This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Order No. 984, as amended (7 CFR part 984), regulating the handling of walnuts grown in California. Part 984 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The California Walnut Board (hereinafter referred to as the “Board”) locally administers the Order and is comprised of growers and handlers of walnuts operating within California, and a public member.

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

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

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

This final rule revises reporting requirements under the Order by authorizing the Board to collect reports from handlers about monthly purchase commitments with domestic and foreign buyers. The Board believes that the collection of this information enables the industry to have more accurate and timely data regarding the industry's monthly supply and demand, and enhances overall marketing efforts.

The Marketing Order Revision Committee (MORC) met to discuss the proposal in a public meeting via teleconference on April 2, 2020. The MORC recommended the change in reporting requirements to enable the industry to have more complete information on purchase commitments. The Board unanimously recommended this action at a public meeting held on May 7, 2020, where stakeholders were encouraged to express their views and provide input.

Section 984.71 authorizes the Board to require handlers to report inventory of inshell and shelled walnuts as specified by the Board.

Section 984.72 authorizes the Board to require that handlers who handle merchantable walnuts, inshell or shelled, at any time during the marketing year shall submit reports showing the quantity handled and other pertinent information, as specified by the Board.

Section 984.73 authorizes the Board, with the approval of the Secretary, to require handlers to report walnut receipts from growers, handlers, or others on a form and at designated times.

Section 984.76 authorizes the Board, with the approval of the Secretary, to request handlers to furnish other reports and information as needed to enable the Board to perform its duties under the Order.

Sections 984.471, 984.472, and 984.473 provide the requirements related to reports of inventory, merchantable walnuts shipped, and walnuts received from growers, respectively.

Currently, reports of shipments and receipts are filed by handlers on CWB Form No. 6 no later than the 5th day of month following such shipments or receipts. This report also includes the quantity shipped to domestic and foreign buyers for shelled and inshell walnuts, including information about the quantity of walnuts exported by country of destination. Pursuant to this final rule, handlers would report purchase commitments of walnuts, not yet shipped, made with domestic and foreign buyers. The change and information about each handler's shipments and receipts are expected to provide more timely information about supply and demand for walnuts, and enhance marketing and promotion efforts.

Section 984.472 is amended to add new paragraph (c), which requires handlers to submit reports on the purchase commitments with buyers that are not yet shipped. The title of Section 984.472 is also amended to read “Reports of merchantable walnuts shipped, received, and committed.”

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

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

There are approximately 90 handlers subject to regulation under the Order and approximately 4,400 walnut growers in the production area. The Small Business Administration (SBA) defines small agricultural service firms as those having annual receipts of less than $30,000,000, and small agricultural producers as those having annual receipts of less than $1,000,000 (13 CFR 121.201).

According to the Board, there are approximately 4,400 producers and 90 handlers in the production area. The Board also reported that approximately 82 percent of California's walnut handlers shipped merchantable walnuts valued under $30 million during the 2018-2019 marketing year, and would, therefore, be considered small handlers according to the SBA definition.

Data from the 2017 Census of Agriculture, published by USDA's National Agricultural Statistics Service (NASS), show that 86 percent of California farms growing walnuts had walnut sales of less than $1 million. In an alternative computation using NASS data, the 3-year average crop value (2016/17 to 2018/19) was $1.24 billion. Average bearing acres over that same 3-year period were 333,000. Dividing crop value by acres yields a revenue per acre estimate of $3,733. Using these numbers, it would take approximately 268 acres ($1,000,000/$3,733) to yield $1 million in annual walnut sales. The 2017 Census of Agriculture Census data show that 80 percent of walnut farms in 2017 were below 260 acres. By either measure, the NASS data demonstrate that well over three-fourths of California walnut farms would be considered small businesses according to the SBA definition.

This final rule revises the title of section 984.472 and adds a new paragraph (c) to include the requirement for handlers to report monthly purchase commitments made with domestic and foreign buyers. This action provides more accurate and timely information regarding the industry's monthly supply and demand, and enhances overall marketing efforts.

During the MORC meeting on April 2, 2020, alternatives were discussed, including not collecting information about purchase commitments. However, the industry believes that information about walnut supply and demand is critical in supporting overall marketing efforts. Timely and accurate information gives the handlers and the Board valuable data, permitting them to focus on their sales efforts. At the May 7, 2020, meeting, the Board discussed the MORC's recommendation and its reasoning. There was agreement about the value of having the commitment information, along with information on shipments and receipts.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) under OMB No. 0581-0178, Vegetable and Specialty Crops. This final rule requires changes to the Board's existing CWB Form No. 6 by changing the title and adding the provision to collect information on purchase commitments with domestic and foreign buyers. The revised form has been submitted to OMB for approval.

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

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

The Board's meetings were widely publicized throughout the walnut industry and all interested persons were invited to attend the meetings and encouraged to participate in the deliberations on all issues. The MORC's meeting on April 2, 2020, and the Board's meeting on May 7, 2020, were public meetings held via teleconference and all entities, both large and small, were encouraged to express their views on this issue.

A proposed rule concerning this action was published in the Federal Register on August 25, 2020, (85 FR 52278). Copies of the proposal were provided by the Board to members and handlers. Finally, the proposed rule was made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending September 24, 2020, was provided to allow interested persons to respond to the proposal. Ten comments were received.

Seven of the comments favored adding the requirement for handlers to report purchase commitments, two of the commenters did not favor the change, and one commenter neither favored nor opposed the change.

Those favoring the change did so for similar reasons: The value in having accurate information about monthly inventories; the value in collecting the data and the importance of the data in relationship to the Board's marketing efforts; and the ability of the information to provide market trend data and an overall better picture of the market.

The two commenters who opposed the change did so because they were concerned about the reporting burden imposed on walnut handlers. One commenter also noted such commitment data could be impacted by cancelled orders or order adjustments. The other commented that the value of the information might not be offset by the increased reporting burden on walnut handlers.

The commenter who did not take a position for or against the changes to the Order discussed the potential for such reported information to be skewed by backorders, and urged AMS to consider an additional inventory category with a shipping time limit.

As to the two commenters who did not favor the change, it should be noted that some walnut handlers are also members of the Board, and this change to the reporting requirements was discussed in two separate public meetings a month apart. The vote on the change by the MORC on April 2, 2019, and by the full Board on May 7, 2019, were unanimous. There were no opposing votes, and no handlers commented on the rule during the comment period. The handlers serving on the MORC and the Board did not feel that the additional information required by the change represented a significant burden to the reporting requirements. AMS believes that benefits of this change to the marketing of walnuts outweigh the concerns of the minimal increase in the reporting burden. Also, AMS finds the claim of commitment data being impacted by cancelled orders or order adjustments to be highly speculative, with no firm evidence presented to substantiate the assertion. Thus, there are no changes made to the final rule.

In addition, the comment about changes to the data created by potential backorders may not materialize, since handlers are free to make interhandler transfers of walnuts to meet their purchase commitments; and the nature of agricultural commodities, in general, is not conducive to the development of backorders. In agriculture, a crop is produced and harvested, and more is not coming until about a year later.

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

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

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

For the reasons set forth in the preamble, 7 CFR part 984 is amended as follows:

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended the Truth in Lending Act (TILA) to add special appraisal requirements for “higher-risk mortgages.”  1 In January 2013, the Agencies jointly issued a final rule implementing these requirements and adopted the term “higher-priced mortgage loan” (HPML) instead of “higher-risk mortgage” (the January 2013 Final Rule). 2 In July 2013, the Agencies proposed additional exemptions from the January 2013 Final Rule (the 2013 Supplemental Proposed Rule). 3 In December 2013, the Agencies issued a supplemental final rule with additional exemptions from the January 2013 Final Rule (the December 2013 Supplemental Final Rule). 4 Among other exemptions, the Agencies adopted an exemption from the new HPML appraisal rules for transactions of $25,000 or less, to be adjusted annually for inflation.

The OCC's, the Board's, and the Bureau's versions of the January 2013 Final Rule and December 2013 Supplemental Final Rule and corresponding official interpretations are substantively identical. The FDIC, NCUA, and FHFA adopted the Bureau's version of the regulations under the January 2013 Final Rule and December 2013 Supplemental Final Rule. 5

The OCC's, Board's, and Bureau's regulations, 6 and their accompanying interpretations, 7 provide that the exemption threshold for smaller loans will be adjusted effective January 1 of each year based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that was in effect on the preceding June 1. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If there is no annual percentage increase in the CPI-W, the OCC, the Board, and the Bureau will not adjust the threshold amounts from the prior year. 8

On November 30, 2016, the OCC, the Board, and the Bureau published a final rule in the Federal Register to memorialize the calculation method used by the agencies each year to adjust the exemption threshold to ensure that the values for the exemption threshold keep pace with the CPI-W (HPML Small Dollar Adjustment Calculation Rule). 9 The HPML Small Dollar Adjustment Calculation Rule memorialized the policy that, if there is no annual percentage increase in the CPI-W, the OCC, the Board, and Bureau will not adjust the exemption threshold from the prior year. The HPML Small Dollar Adjustment Calculation Rule also provided that, in years following a year in which the exemption threshold was not adjusted because there was a decrease in the CPI-W from the previous year, the threshold is calculated by applying the annual percentage change in the CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly; if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding.

