harvest areas, such as the Yukon-Kuskokwim Delta. Based on our monitoring of the migratory bird species and populations taken for subsistence, we find that this rule will provide for the preservation and maintenance of migratory bird stocks as required by the MBTA. Communication and coordination between the Service, the Co-management Council, and the Pacific Flyway Council have allowed us to set harvest regulations to ensure the long-term viability of the migratory bird stocks.

Section 7 of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq. ) requires the Secretary of the Interior to review other programs administered by the Department of the Interior and utilize such programs in furtherance of the purposes of the ESA. The Secretary is further required to insure that any action authorized, funded, or carried out by the Department of the Interior is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of critical habitat.

Spectacled eiders ( Somateria fischeri ) and the Alaska-breeding population of Steller's eiders ( Polysticta stelleri ) are listed as threatened species under the ESA. Their migration and breeding distribution overlap with areas where the spring and summer migratory bird subsistence hunt is open in Alaska. Neither species is included in the list of subsistence migratory bird species at 50 CFR 92.22; therefore, both species are closed to subsistence harvest.

The Alaska Division of Migratory Bird Management conducted an intra-agency consultation with the Service's Fairbanks Fish and Wildlife Field Office on the proposed and a related interim rule (85 FR 18455, April 2, 2020). The consultation was completed with a biological opinion that concluded these rulemaking actions are not likely to jeopardize the continued existence of endangered or threatened species or result in the destruction or adverse modification of designated critical habitat. Therefore, we have determined that this rule complies with the ESA.

This rule is not subject to the requirements of Executive Order 13771 (82 FR 9339, February 3, 2017) because this rule would establish annual harvest limits related to routine hunting or fishing.

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

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

The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). A regulatory flexibility analysis is not required. Accordingly, a Small Entity Compliance Guide is not required. This rule would legalize a preexisting subsistence activity, and the resources harvested will be consumed.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

(a) Would not have an annual effect on the economy of $100 million or more. It legalizes and regulates a traditional subsistence activity. It will not result in a substantial increase in subsistence harvest or a significant change in harvesting patterns. The commodities that will be regulated under this rule are migratory birds. This rule deals with legalizing the subsistence harvest of migratory birds and, as such, does not involve commodities traded in the marketplace. A small economic benefit from this rule derives from the sale of equipment and ammunition to carry out subsistence hunting. Most, if not all, businesses that sell hunting equipment in rural Alaska qualify as small businesses. We have no reason to believe that this rule would lead to a disproportionate distribution of benefits.

(b) Would not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions. This rule does not deal with traded commodities and, therefore, would not have an impact on prices for consumers.

(c) Would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This rule deals with the harvesting of wildlife for personal consumption. It would not regulate the marketplace in any way to generate substantial effects on the economy or the ability of businesses to compete.

We have determined and certified under the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq. ) that this rule will not impose a cost of $100 million or more in any given year on local, State, or tribal governments or private entities. The rule would not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act is not required.

Participation on regional management bodies and the Co-management Council requires travel expenses for some Alaska Native organizations and local governments. In addition, they assume some expenses related to coordinating involvement of village councils in the regulatory process. Total coordination and travel expenses for all Alaska Native organizations are estimated to be less than $300,000 per year. In a notice of decision (65 FR 16405; March 28, 2000), we identified 7 to 12 partner organizations (Alaska Native nonprofits and local governments) to administer the regional programs. The ADFG also incurs expenses for travel to Council and regional management body meetings. In addition, the State of Alaska would be required to provide technical staff support to each of the regional management bodies and to the Council. Expenses for the State's involvement may exceed $100,000 per year, but should not exceed $150,000 per year. When funding permits, we make annual grant agreements available to the partner organizations and the ADFG to help offset their expenses.

Under the criteria in Executive Order 12630, this rule would not have significant takings implications. This rule is not specific to particular land ownership, but applies to the harvesting of migratory bird resources throughout Alaska. A takings implication assessment is not required.

Under the criteria in Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. We discuss effects of this rule on the State of Alaska in the Unfunded Mandates Reform Act section, above. We worked with the State of Alaska to develop these regulations. Therefore, a federalism summary impact statement is not required.

The Department, in promulgating this rule, has determined that it would not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988.

