Please refer to Docket ID NRC-2017-0090 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:

• Federal Rulemaking website: Go to https://www.regulations.gov/ and search for Docket ID NRC-2017-0090.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, at 301-415-4737, or by email to PDR.Resource@nrc.gov. For the convenience of the reader, instructions about obtaining materials referenced in this document are provided in the Availability of Documents section.

• Attention: The Public Document Room (PDR), where you may examine and order copies of public documents is currently closed. You may submit your request to the PDR via email at PDR.Resource@nrc.gov or call 1-800-397-4209 between 8:00 a.m. and 4:00 p.m. (EST), Monday through Friday, except Federal holidays.

• Attention: The Technical Library, which is located at Two White Flint North, 11545 Rockville Pike, Rockville, Maryland 20852, is open by appointment only. Interested parties may make appointments to examine documents by contacting the NRC Technical Library by email at Library.Resource@nrc.gov between 8:00 a.m. and 4:00 p.m. (EST), Monday through Friday, except Federal holidays.

The NRC encourages electronic comment submission through the Federal Rulemaking website ( https://www.regulations.gov ). Please include Docket ID NRC-2017-0090 in your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at https://www.regulations.gov/ as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS. Comments received after August 2, 2021, will be considered if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date. Comments received on this direct final rule also will be considered to be comments on a companion proposed rule published in the Proposed Rules section of this issue of the Federal Register .

Because the NRC anticipates that this action will be non-controversial, the NRC is using the “direct final rule procedure” for this rule. The rule will become effective on September 29, 2021. However, if the NRC receives significant adverse comments by August 2, 2021, then the NRC will publish a document that withdraws this direct final rule and would subsequently address the comments received in any final rule as a response to the companion proposed rule published in the Proposed Rules section of this issue of the Federal Register . Absent significant modifications to the proposed revisions requiring republication, the NRC does not intend to initiate a second comment period on this action in the event the direct final rule is withdrawn.

A significant adverse comment is a comment in which the commenter explains why the rule (including the environmental assessment) would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if it meets the following criteria:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, a substantive response is required when—

(a) The comment causes the NRC to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC to make a change (other than editorial) to the rule.

For detailed instructions on filing comments, please see the ADDRESSES section in the companion proposed rule published in the Proposed Rules section of this issue of the Federal Register .

The General Electric Company (GE) submitted the U.S. Advanced Boiling Water Reactor (U.S. ABWR) standard design certification initial application on September 29, 1987. The NRC initially docketed the application (Docket No. STN 50-605) on February 22, 1988, but later changed the docket number to 52-001 on March 20, 1992 (57 FR 9749) to reflect GE's request [or the applicant's request] to review the application under part 52, “Licenses, Certifications, and Approvals for Nuclear Power Plants,” of title 10 of the Code of Federal Regulations (10 CFR). The NRC documented its review in NUREG-1503, “Final Safety Evaluation Report Related to the Certification of the Advanced Boiling Water Reactor Design,” in July 1994 (ADAMS Accession No. ML080670592), and NUREG-1503, Supplement 1, “Final Safety Evaluation Report Related to the Certification of the Advanced Boiling Water Reactor Design,” in May 1997 (ADAMS Accession No. ML080710134). The NRC issued the agency's first design certification (DC) rule, for the U.S. ABWR, in the Federal Register (62 FR 25800), effective June 11, 1997. In 2007, GE and Hitachi Nuclear Energy formed an alliance, and General Electric-Hitachi Nuclear Energy Americas, LLC, (GEH) became the entity retaining the U.S. ABWR design from GE.

On December 7, 2010, GEH submitted its application to renew the certification of the U.S. ABWR standard design to the NRC under subpart B, “Standard design certifications,” to 10 CFR part 52. The NRC published a notice of receipt of the application in the Federal Register on January 27, 2011 (76 FR 4948). On February 18, 2011, the NRC formally accepted the design certification renewal application for docketing (76 FR 9612). The preapplication information submitted before the NRC formally accepted the application for docketing can be found in ADAMS under Docket No. PROJ0774.

Subpart B to 10 CFR part 52 presents the process for obtaining standard design certifications. Under § 52.57(a), an application for DC renewal must contain all information necessary to bring the information and data contained in the previous application up to date. Updates under § 52.57(a) include clarifications consistent with the original understanding of the design information, and changes to correct known errors, typographical errors, or defects, as defined in § 21.3. For the NRC to issue a rule granting the DC renewal under § 52.59(a), the design, either as originally certified or as modified during the rulemaking on renewal, must comply with (1) the Atomic Energy Act of 1954, as amended (AEA), (2) the NRC regulations applicable and in effect at the time the certification was issued, and (3) the applicable requirements of § 50.150, “Aircraft impact assessment.”  1

A DC renewal applicant may propose to amend the design under § 52.59(c). An amendment is an applicant-proposed change that is not an update under § 52.57(a) or a change to meet the renewal standards in § 52.59(a). Amendments must comply with the AEA and the NRC's regulations applicable and in effect at the time of renewal rather than the § 52.29(a) standards. If the amendment request entails such an extensive change to the certified design that an essentially new standard design is being proposed, a new DC application must be submitted.

In addition, NRC regulations at § 52.59(b) state that the Commission may impose other requirements if it determines any of the following:

1. They are necessary for adequate protection to public health and safety or common defense and security;

2. They are necessary for compliance with the NRC's regulations and orders applicable and in effect at the time the certification was issued; or

3. There is a substantial increase in overall protection of the public health and safety or the common defense and security to be derived from the new requirements, and the direct and indirect costs of implementing those requirements are justified in view of this increased protection.

The final U.S. ABWR DC rule for the original certification, Supplementary Information, Section II.A.1, “Finality,” stated that the NRC “does not plan or expect to be able to conduct a de novo review of the entire design if a certification renewal application is filed under § 52.59[,]” “Criteria for renewal” (62 FR 25800, 25805). Instead, the NRC stated that it expects that the focus of the review would be on changes to the design that are proposed by the applicant and insights from relevant operating experience with the certified design or other designs, or other material new information arising after the NRC staff's review of the design certification. Furthermore, the standards in § 52.59(b) control the imposition of new requirements during the review of applications for renewal. When GEH applied to renew the U.S. ABWR DC, the NRC affirmed this position, reviewed only those aspects of the design that were amended or modified, and determined whether operating experience or other material new information indicated that additional changes to the design were necessary. The staff reviewed GEH's proposed amendments and modifications to the design; the staff did not impose changes under 10 CFR 52.59(b).

On June 12, 2009, the NRC published a rule requiring applicants for new nuclear power reactors to perform a design-specific assessment of the effects of the impact of a large, commercial aircraft (74 FR 28111). By letter dated December 7, 2010, GEH submitted its application to renew the U.S. ABWR DC to the NRC, which included Revision 5 to the design control document. This revision includes a containment re-analysis amendment and the necessary changes to meet the requirements of § 50.150, “Aircraft impact assessment.” Revision 5 of the DCD also describes the aircraft impact assessment results and identifies and incorporates design features and functional capabilities to show, with reduced use of operator actions, that the reactor core remains cooled and spent fuel pool integrity is maintained.

In a letter dated July 20, 2012, the NRC identified proposed changes that were regulatory improvements or that could meet the criteria in § 52.59(b). The NRC suggested that GEH consider the recommendations contained in SECY-12-0025, “Proposed Orders and Requests for Information in Response to Lessons Learned from Japan's March 11, 2011, Great Tohoku Earthquake and Tsunami,” dated February 17, 2012, addressing Recommendations 4.2, 7.1, and 9.3 from SECY-11-0093, “Near-Term Report and Recommendations for Agency Actions Following the Events in Japan,” enclosure, “Recommendations for Enhancing Reactor Safety in the 21st Century; The Near-Term Task Force Review of Insights from the Fukushima Dai-Ichi Accident report,” dated July 12, 2011. Subsequently, during the Mitigation of Beyond-Design-Basis Events rulemaking that resulted in § 50.155, “Mitigation of beyond-design-basis events,” the Commission decided not to impose mitigation strategies requirements on DCs. 2

After the NRC's July 20, 2012, letter to GEH, the NRC issued several requests for additional information to identity additional items or clarify the items communicated in the 2012 letter. By letter dated February 19, 2016, GEH submitted DCD, Revision 6, to incorporate changes to the U.S. ABWR DCD made in response to NRC's 2012 letter and to the NRC's requests for additional information. In addition, this revision transmitted corrections of typographical errors that were identified during document development, and other formatting changes. These corrections represent non-substantive changes that are editorial in nature. The NRC reviewed these typographical changes and determined that the changes do not affect the NRC's findings in the final safety evaluation report for original certification and are acceptable. On December 20, 2019, the applicant submitted DCD, Revision 7, that incorporated the remaining changes provided in earlier responses to requests for additional information. The NRC reviewed DCD, Revision 7, against the changes proposed in responses to requests for additional information and noted that two short paragraphs were missing from Chapter 5. On March 16, 2020, the applicant resubmitted DCD, Revision 7, Chapter 5, including the previously missing paragraphs. To ensure that the public can reference a single ADAMS package for this document, the NRC copied the original DCD, Revision 7, ADAMS package, and replaced Chapter 5 with the corrected file. This corrected ADAMS package is the collection of DCD, Revision 7, chapters that the NRC has reviewed (ADAMS Accession No. ML20093K254). The NRC's review is documented in Supplement 2 to NUREG-1503, “Final Safety Evaluation Report Related to the Certification of the Advanced Boiling Water Reactor Design.” This final rule certifies Revision 7 of the U.S. ABWR DCD as provided in ADAMS Accession No. ML20093K254.

In a letter dated June 9, 2016, Toshiba Corporation Energy Systems and Solutions Company (Toshiba) withdrew its application to renew the original U.S. ABWR design certification with its version of the U.S. ABWR design certification. The Toshiba ABWR was to incorporate the Toshiba-specific aircraft impact assessment amendment of the U.S. ABWR design certification, identified in the current appendix A to 10 CFR part 52 as the South Texas Project Nuclear Operating Company (STPNOC) DCD. The original U.S. ABWR design certification has expired, along with its STPNOC DCD aircraft impact assessment amendment, and Toshiba has withdrawn its renewal U.S. ABWR DC application; therefore, Toshiba's STPNOC DCD with its Toshiba-specific aircraft impact assessment amendment is not considered to be a timely renewal as described in § 52.57(b).

In a letter dated June 22, 2018, the only U.S. ABWR combined license (COL) holder, Nuclear Innovation North America LLC, requested NRC approval to withdraw the COLs for South Texas Project, Units 3 and 4 (COLs NPF 97 and NPF 98). The NRC approved the termination of these COLs on July 12, 2018. Since the only COL or COL applicant who referenced the Toshiba STPNOC DCD has terminated its licenses, and no other license or application referenced the U.S. ABWR DC, the Toshiba STPNOC DCD no longer meets the requirement for validity beyond the date of expiration under § 52.55(b). Finally, GEH has not requested to renew the STPNOC amendment. For all these reasons, the NRC is not retaining the original DCD or the STPNOC DCD option in Appendix A to 10 CFR part 52. Instead, the NRC is replacing appendix A to 10 CFR part 52 with this final rule certifying the renewed GEH U.S. ABWR design, as explained in Section IV.

The final safety evaluation report for the renewed U.S. ABWR standard design consists of (1) the original final safety evaluation report published in July 1994 (NUREG-1503, Volume 1— Chapters 1 through 22 and Volume 2—Appendices); (2) NUREG-1503, Supplement 1, published in May 1997; and (3) NUREG-1503, Supplement 2, published in October 2020. NUREG-1503 and NUREG-1503, Supplement 1, document the staff's review of the original certified DC. 3 NUREG-1503, Supplement 2, documents the NRC staff's review of Revision 7 of the U.S. ABWR DCD. The original final safety evaluation report and its supplements are available as indicated in Section XVI, “Availability of Documents,” in this document.

The following discussion describes the purpose and key aspects of each section of the U.S. ABWR DC renewal rule. This rule is unique because it is the first DC renewal. In addition to the GEH U.S. ABWR design certification, the current appendix A to 10 CFR part 52 includes discussions related to the U.S. ABWR design certified for the STPNOC acting together with Toshiba. As described in Section III, “Background,” of this document, the NRC has terminated the COLs that relied on the U.S. ABWR design certification rule as amended, and Toshiba has withdrawn its U.S. ABWR DC renewal application. Therefore, the NRC believes that the best approach for this renewal is to completely replace appendix A to 10 CFR part 52 with this final rule certifying the renewed GEH U.S. ABWR design. There is no discussion of the removal of STPNOC/Toshiba specific parts of the existing appendix A to 10 CFR part 52. The U.S. ABWR DC renewal rule maintains the structure of existing DC rules, with certain modifications where necessary to account for differences in the U.S. ABWR design documentation, design features, and environmental assessment (including severe accident mitigation design alternatives). As a result, DC rules are standardized to the extent practical.

The purpose of Section I of appendix A to 10 CFR part 52 is to identify the standard design approved by this U.S. ABWR DC renewal final rule and the applicant for certification of the standard design. Identification of the DC applicant is necessary to implement appendix A to 10 CFR part 52 for two reasons. First, § 52.63(c) identifies the DC applicant as a potential source for an applicant for a COL to obtain the generic DCD and supporting design information. If the COL applicant does not obtain the design information from the DC applicant, but instead uses a different entity, then the COL applicant must meet the requirements in § 52.73, “Relationship to other subparts.” Second, paragraph X.A.1 of this final rule requires that the identified DC applicant maintain the generic DCD throughout the time that appendix A to 10 CFR part 52 may be referenced.

The purpose of Section II of appendix A to 10 CFR part 52 is to define specific terminology with respect to this final DC rule. During development of the first two DC rules, the NRC decided that there would be both generic (master) design control documents maintained by the NRC and the design certification applicant, as well as individual plant-specific DCDs maintained by each applicant or licensee that references a certified standard design. This distinction is necessary in order to specify the relevant plant-specific requirements to applicants and licensees referencing appendix A to 10 CFR part 52. In order to facilitate the maintenance of the master design control documents, the NRC requires that each application for a standard design certification be updated to include an electronic copy of the final version of the DCD. The final version is required to incorporate all amendments to the DCD submitted since the original application, as well as any changes directed by the NRC as a result of its review of the original DCD or as a result of any public input that the staff determined was valid. In the case of the U.S. ABWR DC renewal, there was no significant public participation in the staff review. This final version is the master DCD incorporated by reference in the design certification rule. The master DCD will be revised as needed to include generic changes to the version of the DCD that is approved in this design certification final rule. These changes would occur as the result of generic rulemaking by the NRC, under the change criteria in Section VIII of appendix A to 10 CFR part 52.

The NRC also requires each applicant and licensee referencing appendix A to 10 CFR part 52 to submit and maintain a plant-specific DCD as part of the COL final safety analysis report. This plant-specific DCD must either include or incorporate by reference the information in the generic DCD. The plant-specific DCD would be updated as necessary to reflect the generic changes to the DCD that the NRC may adopt through rulemaking, plant-specific departures from the generic DCD that the NRC imposed on the licensee by order, and any plant-specific departures that the licensee chooses to make in accordance with the relevant processes in Section VIII. Therefore, the plant-specific DCD functions similarly to an updated final safety analysis report because it provides the most complete and accurate information on a plant's design basis for that part of the plant that would be within the scope of appendix A to 10 CFR part 52.

The NRC is treating the technical specifications in Chapter 16, “Technical Specifications,” of the generic DCD as a special category of information and designating them as generic technical specifications in order to facilitate the special treatment of this information under appendix A to 10 CFR part 52. A COL applicant must submit plant-specific technical specifications that consist of the generic technical specifications, which may be modified as specified in paragraph VIII.C, and the remaining site-specific information needed to complete the technical specifications. The final safety analysis report that is required by § 52.79, “Contents of applications; technical information in final safety analysis report,” will consist of the plant-specific DCD, the site-specific final safety analysis report, and the plant-specific technical specifications.

The terms Tier 1, Tier 2, and Tier 2* are defined, and the term COL action items (COL license information) is described in appendix A to 10 CFR part 52 because these concepts were not envisioned when 10 CFR part 52 was developed. The DC applicants and the NRC use these terms in implementing the two-tiered rule structure (the DCD is divided into Tiers 1 and 2 to support the rule structure) that was proposed by representatives of the nuclear industry after publication of 10 CFR part 52. The Commission approved the use of a two-tiered rule structure in its staff requirements memorandum, dated February 15, 1991, on SECY-90-377, “Requirements for Design Certification under 10 CFR part 52,” dated November 8, 1990.

Tier 1 information means the portion of the design-related information contained in the generic DCD that is approved and certified by this appendix. Tier 2 information means the portion of the design-related information contained in the generic DCD that is approved but not certified by this appendix. The change process for Tier 2 information is similar to, but not identical to, the change process set forth in § 50.59, “Changes, tests, and experiments.” The regulations in § 50.59 describe when a licensee may make changes to a plant as described in its final safety analysis report without a license amendment. Because the change process for Tier 2 information provided in Section VIII of this appendix provides more specific criteria than § 50.59, as described in § 50.59(c)(4), the definitions and criteria of § 50.59 are not applicable to this process.

Certain Tier 2 information has been designated in the generic DCD with brackets, italicized text, and an asterisk as “Tier 2*” information and a plant-specific departure from Tier 2* information requires prior NRC approval (refer to Section IV.H of this document). However, the Tier 2* designation expires for some of this information when the facility first achieves full power after the finding required by § 52.103(g). The process for changing Tier 2* information and the time at which its status at Tier 2* expires is set forth in paragraph VIII.B.6 of this appendix. Some Tier 2* requirements concerning special preoperational tests are designated to be performed only for the first plant or first three plants referencing the U.S. ABWR DC renewal rule. The Tier 2* designation for these selected tests will expire after the first plant or first three plants complete the specified tests. However, a COL action item requires that subsequent plants also perform the tests or justify that the results of the first-plant-only or first-three-plants-only tests are applicable to the subsequent plant.

The NRC is including a definition for a “ Departure from a method of evaluation described in the plant-specific DCD used in establishing the design bases or in the safety analyses” in paragraph II.G of this appendix, so that the eight criteria in paragraph VIII.B.5.b will be implemented for new reactors as intended.

The purpose of Section III of appendix A to 10 CFR part 52 is to describe and define the scope and content of this design certification, explain how to obtain a copy of the generic DCD, identify requirements for incorporation by reference of the U.S. ABWR DC renewal final rule, and set forth how documentation discrepancies or inconsistencies are to be resolved.

Paragraph III.A is the required statement of the Office of the Federal Register for approval of the incorporation by reference of the U.S. ABWR DCD, Revision 7, which includes a late correction to Tier 2, Chapter 5. In addition, this paragraph provides the information on how to obtain a copy of the DCD.

Paragraph III.B is the requirement for COL applicants and licensees referencing the U.S. ABWR DCD to comply with the requirements of this appendix in order to benefit from the issue finality afforded the certified design. The legal effect of incorporation by reference is that the incorporated material has the same legal status as if it were published in the Code of Federal Regulations. This material, like any other properly issued regulation, has the force and effect of law. Tier 1 and Tier 2 information and generic technical specifications have been combined into a single document called the generic DCD, in order to effectively control this information and facilitate its incorporation by reference into the final rule. In addition, paragraph III.B clarifies that the conceptual design information and GEH's evaluation of severe accident mitigation design alternatives as described in the “Technical Support Document for the ABWR” are not part of appendix A to 10 CFR part 52. As provided by § 52.47(a)(24), these conceptual designs are not part of appendix A to 10 CFR part 52 and, therefore, are not applicable to an application that references appendix A to 10 CFR part 52. Therefore, an applicant referencing appendix A to 10 CFR part 52 would not be required to conform to the conceptual design information that was provided by the DC applicant. The conceptual design information, which consists of site-specific design features, was required to facilitate the DC review. Similarly, the severe accident mitigation design alternatives were required to facilitate the environmental assessment.

Paragraphs III.C and III.D set forth the manner by which potential conflicts are to be resolved and identify the controlling document. Paragraph III.C establishes the Tier 1 description in the DCD as controlling in the event of an inconsistency between the Tier 1 and Tier 2 information in the DCD. Paragraph III.D establishes the generic DCD as the controlling document in the event of an inconsistency between the DCD and the final safety evaluation report for the certified standard design.

Paragraph III.E makes it clear that design activities outside the scope of the DC may be performed using actual site characteristics, provided that the design activities do not affect the DCD or conflict with the interface requirements. This provision applies to site-specific portions of the plant, such as the administration building.

Section IV of appendix A to 10 CFR part 52 sets forth additional requirements and restrictions imposed upon an applicant who references appendix A to 10 CFR part 52.

Paragraph IV.A sets forth the information requirements for COL applicants and distinguishes between information and documents that must be included in the application or the design control document and those which may be incorporated by reference. Any incorporation by reference in the application should be clear and should specify the title, date, edition or version of a document, the page number(s), and table(s) containing the relevant information to be incorporated. The legal effect of such an incorporation by reference into the application is that appendix A to 10 CFR part 52 would be legally binding on the applicant or licensee.

In paragraph IV.B the NRC reserves the right to determine how appendix A to 10 CFR part 52 may be referenced under 10 CFR part 50, “Domestic licensing of production and utilization facilities.” This determination may occur in the context of a subsequent rulemaking modifying 10 CFR part 52 or this DC rule, or on a case-by-case basis in the context of a specific application for a 10 CFR part 50 construction permit or operating license. This provision is necessary because the previous DC rules were not implemented in the manner that was originally envisioned at the time that 10 CFR part 52 was issued. The NRC's concern is with the manner by which the inspections, tests, analyses, and acceptance criteria (ITAAC) were developed and the lack of experience with DCs in a licensing proceeding. Therefore, it is appropriate that the NRC retain some discretion regarding the manner by which appendix A to 10 CFR part 52 could be referenced in a 10 CFR part 50 licensing proceeding.

The purpose of Section V of appendix A to 10 CFR part 52 is to specify the regulations that are applicable and in effect for the U.S. ABWR DC renewal. These regulations consist of the technically relevant regulations identified in paragraph V.A, except for the regulations in paragraph V.B that are not applicable to this certified design.

The purpose of Section VI of appendix A to 10 CFR part 52 is to identify the scope of issues that are resolved by the NRC through this final rule and, therefore, are “matters resolved” within the meaning and intent of § 52.63(a)(5). The section is divided into five parts: Paragraph VI.A identifies the NRC's safety findings in adopting appendix A to 10 CFR part 52, paragraph VI.B identifies the scope and nature of issues that are resolved by this final rule, paragraph VI.C identifies issues that are not resolved by this final rule, paragraph VI.D identifies the issue finality restrictions applicable to the NRC with respect to appendix A to 10 CFR part 52, and paragraph VI.E identifies the availability of secondary resources.

Paragraph VI.A describes the nature of the NRC's findings in general terms and makes the findings required by § 52.54, “Issuance of standard design certification,” for the NRC's approval of this DC final rule.

Paragraph VI.B sets forth the scope of issues that may not be challenged as a matter of right in subsequent proceedings. The introductory phrase of paragraph VI.B clarifies that issue resolution, as described in the remainder of the paragraph, extends to the delineated NRC proceedings for plants referencing appendix A to 10 CFR part 52. The remainder of paragraph VI.B describes the categories of information for which there is issue resolution.

Paragraph VI.C reserves the right of the NRC to impose operational requirements on applicants that reference appendix A to 10 CFR part 52. This provision reflects the fact that only some operational requirements, including portions of the generic technical specifications in Chapter 16 of the DCD, and no operational programs ( e.g., operational quality assurance), were completely reviewed by the NRC in this DC final rule. However, those operational requirements that the NRC completely reviewed and approved as documented in the NRC's final safety evaluation report, are subject to the change control provisions of paragraph VIII.C. The NRC notes that operational requirements may be imposed on licensees referencing this DC through the inclusion of license conditions in the license, or established by a COL applicant or license holder through the inclusion with sufficient specificity of a description of the operational requirement in the plant-specific final safety analysis report. 4 The NRC's choice of the regulatory vehicle for imposing the operational requirements will depend upon the following, among other things: (1) Whether the development and/or implementation of these requirements must occur prior to either the issuance of the COL or the Commission finding under § 52.103(g) and (2) the nature of the change controls that are appropriate given the regulatory, safety, and security significance of each operational requirement.

Also, paragraph VI.C allows the NRC to impose future operational requirements (distinct from design matters) on applicants who reference this DC. License conditions for portions of the plant within the scope of this DC ( e.g., start-up and power ascension testing) are not restricted by § 52.63. The requirement to perform these testing programs is contained in the Tier 1 information. However, ITAAC cannot be specified for these subjects because the matters to be addressed in these license conditions cannot be verified prior to fuel load and operation, when the ITAAC are satisfied. In the absence of detailed design information to evaluate the need for and develop specific post-fuel load verifications for these matters, the NRC is reserving the right to impose, at the time of COL issuance, license conditions addressing post-fuel load verification activities for portions of the plant within the scope of this DC.

Paragraph VI.D requires the NRC to follow the restrictions contained in Section VIII of appendix A to 10 CFR part 52 when requiring generic or plant-specific modifications, changes, or additions to structures, systems, and components; design features; design criteria; and ITAAC within the scope of the certified design.

Paragraph VI.E provides that the NRC will specify at an appropriate time the procedures on how to obtain access to sensitive unclassified and non-safeguards information (SUNSI) and safeguards information (SGI) for the U.S. ABWR DC renewal rule. Access to such information would be for the sole purpose of requesting or participating in certain specified hearings, such as hearings required by § 52.85, “Administrative review of applications; hearings,” or an adjudicatory hearing.

The purpose of Section VII of appendix A to 10 CFR part 52 is, in part, to specify the period during which this design certification may be referenced by an applicant or licensee for a COL, under § 52.55, “Conditions of construction permits, early site permits, combined licenses, and manufacturing licenses,” and the period it will remain valid when the DC is referenced. For example, if a COL application references this DC during the 15-year period, then the DC would be effective for that COL application until that COL application is withdrawn or the license issued on that COL application expires, including periods of operation under a renewed license. The NRC intends for appendix A to 10 CFR part 52 to remain valid for the life of the plants that reference the DC to achieve the benefits of standardization and licensing stability. This means that changes to, or plant-specific departures from, information in the plant-specific DCD must be made under the change processes in Section VIII for the life of a plant that references this DC rule.

The purpose of Section VIII of appendix A to 10 CFR part 52 is to set forth the processes for generic changes to, or plant-specific departures (including exemptions) from, the DCD. The NRC adopted this restrictive change process in order to achieve a more stable licensing process for applicants and licensees that reference DC rules. Section VIII is divided into three paragraphs, which correspond to Tier 1, Tier 2, and operational requirements.

Generic changes (called “modifications” in § 52.63(a)(3)) must be accomplished by rulemaking because the intended subject of the change is this DC final rule itself, as is contemplated by § 52.63(a)(1). Consistent with § 52.63(a)(3), any generic rulemaking changes are applicable to all plants referencing this DC rule, absent circumstances which render the change technically irrelevant. By contrast, plant-specific departures could be either required by an order to one or more applicants or licensees; or an applicant or licensee-initiated departure applicable only to that applicant's or licensee's plant(s), similar to a § 50.59 departure or an exemption. Because these plant-specific departures result in a DCD that is unique for that plant, Section X of appendix A to 10 CFR part 52 requires an applicant or licensee to maintain a plant-specific DCD. For purposes of brevity, the following discussion refers to the processes for both generic changes and plant-specific departures as “change processes.” Section VIII refers to an exemption from one or more requirements of this appendix and addresses the criteria for granting an exemption. The NRC cautions that when the exemption involves an underlying substantive requirement ( i.e., a requirement outside this appendix), then the applicant or licensee requesting the exemption must demonstrate that an exemption from the underlying applicable requirement meets the criteria of § 52.7, “Specific exemptions,” or § 50.12, “Specific exemptions.”

Tier 1 information is the portion of design-related information in the generic DCD that the NRC approves in the 10 CFR part 52 design certification appendices. Tier 1 information can only be changed with NRC approval by rulemaking, approval of an exemption from the certified design rule, or required by the Commission through a plant-specific order. Tier 2 information also is approved by the NRC in the 10 CFR part 52 design certification rule appendices, but it is not certified and licensees who reference the design can change this information using the process outlined in Section VIII of the appendices. This change process is similar to that in § 50.59 and is generally referred to as the “§ 50.59-like” process. If the criteria in Section VIII are met, a licensee can change Tier 2 information without prior NRC approval. The NRC created a third category, Tier 2*, to address industry requests to minimize the scope of Tier 1 information and provide greater flexibility for making changes. Tier 2* information is included in Tier 2 and has the same safety significance as Tier 1 information, but the NRC decided to provide more flexibility for licensees to change this type of information. Tier 2* is significant information that cannot be changed without prior NRC approval of a license amendment requesting the change. Paragraph VIII.B.6 of appendix A to 10 CFR part 52 sets forth the process for changing Tier 2* information.

Paragraph VIII.A describes the change process for changes to Tier 1 information that are accomplished by rulemakings that amend the generic DCD and are governed by the standards in § 52.63(a)(1). A generic change under § 52.63(a)(1) will not be made to a certified design while it is in effect unless the change: (1) Is necessary for compliance with NRC regulations applicable and in effect at the time the certification was issued; (2) is necessary to provide adequate protection of the public health and safety or the common defense and security; (3) reduces unnecessary regulatory burden and maintains protection to public health and safety and common defense and security; (4) provides the detailed design information necessary to resolve select design acceptance criteria; (5) corrects material errors in the certification information; (6) substantially increases overall safety, reliability, or security of a facility and the costs of the change are justified; or (7) contributes to increased standardization of the certification information. The rulemakings must provide for notice and opportunity for public comment on the proposed change, under § 52.63(a)(2). The NRC will give consideration as to whether the benefits justify the costs for plants that are already licensed or for which an application for a permit or license is under consideration except for those changes that are necessary to provide adequate protection of the public health and safety or the common defense and security.

Departures from Tier 1 may occur in two ways: (1) The NRC may order a licensee to depart from Tier 1, as provided in paragraph VIII.A.3, or (2) an applicant or licensee may request an exemption from Tier 1, as addressed in paragraph VIII.A.4. If the NRC seeks to order a licensee to depart from Tier 1, paragraph VIII.A.3 would require that the NRC find both that the departure is necessary either to assure adequate protection of the public health and safety or the common defense and security or to bring the certification into compliance with the NRC's regulations applicable and in effect at the time of approval of the DC and that special circumstances are present, taking into consideration whether the special circumstances outweigh any decrease in safety that may result from the reduction in standardization caused by the plant-specific order. Paragraph VIII.A.4 provides that exemptions from Tier 1 requested by an applicant or licensee are governed by the requirements of §§ 52.63(b)(1) and 52.98(f), which provide an opportunity for a hearing. In addition, the NRC would not grant requests for exemptions that will result in a significant decrease in the level of safety otherwise provided by the design.

Paragraph VIII.B describes the change processes for the Tier 2 information; which have the same elements as the Tier 1 change process, but some of the standards for plant-specific orders and exemptions would be different. Generic Tier 2 changes would be accomplished by rulemaking that would amend the generic DCD and would be governed by the standards in § 52.63(a)(1). A generic change under § 52.63(a)(1) would not be made to a certified design while it is in effect unless the change: (1) Is necessary for compliance with NRC regulations that were applicable and in effect at the time the certification was issued; (2) is necessary to provide adequate protection of the public health and safety or the common defense and security; (3) reduces unnecessary regulatory burden and maintains protection to public health and safety and the common defense and security; (4) provides the detailed design information necessary to resolve select design acceptance criteria; (5) corrects material errors in the certification information; (6) substantially increases overall safety, reliability, or security of a facility and the costs of the change are justified; or (7) contributes to increased standardization of the certification information.

Departures from Tier 2 would occur in five ways: (1) The Commission may order a plant-specific departure, as set forth in paragraph VIII.B.3; (2) an applicant or licensee may request an exemption from a Tier 2 requirement as set forth in paragraph VIII.B.4; (3) a licensee may make a departure without prior NRC approval under paragraph VIII.B.5; (4) the licensee may request NRC approval for proposed departures which do not meet the requirements in paragraph VIII.B.5 as provided in paragraph VIII.B.5.e; and (5) the licensee may request NRC approval for a departure from Tier 2* information under paragraph VIII.B.6.

Similar to Commission-ordered Tier 1 departures and generic Tier 2 changes, Commission-ordered Tier 2 departures cannot be imposed except when necessary, either to bring the certification into compliance with the NRC's regulations applicable and in effect at the time of approval of the DC or to ensure adequate protection of the public health and safety or the common defense and security, provided that special circumstances are present as set forth in paragraph VIII.B.3. However, unlike in the case of Tier 1 departures, the Commission would not have to consider whether the special circumstances for the Tier 2 departures would outweigh any decrease in safety that may result from the reduction in standardization caused by the plant-specific order, as required by § 52.63(a)(4). The NRC has determined that it is not necessary to impose an additional limitation for standardization similar to that imposed on Tier 1 departures by § 52.63(a)(4) and (b)(1) because it would unnecessarily restrict the flexibility of applicants and licensees with respect to Tier 2 information.

An applicant or licensee referencing this DC rule may request an exemption from Tier 2 information as set forth in paragraph VIII.B.4. The applicant or licensee would have to demonstrate that the exemption complies with one of the special circumstances in regulations governing specific exemptions in § 50.12(a). In addition, the NRC would not grant requests for exemptions that would result in a significant decrease in the level of safety otherwise provided by the design. However, unlike Tier 1 changes, the special circumstances for the exemption do not have to outweigh any decrease in safety that may result from the reduction in standardization caused by the exemption. If the exemption is requested by an applicant for a license, the exemption would be subject to litigation in the same manner as other issues in the licensing hearing, consistent with § 52.63(b)(1). If the exemption is requested by a licensee, then the exemption would be subject to an opportunity for hearing in the same manner as license amendments.

Paragraph VIII.B.5 allows an applicant or licensee to depart from Tier 2 information, without prior NRC approval, if the departure does not involve a change to or departure from Tier 1 information, Tier 2* information, or the technical specifications, and the departure does not require a license amendment under paragraph VIII.B.5.b or c. The technical specifications referred to in B.5.a of this paragraph are the technical specifications in Chapter 16 of the generic DCD, including bases, for departures made prior to the issuance of the COL. After the issuance of the COL, the plant-specific technical specifications would be controlling under paragraph VIII.B.5. The requirement for a license amendment in paragraph VIII.B.5.b is similar to the requirement in § 50.59 and applies to all of the information in Tier 2 except for the information that resolves the severe accident issues or that affects information required by § 52.47(a)(28) to address aircraft impacts.

The NRC concludes that the resolution of ex-vessel severe accident design features should be preserved and maintained in the same fashion as all other safety issues that were resolved during the design certification review (refer to SRM on SECY-90-377, “Requirements for Design Certification Under 10 CFR part 52,” dated February 15, 1991, ADAMS Accession No. ML003707892). However, because of the increased uncertainty in ex-vessel severe accident issue resolutions, the NRC has adopted separate criteria in paragraph VIII.B.5.c for determining if a departure from information that resolves ex-vessel severe accident design features would require a license amendment. For purposes of applying the special criteria in paragraph VIII.B.5.c, ex-vessel severe accident resolutions are limited to design features where the intended function of the design feature is relied upon to resolve postulated accidents when the reactor core has melted and exited the reactor vessel, and the containment is being challenged. These design features are identified in Section 19E of the DCD but may be described in other sections of the DCD. The location of design information in the DCD is not important to the application of this special procedure for ex-vessel severe accident design features. However, the special procedure in paragraph VIII.B.5.c does not apply to design features that resolve “beyond-design-basis accidents” or other low-probability events. The important aspect of this special procedure is that it is limited to ex-vessel severe accident design features, as defined above. Some design features may have intended functions to meet “design-basis” requirements and to resolve “ex-vessel severe accidents.” If these design features are reviewed under paragraph VIII.B.5, then the appropriate criteria from either paragraph VIII.B.5.b or VIII.B.5.c are selected depending upon the function being changed.

An applicant or licensee that plans to depart from Tier 2 information, under paragraph VIII.B.5, is required to prepare an evaluation that provides the bases for the determination that the proposed change does not require a license amendment or involve a change to Tier 1 or Tier 2* information, or a change to the TS, as explained above. In order to achieve the NRC's goals for design certification, the evaluation needs to consider all of the matters that were resolved in the DCD, such as generic issue resolutions that are relevant to the proposed departure. The benefits of the early resolution of safety issues would be lost if departures from the DCD were made that violated these resolutions without appropriate review. The evaluation of the relevant matters needs to consider the proposed departure over the full range of power operation from startup to shutdown, as it relates to anticipated operational occurrences, transients, DBAs, and severe accidents. The evaluation must also include a review of all relevant secondary references from the DCD because Tier 2 information, which is intended to be treated as a requirement, is contained in the secondary references. The evaluation should consider the tables in Sections 14.3 and 19.8 of the generic DCD to ensure that the proposed change does not impact Tier 1 information. These tables contain cross-references from the safety analyses in Tier 2 to the important parameters that were included in Tier 1.

Paragraph VIII.B.5.d addresses information described in the DCD to address aircraft impacts, under § 52.47(a)(28). Under § 52.47(a)(28), applicants are required to include the information required by § 50.150(b) in their DCD. A COL applicant or licensee that departs from this information is required to consider the effect of the changed design feature or functional capability on the original aircraft impact assessment required by § 50.150(a). The applicant or licensee is also required to describe in the plant-specific DCD how the modified design features and functional capabilities continue to meet the assessment requirements in § 50.150(a)(1). Submittal of this updated information is governed by the reporting requirements in paragraph X.B.

During an ongoing adjudicatory proceeding ( e.g., for issuance of a COL) a party who believes that an applicant or licensee has not complied with paragraph VIII.B.5 when departing from Tier 2 information may petition to admit such a contention into the proceeding under paragraph VIII.B.5.g. As set forth in paragraph VIII.B.5.g, the petition would have to comply with the requirements of § 2.309, “Hearing requests, petitions to intervene, requirements for standing, and contentions,” and show that the departure does not comply with paragraph VIII.B.5. If on the basis of the petition and any responses thereto, the presiding officer in the proceeding determines that the required showing has been made, the matter would be certified to the Commission for its final determination. In the absence of a proceeding, assertions of noncompliance with paragraph VIII.B.5 requirements applicable to Tier 2 departures would be treated as petitions for enforcement action under § 2.206, “Requests for action under this subpart.”

Paragraph VIII.B.6 provides a process for departing from Tier 2* information. The creation of and restrictions on changing Tier 2* information resulted from the development of the Tier 1 information for the Advanced Boiling Water Reactor design certification (appendix A to 10 CFR part 52) and the System 80+ design certification (appendix B to 10 CFR part 52). During this development process, these applicants requested that the amount of information in Tier 1 be minimized to provide additional flexibility for an applicant or licensee who references these appendices. Also, many codes, standards, and design processes that were not specified in Tier 1 as acceptable for meeting ITAACs were specified in Tier 2. The result of these departures is that certain significant information exists only in Tier 2 and the Commission does not want this significant information to be changed without prior NRC approval. This Tier 2* information is identified in the generic DCD with brackets, italicized text, and an asterisk.

Although the Tier 2* designation was originally intended to last for the lifetime of the facility, like Tier 1 information, the NRC determined that some of the Tier 2* information could expire when the plant first achieves full (100 percent) power, after the finding required by 10 CFR 52.103(g), while other Tier 2* information must remain in effect throughout the life of the facility. The factors determining whether Tier 2* information could expire after full power is first achieved (first full power) were whether the Tier 1 information would govern these areas after first full power and the NRC's determination that prior approval was required before implementation of the change due to the significance of the information. Therefore, certain Tier 2* information listed in paragraph VIII.B.6.c ceases to retain its Tier 2* designation after full power operation is first achieved following the Commission finding under 10 CFR 52.103(g). Thereafter, that information is deemed to be Tier 2 information that is subject to the departure requirements in paragraph VIII.B.5. By contrast, the Tier 2* information identified in paragraph VIII.B.6.b retains its Tier 2* designation throughout the duration of the license, including any period of license renewal.

If Tier 2* information is changed in a generic rulemaking, the designation of the new information (Tier 1, 2*, or 2) will also be determined in the rulemaking and the appropriate process for future changes will apply. If a plant-specific departure is made from Tier 2* information, then the new designation will apply only to that plant. If an applicant who references this design certification makes a departure from Tier 2* information, the new information will be subject to litigation in the same manner as other plant-specific issues in the licensing hearing. If a licensee makes a departure from Tier 2* information, it will be treated as a license amendment under 10 CFR 50.90 and the finality will be determined under paragraph VI.B.5. Any requests for departures from Tier 2* information that affects Tier 1 must also comply with the requirements in paragraph VIII.A.

The change process for technical specifications and other operational requirements in the design control document is set forth in Section VIII, paragraph C. The key to using the change processes described in Section VIII is to determine if the proposed change or departure would require a change to a design feature described in the generic DCD. If a design change is required, then the appropriate change process in paragraph VIII.A or VIII.B would apply. However, if a proposed change to the technical specifications or other operational requirements does not require a change to a design feature in the generic DCD, then paragraph VIII.C would apply. This change process has elements similar to the Tier 1 and Tier 2 change processes in paragraphs A and B, but with significantly different change standards. Because of the different finality status for technical specifications and other operational requirements, the NRC designated a special category of information, consisting of the technical specifications and other operational requirements, with its own change process in paragraph VIII.C. The language in paragraph VIII.C also distinguishes between generic (Chapter 16 of the DCD) and plant-specific technical specifications to account for the different treatment and finality consistent with technical specifications before and after a license is issued.

The process in paragraph VIII.C.1 for making generic changes to the generic technical specifications in Chapter 16 of the DCD or other operational requirements in the generic DCD is accomplished by rulemaking and governed by the backfit standards in § 50.109. The determination of whether the generic technical specifications and other operational requirements were completely reviewed and approved in this DC rule is based upon the extent to which the NRC reached a safety conclusion in the final safety evaluation report on this matter. If a technical specification or operational requirement was completely reviewed and finalized in the design certification rulemaking, then the requirement of § 50.109 would apply because a position was taken on that safety matter. Generic changes made under paragraph VIII.C.1 would be applicable to all applicants or licensees referencing this DC rule as described in paragraph VIII.C.2, unless the change is made technically irrelevant by a plant-specific departure or an exemption is requested.

Some generic technical specifications contain values in brackets [ ]. The brackets are placeholders indicating that the NRC has not reviewed these values and represent a requirement that the applicant for a COL referencing the U.S. ABWR DC renewal rule must replace the values in brackets with final plant-specific values (refer to guidance provided in Regulatory Guide 1.206, Revision 1, “Applications for Nuclear Power Plants”). The NRC will review the final plant-specific values when provided as part of a COL application referencing this design. The values in brackets are neither part of the DC rule nor are they binding. Therefore, the replacement of bracketed values with final plant-specific values does not require an exemption from the generic technical specifications.

Plant-specific departures may occur by either an order under paragraph VIII.C.3 or an applicant's exemption request under paragraph VIII.C.4. The basis for determining if the technical specification or operational requirement was completely reviewed and approved for these processes would be the same as for paragraph VIII.C.1 previously discussed. If the technical specification or operational requirement is completely reviewed and finalized in the design certification rulemaking, then the NRC must demonstrate that special circumstances are present before ordering a plant-specific departure. If not, there would be no restriction on plant-specific changes to the technical specifications or operational requirements, prior to the issuance of a license, provided a design change is not required. Although the generic technical specifications were reviewed and approved by the NRC in support of the design certification review, the NRC intends to consider the lessons learned from subsequent operating experience during its licensing review of the plant-specific technical specifications. The process for petitioning to intervene on a technical specification or operational requirement contained in paragraph VIII.C.5 is similar to other issues in a licensing hearing, except that the petitioner must also demonstrate why special circumstances are present pursuant to § 2.335, “Consideration of Commission rules and regulations in adjudicatory proceedings.”

Paragraph VIII.C.6 states that the generic technical specifications would have no further effect on the plant-specific technical specifications after the issuance of a license that references this appendix. After a license is issued, the bases for the plant-specific technical specifications would be controlled by the bases change provision set forth in the administrative controls section of the plant-specific technical specifications.

This section is reserved for future use. The matters discussed in this section of earlier design certification rules—inspections, tests, analyses, and acceptance criteria-are now addressed in the substantive provisions of 10 CFR part 52. Accordingly, there is no need to repeat these regulatory provisions in the U.S. ABWR DC renewal rule. However, this section is being reserved to maintain consistent section numbering with other design certification rules.

The purpose of Section X of appendix A to 10 CFR part 52 is to set forth the requirements that will apply to maintaining records of changes to and departures from the generic DCD, which are to be reflected in the plant-specific DCD. Section X also sets forth the requirements for submitting reports (including updates to the plant-specific DCD) to the NRC. This section of appendix A to 10 CFR part 52 is similar to the requirements for records and reports in 10 CFR part 50, except for minor differences in information collection and reporting requirements.

Paragraph X.A.1 requires that a generic design control document including SUNSI and SGI referenced in the generic design control document be maintained by the applicant for this rule. The generic DCD concept was developed, in part, to meet the requirements for incorporation by reference, including public availability of documents incorporated by reference. However, the SUNSI and SGI could not be included in the generic design control document because they are not publicly available. Nonetheless, the SUNSI and SGI were reviewed by the NRC and, as stated in paragraph VI.B.2, the NRC would consider the information to be resolved within the meaning of § 52.63(a)(5). Because this information is not in the generic DCD, this information, or its equivalent, is required to be provided by an applicant for a license referencing this U.S. ABWR DC renewal rule. Only the generic DCD is identified and incorporated by reference into this rule. The generic design control document and the NRC-approved version of the SUNSI and SGI must be maintained by the applicant (GEH) for the period of time that appendix A to 10 CFR part 52 may be referenced.

Paragraphs X.A.2 and X.A.3 place recordkeeping requirements on an applicant or licensee that references this design certification so that its plant-specific DCD accurately reflects both generic changes to the generic DCD and plant-specific departures made under Section VIII. The term “plant-specific” is used in paragraph X.A.2 and other sections of appendix A to 10 CFR part 52 to distinguish between the generic DCD that is being incorporated by reference into appendix A to 10 CFR part 52, and the plant-specific DCD that the COL applicant is required to submit under paragraph IV.A. The requirement to maintain changes to the generic DCD is explicitly stated to ensure that these changes are not only reflected in the generic design control document, which will be maintained by the applicant for the design certification, but also in the plant-specific DCD. Therefore, records of generic changes to the design control document will be required to be maintained by both entities to ensure that both entities have up-to-date design control documents.

Paragraph X.A.4.a requires the U.S. ABWR DC rule applicant to maintain a copy of the aircraft impact assessment analysis for the term of the certification and any renewal. This provision, which is consistent with § 50.150(c)(3), would facilitate any NRC inspections of the assessment that the NRC decides to conduct. Similarly, paragraph X.A.4.b requires an applicant or licensee who references appendix A to 10 CFR part 52 to maintain a copy of the aircraft impact assessment performed to comply with the requirements of § 50.150(a) throughout the pendency of the application and for the term of the license and any renewal. This provision is consistent with § 50.150(c)(4). For all applicants and licensees, the supporting documentation retained should describe the methodology used in performing the assessment, including the identification of potential design features and functional capabilities to show that the acceptance criteria in § 50.150(a)(1) will be met.

Paragraph X.A does not place recordkeeping requirements on site-specific information that is outside the scope of this rule. As discussed in paragraph IV.B of this document, the final safety analysis report required by § 52.79 will contain the plant specific DCD and the site-specific information for a facility that references this rule. The phrase “site-specific portion of the final safety analysis report” in paragraph X.B.3.c refers to the information that is contained in the final safety analysis report for a facility (required by § 52.79) but is not part of the plant-specific DCD (required by paragraph IV.A). Therefore, this rule does not require that duplicate documentation be maintained by an applicant or licensee that references this rule because the plant-specific DCD is part of the final safety analysis report for the facility.

Paragraph X.B.1 requires applicants or licensees that reference this rule to submit reports that describe departures from the design control document and include a summary of the written evaluations. The requirement for the written evaluations is set forth in paragraph X.A.3. The frequency of the report submittals is set forth in paragraph X.B.3. The requirement for submitting a summary of the evaluations is similar to the requirement in § 50.59(d)(2).

Paragraph X.B.2 requires applicants or licensees that reference this rule to submit updates to the design control document, which include both generic changes and plant-specific departures, as set forth in paragraph X.B.3. The requirements in paragraph X.B.3 for submitting reports will vary according to certain time periods during a facility's lifetime. If a potential applicant for a COL that references this rule decides to depart from the generic DCD prior to submission of the application, then paragraph X.B.3.a will require that the updated design control document be submitted as part of the initial application for a license. Under paragraph X.B.3.b, the applicant may submit any subsequent updates to its plant-specific DCD along with its amendments to the application provided that the submittals are made at least once per year.

Paragraph X.B.3.b also requires semi-annual submission of the reports required by paragraph X.B.1 and X.B.2 throughout the period of application review and construction. The NRC will use the information in the reports to support planning for the NRC's inspection and oversight during this phase, when the licensee is conducting detailed design, procurement of components and equipment, construction, and preoperational testing. In addition, the NRC will use the information in making its finding on ITAAC under § 52.103(g), as well as any finding on interim operation under Section 189.a(1)(B)(iii) of the Atomic Energy Act of 1954, as amended. Once a facility begins operation (for a COL under 10 CFR part 52, after the Commission has made a finding under § 52.103(g)), the frequency of reporting will be governed by the requirements in paragraph X.B.3.c.

On July 13, 1994, the NRC issued a final design approval for the U.S. ABWR design under appendix O to 10 CFR part 52, “Standardization of design: staff review of standard designs”; the approval was published in the Federal Register on July 20, 1994 (59 FR 37058). The final design approval was scheduled to expire on July 13, 1999. On November 23, 1994, the NRC issued a revised final design approval under appendix O to 10 CFR part 52, which expired on July 13, 2009. On December 1, 1994, the NRC published the revised final design approval for U.S. ABWR standard design (59 FR 61647). On August 28, 2007, the NRC replaced appendix O of 10 CFR part 52 with Subpart E of 10 CFR part 52, “Standard design approvals,” thereby replacing a final design approval with a standard design approval (72 FR 49351). As discussed in the statements of consideration for the 2007 rulemaking, a renewal process was not specifically provided for either a final design approval or standard design approval. The issued final design approval has expired, a renewal was neither requested nor available, nor is there a standard design approval being sought concurrent with this U.S. ABWR DC renewal rule. Therefore, the U.S. ABWR design does not have a current final design approval or standard design approval.

The following paragraphs describe the specific changes in this direct final rule:

This direct final rule amends appendix A to 10 CFR part 52 to incorporate the renewed U.S. ABWR standard design into the NRC's regulations. Applicants or licensees intending to construct and operate a plant using the U.S. ABWR design may do so by referencing the DC rule.

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC certifies that this direct final rule does not have a significant economic impact on a substantial number of small entities. This direct final rule affects only the licensing and operation of nuclear power plants. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810).

The NRC has not prepared a regulatory analysis for this direct final rule. The NRC prepares regulatory analyses for rulemakings that establish generic regulatory requirements applicable to all licensees. Design certifications are not generic rulemakings in the sense that design certifications do not establish standards or requirements with which all licensees must comply. Rather, design certifications are NRC approvals of specific nuclear power plant designs by rulemaking, which then may be voluntarily referenced by applicants for combined licenses or construction permits. Furthermore, an applicant for a design certification, rather than the NRC, initiates design certification rulemakings. Preparation of a regulatory analysis in this circumstance would not be useful because the design to be certified is proposed by the applicant, rather than the NRC. For these reasons, the NRC concludes that preparation of a regulatory analysis is neither required nor appropriate.

The NRC has determined that this direct final rule does not constitute a backfit as defined in the backfit rule (§ 50.109), and it is not inconsistent with any applicable issue finality provision in 10 CFR part 52.

This U.S. ABWR DC renewal rule does not constitute backfitting as defined in the backfit rule (§ 50.109) because there are no existing operating licenses under 10 CFR part 50, or COLs or manufacturing licenses under 10 CFR part 52 referencing this DC rule and because no current final design approval or standard design approval exists for the U.S. ABWR.

This U.S. ABWR DC renewal rule is not inconsistent with any applicable issue finality provision in 10 CFR part 52 because it does not impose new or changed requirements on existing DC rules in appendices B through F to 10 CFR part 52 and there are no COLs or manufacturing licenses issued by the NRC that reference the original U.S. ABWR DC rule. Conforming changes appear in appendix A to 10 CFR part 52 to reflect the renewed standard design in place of the original U.S. ABWR DC; however, these changes do not impose any additional requirements.

For these reasons, neither a backfit analysis nor a discussion addressing the issue finality provisions in 10 CFR part 52 was prepared for this rule.

The National Technology Transfer and Advancement Act of 1995, Public Law 104-113, requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC certifies the renewal for the U.S. ABWR standard design for use in nuclear power plant licensing under 10 CFR part 50 or 52. Design certifications are not generic rulemakings establishing a generally applicable standard with which all 10 CFR parts 50 and 52 nuclear power plant licensees must comply. Design certifications are Commission approvals of specific nuclear power plant designs by rulemaking. Furthermore, design certifications are initiated by an applicant for rulemaking, rather than by the NRC. This action does not constitute the establishment of a standard that contains generally applicable requirements.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner that also follows other best practices appropriate to the subject or field and the intended audience. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).

The NRC has determined under the National Environmental Policy Act of 1969, as amended (NEPA), and the NRC's regulations in subpart A of 10 CFR part 51, that this direct final rule, if confirmed, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The NRC's generic determination in this regard, reflected in § 51.32(b)(1), is based upon the following considerations. A DC rule does not authorize the siting, construction, or operation of a facility referencing any particular design, but only codifies a standard design certification in a rule (the U.S. ABWR DC renewal in this case). The NRC will evaluate the environmental impacts and issue an environmental impact statement as appropriate under NEPA as part of the application for the construction and operation of a facility referencing any particular DC rule.

However, consistent with § 51.30(d) and § 51.31(b), the NRC has prepared an environmental assessment, “Environmental Assessment by the U.S. Nuclear Regulatory Commission Relating to Renewal of the Certification of the ABWR Standard Design,” for the U.S. ABWR design renewal addressing various design alternatives to prevent and mitigate severe accidents. The environmental assessment is based, in part, upon the NRC's review of GEH's supplemental evaluation of various severe accident mitigation design alternatives to prevent and mitigate severe accidents required in “Amendment to Technical Support Document for the ABWR,” which updates information in the original “Technical Support Document for the ABWR.” Based upon review of GEH's evaluation, the Commission concludes that (1) GEH identified a reasonably complete set of potential design alternatives to prevent and mitigate severe accidents for the U.S. ABWR design renewal; (2) none of the potential design alternatives are justified on the basis of cost-benefit considerations; and (3) it is unlikely that other design changes would be identified and justified during the term of the design certification on the basis of cost-benefit considerations because the estimated core damage frequencies for the U.S. ABWR are very low on an absolute scale. These issues are considered resolved for the U.S. ABWR design. Based on its own independent evaluation, the NRC reached the same conclusion as GEH that none of the possible candidate design alternatives are potentially cost beneficial for the U.S. ABWR design. This independent evaluation was based on reasonable treatment of costs, benefits, and sensitivities. The NRC concludes that GEH has adequately identified areas where risk potentially could be reduced in a cost-beneficial manner and adequately assessed whether the implementation of the identified potential severe accident mitigation design alternatives or candidate design alternatives would be cost beneficial for the given evaluation criteria as provided in the U.S. ABWR DC renewal environmental assessment.

The finality of all environmental issues concerning severe accident mitigation design alternatives in the current U.S. ABWR design certification rule relied on site parameters being within those specified in the technical support document for the original U.S. ABWR, dated December 1994 as amended November 30, 2010. However, in an Atomic Safety and Licensing Board memorandum and order in the South Texas Project Electric Generating Station Units 3 and 4 Combined License proceeding (LBP-11-07), the board determined that no list of site parameters was specified in the U.S. ABWR technical support document. Therefore, the NRC staff re-evaluated the criteria for determining whether finality for severe accident mitigation design alternatives should apply in a future U.S. ABWR licensing action. To this end, the NRC staff selected the criteria for finality as the averted risk person-rem value for each severe accident mitigation design alternative provided in Table 5 of the original technical support document. Although finality criteria for the severe accident mitigation design alternative for this DC renewal action cannot be based on site parameters, the selected criteria, if met, provide assurance that a severe accident mitigation design alternative would still not be cost beneficial at a proposed site for the U.S. ABWR design. Therefore, the NRC finds that the evaluation performed by GEH is reasonable and sufficient.

The environmental assessment is available as indicated in Section XVI, “Availability of Documents.”

This final rule does not contain any new or amended collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Existing collections of information were approved by the Office of Management and Budget, control number 3150-0151.

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

This final rule is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.

Under the “Policy Statement on Adequacy and Compatibility of Agreement States Programs,” approved by the Commission on June 20, 1997, and published in the Federal Register (62 FR 46517; September 3, 1997), this rule is classified as compatibility “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act or the provisions of 10 CFR, and although an Agreement State may not adopt program elements reserved to the NRC, it may wish to inform its licensees of certain requirements by a mechanism that is consistent with a particular State's administrative procedure laws, but does not confer regulatory authority on the State.

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

The NRC may post materials related to this document, including public comments, on the Federal Rulemaking website at https://www.regulations.gov under Docket ID NRC-2017-0090.

This section contains instructions regarding how the non-publicly available documents related to this final rule, and specifically those listed in Tables 1.6-1 and 1.6-2 beginning on page 1.6-2 of Tier 2 of the DCD, may be accessed by interested persons who wish to comment on the design certification. These documents contain proprietary information and SGI. Requirements for access to SGI are primarily set forth in 10 CFR parts 2 and 73. This section provides information specific to this final rule; however, nothing in this section is intended to conflict with the SGI regulations.

Interested persons who desire access to proprietary information on the U.S. ABWR design should first request access to that information from GEH, the design certification applicant. A request for access should be submitted to the NRC if the applicant does not either grant or deny access by the 10-day deadline described in the following section.

Within 10 days after publication of this direct final rule, any individual or entity who believes access to proprietary information or SGI is necessary in order to submit comments on this U.S. ABWR DC renewal rule may request access to such information. Requests for access to proprietary information or SGI submitted more than 10 days after publication of this document will not be considered absent a showing of good cause for the late filing explaining why the request could not have been filed earlier.

The requestor shall submit a letter requesting permission to access proprietary information and/or SGI to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Attention: Rulemakings and Adjudications Staff, Washington, DC 20555-0001. The expedited delivery or courier mail address is: Office of the Secretary, U.S. Nuclear Regulatory Commission, Attention: Rulemakings and Adjudications Staff, 11555 Rockville Pike, Rockville, Maryland 20852. The email address for the Office of the Secretary is Rulemaking.Comments@nrc.gov. The requester must send a copy of the request to the DC applicant at the same time as the original transmission to the NRC using the same method of transmission. Requests to the applicant must be sent to Michelle Catts, Senior Vice President, Regulatory Affairs, General Electric-Hitachi Nuclear Energy Americas, LLC, 3901 Castle Hayne Road, P.O. Box 780, M/C A10, Wilmington, NC 28402.

The request must include the following information:

1. The name of this design certification, U.S. ABWR design certification; the rulemaking identification number, RIN 3150-AK04; the rulemaking docket number, NRC-2017-0090; and the Federal Register citation for this rule.

2. The name, address, and email or FAX number of the requester.

3. If the requester is an entity, the name of the individual(s) to whom access is to be provided, including the identity of any expert, consultant, or assistant who will aid the requestor in evaluating the information.

4. If the request is for proprietary information, the requester's need for the information in order to prepare meaningful comments on the design certification must be demonstrated. Each of the following areas must be addressed with specificity:

a. The specific issue or subject matter on which the requester wishes to comment;

b. An explanation why information that is publicly available is insufficient to provide the basis for developing meaningful comment on the U.S. ABWR DC renewal rule with respect to the issue or subject matter described in paragraph 4.a. of this section; and

c. The technical competence (demonstrable knowledge, skill, training or education) of the requestor to effectively utilize the requested proprietary information to provide the basis for meaningful comment. Technical competence may be shown by reliance on a qualified expert, consultant, or assistant who satisfies these criteria.

d. A chronology and discussion of the requester's attempts to obtain the information from the design certification applicant, and the final communication from the requester to the applicant and the applicant's response, if any was provided, with respect to the request for access to proprietary information must be submitted.

5. If the request is for SGI, the request must include the following:

a. A statement that explains each individual's “need to know” the SGI, as required by §§ 73.2 and 73.22(b)(1). Consistent with the definition of “need to know” as stated in § 73.2, “Definitions,” the statement must explain:

i. The specific issue or subject matter on which the requester wishes to comment;

ii. An explanation of why publicly available information is insufficient to provide the basis for developing meaningful comment on the design certification with respect to the issue or subject matter described in paragraph 5.a.i. of this section and why the SGI requested is indispensable in order to develop meaningful comments;  6 and

iii. The technical competence (demonstrable knowledge, skill, training, or education) of the requestor to effectively utilize the requested SGI to provide the basis and specificity for meaningful comment. Technical competence may be shown by reliance on a qualified expert, consultant, or assistant who satisfies these criteria.

b. A completed Form SF-85, “Questionnaire for Non-Sensitive Positions,” for each individual who would have access to SGI. The completed Form SF-85 will be used by the Office of Administration to conduct the background check required for access to SGI, as required by 10 CFR part 2, subpart C, and § 73.22(b)(2), to determine the requestor's trustworthiness and reliability. For security reasons, Form SF-85 can only be submitted electronically through the electronic questionnaire for investigations processing (e-QIP) website, a secure website that is owned and operated by the Defense Counterintelligence and Security Agency (DCSA). To obtain online access to the form, the requestor should contact the NRC's Office of Administration at 301-415-3710. 7

c. A completed Form FD-258 (fingerprint card), signed in original ink, and submitted in accordance with § 73.57(d). Copies of Form FD-258 will be provided in the background check request package supplied by the Office of Administration for each individual for whom a background check is being requested. Copies of Form FD-258 may be obtained by sending an email to MAILSVC.Resource@nrc.gov or by sending a written request to U.S. Nuclear Regulatory Commission, Attn: Mailroom/Fingerprint Card Request, 11555 Rockville Pike, Rockville, MD 20852. The fingerprint card will be used to satisfy the requirements of 10 CFR part 2, subpart C, § 73.22(b)(1), and Section 149 of the Atomic Energy Act of 1954, as amended, which mandates that all persons with access to SGI must be fingerprinted for an FBI identification and criminal history records check.

d. A check or money order in the amount of $326.00  8 payable to the U.S. Nuclear Regulatory Commission for each individual for whom the request for access has been submitted; and

e. If the requester or any individual who will have access to SGI believes they belong to one or more of the categories of individuals relieved from the criminal history records check and background check requirements, as stated in § 73.59, the requester should also provide a statement specifically stating which relief the requester is invoking, and explaining the requester's basis (including supporting documentation) for believing that the relief is applicable. While processing the request, the NRC's Office of Administration, Personnel Security Branch, will make a final determination whether the stated relief applies. Alternatively, the requester may contact the Office of Administration for an evaluation of his or her status prior to submitting the request. Persons who are not subject to the background check are not required to complete the SF-85 or Form FD-258; however, all other requirements for access to SGI, including the need to know, are still applicable.

Copies of documents and materials required by paragraphs 5.d.-g., as applicable, of this section must be sent to the following address: Office of Administration, U.S. Nuclear Regulatory Commission, Personnel Security Branch, Mail Stop TWFN-07D04M, 11555 Rockville Pike, Rockville, MD 20852. These documents and materials should not be included with the request letter to the Office of the Secretary, but the request letter should state that the forms and fees have been submitted as required.

To avoid delays in processing requests for access to SGI, all forms should be reviewed for completeness and accuracy (including legibility) before submitting them to the NRC. The NRC will return incomplete or illegible packages to the sender without processing.

Based on an evaluation of the information submitted under paragraphs 4.a.-4.d. or 5.a.-g. of this section, as applicable, the NRC staff will determine within 10 days of receipt of the written access request whether the requester has established a legitimate need for access to proprietary information or need to know the SGI requested.

For proprietary information access requests, if the NRC determines that the requester has established a legitimate need for access to proprietary information, the NRC will notify the requester in writing that access to proprietary information has been granted. The NRC must first notify the DC applicant of the NRC's determination to grant access to the requester not less than 10 days before informing the requester of the NRC's decision. If the applicant wishes to challenge the NRC's determination, it must follow the procedures in Predisclosure Procedures for Proprietary Information Constituting Trade Secrets or Confidential Commercial or Financial Information of this section. The NRC will not provide access to disputed proprietary information to the requester until the procedures are completed as described in Predisclosure Procedures for Proprietary Information Constituting Trade Secrets or Confidential Commercial or Financial Information of this section. The written notification will contain instructions on how the requestor may obtain copies of the requested documents, and any other conditions that may apply to access to those documents. These conditions may include, but are not limited to, the signing of a Non-Disclosure Agreement or Affidavit setting forth terms and conditions to prevent the unauthorized or inadvertent disclosure of proprietary information by each individual who will be granted access.

For requests for access to SGI, if the NRC determines that the requester has established a need to know the SGI, the NRC's Office of Administration will then determine, based upon completion of the background check, whether the proposed recipient is trustworthy and reliable, as required for access to SGI by § 73.22(b). If the NRC's Office of Administration determines that the individual or individuals are trustworthy and reliable, the NRC will promptly notify the requester in writing. The notification will provide the names of approved individuals as well as the conditions under which the SGI will be provided. Those conditions may include, but are not limited to, the signing of a Non-Disclosure Agreement or Affidavit by each individual who will be granted access to SGI.

Prior to providing SGI to the requester, the NRC staff will conduct (as necessary) an inspection to confirm that the recipient's information protection system is sufficient to satisfy the requirements of § 73.22. Alternatively, recipients may opt to view SGI at an approved SGI storage location rather than establish their own SGI protection program to meet SGI protection requirements.

Any comments on this final rule that are based upon the disclosed proprietary information or SGI must be filed by the requester no later than 25 days after receipt of (or access to) that information, or the close of the public comment period, whichever is later. The commenter must comply with all NRC requirements regarding the submission of proprietary information and SGI to the NRC when submitting comments to the NRC (including marking and transmission requirements).

If the request for access to proprietary information or SGI is denied by the NRC, the NRC shall promptly notify the requester in writing, briefly stating the reason or reasons for the denial.

Before the Office of Administration makes a final adverse determination regarding the trustworthiness and reliability of the proposed recipient(s) for access to SGI, the Office of Administration, in accordance with § 2.336(f)(1)(iii), must provide the proposed recipient(s) any records that were considered in the trustworthiness and reliability determination, including those required to be provided under § 73.57(e)(1), so that the proposed recipient(s) have an opportunity to correct or explain the record.

Appeals from a denial of access must be made to the NRC's Executive Director for Operations (EDO) under § 9.29. The decision of the EDO constitutes final agency action under § 9.29(d).

The NRC will follow the procedures in § 9.28 if the NRC determines, under the Determination of Legitimate Need for Access of this section, that access to proprietary information constituting trade secrets or confidential commercial or financial information will be provided to the requester. However, any objection filed by the applicant under § 9.28(b) must be filed within 15 days of the NRC notice in the Determination of Legitimate Need for Access of this section rather than the 30-day period provided for under § 9.28(b). In applying the provisions of § 9.28, the applicant for the DC rule will be treated as the “submitter.”

The NRC is incorporating by reference the U.S. ABWR DCD, Revision 7. As described in the “Discussion” section of this document, the generic DCD combined into a single document Tier 1 and Tier 2 information and generic technical specifications in order to effectively control this information and facilitate its incorporation by reference into the rule. The NRC also is incorporating by reference two GEH technical reports (NEDO-33875 and NEDO-33878).

The NRC is required by law to obtain approval for incorporation by reference from the Office of the Federal Register (OFR). The OFR's requirements for incorporation by reference are set forth in 1 CFR part 51. The OFR's regulations require an agency to include in a direct final rule a discussion of the ways that the materials the agency incorporates by reference are reasonably available to interested parties or how it worked to make those materials reasonably available to interested parties. The discussion in this section complies with the requirement for direct final rules as set forth in 1 CFR 51.5(b)(2).

The NRC considers “interested parties” to include all potential NRC stakeholders, not only the individuals and entities regulated or otherwise subject to the NRC's regulatory oversight. These NRC stakeholders are not a homogenous group but vary with respect to the considerations for determining reasonable availability. Therefore, the NRC distinguishes between different classes of interested parties for the purposes of determining whether the material is “reasonably available.” The NRC considers the following to be classes of interested parties in NRC rulemakings with regard to the material to be incorporated by reference:

• Individuals and small entities regulated or otherwise subject to the NRC's regulatory oversight (this class also includes applicants and potential applicants for licenses and other NRC regulatory approvals) and who are subject to the material to be incorporated by reference by rulemaking. In this context, “small entities” has the same meaning as a “small entity” under § 2.810.

• Large entities otherwise subject to the NRC's regulatory oversight (this class also includes applicants and potential applicants for licenses and other NRC regulatory approvals) and who are subject to the material to be incorporated by reference by rulemaking. In this context, “large entities” are those that do not qualify as a “small entity” under § 2.810.

• Non-governmental organizations with institutional interests in the matters regulated by the NRC.

• Other Federal agencies, States, local governmental bodies (within the meaning of § 2.315(c)).

• Federally-recognized and State-recognized  9 Indian tribes.

• Members of the general public ( i.e., individual, unaffiliated members of the public who are not regulated or otherwise subject to the NRC's regulatory oversight) who may wish to gain access to the materials which the NRC incorporates by reference by rulemaking in order to participate in the rulemaking process.

The NRC makes the materials incorporated by reference available for inspection to all interested parties, by appointment, at the NRC Technical Library, which is located at Two White Flint North, 11545 Rockville Pike, Rockville, Maryland 20852; telephone: 301-415-7000; email: Library.Resource@nrc.gov. In addition, as described in Section XVI of this document, documents related to this direct final rule are available online in the NRC's Agencywide Documents Access and Management System (ADAMS) Public Documents collection at https://www.nrc.gov/reading-rm/adams.html.

The NRC concludes that the materials the NRC is incorporating by reference in this final rule are reasonably available to all interested parties because the materials are available to all interested parties in multiple ways and in a manner consistent with their interest in the materials.

I. This Final Rule II. Background A. CECL Accounting Methodology B. The Board's August 19, 2020, Proposed Rule III. Legal Authority A. The Board's Rulemaking Authority, Generally B. CECL Transition C. Small FICU Charges for Loan Losses D. Alternatives to GAAP IV. Discussion of the Public Comments on the August 19, 2020, Proposed Rule A. The Comments, Generally B. Comments Regarding Transition Phase-In C. Comments Regarding GAAP Exemption for Smaller FICUs V. Description of Final Rule A. New Subpart G to Part 702 B. Eligibility for the Transition Provisions C. NCUA Implementation of the Transition Provisions D. Mechanics of the CECL Transition Provisions E. Example of Transition Schedule F. Statutory Limit on Amount of Net Worth Ratio Change G. NCUA Oversight H. Small FICU Determinations of Charges for Loan Losses VI. Department of the Treasury Report VII. Regulatory Procedures A. Regulatory Flexibility Act B. Paperwork Reduction Act C. Executive Order 13132 on Federalism D. Assessment of Federal Regulations and Policies on Families E. Small Business Regulatory Enforcement Fairness Act I. This Final Rule

On July 30, 2020, the NCUA Board (Board) proposed amending the agency's regulations to facilitate the adoption by FICUs of the CECL accounting methodology as mandated by GAAP. The proposed rule was subsequently published in the Federal Register on August 19, 2020. 1 This final rule follows publication of the August 19, 2020, proposed rule and takes into consideration the public comments received on the proposal. Following consideration of the comments, the Board has decided to make the following changes to the proposed rule:

1. The Board has made a technical change to the regulatory text for purposes of clarity. The Board has removed the references to specific calendar dates in the discussion of the transition period for the phase-in. The regulatory text now consistently refers to fiscal years.

2. The final rule also clarifies that state-chartered FICUs with less than $10 million in assets and that are required by state law to comply with GAAP are eligible for the transition phase-in.

Section IV. of this preamble summarizes the significant issues raised by the public commenters on the proposed rule, as well as the Board's responses to these issues, including the Board's rationale for making the change listed above.

The CECL standard applies to all banks, savings associations, credit unions, 2 and financial institution holding companies, regardless of size, that file regulatory reports for which the reporting requirements conform to GAAP. Adoption of CECL is expected to result in greater transparency of expected losses at an earlier date during the life of a loan.

The Federal Accounting Standards Board (FASB), which establishes the GAAP standards, provided a staggered effective date for CECL. In doing so, it has recognized two classes of institutions subject to CECL: (1) Public business entities (PBEs) that meet the definition of a U.S. Securities and Exchange (SEC) filer, excluding entities eligible to be smaller reporting companies (SRCs) as defined by the SEC, and (2) all other entities, which includes FICUs. The effective date for SEC-filers (other than SRCs) was fiscal years beginning after December 15, 2019. All other entities (including all FICUs) are required to commence implementation of the standard for fiscal years beginning after December 15, 2022. 3 All entities subject to CECL, however, may voluntarily elect to adopt CECL earlier than the specified implementation date, commencing as early as fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 4

CECL differs from the incurred loss methodology currently used by FICUs in several key respects. Most significantly for purposes of this rulemaking, CECL requires the recognition of lifetime expected credit losses for financial assets measured at amortized cost, not just those credit losses that have been incurred as of the reporting date. CECL also requires the incorporation of reasonable and supportable forecasts in developing an estimate of lifetime expected credit losses, while maintaining the current requirement for consideration of past events and current conditions. Furthermore, the probable threshold for recognition of allowances in accordance with the incurred loss methodology is removed under CECL. Taken together, estimating expected credit losses over the life of an asset under CECL, including consideration of reasonable and supportable forecasts but without applying the probable threshold that exists under the incurred loss methodology, results in earlier recognition of credit losses. 5

Upon adoption of CECL, an institution will record a cumulative-effect adjustment to retained earnings (known as “the day-one adjustment”). The day-one adjustment will be equal to the difference, if any, between the amount of credit loss allowances required under the incurred loss methodology and the amount of credit loss allowances required under CECL. A critical consideration for institutions subject to the new accounting rules will be the impact of CECL on capital. Institutions could experience a sharp increase in expected credit losses on the effective date as a result of the day-one adjustment, which could lower their capital classification under relevant statutory and regulatory authorities (such, as for example, under the Board's PCA regulations for credit unions).

The Board issued the August 19, 2020, proposed rule to mitigate the adverse effects on a FICU's PCA classification that may result from the day-one adjustment. Specifically, the proposed rule provides that, for purposes of the PCA regulations, the Board will phase-in the day-one effects on a FICU's net worth ratio over a three-year period (12 quarters). The proposed phase-in is consistent with the similar three-year phase-in provided by the other banking agencies to alleviate the impacts of adopting CECL on the banking organization subject to their supervision. 6

Under the proposed rule, the phase-in would only be applied to those FICUs that adopt the CECL methodology for fiscal years beginning on or after December 15, 2022. FICUs that elect to adopt CECL earlier than the deadline established by FASB would not be eligible for the phase-in. Further, unlike banking organizations subject to the rule issued by the other banking agencies, eligible FICUs would not have the choice of opting into (or out of) the phase-in. Rather, the Board will apply the phase-in for all FICUs that meet the prescribed eligibility criteria.

FICUs would continue to calculate their net worth in accordance with GAAP and would also continue to be required to account for CECL for all other purposes, such as Call Reports. Further, under the proposed rule, FICUs with less than $10 million in assets would no longer be required to determine their charges for loan losses in accordance with GAAP. This provision would eliminate the adverse PCA consequences for smaller FICUs resulting from CECL. The Board's regulations would allow these FICUs to instead make charges for loan losses in accordance with any reasonable reserve methodology (incurred loss), provided that it adequately covers known and probable loan losses. Accordingly, FICUs in this asset-size category that choose to use the incurred loss methodology would not be subject to the phase-in described in this proposed rule.

Interested readers should refer to the preamble of the Board's August 19, 2020, proposed rule for additional background information regarding the proposed regulatory changes.

The Board is issuing this final rule pursuant to its authority under the Federal Credit Union (FCU) Act. 7 The FCU Act grants the Board a broad mandate to issue regulations governing both federal credit unions and all FICUs. For example, section 120 of the FCU Act is a general grant of regulatory authority and authorizes the Board to prescribe rules and regulations for the administration of the act. 8 Other provisions of the FCU Act, confer specific rulemaking authority to address prescribed issues or circumstances. For example, section 216 of the FCU Act directs the Board to establish by regulation a system of PCA to restore the net worth of FICUs. 9 This final rule is being issued under both the general rulemaking authority conferred by section 120 of the FCU Act and also, as discussed below, the more specific grant of authority under section 216.

Section 216 of the FCU Act authorizes the NCUA Board to issue regulations adjusting the net worth ratio requirements for FICUs if the other “banking agencies increase or decrease the required minimum level for the leverage limit” pursuant to section 38 of the Federal Deposit Insurance (FDI) Act. 10 In addition, section 216 of the FCU Act also requires that the Board determine—in consultation with the other banking agencies—“the reason for the increase or decrease in the required minimum level for the leverage limit also justifies adjustment to the net worth ratios.”  11 In accordance with the consultation requirements, the NCUA, at the proposed rule stage, briefed relevant staff of the other banking agencies of the contents and purposes of this rulemaking.

With regards to the other factor identified in the quoted statutory language, the February 14, 2019, final rule does not directly raise or lower the leverage limit, 12 or any other of the capital ratios applicable to banking organizations. For example, the leverage limit (defined as the ratio of tier 1 capital to average total consolidated assets) remains unchanged at 4 percent. Nevertheless, the stated intent of the other banking agencies was to effectively modify the capital ratios for purposes of PCA oversight. Accordingly, the NCUA has determined that both conditions set forth in section 216 have been satisfied for purposes of issuing this proposed rule. 13

The effects of the proposed phase-in on a FICU's net worth calculations are consistent with section 216 of the FCU Act and closely modeled on the CECL transition provisions issued by the other banking agencies. Specifically, the final rule is narrowly tailored to temporarily mitigating the impacts of CECL adoption on the PCA classification of a FICUs net worth. This final rule does not adjust the numeric net worth ratios under the NCUA's PCA system. Further, the rule does not revise the definition of net worth, and FICUs will continue to calculate their net worth and net worth ratios in accordance with existing statutory and regulatory requirements. The sole purpose of the phase-in is to aid FICUs in adjusting to the new GAAP standards in a uniform manner and without disrupting their ability to serve their members.

The Board notes that while section 216 defines “net worth”—the numerator for determining the net worth ratio—it does not define the term “total assets,” which comprises the denominator of the equation. The definition of the term is left to the regulatory discretion of the Board. The Board has elected to exercise this discretion and defined “total assets” in part 702. Specifically, the regulations provide that a FICU's total assets may be measured by either its (1) average quarterly balance; (2) average monthly balance; (3) average daily balance; or (4) quarter-end balance. 14 As an alternative to the phase-in that would be provided by this final rule, the Board could have elected to revise the definition of “total assets” in a manner enabling FICUs to effect the CECL day-one adjustments without undue adverse consequences. The Board opted for the phase-in given its simplicity and ease of administration. Nonetheless, the Board acknowledges that an alternative legal basis exists for rulemaking to mitigate the consequences of CECL implementation.

Section 202 of the FCU Act requires that, in general, “applicable reports and statements required to be filed with the Board shall be uniform and consistent with” GAAP. 15 The statute, however, also provides an exception to GAAP compliance for FICUs with total assets of “less than $10,000,000, unless prescribed by the Board or an appropriate State credit union supervisor.”  16

The Board's regulations in § 702.402 require that charges for loan losses be made in accordance with GAAP and does not distinguish based on the asset size of FICUs. In effect, § 702.402 exercises the Board's discretion under section 202 of the FCU Act to override the exception for smaller FICUs by prescribing regulations. The Board has elected to once again exercise its statutory discretion under section 202 of the FCU Act. The Board's regulations will no longer require that FICUs with total assets less than $10 million make charges for loan losses in accordance with GAAP. Instead the regulations will allow these FICUs to make such charges under any reasonable reserve methodology (incurred loss) provided it adequately covers known and probable loan losses. The transition provisions described above apply to FICUs adopting CECL. Accordingly, smaller FICUs that elect to use a non-GAAP measure are not eligible for the phase-in.

The Board also notes that section 202 of the FCU Act could also potentially, as an alternative to the provisions discussed above, authorize the Board to provide a transition of the day-one effects of CECL implementation. This provision authorizes the Board to prescribe an accounting principle for application to any FICU if the Board determines that the application of a GAAP principle is not appropriate. Because the Board has clear authority to effect the transition to CECL under section 216, it is not necessary to rely on section 202.

The public comment period on the proposed rule closed on October 19, 2020. The NCUA received 18 public comments on the proposal. Comments were received from individual FICUs, as well as from national, state, and regional organizations representing FICUs.

Thirteen of the commenters objected to FASB's application of CECL to FICUs, largely due to the anticipated negative impact of the day-one adjustment. The commenters wrote that FICUs building reserves to meet the CECL benchmark will be diverting funds that could otherwise be used to provide credit to members and communities during the ongoing COVID-19 event. They urged the NCUA to continue exploring all avenues, including working with FASB, to exempt FICUs from the CECL requirements.

While believing CECL should not apply to FICUs at all, the commenters unanimously supported the proposed rule. The commenters commended the Board's efforts to assist FICUs with the transition to the CECL methodology. Several of these commenters, however, also offered suggested changes to the proposed rule.

NCUA Response: The Board appreciates the support expressed by the commenters, as well as the specific questions and concerns raised in their individual comments. The Board has addressed these specific comments below. The Board reiterates its belief that, given the unique characteristics of the credit union industry, the CECL accounting standards should not apply to FICUs. The Board will continue to work with FASB, the other banking agencies, and appropriate stakeholders to exempt FICU from these standards.

Comment: Mandatory opt-in for transition phase-in. Under the proposed rule, FICUs would not have the option of electing whether to opt into (or out of) the transition provisions. Several commenters urged the NCUA to reconsider this automatic approach and provide a FICU with the ability to opt into or out of the transition provisions based on its financial condition. The commenters wrote that, for strategic reasons, some FICUs may wish to recognize the full cost and adverse effect on their capital of CECL in one year rather than phasing in the adverse effects over a prolonged period. The commenters wrote that if the NCUA decides it must determine eligibility, the agency should expand the factors upon which the determination is made beyond a reduction in earnings caused by the application of CECL. For example, the NCUA might consider additional factors, such as asset quality and overall risk in the loan portfolio, current financial condition of the credit union, and the current state of the economy at the time of the determination. Alternatively, the NCUA could limit the mandatory opt-in for FICUs with a lower CAMEL rating.

NCUA Response: The Board has declined to adopt these comments. As the commenters note, it is true that some FICUs will have a business rationale for recognizing the day-one effects of CECL on their capital ratios. This final rule does not compel any FICU to make use of the transition phase-in. A FICU that determines adoption of CECL is in its best interests has the option to do so, and is free to make this decision at any time until the effective date established by FASB for CECL implementation (fiscal years beginning after December 15, 2022). The Board continues to believe, however, that requiring an affirmative opt-in from the majority of FICUs that require the phase-in would constitute an unnecessary administrative exercise. Automatic implementation of the phase-in by the NCUA will help to ensure its uniform application and that its benefits are provided to the greatest possible number of eligible FICUs.

Comment: Option for longer phase-in. Two commenters suggested that the NCUA consider granting longer phase-in requests when a FICU's projected capital level after three years is expected to remain below normal. According to the commenters, such flexibility would allow FICUs to focus on restoring capital levels during an appropriately tailored phase-in timeframe rather than bracing for adverse supervisory consequences or the administrative burden of heightened examiner scrutiny.

NCUA Response: The Board believes that the three-year period will suffice to alleviate the most detrimental impacts on a FICU's capital ratios resulting from adoption of CECL. Further, and as noted above, the Board is promulgating this rule pursuant to the legal authority conferred by section 216 of the FCU Act. In general, section 216 charges the NCUA with establishing PCA regulations that are “comparable” to section 38 of the FDI Act—the statute that applies PCA to other federally insured depository institutions. 17 More specifically with regards to this rulemaking, section 216 authorizes the Board to “correspondingly” revise its regulations in response to changes made by the other banking agencies to the leverage limit under section 38 of the FDI Act. 18 In accordance with these statutory directives, the phase-in provided by this final rule is modelled on the transition provisions adopted by the other banking agencies, and provides a similar three- year phase-in period. 19 The Board therefore declines to make the suggested change in order to maintain consistency with the CECL transition provisions issued by the other banking agencies.

Comment: Redefining “total assets” in the net worth calculation. Related to the preceding comment, one commenter noted the preamble language stating that “[a]s an alternative to the to the phase-in . . . the Board could have elected to revise the definition of `total assets' in a manner enabling FICUs to effect the CECL day-one adjustments without undue adverse consequences.”  20 The commenter wrote that, while the NCUA's reliance on the authority provided by section 216 of the FCU Act is understandable from an administrative standpoint, the agency should consider issuing using the alternative “total assets” framework to grant FICUs more options, such as the ability to choose a longer phase-in period.

NCUA Response: The commenter is correct that the Board, in large measure, opted for the phase-in due to its ease of administration. Ensuring the administrative simplicity of its regulations is a significant consideration for the Board, especially during this pandemic period and the resulting economic fallout. Ease of administration, however, was only one of several considerations that factored into the Board's decision. In making note of the statutory authority to re-define “total assets” in the preamble to the August 19, 2020, proposed rule, the Board simply wished to acknowledge the existence of an alternative legal basis for this rulemaking. A rule implementing this alternate statutory authority would have almost surely been more time-consuming and complex than the phase-in. The re-definition of “total assets” might have possible effects beyond CECL implementation to include the NCUA's PCA system as a whole. Moreover, and as noted previously, the NCUA is statutorily charged to maintain PCA regulations that are “comparable” with section 38 of the FDI Act. A change to the definition of “total assets” would require careful analysis to ensure compliance with the statutory comparability requirement. Given these considerations, the Board continues to believe that a phase-in issued on the authority provided by section 216 of the FCU Act is the most effective, administratively simple, and quickest manner to mitigate the day-one impacts of CECL implementation on FICUs.

Comment: Non-calendar fiscal years. One commenter objected that the proposed regulatory text measures the phase-in benefit by calendar dates and fails to account for FICUs that have non-calendar fiscal years. Specifically, the commenter wrote that the regulatory text refers to specific calendar date in the provisions for measuring the CECL transition amount. The commenter wrote that the calendar dates fail to capture the impact for FICUs with non-calendar fiscal years. The commenter wrote that this is inconsistent with the preamble, which references a credit union's fiscal year and, in Section III.E., refers to a hypothetical FICU with a calendar fiscal year, impliedly acknowledging that FICUs may have a fiscal year other than a calendar fiscal year. 21 The commenter also noted that the regulation issued by the other banking agencies defines the CECL transition amount based on the regulated entity's fiscal year without referencing specific dates. 22 The commenter suggested that to remedy this problem, the NCUA should follow the approach of the other banking agencies and define the CECL transitional amount by reference to a credit union's fiscal year rather than set calendar dates.

NCUA Response: As the commenter notes, the preamble to the proposed rule correctly provides that the transition period is based on the credit union's fiscal year (which may be a non-calendar year in the case of state-chartered credit unions) and not on specific dates. The commenter notes preamble language referencing the possibility of a non-calendar year fiscal year. Another example is the preamble language providing that “[t]he difference in retained earnings constitutes the transitional amount that would be phased-in to the net worth ratio calculation over the proposed transition period, which would be the three-year period (twelve quarters) beginning the first day of the fiscal year in which the FICU adopts CECL” (emphasis added). 23 The Board agrees that the references to specific dates were potentially confusing. The Board has therefore removed the references to specific calendar dates, and the regulatory text now consistently refers to fiscal years.

Comment: Calculation of transitional amount. One commenter noted that proposed § 702.703(b)(2) defines the transition amount for the fourth through twelfth quarters as the difference between a FICU's retained earnings on December 31, 2023 and December 30, 2024. The commenter wrote that the NCUA may have intended to refer to years 2022 and 2023 in this provision, since this measurement of the CECL transitional amount applies to Call Reports filed beginning on the first day in 2024, and it does not seem feasible to calculate the amount by reference to a figure that cannot be determined until the last day in 2024.

NCUA Response: As noted in the preceding response, the NCUA has removed the references to specific calendar dates in the regulatory text. For purposes of calculating the fourth through twelfth quarters of the transition period, the regulatory text now provides that the CECL transitional amount is equal to the difference between the credit union's retained earnings as of the end of the fiscal year in which the credit union adopts CECL and the credit union's retained earnings as of the beginning of its next fiscal year.

Comment: Examinations and stress testing. Several comments, while generally supportive of the proposed rule, had questions regarding the NCUA examination and stress testing protocols resulting from its implementation. One of these commenters suggested that the NCUA should consider implementing streamlined procedures for evaluating capital plans (including net worth restoration plans) when a FICU is expected to encounter capital stresses related to CECL adoption that persist after any applicable phase-in period. Another commenter warned that incorporating CECL into the stress testing regimen will increase capital volatility within the modelling and complicate stress testing estimations. The commenter urged the NCUA to continue discussions with covered FICUs and state regulators to ensure the regulatory stress testing framework can incorporate CECL when appropriate.

NCUA Response: The NCUA will monitor and periodically assess the efficacy of the CECL transition phase-in provisions. The Board will take these comments regarding capital plans and stress testing under advisement and, should it be deemed necessary, issue supplemental guidance or implement revised procedures to assist FICUs in their implementation of the rule.

Comment: Need for Call Report guidance. One of the commenters requested clarification on how the phased-in retained earnings would be reported on a FICU's Call Report. For example, the commenter asked whether the Call Report will reflect the phase-in adjustment through the addition of a new field.

NCUA Response: The Board notes that a new field has been provided in the Call Report for purposes of the phase-in. The NCUA will issue additional guidance and Call Report revisions as deemed necessary to assist FICUs in implementing this final rule.

Comment: Future ability to phase-in CECL. Five commenters encouraged the NCUA to authorize a FICU accumulating $10 million, or greater, in assets after CECL has been implemented to phase-in the day-one negative impact. These commenters wrote that the one-time adjustment will be equally injurious to FICUs adopting CECL in the future and compensating for that is as important as doing so now.

NCUA Response: The Board has not revised the rule in response to these commenters. The final rule is designed to facilitate a FICU's transition to CECL without disrupting its ability to serve its members as a result of a PCA re-classification. Unlike FICUs that already (or soon will) exceed the $10 million asset threshold for GAAP compliance, other FICUs will have more time and be better positioned to adjust their asset growth. The Board expects that smaller FICUs will undertake the necessary analysis to determine the possible impact of coming into GAAP compliance in developing their business plans. As a result, the Board does not believe that the phase-in is necessary or appropriate for such FICUs.

Comment: Transition phase-in for small federally insured state-chartered credit unions subject to GAAP. As provided in the preamble to the proposed rule, the exemption from the GAAP standards does not extend to smaller State-chartered FICUS that are required to comply with GAAP under State law. 24 One commenter inquired about the ability of these state-chartered FICUs to use the transition phase-in. The commenter noted that the regulatory text does not specify if these credit union are eligible for the transition provision. The commenter recommended the NCUA's final rule should make the proposed three-year phase-in available to FICUs that must follow GAAP, regardless of the size of the FICU.

NCUA Response: The transition provisions were designed to apply to all FICUs that adopt CECL, irrespective of their asset size. As the preamble to the proposed rule makes clear, the only FICUs “not eligible for the phase in” are “smaller FICUs that elect to use a non-GAAP measure.”  25 State-chartered FICUs that are required by state law to follow GAAP are prohibited from making such election. Accordingly, the Board intended them to be eligible for the transition relief provided by this rulemaking. The Board has revised the regulatory text to clarify the eligibility of these credit unions. The final rule clarifies that state-chartered FICUs with less than $10 million in assets and that are required by state law to comply with GAAP are eligible for the transition phase-in.

Alternative GAAP structure for FICUs. The preamble to the proposed rule notes that “section 202 of the FCU Act could also potentially, as an alternative to the provisions [of the proposed rule], authorize the Board to provide a transition of the day-one effects of CECL implementation.”  26 This provision authorizes the Board to prescribe an alternative accounting principle to GAAP, so long as it is “no less stringent” than the GAAP principle it replaces. 27

Four commenters wrote that the NCUA should consider the question of what constitutes an accounting standard that “is no less stringent” than GAAP for the purpose of expanding the scope of CECL relief. In doing so, commenters suggested that the NCUA might explore the possibility of a revised incurred loss methodology that allows more flexible evaluation of qualitative and environmental factors. The commenters also suggested that the NCUA should work directly with the FASB to advance an interpretation of the “no less stringent” requirement that recognizes the unique burden that CECL poses for FICUs. One of these commenters wrote that the NCUA should request that FASB recognize the incurred loss methodology as an appropriate alternative accounting principle under section 202 of the FCU Act.

NCUA Response: The development of an alternate set of accounting standards that are “no less stringent” than GAAP would be a complex and time-consuming endeavor necessitating consultations with FASB and other stakeholders. At this time, the Board believes that GAAP compliance is the most effective way to help ensure that financial reporting is transparent and consistent between FICUs. The Board, however, will continue to explore ways to alleviate the compliance burdens imposed by GAAP. As noted, the Board is committed to working with FASB, the other banking agencies, and appropriate stakeholders on a possible exemption for FICUs from the CECL accounting standards.

Comment: Transition phase-in for small federally insured state-chartered credit unions subject to GAAP. As provided in the preamble to the proposed rule, the exemption from the GAAP standards does not extend to smaller state-chartered FICUS that are required to comply with GAAP under state law. 28 One commenter inquired about the ability of these state-chartered FICUs to use the transition phase-in. The commenter noted that the regulatory text does not specify if these credit union are eligible for the transition provision. The commenter recommended the NCUA's final rule should make the proposed three-year phase-in available to FICUs that must follow GAAP, regardless of the size of the FICU.

NCUA Response: The transition provisions were designed to apply to all FICUs that adopt CECL, irrespective of their asset size. As the preamble to the proposed rule makes clear, the only FICUs “not eligible for the phase in” are “smaller FICUs that elect to use a non-GAAP measure.”  29 State-chartered FICUs that are required by state law to follow GAAP are prohibited from making such election. Accordingly, the Board intended them to be eligible for the transition relief provided by this rulemaking. The Board has revised the regulatory text to clarify the eligibility of these credit unions. The final rule clarifies that state-chartered FICUs with less than $10 million in assets and that are required by state law to comply with GAAP are eligible for the transition phase-in.

Comment: GAAP relief for federally insured state-chartered credit unions. As noted above, the preamble to the proposed rule provides that state-chartered FICUs subject to state laws and regulations may be required to comply with GAAP or other accounting standards under applicable state requirements. 30 One commenter wrote that approximately half the states either have explicit statutory or regulatory requirements for all FISCUs to comply with GAAP, or it is unclear whether such an express requirement exists. Two commenters suggested that the NCUA should work with the appropriate supervisory authorities to promote regulatory relief in states where the impediments are regulatory in nature. For those states with statutory mandates regarding GAAP adherence, the commenter asked that the NCUA pursue potential legislative fixes and to notify state legislative leaders of the exemption and the advantage federal credit unions would have over similarly sized FISCUs if not provided legislative relief.

NCUA Response: The Board will continue to work with FASB and other stakeholders, including appropriate State regulators, to minimize the detrimental impacts of GAAP compliance on FICUs. The Board also notes that, as discussed in the preceding comment response, state-chartered FICUs with less than $10 million in assets and that are required by state law to comply with GAAP are eligible for the transition phase-in.

The final rule adds a new subpart G to the PCA regulations in 12 CFR part 702, captioned “CECL Transition Provisions.” New subpart G applies to FICUs that meet the eligibility criteria specified in the final rule. Notwithstanding the CECL transition provisions, all other aspects of part 702 would continue to apply.

FICUs that have not adopted CECL prior to their first fiscal year beginning after December 15, 2022 (the implementation date established by FASB) are eligible for the phase-in. The NCUA will use the phase-in to determine the FICU's net worth category under § 702.102 or § 702.202 (for FICUs statutorily defined as “new”). To be eligible for the transition provision, the FICU must record a reduction in retained earnings due to the adoption of CECL.

Eligible FICUs would not have the option of electing whether to opt-into (or out of) the transition provisions. Although this differs from the other banking agencies' rule, it is consistent with the goal of this rulemaking to mitigate disruptions caused by CECL adoption. As noted, eligibility for the transition provision is limited to those FICUs for which the phase-in is truly necessary—that is, they will experience a reduction in retained earnings as a result of CECL. The Board believes that requiring these FICUs to affirmatively opt-into the transition provisions would constitute an unnecessary administrative exercise to confirm their already obvious need for the phase-in. Automatic implementation of the phase-in by the NCUA will help to ensure its uniform application and that its benefits are provided to the greatest possible number of eligible FICUs.

The final rule issued by the other banking agencies relies on banking organizations to calculate the phase-in amounts. In contrast, the NCUA will make the required phase-in calculations. As above, the Board has determined that this will help ensure the uniform implementation of the phase-in, as well as facilitate the accurate calculation of the transition amounts.

To calculate the transitional amount under the CECL transition provision, the NCUA will compare the differences in a FICU's retained earnings between: (1) The FICU's closing balance sheet amount for the fiscal year-end immediately prior to its adoption of CECL (pre-CECL amount); and (2) the FICU's balance sheet amount as of the beginning of the fiscal year in which the FICU adopts CECL (post-CECL amount). The difference in retained earnings constitutes the transitional amount that would be phased-in to the net worth ratio calculation over the proposed transition period, which would be the three-year period (twelve quarters) beginning the first day of the fiscal year in which the FICU adopts CECL. Specifically, a FICU's CECL transitional amount would be the difference between the pre-CECL and post-CECL amounts of retained earnings.

The NCUA will phase-in the FICU's CECL transitional amount. The NCUA would also phase-in the CECL transitional amount to the FICU's total assets for purposes of the net worth ratio. Both the FICU's retained earnings and total assets would be deemed increased by the CECL transitional amount. The CECL transitional amount would be phased-in over the transition period on a straight-line basis automatically as part of the Call Report.

As noted, FICUs are currently required to commence implementation of the standard for fiscal years beginning after December 15, 2022. In determining the net worth ratio of a FICU, the NCUA will deem retained earnings and total assets as reported on the Call Report to be increased by 100 percent of the FICU's CECL transitional amount during the first three reporting quarters of the fiscal year in which the FICU adopts CECL. The FICU may use this period to build capital and to make resulting material adjustments to its CECL transitional amount. The NCUA will base its subsequent calculations regarding the phase-in based on the CECL transitional amount reported by the FICU as of the fourth reporting quarter of the fiscal year in which the FICU adopts CECL, and further adjustments to the amount are not permitted.

Beginning with the fourth reporting quarter of the fiscal year in which the FICU adopts CECL, the NCUA will deem retained earnings and total assets to be increased by 67 percent of the FICU's CECL transitional amount. This percentage will be decreased to 33 percent beginning with the fourth quarterly Call Report of the following fiscal year (the eighth reporting quarter of the FICU's CECL implementation). Commencing with the twelfth reporting quarter of the FICU's CECL implementation, the FICU's net worth ratio will completely reflect the day-one effects of CECL. All other items remaining equal, this computation will result in a gradual phase-in of the CECL day-one effects.

As an example of the proposed phase-in, consider a hypothetical FICU that has a calendar fiscal year. On the closing balance sheet date immediately prior to adopting CECL, the FICU has $10 million in retained earnings and $1 million of Allowance for Loan and Lease Losses (ALLL) ( i.e., credit loss). On the opening balance sheet date of January 1, 2023, immediately after adopting CECL, the FICU determined it needs $1.2 million of allowance for credit losses. The FICU would recognize the adoption of CECL by recording a reduction in beginning retained earnings of $200,000. For each of the first three quarterly reporting periods in 2023, the NCUA would deem both the FICU's retained earnings and total assets to be increased by the full $200,000. Commencing with the fourth quarterly Call Report submitted in 2023 the FICU's retained earnings and total assets would be deemed increased by $134,000 ($200,000 × 67 percent), for purposes of calculating the FICU's net worth ratio. The $134,000 increase would remain constant for the first three quarters in 2024. Starting with the fourth quarterly Call Report in 2024, retained earnings and total assets would be deemed increased by $66,000 ($200,000 × 33 percent). Using the same mathematical equation, the $66,000 increase would remain constant for the first three quarters in 2025. Upon the FICU's submission of its fourth quarterly report in 2025, there would be zero increase in retained earnings and total assets, thus the FICU's net worth ratio will completely reflect the day-one effects of CECL.

Table 1 presents the example above in tabular format:

Section 216 of the FCU Act limits any change to the net worth ratio thresholds for each of the five net worth categories to “an amount that is equal to not more than the difference between the required minimum level most recently established by the Federal banking agencies and 4 percent of total assets (with respect to institutions regulated by those agencies).”  31 The limitation is not applicable to this final rule because, as noted above, the Board is following the lead of the other banking agencies and not modifying any specific net worth ratio threshold amount. Therefore, applying this element would be impracticable and would frustrate the purpose of the statutory provision. While the effect of the proposed regulatory amendments will be to adjust the calculation of the net worth ratios and, in some instances, the resultant net worth classifications, the actual numeric threshold amounts will remain the same. For example, a FICU will continue to be “well capitalized” if its net worth ratio is 7 percent or higher and it meets any applicable risk-based net worth requirement.

For purposes of determining whether a FICU is in compliance with its PCA requirements, the NCUA will use the FICU's net worth ratio as adjusted by the CECL transition provision. Through the supervisory process, the NCUA will continue to examine credit loss estimates and allowance balances regardless of whether the FICU is subject to the CECL transition provision. In addition, the NCUA may examine whether FICUs will have adequate amounts of capital at the expiration of their CECL transition provision period.

As discussed, section 202 of the FCU Act provides an exception for FICUs with less than $10 million in total assets to the general requirements that reports and statements filed with the Board comply with GAAP. As also noted above, the Board's regulations in § 702.402 require that charges for loan losses be made in accordance with GAAP and does not distinguish between the asset size of FICUs. The Board, however, is aware that compliance with GAAP may be burdensome for smaller FICUs. This difficulty is likely to be exacerbated with the adoption of CECL. Accordingly, the final rule provides that FICUs with total assets of less than $10 million may make charges for loan losses either in accordance with GAAP or with any reasonable reserve methodology (incurred loss) provided it adequately covers known and probable loan losses. This provision will eliminate the adverse PCA consequences for smaller FICUs resulting from CECL, and these FICUs will not be subject to the phase-in procedure detailed above.

The Board does note, however, that pursuant to section 202 state-chartered, federally insured credit unions subject to state laws and regulations may be required to comply with GAAP or other accounting standards under applicable State requirements. These credit unions are eligible for the phase-in.

The Senate Committee Report to the Financial Services and General Government Appropriations Act, 2020, 32 directs the Department of the Treasury, in consultation with the other banking agencies and the NCUA to “conduct a study on the need, if any, for changes to regulatory capital requirements necessitated by CECL.”  33 The Department of the Treasury issued its report on September 15, 2020. 34

While the report affirms the Department of the Treasury's support for the goals of CECL, it also acknowledged that a “definitive assessment of the impact of CECL on regulatory capital is not currently feasible, in light of the state of CECL implementation across financial institutions and current market dynamics.”  35 Accordingly, the report provides that the Department of the Treasury “will continue to actively monitor CECL implementation and consult with relevant stakeholders, including the prudential regulators, FASB, and the SEC.”  36 Among other recommendations, the report suggests that the prudential regulators “monitor the use and impact of transitional relief granted, and extend or amend the relief, as necessary.”  37 Further, the report provides that “FASB, together with the prudential regulators, should examine the application of CECL to smaller lenders.” The report highlights FICUs and community banks in this regard, noting that the NCUA and the FDIC have separately asked for relief from FASB. 38

This final rule is consistent with the Department of the Treasury's report, particularly with respect to the recommendation regarding transitional relief. The Board will continue to assess the impacts of CECL on regulatory capital and will consider these— and any other future recommendations made by the Department of the Treasury—in taking further action to address the impacts of CECL implementation on the credit union industry.

The Regulatory Flexibility Act requires the NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small entities. 39 For purposes of this analysis, the NCUA considers small credit unions to be those having under $100 million in assets. 40 The Board fully considered the potential economic impacts of the proposed phase-in on small credit unions during the development of the final rule. For example, the rule would, to the extents authorized by statute, completely exempt some of the smallest FICUs ( i.e., those with total assets less than $10 million) from the adverse effects of CECL. Accordingly, NCUA certifies that it would not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or increases an existing burden. 41 For purposes of the PRA, a paperwork burden may take the form of a reporting, disclosure or recordkeeping requirement, each referred to as an information collection. The changes to part 702 may revise existing information collection requirements to the Call Report. Should changes be made to the Call Report, they will be addressed in a separate Federal Register notice. The revisions to the Call Report will be submitted for approval by the Office of Information and Regulatory Affairs at the Office of Management and Budget prior to their effective date.

Executive Order 13132  42 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency, as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The final rule would not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The Board has therefore determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.

The NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999. 43

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)  44  generally provides for congressional review of agency rules. A reporting requirement is triggered in instances where the NCUA issues a final rule as defined by section 551 of the Administrative Procedure Act. 45 An agency rule, in addition to being subject to congressional oversight, may also be subject to a delayed effective date if the rule is a “major rule.” The NCUA does not believe this rule is a “major rule” within the meaning of the relevant sections of SBREFA. As required by SBREFA, the NCUA has submitted this final rule to the Office of Management and Budget (OMB) for it to determine if the final rule is a “major rule” for purposes of SBREFA. The NCUA also will file appropriate reports with Congress and the Government Accountability Office so this rule may be reviewed.

For the reasons discussed above, the NCUA amends 12 CFR part 702 as follows:

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2021-0150, dated June 21, 2021; corrected June 25, 2021 (EASA AD 2021-0150) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus SAS Model A319-151N, A319-153N, A319-171N, A320-251N, A320-252N, A320-253N, A320-271N, A320-272N, A320-273N, A321-251N, A321-251NX, A321-252N, A321-252NX, A321-253N, A321-253NX, A321-271N, A321-271NX, A321-272N and A321-272NX airplanes.

EASA and Airbus issued various communication documents (respectively EASA Safety Information Bulletin (SIB) 2020-14, Airbus Operators Information Transmission (OIT) 999.0048/20, Airbus Operational Training Transmission (OTT) 999.0025/21, and Airbus Flight Operations Transmission (FOT) 999.0020/21) to remind operators to apply appropriate procedures for returning airplanes to service from short term or long term storage/parking, including procedures to inspect the pitot static system. However, an increasing number of operational disruptions have been reported, due to contaminated air data system, caused by lack of application of appropriate maintenance procedures for returning airplanes to service.

This AD was prompted by reports of an increasing number of operational disruptions due to airspeed discrepancies after airplanes have been parked or stored (a large number of airplanes have been parked or stored due to the COVID-19 pandemic). Consistent erroneous airspeed indications (which stands for 2 or 3 pitot probes delivering erroneous speed information within the same speed range) may adversely affect airplane response, in particular during the rotation phase. The FAA is issuing this AD to address airspeed discrepancies, which could lead to an unstable flight path after take-off, possibly resulting in reduced control of the airplane. See the MCAI for additional background information.

EASA AD 2021-0150 describes procedures for, among other actions, revising the AFM to include a procedure to reinforce the airspeed check during the take-off phase and provide instructions to abort take-off in certain cases ( e.g., an unreliable airspeed situation or certain airspeed differences).

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

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

This AD requires accomplishing the actions specified in EASA AD 2021-0150 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD and except as discussed under “Differences Between this AD and the MCAI.”

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2021-0150 is incorporated by reference in this AD. This AD requires compliance with EASA AD 2021-0150 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2021-0150 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2021-0150. Service information required by EASA AD 2021-0150 for compliance will be available at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0540 after this AD is published.

Paragraph (3) of EASA AD 2021-0150 requires revising the minimum equipment list (MEL) to incorporate an EASA master minimum equipment list (MMEL) change to mandate that the integrated standby instrument system (ISIS) airspeed indication must be operative. However, the FAA MMEL does not provide relief for an inoperative ISIS airspeed indication function. Therefore, paragraph (3) of EASA AD 2021-0150 is unnecessary for this AD.

EASA AD 2021-0150 requires operators to “inform all flight crews” of revisions to the AFM and thereafter to “operate the aeroplane accordingly.” However, this AD does not specifically require those actions as those actions are already required by FAA regulations.

FAA regulations require operators furnish to pilots any changes to the AFM (ex: 14 CFR 121.137), and to ensure the pilots are familiar with the AFM (ex: 14 CFR 91.505). As with any other training requirement, training on the updated AFM content is tracked by the operators and recorded in each pilot's training record, which is available for the FAA to review. FAA regulations also require pilots to follow the procedures in the existing AFM including all updates. 14 CFR 91.9 requires that no person may operate a civil aircraft without complying with the operating limitations specified in the AFM.

Therefore, including a requirement in this AD to operate the airplane according to the revised AFM would be redundant and unnecessary. Further, compliance with such requirements in an AD would be impracticable to demonstrate or track on an ongoing basis; therefore, a requirement to operate the airplane in such a manner would be unenforceable.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because consistent erroneous airspeed indications may adversely affect airplane response, in particular during the rotation phase. This unsafe condition is particularly prevalent in the large number of airplanes that are returning to service after airplanes have been parked or stored due to the COVID-19 pandemic. Without reinforcing the airspeed check and providing instructions to abort take-off in certain cases, airspeed discrepancies could lead to an unstable flight path after take-off, possibly resulting in reduced control of the airplane. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.

The FAA invites you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2021-0540; Project Identifier MCAI-2021-00694-T” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

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

Once the compliance time specified in this AD has passed, special flight permits, as described in 14 CFR 21.197 and 21.199, are not allowed. As a result of the COVID-19 pandemic, a large numbers of airplanes have been put in storage. For those airplanes removed from storage after the compliance time specified in this AD has passed, operators must incorporate the AFM revision required by this AD before further flight.

The FAA considers this AD interim action and further AD action might follow.

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

The FAA estimates that this AD affects 204 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the Class E airspace at Great Falls International Airport, Great Falls, MT, to ensure the safety and management of IFR operations at the airport.

The FAA published a notice of proposed rulemaking in the Federal Register (86 FR 3891, January 15, 2021) for Docket No. FAA-2020-1126 to modify the Class E airspace at Great Falls International Airport, Great Falls, MT. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to publication of the NPRM, the FAA identified an error in the description for the airspace extending upward from 700 feet above the surface. In the NPRM a portion of this airspace was described as “within 8 miles south and 4 miles north of the 222° from the airport, extending from 2.6 miles southwest of the airport to 18.7 miles southwest of the airport.” The Final Rule corrects this description to read “within 8 miles south and 4 miles north of the 225° bearing from the airport, extending from 2.6 miles southwest of the airport to 18.7 miles southwest of the airport.”

Class D, E4, and E5 airspace designations are published in paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.11E, dated July 21, 2020, and effective September 15, 2020, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designation listed in this document will be published subsequently in the Order.

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

This amendment to 14 CFR part 71 modifies the Class E airspace, designated as an extension to a Class D or Class E surface area, at Great Falls International Airport. This action reduces the size of the area to properly contain IFR aircraft descending below 1,000 feet above the surface.

This action also modifies the Class E airspace extending upward from 700 feet above the surface. This action significantly reduces the size of this area to properly contain IFR departures to 1,200 feet above the surface and IFR arrivals descending below 1,500 feet above the surface.

Additionally, this action modifies the Class E airspace extending upward from 1,200 feet above the surface. This action reduces the size of this area to properly contain IFR aircraft transitioning to/from the terminal and en route environments.

This action also removes the Great Falls VORTAC from the Class E4 and Class E5 text headers and airspace descriptions. The Navigational Aid (NAVAID) is not needed to describe the airspace areas. Removal of the NAVAID allows the airspace to be described from a single point, which simplifies the airspaces' descriptions.

Further, this action removes Malmstrom AFB from the Class E5 text header and airspace description. Reference to Malmstrom AFB is not needed to describe the airspace area. Removal of Malmstrom AFB allows the airspace to be described from a single point, which simplifies the airspace's description.

Lastly, this action implements several administrative amendments to the airspaces' legal descriptions. The first line of the Class D and Class E4 text headers is amended to remove the airport name. The airport's geographic coordinates in the Class D, Class E4, and Class E5 text header are updated to lat. 47°28′56″ N, long. 111°22′13″ W.

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

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant the preparation of an environmental assessment.

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

This rule amends 14 CFR part 97 by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary. This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, CFR part 97, (is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

This rule amends 14 CFR part 97 by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, 8260-15B, when required by an entry on 8260-15A, and 8260-15C.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers or aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the typed of SIAPS, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flights safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CRF part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

The Railroad Retirement Act (RRA) provides monthly annuities for railroad employees based on age and years of service in the railroad industry. Section 14(b)(2) of the RRA [45 U.S.C. 231m(b)(2)] provides that portions of an employee annuity calculated under sections 2(b), 3(b), 3(f), and 3(h) of the RRA [45 U.S.C. 231a(b), 231b(b), 231b(f), and 231b(h)] may be characterized as community property and subject to distribution in accordance with a court decree of divorce, annulment, or legal separation or the terms of any court-approved property settlement incident to any such court decree. The current version of Board regulations at 20 CFR 295.1 through 295.7 implement this provision.

The current version of section 295.5(d) of the Board's regulations explains that payments to a spouse or former spouse pursuant to a court order will not be made to the heirs, legatees, creditors, or assignees of a deceased spouse or former spouse. Any annuity amounts due to the spouse or former spouse but unpaid at the time of the spouse or former spouse's death will be made in accordance with the Board's regulations governing payments of employee annuities due but unpaid at the death of the employee. At the time § 295.5(d) was published in the Federal Register , the Board's regulations governing employee annuities due but unpaid at death were found in § 234.1 of the Board's regulations. Part 234 of the Board's regulations has since been amended and the section governing employee annuities due but unpaid at death is now designated as § 234.31 of the Board's regulations.

We are amending § 295.5(d) of the Board's regulations to provide the correct cross-reference to the section of the Board's regulations governing employee annuities due but unpaid at death. This change is not intended to be substantive.

This change was published as a proposed rule on December 9, 2016, and comments were invited to be submitted by February 7, 2017. See 81 FR 89014 (December 9, 2016). No comments were submitted, and the final rule is the same as the proposed rule. Because this final rule is not a substantive change, but is merely a correction of a citation, it becomes effective on the date this notice of rulemaking is published in the Federal Register .

The Office of Management and Budget has determined that this is not a significant regulatory action under Executive Order 12866. Therefore, no regulatory impact analysis is required.

The Board certifies that this final rule will not have a significant economic impact on a substantial number of small entities because it affects individuals only. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.

This final rule imposes no reporting or recordkeeping requirements subject to OMB clearance.

For the reasons stated in the preamble, the Railroad Retirement Board amends 20 CFR part 295 as follows:

On June 10, 2021 (86 FR 30779), HUD published its Restoring Affirmatively Furthering Fair Housing Definitions and Certifications interim final rule. Following publication, the Federal Register alerted HUD to an error in the amendatory instruction for revisions to 24 CFR 92.508. Specifically, the amendatory instruction directed that paragraph (a)(7)(i)(C) be revised, however, the revision being made by the interim final rule is to paragraph (a)(7)(i)(B). This document corrects the amendatory instructions for 24 CFR 92.508 to reflect the correct paragraph being revised.

In FR Doc. 2021-12114 appearing on page 30779 in the Federal Register on June 10, 2021, the following correction is made:

Public Law 112-74, as amended by Public Law 113-235 and Public Law 114-113, authorizes the Director of BIE, or the Director's designee, to enter into agreements with public and private persons and entities allowing them to lease the land or facilities of a Bureau-operated school in exchange for consideration (in the form of funds) that benefits the school. The head of the school determines the manner in which the consideration will be used to benefit the school, as long as the use is for school purposes otherwise authorized by law. Congress provided that any funds obtained under this authority will not affect or diminish appropriations for the operation and maintenance of Bureau-operated schools, and that no funds will be withheld from distribution to the budget of a school due to receipt of such funds.

This public law also allows personnel of Bureau-operated schools to participate in fundraising activity for the benefit of a Bureau-operated school in their official capacity, as part of their official duties.

To carry out these public law provisions, the Act requires the Secretary of the Interior to promulgate regulations. The Act provides that the regulations must include standards for the appropriate use of Bureau-operated school lands and facilities by third parties under a rental or lease agreement; provisions for the establishment and administration of mechanisms for the acceptance of consideration for the use and benefit of a school; accountability standards to ensure ethical conduct; and provisions for monitoring the amount and terms of consideration received, the manner in which the consideration is used, and any results achieved by such use.

The BIE published a proposed rule on October 14, 2020 (85 FR 65000) and received four comments, which are discussed later in this preamble.

This rule establishes a new Code of Federal Regulations (CFR) part to implement the leasing and fundraising authority that Congress granted to BIE under Public Law 112-74, as amended by Public Law 113-235 and Public Law 114-113. The leasing provisions of this rule apply only to the facilities and land of Bureau-operated schools. This rule does not apply to public schools, Public Law 100-297 Tribally controlled grant schools, or Public Law 93-638 contract schools. This rule implements statutory leasing authority specific to leasing of Bureau-operated school facilities and land and is separate from the general statutory authority for leasing. To obtain approval of a lease of a Bureau-operated facility or land, one would need to comply with this new regulation, rather than the more generally applicable regulations at 25 CFR part 162. While the regulations at part 162 allow the granting of permits for use of Government land, the primary purpose of part 162 is to promote leasing of Indian land for housing, economic development, and other purposes. In contrast, the purpose of these new regulations at part 48 is to lease or rent Bureau-operated school facilities in exchange for consideration that will be used for school purposes. We note that nothing in this rule affects 25 CFR 31.2, which allows for use of Bureau-operated school facilities or land for community activities and adult education activities upon approval by the superintendent or officer-in-charge, where no consideration is received in exchange for the use of the facilities. The fundraising provisions of this rule apply only to employees of schools operated by the BIE. Subpart A of the rule sets forth the purpose, definitions, and other general provisions applicable to both leasing and fundraising.

Subpart B establishes the mechanisms and standards by which the Bureau may lease Bureau-operated school facilities and land to third parties. The statutory authority for the rule's leasing sections provides that the BIE Director or the Director's designee is authorized to enter into agreements with public and private persons and entities that provide for such persons and entities to rent or lease the land or facilities of a Bureau-operated school in exchange for a consideration (in the form of funds) that benefits the school, as determined by the head of the school. Public Law 112-74, section 115(a)(1). The rule allows only the BIE Director or his or her designee to enter into leases, and defines the Director's designee to be the Associate Deputy Director—Bureau-Operated Schools or the Associate Deputy Director—Navajo Schools. While most lease negotiations will occur at the school level, having someone at the Associate Deputy Director level make the ultimate determination whether to enter into a lease provides an appropriate level of oversight. The rule is written to provide a basic framework for leasing of Bureau-operated school facilities without being overly prescriptive so that it can accommodate a wide range of leasing circumstances—everything from leasing out a school gymnasium for a few hours to entering into a commercial lease of Bureau-operated school facility land to a billboard company. Accordingly, the rule sets forth the standards the BIE Director (or designee) will use to determine whether to enter into a lease. A primary standard for determining whether to enter into a lease is that the lease provides a net financial benefit to the school because the statutory authority for this regulation is centered on BIE receiving consideration in the form of funds that benefit the school. The BIE Director (or designee) will also consider including lease terms to incorporate the standards listed in § 48.104. This subpart also establishes what provisions a lease must include, what actions are necessary if permanent improvements are to be constructed under the lease, and how the Bureau will ensure compliance with the lease. In accordance with the limited authority provided by the statute, this subpart provides that the Bureau may only accept funds (as opposed to in-kind consideration) as consideration for a lease and may only use the funds for school purposes. The rule also broadly establishes how the Director or his or her designee will determine what amount is proper for lease consideration. While fair market value is a consideration, a formal appraisal may not be needed in all circumstances ( e.g., leasing out the school gym for a few hours) so the rule does not require a formal appraisal. The rule also establishes the mechanics for lessees to pay consideration and describes how the Bureau will process the funds. The rule provides the same late payment fees as are provided in the part 162 provisions for leasing Indian land. For oversight purposes, the rule requires Bureau-operated school personnel to report annually on any active lease to the Director and others, and include an accounting of all expenditures and supporting documentation showing expenditures were made for school purposes.

Subpart C of the rule addresses fundraising activities by employees of Bureau-operated schools in their official capacity on behalf of those schools. (Nothing in this rule affects fundraising activities by students). The statutory authority for the rule's fundraising sections allows BIE personnel to participate in a fundraising activity for the benefit of a Bureau-operated school in an official capacity as part of their official duties, and using the employee's official title, position, and authority. This subpart of the rule allows authorized personnel to spend a “reasonable portion” of his or her official duty time fundraising. BIE uses the phrase “reasonable portion” rather than specifying a number of hours or percentage of duty time to provide flexibility for different work schedules and fundraising activities while ensuring that school personnel are still fulfilling their work duties. The Director, Director's designee, or Head of School would determine what constitutes a reasonable portion when they review the proposed fundraising activity under § 48.202 to certify that it complies with regulatory requirements. In accordance with the statute's requirement for the regulations to establish standards to ensure ethical conduct, this subpart limits the types of fundraising an employee may conduct to ensure fundraising maintains the school's integrity, the Bureau's impartiality, and public confidence in the school. Certain approvals are required before personnel may accept a donation on behalf of a school as a mechanism for acceptance of the use of funds and a check to ensure standards are being upheld. In accordance with the statute's requirement that fundraising activity benefit a Bureau-operated school, each Bureau-operated school that receives donations is required to report annually to the Director and others, including an accounting of all expenditures and supporting documentation showing expenditures were made for school purposes.

BIE received four written comment submissions on the proposed rule, some of which contained more than one comment. A summary of each of the issues raised in the comments and BIE's responses follow:

Comment: No taxpayer dollars should be used for religious purposes unless the religion is a traditional Native American religion.

Response: Funds received under Part 48 are not taxpayer funds. The funds received come from leases and donations and can be used for school purposes as defined in § 48.3, which do not include sectarian purposes. It is the policy for the BIE Director, pursuant to 25 CFR 32.4(f), to promote and respect the right to cultural practices and religious freedom for all students, consistent with Tribal and Alaska Native entities' wishes and with the provisions of the American Indian Religious Freedom Act.

Comment: The requirements in Subpart B are vague because they don't list the detailed requirements that each possible lessee must have to obtain a lease.

Response: The rule lists the detailed requirements for the lease at § 48.105.

Comment: The rule should establish specific guidelines regarding how the funds are to be used to benefit the school or there will be confusion and misuse of funds.

Response: The rule defines the “school purposes” for which the funds may be used. See §§ 48.3 (definition of “school purposes”), 48.110 (regarding use of funds received through leasing), and 48.204 (regarding use of funds received through fundraising).

Comment: This rule should incorporate other types of schools such as Tribal schools that are underfunded in locations where students may not have the opportunity to attend a Bureau school.

Response: The statutory authority for this rule extends only to BIE-operated schools.

Comment: We are in favor of this rule because of the magnitude of BIE-operated schools' need for funds and that any funding received through leasing and fundraising will not affect or diminish appropriations. Since the intent of the rule is to increase the amount of funds at BIE-schools' disposal in order to improve educational outcomes for students, it would be regrettable if this rule eventually precipitated the opposite and resulted in a loss of funding for these schools.

Response: Congress provided that nothing in the statute authorizing leasing of and fundraising by Bureau-operated schools diminishes or otherwise affects the appropriation of funds to the budget accounts for operation and maintenance of Bureau-operated schools. Congress further provided that no funds may be withheld from distribution to the budget of any Bureau-operated school due to the school's receipt of funds from leasing or fundraising.

Comment: The stipulation that the rule does not affect 25 CFR 31.2, which allows BIE facilities to be used for adult education and community activities without the requirement of consideration, mitigates concerns that the rule may be detrimental to the community, as both adult education activities and communities provide positive outcomes, particularly in communities facing higher poverty rates, such as those in which BIE-operated schools are located.

Response: The final rule includes the stipulation that this commenter supports.

Comment: The requirement in section 48.205(f) that participation in fundraising must be voluntary is important not just for teachers, but also students, community members and organizations, to ensure they are not punished or retaliated against for not participating in a fundraiser, or for participating in an “unsuccessful” fundraiser.

Response: The final rule includes the requirement that this commenter supports.

Comment: A major advantage to this rule is that it improves these schools' access to much-needed funds without having to increase government spending or divert government funding from other important purposes. Although BIE schools receive more funding per pupil than the average U.S. public school, the financial need for this rule is still evident due to the unique challenges and higher costs such schools face. The funding schools can obtain from fundraising would help make necessary improvements to the quality of education for all its students; however, the GAO, in its 2014 report, specified concerns regarding BIE schools' ability to manage funds efficiently and ethically and, in 2017, added BIE to its High Risk List for agencies and programs vulnerable to mismanagement. A prudent solution would be to resolve existing issues to prevent poor stewardship of taxpayer dollars. Ideally, BIE would first demonstrate an improved ability to handle its finances before entrusting BIE schools with additional funds.

Response: The rule provides that the schools must report on the use of funds received through leasing ( see § 48.115) and fundraising (§ 48.208).

Comment: The condition at section 48.206 requiring donations equal to or exceeding $5,000 be approved by the Director's designee could cause school administrators to discourage donations exceeding this threshold in order to minimize bureaucratic approvals, or misrepresent the true dollar amount of the donation while “pocketing” amounts in excess of the threshold.

Response: Criminal statutes prohibit employees from “pocketing” funds.

Comment: Listing $5,000 as a threshold will eventually produce considerably different results over time due to inflation; instead, add a stipulation that the exact dollar amount is to be equivalent of the real value as of 2021. There are free, fast, user-friendly inflation calculators on the internet that would assist in adjusting the value based on inflation in successive years.

Response: BIE will reevaluate this monetary threshold after it obtains experience in implementing this regulation.

Comment: The rule's requirement at section 48.104 that the Director must determine that any proposed leases must not interfere with school activities or compromise school safety should be supported by a reporting mechanism between the impacted school's faculty, staff, and students and the Director in case an interference occurs during the lease term. Those individuals witness the day-to-day operations of the school and will identify whether a lease results in unanticipated negative effects on schooling. There should be a procedure to allow them to file complaints with the Director so the Director fully understands the effects of the actual implementation of a given lease and can take appropriate actions as needed.

Response: The Head of the School, in consultation with the school board or board of regents, certifies that the lease will not interfere with existing or planned school activities prior to the Director entering into the lease. Each individual lease will have provisions specific to the activities that the lessee will conduct under the lease to ensure that lease activities will not interfere with school activities. Failure to comply with lease terms would be addressable under §§ 48.116 and 48.117.

Comment: It seems that Native American children with exceptionalities are or may be denied the protections of the Rehabilitation Act of 1973 and other laws that empower them to achieve education-related goals. Many living on reservations are trapped in poverty, inadequate housing, alcoholism, drug abuse, and exceptionally high levels of unemployment, and children living on the reservation have two options: obtain an education to end the vicious cycle or remain trapped. Without the opportunity to obtain an education because you are, by default, excluded from the classroom because of your exceptionality. It is imperative that children attending public schools on Indian reservations be granted the opportunity to obtain an education, regardless of whether they have an exceptionality.

Response: This comment is not directly relevant to this rulemaking, but BIE has considered it in its implementation of Section 504 of the Rehabilitation Act of 1973.

The final rule makes three changes to the proposed rule for clarity and to better define BIE officials' roles and responsibilities:

• Revises the definition of “Director's designee” to mean only the Associate Deputy Director (deleting the “Education Program Administrator”);

• Adds in § 48.202 that the Head of the School, in addition to the Director or Director's designee, is one of the individuals authorized to approve fundraising in advance; and

• Separates out the discussion of how a Bureau-operated school processes donated funds from § 48.207, regarding how donations may be used, to a new § 48.208.

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

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

The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). It does not change current funding requirements and any economic effects on small entities would be fees charged for the use of the facilities, which must be tied to either fair market value or the costs to the Bureau of the lease and would not have a significant economic effect on the small entities.

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

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

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

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

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

This rule does not affect a taking of private property or otherwise have taking implications under Executive Order 12630. A takings implication assessment is not required.

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

This rule complies with the requirements of Executive Order 12988. Specifically, this rule:

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

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

The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175 and have identified substantial direct effects on federally recognized Indian Tribes that will result from this rulemaking. The Department acknowledges that Tribes with children attending Bureau-operated schools have an interest in this rule because it provides for consideration for the leasing of Bureau-operated schools and fundraising standards for employees of Bureau-operated schools. As such, the Department engaged Tribal government representatives by distributing a letter, dated June 19, 2014, with a copy of the draft rule and requesting comment on the draft rule by July 31, 2014. The Department also published a proposed rule on June 21, 2016 (81 FR 40218) and hosted a listening session and two teleconference consultations on the rule, but received no substantive comments. The Department hosted an additional consultation November 13, 2020, but received no substantive comments.

This rule contains new information collections. All information collections require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). We may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. The Department is seeking approval of a new information collection, as follows.

Brief Description of Collection: The Bureau of Indian Education (BIE) is establishing standards for the appropriate use of lands and facilities by third parties. These standards address the following: The execution of lease agreements; the establishment and administration of mechanisms for the acceptance of consideration for the use and benefit of a Bureau-operated school; the assurance of ethical conduct; and monitoring the amount and terms of consideration received, the manner in which the consideration is used, and any results achieved by such use. The paperwork burden associated with the rule results from lease provisions; lease violations; and assignments, subleases, or mortgages of leases.

Title: Use of Bureau-Operated Schools by Third Parties.

OMB Control Number: 1076-0187.

Form Number: None.

Type of Review: New collection.

Respondents/Affected Public: Individuals and Private Sector.

Total Estimated Number of Annual Respondents: 17.

Total Estimated Number of Annual Responses: 24.

Estimated Completion Time per Response: One to three hours.

Total Estimated Number of Annual Burden Hours: 68 hours.

Respondents' Obligation: Required to obtain a benefit.

Frequency of Response: Annually.

Total Estimated Annual Non-Hour Burden Cost: $0.

OMB Control Number: 1090-0009.

Title: Donor Certification Form (DI-3680).

Brief Description of Collection: This information will provide Department staff with the basis for beginning the evaluation as to whether the Department will accept the proposed donation. The authorized employee will receive the donor certification form in advance of accepting the proposed donation where the donation is valued at $25,000 or more. The employee will then review the totality of circumstances surrounding the proposed donation to determine whether the Department can accept the donation and maintain its integrity, impartiality, and public confidence. We expect to receive 25 responses to this information collection annually. The burden associated with this information collection is already reflected in the approval of OMB Control Number 1090-0009.

As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies to comment on any aspect of this information collection, including:

(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;

(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;

(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and

(4) Ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of response.

Written comments and recommendations for the information collection should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/PRAMain. Find this particular information collection by selecting “Currently under 30-day Review—Open for Public Comments” or by using the search function. Please provide a copy of your comments to consultation@bia.gov. Please reference OMB Control Number 1076-0187 in the subject line of your comments.”

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 the environmental effects of this rule are too speculative to lend themselves to meaningful analysis and will later be subject to the NEPA process, unless covered by a categorical exclusion. (For further information see 43 CFR 46.210(i)). We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

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

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated the functions and duties in the administration and enforcement of these provisions to the TTB Administrator through Treasury Order 120-01, dated December 10, 2013 (superseding Treasury Order 120-01, dated January 24, 2003).

Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to establish definitive viticultural areas and regulate the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission to TTB of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features, as described in part 9 of the regulations, and a name and a delineated boundary, as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and provides that any interested party may petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions for the establishment or modification of AVAs. Petitions to establish an AVA must include the following:

• Evidence that the area within the proposed AVA boundary is nationally or locally known by the AVA name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed AVA;

• A narrative description of the features of the proposed AVA affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed AVA boundary;

• If the proposed AVA is to be established within, or overlapping, an existing AVA, an explanation that both identifies the attributes of the proposed AVA that are consistent with the existing AVA and explains how the proposed AVA is sufficiently distinct from the existing AVA and therefore appropriate for separate recognition;

• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon; and

• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

TTB received a petition from Alan Busacca, on behalf of the Goose Gap Wine Grower's Association, proposing to establish the “Goose Gap” AVA. The proposed AVA is located in Benton County, Washington, and lies entirely within the established Yakima Valley (27 CFR 9.69) and Columbia Valley (27 CFR 9.74) AVAs and does not overlap any other existing or proposed AVA. Within the approximately 8,129-acre proposed AVA, there are 2 commercial vineyards which cover a total of more than 1,800 acres, as well as 1 winery. The distinguishing features of the proposed Goose Gap AVA are its geology and soils.

According to the petition, the proposed AVA is part of a series of folded hills and valleys collectively known as the Yakima Fold Belt, which runs from the Beezely Hills in the north to the Horse Heaven Hills in the south. The proposed Goose Gap AVA is comprised of two geographic features with similar viticultural conditions: Goose Gap and the adjoining Goose Hill. Goose Gap and Goose Hill together form part of a single folded and faulted block of the Columbia River Basalt. Goose Gap is formed from a syncline, a down-folded arch in the bedrock that creates a saddle-like shape, whereas Goose Hill is formed from an anticline, an arch-like structure of basalt that bends upwards to form a ridge and slopes. Goose Gap and Goose Hill both have an east-west orientation, south and southwest slopes that are too steep for planting, and plantable north and northeast slopes. By contrast, the petition states that all of the ridges and hills in the region surrounding the proposed AVA have a northwest-southeast orientation, plantable south and southwest slopes, and north and northeast slopes that are too steep for vineyards. Because vineyards in the proposed Goose Gap AVA are planted on north-and northeast-facing slopes, they receive less solar radiation than nearby vineyards planted on south- and southwest-facing slopes. As a result, grapes grown in the proposed AVA typically ripen later than the same varietals grown in the neighboring Red Mountain AVA (27 CFR 9.167), which is to the northwest of the proposed AVA.

Five main soil series comprise almost 95 percent of the soils in the proposed Goose Gap AVA: Warden, Shano, Kiona, Hezel, and Prosser. The Warden series soils, which make up 65 percent of the proposed AVA, consist of wind-blown loess over layered or stratified silts and fine sands, and have rooting depths of six feet or more with no hardpans or other root-restrictive layers. Shano soils constitute seven percent of the proposed AVA and are also formed from wind-blown loess and are deep soils with low levels of organic material. Kiona soils comprise 9 percent of the proposed AVA and are formed in loess and rubble from fractured basalt. Hezel soils make up seven percent of the proposed AVA and are made of windblown sand over stratified silts and sands. Finally, Prosser soils comprise five percent of the proposed AVA and derive from loess mixed with flood sediments. Prosser soils are generally shallow and overlay fractured basalt bedrock. In comparison, Warden soils are less common in the established Red Mountain AVA to the northwest of the proposed AVA, the Horse Heaven Hills AVA (27 CFR 9.188) to the southwest of the proposed AVA, and in the established Yakima Valley AVA that encompasses the proposed AVA. Additionally, Scooteney soils comprise almost 11 percent of soils in the established Red Mountain AVA, and Ritzville soils comprise almost 30 percent of the soils in the established Horse Heaven Hills AVA, yet both soil series are completely absent from the proposed Goose Gap AVA.

TTB published Notice No. 196 in the Federal Register on October 23, 2020 (85 FR 67469), proposing to establish the Goose Gap AVA. In the notice, TTB summarized the evidence from the petition regarding the name, boundary, and distinguishing features for the proposed AVA. The notice also compared the distinguishing features of the proposed AVA to the surrounding areas. For a detailed description of the evidence relating to the name, boundary, and distinguishing features of the proposed AVA, and for a detailed comparison of the distinguishing features of the proposed AVA to the surrounding areas, see Notice No. 196.

In Notice No. 196, TTB solicited comments on the accuracy of the name, boundary, and other required information submitted in support of the petition. In addition, given the proposed AVA's location within the Columbia Valley and Yakima Valley AVAs, TTB solicited comments on whether the evidence submitted in the petition regarding the distinguishing features of the proposed AVA sufficiently differentiates it from the established AVAs. TTB also requested comments on whether the geographic features of the proposed AVA are so distinguishable from the Columbia Valley and Yakima Valley AVAs that the proposed Goose Gap AVA should no longer be part of these established AVAs. The comment period closed December 22, 2020.

In response to Notice No. 196, TTB received one comment. The comment, from a local vineyard owner, supported the proposed Goose Gap AVA. TTB did not receive any comments regarding the location of the proposed AVA within the established Columbia Valley and Yakima Valley AVAs.

After careful review of the petition and the comments received in response to Notice No. 196, TTB finds that the evidence provided by the petitioner supports the establishment of the Goose Gap AVA. Accordingly, under the authority of the FAA Act, section 1111(d) of the Homeland Security Act of 2002, and parts 4 and 9 of the TTB regulations, TTB establishes the “Goose Gap” AVA in Benton County, Washington, effective 30 days from the publication date of this document.

TTB has also determined that the Goose Gap AVA will remain part of the established Columbia Valley AVA. As discussed in Notice No. 196, the Goose Gap AVA shares some broad characteristics with the established AVA. For example, elevations within the Goose Gap AVA and the Columbia Valley AVA are generally below 2,000 feet. However, the Goose Gap AVA does have some features that differentiate it from the Columbia Valley AVA. For instance, the Goose Gap AVA encompasses a single folded and faulted block of Columbia River basalt, characterized by the Goose Gap syncline and the adjoining Goose Hill anticline. The Columbia Valley AVA, by contrast, consists of multiple ridges, hills, and valleys within a single broad basin.

Finally, TTB has also determined that the Goose Gap AVA will remain part of the established Yakima Valley AVA. The two AVAs share soils that are a combination of glacial-flood and windborne soils, including the Warden soil series, and rest on Columbia River basalt. However, the Goose Gap AVA is unique among the hills of the Yakima Valley AVA in that it has an east-west alignment and plantable north and northeast slopes. Additionally, a major soil series of the Yakima Valley AVA is the Scooteney-Starbuck soil association. However, within the Goose Gap AVA, Scooteney soils are absent, and Starbuck soils comprise less than 2 percent of the soils.

See the narrative description of the boundary of the Goose Gap AVA in the regulatory text published at the end of this final rule.

The petitioners provided the required maps, and they are listed below in the regulatory text. The Goose Gap AVA boundary may also be viewed on the AVA Map Explorer on the TTB website, at https://www.ttb.gov/wine/ava-map-explorer.

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. For a wine to be labeled with an AVA name or with a brand name that includes an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with an AVA name and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the AVA name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

With the establishment of the Goose Gap AVA, its name, “Goose Gap,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text of the regulations clarifies this point. Consequently, wine bottlers using the name “Goose Gap” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use the AVA name as an appellation of origin.

The establishment of the Goose Gap AVA will not affect the existing Columbia Valley or Yakima Valley AVAs, and any bottlers using “Columbia Valley” or “Yakima Valley” as an appellation of origin or in a brand name for wines made from grapes grown within the Columbia Valley or Yakima Valley AVAs will not be affected by the establishment of this new AVA. The establishment of the Goose Gap AVA will allow vintners to use “Goose Gap”, “Yakima Valley,” and “Columbia Valley” as appellations of origin for wines made primarily from grapes grown within the Goose Gap AVA if the wines meet the eligibility requirements for the appellation.

TTB certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of an AVA name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

It has been determined that this final rule is not a significant regulatory action as defined by Executive Order 12866 of September 30, 1993. Therefore, no regulatory assessment is required.

Karen A. Thornton of the Regulations and Rulings Division drafted this final rule.

For the reasons discussed in the preamble, TTB amends title 27, chapter I, part 9, Code of Federal Regulations, as follows:

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated the functions and duties in the administration and enforcement of these provisions to the TTB Administrator through Treasury Order 120-01, dated December 10, 2013 (superseding Treasury Order 120-01, dated January 24, 2003).

Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to establish definitive viticultural areas and regulate the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission to TTB of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features as described in part 9 of the regulations and, once approved, a name and a delineated boundary codified in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and allows any interested party to petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions to establish or modify AVAs. Petitions to establish an AVA must include the following:

• Evidence that the area within the proposed AVA boundary is nationally or locally known by the AVA name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed AVA;

• A narrative description of the features of the proposed AVA affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed AVA boundary;

• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon; and

• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

TTB received a petition from Mark Beaman, winemaker at Maui Wines, proposing the establishment of the “Ulupalakua” AVA. The proposed AVA is located within the privately-owned, 18,000-acre Ulupalakua Ranch on the island of Maui, Hawaii. The proposed AVA contains approximately 70 acres, with approximately 16 acres of vineyards. Although there is no winery within the boundary of the proposed AVA, grapes from the proposed AVA are made into wine at the Maui Wines facility, which is a short distance south of the proposed AVA. According to the petition, the distinguishing features of the proposed Ulupalakua AVA include its topography, soils, and climate.

The proposed Ulupalakua AVA contains a series of four distinct benches that are oriented to the southwest. The benches are gently sloped, with slope angles between 0 and 5 percent, and are separated by steeper erosional ravines. The petition states that the gentle slopes of the benches minimize the risk of erosion, facilitate safe agriculture, and allow vineyards planted on the benches to receive uniform amounts of sunlight, rainfall, and temperature-moderating cloud cover. By contrast, the surrounding regions all contain steeper slopes. The petition notes that the regions to the north, west, and east of the proposed AVA have average slope angles of 15 to 17 percent. The petition also notes that the regions to the north and west of the proposed AVA contain more erosional features, such as ravines, which are less suitable for viticulture than gently sloping benches. Furthermore, the region to the south of the proposed AVA contains rugged, exposed volcanic rocks that are not suitable for viticulture.

The soils of the proposed Ulupalakua AVA formed from the erosion of ancient alkali lava flows from Mt. Haleakala. Kula loam makes up 80 percent of the soil of the proposed AVA and is derived from weathered basic igneous rocks. The remaining 20 percent of the soils of the proposed AVA are comprised of the Io series, which are silt loams that gradually acquire more clay deeper in the soils. According to the petition, the soils of the proposed AVA are fertile enough to produce healthy vines and fruit without promoting excessive vine and leaf growth. Additionally, the uniformity of the soils within the proposed AVA results in a greater consistency in growing conditions for vineyards than can be found in the surrounding regions. To the south of the proposed AVA, the soil changes to Kula very rocky loam, which consists of very large volcanic rocks and boulders which would not be suitable for vineyards. The same Kula soil found within the proposed AVA is also found to the west, but the petition notes that the topsoil west of the proposed AVA has been scoured by erosion and would be thinner and not as suitable for viticulture. The petition did not provide information on the soils to the north and east of the proposed AVA.

Within the proposed Ulupalakua AVA, annual temperatures are moderate and do not drop below 50 degrees Fahrenheit (F), which is generally considered to be the minimum temperature required for grape vine growth and fruit development. The difference between the average high and low temperatures each month in the proposed AVA is typically 20 degrees or less. The proposed AVA receives an average of 30.7 inches of rainfall a year and less than 2 inches per month in the harvest months of July and August. According to the petition, the low rainfall amounts during harvest reduce the risk of mildew and rot, while the mild temperatures protect ripening fruit against sunburn and heat stress.

The petition states that the proposed AVA's climate is influenced by its proximity to Mt. Haleakala. To the north of the proposed Ulupalakua AVA, on the higher slopes of the mountain, annual temperatures are cooler and temperatures drop below 50 degrees F. Because moist air moves from east to west over the mountain, regions to the east of the proposed AVA typically receive higher average annual rainfall amounts, while elevations to the west of the proposed AVA have less rainfall. The petition did not include temperature data for locations to the east, west, or south of the proposed AVA, nor did it include precipitation data for regions to the north and south of the proposed AVA.

TTB published Notice No. 199 in the Federal Register on November 10, 2020 (85 FR 71726), proposing to establish the Ulupalakua AVA. In the notice, TTB summarized the evidence from the petition regarding the name, boundary, and distinguishing features for the proposed AVA. The notice also compared the distinguishing features of the proposed AVA to the surrounding areas. For a detailed description of the evidence relating to the name, boundary, and distinguishing features of the proposed AVA, and for a detailed comparison of the distinguishing features of the proposed AVA to the surrounding areas, see Notice No. 199. In Notice No. 199, TTB solicited comments on the accuracy of the name, boundary, and other required information submitted in support of the petition. The comment period closed on January 11, 2021.

In response to Notice No. 199, TTB received one comment. However, the comment did not contain information related to the proposed AVA or to the AVA program in general, and was not posted to the public docket.

After careful review of the petition, TTB finds that the evidence provided by the petitioner supports the establishment of the Ulupalakua AVA. Accordingly, under the authority of the FAA Act, section 1111(d) of the Homeland Security Act of 2002, and parts 4 and 9 of the TTB regulations, TTB establishes the “Ulupalakua” AVA in Hawaii, effective 30 days from the publication date of this document.

See the narrative description of the boundary of the Ulupalakua AVA in the regulatory text published at the end of this final rule.

The petitioner provided the required maps, and they are listed below in the regulatory text. The Ulupalakua AVA boundary may also be viewed on the AVA Map Explorer on the TTB website, at https://www.ttb.gov/wine/ava-map-explorer.

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. For a wine to be labeled with an AVA name or with a brand name that includes an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with an AVA name and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the AVA name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

With the establishment of the Ulupalakua AVA, its name, “Ulupalakua,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text of the regulations clarifies this point. Consequently, wine bottlers using the name “Ulupalakua” in a brand name, including a trademark, or in another label reference to the origin of the wine, will have to ensure that the product is eligible to use the AVA name as an appellation of origin.

The establishment of the Ulupalakua AVA will not affect any existing AVA. The establishment of the Ulupalakua AVA will allow vintners to use “Ulupalakua” as an appellation of origin for wines made primarily from grapes grown within the Ulupalakua AVA if the wines meet the eligibility requirements for the appellation.

TTB certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of an AVA name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

It has been determined that this final rule is not a significant regulatory action as defined by Executive Order 12866 of September 30, 1993. Therefore, no regulatory assessment is required.

Karen A. Thornton of the Regulations and Rulings Division drafted this final rule.

For the reasons discussed in the preamble, TTB amends title 27, chapter I, part 9, Code of Federal Regulations, as follows:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the following provisions of the Internal Revenue Code of 1986, as amended (IRC, 26 U.S.C.): Chapter 51 (imposing Federal excise tax on distilled spirits, wine, and beer), chapter 52 (imposing Federal excise tax on tobacco products and cigarette papers and tubes), and sections 4181-4182 (imposing Federal excise tax on firearms and ammunition). TTB administers these provisions pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). The Secretary of the Treasury (the Secretary) has delegated related IRC administrative and enforcement authorities to TTB through Treasury Order 120-01. The Secretary also has delegated administration and enforcement of other internal revenue laws to the Internal Revenue Service under Treasury Order 150-10.

Under section 7623 of the IRC (26 U.S.C. 7623), individuals who provide information to the Department of the Treasury that is used to detect underpayments of Federal taxes or violations of internal revenue laws may be eligible for monetary “whistleblower” awards under regulations issued by the Secretary.

TTB had previously issued a whistleblower reward regulation at 27 CFR 70.41. However, amendments to the Internal Revenue Code have made this regulation obsolete. See the amendments made to 26 U.S.C. 7623 by section 406 of the Tax Relief and Health Care Act of 2006 (Pub L. 109-432), section 41108 of the Balanced Budget Act of 2018 (Pub. L. 115-123), and section 1405 of the Taxpayer First Act (Pub. L. 116-25). As a result of these statutory amendments, described more fully below, § 70.41 has become obsolete, and TTB is removing that section from its regulations in 27 CFR part 70, Procedure and Administration.

Section 406 of the Tax Relief and Health Care Act of 2006 significantly revised 26 U.S.C. 7623 and required the Treasury Department to establish a “Whistleblower Office” within the Internal Revenue Service (IRS) to analyze information received by whistleblower claimants and determine the amount of any award under 26 U.S.C. 7623(b). The IRS Whistleblower Office processes claims pertaining to underpayments of tax that are owed to the IRS or violations of internal revenue laws administered by the IRS that may be eligible for an award under 26 U.S.C. 7623(a) and (b). See IRS Delegation Order 25-07 (delegation to the Whistleblower Office of the authority to approve IRS discretionary awards under section 7623(a)). Section 41108 of the Balanced Budget Act of 2018 then clarified the definition of “collected proceeds” from which the Treasury Department may make awards to whistleblowers. The Taxpayer First Act further amended 26 U.S.C. 7623 by establishing a notification process for whistleblowers and adding protections for whistleblowers against retaliation.

To modernize the process for accepting, processing, and rewarding whistleblowers and to give effect to the statutory changes, TTB has entered into a memorandum of understanding (MOU) with the IRS Whistleblower Office. As set forth in that MOU, the IRS Whistleblower Office will accept claims from whistleblowers via IRS Form 211, Application for Award for Original Information, and refer such information to TTB when applicable. TTB will determine if the information is actionable after any investigation undertaken, collect proceeds, and provide information, including an evaluation of the whistleblower's contributions, to the IRS Whistleblower Office. The IRS Whistleblower Office will process all TTB-related whistleblower award claims filed under 26 U.S.C. 7623 under the IRS regulations and procedures. Under the MOU, the IRS will consider references to the “Internal Revenue Service” or “IRS” in the relevant IRS regulations and procedures to include TTB personnel and TTB actions when appropriate.

Updated information on the whistleblower program, including how and where to file such claims with the IRS Whistleblower Office is available on the TTB website at www.ttb.gov.

It has been determined that this notice is not a significant regulatory action as defined in Executive Order 12866 of September 30, 1993. Therefore, a regulatory assessment is not necessary.

TTB is issuing this final rule without prior notice and opportunity for public comment pursuant to authority under section 4(a) of the Administrative Procedure Act, as amended (APA) (5 U.S.C. 553(b)(B)). That provision authorizes an agency to issue a rule without prior notice when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” In this final rule, TTB is removing a regulatory provision that has become obsolete due to statutory changes, so TTB finds that prior notice is unnecessary. TTB also finds that it is unnecessary to provide a delayed effective date for revoking its obsolete regulation under section 4(c) of the APA (5 U.S.C. 553(d)); this rule is therefore effective immediately.

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) do not apply. Pursuant to 26 U.S.C. 7805(f), TTB submitted this final rule to the Chief Counsel for Advocacy of the Small Business Administration (SBA) for comment on the impact of the regulations on small businesses. TTB received no comments from SBA in response to this final rule.

This final rule imposes no new collection of information. The IRS will account for any burden associated with additional respondents to its information collection, IRS Form 211, Application for Reward for Original Information (20,000 annual respondents and 15,000 burden hours), which has been previously reviewed and approved by OMB and assigned control number 1545-0409.

Michael Hoover of the Regulations and Rulings Division drafted this document with the assistance of other Alcohol and Tobacco Tax and Trade Bureau personnel.

For the reasons discussed in the preamble, TTB is amending 27 CFR chapter I, part 70 as follows:

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. Publishing an NPRM would be impracticable in this case due to the timing of the event. The event sponsor submitted their application on May 9th, 2021 however, the application was incomplete and did not address the vessels that would be used to carry out the event. As the Coast Guard received late notification of the fireworks display vessels, there is not sufficient time for notice and comment procedures.

For the reasons stated above, we are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it 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 fireworks event on July 4, 2021.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034; The Captain of the Port (COTP), Los Angeles—Long Beach has determined that potential hazards associated with navigation safety may arise because the fireworks display creates potential for hazards for any person or vessel within a 1,000-foot radius of the fireworks launch barge. Potential hazards include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. This temporary safety zone is necessary to ensure the safety of, and reduce the risk to, the public, and mariners, in the Newport Beach Harbor.

This rule establishes a temporary safety zone on July 4, 2021, encompassing all navigable waters from the surface to the sea floor within a 100-foot radius around the fireworks launch barge SWOB-1, during the loading of the pyrotechnics at LA Berth 184, and during the transit of the fireworks barge from LA Berth 184 to the fireworks launch site in approximate position: 33°35.474′ N; 117°53.296′ W, in vicinity of Newport Beach Harbor. The temporary safety zone will then increase to 1,000-feet 15 minutes prior to, and for the duration of the fireworks display, expected to commence at 9 p.m. and last approximately 30 minutes. These coordinates are based on North American Datum of 1984.

No vessel or person is permitted to operate in the safety zone without obtaining permission from the Captain of the Port (COTP) or the COTP's designated representative. Sector Los Angeles—Long Beach may be contacted on VHF-FM Channel 16 or 310-521-3801. The general boating public will be notified prior to the enforcement of the temporary safety zone via Broadcast Notice to Mariners.

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

E.O.s 12866 (“Regulatory Planning and Review”) and 13563 (“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 both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

This regulatory action determination is based on the size, location, duration of the safety zone. Although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Broadcast Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities.

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 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 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 E.O. 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 E.O. 13132.

Also, this rule does not have tribal implications under E.O. 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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

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 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 a safety zone in an area in the vicinity of Newport Beach Harbor, Newport, CA. Such actions are categorically excluded from further review under paragraph 60(a) of Appendix A, Table 1 of the Department of Homeland Security Directive 023-01-001-01, Rev. 01. An environmental analysis checklist supporting this determination and Record of Environmental Consideration (REC) are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from 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 165 as follows:

The Coast Guard normally enforces the safety zone in 33 CFR 165.1330 for the Fleet Week Maritime Festival on waters adjacent to Pier 66 in Elliott Bay, Seattle, WA. This event is held annually during the parade of ships on the last week of July or first week of August. This year, the event organizers cancelled Fleet Week. Therefore, the Coast Guard does not plan to enforce the safety zone in 33 CFR 165.1330, for July or August 2021.

In addition to this notification of non-enforcement in the Federal Register , if the situation changes and the Captain of the Port Sector Puget Sound (COTP) determines that the regulated area needs to be enforced, the COTP will issue a Broadcast Notice to Mariners and provide actual notice of enforcement to any persons in the regulated area.

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 July 4, 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 impracticable and contrary to the public interest because immediate action is necessary to protect persons and property from the dangers associated with the event.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1233. The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the New Richmond Fireworks, occurring on July 4, 2021 from 10 p.m. through 10:30 p.m., will be a safety concern for all navigable waters on the Ohio River, extending the entire width of the river, at mile marker (MM) 450.0. 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 July 4, 2021 from 10 p.m. through 10:30 p.m. on all navigable waters of the Ohio River, extending the entire width of the river, at MM 450.0. 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 during the fireworks display. The Coast Guard was informed that the operations will take place from 10 p.m. through 10:30 p.m. Enforcement of the regulated area will occur during the fireworks display. 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 at 1-800-253-7465. 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 at Mile Marker 450 Ohio River on July 4, 2021 from 10 p.m. through 10:30 p.m. 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 thirty minutes that prohibits entry on all navigable waters of the Ohio River at MM 450. It is categorically excluded from further review under paragraph L60(a) 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 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. The Coast Guard was notified of the event without ample time to allow for a reasonable comment period because we must establish this safety zone by August 7, 2021.

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 impracticable because action is needed on August 7, 2021 to ensure the safety of the participants in the Three Rivers Regatta, rowing marine event.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the Three Rivers Regatta, rowing marine event, will be a safety concern for anyone within the rowing area. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the special local regulated area for the duration of the rowing event.

This rule establishes a temporary safety zone on the Tennessee River from mile markers 643 to 652 from 8 a.m. until 5 p.m. on August 7, 2021. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters while high speed boat races are taking place. No non-participant vessels or persons will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. Vessels and persons transiting the area must comply with all orders or directions given to them by the COTP or their designated representative. The COTP will provide notice of the regulated area through advanced notice via broadcast notice to mariners and by on-scene designated representatives.

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 restricts transit on theTennessee River from mile 643 to 652. The area will have limited access for a period of 9 hours. Moreover, the Coast Guard would issue Broadcast Notices to Mariners, Local Notices to Mariners, and Marine Safety Information Bulletins, as appropriate, about this safety zone so that waterway users may plan accordingly for this short restriction on transit. This rule will allow vessels to request permission to enter the safety zone.

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 a safety zone lasting 9 hours that will prohibit entry within MM 643 to 652, on the Tennessee River, of vessels for the duration of the Three Rivers Regatta, rowing marine event. It is categorically excluded from further review under paragraph L60(a) 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. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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 two annual recurring marine events listed in 33 CFR 100.704, Table 1 to § 100.704, Items No. (7) and (8), for the Beaufort Water Festival and Air Show. The Coast Guard will enforce these two annual recurring marine events on July 16, 2021, from 9 p.m. until 10:30 p.m., on July 17, 2021, from 8 a.m. until 12:30 p.m., on July 18, 2021, from 12:30 p.m. until 3:30 p.m., and on July 24, 2021, from 12:30 p.m. until 4:30 p.m. This action is being taken to provide for the safety of life on navigable waterways during this event. The regulations in § 100.704, Table 1 to § 100.704, Items No. (7) and (8), specify the locations of the regulated areas for the Beaufort Water Festival, which encompass a portion of the Beaufort River in Beaufort, South Carolina. During the enforcement periods, as reflected in § 100.704(c)(1), if you are the operator of a vessel in the regulated area you must comply with directions of the COTP Charleston or from his designated representative, including the Patrol Commander or any Official Patrol displaying a Coast Guard ensign.

In addition to this notice of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

The proposed rule was published at 86 FR 21681 on April 23, 2021. The Petitioner filed comments in support of the petition reaffirming its commitment to apply for channel 35. No other comments were filed. The Petitioner states that VHF channels have certain propagation characteristics which may cause reception issues for some viewers. In addition, WCYB-TV has received numerous complaints from viewers unable to receive the Station's over-the-air signal, despite being able to receive signals from other stations. While the proposed channel 35 noise limited contour does not completely encompass the relevant channel 5 noise limited contour, WCYB-TV is an NBC affiliate and there are six other NBC affiliated stations that serve some portion of the loss area, which, in the aggregate, serve the entire area of the channel 5 noise limited contour not encompassed by the proposed channel 35 contour, so that no one would lose NBC network service if channel 35 was substituted for channel 5. As the Bureau explained in the NPRM, it used the technical parameters of WCYB-TV's original post-transition digital channel 5 facility (File No. BPCDT-20080327AFS) in determining any predicted loss which may occur.

This is a synopsis of the Commission's Report and Order, MB Docket No. 21-128; RM-11895; DA 21-695, adopted June 15, 2021, and released June 15, 2021. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

On Dec. 31, 2020, the then president signed into law the Secure Federal Leases from Espionage and Suspicious Entanglements Act (Secure Federal LEASEs Act), (Pub. L. 116-276, 134 Stat. 3362). The Act imposes disclosure requirements regarding the foreign ownership, particularly “beneficial ownership,” of prospective lessors of “high-security leased space” ( i.e., property leased to the Federal government having a security level of III or higher). Section 3 and Section 5 of the Act regarding immediate and highest-level ownership applies to a lease or lease novation for high-security leased space entered into six months after the date of the enactment of the Act. GSA will modify existing leases to reflect the requirements of the Act when any of the various actions highlighted in the Applicability section arise.

These requirements of the statute are applicable to leases by the U.S. General Services Administration (GSA), the Architect of the Capitol, “or the head of any Federal agency, other than the Department of Defense (DOD), that has independent statutory leasing authority” (Federal lessees). The Act is not applicable to DOD or to the intelligence community. In that regard, Section 2876 of the FY 2018 National Defense Authorization Act (NDAA) (Pub. L. 115-91) already provides DOD similar authority to obtain ownership information with respect to its high-security leased space. GSA's regulatory action applies to GSA and to agencies relying upon GSA's leasing authority.

The Act addresses national security risks identified in the Government Accountability Office (GAO) report, GSA Should Inform Tenant Agencies When Leasing High-Security Space from Foreign Owners, dated January 2017 (GAO-17-195). This report found certain high-security Federal agencies were in buildings owned or controlled by foreign entities. According to the report, most Federal tenants were unaware the spaces GAO identified were subject to foreign ownership or control, exposing these agencies to the heightened risk of surreptitious physical or cyber espionage by foreign actors. The report also noted GAO could not identify the owners of approximately one-third of the Federal government's high-security leases because such ownership information was unavailable for those buildings.

As the US Government's “landlord,” GSA serves as the central leasing agent for Federal leases and is responsible for managing and obtaining space on behalf of multiple Federal agencies. When GSA enters into a leasing agreement, the agency becomes the “tenant” of GSA, with GSA acting as the lessee of the property. GSA currently uses information contained in the System for Award Management (SAM) to collect foreign ownership information for potential lessors, including immediate or highest-level owners. However, as Congress recognized in the Act, SAM does not capture more nuanced forms of foreign control such as entities involved in financing properties or beneficial ownership.

GSA is currently reviewing and investigating potential future implementation steps and potential updates through electronic means to implement the requirements of the Act, including externally (System for Award Management) or internally (GSA's Lease Offer Platform). As these alternatives are not yet available, this interim rule will require reporting on an action-by-action basis.

The statute defines “high security leased space” as “space leased by a Federal lessee that—(A) will be occupied by Federal employees for nonmilitary activities; and (B) has a facility security level of III, IV or V, as determined by the Federal tenant in consultation with the Interagency Security Committee, the Department of Homeland Security, and the General Services Administration.” Facility security levels and the process for determining these are outlined in the Interagency Security Committees publication “The Risk Management Process.”  1

Section 3 of the Act imposes the following requirements:

• Prior to entering into a lease agreement with a “covered entity” or allowing such a landlord to convey its interest in a leased space that qualifies as a “high-security leased space”—meaning a lease with a security level of Level III, IV, or V—a Federal lessee must require the landlord to identify and disclose whether the “immediate owner” or “highest-level owner” of the leased space, including an entity involved in the financing thereof, is a foreign person or a foreign entity, and to identify the country associated with each ownership entity. A “covered entity” is a person, corporation, company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group, or any governmental entity or instrumentality of a government. Leases entered into by the Department of Defense and for Federal tenants within the intelligence community (as defined in the National Security Act of 1947, 50 U.S.C. 3003) are expressly excluded from these requirements.

• The Act requires disclosure of the “immediate owner” (the entity that has direct control of the offeror of a lease, as defined by ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees) and “highest-level owner” (the entity that owns or controls an immediate owner of the offeror of a lease or that owns or controls one or more entities that control the immediate owner).

• The Act also requires disclosure of whether an entity is involved in the financing of the leased space is a foreign person or entity. GSA has provided a definition of “financing” at 552.270-33.

• Once a lease is executed, the Act requires annual disclosure of the foreign ownership of the landlord (and financing of the property) with respect to each prior one year period.

• Section 3 of the Act applies to any lease or novation agreement entered into on or after June 30, 2021.

• This Section of the Act requires that a covered entity ( i.e., “a person, corporation, company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group”; or “any governmental entity or instrumentality of a government”) identify and disclose whether the immediate or highest-level owner of the leased space, including an entity involved in financing of the property, is a foreign person or a foreign entity, including the country of origin associated with the ownership, before a Federal lessee enters into a lease agreement with a covered entity or approves a novation agreement with a covered entity that involves a change of ownership under a lease for high-security leased space.

• Under the Act, an “immediate owner” is “an entity, other than the offeror of a lease, that has direct control of the offeror, including ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees” and a “highest-level owner” is “the entity that owns or controls an immediate owner of the offeror of a lease, or that owns or controls 1 or more entities that control an immediate owner of the offeror.” If a disclosure is made, the Federal lessee is required to notify the Federal tenant of the building (or other improvement) that will be used for high-security space and to consult with the Federal tenant regarding security concerns and to determine whether mitigation measures are necessary prior to lease award or approval of the novation agreement.

• A covered entity is required to provide this ownership information in response to a solicitation for offers issued by the Federal lessee or before approving a novation agreement for a lease. Covered entities also must update the information provided to the Federal lessee annually. The information that must be provided on an annual basis includes: The list of immediate or highest-level owners of the covered entity during the preceding one-year period of Federal occupancy or the information required to be provided relating to each such immediate or highest-level owner.

Section 4 of the Act is not addressed in this regulation. It will be implemented through separate rulemaking and is outlined here for awareness. Section 4 also imposes disclosure requirements for beneficial ownership:

• Subject to the development of GSA's government-wide plan for obtaining ownership information outlined in Section 4 of the Act, covered entities also will be required to disclose information about beneficial ownership. A “beneficial owner” is “with respect to a covered entity, each natural person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise—(i) exercises control over the covered entity; or (ii) has a substantial interest in or receives substantial economic benefits from the assets of the covered entity.” However, a beneficial owner of a covered entity does not include: A minor child, a person acting as a nominee, intermediary, custodian, or agent on behalf of another person; a person acting solely as an employee of the covered entity and whose control over or economic benefits from the covered entity derives solely from the employment status of the person; a person whose only interest in the covered entity is through a right of inheritance or a creditor of the covered entity unless either also meets the definition of “beneficial owner.” This disclosure will be addressed in a future rule.

• Comments are welcome on foreign ownership, including beneficial ownership, with the understanding that such comments may help inform a future regulatory action.

Lease agreements for high-security leased space will be required to include language that limits the access to the leased space by the covered entity and any member of the property management company responsible for the space without prior approval from the Federal tenant. The Federal tenant may only grant access to the high-security leased space (or any property or information located in the space) if the tenant determines that access is “clearly consistent with [its] mission and responsibilities.” The Federal lessee is required to have written procedures, signed by both the Federal lessee and the covered entity, that govern “access to the high-security leased space in case of emergencies that may damage the leased property.”

Section 4 of the Act requires GSA, in conjunction with the Office of Management and Budget (OMB), to develop a government-wide plan for agencies to identify all immediate, highest-level, or beneficial owners of high-security leased spaces before entering into a lease agreement with a covered entity for the accommodation of a Federal tenant in a high-security leased space.

The plan must require the disclosure of any immediate, highest-level, or beneficial owner that is a foreign person and notification by the Federal lessee of high-security space to the affected Federal tenant of such foreign ownership. The plan, however, must exclude collecting ownership information on widely held pooled-investment vehicles, mutual funds, trusts, or other pooled-investment vehicles. The Act requires GSA to submit the plan to specific Congressional committees by Dec. 31, 2021 and to implement the plan by Dec. 31, 2022. This plan will be separately addressed in a future rule, and is not included in this interim rule.

Unlike the direct control-based immediate owner and highest-level owner, the Act defines the term “beneficial owner” to include any person that—through a contract, arrangement, understanding, relationship, or otherwise—exercises control over the covered entity or has a substantial interest in or receives substantial economic benefits from the assets of the covered entity, with some exceptions. GSA and OMB's plan must require the Federal lessee to collect the foreign ownership information for any immediate, highest-level, or beneficial owner that is a foreign person and, upon such a disclosure of foreign ownership, to notify and consult with the Federal tenant.

This Act is one of several recent examples of congressional concern about foreign ownership and control and congressional action in the world of government contracting to help address potential national security concerns. See, e.g., FY 2021 NDAA (Pub. L. 116-283), § 819, Modifications to Mitigating Risks Related to Foreign Ownership, Control, or Influence of DOD Contractors and Subcontractors; § 885, Disclosure of Beneficial Owners in Database for Federal Agency Contract and Grant Officers; § 6403, Beneficial Ownership Information Reporting Requirements.

Covered entities already provide certain information on immediate and highest-level ownership through the System for Award Management registration process, per OMB Control Numbers 9000-0097 and 9000-0185. However, covered entities will need to provide additional information through a manual representation regarding any financing entities and foreign ownership details for the enhanced requirements per Section 3 of the Act. Additionally, subject to the development and implementation of GSA's government-wide plan for Section 4 of the Act, through separate rulemaking, covered entities will need to provide disclosure of creditors who may be deemed beneficial owners if they either exercise control over the covered entity or have a substantial interest in or receive substantial economic benefits from the covered entity's assets. Therefore, property owners will need to take this provision into account when considering financing options for leasing high-security space to the Federal government.

With this rule, GSA is implementing Section 3 and Section 5 of the Act.

• Requires Federal lessees for high-security leased space to require covered entities to identify and disclose whether the owner of the leased space, including an entity involved in the financing thereof, is a foreign person or a foreign entity, including the country associated with the ownership entity, before entering into a lease agreement. Covered entities must provide Federal lessees such information—

○ when first submitting proposals in response to a solicitation for offers issued by the lessee; and

○ annually, to include the list of immediate or highest level owners of the covered entity during the preceding one-year period of occupancy.

• Requires the Federal lessee to notify the Federal tenant in writing if such a disclosure of foreign ownership is made and consult with the tenant regarding any security concerns prior to awarding a new lease agreement.

• Requires that leases for high-security space include certain language regarding access to the high-security leased space by the covered entity and any member of the property management company.

Section 4 of the Act requires the identification of beneficial owners of high-security leased spaces and will be addressed in a subsequent rulemaking through GSAR Case 2021-G522 and FMR Case 2021-102-1. In addition, the FAR Council has opened FAR Case 2021-005 which will implement sections 885 and 6403 of the NDAA for FY 2021 (Pub. L. 116-283) to require certain offerors to disclose beneficial ownership information in their offers for contracts over the simplified acquisition threshold.

Finally, other agencies may need to do additional rulemaking because the GSAR only governs the contract terms and conditions for leased space procured by GSA and its delegated agencies.

Title 40 of the United States Code (U.S.C.) Section 121 authorizes GSA to issue regulations, including in the GSAR, to control the relationship between GSA and contractors. In addition, the Secure Federal LEASEs Act, authorizes the collection of ownership information for high-security leased space.

With this rule, GSA is implementing one new GSAR representation and one new GSAR clause. The new representation is 552.270-33 (Foreign Ownership and Financing Representation for High-Security Leased Space) and the new clause is 552.270-34 (Access to Limitations for High-Security Leased Space). Both apply to new lease awards, the exercise of options for current leases, lease extensions, and ownership changes for high-security leased space. Except where otherwise provided, the Act's disclosure requirements shall apply with respect to any lease or novation agreement entered into on or after June 30, 2021, involving high-security leased space. That includes new, renewal, succeeding, expansion, superseding, extension, and replacing leases and novations.

The new GSAR representation implemented in 552.270-33 requires offerors for high-security leased space to identify whether the immediate owner, highest-level owner, or an entity involved in the financing of the lease is foreign-owned. If so, they must represent the associated country. Awardees will also be required to re-represent on an annual basis. This representation also applies upon extensions, exercise of renewal options and change of ownership/novations.

The new GSAR clause at 552.270-34 requires lessors for high-security leased space to limit access to the space unless approved by an authorized Government representative.

GSA anticipates that this rule will have an impact on current Federal lessors of high-security leased space, future potential lessors of high-security leased space, and the Federal lessor industry of high-security leased space. The rule seeks to ensure effective implementation and enforcement of the national security measures imposed by the Secure Federal LEASEs Act with minimal disruption to the mission of GSA and its Federal tenants and Federal lessors. As set forth in Section VI.(d) below, GSA recognizes the benefits that will result from this rule.

GSA notes that this rule is one of several actions with regard to the Secure Federal LEASEs Act and other statutes regarding foreign ownership by GSA, other agencies with lease authority promulgating their own rules, and by the FAR Council. GSA understands that the impact of actions dealing with foreign ownership, including specifically beneficial owners, is not well understood and is still being assessed.

In addition, while this interim rule, specific to Sections 3 and 5 of the Secure Federal LEASEs Act, will be effective June 30, 2021, GSA is seeking public comment, including, as indicated below, on the potential impact of this rule on Federal lessors. After considering the comments received, a final rule will be issued, taking into account and addressing the public comments, as well as helping to shape implementation of future rules like beneficial ownership. GSA plans to share public comments received on such questions with other agencies and the FAR Council.

The cost and benefit impacts of amending the General Services Administration Acquisition Regulation (GSAR) to implement certain requirements outlined in the Secure Federal LEASEs Act (SFLA) (Pub. L. 116-276) are discussed in the analysis below. This analysis was developed by GSA in consultation with agency procurement officials and the GSA Office of Leasing. Section VI.(h) of this rule is requesting specific feedback regarding the impact of this rule, as well as other pertinent policy questions of interest, in order to inform finalization of this and potential future subsequent rulemakings.

As a strictly contractual matter, an organization's failure to submit an accurate representation to the Government constitutes a breach of contract that can lead to cancellation, termination, and financial consequences. Therefore, it is important for contractors to develop a compliance plan that will allow them to submit accurate representations to the Government in the course of their offers.

GSA notes that this interim rule does not authorize GSA lease contracting officers to use the information disclosed by offerors as a differentiating factor for selection of a lease award, nor does it authorize GSA to terminate a lease, prevent a novation, or otherwise decline to make an award based on the disclosure. As such, GSA estimates that this rule will not result in these activities, and therefore no moving costs have been included in this regulatory impact analysis.

GSA assumes that most Federal lessors maintaining high-security leased space or Federal lessors that are competing for solicitations for high-security leased space are already familiar with the majority of the requirements of this rule, or, similarly, will not find the requirements of this interim rule as anything significantly more than what is currently expected. GSA previously implemented ownership disclosures requirements through internal policy  2 , GSA's Request for Lease Proposals (or solicitations), and GSA's guidance through its public-facing Leasing Desk Guide  3 and Leasing Alerts and Lease Acquisition Circulars. 4

Regardless of who owns the leased space, Federal agencies are already taking risk management measures appropriate for the security level of the space. The GSA Leasing Desk Guide  5 outlines requirements and standards for new and replacement space. In Chapter 19 (issued in 2012), it provides instructions for competitive procurements based on the Interagency Security Committee (ISC), 6 Physical Security Standards, and it outlines the Public Buildings Service's (PBS) responsibilities for performing background investigations on the lessors' contractors.

In addition, a 2018 GSA Leasing Alert, 7 provided required and recommended measures for lessors related to cybersecurity protections and precautions in leased facilities. It establishes lease language that prohibits lessors from connecting any portion of their building and access control systems (BACS) to any federally-owned or operated IT network and requires notification for cybersecurity incidents that impact a federal tenant's safety, security, or proper functioning. The lease language also outlines recommended cybersecurity measures that lessors are encouraged to follow.

Lessors are already currently required to report certain ownership information. As previously outlined, GSA currently uses information contained in the System for Award Management (SAM) to collect foreign ownership information for potential lessors, including immediate or highest-level owners, and provides such information to tenant agencies. While this rule requires additional information related to the lessor's financing, the review of immediate or highest-level owner detail has already been in place and is a requirement Federal lessor's are familiar with.

As outlined in the GSA Leasing Desk Guide, the facility security level (FSL)  8 for each space requirement is set by the Department of Homeland Security- Federal Protective Service (FPS) and the client agency, in consultation with the GSA as part of the requirements development phase of a lease acquisition. If the client agency and FPS have not already conferred, GSA must coordinate with the necessary parties to set the appropriate level of security before the solicitation is drafted. The Desk Guide states that GSA Leasing acquisition members must maintain contact as necessary with the appropriate FPS inspector throughout the lease administration. The facility security level designation does not change solely based on lessor ownership information collected via this rule.

GSA follows the Interagency Security Committee (ISC) provided standard for Physical Security Criteria (PSC) for Federal Facilities. This standard establishes baseline physical security measures for each FSL. This standard defines the process for determining the appropriate security measures; it also covers any uncommon measures required to address the unique risks at a particular facility. The GSA Desk Guide currently uses the PSC to prescribe the process for determining appropriate countermeasures for a facility. Adherence to this process (1) ensures that all security criteria will be considered; (2) defines the relationship between the levels of risk determined for each undesirable event and; (3) mitigates risk through countermeasures that provide a commensurate Level of Protection (LOP). The lessor ownership information does not affect the PSCs for Federal Facilities and therefore GSA does not anticipate this rule to have a significant impact on the security standards used by GSA tenants.

GSA assumes the following steps would most likely be part of a lessor's plan that would need to be developed by any entity to stay in compliance with the new representation clause at GSAR 552.270-33 and other clause at GSAR 552.207-34 being implemented by this rule:

1. Regulatory Familiarization. The entity must read and understand the GSAR rules and the resulting necessary actions for compliance.

2. Workforce Training. The entity must educate its purchasing/procurement professionals  9 to ensure that they are familiar with the representation and clause and their disclosure requirements (as applicable).

3. Compliance with Clauses. The entity must identify and disclose whether the immediate or highest-level owner of the leased space, including an entity involved in the financing thereof, is a foreign person or a foreign entity, including the country associated with the ownership entity. If a disclosure is made, the Federal lessee shall notify the Federal tenant of the building or other improvement that will be used for high-security space in writing, and consult with the Federal tenant regarding security concerns and necessary mitigation measures, if any, prior to award of the lease or approval of the novation agreement.

This Act requires the identification of all individuals who own or benefit from partial ownership of a property that will be leased by the federal government for high-security use. The statute is in response to a 2017 Government Accountability Office (GAO) report which indicated that Federal agencies were vulnerable to espionage and other intrusions because foreign actors could gain unauthorized access to spaces used for classified operations or to store sensitive data. Agencies store law enforcement evidence and other sensitive data and are often unaware of foreign ownership of their office spaces. While many of the foreign owners identified in the 2017 GAO report were companies based in allied countries such as Canada, Norway, Japan or South Korea, other properties were owned and managed by entities based in more adversarial nations. The report noted Chinese-owned properties, in particular, presented security challenges because of the country's proclivity for cyberespionage and the close ties between private sector companies and the Chinese government. The GAO report highlighted the dangers posed by these properties, indicating that “leasing space in foreign-owned buildings could present security risks such as espionage, unauthorized cyber and physical access to the facilities, and sabotage.”

The United States faces an expanding array of foreign intelligence threats by adversaries who are using increasingly sophisticated methods to harm the Nation. 10 Threats to the United States posed by foreign intelligence entities are becoming more complex and harmful to U.S. interests. 11 Foreign intelligence actors are employing innovative combinations of traditional spying, economic espionage, and supply chain and cyber operations to gain access to critical infrastructure, and steal sensitive information and industrial secrets. 12 The exploitation of key supply chains by foreign adversaries represents a complex and growing threat to strategically important U.S. economic sectors and critical infrastructure. 13

Additionally, by requiring “Financing Entity” information in the representation clause, GSA will benefit by better understanding the source of funds used to finance projects. Risks associated with financing, such as money laundering, involve disguising financial assets so they can be used without detection of the illegal activity that produced them. 14 These transactions further shield the entity from a recorded connection to the funds by providing a plausible explanation for the source of the funds. 15 Typical examples used for this type of activity include the purchase and resale of real estate, investment securities, foreign trusts, or other assets. 16 By collecting this information, GSA will be able to share more transparent information on foreign financing of leases with tenant agencies.

The goal of the Act is to close security loopholes by directing the GSA to design a verification system that identifies a property's owners if the space would be used for high-security purposes. While GSA and other Federal agencies have made positive changes in response to GAO's 2017 report, this rule will help support current best practices being followed more uniformly throughout the Federal government.

Finally, this Act ensures that GSA (and all agencies particularly with independent leasing authority) will have the ability to obtain information on foreign ownership and provide it to relevant Federal tenants.

During the first and subsequent years after publication of the rule, lessors will need to learn about the clauses and its requirements. GSA estimates this cost by multiplying the time required to review the regulations and guidance implementing the rule by the estimated compensation of a purchasing/ procurement mid-career professional. The equivalent labor category used to capture cost estimates therefore is a GS-12 Step 5.

A. To estimate the aggregate burden to Government lessors of complying with the rule, the number of lessors that will be impacted was calculated using numbers pulled from GSA's records and databases. 17 As of June 2021, GSA has approximately 7,860 leases totaling approximately 183,000,000 in Rentable Square Footage (RSF) and approximately $5,600,000,000 in annual rent ($2,800,000,000 of that total represents small entities). Of the 7,860, approximately 1,263  18 (or 16 percent) of the leases are for high-security lease space (lease space in a facility with a security level of III, IV, or V) totaling approximately 87,000,000 in RSF and approximately $3,000,000,000 in annual rent. Approximately 68 percent  19 of the leasing entities are small entities. High-security leases with these small entities represents $1,370,000,000 in annual rent covering approximately 37,000,000 RSF.

B. GSA also delegates leasing authority to several agencies, which are required to follow GSA's policies. GSA estimates there are 1,300  20 buildings represented by these agencies with Delegated Leasing Authority  21 from GSA. GSA does not have data available that identifies which of these are for high-security lease space. GSA assumes that these delegated agencies have a similar profile to GSA's for high-security leased space to total portfolio space, i.e., 16 percent. This would bring the total number of high-security lease space for delegated agencies to 208 (1,300 × 16 percent). GSA also assumes the same profile for small entities of 68 percent.

C. Based on historical data maintained by GSA's Office of Leasing, GSA estimates that 6 percent of its high-security leased space will be solicited for a new contract each year (6 percent of 1,263 = 76 leases). These solicitations result from a mix of expiring high-security leases or new requirements for high-security facilities. GSA assumes these trends will continue for the time horizon outlined by this regulatory impact. Based on historic bid rates and high current vacancy levels, GSA further estimates that 3 lessors will make offers for these high-security lease procurement for a total of 228 offers (76 high-security leases awarded * 3 lessors competing for each solicitation. 76 * 3 = 228) GSA assumes the same profile for delegated facilities.

D. Since 2014, GSA has averaged approximately 31 renewal options per year for high-security leases (equal to approximately 17 percent of all renewals options during the same period) and averaged approximately 106 extensions for existing high-security leases (also equal to approximately 17 percent of all extensions during the same period). GSA assumes the same trend will continue in subsequent years. GSA assumes the same profile for delegated facilities.

E. GSA processed 380 novations from May 1, 2020 to April 30, 2021  22 23 (therefore approximately 5 percent of leases resulted in a novation (380/7,860)). GSA does not have data on how many of those were related to FSL III, IV, or V. GSA will assume 16 percent of those novations were for FSL III, IV, or V leases. Therefore, it is assumed 61 novations were processed for high-security leases in the last year.

A breakdown is provided in the table below.

Why we need to publish a rule. Under Section 4(a)(3) of the Act, if we determine that a species is endangered or threatened, we must designate critical habitat to the maximum extent prudent and determinable. Designations and revisions of critical habitat can only be completed by issuing a rule. We listed the Suwannee moccasinshell as a threatened species on November 7, 2016 (81 FR 69417). We are designating a total of approximately 190 mi (306 km) of stream channel in three units as critical habitat for the Suwannee moccasinshell.

Basis for this rule. Section 3(5)(A) of the Act defines critical habitat as (i) the specific areas within the geographical area occupied by the species, at the time it is listed, on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protections; and (ii) specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination by the Secretary that such areas are essential for the conservation of the species. Section 4(b)(2) of the Act states that the Secretary must make the designation on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impacts of specifying any particular area as critical habitat.

Economic analysis. In accordance with section 4(b)(2) of the Act, we prepared an economic analysis of the impacts of designating critical habitat for the Suwannee moccasinshell. We published the announcement of, and solicited public comments on, the draft economic analysis (DEA; 84 FR 65325, November 27, 2019). Because we received no comments on the DEA, we adopted the DEA as a final version.

Peer review and public comment. In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinion from three knowledgeable individuals with scientific expertise that included familiarity with the Suwannee moccasinshell and its habitat, biological needs, and threats. We received a response from one peer reviewer who agreed with the information in the proposed critical habitat rule. We also considered all comments and information received from the public during the comment period on the proposed designation.

On October 6, 2015 (80 FR 60335), we proposed to list the Suwannee moccasinshell as a threatened species. On October 6, 2016 (81 FR 69417), we published the final listing rule, which added the Suwannee moccasinshell to the List of Endangered and Threatened Wildlife in title 50 of the Code of Federal Regulations at 50 CFR 17.11(h). On November 27, 2019 (84 FR 65325), we proposed to designate critical habitat for the Suwannee moccasinshell. All other previous Federal actions for the Suwannee moccasinshell are described in one or more of the documents discussed above.

In our November 27, 2019, proposed critical habitat rule, we requested written comments from the public on the proposed designation and the associated DEA by January 27, 2020. We also contacted appropriate Federal, State, and local agencies; scientific organizations; and other interested parties and invited them to comment on the proposed critical habitat designation and DEA during the comment period. Notices of the availability of these documents for review and inviting public comment were published by the Tallahassee Democrat on December 4, 2019, Gainesville Sun and Gilchrist Journal on December 5, 2019, and Valdosta Daily Times and Suwannee Democrat on December 11, 2019. We received nine comments during the 60-day comment period. We did not receive any requests for a public hearing. All substantive information provided during the comment period has either been incorporated directly into this final determination or is addressed below.

Section 4(b)(5)(A)(ii) of the Act requires the Service to give actual notice of any designation of lands that are considered to be critical habitat to the appropriate agency of each State in which the species is believed to occur, and invite each such agency to comment on the proposed regulation. The Florida Fish and Wildlife Conservation Commission (FWC) provided comments in support of the designation of critical habitat, and provided additional information related to current and future threats. Specifically, the FWC provided a publication by Holcomb et al. (2018, entire) on the strong connection between spring discharge and species occupancy; information on a proposed surface mining operation along the New River; and a publication by Neupane et al. (2019, entire) that assessed the hydrologic responses to projected climate change in the Suwannee River basin. We incorporated this new information into the final rule.

We received eight public comments on the proposed rule. Several commenters indicated support for the habitat protection of the Suwannee moccasinshell. None of the comments were substantive so as to require the Service's response.

After consideration of the comments we received during the public comment period (refer to Summary of Comments and Recommendations above), and new information published or obtained since the proposed rule was published, we made changes to the final critical habitat rule. Many small, nonsubstantive changes and corrections, not affecting the determination ( e.g., updating the Background section in response to comments, minor clarifications), were made throughout the document. Below is a summary of changes made to the final rule.

(1) We incorporated information on the strong connection between spring discharge and species occupancy from Holcomb et al. (2018, entire) into the discussion of natural flow regimes in the Habitats Protected From Disturbance section under Physical or Biological Features Essential to the Conservation of the Species.

(2) We incorporated information from Neupane et al. (2018, entire), provided by FWC (see above), that assessed the hydrologic responses to projected climate change scenarios in the Suwannee River basin into the discussion of natural flow regimes in the Habitats Protected From Disturbance section under Physical or Biological Features Essential to the Conservation of the Species.

(3) We incorporated information received from FWC (see above) on a proposed surface mining operation in the upper Santa Fe River sub-basin into the discussion of physical or biological features that may require special management considerations or protection within Unit 1 under Final Critical Habitat Designation.

Critical habitat is defined in section 3 of the Act as:

(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features:

(a) Essential to the conservation of the species, and

(b) Which may require special management considerations or protection; and

(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.

Our regulations at 50 CFR 424.02 define the geographical area occupied by the species as: An area that may generally be delineated around species' occurrences, as determined by the Secretary ( i.e., range). Such areas may include those areas used throughout all or part of the species' life cycle, even if not used on a regular basis ( e.g., migratory corridors, seasonal habitats, and habitats used periodically, but not solely by vagrant individuals).

Conservation, as defined under section 3 of the Act, means to use and the use of all methods and procedures that are necessary to bring an endangered or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary. Such methods and procedures include, but are not limited to, all activities associated with scientific resources management such as research, census, law enforcement, habitat acquisition and maintenance, propagation, live trapping, and transplantation, and, in the extraordinary case where population pressures within a given ecosystem cannot be otherwise relieved, may include regulated taking.

Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the Federal agency would be required to consult with the Service under section 7(a)(2) of the Act. However, even if the Service were to conclude that the proposed activity would result in destruction or adverse modification of the critical habitat, the Federal action agency and the landowner are not required to abandon the proposed activity, or to restore or recover the species; instead, they must implement “reasonable and prudent alternatives” to avoid destruction or adverse modification of critical habitat.

Under the first prong of the Act's definition of critical habitat, areas within the geographical area occupied by the species at the time it was listed are included in a critical habitat designation if they contain physical or biological features (1) which are essential to the conservation of the species and (2) which may require special management considerations or protection. For these areas, critical habitat designations identify, to the extent known using the best scientific and commercial data available, those physical or biological features that are essential to the conservation of the species (such as space, food, cover, and protected habitat). In identifying those physical or biological features that occur in specific occupied areas, we focus on the specific features that are essential to support the life-history needs of the species, including, but not limited to, water characteristics, soil type, geological features, prey, vegetation, symbiotic species, or other features. A feature may be a single habitat characteristic or a more complex combination of habitat characteristics. Features may include habitat characteristics that support ephemeral or dynamic habitat conditions. Features may also be expressed in terms relating to principles of conservation biology, such as patch size, distribution distances, and connectivity.

Under the second prong of the Act's definition of critical habitat, we may designate critical habitat in areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. When designating critical habitat, the Secretary will first evaluate areas occupied by the species. The Secretary will only consider unoccupied areas to be essential where a critical habitat designation limited to geographical areas occupied by the species would be inadequate to ensure the conservation of the species. In addition, for an unoccupied area to be considered essential, the Secretary must determine that there is a reasonable certainty both that the area will contribute to the conservation of the species and that the area contains one or more of those physical or biological features essential to the conservation of the species.

Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific data available. Further, our Policy on Information Standards under the Endangered Species Act (published in the Federal Register on July 1, 1994 (59 FR 34271)), the Information Quality Act (section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Pub. L. 106-554; H.R. 5658)), and our associated Information Quality Guidelines provide criteria, establish procedures, and provide guidance to ensure that our decisions are based on the best scientific data available. They require our biologists, to the extent consistent with the Act and with the use of the best scientific data available, to use primary and original sources of information as the basis for recommendations to designate critical habitat.

When we are determining which areas should be designated as critical habitat, our primary source of information is generally from the information developed during the listing process for the species. Additional information sources may include any generalized conservation strategy, criteria, or outline that may have been developed for the species, the recovery plan for the species, articles in peer-reviewed journals, conservation plans developed by States and counties, scientific status surveys and studies, biological assessments, other unpublished materials, or experts' opinions or personal knowledge.

Habitat is dynamic, and species may move from one area to another over time. We recognize that critical habitat designated at a particular point in time may not include all of the habitat areas that we may later determine are necessary for the recovery of the species. For these reasons, a critical habitat designation does not signal that habitat outside the designated area is unimportant or may not be needed for recovery of the species. Areas that are important to the conservation of the species, both inside and outside the critical habitat designation, will continue to be subject to: (1) Conservation actions implemented under section 7(a)(1) of the Act; (2) regulatory protections afforded by the requirement in section 7(a)(2) of the Act for Federal agencies to ensure their actions are not likely to jeopardize the continued existence of any endangered or threatened species; and (3) the prohibitions found in section 9 of the Act. Federally funded or permitted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. These protections and conservation tools will continue to contribute to recovery of this species. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans (HCPs), or other species conservation planning efforts if new information available at the time of these planning efforts calls for a different outcome.

In accordance with section 3(5)(A)(i) of the Act and regulations at 50 CFR 424.12(b), in determining which areas we will designate as critical habitat from within the geographical area occupied by the species at the time of listing, we consider the physical or biological features that are essential to the conservation of the species and that may require special management considerations or protection. The regulations at 50 CFR 424.02 define “physical or biological features essential to the conservation of the species” as the features that occur in specific areas and that are essential to support the life-history needs of the species, including, but not limited to, water characteristics, soil type, geological features, sites, prey, vegetation, symbiotic species, or other features. A feature may be a single habitat characteristic or a more complex combination of habitat characteristics. Features may include habitat characteristics that support ephemeral or dynamic habitat conditions. Features may also be expressed in terms relating to principles of conservation biology, such as patch size, distribution distances, and connectivity. For example, physical features essential to the conservation of the species might include gravel of a particular size required for spawning, alkali soil for seed germination, protective cover for migration, or susceptibility to flooding or fire that maintains necessary early-successional habitat characteristics. Biological features might include prey species, forage grasses, specific kinds or ages of trees for roosting or nesting, symbiotic fungi, or a particular level of nonnative species consistent with conservation needs of the listed species. The features may also be combinations of habitat characteristics and may encompass the relationship between characteristics or the necessary amount of a characteristic essential to support the life history of the species.

In considering whether features are essential to the conservation of the species, we may consider an appropriate quality, quantity, and spatial and temporal arrangement of habitat characteristics in the context of the life-history needs, condition, and status of the species. These characteristics include, but are not limited to, space for individual and population growth and for normal behavior; food, water, air, light, minerals, or other nutritional or physiological requirements; cover or shelter; sites for breeding, reproduction, or rearing (or development) of offspring; and habitats that are protected from disturbance.

Mussels generally live embedded in the bottom of stable streams and other bodies of water, in areas where flow velocities are sufficient to remove finer sediments and provide well-oxygenated waters. The Suwannee moccasinshell inhabits creeks and rivers where it is found in substrates of sand or a mixture of sand and gravel, and in areas with slow to moderate current (Williams 2015, p. 2). The species is often associated with large woody material embedded in the substrate, which may help stabilize substrates and act as a flow refuge. The Suwannee moccasinshell, similar to other freshwater mussels, is dependent on areas with flow refuges, where shear stress is relatively low and sediments remain stable during high flow events (Strayer 1999, pp. 468, 472; Hastie et al. 2001, pp. 111-114; Gangloff and Feminella 2007, p. 71). Substrates that remain stable in high flows conceivably allow these relatively sedentary animals to remain in the same general location throughout their entire lives. These habitat conditions not only provide space for Suwannee moccasinshell populations, but also provide cover and shelter and sites for breeding, reproduction, and growth of offspring.

Freshwater mussels, such as the Suwannee moccasinshell, siphon water into their shells and across four gills that are specialized for respiration, food collection, and brooding larvae in females. Food items include fine detritus (particles of organic debris), algae, diatoms, and bacteria (Strayer et al. 2004, pp. 430-431, Vaughn et al. 2008, p. 410). Adult mussels obtain food items both from the water column and from the sediment, either by taking water in through the incurrent siphon or by moving material extracted from sediments into their shell using cilia (hair-like structures) on their foot. For the first several months, juvenile mussels feed primarily with their foot, although they also may filter interstitial (pore) water (Yeager et al. 1994, pp. 217-221). Food availability and quality for the Suwannee moccasinshell is affected by habitat stability, floodplain connectivity, flow, and water and sediment quality. Adequate food availability and quality is essential for normal behavior, growth, and viability during all life stages of this species.

The Suwannee moccasinshell is a riverine species that depends upon adequate amounts of flowing water. Flowing water transports food items to the sedentary juvenile and adult life stages, provides oxygen for respiration, removes wastes, transports sperm to females, and maintains the stream bottom habitats where the species is found (the effects of flow alteration on habitat is discussed below under Habitats Protected From Disturbance ). A sufficient amount of continuously flowing water is a feature essential to this species.

Important water quality parameters for freshwater mussels include (but are not limited to) dissolved oxygen (DO), temperature, pH, salinity, and suspended sediment. As relatively sedentary animals, mussels must tolerate the full range of physical and chemical conditions that occur naturally within the streams where they persist, but many species are considered sensitive to disturbance. Water quality within the Suwannee River basin may vary according to season, geology, climate events, and human activities within the watershed. Dissolved oxygen (DO) and water temperature are important parameters for freshwater mussel early life stages, which are more sensitive to deviations from normal ranges. Water temperature also plays an important role in the overall water quality, including oxygen solubility and ammonia toxicity. Increased stream temperatures and decreased dissolved oxygen concentrations are important secondary effects associated with flow reduction and cessation (Haag and Warren 2008, pp. 1174-1176). Sensitive mussel species like the Suwannee moccasinshell may suffer lethal and nonlethal effects to low dissolved oxygen levels and elevated stream temperatures (Gagnon et al. 2004, p. 672; Golladay et al. 2004, p. 501; Haag and Warren 2008, pp. 1174-1176; Spooner and Vaughn 2008, p. 313), and are particularly susceptible to these conditions during early life stages (Sparks and Strayer 1998, pp. 132-133; Pandolfo et al. 2010, p. 965; Archambault et al. 2013, p. 247). Water temperatures of not more than 91 °F (32 °C), and DO concentrations of not less than 5.0 milligrams per liter (mg/L) represent important thresholds for freshwater mussels (Sparks and Strayer 1998, pp. 132-133; Gagnon et al. 2004, p. 672; Pandolfo et al. 2010, p. 965; Khan et al. 2019, p. 6). The specific physical and chemical tolerance ranges needed by the Suwannee moccasinshell for normal behavior, growth, and viability of all life stages have not been investigated. In the absence of species-specific data, we are using the current numeric standards for water quality criteria adopted by the States under the Clean Water Act (CWA). We find these criteria represent sustainable levels for aquatic life that would provide for the conservation of the species.

Sites for breeding, reproduction, and development are tied to areas in stable rivers and creeks where flow velocities are sufficient to maintain habitats, and bottom substrates are composed of sand or a mixture of sand and gravel (see Space for Individual and Population Growth and for Normal Behavior above). Juvenile mussels depend upon areas where substrates remain stable during high flow events. The presence of large embedded logs may contribute to substrate stability and act as flow refuges. The larvae of most freshwater mussels are parasitic, requiring a period of encystment on a fish host in order to transform into juvenile mussels. Thus, the presence of appropriate host fishes to complete its reproductive life cycle is essential to the Suwannee moccasinshell. In laboratory host trials, Suwannee moccasinshell larvae transformed primarily on the blackbanded darter ( Percina nigrofasciata ) and to a lesser extent on the brown darter ( Etheostoma edwini ) (Johnson et al. 2016, p. 171). The blackbanded darter is one of the most abundant darter species in coastal plain streams, and the distribution of both fish species overlap with the historical distribution of the Suwannee moccasinshell (Kuehne and Barbour 1983, pp. 29-30; Robins et al. 2018, pp. 317, 336).

The Suwannee moccasinshell's habitat has been impacted by pollution and reduced flows throughout its range, and by channel instability and excessive sedimentation in portions of its range (see Factor A, The Present or Threatened Destruction, Modification, or Curtailment of Its Habitat or Range of the proposed listing rule).

An environment free from toxic levels of pollutants is essential to the Suwannee moccasinshell, especially to its early life stages. There is no specific information on the sensitivity of the species to common municipal, agricultural, and industrial pollutants. However, as a group, freshwater mussels are more sensitive to pollution than many other aquatic organisms and are one of the first species to respond to water quality impacts (Haag 2012, p. 355). A detailed discussion of pollution issues in the basin and potential effects to the Suwannee moccasinshell is provided in the proposed listing rule (80 FR 60335) under Factor A.

The Suwannee moccasinshell depends upon a natural flow regime to maintain its benthic habitats. Altered flow regimes (including higher peak flows, lower base flows, and changes to seasonal flow pulses) within the basin are attributable to altered stormwater runoff patterns, lowering of the groundwater table, recent periods of drought, and climate change. Developed areas and some agricultural lands shed water extremely quickly during storm events. Urban areas significantly affect water quantity because of the high percentage of impervious cover and increases in water consumption. Rainfall on impervious surfaces is immediately transported to stream channels, causing increases in flow volume and velocity. These effects are discussed further in the next section and in the final listing rule under Factor A, Stream Channel Instability.

Because less infiltration occurs in developed areas, less groundwater recharge occurs and stream base flows may be reduced. The distinctive geology of the Suwannee River basin relies heavily on spring discharge to buffer the tannic waters of the mainstem, and groundwater recharge is limited in the region due to confinement of the aquifer. Over 250 springs located in this system have been threatened by increased demand for water resources within the basin and adjacent basins. The combined effects of groundwater pumping and prolonged droughts have resulted in lower groundwater tables and reduced flow and dewatering of basin streams and springs for extended periods (Grubbs and Crandall 2007, p. 78; Torak et al. 2010, pp. 46-47). The springs provide refugia for aquatic organisms during periods of drought when groundwater has the most influence on water quality and quantity. Recent surveys found the species only in portions of the basin with significant contributions from spring discharge and failed to locate the species in areas without this influence (Holcomb et al. 2018, pp. 99-100). The strong connection between spring discharge and Suwannee moccasinshell occupancy indicates that groundwater discharge via springs is important to maintaining flows and water quality needed by the species, especially during drought (Holcomb et al. 2018, p. 95).

Reductions in stream flow may also alter hydraulically mediated sediment sorting throughout the river, which may displace or otherwise alter Suwannee moccasinshell habitat. Climate scenarios for the years 2050 and 2080 predict changes to seasonal and annual hydrology of the Suwannee River basin due to a wetter and warmer climate in the region (Neupane et al. 2018, pp. 2232-2238). Within the basin, surface runoff is projected to increase as a result of increased precipitation, and summer stream flow is projected to decrease substantially (up to 25%) by 2080 due to the effects of higher air temperature (Neupane et al. 2018, p. 2240).

Because freshwater mussels are relatively long-lived and have limited mobility, habitat stability is a requirement shared by nearly all freshwater mussels (Haag 2012, p. 106). Optimal substrate conditions for the Suwannee moccasinshell include consolidated sand or sand and gravel mixtures, without excessive accumulations of sediment or detritus, and that remain stable during high flows. These substrates are dependent on geomorphically stable stream channels and intact riparian areas (Allan et al. 1997, p. 149; Rosgen 1996, pp. 8-11). Stable stream channels consistently transport their sediment load, such that the stream bed neither degrades nor aggrades, and have lower suspended sediment loads (Rosgen 1996, pp. 1-3), which mussels require in order to efficiently feed, respire, and reproduce. Stable stream channels are formed and maintained by natural flow regimes, channel features (dimension, pattern, and profile), and natural sediment input to the system through periodic flooding, which maintains connectivity and interaction with the floodplain. Habitat instability is induced by changes in natural sediment or flow regimes, and by physical modifications to the stream channel or floodplain (channel instability is discussed further under Factor A of the final listing rule).

We have determined that the following physical or biological features are essential to the conservation of Suwannee moccasinshell:

(1) Geomorphically stable stream channels (channels that maintain lateral dimensions, longitudinal profiles, and sinuosity patterns over time without an aggrading or degrading bed elevation).

(2) Stable substrates of muddy sand or mixtures of sand and gravel, and with little to no accumulation of unconsolidated sediments and low amounts of filamentous algae.

(3) A natural hydrologic flow regime (magnitude, frequency, duration, and seasonality of discharge over time) necessary to maintain benthic habitats where the species is found, and connectivity of stream channels with the floodplain, allowing the exchange of nutrients and sediment for habitat maintenance, food availability, and spawning habitat for native fishes.

(4) Water quality conditions needed to sustain healthy Suwannee moccasinshell populations, including low pollutant levels (not less than State criteria), a natural temperature regime, pH (between 6.0 to 8.5), adequate oxygen content (not less than State criteria), hardness, turbidity, and other chemical characteristics necessary for normal behavior, growth, and viability of all life stages.

(5) The presence of abundant fish hosts necessary for recruitment of the Suwannee moccasinshell. The presence of blackbanded darters ( Percina nigrofasciata ) and brown darters ( Etheostoma edwini ) will serve as an indication of fish host presence.

When designating critical habitat, we assess whether the specific areas within the geographical area occupied by the species at the time of listing contain features that are essential to the conservation of the species and which may require special management considerations or protection.

All three units that we are designating as critical habitat, including the unit that was occupied by the species at the time of listing, have mixed ownership of adjacent riparian lands, with mainly private (72 percent) and State (27 percent) lands (Table 1). All State-owned riparian lands are in Florida, and the majority are managed by Florida's Suwannee River Water Management District (District). Tracts are managed to maintain adequate water supply and water quality for natural systems by preserving riparian habitats and restricting development (SRWMD 2014, p. 3).

The District established minimum flows and levels for the lower Suwannee River, downstream of Fanning Springs and for the upper Santa Fe River. Minimum flow and level criteria establish a limit at which further withdrawals would be detrimental to water resources, taking into consideration fish and wildlife habitats, the passage of fish, sediment loads, and water quality, among others (SRWMD 2005, pp. 6-8; SRWMD 2007, entire). In addition, the Suwannee River and Santa Fe River systems have been designated Outstanding Florida Waters, which prevents the permitted discharge of pollutants that would lower existing water quality of, or significantly degrade, such waters. While these programs may indirectly alleviate some detrimental impacts on aquatic habitats, there currently are no plans or agreements designed specifically for the conservation of the Suwannee moccasinshell or for freshwater mussels in general.

The features essential to the conservation of the Suwannee moccasinshell may require special management considerations or protection to ameliorate the following threats: Altered flow regimes, nonpoint source pollution (from stormwater runoff or infiltration), point source pollution (from wastewater discharges or accidental releases), physical alterations to the stream channel (for example, dredging, straightening, impounding, etc.), and altered physical and chemical water quality parameters (especially, temperature, dissolved oxygen, turbidity, pH, and salinity). Special management considerations or protection may be required within critical habitat areas to ameliorate these threats, and include (but are not limited to): (1) Moderation of surface and ground water withdrawals; (2) improvement of the treatment of wastewater discharged from permitted facilities and the operation of those facilities; (3) reductions in pesticide and fertilizer use especially in groundwater recharge areas and near stream channels; (4) use of best management practices designed to reduce sedimentation, erosion, and stream bank alteration; (5) protection and restoration of riparian buffers; and (6) avoidance of physical alterations to stream channels and adjacent floodplains. This list applies only to Federal actions (see the Application of the “Adverse Modification” Standard below for more information).

As required by section 4(b)(2) of the Act, we use the best scientific data available to designate critical habitat. In accordance with the Act and our implementing regulations at 50 CFR 424.12(b), we review available information pertaining to the habitat requirements of the species and identify specific areas within the geographical area occupied by the species at the time of listing and any specific areas outside the geographical area occupied by the species to be considered for designation as critical habitat. As discussed in more detail below, we are designating critical habitat in areas within the geographical area occupied by the species at the time of listing. We also are designating specific areas outside the geographical area occupied by the species at the time of listing because we have determined that a designation limited to occupied areas would be inadequate—and therefore designation of unoccupied areas is essential—to ensure the conservation of the species.

On December 16, 2020, we published a final rule in the Federal Register (85 FR 81411) adding a definition of “habitat” to our regulations for purposes of critical habitat designations under the Endangered Species Act of 1973, as amended (Act). This rule became effective on January 15, 2021 and only applies to critical habitat rules for which a proposed rule was published after January 15, 2021. Consequently, this new regulation does not apply to this final rule.

The current distribution of the species is much reduced from its historical range. We anticipate that recovery will require continued protection of the existing population and its habitat, as well as reintroduction of Suwannee moccasinshell into historically occupied areas, ensuring there are multiple viable populations and that they occur over a wide geographic area. Range-wide recovery considerations, such as maintaining existing genetic diversity and striving for representation of all major portions of the species' current range, were considered in formulating the critical habitat.

For this rule, we delineated critical habitat unit boundaries using the following criteria:

(1) We compiled all available occurrence data records.

(2) We used confirmed presences between the years 2000 and 2016 as the foundation for identifying areas currently occupied.

(3) We evaluated habitat suitability of stream segments currently occupied by the species and retained all occupied stream segments.

(4) We evaluated unoccupied stream segments for suitability, connectivity, and expansion, and identified areas containing the components comprising the physical or biological features that may require special management considerations or protection.

(5) We omitted some unoccupied areas that are highly degraded and are not likely restorable ( e.g., insufficient flowing water, channel destabilized), and, therefore, are not considered essential for the conservation of the species.

(6) We delineated boundaries of critical habitat units based on the above information.

Specific criteria and methodology used to determine critical habitat unit boundaries are discussed below.

Sources of data for this critical habitat designation include multiple databases maintained by Florida Fish and Wildlife Conservation Commission, Dr. James D. Williams, Florida Museum of Natural History, and U.S. Geological Survey; verified museum records from multiple institutions (see Methods in Johnson et al. 2016, pp. 164-165); and a status report by Blalock-Herod and Williams (2001, entire). Historical and recent occurrence data included records collected from May 1916 to March 2016. Many surveys were conducted throughout the Suwannee River basin by Florida Fish and Wildlife Conservation Commission biologists during 2012-2016, and all sites with historical occurrences of Suwannee moccasinshell were sampled during this period. Sources of information pertaining to habitat requirements of the Suwannee moccasinshell include observations recorded during surveys and information contained in Blalock-Herod and Williams (2001, entire) and Williams et al. (2014, pp. 278-280).

We define “currently occupied” as river reaches with positive surveys from 2000 to 2016. In making these determinations, we recognized that known occurrences for some mussel species are extremely localized, and rare mussels can be difficult to locate. In addition, stream habitats are highly dependent upon upstream and downstream channel habitat conditions for their maintenance. Therefore, we considered the entire reach between the uppermost and lowermost currently occupied locations to delineate the probable upstream and downstream extent of the Suwannee moccasinshell's distribution. Within the current range of the species, some habitats may or may not be actively utilized by individuals, but we consider these areas to be occupied at the scale of the geographic range of the species.

We are designating as critical habitat for the Suwannee moccasinshell one occupied unit in the Suwannee River and lower Santa Fe River. This area contains one or more of the physical or biological features essential to the conservation of the Suwannee moccasinshell, and those physical or biological features may require special management conditions or protections. However, this single population provides little redundancy for the species, and a series of back-to-back stochastic events or a single catastrophic event could significantly reduce or extirpate this one population. Consequently, we have determined that the occupied area is inadequate to ensure the conservation of the species. Therefore, we have also identified, and are designating as critical habitat, unoccupied areas that are essential for the conservation of the species.

We are designating two unoccupied units as critical habitat. The units have some of the physical or biological features essential to the conservation of the species, and we are reasonably certain that each will contribute to the conservation of the species. Our specific rationale for each unit can be found in the unit descriptions below.

An examination of all available collection data shows that the Suwannee moccasinshell's range and numbers have declined over time (see “Distribution and Abundance” discussion in the final listing rule). For example, despite considerable survey effort, the species has not been collected in the lower Suwannee River or Withlacoochee River sub-basins since the 1960s, and was last collected in the upper Santa Fe River sub-basin in 1996 (Johnson et al. 2016, p. 170). There has also been a reduction in numbers, with fewer individuals encountered during recent surveys than were collected historically (Johnson et al. 2016, pp. 166, 170).

The Suwannee moccasinshell's reduced range and small population size may increase its vulnerability to many threats. Aquatic species with small ranges, few populations, and small or declining population sizes are the most vulnerable to extinction (Primack 2008, p. 137; Haag 2012, p. 336). The effects of certain environmental pressures, particularly habitat degradation and loss, catastrophic weather events, and introduced species, are greater when population size is small (Soulé 1980, pp. 33, 71; Primack 2008, pp. 133-137, 152). Threats to the Suwannee moccasinshell are compounded by its reduced and linear distribution, with nearly the entire population presently distributed within the Suwannee River mainstem. A small population also occurs in the lower Santa Fe River; however, only 5 recent collections (3 of which are relic shell) have been reported in this sub-basin (Johnson et al. 2016, p. 171).

A larger population of Suwannee moccasinshell occurring over a wide geographic area can have higher resilience. A large population is better able to return to pre-disturbance numbers after stochastic events, and also has increased availability of mates and reduced risk of genetic drift and inbreeding depression. The minimum viable population size needed to withstand stochastic events is not known for mussels. For species with complex life histories like freshwater mussels, maximizing the chances of viability over the long term, likely requires a population of considerable size (Haag 2012, p. 371). Reestablishing viable populations in the Withlacoochee and upper Santa Fe River sub-basins increases Suwannee moccasinshell redundancy by expanding its range into historically occupied areas, potentially increasing population size, and providing refuge from catastrophic events (for example, flooding and spills) in the Suwannee River.

We determined the Withlacoochee and upper Santa Fe River sub-basins have the potential for future reoccupation by the species, provided that stressors are managed and mitigated. These specific areas encompass the minimum area of the species' historical range within the critical habitat designation, while still providing ecological diversity so that the species has the ability to evolve and adapt over time (representation) to ensure that the species has an adequate level of redundancy to guard against future catastrophic events. These areas also represent the stream reaches within the historical range with the best potential for recovery of the species due to their current conditions and likely suitability for reintroductions. Accordingly, we are designating one unoccupied unit in the upper Santa Fe River and one unoccupied unit in the Withlacoochee River. As described below in the individual unit descriptions, each unit contains one or more of the physical or biological features and is reasonably certain to contribute to the conservation of the species.

The critical habitat streams were mapped with USGS National Hydrography Dataset GIS data. The high-resolution 1:24,000 flowlines were used to delineate the upstream and downstream boundaries of the critical habitat units and to calculate river kilometers and miles, according to the criteria explained below. The downstream boundary of a unit is the confluence of a named tributary stream or spring, below the farthest downstream occurrence record. The upstream boundary is the confluence of the first major tributary, road-crossing bridge, or a permanent barrier to fish passage above the farthest upstream occurrence record. The confluence of a large tributary typically marks a significant change in the size of the stream and is a logical and recognizable upstream terminus. Likewise, a dam or other barrier to fish passage marks the upstream extent to which mussels may disperse via their fish hosts. In the unit descriptions, distances between landmarks marking the upstream or downstream extent of a stream segment are given in river kilometers (km) and equivalent miles (mi), as measured tracing the course of the stream, not straight-line distance.

The areas designated as critical habitat include only stream channels within the ordinary high-water line. States were granted ownership of lands beneath navigable waters up to the ordinary high-water line upon achieving statehood ( Pollard v. Hagan , 44 U.S. (3 How.) 212 (1845)). Prior sovereigns or the States may have made grants to private parties that included lands below the ordinary high-water mark of some navigable waters that are included in this rule. Most, if not all, lands beneath the navigable waters included in this final rule are owned by the States of Florida and Georgia. The lands beneath most non-navigable waters included in this final rule are in private ownership.

There are no developed areas within the critical habitat boundaries except for transportation crossings, which do not remove the suitability of these areas for this species. The scale of the maps we prepared under the parameters for publication within the Code of Federal Regulations may not reflect the exclusion of such developed lands. Any such lands inadvertently left inside critical habitat boundaries shown on the maps of this rule have been excluded by text in the rule and are not designated as critical habitat. Therefore, a Federal action involving these lands would not trigger section 7 consultation with respect to critical habitat and the requirement of no adverse modification unless the specific action would affect the physical or biological features in the adjacent critical habitat.

The critical habitat designation is defined by these maps, as modified by any accompanying regulatory text, presented at the end of this document in the text of the rule itself. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. The coordinates on which each map is based are available at the Service's internet site, ( https://www.fws.gov/panamacity ), ( http://www.regulations.gov ) at Docket No. FWS-R4-ES-2019-0059, and at the field office responsible for this designation (see FOR FURTHER INFORMATION CONTACT above).

We are designating approximately 306 km (190 mi) of stream channel in three units as critical habitat for the Suwannee moccasinshell. The three units we are designating as critical habitat are: Unit 1: Suwannee River, Unit 2: Upper Santa Fe River, and Unit 3: Withlacoochee River. About 81 percent of critical habitat for the Suwannee moccasinshell is already designated as critical habitat for either of two ESA-listed species: The oval pigtoe ( Pleurobema pyriforme ) or the Gulf sturgeon ( Acipenser oxyrinchus desotoi ). The table below shows the critical habitat units for the Suwannee moccasinshell and ownership of riparian lands adjacent to the units.