Effective January 1, 2021, the exemption threshold amount remains at $27,200. This amount is based on the CPI-W in effect on June 1, 2020, which was reported on May 12, 2020. The Bureau of Labor Statistics publishes consumer-based indices monthly but does not report a CPI change on June 1; indices are reported in the middle of the prior month. The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 29 percent of the U.S. population. The CPI-W reported on May 12, 2020, reflects a 0.1 percent increase in the CPI-W from April 2019 to April 2020. Accordingly, the 0.1 percent increase in the CPI-W from April 2019 to April 2020 results in an exemption threshold amount of $27,200, after rounding. The OCC, the Board, and the Bureau are revising the commentaries to their respective regulations to add new comments as follows:

• Comment 203(b)(2)-3.viii to 12 CFR part 34, Appendix C to Subpart G (OCC);

• Comment 43(b)(2)-3.viii to Supplement I of 12 CFR part 226 (Board); and

• Comment 35(c)(2)(ii)-3.viii to Supplement I of 12 CFR part 1026 (Bureau).

These new comments state that, from January 1, 2021, through December 31, 2021, the threshold amount is $27,200. These revisions are effective January 1, 2021.

Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the agency finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 10 The amendments in this rule are technical and apply the method previously memorialized in the December 2013 Supplemental Final Rule and the HPML Small Dollar Adjustment Calculation Rule. For these reasons, the OCC, the Board, and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form.

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. 11 As noted previously, the agencies have determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

In accordance with the Paperwork Reduction Act of 1995, 12 the agencies reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.

The OCC analyzes proposed rules for the factors listed in Section 202 of the Unfunded Mandates Reform Act of 1995, before promulgating a final rule for which a general notice of proposed rulemaking was published. 13 As discussed above, the OCC has determined that the publication of a general notice of proposed rulemaking is unnecessary.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Bureau will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. The Office of Information and Regulatory Affairs (OIRA) has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2).

The Acting Associate Director for Research, Markets and Regulations, Dan S. Sokolov, having reviewed and approved this document, is delegating the authority to electronically sign this document to Laura Galban, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register .

For the reasons set forth in the preamble, the OCC amends 12 CFR part 34 as set forth below:

For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below:

For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below:

Regulation I governs the issuance and cancellation of capital stock by the Reserve Banks. Under section 5 of the Federal Reserve Act  1 and Regulation I, 2 a member bank must subscribe to capital stock of the Reserve Bank of its district in an amount equal to six percent of the member bank's capital and surplus. The member bank must pay for one-half of this subscription on the date that the Reserve Bank approves its application for capital stock, while the remaining half of the subscription shall be subject to call by the Board. 3

Section 7(a)(1) of the Federal Reserve Act  4 provides that Reserve Bank stockholders with $10 billion or less in total consolidated assets shall receive a six percent dividend on paid-in capital stock, while stockholders with more than $10 billion in total consolidated assets shall receive a dividend on paid-in capital stock equal to the lesser of six percent and “the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend.” Section 7(a)(1) requires that the Board adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index, published by the BEA.

Regulation I implements section 7(a)(1) of the Federal Reserve Act by (1) defining the term “total consolidated assets,”  5 (2) incorporating the statutory dividend rates for Reserve Bank stockholders  6 and (3) providing that the Board shall adjust the threshold for total consolidated assets annually to reflect the change in the Gross Domestic Product Price Index. 7 The Board has explained that it “expects to make this adjustment [to the threshold for total consolidated assets] using the final second quarter estimate of the Gross Domestic Product Price Index for each year, published by the Bureau of Economic Analysis.”  8

The Board annually adjusts the $10 billion total consolidated asset threshold based on the change in the Gross Domestic Product Price Index between the second quarter of 2015 (the baseline year) and the second quarter of the current year. 9 The second quarter 2020 Gross Domestic Product Price Index estimate published by the BEA in September 2020 (112.860) is 7.85 percent higher than the second quarter 2015 Gross Domestic Product Price Index estimate published by the BEA in September 2020 (104.647). Based on this change in the Gross Domestic Product Price Index, the threshold for total consolidated assets in Regulation I will be $10,785,000,000 as of January 11, 2021.

The provisions of 5 U.S.C. 553(b) relating to notice of proposed rulemaking have not been followed in connection with the adoption of these amendments. The amendments involve expected, ministerial adjustments that are required by statute and Regulation I and are consistent with a method previously set forth by the Board. 10 Accordingly, the Board finds good cause for determining, and so determines, that notice in accordance with 5 U.S.C. 553(b) is unnecessary.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) increased the threshold in the Consumer Leasing Act (CLA) for exempt consumer leases, and the threshold in the Truth in Lending Act (TILA) for exempt consumer credit transactions, 1 from $25,000 to $50,000, effective July 21, 2011. 2 In addition, the Dodd-Frank Act requires that, on and after December 31, 2011, these thresholds be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. In April 2011, the Board issued a final rule amending Regulation M (which implements the CLA) consistent with these provisions of the Dodd-Frank Act, along with a similar final rule amending Regulation Z (which implements TILA) (collectively, the Board Final Threshold Rules). 3

Title X of the Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from the Board to the Bureau, effective July 21, 2011. In connection with this transfer of rulemaking authority, the Bureau issued its own Regulation M implementing the CLA, 12 CFR part 1013, substantially duplicating the Board's Regulation M. 4 Although the Bureau has the authority to issue rules to implement the CLA for most entities, the Board retains authority to issue rules under the CLA for certain motor vehicle dealers covered by section 1029(a) of the Dodd-Frank Act, and the Board's Regulation M continues to apply to those entities. 5

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) increased the threshold in the Truth in Lending Act (TILA) for exempt consumer credit transactions, 1 and the threshold in the Consumer Leasing Act (CLA) for exempt consumer leases, from $25,000 to $50,000, effective July 21, 2011. 2 In addition, the Dodd-Frank Act requires that, on and after December 31, 2011, these thresholds be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. In April 2011, the Board issued a final rule amending Regulation Z (which implements TILA) consistent with these provisions of the Dodd-Frank Act, along with a similar final rule amending Regulation M (which implements the CLA) (collectively, the Board Final Threshold Rules). 3

Title X of the Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from the Board to the Bureau, effective July 21, 2011. In connection with this transfer of rulemaking authority, the Bureau issued its own Regulation Z implementing TILA, 12 CFR part 1026, substantially duplicating the Board's Regulation Z. 4 Although the Bureau has the authority to issue rules to implement TILA for most entities, the Board retains authority to issue rules under TILA for certain motor vehicle dealers covered by section 1029(a) of the Dodd-Frank Act, and the Board's Regulation Z continues to apply to those entities. 5

The Board's and the Bureau's regulations, 6 and their accompanying commentaries, provide that the exemption threshold will be adjusted annually effective January 1 of each year based on any annual percentage increase in the CPI-W that was in effect on the preceding June 1. They further provide that any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. 7 Since 2011, the Board and the Bureau have adjusted the Regulation Z exemption threshold annually, in accordance with these rules.

On November 30, 2016, the Board and the Bureau published a final rule in the Federal Register to memorialize the calculation method used by the agencies each year to adjust the exemption threshold to ensure that, as contemplated by section 1100E(b) of the Dodd-Frank Act, the values for the exemption threshold keep pace with the CPI-W (Regulation Z Adjustment Calculation Rule). 8 The Regulation Z Adjustment Calculation Rule memorialized the policy that, if there is no annual percentage increase in the CPI-W, the Board and Bureau will not adjust the exemption threshold from the prior year. The Regulation Z Adjustment Calculation Rule also provided that, in years following a year in which the exemption threshold was not adjusted because there was a decrease in the CPI-W from the previous year, the threshold is calculated by applying the annual percentage change in the CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly; if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding.

Effective January 1, 2021, the exemption threshold amount remains at $58,300. This amount is based on the CPI-W in effect on June 1, 2020, which was reported on May 12, 2020. The Bureau of Labor Statistics publishes consumer-based indices monthly, but does not report a CPI change on June 1; indices are reported in the middle of the prior month. The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 29 percent of the U.S. population. The CPI-W reported on May 12, 2020 reflects a 0.1 percent increase in the CPI-W from April 2019 to April 2020. Accordingly, the 0.1 percent increase in the CPI-W from April 2019 to April 2020 results in an exemption threshold amount of $58,300, after rounding. The Board and the Bureau are revising the commentaries to their respective regulations to add new comment 3(b)-3.xii to state that, from January 1, 2021 through December 31, 2021, the threshold amount is $58,300. These revisions are effective January 1, 2021. 9

Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Board and the Bureau find that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 10 The amendments in this rule are technical and apply the method previously set forth in the Board Final Threshold Rules and the Regulation Z Adjustment Calculation Rule. For these reasons, the Board and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form.

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. 11 As noted previously, the agencies have determined that it is unnecessary to publish a general notice of proposed rulemaking for this joint final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

In accordance with the Paperwork Reduction Act of 1995, 12 the agencies reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Bureau will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. The Office of Information and Regulatory Affairs (OIRA) has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2).

The Acting Associate Director for Research, Markets and Regulations, Dan. S. Sokolov, having reviewed and approved this document, is delegating the authority to electronically sign this document to Laura Galban, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register .

For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below:

For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below:

The Bureau is issuing this advisory opinion through the procedures for its Advisory Opinions Policy. 1 Refer to those procedures for more information.

The postsecondary education loan market has swelled in the past decade and education debt has become an increasingly large share of total household debt, from 5 percent in 2008 to 11 percent in 2020. 2 Education loans issued or guaranteed by the Federal government, through title IV of the Higher Education Act of 1965, 3 which are administered by the U.S. Department of Education, 4 currently comprise over 92 percent of the education loan market. 5 Between 2006 and 2012, the share of non-Federal education loans issued by private lenders ranged from 9 percent to 13 percent, and since then, the share of total outstanding education loans held by private lenders has been about 8 percent. 6

Prior to 2010, education loans were primarily issued through the Federal Family Education Loan Program (FFELP). 7 Under the FFELP, banks and other private creditors issued education loans that were subsidized and guaranteed by the Federal government. 8 The Health Care and Education Reconciliation Act of 2010 prohibited the origination of new FFELP loans after June 30, 2010, at which point Direct Loans issued under the William D. Ford Direct Loan Program became the predominant type of Federal education loan. 9 Direct Loans are issued and owned by the U.S. Department of Education. 10 FFELP loans, Direct Loans, and other title IV loans are administered by the Department of Education and include borrower protections such as postponement options, income-driven repayment options, in-school deferrals, no prepayment penalties, and loan forgiveness. 11

Most FFELP and Direct loans have fixed interest rates that are determined by Federal statute. 12 Between 2006 and 2013, these statutes set fixed interest rates for most loans issued to undergraduate students at 6.8 percent; Federal PLUS loan  13 rates were set at 8.5 percent for FFELP loans and 7.9 percent for Direct Loans at 7.9 percent. 14 In contrast, by late 2011, private education creditors were offering interest rates of 2.98 percent to 3.55 percent for borrowers with prime or super prime credit scores. 15 This interest rate differential created incentives for prime and super prime borrowers with high fixed-rate Federal education loans to consolidate or refinance their loans into a lower rate education loan product.

The market for consolidation or refinance of Federal education loans by private lenders largely did not exist prior to 2006, because there was little to no demand for such a private product. Between 2001 and 2006, nearly all consolidations of Federal education loans were through the Federal government's loan consolidation program. 16 The interest rate on Federal consolidation loans is generally the weighted average of interest rates on the loans consolidated. 17 Because most Federal loans issued prior to July 1, 2006 charged variable rates, Federal consolidation loans allowed borrowers to take advantage of a downturn in interest rates to lock in fixed interest rates as low as 2.875 percent. 18 Federal consolidation loans also generally offer the same deferment, forbearance, and discharge benefits available on the underlying Federal loans and a wide range of repayment options, including income-driven repayment. 19 The few private creditors who offered education consolidation and refinance loans during this period typically offered variable-rate loans and did not offer the wide range of Federal loan repayment, deferment, forbearance, and discharge options. 20 In addition, education consolidation and refinance loans offered by private creditors typically did not allow borrowers to consolidate or refinance any Federal loans. 21 However, in 2006, legislative changes took effect which changed interest rates for Federal loans from variable rates to fixed rates, initially ranging from 6.8 percent to 8.5 percent, depending on the type of loan and whether the loan was issued under the Direct or FFELP program. 22 Thus, for loans originated after June 2006, a borrower no longer had the ability to take advantage of a drop in market interest rates to lock in a low interest rate through a Federal loan consolidation. 23

This change from variable to fixed rates on Federal loans led to an opening in the market for private lenders to offer a product that would allow borrowers with high fixed interest rate Federal loans to consolidate or refinance those loans and obtain a lower interest rate. In 2012, a few private creditors began offering private loan consolidation and refinance products that allowed borrowers who had graduated and were in repayment to consolidate or refinance their Federal education loans to reduce their interest rate. 24 These products are marketed to consumers with both high interest rate Federal education loans (which were generally issued or extended beginning in 2006) and prime or super prime  25 credit scores. 26 The market for private consolidation and refinancing of Federal education loans has continued to expand in recent years. 27 In 2019, annual originations of private consolidation and refinance education loan products reached an estimated $16 billion, 28 which was larger than that year's originations for private education loans by currently enrolled students. 29

As the market for private consolidations and refinancings of Federal student loans has grown, some industry participants have expressed uncertainty about the application of Regulation Z, which implements the Truth in Lending Act (TILA), to these loan products. Questions have arisen regarding whether consolidation and refinance products that satisfy and replace a consumer's existing Federal loans (or existing Federal and private loans) are considered “private education loans” such that the disclosures and other protections under subpart F of Regulation Z  30 are required. Specifically, creditors need to know whether they are required to provide disclosures under TILA and Regulation Z, and if so, which disclosures they are required to provide. If the loan is not considered a private education loan and is over $50,000, then the loan is not covered under TILA and Regulation Z, and a creditor is not required to provide any disclosures to the consumer. 31 For loans under $50,000, whether a loan is a “private education loan” determines whether creditors must comply with either the private education loan disclosure requirements or installment loan disclosure requirements, because it is impossible to comply with both sets of requirements simultaneously. 32

This advisory opinion generally covers private loan consolidation products that satisfy and replace multiple Federal, or Federal and private, loans, as well as private loan refinance products that satisfy and replace a single Federal or private loan. This advisory opinion does not cover loans that are made, insured, or guaranteed by the Federal government under title IV of the Higher Education Act of 1965. For purposes of this advisory opinion, the terms “private creditor” or “private education creditor” broadly refer to creditors (other than the U.S. Department of Education) who offer refinance or consolidation products for education loans, regardless of whether the creditors themselves are private persons or institutions and whether they offer products other than education loans.

The Higher Education Opportunity Act of 2008 (HEOA) amended TILA by adding new requirements that apply to creditors making “private education loans.”  33 For example, HEOA's amendments to TILA require creditors making “private education loans” to provide special disclosures;  34 prohibits creditors from co-branding with schools;  35 requires creditors to provide a 30-day rumination period;  36 and mandates that borrowers have a right to cancel within three days of fund disbursement. 37

HEOA amended TILA such that private education loans over a certain threshold—$25,000 at the time of HEOA was passed, and $50,000 after the passage of the Dodd-Frank Act  38 —were no longer excluded from coverage. 39 In relevant part, HOEA defined a “private education loan” under TILA as a loan that is (1) not “made, insured, or guaranteed under title IV of the Higher Education Act of 1965,” and (2) “issued expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender.”  40 On August 14, 2009, the Board issued final amendments to TILA's implementing regulation, Regulation Z. The Board also issued commentary to those amendments, including subpart F, which interpreted the term “private education loan” to include “loans extended to consolidate a consumer's pre-existing private education loans.”  41

Questions have arisen regarding whether the refinance and consolidation loans covered by this advisory opinion are “private education loans” under the two conditions set forth in HEOA. The first condition is met because these loans are originated by private education creditors and are not originated or insured by the Federal government or otherwise under title IV of the Higher Education Act of 1965. Thus, this advisory opinion focuses on whether such loans meet the second condition—that is, are they issued or extended by creditors “expressly for postsecondary educational expenses” ?  42 TILA is silent on the question, and the courts have not considered it. The commentary to Regulation Z states that the phrase “extended expressly [ ] for postsecondary educational expenses” includes “loans extended to consolidate a consumer's pre-existing private education loans,”  43 but it does not address loans that consolidate existing Federal education loans, nor does it refer to loans that refinance a single existing loan, whether private or Federal.

With respect to consolidation loans, the Bureau believes that TILA and Regulation Z are ambiguous as to whether a loan that consolidates existing Federal education loans is issued or extended “expressly for postsecondary educational expenses to a borrower.” In other words, it is ambiguous whether the educational purpose of the underlying loans is transferred to the consolidation loan, or if instead the express purpose of the consolidation loan is to manage existing debt, benefit from more favorable interest rates, or some other purpose. The commentary to Regulation Z resolves this ambiguity only for loans consolidating existing private education loans.

The Bureau believes that the best reading of TILA and Regulation Z is that a loan that consolidates Federal loans or a loan that refinances a Federal loan incurred expressly for postsecondary educational expenses is, itself, “expressly for postsecondary educational expenses.” Borrowers apply for these loans explicitly to consolidate loans that were originated expressly for postsecondary educational expenses, and a creditor issues them pursuant to an explicit understanding that they will be used to satisfy debt incurred expressly for postsecondary educational expenses. Thus, these loans, from the perspective of both the borrower and the creditor, are “expressly for” postsecondary education expenses. 44 Additionally, Congress included the term “borrower” (and the Board included the term “consumer”) in its definition of “private education loan,” instead of referring solely to a “student,” as in other sections of TILA. 45 This choice suggests that the statute can best be implemented by construing “private education loan” to include loans originated to consumers other than those currently in school, such as former students. 46

This reading also best implements one of the general purposes of TILA, which Congress amended in HEOA, “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.”  47 Prior to HEOA, borrowers seeking credit relating to postsecondary educational expenses would receive comprehensive disclosures if they were seeking Federal loans originated pursuant to title IV of the Higher Education Act of 1965, 48 but they would not receive even ordinary TILA disclosures for education loans over $25,000. 49 As a result, pre-HEOA borrowers were less able to compare their options. But with the TILA amendments in HEOA, Congress made more robust comparisons possible for all “private education loans,” regardless of their size.

Additionally, this reading is most consistent with the statement in the Regulation Z commentary that “loans extended to consolidate a consumer's pre-existing private education loans” are themselves private education loans originated “expressly [ ] for postsecondary educational purposes.” Nothing in the text of TILA or Regulation Z supports concluding that private education loans retain their purpose as “expressly for postsecondary educational expenses” when they are consolidated but that Federal education loans originated for the same expenses do not. 50

The Bureau also does not believe that the Comment's specific mention of “pre-existing private education loans” precludes the interpretation that consolidated pre-existing Federal loans are covered. The Board issued the commentary to Regulation Z, which interpreted the term “private education loan,” in 2009. 51 As discussed in the Background section, while there was a small market for consolidating private education loans in 2009, the private market for consolidation of Federal loans did not emerge until 2012. The Board did not receive any comments on its proposed rule that indicated the existence of such a market and no commenters sought clarity on the application of the proposed rule to Federal education loan consolidations. 52 Additionally, the relevant Comment to Regulation Z indicates that it is intended to be illustrative rather than exhaustive because it states that “[t]he term includes” loans consolidating private loans as well as loans extended for expenses incurred while the student is enrolled. 53

The above analysis addressing the consolidation of multiple Federal education loans also applies to loans that refinance a single pre-existing loan that was originated expressly for postsecondary education expenses, regardless of whether the pre-existing loan was a private or Federal loan. While the commentary refers only to consolidation of multiple pre-existing loans, the commentary is not intended to be exhaustive, 54 and the Bureau does not believe there is any principled reason to conclude that the postsecondary education purpose of multiple loans may transfer to a new loan, while the postsecondary purpose of a single loan transferred to a new loan may not. 55

Accordingly, the Bureau interprets the commentary's reference to loans that “consolidate a consumer's pre-existing private education loans” as simply referencing the type of consolidation loan that existed at the time the commentary was issued by the Board. Thus, for the reasons discussed in this advisory opinion, the Bureau interprets the phrase “expressly for postsecondary educational expenses” to include loans that either consolidate Federal education loans that were themselves originated expressly for postsecondary education expenses or to refinance a single private or Federal education loan that was originated for such purpose.

