On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act which, among other things, created the Paycheck Protection Program (PPP) to facilitate lending to small businesses affected by the outbreak of COVID-19 and imposition of associated containment measures (COVID event). Although the CARES Act specified that the PPP would end on June 30, 2020, it was later extended to August 8, 2020. 1 On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021 (Appropriations Act), which further extended the PPP to March 31, 2021. 2 The Appropriations Act also created “PPP second draw loans,” which are substantially similar to the PPP loans that have been made to date. 3

Regulation O sets forth quantitative and qualitative requirements for loans made by a bank  4 to its directors, executive officers, and principal shareholders, as well as to any companies owned by such persons (collectively, insiders). 5 Regulation O also sets forth procedural and recordkeeping requirements for loans by banks to their insiders. These requirements normally would apply to PPP loans made by banks to the small businesses owned by their insiders. In some cases, the restrictions in Regulation O could delay or entirely prohibit a bank from making a PPP loan to such a business. This could be particularly challenging in small communities where bank insiders often own small businesses and there are few alternative lenders.

On April 17, 2020, the Board issued an exception to section 22(h) of the Federal Reserve Act  6 and the corresponding provisions of Regulation O for PPP loans made to insiders that would not be prohibited from receiving a PPP loan under the Small Business Administration (SBA) lending restrictions (original IFR). 7 The exception was intended to facilitate lending by banks to a broad range of small businesses within their communities, consistent with applicable law and safe and sound banking practices. The exception applied only to PPP loans made by June 30, 2020, the original date on which the PPP was set to expire. The Board extended the exception after Congress extended the PPP. 8

The Board received a dozen comments in response to the IFRs it issued in April and July from one trade association, several small businesses, and several individuals. Most of the comments expressed support for the Board's relief, indicating that it would bolster the effectiveness of the PPP in providing support to small businesses. Several raised issues related to the terms and administration of the PPP. One commenter asserted that no bank executives should receive loans from their banks in excess of $15,000 because executives could take advantage of their banks to the detriment of depositors.

In response to comments about the terms and administration of the PPP, the Board notes that the SBA is the agency responsible for setting forth the requirements and administering the program. Any comments concerning those matters are properly addressed to the SBA. Regarding one commenter's suggestion that no executive should be able to borrow more than $15,000 from its banks because executives could exert undue influence and cause harm to a bank, the Board notes that PPP loans have standardized terms and are fully guaranteed as to principal and interest by the U.S. government. Accordingly, a bank may not amend the terms of a PPP loan to be unduly favorable to an executive and the bank is unlikely to suffer a loss because of the loan guarantee. The Board also notes that the relief only extends to insiders who would not be prohibited from receiving a PPP loan by the SBA's lending restrictions, which currently prohibit an “officer” from receiving a PPP loan from his or her bank. 9

The Board is issuing this interim final rule to extend the exception to PPP loans made through March 31, 2021, and to PPP second draw loans.

Section 22(h) authorizes the Board to adopt, by regulation, exceptions to the definition of “extension of credit” in section 22(h) for transactions that “pose minimal risk.”  10 Therefore, the Board may except PPP loans and PPP second draw loans from the restrictions in section 22(h) and the corresponding provisions of Regulation O upon a determination that such loans pose minimal risk.

The Board determined in the original IFR that PPP loans pose minimal risk. 11 Among other things, this determination relieved member banks from ensuring that PPP loans made to certain insiders complied with the qualitative, quantitative, and procedural requirements set forth in section 22(h) and Regulation O. The Appropriations Act did not change any of the features of PPP loans on which the Board relied in the original IFR to determine that PPP loans pose minimal risk. Moreover, under the Appropriations Act, PPP second draw loans have the same features as PPP loans, except that fewer borrowers are eligible for PPP second draw loans as for PPP loans. 12 Accordingly, for the same reasons cited in the original IFR, the Board has determined that PPP loans and PPP second draw loans appear to pose minimal risk to bank safety and soundness. 13

SBA lending restrictions continue to apply to certain PPP loans and PPP second draw loans that also would be subject to section 22(h) and the corresponding provisions of Regulation O. 14 Excepting loans that would be prohibited by the SBA lending restrictions from the requirements of section 22(h) and the corresponding provisions in Regulation O would not achieve any meaningful regulatory purpose. Excepting these loans from one regime and not the other also may create confusion because some lenders may mistakenly interpret an exception under one regime to extend to both regimes. Accordingly, the exception continues to apply only for insiders that would not be prohibited from receiving a PPP loan or PPP second draw loan by the SBA lending restrictions.

This interim final rule does not except a PPP loan or PPP second draw loan from other restrictions that may apply to the loan, including section 22(g) of the Federal Reserve Act or section 215.5 of Regulation O. 15 This determination also does not affect application of SBA lending restrictions to a PPP loan or PPP second draw loan. The SBA has stated that “[f]avoritism by [a PPP] [l]ender in processing time or prioritization of [a] director's or equity holder's PPP application is prohibited.”  16 The Board will administer the interim final rule accordingly.

Question 1: Are there any additional terms or conditions that should apply to the exception? Why?

Question 2: Based on the experience with the PPP program, what, if any, terms or conditions for PPP second draw loans would make it unreasonable for such loans to be exempted from the requirements of section 22(h)?

The Board is issuing the interim final rule without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA). 17 Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”  18

The Board believes that the public interest is best served by implementing the interim final rule immediately in light of the short timeframe for execution of the renewed PPP mandated by the Appropriations Act. Accordingly, the Board finds that there is good cause consistent with the public interest to issue the rule without advance notice and comment. 19

The APA also requires a 30-day delayed effective date, except for (1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause. 20 Because the rules relieve a restriction by providing an exception to the definition of “extension of credit” in section 22(h) and Regulation O, the interim final rule is exempt from the APA's delayed effective date requirement. 21

While the Board believes that there is good cause to issue the rule without advance notice and comment and with an immediate effective date, the Board is interested in the views of the public and requests comment on all aspects of the interim final rule.

The Paperwork Reduction Act (44 U.S.C. 3501-3521) (PRA) 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 OMB control number. On June 15, 1984, OMB delegated to the Board authority under the PRA to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board, as well as the authority to temporarily approve a new collection of information without providing opportunity for public comment if the Board determines that a change in an existing collection must be instituted quickly and that public participation in the approval process would defeat the purpose of the collection or substantially interfere with the Board's ability to perform its statutory obligation.

This interim final rule does not contain any collections of information subject to the PRA.

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

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

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA), 24 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), the federal banking agencies must consider, consistent with the principle of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form, with certain exceptions, including for good cause. 25 The Board believes that the public interest is best served by implementing the interim final rule immediately. As discussed in the original IFR, the COVID event has disrupted economic activity in the United States and other countries. The magnitude and persistence of the COVID event on the economy remain uncertain. In light of the substantial disruptions in the economy, and the likelihood that this interim final rule would help ameliorate those disruptions by promoting lending to small businesses, the Board finds good cause exists under section 302 of RCDRIA to publish this interim final rule with an immediate effective date.

As such, the interim final rule will be effective immediately on publication. Nevertheless, the Board seeks comment on RCDRIA.

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

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

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

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

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

• What else could we do to make the regulation easier to understand?

For the reasons stated in the preamble, the Board of Governors of the Federal Reserve System amends 12 CFR chapter II as follows:

Regulation Z, 12 CFR part 1026, implements the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., and includes a requirement that creditors establish an escrow account for certain higher-priced mortgage loans (HPMLs), 1 and also provides for certain exemptions from this requirement. 2 In the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), 3 Congress directed the Bureau to issue regulations to add a new exemption from TILA's escrow requirement that exempts transactions by certain insured depository institutions and insured credit unions. This final rule implements the EGRRCPA section 108 statutory directive, removes certain obsolete text from the Official Interpretations to Regulation Z (commentary), 4 and also corrects prior inadvertent deletions from and two scrivener's errors in existing commentary. 5

New § 1026.35(b)(2)(vi) exempts from the Regulation Z HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if: (1) The institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing HPML escrow exemption criteria are met, as described below in part V. 6

Prior to the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 7 the Board of Governors of the Federal Reserve System (Board) issued a rule  8 requiring, among other things, the establishment of escrow accounts for payment of property taxes and insurance for certain “higher-priced mortgage loans,” a category which the Board defined to capture what it deemed to be subprime loans. 9 The Board explained that this rule was intended to reduce consumer and systemic risks by requiring the subprime market to structure loans and disclose their pricing similarly to the prime market. 10

In 2010, Congress enacted the Dodd-Frank Act, which amended TILA and transferred TILA rulemaking authority and other functions from the Board to the Bureau. 11 The Dodd-Frank Act added TILA section 129D(a), which adopted the Board's rule requiring that creditors establish an escrow account for higher-priced mortgage loans. 12 The Dodd-Frank Act also excluded certain loans, such as reverse mortgages, from this escrow requirement. The Dodd-Frank Act further granted the Bureau authority to structure an exemption based on asset size and mortgage lending activity for creditors operating predominantly in rural or underserved areas. 13 In 2013, the Bureau exercised this authority to exempt from the escrow requirement creditors with under $2 billion in assets and meeting other criteria. 14 In the Helping Expand Lending Practices in Rural Communities Act of 2015, Congress amended TILA section 129D again by striking the term “predominantly” for creditors operating in rural or underserved areas. 15

Congress enacted the EGRRCPA in 2018. In section 108 of the EGRRCPA, 16 Congress directed the Bureau to conduct a rulemaking to create a new exemption, this one to exempt from TILA's escrow requirement loans made by certain creditors with assets of $10 billion or less and meeting other criteria. Specifically, section 108 of the EGRRCPA amended TILA section 129D(c) to require the Bureau to exempt certain loans made by certain insured depository institutions and insured credit unions from the TILA section 129D(a) HPML escrow requirement.

TILA section 129D(c)(2), as amended by the EGRRCPA, requires the Bureau to issue regulations to exempt from the HPML escrow requirement any loan made by an insured depository institution or insured credit union secured by a first lien on the principal dwelling of a consumer if: (1) The institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing Regulation Z HPML escrow exemption criteria, or those of any successor regulation, are met. The Regulation Z exemption criteria that the statute includes in the new exemption are: (1) The requirement that the creditor extend credit in a rural or underserved area (§ 1026.35(b)(2)(iii)(A)); (2) the exclusion from exemption eligibility of transactions involving forward purchase commitments (§ 1026.35(b)(2)(v)); and (3) the prerequisite that the institution and its affiliates not maintain an escrow account other than either (a) those established for HPMLs at a time when the creditor may have been required by the HPML escrow rule to do so, or (b) those established after consummation as an accommodation to distressed consumers (§ 1026.35(b)(2)(iii)(D)).

The Bureau released a proposed rule to implement EGRRCPA section 108 on July 2, 2020, and the proposal was published in the Federal Register on July 22, 2020. 17 The comment period closed on September 21, 2020. Twelve commenters explicitly supported the proposed rule and four were generally opposed to it. Almost all of the commenters who supported the rule suggested one or more changes, discussed below in the section-by-section analysis. The commenters were individuals and individual banks and credit unions, as well as State, regional and national trade associations representing banks and credit unions. There were also two anonymous comments. No community or consumer organizations commented on the proposed rule. As discussed in more detail below, the Bureau has considered these comments in finalizing this final rule as proposed, except that the final rule provides a transition period of 120 days, rather than the 90 days set forth in the proposed rule. 18

The Bureau is issuing this final rule pursuant to its authority under the Dodd-Frank Act and TILA.

Section 1022(b)(1) of the Dodd-Frank Act authorizes the Bureau to prescribe rules “as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer financial laws, and to prevent evasions thereof.”  19 Among other statutes, TILA and title X of the Dodd-Frank Act are Federal consumer financial laws. 20 Accordingly, in adopting this rule, the Bureau is exercising its authority under Dodd-Frank Act section 1022(b) to prescribe rules that carry out the purposes and objectives of TILA and title X of the Dodd-Frank Act and prevent evasion of those laws.

As amended by the Dodd-Frank Act, TILA section 105(a) directs the Bureau to prescribe regulations to carry out the purposes of TILA, and provides that such regulations may contain additional requirements, classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for all or any class of transactions, that the Bureau judges are necessary or proper to effectuate the purposes of TILA, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. 21 A purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.”  22 This stated purpose is tied to Congress's finding that “economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit.”  23 Thus, strengthened competition among financial institutions is a goal of TILA, achieved through the effectuation of TILA's purposes.

Historically, TILA section 105(a) has served as a broad source of authority for rules that promote the informed use of credit through required disclosures and substantive regulation of certain practices. Dodd-Frank Act section 1100A clarified the Bureau's section 105(a) authority by amending that section to provide express authority to prescribe regulations that contain “additional requirements” that the Bureau finds are necessary or proper to effectuate the purposes of TILA, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. The Dodd-Frank Act amendment clarified that the Bureau has the authority to use TILA section 105(a) to prescribe requirements beyond those specifically listed in TILA that meet the standards outlined in section 105(a). As amended by the Dodd-Frank Act, TILA section 105(a) authority to make adjustments and exceptions to the requirements of TILA applies to all transactions subject to TILA, except with respect to the provisions of TILA section 129 that apply to the high-cost mortgages referred to in TILA section 103(bb). 24

The Bureau's authority under TILA section 105(a) to make exceptions, adjustments, and additional provisions that the Bureau finds are necessary or proper to effectuate the purposes of TILA applies with respect to the purpose of TILA section 129D. That purpose is to ensure that consumers understand and appreciate the full cost of home ownership. The purpose of TILA section 129D is also informed by the findings articulated in TILA section 129B(a) that economic stabilization would be enhanced by the protection, limitation, and regulation of the terms of residential mortgage credit and the practices related to such credit, while ensuring that responsible and affordable mortgage credit remains available to consumers. 25

For the reasons discussed in this document, the Bureau is amending Regulation Z to implement EGRRCPA section 108 to carry out the purposes of TILA and is adopting such additional requirements, adjustments, and exceptions as, in the Bureau's judgment, are necessary and proper to carry out the purposes of TILA, prevent circumvention or evasion thereof, or to facilitate compliance. In developing these aspects of the rule pursuant to its authority under TILA section 105(a), the Bureau has considered: (1) The purposes of TILA, including the purpose of TILA section 129D; (2) the findings of TILA, including strengthening competition among financial institutions and promoting economic stabilization; and (3) the specific findings of TILA section 129B(a)(1) that economic stabilization would be enhanced by the protection, limitation, and regulation of the terms of residential mortgage credit and the practices related to such credit, while ensuring that responsible, affordable mortgage credit remains available to consumers.

In addition, in previous rulemakings, the Bureau adopted two of the regulatory provisions this rule now amends. In adopting those provisions, the Bureau relied on one or more of the authorities discussed above, as well as other authority. 26 The Bureau is amending these provisions in reliance on the same authority, as discussed in detail in the Legal Authority or section-by-section analysis parts of the Bureau's final rules titled “Escrow Requirements Under the Truth in Lending Act” and “Amendments Relating to Small Creditors and Rural or Underserved Areas Under the Truth in Lending Act (Regulation Z).”  27

The escrow requirement exemption in EGRRCPA section 108 is available to “insured credit unions” and “insured depository institutions.” Section 108 amends TILA to provide definitions for these two terms, at TILA section 129D(i)(3) and (4). “Insured credit union” has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752), and “insured depository institution” has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

The Bureau proposed to include these definitions with the existing definitions regarding HPMLs, in § 1026.35(a). No commenters discussed these definitions or objected to the EGRRCPA's limitation of eligibility for the new exemption to insured credit unions and insured depository institutions. The Bureau now adopts these definitions as proposed.

EGRRCPA section 108 amends TILA section 129D to provide that one of the requirements for the new escrow exemption is that an exempted transaction satisfy the criterion previously established by the Bureau and codified at Regulation Z § 1026.35(b)(2)(iii)(D). Section 1026.35(b)(2)(iii)(D) establishes as a prerequisite to the exemption that a creditor or its affiliate is not already maintaining an escrow account for any extension of consumer credit secured by real property or a dwelling that the creditor or its affiliate currently services. 28 The purpose of this prerequisite is to limit the exemption to institutions that do not already provide escrow accounts and thus would have to incur the initial cost of setting up a system to provide such accounts. Instead, only institutions that are otherwise eligible for the exemption but already provide escrow accounts would bear the burden of providing such accounts, with the overall burden for them being lower because they are continuing to provide them rather than incurring the cost of starting them up. This prerequisite, however, is subject to two exceptions.

First, under § 1026.35(b)(2)(iii)(D)( 2 ), a creditor would not lose the exemption for providing escrow accounts as an accommodation to distressed consumers to assist such consumers in avoiding default or foreclosure. The Bureau did not propose to and is not amending this exception.

Second, under § 1026.35(b)(2)(iii)(D)( 1 ), the Bureau in its original escrow exemption rule  29 granted an exception from the non-escrowing requirement to creditors who established escrow accounts for first-lien HPMLs on or after April 1, 2010 (the effective date of the Board's original HPML escrow rule), and before June 1, 2013 (the effective date of the Bureau's first HPML escrow rule that included the Dodd-Frank exemption for certain creditors (the original escrow exemption)). The purpose of this exception was to avoid penalizing creditors that had not previously provided escrow accounts but established them specifically to comply with the regulation requiring escrows. 30 Over time, as the Bureau amended the HPML escrow exemption criteria and made more creditors eligible, the Bureau also extended the end date for the exception to the non-escrowing requirement in § 1026.35(b)(2)(iii)(D), so that creditors that had established escrow accounts in order to comply with the Bureau's regulations could still benefit from the relief provided by the Bureau's amendments to the exemption criteria. 31 The Bureau most recently extended the date to May 1, 2016, consistent with the effective date of the Bureau's latest amendment to the HPML exemption criteria. 32

The proposed rule proposed to amend this exception again, explaining that the dates in then-current § 1026.35(b)(2)(iii)(D)( 1 ) between which creditors were allowed to maintain escrow accounts for first-lien HPMLs without losing eligibility for the exemption (April 1, 2010, until May 1, 2016) were necessary to allow creditors to benefit fully from the existing escrow exemption. However, those same dates would have caused most insured depositories and insured credit unions who would otherwise qualify under the EGRRCPA's new exemption criteria to be ineligible for the exemption. The reason they would have been ineligible is that those depositories and credit unions presumably had established escrows for HPMLs after May 1, 2016, in compliance with the then-current escrow rule's requirements.

In the proposed rule, to assist otherwise exempt institutions to avoid inadvertently making themselves ineligible by establishing escrow accounts before they had heard about the rule and adjusted their compliance, the Bureau proposed to replace the May 1, 2016, end date for the exception to the prerequisite against maintaining escrows with a new end date that was approximately 90 days after the effective date (proposed as the date of publication in the Federal Register ) of the eventual section 108 escrow exemption final rule. In addition, the Bureau proposed to amend comment 35(b)(2)(iii)-1.iv to conform to this change.

The Bureau also proposed to amend comment 35(b)(2)(iii)(D)( 1 )-1 to address the date change. Comments 35(b)(2)(iii)(D)( 1 )-1 and ( 2 )-1 were inadvertently deleted from the Code of Federal Regulations in 2019 during an annual inflation adjustment rulemaking, and no change in interpretation of the associated regulatory provisions was intended. 33 The Bureau proposed to correct this deletion by reinserting the two comments back into Supplement I, with comment 35(b)(2)(iii)(D)( 1 )-1 amended from its former language to reflect the date change described above and with no changes being made to comment 35(b)(2)(iii)(D)( 2 )-1. In addition, a sentence describing the definition of “affiliate” in comment 35(b)(2)(iii)-1.ii.C was also inadvertently deleted from the Code of Federal Regulations in 2019, and no change in interpretation was intended. 34 The Bureau also proposed to add the deleted sentence back into this comment.

Two commenters supported the proposed extension of the non-escrowing date to 90 days beyond the effective ( i.e., publication) date of the rule and said they agreed with the Bureau's concern that small institutions might unintentionally become ineligible. Four other commenters requested that the Bureau allow 120 days instead of 90, stating that small institutions often lack the resources to adjust to new compliance requirements quickly and thus the extra time would be very important. Two other commenters asked for a longer transition period than 90 days but did not specify how many days the Bureau should provide. None of the commenters asking for more than 90 days provided factual evidence of the need for more time beyond their stated knowledge of creditor processes.

The Bureau is amending § 1026.35(b)(2)(iii)(D)( 1 ) and comments 35(b)(2)(iii)-1.iv and (iii)(D)( 1 )-1 generally as proposed, but finalizing the end date for the exception to the non-escrowing requirement as 120 days from the effective date (date of publication) instead of the proposed end date of 90 days from the effective date. The small- to mid-size institutions affected by the rule may not be immediately aware of the change and might make themselves ineligible for the exemption by establishing escrow accounts before they become aware of the change. With the final rule end date change, such institutions will have 120 days to learn of the amendment. The Bureau has no information that extending the non-escrowing date of the final rule from 90 to 120 days after the effective date would harm consumers or have an adverse impact on industry.

The Bureau initially adopted the criterion in § 1026.35(b)(2)(iii)(D) under its broad discretionary authority, set forth in 15 U.S.C. 1639d(c)(4), to establish “any other criteria [for the escrow exemption] consistent with the purposes” of the escrow provisions. In establishing the new exemption in EGRRCPA section 108, Congress incorporated as a prerequisite to the new exemption the criterion in § 1026.35(b)(2)(iii)(D) or “any successor regulation.” The Bureau interprets the reference to “any successor regulation” to authorize it to make amendments to existing § 1026.35(b)(2)(iii)(D) consistent with the purposes of the escrow provisions, the same standard under which the provision was initially authorized. The Bureau believes the amendment to the end date in § 1026.35(b)(2)(iii)(D)( 1 ) is consistent with the purposes of the escrow provisions to avoid disqualifying the majority of institutions that otherwise would qualify for the new exemption. Without this amendment, the Bureau believes that very few insured depository institutions and insured credit unions would have been able to benefit from the new escrow exemption. Such institutions would only have been institutions that (1) together with their affiliates, had more than approximately $2 billion in assets and, without affiliates, less than $10 billion in assets; (2) had not extended any HPMLs since May 1, 2016; and (3) did not offer mortgage escrows in the normal course of business. Because this approach would have restricted access to the new HPML escrow exemption to this limited group of institutions, the usefulness of the exemption would have been extremely limited. The Bureau acknowledges the possibility that creditors outside of the scope of the new escrow exemption might become eligible for the existing escrow exemption as a result of the end-date change. However, any such creditors were able to so during previous date extensions and chose not to. Therefore, the Bureau believes that few, if any, of such creditors would actually take advantage of the existing escrow exemption during this date extension.

In addition, the Bureau's exemption is authorized under the Bureau's TILA section 105(a) authority to make adjustments to facilitate compliance with TILA and effectuate its purposes. 35 Modifying the date will facilitate compliance with TILA for the institutions that would qualify for the exemption but for the previous end date.

Finally, in a recent annual inflation adjustment rulemaking, the Bureau erroneously amended comment 35(b)(2)(iii)-1.iii.E to include a reference to the year “2019” rather than the correct “2020,” and also erroneously amended comment 35(b)(2)(iii)-1.iii.E.8 to include a reference to the year “2010” rather than the correct “2021.”  36 The Bureau considers these to be scrivener's errors that should be interpreted as references to the year “2020” and “2021” respectively, and the Bureau is now correcting the errors for clarity.

The proposed rule explained that existing § 1026.35(b)(2)(iv)(A)( 3 ) provided that a county or census block could be designated as rural using an application process pursuant to section 89002 of the Helping Expand Lending Practices in Rural Communities Act. 37 Because the provision ceased to have any force or effect on December 4, 2017, the Bureau proposed to remove this provision and make conforming changes to § 1026.35(b)(2)(iv)(A). The Bureau also proposed to remove references to the obsolete provision in comments 35(b)(2)(iv)(A)-1.i and -2.i, as well as comment 43(f)(1)(vi)-1.

On June 23, 2020, the Bureau issued an interpretive rule that describes the HMDA data to be used in determining whether an area is “underserved.”  38 As the interpretive rule explained, certain parts of the methodology described in comment 35(b)(2)(iv)-1.ii became obsolete because they referred to HMDA data points replaced or otherwise modified by the 2015 HMDA Final Rule. In the proposed rule, the Bureau proposed to remove as obsolete the last two sentences from comment 35(b)(2)(iv)-1.ii and to remove references to publishing the annual rural and underserved lists in the Federal Register , based on its tentative conclusion that such publication does not increase the ability of financial institutions to access the information, and that posting the lists on the Bureau's public website is sufficient.

The Bureau did not receive comments on these proposed changes to § 1026.35(b)(2)(iv)(A), the related changes to the official commentary, or the changes to comment 35(b)(2)(iv)-1. 39 For the reasons discussed above, the Bureau is finalizing these amendments as proposed.

EGRRCPA section 108 further amends TILA section 129D to provide that one of the requirements for the new escrow exemption is that an exempted loan satisfy the criterion in Regulation Z § 1026.35(b)(2)(v), a prerequisite to the original escrow exemption. Existing § 1026.35(b)(2)(v) provides that, unless otherwise exempted by § 1026.35(b)(2), the exemption to the escrow requirement would not be available for any first-lien HPML that, at consummation, is subject to a commitment to be acquired by a person that does not satisfy the conditions for an exemption in § 1026.35(b)(2)(iii) ( i.e., no forward commitment). In adopting the original escrow exemption, the Bureau stated that the prerequisite of no forward commitments would appropriately implement the requirement in TILA section 129D(c)(1)(C)  40 that the exemption apply only to portfolio lenders. 41 The Bureau also reasoned that conditioning the exemption on a lack of forward commitments, rather than requiring that all loans be held in portfolio, would avoid consumers having to make unexpected lump sum payments to fund an escrow account. 42

To implement section 108, the Bureau proposed to add references in § 1026.35(b)(2)(v) to the new exemption to make clear that the new exemption would also not be available for transactions subject to forward commitments of the type described in § 1026.35(b)(2)(v). The Bureau also proposed to add similar references to the new exemption in comment 35(b)(2)(v)-1 discussing “forward commitments.” The Bureau did not receive comments regarding these provisions and is finalizing them as proposed.

As explained above in part I, section 108 of the EGRRCPA amends TILA section 129D to provide a new exemption from the HPML escrow requirement. 43 The new exemption is narrower than the existing TILA section 129D exemption in several ways, including the following. First, the section 108 exemption is limited to insured depositories and insured credit unions that meet the statutory criteria, whereas the existing escrow exemption applies to any creditor (including a non-insured creditor) that meets its criteria. Second, the originations limit in the section 108 exemption is specified to be 1,000 loans secured by a first lien on a principal dwelling originated by an insured depository institution or insured credit union and its affiliates during the preceding calendar year. In contrast, TILA section 129D(c)(1) (as redesignated) gave the Bureau discretion to choose the originations limit for the original escrow exemption, which the Bureau set at 500 covered transactions, and subsequently amended to 2,000 covered transactions (other than portfolio loans). 44 Third, TILA section 129D(c)(1) also gave the Bureau discretion to determine any asset size threshold (which the Bureau set at $2 billion) and any other criteria the Bureau may establish, consistent with the purposes of TILA. EGRRCPA section 108, on the other hand, specifies an asset size threshold of $10 billion and does not expressly state that the Bureau can establish other criteria. (However, as discussed above, section 108 does appear to allow for a more circumscribed ability to alter certain parameters of the new exemption by referencing the existing regulation “or any successor regulation.”). 45

As explained in the proposed rule, EGRRCPA section 108 carves out a carefully circumscribed exemption available to insured depository institutions and insured credit unions that do not pursue mortgage lending as a major business line. Congress provided an asset size limit of $10 billion, approximately eight billion dollars above the existing escrow exemption, but reduced the originations limit to 1,000 loans.

The Bureau proposed to implement the EGRRCPA section 108 exemption consistent with this understanding of its limited scope. Proposed new § 1026.35(b)(2)(vi) would have codified the section 108 exemption by imposing as a precondition a bar on its use with transactions involving forward commitments, as explained above in the discussion of the forward commitments provision, § 1026.35(b)(2)(v), and limiting its use to insured depository institutions and insured credit unions. The other requirements for the exemption would have been implemented in proposed subparagraphs (A), (B) and (C), discussed below.

Only one commenter, a national trade association, referred to the proposal's discussion of the nature and purpose of the new exemption. That commenter agreed with the Bureau's reading of the statute and supported the Bureau's implementation of the new exemption.

To facilitate compliance, the Bureau also proposed to provide three-month grace periods  46 for the annually applied requirements for the EGRRCPA section 108 escrow exemption, in § 1026.35(b)(2)(vi)(A), (B), and (C). The grace periods would allow exempt creditors to continue using the exemption for three months after they exceed a threshold in the previous year, to allow a transition period and facilitate compliance. 47 The new proposed exemption would have used the same type of grace periods as in the existing escrow exemption at § 1026.35(b)(2)(iii).

Three commenters supported the proposed grace periods, citing compliance uncertainty and volume and asset fluctuations. Two of these commenters discussed the general use of grace periods for the different thresholds in the rule, and one discussed the use of a grace period with the 1,000-loan threshold specifically. No commenters opposed the use of grace periods. As explained further below in the section-by-section analysis of § 1026.35(b)(2)(vi)(A), the Bureau is now adopting the grace periods as proposed.

In addition to the three-month grace periods, the proposed exemption had other important provisions in common with the existing escrow exemption, including the rural or underserved test, the definition of affiliates, and the application of the non-escrowing time period requirement. Thus, the Bureau proposed to add new comment 35(b)(2)(vi)-1, which cross-references the commentary to § 1026.35(b)(2)(iii). Specifically, proposed comment 35(b)(2)(vi)-1 explained that for guidance on applying the grace periods for determining asset size or transaction thresholds under § 1026.35(b)(2)(vi)(A) or (B), the rural or underserved requirement, or other aspects of the exemption in § 1026.35(b)(2)(vi) not specifically discussed in the commentary to § 1026.35(b)(2)(vi), an insured depository institution or insured credit union may, where appropriate, refer to the commentary to § 1026.35(b)(2)(iii).

No commenters discussed proposed comment 35(b)(2)(vi)-1 and its cross reference to the commentary to § 1026.35(b)(2)(iii). For the reasons discussed above, the Bureau now adopts the comment as proposed.

EGRRCPA section 108(1)(D) amends TILA section 129D(c)(2)(A) to provide that the new escrow exemption is available only for transactions by an insured depository or credit union that “has assets of $10,000,000,000 or less.” The Bureau proposed to implement this provision in new § 1026.35(b)(2)(vi)(A) by: (1) Using an institution's assets during the previous calendar year to qualify for the exemption, but allowing for a three-month grace period at the beginning of a new year if the institution loses the exemption it previously qualified for; and (2) adjusting the $10 billion threshold annually for inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million dollars.

Two commenters opposed the $10 billion asset threshold, arguing that larger financial institutions should have access to the exemption. One of these commenters suggested that the Bureau make the exemption available to financial institutions with assets of $4 billion dollars or more that originate 100 or more mortgages per year. However, section 108 of the EGRRCPA specifically sets a threshold of $10 billion as a maximum. The comment provided no basis for the Bureau to ignore the express language of the statute in its implementing regulations.

The existing escrow exemption at § 1026.35(b)(2)(iii) includes three-month grace periods for determination of asset size, loan volume, and rural or underserved status. As explained above in the section-by-section analysis of § 1026.35(b)(2)(vi), those grace periods allow exempt creditors to continue using the exemption for three months after they exceed a threshold in the previous year, so that there will be a transition period to facilitate compliance when they no longer qualify for the exemption. 48 The use of grace periods therefore addresses potential concerns regarding the impact of asset size and origination volume fluctuations from year to year. 49 As with the grace periods in the existing escrow exemption, the new proposed grace period in § 1026.35(b)(2)(vi)(A) would cover applications received before April 1 of the year following the year that the asset threshold is exceeded, and allow institutions to continue to use their asset size from the year before the previous year.

The Bureau has determined that, although new TILA section 129D(c)(2)(A) does not expressly provide for a grace period, the Bureau is justified in using the same type of grace period in the new exemption as provided for in the existing regulatory exemption. EGRRCPA section 108 specifically cites to and relies on aspects of the existing regulatory exemption, which uses grace periods for certain factors. In fact, section 108 incorporates one requirement from the existing escrow exemption, the rural or underserved requirement at § 1026.35(b)(2)(iii)(A), that uses a grace period. The Bureau believes that grace periods are authorized under its TILA section 105(a) authority. 50 The Bureau concludes that the proposed grace periods for the asset threshold, and the loan origination limit in § 1026.35(b)(2)(vi)(B), 51 would facilitate compliance with TILA for institutions that formerly qualified for the exemption but then exceeded the threshold in the previous year. Those institutions would have three months to adjust their compliance management systems to come into compliance and provide the required escrow accounts. The grace periods would reduce uncertainties caused by yearly fluctuations in assets or originations and make the timing of the new and existing exemptions consistent. They would also ease the aggregate compliance burden of the escrow provisions, consistent with the overall purpose of the statutory amendments.

As explained in the section-by-section analysis of § 1026.35(b)(2)(vi), all comments received that referred to grace periods supported their use. For the reasons discussed in that section-by-section analysis and immediately above, the Bureau now finalizes as proposed the three-month grace period for the asset threshold provision in § 1026.35(b)(2)(vi)(A).

Congress restricted the EGRRCPA section 108 exemption to insured depositories and credit unions with assets of $10 billion or less. Although section 108 does not expressly state that this figure should be adjusted for inflation, the Bureau proposed this adjustment to effectuate the purposes of TILA and facilitate compliance with TILA. EGRRCPA section 108 specifically cites to and relies on criteria in the existing escrow exemption, whose asset threshold is adjusted for inflation. Furthermore, monetary threshold amounts are adjusted for inflation in numerous places in Regulation Z. 52 In addition, inflation adjustment keeps the threshold value at the same level in real terms as when adopted, thereby ensuring the same effect over time as provided for initially in the statute. Therefore, adjusting the threshold value to account for inflation is necessary or proper under TILA section 105(a) to effectuate the purposes of TILA and facilitate compliance with TILA. 53 The Bureau believes that adjusting the threshold for inflation would facilitate compliance by allowing the institutions to remain exempt despite inflation, and that failure to adjust for inflation would interfere with the purpose of TILA by reducing the availability of the exemption over time to fewer institutions than the provision was meant to cover.

In order to facilitate compliance with § 1026.35(b)(2)(vi)(A), the Bureau proposed to add comment 35(b)(2)(vi)(A)-1. Comment 35(b)(2)(vi)(A)-1 would explain the method by which the asset threshold will be adjusted for inflation, that the assets of affiliates are not considered in calculating compliance with the threshold (consistent with EGRRCPA section 108), and that the Bureau will publish notice of the adjusted asset threshold each year.

The Bureau did not receive any comments on the proposed annual inflation adjustment to the asset threshold. For the reasons discussed above, the Bureau now is finalizing this provision and comment 35(b)(2)(vi)(A)-1 as proposed.

EGRRCPA section 108 limits use of its escrow exemption to insured depositories and insured credit unions that, with their affiliates, “during the preceding calendar year . . . originated 1,000 or fewer loans secured by a first lien on a principal dwelling.” This threshold is half the limit in the existing regulatory exemption and does not exclude portfolio loans from the total.

The Bureau proposed to implement the 1,000-loan threshold in new § 1026.35(b)(2)(vi)(B), with a three-month grace period similar to the one provided in proposed § 1026.35(b)(2)(vi)(A) and the “rural or underserved” requirement in proposed § 1026.35(b)(2)(vi)(C) (discussed in more detail in the relevant section-by-section analysis below). (For the Bureau's reasoning regarding the adoption of grace periods with the new exemption, see the section-by-section analyses of § 1026.35(b)(2)(vi) and (vi)(A) above.)

There are important differences between the 2,000-loan transaction threshold in existing § 1026.35(b)(2)(iii)(B) and the 1,000-loan transaction threshold in proposed § 1026.35(b)(2)(vi)(B). Proposed comment 35(b)(2)(vi)(B)-1 would aid compliance by explaining the differences between the transactions to be counted toward the two thresholds for their respective exemptions.

Four commenters discussed the proposed loan-limit threshold. As explained above in the section-by-section analysis of § 1026.35(b)(2)(vi)(A), one commenter suggested that the Bureau make the exemption available to financial institutions with assets of $4 billion dollars or more that originate 100 or more mortgages per year. Two commenters stated that the threshold should be 2,000 loans a year, the same as the existing escrow exemption, in order to reduce costs and allow them to better serve their customers. However, EGRRCPA section 108 specifies the 1,000 loan limit, and does not cite to the 2,000 loan limit in the existing escrow exemption, even though it does cite to the existing escrow exemption for other requirements. 54 In other words, Congress specifically addressed this issue and chose not to use the numbers suggested by the commenters.

For the reasons discussed above, the Bureau is finalizing § 1026.35(b)(2)(vi)(B) and comment 35(b)(2)(vi)(B)-1 as proposed.

EGRRCPA section 108 requires that, in order to be eligible for the new exemption, an insured depository institution or insured credit union must, among other things, satisfy the criteria in § 1026.35(b)(2)(iii)(A) and (D), or any successor regulation. The Bureau proposed to implement these requirements in new § 1026.35(b)(2)(vi)(C).

Section 1026.35(b)(2)(iii)(A) requires that during the preceding calendar year, or, if the application for the transaction was received before April 1 of the current calendar year, during either of the two preceding calendar years, a creditor has extended a covered transaction, as defined by § 1026.43(b)(1), secured by a first lien on a property that is located in an area that is either “rural” or “underserved,” as set forth in § 1026.35(b)(2)(iv). As discussed above in the section-by-section analysis of § 1026.35(b)(2)(vi)(A), the current regulation includes a three-month grace period at the beginning of a calendar year to allow a transition period for institutions that lose the existing escrow exemption, and EGRRCPA section 108 incorporates that provision, including the grace period, into the new exemption. By following the EGRRCPA and citing to the current regulation, the Bureau proposed to include the criteria for extending credit in a rural or underserved area, including the grace period, in the new exemption.

Four commenters stated that the final rule should exclude small manufactured housing loans from the “rural or underserved” requirement. These commenters raised concerns that the cost of escrowing was taking lenders out of this market and making these loans less available, and they indicated that the requirement would interfere with many institutions' ability to make appropriate use of the new exemption. Two of these commenters suggested that the Bureau eliminate the rural or underserved requirement for loans under $100,000, which they said would generally be manufactured housing loans, as long as the lender meets all of the other requirements for the new HPML escrow exemption. The commenters did not provide any data or specific information to support their statements.

The rural or underserved provision is a TILA statutory requirement incorporated in the existing regulatory exemption. 55 EGRRCPA section 108 expressly cites to and adopts this requirement, 56 and the proposed rule proposed to do the same. The Bureau does not believe that partial elimination of this statutory requirement would implement EGRRCPA section 108 appropriately. Furthermore, the statutory EGRRCPA provision did not differentiate between manufactured housing and other real estate, the Bureau's proposal did not discuss the rule's potential effects on manufactured housing loans, and the proposal did not consider or include a loan amount based carve-out. The commenters did not provide any evidence that Congress intended a carve-out targeted at manufactured housing as they propose, and such a carve-out could affect the existing escrow exemption if adopted fully. Moreover, these commenters did not provide data demonstrating that the escrow requirement interferes with the availability of manufactured housing loans, and the Bureau does not have such data. For these reasons, the Bureau declines to alter the rural or underserved requirement for the new exemption and finalizes the provision as proposed. However, the Bureau will continue to monitor the market regarding this issue.

The EPA approves a revision to the State of New Jersey's (the State) SIP for attainment and maintenance of the ozone National Ambient Air Quality Standards (NAAQS). On July 15, 2020 (85 FR 42803), the EPA proposed to approve the State's April 30, 2019, SIP revision, which relates to the application of the New Jersey Administrative Code (NJAC) Title 7, Chapter 27, Subchapter 16, “Control and Prohibition of Air Pollution from Volatile Organic Compounds” (NJAC 7:27-16) and the NJAC, Title 7, Chapter 27, Subchapter 19, “Control and Prohibition of Air Pollution from Oxides of Nitrogen” (NJAC 7:27-19) to the Sayreville EAF. Under this SIP revision, the emission limits for VOC and NO X for the Sayreville EAF are the lowest emission limits achievable with the application of control technology that is reasonably available given the technological and economic feasibility considerations associated with operating the Sayreville EAF ( i.e., RACT for the Sayreville EAF). The Facility is allowed to continue to operate under its current approved emission limits of 57 pounds per hour (lb/hr) of VOC and 31 lb/hr of NO X for the Sayreville EAF, because its request to be covered under alternative control plans for VOC pursuant to NJAC 7:27 Subchapter 16 and for NO X pursuant to NJAC 7:27 Subchapter 19 met the State's deadlines and statutory criteria for approval. A full summary of EPA's findings for this source-specific SIP revision is included in the technical support document that is contained in EPA's docket assigned to this Federal Register document.

The EPA's approval is based on the conclusion that the State's April 30, 2019 SIP revision to authorizing the Facility to continue to operate under existing VOC and NO X emission limits for the Sayreville EAF operated by CMC Steel New Jersey conforms with the State's regulations under NJAC 7:27-16.17 and NJAC 7:27-19.13. After reviewing CMC Steel New Jersey's updated facility-specific VOC and NO X control plans, which were submitted to NJDEP, that are the subject of this source-specific SIP revision, the EPA makes the following determination:

(1) The Facility qualifies to continue to operate under the current NJDEP-approved emission limits for VOC and NO X . Under NJAC: 7:27-16.17(c)(3), facilities that sought to continue operating with an alternative VOC control plan that was approved prior to May 19, 2009, were required to submit updated proposed VOC control plans to NJDEP for review by August 17, 2009. Similarly, under NJAC: 7:27-19.13(a)(3), facilities that sought to continue to operate under existing facility-specific NO X control plans that were approved prior to May 1, 2005, were required to submit updated proposed NO X control plans to NJDEP for review by August 17, 2009. The Facility met both deadlines with the submission of its VOC and NO X control plans, respectively.

(2) The Facility's Operating Permit, issued pursuant to Title V of the Clean Air Act (CAA), 42 U.S.C. 7661a, describes a facility-specific VOC emission limit of 57 lb/hr and a facility-specific maximum allowable NO X emission limit of 31 lb/hr, both of which are consistent with the updated VOC and NO X control plans that are the subject of this SIP revision.

(3) The EPA's consultation with air pollution control experts from NJDEP and EPA confirms the Facility's RACT analysis conclusion that no comparable electric arc furnace emission control technologies are deployed at other facilities nationwide. For a detailed explanation and evaluation of the SIP revision, refer to the proposed rulemaking. See 85 FR 42803, July 15, 2020.

The EPA received no public comments in response to the July 15, 2020 proposed rulemaking. Therefore, the EPA approves this SIP revision with no further changes.

The EPA approves the State of New Jersey's SIP revision dated April 30, 2019, which includes a source-specific SIP for CMC Steel New Jersey, located at 1 N Crossman, Sayreville, New Jersey. The control options in this source-specific SIP address the State of New Jersey's RACT requirements included in NJAC 7:27-16, “Control and Prohibition of Air Pollution from Volatile Organic Compounds” and New Jersey NJAC 7:27-19, “Control and Prohibition of Air Pollution from Oxides of Nitrogen”, both effective January 16, 2018. The EPA makes the following findings: (1) The Facility met NJDEP's statutory criteria and deadlines to qualify for continuing to operate under existing VOC and NO X emission limits; (2) the Facility meets emission limits set by NJDEP for VOC emission rate at 57 lb/hr and for NO X emission rate at 31 lb/hr; and (3) the Facility implements RACT controls for VOC and NO X —for VOC, through execution of the Scrap Management Plan and operating a direct evacuation system and for NO X , through application of good operating practices that maintain a constant temperature in the preheater chamber and minimizes electricity consumption to avoid indirect NO X emissions. The Facility has demonstrated that it meets all applicable requirements of the CAA and it will not interfere with any applicable requirements pertaining to attainment of the NAAQS and reasonable further progress or with any other applicable requirement of the CAA.

In this document, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is incorporating by reference the provisions described above in Section IV. Summary of the EPA's Final Action. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 2 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by the EPA for inclusion in the State Implementation Plan, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation. 1

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 19, 2021. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2019-0641 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before April 19, 2021. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2019-0641, by one of the following methods:

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

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

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

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

In the Federal Register of April 15, 2020 (85 FR 20910) (FRL-10006-54), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 9E8794) by IR-4, IR-4 Project Headquarters, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201W, Princeton, NJ 08540. The petition requested that EPA establish tolerances in 40 CFR 180.431 for residues of the herbicide clopyralid (3,6-dichloro-2-pyridinecarboxylic acid) in or on the raw agricultural commodities Onion, bulb, subgroup 3-07A at 0.4 parts per million (ppm); Caneberry subgroup 13-07A at 0.1 ppm; Wheatgrass, intermediate, bran at 12 ppm; Wheatgrass, intermediate, forage at 9 ppm; Wheatgrass, intermediate, germ at 12 ppm; Wheatgrass, intermediate, grain at 3 ppm; Wheatgrass, intermediate, middling at 12 ppm; Wheatgrass, intermediate, shorts at 12 ppm; Wheatgrass, intermediate, straw at 9 ppm. That document referenced a summary of the petition prepared by Corteva, the registrant, which is available in the docket, http://www.regulations.gov. No comments were received in response to the notice of filing.

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

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

In an effort to streamline its publications in the Federal Register , EPA is not reprinting sections that repeat what has been previously published for tolerance rulemakings of the same pesticide chemical. Where scientific information concerning a particular chemical remains unchanged, the content of those sections would not vary between tolerance rulemakings and republishing the same sections is unnecessary; EPA considers referral back to those sections as sufficient to provide an explanation of the information EPA considered in making its safety determination for the new rulemaking.

EPA has previously published a number of tolerance rulemakings for clopyralid, in which EPA concluded, based on the available information, that there is a reasonable certainty that no harm would result from aggregate exposure to clopyralid and established tolerances for residues of that chemical. EPA is incorporating previously published sections from those rulemakings as described further in this rulemaking, as they remain unchanged.

Toxicological Profile. For a discussion of the Toxicological Profile of clopyralid, see Unit III.A. of the May 23, 2018 rulemaking (83 FR 23819) (FRL-9977-13).

Toxicological Points of Departure/Levels of Concern. For a summary of the Toxicological Points of Departure/Levels of Concern used for the safety assessment, see Unit III.B. of the May 23, 2018 rulemaking.

Exposure Assessment. Much of the exposure assessment remains the same, although updates have occurred to accommodate exposures from the petitioned-for tolerances. The updates are discussed in this section; the remaining discussion of EPA's assumptions for exposure remain unchanged since the 2018 rulemaking. For a description of the rest of the EPA approach to and assumptions for the exposure assessment, see Unit III.C. of the May 23, 2018 rulemaking.

Safety Factor for Infants and Children. EPA continues to conclude that there is reliable data to support the reduction of the Food Quality Protection Act (FQPA) safety factor. See Unit III.D. of the May 23, 2018 rulemaking for a discussion of the Agency's rationale for that determination.

Aggregate Risks and Determination of Safety. EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute population adjusted dose (aPAD) and chronic PAD (cPAD). Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate margin of exposure (MOE) exists. For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure.

No acute effects were identified in the toxicological studies for clopyralid; therefore, acute risk is not expected. Chronic dietary risks are below the Agency's level of concern of 100% of the cPAD: They are 30% of the cPAD for children 1 to 2 years old, the population subgroup with the highest exposure estimate. The short-term MOE is greater than the Agency's level of concern of 100: It is 1,400 for children 1 to less than 2 years old, the population group of concern. Intermediate-term or long-term residential exposures are not expected.

Therefore, based on the risk assessments and information described above, EPA concludes there is a reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to clopyralid residues. More detailed information about the Agency's analysis can be found at http://www.regulations.gov in the document titled “Clopyralid. Human Health Risk Assessment for a Proposed Use on Bulb Onion Subgroup (3-07B), Caneberry Subgroup (13-07A), Wheatgrass, and a Label Amendment for Strawberry” in docket ID number EPA-HQ-OPP-2019-0641.

The Pesticide Analytical Manual Volume II (PAM II) lists a method utilizing gas chromatography with electron capture detection (GC/ECD) for determination of clopyralid residues in plant commodities (Method I or Method ACR 75.6).

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). No Codex MRLs have been established for clopyralid.

Therefore, tolerances are established for residues of clopyralid in or on the Caneberry subgroup 13-07A at 0.1 ppm; Onion, bulb, subgroup 3-07A at 0.4 ppm; Wheatgrass, intermediate, bran at 12 ppm; Wheatgrass, intermediate, forage at 9 ppm; Wheatgrass, intermediate, germ at 12 ppm; Wheatgrass, intermediate, grain at 3 ppm; Wheatgrass, intermediate, middling at 12 ppm; Wheatgrass, intermediate, shorts at 12 ppm; and Wheatgrass, intermediate, straw at 9 ppm.

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

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

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal Governments, on the relationship between the National Government and the States or Tribal Governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

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

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2019-0492 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before April 19, 2021. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2019-0492, by one of the following methods:

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

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

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

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

In the Federal Register of February 11, 2020 (85 FR 7708) (FRL-10005-02), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 9E8757) by Nissan Chemical Corporation, 5-1, Nihonbashi 2-Chome Chuo-Ku, Tokyo 101-6119 Japan, c/o Lewis and Harrison, 2461 South Clark Street, Suite 710, Arlington, VA 22202. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the insecticide fluxametamide, including its metabolites and degradates, in or on tea at 5 parts per million (ppm). That document referenced a summary of the petition prepared by Nissan Chemical Corporation c/o Lewis and Harrison, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has revised the commodity definition and is establishing a tolerance for tea, dried and tea, instant. The reasons for these changes are explained in Unit IV.C.

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

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

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Fluxametamide belongs to a class of compounds called isoxazolines, which are potent inhibitors of γ-aminobutyric acid (GABA)-, glutamate-, and glycine-gated chloride channels in insects. However, this pesticidal mode of action (MOA) does not seem to be operative in mammals as neurotoxicity was not found in either the acute or subchronic neurotoxicity studies at the limit dose.

The available studies show different organs can be affected. For the dietary toxicity studies in rats (neurotoxicity study, chronic/carcinogenicity, and reproductive toxicity studies), a common effect on the gastrointestinal (GI) tract was observed. The effects consisted of gross pathology (an increase incidence of abnormally pale color duodenum and jejunum) and histopathology (increased incidence of enterocyte epithelial vacuolation of the jejunum). Most of the effects seen in the subchronic neurotoxicity study were reproduced in the combined chronic and carcinogenicity study with increased severity and at lower dose level. In addition, consistent adverse effects were found in the lung (aggregate alveolar marcophages and cholesterol cleft) and liver (centrilobular hepatocellular vacuolation and periportal hepatocellular vacuolation). These adverse effects were present at a dose as low as 9 mg/kg/day in the carcinogenicity study.

Fluxametamide is classified as having “suggestive evidence of carcinogenic potential” based on thyroid tumors in male rats and liver tumors in male mice. The reasons for this classification are (1) both tumor types are driven by adenomas, (2) these increased tumor incidences are seen at the highest doses tested (877 mg/kg/day for male mice and 899 mg/kg/day for male rats); these doses are approaching the limit dose (1000 mg/kg/day) for a carcinogenicity study, (3) there is no hyperplasia of the liver in either male or female mice, (4) no increase in treatment-related tumors has been observed in female mice or female rats, and (5) no genotoxicity is observed in the required battery of mutagenic studies. Due to the lack of genotoxicity and the fact that the tumors are seen only at doses more than 100-fold above the chronic reference dose, EPA has determined that a non-linear approach relying on the chronic reference dose (RfD) will adequately account for all chronic toxicity, including carcinogenicity, that could result from exposure to fluxametamide.

The in-utero and perinatal treatment with fluxametamide in rats resulted in toxicity and increased quantitative susceptibility in developing animals. In the 2-generation reproduction study, fluxametamide produced no parental effect at the highest dose tested (19 mg/kg/day), while at the same dose level produced offspring effect which consisted of the observation that the pups had distended abdomens and affected pups had to be sacrificed for humane reason. The dermal toxicity study did not show systemic toxicity at the limit dose (1000 mg/kg/day).

Specific information on the studies received and the nature of the adverse effects caused by fluxametamide, as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies, can be found at http:/www.regulations.gov in document titled “Fluxametamide: Human Health Risk Assessment to Support the Establishment of a Tolerance without U.S. Registration in/on Tea. First Food Use” hereinafter “Fluxametamide Human Health Risk Assessment” at pages 16-22 in docket ID number EPA-HQ-OPP-2019-0492.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticide.

A summary of the toxicological endpoints for fluxametamide used for human risk assessment can be found in the Fluxametamide Human Health Risk Assessment.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to fluxametamide, EPA considered exposure under the petitioned-for tolerances. EPA assessed dietary exposures from fluxametamide in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. No such effects were identified in the toxicological studies for fluxametamide; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used 2003-2008 food consumption data from the United States Department of Agriculture's (USDA) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA assumed tolerance-level residues of fluxametamide on tea and 100% crop treated.

iii. Cancer. EPA determines whether quantitative cancer exposure and risk assessments are appropriate for a food-use pesticide based on the weight of the evidence from cancer studies and other relevant data. Based on the data summarized in Unit III.A., EPA has concluded that a nonlinear RfD approach will adequately account for all chronic toxicity, including carcinogenicity, that could result from exposure to fluxametimide. A separate cancer dietary exposure and risk assessment is not required. Cancer risk was assessed using the same exposure estimates as discussed in Unit III.C.1.ii., chronic exposure.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue and/or PCT information in the dietary assessment for fluxametamide. Tolerance level residues and/or 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. EPA assumes that there is no exposure through drinking water because fluxametamide is not registered for use in the United States. Because residues are not expected in drinking water, dietary risk estimates include exposures from food only.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Fluxametamide is not being proposed to be registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to fluxametamide and any other substances and fluxametamide does not appear to produce a toxic metabolite produced by other substances. For the purposes of this action, therefore, EPA has not assumed that fluxametamide has a common mechanism of toxicity with other substances.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. There is an increase in quantitative susceptibility in two-generation reproductive toxicity study in rats. In this study, parental animals showed no adverse effects at 19 mg/kg/day (highest dose tested, HDT), whereas some pups had to be euthanized due to distended abdomen at the same dose. However, the concern is low because there was a clear NOAEL for the offspring effect (6 mg/kg/day) and the POD selected for chronic dietary exposure assessment (1 mg/kg/day) is protective of the offspring effects seen in the reproductive toxicity study.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicity database for fluxametamide is complete.

ii. There is no indication that fluxametamide is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is evidence of an increase in quantitative susceptibility in the 2-generation reproductive toxicity study in rats. In this study, parental animals showed no adverse effects at 19 mg/kg/day highest dose tested, (HDT), whereas some pups had to be euthanized due to distended abdomen at the same dose. However, the concern is low because there was a clear NOAEL for the offspring effect (6 mg/kg/day) and the POD selected for chronic dietary exposure assessment (1 mg/kg/day) is protective of the offspring effects seen in the reproductive toxicity study. The selected points of departure for risk assessment are protective of the quantitative increase in susceptibility seen in the rat reproductive toxicity study, for which a clear NOAEL and LOAEL are established.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. These assessments will not underestimate the exposure and risks posed by fluxametamide.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, fluxametamide is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to fluxametamide from food only will utilize less than 1% of the cPAD for all population subgroups. There are no residential uses for fluxametamide.

3. Short-and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Because fluxametamide is not registered in the United States, the only exposures will be dietary, from residues in or on imported tea; therefore, no short-term or intermediate-term residential exposure is expected. Because there is no short- or intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term risk), no further assessment of short- or intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for fluxametamide.

4. Aggregate cancer risk for U.S. population. As stated in Unit III.A., EPA has concluded that the chronic reference dose (RfD) will adequately account for all repeated exposure/chronic toxicity, including carcinogenicity, which could result from exposure to fluxametamide. Based on the lack of chronic risk at regulated levels of exposure, EPA concludes that exposure to fluxametamide will not pose an aggregate cancer risk.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to fluxametamide residues.

Adequate enforcement methodology (high-performance liquid chromatography method with tandem mass spectrometry detection (LC/MS/MS), Method NCI-2012-101/NCI-2013-017) is available to enforce the tolerance expression.

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

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

The Codex has not established an MRL for fluxametamide.

The petition requested a tolerance for residues of fluxametamide in or on tea. Since dried tea is the commodity that enters commerce, EPA is establishing the tolerance for the processed commodity tea, dried rather than tea, plucked leaves. EPA is also establishing a tolerance for tea, instant, which is another processed commodity of tea, plucked leaves, and EPA has determined that the same tolerance of 5 ppm is appropriate for instant tea.

Therefore, tolerances are established for residues of fluxametamide, including its metabolites and degradates, in or on tea, dried at 5 ppm and tea, instant at 5 ppm.

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

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

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

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

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

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2020-0064 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before April 19, 2021. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2020-0064, by one of the following methods:

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

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

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

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

In the Federal Register of April 15, 2020 (85 FR 20910) (FRL-10006-54), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 9F8810) by Syngenta Crop Protection, LLC, 410 Swing Road, Greensboro, NC 27409. The petition requested that 40 CFR 180.505 be amended by establishing a tolerance for residues of the insecticide emamectin benzoate (a mixture of a minimum of 90% 4′-epi-methylamino-4′-deoxyavermectin B1a and a maximum of 10% 4′-epi-methlyamino-4′deoxyavermectin B1b benzoate), and its metabolites 8,9 isomer of the B1a and B1b in or on tea leaves at 0.2 parts per million (ppm). That document referenced a summary of the petition prepared by Syngenta Crop Protection, LLC, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA is establishing tolerances that vary from what is requested. The reason for these changes is explained in Unit IV.D.

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

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

In an effort to streamline Federal Register publications, EPA is not reprinting here summaries of its analysis that have previously appeared in the Federal Register in previous tolerance rulemakings for the same pesticide. To that end, this rulemaking refers the reader to several sections from the August 27, 2019 tolerance rulemaking for residues of emamectin benzoate that remain unchanged for an understanding of the Agency's rationale in support of this rulemaking. See (84 FR 44718) (FRL-9997-10). Those sections are: Units III.A (Toxicological Profile); III.B. (Toxicological Points of Departure/Levels of Concern); III.C. (Exposure Assessment), except as explained in the next paragraphs; III.D. (Safety Factor for Infants and Children); and IV.A (Analytical Enforcement Method).

Exposure assessment updates. EPA's exposure assessments have been updated to include the additional exposure from residues of emamectin benzoate in or on tea commodities. The assessments continue to be refined as described in the August 27, 2019 tolerance rule preamble. The residues of emamectin benzoate on tea commodities is not being approved for domestic use, so no changes were made to EPA's drinking water assessment or residential exposure assessment.

Assessment of aggregate risks. EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists. For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure.

Acute dietary risks are below the Agency's level of concern: 26% of the acute population adjusted dose (aPAD) for children 1 to 2 years old, the population group of concern. Chronic dietary risks are below the Agency's level of concern: 3.4% of the chronic population adjusted dose (cPAD) for children 1 to 2 years old, the group with the highest exposure. As there are no residential exposures expected, aggregate risks are equivalent to the dietary risks, which are below the Agency's levels of concern. Based on the most recent screening-level cumulative exposure assessment, EPA has concluded the cumulative aggregate dietary and residential exposures for emamectin benzoate result in aggregate margins of exposures above the level of concern of 100 for all scenarios assessed and are not of concern.

Determination of safety. Therefore, based on the risk assessments and information described above, EPA concludes there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to emamectin benzoate residues. More detailed information on the subject action to establish a tolerance in or on tea commodities can be found in the document entitled, “Emamectin (Emamectin Benzoate). Human Health Risk Assessment in Support of Establishing Tolerances without a U.S. Registration for Residues of Emamectin in/on Tea Commodities” by going to http://www.regulations.gov. The referenced document is available in the docket established by this action, which is described under ADDRESSES . Locate and click on the hyperlink for docket ID number EPA-HQ-OPP-2020-0064.

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

The Codex has not established a MRL for emamectin benzoate.

The tolerance on tea commodities is being set at 0.5 ppm instead of the proposed level at 0.2 ppm in order to harmonize with the Japanese MRL. For the proposed tolerance on tea, the commodity definition was revised to include the standard commodities of “tea, dried” and “tea, instant.”

Therefore, tolerances are established for residues of emamectin benzoate (a mixture of a minimum of 90% 4′-epi-methylamino-4′-deoxyavermectin B1a and a maximum of 10% 4′-epi-methlyamino-4′deoxyavermectin B1b benzoate) and its metabolites in or on tea, dried and tea, instant at 0.5 ppm.

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

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

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

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

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

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2019-0580 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before April 19, 2021. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2019-0580, by one of the following methods:

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

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

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

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

In the Federal Register of March 3, 2020 (85 FR 12454) (FRL-10005-58), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 9F8776) by Nichino America, Inc., 4550 Linden Hill Road, Suite 501, Wilmington, DE 19808. The petition requested that 40 CFR 180.625 be amended by establishing tolerances for residues of the herbicide orthosulfamuron in or on almond hulls at 0.03 parts per million (ppm), small fruit vine climbing subgroup, except fuzzy kiwifruit (crop subgroup 13-07F) at 0.01 ppm, and tree nuts (crop group 14-12) at 0.01 ppm. That document referenced a summary of the petition prepared by Nichino America, Inc., the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing. Based upon review of the data supporting the petition, EPA has corrected the commodity definitions to reflect current Agency terminology.

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

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

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Orthosulfamuron is included in a group of herbicides referred to as sulfonylureas that control weeds through inhibition of the enzyme acetolactate synthase (ALS). The toxicological database for orthosulfamuron is complete and no additional data are required. Orthosulfamuron showed low acute toxicity by all routes and no dermal irritation or sensitization (Category IV) and was a mild eye irritant (Category III). The major target organs of orthosulfamuron are the liver, kidneys and thyroid gland, with effects generally observed at high doses following chronic oral exposure. No evidence of pre- and/or post-natal quantitative or qualitative susceptibility was observed, and the database overall did not show evidence of neurotoxicity.

Thyroid follicular cell tumors were observed at high doses in only one sex and one species, and there was no evidence of genotoxicity. Therefore, in accordance with the EPA Final Guidelines for Carcinogen Risk Assessment (March 2005), orthosulfamuron is classified as “Suggestive Evidence of Carcinogenicity.”

Specific information on the studies received and the nature of the adverse effects caused by orthosulfamuron as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “ Orthosulfamuron. Human Health Risk Assessment for Proposed New Uses on Small Fruit Vine Climbing Subgroup, Except Fuzzy Kiwifruit (13-07F), Tree Nuts (14-12), Non-Bearing Citrus Fruit (10-10), and Non-Bearing Stone Fruit (12-12) ” (hereinafter “Orthosulfamuron Human Health Risk Assessment”) on page numbers 25-35 in docket ID number EPA-HQ-OPP-2019-0580.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for orthosulfamuron used for human risk assessment can be found on page 13 in the Orthosulfamuron Human Health Risk Assessment.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to orthosulfamuron, EPA considered exposure under the petitioned-for tolerances as well as all existing orthosulfamuron tolerances in 40 CFR 180.625. EPA assessed dietary exposures from orthosulfamuron in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

No such effects were identified in the toxicological studies for orthosulfamuron; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment, EPA used 2003-2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA). As to residue levels in food, EPA assumed tolerance-level residues and 100 percent crop treated (PCT).

iii. Cancer. EPA determines whether quantitative cancer exposure and risk assessments are appropriate for a food-use pesticide based on the weight of the evidence from cancer studies and other relevant data. Cancer risk is quantified using a linear or nonlinear approach. Based on the available data for orthosulfamuron, which is summarized in Unit III.A., EPA has concluded that a nonlinear approach is appropriate for assessing cancer risk to orthosulfamuron. The chronic dietary reference dose (cRfD) is significantly lower than the dose that caused thyroid tumors in male rats, and therefore is protective of potential carcinogenicity. Cancer risk was assessed using the same exposure estimates as discussed in Unit III.C.1.ii., chronic exposure.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue or PCT information in the dietary assessment for orthosulfamuron. Tolerance-level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for orthosulfamuron in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of orthosulfamuron. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Screening groundwater-sourced drinking water exposure estimates were generated with the Pesticide Root Zone Model for GroundWater (PRZM-GW, version 1.07) for use in sulfonylurea dietary risk assessments. Rather than using chemical-specific estimated drinking water concentrations (EDWCs) following the usual assessment procedures, these coarse-screen estimates should exceed upper-bound, chemical-specific EDWCs for any sulfonylurea (SU). This was achieved by using model inputs that represent the use pattern of highest exposure from any SU, the highest soil mobility of any SU residue of concern, and the highest persistence to any route of degradation over time. The resulting coarse-screen EDWC from PRZM-GW was used as the conservative estimate of exposure. The chronic dietary assessment for orthosulfamuron used the coarse-screen maximum daily concentration of 0.751 ppm.

3. Non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Orthosulfamuron is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of the FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

The Agency has assessed orthosulfamuron, and its chemical class, sulfonylureas, and determined that the SUs do not share a common mechanism of toxicity (EPA-HQ-OPP-2011-04538-0024). The SUs share a core chemical structure with varying degrees of structural similarity based on individual substituents on either side of the molecule. In addition, the SUs share a pesticidal mode of action (MOA) (inhibition of acetolactate synthase (ALS)), although the function of ALS in humans is unknown and the relevance of this MOA in humans in unclear. Based on toxicity studies, the SUs do not share a common toxicological profile; instead the target organs vary among the class and are often non-specific, such as changes in body weight or general effects on the liver. Further dividing the SUs into subclasses based on the urea substituent did not result in a clear association of a target organ with any particular substructure.

Based on the weight of the evidence, which includes the lack of a common toxicological profile, the uncertainty in the human relevance of ALS inhibition, and the lack of mammalian MOA data, a testable hypothesis for a common mechanism of action cannot be identified. Therefore, the Agency concludes that no common mechanism of toxicity exists among these pesticides and a cumulative risk assessment approach is not appropriate for this class of pesticides.

Section 408(b)(2)(C) of the FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. The rationale for that decision remains the same as in the February 28, 2007 final rule establishing tolerances for a use on rice. See 72 FR 8928 (FRL-8113-4) for the full rationale in Unit III.D.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, orthosulfamuron is not expected to pose an acute risk.

2. Chronic risk: Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to orthosulfamuron from food and water will utilize 81% of the cPAD for all infants less than 1 year old, the population group receiving the greatest exposure. There are no residential uses for orthosulfamuron.

3. Short-term and intermediate-term risk. Short-term and intermediate-term aggregate exposure takes into account short-term or intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Short-term and intermediate-term adverse effects were identified in the toxicity database ( e.g., kidney and liver effects); however, orthosulfamuron is not registered for any use patterns that would result in short-term or intermediate-term residential exposure. Short-term risk is assessed based on short-term residential exposure plus chronic dietary exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no short-term or intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term or intermediate-term risk), no further assessment of short-term or intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short-term and intermediate-term risk for orthosulfamuron.

4. Aggregate cancer risk for U.S. population. As stated in Unit III.C.1.iii, EPA has concluded that the chronic reference dose (RfD) will adequately account for all repeated exposure/chronic toxicity, including carcinogenicity, which could result from exposure to orthosulfamuron. As there is no chronic risk of concern, EPA concludes that exposure to orthosulfamuron will not pose an aggregate cancer risk.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to orthosulfamuron residues.

Adequate enforcement methodology utilizing high-performance liquid chromatography with tandem mass spectrometric detection (LC/MS/MS) is available to enforce the tolerance expression.

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

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

The Codex has not established an MRL for orthosulfamuron in any commodity.

Therefore, tolerances are established for residues of orthosulfamuron in or on Almond, hulls at 0.03 ppm; Fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.01 ppm; and Nut, tree, group 14-12 at 0.01 ppm.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

The supporting document for this site modification action is the Final Evaluation and Environmental Assessment for Expansion of the Existing Humboldt Open Ocean Disposal Site (HOODS) Offshore of Eureka, California (Final EA). This document and its appendices are available via the EPA website https://www.epa.gov/ocean-dumping/humboldt-open-ocean-disposal-site-hoods-documents.

Persons potentially affected by this action include those who seek or might seek permits or approval to dispose of dredged material into ocean waters pursuant to the MPRSA, 33 U.S.C. 1401 to 1445. The EPA's action would be relevant to persons, including organizations and government bodies seeking to dispose of dredged material in ocean waters offshore of Humboldt Bay, California. Currently, the U.S. Army Corps of Engineers (USACE) would be most affected by this action. Potentially affected categories and persons include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding persons likely to be affected by this action. For any questions regarding the applicability of this action to a particular entity, please refer to the contact person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

HOODS is the only designated ocean dredged material disposal site (ODMDS) off the coast of Humboldt Bay, California. The original HOODS was located three to four nautical miles (nmi) offshore Humboldt Bay, and was one square nautical mile (nmi 2 ) in size. HOODS originally received final designation by the EPA in 1995. Since that time an average of one million cubic yards (cy) of dredged material has been disposed at HOODS each year. The great majority of this material has been sand dredged by USACE from the Humboldt Harbor entrance channel. The dredged sand that has been disposed at HOODS has mounded to the point where the site is now effectively reaching full capacity. The USACE San Francisco District and EPA Region 9 have identified a need to increase the capacity of HOODS so that ongoing dredging can continue to provide for safe navigation in and around Humboldt Bay. The need for increasing ocean disposal capacity at HOODS is based on historical dredging volumes, estimates of future dredging needs, and currently limited availability of alternatives to ocean disposal in the area.

The EPA is modifying the existing HOODS boundaries rather than designating a new ocean disposal site off the coast of Humboldt Bay. Monitoring studies at HOODS have confirmed that there have been no significant adverse environmental consequences of disposal in this area, and that there are no unique or limited habitats, features, or uses of the ocean that would be affected by expanding the site. Note that modifying the existing HOODS boundary does not by itself mean that dredged material from any specific project will necessarily be approved to be disposed at the site. Before any person can ocean dump dredged material at HOODS, the EPA and the USACE must evaluate the project according to the ocean dumping regulatory criteria (40 CFR 227) and the USACE must authorize the disposal under section 103 of the MPRSA. 33 U.S.C. 1413(b). The USACE relies on the EPA's ocean dumping criteria when evaluating permit requests for (and implementing federal projects involving) the transportation of dredged material for the purpose of dumping it into ocean waters. MPRSA permits and federal approvals for projects involving ocean dumping of dredged material are subject to the EPA's review and concurrence in accordance with 33 U.S.C. 1413(c). The EPA may concur with or without conditions or decline to concur ( i.e., non-concur) on the permit or federal project authorization. If the EPA concurs with conditions, the final permit or authorization must include those conditions. If the EPA declines to concur, the USACE cannot issue the permit for ocean dumping of dredged material or authorize the transportation to and disposal of dredged material in the ocean associated with the federal project.

The draft Environmental Assessment (EA) supporting this action, along with other publicly available docket materials, was made available for public review at www.regulations.gov, and also on the EPA Region 9 web page: https://www.epa.gov/ocean-dumping/humboldt-open-ocean-disposal-site-hoods-documents. EPA received comments from a total of four entities. Comments received, and EPA's responses, are summarized below.

This action is the modification (by expansion) of the original HOODS. The modified boundaries expand the original HOODS from one nmi 2 to four nmi 2 in size. The modified HOODS is in approximately −150 to −210 feet of water (−45 to −64 meters). The location of the modified site is defined by the coordinates listed below. These new boundaries supersede and replace the original boundaries of HOODS. The coordinates for the expanded site are in North American Datum 83 (NAD 83):

The modification of the HOODS boundary will allow the EPA to adaptively manage the site to maximize its capacity, manage mounding and loss of fine sediments outside of the site, and minimize the potential for any long-term adverse effects to the marine environment.

The modified HOODS is expected to continue to receive suitable dredged material from the Federal navigation project at Humboldt Harbor, California, and suitable dredged material from other local and regional dredging applicants who obtain an MPRSA permit for the disposal of dredged material at the site. Under the Ocean Dumping regulations (40 CFR 228.3(b)), EPA is responsible for the management of all ocean disposal sites designated under the MPRSA. Management of the ocean disposal sites consists of regulating the times, quantity and characteristics of the material dumped at the site; establishing disposal controls, conditions and requirements to avoid and minimize potential impacts to the marine environment; and monitoring the site and surrounding environment to verify that unanticipated or significant adverse effects are not occurring from past or continued use of the ocean disposal site and that terms of the MPRSA permit are met. All persons using HOODS will be required to follow any project-specific permit conditions, as well as provisions of the updated Site Management and Monitoring Plan (SMMP) for the modified site as identified or incorporated into a permit or Federal project approval. The updated SMMP is available as an appendix to the Final EA, and separately at https://www.epa.gov/ocean-dumping/humboldt-open-ocean-disposal-site-hoods-documents. It includes management and monitoring considerations to ensure that disposal activities will not unreasonably degrade or endanger the marine environment, human health, welfare, or economic potentialities. The updated SMMP for the modified HOODS also includes management conditions to ensure adverse mounding does not occur at the site, and that the minimum area of the modified site is affected by disposal in any year.

In evaluating the modified HOODS, the EPA assessed the site according to the criteria of the MPRSA, with emphasis on the general and specific regulatory criteria of 40 CFR part 228, to determine whether the site modification action satisfies those criteria. The Final EA provides a detailed evaluation of the criteria and other related factors for the modification of HOODS.

(a) Sites must be selected to minimize interference with other activities in the marine environment, particularly avoiding areas of existing fisheries or shellfisheries, and regions of heavy commercial or recreational navigation. (40 CFR 228.5(a)).

The original 1995 site designation identified the HOODS location as having the least potential for adverse impacts to important fish and shellfish resources (particularly including smelt, flatfish, and decapods which are all most abundant in waters shallower than 50 m in the area, closer to shore). In addition, as part of development of the Final EA supporting this action, the EPA completed informal consultation with the National Marine Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service (USFWS), and confirmed that ongoing use of the modified HOODS would continue to avoid adverse effects on existing fisheries, shellfisheries, or habitats of concern. In addition, expansion of HOODS will ensure that mounding of disposed sand does not occur to the extent that the wave climate near the Humboldt entrance channel is altered and adversely affects navigation conditions. This action therefore satisfies this MPRSA criterion.

(b) Sites must be situated such that temporary perturbations to water quality or other environmental conditions during initial mixing caused by disposal operations would be reduced to normal ambient levels or undetectable contaminant concentrations or effects before reaching any beach, shoreline, marine sanctuary, or known geographically limited fishery or shellfishery. (40 CFR 228.5(b)).

The HOODS modification area will be used for disposal of suitable dredged material as determined by Section 102 of the MPRSA, 33 U.S.C. 1412, and the Ocean Dumping Criteria published at 40 CFR 220-228. Based on the USACE and EPA dredged material testing and evaluation procedures, disposal of dredged maintenance material and proposed new work material is not expected to have any significant impact on water quality. The existing and modified HOODS boundaries are located sufficiently far from shore and fisheries resources to allow temporary water quality disturbances caused by disposal of dredged material to be reduced to ambient conditions before reaching any environmentally sensitive areas.

(c) The sizes of disposal sites will be limited in order to localize for identification and control any immediate adverse impacts, and to permit the implementation of effective monitoring and surveillance to prevent adverse long-range impacts. Size, configuration, and location are to be determined as part of the disposal site evaluation. (40 CFR 228.5(d)).

The location, size, and configuration of the modified HOODS boundaries provide long-term capacity, while also permitting effective site management, site monitoring, and limiting environmental impacts to the surrounding area to the greatest extent practicable.

The Final EA supporting this action considered two alternatives for modifying HOODS: Expansion by 0.5 nmi to the north and west; and expansion by 1.0 nmi to the north and west (the selected action). Under the selected action, the effective total capacity of the site increases from the original 25 million cy to over 100 million cy ( i.e., allowing for 75 million cy of additional disposal to occur), before mounding to −130 feet could again occur across the entire site. If today's disposal practices were to continue unchanged ( i.e., if an average of 1 million cy of entrance channel sand per year were to continue being disposed of at HOODS indefinitely), the site would reach capacity again in about 75 years. In contrast, the smaller expansion alternative would provide effective capacity for about 30 years of disposal. This smaller footprint would also limit on-site management options compared to the selected action.

When determining the size of the modified site, the ability to implement effective monitoring and surveillance programs was considered to ensure that the environment of the site could be protected, and that navigational safety would not be compromised by the mounding of dredged material. The EPA and USACE have demonstrated that the modified HOODS area is feasible to manage and monitor, as shown by successful surveys in 2008 and 2014. The updated SMMP (Appendix D of the Final EA) describes the future monitoring and management activities that the EPA and USACE will implement to confirm that disposal at the site is not significantly affecting adjacent areas.

(d) EPA will, wherever feasible, designate ocean dumping sites beyond the edge of the continental shelf and other such sites where historical disposal has occurred. (40 CFR 228.5(e)).

The continental shelf break is approximately 10 nmi offshore at Eureka, California. The Zone of Siting Feasibility (ZSF) analysis prepared by USACE in support of the original (1995) HOODS designation determined that an economically practicable ocean disposal site serving Humboldt Harbor could not be located off the continental shelf, but rather would have to be within approximately 4 nmi from the ends of the entrance channel jetties. The original HOODS boundary is 2.5 to 3.7 nmi from these jetties. The modified HOODS boundary will extend from 3 nmi to 5 nmi from the jetties, largely encompassing and superseding the original boundary. While portions of the modified site are slightly beyond the original ZSF threshold of 4 nmi, the expansion area remains as close to the entrance channel as practicable while allowing capacity for future disposal needs without creating potentially unsafe mounding. Also, the modified HOODS will occur immediately adjacent to where disposal of virtually identical dredged material has occurred for the past 25 years. This allows the least area to be disturbed overall from ongoing and future disposal activity.

(1) Geographical Position, Depth of Water, Bottom Topography and Distance from Coast. (40 CFR 228.6(a)(1)).

The modified HOODS is on the continental shelf three to five nmi offshore of Eureka, California, in water depths of approximately 150 to 210 feet (45 to 64 m). The seafloor in this area is comprised of a gently sloping, essentially featureless sedimentary plain that grades evenly from fine sand in shallower depths to silts in deeper areas. The EA contains a map of the modified HOODS boundaries.

(2) Location in Relation to Breeding, Spawning, Nursery, Feeding, or Passage Areas of Living Resources in Adult or Juvenile Phases. (40 CFR 228.6(a)(2)).

The HOODS area provides feeding and breeding areas for common resident benthic organisms, fish, marine mammal, turtle, and seabird species. However, the modified HOODS boundaries have been selected to avoid the presence of any unique or limited breeding, spawning, nursery, feeding, or passage areas for adult or juvenile phases of living resources and modification of the site is not expected to affect any geographically limited ( i.e., unique) resources or habitats. Informal Endangered Species Act (ESA) consultation with USFWS, and both ESA and Essential Fish Habitat (EFH) consultations with NMFS, confirmed that ongoing disposal operations in the modified HOODS will not have significant impacts to sensitive living resources or their habitats.

(3) Location in Relation to Beaches and Other Amenity Areas. (40 CFR 228.6(a)(3)).

The modified HOODS boundaries begin at approximately three nmi offshore and the square site extends two nmi further offshore. The site is therefore well removed from beaches or amenity areas, and currents in the area are not expected to transport material disposed at HOODS toward shore. No significant impacts to beaches or amenity areas associated with use of the existing HOODS have been detected.

(4) Types and Quantities of Wastes Proposed to be Disposed of, and Proposed Methods of Release, including Methods of Packing the Waste, if any. (40 CFR 228.6(a)(4)).

Only suitable dredged material that meets the Ocean Dumping Criteria in 40 CFR 220-228 and receives a permit or is otherwise authorized for dumping by the USACE, and concurred with by EPA, will be disposed in the modified HOODS. Dredged materials dumped in this area will be primarily sand with some fines, and most will originate from Humboldt Harbor. Average yearly disposal of dredged material is expected to continue to be approximately 1,000,000 cubic yards, primarily by government owned or contracted hopper dredges. None of the material is packaged in any manner. If a Nearshore Sand Placement Site (NSPS) is established nearby in the future, the volume of sand disposed at HOODS could substantially decrease.

(5) Feasibility of Surveillance and Monitoring. (40 CFR 228.6(a)(5)).

The EPA expects monitoring and surveillance at the modified HOODS to continue to be feasible and readily performed from ocean or regional class research vessels. The area of the modified HOODS has been successfully surveyed and sampled in 2008 and 2014. The EPA and USACE will continue to periodically monitor the site for physical, biological and chemical attributes, as described in the draft SMMP for the proposed modified site.

(6) Dispersal, Horizontal Transport and Vertical Mixing Characteristics of the Area, including Prevailing Current Direction and Velocity, if any. (40 CFR 228.6(a)(6)).

Ocean current monitoring in the vicinity of HOODS has confirmed both up- and down-coast current directions (depending on the season), with near-surface current velocities on the order of 25 cm/sec (0.5 knot), and deeper-water current velocities of 20 cm/sec (0.4 knot) at 45 meters deep and 15 cm/sec (0.3 knot) at the bottom. These current conditions have not adversely affected the ability to successfully and precisely dispose of dredged material permitted or authorized for disposal at HOODS in the past nor are they expected to affect disposal in the future.

(7) Existence and Effects of Current and Previous Discharges and Dumping in the Area (including Cumulative Effects). (40 CFR 228.6(a)(7)).

Previous disposal of dredged material at the existing HOODS has resulted in mounding of sand and burial of benthic organisms within the site but no discernable physical, chemical, or biological effects outside the site. Water quality effects from active disposal are temporary, spatially limited, and return to background levels prior to the next disposal event. Short-term, long-term, and cumulative effects of dredged material disposal in the modified site would be negligible, and similar to those for the existing HOODS.

The only discharge in the vicinity of HOODS is from DG Fairhaven Power LLC's Fairhaven Power Facility on the Samoa Peninsula. Fairhaven Power is permitted to discharge a maximum of 0.35 million gallons per day of powerplant-related process water, cooling tower water, and other wastewater under terms of their current National Pollutant Discharge Elimination System (NPDES) permit No. CA0024571, issued by the State of California's North Coast Water Board. The company discharges through an existing outfall into ocean waters adjacent to the Samoa Peninsula. The NPDES permit prohibits discharging wastewater in violation of effluent standards or prohibitions established under Section 307(a) of the Clean Water Act, and it also prohibits discharging sewage sludge. The outfall is located approximately 3.5 nautical miles (6.5 kilometers) east of the HOODS. Prevailing nearshore currents would direct discharge plumes from this outfall up or down the coast, depending of the seasonal current regime, not offshore towards the HOODS. The EPA believes that there will be no adverse cumulative or synergistic impacts from the use of HOODS and discharges from the outfall described.

(8) Interference with Shipping, Fishing, Recreation, Mineral Extraction, Desalination, Fish and Shellfish Culture, Areas of Special Scientific Importance and Other Legitimate Uses of the Ocean. (40 CFR 228.6(a)(8)).

Minor, short-term interferences with commercial and recreational boat traffic may occur within Humboldt Harbor during dredging operations. However, interference as a result of the transport and disposal of dredged material to HOODS would be even less because disposal vessels move slowly, remain in established navigation channels, and operations are announced via U.S. Coast Guard Notice to Mariners. There may be minor, temporary interferences with recreational fishing in the area during disposal operations, but HOODS is not closed to fishing or other uses. HOODS has not been identified as an area of special scientific importance. There are no aquaculture areas near the site. The likelihood of direct interference with these activities is therefore negligible.

(9) The Existing Water Quality and Ecology of the Sites as Determined by Available Data or Trend Assessment of Baseline Surveys. (40 CFR 228.6(a)(9)).

Water quality at the existing HOODS is typical of waters offshore of the northern California coast. Monitoring conducted in the vicinity of the proposed modified HOODS and experience with past disposals in the existing HOODS have not identified any adverse water quality impacts from ocean disposal of dredged material. Water column plumes associated with disposal events rapidly return to background, before subsequent disposal events occur. The seafloor in this area is comprised of a gently sloping, essentially featureless sedimentary plain that grades evenly from fine sand in shallower depths to silts in deeper areas. The existing HOODS supports benthic and epibenthic fauna characteristic of the region, but there are no unique or limited habitats in the vicinity. No adverse impacts to benthos outside the disposal site have been identified based on comprehensive monitoring.

(10) Potentiality for the Development or Recruitment of Nuisance Species in the Disposal Site. (40 CFR 228.6(a)(10)).

Nuisance species, considered as any undesirable organism not previously existing at a location, have not been observed at, or in the vicinity of, the modified HOODS. Disposal of dredged material, as well as monitoring, has been ongoing for the past 25 years. The dredged material to be disposed at the modified site is expected to be from similar locations to those dredged previously and disposed of at the existing site; therefore, it expected that any benthic organisms transported to the site would be relatively similar in nature to those already present.

(11) Existence at or in Close Proximity to the Site of any Significant Natural or Cultural Feature of Historical Importance. (40 CFR 228.6(a)(11)).

EPA extended government-to-government consultation offers to 10 potentially affected tribes. The Tribal Historic Preservation Offices of three of those (the Wiyot Tribe, the Blue Lake Rancheria, and the Bear River Band of the Rohnerville Rancheria) requested further discussion. Based on those discussions, the tribes determined that the offshore location of the HOODS expansion would not affect their onshore cultural resources of concern.

EPA also evaluated state records and coordinated with the California State Lands Commission concerning historic shipwrecks near HOODS. The EA documents that the nearest recorded shipwreck sites are close to shore and would not be affected by ongoing disposal at HOODS. In addition, USACE conducted a survey for potential shipwrecks near the existing HOODS in 1991 (prior to designation of the existing HOODS). The USACE survey identified three magnetic anomalies that could potentially be associated with unrecorded shipwrecks. None of these anomalies has been buried by the existing HOODS disposal mound. The EPA collected high-resolution multibeam echo sounder data in 2014 at the locations of each magnetic anomaly, and confirmed that no debris, structures, or other material extended above the sediment surface at any of these locations. Because these anomalies do not extend above the surface now, and apparently have not since at least 1991, their exact character remains unknown. Ongoing disposal operations may effectively bury these features further but will not otherwise directly affect them.

The EPA's primary voluntary NEPA document for modifying the original HOODS is the Final EA, prepared by the EPA in cooperation with the USACE. The draft EA was issued for public review simultaneously with the proposed rule on May 29, 2020. The Final EA, including all public comments received and EPAs responses to comments, is being published simultaneously with this final rule and is also available separately at https://www.epa.gov/ocean-dumping/humboldt-open-ocean-disposal-site-hoods-documents. The Final EA and its Appendices provide the threshold environmental review for modification of HOODS. It discusses in detail the purpose and need for the proposed action and examines alternatives. The EPA determined that there would be no significant adverse impacts of implementing either of the action alternatives evaluated for modifying HOODS.

The following three ocean disposal alternatives were considered in detail in the Final EA.

The No Action Alternative is defined as not modifying the size of the original HOODS boundaries. This alternative would not address the need for an adequately sized ocean disposal site to accommodate an annual average of 1,000,000 cy of ongoing and future dredging. Because there is no other currently available disposal site for this material, rapid shoaling of the entrance channel would quickly render navigation unsafe, significantly affecting the economy of the greater Eureka area. Increased wave action in the Harbor entrance would endanger commercial ships as well as fishing and recreational vessels. This situation would discourage shippers from using Humboldt Bay for commerce, because it requires additional vessel trips to accommodate “light-loaded” vessels, resulting in increased transportation costs, decreased vessel safety, and maneuvering problems. This would have a long-term adverse impact on the local economy. In addition, use of the Humboldt Harbor as a port of refuge could be affected. Finally, ship groundings caused by improperly maintained deep-draft channels could result in adverse ecological repercussions ( i.e., oil and fuel spills). Although the No Action Alternative would not address the purpose and need for action, it was evaluated as a basis to compare the effects of the other alternatives considered.

Alternative 1, the Selected Action, is to slightly reorient and expand the existing HOODS boundary by one nmi to the north (upcoast) and one nmi to the west (offshore). Alternative 1 is the Selected Action because it would provide environmentally acceptable disposal capacity for many years, while also affording the most operational flexibility for managing the dredged material in a manner that would further minimize even physical impacts over time. This configuration would result in the total area of the site increasing from one square nmi to four square nmi, and would supersede the original HOODS boundary. The effective total capacity of the site would increase from the original 25 million cy to over 100 million cy ( i.e., allowing for 75 million cy of additional disposal to occur), before mounding to −130 feet could again occur across the entire site. If current disposal practices were to continue unchanged ( i.e., if 1 million cy of entrance channel sand per year were to continue to be disposed of at HOODS indefinitely), the modified site would reach capacity in about 75 years.

Alternative 2 is the expansion of the existing HOODS boundary by 1/2 nmi to the north (upcoast) and 1/2 nmi to the west (offshore). This configuration would result in the total area of the site increasing from 1 square nmi to 2.25 square nmi and would supersede the original HOODS boundary. The effective total capacity of the site would increase from the original 25 million cy to approximately 56 million cy ( i.e., allowing for approximately 31 million cy of additional disposal to occur), before mounding to −130 feet could again occur across the entire site. If current disposal practices were to continue unchanged ( i.e., if 1 million cy per year of entrance channel sand were to continue to be disposed of at HOODS indefinitely), the modified site would reach capacity in about 31 years.

The EPA submitted an EFH assessment to the NMFS, pursuant to Section 305(b), 16 U.S.C. 1855(b)(2), of the Magnuson-Stevens Fishery Conservation and Management Act, as amended, 16 U.S.C. 1801 to 1891. The EPA determined that this action will not significantly affect managed species or EFH. NMFS concurred with the EPA's determination, but included one Conservation Recommendation to further minimize potential impacts. Specifically, NMFS recommended continuing to manage future disposal at HOODS by expanding the mound while leaving other areas of the site undisturbed as long as possible, rather than purposely spreading disposal events throughout the site each year. The updated SMMP discusses how EPA will implement this NMFS Conservation Recommendation.

The EPA submitted a Consistency Determination (CD) package to the California Coastal Commission (CCC) on July 20, 2020, following the close of the public comment period on the draft EA and the proposed rule. The CD package specifically addresses how the proposed action to expand HOODS is consistent to the maximum extent practicable with the California Coastal Act Chapter 3 policies. On October 9, 2020, the CCC unanimously concurred with EPA's CD and did not propose any additional measures beyond those already contained in the updated SMMP.

The ESA, as amended, 16 U.S.C. 1531 tthrough 1544, requires federal agencies to consult with NMFS and the USFWS to ensure that any action authorized, funded, or carried out by the federal agency is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of any critical habitat. The EPA completed informal ESA consultations with USFWS and NMFS, and the consultations are included as an Appendix to the EA.

Based on those consultations, the EPA determined that this action will have “no effect” on marine mammals, sea turtles and certain seabird species. The EPA further determined that this action “may affect but is not likely to adversely affect” anadromous fish (including the SONCC Coho ESU, the CC Chinook Salmon ESU, the NC Steelhead DPS, Eulachon, and sDPS Green Sturgeon), marbled Murrelet, and short-tailed albatross. The Services concurred with these findings and no additional mitigation measures were recommended beyond the avoidance and minimization aspects of the EPA mandatory disposal site use conditions which would apply to every project using HOODS (these conditions are included with the SMMP, and relevant provisions of the SMMP would be identified or incorporated into subsequently issued permits and Federal projects).

The National Historic Preservation Act (NHPA), 16 U.S.C. 470 through 470a-2, requires federal agencies to consider the effect of their actions on districts, sites, buildings, structures, or objects, included in, or eligible for inclusion in the National Register of Historic Places (NRHP). The depths of the expanded HOODS (approximately 150-210 feet) generally excludes potential habitation or resources related to human settlements in this area. Historic shipwreck remnants do exist in the general vicinity, but none would be affected by ongoing disposal activities within the expanded HOODS boundaries.

This rule modifies the HOODS by replacing the boundaries of the existing site with expanded boundaries, pursuant to Section 102 of the MPRSA, 33 U.S.C 1412. This action complies with applicable executive orders and statutory provisions as follows:

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

Executive Order 13089 on Coral Reef Protection directs agencies “to preserve and protect the biodiversity, health, heritage, and social and economic value of U.S. coral reef ecosystems and the marine environment.” This E.O. does not apply to this action because there are no coral reef ecosystems in the HOODS area.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). This site modification does not require persons to obtain, maintain, retain, report, or publicly disclose information to or for a federal agency.

The Regulatory Flexibility Act generally requires federal agencies to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business defined by the Small Business Administration's size regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The EPA determined that this action will not have a significant economic impact on small entities because the rule will only have the effect of modifying an existing site in order to allow ongoing disposal of dredged material in ocean waters. After considering the economic impacts of this rule, the EPA certifies that this action will not have a significant economic impact on a substantial number of small entities.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1531 through 1538, for State, local, or tribal governments or the private sector. This action imposes no new enforceable duty on any State, local or tribal governments or the private sector. Therefore, this action is not subject to the requirements of sections 202 or 205 of the UMRA. This action is also not subject to the requirements of section 203 of the UMRA because it contains no regulatory requirements that might significantly or uniquely affect small government entities. Those entities are already subject to existing permitting requirements for the disposal of dredged material in ocean waters.

This action does not have federalism implications. It does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and State and local governments, the EPA specifically solicited comments on this action from State and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 because the modification of the existing HOODS will not have a direct effect on Indian Tribes, on the relationship between the federal government and Indian Tribes, or on the distribution of power and responsibilities between the federal government and Indian Tribes. In addition, the depths of the modified HOODS (approximately 150 to 200 feet) generally exclude potential habitation or resources related to human settlements. Thus, Executive Order 13175 does not apply to this action. Nevertheless, the EPA specifically solicited input from officials of 10 potentially interested tribal governments during both the scoping and public review phases of this action. EPA also extended government-to-government consultation offers to these 10 potentially affected tribes. The Tribal Historic Preservation Offices of three of them (the Wiyot Tribe, the Blue Lake Rancheria, and the Bear River Band of the Rohnerville Rancheria) requested further discussion concerning any potential for effects on cultural resources of concern. Based on those discussions, the tribes determined that the offshore location of the HOODS expansion would not affect onshore cultural resources.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This action is not subject to Executive Order 13211, “Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355) because it is not a “significant regulatory action” as defined under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272), directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus bodies. The NTTAA directs the EPA to provide Congress, through Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This action includes environmental monitoring and measurement as described in the updated SMMP. The EPA will not require the use of specific, prescribed analytic methods for monitoring and managing the modified HOODS. The Agency plans to allow the use of any method, whether it constitutes a voluntary consensus standard or not, that meets the monitoring and measurement criteria discussed in the SMMP.

Executive Order 12898 (59 FR 7629) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. The EPA determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The EPA has assessed the overall protectiveness of modifying the existing HOODS against the criteria established pursuant to the MPRSA to ensure that any adverse impact to the environment will be mitigated to the greatest extent practicable.

EPA published the draft EA and the proposed rule for a 30-day public comment period on May 29, 2020, and accepted comments until June 29, 2020. Both the draft EA and proposed rule were available at www.regulations.gov (Docket ID No. EPA-R09-OW-2020-0188) and at https://www.epa.gov/ocean-dumping/humboldt-open-ocean-disposal-site-hoods-documents.

EPA received feedback from a total of four commenters on the draft EA and proposed rule. Most of the comments did not specify whether they applied to the EA, the proposed rule, or the SMMP; EPA therefore accepted them as applicable to all three documents. The full comments, and EPA's responses, are included in Appendix E to the Final EA and are summarized below. Based on the comments received, only minor, clarifying wording changes have been made to the Final EA, final rule, and updated SMMP.

One citizen commenter supported expanding HOODS, asked how long before expansion might be needed again, hoped that expansion would cause no environmental harm, and recommended that dumping violations should be punished. EPA responded that the site should not need further expansion for approximately 75 years at present disposal rates; that EPA had substantial enforcement authority should violations occur; and that environmental impacts are not expected based on the prior 25 years of site use and the results of recent comprehensive monitoring studies.

One agency commenter pointed out some potential for confusion regarding whether the modified HOODS boundary would completely supersede the original HOODS boundary on future NOAA navigation charts, or whether both old and new boundaries would be shown. The commenter pointed out that if both were shown, confusion could result because small corners of the old boundary would protrude from the (otherwise perfectly square) new boundary. EPA responded that the new boundary would completely supersede the original boundary on future NOAA navigation chart updates.

Another agency commented that it looked forward to receiving EPA's consistency determination for the proposed boundary modification and to working with EPA staff on this submittal. EPA thanked the agency and noted that EPA would not publish the final rule for modifying HOODS until the agency's comments (if any) had been fully considered.

The final agency commenter pointed out a minor typographical error in draft EA Section 4.4.1. This typographical error was corrected.

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

States which have received final approval from EPA under RCRA section 9004(b) of RCRA, 42 U.S.C. 6991c(b), must maintain an underground storage tank program that is equivalent to, consistent with, and no less stringent than the federal underground storage tank program. When EPA makes revisions to the regulations that govern the UST program, states must revise their programs to comply with the updated regulations and submit these revisions to EPA for approval. Most commonly, states must change their programs because of changes to EPA's regulations in 40 Code of Federal Regulations (CFR) part 280. States can also initiate changes on their own to their underground storage tank program and these changes must then be approved by EPA.

On October 11, 2018, in accordance with 40 CFR 281.51(a), Indiana submitted a complete program revision application seeking EPA approval for its UST program revisions (State Application). Indiana's revisions correspond to EPA's final rule published on July 15, 2015 (80 FR 41566), which revised the 1988 UST regulations and the 1988 state program approval (SPA) regulations (2015 Federal Revisions). As required by 40 CFR 281.20, the State Application contains the following: A transmittal letter from the Governor requesting approval, a description of the program and operating procedures, a demonstration of the state's procedures to ensure adequate enforcement, a Memorandum of Agreement outlining the roles and responsibilities of EPA and the implementing agency, a statement of certification from the Attorney General, and copies of all relevant state statutes and regulations. We have reviewed the State Application and determined that the revisions to Indiana's UST program are equivalent to, consistent with, and no less stringent than the corresponding federal requirements in subpart C of 40 CFR part 281, and that the Indiana program provides for adequate enforcement of compliance (40 CFR 281.11(b)). Therefore, EPA grants Indiana final approval to operate its UST program with the changes described in the program revision application and as outlined below in Section I.G of this document.

This action does not impose additional requirements on the regulated community because the regulations being approved by this rule are already in effect in the State of Indiana, and are not changed by this action. This action merely approves the existing state regulations as meeting the federal requirements and renders them federally enforceable.

EPA is publishing this direct final rule without a prior proposed rule because we view this as a noncontroversial action and we anticipate no adverse comment. Indiana did not receive any comments during its comment period when the rules and regulations being considered today were proposed at the state level.

Along with this direct final rule, EPA is publishing a separate document in the “Proposed Rules” section of this Federal Register that serves as the proposal to approve the State's UST program revisions, and provides an opportunity for public comment. If EPA receives comments that oppose this approval, EPA will withdraw this direct final rule by publishing a document in the Federal Register before it becomes effective. EPA will base any further decision on approval of the State Application after considering all comments received during the comment period. EPA will then address all public comments in a later final rule. You may not have another opportunity to comment. If you want to comment on this approval, you must do so at this time.

On August 11, 2006, EPA finalized a rule approving the UST program that Indiana proposed to administer in lieu of the federal UST program. The State's program has not previously been codified.

In order to be approved, each state program application must meet the general requirements in 40 CFR 281.11, and specific requirements in 40 CFR Subpart B (Components of a Program Application); Subpart C (Criteria for No Less Stringent); and Subpart D (Adequate Enforcement of Compliance). This also is true for proposed revisions to approved state programs.

As more fully described below, the State has made the changes to its approved UST program to reflect the 2015 Federal Revisions. EPA is approving the State's changes because they are equivalent to, consistent with, and no less stringent than the federal UST program and because EPA has confirmed that the Indiana UST program will continue to provide for adequate enforcement of compliance as described in 40 CFR 281.11(b) and part 281, Subpart D after this approval.

The Indiana Department of Environmental Management (IDEM or Department) is the lead implementing agency for the UST program in Indiana, except in Indian country.

IDEM continues to have broad statutory authority to regulate the installation, operation, maintenance, and closure of USTs, as well as UST releases under Indiana Code Title 4 State Offices and Administration, Article 22 Administrative Rules and Procedures, Chapter 2, Adoption of Administrative Rules; and selected provisions from Title 13 Environment, Article 23 Underground Storage Tanks. The Indiana UST Program gets its enforcement authority from the powers of the Department found in IC Sections 4-21.5-4, 13-14-2-6. 13-14-2-7, 13-23-1-4, 13-23-14-3, and 13-30-3. Under IC 13-14-2-2, an employee or agent of the Department has the authority to enter and inspect any property premises or place where regulated substances are stored at any reasonable time. In the case of a release, IC Sections 13-23-13-2, 13-23-13-4, and 13-23-13-12 provide employees or agents of the Department the authority to take such action as necessary, including the authority to enter any property, premises or place where an UST is located for inspection, in order to conduct sampling, and to have access to records. IC Section 13-23-13-1 provides the Department with rulemaking authority for corrective action. Notice of violation may be issued, and penalties for non-compliance with Indiana's UST Act may be assessed under IC 13-30-3-3. The State also includes requirements for delivery prohibitions in the event of non-compliance as described in 329 Indiana Administrative Code (IAC) Section 9-1-15.1.

Specific authorities to regulate the installation, operation, maintenance, and closure of USTs, as well as UST releases are found under IC 13-23, in addition to the regulatory provisions in 329 IAC Article 9 Underground Storage, as amended effective June 28, 2018; Reporting and recordkeeping requirements are found under 329 IAC 9-3-1. The aforementioned statutory and regulatory sections satisfy the requirements of 40 CFR 281.40 and 281.41.

Through a Memorandum of Agreement between the State of Indiana and EPA, signed by EPA Region 5 Regional Administrator November 27, 2018, the State maintains procedures for receiving and ensuring proper consideration of information about violations submitted by the public. The State agrees to comply with public participation provisions contained in 40 CFR 281.42 including the provision that the State will not oppose intervention under Rule 24 of the Indiana Rules of Court, Rules of Trial Procedure, in the same manner as the Federal rules at 40 CFR 281.42.

To qualify for final approval, revisions to a state's program must be “equivalent to, consistent with, and no less stringent” than the 2015 Federal Revisions. In the 2015 Federal Revisions, EPA addressed UST systems deferred in the 1988 UST regulations, and added, among other things, new operation and maintenance requirements; secondary containment requirements for new and replaced tanks and piping; operator training requirements; and a requirement to ensure UST system compatibility before storing certain biofuel blends. In addition, EPA removed past deferrals for emergency generator tanks, field constructed tanks, and airport hydrant systems. EPA analyzes revisions to approved state programs pursuant to the criteria found in 40 CFR 281.30 through 281.39.

The Department has revised its regulations to help ensure that the state's UST program revisions are equivalent to, consistent with, and no less stringent than the 2015 Federal Revisions. In particular, the Department has amended Indiana Administrative Code to incorporate the revised requirements of 40 CFR part 280, including the requirements added by the 2015 Federal Revisions. The State, therefore, has ensured that the criteria found in 40 CFR 281.30 through 281.38 are met.

Title 40 CFR 281.39 describes the state operator training requirements that must be met in order to be considered equivalent to, consistent with, and no less stringent than federal requirements. Indiana has elected to incorporate by reference the Federal Rules at 329 IAC 9-1-1(b) and (c); therefore, Indiana's operator training requirements are equivalent to, consistent with, and no less stringent than federal requirements.

As part of the State Application, the Chief Counsel in the Advisory Division of the State of Indiana—Office of the Attorney General certified that the laws of Indiana provide adequate authority to carry out the “no less stringent” technical requirements submitted by the State in order to meet the criteria in 40 CFR 281.30 through 281.39. EPA is relying on this certification in addition to the analysis submitted by the State in making our determination.

For further information on EPA's analysis of the State's application, see the supporting documentation for both the statutory and regulatory programs contained in the docket for this rulemaking.

Where an approved state program has a greater scope of coverage than required by federal law, the additional coverage is not part of the federally-approved program and are not federally enforceable (40 CFR 281.12(a)(3)(ii)). The following regulatory requirements are considered broader in coverage than the federal program as these state-only regulations are not required by federal regulation and are implemented by the state in addition to the federally approved program:

Indiana Code Title 13, Article 23 Underground Storage Tanks:

Chapter 6 Underground Storage Petroleum Tank Trust Fund, Sections 13-23-6-1 through 13-23-6-5; Chapter 7 Underground Petroleum Storage Tank Excess Liability Fund, Sections 13-23-7-1 through 13-23-7-7; Chapter 8 Use of Money in Excess Liability Fund, Sections 13-23-8-4 through 13-23-8-6; Chapter 9 Payment from Excess Liability Fund, Sections 13-23-9-1.3 through 13-23-9-6; and Chapter 13 Corrective Actions, Sections 13-23-13-6 and 13-23-13-7, because funds of this type are state specific and are broader in scope than the federal program.

Chapter 12 Fees, Sections 13-23-12-1 through 13-23-12-4 because fees are broader in scope and not imposed by the federal program.

Where an approved state program includes requirements that are considered more stringent than required by federal law, the more stringent requirements become part of the federally approved program (40 CFR 281.12(a)(3)(i)).

The following regulatory requirements are considered more stringent than the federal program, and on approval, they become part of the federally approved program and are federally enforceable:

Under 329 Indiana Administrative Code (IAC):

At Section 329 IAC 9-2-2(f) Indiana requires UST system owners and operators to ensure that workers performing UST installations, testing, upgrades, closures, removals, and change in service are certified by the State Fire Marshall. The federal regulations do not require certification making the state requirement more stringent.

At Section 329 IAC 9-2-2(g) Indiana requires UST system owners and operators to submit notice of temporary closure, upgrades, or release detection installation within 30 days of completing such actions. The federal regulations do not contain similar requirements.

Indiana has state-only provisions related to reporting at 329 IAC 9-3-1(b)(4), and (b)(6)-(b)(15). These additional reporting requirements are more stringent than the federal regulations because 40 CFR 280.34 does not require the submittal of the documentation described in this state program requirement.

At Section 329 IAC 9-3-1(c)(5)-(c)(10) the state has additional recordkeeping requirements that require retention of additional items not required by the federal regulations. These additional requirements make the state program more stringent than the federal regulations.

329 IAC 9-2-3 requires UST system owners or operators to certify compliance with the release detection requirements of 40 CFR 280, Subpart D and Indiana Article 9 within the state's notification forms. The federal program requires certification, but does not require the use of specific notification forms or that the person who performs the work be certified by the state fire marshal, making this state-only requirement more stringent.

At Section 329 IAC 9-4-4(a)(1) the State requires owners and operators to contain, cleanup a spill or overfill, and report the incident in cases when a petroleum release to the environment equals or exceeds 25 gallons at 329 IAC 9-4-4(a)(1)(A). This state provision is more stringent than the federal regulations, because under the federal regulations these actions are only required if the release of petroleum exceeds 25 gallons.

Section 329 IAC 9-5-5.1 is more stringent because Indiana has additional and more detailed requirements for site characterization after release than federal regulations. Specifically, at 329 IAC 9-5-5.1(b), Indiana requires an investigation and submittal of a signed report detailing specific information concerning site background, release incident description, initial response and abatement, free product recovery, investigation, sampling, results and conclusions, and recommendations.

At Section 329 IAC 9-5-4.2 the state provision is more stringent because Indiana has a more detailed requirement for the safe handling of flammable products. Specifically, at 329 IAC 9-5-4.2(3), Indiana requires that flammable products be handled in in accordance with the site health and safety plan which is required under the State's corrective action plan at Section 329 IAC 9-5-7(e).

329 IAC 9-5-6 addresses further site investigations for soil and ground water cleanup. The state provisions are more stringent than the federal regulations because Indiana has additional and more detailed requirements for further site investigation in the event evidence exists that a contaminant exceeds the cleanup objectives of IC 13-12-3-2.

At Section 329 IAC 9-5-7 the state provisions are more stringent because Indiana has additional and more detailed requirements for the corrective action plan than the federal regulations including consideration of the proximity of potential contaminant receptors and suitability of chosen remediation method when approving corrective action plans and adherence to a written health and safety plan.

At 329 IAC 9-6-5(d) the State requires owners and operators provide certification of closure compliance pursuant to the notification form requirements at 329 IAC 9-2-2 (see specifically 329 IAC 9-2-2(f) and (g)). The federal program does not include a similar requirement making the state provision potentially more stringent than the federal regulations.

At 329 IAC 9-6-2.1(a) the State requires owners and operators to notify both the department and the office of the state fire marshal before beginning permanent closure or a change-in-service where the federal regulation requires notification only of the implementing agency. The state provision is more stringent than federal regulations because of this additional notification requirement.

Section 329 IAC 9-6-3 requires that when previously closed UST systems must be assessed and closed as directed by the State Commissioner, the closures be performed by a person certified under the rules of the fire prevention and building safety commission at 675 IAC 12-12. The State's requirement for certification is more stringent than federal regulations.

At Section 329 IAC 9-8-4(a) the state provision is more stringent than the federal regulations as it requires all UST system owners and operators to maintain financial responsibility for corrective action and third-party claims in a per-occurrence amount of at least $1 million, without considering their monthly throughput or whether they are located at petroleum marketing facilities. The federal regulations allow owners or operators who do not meet the requirement of 280.93(a)(1) to maintain financial responsibility of $500,000.

At Section 329 IAC 9-8-17(b) this state provision continues to require that the local government fund be funded for ten times the full amount of coverage required under 329 IAC 9-8-4 though EPA reduced the required local government fund funding amount from ten times the full amount of coverage required under § 280.93 to five times the coverage. The State's higher coverage requirement makes the state provision more stringent than the federal regulations.

At Section 329 IAC 9-8-25(a) and (b) the State requires owners or operators to replenish guarantees, letters of credit and surety bonds by the anniversary date or within 120 days after the reduction has occurred, whichever is sooner. The State's inclusion of this other option and subjecting owners or operators to whichever option is sooner is more stringent than the federal program that does not contain these requirements.

EPA's approval of Indiana's Program does not extend to Indian country as defined in 18 U.S.C. 1151. Indian country generally includes any land held in trust by the United States for an Indian tribe; and any other areas that are “Indian country” within the meaning of 18 U.S.C. 1151. Any lands removed from an Indian reservation status by federal court action are not considered reservation lands even if located within the exterior boundaries of an Indian reservation. EPA will retain responsibilities under RCRA for underground storage tanks in Indian country. Therefore, this action has no effect in Indian country. See 40 CFR 281.12(a)(2).

This action only applies to Indiana's UST Program requirements pursuant to RCRA Section 9004 and imposes no requirements other than those imposed by state law. It complies with applicable EOs and statutory provisions as follows:

The Office of Management and Budget (OMB) has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, Oct. 4, 1993) and 13563 (76 FR 3821, Jan. 21, 2011). This action approves state requirements for the purpose of RCRA section 9004 and imposes no additional requirements beyond those imposed by state law. Therefore, this action is not subject to review by OMB.

Because this action approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538). For the same reason, this action also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

This action will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, Aug. 10, 1999), because it merely approves state requirements as part of the state RCRA Underground Storage Tank Program without altering the relationship or the distribution of power and responsibilities established by RCRA.

This action also is not subject to Executive Order 13045 (62 FR 19885, Apr. 23, 1997), because it is not economically significant and it does not make decisions based on environmental health or safety risks.

This rule is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a “significant regulatory action” as defined under Executive Order 12866.

Under RCRA section 9004(b), EPA grants a state's application for approval as long as the state meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a state approval application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct.

EPA has complied with Executive Order 12630 (53 FR 8859, Mar. 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order.

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). “Burden” is defined at 5 CFR 1320.3(b).

Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. Because this rule approves pre-existing state rules which are at least equivalent to, consistent with, and no less stringent than existing federal requirements, and imposes no additional requirements beyond those imposed by state law, and there are no anticipated significant adverse human health or environmental effects, the rule is not subject to Executive Order 12898.

The Congressional Review Act, 5 U.S.C. 801-808, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this document and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). However, this action will be effective April 19, 2021 because it is a direct final rule.