Background and Description of the Joint Final Rule

The Agencies' CRA regulations establish CRA performance standards for small and intermediate small banks. The CRA regulations define small and intermediate small banks by reference to asset-size criteria expressed in dollar amounts, and they further require the Agencies to publish annual adjustments to these dollar figures based on the year-to-year change in the average of the CPI-W, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million. 12 CFR 228.12(u)(2) and 345.12(u)(2). This adjustment formula was first adopted for CRA purposes by the Board, the Office of the Comptroller of the Currency (OCC), and the FDIC on August 2, 2005, effective September 1, 2005. 70 FR 44256 (Aug. 2, 2005). At that time, the Agencies noted that the &CPI-W is also used in connection with other federal laws, such as the Home Mortgage Disclosure Act. See 12 U.S.C. 2808; 12 CFR 1003.2. On March 22, 2007, and effective July 1, 2007, the former Office of Thrift Supervision (OTS), the agency then responsible for regulating savings associations, adopted an annual adjustment formula consistent with that of the other federal banking agencies in its CRA rule previously set forth at 12 CFR part 563e. 72 FR 13429 (Mar. 22, 2007).

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 1 effective July 21, 2011, CRA rulemaking authority for federal and state savings associations was transferred from the OTS to the OCC, and the OCC subsequently republished, at 12 CFR part 195, the CRA regulations applicable to those institutions. 2 In addition, the Dodd-Frank Act transferred responsibility for supervision of savings and loan holding companies and their non-depository subsidiaries from the OTS to the Board, and the Board subsequently amended its CRA regulation to reflect this transfer of supervisory authority. 3

On May 20, 2020, the OCC issued a CRA final rule establishing a revised CRA regulatory framework  4 and has determined that it will adjust the asset-size criteria for institutions that are subject to OCC-issued CRA regulations, including national banks and federal and state savings associations, by a means separate from this rulemaking process.

The threshold for small banks was revised most recently in December 2019 and became effective January 1, 2020. 84 FR 71738 (Dec. 30, 2019). The current CRA regulations provide that banks that, as of December 31 of either of the prior two calendar years, had assets of less than $1.305 billion are small banks. Small banks with assets of at least $326 million as of December 31 of both of the prior two calendar years and less than $1.305 billion as of December 31 of either of the prior two calendar years are intermediate small banks. 12 CFR 228.12(u)(1) and 345.12(u)(1). This joint final rule revises these thresholds.

During the 12-month period ending November 2020, the CPI-W increased by 1.29 percent. As a result, the Agencies are revising 12 CFR 228.12(u)(1) and 345.12(u)(1) to make this annual adjustment. Beginning January 1, 2021, banks that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion are small banks. Small banks with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years are intermediate small banks. The Agencies also publish current and historical asset-size thresholds on the website of the Federal Financial Institutions Examination Council at http://www.ffiec.gov/cra/.

Under 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA), an agency may, for good cause, find (and incorporate the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.

The amendments to the regulations to adjust the asset-size thresholds for small and intermediate small banks result from the application of a formula established by a provision in the respective CRA regulations that the Agencies previously published for comment. See 70 FR 12148 (Mar. 11, 2005), 70 FR 44256 (Aug. 2, 2005), 71 FR 67826 (Nov. 24, 2006), and 72 FR 13429 (Mar. 22, 2007). As a result, §§ 228.12(u)(1) and 345.12(u)(1) of the Agencies' respective CRA regulations are amended by adjusting the asset-size thresholds as provided for in §§ 228.12(u)(2) and 345.12(u)(2).

Accordingly, the Agencies' rules provide no discretion as to the computation or timing of the revisions to the asset-size criteria. For this reason, the Agencies have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary.

The effective date of this joint final rule is January 1, 2021. Under 5 U.S.C. 553(d)(3) of the APA, the required publication or service of a substantive rule shall be made not less than 30 days before its effective date, except, among other things, as provided by the agency for good cause found and published with the rule. Because this rule adjusts asset-size thresholds consistent with the procedural requirements of the CRA rules, the Agencies conclude that it is not substantive within the meaning of the APA's delayed effective date provision. Moreover, the Agencies find that there is good cause for dispensing with the delayed effective date requirement, even if it applied, because their current rules already provide notice that the small and intermediate small asset-size thresholds will be adjusted as of December 31 based on 12-month data as of the end of November each year.

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking when a general notice of proposed rulemaking is not required. 5 U.S.C. 603 and 604. 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.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The Agencies have determined that this final rule does not create any new, or revise any existing, collections of information pursuant to the Paperwork Reduction Act. Consequently, no information collection request will be submitted to the OMB for review.

Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) (12 U.S.C. 4802) requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. 5 In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form. 6

Because the final rule does not impose additional reporting, disclosure, or other requirements on IDIs, section 302 of RCDRIA does not apply. Nevertheless, the requirements of section 302 of RCDRIA, and the administrative burdens and benefits of the final rule, were considered as part of the overall rulemaking process.

For purposes of Congressional Review Act, the OMB makes a determination as to whether a final rule constitutes a “major” rule. 7 If a rule is deemed a “major rule” by the OMB, the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication. 8

The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in—(A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. 9 As required by the Congressional Review Act, the FDIC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.

For the reasons set forth in the common preamble, the Board of Governors of the Federal Reserve System amends part 228 of chapter II of title 12 of the Code of Federal Regulations as follows:

For the reasons set forth in the common preamble, the Board of Directors of the Federal Deposit Insurance Corporation amends part 345 of chapter III of title 12 of the Code of Federal Regulations to read as follows:

On August 13, 2020, the FCA issued a final rule that amended § 615.5140(b) so FCS associations are authorized to purchase in the secondary market and hold as investments, portions of loans that non-System lenders originate, and the USDA fully and unconditionally guarantees as to the payment of principal and interest. The final rule was published in the Federal Register on October 6, 2020.

In accordance with 12 U.S.C. 2252(c)(1), the effective date of the final rule is no earlier than 30 days from the date of publication in the Federal Register during which either or both Houses of Congress are in session. Based on the records of the sessions of Congress, the effective date of the regulation is December 23, 2020.

The Bureau is amending appendix O for Regulation V, which implements the FCRA, to establish the maximum allowable charge for disclosures by a consumer reporting agency to a consumer for 2021. The maximum allowable charge will be $13.00 for 2021.

Under section 609 of the FCRA, a consumer reporting agency must, upon a consumer's request, disclose to the consumer information in the consumer's file. 1 Section 612(a) of the FCRA gives consumers the right to a free file disclosure upon request once every 12 months from the nationwide consumer reporting agencies and nationwide specialty consumer reporting agencies. 2 Section 612 of the FCRA also gives consumers the right to a free file disclosure under certain other, specified circumstances. 3 Where the consumer is not entitled to a free file disclosure, section 612(f)(1)(A) of the FCRA provides that a consumer reporting agency may impose a reasonable charge on a consumer for making a file disclosure. Section 612(f)(1)(A) of the FCRA provides that the charge for such a disclosure shall not exceed $8.00 and shall be indicated to the consumer before making the file disclosure. 4

Section 612(f)(2) of the FCRA also states that the $8.00 maximum amount shall increase on January 1 of each year, based proportionally on changes in the Consumer Price Index, with fractional changes rounded to the nearest fifty cents. 5 Such increases are based on the Consumer Price Index for All Urban Consumers (CPI-U), which is the most general Consumer Price Index and covers all urban consumers and all items.

For 2021, the ceiling on allowable charges under section 612(f) of the FCRA will be $13.00, an increase of fifty cents from 2020. The Bureau is using the $8.00 amount set forth in section 612(f)(1)(A)(i) of the FCRA as the baseline for its calculation of the increase in the ceiling on reasonable charges for certain disclosures made under section 609 of the FCRA. Since the effective date of section 612(a) was September 30, 1997, the Bureau calculated the proportional increase in the CPI-U from September 1997 to September 2020. The Bureau then determined what modification, if any, from the original base of $8.00 should be made effective for 2021, given the requirement that fractional changes be rounded to the nearest fifty cents.

Between September 1997 and September 2020, the CPI-U increased by 61.464 percent from an index value of 161.2 in September 1997 to a value of 260.28 in September 2020. An increase of 61.464 percent in the $8.00 base figure would lead to a figure of $12.92. However, because the statute directs that the resulting figure be rounded to the nearest $0.50, the maximum allowable charge is $13.00. The Bureau therefore determines that the maximum allowable charge for the year 2021 will increase to $13.00.

Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 6 Pursuant to this final rule, in Regulation V, appendix O is amended to update the maximum allowable charge for 2021 under section 612(f). The amendments in this final rule are technical and non-discretionary, as they merely apply the method previously established in Regulation V for determining adjustments to the thresholds. For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. The amendments therefore are adopted in final form.

Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule. 5 U.S.C. 553(d). At a minimum, the Bureau believes the amendments made by this rule fall under the third exception to section 553(d). The Bureau finds that there is good cause to make this rule effective on January 1, 2021. The amendments made by this rule are technical and non-discretionary, and apply the method previously established in the Bureau's regulations for automatic adjustments to the threshold.

Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 7

In accordance with the Paperwork Reduction Act of 1995, 8 the Bureau 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 United States Senate, the United States 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 Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register .

For the reasons set forth in the preamble, the Bureau amends Regulation V, 12 CFR part 1022, as set forth below:

Discussion

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0108, dated May 14, 2020 (EASA AD 2020-0108) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for certain Airbus SAS Model A300-600 series airplanes and Model A310 series airplanes.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A300 F4-605R airplanes and Model A310-324 airplanes. The NPRM published in the Federal Register on September 16, 2020 (85 FR 57802). The NPRM was prompted by a report that certain ELT lithium batteries lack protection against current injection. The NPRM proposed to require modification of the airplane circuit connecting the ELT battery, as specified in a EASA AD.

The FAA is issuing this AD to address ELT lithium batteries lacking protection against current injection, which could induce a local battery fire, even after a significant delay, and could result in damage to the airplane and injury to occupants. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA received no comments on the NPRM or on the determination of the cost to the public.

The FAA reviewed the relevant data 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.

EASA AD 2020-0108 describes procedures for modification of the airplane circuit connecting the ELT battery by installing a diode. 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.

The FAA estimates that this AD affects 6 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

Discussion

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 737-100, -200, -200C, -300, -400, and -500 series airplanes. The NPRM published in the Federal Register on September 22, 2020 (85 FR 59449). The NPRM was prompted by a report of cracks found in fastener holes at a certain station of the center wing box. The NPRM proposed to require repetitive external surface HFEC inspections and repetitive external surface ultrasonic inspections; or repetitive internal detailed inspections; of a certain station of the center wing box for any cracking, and repair if necessary.

The FAA is issuing this AD to address any cracking found in fastener holes at the center wing box, which could result in inability of a principal structural element to sustain limit load and could adversely affect the structural integrity of the airplane.

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

Jason Carrig and Boeing stated their support for the NPRM.

Aviation Partners Boeing stated that accomplishing Supplemental Type Certificate (STC) ST01219SE does not affect the actions specified in the proposed AD.

The FAA concurs with the commenter. 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 ST01219SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01219SE 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.

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

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

• Do not add 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 final rule.

The FAA reviewed Boeing Alert Requirements Bulletin 737-57A1348 RB, dated June 1, 2020. The service information describes procedures for repetitive external surface HFEC inspections and repetitive external surface ultrasonic inspections; or repetitive internal detailed inspections; of the center wing box, station 663.75 rear spar, lower skin, and lower chord between left buttock line 31.83 and right buttock line 31.83, for any cracking, and repair 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 141 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 providing 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:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to The Boeing Company Model 787-8, 787-9, and 787-10 airplanes powered by Rolls Royce Trent 1000 engines. The NPRM published in the Federal Register on June 16, 2020 (85 FR 36352). The NPRM was prompted by reports of damage to the IFS forward upper fire seal and damage to thermal insulation blankets in the forward upper area of the TR. The NPRM proposed to require repetitive inspections of the IFS forward upper fire seal and thermal insulation blankets in the forward upper area of the TR for damage and applicable on-condition actions.

The FAA is issuing this AD to address damage to the IFS forward upper fire seal and the thermal insulation blankets of the TR due to airflow through structural gapping that could occur at the interface between the leading edge of the IFS and the engine splitter structure during flight. Failure of the IFS forward upper fire seal could cause the loss of seal pressurization and degrade the ability to detect and extinguish an engine fire, resulting in an uncontrolled fire. Damage to the TR insulation blanket could result in thermal damage to the TR inner wall, the subsequent release of engine exhaust components, and consequent damage to critical areas of the airplane. Furthermore, damage to the TR inner wall and IFS forward upper fire seal could compromise the integrity of the firewall and its ability to contain an engine fire, resulting in an uncontrolled fire.

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

An individual commenter asked how likely it is that the same unsafe condition addressed in the proposed AD is to occur on other new products that are currently being evaluated for certification by the FAA, including the Boeing Model 777X. The commenter stated that the use of an electric thruster instead of a hydraulically-driven thrust reverser actuator would reduce the maintenance of a hydraulic system, and eliminate potential corrosion and fire risk.

The FAA agrees to clarify. As required by 14 CFR 21.21(b)(2), to certify an aircraft, the FAA must find that no feature or characteristic makes the aircraft unsafe. If the unsafe condition identified in this AD is determined to exist on any product that has not been certified by the FAA, the unsafe condition must be adequately addressed prior to FAA certification of that product. No change to this final rule is necessary in this regard.

The individual commenter asked why there was a 36 month period after August 27, 2018 (the effective date of AD 2018-15-03 Amendment 39-19335 (83 FR 34753, July 23, 2018) (AD 2018-15-03)), to take action on Boeing Alert Service Bulletin B787-81205-SB780033-00, Issue 001, dated November 1, 2017, which is required by AD 2018-15-03. The FAA infers that the commenter is referring to the 36-month compliance time for accomplishing the actions described in Boeing Alert Service Bulletin B787-81205-SB780033-00, Issue 001, dated November 1, 2017. The FAA also infers that the commenter is concerned regarding the time it took the FAA to take AD action to address the unsafe condition.

The FAA agrees to provide clarification regarding the timing of the publication of AD 2018-15-03 and the relationship between AD 2018-15-03 and this final rule. In the preamble of the NPRM preceding this final rule, the FAA stated that the proposed AD would not supersede or terminate any requirement of AD 2018-15-03. AD 2018-15-03 and this final rule both address damage to the IFS forward upper fire seal and damage to the thrust reverser thermal blanket. However, the damage to these areas is the result of two different causes. When the FAA developed AD 2018-15-03, that AD addressed the cause of damage that was identified at that time. The FAA assessed the level of risk and the compliance time, so that mandatory actions would be accomplished as soon as reasonably practical while maintaining an acceptable level of safety during the compliance period. The FAA determined that a compliance time of 36 months was adequate to address the unsafe condition identified in AD 2018-15-03.

After AD 2018-15-03 was issued, Boeing identified an additional cause of the unsafe condition that was different from the one specified in AD 2018-15-03. This newly identified cause could similarly result in damage to the IFS forward upper fire seal and the thrust reverser thermal blanket. This final rule addresses the newly identified cause of the unsafe condition that was identified after AD 2018-15-03 was issued. As discussed in the preamble of the NPRM and the preamble of this final rule, the actions required by this final rule are interim action and the FAA may consider further rulemaking when a final corrective action becomes available.

No change to this final rule is necessary in regard to this comment.

The individual commenter also asked for clarification regarding what type of inspector would perform the inspections of the IFS forward upper fire seal and thermal blanket specified in the proposed AD. The commenter asked if the inspections would be performed by flight line inspectors or FAA inspectors.

The FAA agrees to provide clarification. The inspections required by this AD will be performed by qualified and certified maintenance personnel employed by airlines and airplane operators. No change to this final rule is necessary in this regard.

Boeing requested that the Discussion section and paragraph (e) of the proposed AD be revised to clarify the unsafe condition. The commenter stated that the unsafe condition statement in the proposed AD was not accurate. However, the commenter did not provide an explanation as to why the unsafe condition statement was not accurate.

The commenter indicated that in both the Discussion section and paragraph (e) of the proposed AD the explanation of the unsafe condition should be changed by removing the phrase “the loss of seal pressurization” from “Failure of the IFS forward upper fire seal could cause the loss of seal pressurization and degrade the ability to detect and extinguish an engine fire, resulting in an uncontrolled fire,” and replace it with the phrase “excessive airflow into the core compartment firezone.”

The commenter also requested that in both the Discussion section and paragraph (e) of the proposed AD the explanation of the unsafe condition be changed by removing the phrase “the subsequent release of engine exhaust components, and consequent damage to critical areas of the airplane” from “Damage to the TR insulation blanket could result in thermal damage to the TR inner wall, the subsequent release of engine exhaust components, and consequent damage to critical areas of the airplane,” and replace it with the phrase “compromising the integrity of the firewall barrier which would increase the risk of an uncontained fire.”

The FAA agrees with the commenter's request to clarify that damage to the TR inner wall could increase the risk of an uncontained fire. The FAA concurs that, depending on the level of damage to the TR inner wall and IFS forward upper fire seal, the capability of the firewall to contain an engine fire could be compromised, and therefore, it could result in an uncontrolled fire. The FAA also considers that damage to the IFS forward upper fire seal has the same effect. Although the FAA has already identified the potential for an uncontrolled fire as part of the unsafe condition addressed by this AD, the FAA has revised the Discussion section and paragraph (e) of this AD to provide additional clarification on this point.

The FAA disagrees with the commenter's request to remove the reference to “loss of seal pressurization and” from the description of the unsafe condition. This final rule addresses structural gapping that could occur between the leading edge of the IFS and the engine splitter structure during flight. Airflow through this structural gapping could damage the IFS forward upper fire seal and the thrust reverser thermal blanket. When the IFS forward fire seal is damaged, airflow can pass through the damaged areas of the IFS forward fire seal in addition to airflow through structural gapping, and this condition could further degrade the ability to detect and extinguish an engine fire, and also damage the TR thermal blanket. The FAA's intent was to explain the effect of airflow through the damaged IFS forward fire seal due to loss of seal pressurization caused by the failure of the IFS forward upper fire seal. The FAA has not revised this AD in this regard.

The FAA also disagrees with the commenter's request to remove “the subsequent release of engine exhaust components, and consequent damage to critical areas of the airplane” from the description of the unsafe condition. The FAA has identified the potential of engine components departing the airplane due to damage to the TR inner wall as part of the unsafe condition addressed in this AD. This failure effect has been similarly discussed and addressed in a number of previously issued ADs including AD 2018-15-03, which is related to this AD. This AD has not been revised in this regard.

Boeing requested that the cost estimate in the NPRM be revised. Boeing stated that it initially communicated to the FAA that the manpower estimate of 0.5 man-hour for fire seal inspection and 0.5 man-hour for thermal blanket inspection was meant to be per engine, instead of per thrust reverser half as the FAA considered under the estimated cost provided in the NPRM. Boeing explained that the corrected manpower estimate for the fire seal inspection should be 0.25 man-hour per thrust reverser half, and the corrected manpower estimate for the thermal blanket inspection should be 0.25 man-hour per thrust reverser half. Boeing recommended that instead of 4 work-hours × $85 per hour = $340 per inspection cycle, the FAA update the labor cost for the inspection to 2 work-hours for a cost of $170 per inspection cycle. Boeing asserted that this would change the cost on U.S. operators to $2,380 per inspection cycle, based on 14 U.S. airplanes.

The FAA agrees with Boeing's observation that the cost estimate in the NPRM was incorrect based upon information that was incorrectly communicated from Boeing to the FAA. The FAA has revised the Costs of Compliance in this final rule.

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

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

• Do not add 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 final rule.

The FAA reviewed Boeing Alert Requirements Bulletin B787-81205-SB780041-00 RB, Issue 001, dated March 31, 2020. The service information describes procedures for repetitive inspections of the IFS forward upper fire seal and thermal insulation blankets of the TR for damage and applicable on-condition actions. Damage to a forward upper fire seal includes cuts, splits, nicks, punctures, and missing sections. Damage to an upper thermal blanket includes tears, cuts, missing metal skin, missing insulation, and over-temperature conditions shown by discoloration or scorching. The on-condition actions include replacing any damaged forward upper fire seal with a new fire seal having an appropriate part number, and replacing any damaged forward upper thermal blanket with a new thermal blanket. 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 considers this AD interim action. If final action is later identified, the FAA might consider further rulemaking then.

The FAA estimates that this AD affects 14 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2019-43, dated November 8, 2019 (“AD CF-2019-43”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model BD-100-1A10 airplanes. You may examine the MCAI in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-0458.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model BD-100-1A10 airplanes. The NPRM published in the Federal Register on June 3, 2020 (85 FR 34141). The NPRM was prompted by a report that corrosion was found on the shock strut cylinders during unscheduled maintenance of the NLG. The NPRM proposed to require a modification of the NLG shock strut cylinder. The FAA is issuing this AD to address corrosion of the NLG, which could result in structural failure of the NLG. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comment received on the NPRM and the FAA's response to that comment.

Flexjet stated that where the compliance section of Bombardier Service Bulletin 100-32-33, Revision 02, dated September 30, 2019, and Figure 1 to paragraph (g) of the proposed AD, specify the compliance time for NLG assemblies with more than 96 months time since new (TSN), the compliance time does not take into account that the NLG cylinders with part number (P/N) 40640-3 and P/N 40640-5 serialized (next higher assembly P/N 40640-105 and subcomponents) are life-limited items with a 7,500 flight cycle discard interval. Flexjet commented that during the first 96 month inspection, if the operator has high flight cycles, it may elect to replace the cylinder at that time. Flexjet also commented that the compliance section of Bombardier Service Bulletin 100-32-33, Revision 02, dated September 30, 2019, does not take into account that a new cylinder could be installed at the 96-month inspection and it also does not address if the cylinder was replaced for another reason after the 96-month inspection.

Flexjet stated that the proposed AD needs to be specific on applying to the nose gear cylinder and sleeve part numbers and not the nose gear or nose gear strut assembly part numbers. Flexjet also stated that the nose gear cylinder and sleeve are the parts with corrosion and the primary reason for the service information. Flexjet pointed out that the sleeve is cut off for inspection of the cylinder and the same part number sleeve goes back on following the inspection. The FAA infers that Flexjet was requesting that the language in paragraphs (g)(1) and (2) of this AD specify that the actions apply to airplanes with NLG assemblies having NLG cylinder assemblies and sleeves with certain part numbers.

The FAA disagrees with the comment. While NLG cylinder assemblies and their subcomponents can be replaced before or after the 96-month interval inspection, paragraphs 2.B. and 2.C. of the Accomplishment Instructions of Bombardier Service Bulletin 100-32-33, Revision 02, dated September 30, 2019, ensure the proper corrective actions are taken to prevent corrosion with those replaced components when reassembled on the NLG assembly. This is why the identification on the NLG assembly modplate is required. In addition, paragraph (f) of this AD specifies to, “Comply with this AD within the compliance times specified, unless already done.” Therefore, if some of the specified corrective actions are already complied with, only the remaining corrective actions in the AD need to be completed to comply with this AD. The FAA has not changed this AD in this regard.

The FAA reviewed the relevant data, considered the comment 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.

Bombardier has issued Service Bulletin 100-32-33, Revision 02, dated September 30, 2019; and Service Bulletin 350-32-009, Revision 02, dated September 30, 2019. This service information describes procedures for modification of the NLG shock strut cylinder. These documents are distinct since they apply to different airplane serial numbers. 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 560 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:

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 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 amends the Class E airspace extending upward from 700 feet above the surface at Warroad International Memorial Airport, Warroad, MN, to support instrument flight rule operations at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (85 FR 67322; October 22, 2020) for Docket No. FAA-2020-0878 to amend the Class E airspace extending upward from 700 feet above the surface at Warroad International Memorial Airport, Warroad, MN. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6005 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 Class E airspace designations listed in this document will be published subsequently 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.

This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 amends the Class E airspace extending upward from 700 feet above the surface to within a 6.6-mile (decreased from a 7-mile) radius of Warroad International Memorial Airport, Warroad, MN; removes the exclusionary language from the airspace legal description as it is no longer required; and updates the name (previously Warroad International-Swede Carlson Field) and geographic coordinates of the airport to coincide with the FAA's aeronautical database.

This action is the result of an airspace review caused by the decommissioning of the Baudette VOR, which provided navigation information for the instrument procedures this airport, as part of the VOR MON Program.

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, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under 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 only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does 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 qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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 (U.S.C.). 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 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 will remove Class E airspace extending upward from the surface designated as an extension to a Class C surface area for the Fresno Yosemite International Airport, Fresno, CA, to support IFR operations in standard instrument approach and departure procedures at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (85 FR 64424; October 13, 2020) for Docket No. FAA-2018-1001 to remove the Class E airspace extending upward from the surface designated as an extension to a Class C surface area for the Fresno Yosemite International Airport, Fresno, CA. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E3 airspace designations are published in paragraph 6003 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 Class E airspace designation listed in this document will be published subsequently 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 14 CFR part 71 by removing the Fresno Yosemite International Airport Class E3 airspace extending upward from the surface of the earth. The Clovis VORTAC was decommissioned and requires the legal descriptions in FAA Order 7400.11E be rewritten to eliminate reference to this navigational aid. In addition, during review of the Class E airspace extending upward from the surface as an extension to the Class C surface area, it was identified that the airspace is no longer needed to support approaches into the airport. This action will support the operation of Instrument Flight Rules (IFR) under standard instrument approach and departure procedures in the National Airspace System.

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, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order (E.O.) 12866; (2) is not a “significant rule” under 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 only affects 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 qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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 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 amends the Class D airspace, the Class E surface area, and the Class E airspace extending upward from 700 feet above the surface and establishes a Class E airspace area designated as an extension to a Class D and Class E surface area at Sawyer International Airport, Marquette, MI, to support instrument flight rule operations at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (85 FR 67320; October 22, 2020) for Docket No. FAA-2020-0880 to amend the Class D and Class E airspace and establish a Class E airspace area designated as an extension to Class D and Class E surface areas at Sawyer International Airport, Marquette, MI. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D and E airspace designations are published in paragraph 5000, 6002, 6004, and 6005, respectively, 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 Class D and E airspace designations listed in this document will be published subsequently 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.

This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71:

Amends the Class D airspace at Sawyer International Airport, Marquette, MI, by updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database; removes the city associated with the airport to comply with changes to FAA Order 7400.2M, Procedures for Handling Airspace Matters; and replaces the outdated term “Airport/Facility Directory” with “Chart Supplement”;

Amends the Class E surface airspace at Sawyer International Airport by updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database; removes the city associated with the airport to comply with changes to FAA Order 7400.2M; and replaces the outdated term “Airport/Facility Directory” with “Chart Supplement”;

Establishes a Class E airspace area designated as an extension to Class D and Class E surface areas within 2.4 miles each side of the 022° bearing from the Sawyer VOR extending from the 4.6-mile radius of the Sawyer International Airport to 7 miles north of the Sawyer VOR;

And amends the Class E airspace extending upward from 700 feet above the surface at Sawyer International Airport by updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database; and removes the airspace extending upward from 1,200 feet above the surface and the exclusionary language as they are no longer required.

This action is the result of an airspace review caused by the decommissioning of the Iron Mountain VOR, which provided navigation information for the instrument procedures this airport, as part of the VOR MON Program.

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, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under 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 only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does 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 qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

This rule represents the culmination of a rapid escalation of tensions over several months between the United States and China over the Hong Kong Special Administrative Region (Hong Kong or HKSAR). A brief timeline follows below.

On May 21, a spokesperson for the PRC's National People's Congress (NPC) announced the body would consider a resolution authorizing the adoption of national security legislation for the HKSAR.

On May 27, the Secretary of State submitted the 2020 Hong Kong Policy Act Report to Congress, certifying that the HKSAR “does not continue to warrant treatment under U.S. laws in the same manner as U.S. laws were applied to Hong Kong before July 1997.” The Secretary's certification was issued pursuant to sections 205 and 301 of the United States-Hong Kong Policy Act of 1992 (HKPA).

On May 29, the President announced the Administration would “begin the process” of revoking the HKSAR's separate treatment from mainland China under U.S. laws, a status afforded to the HKSAR under the HKPA.

In June 2020, China followed through on imposing national security legislation on Hong Kong, and on further denying Hong Kong's autonomy and freedoms promised by China to the people of Hong Kong under the 1984 Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China on the Question of Hong Kong (Joint Declaration). This national security legislation fundamentally undermined autonomy in Hong Kong, thereby increasing the risk that sensitive U.S. technology and items will be diverted to unauthorized end uses and end users in China or elsewhere. BIS announced on its website on June 30, 2020, and subsequently published in the Federal Register on July 31 at 85 FR 45998, a notice suspending the availability of all license exceptions for Hong Kong that provide differential treatment as compared to those available to the PRC. A license exception is an authorization allowing exports, reexports, or transfers (in-country) under stated conditions of items subject to the EAR that would otherwise require a license.

On July 14, the President signed Executive Order (E.O.) 13936 (85 FR 43413, 7/17/2020).

The amendments in this rule relative to Hong Kong implement E.O. 13936 with regard to its effect on the Export Control Reform Act of 2018 (ECRA) and the EAR. Section 2 of E.O. 13936 suspends the application of section 201(a) of the HKPA, to a variety of statutes, including ECRA. Section 3 of E.O. 13936 directs the heads of relevant agencies to “commence all appropriate actions [within 15 days] to further the purposes” of E.O. 13936, including by amending any regulations implementing statutes specified in section 2 that provide different treatment for Hong Kong as compared to China.

Pursuant to E.O. 13936, BIS amends the EAR to remove provisions that provide differential and preferential treatment for exports to Hong Kong, reexports to Hong Kong and transfers (in-country) within Hong Kong of all items subject to the EAR when compared to the treatment for such transactions to or within China. As a result of this rule, Hong Kong will be treated the same as China under the EAR except in certain circumstances that do not provide preferential treatment. The references to Hong Kong that remain in the EAR support U.S. national security and foreign policy objectives, and recognize certain differences that remain in how trade is processed within and through Hong Kong. Specifically, in this rule, BIS amends:

Supplement No. 1 to Part 738—Commerce Country Chart by removing the entry for Hong Kong from the Commerce Country Chart. License requirements for Hong Kong will now be governed by the Commerce Country Chart entry for China.

On July 31, 2020, BIS published a final rule amending the EAR to suspend the availability of all license exceptions to Hong Kong that provide differential and preferential treatment as compared to those available to China (See: 85 FR 45998). The changes implemented in this final rule are consistent with and in addition to the amendments of the July 31, 2020 final rule. License exceptions made unavailable to Hong Kong and listed by that rule in paragraph (23) of § 740.2(a) of the EAR remain unavailable. However, because Hong Kong is being removed as a separate destination on the Commerce Country Chart and in other places in the EAR, and will fall under the destination of China, this rule removes paragraph (23) of § 740.2(a) of the EAR, which is no longer necessary to bring license exception availability for Hong Kong in line with license exception availability for China.

In addition, in order to remove specific references to Hong Kong in Part 740, BIS amends:

Section 740.7—Computers (APP) by removing Hong Kong from the list of Computer Tier 1 destinations in paragraph (c). Hong Kong will now be considered a part of China, in Computer Tier 3.

Section 740.11—Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station (GOV) by removing Hong Kong from the description of `Cooperating governments' in paragraph (c)(1). This paragraph of License Exception GOV is not available for China, and thus is not available for Hong Kong.

Section 740.16—Additional permissive reexports (APR) by removing Hong Kong from paragraphs (a) (formerly titled Reexports from Country Group A:1 and Hong Kong) and (b)—Reexports to and among specified countries. These paragraphs of License Exception APR are not available for reexports from China, and paragraph (b) is not available for reexports to China, and thus these paragraphs are not available for similar transactions to or from Hong Kong. However, as part of China in Country Group D:1, Hong Kong will now be an eligible destination for reexports consistent with the provisions of paragraph (a).

Supplement No. 1 to Part 740—Country Groups by removing the entry for Hong Kong from Country Group A:6, and from Country Group B. Hong Kong will no longer appear separately within the Country Groups but will instead be considered a part of China. China is currently in Country Groups D:1, D:3, D:4, and D:5, and limitations or authorizations that apply to transactions involving China as part of those country groups will now also apply to transactions involving Hong Kong. This includes any limitations that apply to China as a result of its placement in Country Group D:5, consistent with the State Department's determination that the arms embargo on China also applies to Hong Kong.

Section 742.6—Regional stability by removing and reserving paragraph (a)(6)—RS requirement that applies to Hong Kong—a license requirement. This license requirement, for Export Control Classification Number 6A003.b.4.b, already applies to China, so removal of this provision specific to Hong Kong will not change a license requirement in the EAR.

Supplement No. 4 to Part 744—Entity List by removing the entries of entities under the separate entry for “Hong Kong” and merging, alphabetically, those entities under the entry for “China, the People's Republic of”.

Supplement No. 6 to Part 744—Unverified List by removing the entries of entities under the separate entry for “Hong Kong” and merging, alphabetically, those entities under the entry for “China, the People's Republic of”.

Supplement No. 2 to Part 745—States Parties to the Convention on the Prohibition of the Development, Production, Stockpiles, and Use of Chemical Weapons and on Their Destruction by amending the first sentence with an asterisk that refers to Hong Kong at the end of the Supplement. This provision previously stated that Hong Kong was considered a part of China for CWC purposes only, but now it is considered a part of China for purposes of the EAR more generally.

Section 748.10—People's Republic of China (PRC) End-User Statement by adding a NOTE 5 to paragraph (a) of the section to clarify for the public that a PRC-issued End User Statement is not required for license applications for exports or reexports to Hong Kong, even though Hong Kong is considered a part of China elsewhere in the EAR. As stated in Note 1 to paragraph (b) in § 748.9 of the EAR, BIS may still request end-user statements or other support documents for license applications involving Hong Kong on a case-by-case basis.

BIS adds a note to paragraph (b)(10) of § 758.1 ( The Electronic Export Information (EEI) Filing to the Automated Export System (AES)) stating that the EEI filing requirement for China described in paragraph (b)(10) applies to exports to Hong Kong for purposes of the EAR, even if the AES requirements state that the destination filed in EEI is to be listed as Hong Kong.

In removing Hong Kong as a separate destination for purposes of export controls under the EAR, it is treated as part of China for export control purposes and, thereby, is subject to the same license requirements, license exceptions and other applicable provisions under the EAR. Certain EAR provisions, however, retain references to Hong Kong because Hong Kong still operates a separate customs system and a separate export control system.

This rule implements a significant change for Hong Kong, which had previously been in different country groups, eligible for different license exceptions, and subject to different license requirements than China throughout the EAR. A notable change for those engaging in trade with or through Hong Kong will be that Hong Kong, as part of China, will now effectively fall in Country Group D, which will affect license exception availability. However, the impact of this change should be consistent with the impact of the July 31 rule suspending certain license exception eligibility for Hong Kong (see 85 FR 45998) and the earlier notice on the BIS website that accomplished the same purpose.

Certain licensing policies applicable specifically to China will now apply to license applications for transactions to Hong Kong, including policies described in §§ 742.3(b), 742.4(b), and 742.6(b).

In addition, treatment of Hong Kong as part of China, and thus in Country Group D:1, as a result of this rule will result in restrictions on the export, reexport, and transfer (in-country) of certain microprocessors to military end uses and end users in Hong Kong, pursuant to § 744.17, Restrictions on certain exports, reexports, and transfers (in-country) of microprocessors and associated “software” and “technology” for `military end uses' and to `military end users.' Similarly, as it is no longer distinguished as a separate destination from China under the EAR, exports to persons in Hong Kong are subject to the military end-use and end-user provisions of § 744.21—Restrictions on certain `military end use' or `military end user' in the People's Republic of China, Russia, or Venezuela.

For Hong Kong, as part of China, placement in Country Group D:1 will expand the licensing requirements for reexports of the foreign-produced direct product of U.S.-origin technology and software to Hong Kong pursuant to § 736.2(b)(3), General Prohibition Three.

As part of China, Hong Kong will also be subject to restrictions due to its placement in Country Group D:5—U.S. Arms Embargoed Countries, consistent with the State Department's interpretation that Hong Kong is now considered to be included in the entry for China for purposes of the International Traffic in Arms Regulations (ITAR) § 126.1.

End users in Hong Kong are now eligible to be added as validated end users in Supplement No. 7 to Part 748 of the EAR. The procedures for the addition of such end users is described more fully in § 748.15 of the EAR.

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866.

2. Notwithstanding any other provision of law, no person may be required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves a collection currently approved by OMB under control number 0694-0088, Simplified Network Application Processing System. This collection includes, among other things, license applications, and carries a burden estimate of 42.5 minutes for a manual or electronic submission for a total burden estimate of 31,878 hours. BIS expects the burden hours associated with this collection to increase slightly by 4 hours for an estimated cost increase of $120. This increase is not expected to exceed the existing estimates currently associated with OMB control number 0694-0088.

3. This rule does not contain policies with federalism implications as that term is defined under Executive Order 13132.

4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4801-4852), which was included in the John S. McCain National Defense Authorization Act for Fiscal Year 2019, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

6. This final rule is not subject to the requirements of Executive Order 13771 (82 FR 9339, February 3, 2017) because it is issued with respect to a national security function of the United States. Hong Kong's current lack of autonomy increases the risk sensitive U.S. technology and items will be illegally diverted to unauthorized end uses and end users in the PRC or to unauthorized destinations such as Iran or North Korea. As the U.S. Government finds it can no longer distinguish between the export of controlled items to Hong Kong and the PRC, Executive Order 13936 and this subsequent rulemaking are meant to counteract actions taken by the PRC. The PRC's actions pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and its allies. Based on the current situation, Hong Kong no longer warrants treatment under certain United States laws, including export control laws, in the same manner as United States laws were applied to Hong Kong before July 1, 1997.

Therefore, the cost-benefit analysis required pursuant to Executive Orders 12866 and 13563 indicates this rule is intended to improve national security as its primary direct benefit. Accordingly, this rule meets the requirements set forth in the April 5, 2017 OMB guidance implementing Executive Order 13771 (82 FR 9339, February 3, 2017) regarding what constitutes a regulation issued “with respect to a national security function of the United States,” and is, therefore, exempt from the requirements of Executive Order 13771.

Shipments of items that may no longer be made under No License Required (NLR) as a result of this action and were on dock for loading, on lighter, laden aboard an exporting or transferring carrier, or en route aboard a carrier to a port of export or reexport on December 23, 2020, pursuant to actual orders for export to Hong Kong, reexport to Hong Kong, or transfer within Hong Kong may proceed to their destination under NLR January 22, 2021.

Accordingly, parts 738, 740, 742, 744, 745, 748, and 758 of the Export Administration Regulations (15 CFR parts 730 -774) are amended as follows:

Background

In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding the new `military end user' list as supplement no. 7 to part 744—Military End User (MEU) List. This final rule also adds the first tranche of entities to this new list. This final rule will add one hundred and two `military end users' to the MEU List consisting of fifty-seven military end users in China and forty-five in Russia. These entities have been determined by the U.S. Government to be `military end users,' and therefore exports, reexports, or transfers (in-country) of the designated items to these parties are exports, reexports or transfers (in-country) to the national armed services (army, navy, marine, air force, or coast guard), the national guard, the national police, government intelligence or reconnaissance organizations, or a person or entity whose actions or functions are intended to support `military end-uses' as defined in § 744.21(f).

Section 744.21(a) sets forth a license requirement to exports, reexports, or transfers (in-country) identified in supplement no. 2 to part 744 to China, Russia, and Venezuela, when the exporter, reexporter, or transferor has “knowledge” that the item is destined for a `military end use' (as defined in § 744.21(f)) or `military end user' (as defined in § 744.21(g)). Additionally, pursuant to § 744.21(b), BIS may inform persons that a license is required for the export, reexport, or transfer (in-country) of any item because there is an unacceptable risk of use in or diversion to such an end use or end user. With the creation of the MEU List described below, BIS `is informing' exporters, reexporters, and transferors that a license will be required to export, reexport, or transfer (in-country) any item described in supplement no. 2 to part 744 to these `military end users' that will be identified on the new MEU List.

This rule does not change the scope of § 744.21. The addition of the new MEU List in supplement no. 7 to part 744 and this initial tranche of one hundred and two `military end users' is part of the § 744.21(b) `is informed' process and does not imply that other parties, not included on the list, are not subject to the prohibition in § 744.21(a). Adding the new MEU List via an amendment to the EAR is an effective way for BIS to inform all potential exporters, reexporters, and transferors that all exports, reexports, or transfers (in-country) of designated items to these entities represent an unacceptable risk of use in or diversion to a `military end use' or a `military end user' for purposes of § 744.21, and therefore require a license. All of the one hundred and two entities added to the MEU List in today's final rule are `military end users' within the definition of § 744.21(g), and were thus already subject to the `military end use' and `military end user' requirements under § 744.21. Prior to this final rule, exporters, reexporters, or transferors were responsible for identifying these entities as `military end users' themselves, assuming they were not otherwise individually informed pursuant to the `is informed' process under § 744.21(b). Exporters, reexporters, or transferors will still be responsible for ensuring their transactions are in compliance with the license requirements set forth in § 744.21 because BIS cannot list every `military end user' or party representing a risk of diversion thereto in the MEU List, or identify all situations which could lead to an item being used for a `military end use.' The determinations that certain entities are `military end users' are only relevant to the stated EAR controls and do not apply to exports, reexports, or transfers subject to International Traffic in Arms Regulations (ITAR) or other controls.

The addition of the new MEU list and this first tranche of one hundred and two entities is also responsive to requests received from the public and draws upon decisions made by BIS in reviewing license applications under § 744.21. Specifically, exporters, reexporters, or transferors requested in numerous advisory opinions received by BIS on the application of § 744.21 since April 28, 2020, as well as from BIS's TACs, that BIS identify `military end users' by name and address in the regulations, where possible, to facilitate compliance. For example, BIS has received over 80 advisory opinions and emailed requests for guidance on the April 28 MEU rule, including requests asking whether 34 specific entities are considered `military end users' for purposes of § 744.21. In addition, since the revisions to the MEU provisions became effective on June 29, 2020 (the date the April 28, 2020 final rule (85 FR 23459) that expanded the `military end-use' and `military end-user' control under § 744.21), there have been several hundred license applications filed under § 744.21 (MEU license applications).

BIS interacts with various exporters, reexporters, or transferors who may provide information on potential `military end users' in license applications or requests for advisory opinions submitted to BIS, as well as the additional information resources available to the U.S. Government; therefore, as specified in § 744.21(b), when BIS identifies an entity as a `military end user,' it may use the `is informed' process to publish Federal Register notices adding these `military end users' to the new MEU List under supplement no. 7 to part 744. BIS agrees that identifying `military end users' on the MEU List, where possible, will ease the public's compliance burden and make for a more effective `military end use' and `end user' control under § 744.21.

The issuance of a separate public list in the EAR identifying parties previously listed in `is informed' letters or for whom licenses were denied due to their status as a `military end user' under the EAR is desirable because individual `is informed' letters, licensing determinations for specific transactions, and BIS responses to advisory opinion and email requests are private and confidential to the requester. Publishing a list of parties that already have been determined to be `military end-users' allows the public to be informed of BIS's determinations in these individual cases. Therefore, the most practical and effective approach is to publish a Federal Register notice adding these `military end users' to the MEU List, so all potential exporters, reexporters, or transferors are informed simultaneously.

As described below, BIS is also amending the EAR to provide clarity on the process it follows to add entities to the MEU List, to ensure consistent treatment of those parties, and to allow listed parties to request removal from the list. The initial list of `military end users' being added to the MEU List in today's rule is not exhaustive, and exporters, reexporters, and transferors must still conduct due diligence for parties not on the list ( see § 744.21(b) and supplement no. 3 to part 732—BIS's “Know Your Customer” Guidance and Red Flags). As a result, compliance remains the obligation of the exporter, reexporter or transferor. Exclusion from the MEU list is not indicative of whether or not a license is required. For example, parties not listed on the MEU List in this final rule, but included on the lists made public pursuant to Section 1237 of the National Defense Authorization Act of Fiscal Year 1999, 50 U.S.C. 1701 note, would raise a Red Flag under the EAR and would require additional due diligence by the exporter, reexporter, or transferor to determine whether a license is required under § 744.21. Additional parties may be added to or deleted from the MEU List pursuant to a determination made by the End-User Review Committee (ERC) as described below.

In § 744.21 (Restrictions on certain `military end use' or `military end user' in the People's Republic of China, Russia, or Venezuela), this final rule revises paragraph (b) (Additional prohibition on those informed by BIS) by adding a new paragraph (b)(1) (Military End-User' (MEU) List). Under new paragraph (b)(1), this final rule specifies that BIS may designate entities subject to the additional prohibition under paragraph (b) based on a determination by the ERC that the entity is a `military end user,' and thus inform the public that those entities are subject to the license requirements under paragraph (b). New paragraph (b)(1) specifies that these `military end users' will be added to the MEU List in supplement no. 7 to part 744 in Federal Register notices published by BIS. The introductory text of paragraph (b)(1) also reaffirms that the listing of entities in supplement no. 7 to part 744 is not an exhaustive listing of `military end users' or entities engaged in `military end uses' and specifies that exporters, reexporters, or transferors must still conduct their own due diligence for entities not identified on the MEU List to determine whether a license in necessary pursuant to the criteria set forth in § 744.21.

This final rule adds new paragraph (b)(1)(i) (End-User Review Committee), in § 744.21, to identify the member agencies of the End-User Review Committee (ERC) and to specify the role the ERC will play in determining what entities should be added to MEU List, as well as approving any modifications or removals that may be warranted to the MEU List after entities are added. This final rule clarifies in new paragraph (b)(1)(i) that decisions by the ERC for purposes of the MEU List will be made following the procedures identified in § 744.21 and in supplement no. 5 to part 744—Procedures for End-User Review Committee Entity List and `Military End-User' (MEU) List Decisions. The ERC is an existing interagency group that also makes determinations for the Entity List in supplement no. 4 to part 744 as described in § 744.16 and in supplement no. 5 to part 744. Because of the ERC's expertise in dealing with end users of concern, BIS determined it was warranted to expand the ERC's area of responsibility for parties of concern to also include determinations for the new MEU List.

This final rule adds new paragraph (b)(1)(ii) (License requirement), in § 744.21, to specify the license requirements that apply for entities listed in supplement no. 7 to part 744. This final rule specifies that a license is required to export, reexport, or transfer (in-country) any item listed in supplement no. 2 to part 744 to entities identified on the MEU List, which is in addition to the license requirement applicable to such items intended for any `military end user' or `military end use' in China, Russia, or Venezuela which are not on the MEU List, as described in § 744.21(a). BIS is exercising its authority under § 744.21(b) to inform exporters, reexporters, and transferors that entities on the MEU List are `military end users' for purposes of § 744.21, and thus exports, reexports, or transfers (in country) of the specified items to those entities require a license because they represent an unacceptable risk of use in or diversion to a `military end use' or `military end user' in China, Russia, or Venezuela. This final rule under paragraph (b)(1)(ii) also clarifies the scope of the license requirement in § 744.21(b), by specifying that it applies when an entity that is listed on the MEU List is a party to the transaction as described in § 748.5(c) through (f) of any item listed in supplement no. 2 to part 744.

This final rule specifies in the introductory text of supplement no. 7 to part 744 that no EAR license exceptions are available for exports, reexports, or transfers (in-country) to listed entities on the MEU List for items specified in supplement no. 2 to part 744, except license exceptions for items authorized under the provisions of License Exception GOV set forth in § 740.11(b)(2)(i) and (ii) as specified in § 744.21(c).

This final rule clarifies in the introductory text of supplement no. 7 to part 744 that license applications for entities listed on the MEU list will be subject to the license application procedure and license review standards specified in paragraphs (d) and (e) of § 744.21.

This final rule adds a new paragraph (b)(2) (Requests for removal from or modification for `Military End User' (MEU) List), in § 744.21, to specify the process and method for any entity listed on the MEU List to request that its listing be removed or modified. In the introductory text of new paragraph (b)(2), this final rule specifies that any listed MEU entity may submit a removal or modification request. The introductory text of paragraph (b)(2) specifies these requests must be submitted to the ERC at the address provided. If an entity listed on the MEU List wants to petition BIS for its removal or modification, the entity must address the criteria in § 744.21 of the EAR by addressing, as applicable, why the entity is not a `military end user' or involved in `military end-uses.'

This final rule adds a new paragraph (b)(2)(i) (Review), in § 744.21, to specify that the ERC will review such requests in accordance with the procedures set forth in supplement no. 5 to part 744, which is also consistent with the process for requesting removal or modification of Entity List entries.

The final rule adds a new paragraph (b)(2)(ii) (BIS action), in § 744.21, to specify how an entity that has submitted a removal or modification request will be notified in writing by the Deputy Assistant Secretary for Export Administration once the decision on the request is made. This paragraph (b)(2)(ii) also specifies that the BIS decision will be the final agency action on the request.

In § 756.2 (Appeal from an Administrative Action), as a conforming change for the addition of paragraph (b)(2) in § 744.21, this final rule adds that decisions on requests to remove or modify a MEU List entry to the list of administrative actions are not subject to part 756 appeals under paragraph (a)(3). Paragraph (a)(3) also specifies that requests for removals of modifications from the Entity List and Unverified List are not subject to part 756 appeals, so adding the MEU List to this paragraph will create consistent treatment under this section for these three EAR lists.

This final rule adds new supplement no. 7 to part 744—`Military End User' (MEU) List. As described in detail above, the MEU List identifies entities that have been determined by the ERC to be `military end users' pursuant to § 744.21 of the EAR. That section imposes additional license requirements on, and limits the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities on the MEU List, as specified in supplement no. 7 to part 744 and § 744.21. Entities will be listed on the new MEU List under the destinations of China, Russia, or Venezuela.

The license review policy for each listed entity is identified in the introductory text of supplement no. 7 to part 744 and in § 744.21(b) and (e). The new MEU List includes introductory text, which specifies the scope of the license requirements, limitations on the use of EAR license exceptions, and the license review policy that applies to the entities. These requirements are also reflected in § 744.21, but for ease of reference, this final rule also includes these in the introductory text of the supplement. The MEU List consists of three columns: Column 1 (Country) identifies the three countries where entities may be listed (China, Russia, Venezuela); column 2 (Entity) identifies the names and addresses of the entities; and column 3 ( Federal Register citation) identifies the Federal Register citation for final rules that added or modified entities on the MEU List. Unlike the Entity List, the license requirements and license review policy are the same for all MEU entities, so there is no need to include those columns in the MEU List. Instead, that information is specified in the introductory text of supplement no. 7 to part 744 and in § 744.21.

This final rule revises existing supplement no. 5 to part 744 (Procedures For End-User Review Committee Entity List Decisions), as a conforming change to add references to the new MEU List in supplement no. 7 to part 744. This final rule also makes other minor conforming changes to supplement no. 5 to part 744 to account for ERC decisions for additions, removals and modifications of MEU List entries, including revising the title of the supplement to reference the MEU List and clarifying the process for how the ERC reviews the Entity List for making modifications by removing a reference to annual reviews and simply stating the ERC reviews the Entity List and the MEU List regularly for identifying needed modifications. This final rule does not make any substantive changes to the ERC procedures, except for expanding the scope of ERC responsibility and procedures, so they also apply to additions, removals and modifications of MEU List entries.

As described above, the ERC, composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the MEU List in supplement no. 7 to part 744. The ERC make all decisions to add an entry to the MEU List by majority vote and all decisions to remove or modify an entry by unanimous vote.

Under § 744.21(b) of the EAR, BIS may inform persons either individually by specific notice, through amendment to the EAR published in the Federal Register , or through a separate notice published in the Federal Register , that a license is required for specific exports, reexports, or transfers (in-country) of any item because there is an unacceptable risk of use in or diversion to a `military end use' or `military end user' in China, Russia, or Venezuela. Under § 744.21(b)(1) of the EAR, BIS may designate entities subject to this additional prohibition under paragraph (b) that have been determined by the ERC to be a `military end user' pursuant to § 744.21. These entities will be added to supplement no. 7 to part 744 (`Military End User' (MEU) List) in Federal Register notices published by BIS.

This rule implements the decision of the ERC to add one hundred and two entities to the MEU List. These one hundred and two entities will be listed on the MEU List under the destinations of China and Russia, and a reserved category for Venezuela will also be added to the MEU List. The ERC made the decision to add each of the one hundred and two entities described below under the standard set forth in § 744.21 of the EAR, including the criteria for what constitutes a `military end user' under paragraph (g) and `military end use' under paragraph (f).

The ERC determined to add the fifty-seven entities identified below, under the destination of China, because the ERC has determined these entities are `military end users' based on the criteria in § 744.21(g) and (f).

The ERC determined to add the forty-five entities identified below, under the destination of Russia, because the ERC has determined these entities are `military end users' based on the criteria in § 744.21(g) and (f).

No license exceptions are available for exports, reexports, or transfers (in-country) to listed entities on the MEU List for items specified in supplement no. 2 to part 744, except license exceptions for items authorized under the provisions of License Exception GOV set forth in § 740.11(b)(2)(i) and (ii) of the EAR.

For the one hundred and two entities added to the MEU List by this rule, BIS imposes a license review policy of a presumption of denial as set forth in § 744.21(e).

The acronym “a.k.a.” (also known as) is used in entries on the MEU List to identify aliases, thereby assisting exporters, reexporters, and transferors in identifying entities on the MEU List.

For the reasons described above, this final rule adds the following one hundred and two entities to the MEU List:

• Academy of Aerospace Solid Propulsion Technology (AASPT);

• The following eight subordinate institutions of Aero-Engine Company of China: AECC Aero Science & Technology Co. Ltd.; AECC Aviation Power Co. Ltd.; AECC Beijing Institute of Aeronautical. Materials; AECC China Gas Turbine Establishment; AECC Commercial Aircraft Engine Co. Ltd.; AECC Harbin Dongan Engine Co., Ltd.; AECC Shenyang Liming Aero Engine Co., Ltd.; and AECC South Industry Company Limited;

• Anhui Yingliu Hangyuan Power;

• The following seven subordinate institutions of Aviation Industry Corporation of China:

AVIC Aircraft Co. Ltd.; AVIC Chengdu Aircraft Industrial (GROUP) Co., Ltd.; AVIC Flight Automatic Control Research Institute (FACRI); AVIC General Aircraft Huanan Industry Co. Ltd.; AVIC General Aircraft Zhejiang Institute Co., Ltd.; AVIC International Holding Corporation; AVIC Leihua Electronic Technology Research Institute (LETRI);

• Baimtec Material Co., Ltd.;

• Beijing Aero Lever Precision Ltd.;

• Beijing Ander Tech. Co., Ltd.;

• Beijing Guang Ming Electronics Co., Ltd.;

• Beijing Siyuan Electronic Co., Ltd.;

• CAST Xi'an Spaceflight Engine Factory;

• Chengdu Holy Aviation Science & Tech;

• China Aviation Ind. Std. Parts;

• CSSC Xijiang Shipbuilding Co., Ltd.;

• Elink Electronic Technology Co. Ltd.;

• Fly Raise International Limited;

• Fuhua Precision Man. Co.;

• Government Flying Service;

• Guangzhou Hangxin Aviation Technology Co., Ltd.;

• Guizhou Aviation Tech. Dev. Nat.;

• Guizhou Liyang Intl Manufacturing Co Ltd.;

• Hafei Aviation Industry Co., Ltd. (HAFEI);

• Hangzhou Bearing Test & Research Center Co., Ltd.;

• Harbin General Aircraft Industry Co., Ltd.;

• Henan Aerospace Precision Mach;

• Hunan South General Aviation Engine Co., Ltd.;

• Hutchison Optel Telecom Technology Co., Ltd.;

• Jiangsu Meilong Aviation Components Co.;

• Jiatai Aircraft Equipment Co., Ltd.;

• Jincheng Group Imp & Exp. Co. Ltd.;

• Laboratory of Toxicant Analysis, Institute of Pharmacology and Toxicology;

• Molecular Devices Shanghai Corporation;

• Nanjing Engineering Institute of Aircraft Systems (NEIAS);

• National Satellite Meteorological Bureau;

• Second Institute of Oceanography, Ministry of Natural Resources;

• Shaanxi Aero Electric Co., Ltd.;

• Shaanxi Aircaft Industry Co Ltd.;

• Shanghai Aerospace Equip. Man.;

• Shanghai Aircraft Design and Research Institute;

• Shanghai Aircraft Manufacturing Co. Ltd. (SAMC);

• Shanghai Tianlang Electronic Science Co., Ltd.;

• Shenyang Academy of Instrumentation Science Co., Ltd.;

• Shenyang Aircraft Corporation;

• Shenyang Xizi Aviation Industry Co., Ltd.;

• Sichuan Hangte Aviation Tech. Co., Ltd.;

• Star Tech Aviation Co., Ltd.;

• Sumec Instruments Equipment Co. Ltd.;

• Suzhou Eric Mechanics and Electronics Co. Ltd.;

• Wuxi Hyatech Co., Ltd.;

• Wuxi Paike New Mat. Tech. Co., Ltd.;

• Wuxi Turbine Blade Co. Ltd.;

• Xac Group Aviation Electronics Import & Export Co. Ltd.;

• XAIC Tech (Xi'an) Industrial Co., Ltd.;

• Xian Aero-Engine Controls Co., Ltd.;

• Xian Aircraft Industrial Company Limited;

• Xi'an Xae Flying Aviation Manufacturing Technology Co., Ltd.;

• Xian Xr Aero-Components Co. Ltd.;

• Yibin Sanjiang Machine Co., Ltd.; and

• Zhejiang Perfect New Material Co., Ltd.

• Admiralty Shipyard JSC;

• Aleksandrov Scientific Research Technological Institute NITI;

• Argut OOO;

• Communication center of the Ministry of Defense;

• Federal Research Center Boreskov Institute of Catalysis;

• Federal State Budgetary Enterprise of the Administration of the President of Russia;

• Federal State Budgetary Enterprise Special Flight Unit Rossiya of the Administration of the President of Russia;

• Federal State Unitary Enterprise Dukhov Automatics Research Institute (VNIIA);

• Foreign Intelligence Service (SVR);

• Forensic Center of Nizhniy Novgorod Region Main Directorate of the Ministry of Interior Affairs;

• Irkut Corporation;

• Irkut Research and Production Corporation Public Joint Stock Company;

• Joint Stock Company Scientific Research Institute of Computing Machinery;

• JSC Central Research Institute of Machine Building (JSC TsNIIMash);

• JSC Rocket and Space Centre—Progress;

• Kamensk-Uralsky Metallurgical Works J.S. Co.;

• Kazan Helicopter Plant PJSC;

• Komsomolsk-na-Amur Aviation Production Organization (KNAAPO);

• Korporatsiya Vsmpo Avisma OAO;

• Ministry of Defence RF;

• Molot Oruzhie;

• NPO High Precision Systems JSC;

• NPO Splav JSC;

• Oboronprom OJSC;

• PJSC Beriev Aircraft Company;

• PJSC Irkut Corporation;

• PJSC Kazan Helicopters;

• POLYUS Research Institute of M.F. Stelmakh Joint Stock Company;

• Promtech-Dubna, JSC;

• Public Joint Stock Company United Aircraft Corporation;

• Radiotechnical and Information Systems (RTI) Concern;

• Rapart Services LLC;

• Rosoboronexport OJSC (ROE);

• Rostec (Russian Technologies State Corporation);

• Rostekh—Azimuth;

• Russian Aircraft Corporation MiG;

• Russian Helicopters JSC;

• Sukhoi Aviation JSC;

• Sukhoi Civil Aircraft;

• Tactical Missiles Corporation JSC;

• Tupolev JSC;

• UEC-Saturn;

• United Aircraft Corporation;

• United Engine Corporation; and

• United Instrument Manufacturing Corporation.

This final rule adds and reserves a blank entry listing Venezuela in the Country column, but does not add any `military end users' to the MEU List under Venezuela at this time. This final rule clarifies here that for purposes of § 744.21, entities of the U.S.-recognized interim government of Venezuela are not considered `military end users' or engaged in `military end uses' for purposes of the EAR.

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on December 23, 2020, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA)(codified, as amended, at 50 U.S.C. Sections 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications and carries a burden estimate of 42.5 minutes for a manual or electronic submission, and OMB control number 0694-0134, Entity List and Unverified List Requests. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule, but are expected to slightly increase under OMB control number 0694-0134 because of the estimated thirteen removal or modification requests for the MEU List that BIS may receive each year. Each removal or modification request is estimated to impose a burden of 15 hours, so 15 × 13 is estimated to result in a burden increase of 195 hours under OMB control number 0694-0134.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4801-4852), this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

On May 17, 2019, the United States announced joint understandings with Canada and Mexico, respectively, concerning trade in aluminum covered by the action taken pursuant to Section 232 of the Trade Expansion Act of 1962, as amended. Among other things, the understandings call for the monitoring of aluminum trade between the United States and Canada and Mexico, respectively. Consistent with the joint understandings, and to enhance U.S. Government monitoring and analysis of aluminum products more generally, Commerce published a proposed rule on April 29, 2020 to establish the AIM system. The goal of the AIM system is to allow for the effective and timely monitoring of import surges of specific aluminum products and to aid in the prevention of transshipment of aluminum products. Over the past two decades, Commerce has operated the similar recently updated Steel Import Monitoring and Analysis (SIMA) system that allows for the effective and timely monitoring of import surges of specific steel products, and aids in the prevention of transshipment of steel products.

To the extent practicable, the AIM System will operate in a similar manner as the SIMA system, which has been operating under its current authority since March 11, 2005. 1 The purpose of the SIMA system is to provide steel producers, steel consumers, importers, and the general public with accurate and timely information on anticipated imports of certain steel products into the United States. Steel import licenses, issued through the online SIMA licensing system, are required by U.S. Customs and Border Protection (CBP or Customs) for filing entry summary documentation, or its electronic equivalent, for imports of certain steel mill products into the United States. Through the monitoring tool, certain import data collected from the licenses are aggregated weekly and reported on the publicly available SIMA website, https://www.trade.gov/steel. This tool provides valuable data regarding U.S. imports of certain steel mill imports, as early as possible, and makes such data available to the public up to eight weeks in advance of official U.S. import statistics issued by the U.S. Census Bureau (Census).

On January 19, 2018, pursuant to section 232 of the Trade Expansion Act of 1962 (the Trade Expansion Act), as amended (19 U.S.C. 1862), the Secretary of Commerce (Secretary) transmitted to the President a report on his investigation into the effect of imports of aluminum articles on the national security of the United States. 2 The Secretary found and advised the President that aluminum articles were being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States. 3 In Presidential Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum Into the United States) (Proclamation 9704), the President concurred with the Secretary's findings and decided to adjust the imports of aluminum articles, as defined in clause 1 of Proclamation 9704, by imposing a 10 percent ad valorem tariff on such articles imported from most countries. 4 Between March 2018 and August 2020, the President made several additional adjustments to the imports of aluminum articles. 5

As a result, effective March 23, 2018, certain aluminum imports were subject to Section 232 tariffs, and imports from Canada and Mexico were exempted from these tariffs. With respect to Canada and Mexico, Proclamation 9704 provided that the United States would continue ongoing discussions with these countries and exempt aluminum imports from these countries from Section 232 tariffs. 6 Further, Proclamation 9704 stated that Canada and Mexico would be expected to take action to prevent transshipment of aluminum imports through these countries to the United States. 7 Subsequently, Presidential Proclamation 9758 of May 31, 2018 (Adjusting Imports of Aluminum into the United States) (Proclamation 9758) removed the exemption for aluminum imports from Canada and Mexico, and imposed Section 232 duties on aluminum imports from these countries, effective June 1, 2018. 8

On May 17, 2019, the United States announced that discussions had yielded joint understandings with Canada and Mexico, respectively, to remove the Section 232 tariffs for aluminum imports from those countries. 9 As part of the joint understandings, the United States and Canada, and the United States and Mexico, agreed to implement effective measures to prevent the transshipment of aluminum products made outside of the United States, Canada, and Mexico, among other commitments. Additionally, the joint understandings provide that the countries will establish an agreed-upon process for monitoring aluminum trade between them. In light of the joint understandings, Presidential Proclamation 9893 of May 19, 2019 (Adjusting Imports of Aluminum into the United States) (Proclamation 9893) provided that a satisfactory alternative means had been agreed upon and, effective May 21, 2019, aluminum imports from Canada and Mexico would not be subject to Section 232 tariffs. 10

On April 29, 2020, Commerce published a proposal for the establishment of the AIM system in 19 CFR part 361. 11 Commerce received 17 comments on the Proposed Rule, and we have addressed those comments below. The Proposed Rule, comments received, and this final rule can be accessed using the Federal eRulemaking portal at http://www.regulations.gov/. After analyzing and considering the comments received, we are adopting regulations to establish the AIM system.

Pursuant to its authority under the Census Act, as amended (the Census Act) (13 U.S.C. 301(a) and 302), and consistent with the joint understandings, Commerce is establishing a system of import licensing to facilitate the monitoring of imports of aluminum articles, including monitoring for import surges, known as the AIM system. Commerce has thus proposed a rule and received comments regarding the establishment of the AIM system. The AIM system will operate in a similar way as the existing SIMA system (19 CFR part 360) and will be codified under 19 CFR part 361. Also, Commerce recently incorporated minor changes into its regulations for the SIMA system. 12 The AIM system tracks the modified SIMA system as closely as possible except where necessary to address the inherent differences between steel and aluminum imports.

The responsibility for issuing these regulations is delegated to the Assistant Secretary for Enforcement and Compliance.

The AIM system is based entirely on a web-based platform at https://www.trade.gov/aluminum and is comprised of the online registration system, automatic aluminum import license issuance system, and aluminum import monitor. As addressed in further detail below, for purposes of importing basic aluminum products, 13 any importer, importing company, customs broker or importer's agent of basic aluminum products must (1) register and obtain a username, (2) file for and obtain a unique aluminum import license (issued automatically) for each shipment, and (3) provide the license number to CBP as part of the submission of the entry summary form, Customs Form 7501, or its electronic equivalent. As discussed below, aluminum imports valued under $5,000 per shipment may obtain a multi-use low-value license. Additionally, informal entries are exempt from the licensing requirement. 14

The public AIM monitor, described further below, will aggregate and report certain information obtained from the aluminum licenses on a monthly basis and will be refreshed each week, as appropriate. Additionally, outdated license information will be replaced, where available, with publicly available U.S. import statistics. Like the public SIMA monitor, the public AIM monitor will function as an early warning system, yielding public data up to eight weeks prior to the release of publicly available import statistics by Census.

Similar to the SIMA system, the AIM system will include both an online registration system and an automatic aluminum import license issuance system, as provided in 19 CFR 361.101-103. Section 361.102, covering the online registration system, provides that in order to obtain an aluminum import license, any importer, importing company, customs broker or the importer's agent must first register with Commerce and obtain a username to log into the automatic aluminum import license issuance system. Although a primary username will be issued to an importing company or brokerage house, all operating units within the company ( e.g., individual branches, divisions or employees) may have separate usernames associated with different email addresses that will be associated with the parent company. The AIM system will be designed to allow multiple users of a single Employer Identification Number (EIN) from different locations within the company to enter information simultaneously.

There is no fee to register ( see § 361.106), and a username will be issued immediately if all registration fields are completed. As part of the registration process, the importer, importing company, customs broker, or importer's agent will be required to provide certain general information, including the applicant company name, EIN or the CBP-issued importer number (where no EIN is available), address, phone number, and email address for both the company's headquarters and any branch offices that will be applying for aluminum licenses. This information will be used solely for the purposes of administering the aluminum import licensing and monitoring programs. The information will not be released by Commerce, except as required by U.S. law.

Section 361.103, covering the automatic issuance of import licenses, provides that aluminum import licenses will be issued to registered importers, customs brokers, or their agents through an automatic aluminum import licensing system. The separately issued username discussed above will be required to apply for the import license. There will be no fee charged to apply for the import licenses (see § 361.106). Like steel import licenses, aluminum import licenses will be issued automatically after the completion of all fields on the application form. In order to obtain the license, the applicant (also referred to as the filer) must report the information identified under § 361.103(c)(1) in the fields of the license application form. Certain fields will be generated automatically in the license form from the information in the registration system. Other information will be available from drop down lists in the application form ( e.g., aluminum HTS numbers, country of origin, country of smelt, port of entry) and will not have to be typed.

Much of the information requested on the license form is readily available to the importer or its broker and is similar to the information required by CBP for purposes of the entry summary. For certain fields, the information requested is not already required by CBP. Specifically, in the Proposed Rule Commerce proposed a field to reflect the country where the primary aluminum used in the manufacture of the imported aluminum product was smelted and poured. However, based on comments, and as discussed further below, in this final rule Commerce has altered this requirement. As stated in § 361.103(c)(1)(xiii), (xiv), and (xv), Commerce requires the applicant to provide information in three separate fields: (1) The country where the largest volume of primary aluminum used in the manufacture of the imported aluminum product was smelted (referred to as “country of smelt for the largest volume of primary aluminum” as shorthand), (2) the country where the second largest volume of primary aluminum used in the manufacture of the imported aluminum product was smelted (referred to as “country of smelt for the second largest volume of primary aluminum” as shorthand), and (3) the country where the aluminum used in the imported aluminum product was most recently cast (referred to as “country of most recent cast” for shorthand). These fields are further described under § 361.103(c)(3). The reference to “pour” and “poured” is removed from the final rule.

Section 361.103(c)(3)(i)(A) defines the field for the country of smelt for the largest volume of primary aluminum as the country where the largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. 15 Section 361.103(c)(3)(i)(B) provides that filers may state “not applicable” in this field if the product contains only secondary aluminum and no primary aluminum. Secondary aluminum is defined as aluminum metal that is produced from recycled aluminum scrap through a re-melting process. 16 Additionally, recognizing that importers may have some initial difficulties in securing this information, § 361.103(c)(3)(i)(C) allows filers to state “unknown” for this field on the license application on a temporary basis. Specifically, “unknown” may be stated for a period of one year from the publication of the final rule ( i.e., up to December 23, 2021) to allow license applicants sufficient time to gather the requisite information. Effective December 24, 2021, filers will no longer be able to state “unknown” and then will be required to provide the requested information for this field.

Similar to the country of smelt for the largest volume of primary aluminum field, § 361.103(c)(3)(ii)(A) defines the field for the country of smelt for the second largest volume of primary aluminum as the country where the second largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. Section 361.103(c)(3)(ii)(B) also provides that filers may state “not applicable” in this field if the product contains only secondary aluminum and no primary aluminum. Additionally, filers may state “not applicable” in this field if the product does not contain a second largest volume of primary aluminum. Further, filers will be allowed to state “unknown” in this field for a period of one year from the publication of the final rule ( i.e., up to December 23, 2021) for the reasons stated above. Effective December 24, 2021, filers will no longer be able to state “unknown” and then will be required to provide the requested information for this field.

Section 361.103(c)(3)(iii)(A) defines the field for the country of most recent cast as the country where the aluminum (with or without alloying elements) was last liquified by heat and cast into a solid state. The final solid state can take the form of either a semi-finished product (slab, billets or ingots) or a finished aluminum product. 17 Unlike the two fields described above, section 361.103(c)(3)(iii)(B) and (C) provide that filers will not be allowed to state “not applicable” or “unknown” for this field. As discussed further below, the country of most recent cast is information that generally is readily available to the importer or its broker and is most likely to be identified in the import documentation accompanying the entry summary to be filed with CBP (invoices, lab reports, etc.). In some instances, the country of most recent cast may be identified as the country of origin. Further, because a semi-finished or finished aluminum product could go through the casting process multiple times before importation into the United States, the field only requests the country of most recent cast.

A sample copy of the aluminum import license and the accompanying instructions will be available for viewing on Enforcement and Compliance's website ( https://www.trade.gov/aluminum/ ). Upon completion of the application form, the importer, customs broker or the importer's agent will certify as to the accuracy and completeness of the information and submit the form electronically. Once the license is issued, the system will automatically issue an aluminum import license number which will appear on the application page. The applicant will also receive a confirmation email. The refreshed form containing the submitted information and the newly issued license number will appear on the screen (the “license form”). Applicants can print the license form themselves. If needed, copies of completed license forms can be retrieved by the user or requested from Commerce during normal business hours.

Section 361.103(e) requires that users correct licenses themselves if they determine that there is an error submitted. To access a previously issued license, a user must log on with his/her username and identify the license number and the volume (quantity in kilograms) for the first product shown on the license. The information on the license should match the information presented in the entry summary data as closely as possible which includes the value and quantity of the shipment, the expected date of importation, and the customs port of entry.

Pursuant to § 361.101(b), the aluminum import license will be required for every entry of covered aluminum products (with certain exceptions for foreign trade zones and informal entries described below). As with SIMA, a single license can cover multiple products, as long as the information at the top of the form ( i.e., importer, exporter, manufacturer, country of origin and exportation, the expected date of export, first and second country of smelt, and expected date of import), are the same for the shipment. However, separate licenses will be required if any of the information above differs with respect to a given set of covered imported aluminum products. As a result, a single CBP entry may require more than one aluminum import license. The applicable license number(s) must cover the total quantity of the aluminum product entered and should match the information provided on the CBP entry summary. There is no requirement to present physical copies of the license forms at the time of entry summary. However, copies must be maintained in accordance with CBP's normal requirements. Licenses will be issued for single use and will be specific to an entry (as discussed above), with the exception of low-value licenses described below.

Certain information collected from the license application system that can be aggregated without revealing business proprietary information will be reported on the public AIM monitor, as described in further detail below. All other information including copies of the licenses and the names of importers, exporters, and manufacturers, will be considered business proprietary information and will not be released to the public.

In accordance with § 361.103(d), the aluminum import license can be applied for up to 60 days prior to the expected date of import and until the date of filing of the CBP entry summary documents, or its electronic equivalent. The aluminum import license is valid for up to 75 days. However, import licenses which are valid on the date of import but expire prior to the filing of CBP entry summary documents will be accepted. Issues related to foreign trade zones are addressed below.

In accordance with § 361.101(e), aluminum import licenses are not required on temporary importation bond (TIB) entries, transportation and exportation (T&E) entries or entries into a bonded warehouse. Covered aluminum products withdrawn for consumption from a bonded warehouse will require a license at the entry summary.

Pursuant to § 361.101(c), all shipments of covered aluminum products into foreign trade zone (FTZ), known as FTZ admissions, will require an aluminum import license prior to the filing of FTZ admission documents. The license number(s) must be reported on the FTZ admission documents and/or status designation (Customs Form 214) at the time of filing. There is no requirement to present physical copies of the license forms at the time of FTZ admission. However, copies must be maintained in accordance with Customs' normal requirements. FTZ admission documents without the required license number(s) will not be considered complete and will be subject to liquidated damages for violation of the bond condition requiring timely completion of admission. A further aluminum import license will not be required for shipments of entries for consumption from zones into the commerce of the United States. In the case of FTZ admissions, the aluminum import license can be applied for up to 60 days prior to the expected date of importation into the Zone and until the date of filing of Customs Form 214. For FTZs, the licenses do not expire and covered aluminum products do not require a new license when leaving the zone and entering for consumption.

In accordance with § 361.101(d), no import license shall be required on informal entries of covered aluminum products, such as merchandise valued at less than $2,500 ( see 19 CFR 143.21 through 143.28 for further information). This exemption applies to informal entries only; imports of aluminum valued at less than $2,500 that are part of a formal entry will require a license.

Pursuant to § 361.103(f), for shipments containing less than $5,000 worth of aluminum, applicants can apply for a reusable low-value license.

As provided in § 361.104, the public AIM monitor, featured on the AIM system website, will report certain aggregate information on imports of aluminum product categories using both publicly available import data and data obtained from the aluminum licenses. The public AIM monitor will provide information on U.S. imports of aluminum from all countries by broad product categories in both value and volume measures. Once the license collection begins, additional data will be added to the public AIM monitor. Aggregate data will be reported, as appropriate, on a monthly basis by country of origin, country where the largest volume of primary aluminum used in the manufacture of the product was smelted, country where the second largest volume of primary aluminum used in the manufacture of the product was smelted, country of most recent cast, and relevant aluminum product grouping, etc. and will include import quantity (metric tons), import Customs value (U.S. $), and average unit value ($/metric ton). The website will also contain certain aggregate data at the 6-digit Harmonized Tariff Schedule level and will also present a range of historical data for comparison purposes. Provision of aggregate data on the website may be revisited should concerns arise over the possible release of proprietary data. The public AIM monitor will be similar to SIMA's but will not incorporate preliminary Census data. Commerce believes that the early release preliminary data from Census is not critical to the early warning monitor because the aluminum import license data will be available.

With respect to the public AIM monitor, which will aggregate and report certain license data, Commerce will only release or update weekly data on the country of smelt and cast for each product group (at the 6-digit HTS level) if there are sufficient observations for the product groups. Commerce releases data on its public AIM monitor under the authority of the Census Act (13 U.S.C. 301(a) and 302) and must adhere to Census guidance for the release of data which requires the protection of proprietary data. After collecting the data on the countries of smelt and country of most recent cast, Commerce will determine whether there are sufficient data observations to report at a 6-digit product group level without disclosing proprietary data. The public AIM monitor will divide license data into various product groupings, which can be seen at https://www.trade.gov/aluminum. In instances where there are few ( i.e., less than three) observations of certain country of origin/product group combinations, Commerce will not provide this disaggregated data ( i.e., product group level) when adding the countries of smelt and country of cast data. Further, provision of aggregate data on the public AIM monitor may be revisited should concerns arise over the possible release of business proprietary data.

Reported monthly import data will be updated each week with new data collected from licenses issued in the prior week. The data collected may be adjusted periodically for corrected, canceled or unused aluminum import licenses, if deemed appropriate, for accurate monitoring purposes. Information provided in the public AIM monitor will mirror the information available on the public SIMA monitor. 18

The public AIM monitor will also present a range of historical data for comparison purposes. This will include comparisons to the previous month and to the same month in the previous year; three month rolling averages along with similar comparisons to the immediately preceding period, the same period from the preceding year; and monthly import data on each aluminum product category.

At the sub-regulatory level, Commerce will consider adding additional product groups (for example, aluminum scrap) to the public AIM monitor beyond the HTS categories covered by the license requirement, which will be based on publicly available import data. 19

Section 361.105 is reserved. Section 361.106 provides that no fees will be charged for obtaining a username, issuing an aluminum import license or accessing the public AIM monitor. Additionally, § 361.107 provides that the AIM system will generally be accessible 24 hours a day, 7 days a week but may be unavailable at times for server maintenance. If the system is unavailable for an extended period of time, parties will be able to obtain licenses from Commerce directly via email ( aluminum.license@trade.gov ) during regular business hours. Should the system be inaccessible for an extended period of time, Commerce would advise Customs to consider this as part of mitigation on any liquidated damage claims that may be issued. Lastly, § 361.108 states that Commerce may revoke a filer's electronic licensing privileges if the filer consistently files inaccurate licensing information or otherwise abuses the system. In such instances, the filer would only be able to obtain a license directly from Commerce, which may take 10 working days to process. Delays in the filing caused by the removal of a filer's electronic filing privilege will not be considered a mitigating factor by CBP.

Commerce received 17 comments on the proposed rule that Commerce considered in finalizing this rule. Below is a summary of the comments, grouped by issue category, followed by Commerce's response. Further, because the AIM system is being adopted for the first time in this final rule, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice. Parties will have the opportunity to provide further comment on any issue discussed herein or any related topic at that time.

Several commenters supported the general concept of a “smelt and pour” requirement, while several other commenters opposed it. Most commenters recommended using the term “smelt and cast” instead of “smelt and pour” because they argued that “pour” was not a term used widely in the aluminum industry. These commenters recommended a wide range of alternatives.

Several commenters recommended that Commerce collect information on the country of smelt and replace the term “pour” with the country of most recent cast. Another commenter recommended collecting information only on the country of most recent cast, but not the country where primary aluminum was smelted.

Several commenters stated that filers would not always know where primary aluminum used in their products was originally smelted because primary aluminum is often smelted and shipped to one or more third countries where it may be re-melted, alloyed, and/or shaped before shipment to the U.S. These commenters were concerned that tracing the primary aluminum, from the original smelting, through all the stages of re-melting in different countries might not be possible. However, several other commenters asserted that it is possible to trace the country of smelt, but it might take some time to gather such information. Another commenter requested that Commerce collect information on country of origin, and opposed collecting information on smelting, pouring, or casting. This commenter stated that it would be burdensome to collect information beyond country of origin for alloys and secondary products but did not provide further details about the burden. This commenter also stated that it would be impossible to collect “smelt and pour” information for scrap.

One commenter asserted that aluminum semi-finished goods (profiles, castings, and rolled products) were produced using a mixture of primary aluminum, secondary (recycled) aluminum, and pre- and post-consumer aluminum scrap. The commenter stated that it was unclear how a smelt and pour field should be completed for typical aluminum products where the aluminum was smelted in various countries. This commenter recommended removing the smelt and pour field altogether, allowing an “unknown” option, or replacing smelt and pour with “last melted and poured.” Several other commenters explained that some aluminum imports contain only secondary (recycled) aluminum and, as a result, requested that importers have the option of reporting “no primary aluminum” in the smelt and pour (or smelt and cast) field. Another commenter also requested that the AIM system collect information on country of alloying which may be different from the country of most recent cast.

Two commenters requested that Commerce collect documentation regarding the country of smelt and pour or the country of origin. One of these commenters requested that Commerce collect Country of Origin and Country of Analysis certificates, and another commenter requested the collection of mill test certificates for each stage of processing. Another commenter suggested that CBP examine the aluminum licenses, not just the license number, and inspect them against other import documents. Similarly, another commenter suggested that documentation proving Mexican country of origin should be required for imports from Mexico. These commenters expressed concerns that primary aluminum could be produced in countries other than Canada and Mexico, shipped to these countries as either ingots or other shapes, re-melted, and then entered duty-free if declared as Canadian or Mexican country of origin.

Response: In the Proposed Rule, Commerce proposed a field to reflect the country where the primary aluminum used in the manufacture of the imported aluminum product was smelted and poured. Based on comments received on the Proposed Rule, Commerce will make several modifications to better reflect the characteristics of the aluminum industry and provide clarity to license applicants. These modifications are described in detail above and summarized here.

Specifically, the reference to “country of smelt” has been further refined and the reference to “country of pour” is removed from the final rule. Pursuant to § 361.103(c)(1)(xiii), (xiv), and (xv), Commerce will require the license applicant to provide information in three separate fields: (1) The country where the largest volume of primary aluminum used in the manufacture of the imported aluminum product was smelted (referred to as “country of smelt for the largest volume of primary aluminum” as shorthand), (2) the country where the second largest volume of primary aluminum used in the manufacture of the imported aluminum product was smelted (referred to as “country of smelt for the second largest volume of primary aluminum” as shorthand), and (3) the country where the aluminum used in the imported aluminum product was most recently cast (referred to as “country of most recent cast” for shorthand). These fields are further described under § 361.103(c)(3), including definitions. These updates also are adopted in the aluminum license application form. We address individual comments below.

As discussed above, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice. In particular, parties may comment on the requirement to report the country of smelt for the largest and second largest volume of primary aluminum and the country of most recent cast discussed herein.

We agree with commenters that the reference to “country of pour” should be removed from the final rule because this term is not widely used in the aluminum industry. Additionally, based on comments, we have adopted the three fields described above. Requiring the completion of these separate fields will allow Commerce to collect data that are most relevant to the aluminum industry while minimizing the burden to applicants. Moreover, collection of this data will allow for the effective and timely monitoring of import surges of specific aluminum products and will assist in preventing the transshipment of aluminum products. Separately requiring the identification of the country of smelt for the largest and second largest volume of primary aluminum and the country of most recent cast better reflects data available to the industry. Furthermore, the specificity of the requested information should minimize confusion caused by the initially proposed “smelt and pour” field.

Commerce also agrees with certain commenters' requests that clear definitions regarding these terms should be included in the aluminum license application. Specifically, in the country of smelt for the largest volume of primary aluminum field, the license applicant will be required to identify the country where the largest quantity of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. 20 The country of smelt for the second largest volume of primary aluminum field adopts a similar definition. The establishment of these fields and the adopted definitions for these fields takes into account comments on the Proposed Rule as well as third-party sources, such as the discussion of primary aluminum production featured on the website of the Aluminum Association. 21 Thus, these definitions are consistent with the well-understood and generally accepted description of the primary aluminum production process in the aluminum industry. Additionally, these precise field names and definitions are further refinements of the term “country of smelt,” that was included the Proposed Rule, to provide increased clarity and consistency for all potentially regulated entities.

Moreover, by including a field for the country of smelt for the second largest volume of primary aluminum, Commerce will address concerns from foreign producers, importers, and downstream producers that primary aluminum is often melted and chemically mixed with secondary aluminum and/or primary aluminum from multiple countries. At the same time, Commerce will allow applicants to state “not applicable” in this field if the product does not contain a second largest volume of primary aluminum. Additionally, applicants may state “not applicable” in this field if the product contains only secondary aluminum and no primary aluminum. For clarity, Commerce defines secondary aluminum as aluminum metal that is produced from recycled aluminum scrap through a re-melting process. 22 Consistent with other definitions adopted in this final rule, this definition takes into account comments on the Proposed Rule as well as third-party sources, and reflects a well-understood and generally accepted description of the secondary aluminum production process in the aluminum industry.

Lastly, in the country of most recent cast field, the license applicant will be required to identify the country where the aluminum (with or without alloying elements) was last liquified by heat, and cast into a solid state. 23 The final solid state can take the form of either a semi-finished product (slab, billets or ingots) or a finished aluminum product. 24 This is a refinement of the term “country of pour,” that was also in the Proposed Rule, and also provides increased clarity as requested by commenters. And similar to the above definitions, this definition takes into account third-party sources and reflects a well-understood and generally accepted description of aluminum processing in the aluminum industry. In light of this, we are adopting these fields and corresponding definitions in the final rule.

As stated above, recognizing that importers may have some initial difficulty in securing the information necessary to complete the fields for the country of smelt for the largest and second largest volume of primary aluminum, Commerce will allow filers to state “unknown” in these fields on a temporary basis. Specifically, “unknown” may be stated for a period of one year from the publication of the final rule ( i.e., up to December 23, 2021) to enable license applicants sufficient time to gather the requisite information. Effective one year from the publication of the final rule, December 24, 2021, filers will no longer be able to state “unknown” and then will be required to provide the requested information for this field.

This will address concerns from commenters who do not always know the country where primary aluminum was smelted, especially when it is re-melted and alloyed with secondary aluminum. In contrast, for the modified SIMA system, Commerce determined that steel license applicants would be expected to know the country where the steel used in the manufacture of the product is melted and poured for purposes of completing this field in the license application. Specifically, Commerce determined that this information is identifiable in the mill test certification that would be readily available to the applicant, and, for this reason, declined to allow SIMA license applicants an option to state “unknown” in this field. 25 Given the concerns identified above ( i.e., that aluminum license applicants may not know the country where primary aluminum was smelted), Commerce is allowing the use of the “unknown” option for aluminum license applicants as described herein. Nevertheless, Commerce recognizes that allowing an “unknown” option presents the potential for abuse and possible loophole concerns related to circumvention/transshipment and may inhibit the accurate collection of data. Therefore, Commerce will implement the following measures.

First, Commerce will allow the use of the “unknown” option for one year after the publication of the final rule, as described above. This will place importers on notice that they need to start collecting the necessary documentation that tracks this information within their supply chains. It will also allow the AIM system to be launched expeditiously while providing importers an adjustment period to start collecting this information. By providing this adjustment period and considering the burden to importers, the AIM system would then be aligned with SIMA requirements in one year when the “unknown” option is removed from the form.

Second, applicants are required to certify that the information on the license application is correct to the best of the applicant's knowledge. Therefore, when importers select “unknown” in the license application, they are certifying that this is the best information available to them at the time of license application.

Third, Commerce will monitor use of the “unknown” option for abuse, in a similar manner to current monitoring of the use of low-value import licenses in the SIMA system. Commerce will identify license applicants who repeatedly report “unknown” in the fields for the countries where the largest and/or second largest volume(s) of primary aluminum is smelted and contact these applicants to confirm that they are providing the best available information.

Fourth, to the extent possible without revealing business proprietary information, Commerce will also report data on the volume of imports associated with licenses that use the “unknown” option on the public AIM monitor. This will increase transparency and allow the industry to closely monitor, including raising concerns, of potential abuse and circumvention/transshipment.

Although commenters requested that Commerce collect further documentation ( i.e., mill test certificates, Country of Analysis/Origin certificates) and/or require CBP to examine licenses in order to prevent transshipment and circumvention/evasion, Commerce will not require such documentation or requirement at this time. These suggestions would create additional burdens and the public has not had an opportunity to comment. Moreover, it would be administratively burdensome for Commerce to examine these documents in issuing licenses through the automated license application system, and for CBP to examine such documentation upon entry of covered aluminum products. Such a requirement would necessitate further inter-agency consultation and coordination and has not been considered for purposes of this final rule.

Finally, Commerce will not collect information on the country of alloying because this would add another field to the license form and would likely provide redundant information that is already collected through the identification of country of most recent cast.

That said, as discussed above, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice. Parties may further comment on the issues discussed above at that time.

The Proposed Rule solicited comments on a licensing requirement for aluminum products subject to Section 232 tariffs, pursuant to Presidential Proclamation 9704, 26 but several commenters discussed whether the licensing requirement should be expanded to cover additional aluminum products. Specifically, several commenters requested confirmation that scrap products (not subject to Section 232 tariffs) be exempted from the Proposed Rule' s smelt and pour requirement but did not comment on whether scrap products should be subject to the licensing requirement in the first instance. Several commenters stated that scrap should be subject to the licensing requirement, though not subject to the Proposed Rule' s smelt and pour requirement, including one commenter that requested all of HTSUS Chapter 76 be subject to the licensing requirement. One commenter recommended allowing scrap importers to list the country where the scrap was purchased as the country of origin. Additionally, a commenter recommended expanding the licensing requirement to cover aluminum wire and cable products (HTS 7614.90.20, 7614.90.40, and 7614.90.50) because these products are now subject to Section 232 tariffs, pursuant to Presidential Proclamation 9980. 27

Response: The AIM system will not require import licenses for aluminum scrap (HTS 7602), and certain downstream/derivative products whose inclusion is requested in comments and are now subject to Section 232 tariffs pursuant to Presidential Proclamation 9980 ( i.e., aluminum wire and cable products (HTS 7614.90.20, 7614.90.40, and 7614.90.50)). 28 Commerce did not request comments on including these products in the Proposed Rule   29 and, as a result, the public has not been afforded an opportunity to provide comments on such a change to the scope of products subject to the AIM system. However, Commerce has considered the commenters' assertion that collecting data on scrap and downstream products will assist in monitoring potential evasion/circumvention. Accordingly, as discussed above, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice. Parties may comment on the inclusion of these products in the AIM system's import license requirement at that time. Furthermore, as noted above, at the sub-regulatory level, Commerce will consider adding additional product groups (such as aluminum scrap) to the public AIM monitor beyond the HTS categories covered by the license requirement, which will be based only on publicly available import data.

Several commenters stated that aluminum prices are based on a London Metal Exchange (LME) reference price that is often unavailable at time of importation, so the price of the product imported would need to be corrected (reconciled) post-entry. These commenters were concerned that importers would need to correct values for all or nearly all aluminum imports after entry, increasing the public burden on completing the license application.

Response: As per 19 CFR 361.103(e), applicants will need to correct their licenses if they determine that there was an error in their application. The information on the license should match the information presented in the Customs Form 7501 entry summary document as closely as possible; this includes the value and quantity of the shipment, the expected date of importation, and the Customs port of entry. Commerce has included instructions on the license application, specifying that importers are to provide their best estimate of the value of imports at the time of license completion. Although this estimate does not need to perfectly match the final reconciled value on CBP entry summary documents, the estimate should be reasonably accurate, based on invoices, shipping documents, or the current LME reference price for the commodity imported (at time of license completion). Further, the regulations state that licenses are to closely reflect the information contained in the entry summaries. Therefore, importers will have the ability to edit and correct the information provided on the licenses after entry and will be able to address large discrepancies in accordance with 19 CFR 361.103(e).

There were two comments about the reporting of data in the public AIM monitor. One commenter requested that data be collected and reported at the 10-digit HTS level in order to distinguish between two types of aluminum products, can sheet end and body stock, that are the same at the 8-digit HTS level. Another commenter requested that the public AIM monitor publicly disclose specific import data (including specific importers and sources of imports), rather than aggregate import data to increase transparency.

Response: Commerce understands that it would be optimal from the data users' perspective to have the full 10-digit information collected through the licenses available to the users of the public AIM monitor. However, this may contain proprietary data, making it impossible for Commerce to provide so much detail. Commerce will release data in as much detail as possible ( i.e., at the most disaggregated level possible) without releasing companies' proprietary information. Like the public SIMA monitor, Commerce will release data on its public AIM monitor under the authority of the Census Act (13 U.S.C. 301(a) and 302) and must adhere to Census guidance for the release of data which requires the protection of proprietary data. After collecting license data, Commerce will determine whether there are sufficient data observations ( i.e., more than three) to report at a 6-digit HTS level without disclosing business proprietary data. As with steel license data, the rationale for releasing only 6-digit HTS detail information is based on the notion that releasing data at the 10-digit HTS level from the license collection (updated weekly) could violate these rules and likely release identifiable proprietary information. Once Commerce begins the license collection, Commerce will re-evaluate the level of product detail it can release appropriately without disclosing proprietary information.

One commenter requested allowing quarterly licenses that were only estimates of the total import volume, created up to 120 days before importation to reduce the public burden and to provide an early warning about imports farther in advance than the 60 days in the proposed rule. Another commenter requested that Commerce not require licenses too far ahead of importation date (no more than 30 days).

Response: In accordance with § 361.103(d), and as described above, Commerce will require applicants to obtain a license prior to entry, up to 60 days in advance, the same period as the existing SIMA system. Licenses will be automatic and immediate, so an importer could create a license only minutes before entry. However, applicants will be encouraged to create licenses further in advance to maximize Commerce's ability to provide the public with an early warning about import trends. Licenses cannot be based on quarterly summaries, and volumes should closely match those on all other documents required for importation because allowing vague quarterly estimates would undermine the accuracy of the system.

There were several comments about Section 232 tariffs and tariff exclusions. One commenter requested requiring importers to indicate whether they received an exclusion on the license and requested that the public AIM monitor present exclusion data on its website. Another commenter requested that licensing only be required for imports from countries that are not exempt from the Section 232 program.

Response: Commerce, at this time, will not require AIM license applicants to report information on Section 232 exclusions in the license application. As an initial matter, the AIM system and the Section 232 exclusion process, although both housed within Commerce, are administered separately and under separate legal authorities. Therefore, inclusion of a new field for Section 232 exclusions will require further consideration and analysis. Further, because Commerce did not request comments on including this additional field in the Proposed Rule, the public has not been afforded an opportunity to provide comments on what would be a significant change to the license application.

That said, Commerce has considered the commenters' assertion that collecting data on Section 232 exclusions could assist in monitoring for potential surges. Accordingly, as discussed above, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice, including the potential inclusion of a field for Section 232 exclusions on the AIM license application, at that time.

Additionally, Commerce is not accepting the commenter's request that licenses only be required for imports from countries that are not exempt from Section 232 tariffs. Requiring licenses for aluminum imports from all countries is consistent with the objectives of the joint understandings and the AIM system to monitor all imports of aluminum for potential surges. Indeed, a main objective of the joint understandings is to monitor potential surge patterns involving countries exempted from the Section 232 tariffs. 30

One commenter requested additional training material on how to create licenses and reconcile import values.

Response: Commerce will create training webinars, a “Frequently Asked Questions” page on the AIM system website, and other materials to ensure that the public understands the licensing requirement. This does not require regulatory modifications.

One commenter requested that bonded warehouses not be exempted from licensing requirements. The commenter raised concerns that, because licenses can be obtained quickly and automatically, exempting bonded warehouses from licensing requirements creates the potential for importers to stockpile aluminum without licenses and then to later import them into the United States for consumption based on more favorable pricing conditions in the U.S. market. This commenter asserted that storing goods in bonded warehouses would also undermine the early warning provided by requiring importers to obtain licenses prior to entry of aluminum products.

Response: As provided in section 19 CFR 361.101(e) and consistent with the SIMA system, Commerce will not require users to obtain aluminum import licenses for entry into bonded warehouses. However, entries of covered aluminum products withdrawn for consumption from bonded warehouses will require a license at the entry summary. Entry into bonded warehouses does not constitute an entry for consumption as provided in § 361.101(b) and (e), and some of the aluminum could subsequently be re-exported from bonded warehouses. Additionally, Commerce also finds that including these shipments in the aluminum license data would likely overestimate monthly imports of aluminum for consumption. Furthermore, this would require users to obtain two separate licenses for importation into bonded warehouses and importation into consumption. This would increase the public burden and further reduce the accuracy of AIM licenses because the system would double-count these licenses.

Several commenters requested that the United States and Mexico implement an “agreed-upon process for monitoring aluminum trade between both countries” as part of USMCA negotiations. One commenter sought explicit clarification regarding whether the AIM system constitutes the “agreed-upon process for monitoring aluminum trade between countries” in accordance with the joint understandings on aluminum. 31 In particular, this commenter requested that the U.S. clarify the role of the AIM system with regard to the objectives of the joint understandings. This commenter also requested that Commerce clarify whether any additional measures to prevent unfair imports and transshipment are intended to complement the AIM system. This commenter further requested clarification regarding whether the AIM system could be modified in the future in the event of an “alternative bilateral” agreement.

Another commenter asserted that the joint understandings specify that the importing country may request consultation with the exporting country in the event of an import surge. This commenter requested that the AIM system therefore include a method for periodic consultations with the Government of Mexico.

Response: Although Commerce is cognizant of commenters' concerns regarding increased imports and transshipment, Commerce will not consult further with the Government of Mexico at this time. The Office of the U.S. Trade Representative is already actively engaged in ongoing discussions with the Mexican Government regarding import surges. Commenters should therefore direct relevant comments or questions to USTR. The Government of Mexico is aware that the AIM system has been proposed by the U.S. Government for monitoring aluminum import surges. 32 Furthermore, the AIM system is a monitoring system and not an enforcement mechanism, therefore, incorporating a consultation method into the system exceeds the authority under which the system is established and the scope of its intended activities.

The Office of Management and Budget (OMB) has determined that this final rule is significant, but not economically significant, for purposes of Executive Order 12866.

This final rule is not subject to Executive Order 13771 because it imposes de minimis costs.

This final rule does not contain policies with federalism implications as that term is defined in section 1(a) of Executive Order 13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).

This rule contains a collection of information subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35 (PRA). Similar requirements have been approved for steel by OMB (OMB No.: 0625-0245; Expiration Date: 07/31/2023). Based on Commerce's experience with steel and sample data for aluminum entries, Commerce estimates that public reporting for the data collection of information in the aluminum import license will be less than 10.5 minutes per response, including the time for reviewing instructions, and completing and reviewing and correcting the collection of information. Commerce also estimates that the average registered applicant will complete about 173 licenses per year each and an estimated total of 278,538 regular licenses and 50 low value licenses will be issued each year.

OMB Number: 0625-0279.

ITA Number: ITA-4142a (regular license); ITA-4142b (low-value license).

Type of Review: Regular Submission.

Affected Public: Business or other for-profit.

Estimated Number of Registered Users: 1,750.

Estimated Time per Response: Less than 10.5 minutes.

Estimated Total Annual Burden Hours: 48,749 hours.

Estimated Total Annual Costs: $0.00.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. As discussed above, after the AIM system is in place, Commerce will seek additional comment from parties on potential improvements or changes to the system in a subsequent notice. Parties may further comment on this collection of information at that time.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration at the proposed rule stage that this rule if adopted, would not have a significant economic impact on a substantial number of small entities as that term is defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA). The factual basis for the certification is found in the proposed rule and is repeated below. No comments were received on the certification or the economic impacts of this action. As a result, no final regulatory flexibility analysis is required and none was prepared.

This rule will not have a significant economic impact on a substantial number of small entities. This rule, if implemented, would: (1) Require importers of covered aluminum products to apply for and obtain an import license from Commerce's online license application system; (2) for purposes of obtaining the license, require import license applicants to provide information that is largely already required for purposes of importation into the customs territory of the United States pursuant to CBP requirements; (3) for information that is not already required for entry purposes, require import license applicants to specify certain information including the country where primary aluminum used in the manufacture of the imported aluminum product was smelted and where the product was most recently cast; and (4) cover the following HTS codes: 7601, 7604, 7605, 7606, 7607, 7608, 7609, 7616.99.51.60, and 7616.99.51.70, and any subsequent revisions to these HTS classifications.

The entities that would be impacted by this rule are importers and brokerage companies that import aluminum products. Based on statistics derived from current license applications for steel under the SIMA system, of the approximately 563,107 licenses (both regular and low-value licenses) issued each year, Commerce estimates that less than two percent (11,262) of steel license applications are filed by importers and brokerage companies considered to be small entities. Commerce estimates that the number of aluminum licenses issued under the AIM system will be about half of the number of steel licenses under the SIMA system, based on statistics for one month's entry information. 33 Therefore, our estimate for aluminum is that approximately 278,588 licenses (both regular and low-value licenses) will be issued each year, and of that figure, less than two percent (5,572) of the license applications will be filed by importers and brokerage companies considered to be small entities.

Agencies within the Department of Labor (Department) often must collect debt owed them, including debt relating to legal violations such as citation penalties. To collect such debt, agencies sometimes must send multiple demand letters. Prior to this final rule, 29 CFR 20.55(a) provided that “second and subsequent demands shall generally be made at 30 day intervals from the first.” The Department's Office of the Chief Financial Officer (OCFO) has indicated that agencies may have an increased likelihood of securing debt payments if second and subsequent demands are sent at intervals of time separated by less than thirty days. In particular, in reviewing enforcement agency debt collection practices, OCFO has noted that agencies that send out demand letters more quickly and at shorter intervals have higher collection rates than agencies that do not. Although agency heads (or designees) could send second and subsequent demand letters at intervals of time separated by less than thirty days pursuant to 29 CFR 20.55(a) as it existed before this final rule, this final rule amends 29 CFR 20.55(a) to provide clearer notice to the public that agency heads (or designees) can send demand letters in their sole discretion more often than every thirty days.

This final rule also amends 29 CFR 20.55(a) to better describe current Department practice. Prior to this final rule, 29 CFR 20.55(a) stated that “agencies should give due regard to the need to act promptly so that, as a general rule, if necessary to refer the debt to the Department of Justice for litigation, such referral can be made within one year of the final determination of the fact and the amount of the debt.” It has been revised to state that “agencies should give due regard to the need to act promptly so that, if necessary, the debt may be referred in a timely manner to the Department of Justice for litigation.” This change better reflects current practice, pursuant to which the Department of Treasury typically seeks to collect federal debt for up to two years. 1 After two years, the Department of Treasury refers uncollected debt back to the relevant agency, including agencies within the Department of Labor. Because debt is not typically referred back to agencies until the debt is at least two years old, referral to the Department of Justice will generally not be made until the debt is at least two years old.

Pursuant to 5 U.S.C. 553, this rule is being published as a final rule to have immediate effect upon publication in the Federal Register . This final rule deals only with internal operating procedures regarding the Department's debt-collection practices. This final rule thus qualifies as a rule “of agency organization, procedure, or practice” or a “general statement of policy” under 5 U.S.C. 553(b)(A), so it is exempt from the notice-and-comment requirements of the Administrative Procedure Act.

This rule is not a “major rule” under 5 U.S.C. 801(a)(3) nor a “substantive rule” under 5 U.S.C. 553(d) and may also qualify as a “statement[ ] of policy” under 5 U.S.C. 553(d)(2). Thus it can be effective immediately. The Department is making it effective immediately because of its strong interest in promptly collecting debt, especially debt derived from legal violations. The prompt collection of such debt provides the regulated public a stronger incentive to follow the law by showing that duly levied citations and other penalties must in fact be paid. Collecting debts also strengthens the Department's fisc, which assists with budgeting and offsets funds that might otherwise be requested from Congress and, ultimately, the nation's taxpayers. Delaying the effective date of this rule would unnecessarily hinder the Department's law-enforcement mission.

Executive Order 12866 requires that regulatory agencies assess both the costs and benefits of significant regulatory actions. Under the Executive Order, a “significant regulatory action” is one meeting any of a number of specified conditions, including the following: Having an annual effect on the economy of $100 million or more; creating a serious inconsistency or interfering with an action of another agency; materially altering the budgetary impact of entitlements or the rights of entitlement recipients; or raising novel legal or policy issues.

The Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) has determined that this rule is not a “significant regulatory action” under Executive Order 12866 and waived review. This final rule deals only with internal operating procedures regarding the Department's debt collection practices. Because no notice of proposed rulemaking is required for this rule under section 553(b) of the APA, the requirements of the Regulatory Flexibility Act (5 U.S.C. 601) pertaining to regulatory flexibility do not apply to this rule. See 5 U.S.C. 601(2). Accordingly, the Department is not required to either certify that the final rule would not have a significant economic impact on a substantial number of small entities or conduct a regulatory flexibility analysis. Because, as noted above, no notice of proposed rulemaking is required for this rule, no requirements of the Unfunded Mandates Reform Act of 1995 are triggered. In addition, the amended regulation contain no additional information-collection or record-keeping requirements under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., and the implementing regulations at 5 CFR part 1320.

For the reasons discussed in the preamble, the Department of Labor amends 29 CFR part 20 as follows:

Since 1996, Federal agencies have been required to issue regulations adjusting for inflation the statutory civil monetary penalties  1 that can be imposed under the laws administered by that agency. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 (DCIA), required agencies to review their statutory civil monetary penalties every four years, and to adjust the statutory civil monetary penalty amounts for inflation if the increase met the DCIA's adjustment methodology. In accordance with the DCIA, the EPA reviewed and, as appropriate, adjusted the civil monetary penalty levels under each of the statutes the agency implements in 1996 (61 FR 69360), 2004 (69 FR 7121), 2008 (73 FR 75340), and 2013 (78 FR 66643).

The 2015 Act  2 required each Federal agency to adjust the level of statutory civil monetary penalties under the laws implemented by that agency with an initial “catch-up” adjustment through an interim final rulemaking. The 2015 Act also required Federal agencies, beginning on January 15, 2017, to make subsequent annual adjustments for inflation. Section 4 of the 2015 Act requires each Federal agency to publish these adjustments by January 15 of each year. The purpose of the 2015 Act is to maintain the deterrent effect of civil monetary penalties by translating originally enacted statutory civil penalty amounts to today's dollars and rounding statutory civil penalties to the nearest dollar.

As required by the 2015 Act, the EPA issued a catch-up rule on July 1, 2016, which was effective August 1, 2016 (81 FR 43091). The EPA has made four annual adjustments since then: On January 12, 2017, effective on January 15, 2017 (82 FR 3633); on January 10, 2018, effective on January 15, 2018 (83 FR 1190); on February 6, 2019, effective February 6, 2019 (84 FR 2056), and issued a subsequent correction on February 25, 2019 (84 FR 5955); and on January 13, 2020, effective the same day (85 FR 1751). This rule implements the fifth annual adjustment mandated by the 2015 Act.

The 2015 Act provides a formula for calculating the adjustments. Each statutory maximum and minimum  3 civil monetary penalty as currently adjusted is multiplied by the cost-of-living adjustment multiplier, which is the percentage by which the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October 2020 exceeds the CPI-U for the month of October 2019. 4

With this rule, the new statutory maximum and minimum penalty levels listed in the third column of Table 1 of 40 CFR 19.4 will apply to all civil monetary penalties assessed on or after December 23, 2020, for violations that occurred after November 2, 2015, the date the 2015 Act was enacted. The former maximum and minimum statutory civil monetary penalty levels, which are in the fourth column of Table 1 to 40 CFR 19.4, will now apply only to violations that occurred after November 2, 2015, where the penalties were assessed on or after January 13, 2020, but before December 23, 2020. The statutory civil monetary penalty levels that apply to violations that occurred on or before November 2, 2015, are codified at Table 2 to 40 CFR 19.4. The fifth column of Table 1 and the seventh column of Table 2 display the statutory civil monetary penalty levels as originally enacted.

The formula for determining the cost-of-living or inflation adjustment to statutory civil monetary penalties consists of the following steps:

Step 1: The cost-of-living adjustment multiplier for 2021 is the percentage by which the CPI-U of October 2020 (260.388) exceeds the CPI-U for the month of October 2019 (257.346), which is 1.01182. 5 Multiply 1.01182 by the current penalty amount. This is the raw adjusted penalty value.

Step 2: Round the raw adjusted penalty value. Section 5 of the 2015 Act states that any adjustment shall be rounded to the nearest multiple of $1. The result is the final penalty value for the year.

Pursuant to section 4 of the 2015 Act, each Federal agency is required to publish adjustments no later than January 15 each year. In accordance with section 553 of the Administrative Procedure Act (APA), most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the Federal Register . However, section 4(b)(2) of the 2015 Act provides that each agency shall make the annual inflation adjustments “notwithstanding section 553” of the APA. Consistent with the language of the 2015 Act, this rule is not subject to notice and an opportunity for public comment and will be effective on December 23, 2020.

Additional information about these statutes and Executive orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to OMB for review.

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

This action does not impose an information collection burden under the PRA. This rule merely increases the level of statutory civil monetary penalties that can be imposed in the context of a Federal civil administrative enforcement action or civil judicial case for violations of EPA-administered statutes and their implementing regulations.

This action is not subject to the RFA. The RFA applies only to rules subject to notice and comment rulemaking requirements under the APA, 5 U.S.C. 553, or any other statute. Because the 2015 Act directs Federal agencies to publish this rule notwithstanding section 553 of the APA, this rule is not subject to notice and comment requirements or the RFA.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action is required by the 2015 Act, without the exercise of any policy discretion by the EPA. This action also imposes no enforceable duty on any state, local or tribal governments or the private sector. Because the calculation of any increase is formula-driven pursuant to the 2015 Act, the EPA has no policy discretion to vary the amount of the adjustment.

This action does not have federalism implications. It 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.

This action does not have tribal implications as specified in Executive Order 13175.

This rule merely reconciles the real value of current statutory civil monetary penalty levels to reflect and keep pace with the levels originally set by Congress when the statutes were enacted or amended. The calculation of the increases is formula-driven and prescribed by statute, and the EPA has no discretion to vary the amount of the adjustment to reflect any views or suggestions provided by commenters. Accordingly, this rule will not have a substantial direct effect on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

The rulemaking does not involve technical standards.

The EPA believes that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. Rather, this action is mandated by the 2015 Act, which prescribes a formula for adjusting statutory civil penalties on an annual basis to reflect inflation.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and comment rulemaking procedures are impracticable, unnecessary or contrary to the public interest (5 U.S.C. 808(2)). The EPA finds that the APA's notice and comment rulemaking procedures are unnecessary because the 2015 Act directs Federal agencies to publish their annual penalty inflation adjustments “notwithstanding section 553 [of the APA].”

For the reasons set out in the preamble, the EPA amends title 40, chapter I, part 19 of the Code of Federal Regulations as follows:

On September 28, 2020, HHS published a notice of proposed rulemaking (NPRM) in the Federal Register (85 FR 60748) to implement Executive Order 13937 (Executive Order) of July 24, 2020, by amending the regulations implementing Section 330 of the Public Health Service Act (PHS Act or the Act), to require entities funded under Section 330(e) of the Act to establish practices to provide insulin and injectable epinephrine to low-income patients at the price the health center purchased these two drugs through the 340B Program. The NPRM provided for a 30-day comment period, and HHS received 226 comments. HHS carefully considered all comments in developing this rule, as outlined in Section V below, and presents a summary of all significant comments and HHS responses.

As discussed in the NPRM, on March 13, 2020, President Trump declared the COVID-19 pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, territories, and the District of Columbia. With the COVID-19 emergency, many low-income individuals are experiencing significant economic hardship. These low-income individuals who are dependent upon the life-saving medications of insulin and/or injectable epinephrine are now less able to access these drugs at an affordable price. On July 24, 2020, President Trump issued Executive Order 13937 to direct health centers that receive grants under section 330(e) of the PHS Act to support the improved access to certain life-saving medications by low-income individuals. As provided in the Executive Order, it is the policy of the United States to enable Americans without access to affordable insulin and injectable epinephrine through commercial insurance or federal programs, such as Medicare and Medicaid, to purchase these pharmaceuticals from a health center at the same price at which the health center acquired the medication through the 340B Program. This final rule aligns with the goals of the President's mandate.

Through the Executive Order, the President directed the Secretary of Health and Human Services (the Secretary) to take action, to the extent permitted by law, to ensure all future grants available under section 330(e) of the PHS Act, as amended, 42 U.S.C. 254b(e), are conditioned upon health centers having established practices to make insulin and injectable epinephrine available at the discounted price paid by the health center grantee or subgrantee under the 340B Program (plus a minimal administration fee) to individuals with low incomes, as determined by the Secretary, who:

(a) Have a high cost sharing requirement for either insulin or injectable epinephrine;

(b) Have a high unmet deductible; or

(c) Have no health care insurance.

Under section 330(k)(3) of the Act, the Secretary may not approve an application for a grant under subparagraph (A) or (B) of subsection (e)(1) unless the Secretary determines that the entity for which the application is submitted meets the requirements enumerated in section 330(k)(3)(A)-(N). Section 330(k)(3)(N) requires that “the center has written policies and procedures in place to ensure the appropriate use of Federal funds in compliance with applicable Federal statutes, regulations, and the terms and conditions of the Federal award.” Through this final rule, and consistent with the Act, HRSA will include in the Terms section of applicable Notices of Award (NOAs) issued under section 330(e) grant awards, the requirement that health center awardees comply with the discounted price provisions described herein.

This regulation applies to new grants and new project periods for service area, new access point, supplemental, and expanded services awards issued under section 330(e) of the PHS Act.

The statement of authority for 42 CFR part 51c continues to read section 330 of the PHS Act (42 U.S.C. 254b) and section 215 of the PHS Act (42 U.S.C. 216).

This rule codifies the proposed requirement described in the September 2020 NPRM implementing the Executive Order issued to support the improved access to certain life-saving medications for low-income individuals. This rule establishes a requirement for awarding new grants under section 330(e) of the PHS Act (42 U.S.C. 254b) that the awardee have established written practices to make insulin and injectable epinephrine available at or below the discounted price paid by the health center grantee or subgrantee under the 340B Program (plus a minimal administration fee) to health center patients with low incomes who: (a) Have a high cost sharing requirement for either insulin or injectable epinephrine, (b) have a high unmet deductible, or (c) have no health insurance. This final rule also provides definitions relevant to this requirement.

Through this final rule, the requirement for all grant awards under section 330(e) of the PHS Act is as follows:

Under Executive Order 13937, issued July 24, 2020, if your health center or a subrecipient receives section 330(e) funding, is enrolled in the 340B Program and purchases, is reimbursed, or provides reimbursement to other entities for insulin and injectable epinephrine, whether obtained using federal or non-federal funds, your health center must have established practices to make insulin and injectable epinephrine available to low-income health center patients (defined herein as those individuals or families with annual incomes at or below 350 percent of the Federal Poverty Guidelines (FPG))—who either have insurance with a high cost sharing requirement for either insulin or injectable epinephrine, as applicable, a high unmet deductible, or who have no health insurance—at or below the price the health center paid through the 340B Program, plus a minimal administration fee. You are not required to charge third-party payors this discounted price.

Consistent with the Executive Order, this Term only applies to health centers receiving section 330(e) grant funds that participate in the 340B Program (42 U.S.C. 254b and 256b). This requirement is limited to increasing affordable access to insulin and injectable epinephrine. The requirement to make insulin and injectable epinephrine available at or below the same price paid through the 340B Program does not apply to other 340B drugs. Health centers subject to this requirement are expected to provide drugs in these two categories at or below the price paid through the 340B Program to health center patients only, and only to those health center patients identified as low-income, as described below. An individual will not be considered a “patient” of the health center for this purpose if the only health care service received by the individual from the health center is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting. See Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 FR 55,156 (Oct. 24, 1996). Nothing in this Program Term or the actions described in this final rule prohibits or otherwise restricts a health center from setting the price for insulin or injectable epinephrine lower than the price the health center paid through the 340B Program.

This Program Term will be included on all Notices of Award issued to health centers receiving grant funds under section 330(e) of the Act.

The Executive Order states that future grants under section 330(e) should be conditioned upon health centers or subrecipients participating in the 340B Program, including through contract pharmacy arrangements, having established practices to make insulin and injectable epinephrine accessible at an affordable price to low-income patients. To implement this requirement, all future awards made available under section 330(e) will include the requirement that health centers participating in the 340B Program comply with the regulation as described in the Program Term in order to receive a grant award. Specifically, these funding opportunities will require health centers that participate in the 340B Program to have established practices that implement the Executive Order by offering insulin and injectable epinephrine to low-income health center patients at no more than the price the health center paid through the 340B Program plus a minimal administration fee. In particular, these practices will provide information to health center patients in an easily understandable format regarding their administration fees, and the low-income, high cost sharing, and high unmet deductibles standard as described in this regulation. Health centers that have one or more subgrantees that participate in the 340B Program must demonstrate such subgrantees have established practices to offer health center patients these 340B discounted drugs as described in this final rule.

Through this final rule, HRSA defines the following terms to assist health centers in complying with and implementing the Executive Order.

1. “Established practices”: The health center demonstrates through its written policies, procedures, and/or other relevant documents that it has established practices to offer insulin and injectable epinephrine at no more than the discounted price paid by the health center under the 340B Program plus a minimal administration fee.

2. “Health center grantee or subgrantee”: The Executive Order cites section 1905(l)(2)(B)(i) and (ii) of the Social Security Act, as amended (42 U.S.C. 1396d(l)(2)(B)(i) and (ii)). These two subparagraphs refer to organizations receiving an award under section 330 of the PHS Act (health centers) directly or as a subrecipient of grant funding. For purposes of this final rule, this definition of health center grantee or subgrantee is defined as organizations receiving funding under section 330(e) of the PHS Act.

3. “Minimal administration fee”: This final rule establishes that health centers receiving funding under section 330(e) of the PHS Act are expected to offer insulin and injectable epinephrine at or below the price the health center paid through the 340B Program, plus a minimal administration fee. As the Executive Order does not allow any other charge for these two categories of drugs, the minimal administration fee is expected to include any dispensing fee, counseling costs, and any other charges associated with the patient receiving the medication. As the fee must be “minimal,” consistent with the stated policy of the Executive Order, the administration fee should not create a barrier to low-income health center patients accessing these drugs, and health centers should make every reasonable effort to keep the fee as low as possible. Health centers may consider referring to the Medicaid dispensing fee in their state  1 as a comparison for what may be considered a minimal administration fee. Please note that when there is a separate fee associated with provision of the pharmaceutical service, such as a dispensing fee, health centers must apply a sliding fee discount to that fee. The Health Center Program Compliance Manual's Sliding Fee Discount Program Chapter specifies the requirements of a health center's sliding fee discount program for in-scope services including pharmaceutical services. 2

4. “Individuals with low incomes”: This final rule defines individuals with low incomes as individuals and families with annual incomes of no greater than 350 percent of the Federal Poverty Guidelines.

5. “High cost sharing requirement”: For purposes of this final rule, cost sharing refers to a patient's out-of-pocket costs, including, but not limited to, deductibles, coinsurance, and copayments, or similar charges. More specifically, a cost sharing requirement that exceeds twenty percent of the amount the health center is charging its patients for the drug would be considered a high cost sharing requirement.

6. “High deductible”: High deductible refers to a deductible amount that is not less than the amount required for a high deductible health plan as defined in section 223(c)(2)(A) of the Internal Revenue Code, which, for 2020, is any plan with a deductible of at least $1,400 for an individual or $2,800 for a family, with out-of-pocket costs not to exceed $6,900 for an individual and $13,800 for a family for in-network services. For 2021, the deductible limits would remain the same, while the limits for out-of-pocket costs would increase to $7,000 for self-only coverage and $14,000 for family coverage. When the Internal Revenue Service (IRS) updates these figures, HRSA will post the updated high deductible amounts on the Health Center Program website.

7. “High unmet deductible”: High unmet deductible refers to the amount a patient owes toward their high deductible at any time during a plan year in which the portion of the patient's high deductible for the plan year that has not yet been met exceeds 20 percent of the deductible.

8. “Health insurance”: Health insurance refers to private insurance, State and exchange plans, employer-funded plans, and coverage under titles XVIII, XIX, and XXI of the Social Security Act.

HRSA received a total of 226 comments from the public, including individuals requiring insulin or injectable epinephrine and their family members, associations and organizations representing health centers and other stakeholders, health center staff and clinical professionals, health insurance issuers, and pharmaceutical manufacturers. The vast majority of commenters identifying themselves as individuals or the family members of those who rely on insulin or injectable epinephrine (22) were in favor of the proposed rule, although several suggested the proposed rule did not go far enough in reducing prices of these two medications. Many commenters (175), including many health centers, strongly urged that the proposed rule either not be finalized or be delayed in implementation, although most of these comments shared in the Administration's goal of ensuring access to these two life-saving medications. Most of the comments opposing implementation of the rule or suggesting delaying implementation also recommended changes to the language of the NPRM if it were to be implemented.

All comments were considered in developing this final rule. This section presents a summary of all major issues raised by commenters, grouped by subject, as well as responses to the comments. Commenters used the terms “Federally Qualified Health Centers (FQHCs)” and “health centers” interchangeably. For consistency, and as this rule applies to health centers funded under Section 330(e) of the PHS Act, and not to other FQHCs, this final rule uses “health center” throughout.

Approximately 23 commenters expressed support for the proposed rule. Commenters cited a number of reasons for their support, including the high cost of insulin and injectable epinephrine and concern over increasing costs of medications. Commenters also stated that lower cost medications lead to higher medication patient adherence and, as such, lower the costs to the overall health system. One commenter noted that the proposed rule would mostly benefit those between 200 percent and 350 percent of the FPG. 3 Many of these commenters felt the proposed rule should be expanded to include more medications and patients beyond those served by health centers.

Additionally, one commenter requested that HRSA include the proposed rule's requirements in all grants establishing 340B eligibility, and that the proposed rule's requirements should also apply to health centers' contract pharmacy arrangements.

Response: HRSA appreciates the commenters' support for the rule. Consistent with the direction provided to HHS in the Executive Order, HRSA is not expanding this final rule beyond health centers receiving grants under Section 330(e) of the PHS Act, to drugs beyond insulin and injectable epinephrine, or otherwise beyond the parameters identified in the proposed rule. As a clarification, health centers utilizing contract pharmacy arrangements must also adhere to this final rule.

Two commenters expressed concerns with the proposed rule's enforceability. Commenters suggested that a rule implementing the Executive Order could be easily circumvented and could be challenging to enforce. More specifically, commenters stated that without explicit codes for documenting which health centers participate in the 340B Program, it would be difficult to monitor and enforce compliance. Another commenter suggested HRSA clearly identify which health centers are participating in the 340B Program to help private sector partners support the implementation of the proposed rule. In addition, the commenter stated that HRSA should specify methods that would be used to verify income and insurance status in order to successfully operate the program.

One commenter also included suggestions for ensuring compliance and eliminating loopholes, including: (1) Providing receipt information for the monetary exchange between patients and providers, (2) comparing the manufacturer's drug price against the price charged to patients, and (3) using incentives to ensure compliance beyond the loss of section 330(e) funding awards ( e.g., loss of medical license for non-compliance).

Response: HRSA appreciates these comments. HRSA provides oversight of all covered entities in the 340B Program, including health centers, and HRSA declines to add these suggested compliance requirements. In particular, the suggestion that non-compliance should result in the loss of a medical license is outside of HRSA's purview.

With regard to the other suggestions for monitoring compliance with the final rule, HRSA will monitor the ongoing implementation of this final rule and will make changes as appropriate to ensure its effective implementation.

Approximately 52 commenters stated that the 340B Program is operating as intended when originally created and changes are not needed. Many of these commenters stated that health centers already provide discounted drugs to patients, regardless of their ability to pay. Commenters also noted that health centers are required by law to use 340B savings to expand access to health care for the underserved, and these savings are crucial to enabling health centers to offer other services to their patients in addition to providing discounts for drugs.

One commenter called on HRSA to take a more holistic approach to realign the 340B Program with its original intent and scope and support health centers' access to the 340 Program.

Response: HRSA acknowledges that health centers use 340B Program savings to benefit their patient population, as required by the Health Center Program, and many health centers provide discounted medications to their patients. Consistent with the Executive Order, this final rule applies only to insulin and injectable epinephrine and does not address other drugs health centers purchase through the 340B Program.

Approximately 175 commenters suggested that the Executive Order, on which the NPRM is based, reflects fundamental misunderstandings about health centers' mission and operations, and does not recognize the essential role that health centers play in ensuring access to affordable pharmaceuticals for medically vulnerable populations. The commenters expressed concern with the Executive Order provision that suggested that health centers are benefiting inappropriately from the 340B Program at the expense of their vulnerable patients. The commenters argued that health centers do much more than pass on the 340B discount to their low-income patients, and often discount drug prices below the 340B price to ensure they are affordable. Additionally, commenters stated that all health centers are required to invest all 340B savings into activities that expand access to care for low-income populations, and that health centers are already part of the solution to unaffordable drug prices, and not part of the problem. Commenters also stated that health centers are widely praised for their strong track record of compliance with both the letter and the spirit of the 340B statute.

Response: The final rule implements the goals and intent of the Executive Order to make insulin and injectable epinephrine more affordable. HRSA acknowledges that health centers play a crucial role in providing access to comprehensive, high quality primary health care to all patients regardless of ability to pay. Further, HRSA is cognizant of health centers' compliance with the 340B statute and strong track record of using the savings generated to benefit patients. HRSA values its partnerships with all health centers and commends their efforts to ensure access to affordable drugs for all of their patients.

Approximately 161 commenters suggested that the Executive Order on which the NPRM is based reflects a fundamental misunderstanding of the 340B Program, and if implemented as written would decrease some patients' access to affordable drugs. The commenters argued that this misunderstanding of 340B pricing would result in some patients paying more for insulin, dramatic fluctuations in insulin costs from one quarter to another and requiring quarterly changes to a patient's prescription to keep them on the most affordable insulin brand available.

The commenters also disagreed with the Executive Order's statement that health centers pay only one penny for a month's supply of insulin or injectable epinephrine. The commenters suggested that this statement was not universally true given drug pricing fluctuations, with prices for drugs often varying from one penny in one quarter to over $100 in another quarter. These commenters stated that health centers cannot guarantee that the price of the insulin or injectable epinephrine that a patient will pay on a certain day is the exact 340B price. This 340B price fluctuation from quarter to quarter can create an undue administrative compliance burden on health center staff.

One commenter suggested that the drug price charged to the health center patient should be the average 340B drug price to account for the quarterly variations in pricing.

Response: The rule implements the goals and intent of the Executive Order to make insulin and injectable epinephrine more affordable. HRSA recognizes that health centers have a strong history of compliance with the 340B statute and that many already significantly discount drugs for their patients, either through in-house pharmacies or via 340B contract pharmacies.

Drug prices are set quarterly based on prices manufacturers submit to the Centers for Medicare & Medicaid Services. Although insulin and injectable epinephrine prices may vary from quarter to quarter, the final rule allows health centers to offer these drugs at lower than the 340B price despite these fluctuations. Given this flexibility, and consistent with the intent of the Executive Order, HRSA will not change the final rule to allow for the averaging of 340B prices.

Approximately 143 commenters noted that the language in the proposed rule departs from language in the Executive Order. Specifically, the proposed rule would allow health centers to make insulin and injectable epinephrine available “at or below ” the price the health center paid through the 340B Program, whereas the Executive Order requires that health centers make such medications available “at the discounted price.” Commenters suggested that the Executive Order prohibits health centers from providing these drugs at prices below the 340B Ceiling Price. The commenters agreed with the need to allow flexibility in providing further discounts to patients but expressed concern that the discrepancy in language between the Executive Order and proposed rule demonstrates the inappropriateness of both.

Response: HRSA intends to proceed with language in the proposed rule requiring health centers to make insulin and injectable epinephrine available “at or below ” the price paid by the health center through the 340B Program. This final rule will allow a health center to provide either of these two medications to patients at a price below the 340B Price. The language in this rule is consistent with the intent of the Executive Order.

Approximately 164 commenters requested that HRSA change its proposed definition of “low-income” from 350 percent of the FPG to 200 percent of the FPG to better align with definitions used by other federal programs and private entities. Commenters noted that income assessments are not typically conducted by clinical staff, and those who conduct the assessments do not and should not have access to the personal health information that would be required for them to conduct a separate income analysis for patients who require insulin or injectable epinephrine. Additionally, commenters stated that such staff may not be competent to determine which patients may need such drugs now or in the future. Commenters specifically argued that using a low-income definition different from the 200 percent of the FPG required by the Health Center Program would create significant burden on health center staff to determine eligibility for health center discounts differently from eligibility for the pricing created by the proposed rule. This discrepancy would also create potential burden when using a contract pharmacy, where staff may be unfamiliar with evaluating patient income and may be unwilling to do so. Commenters further noted HHS, the United States Census Bureau, and private groups use 200 percent of the FPG to define low-income for research purposes. Commenters stated that for every federal program with income eligibility thresholds, low-income is defined as 250 percent of the FPG or less. While the Patient Protection and Affordable Care Act uses a ceiling above 350 percent to identify those eligible for premium tax credits on the Exchanges, this is not a definition of low income, as premium tax credits are designed for both lower and middle class individuals. Finally, commenters argued that a 350 percent FPG threshold could eliminate health centers' ability to retain 340B savings from privately insured patients due to health insurance issuers frequently requiring health centers to bill no more than their usual and customary (U&C) rate. While health centers have been successful resisting issuers' attempts to define U&C rates as discounted rates provided to patients at or below 200 percent FPG, the commenters expressed concern that defining low-income as 350 percent FPG will cover most health center patients, making it very difficult to argue that the 340B price for insulin and injectable epinephrine is not the health center's U&C rate. This change would effectively transfer the 340B benefit from health centers to private health insurance issuers.

Response: HRSA intends to proceed with the language in the proposed rule requiring health centers to make insulin and injectable epinephrine available at or below the price paid by the health center through the 340B Program to health center patients that have incomes at or below 350 percent FPG and that otherwise meet the criteria described in this rule. While HRSA appreciates the feedback on the definition of “low income”, we do not agree that it is too burdensome to implement as written. The language in this rule is consistent with the intent of the Executive Order.

Approximately 162 commenters requested clarification of the regulatory language that only those patients who meet the 340B patient definition are eligible for the 340B (or lower) price. Commenters argued that the regulatory language must clearly state that the health center is required to charge the 340B price (or less) only to those low-income individuals who meet the definition of “FQHC patient” under the 340B Program. Without such language, health centers could be forced to provide 340B pricing (or less) to individuals who are not eligible to receive 340B-priced drugs from the health center. Commenters used the example that low-income individuals could demand the health center provide them with discounted insulin, without permitting the health center to assume responsibility for their care (a necessary step for 340B eligibility). In such situations, 340B compliance would require the health center to purchase the insulin at the regular price, while this regulation would require that the individual be charged the 340B price or lower—an outcome that would be both expensive and administratively burdensome for the health center. Commenters recommended an addition to the regulatory text to clarify that only eligible health center patients should be able to access these drugs at the 340B price.

Response: The intent of the rule is to provide insulin and injectable epinephrine at no more than the 340B price to health center patients and not to individuals who are not health center patients. HRSA understands commenters' concerns, and the language in 42 CFR 51c.303(w)(1) has been revised to clarify that the final rule applies only to “health center patients.” HRSA also notes that the NPRM states that a “patient” for purposes of this subsection means only health center patients who receive in-scope health center services beyond dispensing of drugs that are self-administered or administered at home. This definition is also being finalized in this rule.

Approximately 161 commenters requested that HRSA add regulatory language ensuring that health centers are not forced to provide discounts to underinsured patients if doing so would violate the terms of their insurance contracts. These commenters noted that many health insurance issuers prohibit providers from charging patients less for a service or supply than the amount due under their deductible or cost sharing requirements.

Response: HRSA acknowledges that health centers need to comply with the terms of their contracts with third-party payors. HRSA clarifies in the final rule that provision of insulin and injectable epinephrine at or below the 340B discounted price is subject to potential restrictions in contracts with third-party payors. The language of the final rule reflects this clarification.

Approximately 161 commenters requested HRSA clarify its definitions of “high cost sharing requirement.” Commenters specifically noted confusion surrounding the definition of “high cost sharing requirement” and asked whether it means that a low-income patient should be charged the lesser of their cost sharing amount, or the amount they would be charged under the proposed rule if they were uninsured. In addition, two commenters argued that health centers already provide their patients with medications at significant discounts and are thus concerned about defining “high cost sharing requirement” as 20 percent of an already discounted price. The two commenters noted that it is unlikely that a private health insurance issuer would define a charge that is 20 percent of an already discounted price as a “high cost sharing requirement.” Commenters requested the definition be rewritten to reflect that 20 percent of an already discounted price is not a high cost sharing requirement. One commenter requested clarification as to how “high cost sharing” would be calculated for a patient with an insurance plan that ties the patient's cost sharing to a deductible or co-insurance that may change over the course of a plan year and suggested that this kind of fluctuation in cost sharing would require communication with payors and should be worked out before a final rule is promulgated.

Two commenters requested that “high deductible” and “high unmet deductible” be changed to a specifically defined amount so that health center and contract pharmacy staff could determine eligibility from a patient's insurance card. They specifically noted the proposed definition of “high deductible” points to a section in the Internal Revenue Code and that it would be burdensome for intake staff to determine if a patient has a “high deductible” or a “high unmet deductible” using this definition. One commenter requested further clarification of “high unmet deductible,” asking if once a patient meets 80 percent of their deductible they are no longer eligible for the proposed rules' pricing. The commenter noted that, if so, the patient's deductible payments would need to be tracked throughout the plan year and made available at the point of sale through the claims adjudication process. Additionally, medical claims may need to be factored into the unmet deductible amount, which could be challenging due to the delays in processing medical claims for patients with a dual pharmacy/medical deductible.

Response: HRSA appreciates the feedback surrounding the definition of “high cost sharing requirement.” The rule does not state that a low-income patient should be charged the lesser of their cost sharing amount or the amount they would be charged under the proposed rule if they were uninsured. Rather, the rule states that such patients should be provided access to insulin and injectable epinephrine at no more than the price at which the health center purchased the drug through the 340B program. While HRSA appreciates the feedback on the definition of “high cost sharing requirement,” we do not agree that it is too burdensome to implement as written. HRSA also notes that health centers may choose to charge their patients less than the discounted price at which the health center purchased the drug through the 340B Program, regardless of the patient's insurance out-of-pocket costs or insurance status.

HRSA appreciates the feedback that the proposed rule may be difficult to implement for patients whose cost sharing changes throughout the plan year. HRSA will monitor implementation of the final rule and will modify it if we determine that a modification is warranted.

HRSA appreciates the feedback that it will be difficult for health center intake staff to determine eligibility for the final rule's pricing on insulin and injectable epinephrine because the rule's definition of “high deductible” references the Internal Revenue Code definition. As reflected in the preamble of the NPRM, HRSA will publish the Internal Revenue Code definition of high deductible on the Health Center Program website. Such eligibility determinations may be integrated into existing processes utilized by health centers. Furthermore, it is HRSA's understanding that many insurance cards do print the deductible on their cards, and we agree that the ability to evaluate whether a plan has a “high deductible” based on such information may make evaluation less burdensome on health center staff. However, HRSA does not have the authority to require health insurance issuers to place deductible amounts on the proof of insurance cards they provide to patients.

HRSA appreciates the feedback on the definition of “high unmet deductible” and the potential difficulty with implementing this provision of the rule. To clarify, HRSA does intend that once a patient meets 80 percent of a high unmet deductible, the health center would no longer be required to provide that patient with insulin or injectable epinephrine at the 340B price as described by this rule, unless such patient separately meets the definition of either having a “high cost sharing requirement” or having no insurance. We realize this may have the potential to create additional burden on health centers and their contract pharmacies to ascertain a patient's eligibility for pricing under this rule. HRSA will monitor implementation of this final rule and will modify it if it is deemed that a modification is warranted.

Approximately 161 commenters requested clarification that, as a result of this rule, the “minimal administration fee” for insulin and injectable epinephrine will differ from the fees (if any) associated with dispensing other pharmaceuticals. Commenters noted that this rule will create significant additional administrative burdens for health centers, beyond the costs regularly associated with dispensing, counseling, and 340B compliance. One commenter requested that if the eligibility threshold under this rule is not aligned with the 200 percent of the FPG established for discounts to health center services under the Health Center Program, that HRSA define “minimal administration fee” to include costs associated with dispensing, 340B compliance, and the additional administrative work required to identify patients. Furthermore, they requested that HRSA clarify that this fee is unique to the dispensing of insulin and injectable epinephrine.

One commenter requested clarification that administration fees may include limited per prescription fees associated with operationalizing an overall 340B Program or contract pharmacy network. Because health centers often have arrangements with third-party vendors and/or contract pharmacies that include a per prescription fee, and such fees are often minimal, changes to how these fees are calculated and administered could cause patients to lose access to some pharmacies.

Response: The final rule defines “minimal administration fee” as a fee that may not create a barrier to low-income patients' access to insulin and injectable epinephrine. It would be inconsistent with the intent of the Executive Order and the rule to define “minimal administration fee” in a way that could create a barrier to accessing these drugs. A definition that included potential costs related to compliance could be seen as accepting that health centers will charge patients a higher fee to purchase insulin and injectable epinephrine than for other pharmaceuticals.

As all health centers are required to collect information regarding patient income, HRSA does not anticipate the need for a separate eligibility review. Entities participating in the 340B Program already manage different prices for 340B drugs on a quarterly basis. This final rule has clarified that only health center patients are eligible for insulin and injectable epinephrine at the prices set under this rule, and HRSA does not anticipate health centers incurring additional costs related to non-health center patients receiving these drugs. Monitoring and reporting compliance with this rule is not anticipated to be significant.

HRSA recognizes that the minimal administration fee described in the rule does not occur with other pharmaceuticals, including other 340B drugs, where multiple fees are listed separately. The rule defines the term, and states that health centers may, but are not required to, charge such a minimal administration fee for insulin and injectable epinephrine. HRSA acknowledges that this minimal administration fee is unique to this rule and insulin and injectable epinephrine as covered here, and that this rule does not create a new term that applies to the 340B Program beyond this rule. As noted in the rule, all definitions are provided “for purposes of this paragraph exclusively.” Therefore, HRSA declines to make revisions to this section.

One commenter requested that HRSA clarify and provide additional guidance on the proposed rule's requirement for “established practices.” Because not all covered entities have mechanisms in place to adjudicate 340B claims for uninsured or underinsured patients, the commenter noted that many will have to take affirmative steps to develop systems and processes to support the provisions of the proposed rule, which have cost and time implications. These additional administrative costs could lead to reduced patient access to health center services or discounted drugs.

The commenter requested HRSA clarify that to the extent that 340B covered entities have existing contracts with third-party administrators or vendors regarding established practices, deference be given to the practices in those existing contracts. However, for those covered entities that do not have established practices in place, the commenter requested that HRSA provide clear guidance on how covered entities should notify contract pharmacies so that they are aware which patients are eligible for the discounted prices.

Response: HRSA proposed a definition of “established practices” in the NPRM and finalizes that definition in this rule. We understand that some health centers will have to establish new practices to ensure compliance with the requirements of this rule; however, HRSA does not anticipate that the administrative costs of establishing such practices will be substantial.

One commenter suggested several edits to the NPRM language proposed at 42 CFR 51c.303(w)(1). Specifically, they suggested that the regulatory language in subsection 51c.303(w)(1), as proposed in the NPRM, be edited to replace “through a written agreement” with “indirectly.” They argued that some 340B covered entities either do not have written agreements with contract pharmacies, or do not abide by such agreements. They further suggested that “discounted price paid by the health center” be replaced with “340B Ceiling Price,” arguing that “ceiling price” be more clearly defined. They also suggested several typographical edits.

Response: As the commenter noted, health centers should have written agreements with contract pharmacies used for dispensing 340B drugs. HRSA believes that the use of “written agreements” as proposed in the NPRM will provide greater clarity for health centers in complying with this rule. It is HRSA's intent that a health center choosing to participate in the 340B Program must provide the two life-saving medications identified in this rule either directly or through a written agreement. Other forms of “indirect” distribution of the drug would not be compliant with the rule. HRSA will monitor implementation of this final rule and will modify it if it is deemed that a modification is warranted.

HRSA will not at this time use “340B Ceiling Price” as suggested by the commenter. The Executive Order intended for low-income patients to access insulin and injectable epinephrine at no more than the price paid by the health center through the 340B Program. As it is possible that the health center may have paid less than the 340B Ceiling Price, the language proposed in the NPRM is finalized in this rule.

HRSA appreciates the commenter's identification of several typographical edits and accepts those suggestions, which are reflected in the final rule.

Two commenters expressed concern regarding market distortions. One commenter argued that the proposed rule could exacerbate market distortions, as well as create new ones. Another commenter noted that applying this policy to the insured could deflect costs from insurance plans to patients and that the policy could perpetuate a situation whereby patients with insurance may be unable to utilize the benefit in a meaningful way. The commenter argued that allowing patients with insurance to access 340B Program pricing creates a perverse incentive for insurance plans to continue shifting out-of-pocket costs for 340B drugs to patients. They argued that this undermines the purpose of insurance, and that to the extent more patients remain in the deductible phase of the benefit for all if not most of the year, the health insurance issuer does not provide any coverage for the patient's prescription.

Response: HRSA appreciates the concern expressed in these comments. However, the purpose of the Executive Order and the rule is to reduce the cost of insulin and injectable epinephrine to patients. Therefore, HRSA will finalize the rule as described.

One commenter noted the NPRM expressly states there will be no additional paperwork or reporting burden for health centers associated with implementation. The commenter was concerned that implementation of the proposed rule could lead to additional paperwork, reporting, and regulatory burdens for independent pharmacies operating as contract pharmacies for health centers. The commenter requested clarification in the final rule that no additional burdens will be placed on contract pharmacies.

Response: Health centers and contract pharmacies operate as private entities and make independent decisions as to their contracting arrangements. HRSA will continue to monitor the impact of this final rule on health centers and their contract pharmacy arrangements and will modify it if it is determined that a modification is warranted.

One commenter disagreed with the proposed rule and believed it was economically significant and that it would have an impact on small entities. The commenter requested that HRSA be required to further evaluate the costs and benefits of finalizing the proposed rule and to look at alternatives to implementing the rule.

Response: This comment is addressed in the Regulatory Impact Analysis section of this final rule.

One commenter argued that the NPRM does not provide legal justification and is therefore arbitrary and capricious and contrary to the Administrative Procedure Act. The commenter requested that HRSA withdraw the NPRM.

Response: HRSA has indicated the statutory authority for the NPRM and final rule as Section 330 of the PHS Act (42 U.S.C. 254b) and Section 215 of the PHS Act (42 U.S.C. 216), and is issuing the final rule pursuant to Executive Order 13937. HRSA disagrees with the commenter that the rule is arbitrary and capricious. HRSA stated in the NPRM that the ongoing Coronavirus Disease COVID-19 pandemic has caused significant hardship among many low-income individuals and, because of this and consistent with the Executive Order, HRSA is attempting to ensure two life-saving medications, insulin and injectable epinephrine, are available at affordable rates. HRSA disagrees that the NPRM and final rule are inconsistent with the Administrative Procedure Act.

Other commenters raised a variety of issues that do not pertain directly to the implementation of Executive Order 13937 requiring entities funded under Section 330(e) of the PHS Act to establish practices to provide access to insulin and injectable epinephrine to low-income health center patients at the price the health center purchased these two drugs through the 340B Program, which was the focus of the proposed rule. This final rule does not address those issues as they are outside the scope of the proposed rule.

HHS has examined the effects of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 8, 2011), the Regulatory Flexibility Act (Pub. L. 96-354, September 19, 1980), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 1999). HHS has also considered Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), and received public comments describing new administrative costs for health centers. As a result, OMB has determined this rule is regulatory for purposes of Executive Order 13771.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866, emphasizing the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year), and a “significant” regulatory action is subject to review by the Office of Management and Budget (OMB).

HHS does not believe that this rule will have an economic impact of $100 million or more in any 1 year, or adversely and materially affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities. Because this rule is limited in scope to two classes of drugs that are of particular need and it aligns with the mission for health centers to provide access to care for vulnerable individuals and families, HHS believes it will have minimal economic impact. The economic impact is also expected to be minimal given the rule is limited to only two drug categories which are available under the 340B Program at significantly reduced prices. Indeed, approximately 91 percent of patients at affected health centers have incomes at or below 200 percent of FPG, and thus receive discounts on health services. (In addition, health centers are required to reinvest any income from the 340B Program into patient services.) Many commenters noted that health centers already provide medications at reduced prices to their patients. For example, some health centers reported charging $7 for a 1-month supply of insulin for individuals below 200 percent of poverty. As discussed earlier, in the summary of public comments, the final rule leads to new administrative costs for health centers in association with new processes and procedures. There are approximately 1,385 health center awardees that could experience these new costs. 4 HRSA estimates that, on average, each health center would need one additional full-time equivalent (FTE) eligibility assistance worker at approximately $50,000 to support necessary additional administrative processes, totaling approximately roughly $68,750,000. Therefore, OMB has not designated this rule as “economically significant” under section 3(f)(1) of the Executive Order 12866. HHS welcomed but received no public comments that demonstrated this rule will have an economic impact exceeding the threshold set by E.O. 12866.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) (RFA) and the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended the RFA, require HHS to analyze options for regulatory relief of small businesses. If a rule has a significant economic effect on a substantial number of small entities, the Secretary must specifically consider the economic effect of the rule on small entities and analyze regulatory options that could lessen the impact of the rule. HHS will use an RFA threshold of at least a 3 percent impact on at least 5 percent of small entities.

For purposes of the RFA, HHS considers all health care providers to be small entities either by meeting the Small Business Administration (SBA) size standard for a small business, or for being a nonprofit organization that is not dominant in its market. The current SBA size standard for health care providers ranges from annual receipts of $8 million to $41.5 million. As of August 8, 2020, the Health Center Program provides grant funding under section 330(e) of the PHS Act to 1,310 organizations to provide health care to medically underserved communities. HHS has determined, and the Secretary certifies, that this rule will not have a significant impact on the operations of a substantial number of small health centers; therefore, we are not preparing an analysis of impact for the RFA.

HHS welcomed comments concerning the impact of this proposed rule on health centers and received one comment on this topic. The commenter argued that the rule will have a significant economic impact on a substantial number of small entities. The commenter argued that the stress this rule will cause to health centers may result in reductions in services, employment, and access to life-saving treatment. Specifically, the commenter stated that the rule will have the impact of (1) dramatically reducing 340B savings for health centers, (2) likely increasing the cost of life-saving medications nationwide, and (3) creating enormous administrative burdens for health centers, specifically because the NPRM proposed defining “low-income” as at or below 350 percent of the FPG, a different income threshold than the 200 percent used by the Health Center Program.

HHS acknowledges the commenter's concerns. However, HHS has not changed its determination that the RFA does not apply to this rule. The comment did not demonstrate that a reduction in 340B savings would meet the threshold of a 3 percent impact on 5 percent of small entities. A reduction in 340B savings is limited to those related to these two medication categories, and only when provided to low-income patients that are uninsured, or who have a high cost sharing requirement or high unmet deductible. The comment did not demonstrate or explain how this rule will increase the cost of medications nationwide. To the contrary, the rule will increase the access of certain low-income patients to affordable insulin and injectable epinephrine.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year.” In 2019, that threshold level was approximately $164 million. HHS does not expect this rule to exceed the threshold.

HHS has reviewed this rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have “federalism implications.” This rule would not “have substantial direct effects on the States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This rule would not adversely affect the following family elements: Family safety, family stability, marital commitment; parental rights in the education, nurture, and supervision of their children; family functioning, disposable income or poverty; or the behavior and personal responsibility of youth, as determined under section 654(c) of the Treasury and General Government Appropriations Act of 1999.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that OMB approve all collections of information by a federal agency from the public before they can be implemented. This rule is projected to have no impact on current reporting and recordkeeping burden for health centers. This rule would result in no new reporting burdens. HHS welcomed but did not receive comments that this rule would result in new reporting burdens for health centers.

Accordingly, by the authority vested in me as the Secretary of Health and Human Services, and for the reasons set forth in the preamble, 42 Code of Federal Regulations Part 51c is amended as follows:

The Independent Offices Appropriations Act (IOAA), codified at 31 U.S.C. 9701, provides that each service of value provided by an agency to a person (except those on official business of the U.S. Government) shall be self-sustaining to the extent possible and, accordingly, permits agencies to establish fees for services provided by the agency. The Office of Management and Budget (OMB) subsequently established a policy of full cost recovery for government services under which agencies must assess and collect user fees. OMB Circular A-25, User Charges (July 8, 1993). Under these authorities, the Board's predecessor—the Interstate Commerce Commission (ICC)—adopted the fee structure at 49 CFR 1002.2 to “cover all the [agency's] expenses, including administrative expenses.” See Crystal City R.R.—Aban. Exemption—in LaSalle, Zavala, & Dimmit Cntys., Tex., AB 427X et al., slip op. at 2 (ICC served Aug. 22, 1995).

The Board's regulations also provide for waiver or reduction of filing fees in certain limited circumstances. Under 49 CFR 1002.2(e)(1), the Board's filing fees generally are waived for filings made by a federal government agency or a state or local government entity. 1 Additionally, in “extraordinary situations,” a filing fee may be waived or reduced if the applicant shows that the waiver or reduction is in the best interest of the public or that payment of the fee would impose an undue hardship on the requestor. 49 CFR 1002.2(e)(2)(ii).

In 2000, the Board issued a policy statement that clarified its anticipated approach to fee waivers in several respects. Reguls. Governing Fees for Serv. 5 S.T.B. 352 (2000). As relevant here, the Board clarified that for state and local government entities, fees would be assessed pursuant to section 1002.2 “to any entity (a state or local governmental entity, a quasi-governmental entity, or a government-subsidized transportation company) that owns or proposes to own a carrier, or that is a shipper, and comes before the Board in that capacity. . . . The fee waiver will be available to a state or local government entity that is not acting in the capacity of a carrier or shipper.” 5 S.T.B. at 355. The Board also stated that “[f]ees will also be assessed to quasi-governmental corporations or government-subsidized transportation companies for any filing submitted for which there is a fee.” Id.

The Board has determined that it is appropriate to clarify its regulations and codify certain existing policies and practices to promote transparency and assist stakeholders who are considering requesting a waiver or reduction of filing fees. The Board will amend 49 CFR 1002.2(e)(1) to provide, consistent with Regulations Governing Fees for Services, that the fee waiver for government entities is not available to (1) quasi-governmental entities or government-subsidized transportation companies, or (2) any state and local government entity that is acting in the capacity of a carrier or shipper, or any such entity that owns or proposes to own a carrier and is before the agency in its proprietary role. As explained in Regulations Governing Fees for Services, when government entities are acting in a commercial capacity, they should be treated the same as any other entity that acts in a commercial capacity for purposes of fee waivers. 5 S.T.B. at 354-55. 2 This approach balances Congress' policy that agencies provide services in a manner that is “self-sustaining to the extent possible” through collection of fees, 31 U.S.C. 9701(a), with the agency's longstanding view that government entities should not generally be charged fees when the benefits of their actions flow to the general public. See 5 S.T.B. at 354-55.

The Board will also clarify in section 1002.2(e)(1) and (e)(2) how applicants for fee waivers or reductions will be notified of decisions on their requests, consistent with the Board's existing practices. In certain circumstances when a fee waiver request is granted under section 1002.2(e)(1) during the processing of the filing, the filing will be stamped “Filing Fee Waived” and posted in the public docket, and the Board need not provide any further notice to the applicant that the fee waiver request was granted. 3 In all other circumstances, if a request for a fee waiver or reduction is granted or denied under either section 1002.2(e)(1) or (e)(2), the Board, through the Chief of the Section of Administration in the Office of Proceedings, will notify the applicant by letter. 4

Additionally, the Board has held that third parties lack any legal interest in, and therefore cannot challenge or appeal, the grant or denial of a fee waiver or reduction request. Hartwell First United Methodist Church—Adverse Aban. & Discontinuance—Great Walton R.R., AB 1242 (STB served June 2, 2017). The Board will codify that principle by amending 49 CFR 1002.2(e) to provide that third-party appeals of fee waiver or reduction decisions are not permitted.

Finally, the Board will amend the language in 49 CFR 1002.2(e) to consistently refer to the entity seeking a fee waiver or reduction as the “fee waiver applicant.”

Under the Administrative Procedure Act (APA), the public generally may participate in the promulgation of rules through a notice and comment period. 5 U.S.C. 553(b) & (c). However, an agency may publish “rules of agency organization, procedure, or practice” in final form without notice and comment. See 5 U.S.C. 553(b)(3)(A). Because the Board has determined that these updates to its regulations relate to agency organization, practice, and procedure, the Board finds that notice and public comment on these changes is unnecessary.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601-612, generally requires an agency to prepare a regulatory flexibility analysis of any rules subject to notice-and-comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because the Board has determined that notice and comment are not required under the APA for these rulemakings, the requirements of the RFA do not apply.

These final rules do not require a new or amended information collection under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521.

The Board has determined that this action is not a rule as defined by the Congressional Review Act, 5 U.S.C. 804(3).

It is ordered:

1. The Board adopts the final rules as set forth in this decision. Notice of the adopted rules will be published in the Federal Register .

2. This decision is effective on January 22, 2021.

For the reasons set forth in the preamble, the Surface Transportation Board amends part 1002 of title 49, chapter X, of the Code of Federal Regulations as follows:

Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27 subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and as implemented by the United States among the various domestic fishing categories, per the allocations established in the 2006 Consolidated Atlantic HMS Fishery Management Plan (2006 Consolidated HMS FMP) (71 FR 58058, October 2, 2006) and amendments. NMFS is required under ATCA and the Magnuson-Stevens Act to provide U.S. fishing vessels with a reasonable opportunity to harvest the ICCAT-recommended quota.

The current baseline General and Reserve category quotas are 555.7 mt and 29.5 mt, respectively. See § 635.27(a). Each of the General category time periods (January through March, June through August, September, October through November, and December) is allocated a “subquota” or portion of the annual General category quota. The baseline subquotas for each time period are as follows: 29.5 mt for January through March; 277.9 mt for June through August; 147.3 mt for September; 72.2 mt for October through November; and 28.9 mt for December. Any unused General category quota rolls forward from one time period to the next and is available for use in subsequent time periods.

Under § 635.27(a)(9), NMFS has the authority to transfer quota among fishing categories or subcategories, after considering regulatory determination criteria provided under § 635.27(a)(8). NMFS has considered all of the relevant determination criteria and their applicability to this inseason quota transfer. These considerations include, but are not limited to, the following:

Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock (§ 635.27(a)(8)(i)), biological samples collected from BFT landed by General category fishermen and provided by BFT dealers provide valuable data for ongoing scientific studies of BFT age and growth, migration, and reproductive status. Additional opportunity to land BFT, and potentially over a greater portion of the January through March time period, would support the continued collection of a broad range of data for these studies and for stock monitoring purposes.

NMFS also considered the catches of the General category quota to date (including in December 2020 and during the winter fishery in the last several years), and the likelihood of closure of that segment of the fishery if no adjustment is made (§ 635.27(a)(8)(ii) and (ix)). Without a quota transfer from December 2021, the quota available for the January through March period would be 29.5 mt (5.3 percent of the General category quota), and participants would have to stop BFT fishing activities once that amount is met, while commercial-sized BFT may remain available in the areas where General category permitted vessels operate. Transferring 19.5 mt of the 28.9-mt quota available for December 2021 (with 28.9 mt representing 5.2 percent of the General category quota) would result in 49 mt (8.8 percent of the General category quota) being available for the January through March 2021 subquota period. This quota transfer would provide additional opportunities to harvest the U.S. BFT quota without exceeding it, while preserving the opportunity for General category fishermen to participate in the winter BFT fishery at both the beginning and end of the calendar year.

Regarding the projected ability of the vessels fishing under the particular category quota (here, the General category) to harvest the additional amount of BFT quota transferred before the end of the fishing year (§ 635.27(a)(8)(iii)), NMFS considered General category landings over the last several years. Landings are highly variable and depend on access to commercial-sized BFT and fishing conditions, among other factors. Any unused General category quota from the January through March subperiod that remains as of March 31 will roll forward to the next subperiod within the calendar year ( i.e., the June through August time period). In early 2020, NMFS transferred 19.5 mt of quota from the December 2020 subquota to the January through March 2020 subquota period, resulting in a subquota of 49 mt for the January through March 2020 period and a subquota of 9.4 mt for the December 2020 period (85 FR 17, January 2, 2020). NMFS also made a transfer of 51 mt from the Reserve to the General category effective February 5, 2020, resulting in an adjusted subquota of 100 mt for the January through March 2020 period (85 FR 6828, February 6, 2020), and closed the General category fishery for the January through March subquota period effective February 24 (85 FR 10993, February 26, 2020). Under a one-fish General category daily retention limit ( i.e., of large medium or giant BFT, measuring 73 inches (185 cm) curved fork length or greater) effective January 1 through February 24, a total of 124.1 mt were landed.

NMFS also considered the estimated amounts by which quotas for other gear categories of the fishery might be exceeded (§ 635.27(a)(8)(iv)) and the ability to account for all 2021 landings and dead discards. In the last several years, total U.S. BFT landings have been below the available U.S. quota such that the United States has carried forward the maximum amount of underharvest allowed by ICCAT from one year to the next. NMFS will need to account for 2021 landings and dead discards within the adjusted U.S. quota, consistent with ICCAT recommendations, and anticipates having sufficient quota to do that. Thus, this quota transfer would allow fishermen to take advantage of the availability of fish on the fishing grounds to the extent consistent with the available amount of transferrable quota and other management objectives, while avoiding quota exceedance.

NMFS also considered the effects of the adjustment on the BFT stock and the effects of the transfer on accomplishing the objectives of the 2006 Consolidated HMS FMP (§ 635.27(a)(8)(v) and (vi)). This transfer would be consistent with the current quotas, which were established and analyzed in the 2018 BFT quota final rule (83 FR 51391, October 11, 2018), and with objectives of the 2006 Consolidated HMS FMP and amendments and is not expected to negatively impact stock health or to affect the stock in ways not already analyzed in those documents. Another principal consideration is the objective of providing opportunities to harvest the full annual U.S. BFT quota without exceeding it based on the goals of the 2006 Consolidated HMS FMP and amendments, including to achieve optimum yield on a continuing basis and to optimize the ability of all permit categories to harvest their full BFT quota allocations (related to § 635.27(a)(8)(x)). Specific to the General category, this includes providing opportunity equitably across all time periods.

NMFS also anticipates that some underharvest of the 2020 adjusted U.S. BFT quota will be carried forward to 2021 and placed in the Reserve category, in accordance with the regulations. This, in addition to the fact that any unused General category quota will roll forward to the next subperiod within the calendar year, as well as NMFS' plan to actively manage the subquotas to avoid any exceedances, makes it likely that General category quota will remain available through the end of 2021 for December fishery participants, even with the quota transfer. NMFS also may choose to transfer unused quota from the Reserve or other categories, inseason, based on consideration of the determination criteria, as NMFS did for late 2020. NMFS anticipates that General category participants in all areas and time periods will have opportunities to harvest the General category quota in 2021, through active inseason management actions such as retention limit adjustments and/or the timing of quota transfers, as practicable.

Based on the considerations above, NMFS is transferring 19.5 mt of the 28.9-mt General category quota allocated for the December 2021 period to the January through March 2021 period, resulting in a subquota of 49 mt for the January through March 2021 period and a subquota of 9.4 mt for the December 2021 period.

NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landings reports within 24 hours of a dealer receiving BFT. Late reporting by dealers compromises NMFS' ability to timely implement actions such as quota and retention limit adjustment, as well as closures, and may result in enforcement actions. Additionally, and separate from the dealer reporting requirement, General and HMS Charter/Headboat category vessel owners are required to report the catch of all BFT retained or discarded dead within 24 hours of the landing(s) or end of each trip, by accessing hmspermits.noaa.gov or by using the HMS Catch Reporting app, or calling (888) 872-8862 (Monday through Friday from 8 a.m. until 4:30 p.m.).

Under § 635.23(a)(4), NMFS may increase or decrease the daily retention limit of large medium and giant BFT over a range of zero to a maximum of five per vessel based on consideration of the relevant criteria provided under § 635.27(a)(8). However, at this time, NMFS is maintaining the default daily retention limit of one large medium or giant BFT per vessel per day/trip (§ 635.23(a)(2)) for the January through March 2021 General category fishery. Regardless of the duration of a fishing trip, no more than a single day's retention limit may be possessed, retained, or landed. For example (and specific to the limit that will apply beginning January 1, 2021), whether a vessel fishing under the General category limit takes a 2-day trip or makes two trips in 1 day, the daily limit of one fish may not be exceeded upon landing. This General category retention limit is effective in all areas, except for the Gulf of Mexico, where NMFS prohibits targeted fishing for BFT, and applies to those vessels permitted in the General category, as well as to those HMS Charter/Headboat permitted vessels with a commercial sale endorsement when fishing commercially for BFT.

Depending on the level of fishing effort and catch rates of BFT, NMFS may determine that additional action ( e.g., quota adjustment, daily retention limit adjustment, or closure) is necessary to ensure available subquotas are not exceeded or to enhance scientific data collection from, and fishing opportunities in, all geographic areas. If needed, subsequent adjustments will be published in the Federal Register . As needed, NMFS will close the General category fishery when the adjusted January through March period subquota has been reached. Even if the adjusted subquota is not reached, the General category fishery will close automatically on March 31, 2021, and will remain closed until it reopens on June 1, 2021. Fishermen may call the Atlantic Tunas Information Line at (978) 281-9260, or access hmspermits.noaa.gov, for updates on quota monitoring and inseason adjustments.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is consistent with regulations at 50 CFR part 635, which were issued pursuant to section 304(c) of the Magnuson-Stevens Act and the Atlantic Tunas Convention Act, and is exempt from review under Executive Order 12866.

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

The regulations implementing the 2006 Consolidated HMS FMP and amendments provide for inseason quota transfers to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Affording prior notice and opportunity for public comment to implement the quota transfer for the January through March 2021 subquota period is impracticable and contrary to the public interest as NMFS could not have proposed this action earlier, as it needed to consider and respond to updated landings data, including the recently available December 2020 data, in deciding to transfer a portion of the December 2021 subquota to the January through March 2021 subquota. If NMFS was to offer a public comment period now, after having appropriately considered that data, it could preclude fishermen from harvesting BFT that are legally available consistent with all of the regulatory criteria, and/or could result in selection of a retention limit inappropriately high for the amount of quota available for the period. This action does not raise conservation and management concerns. Transferring quota within the General category does not affect the overall U.S. BFT quota, and available data shows the adjustment would have a minimal risk of exceeding the ICCAT-allocated quota. NMFS notes that the public had an opportunity to comment on the underlying rulemakings that established the U.S. BFT quota and the inseason adjustment criteria. For all of the above reasons, there is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council (Council) under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020 and revision to implement Amendment 109, 85 FR 74266, November 20, 2020) set the 2021 pollock TAC at 119,239 metric tons (mt) in the GOA. In December 2020, the Council recommended a 2021 pollock TAC of 113,227 mt for the GOA, which is less than the 119,239 mt established by the final 2020 and 2021 harvest specifications for groundfish in the GOA. The Council's recommended 2021 TAC, and the area and seasonal apportionments, is based on the Stock Assessment and Fishery Evaluation report (SAFE), dated November 2020.

The final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020 and revision to implement Amendment 109, 85 FR 74266, November 20, 2020) set the 2021 Pacific cod TAC at 6,431 mt in the GOA. In December 2020, the Council recommended a 2021 Pacific cod TAC of 17,321 mt for the GOA, which is more than the 6,431 mt established by the final 2020 and 2021 harvest specifications for groundfish in the GOA. The Council's recommended 2021 TAC, and the area and seasonal apportionments, is based on the SAFE, dated November 2020.

Steller sea lions occur in the same location as the pollock and Pacific cod fisheries and are listed as endangered under the Endangered Species Act. Pollock and Pacific cod are principal prey species for Steller sea lions in the GOA. The seasonal apportionment of pollock and Pacific cod harvests are necessary to ensure the groundfish fisheries are not likely to cause jeopardy of extinction or adverse modification of critical habitat for Steller sea lions. The regulations at § 679.20(a)(5)(iv) specify how the pollock TAC will be apportioned and the regulations at § 679.20(a)(6)(ii) and (a)(12)(i) specify how the Pacific cod TAC will be apportioned.

In accordance with § 679.25(a)(1)(iii), (a)(2)(i)(B), and (a)(2)(iv) the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that, based on the best available scientific information for this fishery, the current GOA pollock and Pacific cod TACs are incorrectly specified. Consequently, pursuant to § 679.25(a)(1)(iii), the Regional Administrator is adjusting the 2021 GOA pollock TAC to 113,227 mt and the 2021 Pacific cod TAC to 17,321 mt. Therefore, Tables 4 and 6 of the final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020 and revision to implement Amendment 109, 85 FR 74266, November 20, 2020) are revised consistent with this adjustment.

NMFS published a final rule to implement Amendment 109 to the FMP (85 FR 38093, June 25, 2020). That rule revised the pollock seasons in the GOA, along with Pacific cod seasonal allocations, for the Central and Western Regulatory Areas of the GOA. Amendment 109 modified the existing annual pollock TAC allocation to two equal seasonal allocations (50 percent of TAC), rather than four equal seasonal allocations (25 percent of TAC). The pollock A and B seasons were combined into a January 20 through May 31 A season, and the pollock C and D seasons were combined into a September 1 through November 1 B season. Additionally, Amendment 109 revised the Pacific cod TAC seasonal allocations to the trawl catcher vessel sector by increasing the A season allocation and decreasing the B season allocation. The revisions implemented by Amendment 109, which are effective January 1, 2021, are incorporated into this inseason adjustment.

Pursuant to § 679.20(a)(5)(iv), Table 4 of the final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020 and revision to implement Amendment 109, 85 FR 74266, November 20, 2020) is revised for the 2021 TACs of pollock in the Central and Western Regulatory Area of the GOA.

Pursuant to § 679.20(a)(6)(ii) and (a)(12)(i), Table 6 of the final 2020 and 2021 harvest specifications for groundfish in the GOA (85 FR 13802, March 10, 2020 and revision to implement Amendment 109, 85 FR 74266, November 20, 2020) is revised for the 2021 TACs of Pacific cod in the GOA.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b), and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would allow for harvests that exceed the appropriate allocation for pollock and Pacific cod based on the best scientific information available. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 16, 2020.

Without this inseason adjustment, NMFS could not allow the fishery for pollock, Atka mackerel, and Pacific cod in the BSAI to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until January 7, 2021.