As a result, these consolidation or refinance loans are covered under the term “private education loan” in TILA and Regulation Z and are therefore subject to TILA and Regulation Z's requirements in subpart F (including Regulation Z's disclosures, prohibition on co-branding, 30-day rumination period, and a right to cancel).

This advisory opinion is an interpretive rule issued under the Bureau's authority to interpret TILA and Regulation Z, including under section 1022(b)(1) of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act, 56 which authorizes guidance as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of Federal consumer financial laws. 57

By operation of TILA section 130(f), no provision of TILA sections 130, 108(b), 108(c), 108(e), or 112 imposing any liability applies to any act done or omitted in good faith in conformity with this interpretive rule, notwithstanding that after such act or omission has occurred, the interpretive rule is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. 58

As an interpretive rule, this advisory opinion is exempt from the notice-and-comment rulemaking requirements of the Administrative Procedure Act. 59 Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 60 The Bureau has also determined that this advisory opinion does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring approval by the Office of Management and Budget under the Paperwork Reduction Act. 61

Pursuant to the Congressional Review Act, 62 the Bureau will submit a report containing this interpretive rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to the rule's published effective date. The Office of Information and Regulatory Affairs has designated this interpretive rule as not a “major rule” as defined by 5 U.S.C. 804(2).

The Director of the Bureau, Kathleen L. Kraninger, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register .

The Bureau is issuing this advisory opinion through the procedures for its Advisory Opinions Policy. 1 Refer to those procedures for more information.

According to the Bureau of Labor Statistics, nearly two-thirds of U.S. private businesses use biweekly, semimonthly, or monthly pay periods. 2 The Bureau understands that the interval of time between hours worked and receiving a paycheck can contribute to employees' financial distress, particularly for new hires when the length of time between the first day of employment and the first paycheck may be longer than subsequent paycheck intervals, depending on where the hire date falls in a pay cycle. A study by the Financial Health Network found that 38 percent of respondents cited timing mismatches between income and expenses as a reason for using short-term, small-dollar credit. 3

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all PW PW4164, PW4164-1D, PW4168, PW4168-1D, PW4168A, PW4168A-1D, and PW4170 model turbofan engines with a certain outer combustion chamber assembly and 3rd stage LPT duct segments installed. The NPRM published in the Federal Register on June 12, 2020 (85 FR 35812). The NPRM was prompted by multiple reports of damaged or failed 3rd stage LPT duct segments that resulted in engine surges, in-flight shutdowns, diversions, and air turnbacks. The reports were attributed to elevated gas path temperature at the outer diameter of the turbine flowpath and high-pressure turbine (HPT) 2nd stage blade outer air seal spallation, which led to the distortion and liberation of 3rd stage LPT duct segments. In the NPRM, the FAA proposed to require removing and replacing certain 3rd stage LPT duct segments. The FAA is issuing this AD to address the unsafe condition on these products.

The FAA received comments from two commenters. The commenters were Air Line Pilots Association, International (ALPA) and Delta Air Lines, Inc. (Delta). ALPA supported the proposal without change. Delta supported the proposal but recommended certain changes. The following presents the comments received on the NPRM and the FAA's response to each comment.

Delta requested that the FAA revise paragraph (g) of this AD to require replacement of duct segments that have operated with more than 2,500 cycles with a Talon IIB combustor. Alternatively, Delta requested the FAA revise paragraph (i) of this AD to define an “engine shop visit” as “removal and disassembly of the HPT module.” Delta noted several industry events have occurred related to the failure of 3rd stage LPT duct segments, also commonly called outer transition ducts (OTDs), on PW4000-100 engines with Talon IIB combustors. Prior information from the design approval holder indicates that industry failures have occurred only on parts that have operated more than 3,000 flight cycles with a Talon IIB combustor.

Delta further noted that paragraph (g) of the proposed rule would require that duct segments with certain part numbers be removed and replaced with new parts at every engine shop visit, defined in paragraph (i) as the “induction of an engine into the shop for maintenance involving the separation of pairs of major mating flanges.” Per this definition, engines with few cycles in service since prior OTD replacement would require installation of new hardware, even for minor repairs where maintenance of the LPT would not have otherwise been required.

Additionally, Delta commented that OTD replacement requires significant teardown of the LPT module, which will result substantial fallout and repair costs for unrelated hardware. Delta reasoned that the proposed rule would require repetitive replacement of low-time duct segments at substantial financial burden to achieve minimal risk reduction. Since industry experience has demonstrated duct segment liberation to occur on hardware above 3,000 flight cycles, Delta concluded that sufficient data should exist to establish an allowable service life that maintains an acceptable level of safety.

Delta also noted that while a cycle-based requirement would be preferable, defining an engine shop visit as “removal and disassembly of the HPT module” would maintain an acceptable level of safety. Delta commented that requiring replacement of low-time duct segments during minor repairs presents a substantial financial burden for minimal risk reduction.

The FAA disagrees with revising paragraph (g) or (i) of this AD. Requiring removal of the 3rd stage LPT duct segments at the next HPT overhaul does not adequately address the unsafe condition. The FAA's risk assessment assumed that the 3rd stage LPT duct segments would be replaced at every shop visit, which provides an acceptable level of safety. Operators may propose to the FAA an alternative method of compliance in accordance with paragraph (j) of this AD. The FAA did not change this AD.

Delta requested that the FAA revise paragraph (g) of this AD to require that 3rd stage LPT duct segments that have been removed from service be discarded, scrapped, or mutilated. Delta reasoned that the rule would apply only to PW4000-100 engines with certain combustors, but the subject part numbers are certified for installation in other engine models. Delta expressed concern that without a requirement to discard or scrap the removed duct segments, they could potentially be installed in a PW4000-94 or non-Talon-IIB PW4000-100 engine or sold to an operator without knowledge of their prior operation with a Talon IIB combustor.

The FAA disagrees with Delta's request. When parts are removed from service due to an AD, they are unserviceable unless the AD specifies otherwise. Unserviceable parts are not airworthy and should be disposed of in a manner that does not allow them to be returned to service. Operators must ensure only serviceable parts are installed on engines before approving the aircraft for return to service. The FAA did not change this AD.

Delta requested that the FAA update the proposed rule to reflect the available fleet data, which shows that failure of 3rd stage LPT duct segments has only occurred after 3,000 cycles or greater in operation on engines with a Talon IIB combustor. Delta stated that the Discussion paragraph of the proposed rule does not provide prior service history of LPT duct segments that have failed in-service. Delta further noted that prior communications from the design approval holder indicate that industry failures occurred on parts that operated 3,000 flight cycles or more under exposure to the higher-than-expected temperatures with a Talon IIB combustor installed.

The FAA disagrees. The Discussion paragraph of the NPRM provides an adequate discussion of the failure in service of 3rd stage LPT duct segments. The FAA did not change this AD.

Delta requested that the FAA add PW Service Bulletin (SB) PW4G-100-72-220 to the Related Service Information paragraph of this AD. Delta noted that the accomplishment of SB PW4G-100-72-220 installs a Talon IIB combustor, and 3rd stage duct segments operated on a post-SB engine would be subject to the proposed rule as well.

The FAA agrees and has added PW SB PW4G-100-72-220 to the Related Service Information paragraph of this AD.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed PW SB No. PW4G-100-72-214, dated December 15, 2011; PW SB No. PW4G-100-72-219, Revision 1, dated October 5, 2011; PW SB No. PW4G-100-72-253, dated November 24, 2014; and PW SB No. PW4G-100-72-220, Revision 4, dated September 30, 2011. PW SB No. PW4G-100-72-214 introduces the Talon IIB outer combustion chamber assembly that reduces the combustor exit temperature levels at the outer diameter of the combustor. PW SB No. PW4G-100-72-219 describes procedures for installing the Advantage70 engine upgrade kit to improve engine reliability and fuel consumption, and to reduce maintenance costs. PW SB No. PW4G- 100-72-253 describes procedures for replacing the outer combustion chamber assembly waspaloy nuts. PW SB PW4G-100-72-220 describes procedures for installing the Advantage70 engine upgrade kit to improve engine reliability and fuel consumption, reduce maintenance costs, and convert engine thrust rating.

The FAA estimates that this AD affects 99 engines installed on airplanes of U.S. registry.

The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

Discussion

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2018-14-02, Amendment 39-19322 (83 FR 31650, July 9, 2018) (“AD 2018-14-02”). AD 2018-14-02 applied to certain The Boeing Company Model 777-200, -200LR, -300, and -300ER series airplanes. The NPRM published in the Federal Register on July 28, 2020 (85 FR 45357). The NPRM was prompted by reports that additional areas of BMS 8-39 flexible urethane foam were found on the overhead panel support structure in the flight compartment. The degradation of the foam over time increases the potential for an uncontrolled fire below the passenger compartment floor and other locations outside the areas covered by smoke detection and fire protection systems. The NPRM proposed to continue to require the actions in AD 2018-14-02, and, for certain airplanes, the NPRM also proposed to require an inspection of the foam insulation on the overhead panel support structure, and replacement if necessary. The FAA is issuing this AD to address BMS 8-39 flexible urethane foam found in certain areas of an airplane, which, if exposed to an ignition source, could cause loss of control of the airplane during a fire.

The FAA gave the public the opportunity to participate in developing this AD. The FAA has considered the comments received. Boeing and United Airlines indicated their support for the NPRM.

The FAA reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD as proposed, except for minor editorial changes. The FAA has determined that these minor changes:

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

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

The FAA reviewed Boeing Special Attention Service Bulletin 777-25-0621, Revision 2, dated February 28, 2020. This service information describes procedures for removal and replacement of the foam on the overhead panel support structure; a general visual inspection for foam insulation on the dripshield above the overhead panel support structure; a detailed inspection for foam insulation on the overhead panel support structure; and replacement if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 132 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. The NPRM published in the Federal Register on June 30, 2020 (85 FR 39108). The NPRM was prompted by a determination that the upper wing skin at engine nacelle points may be subject to undetected cracking. The NPRM proposed to require repetitive ultrasonic inspections of the upper wing skin at certain engine strut positions for cracking; repetitive detailed and ultrasonic inspections of the strut lower spar fitting, diagonal brace strut end clevis, and diagonal brace wing attach end clevis for cracking; repetitive detailed inspections of lower link fitting at certain engine strut positions for cracking; and applicable on-condition actions.

The FAA is issuing this AD to address undetected cracking in the upper wing skin, strut lower spar fitting, or clevis lugs at either end of the diagonal brace and lower link fitting. This condition, if not addressed, could adversely affect the structural integrity of the engine strut and may lead to the separation of the strut to wing box assembly.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA has considered the comments received. Boeing stated that it concurred with the NPRM.

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

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

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

The FAA reviewed Boeing Alert Requirements Bulletin 747-57A2363 RB, dated December 23, 2019. The service information describes procedures for ultrasonic inspections of the upper wing skin at engine strut positions 1 through 4 for cracking; detailed and ultrasonic inspections of the strut lower spar fitting, diagonal brace strut end clevis, and diagonal brace wing attach end clevis for cracking; detailed inspections of lower link fitting at engine strut positions 1 through 4 for cracking; and applicable on-condition actions. On-condition actions include repair. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 125 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

Discussion

The FAA issued AD 2020-01-17, Amendment 39-19823 (85 FR 5310, January 30, 2020) (AD 2020-01-17), which applied to all Airbus SAS Model A318, A319, A320, and A321 series airplanes. AD 2020-01-17 required repetitive checks of the pressure gauges on the inflation reservoir of each emergency escape slide/raft to determine the amount of pressure and, depending on findings, accomplishment of applicable corrective actions. The FAA issued AD 2020-01-17 to address insufficient reservoir pressure in an emergency escape slide/raft, which would prevent the deployment of the emergency escape slide/raft during an emergency, possibly resulting in injury to the occupants.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0236, dated October 27, 2020 (EASA AD 2020-0236) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, -133, -151N, -153N, and -171N airplanes; Model A320-211, -212, -214, -215, -216, -231, -232, -233, -251N, -252N, -253N, -271N, -272N, and -273N airplanes; and Model A321 series airplanes. Model A319-153N and A320-215 airplanes are not certified by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability.

This AD was prompted by a report that during airplane boarding a loud bang was heard. A subsequent inspection revealed that one emergency escape slide/raft was found with zero reservoir pressure, due to a burst rupture disk assembly in the inflation reservoir, which was probably caused by a manufacturing defect. This AD was also prompted by the determination that additional parts are subject to the unsafe condition, and by the availability of an optional terminating action for the repetitive checks. The FAA is issuing this AD to address insufficient reservoir pressure in an emergency escape slide/raft, which would prevent the deployment of the emergency escape slide/raft during an emergency, possibly resulting in injury to the occupants. See the MCAI for additional background information.

EASA AD 2020-0236 describes procedures for repetitive checks of the pressure gauge on the inflation reservoir of each emergency escape slide/slide raft to determine the amount of pressure, and applicable corrective actions. The corrective actions include, among other things, replacement of any affected emergency escape slide/raft or inflation reservoir. EASA AD 2020-0236 also describes procedures for a modification or replacement of affected parts, which would eliminate the need for the repetitive pressure checks.

This AD also requires EASA AD 2019-0316, dated December 23, 2019, which the Director of the Federal Register approved for incorporation by reference as of February 14, 2020 (85 FR 5310, January 30, 2020).

This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

This AD retains the requirements of AD 2020-01-17, and requires accomplishing the actions specified in EASA AD 2020-0236 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD. Accomplishment of the initial pressure check specified in EASA AD 2020-0236 terminates the requirements of AD 2020-01-17.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities (CAAs) to use this process. As a result, EASA AD 2020-0236 is incorporated by reference in this AD. This AD, therefore, requires compliance with EASA AD 2020-0236 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2020-0236 that is required for compliance with EASA AD 2020-0236 is available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-1105.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because if a rupture disk assembly in the inflation reservoir of an emergency escape slide/slide raft burst, it would result in a sudden loss of reservoir pressure and prevent the deployment of the emergency escape slide/raft during an emergency, possibly resulting in injury to the occupants. In addition, the compliance time for the required action is shorter than the time necessary for the public to comment and for publication of the final rule. Therefore, the FAA finds good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reasons stated above, the FAA finds that good cause exists for making this amendment effective in less than 30 days.

The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address under the ADDRESSES section. Include “Docket No. FAA-2020-1105; Project Identifier MCAI-2020-01459-T” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to https://www.regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this final rule.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Sanjay Ralhan, Aerospace Engineer, Large Aircraft Section, International Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email Sanjay.Ralhan@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

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

The FAA estimates that this AD affects 1,680 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has received no definitive data on which to base the cost estimates for the on-condition actions specified in this AD.

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2018-16-05, Amendment 39-19345 (83 FR 38250, August 6, 2018) (“AD 2018-16-05”). AD 2018-16-05 applied to certain The Boeing Company Model 757-200, -200PF, -200CB, and -300 series airplanes. The NPRM published in the Federal Register on December 17, 2019 (84 FR 68822). The NPRM was prompted by reports of bolt rotation in the engine drag fitting joint and fastener heads; an inspection of the fastener holes revealed that cracks were found in the skin. The NPRM was also prompted by a report of multiple cracks found in the drag fitting at fastener holes during inspections required by AD 2018-16-05. The NPRM proposed to continue to require repetitive inspections for skin cracking and shim migration at the upper link drag fittings, diagonal brace cracking, and fastener looseness; and applicable on-condition actions. The NPRM also proposed to reduce the compliance times for certain inspections and add repetitive inspections at certain fastener hole locations and applicable on-condition actions. The FAA is issuing this AD to address cracking in the wing upper skin and forward drag fittings, which could lead to a compromised upper link and reduced structural integrity of the engine strut.

The FAA gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.

United Airlines (United) and American Airlines (American) stated their concurrence with the NPRM.

Aviation Partners Boeing (APB) stated that they have reviewed the NPRM and have determined that the installation of winglets per Supplemental Type Certificate (STC) ST01518SE does not affect the accomplishment of the manufacturer's service instructions.

The FAA agrees with the commenter that STC ST01518SE does not affect the accomplishment of the manufacturer's service instructions. The FAA has redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD and added paragraph (c)(2) to this AD to state that installation of STC ST01518SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST00830SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.

American and United requested that the repetitive interval for the general visual inspection of the diagonal brace and diagonal brace fittings be increased from 2,100 flight cycles (FC) to 3,000 FC. In addition, American requested that the initial interval for the inspection also be increased to 3,000 FC. The commenters maintained that 2,100 FC does not align with their maintenance program intervals, which causes a significant burden on operators. United and American also stated that they have completed the inspection of 13 and 20 airplanes respectively and found no evidence of cracking, which indicates that the existing 3,000 FC interval is conservative.

The FAA disagrees with the requested change to the indicated repetitive inspection interval and initial interval. The FAA acknowledges that incorporating the interval into the existing maintenance program could be challenging for some operators. However, the inspection involves a visual assessment that requires limited disassembly and could be carried out without placing the aircraft in a heavy maintenance configuration. The reduced intervals are based on the re-assessment of the damage tolerance analysis to adjust for eleven additional crack findings since issuance of Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017. The FAA has determined that the reduced inspection interval is necessary to avoid jeopardizing safety. The FAA has not changed the initial and repetitive inspection intervals required in this AD.

Boeing requested that clarification be added to the proposed AD to specify that the grace period provided for the newly proposed requirements cannot be used to extend compliance times for actions required by AD 2018-16-05. Boeing suggested that the FAA add a new paragraph to the proposed AD that would explicitly re-state the requirements of AD 2018-16-05. Boeing asserted that the new paragraph would maintain the requirements of AD 2018-16-05 only until the actions of paragraph (g) of the proposed AD are implemented.

The FAA does not agree to restate the requirements of AD 2018-16-05 or to add a new paragraph regarding the compliance time for the previously required actions. As explained in the NPRM, the requirements of AD 2018-16-05 are referenced in the service information required in this AD. Except for the diagonal brace inspections, the compliance times given in Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019, for all actions required by AD 2018-16-05 are unchanged. The compliance times are defined both in terms of the effective date of AD 2018-16-05 and the effective date of the service information. For the diagonal brace inspections, the compliance time may provide an additional grace period; however, this affects only one inspection cycle, is applicable to a small number of operators, and is an acceptable compliance time to ensure safety. The FAA has determined all other compliance times will ensure an acceptable level of safety. This AD has not been changed in this regard.

American and Boeing requested that the proposed AD be revised to include clarification of the effective date of AD 2018-16-05. The commenters observed that some compliance times are given as the number of flight cycles after the “effective date of AD 2018-16-05,” and that where Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, uses that phrase, the proposed AD should require using “September 10, 2018.” American asserted that the compliance times should be in terms of the date, not of the superseded AD, and that determining the effective date of the replaced AD could be difficult otherwise. The commenters asserted that including this clarification in the new AD would avoid confusion for operators.

The FAA agrees to clarify the effective date of AD 2018-16-05. The FAA has added an exception in paragraph (h)(3) to indicate that, where Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019, uses the phrase “the effective date of AD 2018-16-05,” this AD requires using “September 10, 2018 (the effective date of AD 2018-16-05).”

American, Boeing, and FedEx requested that the proposed AD give credit for previously accomplished actions that were similar to or the same as the actions specified in Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019. American noted that Revision 1 of the service bulletin specifies a high frequency eddy current (HFEC) inspection for cracking at fastener locations 11-18 for airplanes already inspected in accordance with the original issue of the service bulletin. American and Boeing asserted that operators of airplanes with fastener holes 1-10 already inspected per Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, should get credit for the initial inspection of fastener holes 1-10.

The FAA agrees and has added paragraph (i) to this AD to provide credit for previous actions accomplished using Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017. The FAA has also reidentified subsequent paragraphs accordingly. As specified in Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019, the new actions for fastener locations 11-18 must still be accomplished for airplanes on which the original revision of the RB was previously done.

American, Delta Air Lines, FedEx, and United requested that the proposed AD be changed to allow AMOCs previously approved for AD 2018-16-05 for the corresponding requirements of this AD. American, FedEx, and United observed that the inspections specified in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, relating to fastener locations 1-10, as well as the repetitive inspections for these locations, do not change with Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019. The commenters asserted that the repairs and corresponding AMOCs should continue to be acceptable.

The FAA agrees with the requested change. The FAA has changed paragraph (j)(4) of this AD (referred to as paragraph (i)(4) in the proposed AD) to specify that AMOCs granted to AD 2018-16-05 are acceptable as AMOCs to this AD for the corresponding requirements.

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

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

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

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

The FAA reviewed Boeing Alert Requirements Bulletin 757-57A0073 RB, Revision 1, dated August 1, 2019. This service information describes procedures for repetitive inspections, including general visual, detailed, and HFEC inspections, for loose fasteners, skin cracking, and shim migration at the upper link drag fittings and for cracking in the diagonal brace and diagonal brace fittings and applicable on-condition actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 561 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System.

The FAA published a notice of proposed rulemaking (NPRM) for Docket No. FAA-2020-0667 in the Federal Register (85 FR 47317; August 5, 2020), amending VOR Federal airways V-15, V-26, V-55, V-78, V-100, V-159, V-175, V-219, and V-307, and RNAV routes T-285 and T-354 in the Northcentral United States. The proposed amendment actions were due to the planned decommissioning of the VOR portion of the Park Rapids, MN, VOR/DME; Sioux City, IA, VORTAC; and Huron, SD, VORTAC NAVAIDs. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.

Subsequent to the NPRM, the FAA published a rule for Docket No. FAA-2020-0189 in the Federal Register (85 FR 50777; August 18, 2020), amending VOR Federal airway V-55 by removing the airway segment between the Pullman, MI, VOR/DME and the intersection of the Green Bay, WI, VORTAC 270° and Oshkosh, WI, VORTAC 339° radials (BIPID fix). That airway amendment, effective November 5, 2020, is included in this rule.

Additionally, subsequent to the NPRM, the FAA published a rule for Docket No. FAA-2020-0294 in the Federal Register (85 FR 51324; August 20, 2020), amending RNAV route T-354 by replacing the Siren DME route point with the SSKYY, WI, waypoint and extending the route southeastward from the SSKYY, WI, waypoint to the Cunningham, KY, VOR/DME. Those route amendments, effective November 5, 2020, are also included in this rule.

VOR Federal airways are published in paragraph 6010(a) and RNAV T-routes are published in paragraph 6011 of FAA Order 7400.11E dated July 21, 2020, and effective September 15, 2020, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document will be subsequently published in the Order.

This document amends FAA Order 7400.11E, Airspace Designations and Reporting Points, dated July 21, 2020, and effective September 15, 2020. FAA Order 7400.11E is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11E lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is amending Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying VOR Federal airways V-15, V-26, V-55, V-78, V-100, V-159, V-175, V-219, and V-307, and RNAV routes T-285 and T-354. The planned decommissioning of the VOR portion of the Park Rapids, MN, VOR/DME; Sioux City, IA, VORTAC; and Huron, SD, VORTAC NAVAIDs has made this action necessary. The VOR Federal airway changes are outlined below.

V-15: V-15 extends between the Navasota, TX, VOR/DME and the Bonham, TX, VORTAC; between the Okmulgee, OK, VOR/DME and the Neosho, MO, VOR/DME; and between the Sioux City, IA, VORTAC and the Minot, ND, VOR/DME. The airway segment overlying the Sioux City, IA, and Huron, SD, VORTACs between the Sioux City, IA, VORTAC and the Aberdeen, SD, VOR/DME is removed. The unaffected portions of the existing airway remain as charted.

V-26: V-26 extends between the Blue Mesa, CO, VOR/DME and the White Cloud, MI, VOR/DME. The airway segment overlying the Huron, SD, VORTAC between the Pierre, SD, VORTAC and the Redwood Falls, MN, VOR/DME is removed. The unaffected portions of the existing airway remain as charted.

V-55: V-55 currently extends between the Dayton, OH, VOR/DME and the Pullman, MI, VOR/DME; and between the Park Rapids, MN, VOR/DME and the Bismarck, ND, VOR/DME. The airway segment overlying the Park Rapids, MN, VOR/DME between the Park Rapids, MN, VOR/DME and the Grand Forks, ND, VOR/DME is removed. The unaffected portions of the existing airway remain as charted.

V-78: V-78 extends between the Huron, SD, VORTAC and the Escanaba, MI, VOR/DME; and between the Pellston, MI, VORTAC and the Saginaw, MI, VOR/DME. The airway segment overlying the Huron, SD, VORTAC between the Huron, SD, VORTAC and the Watertown, SD, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

V-100: V-100 extends between the Medicine Bow, WY, VOR/DME and the Litchfield, MI, VOR/DME. The airway segment overlying the Sioux City, IA, VORTAC between the O'Neill, NE, VORTAC and the Fort Dodge, IA, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

V-159: V-159 extends between the Virginia Key, FL, VOR/DME and the Vulcan, AL, VORTAC; and between the Holly Springs, MS, VORTAC and the Huron, SD, VORTAC. The airway segment overlying the Sioux City, IA, and Huron, SD, VORTACs between the Omaha, IA, VORTAC and the Huron, SD, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

V-175: V-175 currently extends between the Malden, MO, VORTAC and the Winnipeg, MB, Canada, VORTAC. The airspace within Canada is excluded. The airway segment overlying the Sioux City, IA, VORTAC between the Des Moines, IA, VORTAC and the Worthington, MN, VOR/DME is removed; and the airway segment overlying the Park Rapids, MN, VOR/DME between the Alexandria, MN, VOR/DME and the Winnipeg, MB, Canada, VORTAC is removed. The exclusion statement for the airspace within Canada is also removed. The unaffected portions of the existing airway remain as charted.

V-219: V-219 extends between the Hayes Center, NE, VORTAC and the Sioux City, IA, VORTAC. The airway segment overlying the Sioux City, IA, VORTAC between the Norfolk, NE, VOR/DME and the Sioux City, IA, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

V-307: V-307 extends between the Harrison, AR, VOR/DME and the Sioux City, IA, VORTAC. The airway segment overlying the Sioux City, IA, VORTAC between the Omaha, IA, VORTAC and the Sioux City, IA, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

The RNAV route changes are outlined below.

T-285: T-285 extends between the North Platte, NE, VOR/DME and the Huron, SD, VORTAC. The Huron, SD (HON), route point is changed from being listed as “VORTAC” to “DME.” The existing RNAV route remains as charted.

T-354: T-354 extends between the Park Rapids, MN, VOR/DME and the Cunningham, KY, VOR/DME. The Park Rapids, MN (PKD), route point is changed from being listed as “VOR/DME” to “DME” and a route segment extending northwestward from the Park Rapids, MN, DME to the BYZIN, ND, waypoint is added. The existing RNAV route remains as charted with the addition of the route segment between the BYZIN, ND, waypoint and the Park Rapids, MN, DME.

All NAVAID radials listed in the VOR Federal airway descriptions below are unchanged and stated in True degrees.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action of amending VOR Federal airways V-15, V-26, V-55, V-78, V-100, V-159, V-175, V-219, and V-307, and RNAV routes T-285 and T-354, due to the planned decommissioning of the VOR portion of the Park Rapids, MN, VOR/DME; Sioux City, IA, VORTAC; and Huron, SD, VORTAC NAVAIDs, qualifies for categorical exclusion under the National Environmental Policy Act and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points). As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. The FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System.

The FAA published a notice of proposed rulemaking for Docket No. FAA-2020-0654 in the Federal Register (85 FR 44801; July 24, 2020), amending VOR Federal airways V-53, V-115, and V-140, and RNAV T-routes T-215 and T-323; and removing VOR Federal airway V-339 in the vicinity of Hazard, KY. The proposed amendment and revocation actions were due to the planned decommissioning of the VOR portion of the Hazard, KY, VOR/DME. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.

VOR Federal airways are published in paragraph 6010(a) and RNAV T-routes are published in paragraph 6011 of FAA Order 7400.11E dated July 21, 2020, and effective September 15, 2020, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document will be subsequently published in the Order.

This document amends FAA Order 7400.11E, Airspace Designations and Reporting Points, dated July 21, 2020, and effective September 15, 2020. FAA Order 7400.11E is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11E lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is amending Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying VOR Federal airways V-53, V-115, and V-140, and RNAV routes T-215 and T-323; and removing VOR Federal airway V-339. The planned decommissioning of the VOR portion of the Hazard, KY, VOR/DME NAVAID has made this action necessary. The VOR Federal airway changes are outlined below.

V-53: V-53 extends between the Charleston, SC, VOR/Tactical Air Navigation (VORTAC) and the Brickyard, IN, VOR/DME. The airspace within R-3401B is excluded. The airway segment overlying the Hazard, KY, VOR/DME between the Holston Mountain, TN, VORTAC and the Lexington, KY, VOR/DME is removed. The unaffected portions of the existing airway remain as charted.

V-115: V-115 extends between the Crestview, FL, VORTAC and the Parkersburg, WV, VORTAC. The airway segment overlying the Hazard, KY, VOR/DME between the Volunteer, TN, VORTAC and the Charleston, WV, VORTAC is removed. The unaffected portions of the existing airway remain as charted.

V-140 : V-140 extends between the Panhandle, TX, VORTAC and the Casanova, VA, VORTAC. The airway segment overlying the Hazard, KY, VOR/DME between the London, KY, VOR/DME and the Bluefield, WV, VOR/DME is removed. The unaffected portions of the existing airway remain as charted.

V-339: V-339 extends between the Hazard, KY, VOR/DME and the Falmouth, KY, VOR/DME. The airway is removed in its entirety.

The RNAV T-route changes are outlined below.

T-215: T-215 extends between the Lexington, KY, VOR/DME and the GAMKE, IN, waypoint (WP). The route is extended southeastward from the Lexington, KY, VOR/DME to the Holston Mountain, TN, VORTAC. Additionally, the type of facility for Lexington, KY, is corrected from “VORTAC” to “VOR/DME” and the geographic coordinates of each route point are updated to be expressed in degrees, minutes, seconds, and hundredths of a second.

T-323: T-323 extends between the CROCS, GA, WP and the HIGGI, NC, WP. The route is extended northward from the HIGGI, NC, WP to the Hazard, KY, DME. Additionally, the geographic coordinates of each route point are updated to be expressed in degrees, minutes, seconds, and hundredths of a second.

All NAVAID radials in the VOR Federal airway descriptions below are unchanged and stated in True degrees.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action of amending VOR Federal airways V-53, V-115, and V-140, and RNAV routes T-215 and T-323; and removing VOR Federal airway V-339, due to the planned decommissioning of the VOR portion of the Hazard, KY, VOR/DME NAVAID, qualifies for categorical exclusion under the National Environmental Policy Act and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points). As such, this action is not expected to result in any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. The FAA has determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

The United States Agency for Global Media (“USAGM”) is an agency of the Federal Government that exercises authority over non-military United States government broadcasting. USAGM, which was created by the International Broadcasting Act of 1994 under a different name, currently operates five networks—Voice of America (“VOA”), the Office of Cuba Broadcasting (“OCB”), Radio Free Europe/Radio Liberty (“RFE/RL”), Radio Free Asia (“RFA”) and the Middle East Broadcasting Networks (“MBN”) (collectively the “USAGM Networks” or “Networks”).

On June 4, 2020, the Broadcasting Board of Governors (“BBG”), USAGM's leadership at the time, promulgated a regulation governing internal agency operations, Firewall and Highest Standards of Professional Journalism, 85 FR 36150 (June 15, 2020) (codified at 22 CFR part 531) (the “Regulation”) that purported to implement section 305(b) of International Broadcasting Act (“IBA”) (22 U.S.C. 6204(b)).

The Regulation was promulgated only when it became apparent that the leadership of USAGM was about to change via Senate confirmation of a USAGM Chief Executive Officer (“CEO”). See Firewall and Highest Standards of Professional Journalism, 85 FR at 36150 (expressly identifying the pending end of the Board's tenure as the motivating factor for the timing and issuance of the Regulation). Senate confirmation of a CEO caused the BBG to dissolve, and transferred all of its powers to the CEO. See 22 U.S.C. 6203(b)(1).

At its core, the Regulation asserts that “a firewall exists between anybody involved with any aspect of journalism ( e.g., the creation, editing, reporting, distributing, etc., of content) and everyone else in the organization,” and that this former Board-preferred policy is violated when anyone outside of the “newsroom” “attempts to direct, pressure, coerce, threaten, interfere with, or otherwise impermissibly influence any of the USAGM Networks, including their leadership, officers, employees, or staff, in the performance of their journalistic and broadcasting duties and activities.” 22 CFR 531.3(b), (c). This regulatory instruction by its terms suggests USAGM is a typical broadcasting organization, which squarely contradicts USAGM's statutory mandate to promote particular United States values and interests. See, e.g., 22 U.S.C. 6202(a)(1)-(2) (mandating that United States international broadcasting be consistent with United States foreign policy objectives, international telecommunications policies, and United States treaty obligations); id. Section 6202(a)(8) (mandating the promotion of “respect for human rights, including freedom of religion”). Unlike private broadcasting organizations, the mission of USAGM from its statutory origins has been to support United States foreign policy goals by furthering American values and facilitating the dissemination of objectively accurate factual news and information overseas. See United States Information and Educational Exchange Act of 1948, Public Law 80-402, section 2, 62 Stat. 6, 6 (1948); see also, e.g., id. section 6201(2) (noting that the values furthered by the agency such as the “[o]pen communication of information and ideas among the peoples of the world,” further international peace and stability, and serve “the interests of the United States”); id. section 6202(a)(1), (3) (requiring United States broadcasting to “be consistent with the broad foreign policy objectives of the United States” and with United States treaty obligations); id. section 6202(b)(1), (3) (mandating that United States international broadcasting include “news which is consistently reliable and authoritative, accurate, objective, and comprehensive” and constitutes a “clear and effective presentation of the policies of the United States Government and responsible discussion and opinion on those policies”); id. section 6202(b)(4) (requiring United States international broadcasting to include “the capability to provide a surge capacity to support United States foreign policy objectives during crises abroad”).

Upon taking office, the CEO directed a review of the Regulation and sought external legal counsel.

The Regulation is hereby repealed.

Since United States international broadcasting was first codified in 1948, the statutory objective was—and still is—“to enable the Government of the United States to promote a better understanding of the United States in other countries . . . [including by] an information service to disseminate abroad information about the United States, its people, and policies . . . .” United States Information and Educational Exchange Act of 1948, Public Law 80-402, section 2, 62 Stat. 6, 6 (1948) (codified at 22 U.S.C. 1431).

When VOA was codified in statute in 1976, Congress made clear that VOA's purpose was to serve American interests abroad. VOA was to “communicat[e] directly with the peoples of the world by radio” to serve the “long-range interests of the United States” as governed by enumerated principles which have been codified in the VOA Charter. “VOA will serve as a consistently reliable and authoritative source of news [that is] accurate, objective, and comprehensive”; “represent America . . . and . . . present a balanced and comprehensive projection of significant American thought”; and “present the policies of the United States clearly and effectively, and . . . present responsible discussion and opinion on these policies.” Foreign Relations Authorization Act, FY 1977, Public Law 94-350, section 206, 90 Stat. 823, 831-32 (1976).

The current statutory mission of USAGM is to serve United States interests through Government sponsored news abroad. Under the IBA, United States international broadcasting must:

• “[B]e consistent with the broad foreign policy objectives of the United States.” Id. section 6202(a)(1).

• “[B]e consistent with the international telecommunications policies and treaty obligations of the United States.” Id. section 6202(a)(2).

• “[I]nclude a balanced and comprehensive projection of United States thought and institutions, reflecting the diversity of United States culture and society.” Id. section 6202(b)(2).

• “[I]nclude clear and effective presentation of the policies of the United States Government and responsible discussion and opinion on those policies, including editorials, broadcast by the Voice of America, which present the views of the United States Government.” Id. section 6202(b)(3).

• Maintain “the capability to provide a surge capacity to support United States foreign policy objectives during crises abroad.” Id. section 6202(b)(4).

• “[P]romote respect for human rights, including freedom of religion.” Id. section 6202(a)(8). VOA is further required to “present a balanced and comprehensive projection of significant American thought and institutions” ( id. section 6202(c)(2)) and to “present the polices of the United States clearly and effectively, and . . . also present responsible discussion and opinion on these policies.” ( Id. section 6202(c)(3)). These tasks are seen as essential to serving “[t]he long range interests of the United States.” Id. section 6202(c). 1

Because of this special mission, USAGM and its Networks do not function as a traditional news or media agency and were never intended to do so. See, e.g., id. section 6202(a)(3) (prohibiting United States international broadcasting from “duplicat[ing] the activities of private United States broadcasters”); see also id. section 6202(a)(4) (prohibiting United States international broadcasting from “duplicat[ing] the activities of government supported broadcasting entities of other democratic nations”). By design, their purpose and focus is foreign relations and the promotion of American objectives—not simply presenting news or engaging in journalistic expression. For example, the Networks are to articulate the American perspective while countering international views that undermine American values and freedom, or that might aid our enemies' messaging, by providing a “clear and effective presentation of the policies of the United States Government and responsible discussion and opinion on those policies.” Id. section 6202(b)(3). They also counter soft-power through news in countries without a free media by presenting “a variety of opinions and voices from within particular nations and regions prevented by censorship or repression from speaking to their fellow countrymen.” Id. section 6202(b)(7).

By law, the USAGM networks must “not duplicate the activities of private United States broadcasters” ( id. section 6202(a)(3)) or “the activities of government supported broadcasting entities of other democratic nations.” ( Id. section 6202(a)(4)). Under the Smith-Mundt Act of 1948 (as amended) USAGM may broadcast only news “intended for foreign audiences abroad.” Id. section 1461(a) (emphasis added). And “[n]o funds authorized to be appropriated to the Department of State or the Broadcasting Board of Governors shall be used to influence public opinion in the United States.” Id. section 1461-1a(a).

The IBA grants the CEO a number of broad authorities to carry out these weighty responsibilities to promote American interests abroad. 2 In particular the CEO has express power:

• “To direct and supervise all broadcasting activities conducted pursuant to this title.” Id. section 6204(a)(1).

• “To review and evaluate the mission and operation of, and to assess the quality, effectiveness, and professional integrity, of all such activities within the context of the broad foreign policy objectives of the United States.” Id. section 6204(a)(2).

• “To ensure that United States international broadcasting is conducted in accordance with the standards and principles” set forth in the IBA. Id. section 6204(a)(3).

• “To review, evaluate, and determine, at least annually, after consultation with the Secretary of State, the addition or deletion of language services.” Id. section 6204(a)(4).

• To take a number of different expansive personnel, materiel, and contracting actions. Id. section 6204(a)(8), (10)-(11), (15)-(19).

• “To redirect or reprogram funds within the scope of any grant or cooperative agreement, or between grantees, as necessary.” Id. section 6204(a)(21).

• To appoint the Officers and Directors of the USAGM Networks who serve at his pleasure. Id. section 6209(d).

The CEO also “shall regularly consult with and seek from the Secretary of State guidance on foreign policy issues.” Id. section 6209b.

Article II imbues the statutory scheme charging USAGM to promote American interests abroad. USAGM, which is now overseen by a single CEO, is not an “independent establishment.”  3 Its CEO is “appointed by the President, by and with the advice and consent of the Senate.” 22 U.S.C. 6203(b)(1). The CEO thus has both the power and the duty to execute the applicable laws of the United States under the President's supervision. See, e.g., Myers v. United States, 272 U.S. 52, 135 (1926); Statute Limiting the President's Authority to Supervise the Director of the Center for Disease Control in the Distribution of an AIDS Pamphlet, 12 Op. OLC 47, 56-58 (Mar. 11, 1988); The Jewels of the Princess Orange, 2 U.S. Op. Att'y Gen. 482, 486-87 (Dec. 31, 1831). Executive power is at its zenith in the realm of foreign affairs.

“[T]he President alone has the power to speak or listen as a representative of the nation.” United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 319 (1936). Therefore, the President is the “`sole organ of the federal government in the field of international relations'” ( Id. at 320 (internal citation omitted)) and the President has “unique responsibility” for the conduct of “foreign . . . affairs.” ( Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155, 188 (1993)). Because USAGM's mandate is to further the foreign policy interests of the United States, the President's appointee necessarily must have the authority to participate in the substance of advancing that mission. 4

The Regulation begins by asserting that USAGM is “an independent establishment of the federal government,” ( Firewall and Highest Standards of Professional Journalism, 85 FR 36150) and claims that USAGM networks necessarily enjoy full editorial independence in order to maintain their “professional independence and integrity,” per section 305(b) of the IBA. This statutorily mandated firewall protects the independence of the networks by insulating their editorial decisions from interference from those outside of the network, or from impermissible considerations, as set forth in 22 CFR 531.1(a). Section 305(b) of the IBA, however, provides only that “[t]he Secretary of State and the Chief Executive Officer, in carrying out their functions, shall respect the professional independence and integrity of the Board, its broadcasting services, and the grantees of the Board.” 22 U.S.C. 6204(b).

The Regulation then posits that the “newsroom” of each USAGM Network is “fully insulated” from what it calls “ any political or other external pressures or processes that would be inconsistent with the highest standards of professional journalism.” Id. section 531.2(b) (emphasis added). At its core, the Regulation asserts it is violated when any person within the Executive Branch or a Network, but outside the newsroom, attempts to direct, pressure, coerce, threaten, interfere with, or otherwise impermissibly influence any of the USAGM networks, including their leadership, officers, employees, or staff, in the performance of their journalistic and broadcasting duties and activities. It is also violated when someone inside the newsroom acts in furtherance of or pursuant to such impermissible influence. Id. section 531.3(c). The Regulation purports to bind not only USAGM officials, but the entire Executive Branch—up to and including the President of the United States. The Regulation's only exception to this general edict is that the firewall does not prevent a USAGM CEO or Board from undertaking the same type of direction and oversight that those in equivalent leadership positions in an organization overseeing other reputable news organizations may provide, in a manner consistent with the highest standards of professional journalism. Id. section 531.3(e)(3).

There is a significant tension between the Regulation on the one hand, and USAGM's statutory mandate and the CEO's responsibilities and powers under statute and Article II on the other.

The Regulation relies solely on section 305(b) of the IBA for its conclusion that “USAGM networks necessarily enjoy full editorial independence in order to maintain their `professional independence and integrity.' ” Id. § 531.1(a).

But section 305(b) clearly does not use the terms “respect” or “independence” in anything approaching the concept of structural, managerial, or policy independence, or the manner in which those terms may apply to any given private news network. Rather, the statutory reference to “professional independence” requires the preservation of professionalism and technical excellence. See, e.g., Oxford English Dictionary (“professional”: “[c]haracteristic of or suitable for a professional person”; “[t]hat has or displays the skill, knowledge, experience, standards, or expertise of a professional; competent, efficient”; “[t]hat has knowledge of the theoretical or scientific parts of a trade or occupation, as distinct from its practical or mechanical aspects”; “that raises a trade to a learned profession”); see also, e.g., 22 U.S.C. 6202(a)(5) (requiring United States international broadcasting to “be conducted in accordance with the highest professional standards of broadcast journalism”); Id. section 6202(a)(6)-(7) (requiring broadcasting to “be based on reliable information” and “be designed so as to effectively reach a significant audience”); Id. section 6202(b) (mandating, e.g., the provision of “news which is consistently reliable and authoritative, accurate, objective, and comprehensive,” presentations that are “clear and effective,” and “reliable research capacity”).

By its terms, the IBA's reference to “professional independence” is distinct from other statutory provisions purporting to establish entities independent from managerial or policy control or significant executive supervision. The phrase “professional independence” appears nowhere else in the United States Code. Statutory uses of the term “independen[t]” reference separate or freestanding entities, in contrast, and typically employ just the standalone adjective “independent” or “independence.” See, e.g., 5 U.S.C. 105 (“For the purpose of this title, `Executive agency' means an Executive department, a Government corporation, and an independent establishment.” (emphasis added)); 24 U.S.C. 30 (“head of the department or independent agency” (emphasis added)); 42 U.S.C. 1962b-1(b) (“each Federal department or independent agency” (emphasis added)); 44 U.S.C. 1907 (referencing “executive departments” and “independent agencies”).

Further, as discussed, USAGM Networks are statutorily prohibited from competing with private “United States broadcasters” and other “state supported broadcasting” from democratic nations, and they cannot seek to influence public opinion in the United States. 22 U.S.C. 6202(a)(3)-(4); id. section 1461-1a(a). Conversely, the USAGM Networks are required to program specific content to meet “[the] needs which remain unserved by the totality of media voices available to the people of certain nations,” ( Id. section 6202(b)(5)) and “[i]nclude clear and effective presentation of the policies of the United States Government and responsible discussion and opinion on those policies.” ( Id. section 6202(b)(3)).

The IBA provides that the CEO must, among other things, “direct and supervise all [USAGM] broadcasting activities”; “review and evaluate the mission and operation of, and to assess the quality, effectiveness, and professional integrity of, all such activities within the context of the broad foreign policy objectives of the United States”; and “ensure that United States international broadcasting is conducted in accordance with [certain] standards and principles,” including that such broadcasting “shall . . . be consistent with the broad foreign policy objectives of the United States,” “be consistent with the international telecommunications policies and treaty obligations of the United States,” and “be conducted in accordance with the highest professional standards of broadcast journalism.” Id. section 6202(a)(1)-(2), (5), 6204(a)(1)-(3). The IBA does not prohibit USAGM or the CEO from supervising the broadcasting networks; to the contrary, the IBA requires that the CEO oversee those networks for consistency with United States foreign policy and international treaty obligations, as well as the journalistic integrity of their operations. It is difficult to see how the CEO could fully discharge these statutory responsibilities under the Regulation, which prohibits him from “direct[ing] . . . USAGM networks . . . in the performance of their journalistic and broadcasting duties and activities.” 22 CFR 531.3(c).

Finally, nothing in the IBA purports to authorize USAGM Networks to engage in broadcasting activities that would impair the President's conduct of foreign affairs as “`the sole organ of the federal government in the field of international relations.'” Curtiss-Wright Exp. Corp., 299 U.S. at 320 (internal citation omitted); See also Id. 22 U.S.C. 6202(a)(1) (requiring United States International Broadcasting to be “consistent with the broad foreign policy objectives of the United States”); 22 U.S.C. 6209b (The CEO also “shall regularly consult with and seek from the Secretary of State guidance on foreign policy issues.”).

But the Regulation's blanket prohibition on Executive Branch activities that affect editorial decision making—seemingly in all circumstances and for any reason—could improperly cabin the Executive Branch's ability to protect and advance its interests in foreign affairs, as necessary.

A proper analysis of section 305(b) should have taken into account the relationship between that provision and USAGM's statutory responsibility to oversee United States international broadcasting networks, as well as the President's authority to conduct foreign affairs. The Regulation failed to consider these relevant factors in its analysis, and instead incorrectly read section 305(b) in isolation to be a bar to effective supervision.

In the final rule published on December 4, 2020, 85 FR 78234, in § 501.20, the Postal Service listed the effective date that decertified indicia may not be recognized as valid postage for use or refunds as June 20, 2025. This should instead read June 30, 2025. The Postal Service makes this change below.

For the reasons stated in the preamble, the Postal Service corrects 39 CFR part 501 by making the following correcting amendment: