Table of Contents I. Introduction A. Background; Purpose of and Need for the Rule B. Overview of the Proposed Rule II. Discussion of Comments and Agency Response A. Overview of Comments Received B. Purpose of the Rule; “Rapid and Orderly” Resolution C. Identification of Core Business Lines; Associated Operations and Services D. Content and Form of an Enterprise Resolution Plan E. Timing of Plan Submission; Interim Updates F. FHFA Identification of Deficiencies and Shortcomings G. Timing of FHFA Feedback; Provision of Formal Guidance H. Comments Beyond the Scope of the Rule III. Summary of Changes to the Final Rule A. Section 1242.4(a)(2), Altering Submission Dates B. Section 1242.5(a), Reservation of Authority To Tailor Submission Requirements C. Section 1242.7(b), Addition of a “Shortcomings” Category IV. Regulatory Analyses A. Paperwork Reduction Act B. Regulatory Flexibility Act C. Congressional Review Act I. Introduction A. Background; Purpose of and Need for the Rule

Enterprise Purpose and Business. Fannie Mae and Freddie Mac are federally chartered housing finance enterprises whose purposes include providing stability to the secondary market for residential mortgages; providing ongoing assistance to the secondary market for residential mortgages (including activities related to mortgages on housing for low- and moderate-income families) by increasing the liquidity of mortgage investments and improving distribution of investment capital available for residential mortgage financing; and, promoting access to mortgage credit throughout the United States, including central cities, rural areas, and underserved areas, by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing. 1 To meet these purposes, the Enterprises are statutorily authorized to engage in limited activities—primarily, the purchase and securitization of eligible mortgage loans—and are directed to use their authority in certain ways, such as meeting statutorily required goals related to housing loans for low- and very low-income families and serving underserved housing markets. 2

Each Enterprise generally organizes its business activity into a single-family business and a multifamily business. The Enterprises' combined single-family book of business is in excess of $5 trillion and the combined multifamily book is approximately $650 billion.

The Enterprise business models for supporting single-family and multifamily housing consist primarily of a guarantee business in which the Enterprises guarantee the timely payment of principal and interest to investors in mortgage-backed securities (MBS) issued by the Enterprises. 3 Mortgage lenders participate in the MBS swap and cash window programs, originating loans in accordance with Enterprise standards and either providing those loans to an Enterprise in exchange for securities guaranteed by the Enterprise or selling loans directly to the Enterprise for cash. In the portfolio business, the Enterprises issue debt and invest the proceeds in whole loans or in MBS that they hold on their balance sheets. In both their portfolio and guarantee businesses, the Enterprises assume credit risk on purchased or securitized loans (in MBS swap and cash programs, the Enterprise assumes the credit risk in exchange for a guarantee fee).

The Enterprises' guarantee of timely payment of principal and interest to investors is not backed by the full faith and credit of the United States. 4 The Enterprises are required to state in all of their obligations and securities that such obligations and securities, including the interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than the Enterprise itself. 5 Nonetheless, because of the Enterprises' federal statutory charters and some federally conferred business privileges, 6 pricing of Enterprise obligations suggested, even before the provision of explicit Treasury support at the time of the financial crisis, that investors perceive a full faith and credit guarantee. 7 Investors may have been relying on this perception when deciding to invest in the Enterprises' debt and MBS at borrowing costs near that of debt issued by the federal government, despite the Enterprises' high leverage. That same perception may encourage typically conservative investors, including foreign sovereigns, to purchase Enterprise obligations and securities. The perception of an implicit guarantee thus undermines market discipline and incentivizes risk taking and growth at the Enterprises.

Enterprise Supervision; Resolution. As regulator and supervisor of the Enterprises, FHFA's duties include ensuring that the Enterprises operate in a safe and sound manner; foster liquid, efficient, competitive, and resilient national housing finance markets; and, operate in a manner that is consistent with the public interest. 8 FHFA is also authorized to appoint itself as conservator or receiver of an Enterprise if statutory grounds are met. 9 When appointed receiver of an Enterprise, FHFA must establish a limited-life regulated entity (LLRE), which immediately succeeds to the Enterprise's federal charter and thereafter operates subject to the Enterprise's authorities and duties. 10 Because Enterprise obligations and securities are not backed by the full faith and credit of the United States, resolution of an Enterprise by FHFA necessarily would involve only the Enterprise's resources available to absorb losses and satisfy investor and creditor claims—Enterprise assets, capital and capital-like instruments, and contracts that transfer risk of loss to third parties.

In September 2008, when it was apparent that substantial deterioration in the housing market would leave the Enterprises unable to fulfill their statutory purposes and mission without government intervention, FHFA appointed itself conservator of each Enterprise. 11 At the same time, as conservator for each Enterprise, FHFA entered into the Senior Preferred Stock Purchase Agreements (PSPAs) with the U.S. Department of the Treasury (Treasury or Treasury Department) to provide each Enterprise financial support up to a specified amount. 12 This limited support, which continues to the present, permits the Enterprises to meet their outstanding obligations and continue to provide liquidity to the mortgage markets while maintaining a positive net worth.

The Enterprise conservatorships have lasted for over twelve years, considerably longer than any conservatorship under the auspices of the Federal Deposit Insurance Corporation (FDIC) or the Resolution Trust Corporation (established to resolve failed thrifts following the 1989 thrift crisis and since abolished). 13 FHFA's current Strategic Plan includes the objective of responsibly ending the conservatorships. 14 In preparation, FHFA is developing a more robust prudential regulatory framework for the Enterprises, including capital, liquidity, and stress testing requirements, and enhanced supervision.

FHFA believes a resolution planning rule is also an important part of developing such a framework and is a key step toward the robust regulatory post-conservatorship framework FHFA is developing. The Treasury Department's 2019 Housing Reform Plan also noted the importance of developing a credible resolution framework for the Enterprises to protect taxpayers, enhance market discipline, and mitigate moral hazard and systemic risk. 15 FHFA shares that Plan's view of the benefits of a credible Enterprise resolution framework. Finally, by providing that the charter of an Enterprise that has been placed into receivership be transferred immediately to the LLRE upon its organization  16 and prohibiting FHFA from terminating the charter, 17 the Safety and Soundness Act effectively requires that an Enterprise resolution through receivership be viable. Resolution planning would be a key element of implementing that statutory mandate, and thus of meeting congressional intent.

For the foregoing reasons, FHFA proposed a rule that would require the Enterprises to develop credible resolution plans and submit them to FHFA for review, set forth information and other content requirements for such plans, and establish procedures for submission and review. 18 The proposed rule is summarized for convenience below.

In developing an Enterprise resolution planning framework, FHFA has considered the resolution planning framework of the FDIC for large insured depository institutions (IDIs) and a framework jointly established by the FDIC and the Federal Reserve Board (FRB) pursuant to section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the DFA section 165 rule), which covers large, interconnected bank holding companies and nonbank financial companies designated by the Financial Stability Oversight Council for enhanced supervision by the FRB. While there would be significant differences among FDIC resolution of an IDI, resolution of a bank holding company in a bankruptcy proceeding, and FHFA resolution of an Enterprise, the FDIC's IDI rule and the DFA section 165 rule provided valuable context for FHFA's consideration of the goals and requirements of an appropriate Enterprise resolution planning framework in view of FHFA's statutory authorities and mandates.

In the proposed rule, FHFA addressed the substantive and procedural requirements for “credible” Enterprise resolution plans that would be developed to facilitate their “rapid and orderly resolution” by FHFA as receiver. Because FHFA is statutorily required to create an LLRE for an Enterprise in receivership, and because the LLRE immediately succeeds to the Enterprise's federal charter and thereafter operates subject to the Enterprise's authorities and duties, FHFA proposed to define “rapid and orderly resolution” for an Enterprise as the process for establishing its successor LLRE, including transferring Enterprise assets and liabilities to the LLRE, such that succession can be accomplished promptly and in a manner that substantially mitigates the risk that the failure of the Enterprise would have serious adverse effects on national housing finance markets.

The Enterprise resolution planning process would begin with identification of an Enterprise's “core business lines” (CBLs)—those business lines of the Enterprise that plausibly would continue to operate in the LLRE, considering the Enterprise's statutory purposes, mission, and authorized activities. Identification of CBLs would include identification of associated operations, services, functions, and supports necessary for each CBL to be continued. Understanding CBLs will enable FHFA and the Enterprise to determine the operations of the LLRE, and what assets and liabilities must be transferred from the Enterprise to carry out those operations. FHFA proposed a two-step process for identifying CBLs, in which FHFA would determine Enterprise CBLs after reviewing the Enterprises' preliminary identification. That process is intended to balance FHFA's statutory responsibilities as supervisor of the Enterprises with the Enterprises' greater awareness of their own business operations.

Other proposed substantive requirements addressed the content of Enterprise resolution plans. FHFA proposed to require each resolution plan to contain strategic analysis and information important to understanding an Enterprise's CBLs and facilitating their continuation in an LLRE established by FHFA as receiver. Each resolution plan would also be required to reflect required and prohibited assumptions.

Specifically, each Enterprise would be required to consider that resolution may occur under the severely adverse economic conditions provided to the Enterprise by FHFA in conjunction with any stress testing required pursuant to FHFA's regulation on stress testing of the regulated entities, 12 CFR part 1238, or another scenario provided by FHFA, possibly more idiosyncratic to an Enterprise. Similar to the DFA section 165 rule, each Enterprise would be prohibited from assuming that any extraordinary support from the United States government would be continued or provided to the Enterprise to prevent either its becoming in danger of default or in default. 19 For the Enterprises, this includes support obtained or negotiated on behalf of the Enterprises by FHFA in its capacity as conservator of each Enterprise through the PSPAs with the Treasury Department. Each Enterprise's resolution plan would also be required to reflect statutory provisions that the Enterprise's “obligations and securities, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than [the Enterprise].”  20

Each Enterprise's strategic analysis would detail how, in practice, the Enterprise could be resolved through FHFA's receivership authority by liquidating assets or by transferring them to an LLRE, which would continue to operate the Enterprise's CBLs. Among other elements, this analysis would address: (1) Actions that the Enterprise could take to facilitate its rapid and orderly resolution, including those actions it plans to take and the time period for successfully executing them; (2) funding, liquidity, support functions, and other resources, mapped to the Enterprise's CBLs, including the amount of capital and capital-like instruments (such as subordinated debt, convertible debt, other contingent capital, mortgage insurance, and CRT transactions) available to absorb losses before imposing losses on creditors or investors, mapped to associated assets; (3) the Enterprise's strategy for maintaining and funding its CBLs when the Enterprise is becoming in danger of default or in default; (4) capital support that will be needed by an LLRE, both during its life and when its status as a “limited-life” regulated entity ends, to maintain market confidence; (5) the Enterprise's strategy in the event of a failure or discontinuation of a CBL (including an associated operation, service, function, or support that is critical to a CBL) and actions that could be taken to prevent or mitigate any adverse effects of such failure or discontinuation on the national housing finance markets; (6) how and the extent to which claims against the Enterprise by the Enterprise's creditors and counterparties would be satisfied in accordance with FHFA's regulation setting forth the priority of expenses and unsecured claims set forth at 12 CFR 1237.9, consistent with continuation of the Enterprise's CBLs by an LLRE; and (7) the Enterprise's strategy for transferring or unwinding qualified financial contracts, consistent with applicable statutory requirements. 21

Each Enterprise's strategic plan would also be required to identify and describe potential material weaknesses or impediments to rapid and orderly resolution as conceived in its plan, and any actions or steps the Enterprise has taken or proposes to take, or actions or steps that other market participants could take, to address the identified weaknesses or impediments. The Enterprise would be required to include a timeline for such remedial or other mitigating actions that are under its control.

In addition to strategic analysis, the proposed rule set forth other information requirements for Enterprise resolution plans, including key information about the Enterprise's structure, governance, operations, business practices, financial responsibilities, and risk exposures. The proposed rule also addressed Enterprise development and maintenance of resolution-related capabilities to be assessed or verified periodically by FHFA that could generate, on a timely basis, critical information ( e.g., identification of key personnel) that FHFA would need as receiver to fulfill its statutory duties. Together, these components would help inform the immediate establishment of the LLRE to continue Enterprise business functions, including an informed division of assets and liabilities between the Enterprise receivership estate and a newly established LLRE.

Advance information, strategic analysis, and action, where appropriate, would also support other important goals of a rapid and orderly Enterprise resolution—to minimize disruption in the national housing finance markets, preserve Enterprise franchise and asset value, and ensure creditors bear losses in the order of their priority. 22 These goals work in concert, since a disruption of national housing finance markets also could increase costs to FHFA as receiver to the detriment of claimants on an Enterprise's receivership estate. Likewise, transparency in the Enterprises' resolution planning process, including a proposed requirement that each Enterprise resolution plan contain a “public section” that FHFA would publish, would further another important policy goal—fostering market discipline.

In addition to the substantive requirements of Enterprise resolution plans, the proposed rule addressed procedural requirements related to resolution planning, including the dates for submission of initial and subsequent resolution plans; FHFA review of and feedback on Enterprise resolution plans, including identification and notice of any deficiencies; requirements related to submission of revised resolution plans, to address identified deficiencies; the confidential treatment of all information that is not included in the plan's “public” section; and identification of the resolution planning rule as a prudential standard. In addition, FHFA clarified that neither the Enterprise resolution planning rule nor any resolution plan would give rise to rights of third parties and did not limit actions FHFA may take as receiver. FHFA retains all discretion conferred by statute or rule on the agency when acting as receiver for an Enterprise.

FHFA received 14 comments on the proposed Enterprise resolution planning rule, which included comments from each Enterprise, the Mortgage Bankers Association, the American Bankers Association, the National Association of Home Builders, the Housing Policy Council, the National Association of Realtors, the Center for Responsible Lending, and the Heritage Foundation, as well as comments from five individuals including a former Chief Executive Officer of Freddie Mac. Most comments were supportive of resolution planning generally and many suggested areas where the proposed rule could be improved or clarified.

Many supportive comments expressed the view that efforts by FHFA to improve supervision of the Enterprises (as demonstrated through the recent Enterprise capital final rule, a recently proposed Enterprise liquidity rule, and this resolution planning rulemaking) did not obviate the need for housing finance reform legislation. Some comments focused considerable attention on elements for legislative reform, which are beyond the scope of FHFA rulemaking. Other commenters addressed the need for additional FHFA rulemaking in conjunction with resolution planning, such as a potential rule on total loss absorbing capacity (TLAC), which is also beyond the scope of this rulemaking. 23

Comments received and FHFA's responses are summarized by topic below. In general, however, many commenters raised questions about FHFA's approach to support provided to the Enterprises through the PSPAs with Treasury. While most of these commenters generally supported FHFA's proposal to prohibit the Enterprises from assuming the provision or continuation of extraordinary government support, many requested clarification about what that assumption meant, in terms of how the Enterprises and the broader market should consider the existing PSPAs for purposes of Enterprise resolution planning. Commenters also addressed the proposed definition of “core business line” and the process for identifying CBLs; identification of impediments to rapid and orderly resolution; the benefit of a “shortcomings” category for supervisory concerns about a resolution plan that do not rise to the level of a “deficiency”; reduction of burden; and some rule processes.

Priority of Objectives. FHFA proposed to require the Enterprises to develop “credible” plans to facilitate their “rapid and orderly resolution” by FHFA as receiver, and proposed to define a “credible” plan in part as one that “plausibly achieves” the purpose of the rule. 24 The purpose of the rule, also set forth in the proposal, is to require each Enterprise to develop a resolution plan to facilitate its rapid and orderly resolution using FHFA's receivership authority in a manner that: (1) Minimizes disruption in the national housing finance markets by providing for the continued operation of the CBLs of the Enterprise in receivership by a newly constituted LLRE; (2) preserves the value of the Enterprise's franchise and assets; (3) facilitates the division of assets and liabilities between the LLRE and the receivership estate; (4) ensures that investors in mortgage-backed securities guaranteed by the Enterprises and in Enterprise unsecured debt bear losses in accordance with the priority of payments established in the Safety and Soundness Act, while minimizing unnecessary losses and costs to these investors; and (5) fosters market discipline by making clear that no extraordinary government support will be available to indemnify investors against losses or fund the resolution of an Enterprise. 25

One commenter observed that the five objectives of Enterprise resolution planning could potentially be competing priorities. To assist the Enterprises in the development of “credible” plans, that commenter suggested FHFA should clarify the priority of the objectives. The commenter also advocated for the flexibility to submit a resolution plan with optional strategies that reflect relative weighting of the rule's objectives, because different, reasonable, strategies could provide optionality to FHFA in any receivership scenario. If optional strategies were provided in a resolution plan, FHFA could evaluate whether the Enterprise demonstrated “that one strategy achieves such purposes better than the other reasonable strategies [it] analyzed.”

FHFA recognizes that there is some tension among the objectives set forth in the proposed rule. After consideration, however, FHFA has determined not to prioritize among them in this rulemaking. The priority of these objectives may change over time or in a particular resolution scenario, which argues against establishing a priority structure in a rule. FHFA also believes that, as drafted, the rule provides flexibility to an Enterprise to consider, offer, and explain prioritization of objectives, tradeoffs among the objectives that the Enterprise considered in proposing a resolution strategy or other choices reflected in its plan, and even optional strategies that reflect relative weighting of the rule's objectives. In such instances, the Enterprise's explanation would be helpful to FHFA in its understanding and review of submitted plans. More broadly, the rule permits optionality in the resolution planning process, which could result in plans that are more resilient and actionable under a range of possible circumstances.

“Rapid and Orderly” Standard. FHFA proposed to require each Enterprise to develop resolution plans to facilitate its “rapid and orderly” resolution, and proposed to define “rapid and orderly resolution” as “a process for establishing a [LLRE] as successor to the Enterprise under section 1367 of the Safety and Soundness Act (12 U.S.C 4617), including transferring Enterprise assets and liabilities to the [LLRE], such that succession by the [LLRE] can be accomplished promptly and in a manner that substantially mitigates the risk that the failure of the Enterprise would have serious adverse effects on national housing finance markets.”  26 One commenter remarked that, as drafted, the definition of “rapid and orderly resolution” would apply to all aspects of resolution, where “only certain . . . stages need to be conducted rapidly for an orderly resolution to occur, namely, the initial recapitalization and stabilization phase[s].” In contrast, “the claims process through a receivership will necessarily take . . . a longer period” and imposing “rapidity on these stages of the resolution would come at the expense of their orderliness, and could undermine the stability of the U.S. financial system.” Another commenter opined that “a rapid and orderly resolution is . . . unrealistic [and] FHFA should . . . work with other stakeholders, including Congress, to implement critical reforms to minimize the potential for market disruption in the event of an Enterprise's insolvency.”

FHFA agrees that conducting some stages of a resolution rapidly, or promptly, will facilitate an orderly resolution, while other stages—such as the claims process—could take longer to carry out. However, FHFA disagrees that the rule text as proposed must be changed to accommodate this distinction. As drafted, the rule definition of “rapid and orderly resolution” focuses on accomplishing succession by the LLRE promptly. More generally, FHFA intends the “rapid and orderly” standard to work in concert with the rule's purpose and objectives. In that light, while FHFA recognizes that not all steps in a resolution process may, or should, be taken with similar speed, FHFA also believes that no step in a “rapid and orderly” resolution would involve undue delay.

Definition of “Core Business Line.” FHFA proposed to require each Enterprise to make a preliminary identification of each “core business line” and provide notice of such identification to FHFA. 27 For this purpose, FHFA proposed to define “core business line” as “a business line of the Enterprise that plausibly would continue to operate in a [LLRE], considering the purposes, mission, and authorized activities of the Enterprise as set forth in its authorizing statute and the Safety and Soundness Act [including] associated operations, services, functions, and supports necessary for any identified core business line to be continued.” As examples of “associated operations, services, functions, and supports,” the proposed CBL definition listed “servicing, credit enhancement, securitization support, information technology support and operations, and human resources and personnel.”  28

FHFA noted in the preamble to the proposed rule that the DFA section 165 and FDIC IDI resolution planning rules included the terms “critical operations” and “critical services,” respectively, which bank holding companies or insured depository institutions were required to identify in addition to their “core business lines.”  29 Considering the DFA section 165 rule definition of “critical operations” and the Enterprises' statutory purposes and mission, FHFA expressed the view that there would be alignment between the Enterprises' core business lines and their critical operations, such that there was no need to separately identify “critical operations.” Likewise, considering the FDIC IDI rule definition of “critical services,” FHFA reasoned that there would be alignment between such services and the “associated operations, services, functions, and supports necessary for any identified core business line to be continued,” which each Enterprise is required to identify for each of its CBLs. On that basis, FHFA determined that it was not necessary to require the Enterprises to separately identify their “critical services.” FHFA requested comment on its determination not to require identification of, or define, “critical operations” and “critical services.”  30

Commenters generally agreed with FHFA's proposed approach to identification of Enterprise CBLs, noting that it is important to understand what business lines would be continued in the LLRE. One commenter called identification of CBLs “the primary benefit . . . [of Enterprise resolution planning,]” because it would provide notice of business lines that should be assumed by the LLRE to preserve a well-functioning market; and another commenter remarked that identification of CBLs would “[m]ake clear to market participants and the public what the operational capabilities of the LLRE will be and what any changes or limitations will be, compared to pre-resolution operations.”

Some commenters agreed that separate identification of “critical operations” and “critical services” was not necessary and would not improve the rule. One commenter offered the opposite view that bifurcating the CBL definition “between core business lines and critical services . . . [would] allow the Enterprises to more clearly map core business lines and critical services . . . [and] show what core business lines rely on each of the critical services.”

Another commenter addressed the scope of the CBL definition, to the effect that associated “supports” could cover third parties and, if CBLs were intended to be continued by the LLRE, then the proposed rule could imply that the Enterprise was responsible for the continuation of the third party itself. That commenter suggested FHFA clarify that “resolution planning with respect to Third Parties would not impose obligations beyond a need to maintain resolution-friendly contracts and an ability to pay Third Parties to maintain access to critical outsourced services during resolution.” To that end, the commenter also suggested clarifying that “supports” in the CBL definition did not include “third parties” and that FHFA “include a definition of Third Parties to capture those external service providers necessary to support” CBLs.

After considering these comments, FHFA does not believe that the rule should create separate categories for “critical operations” or “critical services,” because these concepts are already covered within the CBL definition. Likewise, FHFA does not believe that “support” should be removed from the CBL definition. The description of business activities associated with execution of a CBL, in whatever manner those activities are carried out, was meant to be comprehensive, and creating segmentation in the rule— e.g., removing supports provided by third parties from the CBL definition and creating a separate definition and process for “third party” identification—could undercut that comprehensive understanding.

Although FHFA is not changing the CBL definition, it should also be noted that the rule would not prevent an Enterprise, in developing its resolution plan, from characterizing some operations or services as “critical,” or from distinguishing services necessary for the continuation of a CBL in an LLRE provided by a third party from those provided by a business unit or affiliate. FHFA believes this approach—permitting the use of such categories without requiring it—creates flexibility for the Enterprises and reduces burden on the Enterprises and FHFA.

Finally, FHFA agrees that an Enterprise is not responsible for continuation in business of third parties that provide associated supports. Rather, an Enterprise resolution plan should address its strategy for ensuring the continuation of the business support that the third party provides, which is necessary to the continuation of the CBL. This may include renegotiating contracts with third-party providers to be more resolution-friendly, considering strategies for maintaining the ability to pay third parties during Enterprise resolution, and considering the ability of other parties to provide the same type of support and the feasibility of substitution.

Process for Identifying “Core Business Lines.” The proposed rule set forth a process by which the Enterprises would make a preliminary identification of their CBLs, subject to FHFA review. Thereafter, FHFA would provide notice to each Enterprise of its CBLs. 31 The entire identification process would be completed within six months, with three months for Enterprise preliminary identification. 32

Some commenters objected to FHFA's discretion to determine Enterprise CBLs, with one commenter remarking that it was unnecessary to have an Enterprise process for identification in light of FHFA's discretion, and intention, to determine CBLs. Instead, that commenter suggested that FHFA should determine Enterprise CBLs in consultation with the Enterprises, and the CBLs should be the same for each Enterprise. Two commenters opined that all Enterprise charter-compliant activities should be deemed CBLs. One commenter questioned whether three months was adequate for the Enterprises to complete their preliminary review, including engagement with senior management and their respective boards of directors. One commenter expressed support for FHFA's providing notice to each Enterprise of all CBLs identified or any removal of a CBL identification, across both Enterprises.

After considering these comments, FHFA is not changing the proposed process for identifying of CBLs. It is appropriate for FHFA to determine Enterprise CBLs, considering FHFA's statutory duties to ensure that the Enterprises meet their statutory purposes and that the LLRE established for an Enterprise in receivership preserves and continues the Enterprise's statutory function and mission in the housing finance market. However, given the Enterprises' greater understanding of their business operations, it is also appropriate for the Enterprises to identify associated operations, services, functions, and supports, which are included in the CBL definition.

FHFA does not agree that it should simply deem all charter-compliant activities to be CBLs. One purpose of the rule is to consider, and then identify, those Enterprise business lines that plausibly would continue to operate in an LLRE in light of the Enterprise's purposes, mission, and authorized activities. That purpose is not achieved by simply assuming that all charter-compliant activities are CBLs. While all CBLs transferred to the LLRE will be charter-compliant activities, not all charter-compliant activities may be identified as core.

At this time, FHFA is also not establishing a rule process or requirement for deeming a CBL at one Enterprise to be a CBL of the other Enterprise. While FHFA anticipates there will be substantial or even complete alignment of CBLs across the Enterprises, after additional consideration FHFA believes it would be appropriate to consider the CBLs of each Enterprise independently of the other, implementing the rule's CBL identification process, before making any decision that would require alignment.

Finally, FHFA does not propose to change the three-month time period for the Enterprises' initial preliminary identification of CBLs, because the Enterprises did not object to it. FHFA also notes that, after the Enterprises provide preliminary notices of identification to FHFA, there is an additional three-month period for FHFA to review each Enterprise's notice and follow up as appropriate. That second three-month period and the opportunity it creates for Enterprise and FHFA collaboration provide flexibility to ensure CBLs are identified within six months after the effective date of the rule.

Prohibited Assumption of Extraordinary Government Support. FHFA proposed to prohibit the Enterprises, when developing their resolution plans, from assuming “the provision or continuation of extraordinary support by the United States to the Enterprise to prevent either its becoming in danger of default or in default (including, in particular, support obtained or negotiated on behalf of the Enterprise by FHFA in its capacity as supervisor, conservator, or receiver of the Enterprise, including the Senior Preferred Stock Purchase Agreements [PSPAs] entered into by FHFA and the U.S. Department of the Treasury on September 7, 2008 and any amendments thereto).”  33 This prohibition received a considerable amount of input from commenters.

Some commenters supported the proposed prohibited assumption, while others did not. Among the former, one commenter viewed it as “critical” that Enterprise resolution planning not include the support currently provided by the PSPAs. In contrast, another commenter viewed the “the denial that the [PSPAs] for the [Enterprises] exist[ ] and can be relied upon, and . . . the requirement that the [Enterprises] plan to continue operations in receivership without that support, despite its being necessary and integral to their business model” as “fatal flaws” that “vitiate the entire rule.” A third commenter called it “impractical” to require the Enterprises to “continue operations in receivership without any government support.” Some commenters suggested FHFA reserve authority to waive provisions of the rule and offered the treatment of the PSPAs as an example of an area where FHFA could use waiver authority. Similar comments suggested FHFA expressly retain discretion in the rule, such as discretion “to permit, if FHFA deems it useful, the Enterprises to assume the continuation of the PSPAs on a transitional basis” or, more pointedly, suggested that FHFA clarify that it “retains the discretion to allow the Enterprises to assume the continuation of any government support that is actually in place at least 12 months before each planned submission date.”

Commenters also raised questions or requested clarification about how the prohibited assumption, as related to the PSPAs, should be given effect when the Enterprises develop their resolution plans. One commenter interpreted the fact that PSPA support must be assumed away to mean that FHFA intended the Enterprises to plan for resolution after they had exited conservatorship and were well-capitalized, and asked FHFA to clarify that interpretation. Another commenter suggested that Enterprise resolution plans should reflect the Enterprise's actual assets and obligations at the time the plan is drafted and thus, “[a]s long as . . . PSPA support continues to be available, a plan that assumes the opposite will be less useful in guiding the actual resolution.” That commenter requested FHFA clarify that “an Enterprise should not assume in its initial resolution plan a future state in which it is fully capitalized and released from conservatorship” and that, for purposes of developing a resolution strategy, “the PSPA support of the Enterprise's existing obligations continues to apply.”

Other commenters noted that the proposed rule clearly prohibited consideration of support provided by the PSPAs but did not address how the Enterprises should, or may, consider other aspects of the PSPAs, and thus needed clarification. One commenter identified “potential . . . ambiguity regarding the scope of the assumption” and suggested that the final rule clarify that the prohibited assumption “means that the PSPAs would be assumed to have been terminated in their entirety . . . [leaving] no restrictions on the Enterprises' freedom to raise debt or equity or transfer all or any portion of their assets without the U.S. Treasury Department's consent, and that the senior preferred stock will have been retired at no additional cost to the Enterprises.” That commenter opined that without such clarification, PSPA restrictions could operate as impediments to the rapid and orderly resolution of the Enterprises or to actions or steps designed to remediate other impediments. Another commenter requested FHFA to clarify that the rulemaking “does not constitute any weakening—real or perceived—of the existing PSPAs,” due to concern that the rule's prohibited assumption could cause investors to “doubt the ongoing government support for the Enterprises and pull back from their participation in the secondary market.”

FHFA has carefully considered comments received on the proposed prohibited assumption and believes it should remain in the final rule as it was proposed, without change. One important purpose of the rule is to foster market discipline. The Enterprise charter acts make clear that they are private companies, and the Safety and Soundness Act makes no provision for funding a receivership. Statutory provisions clarify that neither the Enterprises themselves nor their securities or obligations are backed by the United States. Despite these provisions, investors, creditors, and others doing business with the Enterprises may perceive that the Enterprises have implicit United States government support. Financial support from the Treasury Department provided through the PSPAs, while explicitly limited to a finite amount of support and usable in receivership only for certain purposes, could encourage that perception.

To clarify the status of the Enterprises as privately owned corporations and to accurately reflect the provisions of the Enterprises' charter acts and the Safety and Soundness Act, FHFA sought to make explicit in the Enterprise resolution planning rule that, in drafting their resolution plans, each Enterprise should assume that no extraordinary government support would be available to prevent it from being placed into receivership, to indemnify investors against losses, or to fund its resolution. Changing the prohibited assumption as it relates to government support provided through the PSPAs would not be consistent with the policy of fostering market discipline. In addition, the support available under the PSPAs is finite in amount and cannot be replenished if drawn. There is no assurance that there would be any available capacity under the PSPA at the point in which an Enterprise is placed in receivership. FHFA believes it would be inconsistent with these limitations to allow the Enterprises to factor into their resolution plans—plans that are premised upon some future adverse event—any remaining PSPA support that might exist today.

Although FHFA is not changing the prohibition against assuming the provision or continuation of extraordinary government support, questions commenters raised about the treatment of other aspects of the PSPAs in Enterprise resolution planning should be addressed. The PSPAs do exist and they remain in effect. In prohibiting the Enterprises from assuming the provision of support through the PSPAs, FHFA does not intend the Enterprises to plan, today, for a future resolution that occurs after they are out of conservatorship and well-capitalized. Likewise, FHFA does not intend an Enterprise to assume that the PSPAs have been terminated in their entirety. Resolution plans that could result from either of those approaches could be conjectural and less useful to FHFA and the Enterprises, where more useful resolution plans will reflect the Enterprise's assets and obligations at the time the plan is developed.

For these reasons, while an Enterprise may not consider support provided by the PSPA in developing a resolution plan, an Enterprise may consider how other provisions of the PSPAs could impact resolution. An Enterprise may, for example, address constraints imposed by PSPA covenants, if appropriate within the context of the Enterprise's full plan. An Enterprise may also identify an aspect of or provision in a PSPA as an “impediment” to resolution or in association with an identified “material weakness” in the Enterprise's resolution plan, and such characterization would not, in itself, cause the resolution plan not to be “credible.” Other comments related to the identification of impediments in a resolution plan are addressed below.

Finally, FHFA interprets comments advocating for FHFA's reservation of discretion or express waiver authority regarding the assumption against extraordinary government support as comments calling for eliminating this assumption from the final rule. In that light, while it is appropriate to note that FHFA has retained general waiver authority in a separate rule, 34 and does have discretion to develop resolution planning scenarios for Enterprise consideration, FHFA does not now anticipate using its discretion or waiver authority to change such essential underpinnings of resolution planning as the prohibited assumption of the provision or continuation of extraordinary government support.

Strategic Analysis; Identification of Impediments to Rapid and Orderly Resolution. FHFA proposed to require each Enterprise resolution plan to include a strategic analysis that, among other things, would identify and describe “[a]ny potential material weaknesses or impediments to rapid and orderly resolution as conceived in the Enterprise's plan” and “[a]ny actions or steps the Enterprise has taken or proposes to take, or which other market participants could take, to remediate or otherwise mitigate the weaknesses or impediments identified.” The Enterprises would also be required to provide a timeline for planned remedial or mitigating actions. 35 As FHFA noted in the preamble to the proposed rule, FHFA did not anticipate that it would identify as deficiencies those impediments that an Enterprise would be reasonably unable to address or that it would be impracticable to change. 36 Moreover, a resolution plan could be deemed credible even if it identified impediments to rapid and orderly resolution. 37

Commenters raised questions about the identification of impediments and remedial or mitigating actions. One commenter, for example, requested that FHFA clarify in the rule that examples of “existing impediments” listed in its comment letter “and others similarly identified in the course of preparing the early resolution plan submissions” would not be “grounds for rejecting the Enterprises' resolution plans under FHFA's credibility standard.” “Existing impediments” included: (1) An inability to satisfy current and future regulatory capital needs, including a projected resolution capital execution need, without relying on the PSPA or other government capital support; (2) an inability to impose losses on long-term debt without imposing them pro rata on their short-term creditors, counterparties of qualified financial contracts, and mortgage guarantee beneficiaries, given the unsubordinated nature of such long-term debt; (3) insufficient high-quality liquid assets to satisfy existing and future regulatory liquidity requirements and the projected resolution liquidity execution needs of an LLRE; and (4) PSPA restrictions on raising additional debt or equity, issuing subordinated debt, or transferring assets without U.S. Treasury consent.

FHFA believes furnishing a list of potential impediments in the rule is unnecessary to clarify that FHFA would not, solely on the basis of identifying such impediments in a resolution plan, deem the resolution plan to not be “credible.” The rule provides discretion to the Enterprises in identifying impediments. Provisions of the proposed rule on identification of impediments did not impose any requirements or constraints on the types of impediments an Enterprise could identify within a “credible” resolution plan. To the extent that “existing impediments” listed by the commenter could relate to or implicate provisions of the PSPAs, FHFA has expressly affirmed that such provisions could be identified as impediments in a resolution plan and would not cause the plan not to be “credible,” if appropriate in the context of the specific resolution plan.

One commenter requested that FHFA clarify that identification of impediments to rapid and orderly resolution in a resolution plan would not cause that plan not to be credible, if the Enterprise also identified actions that could be taken to remediate the impediment, explained why such actions are feasible and who is responsible for taking them, and provided a timeline for completing remedial actions the Enterprise planned to take. Three important result of resolution planning will be the identification of impediments, actions that can be taken to remediate them, and timelines for taking planned remedial actions. Taking such actions should improve the resolvability of the Enterprise in a manner that furthers the objectives of the rule. On the other hand, FHFA is not prepared to say that it will always be necessary to have a corresponding remedial action in order for identification of an impediment not to cause a plan to be not credible. Stated another way, FHFA does not believe that identification of an impediment without identifying a remedial action would always cause a plan not to be credible. If FHFA's view changes after gaining experience with Enterprise resolution planning, FHFA will consider whether the rule should be clarified as the commenter suggested.

In general, FHFA anticipates that, where an Enterprise can act to remediate an impediment, the Enterprise's resolution plan may provide relatively more specificity about planned remedial actions and timing for taking them. Where remediating an impediment may require action by others, less within the control of an Enterprise, relatively less detail may be appropriate and less detail would not, in itself, cause the plan not to be credible.

FHFA Identification of a Resolution Strategy. FHFA did not suggest or establish any resolution strategy in the proposed rule. Instead, the proposed rule reflected provisions of the Safety and Soundness Act that require FHFA, as receiver for an Enterprise, to establish an LLRE that “by operation of law and immediately upon its organization . . . succeed[s] to the charter of the [Enterprise] and thereafter operate[s] in accordance with, and subject to, such charter, [the Safety and Soundness Act], and any other provision of law to which the [Enterprise] is subject” except as otherwise provided in the Safety and Soundness Act. 38 One commenter suggested that FHFA establish “a preferred resolution strategy or strategies to guide FHFA's actions in resolution and receivership . . . [to] provide clarity to the Enterprises, the market, and the public.” That commenter also asked FHFA to confirm certain resolution “mechanics:” That the LLRE will be created at the outset of the receivership process; that the LLRE will be permitted to raise capital and debt financing; and that “FHFA will proactively assist in identifying business areas that can be sold to an acquirer.”

After consideration, FHFA has not set forth a preferred resolution strategy in the rule. FHFA has refrained from doing so, in part, to encourage the Enterprises to consider any reasonable approaches to resolution, rather than preemptively focusing their efforts on a single resolution strategy that may not be appropriate to an Enterprise's particular circumstances. In addition, FHFA believes that the iterative process of reviewing the Enterprises' resolution plans could reveal benefits from one strategy over another, or demonstrate that one strategy is preferable to others in certain circumstances. In the future, if FHFA develops a preferred resolution strategy, FHFA may amend the resolution planning rule if FHFA determines it would be appropriate to include such a strategy.

FHFA also does not believe it is necessary to include the described “mechanics” in a resolution planning rule. In general, however, FHFA observes that, because the purpose of the LLRE is to continue CBLs of the Enterprise, it would be important to establish the LLRE at the outset of the receivership process. How an Enterprise's CBLs as continued in the LLRE would be funded is an issue each Enterprise is required to address in its resolution plan, and identification of business areas that could be sold to an acquirer will emerge through an understanding of areas that are not CBLs.

Development of a Plan Template; Reduction of Burden. One commenter recommended that, in the future, FHFA provide “a template for completing a resolution plan in accordance with the regulatory requirements” as the FRB and FDIC have done for companies subject to the DFA section 165 rule. Having such a template would “allow the Enterprises to more clearly understand plan requirements,” “facilitate FHFA's review of submitted plans,” and “minimize differences in the Enterprises' plans attributable to choices related to style and presentation.”

While FHFA agrees that a template for Enterprise resolution plans could provide consistency, FHFA believes it will be better able to assess the benefit of or need for a template, as well as its form, after gaining experience with reviewing Enterprise resolution plans. FHFA also believes that such a template could be provided through guidance in the future, without the need for an amendment to the resolution planning rule. For those reasons, FHFA is not establishing a template at this time.

Some commenters identified areas where changes to the form or content of resolution plans would make developing them less burdensome and possibly provide more relevant information to FHFA. One commenter suggested adding a “materiality” qualifier to rule requirements that the Enterprises list “all affiliates and trusts within the Enterprise's organization;” identify “third-party providers with which the Enterprise has significant business connections;” and analyze “whether the failure of a third-party provider [to an Enterprise] would likely have an adverse impact on the Enterprise” ( e.g., list “material affiliates and trusts;” identify “material third-party providers;” and require analysis of third-party failures likely to have a “material” adverse impact). 39 One commenter noted that the proposed rule permitted an Enterprise to incorporate by reference material from an earlier resolution plan into a later plan, and suggested permitting the Enterprises to incorporate “information that is otherwise available to FHFA through existing supervisory mechanisms . . . such as the Enterprise Regulatory Capital Framework reports.” Finally, a commenter suggested that FHFA consider allowing the Enterprises to develop “targeted plans,” similar to those described in the DFA section 165 rule, “to increase efficiency.”

FHFA does not believe it has sufficient information at this time to add a materiality qualifier to information elements required from an Enterprise by the resolution planning rule, while still ensuring that FHFA receives sufficient information to understand and assess an Enterprise resolution plan (for example, how FHFA could quickly preserve and divide assets between the LLRE and the receivership estate). Likewise, FHFA is not inclined to expand the types of information that could be incorporated by reference at this time, due to concerns that a large amount of information incorporated by reference could make it harder to review, understand, and assess a resolution plan.

FHFA agrees that development of a resolution plan should not impose undue burden on an Enterprise or FHFA, however. To that end, FHFA is adding to the final rule a reservation of authority that will permit FHFA to tailor or adjust the scope or form of information required from the Enterprises, considering the significance of such information to FHFA when reviewing resolution plans, the appropriate level of detail of information, and reduction of burden on an Enterprise or FHFA. That provision will permit FHFA to tailor the scope of information requirements (including, for example, adding a “materiality” qualifier in the future), and to tailor the form of information required (including expanding the sources of information that can be incorporated by reference into a resolution plan). 40 Because this authority is reserved in the final rule, FHFA could provide guidance to the Enterprises making non-substantive adjustments to the scope and form of information required from them, without amending the final rule. 41

Submission of targeted plans is a slightly different issue. Requiring targeted plans instead of full resolution plans in some cycles could be viewed as tailoring or adjusting the scope or form of information required from an Enterprise, and would reduce burden, and on that basis FHFA could address targeted plans through its reservation of authority. But FHFA is also aware that such plans are provided for in the DFA section 165 rule itself. FHFA has consciously worked to incorporate in the Enterprise resolution planning rule concepts that are similar to those addressed in the DFA section 165, to inform the public and other stakeholders of, and affirm, similarities in approach and process. Because the DFA section 165 rule includes a provision for targeted plans, it may be appropriate for FHFA to include such a provision in the Enterprise resolution planning rule, as well. FHFA will continue to consider the benefits provided by targeted plans, whether such plans would be appropriate for the Enterprises, and if so, whether it would be appropriate to provide for targeted plans through a rule amendment or through use of reserved authority to tailor the scope and form of information required in Enterprise resolution plans.

Content of the Plan's Public Section. As proposed, the rule would require the Enterprises to divide their resolution plans into a public section and a confidential section, with the two sections segregated and separately identified. 42 The proposal also listed required content of the public section, modeled on the DFA section 165 rule but tailored for the Enterprises' resolution plans. 43 FHFA intends the public section to make clear the assumptions pursuant to which the Enterprise drafted its resolution plan, including the assumption that no government support will be available to prevent the failure of an Enterprise or to fund its resolution, and to indicate the extent to which potential claims by creditors and counterparties against the Enterprise might be satisfied in a resolution, and priority of those claims. By providing the public with greater transparency about the satisfaction of potential claims and the manner in which those claims might be satisfied, FHFA believes publishing the public section of each Enterprise's resolution plan will foster market discipline by making clear to investors in Enterprise-guaranteed MBS and Enterprise debt that they should no longer rely on an implicit government guarantee and should price the risk of these investments accordingly.

Commenters were supportive of a public section but had differing views on its appropriate scope. One commenter, for example, suggested that the rule “should provide a more extensive public section of the [Enterprises'] resolution plans than the large-bank resolution planning process produces.” In addition, FHFA should require “public notice of material changes to [Enterprise] operations, corporate structures, capabilities, etc. that result or will result from their resolution planning.” In contrast, another commenter remarked that the scope of the public section should “be relatively limited in order to allow more candid disclosure and discussion in the comprehensive confidential section of a resolution plan.” That commenter also requested FHFA clarify that information on specific service providers or counterparties would not be shared in the public section, as public disclosure of key third-party relationships could impact Enterprise commercial relationships.

FHFA does not plan to change the scope of the public section of an Enterprise resolution plan at this time, and is not requiring additional public notice of material changes to Enterprise operations, organization, or capability that result or could result from resolution planning. FHFA expects to work with the Enterprises when developing their initial public sections, to ensure appropriate information, with an appropriate level of detail, is made available to the public, while balancing the need for candor and to preserve confidentiality of some information. Regarding public identification of key third-party relationships specifically, FHFA notes that the rule does not require these to be disclosed.

FHFA proposed to require the Enterprises to submit their initial resolution plans roughly two years after the effective date of the final rule, and to require resolution plans to be submitted every two years thereafter. 44 FHFA also retained authority to require submission on a date different from that established though the rule, in part to avoid requiring resolution plans to be submitted in the fourth quarter, due to other end-of-year reporting obligations, if, based on the date of finalizing the rule, resolutions plans would otherwise be due then. 45

Commenters generally supported the flexibility provided by FHFA's reservation of authority to adjust submission dates. One commenter noted that the DFA section 165(d) rule provides similar flexibility but requires the FRB and FDIC to provide notice of an adjusted submission date at least 12 months in advance of the new due date. 46 That commenter suggested FHFA add a similar timing-of-notice provision to its rule. FHFA agrees that notice of an adjusted submission date should be provided reasonably in advance of the adjusted date, and adding such a notice requirement to the rule would make it more transparent. Thus, FHFA has added a rule requirement that it provide the Enterprises with 12 months' notice in advance of the new submission date.

FHFA also proposed to require the Enterprises to submit interim updates to resolution plans “within a reasonable time, as determined by FHFA.”  47 One commenter suggested FHFA provide a specific time period, such as six months, for an Enterprise to respond to any request for an interim update.

Although FHFA agrees that the Enterprises should be provided a reasonable period to prepare interim updates, FHFA does not believe the rule should state a period because what is a “reasonable” timeframe for preparation will necessarily depend upon the scope of the update requested. FHFA expects to engage with an Enterprise subject to an interim update request on a reasonable period for preparing the update, prior to establishing a submission date.

FHFA proposed to identify and provide notice to an Enterprise of any “deficiencies” in its resolution plan, which the Enterprise would then be required to address in a revised resolution plan. 48 FHFA noted that the DFA section 165 rule also includes “shortcomings” as a second, lesser, category for identified supervisory concerns, and asked if that category should be included in FHFA's rule. 49 In the DFA section 165 rule, identification of a “shortcoming” does not trigger the need to submit a revised plan, but companies are expected to address shortcomings in their next resolution plans, and a shortcoming that is not addressed may be identified as a deficiency in a later plan.

One commenter responded that a rule category for “shortcomings” could “reduce potential ambiguity regarding the level of Enterprise action necessary to respond.” If “shortcomings” are addressed in the rule, then a concern categorized as a “shortcoming” may receive more Enterprise resources (funding and staff time) to remediate, which could be helpful to Enterprise efforts to prioritize and focus appropriate attention.

FHFA found the response related to the potential value of a “shortcomings” category persuasive and so has added it to the final rule, along with a definition of “shortcoming” that is modeled on the definition of “shortcoming” in the DFA section 165 rule. Also in line with that rule, FHFA has included provisions to the effect that an unaddressed shortcoming may become a deficiency, and that it is not necessary for FHFA to identify an aspect of a plan as a shortcoming in order to identify it as a deficiency in a later plan.

FHFA proposed to provide feedback to the Enterprises within one year after receiving complete resolution plans. 50 One commenter requested that FHFA commit to providing feedback not less than 12 months before the filing date of the next plan and to providing the Enterprises “with more than half of the total plan cycle time to respond.”

FHFA intends to provide timely feedback to the Enterprises on their resolution plans and established a benchmark of not later than one year after plans have been submitted in the proposed rule. FHFA proposed to require the Enterprises to provide revised resolution plans addressing any deficiency identified by FHFA within 90 days of receiving notice of deficiency from FHFA. Other matters of concern, including identified shortcomings, may not require half of the total plan cycle for response, and committing to that timing in the final rule would likely result in the submission and review cycle longer than the biennial cycle FHFA desires. For these reasons, FHFA has not amended the rule text on timing of FHFA feedback or Enterprise responses.

Apart from feedback provided directly to an Enterprise on a specific resolution plan, commenters also addressed more general FHFA guidance on resolution planning. Commenters approved FHFA's view, stated in the preamble to the proposed rule, that resolution planning was an iterative process that would include guidance to the Enterprises. 51 One commenter encouraged FHFA to consider providing public notice of and soliciting comment on formal guidance, similar to the process the FDIC and FRB have undertaken with guidance on the DFA section 165 rule, “to engage the public and obtain input from interested stakeholders and to promote transparency in the resolution planning process.” FHFA sees the potential value of a public notice and comment process for formal guidance and will consider the appropriate process for developing guidance, including public engagement, in the future. No change to the rule is necessary in order for FHFA to develop an appropriate process for providing guidance to the Enterprises.

Several commenters addressed subjects that were beyond the scope of the proposed rule. These included comments on the need for a separate FHFA rulemaking requiring or permitting the Enterprises to issue long-term subordinated debt, commonly known as “total loss absorbing capacity” or TLAC, as a means of facilitating the rapid and orderly resolution of an Enterprise. In the proposed rule, FHFA acknowledged that if a TLAC requirement were to be imposed on the Enterprises, such a requirement would be the subject of a separate rulemaking. 52

Another commenter, generally opposed to Enterprise resolution planning, opined that instead of resolution planning FHFA should prioritize strengthening the Enterprises' affordable housing goals. Enterprise housing goals are beyond the scope of the proposed rule.

Other commenters addressed subjects that are beyond FHFA's authority, even if they related to Enterprise resolution planning. For example, several commenters remarked on the continuing need for housing finance reform, with one commenter expressing the view that the possibility of the market disruption that would result if either Enterprise were placed in receivership, regardless of how much resolution planning had taken place, simply underscored the need for comprehensive housing finance system reform legislation. Other commenters stated, or implied, that issues or concerns they identified as related to the proposed rule were actually the result of current statutory requirements. One commenter noted that while FHFA's proposal would carry out the law as written, trying to resolve an Enterprise in the manner required by current law would risk systemic disruption.

Another commenter suggested that the Financial Stability Oversight Council should designate the Enterprises as Systemically Important Financial Market Utilities (SIFMUs) pursuant to title VIII of the Dodd-Frank Act, and after that, FHFA should “reevaluate the statutory basis for oversight of the [Enterprises] in light of [DFA] section 804 and the benefits of SIFMU status.” That commenter did not elaborate on how such a designation would enhance the financial stability, resiliency, or resolvability of the Enterprises. Similar to housing finance reform, designation of the Enterprises as SIFMUs is outside of FHFA's authority.

Because these comments did not address the text of the proposed rule or subjects within the scope of the proposed rule, FHFA did not consider them in promulgating the final rule.

In response to comments, FHFA has added a provision requiring FHFA, when altering a submission date, to provide an Enterprise notice of the altered date at least 12 months before the submission is due to FHFA. This change will ensure the Enterprises have adequate time to prepare resolution plans and aligns this aspect of FHFA's resolution planning rule with a similar provision in the DFA section 165 rule.

In response to comments, FHFA has added a limited reservation of authority to tailor rule requirements on the required form or content of resolution plans, to reduce burden on the Enterprises or FHFA. With this authority FHFA could make non-substantive changes to Enterprise resolution plan form and content requirements without amending the rule itself, which would enhance the efficiency of FHFA's response to rule-imposed burdens.

In response to comments, FHFA has added a category of “shortcomings” for supervisory concerns identified when reviewing Enterprise resolution plans that do not rise to the level of “deficiencies,” but that should be addressed in the Enterprise's next resolution plan. While this rule change was not necessary to permit categorization of supervisory concerns or the supervisory requirement that such concerns be addressed, a rule category for “shortcomings” could assist an Enterprise when determining the priority and resources appropriate for its follow-up actions. In addition, these provisions align FHFA's resolution planning rule with the DFA section 165 rule.

The final rule does not contain any information collection requirement that would require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). Therefore, FHFA has not submitted any information to OMB for review.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires that a regulation that has a significant economic impact on a substantial number of small entities must include an analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605(b). FHFA has considered the impact of the final rule under the Regulatory Flexibility Act. The General Counsel of FHFA certifies that this final rule will not have a significant economic impact on a substantial number of small entities because the regulation applies only to the Enterprises, which are not small entities for purposes of the Regulatory Flexibility Act.

In accordance with the Congressional Review Act (5 U.S.C. 801 et seq. ), FHFA has determined that this final rule is a major rule and has verified this determination with the Office of Information and Regulatory Affairs of the Office of Management and Budget.

Background

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2020-0214, dated October 6, 2020 (EASA AD 2020-0214) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Dassault Aviation Model FALCON 7X airplanes.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2020-07-16 Amendment 39-19895 (85 FR 20405, April 13, 2020) (AD 2020-07-16). AD 2020-07-16 applied to certain Dassault Aviation Model FALCON 7X airplanes. The NPRM published in the Federal Register on January 15, 2021 (86 FR 3879). The NPRM was prompted by a determination that new or more restrictive airworthiness limitations are necessary. The NPRM proposed to require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations, as specified in EASA AD 2020-0214.

The FAA is issuing this AD to address reduced structural integrity and reduced control of airplanes due to the failure of system components. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The FAA has considered the comment received. One commenter indicated support for the NPRM.

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

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

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

EASA AD 2020-0214 describes new or more restrictive airworthiness limitations for airplane structures and safe life limits.

This AD also requires EASA AD 2019-0257, dated October 17, 2019, which the Director of the Federal Register approved for incorporation by reference as of May 18, 2020 (85 FR 20405, April 13, 2020).

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

The FAA estimates that this AD affects 122 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the total cost per operator for the retained actions from AD 2020-07-16 to be $7,650 (90 work-hours × $85 per work-hour).

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. The FAA estimates the total cost per operator for the new actions to be $7,650 (90 work-hours × $85 per work-hour).

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

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

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

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

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

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

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

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2019-22-10, Amendment 39-19789 (84 FR 61533, November 13, 2019) (AD 2019-22-10). AD 2019-22-10 applied to all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. The NPRM published in the Federal Register on September 8, 2020 (85 FR 55391). The NPRM was prompted by an engineering analysis of the inspection reporting results and metallurgical evaluation of the submitted frame fitting assemblies, which indicated that the initial inspection threshold for Model 737-900ER series airplanes and the repetitive inspection interval for all affected airplanes are inadequate to address the cracking in a timely manner. For certain airplanes, the NPRM proposed to reduce the compliance time for the initial inspection, and for all airplanes the NPRM proposed to reduce the repetitive inspection interval.

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

American Airlines (AA) asked that the compliance time for the reporting requirements in paragraphs (h) and (k) of the proposed AD be extended to 30 days after the date of inspection. AA stated that the cracking of the station (STA) 663.75 fitting is now a known problem, and Boeing has been receiving reports for almost a year. AA added that extending the reporting requirement to 30 days would provide relief to the operators while not decreasing safety. Hainan Airlines (HNA) recommended that the compliance time for the reporting requirement in paragraph (k) of the proposed AD be extended from 3 to 30 days after the inspection or after the effective date of the proposed AD, or an equivalent date, to alleviate the burden on operators. HNA believes that Boeing already received a large number of inspection reporting results for its root cause analysis over the past year.

Southwest Airlines (SWA) asked that the compliance time for the reporting requirement be extended to 10 days. SWA stated that the 3-day reporting requirement was developed for AD 2019-20-02, Amendment 39-19755 (84 FR 52754, October 3, 2019). SWA added that the inspection program has matured within Boeing and the Model 737-600, -700, -700C, -800, -900, and -900ER operators, and the reporting requirement of initial inspections can be relaxed from 3 to 10 days to reduce the burden on airline operations for reporting non-crack findings. Additionally, SWA noted that Boeing's airworthiness limitation (Document D626A001-9-01) has a requirement to report any crack found during these inspections to Boeing within 10 days.

AIRDO Airlines asked that the reporting requirement be changed from 3 to 7 days, since the statistical data of the inspection results for most of the aging 737NG airplanes has been reported.

Boeing stated that it has been receiving inspection reports over the past year and has accumulated substantial data, and asked that the reporting requirement be extended to 10 days.

Because of the information available from the inspection findings that have already been reported to Boeing, the FAA agrees to extend the reporting requirements in paragraphs (h) and (k) of this AD to 10 days, which would reduce the reporting burden on operators and would provide an acceptable level of safety. However, Boeing and the FAA are still relying on those inspection results both to provide repair instructions when cracks are found and to better understand the nature, cause, and extent of the cracking and ultimately develop a terminating action. The FAA, therefore, does not agree to extend the reporting requirement to 30 days.

Boeing and AIRDO Airlines asked that reporting as specified in paragraph (k) of the proposed AD not be required if an inspection report was previously submitted in accordance with AD 2019-20-02 or AD 2019-22-10.

The FAA partially agrees with the commenters' request. Although reporting per AD 2019-20-02 alone is not adequate for credit with the reporting requirement specified in paragraph (k) of this AD, reporting per AD 2019-22-10 meets the reporting requirement specified in paragraph (k) of this AD. Therefore, the FAA has revised paragraph (k) of this AD to specify that a report submitted as required in paragraph (h) of this AD is acceptable for compliance with the requirements of paragraph (k) of this AD.

One commenter asked that the reporting requirement in paragraph (k) of the proposed AD be clarified. The commenter stated that inspection report example specified in Boeing Multi-Operator Message MOM-MOM-20-0443-01B (R1), dated June 2, 2020, has columns for repetitive inspections. The commenter noted that reporting findings only for the initial inspection is required by the proposed AD, and would like conformation that reporting findings for repetitive inspections thereafter is not required if no cracks are found.

The FAA acknowledges the commenter's concern and confirms that paragraph (k) of this AD requires reporting findings for only the initial inspection, and no reporting is required for any repetitive inspection regardless of the findings.

Aviation Partners Boeing, SWA, and HNA stated that the installation of blended or split scimitar winglets per Supplemental Type Certificate (STC) ST00830SE does not affect compliance with the proposed actions.

The FAA agrees with the commenters that STC ST00830SE does not affect the accomplishment of the manufacturer's service instructions. Operators of airplanes with these winglets do not need to request a “change in product” alternative method of compliance (AMOC) approval as specified in 14 CFR 39.17. The FAA has redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD, and added paragraph (c)(2) to this AD accordingly.

AA asked that it be allowed to use the figures for the refined inspection areas in FAA Letter 782-19-14004. AA stated that the global AMOC provided in FAA Letter 782-19-14004 and Boeing Multi-Operator Message MOM-MOM-19-0536-01B, dated September 30, 2019, is referenced in Boeing Multi-Operator Message MOM-MOM-20-0443-01B (R1), dated June 2, 2020; however, it is not mentioned in the proposed AD.

The FAA partially agrees with the commenter's request. Paragraph (n)(5) of this AD states that AMOCs approved previously for AD 2019-22-10, which include the referenced global AMOC, are approved as AMOCs for the corresponding provisions of this AD. Therefore, no change to this AD is necessary regarding this issue.

Boeing and HNA requested the FAA correct a typographical error for the effective date of AD 2019-22-10, which is referenced in paragraph (h)(1) of the proposed AD as October 3, 3019, when the correct date is October 3, 2019.

The FAA agrees with the commenters' request. The FAA has corrected the effective date of AD 2019-22-10 in paragraph (h)(1) of this AD accordingly.

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

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

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

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

The FAA reviewed Boeing Multi-Operator Message MOM-MOM-20-0443-01B (R1), dated June 2, 2020. This service information specifies procedures for repetitive detailed inspections for cracking of the left- and right-hand outboard chords of the STA 663.75 frame fittings and failsafe straps around eight fasteners adjacent to the stringer S-18A straps.

This AD also requires Boeing Multi-Operator Message MOM-MOM-19-0623-01B, dated November 5, 2019, which the Director of the Federal Register approved for incorporation by reference as of November 13, 2019 (84 FR 61533, November 13, 2019).

This AD also requires Boeing Multi-Operator Message MOM-MOM-19-0536-01B, dated September 30, 2019, which the Director of the Federal Register approved for incorporation by reference as of October 3, 2019 (84 FR 52754, October 3, 2019).

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

The FAA considers this AD interim action. The inspection reports that are required by this AD will enable the manufacturer to obtain better insight into the nature, cause, and extent of the cracking, and eventually to develop final action to address the unsafe condition. Once final action has been identified, the FAA might consider further rulemaking.

The FAA estimates that this AD affects 1,911 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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

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

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

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

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

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

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

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

This final rule imposes permanent controls on four specified fentanyl-related substances, which will continue to be listed in schedule I of the Controlled Substances Act (CSA). These four fentanyl-related substances are:

• Ethyl (1-phenethylpiperidin-4-yl)(phenyl)carbamate (fentanyl carbamate);

• N -(2-fluorophenyl)- N -(1-phenethylpiperidin-4-yl)acrylamide ( ortho -fluoroacryl fentanyl);

• N -(2-fluorophenyl)- N -(1-phenethylpiperidin-4-yl)isobutyramide ( ortho -fluoroisobutyryl fentanyl); and

• N -(4-fluorophenyl)- N -(1-phenethylpiperidin-4-yl)furan-2-carboxamide ( para -fluoro furanyl fentanyl).

The schedule I listing of these four fentanyl-related substances includes their isomers, esters, ethers, salts, and salts of isomers, esters, and ethers whenever the existence of such isomers, esters, ethers, and salts is possible.

The Controlled Substances Act (CSA) provides that proceedings for the issuance, amendment, or repeal of the scheduling of any drug or other substance may be initiated by the Attorney General (delegated to the Administrator of the Drug Enforcement Administration (DEA) pursuant to 28 CFR 0.100) on his own motion. 21 U.S.C. 811(a). This action is supported by, inter alia, a recommendation from the Assistant Secretary for Health of the Department of Health and Human Services (Assistant Secretary for HHS or Assistant Secretary) and an evaluation of all relevant data by DEA. This action continues the imposition of the regulatory controls and administrative, civil, and criminal sanctions of schedule I controlled substances on any person who handles (manufactures, distributes, imports, exports, engages in research, or conducts instructional activities or chemical analysis with, or possesses) or proposes to handle fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl.

On February 6, 2018, pursuant to 21 U.S.C. 811(h)(1), DEA published a temporary scheduling order in the Federal Register (83 FR 5188) temporarily placing fentanyl-related substances, as defined in that order, in schedule I of the CSA based upon a finding that these substances pose an imminent hazard to the public safety. That temporary order was effective upon the date of publication. Pursuant to 21 U.S.C. 811(h)(2), the temporary control of fentanyl-related substances, a class of substances as defined in the order, as well as the four specific substances already covered by that order, was set to expire on February 6, 2020. However, as explained in DEA's April 10, 2020, correcting amendment (85 FR 20155), Congress overrode and extended that expiration date until May 6, 2021, by enacting the Temporary Reauthorization and Study of the Emergency Scheduling of Fentanyl Analogues Act (Pub. L. 116-114, sec. 2, 134 Stat. 103) (Feb. 6, 2020).

On March 18, 2021 (86 FR 14707), DEA published a notice of proposed rulemaking (NPRM) to permanently control four specific fentanyl-related substances: fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl in schedule I of the CSA. Specifically, DEA proposed to add these substances to the opiates list under 21 CFR 1308.11(b), and assign paragraph numbers 39, 62, 66, and 73 under paragraph (b) to Fentanyl carbamate, ortho -Fluoroacryl fentanyl, ortho -Fluoro isobutyryl fentanyl, and para -Fluoro furanyl fentanyl, respectively. Since the publication of this NPRM, DEA issued a correcting amendment which updated the numbering of all listed opiates in paragraph (b). See 86 FR 16667, March 31, 2021. As a result, this final rule assigns different paragraph numbers under paragraph (b), than originally proposed, to three of the four fentanyl-related substances (though the numbering for Fentanyl carbamate remains the same).

On March 2, 2021, HHS provided DEA with a scientific and medical evaluation and scheduling recommendation, prepared by the Food and Drug Administration (FDA), for fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl and their salts. After considering the eight factors in 21 U.S.C. 811(c), each substance's abuse potential, lack of legitimate medical use in the United States, and lack of accepted safety for use under medical supervision pursuant to 21 U.S.C. 812(b), the Assistant Secretary recommended that these substances be placed in schedule I of the CSA. In response, DEA conducted its own eight-factor analysis of fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl. Please note that both the DEA and HHS 8-Factor analyses and the Assistant Secretary's March 2, 2021, letter are available in their entirety under the tab “Supporting Documents” of the public docket for this action at http://www.regulations.gov under Docket Number “DEA-806.”

After review of the available data including the scientific and medical evaluation and the scheduling recommendations from HHS, DEA published an NPRM entitled “Schedules of Controlled Substances: Placement of Four Specific Fentanyl-Related Substances in Schedule I.” 86 FR 14707, March 18, 2021. The NPRM provided an opportunity for interested persons to file a request for hearing in accordance with DEA regulations on or before April 19, 2021. No requests for such a hearing were received by DEA. The NPRM also provided an opportunity for interested persons to submit comments on the proposed rule on or before April 19, 2021.

DEA received 35 comments on the proposed rule to control fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl in schedule 1 of the CSA. Submissions were from individual or anonymous commenters. Twenty-one commenters provided support for the rule. Three other commenters supported the proposal, but it is not clear whether they were referring to these specific four fentanyl-related substances or the class of fentanyl-related substances that was the subject of DEA's February 6, 2018, temporary scheduling order and that was extended until May 6, 2021 by legislation (Pub. L. 116-114, Sec. 2). Eleven other commenters did not state a position on the rule. Rather, these 11 commenters expressed adverse health concerns, including mortality associated with fentanyl and fentanyl-related substances, and were mostly pleas to help save lives from grieving parents who had lost a child due to an “accidental overdose of fentanyl” or “fentanyl poisoning.” These 11 comments are not germane to this rulemaking. Therefore, DEA will not respond to these comments.

Comment. Twenty-one commenters supported controlling fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl as schedule I controlled substances. These commenters indicated that permanent scheduling of these substances helps deter illicit manufacturing and trafficking of these substances. Further, commenters noted safety concerns with fentanyl, such as deaths, overdoses, addiction, and the involvement of fentanyl and fentanyl-related substances in the current public health crisis associated with the opioid abuse epidemic. Most commenters indicated that DEA needs to impose the permanent control on these substances to help curb addiction and opioid overdose. In addition to supporting control of these four substances, a commenter, who is a member of grief groups for parents who have lost a child due to an accidental overdose (particular drugs or substances not specified by the commenter), noted the fentanyl epidemic and growth of these groups. Specifically, this commenter stated that members have grown from about 4,000 to 12,000 during the “pandemic”—which DEA interprets to mean, in context, the Coronavirus Disease 2019 (COVID-19) pandemic)—with no sign of decline.

DEA Response. DEA appreciates the support for this rulemaking.

Comment. Three commenters supported the proposal, but it is not clear whether they were referring to these specific four fentanyl-related substances or the class of fentanyl-related substances. Two of these commenters mentioned the dangers to health and safety from fentanyl, the illicit trafficking of fentanyl and fentanyl-related substances, and their desires that the temporary ban on the class of fentanyl-related substances—which they noted expires in May 2021—be made permanent. One of the two specifically requested that Congress “pass the legislation” to extend the temporary ban, and the other requested DEA's support in making the proposed temporary ban permanent. The third commenter did not mention the expiring legislation, and simply requested that efforts be continued to maintain the ban on fentanyl and fentanyl-related substances.

DEA Response. DEA agrees with the commenters on the importance that this temporary ban be extended or made permanent. However, as one of the three commenters correctly notes, for the scheduling of fentanyl-related substances to be made permanent by legislative action, Congress (rather than DEA) would have to take such action.

After consideration of the relevant matter presented through public comments, the scientific and medical evaluation and accompanying recommendation of HHS, and after its own eight-factor evaluation, DEA finds that these facts and all other relevant data constitute substantial evidence of the potential for abuse of fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl. DEA is therefore permanently scheduling these four specific fentanyl-related substances as controlled substances under the CSA.

The CSA establishes five schedules of controlled substances known as schedules I, II, III, IV, and V. The CSA also outlines the findings required to place a drug or other substance in any particular schedule. 21 U.S.C. 812(b). After consideration of the analysis and recommendation of the Assistant Secretary and review of all other available data, the Acting Administrator, pursuant to 21 U.S.C. 811(a) and 812(b)(1), finds that:

(1) Fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl have a high potential for abuse that is comparable to other schedule I substances such as acetyl fentanyl and furanyl fentanyl.

(2) Fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl have no currently accepted medical use in treatment in the United States  1 ; and

(3) There is a lack of accepted safety for use of fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl under medical supervision. Based on these findings, the Acting Administrator concludes that fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl, including their isomers, esters, ethers, salts, and salts of isomers, esters, and ethers whenever the existence of such isomers, esters, ethers, and salts is possible, warrant continued control in schedule I of the CSA. 21 U.S.C. 812(b)(1).

Fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl will continue  2 to be subject to the CSA's schedule I regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, dispensing, importation, exportation, research, and conduct of instructional activities involving the handling of controlled substances, including the following:

In accordance with 21 U.S.C. 811(a), this final scheduling action is subject to formal rulemaking procedures done “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order (E.O.) 12866 and the principles reaffirmed in E.O. 13563.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of E.O. 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government.

This rule does not have tribal implications warranting the application of E.O. 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The Acting Administrator, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-602, has reviewed this rule and by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities. On February 6, 2018, DEA published an order to temporarily place fentanyl-related substances, as defined in the order, in schedule I of the CSA pursuant to the temporary scheduling provisions of 21 U.S.C. 811(h). DEA estimates that all entities handling or planning to handle fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl have already established and implemented the systems and processes required to handle these substances which meet the definition of fentanyl-related substances.

There are currently 57 registrations authorized to handle the fentanyl-related substances as a class, which include fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl, as well as a number of registered analytical labs that are authorized to handle schedule I controlled substances generally. These 57 registrations represent 51 entities, of which eight are small entities. Therefore, DEA estimates eight small entities are affected by this final rule.

A review of the 57 registrations indicates that all entities that currently handle fentanyl-related substances, including fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl, also handle other schedule I controlled substances, and have established and implemented (or maintain) the systems and processes required to handle fentanyl carbamate, ortho -fluoroacryl fentanyl, ortho -fluoro isobutyryl fentanyl, and para -fluoro furanyl fentanyl. Therefore, DEA anticipates that this final rule will impose minimal or no economic impact on any affected entities, and thus will not have a significant economic impact on any of the eight affected small entities. Therefore, DEA has concluded that this rule will not have a significant effect on a substantial number of small entities.

In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501 et seq., DEA has determined and certifies that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year. . . .” Therefore, neither a Small Government Agency Plan nor any other action is required under UMRA of 1995.

This rule is not a “major rule” as defined in the Congressional Review Act (CRA), 5 U.S.C. 804. However, DEA is submitting the required reports to the Government Accountability Office, the House, and the Senate under the CRA.

This action does not impose a new collection of information under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

As indicated above, this rule finalizes the schedule I control status of four substances that has already been in effect for over three years. These four substances all fall within the definition of fentanyl-related substances set forth in the February 6, 2018, temporary scheduling order (83 FR 5188). Through the Temporary Reauthorization and Study of the Emergency Scheduling of Fentanyl Analogues Act, which became law on February 6, 2020, Congress extended the temporary control of fentanyl-related substances until May 6, 2021. The February 2018 order was effective on the date of publication, and was based on findings by the then-Acting Administrator that the temporary scheduling of the fentanyl-related substances was necessary to avoid an imminent hazard to the public safety pursuant to 21 U.S.C. 811(h)(1). Because this rule finalizes the control status of four substances that has already been in effect for over three years, it does not alter the legal obligations of any person who handles these substances. Rather, it merely makes permanent the current scheduling status and corresponding legal obligations. Therefore, DEA is making the rule effective on the date of publication in the Federal Register , as any delay in the effective date is unnecessary and would be contrary to the public interest.

For the reasons set out above, DEA amends 21 CFR part 1308 as follows:

I. Background and Legal Authority

The OCSLA, at 43 U.S.C. 1350(b)(1), directs the Secretary of the Interior (Secretary) to adjust the OCSLA maximum daily civil penalty amount at least once every three years to reflect any increase in the Consumer Price Index (CPI) to account for inflation. On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (FCPIA of 2015). The FCPIA of 2015 required Federal agencies to adjust the level of civil monetary penalties found in their regulations with an initial “catch-up” adjustment through rulemaking, if warranted, and then to make subsequent annual adjustments for inflation. The purpose of these adjustments is to maintain the deterrent effect of civil penalties and to further the policy goals of the underlying statutes. Agencies were required to publish the first annual inflation adjustments in the Federal Register by no later than January 15, 2017 and must publish recurring annual inflation adjustments by no later than January 15 of each subsequent year.

BSEE last updated the maximum daily civil penalty amounts in BSEE's regulations for OCSLA violations by a final rule published and effective on March 4, 2020. ( See 85 FR 12733). Consistent with OMB guidance, BSEE's final rule implemented the inflation adjustments required by the FCPIA of 2015 through October 2019.

The OMB Memorandum M-21-10 ( Implementation of Penalty Inflation Adjustments for 2021, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 ; available at https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf ) explains agency responsibilities for: Identifying applicable penalties and performing the annual adjustment; publishing revisions to regulations to implement the adjustment in the Federal Register ; applying adjusted penalty levels; and performing agency oversight of inflation adjustments.

BSEE is promulgating this 2021 inflation adjustment for the OCSLA maximum daily civil penalties as a final rule pursuant to the provisions of the FCPIA of 2015 and OMB's guidance. A proposed rule is not required because the FCPIA of 2015 expressly exempted the annual inflation adjustments implemented pursuant to the FCPIA of 2015 from the pre-promulgation notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. 553 et seq. (the APA), allowing those adjustments to be published directly as final rules. Specifically, the FCPIA of 2015 states that agencies shall adjust civil monetary penalties “notwithstanding Section 553 of the Administrative Procedure Act.” (FCPIA of 2015 at § 4(b)(2)). This interpretation of the FCPIA of 2015 is confirmed by OMB Memorandum M-21-10 at 3 (“This means that the public procedure the APA generally requires—notice, an opportunity for comment, and a delay in effective date—is not required for agencies to issue regulations implementing the annual adjustment.”).

In accordance with the FCPIA of 2015 and the guidance provided in OMB Memorandum M-21-10, BSEE has calculated the necessary inflation adjustment for the maximum daily civil monetary penalty amount in 30 CFR 250.1403 for violations of OCSLA. The previous OCSLA civil penalty inflation adjustment accounted for inflation through October 2019. The required annual civil penalty inflation adjustment promulgated through this rule accounts for inflation through October 2020.

Annual inflation adjustments are based on the percent change between the Consumer Price Index for all Urban Consumers (CPI-U) for the October preceding the date of the adjustment, and the prior year's October CPI-U. Consistent with the guidance in OMB Memorandum M-21-10, BSEE divided the October 2020 CPI-U by the October 2019 CPI-U to calculate the multiplying factor. In this case, the October 2020 CPI-U (260.388) divided by the October 2019 CPI-U (257.346) is 1.01182. OMB Memorandum M-21-10 confirms that this is the proper multiplier. (OMB Memorandum M-21-10 at 1, n.4).

The FCPIA of 2015 requires that BSEE adjust the OCSLA maximum daily civil penalty amount for inflation using the applicable 2021 multiplier (1.01182). Accordingly, BSEE multiplied the existing OCSLA maximum daily civil penalty amount ($45,463) by 1.01182 to arrive at the new maximum daily civil penalty amount ($46,000.37). The FCPIA of 2015 requires that the resulting amount be rounded to the nearest $1.00 at the end of the calculation process. Accordingly, the adjusted OCSLA maximum daily civil penalty for 2021 is $46,000.

The adjusted penalty levels take effect immediately upon publication of this rule. Pursuant to the FCPIA of 2015, the increase in the OCSLA maximum daily civil penalty amount applies to civil penalties assessed after the date the increase takes effect, even when the associated violation(s) predates such increase. Consistent with the provisions of OCSLA and the FCPIA of 2015, this rule adjusts the following maximum civil monetary penalty per day per violation as follows:

Executive Order (E.O.) 12866 provides that the OMB Office of Information and Regulatory Affairs (OIRA) will review all significant rules. OIRA has determined that this rule is not significant. ( See OMB Memorandum M-21-10 at 3).

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

E.O. 13771 of January 30, 2017, directs Federal agencies to reduce the regulatory burden on regulated entities and control regulatory costs. E.O. 13771, however, applies only to significant regulatory actions, as defined in Section 3(f) of E.O. 12866. OIRA has determined that agency regulations implementing the annual adjustment required by the FCPIA of 2015 are not significant regulatory actions under E.O. 12866, provided they are consistent with OMB Memorandum M-21-10. ( See OMB Memorandum M-21-10 at 3). Thus, E.O. 13771 does not apply to this rulemaking.

The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. ( See 5 U.S.C. 603(a) and 604(a)). The FCPIA of 2015 expressly exempts these annual inflation adjustments from the requirement to publish a proposed rule for notice and comment. ( See FCPIA of 2015 at § 4(b)(2); OMB Memorandum M-21-10 at 3). Thus, the RFA does not apply to this rulemaking.

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

(1) Does not have an annual effect on the economy of $100 million or more;

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

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

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

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

Under the criteria in section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. To the extent that State and local governments have a role in Outer Continental Shelf activities, this rule will not affect that role. Therefore, a federalism summary impact statement is not required.

This rule complies with the requirements of E.O. 12988. Specifically, this rule:

(1) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(2) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The Department of the Interior strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department of the Interior's consultation policy, under Departmental Manual Part 512 Chapters 4 and 5, and under the criteria in E.O. 13175. We have determined that it has no substantial direct effects on Federally-recognized Indian tribes or Alaska Native Claims Settlement Act (ANCSA) Corporations, and that consultation under the Department of the Interior's tribal and ANCSA consultation policies is not required.

This rule does not contain information collection requirements, and a submission to the OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) is not required.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because, as a regulation of an administrative nature, this rule is covered by a categorical exclusion ( see 43 CFR 46.210(i)). BSEE also determined that the rule does not implicate any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA. Therefore, a detailed statement under NEPA is not required.

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

For the reasons given in the preamble, the BSEE amends Title 30, Chapter II, Subchapter B, Part 250 of the Code of Federal Regulations as follows.

The Coast Guard will enforce the established special local regulation in 33 CFR 100.922 for the Annual Les Cheneaux Island Antique Wooden Boat Show in Hessel, MI from 7 a.m. to 7 p.m. on August 14, 2021.

This action is being taken to protect the safety of life and property on navigable waters prior to, during, and immediately after the boat show. Our regulation for marine events within the Ninth Coast Guard District, § 100.922, specifies the location of the regulated area for the Annual Les Cheneaux Islands Antique Wooden Boat Show which encompasses the waters of Marquette Bay, Hessel, MI. During the enforcement period, no vessel may transit this regulated area without approval from the Captain of the Port Sault Sainte Marie or a designated representative. Vessels and persons granted permission to enter the special local regulated area shall obey all lawful orders or directions of the Captain of the Port Sault Sainte Marie, or an on-scene representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

This notice of enforcement is issued under authority of 33 CFR 100.922 and 5 U.S.C. 552(a). In addition to this notification publishing in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via Broadcast Notice to Mariners.

On November 19, 2020, the Coast Guard published a Notice of Proposed Rulemaking entitled Drawbridge Operation Regulation; Hackensack River, Jersey City, NJ in the Federal Register (85 FR 73667). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this regulatory change. During the comment period that ended on January 19, 2021, we received no comments in response to the NPRM.

The Coast Guard is issuing this rule under the authority of 33 U.S.C. 499.

The new Route 7 Bridge at mile 3.1 over the Hackensack River at Jersey City, New Jersey, is currently under construction and will have a vertical clearance of 70 feet at mean high water in the closed position and 135 feet at mean high water in the open position. Horizontal clearance is approximately 158 feet. The existing Route 7 Bridge over the Hackensack River has a vertical clearance of 35 feet at mean high water in the closed position and 135 feet at mean high water in the open position. Horizontal clearance is approximately 158 feet.

The waterway users include recreational and commercial vessels including tugboat/barge combinations.

The existing regulation, 33 CFR 117.723(k) published under Federal Register 85 FR 8747, effective April 19, 2020, requires the existing bridge open on signal; except that, from 11 p.m. to 7 a.m., the draw shall open on signal if at least two hours advance notice is given by calling the number posted at the bridge.

In August of 2020, the owner of the bridge, New Jersey Department of Transportation, requested a change to the drawbridge operation regulations to the new bridge. The owner anticipates a lower volume of bridge openings given that the new bridge's vertical clearance in the closed position will be double the clearance of the existing bridge.

Under this rule, the new draw would open on signal when at least four hours advance notice is given by calling the number posted at the bridge. This rule change will allow for more efficient and economic operation of the bridge while meeting the reasonable needs of navigation. The Coast Guard is proposing this rulemaking under authority in 33 U.S.C. 499.

The bridge logs show that the Route 7 Bridge had 16 annual openings in 2018, 10 annual openings in 2019, and 6 annual openings in 2020 (through 6/19/2020).

The Coast Guard provided 60 days for comment regarding this rule and no comments in the docket were received.

There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

The final rule provides that the Route 7 Bridge shall open on signal when at least four hours advance notice is given by calling the number posted at the bridge. It is the Coast Guard's opinion that the rule meets the reasonable needs of marine traffic.

Both existing and new bridges will be operated under the current operating schedule until the existing bridge is demolished/removed at which point this final rule will take effect.

The Coast Guard developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders, and we discuss First Amendment rights of protesters.

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

The Coast Guard believes this rule is not a significant regulatory action. The bridge will still open for all vessel traffic after a four-hour advance notice is given. We believe that this change to the drawbridge operation regulations at 33 CFR 117.723 will meet the reasonable needs of navigation.

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

The new Route 7 Bridge provides 70 feet of vertical clearance at mean high water that should accommodate most of the present vessel traffic, except for deep draft vessels. The new bridge will open on signal for any vessel when at least four hours advance notice is given by calling the number posted at the bridge. While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , section.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.

Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

The Coast Guard will enforce the safety zones in 33 CFR 165.918 as per the time, dates, and locations in Table 1.

This action is being taken to provide for the safety of life on navigable waterways during the fireworks displays. The regulations for safety zones within the Captain of the Port Sault Sainte Marie Zone, § 165.918, apply for these fireworks displays.

This notice of enforcement is issued under authority of 33 CFR 165.918 and 5 U.S.C. 552 (a). In addition to this notice of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Sault Sainte Marie determines that the safety zone need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. We must establish this regulation by May 3, 2021 and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule would be contrary to the public interest because immediate action is necessary to protect persons and property from the dangers associated with the marine event.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the Tanners Creek Wire Crossing, occurring from May 3, 2021 through May 8, 2021 from 9 a.m. until 5 p.m. daily, or until operations are complete, will be a safety concern for all navigable waters on the Ohio River, extending the entire width of the river, from mile marker (MM) 490.0 to MM 492.0. The purpose of this rule is to ensure the safety of life and vessels on these navigable waters before, during, and after the scheduled event.

This rule establishes a safety zone on May 3, 2021 through May 8, 2021 from 9 a.m. until 5 p.m. daily, or until operations are complete on all navigable waters of the Ohio River, extending the entire width of the river, from MM 490 to MM 492. Transit into and through this area is prohibited during periods of enforcement on these dates and times. The periods of enforcement will be prior to, during, and 30 minutes after any vessel movement and wire transfer operations at Tanners Creek. The Coast Guard was informed that the operations will take place between 9 a.m. through 5 p.m. Enforcement of the regulated area will occur while the wire crossing operations are being conducted. A safety vessel will coordinate all vessel traffic during the enforced times of this safety zone. The duration of the safety zone is intended to ensure the safety of life and vessels on these navigable waters before, during, and after the scheduled event. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of Sector Ohio Valley. They may be contacted on VHF-FM Channel 16 or by telephone at1-800-253-7465. Persons and vessels permitted to enter this regulated area must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. This safety zone will be in place on a 2-mile stretch of the Ohio River from May 3, 2021 though May 8, 2021 from 9 a.m. until 5 p.m. daily, or until operations are complete. The Coast Guard will issue written Local Notice to Mariners and Broadcast Notice to Mariners via VHF-FM marine channel 16 about the temporary safety zone, and this rule also allows vessels to seek permission from the COTP or a designated representative to enter the area.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V. A. above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone lasting eight hours for six days and extending for two miles that prohibits entry on all navigable waters of the Ohio River from MM 490.0 to MM 492.0. It is categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES .

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

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

The Coast Guard will enforce the safety zones in 33 CFR 165.918 as per the time, dates, and locations in Table 1.

This action is being taken to provide for the safety of life on navigable waterways during the fireworks displays. The regulations for safety zones within the Captain of the Port Sault Sainte Marie Zone, § 165.918, apply for these fireworks displays.

This notice of enforcement is issued under authority of 33 CFR 165.918 and 5 U.S.C. 552 (a). In addition to this notice of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Sault Sainte Marie determines that the safety zone need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

This is a summary of the Commission's Report and Order in WT Docket No. 20-3, FCC 21-28, adopted on February 16, 2021 and released on February 22, 2021. The full text of this document is available for public inspection online at https://www.fcc.gov/edocs . Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format, etc.), and reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) may be requested by sending an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

The Office of Federal Register (OFR) regulations require that agencies must discuss in the preamble of a final rule the ways that the materials incorporated by reference are reasonably available to interested parties and that interested parties can obtain the materials. In addition, OFR regulations require that the preamble of a final rule summarize the material incorporated by reference. This discussion summarizes and indicates the availability of the 2019 ANSI Standard and the Volume Control Standard.

ANSI C63.19-2019 (2019 ANSI Standard) is officially known as: Accredited Standards Committee C63®—Electromagnetic Compatibility, American National Standard Methods of Measurement of Compatibility Between Wireless Communications Devices and Hearing Aids (approved August 19, 2019). It is an industry approved technical standard for determining hearing aid compatibility between wireless handsets and hearing aids. The standard is available for inspection at the Federal Communications Commission, 45 L Street NE, Reference Information Center, Room 1.150, Washington, DC 20554, (202) 418-0270. The standard is also available for purchase from IEEE Operations Center, 445 Hoes Lane, Piscataway, NJ 08854-4141, by calling (732) 981-0060, or going to https://standards.ieee.org/ .

ANSI/TIA-5050-2018 (Volume Control Standard) is officially known as: Telecommunications—Communications Products—Receive Volume Control Requirements for Wireless (Mobile) Devices (approved January 17, 2018). It is an industry approved technical standard used to evaluate the volume control capabilities of wireless handsets. The standard is available for inspection at the Federal Communications Commission, 45 L Street NE, Reference Information Center, Room 1.150, Washington, DC 20554, (202) 418-0270. The standard is also available for purchase from Telecommunications Industry Association, 1320 North Courthouse Road, Suite 200, Arlington, VA 22201, by calling (703) 907-7700, or by visiting https://global.ihs.com/csf_home.cfm ?&csf=TIA.

The Report and Order also references two additional standards: ANSI C63.19-2007 and ANSI C63.19-2011. Like the 2019 ANSI Standard, these standards are industry approved technical standards for determining hearing aid compatibility between wireless handsets and hearing aids. These two standards were previously incorporated by reference into the Commission's rules and that use is unchanged. They are available from the IEEE at IEEE Operations Center, 445 Hoes Lane, Piscataway, NJ 08854-4141, by calling (732) 981-0060, or going to https://standards.ieee.org/ .

The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in this Report and Order .

The requirements in revised § 20.19(f), (h)(1), and (i) constitute new or modified collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. They will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new information collection requirements contained in this proceeding. This document will be submitted to OMB for review under section 3507(d) of the PRA. In addition, the Commission notes that, pursuant to the Small Business Paperwork Relief Act of 2002, it previously sought, but did not receive, specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes more businesses with fewer than 25 employees, in the FRFA.

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

1. The Commission updates its wireless hearing aid compatibility requirements to ensure that tens of millions of Americans with hearing loss have access to the same types of technologically advanced handsets as those without hearing loss.

2. Recently, a new ANSI standard (the 2019 ANSI Standard) was developed through a voluntary, consensus-driven approach. The new standard requires that the handset meet volume control specifications, applies to a wider range of frequency bands and technologies, replaces the current rating system with a more consumer-friendly approach, and harmonizes testing methodologies with international standards.

3. The Commission's rules require both device manufacturers and service providers to offer consumers a minimum number of wireless handset models that meet specified technical standards for compatibility with different types of hearing aids through acoustic coupling and inductive coupling. Manufacturers and service providers must offer a minimum number of compliant handset models for each “air interface” based on the total number of handset models that they offer. The Commission's rules currently require handset manufacturers to ensure that at least 66% of their handset models are hearing aid-compatible, with that minimum increasing to 85% on October 21, 2021. Likewise, national wireless carriers are currently required to ensure that at least 66% of their handset models are hearing aid-compatible, with that minimum increasing to 85% on April 4, 2022. These requirements for manufacturers and service providers are subject to a de minimis exception. The Commission has stated that it will decide by 2024 whether to require that 100% of handsets be hearing aid-compatible.

4. The Commission's rules also include a volume control requirement, adopted in October 2017, which is designed to accommodate all people with hearing loss, including those who do not use hearing aids. Under the current rules, beginning on March 1, 2021, manufacturers must ensure that all wireless handset models newly submitted for hearing aid compatibility certification are “equipped with volume control that produces sound levels suitable for persons with hearing loss (including persons with and without hearing aids).”

5. The Commission's hearing aid compatibility rules currently incorporate a 2011 version of ANSI's hearing aid compatibility standard (2011 ANSI Standard) to determine if a handset is hearing aid-compatible. In September 2019, the Accredited Standards Committee C63®-Electromagnetic Compatibility (ANSI Committee) asked the Commission to incorporate the 2019 ANSI Standard into the Commission's wireless hearing aid compatibility rules. The 2019 ANSI Standard makes several significant revisions in the processes for determining the compatibility between wireless handsets and hearing aids. Specifically, the 2019 ANSI Standard requires that handsets meet volume control specifications in order to be considered hearing aid-compatible under that standard. In order to pass the volume control requirement, a handset must meet a two-part test. The first part of the requirement tests for conversational gain with a hearing aid, and the second part of the requirement tests for conversational gain without a hearing aid. To pass the first part of the requirement, a handset must have at least 6 dB of conversational gain with a hearing aid, and to pass the second part of the requirement, a handset must have at least 18 dB of conversational gain without a hearing aid. In addition, the 2019 ANSI Standard addresses additional technologies and devices operating in a wider frequency range of 614 MHz to 6 GHz, which now includes the 614-698 MHz band made available for wireless use by the repacking of television broadcast operations. Further, the 2019 ANSI Standard replaces the present numerical M/T rating system with a set of requirements and thresholds that determines compatibility. The 2019 ANSI Standard also reduces the testing burden on handset manufacturers by allowing them to perform certain simple tests first to determine compatibility with acoustic coupling (which may eliminate the need to perform more time-consuming tests); the new standard also reduces the testing burden on hearing aid manufacturers by conforming testing protocols for hearing aids with international standards. The ANSI Committee asserts that, as a result of these changes, the new standard will improve the experience of hearing aid users, including those who use cochlear implants, while at the same time reducing testing burdens.

6. In January 2020 (85 FR 13119, March 6, 2020), the Commission released a notice of proposed rulemaking ( NPRM or 2020 ANSI Standard NPRM ) proposing to adopt the 2019 ANSI Standard as the exclusive testing standard for determining the compatibility of wireless handsets and a two-year transition from the current 2011 ANSI Standard. The NPRM also sought comment on whether to continue to maintain the exemption from hearing aid compatibility requirements for those wireless handsets operating with frequencies above 6 GHz. In addition, the Commission proposed to extend the current deadline for implementing volume control requirements so that it aligns with the date that the 2019 ANSI Standard becomes the exclusive testing standard for hearing aid compatibility. The NPRM also sought comment on updating the rules to make changes related to implementing the 2019 ANSI Standard, particularly with respect to labeling and disclosure and to remove unnecessary or superseded rule provisions. The NPRM generally sought comment on whether these proposals would improve the experience of hearing aid users as well as reduce regulatory burdens for handset manufacturers and service providers.

7. In this Report and Order, the Commission incorporates the 2019 ANSI Standard into its rules and makes it the exclusive testing standard for determining hearing aid compatibility after a two-year transition. In addition, the Commission extends the current volume control deadline so that it coincides with the start of the exclusive use of the 2019 ANSI Standard. Further, the Commission makes corresponding implementation changes to its rules, and refines its hearing aid compatibility labeling requirements. Finally, the Commission removes past transition dates and benchmarks and make other technical changes to the rules.

8. As proposed in the NPRM, the Commission adopts the 2019 ANSI Standard and the ANSI/TIA Volume Control Standard and incorporates the new standards into the Commission's hearing aid compatibility rules by reference as the exclusive technical standards for evaluating the hearing aid compatibility of wireless handsets and volume control after a two-year transition from the 2011 ANSI Standard. The Commission has long recognized that its hearing aid compatibility rules should evolve as revisions to the ANSI standards are developed over time. The Commission has encouraged the ANSI Committee to work with relevant stakeholders to review hearing aid compatibility issues periodically and to determine whether improvements to the standard are warranted. The Commission appreciates the work the ANSI Committee has undertaken with respect to developing the 2019 ANSI Standard, and the Commission incorporates the new standard into its rules by concluding, pursuant to section 710 of the Communications Act, that compliance is necessary to ensure reasonable access to telephone service by persons with impaired hearing.

9. The new standard improves the measurement of potential hearing aid interference and, as a result, improves the listening experience for those who use hearing aids. Further, for the first time, the standard incorporates a volume control requirement that will provide significant benefits to persons with hearing loss, whether or not they use hearing aids. In addition, the new standard covers new technologies and devices and expands the covered frequency range from the current frequency range of 698 MHz to 6 GHz to a new frequency range from 614 MHz to 6 GHz. This expanded frequency range means that handsets operating in the frequencies assigned in the Commission's Broadcast Incentive Auction can also be certified as hearing aid-compatible over those frequencies. The new standard also eliminates the current numerical M/T rating system, which hearing aid users found to be confusing, and replaces it with a more consumer-friendly system. Under this new system, a handset certified as hearing aid-compatible is considered to operate at the equivalent of the M3/T3 levels or better even though the new standard does not use the category rating system. The ANSI committee eliminated the category rating system because hearing aid users found it to be confusing. Under the new standard, a handset is certified as hearing aid-compatible without an assigned rating. Further, the new standard reduces testing burdens for wireless handset manufacturers by allowing certain simple tests be done first to determine compatibility with acoustic coupling, while maintaining an exemption from radiofrequency testing for low power air interfaces. Finally, the new standard also harmonizes with other international hearing aid standards, which helps reduce regulatory burdens for hearing aid manufacturers. Based on these enhancements to the ANSI standard, the Commission finds that incorporating the 2019 ANSI Standard into its rules is in the public interest.

10. The Commission notes that commenters broadly support incorporation of the new standard into its rules. Consumer organizations strongly support implementation of the 2019 ANSI Standard. Industry organizations report that the new standard will encourage competition and advance the public interest and applaud the Commission for ensuring the availability of wireless handsets that will meet the needs of individuals with hearing loss. Industry commenters agree that adopting the new standard will simplify testing and reporting requirements, which will benefit both consumers and manufacturers.

11. Schmid and Partner Engineering AG (Schmid), a manufacturer of hearing aid compatibility testing equipment, raises technical concerns about certain testing requirements for measuring compatibility with acoustic and inductive coupling under the new standard. Specifically, regarding testing of acoustic coupling, Schmid argues that the 2019 ANSI Standard should not permit the use of D-Dot probes for measuring radiofrequency emissions because such probes will lead to inconsistent results, as compared to the use of isotropic probes manufactured by Schmid. With regard to the testing of inductive coupling, Schmid argues that the desired and ambient (noise) undesired T-Coil magnetic field limits set forth in the 2019 ANSI Standard, which Schmid alleges are more restrictive than the limits set forth in the 2011 ANSI Standard, could lead to unclear testing results and increased testing burden and costs.

12. As an initial matter, the Commission notes that both areas of concern were discussed and addressed in the ANSI comment resolution process to the satisfaction of the ANSI Committee, and, thereafter, the committee voted to adopt the new standard. The 2019 ANSI Standard, as with ANSI standards generally, was developed through a voluntary, consensus-driven approach and is broadly supported by both industry and consumer groups.

13. Regarding Schmid's specific concern that allowing D-Dot probes to test acoustic coupling can create inconsistent results, the Commission agrees with commenters that any such uncertainty does not make the use of D-Dot probes unsuitable for testing. All measurements are subject to a certain degree of uncertainty, and labs can factor such uncertainties into their calculations to assess the overall reliability of test results. PCTEST explains that some risks associated with using D-Dot probes were mitigated through revisions to the standard. Moreover, the use of D-Dot probes for testing of acoustic coupling provides certain benefits relative to the use of isotropic probes; in particular, the D-Dot probe is less expensive and more widely available. Further, the Commission notes that the use of D-Dot probes for testing of acoustic coupling is optional under the 2019 ANSI standard, which means that labs can use isotropic probes if they encounter an issue with D-Dot probes. Accordingly, the Commission disagrees with Schmid that the D-Dot probe is unacceptable or that use of isotropic probes should necessarily be preferred.

14. Regarding Schmid's concern about the standard's T-Coil magnetic field limits for testing of inductive coupling, the Commission agrees with commenters that the standard's T-Coil requirements are technically sound as a result of years of study and collaboration. As PCTEST explains, testing during the development of the standard established that the standard's limits are both feasible for manufacturers and tolerable for hearing aid users. Given that the record demonstrates careful consideration of these limits during the ANSI process, the Commission sees no reason for concern with adopting these limits, as part of the 2019 ANSI Standard, into its rules.

15. Finally, with respect to Schmid's concerns about unclear test results and testing burdens and costs, the Commission notes that the new standard was developed over a period of years, subject to five rounds of review, and approved and published by the ANSI Committee in August 2019. The ANSI Committee considers the new standard “a significant advancement” over prior versions and notes that a “continuing goal [is] to keep the testing burden as low as possible and still meet the needs of the standard and, more importantly, of hearing aid wearers.” Julstrom adds that “the requirements laid out in this revision are the result of years of study and collaboration and have been thoroughly vetted.” No other commenter raises concerns about unclear test results or increased burdens and costs. Given this proceeding's record and the years of study and collaboration that went into developing the new standard, the Commission rejects Schmid's concerns. The Commission also notes that, if testing labs request clarification of testing procedures, the Commission's Office of Engineering and Technology (OET) can provide guidance through the issuance of Knowledge Database (KDB) publications.

16. Frequencies Above 6 GHz. Recognizing that the 2019 ANSI Standard, like the 2011 ANSI Standard, does not address frequencies above 6 GHz, the NPRM sought comment on whether hearing aid compatibility testing was needed in higher frequencies. Higher millimeter wave frequencies were not commonly used in mobile handsets at the time that the 2019 ANSI Standard was being developed. However, the NPRM sought comment on whether to continue to exempt handsets operating in frequencies above 6 GHz from the statutory hearing aid compatibility requirements. Based on the record, the Commission declines to lift the exemption that currently excludes frequencies above 6 GHz from hearing aid compatibility requirements.

17. Section 710 of the Communications Act of 1934, as amended, exempts “telephones used with public mobile services” from the hearing aid compatibility requirements, but it directs the Commission to assess periodically the “appropriateness of continuing in effect” the exemption and to revoke or otherwise limit the exemption if certain factors are met. The Commission must revoke or limit the exemption if it determines that: (1) Such revocation or limitation is in the public interest; (2) continuation of the exemption without such revocation or limitation would have an adverse effect on individuals with hearing loss; (3) compliance with the requirements adopted is technologically feasible for the telephones to which the exemption applies; and (4) compliance with the requirements adopted would not increase costs to such an extent that the telephones to which the exemption applies could not be successfully marketed. In conjunction with adopting the Commission's initial requirements for hearing aid compatibility for wireless handsets, the Commission revoked the statutory exemption as to wireless handsets operating below 6 GHz; the Commission has not addressed the exemption with respect to handsets operating on frequencies above 6 GHz.

18. In the past, the Commission generally has relied on an ANSI technical standard to demonstrate technological feasibility. These standards are developed by interested parties—which may include handset manufacturers, service providers, consumer groups, testing bodies, and others—working together to reach a consensus standard that the ANSI Committee presents to the Commission for incorporation into its rules. The Commission has never developed its own technical standard for testing for hearing aid compatibility or modified an existing technical standard. Absent an applicable technical standard that reflects a broad-based agreement as to its utility, soundness, and practicality for implementation, the Commission declines to conclude that compliance with hearing aid compatibility standards for frequencies above 6 GHz is technically feasible or that lifting the statutory exemption is in the public interest. Rather, the Commission requests that the ANSI Committee work with all relevant stakeholders to develop a new standard that addresses hearing aid compatibility in frequencies above 6 GHz.

19. Most commenters addressing this issue agree that the Commission should continue to exempt handset operations in frequencies above 6 GHz from hearing aid compatibility requirements until the ANSI Committee develops a new standard. For example, Samsung maintains that the Commission should defer to the ANSI Committee and only should consider lifting the exemption after ANSI issues a revised standard covering frequencies above 6 GHz. Schmid, however, recommends that the Commission include frequencies above 6 GHz for devices incorporating 5G New Radio FR2 technology to evaluate hearing aid compatibility. Schmid does not explain how the Commission should do so in the absence of a standard that covers such frequencies but states that it is willing to provide the Commission with more information on how it believes these evaluations could be performed. Rather than developing a Commission-derived technical standard for frequencies above 6 GHz, the Commission will continue with its well- established policy of allowing all relevant parties to work through the ANSI process to develop a consensus-driven standard that the Commission may consider for purposes of incorporating into its rules and potentially lifting the current statutory exemption.

20. Certification of Handsets with Non-Covered Operations. As proposed in the NPRM, the Commission will maintain § 20.19(b)(3)(i) of its rules, which provides that a handset model is considered hearing aid-compatible if it is certified as hearing aid-compatible under an applicable technical standard for all covered air interfaces and frequency bands even though the handset may also allow operations on air interfaces and frequency bands not covered by that technical standard. CTIA supports this approach. Further, consistent with past practice, if a handset model certified as hearing aid-compatible under an outdated standard is later submitted for a Class II permissive change, as defined by the Commission's rules, after the end of the transition period that handset model would have to be updated and recertified under the 2019 ANSI Standard.

21. Two-Year Transition Period. The Commission adopts the proposal in the NPRM to make the 2019 ANSI Standard the exclusive testing standard after a two-year transition period. The two-year phase-in period for this new standard will begin on the effective date of the final rule. After this two-year transition period expires, handset manufacturers and service providers may only use the 2019 ANSI Standard to certify new handset models as hearing aid-compatible. The Commission previously has relied on a two-year transition period when transitioning to new technical standards. The Commission finds that using a two-year transition period again is in the public interest. A two-year transition period appropriately balances the design, engineering, and marketing requirements of manufacturers and service providers with the needs of consumers with hearing loss.

22. During the two-year transition period, handset manufacturers and service providers may use either the 2011 or the 2019 ANSI Standard when certifying new handset models. This approach is consistent with past practice, and it takes into consideration the typical handset industry product development cycle. There already may be new handset models in the design phase that are based on being certified under the 2011 ANSI Standard rather than the 2019 ANSI Standard. CTIA, PCTEST, and Samsung support a two-year transition period for manufacturers before requiring the exclusive use of the new testing standard. Further, as Samsung and PCTEST state, a two-year transition period will allow sufficient time for test labs and manufacturers to make the upgrades necessary to comply with the new standard.

23. The Commission disagrees with CTIA's suggestion that service providers should be given an additional year to transition to the new testing standard. While CTIA supports a two-year transition period for manufacturers, it argues that service providers need additional time to conduct trials and otherwise to test on their networks those handsets certified under the new standard. CTIA claims that these trials can only begin after manufacturers design and test devices to the new standard; therefore, it requests that the Commission allow service providers an additional 12-month transition period beyond what the Commission is adopting for device manufacturers. In support of its position, CTIA draws an analogy to when the Commission imposes new deployment benchmarks on handset manufacturers and service providers that require them to increase the number of hearing aid-compatible handset models that they offer for sale. CTIA, however, does not cite any Commission precedent for granting service providers additional time to meet a new ANSI standard.

24. Contrary to the situation in which the Commission imposes new handset deployment benchmarks, the Commission is not requiring service providers to offer a certain number of handsets certified under the new ANSI standard and, therefore, there is no need to extend the service provider transition period. Even though after the two-year transition new handset models must be certified as hearing aid-compatible using the new ANSI standard, service providers can continue offering handsets certified under older ANSI standards to meet deployment benchmarks until they are ready to offer handset models certified under the new standard. Further, delaying the service provider transition period by an additional year would delay consumers' receipt of the benefits of the new testing standard, including the much-needed benefits of the new wireless volume control standard. Accordingly, the Commission finds that providing an additional year for service providers to transition to the 2019 ANSI Standard is unnecessary and would not benefit consumers.

25. Exclusive Use of a Standard. Consistent with the Commission's long-established certification practice, manufacturers will continue to be required to test a new handset model exclusively under either the 2011 ANSI Standard or the 2019 ANSI Standard during the transition period. Once the transition period ends, new handset models can only be certified using the 2019 ANSI Standard; these models must meet all aspects of the standard, including the volume control requirements, over all covered frequency bands to be considered hearing aid-compatible.

26. 100% Finding. The Commission also finds that adopting a two-year transition period does not require us at this time to adjust the future timeframe for the Commission to consider whether to require 100% of covered handsets to be hearing aid-compatible. In November 2015, interested parties agreed to form an independent task force or consensus group to provide for a process to move away from the current fractional benchmark regime, with the ultimate goal of 100% compatibility—subject to the Commission's assessment of whether such 100% compatibility is achievable. The task force's final report is presently due by December 31, 2022, and the Commission has stated its intent to make a final determination on whether 100% compatibility is achievable by no later than 2024. In the NPRM, the Commission sought comment on what effect the proposed transition period could have on the 2024 timeframe for it to consider whether to require 100% of covered handsets to be hearing aid-compatible.

27. HIA argues that adoption of the new testing standard should not be used to justify extending the pending 2024 finding. But CTIA and Samsung assert that it is too soon in the transition to assess whether the new standard will affect the Commission's ability to decide by 2024 whether 100% compatibility is achievable. CTIA further contends that the Commission should not make this determination before receiving the task force's recommendation. The Hearing Loss Association of America (HLAA), while not taking a position with respect to extending the date for the pending 100% finding, states that it “strongly believe[s] that one-hundred percent [hearing aid compatibility] offerings should continue to be the goal.” The Commission agrees that 100% compatibility is the goal and that it is too early in the transition to the new ANSI standard for us to determine whether an adjustment to the 100% achievability timeline is warranted. The Commission will continue to monitor the transition to the new ANSI standard. In the meantime, the Commission declines to adjust the 2024 timeframe.

28. As proposed in the NPRM, the Commission extends the March 1, 2021 deadline in the Commission's volume control rule to align with the start date for exclusive use of the 2019 ANSI Standard. The Commission finds that, given the close proximity of the current volume control deadline, the extension will provide manufacturers additional time to make the handset model design changes needed to meet the volume control requirements. We find good cause to suspend the March 1, 2021, volume control deadline immediately upon adoption of this Report and Order. We take this action to ensure handset manufacturers will not need to comply with this deadline in the event that the rule change's publication in the Federal Register does not occur soon enough in time for the amendment to become effective before the March 1, 2021 deadline. The 2019 ANSI Standard is the first wireless testing standard to implement a volume control requirement, and the record shows that the pending March 1, 2021 deadline does not allow manufacturers sufficient time to implement the volume control requirement that is part of the new ANSI standard. CTIA and Samsung support aligning the volume control deadline with the exclusive use deadline for the new standard. The Commission did not receive comments objecting to this approach.

29. Accordingly, beginning on the date that the 2019 ANSI Standard becomes the exclusive testing standard, all wireless handset models submitted for hearing aid compatibility certification must meet the 2019 ANSI Standard's volume control requirement (as well as the other parts of this standard) in order to be certified as hearing aid-compatible. Handsets submitted for certification under the 2019 ANSI Standard during the two-year transition period similarly must meet the volume control requirement and all other requirements of that standard. The Commission notes, however, that handsets submitted for certification under the 2011 ANSI standard during the transition period will not need to provide volume control capability.

30. Consistent with past Commission practice, the Commission adopts its proposal to allow manufacturers and service providers to meet deployment benchmark requirements by counting handset models certified under the 2019 ANSI Standard or earlier versions of the standard ( i.e., the 2007 and 2011 versions of the standard) as long as these models are still being offered for sale. If the handset model at issue is still being offered for sale and has been certified as hearing aid-compatible under an applicable ANSI standard, then handset manufacturers and service providers can count that handset for deployment purposes. The decision is consistent with the Commission's standard practice when transitioning to a new or revised technical standard. With respect to the 2019 ANSI Standard, for the handset to be certified as hearing aid-compatible over a covered air interface, the handset must meet the requirements for both acoustic and inductive coupling modes for that air interface, including the volume control requirements. CTIA, PCTEST, and Samsung support this approach, and no commenter opposed this proposal.

31. As more and more handset models become certified under the 2019 ANSI Standard, the Commission expects that handset manufacturers and service providers will replace handset models in their portfolios certified under older versions of the ANSI standard with models certified under the new standard. Handset manufacturers and service providers are required to ensure that 66% of the handset models they offer are hearing aid-compatible, and the Commission anticipates that handsets meeting the 2019 ANSI Standard will be readily available by the end of the transition period. Further, the Commission agrees with commenters that re-testing existing handset models for certification under the 2019 ANSI Standard could be burdensome and redundant. In addition, if the Commission were to deviate from the precedent of grandfathering existing handset models for benchmark purposes, some handset manufacturers and service providers might be pressed to meet the new deployment benchmarks. The Commission declines to jeopardize compliance with the existing and upcoming deployment benchmarks, which also might deter the offering of older hearing aid-compatible handset models to consumers, particularly in the absence of record evidence from consumers advocating that the Commission act in a different manner. For these reasons, the Commission finds it in the public interest to allow handset manufacturers and service providers to meet deployment benchmarks using all handset models certified as hearing aid-compatible as long as these handsets are still offered for sale.

32. Consistent with the Congressional directive to ensure that consumers have sufficient information to make informed purchasing decisions when selecting hearing aid-compatible handsets, and in light of the Commission's adoption of the 2019 ANSI Standard and establishment of a transition period, the Commission revises the labeling and disclosure requirements in its rule to make them more informative, consumer-friendly, and less burdensome. Specifically, the Commission revises the organization of § 20.19(f) of its rules to include a part that addresses package labeling requirements and a part that addresses requirements for package inserts and user manuals. Each part includes requirements for the placement and content of information related to the hearing aid compatibility or volume control capability of wireless handsets, relevant to handsets certified under the 2019 ANSI Standard or an earlier version of the ANSI standard. These requirements generally are consistent with the proposals in the NPRM, except that the Commission modifies its volume control labeling proposal to require that the conversational gain of the handset both with and without a hearing aid be placed on the handset's package label. Further, the Commission elaborates on the explanations that must be included in a hearing aid-compatible handset's package insert or user manual.

33. The Commission's current labeling rule is composed of four parts that address what information has to be included on a hearing aid-compatible handset's package label and what other information must be provided to consumers in other formats. The NPRM proposed to reorganize the current labeling rule into three parts rather than four parts. After reviewing the record, the Commission determines that organizing the rule into two parts is more in keeping with its goal of streamlining the rule and making it easier to follow. The Commission finds that this reorganization and the revisions to its labeling rule are in the public interest and consistent with the Commission's Congressional directive to ensure that consumers have sufficient information to make informed purchasing decisions when selecting hearing aid-compatible handsets. The revisions allow consumers to easily compare the different functions of hearing aid-compatible handsets when purchasing a new handset, and they allow handset manufacturers and service providers flexibility in designing their own package labels and conveying supplemental information. Commenters uniformly support the Commission's proposal to streamline and modernize the labeling rule and to make labels, package inserts, and user manuals more informative, consumer-friendly, and less burdensome. The Commission addresses each of these requirements in turn below.

34. Package Label. Consistent with the NPRM, the Commission modifies § 20.19(f)(1)(i) and (ii) to require a hearing aid-compatible handset's package label to expressly state that the handset is hearing aid-compatible and to quantify the handset's volume control capability if the handset is certified using the 2019 ANSI Standard. These requirements ensure that the most pertinent consumer information is placed on the handset's package label. Consumers will be able to quickly ascertain whether a handset is hearing aid-compatible and to identify the handset's volume control capabilities if it is certified using the 2019 ANSI Standard. Consumers who are interested in more detailed information about a handset's capabilities will be able to find this additional information in the user manual or package insert.

35. Section 20.19(f)(1)(i) of the Commission's current rule requires handset manufacturers and service providers to ensure that the package label for hearing aid-compatible handsets identifies the handset as hearing aid-compatible by displaying the handset's ANSI rating. We decline to adopt one commenter's request to change the term “hearing aid-compatible” to “telecoil” or “T-Coil” in our rule. Such a change is unnecessary and may cause further confusion by specifying a single technology. Our use of “hearing aids” or “hearing aid users” refers to “cochlear implants” or “users of cochlear implants.” The Commission's revised rule maintains the requirement that handset manufacturers and service providers identify hearing aid-compatible handsets by requiring the package label to state that the handset is hearing aid-compatible. As proposed in the NPRM, the Commission moves the required disclosure of the ANSI rating from the package label to the package insert or user manual. The Commission makes this change in recognition of the fact that the 2019 ANSI Standard does not use the numerical M/T rating system of older standards. Under the new standard, a handset is assessed as either hearing aid-compatible or not without receiving a numerical rating. Accordingly, the numerical ratings will become less relevant to consumers after the transition period. Further, consumers may not realize that a handset labeled as hearing aid-compatible but without a rating has actually been certified under a more recent testing standard that may provide a better listening experience than a handset with an M/T rating. The ANSI Committee eliminated the numerical M/T rating system to make purchasing a hearing aid-compatible handset more consumer friendly. Finally, handset manufacturers and service providers will be phasing-out handsets that have M/T ratings. The Commission did not receive any comments objecting to this approach. For these reasons, the Commission finds it is in the public interest to move the rating labeling requirement from the package label to the package insert or user manual. Consistent with our current rule, we will continue to require that the ANSI rating that is included in the package insert or user manual be the lowest rating the handset achieves if it has different ratings over its air interfaces or frequency bands.

36. Consistent with the Commission's proposal in the NPRM, it also requires a handset's package label to include the handset's volume control capabilities when the handset has been certified using the 2019 ANSI Standard. Because the 2019 ANSI Standard articulates certain details that are not reflected in the Commission's current volume control label requirement adopted in 2017, certain commenters have asked for clarification of the current volume control label requirement. Specifically, § 20.19(f)(1)(ii) states that, if a “handset has been certified as compliant with a technical standard that specifies acceptable numerical metrics or qualitative ratings for handset volume control, the labeling shall include the relevant volume control metrics or ratings.” Samsung asks the Commission to clarify that a handset is compliant with the volume control label requirement if the label states that it “provides over 6 dB of conversational gain.” PCTEST states that, although it understands the benefits of Samsung's proposal, it would be better for consumers if the Commission required package labels to list the actual amount of conversational gain.

37. The Commission modifies its existing volume control label rule by removing the language regarding metrics and qualitative rating and replacing it with actual conversational gain testing results. The volume control standard that the Commission incorporates into its rules tests for volume control using a conversational gain standard that must be met both with and without hearing aids. Accordingly, the Commission requires handset manufacturers and service providers to include on a hearing aid-compatible handset's package label the handset's actual conversational gain both with and without hearing aids if the handset is certified using the 2019 ANSI Standard. Consistent with § 20.19(f)(1)(ii), in cases where the actual conversational gain with a hearing aid differs depending on the air interfaces or frequency band being used, the package label should include the lowest actual conversational gain with a hearing aid. Having the actual conversational gain both with and without hearing aids on the package label will benefit consumers who use hearing aids and those who do not use hearing aids but have hearing loss.

38. Package Inserts and User Manuals. Consistent with the Commission's labeling proposal, the Commission requires handset manufacturers and service providers to include the following information in package inserts or user manuals for hearing aid-compatible handsets: (1) That the handset is hearing aid-compatible; (2) the ANSI standard used to determine the hearing aid compatibility of the handset model's air interfaces and frequency bands; (3) if using the 2011 ANSI Standard or an earlier version of the standard, the lowest hearing aid compatibility rating assigned to any of the covered air interfaces or frequency bands; (4) the air interfaces or frequency bands on handsets that are not certified to be hearing aid-compatible, if applicable, or have been determined to be hearing aid-compatible under special testing circumstances; and (5) if a handset model was not certified as hearing aid-compatible over all of its air interfaces or frequency bands, a prescribed disclosure notifying consumers of this fact and that they should test the handset thoroughly and in different locations. In addition, consistent with the Commission's current labeling rule, package inserts and user manuals for hearing aid-compatible handsets must include an explanation of the ANSI rating system as well as an explanation of a handset's volume control capabilities. Further, if an air interface has been determined to be hearing aid-compatible under special testing circumstances, the package insert or user manual must disclose this information to consumers and explain how this affects the use and operation of the handset.

39. Further, consistent with the Commission's proposal, it requires package inserts and user manuals to disclose if a handset model has been certified as hearing aid-compatible over some of its air interfaces or frequency bands but not over all of its air interfaces or frequency bands; in such circumstances, the Commission requires that the prescribed disclosure language currently in its rule continues to be used. Also, consistent with the Commission's proposal, it requires that package inserts and user manuals disclose if a handset has been certified as hearing aid-compatible under special testing circumstances. The Commission's current rule does not prescribe specific disclosure language relating to special testing circumstances and the Commission did not propose any specific language in the NPRM to be used in these circumstances. In the case of one specific instance, however, the Commission's current rule does require that special testing circumstance be disclosed to consumers and that the disclosure explain the impact of these special testing circumstances on the use of the handset. While the Commission's current rule gives handset manufacturers and service providers the discretion to provide the above disclosures to consumers through clear and effective means such as the use of call-out cards or other media, revisions to packaging materials, or supplying of information on websites, the Commission now requires that manufacturers and service providers include this information in package inserts or user manuals.

40. The Commission disagrees with comments suggesting that it should relax the above disclosure requirements and allow handset manufacturers and service providers leeway to modify the prescribed disclosure language related to handsets that are not hearing aid-compatible over all of their air interfaces and frequency bands and to determine when and how this language is included. The prescribed disclosure language currently in the Commission's rule has been a part of its hearing aid compatibility labeling rule since 2010 and has worked well to ensure that consumers receive valuable information. It allows consumers to educate themselves about the functions and capabilities of hearing aid-compatible handsets and to compare handset models. Further, it protects consumers by using uniform language that is consistent among manufacturers and service providers, and it guarantees notice to consumers to test the handset thoroughly before purchasing it. For instance, this requirement would benefit consumers who are interested in a hearing aid-compatible handset that includes non-certified air interfaces operating in frequencies above 6 GHz. In this example, handset manufacturers and service providers must include the required disclosure language in order to make sure that consumers are aware that some of the handset's operations are not certified as hearing aid-compatible under an applicable ANSI standard. The Commission also finds that it is in the public interest for handset manufacturers and service providers to inform consumers when a handset model has been certified as hearing aid-compatible under special testing circumstances and what impact these special testing circumstances have on the use of the handset.

41. The Commission finds that the information that it is requiring to be included in package inserts and user manuals is not too granular, as some commenters argue, and that this information serves a useful purpose. CTIA and Samsung urge the Commission to give manufacturers and service providers more flexibility in the methods used to convey information on a handset's hearing aid compatibility and volume control capabilities, including providing this information online rather than in the packaging insert or user manual. The Commission agrees with HLAA, however, that consumers may not necessarily visit service provider websites before going to a service provider's store and purchasing a hearing aid-compatible handset. Therefore, the Commission requires that package inserts and user manuals be provided with hearing aid compatible handsets that include the information outlined above and that this information not just be provided online. By requiring the above information to be included in package inserts and user manuals, the Commission ensures that consumers have access to this material. Handset manufacturers and service providers are also free to provide this information on their publicly accessible websites, and we believe that doing so will benefit consumers by giving them another way to locate information about hearing aid-compatible handsets.

42. The Commission's current rule requires that package inserts and user manuals provide an explanation of the ANSI and volume control rating systems. The Commission finds it in the public interest to continue these requirements. Further, the Commission agrees with HLAA that package inserts and user manuals should explain the old ANSI rating system and the transition to the new system. Given the transition from the M/T rating system, the Commission finds that this information will be helpful to consumers as they educate themselves on the differences between hearing aid-compatible handsets. Likewise, an explanation of a handset's volume control capabilities will also be helpful to consumers as they make purchasing decisions.

43. Finally, the Commission declines to adopt call-out card requirements that would require handset manufacturers and service providers to post certain information about their hearing aid-compatible handsets on display in their stores. HLAA asserts that the Commission's labeling requirement should require the use of call-out cards at the point of sale indicating whether a handset is hearing aid-compatible. CTIA urges the Commission not to impose additional labeling requirements on manufacturers and service providers, including the imposition of in-store printed material requirements. The Commission's current labeling rule does not require the use of call-out cards, and the Commission did not propose to require the use of call-out cards. The Commission declines to further increase the labeling burden on manufacturers and service providers.

44. The NPRM sought comment on whether the Commission should retain § 20.19(d)(4)(i), which requires service providers to make handsets available to consumers for in-store testing. Specifically, this section provides that “[e]ach service provider must make available for consumers to test, in each retail store owned or operated by the provider, all of its handset models that [it offers that are hearing aid-compatible].” HIA and HLAA urge the Commission to maintain this requirement and the Commission did not receive any comments objecting to it maintaining this requirement. The Commission agrees with HIA and HLAA that it is in the public interest to maintain the service provider in-store testing requirement. Live in-store testing permits consumers to undertake a preliminary, but important, evaluation of the volume and interference levels of a given handset and minimizes the “hassle” associated with returning the handset at a later time. Further, this requirement is consistent with the Commission's mandatory disclosure language that encourages consumers to test handsets before making a purchase. Finally, preserving this requirement may allow consumers to avoid a restocking fee. The Commission finds that keeping the service provider in-store testing requirement in place ensures that those with hearing loss have a meaningful opportunity and sufficient time to identify and become comfortable with a handset before purchasing it.

45. Diverse Handset Offerings. The Commission adopts the Commission's proposal to eliminate the “refresh” and “differing levels of functionality” requirements set forth in § 20.19(c)(1)(ii), (c)(4)(ii), and (d)(4)(ii), which require handset manufacturers and service providers to update their selection of hearing aid-compatible handsets periodically. Under the “differing levels of functionality” and “refresh” rules, manufacturers and service providers must offer hearing aid-compatible handsets that contain the same range of features and functions contained in handsets offered to hearing people. This rule was adopted to ensure that people with hearing loss have similar choices in types of handsets as consumers without hearing loss. The Commission's current benchmark deployment rules, however, render these rules unnecessary, and the Commission eliminates these requirements from its rules, including the requirement that service providers make available on their websites information about the “differing levels of functionality” of each handset they offer. The Commission's current deployment benchmarks require 66% of handsets to be hearing aid-compatible and, in the near future, will require 85% of all handsets to be hearing aid-compatible. The Commission's deployment benchmarks ensure that consumers with hearing loss have robust choices in hearing aid-compatible handsets. CTIA and Samsung agree that these requirements are no longer necessary given the large number of hearing aid-compatible handsets on the market.

46. HLAA warns that eliminating these requirements could reduce the incentives for manufacturers and service providers to offer new hearing aid-compatible handsets; it asserts that these requirements should stay in place until service providers are required to offer 100% hearing aid-compatible handsets. The Commission finds, however, that its deployment benchmarks will ensure that manufacturers and service providers continue to have incentives to offer hearing aid-compatible handsets. The Commission adopted the “refresh” and “differing levels of functionality” requirements at a time when its deployment benchmarks were much lower. At that time, there was a need to ensure handset manufacturers and service providers met their deployment benchmarks using a diverse mixture of handsets rather than relying exclusively on entry level or top-of-the line offerings. The Commission's current deployment benchmarks have eliminated this concern. In fact, handset manufacturer compliance reports show that more than 89% of the new handset models manufacturers offered between August 1, 2019 and June 30, 2020 are hearing-aid compatible. Some manufacturers, such as Samsung, ensure that all of their handsets are hearing aid-compatible. Given these facts, the Commission eliminates the “refresh” and “differing levels of functionality” requirements in § 20.19(c)(1)(ii), (c)(4)(ii), and (d)(4)(ii) because they no longer serve their intended purpose.

47. Certification and Reporting Dates. The Commission adopts its proposal to revise the date by which service providers must file certifications of compliance with the Commission's hearing aid compatibility provisions and the date that manufacturers must file compliance reports pursuant to § 20.19(i)(1). Presently, service providers must file a short form certifying that they are in compliance with the Commission's hearing aid compatibility provisions by January 15 each year, and handset manufacturers must file a longer form showing compliance with these provisions by July 15 each year. The filing window for the certifications and reports opens 30 days prior to the filing deadline. The Commission uses these certifications and reports as the primary method of ensuring that handset manufacturers and service providers are complying with the Commission's hearing aid compatibility rules.

48. Section 20.19(i)(1) requires that each certification and report must be up-to-date as of the last day of the calendar month preceding the due date of each certification or report. To ensure that service providers' certifications and handset manufacturers' reports meet this requirement, the Commission moves the service provider certification due date from January 15 to January 31 each year and the handset manufacturer report due date from July 15 to July 31 each year. If January 31 or July 31 fall on a weekend, the due date for the certification or report will be the first business day immediately following the weekend. These revised filing deadlines mean that the filing window for service providers will open the first business day in January and the filing window for manufacturers will open the first business day in July. This change will ensure that the certifications and reports are up-to-date as of the last day of the calendar month preceding the due date of each report and certification. In addition to moving the compliance filing dates, we also change the compliance filing requirement for manufacturers to read that they “shall submit Form 655 reports on compliance with the requirements of this section . . . .” Currently, this requirement reads that they “shall submit [Form 655] reports on efforts toward compliance with the requirements of this section . . . .” 47 CFR 20.19(i)(1) (emphasis added). This change matches the language used for service providers and the “efforts toward” compliance language is unnecessary in that “reports on compliance” necessarily includes “efforts toward compliance.” This change also takes into consideration the national holidays at the beginning of January and July. CTIA and Samsung support these changes, and no commenter opposed these revisions.

49. Removal of Outdated Rules. The Commission adopts its proposal to remove from the hearing aid compatibility rules past transition dates and outdated benchmarks, and to correct clerical errors in the rules. These modifications to the hearing aid compatibility provisions will simplify the rules and make them easier to read and understand. CTIA and Samsung support these changes and no commenter opposed these revisions.

50. Section 68.300. The Commission also adopts its proposal to make a technical correction to § 68.300 of the Commission's rules that addresses hearing aid-compatible labeling requirements for wireline telephones. This correction restores a definition that was erroneously deleted from prior versions of the rule. No one filed comments on this proposed correction. When the Commission amended part 68 of the rules in 2000 to remove various provisions pertaining to registration of terminal equipment connected to the public switched telephone network, it appears that a definition of the term “permanently affixed,” which is relevant to the labeling requirement, was inadvertently deleted. To address this technical error, the Commission amends § 68.300(b) to include the same definition currently provided in § 68.502(a) for “permanently fixed.”

51. Permanently affixed means that the label is etched, engraved, stamped, silkscreened, indelibly printed, or otherwise permanently marked on a permanently attached part of the equipment or on a nameplate of metal, plastic, or other material fastened to the equipment by welding, riveting, or a permanent adhesive. The label must be designed to last the expected lifetime of the equipment in the environment in which the equipment may be operated and must not be readily detachable. The Commission also deletes from § 68.300 the stated compliance date of April 1, 1997, given the length of time that has passed since that date and given that no one commented on this proposed deletion.

52. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the 2020 ANSI Standard NPRM released in January 2020. The Commission sought written public comment on the proposals in the 2020 ANSI Standard NPRM, including comments on the IRFA. The Commission did not receive comments specifically directed as a response to the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

53. In the Report and Order, the Commission incorporates the 2019 ANSI Standard as the exclusive technical standard for evaluating the hearing aid compatibility of wireless handsets. In addition to including a volume control standard as part of the new standard, the 2019 ANSI Standard requires testing that will improve a hearing aid user's experience, including those who use cochlear implants. The new standard addresses new technologies and devices operating in the frequency range of 614 MHz to 6 GHz, harmonizes testing methodologies with international standards, and uses a simple set of requirements and thresholds rather than the M/T rating system used by the 2011 ANSI Standard to determine hearing aid compatibility. The Commission anticipates that using the 2019 ANSI Standard to determine whether a handset is hearing aid-compatible for purposes of the Commission's rules will serve the public interest by establishing standards for new devices and operations over additional frequency bands. New testing methodologies in the 2019 ANSI Standard should also improve the measurement of potential hearing aid interference. The new standard no longer uses the M/T category system, achieves harmonization with other hearing aid standards, and changes several testing procedures meant to improve the consumer experience and reduce testing burdens.

54. The Report and Order adopts a two-year transition period for manufacturers and service providers before requiring the exclusive use of the new standard and aligns the volume control implementation deadline with the end of this two-year transition. The Report and Order allows manufacturers and service providers to continue to meet deployment benchmarks with any handset certified as hearing aid-compatible, regardless of the ANSI standard that was used for certification purposes. Consistent with the hearing aid-compatibility rule that was in effect prior to adoption of the Report and Order, the new rules: (i) Require that a handset's package label indicate that the phone is hearing aid compatibility compliant and must provide the handset's amplification capability if the handset is certified using the 2019 ANSI Standard, including actual conversational gain both with and without hearing aids if the handset is certified using the 2019 ANSI Standard and the handset's volume control capabilities when the handset has been certified using the 2019 ANSI Standard; (ii) require that the user manual or package insert display the handset's ANSI rating and include information explaining the change in the hearing aid-compatibility rating system under the new standard; and (iii) include a prescribed disclosure when a handset meets hearing aid compatibility standards on some of its air interfaces, but not on all of its air interfaces. The Report and Order also maintains the in-store testing requirement applicable to service providers so that those with hearing loss have an opportunity to become comfortable with a handset before purchasing it.

55. Finally, the Report and Order streamlines the wireless hearing aid compatibility rules by eliminating unnecessary and outdated provisions. For example, the Report and Order simplifies the labeling rules to remove the “refresh” and “differing levels of functionality” requirements and to delete references to implementation dates and benchmarks that have passed. Eliminating these references will simplify the rules and make them easier to read and understand. The Report and Order also aligns the definition of “permanently affixed” to ensure that hearing aid compatibility labeling requirements are consistent for both PSTN telephones and telephonic customer premises equipment used for advanced communications services. Additionally, the Report and Order moves the compliance filing deadlines from January 15 to January 31 for service providers and from July 15 to July 31 for manufacturers.

56. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) and to provide a detailed statement of any change made to the proposed rules as a result of those comments.

57. The Chief Counsel did not file comments in response to the proposed rules in this proceeding.

58. The rules adopted in this document will affect the following types of small entities:

59. The rule changes adopted in the Report and Order may impose some new reporting, recordkeeping, or other compliance requirements on some small entities. The Report and Order adopts the 2019 ANSI Standard as the exclusive technical standard for evaluating if a wireless handset is hearing aid-compatible under the Commission's rules. The new standard reduces the testing burden, uses a simple set of limits rather than the M/T category system for handsets as well as hearing aids, achieves harmonization with other hearing aid standards, and makes some additional test procedure-related changes to improve the consumer experience.

60. The Report and Order replaces the 2011 ANSI Standard with the 2019 ANSI Standard after a two-year transition period. During the transition period, handset models meeting either the 2011 ANSI Standard or 2019 ANSI Standard will continue to be certified as hearing aid-compatible by handset manufacturers and service providers under the Commission's rules. Certifications issued before and within the transition period, including certifications under the 2011 ANSI Standard and any earlier versions of ANSI C63.19, will remain hearing aid-compatible. As a result, manufacturers will not need to retest or recertify existing handset models as hearing aid-compatible. The Report and Order also harmonizes the deadline for exclusive use of the new standard with the March 1, 2021 volume control deadline required by the Commission's current rules.

61. The adoption of the 2019 ANSI Standard for wireless handsets and elimination of the currently applicable standard after a transition period will alter the compliance obligations of wireless handset manufacturers and service providers that are small entities, as well as all other wireless handset manufacturers and service providers, by requiring them to use a different method for testing and evaluating wireless handset compliance, including with a new volume control requirement.

62. The 2019 ANSI Standard applies to wireless handsets in a wider frequency range—from 614 MHz to 6 GHz—as compared to the 2011 ANSI Standard's frequency range of 698 MHz to 6 GHz. The Report and Order states that a handset operating only in the ranges specified in the standard would need to satisfy the standard for all frequency bands and air interfaces over which it operates. Because the hearing aid compatibility rules ( e.g., labeling and certification) apply to handsets certified under the new standard using the new frequency range (except as specified in the de minimis exception), small entities that did not previously have to comply with the requirements may be subject to new obligations.

63. Before adoption of the Report and Order, subject to a de minimis exception, handset manufacturers and service providers were required to offer a minimum number of hearing aid-compatible handsets for each covered air interface over which its models operate. Depending on the type and size of an entity and the point in time, manufacturers and providers must ensure that either 66% or 85% of their handset models are hearing aid-compatible. Under the rules adopted by the Report and Order, manufacturers and service providers may meet their requirement to offer minimum numbers of hearing aid-compatible handsets with handsets certified under either the 2019 or 2011 ANSI Standards, or an earlier standard. Consequently, small entities will not have to recertify existing handsets and incur additional compliance costs.

64. The Report and Order simplifies the current labeling requirements so that consumers will have the information that they need in order to easily understand and evaluate the hearing aid compatibility of a particular handset. Handset manufacturers and service providers are able to design their own package labels and provide supplemental information in a way that best meets their needs. For hearing aid-compatible handsets, the handset's package label must state that the handset is hearing aid-compatible and must provide the handset's amplification capability if the handset is certified using the 2019 ANSI Standard. The Report and Order also requires handset manufacturers and service providers to include in package inserts or user manuals more detailed information about the hearing aid compatibility of the handset, including information about the ANSI standard used, an explanation of the ANSI rating system, and an explanation of a handset's volume control amplification capabilities.

65. The Report and Order maintains the current in-store testing obligation applicable to service providers so that those with hearing loss have an opportunity to become comfortable with a handset before purchasing it.

66. The Report and Order also revises § 20.19(c) to delete the “refresh” and “differing levels of functionality” requirements, which require manufacturers to refresh the hearing aid-compatible handset models they offer each year and require service providers to offer a range of hearing aid-compatible handset models with differing levels of functionality, respectively. The Commission's current deployment benchmarks require 66% of handsets to be hearing aid-compatible and, in the near future, will require 85% of all handsets to be hearing aid-compatible. The Commission's deployment benchmarks ensure that consumers have robust choices among hearing aid-compatible handsets and confirm that its decision to eliminate the “refresh” and “differing levels of functionality” requirements will not adversely affect consumers. Removing unnecessary provisions such as these could streamline compliance requirements, which could reduce the cost of compliance for small entities.

67. The date that service providers must file certifications of compliance with the Commission's hearing aid compatibility provisions and the date that manufacturers must file compliance reports is also revised in Report and Order. Prior to adoption of the Report and Order, service provider certifications were due January 15 each year and manufacturer reports were due July 15 each year. The Report and Order moves these dates to January 31 and July 31, respectively, to ensure that service provider certifications and manufacturer reports are up-to-date as of the last day of the calendar month preceding the due date of each report and certification.

68. Small entities may be required to hire attorneys, engineers, consultants, or other professionals to comply with the rule changes adopted in the Report and Order. The Commission does not believe, however, that the costs and/or administrative burdens associated with any of the rule changes will unduly burden small entities because the adopted 2019 ANSI Standard for evaluating the hearing aid compatibility of wireless handsets was developed in collaboration with the industry through a voluntary, consensus-driven approach and is broadly supported by the industry, and expanding the frequency bands covered by the standard and replacing the current rating system will reduce regulatory burdens for handset manufacturers and service providers. While the Commission cannot quantify the cost of compliance with the rule changes and compliance obligations adopted in the Report and Order, in the 2020 ANSI Standard NPRM the Commission requested cost and benefit analyses from the parties in the proceeding to help it identify and evaluate compliance costs and burdens for small entities that may result from the proposed rules and the matters on which the Commission requested comments. The Commission did not receive any comments, cost data or analyses on the impact of the rules and other matters on small entities.

69. Regarding the alternatives the Commission considered in adopting the final rules, the Commission notes that it declined to modify the 2019 ANSI Standard as requested by Schmid and Partner Engineering AG (Schmid). The record indicated that the Schmid requests were already considered and mitigated in 2019 ANSI standards the Commission adopted. The Commission also declined to lift the statutory exemption that currently excludes frequencies above 6 GHz from hearing aid compatibility requirements, choosing instead to allow the ANSI Committee, in coordination with relevant industry participants, to develop a consensus-driven standard for these frequencies that the Commission can incorporate into its rules when the new standard is available. In addition, the Commission declined to add a call-out card requirement to its labeling requirement as suggested by the Hearing Loss Association of America (HLAA). The addition of such a requirement would have mandated the use of call-out cards at the point of sale indicating whether a handset is hearing aid- compatible which would have increased the economic costs of compliance with the Commission's labeling requirements for small entities and other handset manufacturers and service providers, and it declined to do so.

70. In the Report and Order the Commission sought to balance the potential economic impact and burdens that small entity manufacturers and service providers might face in light of the new 2019 ANSI Standard with the need to ensure that Americans with hearing loss can access a wide array of handsets with emerging technologies in the same manner as those without hearing loss. The Commission believes its actions in the Report and Order accomplish this objective.

71. Accordingly, it is ordered, pursuant to sections 4(i), 303(r), and 710 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), 610, this Report and Order is hereby adopted.

72. It is further ordered that the March 1, 2021 deadline included within § 20.19(b)(1) and (f)(1)(ii) is suspended, effective upon adoption of this Report and Order.

73. It is further ordered that the revisions to part 20 of the Commission's rules, 47 CFR part 20, as set forth in the Final Rules are adopted, effective thirty days from the date of publication in the Federal Register , except that the amendments to § 20.19(f), (h)(1), and (i) will become effective following approval by the Office of Management and Budget. Section 20.19(f), (h)(1), and (i) contain new or modified information collection requirements that require review by the Office of Management and Budget under the PRA. The Commission will publish a document in the Federal Register announcing the effective date of the revisions to § 20.19(f), (h)(1), and (i), following approval by the Office of Management and Budget.

74. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 2, 20, and 68 as follows:

TSA published the Security Training Final Rule on March 23, 2020. 1 This rule requires owner/operators of higher-risk freight railroad carriers, public transportation agencies (including rail mass transit and bus systems), passenger railroad carriers, and over-the-road bus companies, to provide TSA-approved security training to employees performing security-sensitive functions. As published on March 23, 2020, TSA scheduled the final rule to take effect on June 22, 2020, with the first compliance deadline set for July 22, 2020. 2 On May 1, 2020, TSA delayed the effective date of the final rule to September 21, 2020, in recognition of the potential impact of the COVID-19 public health crisis and related strain on resources for owner/operators required to comply with the regulation. 3 TSA revised all compliance dates within the rule to reflect the new effective date. 4 On October 26, 2020, TSA extended the compliance deadline in 49 CFR 1570.109(b)(1) and (b)(2) for submission of security training programs from December 21, 2020, to March 22, 2021. 5

On February 19, 2021, Chairs of the Rail Sector Coordinating Council (SCC), 6 Mass Transit SCC, Highway Motor Carrier SCC, and Short Line Industry Lead for the Rail SCC sent a letter to the Senior Official Performing the Duties of the TSA Administrator requesting a further 90-day delay in the date by which regulated entities must submit their security training program to TSA. Their request was based on the ongoing impact of the COVID-19 public health crisis and the likelihood that the development of the security training program “rests with the same subject matter leads that remain focused on containing the spread of, and mitigating risks posed by, the pandemic.”  7 For example, many of the regulated entities subject to the requirements of this rule are also subject to the mask requirements imposed pursuant to Executive Order (E.O.) 13998 of January 21, 2021 (Promoting COVID-19 Safety in Domestic and International Travel), 8 as further directed and implemented pursuant to the Secretary of Homeland Security's January 27, 2021, Determination of a National Emergency (Requiring Actions to Protect the Safety of Americans Using and Employed by the Transportation System), 9 the Centers for Disease Control and Prevention's Order, 10 TSA's security directive issued under the authority of 49 U.S.C. 114, 11 and additional actions taken by the operating administrations of the Department of Transportation. 12

As published, the regulatory text in the final rule contains several incorrect references to other provisions in the rule. First, TSA intended the applicability of the reporting security issues requirement in 49 CFR 1570.203 to align with the applicability of the security coordinator requirement in § 1570.201. As noted in the preamble to the final rule, TSA intended the scope of the security coordinator and reporting requirement to apply to all rail entities covered by Rail Transportation Security rule published in 2008, 13 plus—

• “Any bus operations of a public transportation owner/operator required to provide security training under this rule; and

• Any OTRB owner/operator required to provide security training under this rule.”  14

TSA's intent is also reflected in the Regulatory Impact Analysis (RIA) for the final rule, which only included costs for expanding the current requirement to regulate bus-only transit agencies and OTRB operations in the higher-risk areas designated in the appendices to parts 1582 and 1584. 15 Notwithstanding TSA's clear intention, the final rule incorrectly applies the reporting requirement to, among other entities, “[e]ach owner/operator identified in § . . . 1582.1[.]” And § 1582.1, which provides the scope for all of part 1582, broadly includes “each public transportation agency.”  16 To be consistent with TSA's intent, the applicability of the requirement to report significant security concerns should mirror the applicability of the requirement to have a security coordinator under 49 CFR 1570.201. While § 1570.201 also applies to “each public transportation agency,” it excepts from the requirement a public transportation agency that “owns or operates a bus-only operation” unless “the owner/operator is identified in appendix A to part 1582 of this subchapter or is otherwise notified by TSA in writing a that a threat exists concerning that operation.” TSA is adding parallel language to § 1570.203, to correct the technical error as it relates to public transportation agencies.

Second, the applicability of 49 CFR 1582.101(c) addresses passenger railroads that host freight railroads. As noted in the preamble to the proposed and final rules, TSA intends for passenger railroads to be responsible for ensuring security training requirements are met when they are hosting a freight railroad. 17 The rule incorrectly cross references to 49 CFR 1580.301. Part 1580, however, does not include a § 1580.301. The correct citation is to § 1580.101.

Third, § 1582.101(c) references passenger railroads identified in § 1582.101(a)(1) and (a)(2). Again, these subsections do not exist. The correct citation is to § 1582.101(a) and (b). This final rule correction replaces the incorrect citations with the correct ones.

TSA recognizes the impact of COVID-19 on our surface stakeholders and the need to provide relief at a time when many owner/operators are simultaneously leveraging a range of resources to address multiple challenging circumstances, and struggling financially and limiting operations due to the effects of the COVID-19 public health crisis. After considering the current operational environment and the purpose of this regulation, TSA has decided to further extend the compliance deadline in § 1570.109(b) for security program submission from March 22, 2021, to June 21, 2021.

This extension would provide the industry with a total of 270 days of relief for submission of security training programs as compared to the original deadline of September 20, 2020, and extend the deadline for initial training of all employees in security-sensitive positions into the fall of 2022. 18 Should TSA determine that an additional extension of time for submission of the security training program is necessary based upon the impact of the COVID-19 public health crisis, TSA will publish a document in the Federal Register announcing an updated compliance date for this requirement.

Almost thirty percent of owner/operators required to submit a training program have already submitted them to TSA. For those owner/operators that submitted a training program to TSA for approval by the current deadline (March 22, 2021), TSA is revising 49 CFR 1570.111(a) to ensure we do not disadvantage these owner/operators who were able to submit their programs, but who may still be addressing the operational issues related to COVID-19 that make compliance difficult—particularly related to identifying and training security-sensitive employees during a time when employment may be more fluid based on demand and the impact of sick employees.

TSA has determined that in light of the unprecedented circumstances created by the COVID-19 pandemic, past rule delays, and the additional compliance date delay described above, it is in the public interest to grant owner/operators who submitted their training programs to TSA by the March 2021 deadline an additional 90 days (15 months instead of 12 months) from the date of TSA approval to complete the initial training required by 49 CFR 1570.111. This modification will ensure owner/operators who submitted their training programs to TSA for approval by the current deadline are treated equitably compared to those who wait until the extended deadline to submit their programs. TSA is making certain non-substantive changes to § 1570.111(a) as necessary to clearly reflect this distinction and the compliance deadlines for initial training.

Under E.O. 14002 of January 22, 2021 (Economic Relief Related to the COVID-19 Pandemic), federal agencies are required to “identify actions they can take within existing authorities to address the current economic crisis resulting from the pandemic.”  19 Agencies are further directed to “prioritize actions that provide the greatest relief to individuals, families, and small businesses; and to State, local, Tribal, and territorial governments.”  20

This action supports economic recovery by delaying the impact of TSA's regulatory requirements as applied to freight railroads responsible for moving cargo across the country, small businesses such as some OTRB owner/operators, and the State and local governments operating public transportation systems. Delaying the compliance dates described above will allow these regulated entities to focus on serving the needs of their customers and the communities they serve, ensuring the safety of their employees, and implementing the federal government's requirements for masks to be worn within the nation's commercial and public transportation systems.

TSA takes this action without prior notice and public comment. Sections 553(b) and (d) of the Administrative Procedure Act (5 U.S.C. 553) authorize agencies to dispense with certain rulemaking procedures when they find good cause to do so. Under section 553(b), the requirements of notice and opportunity to comment do not apply when the agency for good cause finds that these procedures are “impracticable, unnecessary, or contrary to the public interest.” Section 553(d) allows an agency, upon finding good cause, to make a rule effective immediately, thereby avoiding the 30-day delayed effective date requirement in section 553.

This final rule recognizes the need to extend the compliance deadline for the requirement in the Security Training Final Rule that would be most difficult for owner/operators to implement during the current COVID-19 public health crisis and the significant disruption and uncertainty in both private and local government operations caused by this crisis. Specifically, TSA is extending the period during which owner/operators must develop a security training program for their employees and submit the program to TSA for approval. Delaying this requirement also effectively delays the deadline for training employees.

TSA has good cause to delay the compliance deadlines without advance notice and comment or a delayed effective date. 21 To delay taking this action while waiting for public comment would be impracticable and contrary to the public interest. The owner/operators subject to the requirements of the final rule need immediate certainty regarding the deadlines of the final rule so that they may focus on other urgent issues affecting their operations.

Given that the rule does not impose new requirements, provides regulatory relief consistent with E.O. 14002 of January 22, 2021, and otherwise only involves technical corrections to an existing regulation, TSA finds sufficient good cause exists to dispense with an opportunity for notice-and-comment and the 30-day effective date requirement. The rule will, therefore, be effective immediately upon publication.

The Paperwork Reduction Act of 1995 (PRA)  22 requires federal agencies to consider the impact of paperwork and other information collection burdens imposed on the public and, under the provisions of PRA section 3507(d), obtain approval from the Office of Management and Budget (OMB) for each collection of information. OMB has approved the collection of information for the Security Training Final Rule under OMB control number 1652-0066. While this rule delays the timing of submission, it does not modify the collection burdens that OMB has already approved.

E.O. 12866 of September 30, 1993 (Regulatory Planning and Review) and E.O. 13563 January 18, 2011 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

E.O. 12866 defines “significant regulatory action” as one that is likely to result in a rule that may (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights or obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O. OMB has not designated this rule a “significant regulatory action,” under E.O. 12866. Accordingly, OMB has not reviewed it.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), requires federal agencies to consider the potential impact of regulations on small businesses, small government jurisdictions, and small organizations during the development of their rules. This final rule, however, makes changes for which notice and comment are not necessary. Accordingly, DHS is not required to prepare a regulatory flexibility analysis. 23

A rule has federalism implications under E.O. 13132 of August 4, 1999 (Federalism), if it has a substantial direct effect on State governments, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. DHS has analyzed this rule under E.O. 13132 and determined that although this rule affects the States, it does not impose substantial direct compliance costs or preempt State law. 24 The rule relieves burdens on States.

The Unfunded Mandates Reform Act of 1995 requires federal agencies to assess the effects of their regulatory actions. In particular, the Unfunded Mandates Reform Act of 1995 addresses actions that may result in the expenditure by a State, local, or Tribal government, in the aggregate, or by the private sector of $100 million (adjusted for inflation) or more in any one year. This final rule will not result in such an expenditure.

TSA has reviewed this rulemaking for purposes of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that this action will not have a significant effect on the human environment. This action is covered by categorical exclusion number A3(e) in DHS Management Directive 023-01 (formerly Management Directive 5100.1), Environmental Planning Program, which guides TSA compliance with the National Environmental Policy Act of 1969.

For the reasons stated in the preamble, the Transportation Security Administration is amending and making correcting amendments to 49 CFR parts 1570 and 1582 as follows:

The Mid-Atlantic Fishery Management Council and the New England Fishery Management Council jointly manage the Atlantic Spiny Dogfish Fishery Management Plan (FMP), with the Mid-Atlantic Council acting as the administrative lead. Additionally, the Atlantic States Marine Fisheries Commission manages the spiny dogfish fishery in state waters from Maine to North Carolina through an interstate fishery management plan. The FMP requires the specification of an annual catch limit (ACL), annual catch target (ACT), and total allowable landings (TAL). These limits and other management measures may be set for up to five fishing years at a time, with each fishing year running from May 1 through April 30. This action implements revised specifications for the 2021 spiny dogfish fishery, based on the Mid-Atlantic Council's updated Risk Policy, and projects maintaining these specifications for fishing year 2022.

Specifications were already projected for the 2021 spiny dogfish fishery as a part of a multi-year specifications action for 2019-2021, based on a 2018 assessment update. Under those initial specifications, the commercial quota would increase 18 percent from fishing year 2020. However, the Mid-Atlantic Council recently updated its risk policy to accept a higher level of risk for stocks at or above biomass targets (85 FR 81152; December 15, 2020), and the Councils recommended that the projected acceptable biological catch (ABC) and resulting commercial quota for the 2021 spiny dogfish fishing year be recalculated using this new approach. Applying the new risk policy increases the 2021 ABC 9 percent from what was initially projected (24 percent above 2020), and raises the 2021 commercial quota 8 percent (27 percent above 2020). The Councils also recommended projecting unchanged specifications for fishing year 2022, as there is a research track stock assessment scheduled for spiny dogfish in 2022, and there will be little additional or new data prior to the assessment to inform specifications prior to that fishing year.

The proposed rule for this action published in the Federal Register on March 4, 2021 (86 FR 12591), and comments were accepted through March 19, 2021. NMFS received one comment from the public, and no changes were made to the final rule as a result of the comment (see Comments and Responses for additional detail). Additional background information regarding the development of these specifications was provided in the proposed rule and is not repeated here.

This action implements the Councils' recommendations for final 2021 and projected 2022 spiny dogfish specifications to maintain compliance with the Mid-Atlantic Council's updated risk policy (Table 1), as outlined in the proposed rule. Although catch limits were already projected to increase in 2021 compared to fishing year 2020, this final revised commercial quota is 8-percent higher than it would have been before applying the new risk policy. Specifications for fishing year 2022 are projected to be unchanged from these revised 2021 limits.

This action does not change any other fishery management measures, including the 6,000-lb Federal trip limit and restriction of one landed trip per calendar day, leaving them unchanged for fishing years 2021 and 2022. By providing projected specifications for 2022, NMFS hopes to assist fishery participants in planning ahead. The Councils will review these projected 2022 specifications to determine if any changes need to be made prior to their final implementation. Changes may occur if quota overages trigger accountability measures, or if new stock information results in changes to the ABC recommendations. NMFS will publish a notice prior to the 2022 fishing year to confirm the projected quotas as final or announce any necessary changes. NMFS expects the 2022 stock assessment to inform development of the next set of specifications beginning in fishing year 2023.

The public comment period for the proposed rule ended on March 19, 2021, and NMFS received one comment from the public. The commenter stated that the proposed increase in quota is foolhardy, and suggested that dogfish quotas should instead be cut by 50 percent. The commenter presented no rationale or evidence to support these claims. These specifications were developed using the best scientific information available and recent fishery behavior, and incorporates an allowable level of risk according to the Mid-Atlantic Council's risk policy. No changes to the proposed specifications were made as a result of the comment.

There are no changes from the proposed rule.

Pursuant to section 304(b)(3) of the Magnuson Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Administrator, Greater Atlantic Region, has determined that these specifications are necessary for the conservation and management of the Atlantic spiny dogfish fishery, and that it is consistent with the Atlantic Spiny Dogfish FMP, other provisions of the Magnuson-Stevens Act, and other applicable laws.

This action relieves a restriction by increasing annual quota catch limits in the spiny dogfish fishery, and is therefore not subject to the 30-day delayed effectiveness provision of the Administrative Procedure Act pursuant to 5 U.S.C. 553(d)(1). This final rule increases all catch specifications from the ABC to the coastwide commercial quota from what was initially planned to go into effect in fishing year 2021 by 8 and 9 percent, respectively; and 24 and 27 percent, respectively, compared to 2020 specifications. These increases are intended to provide additional flexibility and economic opportunity for the spiny dogfish fishing industry. The 2021 fishing year begins on May 1, 2021. If the 30-day delayed effectiveness period postpones the implementation of these measures beyond the May 1 start of the fishing year, the lower and unnecessarily restrictive initially projected 2021 catch limits will roll over into the beginning of 2021. This would be contrary to the public interest as it could create confusion and potential economic harm to the spiny dogfish fishery through lost opportunity under the lower catch limits at the beginning of the fishing year. Furthermore, this action does not require any additional time to come into compliance with this rule. Unlike actions that require an adjustment period, spiny dogfish fishing vessels will not have to purchase new equipment or otherwise expend time or money to comply with these management measures. Therefore, NMFS also finds good cause not to delay this final rule's effectiveness, consistent with 5 U.S.C. 553(d)(3); and to implement these specifications on May 1, 2021, for the 2021 fishing year.

This final rule is exempt from review under Executive Order 12866 because the action contains no implementing regulations.

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

This final rule does not duplicate, conflict, or overlap with any existing Federal rules.

This action contains no information collection requirements under the Paperwork Reduction Act of 1995.