Consistent with Executive Order 13175 (65 FR 67249; November 6, 2000), “Consultation and Coordination with Indian Tribal Governments,” and Department of the Interior policy on Consultation with Indian Tribes (December 1, 2011), we sent letters via electronic mail to all 229 Alaska Federally recognized Indian tribes. Consistent with Congressional direction (Pub. L. 108-199, div. H, Sec. 161, Jan. 23, 2004, 118 Stat. 452, as amended by Pub. L. 108-447, div. H, title V, Sec. 518, Dec. 8, 2004, 118 Stat. 3267), we also sent letters to approximately 200 Alaska Native corporations and other tribal entities in Alaska soliciting their input as to whether or not they would like the Service to consult with them on the migratory bird subsistence harvest regulations.

We implemented the amended treaty with Canada with a focus on local involvement. The treaty calls for the creation of management bodies to ensure an effective and meaningful role for Alaska's indigenous inhabitants in the conservation of migratory birds. According to the Letter of Submittal, management bodies are to include Alaska Native, Federal, and State of Alaska representatives as equals. They develop recommendations for, among other things: Seasons and bag limits, methods and means of take, law enforcement policies, population and harvest monitoring, education programs, research and use of traditional knowledge, and habitat protection. The management bodies involve village councils to the maximum extent possible in all aspects of management. To ensure maximum input at the village level, we required each of the 11 participating regions to create regional management bodies consisting of at least one representative from the participating villages. The regional management bodies meet at least one time each year to review and/or submit proposals to the statewide body.

This rule does not contain any new collections of information that require Office of Management and Budget (OMB) approval under the PRA (44 U.S.C. 3501 et seq. ). We may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number. OMB has reviewed and approved our collection of information associated with voluntary annual household surveys that we use to determine levels of subsistence take (OMB Control Number 1018-0124, expires August 31, 2022).

Implementation of the Service's 2013 supplemental environmental impact statement on the hunting of migratory birds resulted in changes to the overall timing of the annual regulatory schedule for the establishment of migratory bird hunting regulations and the Alaska migratory bird subsistence harvest regulations. The programmatic document, “Second Final Supplemental Environmental Impact Statement: Issuance of Annual Regulations Permitting the Sport Hunting of Migratory Birds (EIS 20130139),” addresses compliance with the National Environmental Policy Act by the Service for issuance of the annual framework regulations for hunting of migratory game bird species. We published a notice of availability in the Federal Register on May 31, 2013 (78 FR 32686), and our Record of Decision on July 26, 2013 (78 FR 45376).

The annual regulations and options are considered in a February 2020 environmental assessment, “Managing Migratory Bird Subsistence Hunting in Alaska: Hunting Regulations for the 2020 Spring/Summer Harvest.” Copies are available from the person listed under FOR FURTHER INFORMATION CONTACT or at http://www.regulations.gov.

Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This is not a significant regulatory action under this Executive Order; it allows only for traditional subsistence harvest and improves conservation of migratory birds by allowing effective regulation of this harvest. Further, this rule is not expected to significantly affect energy supplies, distribution, or use. Therefore, a Statement of Energy Effects is not required.

For the reasons set out in the preamble, we amend title 50, chapter I, subchapter G, of the Code of Federal Regulations as follows:

NMFS and the Council manage the Gulf reef fish fishery, which includes gray snapper, under the FMP. The Council prepared the FMP and NMFS implements the FMP through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On February 28, 2020, NMFS published a notice of availability for Amendment 51 and requested public comment (85 FR 11937). NMFS approved Amendment 51 on May 18, 2020. On July 6, 2020, NMFS published a proposed rule for Amendment 51 and requested public comment (85 FR 40181). The proposed rule and Amendment 51 outline the rationale for the actions contained in this final rule. A summary of the management measures described in Amendment 51 and implemented by this final rule is described below.

Unless otherwise noted, all weights in this proposed rule are in round weight.

Gray snapper in the Gulf exclusive economic zone (EEZ) are managed as a single stock with a stock annual catch limit (ACL), and a stock annual catch target (ACT). There is no allocation of the stock ACL between the commercial and recreational sectors. Generally, the fishing season is open year-round, January 1 through December 31. However, accountability measures (AMs) for gray snapper specify that if commercial and recreational landings exceed the stock ACL in a fishing year, then during the following fishing year if the stock ACL is reached or is projected to be reached, the commercial and recreational sectors will be closed for the remainder of the fishing year. The gray snapper ACL and AMs were implemented in 2012 (76 FR 82044; December 29, 2011) and the stock ACL of 2.42 million lb (1.1 million kg) was not exceeded between 2012 and 2019. However, landings in 2014 and 2016 did exceed the new ACLs being implemented through this final rule.

In 2018, the stock status of gray snapper was evaluated for the first time through a Southeast Data, Assessment, and Review benchmark stock assessment (SEDAR 51). The Council's Scientific and Statistical Committee (SSC) reviewed SEDAR 51 and accepted the assessment as the best scientific information available. The SSC determined that the stock is undergoing overfishing as of 2015, which was the last year of data included in the assessment, because the fishing mortality rate (F) exceeded the current maximum fishing mortality threshold (MFMT). The SSC was not able to determine whether the stock is overfished, because the maximum sustainable yield (MSY) and minimum stock size threshold (MSST) for gray snapper were not specified in the FMP at that time.

SEDAR 51 could not estimate the actual MSY with the best scientific information available. Therefore, the Council considered alternatives for an MSY proxy that uses the spawning potential ratio (SPR). The SPR is the ratio of the average number of eggs per fish over its lifetime when the stock is fished compared to the same value when the stock is not fished. The SPR assumes that a certain amount of fish must survive and spawn in order to replenish the stock. The Council selected the yield when fishing at F 26 % SPR for an MSY proxy to balance protection of the gray snapper stock with an increase in social and economic benefits for fishers targeting the species that is expected to result from allowing more harvest. The SSC recognized that this proxy is scientifically acceptable and this proxy is consistent with the MSY proxy for Gulf red snapper.

As a result of the increasing uncertainty with long-range projections, the SSC only provided overfishing limit (OFL) and acceptable biological catch (ABC) recommendations for the gray snapper stock through 2021. From SEDAR 51, the OFLs associated with the MSY proxy selected by the Council are 2.58 million lb (1.17 million kg) for 2020, and 2.57 million lb (1.17 million kg) for 2021, and the ABCs recommended by the SSC are 2.51 million lb (1.14 million kg) for 2020 and subsequent years.

This final rule revises the ACL for the Gulf gray snapper stock, and removes the ACT.

The current ACL for gray snapper is 2.42 million lb (1.1 million kg) and was established based on average landings from 1999 through 2008. The current ACT is set 14 percent below the ACL, at 2.08 million lb.

To determine the new ACLs, the Council used its ACL/ACT control rule to determine whether to apply a buffer to the ABC recommendations to account for management uncertainty. The results indicated that an 11 percent buffer is appropriate. When applied to the 2020-2021 ABC recommendations, the resulting gray snapper stock ACLs in this final rule are 2.24 million lb (1.02 million kg) for the 2020 fishing year, and 2.23 million lb (1.01 million kg) for 2021, and subsequent years. The Council decided to remove the ACT for gray snapper because it has not been used for management since its implementation in 2012.

Amendment 51 modifies the OFL and ABC for the gray snapper stock as previously explained. Amendment 51 also modifies the MFMT and specifies the MSY, MSST, and OY for the stock. NMFS uses the MSST and MFMT to determine whether a stock is overfished or undergoing overfishing, respectively. If the stock biomass falls below the MSST, then the stock is considered overfished and the Council would then need to develop a rebuilding plan capable of returning the stock to a level that allows the stock to achieve MSY on a continuing basis. In years when there is a stock assessment, if fishing mortality exceeds the MFMT, a stock is considered to be undergoing overfishing, because this level of fishing mortality, if continued, would reduce the stock biomass to an overfished condition. In years in which there is no assessment, overfishing occurs if landings exceed the OFL.

Amendment 51 set the MSY proxy as the yield when fishing at F 26 % SPR . MFMT was changed from F 30 % SPR to F 26 % SPR, and the MSST is 50 percent of the biomass at MSY or the MSY proxy. The OY is the yield when fishing at 90 percent of F MSY (or MSY proxy). As noted previously, under the current MFMT, overfishing was occurring as of 2015. Under the new MFMT of F 26 % SPR , projections from SEDAR 51 suggest that overfishing ended in 2017. Under the new MSST, the stock is not overfished.

NMFS received 11 comments on the notice of availability and 9 comments on the proposed rule for Amendment 51. The majority of the comments supported actions in the proposed rule and Amendment 51. Some comments supporting the action suggested that additional management measures are necessary to protect the stock, such as reducing the recreational bag limit and increasing the minimum size limit.

Comments specific to Amendment 51 and the proposed rule are grouped as appropriate and summarized below, each followed by the response.

Comment 1: Further restrictions are needed to protect the gray snapper stock beyond the actions in Amendment 51. These include reducing the recreational bag limit and increasing the stock minimum size limit.

Response: NMFS disagrees that additional management measures, such as reduced bag limits and increased minimum size limits, are needed at this time to further protect the gray snapper stock. The ACLs established through this final rule are reduced from the Council's SSC ABC recommendation by 11 percent and are consistent with achieving OY. As previously noted, landings between 2012 and 2019 have not exceeded the applicable ACL, but landings in 2014 and 2016 were greater than the ACLs being implemented through this final rule. If the ACL is exceeded, the AM for gray snapper requires that NMFS monitor landings the following year and close the recreational and commercial sectors if landings are projected to reach the ACL. Further, the National Standard 1 Guidelines provide that, if catch exceeds the ACL more than once in the last 4 years, the system of ACLs and AMs should be reevaluated, and modified if necessary to improve its performance and effectiveness. The Council could also consider whether additional management measures such as revising the recreational bag limit and the minimum size limits, are necessary.

Comment 2: Because Amendment 51 does not consider gray snapper bycatch from the Gulf shrimp trawl fishery, the basis for the proposed measures is flawed.

Response: Gray snapper bycatch, including that from the shrimp trawl fishery, was examined in the SEDAR 51 stock assessment, which the Council's SSC accepted as the best scientific information available. The members of the SEDAR 51 data workshop concluded that gray snapper bycatch estimates from the shrimp fishery were inconsequential. As a result, shrimp trawl bycatch data were excluded from the assessment model and were not considered in Amendment 51.

Comment 3: No further regulations related to the harvest of gray snapper are necessary because the current regulations are adequate to protect the gray snapper stock.

Response: NMFS disagrees. The Council's SSC reviewed the results of SEDAR 51, accepted the assessment as the best scientific information available, and recommended new OFLs and ABCs. Consistent with National Standards 1 and 2, the Council took action to update the gray snapper catch levels and determined that it is appropriate to have an 11 percent buffer between the ACL and ABC to account for management uncertainty and reduce the likelihood of overfishing. This final rule does not change any other regulations for gray snapper fishing, such as the recreational bag limit or the minimum size limit.

Comment 4: The reduction in the gray snapper ACL is not fair and reasonable because it favors the commercial sector.

Response: NMFS disagrees that the gray snapper management measures implemented through this final rule favor the commercial sector over the recreational sector. Gray snapper are managed using a stock ACL that is not allocated between the commercial and recreational sectors. Thus, each sector has an equal opportunity to harvest gray snapper, and the recreational harvest of gray snapper has been much greater than the commercial harvest. The most recent 5 years of landings data used in Amendment 51 (2013-2017) indicate that recreational landings were between 1.836 and 2.203 million lb (0.833 and 0.999 million kg) while commercial landings were between 0.136 and 0.200 million lb (0.062 and 0.091 million kg).

Pursuant to section 304(b)(3) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law.

This rule has been determined to be not significant for purposes of Executive Order 12866. This final rule is not an E.O. 13771 regulatory action because this action is not significant under E.O. 12866.

The Magnuson-Stevens Act provides the statutory basis for this final rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting or recordkeeping compliance requirements are introduced in this final rule. This final rule contains no information collection requirements under the Paperwork Reduction Act of 1995.

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 rule 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 from the public were received regarding this certification. As a result, a final regulatory flexibility analysis was not required and none was prepared.

For the reasons set out in the preamble, 50 CFR part 622 is amended as follows: